-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, I0ptYSkHMBqG4bwExAdN2FtUs3dxNTLHJnGAeydVjv3vXVECZhQVXaWax9pbMuDL Qbqrb2gLVbuGLopZAqnJpA== 0000950123-95-001088.txt : 19950424 0000950123-95-001088.hdr.sgml : 19950424 ACCESSION NUMBER: 0000950123-95-001088 CONFORMED SUBMISSION TYPE: 424B5 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950421 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASARCO INC CENTRAL INDEX KEY: 0000007649 STANDARD INDUSTRIAL CLASSIFICATION: PRIMARY SMELTING & REFINING OF NONFERROUS METALS [3330] IRS NUMBER: 134924440 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B5 SEC ACT: 1933 Act SEC FILE NUMBER: 033-55993 FILM NUMBER: 95530436 BUSINESS ADDRESS: STREET 1: 180 MAIDEN LN CITY: NEW YORK STATE: NY ZIP: 10038 BUSINESS PHONE: 2125102000 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN SMELTING & REFINING CO DATE OF NAME CHANGE: 19760607 424B5 1 ASARCO INC. -- PRELIMINARY PROSPECTUS SUPPLEMENT 1 Filed Pursuant to Rule 424(b)(5) Registration No. 33-55883 PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED OCTOBER 25, 1994 $150,000,000 ASARCO Incorporated 8 1/2% Debentures Due 2025 Interest payable May 1 and November 1 Due May 1, 2025 ------------------ The Debentures are not redeemable at the option of the Company prior to maturity. See "Description of Debentures". ------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY REPRE- SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Underwriting Price to Discounts and Proceeds to Public(1) Commissions Company(1)(2) ---------------- ---------------- ------------- Per Debenture................................ 99.25% .875% 98.375% Total........................................ $148,875,000 $1,312,500 $147,562,500
(1) Plus accrued interest, if any, from April 28, 1995. (2) Before deduction of expenses payable by the Company estimated at $200,000. ------------------ The Debentures are offered by the Underwriter when, as and if issued by the Company, delivered to and accepted by the Underwriter and subject to its right to reject orders in whole or in part. It is expected that delivery of the Debentures will be made on or about April 28, 1995. CS First Boston The date of this Prospectus Supplement is April 21, 1995. 2 IN CONNECTION WITH THIS OFFERING, CS FIRST BOSTON CORPORATION MAY OVER- ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. USE OF PROCEEDS The net proceeds from the sale of the 8 1/2% Debentures Due 2025 (the "Debentures") are estimated to be $147,362,500. The net proceeds will be used to repay, in part, revolving credit bank borrowings, which at April 14, 1995 totaled $505 million at interest rates averaging 6.6% per annum. Borrowings under the revolving credit agreement were used to fund the purchase of 7,057,215 shares of Southern Peru Copper Corporation ("SPCC") and for general corporate purposes. RECENT DEVELOPMENTS Southern Peru Copper Corporation On April 5, 1995, Asarco Incorporated ("Asarco" or the "Company") purchased 7,057,215 shares, representing 10.7% of the outstanding common stock, of Southern Peru Copper Corporation at a cost of $116.4 million from Newmont Gold Company. The purchase of these shares (the "Purchase") increased Asarco's interest in SPCC to 63% from 52.3%. The shares of SPCC acquired in the Purchase will enable Asarco to elect a majority of the directors of SPCC. Accordingly, Asarco will consolidate the financial statements of SPCC in its financial statements commencing with the first quarter of 1995. Asarco had previously accounted for its investment in SPCC by the equity method of accounting. The excess of the purchase price over Asarco's interest in the net book value of SPCC attributable to the shares acquired in the Purchase is estimated to be assigned to proven and probable sulfide reserves, proven and probable leachable reserves and mineralized material. The tables below summarize unaudited pro forma consolidated results of operations for the year ended December 31, 1994, assuming the Purchase had occurred at January 1, 1994, and present the financial position as of December 31, 1994, assuming the Purchase had occurred at December 31, 1994. The tables detail the financial information used to derive the pro forma consolidation reflecting Asarco's 63% ownership of SPCC. The components of the tables are: (i) Asarco -- historical financial statements for the year ended December 31, 1994; (ii) SPCC -- historical financial statements for the year ended December 31, 1994; (iii) Eliminations -- elimination of intercompany transactions between Asarco and SPCC; (iv) Pro Forma Adjustments -- adjustments to reflect the effect of the Purchase; and (v) Pro Forma Consolidated -- consolidation of Asarco and SPCC. The unaudited pro forma financial information is based on management's assumptions and does not purport to represent the results that actually would have occurred if the Purchase had, in fact, been completed on the dates assumed. S-2 3
PRO PRO RESULTS OF OPERATIONS: FORMA FORMA (For the year ended December 31, 1994) ASARCO SPCC ELIMINATIONS ADJUSTMENTS CONSOLIDATED -------- ------ ------------ ----------- ------------ (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS) Sales of products and services............... $2,031.8 $701.7 $ (32.9) $ -- $2,700.6 Operating costs and expenses................. 2,014.4 559.7 (32.9) 0.9(a) 2,542.1 -------- ------ ------- ------ -------- Operating income........................... 17.4 142.0 -- (0.9) 158.5 Interest expense............................. (62.5) (7.8) -- (7.7)(b) (78.0) Other income................................. 70.8 29.7 -- -- 100.5 -------- ------ ------- ------ -------- Earnings before taxes on income, equity earnings and minority interest........... 25.7 163.9 -- (8.6) 181.0 Taxes on income (benefit).................... 9.4 54.1 3.3 (2.1)(c) 64.7 Equity in earnings of non-consolidated associated companies (losses).............. 47.7 -- (44.4) -- 3.3 Minority interest............................ -- (18.6) (43.5) 9.8(d) (52.3) -------- ------ ------- ------ -------- Net earnings............................. $ 64.0 $ 91.2 $ (91.2) $ 3.3 $ 67.3 ======== ====== ======== ====== ======== Net earnings per common share................ $ 1.53 $ 1.61 ======== ========
- --------------- Explanation of Pro Forma Adjustments: (a) The excess of the purchase price over Asarco's interest in the net book value of SPCC attributable to the shares acquired is estimated to be assigned to proven and probable sulfide reserves, proven and probable leachable reserves and mineralized material. The amount assigned to proven and probable sulfide reserves has been amortized based on actual 1994 copper production and reserves as of December 31, 1994. Amortization of the amount assigned to proven and probable leachable reserves will begin when production commences in late 1995. Amortization of the amount assigned to mineralized material will begin upon completion of the drilling program and reserve analysis which are expected to be completed by year end 1995; (b) Interest expense on additional debt incurred in connection with the Purchase at the Company's average interest rate for revolving credit borrowings at April 14, 1995 (6.6%). A 1% increase in interest rates would reduce earnings per share by $0.02; (c) Income tax benefit from amortization and additional interest expense at applicable rates net of U.S. deferred income tax on additional undistributed earnings of SPCC; and (d) 1994 SPCC earnings attributable to Asarco's additional interest as a result of the Purchase.
PRO PRO FINANCIAL POSITION: FORMA FORMA (As of December 31, 1994) ASARCO SPCC ELIMINATIONS ADJUSTMENTS CONSOLIDATED -------- ------ ------------ ----------- ------------ (DOLLARS IN MILLIONS) Cash and marketable securities............... $ 18.3 $136.3 $ -- $ -- $ 154.6 Other current assets......................... 729.0 228.7 (3.2) -- 954.5 Investments.................................. 1,143.4 -- (332.1) -- 811.3 Net property................................. 1,305.5 522.9 -- 48.3(a) 1,876.7 Other assets................................. 94.8 80.6 -- -- 175.4 -------- ------ ------- ------ -------- Total assets............................. $3,291.0 $968.5 $(335.3) $ 48.3 $3,972.5 ======== ====== ======== ====== ======== Current liabilities.......................... $ 465.5 $118.8 $ (3.2) $ -- $ 581.1 Long-term debt............................... 914.6 114.1 -- 116.4(b) 1,145.1 Deferred income taxes........................ 156.5 6.2 -- -- 162.7 Minority interest............................ 2.4 79.8 302.7 (68.1)(c) 316.8 Other liabilities............................ 234.6 14.8 -- -- 249.4 -------- ------ ------- ------ -------- Total liabilities........................ 1,773.6 333.7 299.5 48.3 2,455.1 Stockholders' equity......................... 1,517.4 634.8 (634.8) -- 1,517.4 -------- ------ ------- ------ -------- Total liabilities and stockholders' equity................................. $3,291.0 $968.5 $(335.3) $ 48.3 $3,972.5 ======== ====== ======== ====== ========
- --------------- Explanation of Pro Forma Adjustments: (a) Excess of the purchase price over Asarco's additional interest in the net book value of SPCC ; (b) Additional debt incurred in connection with the Purchase; and (c) Change of minority interest in SPCC due to the Purchase. S-3 4 SPCC is an integrated producer of copper that operates mining, smelting and refining facilities in the southern part of Peru. SPCC is among the world's leading producers of copper, producing 267,800 tons of copper from its mines in 1994. Smelter production in 1994 was a record 322,100 tons of blister copper. At December 31, 1994, SPCC's proven and probable ore reserves were approximately 213.6 million tons with an average copper grade of 0.78% at its Toquepala mine and 374.1 million tons with an average copper grade of 0.80% at its Cuajone mine. SPCC also has leachable reserves at Toquepala and Cuajone which total 570.3 million tons with an average copper grade of 0.22%. In addition, results of drilling at Toquepala and Cuajone have identified mineralized material consisting of 640.0 million tons with an average copper grade of 0.74% at Toquepala and 692.1 million tons with an average copper grade of 0.71% at Cuajone. This mineralized material will not qualify as proven and probable reserves until a final and comprehensive economic and technical feasibility study has been completed demonstrating that such additional material can be economically mined. To integrate its operations and further reduce costs, SPCC acquired the Ilo refinery in May 1994 from a Peruvian government owned entity for $65 million and a commitment to spend $20 million over three years to increase capacity and improve efficiency. SPCC's cash cost savings since the acquisition have amounted to approximately $0.05 per pound of copper. During the seven month period of SPCC's ownership in 1994, the refinery produced 123,000 tons of refined copper. Acquisition of the Ilo refinery was part of a $445 million expansion and modernization plan which began in 1992. The program also includes expenditures of $120 million for new equipment and technology, $135 million for environmental projects and $105 million for development and construction of a solvent- extraction/electrowinning ("SX/EW") facility, which is expected to begin operation in late 1995 and add approximately 40,000 tons annually of low-cost copper production. The Company's strategy is to continue to reduce costs and to expand production through modernization of its operations. Ray Mine, Arizona On March 30, 1995, the Company announced that full operations at the Hayden concentrator at its Ray Complex in Arizona would resume by July 1, 1995, three months earlier than originally planned. The capacity of the Hayden concentrator was temporarily curtailed as part of a development program that began in July 1994. The development program was implemented to restore operating flexibility and production capacity lost as a consequence of water accumulated in 1992 and early in 1993 from unusually heavy rains. S-4 5 COPPER PRICES Copper is an internationally traded commodity the price of which is effectively established on terminal markets including the London Metal Exchange and the New York Commodity Exchange ("COMEX"). The following table sets forth quarterly average COMEX prices for copper since 1992.
AVERAGE COMEX COPPER PRICES -------------------- ($/POUND) 1992 First Quarter...................................... $0.994 Second Quarter..................................... 1.019 Third Quarter...................................... 1.111 Fourth Quarter..................................... 0.985 1993 First Quarter...................................... 0.982 Second Quarter..................................... 0.835 Third Quarter...................................... 0.838 Fourth Quarter..................................... 0.757 1994 First Quarter...................................... 0.868 Second Quarter..................................... 0.989 Third Quarter...................................... 1.139 Fourth Quarter..................................... 1.290 1995 First Quarter...................................... 1.375
------------------------------- Source: COMEX First Position, Monthly Average Settlement. RATIO OF EARNINGS TO FIXED CHARGES
YEAR ENDED DECEMBER 31, ----------------------------------------------------------------- PRO FORMA 1994 1994 1993 1992 1991 1990 -------------- ----- ----- ----- ----- ----- Ratio of earnings to fixed charges...... 3.2(a) 1.6 (b) (b) 1.5 3.5
- --------------- (a) The pro forma ratio of earnings to fixed charges is based on the pro forma results of operations contained herein and assumes that the Purchase had occurred on January 1, 1994, and does not include the Debentures offered hereby. (b) For the years 1992 and 1993, earnings were insufficient to cover fixed charges by $73.9 million and $135.3 million, respectively. The ratio of earnings to fixed charges was calculated based on information from the Company's books and records. In computing the ratio of earnings to fixed charges, earnings consist of net earnings of the Company and its consolidated subsidiaries plus taxes on income, fixed charges and minority interest, plus dividends received from non-consolidated associated companies accounted for by the equity method, less interest capitalized net of amount amortized and less equity earnings of non-consolidated associated companies accounted for by the equity method. Fixed charges consist of interest costs on borrowed funds, including capitalized interest, commitment fees and a reasonable approximation of the imputed interest on non-capitalized lease payments. S-5 6 CAPITALIZATION The following table sets forth the capitalization of the Company as of December 31, 1994 and as adjusted to give effect to the sale of the Debentures offered hereby and the application of proceeds therefrom (see "Use of Proceeds"). The components of the table are: (i) Asarco -- historical financial information at December 31, 1994; (ii) Pro Forma Consolidation -- consolidation of Asarco and SPCC giving effect to the purchase of 10.7% of the outstanding common stock of SPCC; and (iii) As Adjusted Pro Forma Consolidation -- consolidation of Asarco and SPCC giving effect to the sale of the Debentures.
AS ADJUSTED PRO PRO FORMA FORMA ASARCO CONSOLIDATION CONSOLIDATION -------- ------------- ------------- (DOLLARS IN MILLIONS) Short-term Debt Bank loans.......................................... $ 5.1 $ 5.1 $ 5.1 Current portion of long-term debt................... 13.3 17.2 17.2 -------- -------- -------- Total short-term debt....................... $ 18.4 $ 22.3 $ 22.3 ======= ======= ======= Long-term Debt Revolving credits, with interest rates averaging 6.5%............................................. $ 410.0 $ 526.4 $ 377.5 $115 million credit facility, term loans maturing 1996 through 2001 at 8.5% interest............... -- 77.2 77.2 Other term financing due 1996 through 2001 with interest rates from 9.1% to 11.5%................ -- 36.9 36.9 Pollution control bonds, with interest rates from 6.8% to 8.9% due in varying amounts annually from 1996 through 2006............................................. 169.8 169.8 169.8 Capital lease obligations, with interest rates from 7.3% to 12.0% due from 1996 through 2006......... 84.9 84.9 84.9 7% Notes Due 2001................................... 50.0 50.0 50.0 7 3/8% Notes Due 2003............................... 99.4 99.4 99.4 7 7/8% Debentures Due 2013.......................... 99.7 99.7 99.7 8 1/2% Debentures Due 2025.......................... -- -- 148.9 Foreign and other Debt, with interest rates from 5.5% to 10.4%, due in varying amounts annually through 2000..................................... 0.8 0.8 0.8 -------- -------- -------- Total long-term debt, less current portion................................... 914.6 1,145.1 1,145.1 -------- -------- -------- Deferred Income Taxes (non-current)................... 156.5 162.7 162.7 -------- -------- -------- Minority Interest..................................... 2.4 316.8 316.8 -------- -------- -------- Stockholders' Equity Common stock........................................ 680.0 680.0 680.0 Unrealized gain on securities reported at fair value............................................ 91.6 91.6 91.6 Retained earnings................................... 853.2 853.2 853.2 Treasury stock, at cost............................. (107.4) (107.4) (107.4) -------- -------- -------- Total stockholders' equity.................. 1,517.4 1,517.4 1,517.4 -------- -------- -------- Total capitalization (a).................... $2,590.9 $3,142.0 $3,142.0 ======= ======= =======
- --------------- (a) Total capitalization is the sum of total long-term debt (less current portion), non-current deferred income taxes, minority interest and total stockholders' equity. S-6 7 SELECTED CONSOLIDATED FINANCIAL INFORMATION The selected consolidated financial information presented in the following table is qualified in its entirety by, and should be read in conjunction with, the Company's consolidated financial statements and related notes incorporated by reference in the Prospectus and herein. The selected consolidated financial information for each of the five years presented below has been derived from consolidated financial statements which have been audited by Coopers & Lybrand L.L.P.
AT OR FOR YEAR ENDED DECEMBER 31, ------------------------------------------------------------------ 1994 1993 1992 1991 1990 ---------- ---------- ---------- ---------- ---------- (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) INCOME STATEMENT DATA: Sales of products and services............. $2,031,846 $1,736,358 $1,908,492 $1,911,806 $2,210,280 Operating costs and expenses: Cost of products and services............ 1,781,141 1,637,959 1,647,263 1,634,198 1,810,705 Selling, administrative and other........ 79,136 88,249 90,631 107,883 95,531 Depreciation and depletion............... 83,097 80,641 86,642 74,869 75,093 Research and exploration................. 19,775 20,871 21,410 26,431 26,644 Provision for plant closures and disposals.............................. -- 13,156 31,900 -- -- Provision for environmental matters...... 51,205 6,241 72,400 7,305 75,527 ---------- ---------- ---------- ---------- ---------- Total operating costs and expenses..... 2,014,354 1,847,117 1,950,246 1,850,686 2,083,500 ---------- ---------- ---------- ---------- ---------- Operating income (loss).................... 17,492 (110,759) (41,754) 61,120 126,780 Interest expense........................... (62,529) (57,321) (51,230) (46,227) (38,038) Other income............................... 12,281 19,961 23,911 22,870 26,561 Gain from sale by Asarco Australia of capital stock............................ -- 3,270 -- -- -- Gain on sale of Asarco Australia........... 58,512 10,286 -- -- -- ---------- ---------- ---------- ---------- ---------- Earnings (loss) before taxes on income and equity earnings and cumulative effect of change in accounting principles.......... 25,756 (134,563) (69,073) 37,763 115,303 Taxes on income (benefit).................. 9,375 (36,503) (37,371) 2,199 15,910 ---------- ---------- ---------- ---------- ---------- Earnings (loss) before equity earnings and cumulative effect of change in accounting principles............................... 16,381 (98,060) (31,702) 35,564 99,393 Equity in earnings of non-consolidated associated companies, net of taxes on income................................... 47,653 27,384 2,575 10,393 36,451 ---------- ---------- ---------- ---------- ---------- Earnings (loss) before cumulative effect of change in accounting principles.......... 64,034 (70,676) (29,127) 45,957 135,844 Cumulative effect of change in accounting principles, net of taxes................. -- 86,295 (53,964) -- -- ---------- ---------- ---------- ---------- ---------- Net earnings (loss)........................ $ 64,034 $ 15,619 $ (83,091) $ 45,957 $ 135,844 ========== ========== ========== ========== ========== PER COMMON SHARE AMOUNTS: Earnings (loss) before cumulative effect of change in accounting principles.......... $ 1.53 $ (1.70) $ (0.70) $ 1.12 $ 3.28 Cumulative effect of change in accounting principles............................... -- 2.08 (1.31) -- -- ---------- ---------- ---------- ---------- ---------- Net earnings (loss)........................ $ 1.53 $ 0.38 $ (2.01) $ 1.12 $ 3.28 ========== ========== ========== ========== ========== Cash dividends per common share............ $ 0.40 $ 0.50 $ 0.80 $ 1.60 $ 1.60 BALANCE SHEET DATA: Cash and marketable securities............. $ 18,321 $ 12,500 $ 33,248 $ 35,210 $ 34,593 Working capital............................ 281,784 201,142 266,541 284,159 342,744 Total assets............................... 3,291,025 3,152,498 2,945,916 2,953,837 2,789,952 Total debt................................. 933,056 900,547 868,769 801,554 543,197 Common stockholders' equity................ 1,517,387 1,471,598 1,357,493 1,474,828 1,489,879
- --------------- Note: For notes to Selected Consolidated Financial Information, see the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994. S-7 8 DESCRIPTION OF DEBENTURES The following description of the particular terms of the Debentures offered hereby (referred to in the Prospectus as the "Offered Securities") supplements, and to the extent inconsistent therewith replaces, the description of the general terms and provisions of the Debt Securities set forth in the Prospectus, to which reference is hereby made. The Debentures are part of the Securities registered by the Company in October 1994 to be issued at an aggregate initial public offering price not to exceed $300,000,000 and on terms to be determined at the time of sale. The Debentures will be issued pursuant to an Indenture dated as of October 1, 1994. The Debentures will be limited to $150,000,000 aggregate principal amount and will mature on May 1, 2025. The Debentures will bear interest at 8 1/2% per annum from April 28, 1995, or from the most recent Interest Payment Date to which interest has been paid or provided for payable semiannually on May 1 and November 1 of each year, commencing on November 1, 1995 to the person in whose name the Debenture is registered at the close of business on April 15 or October 15, as the case may be, next preceding such Interest Payment Date. The Debentures will rank equally and ratably with all other unsecured and unsubordinated indebtedness of the Company. The Debentures will be issued only in fully registered form without coupons in denominations of $1,000 and integral multiples thereof. The Debentures will not be redeemable through the operation of any sinking fund. The Debentures are not redeemable at the option of the Company prior to maturity. UNDERWRITING Under the terms and subject to the conditions contained in an Underwriting Agreement (the "Underwriting Agreement") incorporated by reference in the Terms Agreement dated April 21, 1995, CS First Boston Corporation ("CS First Boston" or the "Underwriter") has agreed to purchase from the Company all of the Debentures. The Underwriting Agreement provides that the obligations of CS First Boston are subject to certain conditions precedent and that CS First Boston will be obligated to purchase all the Debentures, if any are purchased. The Company has been advised by CS First Boston that it proposes to offer the Debentures to the public initially at the public offering price set forth on the cover page of this Prospectus Supplement and to certain dealers at such price less a concession of .50% of the principal amount per Debenture and CS First Boston and such dealers may allow a discount of .25% of such principal amount per Debenture on sales to certain other dealers. After the initial public offering, the public offering price and concession and discount to dealers may be changed by CS First Boston. The Debentures are a new issue of securities with no established trading market. CS First Boston has advised the Company that it intends to act as a market maker for the Debentures. However, CS First Boston is not obligated to do so and may discontinue any market making at any time without notice. No assurance can be given as to the liquidity of the trading market for the Debentures. The Company has agreed to indemnify CS First Boston against certain liabilities, including civil liabilities under the Securities Act of 1933, or contribute to payments which CS First Boston may be required to make in respect thereof. In the ordinary course of its business, CS First Boston has engaged, and may engage in the future, in investment banking and commercial banking transactions with the Company for which it has received, and may receive in the future, customary fees. CS First Boston Limited and Credit Suisse, affiliates of CS First Boston, are the agent and a lender, respectively, under one of the Company's revolving bank credit agreements. S-8 9 LEGAL MATTERS The validity of the issuance of the Debentures offered hereby will be passed upon for the Company by White & Case, New York, New York, and certain legal matters will be passed upon by Augustus B. Kinsolving, General Counsel of the Company, and for the Underwriter by Cravath, Swaine & Moore, New York, New York. Cravath, Swaine & Moore has, from time to time, performed services for the Company. NOTICE TO CANADIAN RESIDENTS RESALE RESTRICTIONS The distribution of the Debentures in Canada is being made only on a private placement basis exempt from the requirement that the Company prepare and file a prospectus with the securities regulatory authorities in each province where trades of Debentures are effected. Accordingly, any resale of the Debentures in Canada must be made in accordance with applicable securities laws which will vary depending on the relevant jurisdiction, and which may require resales to be made in accordance with available statutory exemptions or pursuant to a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the Debentures. REPRESENTATIONS OF PURCHASERS Each purchaser of Debentures in Canada who receives a purchase confirmation will be deemed to represent to the Company and the dealer from whom such purchase confirmation is received that (i) such purchaser is entitled under applicable provincial securities laws to purchase such Debentures without the benefit of a prospectus qualified under such securities laws, (ii) where required by law, that such purchaser is purchasing as principal and not as agent, and (iii) such purchaser has reviewed the text above under "Resale Restrictions". RIGHTS OF ACTION AND ENFORCEMENT The securities being offered are those of a foreign issuer and Ontario purchasers will not receive the contractual right of action prescribed by section 32 of the Regulation under the Securities Act (Ontario). As a result, Ontario purchasers must rely on other remedies that may be available, including common law rights of action for damages or rescission or rights of action under the civil liability provisions of the U.S. federal securities laws. All of the issuer's directors and officers as well as the experts named herein may be located outside of Canada and, as a result, it may not be possible for Ontario purchasers to effect service of process within Canada upon the issuer or such persons. All or a substantial portion of the assets of the issuer and such persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against the issuer or such persons in Canada or to enforce a judgment obtained in Canadian courts against such issuer or persons outside of Canada. NOTICE TO BRITISH COLUMBIA RESIDENTS A purchaser of Debentures to whom the Securities Act (British Columbia) applies is advised that such purchaser is required to file with the British Columbia Securities Commission a report within ten days of the sale of any Debentures acquired by such purchaser pursuant to this offering. Such report must be in the form attached to British Columbia Securities Commission Blanket Order BOR #88/5, a copy of which may be obtained from the Company. Only one such report must be filed in respect of Debentures acquired on the same date and under the same prospectus exemption. S-9 10 PROSPECTUS ASARCO Incorporated Debt Securities Convertible Debt Securities Common Stock Preferred Stock Depositary Shares Convertible Preferred Stock Warrants ----------------------- ASARCO Incorporated ("Asarco" or the "Company") may from time to time offer, together or separately, (i) its debt securities consisting of debentures, notes or other unsecured evidences of indebtedness (the "Debt Securities"); (ii) its convertible debt securities (the "Convertible Debt Securities"), consisting of debentures, notes or other evidences of indebtedness representing unsecured obligations of the Company convertible into common stock, without par value (the "Common Stock") or into Preferred Stock, without par value (the "Preferred Stock") of the Company; (iii) shares of its Preferred Stock, which may be represented by Depository Receipts (the "Depositary Shares") which will represent a fraction of a share of Preferred Stock; (iv) shares of its Preferred Stock convertible into Common Stock or another series of Preferred Stock (the "Convertible Preferred Stock"), which may be represented by Depositary Shares; and (v) warrants to purchase securities of the Company as shall be designated by the Company at the time of the offering (the "Warrants"), in each case, in amounts, at prices and on terms to be determined at the time of the offering. Both the Company and M.I.M. Holdings Limited ("MIM" or the "Selling Stockholder") may also offer and sell from time to time shares of the Common Stock. The Common Stock, the Debt Securities, the Convertible Debt Securities, the Preferred Stock, the Convertible Preferred Stock, the Depositary Shares and the Warrants are collectively called the "Securities." The aggregate initial offering price of the Securities offered by the Company hereby will not exceed $300,000,000 or its equivalent in any other currency or composite currency determined at the applicable exchange rate at the time of sale, and the number of shares of Common Stock offered by the Selling Stockholder hereby will not exceed 10,353,363. The Company will not receive any of the proceeds from the sale of shares by the Selling Stockholder. For each offering of Securities for which this Prospectus is being delivered, there will be an accompanying Prospectus Supplement (the "Prospectus Supplement"), which sets forth, where applicable, (i) in the case of Debt Securities and Convertible Debt Securities, the specific designation, aggregate principal amount, the denomination, maturity, premium, if any, the rate (which may be fixed or variable), time and method of calculating payment of interest, if any, on such Debt Securities or Convertible Debt Securities, any terms of redemption at the option of the Company or the holder, terms for sinking fund payments, and with respect to Convertible Debt Securities, terms for conversion into Common Stock or Preferred Stock; (ii) in the case of Preferred Stock or Convertible Preferred Stock, the specific title and stated value, any dividend, liquidation, redemption, voting and other rights, and any other special terms, including the terms of any Depositary Shares representing Preferred Stock and terms for converting Convertible Preferred Stock into other Securities; (iii) in the case of Common Stock, the number of shares of Common Stock and the terms of offering thereof; and (iv) in the case of Warrants, the designation and number, the exercise price, any listing of the Warrants or the underlying Securities on a securities exchange and any other terms in connection with the offering, sale and exercise of the Warrants. If so specified in the applicable Prospectus Supplement, Debt Securities and Convertible Debt Securities of a series may be issued in whole or in part in the form of one or more temporary or permanent global securities. The Prospectus Supplement will also contain information, as applicable, about certain United States Federal income tax considerations relating to the particular Securities offered thereby. The Company and the Selling Stockholder may sell the Securities to or through underwriters, through dealers or agents or directly to purchasers. See "Plan of Distribution." The accompanying Prospectus Supplement will set forth the names of any underwriters, dealers or agents involved in the sale of the Securities in respect of which this Prospectus is being delivered, the amounts proposed to be purchased by them, any applicable fee, commission or discount arrangements with them, the initial public offering price and the net proceeds to the Company or the Selling Stockholder. The Common Stock is listed on the New York Stock Exchange under the symbol "AR." Any shares of Common Stock sold pursuant to a Prospectus Supplement will be listed on such exchange, subject to an official notice of issuance. ------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is October 25, 1994. 11 AVAILABLE INFORMATION Asarco is subject to the informational 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 can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and the following regional offices of the Commission: New York regional office, Seven World Trade Center, 13th Floor, New York, New York 10048; and Midwest regional office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can be obtained at prescribed rates by writing to the Commission, Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549. Such material can also be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. This Prospectus constitutes part of a Registration Statement filed by Asarco with the Commission under the Securities Act of 1933, as amended (the "Act"). This Prospectus omits certain of the information contained in the Registration Statement, and reference is hereby made to the Registration Statement and to the exhibits relating thereto for further information with respect to the Company and the Securities offered hereby. Any statements contained herein concerning the provisions of any document are not necessarily complete, and, in each instance, reference is made to the copy of such document filed as an exhibit to the Registration Statement or otherwise filed with the Commission. Each such statement is qualified in its entirety by such reference. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE There are hereby incorporated by reference in this Prospectus the Company's (i) Annual Report on Form 10-K for the fiscal year ended December 31, 1993, as amended on June 29, 1994 to include the Company's Report on Form 11-K, (ii) quarterly Reports on Form 10-Q for the quarters ended March 31, and June 30, 1994, (iii) Proxy Statement for the Annual Meeting of Stockholders on April 27, 1994 (filed with the Commission on March 18, 1994) and (iv) Current Report on Form 8-K dated September 30, 1994 heretofore filed by the Company (Commission File Number 1-164) with the Commission pursuant to the Exchange Act. All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the offering of the Securities offered hereby shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. Asarco will provide without charge to each person to whom a copy of this Prospectus has been delivered, on the request of any such person, a copy of any or all of the documents referred to above which have been or may be incorporated in this Prospectus by reference, other than exhibits to such documents (unless such exhibits are specifically incorporated by reference into such document). Requests for such copies should be directed to Mr. Augustus B. Kinsolving, Vice President, General Counsel and Secretary, ASARCO Incorporated, 180 Maiden Lane, New York, New York 10038, Telephone: (212) 510-2000. ------------------------------------ NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER OR AGENT. THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF AND THEREOF. 2 12 THE COMPANY Asarco is one of the world's leading producers of nonferrous metals. The principal metals Asarco produces are copper, lead, zinc, silver and gold. Asarco also produces specialty chemicals and minerals and provides environmental services. Asarco has substantial equity interests in three mining companies: 15.5% in M.I.M. Holdings Limited ("MIM"), 52.3% in Southern Peru Copper Corporation ("SPCC") and 23.6% in Grupo Mexico, S.A. de C.V. ("GMEXICO"). Such companies are referred to herein as "associated companies." Asarco's strategy since the mid-1980s has been to transform the Company into an integrated producer of copper and lead. Once principally a custom smelter and refiner of ores and concentrates produced by others, Asarco has evolved during the last decade into one of the world's largest integrated producers of nonferrous metals. In 1985, Asarco supplied less than 25% of its copper concentrate requirements for its copper smelters and 5% of its lead concentrate requirements for its Missouri lead smelter; in 1991 Asarco supplied to these smelters approximately 76% of its copper concentrate and 80% of its lead concentrate requirements. With the completion of Asarco's expansion programs in 1993, the Company is now able to supply all of its copper concentrate and 95% of its lead concentrate requirements. Since 1988 Asarco has also expanded its specialty chemicals business both by growth of its existing operations and by acquisition, has expanded its minerals business by acquisition and has entered the hazardous waste management and waste recycling business. Asarco or its associated companies operate mines, smelters and refineries in the United States, Australia, Mexico and Peru. Asarco and its associated companies together in 1993 accounted for about 13% of the western world mine production of copper, 22% of lead, 13% of zinc and 13% of silver. The executive offices of Asarco, a New Jersey corporation organized in 1899, are located at 180 Maiden Lane, New York, New York 10038, telephone number (212) 510-2000. USE OF PROCEEDS Unless otherwise set forth in the applicable Prospectus Supplement, Asarco intends to use the net proceeds from the sale of the Securities for general corporate purposes, which may include refinancings of indebtedness, working capital, capital expenditures and acquisitions. The Company will not receive any of the proceeds from the sale of shares of Common Stock by the Selling Stockholder. CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES AND COMBINED FIXED CHARGES AND PREFERRED SHARE DIVIDEND REQUIREMENTS
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED ---------------------------------------- JUNE 30, 1994 1993 1992 1991 1990 1989 ---------------- ---- ---- ---- ---- ---- 2.1 (a) (a) 1.5 3.5 8.2
- --------------- (a) For the years 1992 and 1993, earnings were insufficient to cover fixed charges by $73.9 million and $135.3 million, respectively. The ratio of earnings to fixed charges was calculated based on information from the Company's books and records. In computing the ratio of earnings to fixed charges, earnings consist of net earnings of the Company and its consolidated subsidiaries plus taxes on income and fixed charges, plus dividends received from non-consolidated associated companies accounted for by the equity method, less interest capitalized net of amount amortized and less equity earnings of non-consolidated associated companies accounted for by the equity method. Fixed charges consist of interest costs on borrowed funds, including capitalized interest, commitment fees, and a reasonable approximation of the imputed interest on non-capitalized lease payments. There were no preferred shares outstanding during any of the periods indicated and therefore the ratio of earnings to combined fixed charges and preferred share dividend requirements would have been the same as the ratio of earnings to fixed charges for each period indicated. 3 13 SELLING STOCKHOLDER The following table sets forth certain information with respect to MIM's beneficial ownership of Common Stock, as adjusted to reflect the sale by MIM of the 10,353,363 shares owned by MIM and registered for possible sale hereby. The Common Stock is the only class of equity securities of the Company which is currently outstanding.
SHARES BENEFICIALLY SHARES BENEFICIALLY OWNED IF ALL OWNED PRIOR TO REGISTERED OFFERING NUMBER OF SHARES ARE SOLD --------------------- SHARES BEING -------------------- SELLING STOCKHOLDER(1) NUMBER PERCENT REGISTERED FOR SALE NUMBER PERCENT - ------------------------------- --------- ------- ------------------- -------- ------- M.I.M. Holdings Limited........ 10,353,363 24.6 10,353,363 -0- -0-
- --------------- (1) The address of MIM is M.I.M. Plaza, 410 Ann Street, Brisbane, Queensland 4000, Australia. MIM's decision, subject to market conditions, to sell shares of Asarco is pursuant to a strategy of concentrating on core businesses over which it has direct control and which are low cost producers of the core products of those businesses. The following is a summary description of a 1981 agreement, as amended in 1985, 1987, 1990 and 1993, between MIM and Asarco (the "Agreement"). This summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the provisions of the Agreement. A copy of the Agreement, including the amendments thereto, are exhibits to the Company's Form 10-Q for the second quarter 1981, Form 8-K dated September 30, 1985, Form 8-K filed on September 30, 1987, Form 8-K filed on September 24, 1990 and Form 8-K filed on July 15, 1993. Under the Agreement, MIM has the right to require the Company, under certain conditions, to register under the Act 1,000,000 or more of the shares of the Company's Common Stock it owns should MIM wish to sell such shares. Under the Agreement, with respect to 4,938,400 shares of Asarco Common Stock held by MIM, MIM must provide Asarco with prior written notice of any proposed sale or transfer of 1,000,000 or more shares in a single transaction, a group of related transactions or pursuant to a program of transactions, unless such proposed sale or transfer is pursuant to an underwritten public offering or to a subsidiary of MIM. Asarco has the right to purchase all of the shares set forth in such notice at the price set forth in such notice for 90 days after receipt by Asarco of such notice. Asarco also has agreed to give MIM prior notice of any registered public offering by Asarco of its Common Stock for cash and to include at MIM's request (at MIM's pro rata expense) any shares of the Company's Common Stock owned by MIM in such offering unless including such shares would, in the opinion of the underwriter, raise a substantial question as to whether the proposed offering could be successfully consummated on terms reasonably acceptable to Asarco. The provisions of the Agreement with respect to Asarco's right of first refusal expire on a date designated by either party by twelve months' prior notice (the "Expiration Date"). Under the Agreement, MIM has the right to designate two nominees to Asarco's Board of Directors so long as MIM owns more than 6,500,000 shares of Asarco's Common Stock, adjusted for stock dividends or stock splits, and so long as such ownership constitutes more than 10% of Asarco's Common Stock. Pursuant to the Agreement, Asarco's management has recommended to Asarco's Board of Directors that two nominees designated by MIM be included in the slate of nominees recommended by Asarco's Board of Directors to shareholders for election as directors. Currently Norman C. Fussell and Peter R. Rowland, the Managing Director and a director of MIM, respectively, are directors of Asarco. Asarco has the right to nominate two persons for election to MIM's Board of Directors so long as Asarco's ownership exceeds 241,718,641 MIM common shares, which shall be adjusted for stock dividends, stock splits and rights offers and so long as such ownership constitutes more than 10% of MIM's outstanding common shares. Asarco now owns sufficient MIM shares to have the right to nominate two directors of MIM but does not currently intend to exercise this right. In the Agreement, MIM agreed, subject to certain exceptions, to limit its beneficial ownership of Asarco's Common Stock to 33 1/3% of the outstanding shares of Common Stock until the Expiration Date and Asarco agreed to limit its ownership of MIM's common shares to 40% for the same period. 4 14 Also, under the Agreement, MIM and Asarco have agreed not to authorize or otherwise amend their organizational documents to provide for the authorization of, or issue of, voting securities which would adversely affect in a discriminatory manner the voting rights of the other party so long as the party in whose benefit such covenant runs owns 10% of the voting securities of the other party. The Agreement provides that MIM and Asarco will, prior to any sale, exchange, transfer or other disposition of any shares of the other party owned by MIM or Asarco, as the case may be, meet to consult and discuss in good faith for a period of (except in certain circumstances) no less than 30 days the effects of such proposed disposition. DESCRIPTION OF COMMON STOCK The Company has authorized 80 million shares of Common Stock, without par value, of which 41,946,555 shares were issued and outstanding as of August 31, 1994. The shares of Common Stock currently outstanding are, and the shares of Common Stock that may be offered hereby will be, fully paid and non-assessable. Each holder of Common Stock is entitled to one vote for each share owned of record on all matters voted upon by stockholders, and a majority vote is required for all action to be taken by stockholders except for certain transactions with interested shareholders, for which a vote of 80% of outstanding shares is required for approval. In the event of a liquidation, dissolution or winding-up of the Company, the holders of Common Stock are entitled to share equally and ratably in the assets of the Company, if any, remaining after the payment of all debts and liabilities of the Company and the liquidation preference of any outstanding Preferred Stock. The holders of the Common Stock have no preemptive rights or cumulative voting rights and there are no redemption, sinking fund or conversion provisions applicable to the Common Stock. Holders of Common Stock are entitled to receive dividends if, as and when declared by the Board of Directors out of funds legally available for such purpose, subject to the dividend and liquidation rights of any Preferred Stock that may be issued. In 1989, the Company adopted a Shareholder Rights Plan and declared a dividend of one right (as defined therein) for each share of its Common Stock. In certain circumstances, if a person or group becomes the beneficial owner of 15% or more of the outstanding Common Stock (or in the case of MIM, more than 33 1/3%), with certain exceptions, these rights vest and entitle the holder to certain share purchase rights. In connection with the Rights dividend, 800,000 shares of Junior Participating Preferred Stock were authorized for issuance upon exercise of the Rights. See "Description of Preferred Share Purchase Rights". DESCRIPTION OF PREFERRED STOCK The following summary contains a description of certain general terms of the Company's Preferred Stock to which any Prospectus Supplement may relate. Certain terms of any series of Preferred Stock that may be offered by any Prospectus Supplement will be described in the Prospectus Supplement relating thereto. If so indicated in the Prospectus Supplement, the terms of any series may differ from the terms set forth below. The description of certain provisions of the Company's Preferred Stock does not purport to be complete and is subject to and qualified in its entirety by reference to the provisions of the Company's Restated Certificate of Incorporation, as amended (the "Certificate"), and the Certificate of Designation (the "Certificate of Designation") relating to each particular series of Preferred Stock which will be filed or incorporated by reference, as the case may be, as an exhibit to the Registration Statement of which this Prospectus is a part at or prior to the time of the issuance of such Preferred Stock. GENERAL Under the Certificate, the Board of Directors of the Company is authorized, without further stockholder action to provide for the issuance of up to 10 million shares of Preferred Stock. As of September 30, 1994, no shares of Preferred Stock were issued or outstanding. The Preferred Stock may be issued in one or more series, with such designations or titles; dividend rates; any redemption provisions; special or relative rights in the event of liquidation, dissolution, distribution or 5 15 winding up of the Company; any sinking fund provisions; any conversion provisions; any voting rights thereof; and any other preferences, privileges, powers, rights, qualifications, limitations and restrictions, as shall be set forth as and when established by the Board of Directors of the Company. The shares of any series of Preferred Stock will be, when issued, fully paid and non-assessable and holders thereof will have no preemptive rights in connection therewith. The liquidation preference of any series of Preferred Stock is not necessarily indicative of the price at which shares of such series of Preferred Stock will actually trade at or after the time of their issuance. The market price of any series of Preferred Stock can be expected to fluctuate with changes in market and economic conditions, the financial condition and prospects of the Company and other factors that generally influence the market price of securities. RANK Any series of Preferred Stock will, with respect to rights on liquidation, winding up and dissolution, rank (i) senior to all classes of Common Stock and to all equity securities issued by the Company, the terms of which specifically provide that such equity securities will rank junior to such series of Preferred Stock (the "Junior Liquidation Securities"); (ii) on a parity with all equity securities issued by the Company, the terms of which specifically provide that such equity securities will rank on a parity with such series of Preferred Stock ("Parity Liquidation Securities"); and (iii) junior to all equity securities issued by the Company, the terms of which specifically provide that such equity securities will rank senior to such series of Preferred Stock (the "Senior Liquidation Securities"). In addition, any series of Preferred Stock will, with respect to dividend rights, rank (i) senior to all equity securities issued by the Company, the terms of which specifically provide that such equity securities will rank junior to such series of Preferred Stock and, to the extent provided in the applicable Certificate of Designation, to Common Stock; (ii) on a parity with all equity securities issued by the Company, the terms of which specifically provide that such equity securities will rank on a parity with such series of Preferred Stock and, to the extent provided in the applicable Certificate of Designation, to Common Stock ("Parity Dividend Securities"); and (iii) junior to all equity securities issued by the Company, the terms of which specifically provide that such equity securities will rank senior to such series of Preferred Stock. As used in any Certificate of Designation for these purposes, the term "equity securities" will not include debt securities convertible into or exchangeable for equity securities. DIVIDENDS Holders of each series of Preferred Stock will be entitled to receive, when, as and if declared by the Board of Directors of the Company out of funds legally available therefor, cash dividends at such rates and on such dates as are set forth in the Prospectus Supplement relating to such series of Preferred Stock. Dividends will be payable to holders of record of Preferred Stock as they appear on the books of the Company (or, if applicable, the records of the Depositary referred to below under "Description of Depositary Shares") on such record dates as shall be fixed by the Board of Directors. Dividends on any series of Preferred Stock may be cumulative or non-cumulative. No full dividends may be declared or paid out of funds set apart for the payment of dividends on any series of Preferred Stock unless dividends shall have been paid or set apart for such payment on the Parity Dividend Securities. If full dividends are not so paid, such series of Preferred Stock shall share dividends pro rata with the Parity Dividend Securities. CONVERSION AND EXCHANGE The Prospectus Supplement for any series of Preferred Stock will state the terms, if any, on which shares of that series are convertible into shares of another series of Preferred Stock or Common Stock or exchangeable for another series of Preferred Stock, Common Stock or Debt Securities of the Company. The Common Stock of the Company is described above under "Description of Common Stock." 6 16 REDEMPTION A series of Preferred Stock may be redeemable at any time, in whole or in part, at the option of the Company or the holder thereof and may be subject to mandatory redemption pursuant to a sinking fund or otherwise upon terms and at the redemption prices set forth in the Prospectus Supplement relating to such series. In the event of partial redemptions of Preferred Stock, whether by mandatory or optional redemption, the shares to be redeemed will be determined by lot or pro rata, as may be determined by the Board of Directors of the Company, or by any other method determined to be equitable by the Board of Directors. On and after a redemption date, unless the Company defaults in the payment of the redemption price, dividends will cease to accrue on shares of Preferred Stock called for redemption and all rights of holders of such shares will terminate except for the right to receive the redemption price. LIQUIDATION PREFERENCE Upon any voluntary or involuntary liquidation, dissolution or winding up of the Company, holders of each series of Preferred Stock that ranks senior to the Junior Liquidation Securities will be entitled to receive out of assets of the Company available for distribution to shareholders, before any distribution is made on any Junior Liquidation Securities, including Common Stock, distributions upon liquidation in the amount set forth in the Prospectus Supplement relating to such series of Preferred Stock. If the holders of the Preferred Stock of any series and any other Parity Liquidation Securities are not paid in full, the holders of the Preferred Stock of such series and the Parity Liquidation Securities will share ratably in any such distribution of assets of the Company in proportion to the full liquidation preferences to which each is entitled. After payment of the full amount of the liquidation preference to which they are entitled, the holders of such series of Preferred Stock will not be entitled to any further participation in any distribution of assets of the Company. VOTING RIGHTS Except as indicated in the Prospectus Supplement relating to a particular series of Preferred Stock or except as expressly required by applicable law or the Company's Certificate, the holders of shares of Preferred Stock will have no voting rights. DESCRIPTION OF PREFERRED SHARE PURCHASE RIGHTS In 1989, the Company adopted a Shareholder Rights Plan (the "Rights Plan") and declared a dividend of one Preferred Share Purchase Right (a "Right") for each outstanding share of Common Stock held of record at the close of business on August 7, 1989. Each Right entitles the registered holder, upon the occurrence of certain events, to purchase from the Company a unit consisting of one one-hundredth of a share (a "Unit") of Junior Participating Preferred Stock, without par value, at a purchase price of $90 per Unit. As distributed, the Rights will be attached to and will trade together with the Common Stock. They may be exercised or traded separately only after the earlier to occur of: (i) 10 days following a public announcement that a person or group of persons has obtained the right to acquire beneficial ownership of 15% or more of the outstanding Common Stock, or (ii) 10 business days (or such later date as the Board of Directors may determine) following the commencement of a tender offer or exchange offer that would result in a person or group of persons beneficially owning 15% or more of the outstanding Common Stock. In the event that a person or group of persons acquires 15% or more of the outstanding Common Stock (with certain exceptions), each right will thereafter vest and entitle the holder to receive, upon exercise of the Right, Common Stock having a value equal to two times the exercise price of that Right. Additionally, if the Company is acquired in a merger or other business combination, or 50% or more of the Company's assets or earning power is sold or transferred, each Right shall thereafter have the right to receive, upon exercise, common stock of the acquiring company having a value equal to two times the exercise price of that Right. 7 17 In connection with the Rights Plan, 800,000 shares of Junior Participating Preferred Stock were authorized for issuance upon exercise of the Rights. The Company may redeem the Rights at a price of $.01 per Right at any time until ten days following the date a person or group of persons acquires 15% of the Company's outstanding Common Stock. The Company may amend the Rights (other than the basic economic terms of the Rights) at any time without shareholder approval. The Rights will expire by their terms on August 7, 1999. Under the Rights Plan, MIM will not be deemed an acquiring person unless and until it becomes the beneficial owner of more than 33 1/3% of the shares of outstanding Common Stock. The existence of the Rights Plan and the Rights may, under certain circumstances discourage, delay or prevent a change in control of the Company. DESCRIPTION OF DEPOSITARY SHARES The description set forth below of certain provisions of the Deposit Agreement (as defined below) and of the Depositary Shares and Depositary Receipts (as defined below) does not purport to be complete and is subject to and qualified in its entirety by reference to the forms of Deposit Agreement and Deposit Receipt, included as exhibits to the Registration Statement of which this Prospectus is a part. GENERAL The Company may, at its option, elect to offer fractional shares of Preferred Stock, rather than full shares of Preferred Stock. In the event the Company so elects, the Depositary will issue receipts for Depositary Shares, each of which will represent a fraction (to be set forth in the Prospectus Supplement relating to a particular series of Preferred Stock) of a share of a particular series of Preferred Stock as described below. The shares of any series of Preferred Stock represented by Depositary Shares will be deposited under a Deposit Agreement (the "Deposit Agreement") between the Company and a depositary that is a bank or trust company having its principal offices in the United States and having a combined capital surplus of at least $50,000,000 (the "Depositary"). Subject to the terms of the Deposit Agreement, each owner of a Depositary Share will be entitled, in proportion to the applicable fraction of a share of Preferred Stock represented by such Depositary Share, to all the rights and preferences of the Preferred Stock represented thereby (including dividend, voting, redemption, conversion and liquidation rights). The Depositary Shares will be evidenced by depositary receipts issued pursuant to the Deposit Agreement (the "Depositary Receipts"). The Depositary Receipts will be distributed to those persons purchasing the fractional shares of Preferred Stock in accordance with the terms of the offering. Pending the preparation of definitive Depositary Receipts, the Depositary shall, upon the written order of the Company or any holder of deposited Preferred Stock, execute and deliver temporary Depositary Receipts which are substantially identical to, and entitle the holders thereof to all the rights pertaining to, the definitive Depositary Receipts. Depositary Receipts will be prepared thereafter without unreasonable delay, and temporary Depositary Receipts will be exchangeable for definitive Depositary Receipts at the Company's expense. DIVIDENDS AND OTHER DISTRIBUTIONS The Depositary will distribute all cash dividends or other cash distributions received in respect of the deposited Preferred Stock to the record holders of the Depositary Shares relating to such Preferred Stock in proportion to the numbers of such Depositary Shares owned by such holders. In the event of a distribution other than in cash, the Depositary will distribute property received by it to the record holders of Depositary Shares entitled thereto. If the Depositary determines that it is not feasible to make such distribution, it may, with the approval of the Company, sell such property and distribute the net proceeds from such sale to such holders. 8 18 REDEMPTION OF STOCK If a series of Preferred Stock represented by Depositary Shares is to be redeemed, the Depositary Shares will be redeemed from the proceeds received by the Depositary resulting from the redemption, in whole or in part, of such series of Preferred Stock held by the Depositary. The Depositary Shares will be redeemed by the Depositary at a price per Depositary Share equal to the applicable fraction of the redemption price per share payable in respect of the shares of Preferred Stock so redeemed. If fewer than all the Depositary Shares will be redeemed, the Depositary Shares to be redeemed will be selected by the Depositary by lot or pro rata or by any other equitable method as may be determined by the Depositary. VOTING DEPOSITED PREFERRED STOCK Upon receipt of notice of any meeting at which the holders of any series of deposited Preferred Stock are entitled to vote, the Depositary will mail the information contained in such notice of meeting to the record holders of the Depositary Shares relating to such series of Preferred Stock. Each record holder of such Depositary Shares on the record date (which will be the same date as the record date for the relevant series of Preferred Stock) will be entitled to instruct the Depositary as to the exercise of the voting rights pertaining to the amount of the Preferred Stock represented by such holder's Depositary Shares. The Depositary will endeavor, insofar as practicable, to vote the amount of such series of Preferred Stock represented by such Depositary Shares in accordance with such instructions, and the Company will agree to take all reasonable actions that may be deemed necessary by the Depositary in order to enable the Depositary to do so. The Depositary will abstain from voting shares of the Preferred Stock to the extent it does not receive specific instructions from the holder of Depositary Shares representing such Preferred Stock. AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT The form of the Depositary Receipt evidencing the Depositary Shares and any provision of the Deposit Agreement may at any time be amended by agreement between the Company and the Depositary. However, any amendment which materially prejudices any substantially existing right of the holders of the Depositary Shares representing Preferred Stock of any series will not be effective unless such amendment has been approved by the record holders of a majority of the Depositary Shares then outstanding. Every holder of an outstanding Depositary Receipt at the time any such amendment becomes effective shall be deemed, by continuing to hold such Depositary Receipt to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. The Deposit Agreement may be terminated by the Company or by the Depositary only after (i) all outstanding Depositary Shares have been redeemed; or (ii) each share of Preferred Stock has been converted into other Preferred Stock or Common Stock or has been exchanged for Debt Securities; or (iii) there has been a final distribution in respect of the Preferred Stock in connection with any liquidation, dissolution or winding up of the Company and such distribution has been distributed to the holders of Depositary Shares. CHARGES OF DEPOSITARY The Company will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. The Company will pay all charges of the Depositary in connection with the initial deposit of the relevant series of Preferred Stock and any redemption of such Preferred Stock. Holders of Depositary Receipts will pay other transfer and other taxes and governmental charges and such other charges or expenses as are expressly provided in the Deposit Agreement to be for their accounts. RESIGNATION AND REMOVAL OF DEPOSITARY The Depositary may resign at any time by delivering to the Company notice of its election to do so, and the Company may at any time remove the Depositary, any such resignation or removal to take effect upon the appointment of a successor Depositary and its acceptance of such appointment. Such successor Depositary must be appointed within 60 days after delivery of the notice of resignation or removal and must be a bank or 9 19 trust company having its principal office in the United States and having a combined capital and surplus of at least $50,000,000. MISCELLANEOUS The Depositary will forward all reports and communications from the Company that are delivered to the Depositary and that the Company is required to furnish to the holders of the deposited Preferred Stock. Neither the Depositary nor the Company will be liable if it is prevented or delayed by law or any circumstances beyond its control in performing its obligations under the Deposit Agreement. The obligations of the Depositary under the Deposit Agreement will be limited to performance in good faith of their duties thereunder and they will not be obligated to prosecute or defend any legal proceeding in respect of any Depositary Shares, Depositary Receipts or shares of Preferred Stock unless satisfactory indemnity is furnished. They may rely upon written advice of counsel or accountants, or upon information provided by holders of Depositary Receipts or other persons believed to be competent and on documents believed to be genuine. DESCRIPTION OF DEBT SECURITIES The Debt Securities and the Convertible Debt Securities are to be issued under an Indenture dated as of October 1, 1994 (the "Indenture"), between the Company and Chemical Bank, as Trustee (the "Trustee"). The following summary statements with respect to the Debt Securities and the Convertible Debt Securities do not purport to be complete and are subject to, and are qualified in their entirety by reference to, the detailed provisions of the Indenture, the form of which is filed as an exhibit to the Registration Statement of which this Prospectus is a part. Capitalized terms are defined in the Indenture unless otherwise defined herein. Whenever any particular section of the Indenture or any term defined therein is referred to, such section or definition is incorporated herein by reference. GENERAL The Debt Securities and the Convertible Debt Securities offered hereby will be limited to an aggregate initial offering price not to exceed U.S. $300,000,000 or its equivalent in any other currency or composite currency, determined at the applicable exchange rate at the time of sale. The Indenture does not limit the amount of Debt Securities or Convertible Debt Securities which can be issued thereunder and provides that additional Debt Securities or Convertible Debt Securities may be issued in one or more series thereunder up to the aggregate principal amount which may be authorized from time to time by the Company's Board of Directors. The Debt Securities will be unsecured senior obligations of the Company and will rank equally and ratably with all other unsecured unsubordinated indebtedness of the Company. The Convertible Debt Securities may be subordinated to the Senior Indebtedness. Reference is made to the Prospectus Supplement relating to the particular Debt Securities or Convertible Debt Securities offered thereby for the following terms, where applicable, of the Debt Securities or Convertible Debt Securities: (i) the specific designation of the Debt Securities or Convertible Debt Securities; (ii) the denominations in which such Debt Securities or Convertible Debt Securities are authorized to be issued; (iii) the aggregate principal amount of such Debt Securities or Convertible Debt Securities; (iv) the date or dates on which the principal of such Debt Securities or Convertible Debt Securities will mature or the method of determining such date or dates; (v) the price or prices (expressed as a percentage of the aggregate principal amount thereof) at which the Debt Securities or Convertible Debt Securities will be issued; (vi) the rate or rates (which may be fixed or variable) at which such Debt Securities or Convertible Debt Securities will bear interest, if any, or the method of calculating such rate or rates; (vii) the times and places where principal of, premium, if any, and interest, if any, on such Debt Securities or Convertible Debt Securities will be payable; (viii) the date, if any, after which such Debt Securities or Convertible Debt Securities may be redeemed and the redemption prices; (ix) the date or dates on which interest, if any, will be payable and the record date or dates therefor or the method by which such date or dates will be determined; (x) the period or periods within which, the price or prices at which, the currency or currencies (including currency units) in which, and the terms and conditions upon which, such Debt Securities or Convertible Debt Securities may be 10 20 redeemed, in whole or in part, at the option of the Company; (xi) the obligation, if any of the Company to redeem or purchase such Debt Securities or Convertible Debt Securities pursuant to any sinking fund or analogous provisions, upon the happening of a specified event or at the option of a holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which, such Debt Securities or Convertible Debt Securities shall be redeemed or purchased, in whole or in part, pursuant to such obligations; (xii) the terms and conditions upon which conversion of such Convertible Debt Securities will be effected, including the conversion price, the conversion period and other conversion provisions in addition to or in lieu of those described below; (xiii) the currency or currency units for which such Debt Securities or Convertible Debt Securities may be purchased or in which such Debt Securities or Convertible Debt Securities may be denominated and/or the currency or currency units in which principal of, premium, if any, and/or interest, if any, on such Debt Securities or Convertible Debt Securities will be payable and whether the Company or the holders of any such Debt Securities or Convertible Debt Securities may elect to receive payments in respect of such Debt Securities or Convertible Debt Securities in a currency or currency units other than that in which such Debt Securities or Convertible Debt Securities are stated to be payable; (xiv) if other than the principal amount thereof, the portion of the principal amount of such Debt Securities or Convertible Debt Securities which will be payable upon declaration of the acceleration of the maturity thereof or the method by which such portion shall be determined; (xv) the person to whom any interest on any such Debt Security or Convertible Debt Security shall be payable if other than the person in whose name such Debt Security or Convertible Debt Security is registered on the applicable record date; (xvi) any addition to, or modification or deletion of, any Event of Default or any covenant of the Company specified in the Indenture with respect to such Debt Securities or Convertible Debt Securities; (xvii) the application, if any, of such means of defeasance or covenant defeasance as may be specified for such Debt Securities or Convertible Debt Securities; (xviii) whether such Debt Securities or Convertible Debt Securities are to be issued in whole or in part in the form of one or more temporary or permanent global securities and, if so, the identity of the depositary for such global security or securities; (xix) whether such Convertible Debt Securities shall be subordinated and subject to the right to prior payment in full of all Senior Indebtedness; and (xx) any other special terms pertaining to such Debt Securities or Convertible Debt Securities. Unless otherwise specified in the applicable Prospectus Supplement, the Debt Securities or Convertible Debt Securities will not be listed on any securities exchange. Unless otherwise provided in the applicable Prospectus Supplement, principal and premium, if any, or interest, if any, will be payable and the Debt Securities or Convertible Debt Securities may be surrendered for payment or transferred at the offices of the Trustee as paying and authenticating agent, provided that payment of interest on Registered Securities may be made at the option of the Company by check mailed to the address of the person entitled thereto as it appears in the Security Register. Payment of Debt Securities or Convertible Debt Securities in bearer form will be made at such paying agencies outside of the United States as the Company may appoint. (Sections 301 and 1002) Unless otherwise specified in the applicable Prospectus Supplement, the Debt Securities and Convertible Debt Securities will be issued in fully registered form without coupons in denominations set forth in the Prospectus Supplement. No service charge will be made for any transfer or exchange of such Debt Securities or Convertible Debt Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. (Section 305) Where Debt Securities and Convertible Debt Securities of any series are issued in bearer form, the special restrictions and considerations, including special offering restrictions and special Federal income tax considerations, applicable to any such Debt Securities or Convertible Debt Securities and to payment on and transfer and exchange of such Debt Securities or Convertible Debt Securities will be described in the Prospectus Supplement. Bearer Debt Securities and Convertible Debt Securities will be transferrable by delivery. (Section 305) Some of the Debt Securities and Convertible Debt Securities may be issued at a discount (bearing no interest or interest at below market rates) ("Discount Securities") to be sold at a substantial discount below their stated principal amount. Federal income tax consequences and other special considerations applicable to any such Debt Securities and Convertible Debt Securities or any Debt Securities and Convertible Debt Securities which are denominated in a currency or composite currency other than United States dollars will be described in the applicable Prospectus Supplement. 11 21 The Prospectus Supplement for a particular series may indicate terms for redemption at the option of a Holder. Unless otherwise indicated in the applicable Prospectus Supplement, the covenants contained in the Indenture and the Debt Securities or Convertible Debt Securities (as the case may be) would not provide for redemption at the option of a Holder nor necessarily afford Holders thereof protection in the event of a highly leveraged or other transaction that may adversely affect such Holders. RESTRICTIVE COVENANTS Definitions. "Subsidiary" is defined to mean a corporation whose accounts are consolidated with those of the Company in accordance with generally accepted accounting principles. (Section 101) "Significant Subsidiary" is defined to mean any Subsidiary of the Company which owns a Principal Property and any Subsidiary which owns directly or indirectly stock of a Significant Subsidiary. (Section 101) "Consolidated Net Tangible Assets" is defined to mean the aggregate amount of assets (less applicable reserves and other properly deductible items) after deducting (a) all current liabilities (excluding any thereof constituting Funded Debt by reason of being renewable or extendable) and (b) all goodwill, trade names, trademarks, patents, unamortized debt discount and expense, and other like intangibles, all as set forth on the most recent balance sheet of the Company and its consolidated Subsidiaries and computed in accordance with generally accepted accounting principles. (Section 101) "Funded Debt" is defined to mean all indebtedness for money borrowed having a maturity of more than 12 months from the date as of which the amount thereof is to be determined or having a maturity of less than 12 months but by its terms being renewable or extendable beyond 12 months from such date at the option of the borrower. (Section 101) "Principal Property" is defined to mean any smelters, refineries, mines, concentrators or other facilities, located within the present 50 states of the United States of America (other than its territories or possessions), owned by the Company or any Subsidiary and the gross book value of which (without deduction of any depreciation reserves) on the date as of which the determination is being made exceeds 3% of Consolidated Net Tangible Assets, other than any such facility or portion thereof which is pollution control or other equipment or facility financed by obligations issued by a State or local government unit and other than any smelters, refineries, mines, concentrators or facilities or any portions thereof which the Board of Directors of the Company declares by resolution are not of material importance to the total business conducted by the Company and its Subsidiaries as an entirety. (Section 101) "Nonrecourse Obligations" is defined to mean indebtedness or lease payment obligations substantially related to (i) the acquisition of assets not currently owned by the Company or any of its Significant Subsidiaries or (ii) the financing of the construction or improvement of equipment, mines or facilities involving the development of properties of the Company or any of its Significant Subsidiaries, as to which the obligee with respect to such indebtedness or obligation has no recourse to the general corporate funds or the assets, in general, of the Company or any of its Significant Subsidiaries. (Section 1004) "Debt" is defined to mean notes, bonds, debentures or other similar evidences of indebtedness for money borrowed. (Section 1004) "Attributable Debt" is defined to mean as to any particular Capitalized Lease under which any Person is at the time liable, at any date as of which the amount thereof is to be determined, the total net amount of rent required to be paid by such Person under such Capitalized Lease during the remaining primary term thereof, discounted from the respective due dates thereof to such date at the rate of interest per annum implicit in the terms of such Capitalized Lease, as determined in good faith by the Company, compounded semi-annually. The net amount of rent required to be paid under any such Capitalized Lease for any such period shall be the amount of the rent payable by the lessee with respect to such period, after excluding amounts required to be paid on account of maintenance, repairs, insurance, taxes, assessments, water rates and similar charges. In the case of any Capitalized Lease which is terminable by the lessee upon the payment of a penalty, such net 12 22 amount shall also include the amount of such penalty, but shall not include any rent required to be paid under such Capitalized Lease subsequent to the first date upon which it may be so terminated. (Section 101) "Senior Indebtedness" is defined to mean all Debt of the Company, including principal and interest (and premium, if any) (including, without limitation, any interest that would accrue but for the occurrence of any event specified in paragraphs (6) and (7) of "-- Events of Default") on such Debt except (i) existing subordinated Debt Securities or subordinated Convertible Debt Securities, (ii) such indebtedness as is by its terms expressly stated to be junior in right of payment to the subordinated Debt Securities or subordinated Convertible Debt Securities, and (iii) such indebtedness as is by its terms expressly stated to rank pari passu with the subordinated Debt Securities or subordinated Convertible Debt Securities. (Section 101) RESTRICTIONS ON SECURED DEBT (SECTION 1004) The Company has covenanted that it will not itself, and will not permit any Subsidiary to, incur, issue, assume or guarantee any Debt secured after the date of the Indenture by pledge of, or mortgage or other lien on ("Mortgage"), any Principal Property of the Company or any Significant Subsidiary, or any shares of stock or Debt of any Significant Subsidiary without effectively providing that the Debt Securities or Convertible Debt Securities of all series issued pursuant to the Indenture (together with, if the Company shall so determine, any other Debt of the Company or such Significant Subsidiary then existing or thereafter created which is not subordinate to the Debt Securities or Convertible Debt Securities) shall be secured equally and ratably with (or, at the option of the Company, prior to) such secured Debt, so long as such secured Debt shall be so secured, unless after giving effect thereto, the aggregate principal amount of all such secured Debt then outstanding which would otherwise be prohibited, plus all Attributable Debt of the Company and its Significant Subsidiaries in respect of sale and leaseback transactions (as defined in "-- Restrictions on Sales and Leasebacks") occurring after the date of the Indenture which would otherwise be prohibited by the covenant described in "-- Restrictions on Sales and Leasebacks", would not exceed 10% of Consolidated Net Tangible Assets. This restriction does not apply to, and there shall be excluded in computing secured Debt for the purpose of such restriction, Debt secured by: (1) Mortgages on property of, or on any shares of stock or Debt of, any corporation existing at the time such corporation becomes a Significant Subsidiary; (2) Mortgages in favor of the Company or any Significant Subsidiary; (3) Mortgages in favor of the United States of America or any State thereof, or any department, agency or instrumentality or political subdivision of the United States of America or any State thereof, or in favor of any other country, or any political subdivision thereof, to secure partial, progress, advance or other payments pursuant to any contract or statute, or Mortgages for taxes, assessments or governmental charges or levies in each case (i) not then due and delinquent or (ii) the validity of which is being contested in good faith by appropriate proceedings, and materialmen's, mechanics', carriers', workmen's, repairmen's, landlord's or other like Mortgages, or deposits to obtain the release of such Mortgages; (4) Mortgages on property, shares of stock or Debt existing at the time of acquisition thereof (including acquisition through merger or consolidation) or to secure the payment of all or any part of the purchase price or construction cost thereof or to secure any Debt incurred prior to, at the time of, or within 180 days after, the acquisition of such property or shares or Debt or the completion of any such construction for the purpose of financing all or any part of the purchase price or construction cost thereof, provided that any such Mortgage shall only extend to the property acquired or constructed or property on which the acquired or constructed property is situated; (5) Mortgages securing obligations issued by a State, territory or possession of the United States of America, or any political subdivision of any of the foregoing, to finance the acquisition or construction of property, and on which the interest is not, in the opinion of tax counsel of recognized standing or in accordance with a ruling issued by the Internal Revenue Service, includible in gross income of the holder by reason of Section 103(a) of the Internal Revenue Code (or any successor to such provision) as in 13 23 effect at the time of the issuance of such obligations, including, without limitation, Debt related to the financing of pollution control or other equipment or facilities financed by State or local government units; (6) Mortgages created in connection with a project financed, or assets acquired, with, and created to secure any Nonrecourse Obligations; (7) Production payments or other related rights of others to the output of mines, refineries, smelters, concentrators or production facilities, including project financings, with respect to any property or assets acquired, constructed or improved by the Company or a Subsidiary with the proceeds of such project financings or Mortgages to secure payment of workmen's compensation or to secure performance in connection with tenders, leases of real property, bids or contracts or to secure (or in lieu of) surety or appeal bonds and Mortgages made in the ordinary course of business for similar purposes; and (8) Any extension, renewal, refunding or replacement (or successive extensions, renewals, refundings or replacements), as a whole or in part, of any Mortgage referred to in the foregoing clauses (1) to (7), inclusive; provided, however, that (i) such extension, renewal, refunding or replacement Mortgage shall be limited to all or a part of the same property, shares of stock or Debt that secured the Mortgage extended, renewed, refunded or replaced (plus improvements on such property) and (ii) the Debt secured by such Mortgage at such time is not increased. RESTRICTIONS ON SALES AND LEASEBACKS (SECTION 1005) The Company has covenanted that it will not itself, and will not permit any Significant Subsidiary to, enter into any arrangement with any bank, insurance company or other lender or investor (not including the Company or any Significant Subsidiary) or to which any such lender or investor is a party, providing for the leasing by the Company or any such Significant Subsidiary of any Principal Property which has been or is to be sold or transferred by the Company or such Significant Subsidiary to such lender or investor or to any Person to whom funds have been or are to be advanced by such lender or investor (each, a "sale and leaseback transaction") unless, after giving effect thereto, the aggregate amount of all Attributable Debt with respect to all such transactions occurring after the date of the Indenture and existing at such time plus all secured Debt then outstanding of the Company and its Significant Subsidiaries incurred after the date of the Indenture which would otherwise be prohibited by the covenant described in "-- Restrictions on Secured Debt" above, would not exceed 10% of Consolidated Net Tangible Assets. This restriction does not apply to, and there shall be excluded from Attributable Debt in any computation under such restriction, Attributable Debt with respect to any sale and leaseback transaction if: (1) the lease in such sale and leaseback transaction is for a period, including renewals, of not in excess of three years, or (2) such sale and leaseback transaction is entered into prior to, at the time of, or within 180 days after the later of the acquisition of the Principal Property to which such sale and leaseback transaction relates or the completion of construction thereon, or (3) the lease in such sale and leaseback transaction secures or relates to obligations issued by a State, territory or possession of the United States of America, or any political subdivision of any of the foregoing, to finance the acquisition or construction of property, and on which the interest is not, in the opinion of tax counsel of recognized standing or in accordance with a ruling issued by the Internal Revenue Service, includible in gross income of the holder by reason of Section 103(a) of the Internal Revenue Code (or any successor to such provision) as in effect at the time of the issuance of such obligations, including, without limitation, Debt related to the financing of pollution control or other equipment or facilities financed by State or local government units, or (4) such sale and leaseback transaction is entered into between the Company and a Significant Subsidiary or between Significant Subsidiaries, or (5) such sale and leaseback transaction is created in connection with a project financed, or assets acquired, with, and such obligation constitutes, a Nonrecourse Obligation, or 14 24 (6) the Company or a Significant Subsidiary, within 180 days after the sale or transfer shall have been made by the Company or by any such Significant Subsidiary, applies an amount not less than the greater of (i) the net proceeds of the sale of the Principal Property sold and leased back pursuant to such arrangement or (ii) the fair market value of the Principal Property so sold and leased back at the time of entering into such arrangement (as determined by any two of the following officers of the Company: the Chairman of the Board of Directors, the President, any Vice President, the Treasurer and the Controller) to (x) the purchase of property, facilities or equipment (other than the property, facilities or equipment involved in such sale) which will constitute Principal Property or (y) the retirement of Funded Debt of the Company or any Significant Subsidiary; provided, however, that the amount to be applied to the retirement of Funded Debt of the Company or any Significant Subsidiary shall be reduced by (i) the principal amount of any Funded Debt (including the Debt Securities or Convertible Debt Securities of any series) of the Company or any Significant Subsidiary (or, if the Debt Securities or Convertible Debt Securities of any series are Original Issue Discount Securities, such portion of the principal amount as may be due and payable with respect to such series pursuant to a declaration in accordance with Section 502 of the Indenture), delivered within 180 days after such sale to the Trustee or other applicable trustee for retirement and cancellation, and (ii) the principal amount of Funded Debt, other than any Funded Debt referred to in the immediately preceding clause (i) of this proviso, voluntarily retired by the Company or a Significant Subsidiary within 180 days after such sale; and provided, further, that, notwithstanding the foregoing, no retirement referred to in this clause (y) may be effected by payment at Maturity or pursuant to any mandatory sinking fund payment or any mandatory redemption provision. SUBORDINATION The Convertible Debt Securities may be subordinated and junior in right of payment, to the extent set forth in the applicable Prospectus Supplement, to all "Senior Indebtedness" of the Company as defined in the applicable Prospectus Supplement. EVENTS OF DEFAULT (SECTION 501) The following are Events of Default with respect to Debt Securities or Convertible Debt Securities of each series: (1) default in the payment of the principal of, or any premium on, any of the Debt Securities or Convertible Debt Securities of such series as and when the same shall become due and payable either at Stated Maturity, upon redemption, by declaration or otherwise; or (2) default in the payment of any installment of interest, if any, upon any of the Debt Securities or Convertible Debt Securities of such series as and when it shall become due and payable, and continuance of such default for a period of 30 days; or (3) default in the payment of any sinking fund payment, when and as due and payable by the terms of the Debt Securities or Convertible Debt Securities of such series; or (4) default in the performance, or breach, of any covenant or agreement of the Company in the Indenture or the Debt Securities or Convertible Debt Securities of such series (other than a covenant or agreement a default in the performance or a breach of which is otherwise specified as an Event of Default or which has expressly been included in the Indenture and designated as being solely for the benefit of such series of Debt Securities or Convertible Debt Securities other than such series), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Debt Securities or Convertible Debt Securities of such series then outstanding, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" under the Indenture; or (5) a default under any Debt in excess of $25,000,000 of the Company or any Significant Subsidiary (including a default with respect to Debt Securities or Convertible Debt Securities of any series other 15 25 than such series) or under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any such indebtedness for money borrowed by the Company or any Significant Subsidiary (including the Indenture), whether such indebtedness is existing or shall thereafter be created, which default shall have resulted in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, without such involuntary acceleration having been rescinded or annulled within a period of 30 days after there shall have been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Debt Securities or Convertible Debt Securities of such series then Outstanding a written notice specifying such default and requiring the Company to cause such acceleration to be rescinded or annulled and stating that such notice is a "Notice of Default" under the Indenture; provided, however, that, if such default shall be remedied or cured by the Company or waived by the holders of such indebtedness, then the Event of Default under the Indenture by reason thereof shall be deemed likewise to have been thereupon remedied, cured or waived without any action on the part of the Trustee or any of the holders; or (6) a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law then or thereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Company or for all or substantially all of its property or ordering the winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of 90 consecutive days; or (7) the Company shall commence a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law then or thereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Company or for all or substantially all of its property, or make any general assignment for the benefit of creditors; or (8) any other Event of Default provided with respect to Debt Securities or Convertible Debt Securities of such series. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT If an Event of Default with respect to Debt Securities or Convertible Debt Securities of any series at the time Outstanding occurs and is continuing, then, and in each and every such case, unless the principal of all of the Debt Securities or Convertible Debt Securities of such series shall have already become due and payable, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Debt Securities or Convertible Debt Securities of such series then outstanding, by notice in writing to the Company (and to the Trustee if given by Holders), may declare the entire principal amount (or, if the Debt Securities or Convertible Debt Securities of such series are Original Issue Discount Securities (as defined in the Indenture), such portion of the principal as may be specified in the terms of such series) of all of the Debt Securities or Convertible Debt Securities of such series and any premium and interest accrued thereon to be due and payable immediately, and upon any such declaration such principal amount (or specified amount) and any premium and interest accrued thereon shall become immediately due and payable. However, at any time after a declaration of acceleration with respect to Debt Securities or Convertible Debt Securities of any series has been made, but before a judgment or decree based on such acceleration has been obtained, the Holders of a majority in principal amount of Outstanding Securities of that series may, under certain circumstances, rescind and annul such acceleration. (Section 502) For information as to waiver of defaults, see "Modification and Waiver." Reference is made to the Prospectus Supplement relating to each series of Debt Securities or Convertible Debt Securities which are Discount Securities for the particular provisions relating to acceleration of the Maturity of a portion of the principal amount of such Discount Securities upon the occurrence of an Event of Default and the continuation thereof. 16 26 The Indenture provides that, subject to the duty of the Trustee during default to act with the required standard of care, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the Holders, unless such Holders shall have offered to the Trustee reasonable indemnity. (Section 603) Subject to such provisions for indemnification of the Trustee, the Holders of a majority in principal amount of the Outstanding Securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Debt Securities or Convertible Debt Securities of that series. (Section 512) The Company is required to furnish to the Trustee annually a statement as to the performance by the Company of certain of its obligations under the Indenture and as to any default in such performance. (Section 1006) MODIFICATION AND WAIVER Modifications and amendments of the Indenture may be made by the Company and the Trustee with the consent of the Holders of 66 2/3% in principal amount of the Outstanding Securities of each series affected thereby (each such series voting as a single class); provided, however, that no such modification or amendment may, without the consent of the Holder of each Outstanding Security affected thereby, (a) change the Stated Maturity of the principal, or any installment of principal of or interest on, any Debt Security or Convertible Debt Security, (b) reduce the principal amount thereof, or reduce any premium thereof or change the time of payment of any premium thereon, (c) reduce the rate or change the time of payment of interest thereon, if any, (d) reduce any amount payable on redemption of any such Security (if any), (e) reduce the Overdue Rate thereof, (f) change the place or currency of payment of principal of, or any premium or interest thereon, (g) reduce the amount of principal of any Original Issue Discount Security payable upon acceleration of the Maturity thereof or the amount thereof provable in bankruptcy, (h) impair, if applicable, any right of repayment at the option of the Holder, (i) impair the right to institute suit for the enforcement of any payment on or with respect to any Debt Security or Convertible Debt Security, or (j) reduce the percentage in principal amount of Outstanding Securities of any series, the consent of the Holders of which 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 (k) alter or impair the right of any Holder to convert Securities of any series, if applicable, at the rate and upon the terms established pursuant to the Indenture. (Section 902) The Holders of a majority in aggregate principal amount of the Outstanding Securities of any series may on behalf of the Holders of all Debt Securities or Convertible Debt Securities of that series waive, insofar as that series is concerned, compliance by the Company with certain restrictive provisions of the Indenture. (Section 1007) The Holders of a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all Debt Securities or Convertible Debt Securities of that series waive any past default under the Indenture with respect to Debt Securities or Convertible Debt Securities of that series, except a default not theretofore cured in the payment of the principal of (or premium, if any) or interest on any Debt Securities or Convertible Debt Securities of that series or in respect of any provision which under the Indenture cannot be modified or amended without the consent of the Holder of each Outstanding Security of that series affected. (Section 513) The Indenture contains provisions permitting the Company and the Trustee to enter into one or more supplemental indentures without the consent of the Holders of any of the Debt Securities or Convertible Debt Securities in order (i) to evidence the succession of another corporation to the Company and the assumption of the covenants of the Company by a successor to the Company; (ii) to add to the covenants of the Company or surrender any right or power of the Company; (iii) to add additional Events of Default with respect to any series of Debt Securities or Convertible Debt Securities; (iv) to add to, change or eliminate any provision affecting Debt Securities or Convertible Debt Securities not yet issued; (v) to secure the Debt Securities or Convertible Debt Securities; (vi) to establish the form or terms of Debt Securities or Convertible Debt Securities; (vii) to evidence and provide for a successor Trustee; and (viii) to cure any ambiguity or correct any mistake or to correct any defect or supplement any inconsistent provisions or to make any other provisions 17 27 with respect to matters or questions arising under the Indenture, provided that such action does not adversely affect the interests of any Holder of Debt Securities or Convertible Debt Securities of any series. (Section 901) CONSOLIDATION, MERGER AND SALE OF ASSETS The Company may not consolidate or merge with or into, or transfer or lease all or substantially all its assets to, any Person, and any other Person may not consolidate or merge with or into, the Company, unless (i) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or which acquires or leases all or substantially all the assets of the Company is organized and existing under the laws of the United States, any state thereof or the District of Columbia and expressly assumes all of the Company's obligations under the Debt Securities or Convertible Debt Securities and under the Indenture, (ii) 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 (provided that a transaction will only be deemed to be in violation of this condition (ii) as to any series of Debt Securities or Convertible Debt Securities as to which such Event of Default or such event shall have occurred and be continuing), and (iii) certain other conditions are met. SATISFACTION, DISCHARGE, AND DEFEASANCE PRIOR TO MATURITY OR REDEMPTION Covenant Defeasance of any Series If the Company shall deposit with the Trustee, in trust, at or before maturity or redemption of the Debt Securities or Convertible Debt Securities of any series, money and/or Government Obligations in such amounts and maturing at such times such that the proceeds of such obligations to be received upon the respective maturities and interest payment dates of such obligations will provide funds sufficient, without reinvestment, in the opinion of a nationally recognized firm of independent public accountants, to pay when due the principal of (and premium, if any) and each installment of principal of (and premium, if any) and interest on such series of Debt Securities or Convertible Debt Securities at the Stated Maturity of such principal or installment of principal or interest, as the case may be, then the Company may omit to comply with certain of the terms of the Indenture with respect to that series of Debt Securities or Convertible Debt Securities, including the restrictive covenants described above, and the Events of Default described in clauses (4) and (5) under "Events of Default" above shall not apply. Defeasance of Debt Securities or Convertible Debt Securities of any series is subject to the satisfaction of certain conditions, including among others: (1) the absence of an Event of Default or event which, with notice or lapse of time, would become an Event of Default at the date of the deposit, (2) the delivery to the Trustee by the Company of an Opinion of Counsel to the effect that Holders of the Debt Securities or Convertible Debt Securities of such series will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and covenant defeasance and will be subject to Federal income tax in the same amounts and in the same manner and at the same times as would have been the case if such deposit and covenant defeasance had not occurred, (3) such covenant defeasance will not cause any Debt Securities or Convertible Debt Securities of such series then listed on any nationally recognized securities exchange to be delisted, (4) that such covenant defeasance will not result in a breach of, or constitute a default under, any instrument by which the Company is bound and (5) such covenant defeasance shall not cause the Trustee for the Securities of such series to have conflicting interest for purposes of the Trust Indenture Act with respect to any securities of the Company. If indicated in the Prospectus Supplement relating to a series of Debt Securities or Convertible Debt Securities, in addition to the obligations of the United States of America or obligations guaranteed by the United States of America, Government Obligations may include obligations of the government, and obligations guaranteed by such government, issuing the currency or currency unit in which Debt Securities or Convertible Debt Securities of such series are payable. (Section 1304) Defeasance of any Series Upon the deposit of money or securities as contemplated in the preceding paragraph and the satisfaction of certain other conditions, the Company may also omit to comply with its obligation duly and punctually to 18 28 pay the principal of (and premium, if any) and interest on a particular series of Debt Securities or Convertible Debt Securities, and any Events of Default with respect thereto shall not apply, and thereafter, the Holders of Debt Securities or Convertible Debt Securities of such series shall be entitled only to payment out of the money or securities deposited with the Trustee. (Section 1304) Such conditions include among others: (1) the absence of an Event of Default or event which, with notice or lapse of time, would become an Event of Default at the date of the deposit, (2) the delivery to the Trustee by the Company of an Opinion of Counsel, which refers to or is based on a ruling of the Internal Revenue Service or a change in the applicable Federal income tax law occurring after the date of the Indenture, to the effect that Holders of the Debt Securities or Convertible Debt Securities of such series will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and the satisfaction, discharge and defeasance, and will be subject to Federal income tax in the same amounts and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred, (3) such defeasance will not cause any Debt Securities or Convertible Debt Securities of such series then listed on any nationally recognized securities exchange to be delisted, (4) that such defeasance will not result in a breach of, or constitute a default under, any instrument by which the Company is bound and (5) such defeasance shall not cause the Trustee for the Securities of such series to have a conflicting interest for the purpose of the Trust Indenture Act with respect to any securities of the Company. (Section 1304) Federal Income Tax Consequences Under current Federal income tax law, the deposit and defeasance described above under "Covenant Defeasance of any Series" will not result in a taxable event to any Holder of Debt Securities or Convertible Debt Securities or otherwise affect the Federal income tax consequences of an investment in Debt Securities or Convertible Debt Securities of any series. The Federal income tax treatment of the deposit and defeasance described above under "Defeasance of any Series" is not clear. A deposit and defeasance may be treated as a taxable exchange of such Debt Securities or Convertible Debt Securities for beneficial interests in the trust consisting of the deposited money or securities. In that event, a Holder of Debt Securities or Convertible Debt Securities would be required to recognize gain or loss equal to the difference between the Holder's adjusted basis for the Debt Securities or Convertible Debt Securities and the fair market value of the Holder's beneficial interest in such trust. Thereafter, such Holder would be required to include in income a share of the income, gain, and loss of the trust. As described above, it is a condition to such a deposit and defeasance that the Company obtain an opinion of tax counsel to the effect that such deposit and defeasance will not alter the Holder's tax consequences that would have been applicable in the absence of the deposit and defeasance. Purchasers of the Debt Securities or Convertible Debt Securities should consult their own advisers with respect to the tax consequences to them of such deposit and defeasance, including the applicability and effect of tax laws other than Federal income tax law. CONVERTIBLE DEBT SECURITIES The following provisions will apply to Convertible Debt Securities, unless otherwise provided in the applicable Prospectus Supplement for such Convertible Debt Securities. The holder of any Convertible Debt Securities will have the right exercisable at any time prior to maturity, or prior to such other date as may be specified in the applicable Prospectus Supplement, unless previously redeemed by the Company, to convert such Convertible Debt Securities into shares of Common Stock or Preferred Stock of the Company at the conversion price set forth in the applicable Prospectus Supplement, subject to adjustment. The holder of Convertible Debt Securities may convert any portion thereof which is $1,000 or any integral multiple of $1,000. In the case of Convertible Debt Securities called for redemption, conversion rights will expire at the close of business on the date fixed for the redemption unless the Company shall default in payment of the redemption price, except that in the case of redemption at the option of the Holder thereof, if applicable, the conversion right will terminate upon receipt of written notice of the exercise of such option. (Section 1402) In certain events, the conversion price will be subject to adjustment as set forth in the applicable Prospectus Supplement. Fractional shares of Common Stock or Preferred Stock will not be issued upon conversion, but, 19 29 in lieu thereof, the Company will pay a cash adjustment based on the then current market price for the Common Stock or Preferred Stock. (Section 1406) Subordination of Convertible Debt Securities The obligation of the Company to make payment on account of the principal of, and premium, if any, and interest on the Convertible Debt Securities may be subordinated and junior in right of payment, to the extent and in the manner set forth in the Prospectus Supplement relating to any Convertible Debt Securities, to the prior payment in full of all Senior Indebtedness of the Company. In the event (a) of any insolvency or bankruptcy proceedings, or any receivership, dissolution, winding-up, total or partial liquidation, reorganization or other similar proceedings in respect of the Company or a substantial part of its property, whether voluntary or involuntary, or (b) that (i) a default shall have occurred with respect to the payment of principal of (and premium, if any) or any interest on or other monetary amounts due and payable on any Senior Indebtedness in an amount in excess of $25,000,000 or (ii) there shall have occurred an event of default (other than a default in the payment of principal, premium, if any, or interest, or other monetary amounts due and payable) in respect of any Senior Indebtedness, as defined therein or in the instrument under which the same is outstanding, permitting the holder or holders thereof to accelerate the maturity thereof and such default or event of default shall not have been cured or waived or shall not have ceased to exist, or (iii) separately with respect to each series of Securities, if immediately after giving effect to any payment of principal, premium, if any, or interest on such series of Securities there would occur an event of default (other than a default in the payment of principal or interest or other monetary amounts due and payable) in respect of any Senior Indebtedness, as defined therein or in the instrument under which the same is outstanding, permitting the holder or holders thereof to accelerate the maturity thereof and such default or event of default shall not have been cured or waived or shall not have ceased to exist, or (c) that the principal of and accrued interest on any subordinated Convertible Debt Securities shall have been declared due and payable upon an Event of Default pursuant to the Indenture and such declaration shall not have been rescinded and annulled as provided therein, then the holders of all Senior Indebtedness shall first be entitled to receive payment of the full amount unpaid thereon, or provision shall be made, in accordance with the relevant Senior Indebtedness, for such payment in money or money's worth, before the Holders of any of the subordinated Convertible Debt Securities are entitled to receive any payment on account of the principal of (and premium, if any) or any interest on the indebtedness evidenced by such subordinated Convertible Debt Securities or any cash payments to repurchase such subordinated Convertible Debt Securities at the option of the holders thereof or otherwise. By reason of such subordination, in the event of insolvency, creditors of the Company (including holders of subordinated Convertible Debt Securities) who are not holders of Senior Indebtedness may recover less, ratably, than holders of Senior Indebtedness. REGARDING THE TRUSTEE The Indenture, by reference to Section 315 of the Trust Indenture Act, provides that, except during the continuance of an Event of Default, the Trustee shall perform only such duties as are specifically set forth in the Indenture. During the continuance of any Event of Default, the Trustee shall exercise such of the rights and powers vested in it under the Indenture and use the same degree of care and skill in their exercise as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. The Trustee may acquire and hold Debt Securities or Convertible Debt Securities and, subject to certain conditions, otherwise deal with the Company as if it were not the Trustee under the Indenture. (Section 605) The Company maintains deposit accounts and conducts other banking transactions with the Trustee in the ordinary course of the Company's business. 20 30 DESCRIPTION OF WARRANTS DEBT WARRANTS The Company may issue, together with other Securities or separately, Debt Warrants for the purchase of Debt Securities or Convertible Debt Securities. The Debt Warrants are to be issued under Debt Warrant Agreements (each a "Debt Warrant Agreement") to be entered into between the Company and a bank or trust company, as Debt Warrant Agent (the "Debt Warrant Agent"), all as to be set forth in a Prospectus Supplement relating to Debt Warrants. A copy of the form of Debt Warrant Agreement, including the form of Warrant Certificates representing the Debt Warrants (the "Debt Warrant Certificates"), reflecting the alternative provisions to be included in the Debt Warrant Agreements that will be entered into with respect to particular offerings of Debt Warrants, is filed as an exhibit to the Registration Statement of which this Prospectus forms part. The following summaries of certain provisions of the Debt Warrant Agreement and the Debt Warrant Certificates do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all the provisions of the Debt Warrant Agreement and the Debt Warrant Certificates, respectively, including the definitions therein of certain capitalized terms not defined herein. General. Reference is made to the applicable Prospectus Supplement for the terms of Debt Warrants in respect of which this Prospectus is being delivered, the Debt Warrant Agreement relating to such Debt Warrants and the Debt Warrant Certificates representing such Debt Warrants, including the following: (1) the designation, aggregate principal amount and terms of the Debt Securities or Convertible Debt Securities purchasable upon exercise of such Debt Warrants and the procedures and conditions relating to the exercise of such Debt Warrants; (2) the designation and terms of any related Debt Securities or Convertible Debt Securities with which such Debt Warrants are issued and the number of such Debt Warrants issued with each such Debt Security or Convertible Debt Security; (3) the date, if any, on and after which such Debt Warrants and the related Debt Securities or Convertible Debt Securities will be separately transferable; (4) the principal amount of Debt Securities or Convertible Debt Securities purchasable upon exercise of each Debt Warrant and the price at which such principal amount of Debt Securities or Convertible Debt Securities may be purchased upon such exercise; (5) the date on which the right to exercise such Debt Warrants shall commence and the date on which such right shall expire; (6) if the Debt Securities or Convertible Debt Securities purchasable upon exercise of such Debt Warrants are original issue discount Debt Securities, a discussion of Federal income tax considerations applicable thereto; and (7) whether the Debt Warrants represented by the Debt Warrant Certificates will be issued in registered or bearer form, and, if registered, where they may be transferred and registered. Debt Warrant Certificates will be exchangeable for new Debt Warrant Certificates of different denominations and Debt Warrants may be exercised at the corporate trust office of the Debt Warrant Agent or any other office indicated in the applicable Prospectus Supplement. Prior to the exercise of their Debt Warrants, holders of Debt Warrants will not have any of the rights of holders of the Debt Securities or Convertible Debt Securities purchasable upon such exercise and will not be entitled to payments of principal of (and premium, if any) or interest, if any, on the Debt Securities or Convertible Debt Securities purchasable upon such exercise. Exercise of Debt Warrants. Each Debt Warrant will entitle the holder to purchase for cash such principal amount of Debt Securities or Convertible Debt Securities at such exercise price as shall in each case be set forth in, or be determinable as set forth in, the applicable Prospectus Supplement relating to the Debt Warrants offered thereby. Debt Warrants may be exercised at any time up to 5:00 p.m. New York City time on the expiration date set forth in the applicable Prospectus Supplement. After 5:00 p.m. New York City time on the expiration date, unexercised Debt Warrants will become void. Debt Warrants may be exercised as set forth in the applicable Prospectus Supplement relating to the Debt Warrants. Upon receipt of payment and the Debt Warrant Certificate properly completed and duly executed at the corporate trust office of the Debt Warrant Agent or any other office indicated in the applicable Prospectus Supplement, the Company will, as soon as practicable, forward the Debt Securities or Convertible Debt Securities purchasable upon such exercise. If less than all of the Debt Warrants represented by such 21 31 Debt Warrant Certificate are exercised, a new Debt Warrant Certificate will be issued for the remaining amount of Debt Warrants. COMMON STOCK WARRANTS The Company may issue, together with other securities or separately, Common Stock Warrants for the purchase of Common Stock. The Common Stock Warrants are to be issued under Common Stock Warrant Agreements (each a "Common Stock Warrant Agreement") to be entered into between the Company and a bank or trust company, as Common Stock Warrant Agent (the "Common Stock Warrant Agent"), all as to be set forth in the applicable Prospectus Supplement relating to Common Stock Warrants in respect of which this Prospectus is being delivered. A copy of the form of Common Stock Warrant Agreement, including the form of Warrant Certificates representing the Common Stock Warrants (the "Common Stock Warrant Certificates") reflecting the provisions to be included in the Common Stock Warrant Agreements that will be entered into with respect to particular offerings of Common Stock Warrants, is filed as an exhibit to the Registration Statement of which this Prospectus forms part. The following summaries of certain provisions of the Common Stock Warrant Agreement and the Common Stock Warrant Certificates do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all the provisions of the Common Stock Warrant Agreement and the Common Stock Warrant Certificates, respectively, including the definitions therein of certain capitalized terms not defined herein. General. Reference is made to the applicable Prospectus Supplement for the terms of Common Stock Warrants in respect of which this Prospectus is being delivered, the Common Stock Warrant Agreement relating to such Common Stock Warrants and the Common Stock Warrant Certificates representing such Common Stock Warrants, including the following: (1) the offering price of such Common Stock Warrants, if any; (2) the procedures and conditions relating to the exercise of such Common Stock Warrants; (3) the number of shares of Common Stock purchasable upon exercise of each Common Stock Warrant and the initial price at which such shares may be purchased upon exercise; (4) the date on which the right to exercise such Common Stock Warrants shall commence and the date on which such right shall expire; (5) a discussion of U.S. Federal income tax considerations applicable to the exercise of Common Stock Warrants; (6) call provisions of such Common Stock Warrants, if any; and (7) any other terms of the Common Stock Warrants. Prior to the exercise of their Common Stock Warrants, holders of the Common Stock Warrants will not have any of the rights of holders of the Common Stock purchasable upon such exercise, and will not be entitled to any dividend payments on the Common Stock purchasable upon such exercise. Exercise of Stock Warrants. Each Common Stock Warrant will entitle the holder to purchase for cash such number of shares of Common Stock at such exercise price as shall in each case be set forth in, or be determinable as set forth in, the applicable Prospectus Supplement relating to the Common Stock Warrants offered thereby. Unless otherwise specified in the applicable Prospectus Supplement, Common Stock Warrants may be exercised at any time up to 5:00 p.m. New York City time on the expiration date set forth in the applicable Prospectus Supplement. After 5:00 p.m. New York City time on the expiration date, unexercised Common Stock Warrants will become void. Common Stock Warrants may be exercised as to be set forth in the applicable Prospectus Supplement relating to the Common Stock Warrants in respect of which this Prospectus is being delivered. Upon receipt of payment and the Common Stock Warrant Certificates properly completed and duly executed at the corporate trust office of the Common Stock Warrant Agent or any other office indicated in the applicable Prospectus Supplement, the Company will, as soon as practicable, forward a certificate representing the number of shares of Common Stock purchasable upon such exercise. If less than all of the Common Stock Warrants represented by such Common Stock Warrant Certificate are exercised, a new Common Stock Warrant Certificate will be issued for the remaining amount of Common Stock Warrants. Antidilution Provisions. Unless otherwise specified in the applicable Prospectus Supplement, the exercise price payable and the number of shares purchasable upon the exercise of each Common Stock Warrant will be subject to adjustment in certain events, including (1) the issuance of a stock dividend to holders of Common Stock or a combination, subdivision or reclassification of Common Stock; (2) the 22 32 issuance of rights, warrants or options to all holders of Common Stock entitling the holders thereof to purchase Common Stock for an aggregate consideration per share less than the current market price per share of the Common Stock; or (3) any distribution by the Company to the holders of its Common Stock of evidences of indebtedness of the Company or of assets (excluding cash dividends or distributions payable out of capital surplus and dividends and distributions referred to in (1) above). No fractional shares will be issued upon exercise of Common Stock Warrants, but the Company will pay the cash value of any fractional shares otherwise issuable. PREFERRED STOCK WARRANTS The Company may issue, together with other securities or separately, Preferred Stock Warrants for the purchase of Preferred Stock or Convertible Preferred Stock. The Preferred Stock Warrants are to be issued under Preferred Stock Warrant Agreements (each a "Preferred Stock Warrant Agreement") to be entered into between the Company and a bank or trust company, as Preferred Stock Warrant Agent (the "Preferred Stock Warrant Agent"), all as to be set forth in the applicable Prospectus Supplement relating to the Preferred Stock Warrants in respect of which this Prospectus is being delivered. A copy of the form of Preferred Stock Warrant Agreement, including the form of Warrant Certificates representing the Preferred Stock Warrants (the "Preferred Stock Warrant Certificates") reflecting the provisions to be included in the Preferred Stock Warrant Agreements that will be entered into with respect to particular offerings of Preferred Stock Warrants, is filed as an exhibit to the Registration Statement of which this Prospectus forms part. The following summaries of certain provisions of the Preferred Stock Warrant Agreement and the Preferred Stock Warrant Certificates do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all the provisions of the Preferred Stock Warrant Agreement and the Preferred Stock Warrant Certificates, respectively, including the definitions therein of certain capitalized terms not defined herein. General. Reference is made to the applicable Prospectus Supplement for the terms of Preferred Stock Warrants in respect of which this Prospectus is being delivered, the Preferred Stock Warrant Agreement relating to such Preferred Stock Warrants and the Preferred Stock Warrant Certificates representing such Preferred Stock Warrants, including the following: (1) the offering price of such Preferred Stock Warrants, if any; (2) the procedures and conditions relating to the exercise of such Preferred Stock Warrants; (3) the number of shares of Preferred Stock or Convertible Preferred Stock purchasable upon exercise of such Preferred Stock Warrant and the initial price at which such shares may be purchased upon exercise; (4) the date on which the right to exercise such Preferred Stock Warrants shall commence and the date on which such right shall expire; (5) a discussion of the U.S. Federal income tax considerations applicable to the exercise of Preferred Stock Warrants; (6) call provisions of such Preferred Stock Warrants, if any; and (7) any other terms of the Preferred Stock Warrants. Prior to the exercise of their Preferred Stock Warrants, holders of Preferred Stock Warrants will not have any of the rights of holders of the Preferred Stock or Convertible Preferred Stock purchasable upon such exercise, and will not be entitled to any dividend payments on the Preferred Stock or Convertible Preferred Stock purchasable upon such exercise. Exercise of Stock Warrants. Each Preferred Stock Warrant will entitle the holder to purchase for cash such number of shares of Preferred Stock or Convertible Preferred Stock at such exercise price as shall in each case be set forth in, or be determinable as set forth in, the applicable Prospectus Supplement relating to the Preferred Stock Warrants offered thereby. Unless otherwise specified in the applicable Prospectus Supplement, Preferred Stock Warrants may be exercised at any time up to 5:00 p.m. New York City time on the expiration date set forth in the applicable Prospectus Supplement. After 5:00 p.m. New York City time on the expiration date, unexercised Preferred Stock Warrants will become void. Preferred Stock Warrants may be exercised as to be set forth in the applicable Prospectus Supplement relating to the Preferred Stock Warrants in respect of which this Prospectus is being delivered. Upon receipt of payment and the Preferred Stock Warrant Certificates properly completed and duly executed at the corporate trust office of the Preferred Stock Warrant Agent or any other office indicated in the applicable Prospectus Supplement, the Company will, as soon as practicable, forward a certificate representing the number of shares 23 33 of Preferred Stock purchasable upon such exercise. If less than all of the Preferred Stock Warrants represented by such Preferred Stock Warrant Certificate are exercised, a new Preferred Stock Warrant Certificate will be issued for the remaining amount of Preferred Stock Warrants. CURRENCY WARRANTS The Company may issue, together with Debt Securities or Debt Warrants or separately, Currency Warrants either in the form of Currency Put Warrants entitling the holders thereof to receive from the Company the Cash Settlement Value in U.S. dollars of the right to sell a specified amount of a specified foreign currency or currency units for a specified amount of U.S. dollars, or in the form of Currency Call Warrants entitling the holders thereof to receive from the Company the Cash Settlement Value in U.S. dollars of the right to purchase a specified amount of a specified foreign currency or currency units for a specified amount of U.S. dollars. The spot exchange rate of the applicable Base Currency, upon exercise, as compared to the U.S. dollar, will determine whether the Currency Warrants have a Cash Settlement Value on any given day prior to their expiration. The Currency Warrants are to be issued under a Currency Warrant Agreement to be entered into between the Company and a bank or trust company, as Currency Warrant Agent (the "Currency Warrant Agent"), all as to be set forth in the applicable Prospectus Supplement. A copy of the form of Currency Warrant Agreement, including the forms of Global Warrant Certificates representing the Currency Put Warrants and Currency Call Warrants (the "Currency Warrant Certificates"), reflecting the provisions to be included in the Currency Warrant Agreement that will be entered into with respect to particular offerings of Currency Warrants, is filed as an exhibit to the Registration Statement of which this Prospectus forms part. The description of the Currency Warrants contained herein and the following summaries of certain provisions of the Currency Warrant Agreement and the Currency Warrant Certificates do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all the provisions of the Currency Warrant Agreement and the Currency Warrant Certificates, respectively, including the definitions therein of certain capitalized terms not defined herein. General. Reference is made to the applicable Prospectus Supplement for the terms of Currency Warrants in respect of which this Prospectus is being delivered, the Currency Warrant Agreement relating to such Currency Warrants and the Currency Warrant Certificates representing such Currency Warrants, including the following: (1) whether such Currency Warrants will be Currency Put Warrants, Currency Call Warrants, or both; (2) the formula for determining the Cash Settlement Value, if any, of each Currency Warrant; (3) the procedures and conditions relating to the exercise of such Currency Warrants; (4) the circumstances which will cause the Currency Warrants to be deemed to be automatically exercised; (5) any minimum number of Currency Warrants which must be exercised at any one time, other than upon automatic exercise; and (6) the date on which the right to exercise such Currency Warrants will commence and the date on which such right will expire. Book-Entry Procedures and Settlement. Except as may otherwise be provided in the applicable Prospectus Supplement, the Currency Warrants will be issued in the form of Global Currency Warrant Certificates, registered in the name of a depositary or its nominee. Holders will not be entitled to receive definitive certificates representing Currency Warrants. A holder's ownership of a Currency Warrant will be recorded on or through the records of the brokerage firm or other entity that maintains such holder's account. In turn, the total number of Currency Warrants held by an individual brokerage firm for its clients will be maintained on the records of the depositary in the name of such brokerage firm or its agent. Transfer of ownership of any Currency Warrant will be effected only through the selling holder's brokerage firm. Exercise of Currency Warrants. Each Currency Warrant will entitle the holder to receive the Cash Settlement Value of such Currency Warrant on the applicable Exercise Date, in each case as such terms will be defined in the applicable Prospectus Supplement. If not exercised prior to 3:00 p.m., New York City time, on the fifth New York Business Day preceding the expiration date, Currency Warrants will be deemed automatically exercised on the expiration date. 24 34 CORPORATE PROVISIONS CERTIFICATE OF INCORPORATION AND BY-LAWS The Company's Restated Certificate of Incorporation (the "Certificate") and By-laws ("By-laws") provide for the classification of the Company's Board of Directors into three classes to be elected to staggered three-year terms; limitations on the shareholders' ability to nominate individuals for election as directors; and the inclusion of provisions which require that special meetings of shareholders may only be called by the Chairman of the Board, the President or the Board pursuant to a resolution approved by a majority of the entire Board. The Certificate also provides that the affirmative vote of the holders of at least 80% of the outstanding shares of all classes of capital stock entitled to vote, considered as one class, is required to authorize the Company to enter into certain transactions with any individual, corporation or other person that is the beneficial owner of more than 10% of the outstanding shares of any class of capital stock of the Company. Beneficial ownership of shares by a person includes shares which such person has the right to acquire by agreement or by exercise of warrants, options or other rights, shares so owned by others with which such person has an agreement with respect to the acquisition, holding, voting or disposition of Asarco capital stock or assets, or shares owned by "affiliates" or "associates" of such person (as such terms are defined in the rules and regulations of the Commission). The transactions with a 10% beneficial owner that are subject to such special shareholder approval requirements include: (a) any merger or consolidation of the Company or of any subsidiary of the Company with or into such beneficial owner, (b) any sale, lease, exchange or other disposition of all or any material part of the assets of the Company or of any subsidiary of the Company to or with such beneficial owner, and (c) any issuance or transfer of securities of the Company to such beneficial owner. The special shareholder approval described in this paragraph does not apply to any agreement for the merger of any subsidiary of the Company with the Company if the Company is the surviving corporation. No amendment to the provisions of the Company's Certificate outlined in this paragraph may be made without the affirmative vote of the holders of at least 80% of the outstanding shares of all classes of voting stock entitled to vote, considered as one class. In addition to any vote required by law or by provisions outlined in the preceding paragraph, the Certificate provides that a majority of the Continuing Directors (as defined) of the Company must approve certain transactions, including transactions between the Company and any person (or any affiliate or associate of such person) who at the time of the transaction or during the preceding two years was the beneficial owner of 10% or more of the voting stock of the Company or who has announced the intention of becoming the beneficial owner of such stock (such person is referred to herein as an "interested shareholder"). A "Continuing Director" is defined to include the current members of the Board of Directors and any future members who are not affiliates or associates of an interested shareholder at the time of the transaction and who either became a member of the Board before the interested shareholder became or threatened to become a beneficial owner of 10% of the voting stock or who was nominated or elected by a majority of the other Continuing Directors. The transactions with an interested shareholder that are subject to the approval of the Continuing Directors include: (a) the sale or other disposal of assets or securities to an interested shareholder or any other arrangement for the benefit of an interested shareholder where the assets or securities sold or disposed of have a fair market value of more than $10,000,000 or 1% of the book value of the Company's consolidated total assets; (b) any arrangement pursuant to which the interested shareholder or parties related to such interested shareholder would have any management responsibility over the Company's affairs, other than as a director; (c) the adoption of any plan or proposal for the liquidation or dissolution of the Company or any amendment to the Company's By-laws; and (d) any reclassification of securities, recapitalization or other transaction which has the effect, directly or indirectly, of increasing an interested shareholder's proportionate share of the outstanding capital stock of the Company or a subsidiary. No amendment to the provision of the Company's Certificate outlined in this paragraph may be made without the affirmative vote of the holders of at least 80% of the outstanding voting stock of the Company and the holders of at least a majority of the voting stock who are not affiliated or associated with the interested shareholder. By act of the Continuing Directors, the Board is empowered to waive the requirement that such 80% approval and majority approval be obtained. 25 35 The Company's Board of Directors believes that the provisions described above will help assure that all of the Company's shareholders will be treated similarly if certain kinds of business combinations are effected. However, these provisions also may have the effect of deterring hostile takeovers or delaying or preventing changes in control or management of the Company, and may make it more difficult to accomplish certain transactions that are opposed by the incumbent Board of Directors. NEW JERSEY LAW AND OTHER LIMITATIONS UPON TRANSACTIONS WITH "INTERESTED SHAREHOLDERS" The New Jersey Business Corporation Act provides that in determining whether a proposal or offer to acquire a corporation is in the best interest of the corporation, the Board of Directors may, in addition to considering the effects of any action on shareholders, consider any of the following: (a) the effects of the proposed action on the corporation's employees, suppliers, creditors and customers, (b) the effects on the community in which the corporation operates and (c) the long-term as well as short-term interests of the corporation and its shareholders, including the possibility that these interests may best be served by the continued independence of the corporation. The statute further provides that if, based on these factors, the Board of Directors determines that any such offer is not in the best interest of the corporation, it may reject the offer. These provisions may make it more difficult for a shareholder to challenge the Board of Directors' rejection of, and may facilitate the Board of Directors' rejection of, an offer to acquire the Company. The Company is also subject to the New Jersey Shareholders Protection Act (the "Protection Act"), which prohibits certain New Jersey corporations from engaging in business combinations (including mergers, consolidations, significant asset dispositions and certain stock issuances) with any Interested Shareholder (defined to include, among others, any person that becomes a beneficial owner of 10% or more of the affected corporation's voting power) for five years after such person becomes an Interested Shareholder, unless the business combination is approved by the Board of Directors prior to the date the shareholder became an Interested Shareholder. In addition, the Protection Act prohibits any business combination at any time with an Interested Shareholder other than a transaction that (i) is approved by the Board of Directors prior to the date the Interested Shareholder became an Interested Shareholder, or (ii) is approved by the affirmative vote of the holders of two-thirds of the voting stock not beneficially owned by the Interested Shareholder, or (iii) satisfies certain "fair price" and related criteria. LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS The Company has a shareholder-approved By-law provision requiring it to indemnify its directors and officers to the fullest extent permitted in certain circumstances, to advance expenses, to maintain insurance and to follow certain other procedures. Provisions of the Certificate eliminate the personal monetary liability of directors and officers for breaches of duty, except for (i) breaches of such person's duty of loyalty, (ii) those instances where such person is found not to have acted in good faith or in knowing violation of law and (iii) those instances where such person received an improper personal benefit as the result of such breach. TRANSFER AGENT The transfer agent for the Common Stock is The Bank of New York. PLAN OF DISTRIBUTION GENERAL The Company and the Selling Stockholder may sell Securities to or through underwriters, and also may sell Securities directly to other purchasers or through agents. The distribution of the Securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. 26 36 In connection with the sale of Securities, underwriters may receive compensation from the Company or from purchasers of Securities for whom they may act as agents in the form of discounts, concessions or commissions. Underwriters, dealers and agents that participate in the distribution of Securities may be deemed to be underwriters, and any discounts or commissions received by them from the Company and any profit on the resale of Securities by them may be deemed to be underwriting discounts and commissions under the Act. Any such underwriter or agent will be identified, and any such compensation received from the Company will be described, in the applicable Prospectus Supplement. The Preferred Stock, the Convertible Debt Securities, the Debt Securities, the Depositary Shares and the Warrants will each be a new issue of Securities ("New Issues") with no established trading market. Underwriters and agents to whom New Issues are sold by the Company for public offering and sale may make a market in such New Issues, but such underwriters and agents will not be obligated to do so and may discontinue any market making at any time without notice. No assurance can be given as to the liquidity of the trading market for the New Issues. Under agreements which may be entered into by the Company, underwriters, dealers and agents who participate in the distribution of Securities may be entitled to indemnification by the Company against certain liabilities, including liabilities under the Act, or to contribution with respect to payments required to be made in respect thereof. DELAYED DELIVERY ARRANGEMENTS If so indicated in the applicable Prospectus Supplement, the Company will authorize underwriters or other persons acting as the Company's agents to solicit offers by certain institutions to purchase Securities from the Company pursuant to contracts providing for payment and delivery on a future date. Institutions with which such contracts may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and others, but in all cases such institutions must be approved by the Company. The obligations of any purchaser under any such contract will be subject to the condition that the purchase of the Securities shall not at the time of delivery be prohibited under the laws of the jurisdiction to which such purchaser is subject. The underwriters and such other persons will not have any responsibility in respect of the validity or performance of such contracts. EXPERTS The financial statements and financial statement schedules included in the latest Annual Report of the Company on Form 10-K incorporated herein by reference, have been audited by Coopers & Lybrand, independent accountants, as stated in their report included in such Form 10-K, and have been incorporated by reference herein in reliance upon such report given upon the authority of that firm as experts in accounting and auditing. With respect to any unaudited interim financial information included in the Company's Quarterly Reports on Form 10-Q, that are or will be incorporated herein by reference, Coopers & Lybrand applies limited procedures in accordance with professional standards for reviews of such information. As stated in any of its reports that are included in the Company's Quarterly Reports on Form 10-Q that are or will be incorporated herein by reference, Coopers & Lybrand did not audit and did not express an opinion on such interim financial information. Accordingly, the degree of reliance on any of its reports on such information should be restricted in light of the limited nature of the review procedures applied. Coopers & Lybrand has advised the Company that it is not subject to the liability provisions of Section 11 of the Act for any of its reports on such unaudited interim financial information because those reports are not "reports" or a "part" of the Registration Statement prepared or certified by an accountant within the meaning of Sections 7 and 11 of the Act. 27 37 LEGAL MATTERS The validity of the issuance of the Securities offered hereby will be passed upon for the Company by White & Case, New York, New York, and certain legal matters will be passed upon by Augustus B. Kinsolving, General Counsel of the Company, and for the underwriters, if any, by Cravath, Swaine & Moore, New York, New York. 28 38 - ------------------------------------------------------ NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE. ------------------ TABLE OF CONTENTS
PAGE ------ PROSPECTUS SUPPLEMENT Use of Proceeds...................... S-2 Recent Developments.................. S-2 Copper Prices........................ S-5 Ratio of Earnings to Fixed Charges... S-5 Capitalization....................... S-6 Selected Consolidated Financial Information........................ S-7 Description of Debentures............ S-8 Underwriting......................... S-8 Legal Matters........................ S-9 Notice to Canadian Residents......... S-9 PROSPECTUS Available Information................ 2 Incorporation of Certain Documents by Reference....................... 2 The Company.......................... 3 Use of Proceeds...................... 3 Ratio of Earnings to Fixed Charges... 3 Selling Stockholder.................. 4 Description of Common Stock.......... 5 Description of Preferred Stock....... 5 Description of Preferred Share Purchase Rights.................... 7 Description of Depositary Shares..... 8 Description of Debt Securities....... 10 Description of Warrants.............. 21 Corporate Provisions................. 25 Plan of Distribution................. 26 Experts.............................. 27 Legal Matters........................ 28
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