-----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, RV6JAPn9PJsF37qYCOX5eZB9qtXt5A2m7qw6OJl5rC4JOWS3KkYPTMtAfbd+vqtP 7YbLk6vCO1skvHG2FVWTeA== 0000950130-94-000563.txt : 19940404 0000950130-94-000563.hdr.sgml : 19940404 ACCESSION NUMBER: 0000950130-94-000563 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TAMBRANDS INC CENTRAL INDEX KEY: 0000096277 STANDARD INDUSTRIAL CLASSIFICATION: 2670 IRS NUMBER: 131366500 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 34 SEC FILE NUMBER: 001-08714 FILM NUMBER: 94519680 BUSINESS ADDRESS: STREET 1: 777 WESTCHESTER AVE CITY: WHITE PLAINS STATE: NY ZIP: 10604 BUSINESS PHONE: 9146966000 FORMER COMPANY: FORMER CONFORMED NAME: TAMPAX INC DATE OF NAME CHANGE: 19840502 10-K 1 FORM 10-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 _______________________ FORM 10-K (Mark One) /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended December 31, 1993 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] Commission file number 1-8714 TAMBRANDS INC. -------------- (Exact name of registrant as specified in its charter) Delaware 13-1366500 -------- ---------- (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 777 Westchester Avenue White Plains, New York 10604 - ---------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code, is 914-696-6000 ------------ Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered ------------------- ------------------- Common Stock, par New York Stock Exchange value $.25 per share; and Pacific Stock Exchange Common Share Purchase Rights Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No ________ --------- FORM 10-K (Facing Sheet Continuation) Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained in this Form 10-K, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the voting stock held by non-affiliates of the registrant as of February 9, 1994 was $1,600,048,069. (For this computation, the registrant has excluded the market value of all shares of its Common Stock reported as beneficially owned by officers and directors of the registrant; such exclusion shall not be deemed to constitute an admission that any such person is an "affiliate" of the registrant.) As of March 15, 1994, 37,314,597 shares of the registrant's Common Stock were outstanding. Documents Incorporated by Reference - ----------------------------------- Part III of this Form 10-K incorporates by reference portions of the definitive Proxy Statement for the registrant's annual meeting of shareholders to be held on April 26, 1994, filed with the Securities and Exchange Commission pursuant to Regulation 14A. PART I ------ Item 1. Business - ------ -------- General - ------- Tambrands Inc. (the "Company") has been manufacturing and marketing menstrual tampons, which are sold under the trademark TAMPAX(R), since 1936. It is the leading manufacturer and marketer of tampons in the world. The Company operates in one business segment, personal care products. In recent years, the Company has focused on its core TAMPAX tampon business worldwide and has been expanding its international operations. The Company has manufacturing operations in eight countries. In 1993, TAMPAX tampons were sold in over 150 countries. The Company has subsidiaries operating in Brazil, Canada, the Czech Republic, France, Ireland, Mexico, Poland, Russia, South Africa, Switzerland, Ukraine, the United Kingdom and Venezuela. The Company also has an 80% interest in a joint venture in the People's Republic of China. The Company was incorporated under the laws of the State of Delaware in 1936. The Company's principal executive offices are located at 777 Westchester Avenue, White Plains, New York 10604 (telephone number 914-696-6000). Recent Developments - ------------------- In June 1989, the Company adopted a new corporate strategy of concentrating on the Company's core TAMPAX tampon business. As part of this strategy, the Company announced in December 1989 a major restructuring program designed to reduce costs and improve performance. The restructuring program has included sales of the Company's businesses that were not supportive of the Company's core activities, reductions in workforce and consolidation of certain administrative, manufacturing and research and development facilities in the United States, Canada and Europe. This program has been virtually completed. In December 1991, the Company announced a program to restructure its worldwide manufacturing operations to improve efficiency and reduce costs. The program includes workforce reductions and consolidation of facilities. The program has been virtually completed, and has included the sale of non-core businesses in Brazil and Mexico and the closing of manufacturing plants in Canada and the United States. In June 1993, the Company announced that it would provide a $30 million charge ($20 million after-tax) to provide for restructuring of manufacturing and administrative operations and the cost of management changes, including the adoption of a consolidated international management strategy. The program includes workforce reductions and consolidation of facilities. In order to implement these restructuring programs, the number of manufacturing plants has been reduced by approximately 50% and the Company has sold (i) its cosmetics, diagnostics and MAXITHINS(R) pad and panty shield businesses; (ii) its headquarters in Lake Success, New York; (iii) its non- tampon businesses in Spain, which included sanitary pads, disposable diapers and other baby products; (iv) its interest in a joint venture in Turkey, which primarily produced sanitary pads and diapers; (v) its disposable diaper and external pad businesses in Brazil; and (vi) its alcohol, cotton, baby wipes and external pad businesses in Mexico. The Company currently is engaged in an ongoing program of substantially upgrading production equipment at its remaining manufacturing facilities through further automation and computerization. The Company's 1993 capital spending programs were related to investments in equipment to improve product quality and productivity, modernize facilities and reduce costs. See "Management's Discussion and Analysis of Results of Operations and Financial Condition" contained in item 7 of Part II hereof. In June 1989, the Company initiated a stock repurchase program. As of December 31, 1993, the Company had spent approximately $365 million to purchase approximately 5.9 million shares of its Common Stock under four repurchase programs. The Company was authorized as of December 31, 1993 to purchase 2.02 million additional shares. The Company is continuing its repurchases as conditions warrant. In 1992, the Company established a commercial paper program under which it may borrow up to $150 million for general corporate purposes. At December 31, 1993, $48 million was outstanding under this program. In addition, in 1993, the Company established a $150 million Medium-Term Note program. At December 31, 1993, $30 million was outstanding under this program. On June 1, 1993, Martin F. C. Emmett resigned from his position as Chairman and Chief Executive Officer. Howard B. Wentz, Jr. replaced Mr. Emmett as the Chairman of the Board of Directors and, pending the appointment of a Chief Executive Officer, is performing the duties of Chief Executive Officer. Certain other changes in senior management also occurred in mid-1993. The Company is currently in the process of evaluating candidates for the position of Chief Executive Officer. Products - -------- Menstrual tampons represent virtually all of the Company's sales. The Company's largest selling tampon is the TAMPAX -2- flushable applicator tampon, which first became commercially available in 1936. The Company also manufactures and sells (i) TAMPAX tampons with plastic applicators in the United States; (ii) TAMPAX COMPAK(R) tampons, with a compact all-plastic applicator, in the United States, Canada, France, the United Kingdom and other countries in Europe; and (iii) TAMPAX comfort shaped flushable applicator tampons, with an all-paper rounded-end applicator and a slimmer design than the Company's standard product, in the United States, Canada, Australia, parts of Europe and several other countries. In 1993, the Company introduced nationally in Canada the new TAMPAX SATIN TOUCH/TM/ tampon. This tampon offers the ease and comfort of a plastic applicator but has an all-paper applicator that is flushable and biodegradable. In 1993, the Company introduced nationally its new TAMPAX TAMPETS(R) non- applicator tampon in Ireland. The Company also introduced this tampon in test market in the United Kingdom in 1993 and plans to introduce this tampon nationally in the United Kingdom in 1994. The Company continues to evaluate the possible introduction of these and other products in additional markets. Marketing and Sales - ------------------- Marketing operations are conducted either directly by the Company and its subsidiaries and joint venture, or by independent brokers or sales agents and distributors. Sales are made directly to drug, grocery, variety and discount stores and other comparable outlets, as well as to wholesalers and distributors in those trades. No single customer (including distributors) of the Company and its subsidiaries and joint venture accounted for 10% or more of total net sales in 1993. A small number of significant customers have highly leveraged capital structures, making them particularly sensitive to adverse market interest rate changes and other economic variables. This situation has not significantly affected the Company in prior years. Substantially all sales involve extensions of credit. Credit terms generally are consistent with terms typically extended under local industry practices. Default rates by the Company's customers in the United States have been at or below industry averages, based on information from the Credit Research Foundation. In the United States, the Company's internal sales management group directly handles sales to certain large customer accounts. These sales have been increasing as a percentage of total sales. Other sales in the United States and sales in Belgium, Canada, France and the Netherlands are handled through independent sales brokers, who also may sell other branded consumer products but generally do not carry products that compete with the products of the Company and its subsidiaries. Sales are conducted in the Czech -3- Republic, Poland, Russia, Ukraine and the United Kingdom by the Company's subsidiaries and in the People's Republic of China by its joint venture. Sales are conducted in other countries through independent distributors and agents. During 1993, retailers in the United States and Europe and distributors in Europe continued to reduce their inventories of TAMPAX tampons, as part of an industry-wide trend to reduce consumer goods inventory levels. This inventory reduction adversely affected the Company's 1993 financial results. This inventory reduction trend has continued in the first quarter of 1994 and the Company believes that the trend will continue. However, the rate of inventory reduction in future periods is expected to be significantly less than the rate of reduction experienced in 1993. Media advertising is important to the overall success of the TAMPAX tampon brand. In the United States, Canada and Europe, the Company focuses its advertising on women aged 12-34, using a variety of media, including television and print advertisements. The Company increased its advertising and promotional spending substantially in the second half of 1993, in the face of a significant decline in the Company's market share of the tampon category in the United States in the first half of 1993 and a decline in the tampon share of the sanitary protection category in Europe in 1992 and 1993. The advertising and promotional spending is being concentrated in the Company's five largest markets (the United States, the United Kingdom, Canada, France and Spain) and in the four international markets believed to have the greatest development potential (CIS, principally Russia and Ukraine, Mexico, China and Brazil). The Company also seeks to attract and retain customers through its teen education program, which is designed to help female teenagers understand the various forms of sanitary protection and promotes trial usage of TAMPAX tampons. Competition - ----------- Highly competitive conditions prevail in the feminine protec-tion industry for external pads and menstrual tampons, which are directly competitive in both performance and price, the principal methods of competition. In the United States, there are four other manufacturers whose sales, directly or through subsidiaries, are significant in the total sanitary protection market: Johnson & Johnson, Kimberly-Clark Corporation, Playtex Family Products Corporation and The Procter & Gamble Company. Each of these corporations manufactures and sells external pads or menstrual tampons or both. Each makes and sells products other than external pads and tampons, and the total sales -4- of all products by and the capitalization of each of Johnson & Johnson, Kimberly-Clark and Procter & Gamble are substantially greater than the total sales and capitalization of the Company. These factors may be helpful to the respective competitive positions of these companies in the feminine protection industry. Substantially all of the tampons manufactured by the above-mentioned four companies are sold under these companies' brand names. In addition, there is a small but growing private label segment of the industry. Management believes that the TAMPAX tampon's leading market share position in the U.S. tampon category (approximately 50.3% in dollars and 53.7% in units for the year 1993, according to Information Resources, Inc.) and strong brand loyalty among consumers (as verified by household panel data obtained by Nielsen Marketing Research), are positive factors in the Company's ability to compete in the feminine protection industry. During 1993, the level of competitive activity increased in the United States, particularly in the area of price discounting. Highly competitive conditions prevail in virtually all foreign markets. Competition tends to be fragmented and regional in nature in most of those markets, but tampons produced by, or under license from, Johnson & Johnson, and external pads produced by Procter & Gamble, are sold in many of the foreign markets where the Company does business. Competitive activity intensified in Europe in 1993. This activity included the introduction and aggressive marketing of several new external pad products. Management expects that highly competitive conditions will continue in 1994, including price discounting, new product introductions and continued growth in private label tampons. Raw Materials - ------------- The principal raw materials used in the Company's business are cotton and rayon for tampons, paper and plastic for tampon applicators, and paperboard for cartons and containers. Most of these raw materials are readily available in the market from many sources. Trademarks and Patents - ---------------------- The Company, directly or through its subsidiaries, owns a number of trademarks, trademark registrations and trademark applications in the United States and other countries, which, in the opinion of management, are significant. The Company's trademark registrations vary in duration and are typically renewable by the Company. Certain features of TAMPAX tampons are the subject of U.S. and foreign patents or patent applications owned by the Company. In management's opinion, certain of these patents are significant. The duration of the Company's patents ranges from 5 to 19 years (i.e., the patents have ---- expiration dates -5- ranging from the year 1999 to the year 2013). Research and Development - ------------------------ The Company maintains a research and development laboratory at its facilities in each of Palmer, Massachusetts and Havant, England. The Company's research and development expenditures have approximated 2% of net sales in each of the past three years. Management believes that developing better protecting and more comfortable and convenient products, and products which are environmentally sound, is important to maintaining the Company's competitive position. Research is directed toward these goals. Employees - --------- As part of the restructuring program announced in 1989, the staff of the Company's headquarters and North American Division has been reduced substantially. The sale of non-core businesses also has reduced the number of employees. Additional headcount reductions have occurred and will occur as a result of the restructuring programs announced in 1991 and 1993. At December 31, 1993, the Company and its consolidated subsidiaries employed approximately 3,600 persons, including 900 employees in the People's Republic of China, Russia and Ukraine. Foreign and Domestic Operations; Export Sales - --------------------------------------------- The information regarding foreign and domestic operations of the Company and its subsidiaries set forth on page 38 under the caption "Segment and Geographic Information" in the Notes to Consolidated Financial Statements is incorporated herein by reference. Over the past three years, sales by the Company's foreign operations accounted for approximately one-half of total unit sales. In 1993, sales between geographic areas and export sales of the Company were not significant. Item 2. Properties - ------ ---------- Domestic Properties - ------------------- As part of its worldwide manufacturing restructuring program, during 1993, the Company's Palmer, Massachusetts manufacturing plant was converted to a facility for testing new equipment and developing new products. The Company has consolidated its U.S. manufacturing operations in its three other U.S. plants, located in Auburn, Maine; Claremont, New Hampshire; and Rutland, Vermont. -6- Technical and research and development operations are conducted at the Company's Technical Center, also located in Palmer, Massachusetts. This facility is a testing center for the application of advanced manufacturing technology to the Company's products. The Company owns each of these plants and the Technical Center. The Company leases headquarters office space in White Plains, New York. The Company's production machinery and equipment and the properties owned by it described above are held free and clear of encumbrances. During the last fiscal year, the Company's domestic plants were suitable and adequate for the Company's requirements. The Company's domestic plants operate principally on a three-shift basis, and have sufficient additional capacity to satisfy the foreseeable requirements of the Company. Foreign Properties - ------------------ The Company's foreign subsidiaries own and operate manufacturing plants in France, Ireland, Russia, South Africa, Ukraine and the United Kingdom. The Company's joint venture in the People's Republic of China has contractual rights to use a manufacturing plant there. The Company's foreign subsidiaries lease office space in Brazil, Canada, France, Mexico, Switzerland, Venezuela and in several other countries. The Company's subsidiary in the United Kingdom leases office space there for the Company's international headquarters. In 1993, as part of the Company's worldwide manufacturing restructuring program, the Company determined to effect a restructuring of the manufacturing operations conducted at the plant owned by its subsidiary in France. All European production of COMPAK tampons now will be concentrated at the French plant, and production of other tampons will be consolidated in the Company's other European plants. As part of the restructuring program, the Company also decided in 1993 to close the tampon manufacturing plant in Mexico leased by a subsidiary. The Mexican manufacturing operations are being consolidated in the Company's U.S. plants. The production machinery and equipment and properties owned by the Company's foreign subsidiaries described above are held free and clear of encumbrances. During the last fiscal year, the Company's foreign facilities were suitable and adequate for the Company's requirements. In general, the Company's foreign manufacturing facilities operate on a two- or three-shift basis, and have sufficient additional capacity to satisfy the foreseeable requirements of the Company. -7- Item 3. Legal Proceedings - ------ ----------------- The Company or a subsidiary is a defendant in a small number of pending product liability lawsuits based on allegations that toxic shock syndrome ("TSS") was contracted through the use of tampons. A small number of pre-suit claims involving similar allegations have also been asserted. The damages alleged vary from case to case and often include claims for punitive damages. The Company and certain of its present and former officers have been named as defendants in certain shareholder lawsuits that have been filed in the United States District Court for the Southern District of New York and that have been consolidated under the caption In Re Tambrands Inc. Securities Litigation. The ------------------------------------------ consolidated lawsuit purports to be a federal securities fraud class action on behalf of all purchasers of the Company's common stock during the period December 14, 1992 through June 2, 1993. The complaint alleges that the Company's disclosures during the alleged class period contained material misstatements and omissions concerning its anticipated future earnings. The complaint seeks an unspecified amount of damages on behalf of the purported class. The Company is a nominal defendant in three purported shareholder derivative lawsuits that have been filed in the Supreme Court of the State of New York for Westchester County and that have been consolidated into a single action. Named collectively in the consolidated complaint as individual defendants are the Company's directors (and certain of its former directors) and two of its former officers. The complaint alleges that the officer-defendants exposed the Company to liability in the purported shareholder class action described in the preceding paragraph and misappropriated corporate opportunities by trading in the Company's stock on the basis of nonpublic information. One of the former officers is also alleged to have received improper reimbursements from the Company for alleged personal expenses. The director-defendants are alleged to have acquiesced in the aforesaid alleged violations. The complaint seeks to recover on behalf of the Company an unspecified amount of damages from the individual defendants. No relief is sought against the Company. The Company is involved in certain other legal proceedings incidental to the normal conduct of its business. While it is not feasible to predict the outcome of these legal proceedings and claims with certainty, management is of the belief that any ultimate liabilities for damages either are covered by insurance, are provided for in the Company's financial statements or, to the extent not so covered or provided for, should not individually or in the aggregate have a material adverse effect on the Company's financial position. -8- Item 4. Submission of Matters to a Vote of Security Holders - ------ --------------------------------------------------- No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report. Executive Officers of the Registrant - ------------------------------------ The names and ages of all executive officers of the Company, the current office held by each, and the period during which each has served as such are set forth in the following table:
Period Served Name Age Current Office In Current Office ---- --- -------------- ----------------- Charles J. Chapman 55 Executive Vice President 1993 to date and President, North America (1) Helen G. Goodman 53 Senior Vice President- 1990 to date Human Resources Harry E. Raber 52 Vice President- 1991 to date Corporate Engineering and Manufacturing Alain Strasser 47 Group Vice President- 1989 to date International Jerome B. Wainick 53 Vice President-Research 1990 to date and Development (2) Howard B. Wentz, Jr. 64 Chairman of the Board (3) 1993 to date Raymond F. Wright 55 Senior Vice President- 1989 to date Chief Financial Officer (4)
Each executive officer is appointed by the Board of Directors to serve until the first meeting of directors following the annual meeting of shareholders of the Company. Except as indicated in the footnotes below, the principal occupation and employment during the past five years of each of the above-named executive officers have been as an officer or other member of management of the Company or one or more of its subsidiaries. (1) Mr. Chapman has served as an officer of the Company since August 1989. From prior to March 1989 until August 1989, he was employed by The Spectrum Group, Inc. (an investment company) as Vice President. (2) Mr. Wainick has served as an officer of the Company since June 1990. From prior to March 1989 until June 1990, he was employed by Binney & Smith, Inc. (a manufacturer of arts and crafts -9- supplies), a subsidiary of Hallmark Cards, Inc., as Director of Technical Development. (3) Mr. Wentz is a non-employee director of the Corporation and has been Chairman of the Board and has performed the duties of the Chief Executive Officer of the Corporation since June 2, 1993. Mr. Wentz has served as Chairman of the Board of ESSTAR Incorporated (a manufacturer of portable electric tools and architectural hardware) since July 1989. From prior to March 1989 until June 1989, he served as Chairman, President and Chief Executive Officer of Amstar Corporation (a diversified manufacturer). (4) Mr. Wright has served as an officer of the Company since August 1989. From prior to March 1989 until August 1989, he was employed by International Nabisco Brands as Senior Vice President-Finance. -10- PART II ------- Item 5. Market for Registrant's Common Equity and Related - ------ ------------------------------------------------- Shareholder Matters ------------------- The Company's Common Stock is traded on the New York and Pacific Stock Exchanges. The following table provides quarterly dividend and Common Stock price range information for the years 1992 and 1993:
Common Stock Price Range (a) -------------------------------- Dividends High Low Per Share -------- -------- ------------ 1993 - ---------------- First Quarter $ 65 $ 53 1/2 $ 0.38 Second Quarter 54 1/8 39 1/2 0.38 Third Quarter 49 7/8 40 3/4 0.80(b) Fourth Quarter 46 3/8 41 1/4 -- (b) 1992 - ---------------- First Quarter $ 70 1/2 $ 60 3/4 $ 0.34 Second Quarter 64 3/4 58 5/8 0.34 Third Quarter 66 3/4 58 5/8 0.34 Fourth Quarter 69 7/8 60 5/8 0.38
(a) Reflects trading on the New York Stock Exchange. (b) Dividends of $0.42 per share declared in the third quarter were paid in December 1993. As of March 15, 1994, there were 7,001 holders of record of the Company's Common Stock. Item 6. Selected Financial Data - ------ ----------------------- The information required by this item is set forth in a separate section of this Annual Report on Form 10-K under the caption "Selected Financial Data" appearing on page 25 and is incorporated herein by reference. -11- Item 7. Management's Discussion and Analysis of Results of - ------ -------------------------------------------------- Operations and Financial Condition ---------------------------------- The information required by this item is set forth in a separate section of this Annual Report on Form 10-K under the caption "Management's Discussion and Analysis" beginning on page 26 and is incorporated herein by reference. Item 8. Financial Statements and Supplementary Data - ------ ------------------------------------------- The information required by this item is set forth in a separate section of this Annual Report on Form 10-K as indicated in the "Index to Financial Information" appearing on page 24 and is incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on - ------ ------------------------------------------------ Accounting and Financial Disclosure ----------------------------------- None. PART III -------- Item 10. Directors and Executive Officers of the Registrant - ------- -------------------------------------------------- The information relating to nominees for election as directors of the Company set forth under the caption "Election of Directors" in the Company's definitive Proxy Statement for the annual meeting of shareholders to be held on April 26, 1994 is incorporated herein by reference. Mr. Brian Healey is currently a director of the Company, but he is retiring from the Board of Directors, and he is not a nominee for election as a director at the annual meeting of shareholders to be held on April 26, 1994. Mr. Healey has been a Principal of Brian Healey & Associates, Victoria, Australia (a business consulting firm), since before March 1989. He has been a director of the Company since 1992 and is 60 years old. The information on executive officers set forth under the caption "Executive Officers of the Registrant" beginning on page 9 is incorporated herein by reference. The information relating to compliance with Section 16(a) of the Securities Exchange Act of 1934, as amended, set forth under the caption "Executive Compensation and Other Information - Other Information" in the Company's definitive Proxy Statement for the annual meeting of shareholders to be held on April 26, 1994 is incorporated herein by reference. Item 11. Executive Compensation - ------- ---------------------- The information regarding executive compensation set forth under the captions "Information Regarding the Board of Directors - -12- Compensation of Directors," "Executive Compensation and Other Information" and "Proposal to Approve Amendment to the 1992 Directors Stock Incentive Plan" in the Company's definitive Proxy Statement for the annual meeting of shareholders to be held on April 26, 1994 is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and - ------- ---------------------------------------------------- Management ---------- The information regarding the security ownership of certain beneficial owners and management set forth under the caption "Security Ownership by Management and Others" in the Company's definitive Proxy Statement for the annual meeting of shareholders to be held on April 26, 1994 is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions - ------- ---------------------------------------------- The information pertaining to certain relationships and related transactions set forth under the captions "Information Regarding the Board of Directors - Compensation of Directors" and "Executive Compensation and Other Information - Other Information" in the Company's definitive Proxy Statement for the annual meeting of shareholders to be held on April 26, 1994 is incorporated herein by reference. The services performed for the Company by Doherty, Wallace, Pillsbury & Murphy, P.C. were on terms no less favorable to the Company than if such services had been provided by unaffiliated parties. PART IV ------- Item 14. Exhibits, Financial Statement Schedules, - ------- ---------------------------------------- and Reports on Form 8-K ----------------------- (a) Documents filed as part of this report 1. Financial Statements The list of financial statements set forth under the caption "Index to Financial Information" on page 24 is incorporated herein by reference. 2. Financial Statement Schedules The list of financial statement schedules set forth under the caption "Index to Financial Information" on page 24 is incorporated herein by reference. All other schedules have been omitted, as the required information is inapplicable or the information is presented in the financial statements or related notes. -13- 3. Exhibits Exhibit Number Description ------- ----------- 3(1) Certificate of Incorporation of the Company, as amended through April 28, 1987, filed April 30, 1987 as Exhibit 4(a) to the Company's Form S-8 Registration Statement (Reg. No. 33-13902), incorporated herein by reference. 3(2) Certificate of Amendment of Certificate of Incorporation of the Company, dated April 24, 1990, filed May 15, 1990 as Exhibit 4(2) to the Company's Report on Form 10-Q for the quarter ended March 31, 1990, incorporated herein by reference. 3(3) Certificate of Amendment of Certificate of Incorporation of the Company, dated April 28, 1992, filed May 15, 1992 as Exhibit 4(2) to the Company's Report on Form 10-Q for the quarter ended March 31, 1992, incorporated herein by reference. 3(4) By-Laws of the Company, as amended, filed herewith. 4(1) Description of the rights of security holders set forth in the Certificate of Incorporation of the Company, as amended through April 28, 1987, filed April 30, 1987 as Exhibit 4(a) to the Company's Form S-8 Registration Statement (Reg. No. 33-13902), incorporated herein by reference. 4(2) Description of the rights of security holders set forth in the Certificate of Amendment of Certificate of Incorporation of the Company, dated April 28, 1992, filed May 15, 1992 as Exhibit 4(2) to the Company's Report on Form 10-Q for the quarter ended March 31, 1992, incorporated herein by reference. 4(3) Rights Agreement, dated as of October 24, 1989, between the Company and First Chicago Trust Company of New York, which includes the Form of Right Certificate as Exhibit A and the Summary of Rights to Purchase Common Shares as Exhibit B, filed October 27, 1989 as Exhibit 1 to the Company's Form 8-A Registration Statement, -14- incorporated herein by reference. 4(4)(a) Indenture dated as of December 1, 1993 between the Company and Citibank, N.A., as trustee, relating to the Company's Medium- Term Note Program, filed herewith. 4(4)(b) Form of Floating Rate Debt Security, filed December 16, 1993 as Exhibit 4-a to the Company's Report on Form 8-K, incorporated herein by reference. 4(4)(c) Form of Fixed Rate Debt Security, filed December 16, 1993 as Exhibit 4-b to the Company's Report on Form 8-K, incorporated herein by reference. Management Contracts and Compensatory Plans and Arrangements (Exhibits 10(1) - 10(21)) ----------------------- 10(1)(a) 1981 Long Term Incentive Plan, as amended through November 4, 1988, filed as Exhibit 10(1)(a) to the Company's Report on Form 10-K for the year 1988, incorporated herein by reference. 10(1)(b) Amendment to 1981 Long Term Incentive Plan, dated as of February 27, 1990, filed as Exhibit 10(1)(b) to the Company's Report on Form 10-K for the year 1989, incorporated herein by reference. 10(1)(c) Amendment to 1981 Long Term Incentive Plan, effective as of June 25, 1991, filed as Exhibit 10(1)(c) to the Company's Report on Form 10-K for the year 1991, incorporated herein by reference. 10(1)(d) Amendment to 1981 Long Term Incentive Plan, effective as of June 23, 1992, filed as Exhibit 10(1)(d) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(1)(e) Amendment to 1981 Long Term Incentive Plan, effective as of February 23, 1993, filed as Exhibit 10(1)(e) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(1)(f) Addendum to 1981 Long Term Incentive Plan, filed April 30, 1987 as Exhibit 28(a) to the -15- Company's Form S-8 Registration Statement (Reg. No. 33-13902), incorporated herein by reference. 10(2)(a) 1981 Incentive Stock Option Plan, as amended through April 30, 1987, filed April 30, 1987 as Exhibit 28(a) to the Company's Form S-8 Registration Statement (Reg. No. 33- 13902), incorporated herein by reference. 10(2)(b) Amendment to 1981 Incentive Stock Option Plan, dated as of February 27, 1990, filed as Exhibit 10(2)(b) to the Company's Report on Form 10-K for the year 1989, incorporated herein by reference. 10(2)(c) Amendment to 1981 Incentive Stock Option Plan, effective as of June 23, 1992, filed as Exhibit 10(2)(c) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(2)(d) Amendment to 1981 Incentive Stock Option Plan, effective as of February 23, 1993, filed as Exhibit 10(2)(d) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(3)(a) 1991 Stock Option Plan, filed as Exhibit 10(3) to the Company's Report on Form 10-K for the year 1990, incorporated herein by reference. 10(3)(b) First Amendment to 1991 Stock Option Plan, effective as of July 1, 1991, filed as Exhibit 10(3)(b) to the Company's Report on Form 10-K for the year 1991, incorporated herein by reference. 10(3)(c) Second Amendment to 1991 Stock Option Plan, effective as of July 1, 1991, filed as Exhibit 10(3)(c) to the Company's Report on Form 10-K for the year 1991, incorporated herein by reference. 10(3)(d) Third Amendment to 1991 Stock Option Plan, effective as of June 23, 1992, filed as Exhibit 10(3)(d) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(3)(e) Fourth Amendment to 1991 Stock Option Plan, effective as of February 23, 1993, filed as Exhibit 10(3)(e) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. -16- 10(3)(f) Fifth Amendment to 1991 Stock Option Plan, effective as of February 23, 1993, filed as Exhibit 10(3)(f) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(3)(g) Addendum to 1991 Stock Option Plan, filed as Exhibit 10(3)(g) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(3)(h) Sixth Amendment to 1991 Stock Option Plan, effective as of February 1, 1994, filed herewith. 10(4)(a) 1989 Restricted Stock Plan, as amended through December 31, 1990, filed as Exhibit 10(4) to the Company's Report on Form 10-K for the year 1990, incorporated herein by reference. 10(4)(b) Amendment to 1989 Restricted Stock Plan, effective as of February 23, 1993, filed as Exhibit 10(4)(b) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(5)(a) Supplemental Executive Retirement Plan, effective July 1, 1986, as amended and restated effective July 1, 1994, filed herewith. 10(5)(b) Resolutions of the Compensation Committee of the Board of Directors of the Company with respect to certain benefits under the Supplemental Executive Retirement Plan, adopted on February 11, 1993, filed as Exhibit 10(5)(b) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(6) Trust Agreement between the Company and The Northern Trust Company, dated as of October 31, 1988, filed as Exhibit 10(6) to the Company's Report on Form 10-K for the year 1988, incorporated herein by reference. 10(7) Pension Plan for Non-Employee Directors, filed as Exhibit 10(10) to the Company's Report on Form 10-K for the year 1990, incorporated herein by reference. 10(8)(a) 1992 Directors Stock Incentive Plan, filed as Exhibit 10(11) to the Company's Report on Form 10-K for the year 1991, incorporated herein by -17- reference. 10(8)(b) First Amendment to 1992 Directors Stock Incentive Plan, effective as of August 18, 1992, filed as Exhibit 10(8)(b) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(8)(c) Second Amendment to 1992 Directors Stock Incentive Plan, effective as of February 23, 1993, filed as Exhibit 10(8)(c) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(8)(d) Third Amendment to the 1992 Directors Stock Incentive Plan, effective as of August 24, 1993, filed as Exhibit 10(3) to the Company's Report on Form 10-Q/A for the quarterly period ended September 30, 1993, incorporated herein by reference. 10(8)(e) Fourth Amendment to 1992 Directors Stock Incentive Plan, effective as of March 1, 1994 (subject to shareholder approval at the annual meeting of shareholders to be held on April 26, 1994), filed herewith. 10(9)(a) Amended and Restated Employment Protection Agreement between the Company and Mr. Martin F.C. Emmett, dated as of October 16, 1990, filed as Exhibit 10(11)(a) to the Company's Report on Form 10-K for the year 1990, incorporated herein by reference. 10(9)(b) Employment Protection Agreement between the Company and Mr. Charles J. Chapman, dated as of August 23, 1989, and First Amendment to Employment Protection Agreement between the Company and Mr. Charles J. Chapman, dated as of October 16, 1990, filed as Exhibit 10(11)(b) to the Company's Report on Form 10-K for the year 1990, incorporated herein by reference; 10(9)(c) Employment Protection Agreement between the Company and Mr. Alain Strasser, dated as of November 15, 1989, and First Amendment to Employment Protection Agreement between the Company and Mr. Alain Strasser, dated as of October 16, 1990, filed as Exhibit 10(11)(e) to the Company's Report on Form 10-K for the year 1990, incorporated herein by reference; -18- 10(9)(d) Employment Protection Agreement between the Company and Mr. Raymond F. Wright, dated as of August 23, 1989, and First Amendment to Employment Protection Agreement between the Company and Mr. Raymond F. Wright, dated as of October 16, 1990, filed as Exhibit 10(11)(c) to the Company's Report on Form 10-K for the year 1990, incorporated herein by reference; 10(9)(e) Employment Protection Agreement between the Company and Ms. Helen G. Goodman, dated as of December 1, 1989, and First Amendment to Employment Protection Agreement between the Company and Ms. Helen G. Goodman, dated as of October 16, 1990, filed herewith; The Company has agreements similar to the agreements listed as Exhibits 10(9)(b), 10(9)(c), 10(9)(d) and 10(9)(e) with its other executive officers. 10(10) Letter Agreement between the Company and Mr. Martin F.C. Emmett, dated October 16, 1990, filed as Exhibit 10(12) to the Company's Report on Form 10-K for the year 1990, incorporated herein by reference. 10(11) Amended and Restated Stock Option Agreement between the Company and Mr. Martin F.C. Emmett, dated October 16, 1990, filed as Exhibit 10(13) to the Company's Report on Form 10-K for the year 1990, incorporated herein by reference. 10(12) Consulting Agreements between the Company and Mr. Brian Healey, dated July 1, 1989, filed as Exhibit 10(12) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(13) Executive Severance Program of the Company, filed as Exhibit 10(15) to the Company's Report on Form 10-K for the year 1989, incorporated herein by reference. 10(14) Annual Incentive Plan of the Company, filed as Exhibit 10(6) to the Company's Report on Form 10-K for the year 1984, incorporated herein by reference. 10(15) Summary of supplemental pension plan of Tambrands France S.A., filed as Exhibit 10(16) to the Company's Report on Form 10-K for the -19- year 1992, incorporated herein by reference. 10(16) Summary of Revision to Non-Employee Director Cash Compensation, approved August 24, 1993, filed as Exhibit 10(1) to the Company's Report on Form 10-Q/A for the quarterly period ended September 30, 1993, incorporated herein by reference. 10(17) Amended and Restated Letter Agreement between the Company and Mr. Howard B. Wentz, Jr., dated August 24, 1993, filed as Exhibit 10(2) to the Company's Report on Form 10-Q/A for the quarterly period ended September 30, 1993, incorporated herein by reference. 10(18) Letter Agreement between the Company and Mr. James G. Mitchell, dated June 30, 1993, and amendment thereto, dated October 13, 1993, filed as Exhibit 10(5) to the Company's Report on Form 10-Q/A for the quarterly period ended September 30, 1993, incorporated herein by reference. 10(19) Letter Agreement between the Company and Mr. Constantin B. Ohanian, dated August 18, 1993, filed as Exhibit 10(6) to the Company's Report on Form 10-Q/A for the quarterly period ended September 30, 1993, incorporated herein by reference. 10(20) Severance Agreement between the Company and Mr. Martin F. C. Emmett, dated July 21, 1993, filed as Exhibit 10(4) to the Company's Report on Form 10-Q/A for the quarterly period ended September 30, 1993, incorporated herein by reference. 10(21) Retirement Agreement between the Company and Mr. Charles J. Chapman, dated as of February 28, 1994, filed herewith. 10(22)(a) Commercial Paper Dealer Agreement between the Company and Merrill Lynch Money Markets, Inc., dated November 18, 1992, filed as Exhibit 10(15)(a) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(22)(b) Letter Agreement between the Company and The First National Bank of Chicago, dated as of November 18, 1992, filed as Exhibit 10(15)(b) -20- to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(22)(c) Credit Agreement by and among the Company, the signatory banks thereto and The Bank of New York, as agent, dated as of October 16, 1992, filed as Exhibit 10(15)(c) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 12 Computation of Ratio of Earnings to Fixed Charges, filed herewith. 21 Subsidiaries of the Company, filed herewith. 23 Independent Auditors' Consent, filed herewith. 24 Powers of attorney, filed herewith. 99 Trust Agreement, dated as of November 1, 1991, between the Company and Manufacturers Hanover Trust Company, as trustee under the Tambrands Inc. Savings Plan, filed as Exhibit 28 to the Company's Report on Form 10-K for the year 1991, incorporated herein by reference. (b) Reports on Form 8-K The Company filed a Report under Item 5 of Form 8-K on December 16, 1993 in order to file the forms of Floating Rate Debt Security and Fixed Rate Debt Security to be used in connection with the Company's Medium- Term Note Program. TAMPAX, COMPAK, SATIN TOUCH and TAMPETS are trademarks of Tambrands Inc. -21- SIGNATURES ---------- Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TAMBRANDS INC. Date: March 28, 1994 By /s/ HOWARD B. WENTZ, JR. ----------------------------- Howard B. Wentz, Jr. Chairman Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- /s/ HOWARD B. WENTZ, JR. Chairman and March 28, 1994 - ---------------------------- Director (Principal HOWARD B. WENTZ, JR. Executive Officer) /s/ RAYMOND F. WRIGHT Senior Vice President- March 28, 1994 - ---------------------------- Chief Financial RAYMOND F. WRIGHT Officer (Principal Financial Officer and Principal Accounting Officer) * Director March 28, 1994 - ---------------------------- LILYAN H. AFFINITO /s/ CHARLES J. CHAPMAN Executive Vice March 28, 1994 - ---------------------------- President and CHARLES J. CHAPMAN President, North America and Director * Director March 28, 1994 - ---------------------------- PAUL S. DOHERTY * Director March 28, 1994 - ---------------------------- FLOYD HALL * Director March 28, 1994 - ---------------------------- BRIAN HEALEY -22- Signature Title Date --------- ----- ---- * Director March 28, 1994 - --------------------------- ROBERT P. KILEY * Director March 28, 1994 - --------------------------- JOHN LOUDON * Director March 28, 1994 - --------------------------- RUTH M. MANTON * Director March 28, 1994 - --------------------------- JOHN A. MEYERS * Director March 28, 1994 - --------------------------- H.L. TOWER * Director March 28, 1994 - --------------------------- ROBERT M. WILLIAMS * By /s/ HOWARD B. WENTZ, JR. --------------------------- Howard B. Wentz, Jr. Attorney-in-Fact -23- INDEX TO FINANCIAL INFORMATION ------------------------------ Page Reference --------- Selected Financial Data................................. 25 Management's Discussion and Analysis of Results of Operations and Financial Condition........... 26 Financial Statements: Consolidated Statements of Earnings for the years ended December 31, 1993, 1992 and 1991................. 28 Consolidated Statements of Retained Earnings for the years ended December 31, 1993, 1992 and 1991................. 28 Consolidated Statements of Cash Flows for the years ended December 31, 1993, 1992 and 1991................. 29 Consolidated Balance Sheets as of December 31, 1993 and 1992....................... 30 Notes to Consolidated Financial Statements....................................... 31 Independent Auditors' Report on Consolidated Financial Statements................ 39 Financial Statement Schedules: V Property, Plant and Equipment.............. 40 VI Accumulated Depreciation of Property, Plant and Equipment.............. 43 VIII Reserves................................... 46 IX Short-Term Borrowings...................... 47 X Supplementary Income Statement Information................................ 50 Independent Auditors' Report on Financial Statement Schedules.................... 51 Supplementary Financial Information and Quarterly Data for the years ended December 31, 1993 and 1992................. 52 -24-
Selected Financial Data -------- -------- -------- -------- -------- Years Ended December 31 (in thousands, except per share amounts) 1993 1992 1991 1990 1989 Net sales $611,465 $684,113 $660,722 $631,511 $583,408 Gross profit as a percent of sales 67.0% 66.7% 63.3% 61.0% 60.9% Net earnings 63,450(a) 121,400 79,035(a) 97,768 1,719(a) Per share 1.64 3.06 1.92 2.30 0.04 Earnings before cumulative effect of accounting change 73,702(a) 122,409 79,035(a) 97,768 1,719(a) Per share 1.91 3.09 1.92 2.30 0.04 Dividends per share 1.56 1.40 1.24 1.11 1.04 Capital expenditures 45,636 55,125 44,642 39,158 14,896 Cash utilized for purchase of shares for treasury 57,946 123,451 52,796 107,745 22,694 Medium-Term Notes outstanding 30,000 - - - - Total Assets 362,398 372,981 390,266 381,029 411,002 -------- -------- -------- -------- --------
Per share amounts have been restated to reflect a two-for-one stock split effected in the form of a 100% stock dividend in December 1990. (a) Net of Restructuring and other charges which reduced Net earnings by $20,273, $23,477 and $65,692 in 1993, 1991 and 1989, respectively. -25- MANAGEMENT'S DISCUSSION AND ANALYSIS Results of Operations 1993 VS. 1992 Consolidated Net sales for 1993 were $611.5 million, a decrease of 10.6% from 1992. The decrease is the result of lower unit sales in the USA and Europe, unfavorable foreign exchange rates in Europe and the elimination of non-core products. Volume shortfalls in 1993 were principally caused by a continuing trend by US retailers and European distributors to reduce consumer goods inventory levels. The decline was partially offset by favorable pricing adjustments associated with the European restaging in 1992. Gross profit as a percent of Net sales was 67% for 1993, up from 66.7% in 1992. This increase is attributable to elimination of lower-margin sales of divested products and worldwide manufacturing efficiencies, partially offset by the impact of lower sales volume. In 1993, the Company provided $30.0 million for restructuring of manufacturing and administrative operations and the cost of management changes including the adoption of a consolidated international management strategy. The anticipated annual savings of approximately $20.0 million resulting from work force reductions and worldwide manufacturing restructuring are expected to be fully realized by 1995. Operating income was $116.3 million in 1993, down $78.4 million from 1992. In addition to the restructuring charge of $30.0 million, the decline in Operating income is primarily due to lower Net sales. Marketing, selling and distribution expenses increased 4.4% over 1992. The Company raised its level of advertising and promotional spending to support the Tampax brand in the face of increased competition and to regain market share in the second half of 1993. The increase in brand support was partially offset by reductions in the other components of Marketing, selling and distribution as well as lower administrative spending in 1993. These reductions were the result of the continuing program to reduce overhead expenses. Interest, net and other improved by $5.2 million primarily due to net gains on foreign exchange contracts in the current year, somewhat mitigated by interest expense on increased borrowings. The effective tax rate for 1993, exclusive of the restructuring charge, was 36.8%, compared to 36.2% in 1992. OUTLOOK The Company believes that the recent trend by retailers and distributors to reduce inventories and the related adverse impact on shipments will continue in future periods. However, the rate of inventory reduction in future periods is expected to be significantly less than the rate of reduction experienced in 1993. The Company intends to continue in 1994 the increased advertising and promotional activities in the USA and Europe to provide support for the Tampax brand. 1992 VS. 1991 Consolidated Net sales for 1992 were $684.1 million, an increase of 4% over 1991. The increase was due primarily to pricing adjustments associated with the restaging programs in North America and Europe, partially offset by elimination of non-core sanitary pad and disposable diaper products and lower restaged volume in Europe, but aided somewhat by favorable foreign exchange rates in Europe. Gross profit as a percent of sales in 1992 improved by 3.4 percentage points over 1991, to 66.7%, reflecting the successful North American restaging implemented in the third quarter of 1991, the European restaging of 1992, elimination of non-core products and worldwide manufacturing efficiencies. Operating income rose 21% in 1992 compared to 1991 exclusive of the restructuring charge. Marketing, selling and distribution expenses in the USA decreased in 1992 compared to the prior year's unusually high levels incurred to support the 1991 restaging. This reduction was offset by promotional spending to support the European restaging program and heavy planned advertising and education expenditures designed to build the Tampax franchise worldwide. Operating margins continued to rise in 1992 as marketing and promotional spending normalized and the benefit of the worldwide restaging program was felt. -26- Interest, net and other declined significantly in 1992 compared to 1991 due to reductions in cash and marketable securities balances combined with interest expense on increased Short-term borrowings as a result of the Company's share buyback program. The effective tax rate for 1992 was 36.2%, compared to 36.8% in 1991, exclusive of the restructuring charge. Financial Condition CASH FLOWS FROM OPERATING ACTIVITIES 1993 Cash flows from operating activities amounted to $128.7 million versus $95.8 million in 1992. The reduction in Net earnings was more than offset by the 1993 restructuring charge, the cumulative effect of accounting change, and an improvement in working capital. Over the past three years, Cash flows from operating activities totaled $331.9 million. These funds were used for the repurchase of Common Stock for treasury purposes, payment of dividends and capital expenditures. CAPITAL EXPENDITURES The 1993 capital spending programs relate to investments in equipment to improve product quality and productivity, modernize production facilities and reduce costs. Over the past three years, the Company has spent $145.4 million on capital improvements. Capital expenditures in 1994 are expected to be somewhat below 1993 levels. LIQUIDITY AND CAPITAL RESOURCES During 1993, the Company continued to utilize its strong debt rating and a favorable financial climate to take advantage of low US interest rates through short-term bank credit lines and a commercial paper program. Additionally, to provide financial flexibility, the Company established a $150 million Medium-Term Note facility and accessed the debt market in December 1993 by issuing $30 million of these notes. Cash flows from operations and the ability to borrow from a variety of sources will provide the Company with the liquidity to continue the investments necessary to meet the Company's long-term strategic goals. The Company also utilizes cash resources to enhance shareholder value through the payment of dividends and its stock repurchase program. In 1993, the Company paid record cash dividends of $60.1 million. This is the 42nd consecutive year of higher annual dividend payments. During the year, Tambrands spent $57.9 million in its Common Stock repurchase program. Since 1989, a total of 5,901,900 shares have been purchased. The Company will continue the share repurchase program as conditions warrant. -27- CONSOLIDATED STATEMENTS OF EARNINGS Tambrands Inc. and subsidiaries
-------- -------- -------- Years Ended December 31 (in thousands, except per share amounts) 1993 1992 1991 NET SALES $611,465 $684,113 $660,722 Cost of products sold 201,706 228,081 242,567 -------- -------- -------- Gross profit 409,759 456,032 418,155 Selling, administrative and general expenses: Marketing, selling and distribution 202,031 193,477 194,646 Administrative and general 61,378 67,823 63,027 Restructuring and other charges 30,042 - 30,348 -------- -------- -------- 293,451 261,300 288,021 -------- -------- -------- OPERATING INCOME 116,308 194,732 130,134 Interest, net and other 2,344 (2,869) 1,691 -------- -------- -------- Earnings before provision for income taxes and cumulative effect of accounting change 118,652 191,863 131,825 Provision for income taxes 44,950 69,454 52,790 -------- -------- -------- EARNINGS BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 73,702 122,409 79,035 Cumulative effect of accounting change (10,252) (1,009) - -------- -------- -------- NET EARNINGS $ 63,450 $121,400 $ 79,035 ======== ======== ======== Average number of shares outstanding 38,632 39,640 41,216 PER SHARE Earnings before cumulative effect of accounting change $1.91 $3.09 $1.92 Cumulative effect of accounting change (0.27) (0.03) - -------- -------- -------- Net earnings $1.64 $3.06 $1.92 ======== ======== ========
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
-------- -------- -------- Years Ended December 31 (in thousands, except per share amounts) 1993 1992 1991 Balance at beginning of year $433,851 $375,329 $350,983 Net earnings 63,450 121,400 79,035 Dividends (60,154) (55,469) (51,089) Net issuance of treasury stock in fulfillment of various employee benefit, stock option and award plans (6,325) (7,409) (3,600) -------- -------- -------- Balance at end of year $430,822 $433,851 $375,329 ======== ======== ======== Dividends per share $1.56 $1.40 $1.24 -------- -------- --------
See accompanying notes to consolidated financial statements. -28- CONSOLIDATED STATEMENTS OF CASH FLOWS Tambrands Inc. and subsidiaries
-------- --------- --------- Years Ended December 31 (in thousands) 1993 1992 1991 CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $ 63,450 $ 121,400 $ 79,035 Adjustments to reconcile Net earnings to Net Cash Provided by Operating Activities: Depreciation and amortization 18,372 17,315 15,506 Deferred income taxes (3,400) (3,414) (2,036) Cumulative effect of accounting change 10,252 1,009 - Restructuring and other 14,946 (18,439) 23,048 Change in: Accounts receivable 21,485 (4,017) (23,728) Inventories 537 (4,193) 708 Prepaid expenses and other current assets (81) 1,791 (4,489) Taxes on income 3,426 (12,695) 7,690 Accounts payable and accrued expenses (256) (2,958) 11,670 -------- -------- -------- Net Cash Provided by Operating Activities 128,731 95,799 107,404 -------- -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (45,636) (55,125) (44,642) Proceeds from sales of property, plant and equipment 3,686 7,343 18,049 Proceeds from sales of marketable securities, net 1,164 14,243 16,938 -------- -------- -------- Net Cash Used in Investing Activities (40,786) (33,539) (9,655) -------- -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Payment of dividends (60,154) (55,469) (51,089) Purchase of shares for treasury (57,946) (123,451) (52,796) Short-term debt changes (18,308) 72,316 (6,956) Issuance of Medium-Term Notes 30,000 - - Proceeds from exercise of stock options and other 12,432 14,584 3,237 -------- -------- -------- Net Cash Used in Financing Activities (93,976) (92,020) (107,604) -------- -------- -------- Effect of Exchange Rate Changes on Cash (658) (3,147) (979) -------- -------- -------- Net Decrease in Cash and Cash Equivalents (6,689) (32,907) (10,834) Cash and Cash Equivalents at Beginning of Year 21,987 54,894 65,728 -------- -------- -------- Cash and Cash Equivalents at End of Year $ 15,298 $ 21,987 $ 54,894 ======== ========= ========= SUPPLEMENTAL CASH FLOW INFORMATION Cash flow data: Income taxes paid $ 49,567 $ 82,446 $ 52,296 Interest paid 4,574 8,006 8,090 Non-cash investing activities: Capital leases - - 525 -------- -------- --------
See accompanying notes to consolidated financial statements. -29- CONSOLIDATED BALANCE SHEETS Tambrands Inc. and subsidiaries
-------- --------- December 31 (in thousands, except share data) 1993 1992 ASSETS Current Assets Cash and cash equivalents $ 15,298 $ 21,987 Marketable securities 639 1,798 Accounts receivable, net 75,592 98,639 Inventories 38,000 38,578 Deferred taxes on income 20,427 13,252 Prepaid expenses and other current assets 23,806 22,948 -------- -------- Total Current Assets 173,762 197,202 Property, Plant and Equipment, Net 180,396 158,187 Investments in Affiliates - 9,463 Brands, Trademarks, Patents and Other Intangibles, Net 8,240 8,129 -------- -------- Total Assets $362,398 $ 372,981 ======== ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Short-term borrowings $ 64,368 $ 80,160 Accounts payable 25,793 27,656 Accrued expenses 81,083 62,951 Taxes on income 15,137 13,543 -------- -------- Total Current Liabilities 186,381 184,310 Medium-Term Notes Payable 30,000 - Deferred Taxes on Income 17,119 19,432 Other Liabilities 13,873 1,033 -------- -------- Total Liabilities 247,373 204,775 Shareholders' Equity Common Stock, authorized 300,000,000 shares, par value $.25 per share; issued 43,547,938 shares 10,887 10,887 Retained earnings 430,822 433,851 Cumulative foreign currency translation adjustment (20,659) (10,586) Treasury stock (303,948) (264,555) Unamortized value of restricted stock and pension costs (2,077) (1,391) -------- -------- Total Shareholders' Equity 115,025 168,206 -------- -------- Total Liabilities and Shareholders' Equity $362,398 $ 372,981 ======== =========
See accompanying notes to consolidated financial statements. -30- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Tambrands Inc. and subsidiaries (dollar amounts in thousands, except per share amounts) Accounting Policies The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. Where alternatives exist, the choices selected are described below. CONSOLIDATION The 1993 consolidated financial statements include the accounts of Tambrands Inc. and all majority owned subsidiaries (the "Company"). Prior to 1993, businesses in China, Russia and Ukraine were accounted for under the cost method and carried as Investments in Affiliates. The financial results and positions of these businesses were consolidated in 1993. The effect of consolidation of these subsidiaries is not material to the financial statements as a whole; therefore, prior years have not been restated. FOREIGN CURRENCY TRANSLATION For subsidiaries not located in highly inflationary economies, gains or losses resulting from the translation of subsidiary companies' assets and liabilities denominated in foreign currencies are shown as a separate component of Shareholders' Equity. For subsidiaries operating in highly inflationary economies, working capital items are translated using current rates of exchange with adjustments included in Operating income. CASH EQUIVALENTS Highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents. MARKETABLE SECURITIES Marketable securities, comprised of corporate obligations, are stated at cost, which approximates market. INVENTORIES Inventories are stated at the lower of cost or market. Cost is determined using the LIFO method for all domestic inventories. All other inventories are stated at FIFO. DEPRECIATION Depreciation is computed on the straight-line and accelerated methods over the useful lives of the assets. BRANDS, TRADEMARKS, PATENTS AND OTHER INTANGIBLE ASSETS Intangible assets are amortized on a straight-line basis over periods not exceeding 40 years. INCOME TAXES In 1992, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes," which requires a provision for deferred taxes for differences between the financial statement and tax bases of assets and liabilities. Prior to 1992, deferred income taxes were provided on timing differences between financial and income tax reporting methods. Provision has not been made for income taxes on foreign subsidiaries' unremitted earnings to the extent that such earnings have been reinvested in the business; any United States income taxes payable on the distribution of available earnings should generally be offset by credits for foreign taxes paid. RECLASSIFICATIONS Certain reclassifications have been made to prior years' financial statements to conform to the 1993 presentation. -31- Balance Sheet Components The components of certain balance sheet accounts at December 31 are as follows:
-------- -------- 1993 1992 ACCOUNTS RECEIVABLE, NET Accounts receivable trade $ 75,798 $ 97,003 Less allowance for doubtful accounts 1,453 1,560 -------- -------- 74,345 95,443 Other 1,247 3,196 -------- -------- $ 75,592 $ 98,639 ======== ======== INVENTORIES Raw materials $ 10,140 $ 11,569 Finished goods 27,860 27,009 -------- -------- $ 38,000 $ 38,578 ======== ======== Current cost of LIFO inventories $ 26,837 $ 27,035 Stated value of LIFO inventories 9,838 9,577 -------- -------- Excess of current cost over stated value $ 16,999 $ 17,458 ======== ======== PROPERTY, PLANT AND EQUIPMENT, NET (at cost) Buildings, leaseholds and improvements $ 51,907 $ 56,148 Machinery, equipment and fixtures 189,518 152,457 Land 4,536 3,864 Construction in progress 29,388 32,519 -------- -------- 275,349 244,988 Less accumulated depreciation 94,953 86,801 -------- -------- $180,396 $158,187 ======== ======== BRANDS, TRADEMARKS, PATENTS AND OTHER INTANGIBLES, NET Cost $ 14,147 $ 14,131 Less accumulated amortization 5,907 6,002 -------- -------- $ 8,240 $ 8,129 ======== ======== ACCRUED EXPENSES Promotions $ 16,774 $ 12,885 Salaries and benefits 24,691 22,459 Restructuring reserves 18,071 8,348 Other 21,547 19,259 -------- -------- $ 81,083 $ 62,951 ======== ======== OTHER LIABILITIES Capital lease obligations $ 536 $ 1,033 Postemployment benefits 13,337 - -------- -------- $13,873 $ 1,033 ======== ========
-32- Statement of Earnings Information
------- ------- ------- 1993 1992 1991 Interest, Net and Other Net Financing: Interest income $ 983 $ 3,323 $ 4,906 Interest expense (4,890) (8,567) (8,871) Translation gain on foreign currency loans - 3,427 5,329 ------- ------- ------- (3,907) (1,817) 1,364 Net Realization on Foreign Currency Transactions 6,551 (462) 156 Other (300) (590) 171 ------- ------- ------- Interest, Net and Other $ 2,344 $(2,869) $ 1,691 ======= ======= ======= Depreciation $17,570 $15,749 $14,099 Research and Development 9,881 11,769 10,950
Benefit Plans The Company maintains several non-contributory pension plans covering domestic and foreign employees who meet certain minimum service and age requirements and provides supplemental non-qualified retirement benefits to non-employee directors, certain officers and key employees. Pensions are based upon earnings of covered employees during their periods of credited service. The Company's funding policy for its pensions is to make the annual contributions required by applicable regulations. The following table sets forth the funded status of the plans and the amounts recognized in the accompanying financial statements.
-------- ------- 1993 1992 Plan assets at fair value, primarily stocks and bonds $ 91,242 $79,867 Actuarial present value of benefit obligations Vested benefits 91,491 77,596 Nonvested benefits 6,120 4,485 -------- ------- Accumulated benefit obligation 97,611 82,081 Effect of projected future salary increases 11,723 9,704 -------- ------- Projected benefit obligation 109,334 91,785 -------- ------- Projected benefit obligation in excess of plan assets 18,092 11,918 Deferred actuarial adjustments 4,738 3,038 Deferred prior service cost 3,907 2,583 -------- ------- Accrued pension cost included in accrued expenses $ 9,447 $ 6,297 ======== =======
At December 31, 1993 and 1992, the accumulated benefit obligation of the domestic plans exceeded plan assets by $10,251 and $4,400, respectively. -33- The net cost of pensions included in the Statements of Earnings consists of:
-------- ------- -------- 1993 1992 1991 Service cost - benefits earned during the period $ 4,940 $ 4,880 $ 4,227 Interest cost on projected benefit obligation 7,288 7,368 6,624 Actual return on plan assets (12,703) (7,501) (12,363) Net amortization and deferral 6,697 654 6,556 -------- ------- -------- Net cost of pensions $ 6,222 $ 5,401 $ 5,044 ======== ======= ========
In 1993 and 1992, the discount rate used to determine the projected benefit obligation for the domestic plans was 7.5% and the rate of increase in future compensation was 6%. For the international plans, the discount rate used to determine the projected benefit obligation was 8% in 1993 and ranged from 8.5% to 9% in 1992, and the rate of increase in future compensation ranged from 5.5% to 6.5% and 5.5% to 7% in 1993 and 1992, respectively. Expected long-term rates of return on plan assets ranged from 8.5% to 9.25% in 1993 and 8.4% to 9% in 1992. Prior service costs arising from plan amendments are amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits under each plan. As of January 1, 1993, the Company adopted SFAS No. 112, "Employers' Accounting for Postemployment Benefits," recognizing a pre-tax charge to earnings of $16,000, amounting to $10,252 or $.27 per share after tax. In 1992, the Company recognized the full amount of its estimated accumulated postretirement benefit obligation in accordance with the provisions of SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." The pre-tax charge to 1992 earnings was $1,627 with a net earnings effect of $1,009 or $.03 per share. The after-tax amounts of these accounting changes have been reflected in the 1993 and 1992 Statements of Earnings as a cumulative effect of accounting change. The incremental annual cost of accounting for postretirement and postemployment benefits under the new accounting methods is not material. The actuarial assumptions used to measure the cost of postretirement benefits are consistent with those used to measure the cost of the pension plans. The Company also sponsors a defined contribution 401(k) savings plan available to domestic employees who meet certain minimum age and service requirements. The plan, which is funded principally with the Company's Common Stock, includes provision for a discretionary contribution by the Company of up to 2% of each employee's covered earnings based on Company performance. Income Taxes Provision for income taxes for the years ended December 31 has been made as follows:
------- ------- ------- 1993 1992 1991 Current: United States $44,558 $65,885 $40,851 Foreign 3,792 6,983 13,975 ------- ------- ------- 48,350 72,868 54,826 Deferred: United States (3,915) (3,154) (2,474) Foreign 515 (260) 438 ------- ------- ------- (3,400) (3,414) (2,036) ------- ------- ------- $44,950 $69,454 $52,790 ======= ======= =======
-34- Changes in deferred taxes are due primarily to the restructuring provisions established in 1993, 1991 and 1989 and "safe harbor" leases entered into in 1981 and 1982. The difference between the Company's effective tax rate and the statutory federal rate is principally due to state income taxes and the restructuring and other charges. During 1993 and 1992, Shareholders' Equity was credited for $1,330 and $2,336, respectively, relating to compensation expense for tax purposes in excess of the amounts recognized for financial reporting purposes. In 1992, the Company adopted SFAS No. 109, "Accounting for Income Taxes." The adoption of the statement did not have a material effect on Net earnings. Deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The components of the net deferred tax asset (liability) for the years ended December 31 are as follows:
------- ------- 1993 1992 Deferred tax assets: Employee benefits $ 5,219 $ 5,594 Postemployment benefits 5,748 - Intercompany transactions 2,263 5,410 Restructuring 6,879 1,558 Other 7,416 3,462 ------- ------- 27,525 16,024 ------- ------- Deferred tax liabilities: Property, plant and equipment 16,172 12,563 Safe harbor leases 7,490 7,823 Other 555 1,818 ------- ------- 24,217 22,204 ------- ------- Net deferred tax asset (liability) $ 3,308 $(6,180) ======= =======
Restructuring and Other Charges In 1991, the Company announced a program to restructure its worldwide manufacturing operations to improve efficiency and reduce costs and its intention to exit the sanitary pad and diaper businesses in Brazil. As a result, the Company recorded a $30,348 ($23,477 after tax) restructuring charge. In 1993, the Company announced further restructuring as its previous investments in technology will enable it to operate with reduced manufacturing and administrative overhead and number of employees. The Company provided $30,042, or $20,273 after tax, for this restructuring and the cost of management changes including the adoption of a consolidated international management strategy. The provision includes the costs associated with salary and benefit continuation due to work force reductions and the revaluation and consolidation of certain manufacturing and office facilities. Commitments and Contingencies The Company's lease of its headquarters in White Plains, New York and European headquarters in the United Kingdom are non-cancelable operating leases. Certain computers and related equipment are held under capital leases. Future minimum lease payments under operating leases with terms in excess of one year amount to $4,593 in 1994, $4,088 in 1995, $3,560 in 1996, $3,221 in 1997 and $3,021 in 1998. Rent expense in 1993, 1992 and 1991 amounted -35- to $5,027, $4,031 and $4,204, respectively. Future minimum lease payments under capital leases with terms in excess of one year amount to approximately $550 in both 1994 and 1995; no capital leases extend beyond 1995. The Company has been named in product liability litigation and claims arising from the alleged association of tampons with Toxic Shock Syndrome. The cases seek compensatory and punitive damages in various amounts. The Company and certain of its present and former officers have been named as defendants in certain shareholder lawsuits now consolidated into one action. The consolidated lawsuit purports to be a federal securities fraud class action on behalf of all purchasers of the Company's Common Stock during the period December 14, 1992 through June 2, 1993. The complaint alleges that the Company's disclosures during the alleged class period contained material misstatements and omissions concerning its anticipated future earnings. The complaint seeks an unspecified amount of damages on behalf of the purported class. The Company is a nominal defendant in three purported shareholder derivative lawsuits that have been consolidated into a single action. Named in the consolidated complaint as individual defendants are the Company's directors (and certain of its former directors) and two of its former officers. The complaint alleges that, among other things, the officer-defendants exposed the Company to liability in the purported shareholder class action described in the preceding paragraph. The director-defendants are alleged to have acquiesced in the alleged violations. The complaint seeks to recover on behalf of the Company an unspecified amount of damages from the individual defendants. No relief is sought against the Company. While it is not feasible to predict the outcome of these legal proceedings and claims with certainty, management is of the belief that any ultimate liabilities for damages either are covered by insurance or should not have a material adverse effect on the Company's financial position. Borrowings The Company's Short-term borrowings consist of unsecured commercial paper and notes payable bearing interest at prevailing market rates and supported by bank lines of credit amounting to $161,000 at December 31, 1993 and 1992. Commercial paper borrowings at December 31, 1993 and 1992 were $48,425 and $79,135 at average annual interest rates of 3.4% and 4%, respectively, with maturities in the first quarter of the subsequent year. Notes payable at December 31, 1993 and 1992 totaled $15,943 and $1,025 at average annual rates of 4.3% and 7%, respectively. Commitment fees to secure the lines of credit are not material. In 1993, the Company established a $150,000 Medium-Term Note facility and issued $30,000 of these unsecured notes at interest rates ranging from 5.525% to 5.58% maturing in January 1999. The terms of the borrowing facilities include various covenants which provide, among other things, for limitations on liens and the maintenance of a minimum debt service ratio. The Company was in compliance with such covenants at December 31, 1993. Financial Instruments The Company minimizes its exposure to foreign currency fluctuation through the use of forward exchange contracts and options. Realized and unrealized gains and losses on hedging contracts designated as hedges of foreign currency transactions are deferred and recognized in the Statement of Earnings in the same period as the underlying transactions. All other realized and unrealized gains and losses are recognized in the current period. At December 31, 1993 and 1992, the Company had forward exchange contracts outstanding with face values of $50,627 and $24,038, respectively, the carrying value of which approximated market. The contracts mature in less than one year. The estimated fair value of Medium-Term Notes payable at December 31, 1993 approximated their carrying value of $30,000. -36- Shareholders' Equity COMMON STOCK In 1992, the Company increased the number of authorized shares of Common Stock from 150 million to 300 million. Changes in outstanding shares for the years ended December 31 are as follows:
---------- ---------- ---------- 1993 1992 1991 Shares outstanding at beginning of year 39,162,634 40,647,529 41,537,853 Purchased for treasury (1,187,100) (1,856,200) (1,059,300) Issued for stock option and other employee plans from treasury 317,418 371,305 168,976 ---------- ---------- ---------- Shares outstanding at end of year 38,292,952 39,162,634 40,647,529 ========== ========== ========== Shares held in treasury at end of year 5,254,986 4,385,304 2,900,409 ---------- ---------- ----------
The Company has stock option plans which provide for the granting of options to directors, officers and key employees to purchase shares of its Common Stock within ten years at prices equal to the fair market value on the date of grant. Activity for the years 1993, 1992 and 1991 is as follows:
Average Average Average Shares Price Shares Price Shares Price ------------------- ------------------- ------------------- 1993 1992 1991 Options for Common Stock: Outstanding at beginning of year 2,755,451 $51.22 2,561,623 $46.07 973,952 $31.88 Granted 452,272 43.96 590,075 63.47 1,704,598 52.91 Cancelled (446,546) 54.04 (80,580) 53.35 (16,300) 36.01 Exercised (236,291) 30.42 (315,667) 31.76 (100,627) 26.16 ------------------- ------------------- ------------------- Outstanding at end of year 2,524,886 $51.36 2,755,451 $51.22 2,561,623 $46.07 =================== =================== ===================
At December 31, 1993 and 1992, respectively, there were 1,137,470 and 616,003 shares exercisable at average prices of $51.18 and $42.45 and there were 2,741,522 and 337,887 shares available for granting options. UNAMORTIZED VALUE OF RESTRICTED STOCK AND PENSION COSTS Changes in the unamortized value of restricted stock represent charges for the market value of grants made during the year offset by periodic amortization. Such net charges amounted to ($577), ($442) and $827 for the years ended December 31, 1993, 1992 and 1991, respectively. In 1993, an excess pension liability adjustment amounting to $1,263, net of tax benefits, was charged to Shareholders' Equity. CUMULATIVE FOREIGN CURRENCY TRANSLATION ADJUSTMENT Amounts charged to Shareholders' Equity were $10,073, $19,804 and $1,014 for the years ended December 31, 1993, 1992 and 1991, respectively. -37- Segment and Geographic Information The Company operates in one industry segment, personal care products. The Company markets these products around the world. Sales are made and credit is granted to drug, grocery, variety and discount stores and other comparable outlets as well as to wholesalers and distributors in those trades. A small number of significant customers are financed through highly leveraged capital structures, making them particularly sensitive to market interest rate changes and other economic variables. Information about the Company's operations in different geographic areas follows:
-------- -------- -------- 1993 1992 1991 Net sales United States $363,337 $393,494 $377,880 Europe 182,854 204,114 185,213 Other international 65,274 86,505 97,629 -------- -------- -------- Consolidated $611,465 $684,113 $660,722 ======== ======== ======== Earnings before provision for income taxes and cumulative effect of accounting change United States $107,484 $147,437 $118,344 Europe 18,202 43,010 32,671 Other international (7,034) 1,416 (19,190) -------- -------- -------- Consolidated $118,652 $191,863 $131,825 ======== ======== ======== Identifiable assets at December 31 United States $196,907 $195,192 $172,885 Europe 153,016 158,835 161,688 Other international 11,836 17,156 37,875 Marketable securities 639 1,798 17,818 -------- -------- -------- Consolidated $362,398 $372,981 $390,266 ======== ======== ========
Certain overhead costs are allocated to the geographic areas based on the anticipated benefit to be derived by the area. Net current assets of consolidated subsidiaries operating outside of the United States and the total net assets of such subsidiaries were as follows:
-------- -------- -------- 1993 1992 1991 Net current assets at December 31 Europe $ 57,870 $ 65,668 $ 62,406 Other international 4,384 8,068 11,784 ======== ======== ======== Total net assets at December 31 Europe $132,973 $130,530 $120,349 Other international 5,314 13,691 24,763 ======== ======== ========
-38- INDEPENDENT AUDITORS' REPORT To the Board of Directors and Shareholders of Tambrands Inc.: We have audited the accompanying consolidated balance sheets of Tambrands Inc. and subsidiaries as of December 31, 1993 and 1992 and the related consolidated statements of earnings, retained earnings and cash flows for each of the years in the three-year period ended December 31, 1993. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Tambrands Inc. and subsidiaries as of December 31, 1993 and 1992 and the results of their operations and cash flows for each of the years in the three-year period ended December 31, 1993, in conformity with generally accepted accounting principles. As discussed in the notes to the consolidated financial statements, the Company changed its method for accounting for postemployment benefits in 1993 and for postretirement benefits in 1992. KPMG PEAT MARWICK Stamford, Connecticut January 25, 1994 -39- Schedule V - Page 1 ------------------- TAMBRANDS INC. AND SUBSIDIARIES Property, Plant and Equipment Year Ended December 31, 1993 (dollars in thousands)
Transfers Foreign Restruc- Balance at between currency turing Balance beginning Additions classi- trans- and other at end Classification of period at cost Retirements fications lation charges of period - -------------- ---------- -------- ----------- ---------- -------- --------- --------- Land $ 3,864 $ 799 $ (23) $ 0 $ (92) $ (12) $ 4,536 Buildings, leaseholds and improve- ments 56,148 1,818 (3,023) 3,413 (1,145) (5,304) 51,907 Machinery, equipment and fixtures 152,457 9,103 (7,059) 41,391 (3,648) (2,726) 189,518 Construction in progress 32,519 43,696 (192) (44,804) (636) (1,195) 29,388 -------- ------- -------- -------- ------- ------- -------- $244,988 $55,416(a) $(10,297) $ 0 $(5,521) $(9,237) $275,349 ======== ======= ======== ======== ======= ======= ========
(a) Includes assets of previously unconsolidated subsidiaries of $9,780. -40- Schedule V - Page 2 ------------------- TAMBRANDS INC. AND SUBSIDIARIES Property, Plant and Equipment Year Ended December 31, 1992 (dollars in thousands)
Transfers Foreign Balance at between currency Balance beginning Additions classi- trans- at end Classification of period at cost Retirements fications lation of period - -------------- ---------- -------- ----------- ---------- -------- --------- Land $ 1,074 $ 358 $ (18) $ 2,924 $ (474) $ 3,864 Buildings, leaseholds and improve- ments 55,782 469 (2,635) 5,549 (3,017) 56,148 Machinery, equipment and fixtures 159,864 5,161 (33,202) 29,195 (8,561) 152,457 Construction in progress 23,008 50,396 (867) (37,668) (2,350) 32,519 -------- ------- -------- -------- -------- -------- $239,728 $56,384 (a) $(36,722) $ 0 $(14,402) $244,988 ======== ======= ======== ======== ======== ========
(a) Includes assets of subsidiary acquired of $1,259. -41- Schedule V - Page 3 ------------------- TAMBRANDS INC. AND SUBSIDIARIES Property, Plant and Equipment Year Ended December 31, 1991 (dollars in thousands)
Transfers Foreign Restruc- Balance at between currency turing Balance beginning Additions classi- trans- and other at end Classification of period at cost Retirements fications lation charges of period - -------------- ---------- -------- ----------- ---------- -------- --------- --------- Land $ 1,123 $ 0 $ (44) $ 0 $ (5) $ 0 $ 1,074 Buildings, leaseholds and improve- ments 44,704 10,820 0 563 (305) 0 55,782 Machinery, equipment and fixtures 140,448 20,898 (6,750) 8,676 (318) (3,090) 159,864 Construction in progress 19,308 13,449 0 (9,239) (172) (338) 23,008 -------- ------- ------- ------- ----- ------- -------- $205,583 $45,167 (a) $(6,794) $ 0 $(800) $(3,428) $239,728 ======== ======= ======= ======= ===== ======= ========
(a) Includes capital leases of $525. -42- Schedule VI - Page 1 -------------------- TAMBRANDS INC. AND SUBSIDIARIES Accumulated Depreciation of Property, Plant and Equipment Year Ended December 31, 1993 (dollars in thousands)
Additions Transfers Foreign Restruc- Balance at charged to between currency turing Balance beginning costs and classi- trans- and other at end Classification of period expenses Retirements fications lation charges of period - -------------- ---------- ---------- ----------- --------- -------- --------- --------- Buildings, leaseholds and improve- ments $18,295 $ 2,740 $(1,460) $ 0 $ (387) $ 0 $19,188 Machinery, equipment and fixtures 68,506 17,309 (3,953) 0 (1,242) (4,855) 75,765 ------- ------- ------- ---- ------- ------- ------- $86,801 $20,049 (a) $(5,413) $ 0 $(1,629) $(4,855) $94,953 ======= ======= ======= ==== ======= ======= =======
(a) Includes accumulated and current year depreciation of previously unconsolidated subsidiaries amounting to $2,916. -43- Schedule VI - Page 2 -------------------- TAMBRANDS INC. AND SUBSIDIARIES Accumulated Depreciation of Property, Plant and Equipment Year Ended December 31, 1992 (dollars in thousands)
Additions Transfers Foreign Balance at charged to between currency Balance beginning costs and classi- trans- at end Classification of period expenses Retirements fications lation of period - -------------- ---------- ---------- ----------- --------- -------- --------- Buildings, leaseholds and improve- ments $ 16,927 $ 2,340 $ (124) $ 52 $ (900) $18,295 Machinery, equipment and fixtures 87,124 13,409 (28,706) (52) (3,269) 68,506 -------- ------- -------- ---- ------- ------- $104,051 $15,749 $(28,830) $ 0 $(4,169) $86,801 ======== ======= ======== ==== ======= =======
-44- Schedule VI - Page 3 -------------------- TAMBRANDS INC. AND SUBSIDIARIES Accumulated Depreciation of Property, Plant and Equipment Year Ended December 31, 1991 (dollars in thousands)
Additions Transfers Foreign Restruc- Balance at charged to between currency turing Balance beginning costs and classi- trans- and other at end Classification of period expenses Retirements fications lation charges of period - -------------- ---------- ---------- ----------- --------- -------- --------- --------- Buildings, leaseholds and improve- ments $15,440 $ 1,546 $ 0 $ 0 $ (59) $ 0 $ 16,927 Machinery, equipment and fixtures 80,444 12,553 (5,009) 0 (291) (573) 87,124 ------- ------- ------- ---- ----- ----- -------- $95,884 $14,099 $(5,009) $ 0 $(350) $(573) $104,051 ======= ======= ======= ==== ===== ===== ========
-45- Schedule VIII ------------- TAMBRANDS INC. AND SUBSIDIARIES Reserves Years Ended December 31, 1993, 1992 and 1991 (dollars in thousands)
1993 1992 1991 ------ ------ ------ Reserve deducted in the balance sheet from the asset to which it applies - allowance for doubtful accounts Balance at beginning of period $1,560 $1,580 $1,379 Additions charged to cost and expenses 556 532 423 Reclassification of unrecover- able promotional allowance & other (144) (88) (20) Write-off of bad debts (519) (464) (202) ------ ------ ------ Balance at end of period $1,453 $1,560 $1,580 ====== ====== ======
-46- Schedule IX - Page 1 -------------------- TAMBRANDS INC. AND SUBSIDIARIES Short-Term Borrowings December 31, 1993 (dollars in thousands)
Maximum Average Weighted Description Weighted Amount Amount Average of Balance Average Outstanding Outstanding Interest Short-Term at Interest During the During the Rate During Borrowings 12/31/93 Rate Year Year the Year - ----------- -------- -------- ----------- ----------- ----------- Bank Borrowings $15,943 4.4476% $29,044 $14,516 4.2866% Commercial Paper 48,425 3.5197% 107,792 77,750 3.4058% ------- $64,368 =======
-47- Schedule IX - Page 2 -------------------- TAMBRANDS INC. AND SUBSIDIARIES Short-Term Borrowings December 31, 1992 (dollars in thousands)
Maximum Average Weighted Description Weighted Amount Amount Average of Balance Average Outstanding Outstanding Interest Short-Term at Interest During the During the Rate During Borrowings 12/31/92 Rate Year Year the Year - ----------- -------- -------- ----------- ----------- ----------- Bank Borrowings $ 1,025 7.0326% $ 94,767 $47,310 6.9857% Commercial Paper 79,135 3.9605% 79,135 6,087(a) 3.9605% ------- $80,160 =======
(a) Commercial paper was outstanding only in the month of December. Average outstanding for the month was $50,287. -48- Schedule IX - Page 3 -------------------- TAMBRANDS INC. AND SUBSIDIARIES Short-Term Borrowings December 31, 1991 (dollars in thousands)
Maximum Average Weighted Description Weighted Amount Amount Average of Balance Average Outstanding Outstanding Interest Short-Term at Interest During the During the Rate During Borrowings 12/31/91 Rate Year Year the Year - ----------- -------- -------- ----------- ----------- ----------- Bank Borrowings (a) $7,597 16.3979% $18,562 $8,170 30.6094%(b) Other 250 N/A 250 250 N/A ------ $7,847 ======
(a) Loans outstanding in hyperinflationary countries. (b) Nominal rate excluding devaluation. -49- Schedule X ---------- TAMBRANDS INC. AND SUBSIDIARIES Supplementary Income Statement Information Years Ended December 31, 1993, 1992 and 1991 (dollars in thousands)
Charged to Costs and Expenses ----------------------------- 1993 1992 1991 ------- ------- ------- Maintenance and repairs $ 8,857 $10,424 $10,727 ======= ======= ======= Taxes, other than payroll and income taxes: Franchise and licenses $ 7,100 $10,052 $ 5,354 Real estate, personal property, etc. 2,583 2,633 3,261 ------- ------- ------- $ 9,683 $12,685 $ 8,615 ======= ======= ======= Media Advertising costs $48,309 $37,980 $36,158 ======= ======= =======
-50- Independent Auditors' Report ---------------------------- The Board of Directors and Shareholders Tambrands Inc.: Under date of January 25, 1994, we reported on the consolidated balance sheets of Tambrands Inc. and subsidiaries as of December 31, 1993 and 1992, and the related consolidated statements of earnings, retained earnings and cash flows for each of the years in the three-year period ended December 31, 1993, as contained in the annual report on Form 10-K for the year 1993. Our report refers to a change in accounting for postemployment benefits in 1993 and postretirement benefits in 1992. In connection with our audits of the aforementioned consolidated financial statements, we also have audited the related financial statement schedules as listed in Item 14(a)2 of the annual report on Form 10-K for the year 1993. These financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statement schedules based on our audits. In our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. KPMG PEAT MARWICK Stamford, Connecticut January 25, 1994 -51- Supplementary Financial Information and Quarterly Data ----------------------------------- QUARTERLY DATA (unaudited)
First Second Third Fourth ---------------- ---------------- -------------- -------------- (in millions, except per share amounts) 1993 1992 1993(a) 1992 1993 1992 1993 1992 ------- ------ ------- ------ ------ ------ ------ ------ Net sales $154.3 $174.9 $149.0 $169.4 $161.4 $174.5 $146.7 $165.3 Gross profit 105.1 116.1 100.9 112.4 107.5 116.3 96.2 111.2 Net earnings before cumulative effect of accounting change 32.2 29.3 (3.4) 28.4 23.8 33.6 21.1 31.1 Per share 0.82 0.73 (0.09) 0.72 0.62 0.85 0.55 0.80 Net earnings 21.9 28.3 (3.4) 28.4 23.8 33.6 21.1 31.1 Per share 0.56 0.70 (0.09) 0.72 0.62 0.85 0.55 0.80
(a) Results have been adversely affected by the restructuring and other charges as described in the notes to the consolidated financial statements. -52- Index to Exhibits -----------------
Exhibit Number Description - ---------- -------------------------------------- 3(4) By-Laws of the Company, as amended. 4(4)(a) Indenture dated as of December 1, 1993 between the Company and Citibank, N.A., as trustee, relating to the Company's Medium-Term Note Program. 10(3)(h) Sixth Amendment to 1991 Stock Option Plan, effective as of February 1, 1994. 10(5)(a) Supplemental Executive Retirement Plan, effective July 1, 1986, as amended and restated effective July 1, 1994. 10(8)(e) Fourth Amendment to 1992 Directors Stock Incentive Plan, effective as of March 1, 1994 (subject to shareholder approval at the annual meeting of shareholders to be held on April 26, 1994). 10(9)(e) Employment Protection Agreement between the Company and Ms. Helen G. Goodman, dated as of December 1, 1989, and First Amendment to Employment Protection Agreement between the Company and Ms. Helen G. Goodman, dated as of October 16, 1990. 10(21) Retirement Agreement between the Company and Mr. Charles J. Chapman, dated as of February 28, 1994. 12 Computation of Ratio of Earnings to Fixed Charges. 21 Subsidiaries of the Company. 23 Independent Auditors' Consent. 24 Powers of attorney.
The Company will furnish a copy of any exhibit to a shareholder requesting such exhibit in writing upon payment by the shareholder of a fee representing the Company's reasonable expenses in furnishing such exhibit. EX-3.4 2 TAMBRANDS BY-LAWS EXHIBIT 3(4) BY-LAWS OF TAMBRANDS INC. -------------- as amended through September 20, 1993 ARTICLE I STOCKHOLDERS. ------------ Section 1. The annual meeting of the stockholders of the Corporation shall be held, at such time and at such place within or without the State of Delaware as may be fixed by the Board of Directors from time to time, for the purpose of electing directors and for the transaction of such other business as may properly be brought before the meeting. Any previously scheduled annual meeting of the stockholders may be postponed by resolution of the Board of Directors upon public notice given on or prior to the date previously scheduled for such annual meeting of stockholders. To be properly brought before an annual meeting, business must be (a) specified in the notice of meeting (or any --- supplement thereto) given by or at the direction of the Board of Directors, (b) --- otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before the meeting by a --- stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this Section 1, who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Section 1. For business to be properly brought before an annual meeting by a stockholder, if such business is related to the election of directors of the Corporation, the procedures in Article II, Section 9 of these By-Laws must be complied with. If such business relates to any other matter, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered to or mailed to and received at the principal executive offices of the Corporation not less than 60 days nor more than 90 days prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. Such stockholder's notice shall set forth in writing as to each matter the stockholder proposes to bring before the annual meeting (i) a brief --- description of the business desired to be brought before the annual meeting, the reasons for conducting such business at the annual meeting, and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (ii) as to the stockholder giving the ---- notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (A) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner and (B) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner. Notwithstanding anything in these By-Laws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section 1. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not -2- properly brought before the meeting in accordance with the provisions of this Section 1, and if he should so determine, the Chairman shall declare to the meeting that any such business not properly brought before the meeting shall not be transacted. For purposes of this Section 1 and Article II, Section 9, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition to the provisions of this Section 1, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in these By-Laws shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act. Section 2. Special meetings of the stockholders may be held only upon call of the Board of Directors or of the Executive Committee or of the Chairman of the Board or of the President, at such time and at such place within or without the State of Delaware as may be fixed by the Board of Directors or by the Executive Committee or by the Chairman of the Board or by the President, as the case may be, and as may be stated in the notice setting forth such call. Any previously scheduled special meeting of the stockholders may be postponed by resolution of the Board of Directors upon public notice given on or prior to the date previously scheduled for such special meeting of stockholders. -3- The purpose or purposes of any special meeting of stockholders shall be set forth in the notice of meeting, and, except as otherwise required by law or by the Certificate of Incorporation, no business shall be transacted at any special meeting of stockholders other than the items of business stated in the notice of meeting. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 2, and if he should so determine, the Chairman shall declare to the meeting that any such business not properly brought before the meeting shall not be transacted. Section 3. Notice of the time and place of every meeting of stockholders shall be delivered personally or mailed not less than ten days nor more than 60 days prior to such meeting to each stockholder of record entitled to vote thereat, who shall have furnished a written address to the Secretary of the Corporation for the purpose. Such further notice shall be given as may be required by law. Meetings may be held without notice, if all stockholders entitled to vote are present, or if notice is waived by those not present. Section 4. The holders of record of a majority of the shares of the capital stock of the Corporation, issued and outstanding, and entitled to vote, present in person or by proxy shall, except as otherwise provided by law, constitute a quorum at all meetings of the stockholders. Whether or not a quorum is present at the meeting, the Chairman of the meeting or the holders of a majority of such shares so present or represented may adjourn the meeting from time to time. The stockholders present at any duly organized meeting may continue to transact business until adjournment, notwithstanding the -4- withdrawal of sufficient stockholders to constitute the remaining stockholders less than a quorum. Section 5. Meetings of the stockholders shall be presided over by the Chairman of the Board, or if he is not present, by the President, or if neither of them is present, by a Vice President, or, if neither the Chairman of the Board, the President nor a Vice President is present, by a Chairman to be chosen at the meeting. The Secretary of the Corporation, or in his absence, an Assistant Secretary, shall act as Secretary of the meeting, or, if neither the Secretary nor an Assistant Secretary is present, then the meeting shall choose its Secretary. Section 6. Each stockholder entitled to vote at any meeting shall have one vote in person or by proxy for each share of stock held by him which has voting power upon the matter in question at the time; but no proxy shall be voted on after three years from its date, unless such proxy provides for a longer period. Section 7. Unless otherwise provided by express provision of applicable law, the Certificate of Incorporation or these By-Laws, all matters to be decided at a meeting of stockholders shall be by the vote of a majority of the shares present, either in person or by proxy, that are entitled to vote at such meeting, except that the election of directors shall be by a plurality of votes cast. At all elections of directors by the stockholders the voting shall be by ballot. The Corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the -5- Chairman of such meeting shall appoint one or more inspectors to act at such meeting. No director or candidate for the office of director shall be appointed as such inspector. Each inspector shall first take and subscribe an oath or affirmation faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability, shall make a certificate of the result of the vote taken after the balloting, and shall have such other duties as are prescribed by law. The Chairman of the meeting shall fix and announce at the meeting the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at the meeting. Section 8. In order to determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action (other than action by consent, which is the subject of Article I Section 9 of these By-Laws), the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than 60 nor less than 10 days before the date of any such meeting, nor more than 60 days prior to any other such action. A determination of the stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. Section 9. (a) Unless otherwise provided in the Certificate of -6- Incorporation, any action required to be taken at any annual or special meeting of the stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may, subject to the provisions of this Section 9, be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the actions so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. (b) Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered to the Corporation, written consents signed by a sufficient number of holders to take action are delivered to the Corporation. (c) The record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be fixed by the Board of Directors. Any stockholder seeking to have the stockholders authorize or take corporate action by written consent without a meeting shall, by written notice to the Secretary of the Corporation, request the Board of Directors to fix a record date. Upon receipt of such a request, the Secretary of the Corporation shall, as promptly as practicable, direct the Chairman or the President to call a special meeting of the Board of Directors to be held -7- as promptly as practicable, but in any event not more than 10 days following the date of receipt of such a request. At such a meeting, the Board of Directors shall fix a record date which shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which shall not be more than 10 days after the date that the resolution fixing the record date is adopted by the Board of Directors. Notice of the record date shall be published in accordance with the rules and policies of any stock exchange on which securities of the Corporation are then listed or, if the securities of the Corporation are not listed on a stock exchange, then notice of the record date shall be published in accordance with the rules and policies of the National Association of Securities Dealers Automatic Quotation National Market System. If no record date has been so fixed by the Board of Directors, the record date for determining the stockholders entitled to consent to corporate action in writing without a meeting, where no prior action by the Board of Directors is required by the Delaware General Corporation Law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation. If no date has been fixed by the Board of Directors and prior action by the Board of Directors is required by the Delaware General Corporation Law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action. (d) In the event of the delivery to the Corporation of a written consent or consents purporting to represent the requisite voting power to authorize or take corporate action and/or related revocations, the Secretary -8- of the Corporation shall provide for the safekeeping of such consents and revocations and shall, as promptly as practicable, engage inspectors for the purpose of promptly performing a ministerial review of the validity of the consents and revocations. No action by written consent without a meeting shall be effective until such inspectors have completed their review, determined that the requisite number of valid and unrevoked consents has been obtained to authorize or take actions specified in the consents and certified such determination for entry in the records of the Corporation for the purpose of recording the proceedings of meetings of the stockholders. (e) For purposes of this Section 9, delivery to the Corporation shall be effected by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. ARTICLE II DIRECTORS. ---------- Section 1. The number of directors shall be fixed by the Board of Directors from time to time by appropriate resolution, provided that the number of directors shall not be less than three. A director shall hold office until his successor is elected and has qualified. A director need not be a stockholder. One-third of the total number of directors shall constitute a quorum for the transaction of business, provided that a quorum shall never be less than two directors. If at any meeting of the Board of Directors there -9- shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time until a quorum shall have been obtained. The Board of Directors may designate the Chairman of the Board as an officer. Section 2. Whenever any vacancy shall have occurred in the Board of Directors by reason of death, resignation, increase in the number of directors, or otherwise, it shall be filled by a majority of the remaining directors, though less than a quorum, and the person so chosen shall hold office for the unexpired term of the director whom he will have succeeded, or in a case of the increase of the number of directors, the person so chosen shall hold office until his successor is elected and has qualified. Section 3. Meetings of the Board of Directors shall be held at such place within or without the State of Delaware as may from time to time be fixed by resolution of the Board, or as may be specified in the notice of any meeting. Regular meetings of the Board of Directors shall be held at such times as may from rime to time be fixed by resolution of the Board. Notice need not be given of regular meetings of the Board held at times fixed by resolution of the Board. A meeting of the Board may be held without notice immediately after the annual meeting of stockholders at the same place at which such meeting was held. Special meetings of the Board of Directors may be called at any time by or at the direction of the Board of Directors itself, the Executive Committee, the Chairman of the Board or the President or, in the event of the absence or disability of the Chairman and the President, by or at the direction of the Secretary by oral, telegraphic or written notice to each director, duly served or sent at least 24 hours before such meeting or, if mailed, mailed no later than the fourth calendar day before such meeting. Meetings -10- may be held at any time without notice if all the directors are present or if those not present waive notice of the meeting, in writing. Section 4. The Board of Directors may, in its discretion, by resolution passed by a majority of the whole Board, designate an Executive Committee to consist of the Chairman or the President and such number of other directors (not less than two) as the Board may from time to time determine, which Committee shall have, and may exercise when the Board is not in session, all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it, may declare a dividend or dividends, may authorize the issuance of stock and may adopt a certificate of ownership and merger pursuant to Section 253 (or its successor provision) of the Delaware General Corporation Law; but the power and authority of the Executive Committee shall be subject to the provisions of Section 141(c) (or its successor provision) of the Delaware General Corporation Law and any other applicable statute. The Board may designate one or more directors as alternate members of the Executive Committee, who may replace any absent or disqualified member at any meeting of the Executive Committee. The Board shall have the power at any time to change the membership of the Executive Committee, or to fill vacancies in it, or to dissolve it. The Executive Committee may make such rules for the conduct of its business as it shall from time to time deem necessary or appropriate. A majority of the members of the Executive Committee shall constitute a quorum. Section 5. The Board of Directors may, in its discretion, by resolution passed by a majority of the whole Board, appoint one or more other -11- Committees in addition to the Executive Committee, each consisting of one or more of the directors of the Corporation, which shall have and may exercise such of the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation as shall be conferred by the resolution appointing it, and which, in furtherance thereof, may authorize the seal of the Corporation to be affixed to all papers which may require it; but the power and authority of any such Committee shall be subject to the provisions of Section 141(c) (or its successor provision) of the Delaware General Corporation Law and any other applicable statue. The Board may designate one or more directors as alternate members of any such Committee, who may replace any absence or disqualified member at any meeting of such Committee. The Board shall have the power at any time to change the membership of any such Committee, or to fill vacancies in it, or to dissolve it. Any such Committee may make such rules for the conduct of its business as it shall from time to time deem necessary or appropriate. Except as may be otherwise provided by resolution of the Board, a majority of the members of any such Committee, composed of more than two members, shall constitute a quorum. Section 6. Each director who is not also an officer of the Corporation shall receive as compensation for all his or her services as a Director, an annual fee plus an additional fee for attendance at each meeting of the Board of Directors and each meeting of any committee of the Board of which he or she is a member, each such fee to be in such amount as may from time to time be fixed by resolution of the Board. Directors who are also officers shall receive no additional compensation for their services as Directors of the Corporation. -12- Section 7. The Board of Directors may (but need not) elect one of the directors as Chairman of the Board, but a director so elected shall not be an officer or employee of the Corporation, and shall not exercise the functions of an officer, unless expressly so designated as provided in Section 1 of Article III. The Chairman of the Board shall serve until the meeting of the Board next following the ensuing annual meeting of stockholders but may be removed at any time by the affirmative vote of a majority of the members of the Board then in office. Section 8. Each director shall retire from the Board not later than the date of the annual meeting of the stockholders of the Corporation next following his 70th birthday. Section 9. Nomination of Directors. (a) Only persons who are nominated ----------------------- in accordance with the procedures set forth in this Section 9 shall be eligible for election as directors of the Corporation. Nominations of persons for election to the Board of Directors of the Corporation may be made at any annual meeting of stockholders by or at the direction of the Board of Directors or by any stockholder of the Corporation entitled to vote for the election of directors at the meeting who was a stockholder of record at the time of giving of notice provided for in this Section 9 and who complies with the notice procedures see forth in this Section 9. Any such nomination by a stockholder shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely notice for an annual meeting, a stockholder's notice shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not less than 60 days nor more than 90 days prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the -13- annual meeting is advanced by more than 30 days or delayed-by more than 60 days from such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the 10th day following the day on which public announcement (as defined in Article I, Section 1) of the date of such meeting is first made. Notwithstanding anything in the foregoing sentence to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the Corporation at least 70 days prior to the first anniversary of the preceding year's annual meeting, a stockholder's notice required by this Section 9 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation. Such stockholder's notice shall set forth in writing (i) as to each person whom the stockholder proposes to nominate for election or re-election as a director (A) the name, age, business address and residence address of such person, (B) the principal occupation or employment of such person, (C) the number of shares of stock of the Corporation which are beneficially owned by such person, and (D) any other information relating to such person that is required to be disclosed in connection with the solicitation of proxies for election of directors, or as otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including, -14- without limitation, such person's written consent to being named in a proxy statement as a nominee and to serving as a director if elected); and (ii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made (A) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner and (B) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner. (b) Nominations of persons for election to the Board of Directors of the Corporation may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation's notice of meeting (i) by or at the direction of the Board of Directors or (ii) provided that the Board of Directors has determined that directors shall be elected at such special meeting, by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Section 9, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 9. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified ln the Corporation's notice of meeting, if the stockholder's notice shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not earlier than the 90th day prior to such special meeting and not later than the close of business on the later of the 60th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting -15- and of the nominees proposed by the Board of Directors to be elected at such meeting. (c) At the request of the Board of Directors, any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the Corporation that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 9. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by these By-Laws and in that event the defective nomination shall be disregarded. In addition to the provisions of this Section 9, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. ARTICLE III OFFICERS. --------- Section l. The Board of Directors as soon as may be after the election held in each year shall choose a President of the Corporation, one or more Vice Presidents, a Secretary and a Treasurer. One or more of the Vice Presidents may be designated Executive Vice President, and one or more of the Vice Presidents may be designated Senior Vice President. The Board of Directors or the Executive Committee may from time to time appoint such additional Vice Presidents, such Assistant Vice Presidents, Assistant Secretaries and Assistant Treasurers and such other officers as it may deem proper and may -16- fill vacancies in any office. The office of Secretary and Treasurer may be held by the same person and a Vice President of the Corporation may be either the Secretary or the Treasurer. The President shall be chosen from the directors. The Board of Directors may at any time choose a Chairman of the Board. Section 2. The term of office of all officers shall be one year, or until their respective successors are chosen, but any officer may be removed from office at any time by the affirmative vote of a majority of the members of the Board then in office. Section 3. The officers of the Corporation shall each have such powers and duties as generally pertain to their respective offices, as well as such powers and duties as from time to time may be conferred by the Board of Directors or by the Executive Committee. The Treasurer and the Assistant Treasurers may be required to give bond for the faithful discharge of their duties, in such form and with such surety or sureties as the Board of Directors may from time to time prescribe. ARTICLE IV INDEMNIFICATION. ---------------- Section 1. Nature of Indemnity. The Corporation shall indemnify any -------------------- person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust -17- or other enterprise, including an employee benefit plan, or by reason of any action alleged to have been taken or omitted in such capacity, and may indemnify any person who was or is a party or is threatened to be made a party to such an action, suit or proceeding by reason of the fact that he is or was or has agreed to become an employee or agent of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including an employee benefit plan, against expenses (including attorneys' fees), judgments, fines, excise taxes or penalties (including those payable under the Employee Retirement Income Security Act of 1974, as amended) and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with such action, suit or proceeding and any appeal therefrom, except to the extent prohibited by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), provided, however, that, except as provided -------- ------- in Section 5 of this Article IV, the Corporation shall indemnify any such person seeking indemnification in connection with an action, suit or proceeding (or part thereof) initiated by such person only if such action, suit or proceeding (or part thereof) was authorized by the Board of Directors. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, ---- ---------- shall not, of itself, create a presumption that the person did not act in accordance with any applicable standard of conduct under the Delaware -18- General Corporation Law making it permissible for the Corporation to indemnify the claimant for the amount claimed. Section 2. Successful Defense. To the extent that a director, officer, ------------------- employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 1 hereof or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. Section 3. Determination That Indemnification Is Proper. Any --------------------------------------------- indemnification of a director or officer of the Corporation under Section 1 of this Article IV (unless ordered by a court) shall be made by the Corporation unless a determination is made that indemnification of the director or officer is not proper in the circumstances because he has not met the applicable standard of conduct or because indemnification would otherwise be prohibited under the Delaware General Corporation Law. Any indemnification of an employee or agent of the Corporation under Section 1 of this Article IV (unless ordered by a court) may be made by the Corporation upon a determination that indemnification of the employee or agent is proper in the circumstances because he has met the applicable standard of conduct and indemnification is not otherwise prohibited. Any such determination shall be made (a) if requested by the indemnitee, by Independent Counsel (as hereinafter defined) in a written opinion to the Board of Directors, a copy of which shall be delivered to the indemnitee, or (b) if no request is made by the indemnitee for a determination by Independent Counsel, (i) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors (as hereinafter defined), or (ii) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable, or even if -19- obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the indemnitee, or (iii) by the stockholders of the Corporation. In the event the determination of entitlement to indemnification is to be made by Independent Counsel at the request of the indemnitee, Independent Counsel shall be selected by the indemnitee unless the indemnitee shall request that such selection be made by the Board of Directors, in which event Independent Counsel shall be selected by the Board of Directors. If it is so determined that the indemnitee is entitled to indemnification, payment to the indemnitee shall be made within 10 days after such determination. In making a determination with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination shall presume that the indemnitee is entitled to indemnification under this Article IV, and the Corporation shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. For purposes of this Section 3, "Disinterested Director" means a director of the Corporation who is not and was not a party to the matter in respect of which indemnification is sought by the indemnitee, and "Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (a) the Corporation or the indemnitee in any matter material to either such party, or (b) any other party to the matter giving rise to a claim for indemnification. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in -20- representing either the Corporation or the indemnitee in an action to determine the indemnitee's rights under this Article IV. Section 4. Advance Payment of Expenses. Expenses (including attorney's ---------------------------- fees) incurred by a director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article IV. Such expenses (including attorney's fees) incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. The Board of Directors may authorize the Corporation's counsel to represent such director, officer or employee or agent in any action, suit or proceeding, whether or not the Corporation is a party to such action, suit or proceeding. Section 5. Procedure for Indemnification of Directors and Officers. Any -------------------------------------------------------- indemnification of a director or officer of the Corporation under Sections 1 and 2 of this Article IV, or advance of costs, charges or expenses to a director or officer under Section 4 of this Article IV, shall be made promptly, and in any event within 30 days, upon the written request of the director or officer. If a determination by the Corporation that the director or officer is entitled to indemnification or advances pursuant to this Article IV is required, and the Corporation fails to respond within 30 days to a written request therefor, the Corporation shall be deemed to have approved such request. If the Corporation denies a written request for indemnification or advances, in whole or in part, or if payment in full -21- pursuant to such request is not made within 30 days, the right to indemnification or advances as granted by this Article IV shall be enforceable by the director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in connection with successfully establishing his right to indemnification or advances, in whole or in part, in any such action shall also be indemnified by the Corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for advance of costs, charges and expenses under Section 4 of this Article IV where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the applicable standard of conduct or that indemnification is otherwise prohibited under the Delaware General Corporation Law, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including the Board of Directors, Independent Counsel and the Corporation's stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct, nor the fact that there has been an actual determination by the Corporation (including the Board of Directors, Independent Counsel and the Corporation's stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 6. Survival; Preservation of Other Rights. The foregoing --------------------------------------- provisions of this Article shall be deemed to be a contract between the Corporation and each director, officer, employee and agent who serves in such capacity at any time while these provisions and the relevant provisions of the -22- Delaware General Corporation Law are in effect, and any repeal or modification thereof shall not affect any right or obligation then existing with respect to any state of facts then or previously existing or any action, suit or proceeding previously or thereafter brought or threatened based in whole or in part upon any such state of facts. Such contract may not be modified retroactively without the consent of such director, officer, employee or agent. The indemnification provided by this Article shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall inure to the benefit of the heirs, executors and administrators of such a person and shall continue as to a person who has ceased to be a director, officer, employee or agent. The Corporation may, upon a vote of a majority of the directors, enter into an indemnity agreement with any director, officer, employee or agent of the Corporation providing for the maximum right to indemnification permissible under the applicable laws of the State of Delaware. Section 7. Insurance. The Corporation shall purchase and maintain ---------- insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, including an employee benefit plan, against any liability asserted against him and incurred by him or on his behalf in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article IV, provided that such -23- insurance is available on acceptable terms, which determination shall be made by a vote of a majority of the entire Board of Directors. Section 8. Savings Clause. If this Article or any portion hereof shall --------------- be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director or officer and may indemnify each employee or agent of the Corporation as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, includlng an action by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Article that shall not have been invalidated and to the full extent permitted by applicable law. Section 9. Amendments. This Article may be amended solely by the ----------- affirmative vote of (i) a majority of the Board of Directors, but only to the extent that such amendment would permit the Corporation to provide broader indemnification rights than were provided hereby immediately prior to such amendment, or (ii) the holders of 75% or more of the outstanding shares of Common Stock of the Corporation. ARTICLE V CERTIFICATES OF STOCK. ---------------------- Section 1. The interest of each stockholder of the Corporation shall be evidenced by certificates for shares of stock in such form as the Board of Directors may from time to time prescribe. The shares in the stock of the Corporation shall be transferred on the books of the Corporation by the holder thereof in person or by his attorney, upon surrender for cancellation -24- of certificates for the same number of shares, with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, with such proof of the authenticity of the signature as the Corporation or its agents may reasonably require. Section 2. The certificates of stock shall be signed by the Chairman of the Board or the President or a Vice President and by the Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer, and may be countersigned and registered in such manner, if any, and sealed as the Board of Directors or the Executive Committee may by resolution prescribe. ARTICLE VI CHECKS, NOTES, ETC. ------------------- All checks and drafts on the Corporation's bank accounts and all bills of exchange and promissory notes, and all acceptances, obligations and other instruments for the payment of money, shall be signed by such officer or officers, agent or agents as shall be thereunto authorized from time to time by the Board of Directors or the Executive Committee. ARTICLE VII OFFICES. -------- The Corporation and the stockholders and the directors may have offices outside of the State of Delaware at such places as shall be determined from time to time by the Board of Directors or the Executive Committee. -25- ARTICLE VIII AMENDMENTS. ----------- The By-Laws of the Corporation, regardless of whether made by the stockholders or by the Board of Directors, may be amended, added to, rescinded or repealed at any meeting of the Board of Directors or of the stockholders, provided notice of the proposed change is given in the notice of the meeting. -26- EX-4.(4)(A) 3 INDENTURE COVER EXHIBIT 4(4)(a) TAMBRANDS INC. TO CITIBANK, N.A. Trustee ______________ Indenture Dated as of December 1, 1993 ______________ .............................................................. Certain Sections of this Indenture relating to Sections 310 through 318, inclusive, of the Trust Indenture Act of 1939: Trust Indenture Act Section Indenture Section sec. 310(a)(1) . . . . . . . . . . . . . . . . 609 (a)(2) . . . . . . . . . . . . . . . . 609 (a)(3) . . . . . . . . . . . . . . . . Not Applicable (a)(4) . . . . . . . . . . . . . . . . Not Applicable (b) . . . . . . . . . . . . . . . . . . 608 610 sec. 311(a) . . . . . . . . . . . . . . . . . . 613 (b) . . . . . . . . . . . . . . . . . . 613 sec. 312(a) . . . . . . . . . . . . . . . . . . 701 702 (b) . . . . . . . . . . . . . . . . . . 702 (c) . . . . . . . . . . . . . . . . . . 702 sec. 313(a) . . . . . . . . . . . . . . . . . . 703 (b) . . . . . . . . . . . . . . . . . . 703 (c) . . . . . . . . . . . . . . . . . . 703 (d) . . . . . . . . . . . . . . . . . . 703 sec. 314(a) . . . . . . . . . . . . . . . . . . 704 (a)(4) . . . . . . . . . . . . . . . . 101 1004 (b) . . . . . . . . . . . . . . . . . . Not Applicable (c)(1) . . . . . . . . . . . . . . . . 102 (c)(2) . . . . . . . . . . . . . . . . 102 (c)(3) . . . . . . . . . . . . . . . . Not Applicable (d) . . . . . . . . . . . . . . . . . . Not Applicable (e) . . . . . . . . . . . . . . . . . . 102 sec. 315(a) . . . . . . . . . . . . . . . . . . 601 (b) . . . . . . . . . . . . . . . . . . 602 (c) . . . . . . . . . . . . . . . . . . 601 (d) . . . . . . . . . . . . . . . . . . 601 (e) . . . . . . . . . . . . . . . . . . 514 sec. 316(a) . . . . . . . . . . . . . . . . . . 101 (a)(1)(A) . . . . . . . . . . . . . . . 502 512 (a)(1)(B) . . . . . . . . . . . . . . . 513 (a)(2) . . . . . . . . . . . . . . . . Not Applicable (b) . . . . . . . . . . . . . . . . . . 508 (c) . . . . . . . . . . . . . . . . . . 104 sec. 317(a)(1) . . . . . . . . . . . . . . . . 503 (a)(2) . . . . . . . . . . . . . . . . 504 (b) . . . . . . . . . . . . . . . . . . 1003 sec. 318(a) . . . . . . . . . . . . . . . . . . 107 ___________________ NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture. i TABLE OF CONTENTS __________ PAGE PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 101. Definitions: Act . . . . . . . . . . . . . . . . . . . . . . 2 Affiliate; control . . . . . . . . . . . . . . . 2 Attributable Debt . . . . . . . . . . . . . . . 2 Authenticating Agent . . . . . . . . . . . . . . 2 Board of Directors . . . . . . . . . . . . . . . 2 Board Resolution . . . . . . . . . . . . . . . . 2 Business Day . . . . . . . . . . . . . . . . . . 3 Commission . . . . . . . . . . . . . . . . . . . 3 Company . . . . . . . . . . . . . . . . . . . . 3 Company Request; Company Order . . . . . . . . . 3 Composite Rate . . . . . . . . . . . . . . . . . 3 Consolidated Assets . . . . . . . . . . . . . . 3 Corporate Trust Office . . . . . . . . . . . . . 3 corporation . . . . . . . . . . . . . . . . . . 4 Covenant Defeasance . . . . . . . . . . . . . . 4 Defaulted Interest . . . . . . . . . . . . . . . 4 Defeasance . . . . . . . . . . . . . . . . . . . 4 Depositary . . . . . . . . . . . . . . . . . . . 4 Event of Default . . . . . . . . . . . . . . . . 4 Exchange Act . . . . . . . . . . . . . . . . . . 4 Expiration Date . . . . . . . . . . . . . . . . 4 Funded Indebtedness . . . . . . . . . . . . . . 4 GAAP . . . . . . . . . . . . . . . . . . . . . . 4 Global Security . . . . . . . . . . . . . . . . 4 Holder . . . . . . . . . . . . . . . . . . . . . 4 Indebtedness . . . . . . . . . . . . . . . . . . 4 Indenture . . . . . . . . . . . . . . . . . . . 5 interest . . . . . . . . . . . . . . . . . . . . 5 Interest Payment Date . . . . . . . . . . . . . 5 Investment Company Act . . . . . . . . . . . . . 5 Maturity . . . . . . . . . . . . . . . . . . . . 6 Notice of Default . . . . . . . . . . . . . . . 6 ii Officers' Certificate . . . . . . . . . . . . . 6 Opinion of Counsel . . . . . . . . . . . . . . . 6 Original Issue Discount Security . . . . . . . . 6 Outstanding . . . . . . . . . . . . . . . . . . 6 Paying Agent . . . . . . . . . . . . . . . . . . 7 Person . . . . . . . . . . . . . . . . . . . . . 7 Place of Payment . . . . . . . . . . . . . . . . 7 Predecessor Security . . . . . . . . . . . . . . 7 Principal Property . . . . . . . . . . . . . . . 7 Redemption Date . . . . . . . . . . . . . . . . 8 Redemption Price . . . . . . . . . . . . . . . . 8 Regular Record Date . . . . . . . . . . . . . . 8 Responsible Officer . . . . . . . . . . . . . . 8 Restricted Subsidiary . . . . . . . . . . . . . 8 Securities . . . . . . . . . . . . . . . . . . . 8 Securities Act . . . . . . . . . . . . . . . . . 8 Security Register and Security Registrar . . . . 8 Special Record Date . . . . . . . . . . . . . . 9 Stated Maturity . . . . . . . . . . . . . . . . 9 Subsidiary . . . . . . . . . . . . . . . . . . . 9 Trustee . . . . . . . . . . . . . . . . . . . . 9 Trust Indenture Act . . . . . . . . . . . . . . 9 U.S. Government Obligation . . . . . . . . . . . 9 Vice President . . . . . . . . . . . . . . . . . 9 SECTION 102. Compliance Certificates and Opinions . . . . . . 9 SECTION 103. Form of Documents Delivered to Trustee . . . . . 10 SECTION 104. Acts of Holders; Record Dates . . . . . . . . . 11 SECTION 105. Notices, Etc., to Trustee and Company . . . . . 13 SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . 13 SECTION 107. Conflict with Trust Indenture Act . . . . . . . 14 SECTION 108. Effect of Headings and Table of Contents . . . . 14 SECTION 109. Successors and Assigns . . . . . . . . . . . . . 14 SECTION 110. Separability Clause . . . . . . . . . . . . . . 14 SECTION 111. Benefits of Indenture . . . . . . . . . . . . . 14 SECTION 112. Governing Law . . . . . . . . . . . . . . . . . 15 SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . 15 iii ARTICLE TWO SECURITY FORMS SECTION 201. Forms Generally . . . . . . . . . . . . . . . . 15 SECTION 202. Form of Face of Security . . . . . . . . . . . . 16 SECTION 203. Form of Reverse of Security . . . . . . . . . . 17 SECTION 204. Form of Legend for Global Securities . . . . . . 22 SECTION 205. Form of Trustee's Certificate of Authentication 22 ARTICLE THREE THE SECURITIES SECTION 301. Amount Unlimited; Issuable in Series . . . . . . 22 SECTION 302. Denominations . . . . . . . . . . . . . . . . . 25 SECTION 303. Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . . . . 25 SECTION 304. Temporary Securities . . . . . . . . . . . . . . 27 SECTION 305. Registration, Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . 27 SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities . . . . . . . . . . . . . . . . . . 29 SECTION 307. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . . . . 30 SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . 31 SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . 31 SECTION 310. Computation of Interest . . . . . . . . . . . . 32 ARTICLE FOUR SATISFACTION AND DISCHARGE SECTION 401. Satisfaction and Discharge of Indenture . . . . 32 SECTION 402. Application of Trust Money . . . . . . . . . . . 33 iv ARTICLE FIVE REMEDIES SECTION 501. Events of Default . . . . . . . . . . . . . . . 33 SECTION 502. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . 35 SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . 36 SECTION 504. Trustee May File Proofs of Claim . . . . . . . . 37 SECTION 505. Trustee May Enforce Claims Without Possession of Securities . . . . . . . . . . . 37 SECTION 506. Application of Money Collected . . . . . . . . . 38 SECTION 507. Limitation on Suits . . . . . . . . . . . . . . 38 SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest . . . . . . . . . . . . . . . . . . . 39 SECTION 509. Restoration of Rights and Remedies . . . . . . . 39 SECTION 510. Rights and Remedies Cumulative . . . . . . . . . 39 SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . 39 SECTION 512. Control by Holders . . . . . . . . . . . . . . . 40 SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . 40 SECTION 514. Undertaking for Costs . . . . . . . . . . . . . 40 SECTION 515. Waiver of Usury, Stay or Extension Laws . . . . 41 ARTICLE SIX THE TRUSTEE SECTION 601. Certain Duties and Responsibilities . . . . . . 41 SECTION 602. Notice of Defaults . . . . . . . . . . . . . . . 41 SECTION 603. Certain Rights of Trustee . . . . . . . . . . . 42 SECTION 604. Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . 43 SECTION 605. May Hold Securities . . . . . . . . . . . . . . 43 SECTION 606. Money Held in Trust . . . . . . . . . . . . . . 43 SECTION 607. Compensation and Reimbursement . . . . . . . . . 43 SECTION 608. Conflicting Interests . . . . . . . . . . . . . 44 SECTION 609. Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . 44 SECTION 610. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . 44 SECTION 611. Acceptance of Appointment by Successor . . . . . 46 SECTION 612. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . 47 v SECTION 613. Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . 47 SECTION 614. Appointment of Authenticating Agent . . . . . . 47 ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY SECTION 701. Company to Furnish Trustee Names and Addresses of Holders . . . . . . . . . . . . . . . . . . 49 SECTION 702. Preservation of Information; Communications to Holders . . . . . . . . . . . . . . . . . . 49 SECTION 703. Reports by Trustee . . . . . . . . . . . . . . . 50 SECTION 704. Reports by Company . . . . . . . . . . . . . . . 50 ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE SECTION 801. Company May Consolidate, Etc., Only on Certain Terms . . . . . . . . . . . . . . . . . . . . . 50 SECTION 802. Successor Substituted . . . . . . . . . . . . . 51 ARTICLE NINE SUPPLEMENTAL INDENTURES SECTION 901. Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . . . . . . . . 52 SECTION 902. Supplemental Indentures with Consent of Holders . . . . . . . . . . . . . . . . . . . . 53 SECTION 903. Execution of Supplemental Indentures . . . . . . 54 SECTION 904. Effect of Supplemental Indentures . . . . . . . 54 SECTION 905. Conformity with Trust Indenture Act . . . . . . 54 SECTION 906. Reference in Securities to Supplemental Indentures . . . . . . . . . . . . . . . . . . 55 ARTICLE TEN COVENANTS SECTION 1001. Payment of Principal, Premium and Interest . . . 55 SECTION 1002. Maintenance of Office or Agency . . . . . . . . 55 SECTION 1003. Money for Securities Payments to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . 56 SECTION 1004. Statement by Officers as to Default . . . . . . 57 SECTION 1005. Existence . . . . . . . . . . . . . . . . . . . 57 SECTION 1006. Maintenance of Properties . . . . . . . . . . . 57 SECTION 1007. Payment of Taxes and Other Claims . . . . . . . 57 vi SECTION 1008. Limitation on Liens . . . . . . . . . . . . . . 58 SECTION 1009. Limitation on Sale and Lease-Back . . . . . . . 60 SECTION 1010. Waiver of Certain Covenants . . . . . . . . . . . 61 ARTICLE ELEVEN REDEMPTION OF SECURITIES SECTION 1101. Applicability of Article . . . . . . . . . . . . 61 SECTION 1102. Election to Redeem; Notice to Trustee . . . . . 61 SECTION 1103. Selection by Trustee of Securities to Be Redeemed . . . . . . . . . . . . . . . . . . . 62 SECTION 1104. Notice of Redemption . . . . . . . . . . . . . . 62 SECTION 1105. Deposit of Redemption Price . . . . . . . . . . 63 SECTION 1106. Securities Payable on Redemption Date . . . . . 63 SECTION 1107. Securities Redeemed in Part . . . . . . . . . . 64 ARTICLE TWELVE SINKING FUNDS SECTION 1201. Applicability of Article . . . . . . . . . . . . 64 SECTION 1202. Satisfaction of Sinking Fund Payments with Securities . . . . . . . . . . . . . . . . . . 64 SECTION 1203. Redemption of Securities for Sinking Fund . . . 65 ARTICLE THIRTEEN DEFEASANCE AND COVENANT DEFEASANCE SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . . . 65 SECTION 1302. Defeasance and Discharge . . . . . . . . . . . . 65 SECTION 1303. Covenant Defeasance . . . . . . . . . . . . . . 66 SECTION 1304. Conditions to Defeasance or Covenant Defeasance 66 SECTION 1305. Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous Provisions . . . 68 SECTION 1306. Reinstatement . . . . . . . . . . . . . . . . . 69 TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . 70 SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . 70 ACKNOWLEDGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 70 1 INDENTURE, dated as of December 1, 1993, between TAMBRANDS INC., a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Company"), having its principal office at 777 Westchester Avenue, White Plains, New York 10604, and CITIBANK, N.A., a national banking association duly organized and existing under the laws of the United States, as Trustee (herein called the "Trustee"). RECITALS OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness (herein called the "Securities"), to be issued in one or more series as in this Indenture provided. All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities or of any series thereof, as follows: ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 101. Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of this instrument; 2 (4) unless the context otherwise requires, any reference to an "Article" or a "Section" refers to an Article or a Section, as the case may be, of this Indenture; and (5) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. "Act", when used with respect to any Holder, has the meaning specified in Section 104. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Attributable Debt", when used in connection with a Sale and Lease- Back Transaction, shall mean, as of any particular time, the lesser of (a) the fair value (as determined by the Board of Directors) of the property subject to such arrangement and (b) the then present value (computed by discounting at the Composite Rate) of the obligation of a lessee for net rental payments during the remaining term of any lease in respect of such property (including any period for which such lease has been extended or may, at the option of the lessor, be extended). The term "net rental payments" under any lease for any period shall mean the sum of the rental payments required to be paid in such period by the lessee thereunder, not including, however, any amounts required to be paid by such lessee (whether or not designated as rental or additional rental) on account of maintenance and repairs, insurance, taxes, assessments, water rates or similar charges required to be paid by such lessee thereunder or any amounts required to be paid by such lessee thereunder contingent upon the amount of sales, maintenance and repairs, insurance, taxes, assessments, water rates or similar charges. "Authenticating Agent" means any Person authorized by the Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate Securities of one or more series. "Board of Directors" means either the board of directors of the Company or any duly authorized committee of that board. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. 3 "Business Day", when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. "Company Request" or "Company Order" means a written request or order signed in the name of the Company by its Chairman of the Board, its President or a Senior Vice President, and by a Vice President, its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee. "Composite Rate" means, as of any particular time, the rate of interest, per annum, compounded semiannually, equal to the sum of the rates of interest borne by each of the Securities Outstanding hereunder (as specified on the face of each of the Securities, provided, that, in the case of Securities with variable rates of interest, the interest rate to be used in calculating the Composite Rate shall be the interest rate applicable to such Securities at the beginning of the most recent period for which the interest rate was determined for such Securities in accordance with the terms thereof and provided, further, that, in the case of Securities which do not bear interest, the interest rate to be used in calculating the Composite Rate shall be a rate equal to the yield to Maturity on such Securities, calculated at the time of issuance of such Securities) multiplied, in the case of each of the Securities, by the percentage of the aggregate principal amount of all of the Securities then Outstanding represented by such Security. "Consolidated Assets" means the Company's assets, determined in accordance with GAAP and consolidated for financial reporting purposes in accordance with GAAP, such assets to be valued at book value. "Corporate Trust Office" means the principal office of the Trustee in the borough of Manhattan in The City of New York at which at any particular time its corporate trust business shall be administered, on the date of execution of this Indenture at 120 Wall Street, 13th Floor, New York, New York 10043, except that with respect to presentation of Securities for payment or for registration of transfer or exchange, such term shall mean the office or agency of the Trustee at which, at any particular time, its corporate agency business shall be conducted, which office or agency on the date of execution of this Indenture is located at 111 Wall Street, 5th Floor, New York, New York 10043. 4 "Corporation" means a corporation, association, company, joint-stock company or business trust. "Covenant Defeasance" has the meaning specified in Section 1303. "Defaulted Interest" has the meaning specified in Section 307. "Defeasance" has the meaning specified in Section 1302. "Depositary" means, with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Securities as contemplated by Section 301. "Event of Default" has the meaning specified in Section 501. "Exchange Act" means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time. "Expiration Date" has the meaning specified in Section 104. "Funded Indebtedness" means all Indebtedness of the Company and its Restricted Subsidiaries maturing by its terms more than one year after, or which is renewable or extendible at the option of the Company for a period ending more than one year after, the date as of which Funded Indebtedness is being determined. "GAAP" means such accounting principles as are generally accepted in the United States at the date of this Indenture. "Global Security" means a Security that evidences all or part of the Securities of any series and bears the legend set forth in Section 204 (or such legend as may be specified as contemplated by Section 301 for such Securities). "Holder" means a Person in whose name a Security is registered in the Security Register. "Indebtedness" means, without duplication, (i) all obligations in respect of borrowed money or for the deferred purchase or acquisition price of property (including all types of real, personal, tangible, intangible or mixed property) or services (excluding trade accounts payable, deferred taxes and accrued liabilities which arise in the ordinary course of business) which are, in accordance with GAAP, includible as a liability on a balance sheet consolidated for financial reporting purposes in accordance with GAAP, (ii) all amounts representing the capitalization of rental obligations in accordance with GAAP, and (iii) all Contingent Obligations with respect to the foregoing; for purposes of clause (iii), "Contingent Obligation" means, as to any Person, any obligation of such Person guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations ("primary obligations") of any other Person (the "primary obligor") in any 5 manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any Property constituting direct or indirect security therefor, (ii) to advance or supply funds (a) for the purchase or payment of any such primary obligation or (b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase Property, securities or services primarily for the purpose of assuring the beneficiary of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the beneficiary of such primary obligation against loss in respect thereof; provided, however, that the term "Contingent Obligation" shall not include the indorsement of instruments for deposit or collection in the ordinary course of business. The term "Contingent Obligation" shall also include the liability of a general partner in respect of the primary obligations of a partnership in which it is a general partner. The amount of any Contingent Obligation of a Person shall be deemed to be an amount equal to the principal amount of the primary obligation in respect to which such Contingent Obligation is made. "Indenture" means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively. The term "Indenture" shall also include the terms of particular series of Securities established as contemplated by Section 301, provided, however, that, if at any time more than one Person is acting as Trustee under this Indenture due to the appointment of one or more separate Trustees for any one or more separate series of Securities pursuant to Section 610, "Indenture" shall mean, with respect to such series of Securities for which any such Person is Trustee, this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series of Securities for which such Person is Trustee established as contemplated by Section 301, exclusive, however, of any provisions or terms which relate solely to other series of Securities for which such Person is not Trustee, regardless of when such terms or provisions were adopted, and exclusive of any provisions or terms adopted by means of one or more indentures supplemental hereto executed and delivered after such Person had become such Trustee but to which such Person, as such Trustee, was not a party. "interest", when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity. "Interest Payment Date", when used with respect to any Security, means the Stated Maturity of an instalment of interest on such Security. "Investment Company Act" means the Investment Company Act of 1940 and any successor statute thereto, in each case as amended from time to time. 6 "Maturity", when used with respect to any Security, means the date on which the principal of such Security or an instalment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. "Notice of Default" means a written notice of the kind specified in Section 501(4) or 501(5). "Officers' Certificate" means a certificate signed by the Chairman of the Board, the President or a Senior Vice President, and by a Vice President, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee. One of the officers signing an Officers' Certificate given pursuant to Section 1004 shall be the principal executive, financial or accounting officer of the Company. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Company, and who shall be acceptable to the Trustee. "Original Issue Discount Security" means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Sec- tion 502. "Outstanding", when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (1) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (2) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; (3) Securities as to which Defeasance has been effected pursuant to Section 1302; and (4) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been pre- sented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; 7 provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities of any Series have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities of such series, (A) the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon acceleration of the Maturity thereof to such date pursuant to Section 502, (B) the principal amount of a Security denominated in one or more foreign currencies or currency units which shall be deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of the date of original issuance of such Security in the manner provided as contemplated by Section 301, of the principal amount (or, in the case of an Original Issue Discount Security, of the amount determined as provided in Clause (A) above) of such Security, (C) if the principal amount payable at Stated Maturity of any Security is not determinable upon original issuance, the principal amount of such Security that shall be deemed to be Outstanding shall be the amount as specified or determined as contemplated by Section 301, and (D) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities of such series, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor. "Paying Agent" means any Person authorized by the Company to pay the principal of or any premium or interest on any Securities on behalf of the Company. "Person" means any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof. "Place of Payment", when used with respect to the Securities of any series, means the place or places where the principal of and any premium and interest on the Securities of that series are payable as specified as contemplated by Section 301. "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. "Principal Property" shall mean the principal manufacturing facilities owned by the Company or a Restricted Subsidiary located in the United States, England or Ireland 8 except such as the Board of Directors by resolution reasonably determines (taking into account, among other things, the importance of such property to the business, financial condition and earnings of the Company and its consolidated subsidiaries taken as a whole) not to be a Principal Property and except for (i) any and all personal property including, without limitation, (x) motor vehicles and other rolling stock, and (y) office furnishings and equipment and information and electronic data processing equipment, (ii) any property financed through obligations issued by a state, territory or possession of the United States, or any political subdivision or instrumentality of the foregoing, or (iii) any real property held for development or sale. "Redemption Date", when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "Redemption Price", when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "Regular Record Date" for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301. "Responsible Officer", when used with respect to the Trustee, means the chairman or any vice-chairman of the board of directors, the chairman or any vice-chairman of the executive committee of the board of directors, the chairman of the trust committee, the president, any vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any senior trust officer, trust officer or assistant trust officer, the controller or any assistant controller or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Restricted Subsidiary" means any consolidated Subsidiary that owns any Principal Property. "Securities" has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture, provided, however, that if at any time there is more than one Person acting as Trustee under this Indenture, "Securities" when used with respect to a Person acting as Trustee under this Indenture shall mean Securities authenticated and delivered under this Indenture, exclusive, however, of Securities of any series as to which such Person is not Trustee. "Securities Act" means the Securities Act of 1933 and any statute successor thereto, in each case as amended from time to time. "Security Register" and "Security Registrar" have the respective meanings specified in Section 305. 9 "Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307. "Stated Maturity", when used with respect to any Security or any instalment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such instalment of principal or interest is due and payable. "Subsidiary" means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, "voting stock" means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series. "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "U.S. Government Obligation" has the meaning specified in Section 1304. "Vice President", when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president". SECTION 102. Compliance Certificates and Opinions. Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officers' Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture. 10 Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (except for certificates provided for in Section 1004) shall include, (1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. SECTION 103. Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consoli- dated and form one instrument. 11 SECTION 104. Acts of Holders; Record Dates. Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient. The ownership of Securities shall be proved by the Security Register. Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. The Company may set any day as a record for the purpose of determining the Holders of Outstanding Securities of any series entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities of such series, provided that the Company may not set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section 502, (iii) any request to institute proceedings referred to in Section 507(2) or (iv) any direction referred to in Section 512. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal 12 amount of Outstanding Securities of such series on such record date; and provided, further, that for the purpose of determining whether Holders of the requisite principal amount of such Securities have taken such action, no Security shall be deemed to have been Outstanding on such record date unless it is also Outstanding on the date such action is to become effective. Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 106. The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of Default, (ii) any declaration or acceleration referred to in Section 502, (iii) any request to institute proceedings referred to in Section 507(2) or (iv) any direction referred to in Section 512, in each case with respect to Securities of such series. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of such series on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date; and provided, further, that for the purpose of determining whether Holders of the requisite principal amount of such Securities have taken such action, no Security shall be deemed to have been Outstanding on such record date unless it is also Outstanding on the date such action is to become effective. Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company's expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 106. With respect to any record date set pursuant to this Section, the party hereto which sets such record date may designate any day as the "Expiration Date" and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party hereto in writing, and to each Holder of Securities of the relevant series 13 in the manner set forth in Section 106, on or prior to the existing Expiration Date. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date and, if an Expiration Date is not designated with respect to any record date set pursuant to this Section, the party hereto which set such record date shall be deemed to have designated the 180th day after such record date as the Expiration Date with respect thereto. Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. SECTION 105. Notices, Etc., to Trustee and Company. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, Attention: Corporate Trust Administration, or (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company. SECTION 106. Notice to Holders; Waiver. Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall 14 not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. SECTION 107. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act which is required under such Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act which may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be. SECTION 108. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 109. Successors and Assigns. All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not. SECTION 110. Separability Clause. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 111. Benefits of Indenture. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture. 15 SECTION 112. Governing Law. This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York. SECTION 113. Legal Holidays. In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities (other than a provision of any Security which specifically states that such provision shall apply in lieu of this Section)) payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity. ARTICLE TWO SECURITY FORMS SECTION 201. Forms Generally. The Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, sub- stitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depository therefor or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution thereof. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of such Securities. The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities. 16 SECTION 202. Form of Face of Security. [Insert any legend required by the Internal Revenue Code and the regulations thereunder.] ................................. ............................................ No. ......... $ ........ Tambrands Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Company", which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to ..............................................., or registered assigns, the principal sum of ...................................... Dollars on ............................ ........................... [if the Security is to bear interest prior to Maturity, insert -- , and to pay interest thereon from ............. or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on ............ and ............ in each year, commencing ........., at the rate of ....% per annum, until the principal hereof is paid or made available for payment [if applicable, insert -- , provided that any principal and premium, and any such instalment of interest, which is overdue shall bear interest at the rate of ...% per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand]. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the ....... or ....... (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture]. [If the Security is not to bear interest prior to Maturity, insert -- The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal and any overdue premium shall bear interest at the rate of ....% per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment. Interest on any overdue principal or premium shall be payable on demand. [Any such interest on overdue 17 principal or permium which is not paid on demand shall bear interest at the rate of ...% per annum (to the extent that the payment of such interest on interest shall be legally enforceable), from the date of such demand until the amount so demanded is paid or made available for payment. Interest on any overdue interest shall be payable on demand.]] Payment of the principal of (and premium, if any) and [if applicable, insert -- any such] interest on this Security will be made at the office or agency of the Company maintained for that purpose in ............, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts [if applicable, insert -- ; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register]. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated: TAMBRANDS INC. By................................................... Attest: ......................................... SECTION 203. Form of Reverse of Security. This Security is one of a duly authorized issue of securities of the Company (herein called the "Securities"), issued and to be issued in one or more series under an Indenture, dated as of _______ __, 1993 (herein called the "Indenture", which term shall have the meaning assigned to it in such instrument), between the Company and Citibank, N.A., as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the 18 Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof [if applicable, insert--, limited in aggregate principal amount to $...........]. [If applicable, insert -- The Securities of this series are subject to redemption upon not less than 30 days' notice by mail, [if applicable, insert -- (1) on ........... in any year commencing with the year ...... and ending with the year ...... through operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and (2)] at any time [if applicable, insert -- on or after .........., 19..], as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [if applicable, insert -- on or before ..............., ...%, and if redeemed] during the 12-month period begin- ning ............. of the years indicated, Redemption Redemption Year Price Year Price and thereafter at a Redemption Price equal to .....% of the principal amount, together in the case of any such redemption [if applicable, insert -- (whether through operation of the sinking fund or otherwise)] with accrued interest to the Redemption Date, but interest instalments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.] [If applicable, insert -- The Securities of this series are subject to redemption upon not less than 30 days' notice by mail, (1) on ............ in any year commencing with the year .... and ending with the year .... through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [if applicable, insert -- on or after ............], as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through 19 operation of the sinking fund (expressed as percentages of the principal amount): If redeemed [if applicable, insert -- on or before ......, ....%, and if redeemed] during the 12-month period beginning ............ of the years indicated, Redemption Price For Redemption Redemption Price For Through Operation Redemption Otherwise of the Than Through Operation Year Sinking Fund of the Sinking Fund and thereafter at a Redemption Price equal to .....% of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest instalments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.] [If applicable, insert -- Notwithstanding the foregoing, the Company may not, prior to ............., redeem any Securities of this series as contemplated by [if applicable, insert -- Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than .....% per annum.] [If applicable, insert -- The sinking fund for this series provides for the redemption on ............ in each year beginning with the year ....... and ending with the year ...... of [if applicable, insert -- not less than $.......... ("mandatory sinking fund") and not more than] $......... aggregate principal amount of Securities of this series. Securities of this series acquired or redeemed by the Company otherwise than through [if applicable, insert -- mandatory] sinking fund payments may be credited against subsequent [if applicable, insert -- mandatory] sinking fund payments otherwise required to be made [if applicable, insert -- , in the inverse order in which they become due].] 20 [If the Security is subject to redemption of any kind, insert -- In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancella- tion hereof.] [If applicable, insert -- The Indenture contains provisions for defeasance at any time of [the entire indebtedness of this Security] [or] [certain restrictive covenants and Events of Default with respect to this Security] [, in each case] upon compliance with certain conditions set forth in the Indenture.] [If the Security is not an Original Issue Discount Security, insert -- If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.] [If the Security is an Original Issue Discount Security, insert -- If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Such amount shall be equal to -- insert formula for determining the amount. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company's obligations in respect of the payment of the principal of and premium and interest, if any, on the Securities of this series shall terminate.] The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of 66 2/3% in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of 21 Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Securities of this series are issuable only in registered form without coupons in denominations of $....... and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. 22 SECTION 204. Form of Legend for Global Securities. Unless otherwise specified as contemplated by Section 301 for the Securities evidenced thereby, every Global Security authenticated and delivered hereunder shall bear a legend in substantially the following form: THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. SECTION 205. Form of Trustee's Certificate of Authentication. The Trustee's certificates of authentication shall be in substantially the following form: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. Citibank, N.A. As Trustee By......................................... Authorized Signatory ARTICLE THREE THE SECURITIES SECTION 301. Amount Unlimited; Issuable in Series. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution and, subject to Section 303, set forth, or determined 23 in the manner provided, in an Officers' Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series, (1) the title of the Securities of the series (which shall distinguish the Securities of the series from Securities of any other series); (2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 304, 305, 306, 906 or 1107 and except for any Securities which, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder); (3) the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest; (4) the date or dates on which the principal of any Securities of the series is payable; (5) the rate or rates at which any Securities of the series shall bear interest, if any, the date or dates from which any such interest shall accrue, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for any such interest payable on any Interest Payment Date; (6) the place or places where the principal of and any premium and interest on any Securities of the series shall be payable; (7) the period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the series may be redeemed, in whole or in part, at the option of the Company and, if other than by a Board Resolution, the manner in which any election by the Company to redeem the Securities shall be evidenced; (8) the obligation, if any, of the Company to redeem or purchase any Securities of the series pursuant to any sinking fund or analogous provisions 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 any Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation; (9) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which any Securities of the series shall be issuable; 24 (10) if the amount of principal of or any premium or interest on any Securities of the series may be determined with reference to an index or pursuant to a formula, the manner in which such amounts shall be determined; (11) if other than the currency of the United States of America, the currency, currencies or currency units in which the principal of or any premium or interest on any Securities of the series shall be payable and any manner of determining the equivalent thereof in the currency of the United States of America, including for purposes of the definition of "Outstanding" in Section 101; (12) if the principal of or any premium or interest on any Securities of the series is to be payable, at the election of the Company or the Holder thereof, in one or more currencies or currency units other than that or those in which the Securities are stated to be payable, the currency, currencies or currency units in which the principal of or any premium or interest on such Securities as to which such election is made shall be payable, and the periods within which and the terms and conditions upon which such election is to be made and the amount so payable (or the manner in which such amount shall be determined); (13) if other than the principal amount thereof, the portion of the principal amount of any Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502; (14) if the principal amount payable at the Stated Maturity of any Securities of the series is not determinable upon original issuance thereof, the amount which shall be deemed to be the principal amount of such Securities for any other purpose thereunder or hereunder, including the principal amount thereof which shall be due and payable upon any Maturity other than the Stated Maturity or which shall be deemed to be Outstanding as of any date (or, in any such case, any manner in which such principal amount shall be determined); (15) if applicable, that the Securities of the series, in whole or any specified part, shall be defeasible pursuant to Section 1302 or Section 1303 or both such Sections and, if other than by a Board Resolution, the manner in which any election by the Company to defease such Securities shall be evidenced; (16) if applicable, that any Securities of the series shall be issuable in whole or in part in the form of one or more Global Securities and, in such case, the respective Depositaries for such Global Securities, the form of any legend or legends which shall be borne by any such Global Security in addition to or in lieu of that set forth in Section 204 and, any circumstances in addition to or in lieu of those set forth in Clause (2) of the last paragraph of Section 305 in which any such Global Security may be exchanged in whole or in part for Securities registered on any transfer of such Global Security in whole or in part 25 may be registered in the name or names of Persons other than the Depositary for such Global Security or a nominee thereof; (17) any addition to or change in the Events of Default which applies to any Securities of the series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 502; (18) any addition to or change in the covenants set forth in Article Ten which applies to Securities of the series; and (19) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 901(5)). All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 303) set forth, or determined in the manner provided, in the Officers' Certificate referred to above or in any such indenture supplemental hereto. If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate setting forth the terms of the series. SECTION 302. Denominations. The Securities of each series shall be issuable only in registered form without coupons and only in such denominations as shall be specified as contemplated by Section 301. In the absence of any such specified denomination with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and any integral multiple thereof. SECTION 303. Execution, Authentication, Delivery and Dating. The Securities shall be executed on behalf of the Company by its Chairman of the Board, its President or one of its Senior Vice Presidents, under its corporate seal reproduced thereon attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile. Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities. 26 At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities. If the form or terms of the Securities of the series have been established by or pursuant to one or more Board Resolutions as permitted by Sections 201 and 301, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating, (1) if the form of such Securities has been established by or pursuant to a Board Resolution as permitted by Section 201, that such form has been established in conformity with the provisions of this Indenture; (2) if the terms of such Securities have been established by or pursuant to a Board Resolution as permitted by Section 301, that such terms have been established in conformity with the provisions of this Indenture; and (3) that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. Notwithstanding the provisions of Section 301 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officers' Certificate otherwise required pursuant to Section 301 or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued. Each Security shall be dated the date of its authentication. No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certif- icate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered 27 hereunder. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 309, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture. SECTION 304. Temporary Securities. Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denom- ination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more definitive Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount. Until so exchanged the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series and tenor. SECTION 305. Registration, Registration of Transfer and Exchange. The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed "Security Registrar" for the purpose of registering Securities and transfers of Securities as herein provided. Upon surrender for registration of transfer of any Security of a series at the office or agency of the Company in a Place of Payment for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount. 28 At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount, upon sur- render of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer. In the event of any redemption, in whole or in part, of Securities of any series (or of any series and specified tenor), the Company shall not be required (A) to issue, register the transfer of or exchange Securities of that series (or of that series and specified tenor, as the case may be) during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of any such Securities and ending at the close of business on the day of such mailing, or (B) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. The provisions of Clauses (1), (2), (3) and (4) below shall apply only to Global Securities: (1) Each Global Security authenticated under this Indenture shall be registered in the name of the Depositary designated for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Security for all purposes of this Indenture. (2) Notwithstanding any other provision in this Indenture, no Global Security may be exchanged for Securities registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Security or a nominee thereof unless (A) such Depositary (i) has notified the Company that it is unwilling or unable to 29 continue as Depositary for such Global Security or (ii) has ceased to be a clearing agency registered under the Exchange Act, (B) there shall have occurred and be continuing an Event of Default with respect to such Global Security or (C) there shall exist such circumstances, if any, or in lieu of the foregoing as have been specified for this purpose as contemplated by Section 301. (3) Subject to Clause (2) above, any exchange of a Global Security for other Securities may be made in whole or in part, and all Securities issued in exchange for a Global Security or any portion thereof shall be registered in such names as the Depositary for such Global Security shall direct. (4) Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this Section, Section 304, 306, 906 or 1107 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof. SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual 30 obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. SECTION 307. Payment of Interest; Interest Rights Preserved. Except as otherwise provided as contemplated by Section 301 with respect to any series of Securities, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Pay- ment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below: (1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be given to each Holder of Securities of such series in the manner set forth in Section 106, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the 31 Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2). (2) The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not incon- sistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. SECTION 308. Persons Deemed Owners. Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any premium and (subject to Section 307) any interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. SECTION 309. Cancellation. All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be destroyed by the Trustee and a certificate of destruction furnished to the Company. 32 SECTION 310. Computation of Interest. Except as otherwise specified as contemplated by Section 301 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months. ARTICLE FOUR SATISFACTION AND DISCHARGE SECTION 401. Satisfaction and Discharge of Indenture. This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (1) either (A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (ii) Securi- ties for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or (B) all such Securities not theretofore delivered to the Trustee for cancellation (i) have become due and payable, or (ii) will become due and payable at their Stated Maturity within one year, or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose money in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be; (2) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and 33 (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 607, the obligations of the Trustee to any Authenticating Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive. SECTION 402. Application of Trust Money. Subject to provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and any premium and interest for whose payment such money has been deposited with the Trustee. ARTICLE FIVE REMEDIES SECTION 501. Events of Default. "Event of Default", wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (1) default in the payment of any interest upon any Security of that series when it becomes due and payable, and continuance of such default for a period of 30 days; or (2) default in the payment of the principal of or any premium on any Security of that series at its Maturity; or (3) default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series; or (4) default in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or 34 which has expressly been included in this Indenture solely for the benefit of series of Securities other than that series), and continuance of such default or breach for a period of 90 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 Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (5) a default under any bond, debenture, note or other evidence of indebtedness for money borrowed by the Company (including a default with respect to Securities of any series other than that series) having an aggregate principal amount outstanding of at least $50,000,000, or under any mortgage, indenture or instrument (including this Indenture) under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by the Company having an aggregate principal amount outstanding of at least $50,000,000, whether such indebtedness now exists or shall hereafter 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 indebtedness having been discharged or such acceleration having been cured, waived, rescinded or annulled, within a period of 30 days after there shall have been given, by registered or certified mail, return receipt requested, 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 Outstanding Securities of that series a written notice specifying such default and requiring the Company to cause such indebtedness to be discharged or cause such acceleration to be rescinded or annulled, as the case may be, and stating that such notice is a "Notice of Default" hereunder; provided, however, that, subject to the provisions of Sections 601 and 602, the Trustee shall not be deemed to have knowledge of such default unless either (A) a Responsible Officer of the Trustee shall have actual knowledge of such default or (B) the Trustee shall have received written notice thereof from the Company, from any Holder, from the holder of any such indebtedness or from the trustee under any such mortgage, indenture or other instrument; and provided, further, however, that if any such default or acceleration referred to in this clause (5) shall cease or be cured, waived, rescinded or annulled, then the Event of Default hereunder by reason thereof shall be deemed likewise to have been thereupon cured; or (6) the entry by a court having jurisdiction in the premises of (A) 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 or (B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; or 35 (7) the commencement by the Company of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of 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 or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it to the filing of such peti- tion or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action; or (8) any other Event of Default provided with respect to Securities of that series. SECTION 502. Acceleration of Maturity; Rescission and Annulment. If an Event of Default with respect to Securities of any series at the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series may declare the principal amount (or, if any of the Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified in the terms thereof) of all of the Securities of that series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable. At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if (1) the Company has paid or deposited with the Trustee a sum sufficient to pay (A) all overdue interest on all Securities of that series, (B) the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and any interest thereon at the rate or rates prescribed therefor in such Securities, 36 (C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and (D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and (2) all Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513. No such rescission shall affect any subsequent default or impair any right consequent thereon. SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee. The Company covenants that if (1) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or (2) default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and any premium and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and premium and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. 37 SECTION 504. Trustee May File Proofs of Claim. In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607. No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors' or other similar committee. SECTION 505. Trustee May Enforce Claims Without Possession of Securities. All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered. SECTION 506. Application of Money Collected. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or any premium or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 607; and 38 SECOND: To the payment of the amounts then due and unpaid for principal of and any premium and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and any premium and interest, respectively. SECTION 507. Limitation on Suits. No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series; (2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders. SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest. Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and (subject to Section 307) interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, 39 on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder. SECTION 509. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. SECTION 510. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 511. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. SECTION 512. Control by Holders. The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series, provided that (1) such direction shall not be in conflict with any rule of law or with this Indenture, and 40 (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. SECTION 513. Waiver of Past Defaults. The Holders of not less than a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to such series and its consequences, except a default (1) in the payment of the principal of or any premium or interest on any Security of such series, or (2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. SECTION 514. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act; provided that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company. SECTION 515. Waiver of Usury, Stay or Extension Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. 41 ARTICLE SIX THE TRUSTEE SECTION 601. Certain Duties and Responsibilities. The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. SECTION 602. Notice of Defaults. If a default occurs hereunder with respect to Securities of any series, the Trustee shall give the Holders of Securities of such series notice of such default as and to the extent provided by the Trust Indenture Act; provided, however, that in the case of any default of the character specified in Section 501(4) with respect to Securities of such series, no such notice to Holders shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series. SECTION 603. Certain Rights of Trustee. Subject to the provisions of Section 601: (1) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (2) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; (3) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically 42 prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate; (4) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (5) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (6) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; and (7) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. SECTION 604. Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Securities or the proceeds thereof. SECTION 605. May Hold Securities. The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent. 43 SECTION 606. Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company. SECTION 607. Compensation and Reimbursement. The Company agrees (1) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provi- sion of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negli- gence or bad faith; and (3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. SECTION 608. Conflicting Interests. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. To the extent permitted by such Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under this Indenture with respect to Securities of more than one series. SECTION 609. Corporate Trustee Required; Eligibility. There shall at all times be one (and only one) Trustee hereunder with respect to the Securities of each series, which may be the Trustee hereunder for Securities of one or more other series. Each Trustee shall be a Person that is eligible pursuant to the Trust 44 Indenture Act to act as such has a combined capital and surplus of at least $50,000,000 and has its Corporate Trust Office in [the Borough of Manhattan in] The City of New York. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section and to the extent permitted by the Trust Indenture Act, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee with respect to the Securities of any series shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. SECTION 610. Resignation and Removal; Appointment of Successor. No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611. The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company. If at any time: (1) the Trustee shall fail to comply with Section 608 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or (2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (A) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or (B) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of 45 the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees. If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 611. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Secu- rities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 611, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent juris- diction for the appointment of a successor Trustee with respect to the Securities of such series. The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 106. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office. SECTION 611. Acceptance of Appointment by Successor. In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. 46 In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co- trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be. No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. SECTION 612. Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, 47 conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. SECTION 613. Preferential Collection of Claims Against Company. If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor). SECTION 614. Appointment of Authenticating Agent. The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon original issue and upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 306, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authen- tication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. 48 An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice of such appointment in the manner provided in Section 106 to all Holders of Securities of the series with respect to which such Authenticating Agent will serve. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 607. If an appointment with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternative certificate of authentication in the following form: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. Citibank, N.A., As Trustee By......................................, As Authenticating Agent By....................................... Authorized Officer 49 ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY SECTION 701. Company to Furnish Trustee Names and Addresses of Holders. The Company will furnish or cause to be furnished to the Trustee (1) semi-annually, not later than June 1 and December 1 in each year, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities of each series as of the preceding May 15 or November 15, as the case may be, and (2) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; excluding from any such list names and addresses received by the Trustee in its capacity as Security Registrar. SECTION 702. Preservation of Information; Communications to Holders. The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished. The rights of the Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act. Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act. SECTION 703. Reports by Trustee. The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. 50 A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company. The Com- pany will notify the Trustee when any Securities are listed on any stock exchange. SECTION 704. Reports by Company. The Company shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trustee Indenture Act at the times and in the manner provided pursuant to such Act; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission. ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE SECTION 801. Company May Consolidate, Etc., Only on Certain Terms. The Company shall not consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, and the Company shall not permit any Person to consolidate with or merge into the Company or convey, transfer or lease its properties and assets substantially as an entirety to the Company, unless: (1) in case the Company shall consolidate with or merge into another Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a cor- poration, partnership or trust, shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed; (2) immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company or any Subsidiary as a result of such transaction as having been incurred by the Company or such Subsidiary at the time of such transaction, no Event of Default, and no event which, after notice or 51 lapse of time or both, would become an Event of Default, shall have happened and be continuing; (3) if, as a result of any such consolidation or merger or such conveyance, transfer or lease, properties or assets of the Company would become subject to a mortgage, pledge, lien, security interest or other encumbrance which would not be permitted by this Indenture, the Company or such successor Person, as the case may be, shall take such steps as shall be necessary effectively to secure the Securities equally and ratably with (or prior to) all indebtedness secured thereby; and (4) the Company has delivered to the Trustee an Officers' Certifi- cate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. SECTION 802. Successor Substituted. Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 801, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities. ARTICLE NINE SUPPLEMENTAL INDENTURES SECTION 901. Supplemental Indentures Without Consent of Holders. Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: (1) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; or 52 (2) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company; or (3) to add any additional Events of Default for the benefit of the Holders of all or any series of Securities (and if such additional Events of Default are to be for the benefit of less than all series of Securities, stating that such additional Events of Default are expressly being included solely for the benefit of such series); or (4) to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons, or to permit or facilitate the issuance of Securities in uncertificated form; or (5) to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (A) shall neither (i) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (ii) modify the rights of the Holder of any such Security with respect to such provision or (B) shall become effective only when there is no such Security Outstanding; or (6) to secure the Securities; or (7) to establish the form or terms of Securities of any series as permitted by Sections 201 and 301; or (8) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611; or (9) to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action pursuant to this Clause (9) shall not adversely affect the interests of the Holders of Securities of any series in any material respect. SECTION 902. Supplemental Indentures with Consent of Holders. With the consent of the Holders of not less than 662/3% in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when 53 authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby, (1) change the Stated Maturity of the principal of, or any instalment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security or other Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place of Payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or (2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or (3) modify any of the provisions of this Section, Section 513 or Section 1008, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby, provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to "the Trustee" and concomitant changes in this Section and Section 1008, or the deletion of this proviso, in accordance with the requirements of Sections 611 and 901(8). A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. 54 SECTION 903. Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. SECTION 904. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. SECTION 905. Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act. SECTION 906. Reference in Securities to Supplemental Indentures. Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series. ARTICLE TEN COVENANTS SECTION 1001. Payment of Principal, Premium and Interest. The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of and any premium and interest on the Securities of that series in accordance with the terms of the Securities and this Indenture. 55 SECTION 1002. Maintenance of Office or Agency. The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. SECTION 1003. Money for Securities Payments to Be Held in Trust. If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of or any premium or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium and interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act. Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of or any premium or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act. The Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (1) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2) during the continuance of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment in 56 respect of the Securities of that series, and upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities of that series. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or any premium or interest on any Security of any series and remaining unclaimed for two years after such principal, premium or interest has become due and payable shall, unless otherwise required by law, be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company, unless otherwise required by law. SECTION 1004. Statement by Officers as to Default. The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. SECTION 1005. Existence. Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve any such right or franchise if the Board of Directors shall determine that the 57 preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not disadvantageous in any material respect to the Holders. SECTION 1006. Maintenance of Properties. The Company will cause all properties used or useful in the conduct of its business or the business of any Subsidiary to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that nothing in this Section shall prevent the Company from discontinuing the operation or maintenance of any of such properties if such discontinuance is, in the judgment of the Company, desirable in the conduct of its business or the business of any Subsidiary and not disadvantageous in any material respect to the Holders. SECTION 1007. Payment of Taxes and Other Claims. The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (1) all taxes, assessments and governmental charges levied or imposed upon the Company or any Subsidiary or upon the income, profits or property of the Company or any Subsidiary, and (2) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon the property of the Company or any Subsidiary; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings. SECTION 1008. Limitation on Liens. (a) So long as Securities of any series entitled by their terms to the benefits of this Section shall be Outstanding, the Company will not create or assume, and will not permit any Restricted Subsidiary to create or assume, any notes, bonds, debentures or other similar evidences of Indebtedness secured by any mortgage, pledge, security interest or lien (any such mortgage, pledge, security interest or lien being hereinafter referred to as a "Mortgage" or "Mortgages") of or upon any Principal Property owned by the Company or any Restricted Subsidiary or shares of capital stock or evidence of Indebtedness of any Restricted Subsidiary, whether owned at the date of this Indenture or thereafter acquired, without making effective provision, and the Company in such case will make or cause to be made effective provision, whereby all Securities of each series to which this Section 1008 applies (together with, if the Company shall so determine, any other Indebtedness of the Company or such Restricted Subsidiary, whether then existing or thereafter created which is not subordinated to such Securities) shall be secured by such a Mortgage equally and ratably with (or prior to) any and all other Indebtedness 58 thereby secured, so long as such Indebtedness shall be so secured; provided, however, that the foregoing shall not apply to any of the following: (1) Mortgages on any Principal Property, shares of stock or Indebtedness of any corporation existing at the time such corporation becomes a Subsidiary; (2) Mortgages on any Principal Property, shares of stock or Indebtedness acquired, constructed or improved by the Company or any Restricted Subsidiary after the date of this Indenture which are created or assumed prior to, or contemporaneously with, such acquisition, construction or improvement or within 365 days after the acquisition, completion of construction or improvement or commencement of commercial operation of such property, to secure or provide for the payment of all or any part of the purchase price or the cost of such construction or improvement thereof, or, in addition to Mortgages contemplated by clause (3) below, Mortgages on any Principal Property, shares of stock or Indebtedness existing at the time of acquisition thereof (including acquisition through merger or consolidation) existing at the time of acquisition thereof; (3) Mortgages on any Principal Property or shares of stock or Indebtedness acquired from a corporation which is merged with or into the Company or a Restricted Subsidiary; (4) Mortgages on any Principal Property, shares of stock or Indebtedness to secure Indebtedness to the Company or to a Restricted Subsidiary; (5) Mortgages on any Principal Property, shares of stock or Indebtedness in favor of the United States of America or any State thereof or The Commonwealth of Puerto Rico, or any department, agency or instrumentality or political subdivision of the United States of America or any State thereof or The Commonwealth of Puerto Rico, to secure partial, progress, advance or other payments, or to secure any Indebtedness incurred for the purpose of financing all or any part of the cost of acquiring, constructing or improving the Principal Property, shares of stock or Indebtedness subject to such Mortgages (including Mortgages incurred in connection with pollution control, industrial revenue, Title XI maritime financings or similar financings), or other Mortgages in connection with the issuance of tax- exempt industrial revenue bonds; (6) Mortgages existing as of the date of this Indenture; (7) Mortgages for taxes, assessments or other government charges, the validity of which is being contested in good faith by appropriate proceedings and materialmen's, mechanics' and other like Mortgages, or deposits to obtain the release of such Mortgages; (8) Mortgages created or deposits made to secure the payment of workers' compensation claims or the performance of, or in connection with, tenders, bids, leases, public or statutory obligations, surety and appeal bonds, contracts, 59 performance and return-of-money bonds or to secure (or in lieu of) surety or appeal bonds and Mortgages made in the ordinary course of business for similar purposes; and (9) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Mortgage referred to in the foregoing clauses (1) to (8), inclusive; provided, however, that such extension, renewal or replacement shall be limited to all or a part of the property, shares of stock or Indebtedness which secured the Mortgage so extended, renewed or replaced (plus improvements on such property). (b) Notwithstanding the provisions of paragraph (a) of this Section 1008, the Company or any Restricted Subsidiary may create or assume Mortgages in addition to those permitted by paragraph (a) of this Section 1008, and renew, extend or create such Mortgages, provided, that at the time of such creation, assumption, renewal or replacement, and after giving effect thereto, the aggregate amount of all Indebtedness so secured by such a Mortgage as provided above (not including Indebtedness excluded as provided in clauses (1) through (9) of paragraph (a) above), plus all Attributable Debt of the Company and its Restricted Subsidiaries in respect of Sale and Lease-Back Transactions (as defined in Section 1009) which would not be permitted by either clause (1) or (2) of paragraph (a) of Section 1009), would not exceed 20% of Consolidated Assets. SECTION 1009. Limitation on Sale and Lease-Back. (a) So long as Securities of any series entitled by their terms to the benefits of this Section shall be Outstanding, the Company will not, nor will it permit any Restricted Subsidiary to, enter into any arrangement with any Person (other than the Company or any Restricted Subsidiary) providing for the leasing by the Company or a Restricted Subsidiary of any Principal Property owned by the Company or such Restricted Subsidiary (except for leases for a term of not more than three years), which property has been or is to be sold or transferred by the Company or such Restricted Subsidiary to such person on the security of such Principal Property more than 365 days after the acquisition thereof or the completion of construction and commencement of full operation thereof (herein referred to as a "Sale and Lease-Back Transaction"), unless either (1) the Company or such Restricted Subsidiary would be entitled pursuant to Section 1008 to incur Indebtedness secured by a Mortgage on the Principal Property to be leased back equal in amount to the Attributable Debt with respect to such Sale and Lease-Back Transaction without equally and ratably securing the Securities of such series, or (2) the Company shall, and in any such case the Company covenants that it will, apply or cause to be applied an amount equal to the greater of the net proceeds or the fair value (as determined by the Board of Directors) of the property so sold to the purchase of Principal Property or to the retirement (other than any mandatory retirement), within 365 days of the effective date of any such Sale and Lease-Back Transaction, of Securities or other Funded Indebtedness; provided, however, that any such retirement of Securities shall be made in accordance with this Indenture; and provided, further, that the amount to be applied to such retirement of Securities or other Funded Indebtedness shall be reduced 60 by an amount equal to the sum of (A) an amount equal to the principal amount of any Securities delivered within 365 days after the effective date of such Sale and Lease-Back Transaction to the Trustee for retirement and cancellation, and (B) the principal amount of other Funded Indebtedness voluntarily retired by the Company within such 365-day period, excluding in each case retirements pursuant to mandatory sinking fund or prepayment provisions and payments at maturity. (b) Notwithstanding the provisions of paragraph (a) of this Section 1009, (i) the Company or any Restricted Subsidiary may enter into Sale and Lease-Back Transactions in addition to any permitted by paragraph (a) of this Section 1009 and without any obligation to retire any Securities or other indebtedness; provided, that at the time of entering into such Sale and Lease-Back Transaction and after giving effect thereto, Attributable Debt resulting from such Sale and Lease- Back Transaction, plus the aggregate amount of all Indebtedness secured by a Mortgage (not including Indebtedness excluded as provided in clauses (1) through (9) of paragraph (a) of Section 1008), does not exceed 20% of Consolidated Assets; and (ii) the Company or any Restricted Subsidiary may, at any time prior to December 31, 1995, enter into a Sale and Lease-Back Transaction with respect to any or all of the following properties: its plants located in New Hampshire, Vermont or Maine or its research and development facility located in Palmer, Massachusetts. SECTION 1010. Waiver of Certain Covenants. Except as otherwise specified as contemplated by Section 301 for Securities of such series, the Company may, with respect to the Securities of any series, omit in any particular instance to comply with any term, provision or condition set forth in any covenant provided pursuant to Section 301(18), 901(2) or 901(7) for the benefit of the Holders of such series if before the time for such compliance the Holders of at least 662/3% in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condi- tion, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect. 61 ARTICLE ELEVEN REDEMPTION OF SECURITIES SECTION 1101. Applicability of Article. Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for Securities) in accordance with this Article. SECTION 1102. Election to Redeem; Notice to Trustee. The election of the Company to redeem any Securities shall be established in or pursuant to a Board Resolution or in another manner specified as contemplated by Section 301 for such Securities and set forth, or determined in the manner provided, in an Officers' Certificate. In case of any redemption at the election of the Company of the Securities of any series (including any such redemption affecting only a single Security), the Company shall, at least 60 days (in the case of redemption of less than all of the Securities of a series) or 45 days (in the case of redemption of all the Securities of a series) prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with such restriction. SECTION 1103. Selection by Trustee of Securities to Be Redeemed. If less than all the Securities of any series are to be redeemed (unless all the Securities of such series and of a specified tenor are to be redeemed or unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of a portion of the principal amount of any Security of such series, provided that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security. If less than all of the Securities of such series and of a specified tenor are to be redeemed (unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence. 62 The Trustee shall promptly notify the Company in writing of the Securities selected for redemption as aforesaid and, in case of any Securities selected for partial redemption, the principal amount thereof to be redeemed. The provisions of the two preceding paragraphs shall not apply with respect to any redemption affecting only a single Security, whether such Security is to be redeemed in whole or in part. In the case of any such redemption in part, the unredeemed portion of the principal amount of the Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed. SECTION 1104. Notice of Redemption. Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register. All notices of redemption shall state: (1) the Redemption Date, (2) the Redemption Price, (3) if less than all the Outstanding Securities of any series con- sisting of more than a single Security are to be redeemed, the identi- fication (and, in the case of partial redemption of any Securities, the principal amounts) of the particular Securities to be redeemed and, if less than all the Outstanding Securities of any series consisting of a single Security are to be redeemed, the principal amount of the particular Security to be redeemed, (4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date, (5) the place or places where each such Security is to be surrendered for payment of the Redemption Price, and (6) that the redemption is for a sinking fund, if such is the case. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company and shall be irrevocable. 63 SECTION 1105. Deposit of Redemption Price. Prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date. SECTION 1106. Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that, unless otherwise specified as contemplated by Section 301, instalments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security. SECTION 1107. Securities Redeemed in Part. Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered. 64 ARTICLE TWELVE SINKING FUNDS SECTION 1201. Applicability of Article. The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of any series except as otherwise specified as contemplated by Section 301 such Securities. The minimum amount of any sinking fund payment provided for by the terms or any Securities is herein referred to as a "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of such Securities is herein referred to as an "optional sinking fund payment". If provided for by the terms of any Securities, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202. Each sinking fund payment shall be applied to the redemption of Securities as provided for by the terms of such Securities. SECTION 1202. Satisfaction of Sinking Fund Payments with Securities. The Company (1) may deliver Outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to any Securities of such series required to be made pursuant to the terms of such Securities as and to the extent provided for by the terms of such Securities; provided that the Securities to be so credited have not been previously so credited. The Securities to be so credited shall be received and credited for such pur- pose by the Trustee at the Redemption Price, as specified in the Securities so to be redeemed, for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. SECTION 1203. Redemption of Securities for Sinking Fund. Not less than 60 days prior to each sinking fund payment date for any Securities, the Company will deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing sinking fund payment for such Securities pursuant to the terms of such Securities, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities pursuant to Section 1202 and will also deliver to the Trustee any Securities to be so delivered. Not less than 45 days prior to each such sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in 65 Section 1104. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sec- tions 1106 and 1107. ARTICLE THIRTEEN DEFEASANCE AND COVENANT DEFEASANCE SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance. The Company may elect, at its option at any time, to have Section 1302 or Section 1303 applied to any Securities or any series of Securities, as the case may be, designated pursuant to Section 301 as being defeasible pursuant to such Section 1302 or 1303, in accordance with any applicable requirements provided pursuant to Section 301 and upon compliance with the conditions set forth below in this Article. Any such election shall be established in or pursuant to a Board Resolution or in another manner specified as contemplated by Section 301 for such Securities and set forth, or determined in the manner provided, in an Officers' Certificate. SECTION 1302. Defeasance and Discharge. Upon the Company's exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be, the Company shall be deemed to have been discharged from its obligations with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 1304 are satisfied (hereinafter called "Defeasance"). For this purpose, Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by such Securities and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), subject to the following which shall survive until otherwise terminated or discharged hereunder: (1) the rights of Holders of such Securities to receive, solely from the trust fund described in Section 1304 and as more fully set forth in such Section, payments in respect of the principal of and any premium and interest on such Securities when payments are due, (2) the Company's obligations with respect to such Securities under Sections 304, 305, 306, 1002 and 1003, (3) the Company's obligations under Section 607, (4) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (5) this Article. Subject to compliance with this Article, the Company may exercise its option (if any) to have this Section applied to any Securities notwithstanding the prior exercise of its option (if any) to have Section 1303 applied such Securities. SECTION 1303. Covenant Defeasance. Upon the Company's exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be, (1) the Company shall 66 be released from its obligations under Sections 1005 through 1007, inclusive, any covenants provided pursuant to Section 301(18), 901(2) or 901(7) for the benefit of the Holders of such Securities and Section 801 and (2) the occurrence of any event specified in Sections 501(3), 501(4) (with respect to any of Sections 1005 through 1007, inclusive, any such covenants provided pursuant to Section 301(18), 901(2) or 901(7) and Section 801), 501(5) and 501(8) shall be deemed not to be or result in an Event of Default, in each case with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 1304 are satisfied (hereinafter called "Covenant Defeasance"). For this purpose, Covenant Defeasance means that, with respect to such Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such specified Section (to the extent so specified in the case of Section 501(4)), whether directly or indirectly by reason of any reference elsewhere herein to any such Section or by reason of any reference in any such Section to any other provision herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby. SECTION 1304. Conditions to Defeasance or Covenant Defeasance. The following shall be the conditions to the application of Section 1302 or Section 1303 to any Securities or any series of Securities, as the case may be: (1) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee which satisfies the requirements contemplated by Section 609 and agrees to comply with the provisions of this Article applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefits of the Holders of such Securities, (A) money in an amount, or (B) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (C) a combination thereof, in each case sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or any such other qualifying trustee) to pay and discharge, the principal of and any premium and interest on such Securities on the respective Stated Maturities, in accordance with the terms of this Indenture and such Securities. As used herein, "U.S. Government Obligation" means (x) any security which is (i) a direct obligation of the United States of America for the payment of which the full faith and credit of the United States of America is pledged or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United Stats of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any U.S. Government Obligation which is specified in 67 Clause (x) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal of or interest on any U.S. Government Obligation which is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest evidenced by such depositary receipt. (2) In the event of an election to have Section 1302 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this instrument, there has been a change in the applicable Federal income tax law, in either case (A) or (B) to the effect that, and based thereon such opinion shall confirm that, the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit, Defeasance and discharge to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit, Defeasance and discharge were not to occur. (3) In the event of an election to have Section 1303 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit and Covenant Defeasance to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance were not to occur. (4) The Company shall have delivered to the Trustee an Officers' Certificate to the effect that neither such Securities nor any other Securities of the same series, if then listed on any securities exchange, will be delisted as a result of such deposit. (5) No event which is, or after notice or lapse of time or both would become, an Event of Default with respect to such Securities or any other Securities shall have occurred and be continuing at the time of such deposit or, with regard to any such event specified in Sections 501(6) and (7), at any time on or prior to the 90th day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such 90th day). (6) Such Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting interest within the meaning of the Trust Indenture Act (assuming all Securities are in default within the meaning of such Act). 68 (7) Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any other agreement or instrument to which the Company is a party or by which it is bound. (8) Such Defeasance or Covenant Defeasance shall not result in the trust arising from such deposit constituting an investment company within the meaning of the Investment Company Act unless such trust shall be registered under such Act or exempt from registration thereunder. (9) The Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent with respect to such Defeasance or Covenant Defeasance have been complied with. SECTION 1305. Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous Provisions. Subject to the provisions of the last paragraph of Section 1003, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee or other qualifying trustee (solely for purposes of this Section and Section 1306, the Trustee and any such other trustee are referred to collectively as the "Trustee") pursuant to Section 1304 in respect of any Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any such Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal and any premium and interest, but money so held in trust need not be segregated from other funds except to the extent required by law. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 1304 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of Outstanding Securities. Anything in this Article to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations held by it as provided in Section 1304 with respect to any Securities which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect the Defeasance or Covenant Defeasance, as the case may be, with respect to such Securities. 69 SECTION 1306. Reinstatement. If the Trustee or the Paying Agent is unable to apply any money in accordance with this Article with respect to any Securities by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations under this Indenture and such Securities from which the Company has been discharged or released pursuant to Section 1302 or 1303 shall be revived and reinstated as though no deposit had occurred pursuant to this Article with respect to such Securities, until such time as the Trustee or Paying Agent is permitted to apply all money held in trust pursuant to Section 1305 with respect to such Securities in accordance with this Article; provided, however, that if the Company makes any payment of principal of or any premium or interest on any such Security following such reinstatement of its obligations, the Company shall be subrogated to the rights (if any) of the Holders of such Securities to receive such payment from the money so held in trust. _____________________________ 70 This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. TAMBRANDS INC. By /s/ Raymond F. Wright Name: Raymond F. Wright Title: Senior Vice President - Chief Financial Officer and Treasurer Attest: /s/ Barry K. Meisenheimer Barry K. Meisenheimer Assistant Secretary CITIBANK, N.A. By /s/ Robert T. Kirchner Name: Robert T. Kirchner Title: Vice President Attest: /s/ R.L. Pierce R.L. Pierce Assistant Vice President 71 STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) On the 2nd day of December, 1993, before me personally came Raymond F. Wright, to me known, who, being by me duly sworn, did depose and say that he is Senior Vice President - CFO & Treasurer of Tambrands Inc., one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. /s/ Concetta Bazzano STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) On the 1st day of December, 1993, before me personally came Robert T. Kirchner, to me known, who, being by me duly sworn, did depose and say that he is Vice President of Citibank, N.A., one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. /s/ Peter M. Pavlyshin EX-10.3(H) 4 STOCK OPTION PLAN EXHIBIT 10.3(h) SIXTH AMENDMENT TO THE TAMBRANDS INC. 1991 STOCK OPTION PLAN ---------------------- WHEREAS, TAMBRANDS INC. (the "Company") adopted the 1991 Stock Option Plan (the "Plan"); and WHEREAS, pursuant to Section 11 of the Plan, the Compensation Committee of the Board of Directors has the authority to amend the Plan; NOW, THEREFORE, the Plan is amended as follows, effective February 1, 1994: 1. The last sentences of Section 7(a) and Section 7(b) are deleted in their entirety and a new sentence is inserted in lieu of each such sentence, to read as follows: All such Options shall remain exercisable (i) in the case of any - Options granted on or after February 1, 1994 for the lesser of (x) - five (5) years (or such shorter period of time that the Committee shall specify at the time of grant) after the termination of the Participant's employment and (y) the remainder of their term or (ii) - -- in the case of any Options not described in clause (i), for the remainder of their term. IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its duly authorized officer as of the 1st day of February, 1994. TAMBRANDS INC. By:/s/HELEN G. GOODMAN --------------------------- Senior Vice President - Title:Human Resources ------------------------ WITNESS: /s/KEVIN J. PARADISE - ------------------------- Vice President - Title:Human Resources ------------------- EX-10.5(A) 5 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN EXHIBIT 10(5)(a) - -------------------------------------------------------------------------------- TAMBRANDS INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN Effective July 1, 1986 As Amended and Restated Effective July 1, 1994 - -------------------------------------------------------------------------------- TABLE OF CONTENTS -----------------
Page ---- ARTICLE I........................................................................... 1 Introduction...................................................................... 1 ARTICLE II.......................................................................... 2 Definitions....................................................................... 2 ARTICLE III......................................................................... 12 Retirement Income................................................................. 12 3.1 Retirement Income........................................................... 12 3.2 Normal Retirement Income.................................................... 12 3.3 Deferred Retirement Income.................................................. 15 3.4 Early Retirement Income..................................................... 15 3.5 Reduction for Benefits Received Under Other Retirement Plans..................................................... 16 3.6 Form of Benefits............................................................ 18 3.7 Vesting of Retirement Benefit............................................... 19 3.8 Involuntary Termination of Employment Following a Change of Control.............................................. 19 ARTICLE IV.......................................................................... 20 Death Benefits.................................................................... 20 ARTICLE V........................................................................... 22 Administrative and General Provisions............................................. 22 5.1 Administration............................................................... 22 5.2 Claims Procedure............................................................. 23 5.3 Inalienability and Forfeiture of Benefits.................................... 24 5.4 Unsecured General Creditor................................................... 25 5.5 Trust........................................................................ 25 5.6 Not a Contract of Employment................................................. 26 5.7 Captions..................................................................... 26 5.8 Governing Law................................................................ 26 5.9 Validity..................................................................... 27 5.10 Notice....................................................................... 27 5.11 Incompetent Participant...................................................... 27 ARTICLE VI.......................................................................... 28 Amendment and Termination.......................................................... 28
TAMBRANDS INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ARTICLE I Introduction ------------ The Tambrands Inc. Supplemental Executive Retirement Plan (the "Plan") has been adopted to provide supplemental retirement and death benefits to certain officers and other key employees of Tambrands Inc., its subsidiaries and its divisions. The purpose of this Plan is to attract and retain in the employ of Tambrands Inc. and its subsidiaries and divisions officers and other key employees of superior competence. This Plan was established effective July 1, 1986, and no employee who terminated employment with the Company for any reason before such date shall have any rights under this Plan. This Plan was amended and restated effective July 1, 1988, July 1, 1990, and July 1, 1991 and is hereby amended and restated effective July 1, 1994. Any employee who terminated employment prior to this amendment and restatement shall have no rights under this Plan as amended and restated, but shall look solely to the terms of this Plan prior to this amendment and restatement. ARTICLE II Definitions ----------- "Actuarial Equivalent" means the equivalent in value, based on an -------------------- interest rate and mortality tables and other actuarial methods and assumptions selected from time to time by the Company or an actuary selected by the Company. "Adjusted" means the cost of living adjustment factor prescribed by -------- the Secretary of the Treasury under Section 415(d) of the Code, as applied to such items and in such manner as such Secretary shall provide. "Affiliate" means the Company and any entity affiliated with the --------- Company within the meaning of Code Sections 414(b) with respect to controlled groups of corporations, 414(c) with respect to trades or businesses under common control with the Company, 414(m) with respect to affiliated service groups, and any other entity required to be aggregated with the Company pursuant to regulations under Section 414(o) of the Code. No entity shall be treated as an Affiliate for any period during which it is not part of the controlled group, under common control or otherwise required to be aggregated under Code Section 414. 2 A "Change of Control" shall occur if: ----------------- (i) any person (as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended from time to time (the "Exchange Act"), and as used in Sections 13(d) and 14(d) thereof), excluding the Company, any Affiliate and any employee benefit plan sponsored or maintained by the Company or any Affiliate (including any trustee of such plan acting as trustee), but including a "group" as defined in Section 13(d)(3) of the Exchange Act (a "Person"), becomes the beneficial owner of shares of the Company having at least 20% of the total number of votes that may be cast for the election of directors of the Company (the "Voting Shares") provided, however, that such an event shall not constitute a Change of Control if the acquiring Person has entered into an agreement with the Company approved by the Board of Directors which materially restricts the right of such Person to direct or influence the management or policies of the Company; (ii) the shareholders of the Company shall approve any merger or other business combination of the Company, sale of the Company's assets or combination of the foregoing transactions (a "Transaction") other than a Trans- action involving only the Company and one or more of its Affiliates or a Transaction immediately following which the 3 shareholders of the Company immediately prior to the Transaction continue to have a majority of the voting power in the resulting entity excluding for this purpose any shareholder owning directly or indirectly more than 10% of the shares of the other company involved in the Transaction; or (iii) within any 24-month period beginning on or after April 30, 1989, the persons who were directors of the Company immediately before the beginning of such period (the "Incumbent Directors") shall cease (for any reason other than death) to constitute at least a majority of the Board of Directors or the board of directors of any successor to the Company, provided that any director who was not a director as of May 1, 1989 shall be deemed to be an Incumbent Director if such director was elected to the Board of Directors by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually or by prior operation of this Section. "Code" means the Internal Revenue Code of 1986, as amended from time ---- to time. "Committee" means the Compensation Committee of the Board of Directors --------- of Tambrands Inc. "Company" means Tambrands Inc., its successors and assigns and any ------- company which shall acquire all or substan- 4 tially all of its assets, and certain of their Affiliates as selected by the Committee. "Deferred Retirement Date" means the first day of the month coinciding ------------------------ with or next following the retirement of the Participant after his Normal Retirement Date. "Deferred Retirement Income" means an amount determined, with respect -------------------------- to any Participant, under Section 3.3. "Designated Participant" means an Executive Participant designated by ---------------------- the Committee to be included as a participant for purposes of the benefit formula under Section 3.2(c). "Early Retirement Date" means the first day of the month coinciding --------------------- with or next following the retirement from the Company and any Affiliate of a Participant on or after the attainment of his 55th birthday and the completion of 10 Years of Service. "Early Retirement Income" means an amount deter-mined with respect to ----------------------- any Participant under Section 3.4. "Earnings" for Plan Years on or after July 1, 1989, means "wages" as -------- defined under Section 3121(a) of the Code for purposes of calculating social security taxes, but determined without regard to the wage base limitation in 5 Section 3121(a)(1) of the Code, the special rules in Section 3121(v) of the Code (except that elective nonqualified deferred compensation shall be included), any rules that limit covered employment based on the type or location of an Employee's employer, and any rules that limit the remuneration included in wages based on familiar relationship or based on the nature or location of the employment or the services performed (such as the exceptions to the definition of employment in Section 3121(b)(1) through (20) of the Code). Without limiting the generality of the foregoing, Earnings shall include amounts contributed on behalf of an Employee as part of a salary reduction agreement under a qualified cash or deferred arrangement pursuant to Code Section 401(k), amounts contributed to a plan under Code Section 125 pursuant to a salary reduction election, and elective nonqualified deferred compensation, including, without limitation, any amount that would otherwise have been paid to a Participant as salary or an annual bonus which is forgone by such Participant in order to receive a grant of stock options, but exclude all noncash compensation, non- elective nonqualified deferred compensation, reimbursements or other expense allowances, fringe benefits (cash and non-cash), moving expenses, welfare benefits and any lump sum severance payments other than two weeks severance payments 6 in lieu of notice. For Plan Years prior to July 1, 1989, "Earnings" means the Employee's total cash compensation received during the period, including but not limited to base salary, bonuses, Annual Incentive Plan payments, prior to application of any deferrals pursuant to Code Section 125 or 401(k) or pursuant to any nonqualified plan or elective deferrals, and excluding moving allowances, expense reimbursement, value of stock options, value of equity units, any other stock awards or grants, any fringe benefits or other non-cash items or any payments to, or from, any benefit or deferred compensation plan except as otherwise specifically provided. With respect to any Participant who is employed by an Affiliate not otherwise designated as a participating company in the Plan, the Committee may decide, in its sole discretion, to include compensation earned by such Participant while employed by such Affiliate in the calculation of Earnings under the Plan; provided, however, that the same inclusions and exclusions applicable to Earnings of other Participants shall apply to the Participant's compensation earned while employed by such Affiliate. "Employee" means any person who is regularly employed by the Company. -------- "Executive Participant" means any corporate officers or other key --------------------- employees of Tambrands Inc. or of a 7 Company or division of a Company as are designated by the Committee and approved by the Chief Executive Officer of Tambrands Inc. to be included as a Participant for purposes of the benefit formula under Section 3.2(b). "Grandfathered Participant" means any Executive Participant who, as of ------------------------- June 30, 1990, had attained age 55 and completed 10 Years of Service and was determined by the Committee to be a principal officer of the Company. "Highest Average Earnings" means the arithmetical average of the ------------------------ annual Earnings received by a Participant in each of those five consecutive Plan Years of employment, out of the last ten Plan Years of employment ending with (or immediately preceding) the date as of which Highest Average Earnings is being determined, which produce the highest average. In the event that a Participant shall have been employed by the Company for less than five completed Plan Years, his Highest Average Earnings shall be his average annual Earnings for the completed Plan Years of his employment. "Involuntarily Terminated" means a termination of a Participant's ------------------------ employment (i) by the Company or (ii) by the Participant within ninety days following (a) a material reduction in such Participant's compensation and - benefits (including the termination of this Plan or the reduction of 8 benefits under this Plan, in which case the Participant shall be deemed to have been vested as of the date of the termination of this Plan or the reduction in benefits hereunder), (b) a material change in such Participant's duties or - responsibilities or (c) a transfer of the Participant's principal place of - employment to a location more than 35 miles from the location at which such Participant was principally employed immediately prior to the transfer, unless the Participant shall consent in writing to any such reduction, change or transfer. "Normal Retirement Date" means the first day of the month coinciding ---------------------- with or next following the 65th birthday of the Participant. "Normal Retirement Income" means an amount determined, with respect ------------------------ to any Participant, under Section 3.2. "Participant" means an Employee whose benefits under the Pension Plan ----------- are limited by reason of the limitations under the Code specified in Section 3.2(a) or because certain elements of compensation included in the definition of Earnings are not taken into account under the Pension Plan, an Executive Participant, a Designated Participant or a Grandfathered Participant. Any person who was a Participant but does not qualify under the ongoing definition of Participant shall cease to be a Participant and shall have 9 no further rights hereunder. The participation of a Participant in this Plan shall terminate automatically if the Participant ceases to qualify as a Participant hereunder, unless the Committee authorizes and approves such Participant's renewed or continued participation in this Plan. The Committee, in its sole discretion, shall have the right to terminate the participation of a Participant in this Plan at any time. In the event any Participant ceases to be a Participant either automatically or as a result of Committee action, his rights to benefits he has accrued and is vested in, if any, through his date of ceasing to be a Participant may not be altered or impaired. "Pension Plan" means the Pension Plan for Employees of Tambrands Inc., ------------ as amended from time to time. "Plan" means the Tambrands Inc. Supplemental Executive Retirement ---- Plan. "Plan Year" means each twelve (12) consecutive month period beginning --------- on July 1 and ending on June 30 of the succeeding calendar year. "Primary Social Security Benefit" means the Primary Insurance Amount ------------------------------- as defined under the Federal Social Security Act, computed on an annual basis, and based upon the following assumptions: 10 (i) Payments commence on the later of the last day of the month following the date on which a Participant attains age 62, or the date on which a Participant's retirement income under this Plan commences to be paid; (ii) The Participant had no Earnings during the year which includes the date his employment with the Company terminates or at any time thereafter; (iii) The Participant's Earnings in each prior year are equal to the maximum amount of wages subject to tax under the Federal Insurance Contributions Act. "Retirement Benefit" means the benefit determined under Section 3.1. ------------------ "Trust" means the trust, if any, described in Section 5.4. ----- "Years of Service" means the service credited to a Participant under ---------------- the Pension Plan, provided, that the Committee shall have the discretion to -------- grant additional Years of Service to Participants. Wherever appropriate, words used in this Plan in the singular may include the plural or the plural may be read as the singular; the masculine gender may include the feminine, and the feminine may include the masculine. 11 ARTICLE III Retirement Income ----------------- 3.1 Retirement Income. A Participant who has satisfied the vesting ----------------- conditions related to such benefits set forth in Section 3.7 shall receive retirement income in the amount determined under Section 3.2, 3.3, or 3.4, as such amount may be reduced under Section 3.5. Any such vested retirement income ("Retirement Benefit") shall be payable in the form specified in Section 3.6. 3.2 Normal Retirement Income. Subject to his meeting the applicable ------------------------ requirements of Section 3.7, a Participant shall receive under this Section 3.2 monthly payments ("Normal Retirement Income") commencing at the date specified in and in an annual amount determined under Subsection 3.2(a), (b), (c), or (d), as the case may be. Notwithstanding the foregoing, the Committee in its sole discretion may increase the amount of Normal Retirement Income payable under this Plan. (a) A Participant who has attained his Normal Retirement Date, terminated employment with the Company and notified the Company of his desire to commence benefits under this Subsection, shall receive annually, commencing on his Normal Retirement Date, an amount equal to the benefit payable under the benefit formula in the Pension Plan in the 12 form of a straight life annuity without regard to the $150,000 maximum salary limitation, as such limitation may be Adjusted, under Section 401(a)(17) of the Code, and without regard to the $90,000 maximum dollar limitation, as such limitation may be Adjusted, on benefits (or, if applicable, the percentage limit set forth therein) under Section 415(b) of the Code. (b) An Executive Participant who meets the conditions to receive a benefit under Subsection 3.2(a) shall receive annually, commencing on his Normal Retirement Date, an amount equal to the greater of (i) the amount payable to - such Executive Participant under Subsection 3.2(a) or (ii) (x) 3% of his Highest -- - Average Earnings multiplied by his Years of Service not in excess of 15 years, less (y) 3% of his Primary Social Security Benefit multiplied by his Years of - Service not in excess of 15 years. (c) A Designated Participant who meets the conditions to receive a benefit under Subsection 3.2(a) shall receive annually, commencing on his Normal Retirement Date, an amount equal to the greater of (i) the amount payable to - such Designated Participant under Subsection 3.2(b) or (ii)(x) 45% (or such -- other percentage as shall be designated by the Committee at the time it designates the Employee as a Designated Participant) of his Highest Average Earnings 13 times the lesser of (1) one or (2) a fraction, the numerator of which is the Designated Participant's Years of Service and the denominator of which is the remainder of 62 minus the Participant's age at his or her birthday occurring in the calendar year in which he or she first becomes an employee of the Company less (y) the product of his Primary Social Security Benefit times a percentage equal to the percentage determined under subclause (ii)(x). (d) A Grandfathered Participant who meets the conditions to receive a benefit under subsection 3.2(a) shall receive annually, commencing on his Normal Retirement Date, an amount equal to the greater of (i) the largest amount - payable to such Grandfathered Participant under Subsection 3.2(a), (b) or (c) or (ii) the greater of (x) an amount equal to 1.5% of his Highest Average - Earnings multiplied by the number of his Years of Service, less $762, and (y) - an amount equal to 3% of his Highest Average Earnings multiplied by the number of his Years of Service not in excess of 15 Years of Service, less $762. 3.3 Deferred Retirement Income. A Participant who continues in ------------------------------- employment after his Normal Retirement Date shall continue to accrue benefits under this Plan after his Normal Retirement Date which shall be determined under Section 3.2 based on Years of Service and Earnings to the 14 Deferred Retirement Date. Alternatively, the Committee, in its sole discretion, may adjust the Normal Retirement Income of a Participant who retires after he attains his Normal Retirement Date to provide a benefit which is the Actuarial Equivalent of the accrued benefit the Participant would have received at his Normal Retirement Date or at any time thereafter, provided that in no event shall a Participant's Deferred Retirement Income be less than that determined under the first sentence of this Section 3.3. 3.4 Early Retirement Income. Subject to his meeting the requirements ----------------------- of Section 3.7, a Participant who has attained his Early Retirement Date and who wishes to receive benefits determined in accordance with Section 3.2 before the attainment of his Normal Retirement Date shall so notify the Company and shall thereupon receive Early Retirement Income commencing before his Normal Retirement Date. The annual amount of Early Retirement Income shall be equal to the greater of (i) the Normal Retirement Income credited under Section 3.2(a) - based on Years of Service and earnings, as defined in the Pension Plan, to his Early Retirement Date and (ii) the Normal Retirement Income credited under -- Section 3.2(b) or 3.2(c), whichever is applicable, assuming that the Participant retired at the later of age 62 or his age on his Early Retirement Date (without giving effect to the require- 15 ment of Section 3.2 that the Participant have attained his Normal Retirement Date) and based on his current Highest Average Earnings, multiplied by a fraction, the numerator of which is his actual Years of Service and the denominator of which is his projected Years of Service had he continued employment until the attainment of the later of age 62 or his age on his Early Retirement Date, or (c) the Normal Retirement Income credited under Section 3.2(d) based on Years of Service and Highest Average Earnings to his Early Retirement Date. The amount determined under the preceding sentence (whether under subclause (a), (b) or (c)) shall be reduced by 1/3 of 1% for each month by which his age, when payment commences, is less than 62. No adjustment shall be made for commencements after age 62. The Committee shall have complete discretion as to whether to decrease or eliminate the reductions described in this Section 3.4, and its decision shall be final in all respects. 3.5 Reduction for Benefits Received Under Other Retirement Plans. ------------------------------------------------------------ The amount of Normal Retirement Income payable to a Participant shall be reduced by the Actuarial Equivalent of any amount paid or payable to the Participant under any plan, program or agreement providing pension, retirement, or related benefits (but excluding benefits under any savings, stock bonus or incentive plan unless the 16 Committee in its sole discretion determines to include such a plan at either the time a person becomes eligible for this Plan or at the time of the awarding of recognition of additional Years of Service pursuant to Article I hereof or an additional benefit pursuant to Section 3.2 hereof, but in the event of such additional recognition of service or additional benefit, the reduction shall not be greater than the additional Retirement Income created by such additional recognition of service or additional benefit (an "Other Retirement Plan")) maintained by the Company or any Affiliate (unless it expressly provides otherwise). In the event the Committee, in its sole discretion, grants additional Years of Service to Participants based on prior service with previous employers, the amount of Normal Retirement Income described in the preceding sentence shall be further reduced by the Actuarial Equivalent of any amount paid or payable to the Participant under any Other Retirement Plan maintained by the Participant's previous employers (unless the Committee in its sole discretion modifies such reduction). 3.6 Form of Benefits. If a Participant is married on the date his ---------------- Retirement Benefit commences to be paid such Benefit shall be payable in the form of a joint and survivor annuity which is the Actuarial Equivalent of such Benefit and is payable to the Participant for his life- 17 time and following his death to his surviving spouse for the lifetime of the spouse in one-half the amount payable to the Participant. If a Participant is not married on the date his Retirement Benefit commences to be paid such Benefit shall be payable in the form of a life annuity for his life. Notwithstanding the foregoing, with the consent of the Committee, which it may grant or deny in its sole discretion, a Participant may receive his Retirement Benefit in a form other than specified above, if such optional form of payment is available under the Pension Plan and the Participant meets each requirement under the Pension Plan respecting the election of such form of payment. Each optional form of payment shall be the Actuarial Equivalent of the Participant's Retirement Benefit. If an amount is payable under this Plan in respect of a Participant, and the present value of such amount does not exceed $3,500, such present value may be immediately distributed to the Participant (or his beneficiary, as the case may be) at the discretion of the Company, without the consent of the Participant. 3.7 Vesting of Retirement Benefit. Except as provided in Section ----------------------------- 3.8, no amount shall be payable to a Participant as a Retirement Benefit unless such Participant 18 is vested in such Retirement Benefit in accordance with the provisions of this Section 3.7. A Participant who has completed 5 Years of Service shall be vested in the Retirement Benefit payable under subsection 3.2(a) and, to the extent applicable, 3.2(d). A Participant who has attained his Early Retirement Date (age 55 with 10 Years of Service) while a Participant shall be vested in the Retirement Benefit described in subsection 3.2(b) or 3.2(c), whichever is applicable, and payable under Section 3.4. A Participant who has attained his Normal Retirement Date and completed 10 Years of Service while a Participant shall be vested in the Retirement Benefit described in subsection 3.2(b) or 3.2(c), whichever is applicable, and payable under either Section 3.2 or 3.3. 3.8 Involuntary Termination of Employment Following a Change of ----------------------------------------------------------- Control. Notwithstanding anything else in this Plan to the contrary, in the - ------- event a Participant is Involuntarily Terminated within two years following the occurrence of a Change of Control, regardless of the Participant's age and Years of Service at such termination, such Participant shall be entitled to receive a monthly benefit commencing at or after the later of age 55 and such termination of employment equal to the benefit that would have been payable to such Participant at his Normal Retirement Date 19 (but subject to an actuarial reduction for early commencement to the extent such reduction would be imposed under Section 3.4) based on the number of Years of Service such Participant had completed prior to such termination, plus two additional Years of Service. ARTICLE IV Death Benefits -------------- If a Participant dies after becoming eligible (other than satisfying the requirement for actual retirement) for Early Retirement Income under Section 3.4 and is survived by a spouse, such spouse shall be paid a benefit (a "Surviving Spouse's Benefit") commencing on the first day of the month in which the Participant would have attained his Early Retirement Date had he survived. The monthly amount of the Surviving Spouse's Benefit payable in accordance with this Article shall be equal to the monthly amount which would have been payable to the Participant's spouse if the deceased Participant had separated from service on the date of death, survived until his Early Retirement Date, retired on his Early Retirement Date with a "joint and survivor annuity" as described in Section 3.6, and died on the day following his Early Retirement Date. 20 If a Participant dies while employed by the Company and is not married, no death benefit shall be payable under this Plan. Notwithstanding the preceding provisions of this Article IV, (i) if a - Participant dies while employed by the Company and after properly electing an optional form of payment in accordance with Section 3.6 that has been consented to by the Committee, payment shall be made in accordance with such election or (ii) if a Participant who is entitled to receive a Retirement Benefit under -- subsection 3.2(a) dies, the Company shall pay a death benefit hereunder to the beneficiary, if any, to whom the Pension Plan pays a death benefit in respect of such Participant in an amount equal to the amount which would have been payable to such beneficiary under the Pension Plan had such Retirement Benefit been payable under the Pension Plan. ARTICLE V Administrative and General Provisions ------------------------------------- 5.1 Administration. This Plan shall be administered by Tambrands -------------- Inc. Tambrands Inc. shall have the power, subject to the terms of this Plan, to make all interpretations and other determinations not reserved to the Committee which may be necessary or desirable for this 21 Plan's administration. Any interpretations and determinations of the Committee or Tambrands Inc. shall be final and conclusive. No member of the Committee or employee of Tambrands Inc. may act or vote upon a decision specifically relating to his own participation in this Plan. No member of the Board of Directors of Tambrands Inc. or the Committee and no employee of Tambrands Inc. shall be liable for any action or determination made in good faith with respect to this Plan or the rights of any person under this Plan, nor shall Tambrands Inc. be liable for any such action or determination. Tambrands Inc. or its agents shall keep such records as may be necessary for the administration of this Plan and shall furnish Participants such statements as it may determine to be necessary or desirable to show their interests in this Plan. 22 5.2 Claims Procedure. ---------------- (a) The Committee shall be responsible for determining all claims for benefits under this Plan by Participants or their beneficiaries. Within 90 days after receiving a claim (or within up to 180 days, if the claimant is so notified, including the reason for the delay), the Committee shall notify the Participant or beneficiary of its decision in writing, giving the reasons for its decision if adverse to the claim. If the decision is adverse to the claimant, the Committee shall advise him of the Plan provisions involved, of any additional information which he must provide to perfect his claim and why, and of his right to request a review of the decision. (b) A claimant may request a review of an adverse decision by written request to the Committee made within 60 days after receipt of the decision. The claimant, or his attorney, may review pertinent documents and submit written issues and comments. (c) Within 60 days after receiving a request for review, the Committee shall notify the claimant in writing of (i) its decision, (ii) the reasons therefor, and (iii) the Plan provisions upon which it is based. (d) The Committee may at any time alter the claims procedure set forth above, so long as the revised 23 claims procedure complies with ERISA and the regulations issued thereunder. 5.3 Inalienability and Forfeiture of Benefits. Except as set forth ----------------------------------------- below, the benefits payable under this Plan shall not be subject to alienation, transfer, assignment, garnishment, execution or levy of any kind, and any attempt to cause any benefits to be so subjected shall not be recognized. If any Participant entitled to a benefit under this Plan is discharged for cause, enters into competition with the Company, interferes with the relations between the Company and any customer, discloses confidential information that has an adverse effect on the Company, or engages in any activity that would result in any decrease in sales or income of the Company, the rights of such Participant to a benefit under this Plan will be forfeited, unless the Committee in its sole discretion determines that such activity is not detrimental to the best interest of the Company. The foregoing sentence of this Section 5.3 shall not apply (a) to any event or action occurring after a Change of Control, or (b) to any event occurring prior to a Change of Control unless the Participant had been notified in writing prior to such Change of Control of implementation of the foregoing sentence or the Committee had otherwise taken formal actions to implement the foregoing sentence. 24 5.4 Unsecured General Creditor. Participants shall have no legal or -------------------------- equitable rights, interest or claims in any property or assets of the Company. Except as expressly otherwise provided by the Company pursuant to Section 5.5, no assets of the Company shall be held under any trust for the benefit of Participants, or held in any way as collateral security for the fulfilling of the obligations of the Company under this Plan. The Company's obligation under this Plan shall be merely that of an unfunded and unsecured promise of the Company to pay money in the future. Notwithstanding any other provision of this Plan, any claim for benefits under this Plan shall be subordinate to claims by general creditors of the Company against the assets of the Company and against the assets of any trust that may be established by the Company pursuant to Section 5.4. 5.5 Trust. The Company shall be responsible for the payment of all ----- benefits provided under this Plan. At its discretion, Tambrands Inc. may establish one or more trusts, with such trustees as the Committee may approve, for the purpose of providing for the payment of such benefits. Such trust or trusts may be irrevocable, but the assets thereof shall be subject to the claims of the Company's creditors. To the extent any benefits provided under this Plan are actually paid from any such trust, the Company 25 shall have no further obligation with respect thereto, but to the extent not so paid, such benefits shall remain the obligation of, and shall be paid by, the Company. In the event that assets of any such trust are applied to satisfy claims of creditors of the Company, an amount equal to the amount so applied shall be contributed promptly to the trust by the Company. 5.6 Not a Contract of Employment. The terms and conditions of this ---------------------------- Plan shall not be deemed to constitute a contract of employment between the Company and the Participant, and the Participant shall have no rights against the Company except as may otherwise be specifically provided herein. Moreover, nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of the Company or to interfere with the right of the Company to discipline or discharge him at any time for any reason whatsoever. 5.7 Captions. The captions of the articles, sections and paragraphs -------- of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions. 5.8 Governing Law. The provisions of this Plan shall be construed ------------- and interpreted according to the laws of the State of New York. 26 5.9 Validity. In case any provision of this Plan shall be illegal or -------- invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal and invalid provision had never been inserted herein. 5.10 Notice. Any notice or filing required or permitted to be given ------ to the Committee or the Company under this Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the Committee or the Company, as the case may be, at the principal office of the Company. Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. 5.11 Incompetent Participant. In the event that it shall be found ----------------------- upon evidence satisfactory to the Company that any Participant to whom a benefit is payable under this Plan is unable to care for his affairs because of illness or accident, any payment due (unless prior claim therefor shall have been made by a duly authorized guardian or other legal representative) may be paid, upon appropriate indemnification of the Company and the Committee, to the spouse or other person deemed by the Company to have incurred expense 27 for such Participant. Any such payment shall be a payment for the account of the Participant and shall be a complete discharge of any liability of this Plan therefor. ARTICLE VI Amendment and Termination ------------------------- The Committee may terminate or amend this Plan in any respect at any time, provided that no action of the Committee may, without the consent of the person involved, alter or impair the rights of a Participant to any benefits accrued and vested hereunder. IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its duly authorized officer, as of this 24th day of March, 1994. TAMBRANDS INC. By:/s/ Helen G. Goodman __________________________ Title: Senior Vice President - Human Resources 28 EX-10.8(E) 6 STOCK INCENTIVE PLAN EXHIBIT 10.8(e) FOURTH AMENDMENT TO THE TAMBRANDS INC. 1992 DIRECTORS STOCK INCENTIVE PLAN ----------------------------------- WHEREAS, TAMBRANDS INC. (the "Company") adopted the 1992 Directors Stock Incentive Plan (the "Plan"); and WHEREAS, pursuant to Section 13 of the Plan, the Board of Directors retained the right to amend the Plan; NOW, THEREFORE, the Plan is amended as follows: 1. Section 8(b) is amended to delete the first sentence thereof and to substitute a new first sentence thereof, to read as follows: The date of each grant shall be November 15 for Awards granted in 1991, August 15 for Awards granted in 1992 to Participating Directors, August 24 for Awards granted in 1993 to Participating Directors, August 23 for Awards granted in 1994 to Participating Directors and September 15 for Awards granted in 1994 to Eligible Directors (the "Date of Grant"). 2. Section 8(d) is amended to delete the first sentence thereof and to substitute a new first sentence thereof, to read as follows: A Participant who wishes to elect to receive an Exchange Option in accordance with Section 8(a) shall deliver to the Secretary of the Company a written irrevocable election, in a form acceptable to the General Counsel of the Company, not later than November 8, 1991 for grants to be made in November 1991, August 10, 1992 for grants to be made in August 1992, August 17, 1993 for grants to be made in August 1993, August 16, 1994 for grants to be made in August 1994 and September 8 for grants to be made in September 1994, specifying the type and amount of compensation such Participant wishes to forgo. -2- 3. This Fourth Amendment to the Plan shall be effective as of March 1, 1994. IN WITNESS WHEREOF, the Company has caused this Fourth Amendment to be executed by its duly authorized officer on the ______ day of ________________, 1994. TAMBRANDS INC. By:___________________________ Title:________________________ WITNESS: _________________________ Title:___________________ EX-10.9(E) 7 EMPLOYMENT AGREEMENT AND FIRST AMENDMENT EXHIBIT 10.9(E) EMPLOYMENT PROTECTION AGREEMENT ------------------------------- THIS AGREEMENT between Tambrands Inc., a Delaware corporation (the "Corporation"), and Helen G. Goodman (the "Executive"), dated as of this 1st day of December 1989. W I T N E S S E T H : - - - - - - - - - - WHEREAS, the Corporation and the Executive have agreed to enter into an agreement providing the Corporation and the Executive with certain rights upon the occurrence of a Change of Control (as defined below) to assure the Corporation of continuity of management in the event of any Change of Control; NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is hereby agreed by and between the Corporation and the Executive as follows: 1. Operation of Agreement. The effective date of this Agreement shall ---------------------- be the date on which a Change of Control occurs (the "Effective Date"), provided that if the Executive is not employed by the Corporation on the Effective Date this Agreement shall be void and without effect. This Agreement shall terminate on November 30, 1992, provided that the termination date of this Agreement shall be extended for one additional year on December 1, 1990 and each subsequent December 1, unless the Executive shall have received written notice from the Corporation prior to the September 1 immediately preceding such December 1 that the Board of Directors of the Corporation (the "Board") has determined that the termination date of this Agreement shall not be so extended. Notwithstanding the foregoing, this Agreement shall not terminate on the date determined in accordance with the preceding sentence if a Change of Control shall have occurred prior to such date. 2. Definitions. (a) Change of Control. For purposes of this ----------- ----------------- Agreement, a "Change of Control" shall be deemed to have occurred if: (i) any --- person (as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended from time to time (the "Exchange Act"), and as used in Sections 13(d) and 14(d) thereof)), excluding the Corporation, any majority owned subsidiary of the Corporation (a "Subsidiary") and any employee benefit plan sponsored or maintained by the Corporation or any Subsidiary (including any trustee of such plan acting as trustee), but including a "group" as defined in Section 13(d)(3) of the Exchange Act (a "Person"), becomes the beneficial owner of shares of the Corporation having at least 20% of the total number of votes that may be cast for the election of directors of the Corporation (the "Voting Shares") provided, however, that such an event shall not constitute a Change of Control if the acquiring Person has entered into an agreement with the Corporation approved by the Board which materially restricts the right of such Person to direct or influence the management or policies of the Corporation; (ii) the shareholders ---- of the Corporation shall approve any merger or other business combination of the Corporation, sale of the Corporation's assets or combination of the foregoing transactions (a "Transaction") other than a Transaction involving only the Corporation and one or more of its Subsidiaries, or a Transaction immediately following which the shareholders of the Corporation immediately prior to the Transaction continue to have a majority of the voting power in the resulting entity excluding for this purpose any shareholder owning directly or indirectly more than 10% of the shares of the other company involved in the Transaction, or (iii) within any 24-month period beginning on or after November 30, 1989, the - ----- persons who were directors of the Corporation immediately before the beginning of such period (the "Incumbent Directors") shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to the Corporation, provided that any director who was not a director as of December 1, 1989 shall be deemed to be an Incumbent Director if such director was elected to the Board by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually or by prior operation of this Section 2(a)(iii). (b) Participation by Executive. Notwithstanding the foregoing, no -------------------------- Change of Control shall be deemed to have occurred for purposes of this Agreement by reason of any actions or events in which the Executive participates in a capacity other than in his capacity as the Executive (or as a director of the Corporation or a Subsidiary, where applicable). 3. Employment Period. If the Executive is employed on the Effective ----------------- Date, the Corporation agrees to continue the Executive in its employ, and the Executive agrees to remain in the employ of the Corporation, for the period (the "Employment Period") commencing on the Effective Date and ending on the earliest to occur of (i) the second anniversary of the Effective Date, (ii) the --- ---- Executive's normal retirement date under the Corporation's retirement plans as in effect from time to time and (iii) the date of any termination of the ----- Executive's employment in accordance with Section 6 of this Agreement. 4. Position and Duties. (a) No Reduction in Position. During the ------------------- ------------------------ Employment Period, the Executive's position (including titles), authority and responsibilities shall be at least commensurate with the highest of those held, exercised and assigned at any time during the 90-day period immediately preceding the Effective Date. (b) Business Time. From and after the Effective Date, the Executive ------------- agrees to devote his full business time during normal business hours to the business and affairs of the Corporation and to use his best efforts to perform faithfully and efficiently the responsibilities assigned to him hereunder, to the extent necessary to discharge such responsibilities, except for (i) reasonable time spent in serving on corporate, civic or charitable boards or committees approved by the Board, in each case only if and to the extent not substantially interfering with the performance of such responsibilities, and (ii) periods of vacation and sick leave to which he is entitled. It is expressly understood and agreed that the Executive's continuing to serve on any boards and committees on which he is serving or with which he is otherwise associated with the consent or approval of the Corporation immediately preceding the Effective Date shall not be deemed to interfere with the performance of the Executive's services to the Corporation. 5. Compensation. (a) Base Salary. During the Employment Period, the ------------ ----------- Executive shall receive a base salary ("Base Salary") at a monthly rate at least equal to the monthly salary paid to the Executive by the Corporation and any of its affiliated companies immediately prior to the Effective Date. The Base Salary shall be reviewed at least once each year after the Effective Date, and may be increased (but not decreased) at any time and from time to time by action of the Board or any committee thereof or any individual having authority to take such action in accordance with the Corporation's regular practices. Neither payment of the Base Salary nor payment of any increased Base Salary after the Effective -2- Date shall serve to limit or reduce any other obligation of the Corporation hereunder. For purposes of the remaining provisions of this Agreement, the term "Base Salary" shall mean Base Salary as defined in this Section 5(a) or, if increased after the Effective Date, the Base Salary as so increased. (b) Annual Bonus. In addition to the Base Salary, the Executive shall ------------ be awarded for each fiscal year of the Corporation ending during the Employment Period an annual bonus (either pursuant to a bonus plan or program of the Corporation or otherwise) in cash at least equal to the last annual bonus (annualized, if awarded in respect of a partial year) awarded to the Executive under the Annual Incentive Plan of the Corporation prior to the Effective Date ("Annual Bonus"). If a fiscal year of the Corporation begins, but does not end, during the Employment Period, the Executive shall receive an amount with respect to such fiscal year at least equal to the amount of the Annual Bonus multiplied by a fraction, the numerator of which is the number of days in such fiscal year occurring during the Employment Period and the denominator of which is 365. Each amount payable in respect of the Executive's Annual Bonus shall be paid not later than the last day of March of the year next following the year for which the Annual Bonus (or pro-rated portion) is earned or awarded, unless electively deferred by the Executive pursuant to any deferral programs or arrangements that the Corporation may make available to the Executive, in which event such deferred amount shall be payable in accordance with the terms of such deferral program or arrangement. Neither the Annual Bonus nor any bonus amount paid in excess thereof after the Effective Date shall serve to limit or reduce any other obligation of the Corporation hereunder. (c) Incentive and Savings Plans and Retirement Programs. In addition --------------------------------------------------- to the Base Salary and Annual Bonus payable as hereinabove provided, during the Employment Period, the Executive shall be entitled to participate in all incentive and savings plans and programs, including stock option plans and other equity based compensation plans, and in all retirement plans, on a basis providing him with the opportunity to receive compensation (without duplication of the amount payable as an Annual Bonus) and benefits equal to those provided by the Corporation to the Executive on an annualized basis under such plans and programs as in effect at any time during the 90-day period immediately preceding the Effective Date. (d) Benefit Plans. During the Employment Period, the Executive and his ------------- family shall be entitled to participate in or be covered under all welfare benefit plans and programs of the Corporation and its affiliated companies, including all medical, dental, disability, group life, accidental death and travel accident insurance plans and programs, as in effect at any time during the 90-day period immediately preceding the Effective Date. (e) Expenses. During the Employment Period, the Executive shall be -------- entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the policies and procedures of the Corporation as in effect at any time during the 90-day period immediately preceding the Effective Date. (f) Vacation and Fringe Benefits. During the Employment Period, the ---------------------------- Executive shall be entitled to paid vacation and fringe benefits in accordance with the policies of the Corporation as in effect at any time during the 90-day period immediately preceding the Effective Date. (g) Office and Support Staff. During the Employment Period, the ------------------------ Executive shall be entitled to an office or offices of a size and with -3- furnishings and other appointments, and to secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive at any time during the 90-day period immediately preceding the Effective Date. 6. Termination. (a) Death, Disability or Retirement. Subject to the ----------- ------------------------------- provisions of Section 1 hereof, this Agreement shall terminate automatically upon the Executive's death or attainment of normal retirement age under the Corporation's retirement plans as in effect from time to time, provided that, after the Effective Date, the normal retirement age may not be lowered for purposes of this Agreement without the Executive's consent. The Corporation may terminate this Agreement, after having established the Executive's Disability, by giving the Executive written notice of its intention to terminate his employment, and his employment with the Corporation shall terminate effective on the 90th day after receipt of such notice if, within 90 days after such receipt, the Executive shall fail to return to full-time performance of his duties. For purposes of this Agreement, "Disability" means disability which, after the expiration of more than 26 weeks after its commencement, is determined to be total and permanent by a physician selected by the Corporation or its insurers and acceptable to the Executive or his legal representatives (such agreement to acceptability not to be withheld unreasonably). (b) Voluntary Termination. Notwithstanding anything in this Agreement --------------------- to the contrary, the Executive may, upon not less than 30 days' written notice to the Corporation, voluntarily terminate employment during the Employment Period for any reason (including early retirement under the terms of the Corporation's retirement plan as in effect from time to time), provided that any termination by the Executive pursuant to Section 6(d) of this Agreement on account of Good Reason (as defined therein) shall not be treated as a voluntary termination under this Section 6(b). (c) Cause. The Corporation may terminate the Executive's employment ----- during the Employment Period for Cause. For purposes of this Agreement, "Cause" means (i) an act or acts of dishonesty or gross misconduct on the Executive's --- part which result or are intended to result in material damage to the Corporation's business or reputation or (ii) repeated material violations by the ---- Executive of his obligations under Section 4 of this Agreement which violations are demonstrably willful and deliberate on the Executive's part. (d) Good Reason. The Executive may terminate his employment during the ----------- Employment Period for Good Reason. For purposes of this Agreement, "Good Reason" means (i) a good faith determination by the Executive that, without his prior written consent, the Corporation or any of its officers has taken or failed to take any action (including, without limitation, (A) exclusion of the --- Executive from consideration of material matters within his area of responsibility, (B) statements or actions which undermine the Executive's --- authority with respect to persons under his supervision or reduce his standing with his peers, (C) a pattern of discrimination against or --- harassment of the Executive or persons under his supervision and (D) the --- subjection of the Executive to procedures not generally applicable to other similarly situated executives) which changes the Executive's position (including titles), authority or responsibilities under Section 4 of this Agreement or reduces the Executive's ability to carry out his duties and responsibilities under Section 4 of this Agreement; (ii) any failure by the Corporation to comply with any of the provisions of Section 5 of this Agreement, other than an insubstantial or inadvertent failure remedied by the Corporation promptly -4- after receipt of notice thereof from the Executive; (iii) the Corporation's requiring the Executive to be employed at any location more than 50 miles further from his principal residence than the location at which the Executive was employed immediately preceding the Effective Date; or (iv) any failure by the Corporation to obtain the assumption of and agreement to perform this Agreement by a successor as contemplated by Section 14(b) of this Agreement, provided that the successor has had actual written notice of the existence of this Agreement and its terms and an opportunity to assume the Corporation's responsibilities under this Agreement during a period of 10 business days after receipt of such notice. (e) Notice of Termination. Any termination by the Corporation for --------------------- Cause or by the Executive for Good Reason during the Employment Period shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 15(c) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice given, in the case of a termination for Cause, within 10 business days of the Corporation's having actual knowledge of all of the events giving rise to such termination, and in the case of a termination for Good Reason, within 180 days of the Executive's having actual knowledge of the events giving rise to such termination, and which (i) indicates the specific termination provision in this Agreement relied upon, - --- (ii) sets forth in reasonable detail the facts and circumstances claimed to - ---- provide a basis for termination of the Executive's employment under the provision so indicated, and (iii) if the termination date is other than the date ----- of receipt of such notice, specifies the termination date of this Agreement (which date shall be not more than 15 days after the giving of such notice). The failure by the Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of the Executive hereunder or preclude the Executive from asserting such fact or circumstance in enforcing his rights hereunder. (f) Date of Termination. For purposes of this Agreement, the term ------------------- "Date of Termination" means (i) in the case of a termination for which a Notice --- of Termination is required, the date of receipt of such Notice of Termination or, if later, the date specified therein and (ii) in all other cases, the actual date on which the Executive's employment terminates during the Employment Period. 7. Obligations of the Corporation upon Termination. (a) Death. If ----------------------------------------------- ------ the Executive's employment is terminated during the Employment Period by reason of the Executive's death, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement other than those obligations accrued hereunder at the date of his death, including, for this purpose (i) the Executive's full Base Salary through the Date of --- Termination, (ii) the product of the Annual Bonus and a fraction, the numerator ---- of which is the number of days in the current fiscal year of the Corporation through the Date of Termination, and the denominator of which is 365 (the "Pro- rated Bonus Obligation"), (iii) any compensation previously deferred by the ----- Executive (together with any accrued earnings thereon) and not yet paid by the Corporation and (iv) any other amounts or benefits owing to the Executive under ---- the then applicable employee benefit plans or policies of the Corporation (such amounts specified in clauses (i), (ii), (iii) and (iv) are hereinafter referred to as "Accrued Obligations"). Unless otherwise directed by the Executive (or, in the case of any employee benefit plan qualified (a "Qualified Plan") under Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), as may be required by such plan), all such Accrued Obligations shall be paid to the Executive's legal representatives -5- in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, the Executive's family shall be entitled to receive benefits at least equal to the most favorable level of benefits available to surviving families of executives of the Corporation and its affiliates under such plans, programs and policies relating to family death benefits, if any, of the Corporation and its affiliates in effect at any time during the 90-day period immediately preceding the Effective Date. (b) Disability. If the Executive's employment is terminated by reason ---------- of the Executive's Disability, the Executive shall be entitled, after the Date of Termination until the date when the Employment Period would otherwise have terminated, to continue to participate in or be covered under the benefit plans and programs referred to in Section 5(d) of this Agreement or, at the Corporation's option, to receive equivalent benefits by alternate means at least equal to those provided in accordance with Section 5(d) of this Agreement. Unless otherwise directed by the Executive (or, in the case of any Qualified Plan, as may be required by such plan), the Executive shall also be paid all Accrued Obligations in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, the Executive shall be entitled to receive disability and other benefits at least equal to the most favorable level of benefits available to disabled employees and/or their families in accordance with the plans, programs and policies main- tained by the Corporation or its affiliates relating to disability at any time during the 90-day period immediately preceding the Effective Date. (c) Cause and Voluntary Termination. If, during the Employment Period, ------------------------------- the Executive's employment shall be terminated for Cause or voluntarily terminated by the Executive (other than on account of Good Reason), the Corporation shall pay the Executive the Accrued Obligations other than the Pro- rated Bonus Obligation. Unless otherwise directed by the Executive (or, in the case of any Qualified Plan, as may be required by such plan), the Executive shall be paid all such Accrued Obligations in a lump sum in cash within 30 days of the Date of Termination and the Corporation shall have no further obligations to the Executive under this Agreement. (d) Termination by Corporation other than for Cause or Disability and ----------------------------------------------------------------- Termination by Executive for Good Reason. (i) Lump Sum Payment. If, during - ---------------------------------------- ---------------- the Employment Period, the Corporation terminates the Executive's employment other than for Cause or Disability, or the Executive terminates his employment for Good Reason, the Corporation shall pay to the Executive in a lump sum in cash within 15 days after the Date of Termination the aggregate of the following amounts: (A) if not theretofore paid, the Executive's Base Salary through the Date of Termination at the rate specified in Section 5(a) of this Agreement; (B) a cash amount equal to two times the sum of (1) the Executive's annual Base Salary at the rate specified in Section 5(a) of this Agreement; (2) the Annual Bonus; and (3) the present value, calculated using the annual federal short- term rate as determined under Section 1274(d) of the Code, of (without duplication) (x) the annual cost to the Corporation (based on the --- premium rates or other costs to it) of obtaining coverage equivalent to the coverage under the plans and programs described in Section 5(d) of this Agreement, and (y) the annual- --- -6- ized value of the fringe benefits described under Section 5(f) of this Agreement; provided, however, that in no event shall the Executive be entitled to receive under this clause (B) more than the product obtained by multiplying the amount determined under this clause by a fraction whose numerator shall be the number of months (including fractions of a month) which at the Date of Termination remain until the Executive's normal retirement date under the Corporation's retirement plan or any successor plan as in effect from time to time and whose denominator shall be 24, and provided further that, with respect to the life and medical insurance coverage referred to in Section 5(d) of this Agreement, at the Executive's election made prior to the Date of Termination, the Corporation shall use its best efforts to secure conversion coverage and shall pay the cost of such coverage in lieu of paying the lump sum amount attributable to such life or medical insurance coverage; and (C) a cash amount equal to any amounts (other than amounts payable to the Executive under any Qualified Plans) described in Sections 7(a)(iii) and (iv) of this Agreement. (ii) Discharge of Corporation's Obligations. Subject to the performance -------------------------------------- of its obligations under this Section 7(d), the Corporation shall have no further obligations to the Executive in respect of any termination by the Executive for Good Reason or by the Corporation other than for Cause or Disability, except to the extent expressly provided under any of the plans referred to in Section 5(c) or 5(d) of this Agreement. 8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent ------------------------- or limit the Executive's continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Corporation or any of its affiliated companies and for which the Executive may qualify, nor shall anything herein limit or otherwise prejudice such rights as the Executive may have under any stock option or other plans or agreements with the Corporation or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Corporation or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan or program. 9. Certain Reduction of Payments by the Corporation. (a) For purposes ------------------------------------------------ of this Section 9, (i) "Payment" shall mean any payment or distribution in the --- nature of compensation to or for the benefit of the Executive, whether paid or payable pursuant to this Agreement or otherwise; (ii) "Agreement Payment" shall ---- mean a Payment paid or payable pursuant to this Agreement (disregarding this Section 9); (iii) "Net After Tax Receipts" shall mean the Present Value of a ----- Payment net of all applicable Federal, State and local income and excise taxes (the "Taxes") imposed on the Executive with respect thereto (calculated in the manner described in Section 7(d)(ii) of this Agreement); (iv) "Present Value" ---- shall mean the present value of a Payment or an Agreement Payment determined in accordance with Section 280G(d)(4) of the Code; and (v) "Reduced Amount" shall --- mean the aggregate amount of Payments which (a) is less than the sum of all --- Payments and (b) results in the greatest aggregate Net After Tax Receipts. (b) Anything in this Agreement to the contrary notwithstanding, in the event the Corporation's independent public accounting firm (the "Accounting Firm") shall determine that receipt of all Payments would subject the Executive to tax under Section 4999 of the Code, it shall -7- determine whether some amount of Payments would meet the definition of a Reduced Amount. If the Accounting Firm determines that there is a Reduced Amount, the aggregate Agreement Payments shall be reduced to such Reduced Amount; provided, however, that if the Reduced Amount exceeds the aggregate Agreement Payments, the aggregate Payments shall, after the reduction of all Agreement Payments, be reduced (but not below zero) in the amount of such excess. (c) If the Accounting Firm determines that aggregate Agreement Payments or Payments, as the case may be, should be reduced to the Reduced Amount, the Corporation shall promptly give the Executive notice to that effect and a copy of the detailed calculation thereof, and the Executive may then elect, in his sole discretion, which and how much of the Payments shall be eliminated or reduced (as long as after such election the present value of the aggregate Payments equals the Reduced Amount), and shall advise the Corporation in writing of his election within ten days of his receipt of notice. If no such election is made by the Executive within such ten-day period, the Corporation may elect which of the Agreement Payments or Payments, as the case may be, shall be eliminated or reduced (as long as after such election the present value of the aggregate Agreement Payments or Payments, as the case may be, equals the Reduced Amount) and shall notify the Executive promptly of such election. All determinations made by the Accounting Firm under this Section 9 shall be binding upon the Corporation and the Executive and shall be made within 60 days of a termination of employment of the Executive. As promptly as practicable following such determination, the Corporation shall pay to or distribute for the benefit of the Executive such Payments as are then due to the Executive under this Agreement and shall promptly pay to or distribute for the benefit of the Executive in the future such Payments as become due to the Executive under this Agreement. (d) While it is the intention of the Corporation and the Executive to reduce the amounts payable or distributable to the Executive hereunder only if the aggregate Net After Tax Receipts to the Executive would thereby be increased, as a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will have been paid or distributed by the Corporation to or for the benefit of the Executive pursuant to this Agreement which should not have been so paid or distributed ("Overpayment") or that additional amounts which will not have been paid or distributed by the Corporation to or for the benefit of the Executive pursuant to this Agreement should have been so paid or distributed ("Underpayment"), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the Accounting Firm, based either upon the assertion of a deficiency by the Internal Revenue Service against the Corporation or the Executive which the Ac- counting Firm believes has a high probability of success or controlling precedent or other substantial authority, determines that an Overpayment has been made, any such Overpayment paid or distributed by the Corporation to or for the benefit of the Executive shall be treated for all purposes as a loan ab -- initio to the Executive which the Executive shall repay to the Corporation - ------ together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code; provided, however, that no such loan shall be deemed to have been made and no amount shall be payable by the Executive to the Corporation if and to the extent such deemed loan and payment would not either reduce the Executive's Taxes or generate a refund of such Taxes. In the event that the Accounting Firm, based upon controlling precedent or other substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Corporation to or for the benefit of the Executive together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code. -8- 10. Full Settlement. The Corporation's obligation to make the payments --------------- provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Corporation may have against the Executive or others whether by reason of the subsequent employment of the Executive or otherwise. In no event shall the Executive be obligated to seek other employment by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, and no amount payable under this Agreement shall be reduced on account of any compensation received by the Executive from other employment. In the event that the Executive shall in good faith give a Notice of Termination for Good Reason and it shall thereafter be determined by mutual consent of the Executive and the Corporation or by a tribunal having jurisdiction over the matter that Good Reason did not exist, the employment of the Executive shall, unless the Corporation and the Executive shall otherwise mutually agree, be deemed to have terminated, at the date of giving such purported Notice of Termination, by mutual consent of the Corporation and the Executive and, except as provided in the last preceding sentence, the Executive shall be entitled to receive only those payments and benefits which he would have been entitled to receive at such date otherwise than under this Agreement. 11. Legal Fees and Expenses. In the event that a claim for payment of ----------------------- benefits under this Agreement is disputed, the Corporation shall pay all reasonable legal fees and expenses incurred by the Executive in pursuing such claim, provided that the Executive is successful as to at least part of the disputed claim by reason of litigation, arbitration or settlement. 12. Confidential Information. The Executive shall hold in a fiduciary ------------------------ capacity for the benefit of the Corporation all secret or confidential information, knowledge or data relating to the Corporation or any of its affiliated companies, and their respective businesses, (i) obtained by the --- Executive during his employment by the Corporation or any of its affiliated companies and (ii) not otherwise public knowledge (other than by reason of an ---- unauthorized act by the Executive). After termination of the Executive's employment with the Corporation, the Executive shall not, without the prior written consent of the Corporation, unless compelled pursuant to an order of a court or other body having jurisdiction over such matter, communicate or divulge any such information, knowledge or data to anyone other than the Corporation and those designated by it. In no event shall an asserted violation of the provisions of this Section 12 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement. 13. Employment Contract or Severance Benefits. Notwithstanding ----------------------------------------- anything else in this Agreement to the contrary, any amount payable to the Executive hereunder on account of his termination of employment shall be reduced on a dollar for dollar basis by each dollar actually paid to the Executive with respect to such termination under the terms of any employment contract between the Executive and the Corporation or under any severance program or policy applicable to the Executive. Nothing in this Agreement shall be construed to require duplication of any compensation, benefits or other entitlements provided to the Executive by the Corporation under the terms of any employment contract which may address similar matters. 14. Successors. (a) This Agreement is personal to the Executive and, ---------- without the prior written consent of the Corporation, shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives. -9- (b) This Agreement shall inure to the benefit of and be binding upon the Corporation and its successors. The Corporation shall require any successor to all or substantially all of the business and/or assets of the Corporation, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to the Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Corporation would be required to perform if no such succession had taken place. 15. Miscellaneous. (a) Applicable Law. This Agreement shall be ------------- -------------- governed by and construed in accordance with the laws of the State of Delaware, applied without reference to principles of conflict of laws. (b) Amendments. This Agreement may not be amended or modified ---------- otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. (c) Notices. All notices and other communications hereunder shall be ------- in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to the Executive: at the address listed below If to the Corporation: Tambrands Inc. One Marcus Avenue Lake Success, New York 11042 Attention: Secretary (with a copy to the attention of the General Counsel) or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective when actually received by the addressee. (d) Tax Withholding. The Corporation may withhold from any amounts --------------- payable under this Agreement such Federal, State or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. (e) Severability. The invalidity or unenforceability of any provision ------------ of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. (f) Captions. The captions of this Agreement are not part of the -------- provisions hereof and shall have no force or effect. IN WITNESS WHEREOF, the Executive has hereunto set his hand and the Corporation has caused this Agreement to be executed in its name on its behalf, and its corporate seal to be hereunto affixed and attested by its Assistant Secretary, all as of the day and year first above written. -10- ATTEST: TAMBRANDS INC. /s/MARILYN K. JONES By/s/PAUL E. KONNEY - ------------------------- -------------------------------- Assistant Secretary Title: Senior Vice President- General Counsel and (Seal) Secretary EXECUTIVE: HELEN G. GOODMAN /s/HELEN G. GOODMAN ---------------------------------- Address: Tambrands Inc. One Marcus Avenue Lake Success, New York 11042 GOODMAN.EPA -11- FIRST AMENDMENT --------------- This FIRST AMENDMENT, dated as of October 16, 1990, to the Employment Protection Agreement, dated as of December 1, 1989 (the "Employment Protection Agreement"), by and between Helen G. Goodman (the "Executive") and Tambrands Inc., a Delaware corporation (the "Corporation"), witnesseth: WHEREAS, the Corporation and the Executive entered into the Employment Protection Agreement to assure the Corporation of continuity of management in the event of any change of control; WHEREAS, the Board of Directors of the Corporation has authorized an amendment to the Employment Protection Agreement that it has determined to be in the best interests of the Corporation and its stockholders; and WHEREAS, the Executive has agreed to such amendment; NOW THEREFORE, in consideration of the premises, it is hereby agreed by and between the Corporation and the Executive as follows: 1. Section 9 of the Employment Protection Agreement is hereby amended and restated as follows: 9. Certain Additional Payments by the Corporation. ---------------------------------------------- (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Corporation to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 9) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision) or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes with respect to the Gross-Up Payment (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. (b) Subject to the provisions of Section 9(c), all determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by KPMG Peat Marwick or other firm then auditing the accounts of the Corporation (the "Accounting Firm") which shall provide detailed supporting calculations both to the Corporation and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Corporation. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, or is unwilling or unable to perform its obligations pursuant to this Section 9, the Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Corporation. Any Gross-Up Payment, determined pursuant to this Section 9, shall be paid by the Corporation to the Executive within five days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon the Corporation and the Executive. As a result of the potential uncertainty in the application of Section 4999 of the Code (or any successor provision) at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Corporation should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Corporation exhausts its remedies pursuant to Section 9(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Corporation to or for the benefit of the Executive. (c) The Executive shall notify the Corporation in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Corporation of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than 10 business days after the Executive is informed in writing of such claim and shall apprise the Corporation of the nature of such claim and the date on which such claim is requested to be paid. the Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which he gives such notice to the Corporation (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Corporation notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: (i) give the Corporation any information reasonably requested by the Corporation relating to such claim, (ii) take such action in connection with contesting such claim as the Corporation shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Corporation, (iii) cooperate with the Corporation in good faith in order effectively to contest such claim, and (iv) permit the Corporation to participate in any proceedings relating to such claim; provided, however, that the Corporation shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on a after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limiting the foregoing provisions of this Section 9(c), the Corporation shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of -2- such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Corporation shall determine; provided, however, that if the Corporation directs the Executive to pay such claim and sue for a refund, the Corporation shall advance the amount of such payment to the Executive, on an interest-free basis, and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statue of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Corporation's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. (d) If, after the receipt by the Executive of an amount advanced by the Corporation pursuant to Section 9(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Corporation's complying with the requirements of Section 9(c)) promptly pay to the Corporation the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Corporation pursuant to Section 9(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Corporation does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 2. This First Amendment may not be amended or modified other than by a written agreement executed by the parties hereto or their respective successors and legal representatives. 3. Except as expressly set forth herein, this First Amendment shall not modify or amend any of the provisions contained in the Employment Protection Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect. -3- IN WITNESS WHEREOF, the Executive has hereunto set his hand and the Corporation has caused this First Amendment to be executed in its name on its behalf, and its corporate seal to be hereunto affixed and attested, all as of the day and year first above written. ATTEST: TAMBRANDS INC. /s/JONATHAN W. EMERY By/s/PAUL E. KONNEY - -------------------- --------------------------- Title: Senior Vice President General Counsel and Secretary EXECUTIVE (Seal) /s/HELEN G. GOODMAN ----------------------------- Name: Helen G. Goodman FIRSTAMN -4- EX-10.21 8 EARLY RETIREMENT AGREEMENT EXHIBIT 10.(21) EARLY RETIREMENT AGREEMENT -------------------------- EARLY RETIREMENT AGREEMENT, dated as of February 28, 1994, by and between TAMBRANDS INC., a Delaware corporation (the "Company"), and Charles J. Chapman ("Employee"). WHEREAS, Employee has expressed his intention to retire from employment with the Company; WHEREAS, Employee holds a position of significant importance to the Company; WHEREAS, the Company believes that it is in its best interest to retain the services of Employee for at least several months; and WHEREAS, Employee is willing to delay his early retirement and to remain employed by the Company on the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of their mutual promises, the Company and Employee agree as follows: 1. Employment Period. Employee shall remain in the Company's employ from ----------------- the date hereof until at least July 1, 1994 (the "Earliest Retirement Date"). Employee's employment hereunder shall cease on or after the Earliest Retirement Date upon the first to occur of (i) his retirement or other voluntary - termination of employment, (ii) the date the Company terminates his employment -- pursuant to Section 9 below, (iii) his death or his termination of employment --- due to disability (within the meaning of section 105(d)(4) of the Internal Revenue Code of 1986, as amended) and (iv) April 25, 1995. The period during -- which Employee remains an employee hereunder (regardless of whether after the Earliest Retirement Date) shall be referred to as the "Employment Period". 2. Title and Responsibilities. During the Employment Period, Employee -------------------------- shall have the title of Executive Vice President and President, North America and shall have the responsibilities associated with such title and his position as in effect immediately prior to the date hereof. Notwithstanding anything else contained herein to the contrary, regardless of when the Employment Period ends, it is the current intention of the parties that, if reelected as a member of the Board of Directors (the "Board") at the Company's 1994 annual meeting of shareholders, Employee will continue to serve as a member of the Board for his full term. 3. Salary. During the Employment Period, the Company shall pay Employee a ------ base salary at the rate of $350,000 annually, payable in installments at the same time and in the same manner as the Company pays salary to executive employees located at its headquarters and subject to all applicable deductions or reductions therein made pursuant to Employee's elections under the Company's compensation plans or programs (the "Applicable Reductions"). Salary shall be payable to Employee only with respect to the Employment Period, provided that if ------------- Employee continues in the Company's employ through October 1, 1994 (the "Later Retirement Date"), the Company shall pay Employee, in addition to his salary referred to above, an amount as salary continuance equal to $87,500 minus the Applicable Reductions. The salary continuation amount described in the preceding sentence shall be paid in approximately equal installments (paid not less frequently than monthly) over the period from the end of the Employment Period until April 25, 1995 (the "Salary Continuance Period"), or if the Employment Period ends on April 25, 1995, in a single lump sum as soon as practicable following such date. 4. Bonus. If the Employee is employed on the Earliest Retirement Date, ----- but not the Later Retirement Date, he shall be eligible to receive a bonus for 1994 services in an amount equal to the product of (i) the amount, if any, which - would have been payable to him under the Annual Incentive Plan ("AIP") based on a base salary of $350,000 and assuming that he remained employed for all of 1994, calculated based on actual 1994 performance (the "1994 Bonus"), and (ii) a -- fraction, the numerator of which is the number of days during 1994 during which Employee is employed and the denominator of which is 365. If Employee remains employed through the Later Retirement Date, he shall be eligible to receive the full 1994 Bonus. Any bonus payable to Employee with respect to 1994 shall be paid to Employee at the same time as bonuses are paid to other executives under the AIP. No bonus shall be payable to Employee with respect to services performed after December 31, 1994. 5. Employee Benefits. Until the later of the end of the Employment Period ----------------- or, if applicable, the end of the Salary Continuance Period (such later date referred to as the "End Date"), the Company will provide Employee with coverage under the employee benefit plans, policies and arrangements generally available to its employees, including, but not limited to, participation in the Company's qualified retirement plan and coverage under the Company's medical, dental, life and disability insurance plans (other than long-term disability coverage during the Salary Continuance Period). Accrued vacation days which are unused as of the end of the Employment Period shall be paid to Employee as soon as practicable thereafter. Following the End Date, Employee shall be entitled to continued medical and dental coverage under Section 601 et seq. of the Employee -- --- Retirement Income Security Act of 1974, as amended, subject to the payment by Employee of the applicable premiums. All other benefits shall, unless otherwise expressly provided herein or in the relevant plan, policy or arrangement, cease as of the End Date. 6. Stock Options. With respect to stock options granted to Employee under ------------- the 1991 Stock Option Plan (the "1991 Plan") and the 1981 Long Term Incentive Plan (the "1981 Plan") that have vested and become exercisable on or prior to the End Date, Employee shall be treated as having retired from the Company's employ with the consent of the committee responsible for administering such Plan so long as Employee is employed on the Earliest Retirement Date; provided that, in -------- ---- conjunction with the execution of this Agreement, Employee agrees and acknowledges, that the term of such options shall be reduced from ten years from the date of their initial grant to the fifth anniversary of the End Date. Any unvested options held by Employee at the end of the Employment Period which would not become vested and exercisable in the ordinary course based upon the passage of time during the Salary Continuance Period, if applicable, shall be forfeited as of the date the Employment Period ends. Notwithstanding the provisions of Section 5, Employee shall not be eligible for any additional stock option grants to be made after the date hereof. Except as otherwise provided in this Section 6, all of the terms and conditions of the 1991 Plan and 1981 Plan and the grants made thereunder to Employee shall continue to be applicable to him. 7. Restricted Stock. All shares of restricted stock held by Employee at ---------------- the end of the Employment Period which would not become vested solely based upon the passage of time during the Salary Continuance Period, if applicable, shall be forfeited as of the date the Employment Period ends. Any shares of restricted stock which have or will vest as of a date prior to the End Date shall become vested in accordance with their terms. Notwithstanding anything else contained herein to the contrary, Employee shall not be eligible for any additional restricted stock grants to be made after the date hereof. 8. Retirement Benefits. Following the End Date, Employee shall be ------------------- entitled to receive his accrued vested benefit under the Pension Plan for Employees of Tambrands Inc. (the "Pension Plan"). If Employee is employed on the Earliest Retirement Date, he shall also be entitled to receive a retirement benefit under the formula in the Company's Supplemental Executive Retirement Plan (the "SERP"), giving him service credit through the End Date, which replicates that formula contained in the Pension Plan but without regard to the limits imposed under the Internal Revenue Code or ERISA on the amount of compensation that may be taken into account in determining a participant's benefits. Payment of any benefit under the Pension Plan or the SERP shall be made in accordance with their respective terms, and Employee shall have all rights of a participant under the Pension Plan and the SERP, including all elections as to the form of benefit. 9. Termination by Company. Notwithstanding anything else contained ---------------------- herein to the contrary, if the Company terminates Employee's employment hereunder at any time, whether before or after the Earliest Retirement Date or the Later Retirement Date, other than due to Employee's conviction of a felony or wilful misconduct or gross negligence or if Employee voluntarily terminates his employment hereunder within 60 days following a reduction in his base salary as provided in Section 2 or an adverse change in his title or a material reduction in his responsibilities, as each are set forth in Section 3, Employee shall be entitled to receive the amounts and benefits which would have been payable to Employee had he voluntarily terminated his employment on the Later Retirement Date, and the amount payable as salary continuation shall also include the amount of salary which would have been paid to Employee from the date of such termination to such Later Retirement Date, provided that if such termination of employment occurs prior to the Earliest - ------------- Retirement Date the retirement benefits that would have been provided under the SERP in accordance with Section 8 shall be paid by the Company under this Agreement. In no event shall Employee be or become entitled to receive any other severance or termination benefits by reason of such termination under any plan, policy or program of the Company or any of its subsidiaries. 10. Non-competition. During the Employment Period and for one year after --------------- the End Date, Employee shall not engage directly or indirectly in or become employed by, serve as an agent or consultant to, become a partner, principal or stockholder of any partnership, corporation or other entity (a "Competitor") which is engaged in a business competitive with the Company or its subsidiaries in any geographical area in which the Company or its subsidiaries are engaged prior to the end of the Employment Period; provided that Employee's ownership of less than 2% of the issued and outstanding stock of any corporation whose stock is traded on an established securities market shall not constitute competition with the Company. 11. Non-cooperation. During the Employment Period and for five years --------------- after the End Date, Employee will not become associated with (whether through an investment of capital or otherwise), provide services to or otherwise solicit, aid, assist or cooperate with any person, group or entity (an "Acquiror") in any effort to effect a change of ownership in, or otherwise gain control of, the Company, whether through a stock purchase, merger, asset acquisition, proxy solicitation or any other means. Nothing in this Section 11 shall be construed to preclude Employee from owning less than 1% of the outstanding Common Stock of the Company or an Acquiror, whether acquired pursuant to the terms of any employee benefit plan or otherwise. 12. Non-solicitation. During the Employment Period and for two years ---------------- after the End Date, Employee will not solicit or otherwise induce any employee of the Company or its subsidiaries to leave the employ of the Company or such subsidiaries or to become associated, whether as an employee, officer, partner, director, consultant or otherwise, with any business organization, including, but not limited to, a Competitor or Acquiror. 13. Non-disclosure. Without the prior written consent of the Company, -------------- except to the extent required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency, Employee shall not disclose any trade secrets, customer lists, drawings, designs, product development and related information, marketing plans and related information, sales plans and related information, manufacturing plans and related information, management organization and related information (including data and other information related to members of the Board and management), operating policies and manuals, business plans and related information, financial records and related information, packaging design and related information or other financial, commercial, business or technical information related to the Company or any of its subsidiaries to any third person unless such information has been previously disclosed to the public by the Company or has become public knowledge other than by a breach of this Agreement. 14. Intention of the Parties. If any provision of Sections 10, 11, 12 or ------------------------ 13 is determined by a court of competent jurisdiction not to be enforceable in the manner set forth in this Agreement, the Company and Employee agree that it is the intention of the parties that such provision should be enforceable to the maximum extent possible under applicable law and that such court shall reform such provision to make it enforceable in accordance with the intent of the parties. 15. Release. In consideration of the benefits provided to Employee ------- hereunder, Employee hereby releases and absolves the Company from any and all claims that Employee may now have or may hereafter have against the Company or any of its subsidiaries arising out of or in connection with Employee's employment with, or service as an officer or a director of, the Company or any of its subsidiaries, other than any claim for the benefits to be provided to Employee under this Agreement. 16. Change of Control Agreement. The Employment Protection Agreement by --------------------------- and between the Company and Employee dated as of August 23, 1989, as amended by the first amendment thereto, dated as of October 16, 1990, regarding the continuation of Employee's employment following the occurrence of a "change of control" of the Company (as defined in such agreement) shall terminate upon the last day of the Employment Period. 17. Indemnity. The Company or one of its subsidiaries, as appropriate, --------- shall indemnify Employee for any claim arising out of or in connection with Employee's service as a member of the Board, as an officer of the Company or as an officer or director of any of the Company's subsidiaries in the same manner and to the same extent as the Company or such subsidiary, as the case may be, indemnifies its then current directors, officers or employees, as the case may be. 18. Remedies. Employee acknowledges that a material part of the -------- inducement for the Company to enter into this Agreement is Employee's covenants with respect to non-competition, non-disclosure, non-cooperation and non- solicitation set forth in Sections 10 through 13 hereof. Employee agrees that if Employee shall breach any of those covenants, the Company shall have no further obligation to pay Employee any benefits otherwise payable hereunder (except as may otherwise be required at law) and shall be entitled to such other legal and equitable relief as a court or arbitrator shall reasonably determine unless such breach is an inadvertent breach that does not result in any signi- ficant harm to the Company. 19. Withholding. All cash payments to be made under this Agreement shall ----------- be made net of all applicable income and employment taxes required to be withheld from such payments. To the extent any compensation is payable to Employee in accordance with this Agreement other than as a payment in cash, Employee shall be required to pay the Company an amount equal to all applicable income and employment taxes required to be withheld with respect thereto. 20. Miscellaneous. This Agreement may be amended only by a written ------------- instrument signed by the Company and Employee. Except with respect to any other agreement between the Company and Employee that is specifically referenced herein and intended to continue beyond the execution of this Agreement, this Agreement shall constitute the entire agreement between the Company and Employee with respect to the subject matter hereof. The obligations of the Company to Employee and the covenants of Employee in favor of the Company shall survive the termination of the Employment Period. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs (in the case of Employee) and assigns. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Any notices to be given and any payments to be made hereunder shall be delivered in hand or sent by registered mail, return receipt requested, to the respective party at the address noted above for such party or to such other address as either such party shall direct in accordance with this Section 20. 21. Governing Law. This Agreement shall be governed by the laws of the ------------- State of New York, without reference to the principles of conflict of laws. IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the day first written above. TAMBRANDS INC. By: /s/ Howard B. Wentz, Jr. ------------------------ Title: Chairman of the Board Attest: /s/ Helen G. Goodman - -------------------- /s/ Charles J. Chapman ---------------------- Charles J. Chapman Witness: /s/ Lynda M. Riley - ------------------ EX-12 9 RATIO AND EARNINGS EXHIBIT 12 Tambrands Inc. FORM 10-K PART IV, Item 14., Exhibit 12 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Unaudited) The following table sets forth the Company's ratio of earnings to fixed charges for the periods indicated.
Year Ended (in thousands, except ratios) December 31, ------------------------------------------ 1993 1992 1991 1990 1989 ------- ------- ------- ------- ------ Earnings: Income before income taxes 118,652 191,863 131,825 154,696 30,859 Fixed charges 6,549 9,897 10,258 13,149 9,490 ------- ------- ------- ------- ------ EARNINGS 125,201 201,760 142,083 167,845 40,349 ======= ======= ======= ======= ====== Fixed charges: Interest portion of operating lease expense: Operating lease expense 5,027 4,031 4,204 2,221 2,053 Assumed interest factor 0.33 0.33 0.33 0.33 0.33 ------- ------- ------- ------- ------ Interest portion of operating lease expense 1,659 1,330 1,387 733 677 Interest expense 4,890 8,567 8,871 12,416 8,813 ------- ------- ------- ------- ------ FIXED CHARGES 6,549 9,897 10,258 13,149 9,490 ======= ======= ======= ======= ====== RATIO OF EARNINGS TO FIXED CHARGES 19.1 20.4 13.9 12.8 4.3 ======= ======= ======= ======= ======
EX-21 10 SUBSIDIARIES OF THE REGISTRANT EXHIBIT 21 ---------- TAMBRANDS INC. Subsidiaries of the registrant. - ------------------------------
(1) (2) (3) Percentage of Voting Securities Owned ------------------------------ State or Country By the By Other Name of Subsidiary of Organization Company Subsidiaries - --------------------------- ----------------- ------- -------------------- Tambrands Europe Ltd. Delaware 100% Industrial Catenation South Africa 100% (a) Services (Pty) Ltd. TIM International Delaware 100% Investments Incorporated Tambrands Dosmil, Mexico 100% (b) S.A. de C.V. Tambrands Brasil Ltd. Delaware 100% Shenyang Tambrands People's Republic 80% Company Limited of China Tambrands AG Switzerland 100% (a) Tambrands Benelux S.A. Belgium 100% (c) Tambrands Canada Inc. Canada 100% Tambrands PACE, Inc. Delaware 100% Tambrands Czech Republic 100% (d) Czechoslovakia Limited Tambrands France S.A. France 100% (a) Tambrands Industria e Brazil 100% (e) Comercio Limitada Tambrands Limited United Kingdom 100% (a) Tambrands Ireland Ireland 100% (f) Limited Tambrands Poland Ltd. Poland 100% (d)
(1) (2) (3) Percentage of Voting Securities Owned ------------------------------ State or Country By the By Other Name of Subsidiary of Organization Company Subsidiaries - --------------------------- ----------------- ------- -------------------- Tambrands South Africa South Africa 100% (g) (Pty) Ltd. Tambrands - St. Petersburg Russia 100% (h) Tambrands Ukraine Ukraine 100% (h) Tambrands de Venezuela, C.A. Venezuela 100% (d) ZAO Tambrands Russia 100% (i)
Notes: (a) Owned by Tambrands Europe Ltd. (b) Owned by TIM International Investments Incorporated. (c) Owned by Tambrands Europe Ltd. and Tambrands AG. (d) Owned by Tambrands PACE, Inc. (e) Owned by the Company in part directly and in part indirectly through Tambrands Brasil Ltd. (f) Owned by Tambrands Limited. (g) Owned by Industrial Catenation Services (Pty) Ltd. (h) Owned by Tambrands Limited and Tambrands PACE, Inc. (i) Owned by Tambrands Europe Ltd. and Tambrands - St. Petersburg. EX-23 11 INDEPENDENT AUDITORS REPORT EXHIBIT 23 Independent Auditors' Consent ----------------------------- The Board of Directors Tambrands Inc.: We consent to incorporation by reference in the Registration Statement No. 33-50961 on Form S-3 and Nos. 2-77947, 33-13902, 33-36746, 33-40161, 33-43713 and 33-50398 on Form S-8 of Tambrands Inc. of our reports dated January 25, 1994, relating to the consolidated balance sheets of Tambrands Inc. and subsidiaries as of December 31, 1993 and 1992, and the related consolidated statements of earnings, retained earnings, and cash flows and related schedules for each of the years in the three-year period ended December 31, 1993, which reports appear in the December 31, 1993 annual report on Form 10-K of Tambrands Inc. Our reports refer to a change in accounting for postemployment benefits in 1993 and for postretirement benefits in 1992. KPMG PEAT MARWICK Stamford, Connecticut March 30, 1994 EX-24 12 POWER OF ATTORNEY EXHIBIT 24 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Raymond F. Wright, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1993 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/LILYAN H. AFFINITO ------------------------------ Lilyan H. Affinito Dated: March 14, 1994 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Raymond F. Wright, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1993 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/PAUL S. DOHERTY ------------------------------ Paul S. Doherty Dated: March 14, 1994 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Raymond F. Wright, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1993 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/FLOYD HALL ------------------------------ Floyd Hall Dated: March 14, 1994 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Raymond F. Wright, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1993 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/BRIAN HEALEY ------------------------------ Brian Healey Dated: March 14, 1994 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Raymond F. Wright, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1993 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/ROBERT P. KILEY ------------------------------ Robert P. Kiley Dated: March 14, 1994 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Raymond F. Wright, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1993 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/JOHN LOUDON ------------------------------ John Loudon Dated: March 14, 1994 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Raymond F. Wright, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1993 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/RUTH M. MANTON ------------------------------ Ruth M. Manton Dated: March 14, 1994 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Raymond F. Wright, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1993 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/JOHN A. MEYERS ------------------------------ John A. Meyers Dated: March 14, 1994 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Raymond F. Wright, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1993 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/H. L. TOWER ------------------------------ H. L. Tower Dated: March 14, 1994 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Raymond F. Wright, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1993 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/ROBERT M. WILLIAMS ------------------------------ Robert M. Williams Dated: March 14, 1994 -----END PRIVACY-ENHANCED MESSAGE-----