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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000950117-03-000910.txt : 20030306
<SEC-HEADER>0000950117-03-000910.hdr.sgml : 20030306
<ACCEPTANCE-DATETIME>20030306140301
ACCESSION NUMBER: 0000950117-03-000910
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 13
CONFORMED PERIOD OF REPORT: 20021231
FILED AS OF DATE: 20030306
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: HONEYWELL INTERNATIONAL INC
CENTRAL INDEX KEY: 0000773840
STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714]
IRS NUMBER: 222640650
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-08974
FILM NUMBER: 03594421
BUSINESS ADDRESS:
STREET 1: 101 COLUMBIA RD
STREET 2: PO BOX 4000
CITY: MORRISTOWN
STATE: NJ
ZIP: 07962
BUSINESS PHONE: 9734552000
MAIL ADDRESS:
STREET 1: 101 COLUMBIA RD P O BOX 4000
STREET 2: 101 COLUMBIA RD P O BOX 4000
CITY: MORRISTOWN
STATE: NJ
ZIP: 07962
FORMER COMPANY:
FORMER CONFORMED NAME: ALLIEDSIGNAL INC
DATE OF NAME CHANGE: 19940929
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>a34239.txt
<DESCRIPTION>HONEYWELL INTERNATIONAL
<TEXT>
<Page>
________________________________________________________________________________
________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-8974
HONEYWELL INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
<Table>
<S> <C>
DELAWARE 22-2640650
- --------------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 Columbia Road
P.O. Box 4000
Morristown, New Jersey 07962-2497
- --------------------------------------- ------------------------------------
(Address of principal executive (Zip Code)
offices)
</Table>
Registrant's telephone number, including area code (973)455-2000
Securities registered pursuant to Section 12(b) of the Act:
<Table>
<S> <C>
Name of Each Exchange
Title of Each Class on Which Registered
- --------------------------------------- ------------------------------------
Common Stock, par value $1 per share* New York Stock Exchange
Chicago Stock Exchange
Pacific Exchange
New York Stock Exchange
9.20% Debentures due February 15, 2003 New York Stock Exchange
Zero Coupon Serial Bonds due 2009 New York Stock Exchange
9 1/2% Debentures due June 1, 2016 New York Stock Exchange
</Table>
- ---------
* The common stock is also listed for trading on the London stock exchange.
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 (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of 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 [ ]
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes X No _
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant was approximately $28.9 billion at June 30, 2002.
There were 855,585,367 shares of Common Stock outstanding at February 21, 2003.
________________________________________________________________________________
________________________________________________________________________________
<Page>
TABLE OF CONTENTS
<Table>
<Caption>
ITEM PAGE
---- ----
<S> <C> <C>
Part I. 1 Business.................................................................................... 1
2 Properties.................................................................................. 10
3 Legal Proceedings........................................................................... 10
4 Submission of Matters to a Vote of Security Holders......................................... 14
Executive Officers of the Registrant........................................................... 14
Part II. 5 Market for Registrant's Common Equity and Related Stockholder Matters....................... 16
6 Selected Financial Data..................................................................... 16
7 Management's Discussion and Analysis of Financial Condition and Results of Operations....... 16
7A Quantitative and Qualitative Disclosures About Market Risk.................................. 16
8 Financial Statements and Supplementary Data................................................. 16
9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure........ 16
Part III. 10 Directors and Executive Officers of the Registrant.......................................... 16
11 Executive Compensation...................................................................... 17
12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters................................................................................. 17
13 Certain Relationships and Related Transactions.............................................. 17
14 Controls and Procedures..................................................................... 17
15 [Reserved].................................................................................. 17
16 Principal Accountant Fees and Services...................................................... 17
Part IV. 17 Exhibits, Financial Statement Schedules, and Reports on Form 8-K............................ 18
Signatures................................................................................................ 19
</Table>
- ---------
This report contains certain statements that may be deemed 'forward-looking
statements' within the meaning of Section 21E of the Securities Exchange Act of
1934. All statements, other than statements of historical fact, that address
activities, events or developments that we or our management intends, expects,
projects, believes or anticipates will or may occur in the future are
forward-looking statements. Such statements are based upon certain assumptions
and assessments made by our management in light of their experience and their
perception of historical trends, current conditions, expected future
developments and other factors they believe to be appropriate. The
forward-looking statements included in this report are also subject to a number
of material risks and uncertainties, including but not limited to economic,
competitive, governmental and technological factors affecting our operations,
markets, products, services and prices. Such forward-looking statements are not
guarantees of future performance, and actual results, developments and business
decisions may differ from those envisaged by such forward-looking statements.
<Page>
PART I.
ITEM 1. BUSINESS
Honeywell International Inc. (Honeywell) is a diversified technology and
manufacturing company, serving customers worldwide with aerospace products and
services, control, sensing and security technologies for buildings, homes and
industry, automotive products, specialty chemicals, fibers, and electronic and
advanced materials. Honeywell was incorporated in Delaware in 1985.
MAJOR BUSINESSES
We globally manage our business operations through strategic business units,
which have been aggregated under four reportable segments: Aerospace, Automation
and Control Solutions, Specialty Materials and Transportation and Power Systems.
Financial information related to our reportable segments is included in Note 23
of Notes to Financial Statements in our 2002 Annual Report to Shareowners which
is incorporated herein by reference.
Following is a description of our strategic business units:
<Table>
<Caption>
STRATEGIC
BUSINESS UNITS PRODUCT CLASSES MAJOR PRODUCTS/SERVICES MAJOR CUSTOMERS/USES KEY COMPETITORS
- -------------- --------------- ----------------------- -------------------- ---------------
<S> <C> <C> <C> <C>
AEROSPACE
Engines, Systems Turbine propulsion TFE731 turbofan Business, regional United Technologies
and Services engines TPE331 turboprop and military trainer aircraft (Pratt & Whitney
TFE1042 turbofan Commercial and military Canada)
F124 turbofan helicopters Rolls Royce/
LF502 turbofan Military vehicles Allison
LF507 turbofan Turbomeca
CFE738 turbofan Williams
AS907 turbofan
T53, T55 turboshaft
LT101 turboshaft
T800 turboshaft
AGT1500 turboshaft
LV 100 turboshaft
Retrofits
Repair, overhaul and
spare parts
----------------------------------------------------------------------------------------------------------
Auxiliary power units Airborne auxiliary Commercial, regional, United Technologies
(APUs) power units business and (Pratt & Whitney
Jet fuel starters military aircraft Canada)
Secondary power Ground power United Technologies
systems (Hamilton
Ground power units Sundstrand)
Repair, overhaul and
spare parts
----------------------------------------------------------------------------------------------------------
Environmental control Air management systems: Commercial, regional Auxilec
systems Air conditioning and general Barber Colman
Bleed air aviation aircraft Dukes
Cabin pressure control Military aircraft Eaton-Vickers
Air purification and Ground vehicles Liebherr
treatment Spacecraft Litton Breathing
Electrical power systems: Systems
Power distribution and Pacific Scientific
control Parker Hannifin
Emergency power United Technologies
generation (Hamilton
Repair, overhaul and Sundstrand)
spare parts Smiths
TAT
Goodrich (Lucas
Aerospace)
----------------------------------------------------------------------------------------------------------
Engine systems and Electronic and Commercial, regional and BAE Controls
accessories hydromechanical general aviation aircraft Goodrich
fuel controls Military aircraft (Chandler-Evans)
Engine start systems Parker Hannifin
Electronic engine Goodrich (Lucas
controls Aerospace)
Sensors United Technologies
Electric and pneumatic (Hamilton
power generation systems Sundstrand)
Thrust reverser
actuation, pneumatic and
electric
----------------------------------------------------------------------------------------------------------
</Table>
1
<Page>
<Table>
<Caption>
STRATEGIC
BUSINESS UNITS PRODUCT CLASSES MAJOR PRODUCTS/SERVICES MAJOR CUSTOMERS/USES KEY COMPETITORS
- -------------- --------------- ----------------------- -------------------- ---------------
<S> <C> <C> <C> <C>
Aircraft hardware Consumable hardware, Commercial, regional, business Anixter (Pentacon)
distribution including fasteners, and military aviation Arrow Pemco
bearings, bolts and aircraft Avnet
o-rings BE Aerospace (M&M
Adhesives, sealants, Aerospace)
lubricants, cleaners Dixie
and paints Fairchild Direct
Electrical connectors, Wesco Aircraft
switches, relays and
circuit breakers
Value-added services,
repair and overhaul
kitting and point-of-use
replenishment
- -------------------------------------------------------------------------------------------------------------------------------
Aerospace Avionics systems Flight safety systems: Commercial, business Airshow, Inc.
Electronic Enhanced Ground and general aviation aircraft BAE
Systems Proximity Warning Government aviation Boeing/Jeppesen
Systems (EGPWS) Century
Traffic Alert and Garmin
Collision Avoidance Goodrich
Systems (TCAS) Kaiser
Windshear detection L3
systems Lockheed Martin
Flight data and cockpit Northrop Grumman
voice recorders Rockwell Collins
Weather Radar Smiths
Communication, navigation S-tec
and surveillance Thales
systems: Trimble/Terra
Weather radar Universal Avionics
Navigation Universal Weather
& communication radios
Air-to-ground telephones
Global positioning
systems
Automatic flight control
systems
Satellite systems
Surveillance systems
Integrated systems
Flight management systems
Cockpit display systems
Data management and
aircraft performance
monitoring systems
Vehicle management
systems
Aircraft information
systems
Network file servers
Wireless network
transceivers
Satellite TV systems
Audio/Video equipment
Weather information
network
Navigation database
information
Cabin management systems
Vibration detection and
monitoring
Mission management
systems
Tactical data management
systems
----------------------------------------------------------------------------------------------------------
Airfield, Obstruction, and Inset lights Airports Safegate
Aircraft lighting Control and monitoring Commercial, regional, business Siemens
systems and military aviation
Regulators aircraft
Tower and obstruction
lights
Interior and exterior
aircraft lighting
Visual docking guidance
systems
----------------------------------------------------------------------------------------------------------
</Table>
2
<Page>
<Table>
<Caption>
STRATEGIC
BUSINESS UNITS PRODUCT CLASSES MAJOR PRODUCTS/SERVICES MAJOR CUSTOMERS/USES KEY COMPETITORS
- -------------- --------------- ----------------------- -------------------- ---------------
<S> <C> <C> <C> <C>
Inertial sensor Inertial sensor systems Military and Astronautics-
for guidance, commercial vehicles Kearfott
stabilization, Commercial spacecraft BAE
navigation and control and launch vehicles Ball
Gyroscopes, Commercial, regional, business GEC
accelerometers, inertial and military aircraft L3 Com
measurement units and Transportation KVH
thermal switches Missiles Northrop Grumman
Munitions Rockwell
Smiths
----------------------------------------------------------------------------------------------------------
Automatic test EW ATE Boeing Northrop Grumman
equipment Avionics ATE USAF Lockheed
Vehicle health
Management
----------------------------------------------------------------------------------------------------------
Control products Radar altimeters Military aircraft Ball Brothers
Pressure products Missiles, UAVs BAE
Air data products Commercial Druck
Thermal switches applications Goodrich
Magnetic sensors Solarton
RF sensors NavCom
Rosemount
Northrop Grumman
----------------------------------------------------------------------------------------------------------
Space products and Guidance subsystems Commercial spacecraft BAE
subsystems Control subsystems DOD Ithaco
Processing subsystems FAA L3
Radiation hardended NASA Northrop Grumman
electronics and Raytheon
integrated circuits
GPS-based range safety
systems
----------------------------------------------------------------------------------------------------------
Management and technical Maintenance/operation U.S. and foreign government Boeing
services and provision of space space communications, Computer Sciences
systems, services logistics and information Dyncorp
and facilities services ITT
Systems engineering Commercial space ground Lockheed Martin
and integration segment systems and services Raytheon
Information technology Local governments SAIC
services United Space
Logistics and sustainment Alliance
- -------------------------------------------------------------------------------------------------------------------------------
Aircraft Landing Landing systems Wheels and brakes Commercial and Aircraft Braking
Systems Friction products military aircraft Systems
Wheel and brake Dunlop
overhaul services Goodrich
Messier-Bugatti
- -------------------------------------------------------------------------------------------------------------------------------
Federal Management services Maintenance/ U.S. government Bechtel
Manufacturing & operation of facilities Lockheed Martin
Technologies The Washington
Group
- -------------------------------------------------------------------------------------------------------------------------------
</Table>
3
<Page>
<Table>
<Caption>
STRATEGIC
BUSINESS UNITS PRODUCT CLASSES MAJOR PRODUCTS/SERVICES MAJOR CUSTOMERS/USES KEY COMPETITORS
- -------------- --------------- ----------------------- -------------------- ---------------
<S> <C> <C> <C> <C>
AUTOMATION AND CONTROL SOLUTIONS
Automation and Control Products Heating, ventilating and Original equipment Carrier
Control Products air conditioning manufacturers (OEMs) Cherry
controls and components Distributors Danfoss
for homes and buildings Contractors Eaton
Indoor air quality Retailers Emerson
products including System integrators Endruss & Hauser
zoning, air cleaners, Commercial customers and Holmes
humidification, heat and homeowners served by the Invensys
energy recovery distributor, wholesaler, Johnson Controls
ventilators contractor, retail and Kavlico
Controls plus integrated utility channels Motorola
electronic systems for Package and materials handling Omron
burners, boilers and operations Siemens
furnaces Appliance manufacturers SPX (EST)
Consumer household Automotive companies Yokogawa
products including Aviation companies
humidifiers and Food and beverage processors
thermostats Medical equipment
Water controls Heat treat processors
Sensors, measurement, Computer and business
control and industrial equipment manufacturers
components Data acquisition companies
Process control
instrumentation
Field instrumentation
Analytical
instrumentation
Recorders
Controllers
Datacom components
----------------------------------------------------------------------------------------------------------
Security and fire Security products and OEMs Bosch
products and services systems Retailers GE (Interlogix)
Fire products and systems Distributors Pelco
Access controls and Commercial customers Phillips
closed circuit and homeowners served by the Siemens
television distributor, wholesaler, SPX (EST)
contractor, retail and Tyco
utility channels
- -------------------------------------------------------------------------------------------------------------------------------
Industry Solutions Industrial automation Advanced control software Refining and petrochemical Asea Brown Boveri
solutions and industrial companies Aspentech
automation systems for Chemical manufacturers Emerson (Fisher-
control and monitoring Oil and gas producers Rosemount)
of continuous, batch and Food and beverage processors Invensys
hybrid operations Pharmaceutical companies Siemens
Production management Utilities Yokogawa
software Film and coated producers
Communications systems Pulp and paper industry
for Industrial Control Continuous web producers in
equipment and systems the paper, plastics, metals,
Consulting, networking rubber, non-wovens and
engineering and printing industries
installation
- -------------------------------------------------------------------------------------------------------------------------------
Service Solutions and services HVAC and building control Building managers and owners GroupMac
solutions and services Contractors, architects and Invensys
Energy management developers Johnson Controls
solutions and services Consulting engineers Local contractors
Security and asset Security directors and utilities
management solutions and Plant managers Siemens
services Utilities Trane
Enterprise building Large, global corporations
integration solutions Public school systems
Building information Universities
services Local governments
Critical environment
control solutions and
services
Aftermarket maintenance, See Industry Solutions above See Industry
repair and upgrade for Solutions above
Industry Solutions
projects
- -------------------------------------------------------------------------------------------------------------------------------
</Table>
4
<Page>
<Table>
<Caption>
STRATEGIC
BUSINESS UNITS PRODUCT CLASSES MAJOR PRODUCTS/SERVICES MAJOR CUSTOMERS/USES KEY COMPETITORS
- -------------- --------------- ----------------------- -------------------- ---------------
<S> <C> <C> <C> <C>
SPECIALTY MATERIALS
Specialty Materials Nylon products and Nylon filament and Commercial, residential and BASF
services staple yarns specialty carpet markets Bayer
Bulk continuous Nylon for fibers, DSM
filament engineered resins and film DuPont
Nylon polymer Fertilizer ingredients EMS
Caprolactam Specialty chemicals Enichem
Ammonium sulfate Vitamins Hoechst
Cyclohexanol Paper milling Kolon
Cyclohexanone Food and pharmaceutical Monsanto
Sulfuric acid packaging Rexam Custom
Ammonia Housings (e.g., electric hand Rhodia
Thermoplastic nylon tools, chain saws) Solutia
Thermoplastic alloys Industrial applications Toyoto
and blends Automotive components UBE
Post-consumer Office furniture
recycled PET resins Electrical and electronics
Cast nylon
Biaxially oriented nylon
film
Fluoropolymer film
----------------------------------------------------------------------------------------------------------
Performance fibers Industrial nylon and Passenger car and truck tires Acordis
polyester yarns Passenger car and light truck Akra
Extended-chain seatbelts and airbags DSM
polyethylene composites Broad woven fabrics DuPont
Ropes and mechanical Hyosung
rubber goods Kolon
Luggage Kosa
Sports gear Solutia
Bullet resistant vests, Teijin
helmets and heavy armor
Cut-resistant workwear
Sailcloth
Cordage
----------------------------------------------------------------------------------------------------------
Fluorocarbons Genetron'r' refrigerants, Refrigeration Atofina
aerosol and Air conditioning DuPont
insulation foam blowing Polyurethane foam INEOS Fluor
agents Precision cleaning Solvay
Genesolv'r' solvents Optical
Oxyfume sterilant gases Metalworking
Ennovate 3000 blowing Hospitals
agent for refrigeration Medical equipment
insulation manufacturers
----------------------------------------------------------------------------------------------------------
Hydrofluoric acid (HF) Anhydrous and aqueous Fluorocarbons Ashland
hydrofluoric acid Steel Atofina
Oil refining DuPont
Chemical intermediates E. Merck
Hashimoto
Norfluor
Quimica Fluor
----------------------------------------------------------------------------------------------------------
Fluorine specialties Sulfur hexafluoride Electric utilities Air Products
(SF[u]6) Magnesium Asahi Glass
Iodine pentafluoride Gear manufacturers Atofina
(IF[u]5) Ausimont
Antimony pentafluoride Kanto Denko Kogyo
(SbF[u]5) Solvay Fluor
----------------------------------------------------------------------------------------------------------
Nuclear services UF[u]6 conversion services Nuclear fuel British Nuclear
Electric utilities Fuels
Cameco
Cogema
Tennex
----------------------------------------------------------------------------------------------------------
Life sciences Active pharmaceutical Agrichemicals Avecia
ingredients Pharmaceuticals Degussa
Oxime-based fine Biotech DSM
chemicals Lonza
Fluoroaromatics
Bromoaromatics
----------------------------------------------------------------------------------------------------------
</Table>
5
<Page>
<Table>
<Caption>
STRATEGIC
BUSINESS UNITS PRODUCT CLASSES MAJOR PRODUCTS/SERVICES MAJOR CUSTOMERS/USES KEY COMPETITORS
- -------------- --------------- ----------------------- -------------------- ---------------
<S> <C> <C> <C> <C>
Electronic chemicals Ultra high purity HF Semiconductors Ashland
Solvents Arch
Inorganic acids E. Merck
High purity solvents Sigma Aldrich
----------------------------------------------------------------------------------------------------------
Performance chemicals HF derivatives Diverse by product type Atotech
Imaging chemicals Fluoroaromatics BASF
Chemical processing Phosphors Solvay
Display chemicals Catalysts
Surface treatment Oxime silanes
Catalysts Hydroxylamine
Sealants
----------------------------------------------------------------------------------------------------------
Specialty waxes Polyethylene waxes Coatings BASF
Petroleum waxes and Inks Clariant
blends Candles Eastman
Tire/Rubber Exxon
Personal care IGI
Packaging Leuna
Schumann-Sasol
----------------------------------------------------------------------------------------------------------
Specialty additives Polyethylene waxes PVC Eastman
Petroleum waxes and Plastics Henkel
blends Reflective coatings PolyOne
PVC lubricant systems
Plastic additives
Luminescent photodyes
----------------------------------------------------------------------------------------------------------
Wafer Interconnect- Semiconductors Applied Materials
fabrication dielectrics Microelectronics Dow Chemical
materials and Interconnect-metals Telecommunications Dow Corning
services Semiconductor packaging Japan Energy
materials JSR
Advanced polymers Material Research
Sapphire substrates Tokyo-Ohka
Anti-reflective coatings Tosoh SMD
Global services VMC/Ulvac
----------------------------------------------------------------------------------------------------------
Specialty Amorphous metal ribbons Electrical components Allegheny Ludlum
electronic and components Distribution and industrial Amotech YuYu
materials transformers AM&T
High frequency Hitachi Metals
magnetics Kawasaki Steel
Metal joining Morgan/VAC
Theft deterrent Toshiba
systems
Printed circuit
boards
----------------------------------------------------------------------------------------------------------
UOP (50%-owned joint Processes Petroleum, ABB Lummus
venture) Catalysts petrochemical, gas Axens
Molecular sieves processing and ExxonMobil
Adsorbents chemical industries Procatalyse
Design of process, Shell/Criterion
plants and equipment Stone & Webster
Customer catalyst Zeochem
manufacturing
- -------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION AND POWER SYSTEMS
Garrett Engine Charge-air systems Turbochargers Passenger car, truck ABB
Boosting Systems Remanufactured components and off-highway Aisin Seiki
OEMs Borg-Warner
Engine manufacturers Hitachi
Aftermarket distributors Holset
and dealers IHI
MHI
----------------------------------------------------------------------------------------------------------
Thermal systems Charge-air coolers Passenger car, truck Behr/McCord
Aluminum radiators and off-highway OEMs Modine
Aluminum cooling Engine manufacturers Valeo
modules Aftermarket distributors
Exhaust gas coolers and dealers
- -------------------------------------------------------------------------------------------------------------------------------
</Table>
6
<Page>
<Table>
<Caption>
STRATEGIC
BUSINESS UNITS PRODUCT CLASSES MAJOR PRODUCTS/SERVICES MAJOR CUSTOMERS/USES KEY COMPETITORS
- -------------- --------------- ----------------------- -------------------- ---------------
<S> <C> <C> <C> <C>
Consumer Products Aftermarket Oil, air, fuel, Automotive and heavy AC Delco
Group filters, spark plugs, transmission and coolant vehicle aftermarket channels, Bosch
electronic components and filters OEMs and OES Champion
car care products PCV valves Auto supply retailers Champ Labs
Spark plugs Specialty installers Havoline/Texaco
Wire and cable Mass merchandisers Mann & Hummel
Antifreeze/coolant NGK
Ice-fighter products Peak/Old World
Windshield washer fluids Industries
Waxes, washes and Pennzoil-Quaker
specialty cleaners State
Purolator/Arvin Ind
STP/ArmorAll/
Clorox
Turtle Wax
Various Private
Label
Wix/Dana
Zerex/Valvoline
- -------------------------------------------------------------------------------------------------------------------------------
Friction Materials Friction materials Disc brake pads and shoes Automotive and heavy vehicle Akebono
Aftermarket brake hard Drum brake linings OEMs, OES, brake Dana
parts Brake blocks manufacturers and aftermarket Delphi
Disc and drum brake channels Federal-Mogul
components Mass merchandisers ITT Galfer
Brake hydraulic Installers JBI
components Railway and commercial/ Nisshinbo
Brake fluid military aircraft OEMs TMD
Aircraft brake linings and brake manufacturers Roulunds
Railway linings
- -------------------------------------------------------------------------------------------------------------------------------
</Table>
AEROSPACE SALES
Our sales to aerospace customers were 40, 41 and 40 percent of our total
sales in 2002, 2001 and 2000, respectively. Our sales to commercial aerospace
original equipment manufacturers were 9, 12 and 11 percent of our total sales in
2002, 2001 and 2000, respectively. If there were a large decline in sales of
aircraft that use our components, operating results could be negatively
impacted. In addition, our sales to commercial aftermarket customers of
aerospace products and services were 14, 15 and 17 percent of our total sales in
2002, 2001 and 2000, respectively. If there were a large decline in the number
of flight hours for aircraft that use our components or services, operating
results could be negatively impacted. The terrorist attacks on September 11,
2001 resulted in an abrupt downturn in the aviation industry which was already
negatively impacted by a weak economy. This dramatic downturn in the commercial
air transport industry continued to adversely impact the operating results of
our Aerospace segment in 2002. In response, we have accelerated our
cost-reduction actions to mitigate the impact of this downturn.
U.S. GOVERNMENT SALES
Sales to the U.S. Government (principally by our Aerospace segment), acting
through its various departments and agencies and through prime contractors,
amounted to $2,277, $2,491 and $2,219 million in 2002, 2001 and 2000,
respectively, which included sales to the U.S. Department of Defense of $1,833,
$1,631 and $1,548 million in 2002, 2001 and 2000, respectively. U.S. defense
spending increased in 2002 and is also expected to increase in 2003.
In addition to normal business risks, companies engaged in supplying
military and other equipment to the U.S. Government are subject to unusual
risks, including dependence on Congressional appropriations and administrative
allotment of funds, changes in governmental procurement legislation and
regulations and other policies that may reflect military and political
developments, significant changes in contract scheduling, complexity of designs
and the rapidity with which they become obsolete, necessity for constant design
improvements, intense competition for U.S. Government business necessitating
increases in time and investment for design and development, difficulty of
forecasting costs and schedules when bidding on developmental and highly
sophisticated technical work and other factors characteristic of the industry.
Changes are customary over the life of U.S. Government contracts, particularly
development contracts, and generally result in adjustments of contract prices.
7
<Page>
We, like other government contractors, are subject to government
investigations of business practices and compliance with government procurement
regulations. Although such regulations provide that a contractor may be
suspended or barred from government contracts under certain circumstances, and
the outcome of pending government investigations cannot be predicted with
certainty, we are not currently aware of any such investigations that we expect,
individually or in the aggregate, will have a material adverse effect on us. In
addition, we have a proactive business compliance program designed to ensure
compliance and sound business practices.
BACKLOG
Our total backlog at year-end 2002 and 2001 was $7,332 and $7,178 million,
respectively. We anticipate that approximately $6,194 million of the 2002
backlog will be filled in 2003. We believe that backlog is not necessarily a
reliable indicator of our future sales because a substantial portion of the
orders constituting this backlog may be canceled at the customer's option.
COMPETITION
We are subject to active competition in substantially all product and
service areas. Competition is expected to continue in all geographic regions.
Competitive conditions vary widely among the thousands of products and services
provided by us, and vary country by country. Depending on the particular
customer or market involved, our businesses compete on a variety of factors,
such as price, quality, reliability, delivery, customer service, performance,
applied technology, product innovation and product recognition. Brand identity,
service to customers and quality are generally important competitive factors for
our products and services, and there is considerable price competition. Other
competitive factors for certain products include breadth of product line,
research and development efforts and technical and managerial capability. While
our competitive position varies among our products and services, we believe we
are a significant competitor in each of our major product and service classes.
However, a number of our products and services are sold in competition with
those of a large number of other companies, some of which have substantial
financial resources and significant technological capabilities. In addition,
some of our products compete with the captive component divisions of original
equipment manufacturers.
INTERNATIONAL OPERATIONS
We are engaged in manufacturing, sales and research and development mainly
in the United States, Europe, Canada, Asia and Latin America. U.S. exports and
foreign manufactured products are significant to our operations.
Our international operations, including U.S. exports, are potentially
subject to a number of unique risks and limitations, including: fluctuations in
currency value; exchange control regulations; wage and price controls;
employment regulations; foreign investment laws; import and trade restrictions,
including embargoes; and governmental instability. However, we have limited
exposure in high risk countries and have taken action to mitigate these risks.
Financial information related to geographic areas is included in Note 24 of
Notes to Financial Statements in our 2002 Annual Report to Shareowners which is
incorporated herein by reference.
RAW MATERIALS
The principal raw materials used in our operations are generally readily
available. We experienced no significant or unusual problems in the purchase of
key raw materials and commodities in 2002. We are not dependent on any one
supplier for a material amount of our raw materials. However, we are highly
dependent on our suppliers and subcontractors in order to meet commitments to
our customers. In addition, many major components and product equipment items
are procured or subcontracted on a sole-source basis with a number of domestic
and foreign companies. We maintain a qualification and performance surveillance
process to control risk associated with such reliance on third parties. While we
believe that sources of supply for raw materials and components are generally
adequate, it is difficult to predict what effects shortages or price increases
may have in the future. A prolonged and substantial increase above recent
historical levels in petroleum prices would adversely affect our Specialty
Materials businesses which use petroleum byproducts as raw materials. However,
at present,
8
<Page>
we have no reason to believe a shortage of raw materials will cause any material
adverse impact during 2003.
PATENTS, TRADEMARKS, LICENSES AND DISTRIBUTION RIGHTS
Our business as a whole, and that of our strategic business units, are not
dependent upon any single patent or related group of patents, or any licenses or
distribution rights. We own, or are licensed under, a large number of patents,
patent applications and trademarks acquired over a period of many years, which
relate to many of our products or improvements to those products and which are
of importance to our business. From time to time, new patents and trademarks are
obtained, and patent and trademark licenses and rights are acquired from others.
We also have distribution rights of varying terms for a number of products and
services produced by other companies. In our judgment, those rights are adequate
for the conduct of our business. We believe that, in the aggregate, the rights
under our patents, trademarks and licenses are generally important to our
operations, but we do not consider any patent, trademark or related group of
patents, or any licensing or distribution rights related to a specific process
or product to be of material importance in relation to our total business.
We have registered trademarks for a number of our products, including such
consumer brands as Honeywell, Prestone, FRAM, Anso and Autolite.
RESEARCH AND DEVELOPMENT
Our research activities are directed toward the discovery and development of
new products and processes, improvements in existing products and processes, and
the development of new uses for existing products.
Research and development expense totaled $757, $832 and $818 million in
2002, 2001 and 2000, respectively. The decrease in research and development
expense in 2002 compared with 2001 relates mainly to lower spending by our
Aerospace segment due primarily to program completions and fewer new program
launches by original equipment manufacturers. Customer-sponsored (principally
the U.S. Government) research and development activities amounted to an
additional $603, $697 and $560 million in 2002, 2001 and 2000, respectively.
ENVIRONMENT
We are subject to various federal, state and local government requirements
regulating the discharge of materials into the environment or otherwise relating
to the protection of the environment. It is our policy to comply with these
requirements, and we believe that, as a general matter, our policies, practices
and procedures are properly designed to prevent unreasonable risk of
environmental damage, and of resulting financial liability, in connection with
our business. Some risk of environmental damage is, however, inherent in some of
our operations and products, as it is with other companies engaged in similar
businesses.
We are and have been engaged in the handling, manufacture, use and disposal
of many substances classified as hazardous or toxic by one or more regulatory
agencies. We believe that, as a general matter, our handling, manufacture, use
and disposal of these substances are in accord with environmental laws and
regulations. It is possible, however, that future knowledge or other
developments, such as improved capability to detect substances in the
environment or increasingly strict environmental laws and standards and
enforcement policies, could bring into question our handling, manufacture, use
or disposal of these substances.
Among other environmental requirements, we are subject to the federal
superfund law, and similar state laws, under which we have been designated as a
potentially responsible party that may be liable for cleanup costs associated
with various hazardous waste sites, some of which are on the U.S. Environmental
Protection Agency's superfund priority list. Although, under some court
interpretations of these laws, there is a possibility that a responsible party
might have to bear more than its proportional share of the cleanup costs if it
is unable to obtain appropriate contribution from other responsible parties, we
have not had to bear significantly more than our proportional share in multi-
party situations taken as a whole.
Further information regarding environmental matters is included in
Management's Discussion and Analysis of Financial Condition and Results of
Operations in our 2002 Annual Report to Shareowners
9
<Page>
which is incorporated herein by reference and in Item 3. Legal Proceedings of
this Annual Report on Form 10-K.
EMPLOYEES
We have approximately 108,000 employees at December 31, 2002, of which
approximately 63,000 were located in the United States.
ITEM 2. PROPERTIES
We have over 1,000 locations consisting of plants, research laboratories,
sales offices and other facilities. Our headquarters and administrative complex
is located at Morristown, New Jersey. Our plants are generally located to serve
large marketing areas and to provide accessibility to raw materials and labor
pools. Our properties are generally maintained in good operating condition.
Utilization of these plants may vary with sales to customers and other business
conditions; however, no major operating facility is significantly idle. We own
or lease warehouses, railroad cars, barges, automobiles, trucks, airplanes and
materials handling and data processing equipment. We also lease space for
administrative and sales staffs. Our properties and equipment are in good
operating condition and are adequate for our present needs. We do not anticipate
difficulty in renewing existing leases as they expire or in finding alternative
facilities.
Our principal plants, which are owned in fee unless otherwise indicated, are
as follows:
<Table>
<S> <C> <C>
AEROSPACE
---------
Glendale, AZ South Bend, IN Albuquerque, NM
(partially leased) Olathe, KS (leased) Rocky Mount, NC
Phoenix, AZ Minneapolis, MN Urbana, OH
Tempe, AZ Plymouth, MN Redmond, WA
Tucson, AZ Teterboro, NJ Toronto, Canada
Torrance, CA Yeovil, Somerset
(partially leased) United Kingdom
Clearwater, FL
AUTOMATION AND CONTROL SOLUTIONS
--------------------------------
Phoenix, AZ Northford, CT Golden Valley, MN
San Diego, CA Freeport, IL Syosset, NY
SPECIALTY MATERIALS
-------------------
Baton Rouge, LA Pottsville, PA Hopewell, VA
Geismar, LA Columbia, SC Seelze, Germany
Moncure, NC Chesterfield, VA Longlaville, France
TRANSPORTATION AND POWER SYSTEMS
--------------------------------
Mexicali, Mexico Thaon-Les-Vosges, France Atessa, Italy
Glinde, Germany Skelmersdale, United
Kingdom
</Table>
ITEM 3. LEGAL PROCEEDINGS
SHAREOWNER LITIGATION -- Honeywell and seven of its current and former
officers were named as defendants in several purported class action lawsuits
filed in the United States District Court for the District of New Jersey (the
Securities Law Complaints). The Securities Law Complaints principally allege
that the defendants violated federal securities laws by purportedly making false
and misleading statements and by failing to disclose material information
concerning Honeywell's financial performance, thereby allegedly causing the
value of Honeywell's stock to be artificially inflated. On January 15, 2002, the
District Court dismissed the consolidated complaint against four of Honeywell's
current and former officers. The Court has granted plaintiffs' motion for class
certification defining the purported class as all purchasers of Honeywell stock
between December 20, 1999 and June 19, 2000.
The parties have agreed to participate in a two day settlement mediation in
April, 2003 in an attempt to resolve the cases without resort to a trial. All
significant discovery in the cases has been stayed pending further order of the
court.
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Notwithstanding our agreement to mediate, we believe there is no factual or
legal basis for the allegations in the Securities Law Complaints. Although it is
not possible at this time to predict the litigation outcome of these cases, we
expect to prevail if the cases are not resolved through mediation. However, an
adverse litigation outcome could be material to our consolidated financial
position or results of operations. As a result of the uncertainty regarding the
outcome of this matter no provision has been made in our financial statements
with respect to this contingent liability.
ENVIRONMENTAL MATTERS -- We are subject to various federal, state and local
government requirements relating to the protection of employee health and safety
and the environment. We believe that, as a general matter, our policies,
practices and procedures are properly designed to prevent unreasonable risk of
environmental damage and personal injury to our employees and employees of our
customers and that our handling, manufacture, use and disposal of hazardous or
toxic substances are in accord with environmental laws and regulations. However,
mainly because of past operations and operations of predecessor companies, we,
like other companies engaged in similar businesses, have incurred remedial
response and voluntary cleanup costs for site contamination and are a party to
lawsuits and claims associated with environmental matters, including past
production of products containing toxic substances. Additional lawsuits, claims
and costs involving environmental matters are likely to continue to arise in the
future.
With respect to environmental matters involving site contamination, we
continually conduct studies, individually at our owned sites, and jointly as a
member of industry groups at non-owned sites, to determine the feasibility of
various remedial techniques to address environmental matters. It is our policy
to record appropriate liabilities for environmental matters when environmental
assessments are made or remedial efforts or damage claim payments are probable
and the costs can be reasonably estimated. With respect to site contamination,
the timing of these accruals is generally no later than the completion of
feasibility studies. We expect to fund expenditures for these matters from
operating cash flow. The timing of cash expenditures depends on a number of
factors, including the timing of litigation and settlements of personal injury
and property damage claims, regulatory approval of cleanup projects, remedial
techniques to be utilized and agreements with other parties.
Although we do not currently possess sufficient information to reasonably
estimate the amounts of liabilities to be recorded upon future completion of
studies, litigation or settlements, and neither the timing nor the amount of the
ultimate costs associated with environmental matters can be determined, they
could be material to our consolidated results of operations. However,
considering our past experience and existing reserves, we do not expect that
these matters will have a material adverse effect on our consolidated financial
position.
ASBESTOS MATTERS -- Like many other industrial companies, Honeywell is a
defendant in personal injury actions related to asbestos. We did not mine or
produce asbestos, nor did we make or sell insulation products or other
construction materials that have been identified as the primary cause of
asbestos related disease in the vast majority of claimants. Rather, we made
several products that contained small amounts of asbestos.
Honeywell's Bendix Friction Materials business manufactured automotive brake
pads that included asbestos in an encapsulated form. There is a group of
potential claimants consisting largely of professional brake mechanics. From
1981 through December 31, 2002, we have resolved approximately 60,000 Bendix
claims at an average indemnity cost per claim of approximately two thousand
dollars. Through the second quarter of 2002, Honeywell had no out-of-pocket
costs for these cases since its insurance deductible was satisfied many years
ago. Beginning with claim payments made in the third quarter of 2002, Honeywell
began advancing indemnity and defense claim costs which amounted to
approximately $70 million in payments in the second half of 2002. A substantial
portion of this amount is expected to be reimbursed by insurance and $57 million
has been recorded as a receivable. There are currently approximately 50,000
claims pending and we have no reason to believe that the historic rate of
dismissal will change.
On January 30, 2003, Honeywell and Federal-Mogul Corp. (Federal-Mogul)
entered into a letter of intent (LOI) pursuant to which Federal-Mogul would
acquire Honeywell's automotive Bendix Friction Materials (Bendix) business, with
the exception of certain U.S.-based assets. In exchange, Honeywell would receive
a permanent channeling injunction shielding it from all current and future
personal injury asbestos liabilities related to Honeywell's Bendix business.
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Federal-Mogul, its U.S. subsidiaries and certain of its United Kingdom
subsidiaries voluntarily filed for financial restructuring under Chapter 11 of
the U.S. Bankruptcy Code in October 2001. Federal-Mogul will seek to establish
one or more trusts under Section 524(g) of the U.S. Bankruptcy Code as part of
its reorganization plan, including a trust for the benefit of Bendix asbestos
claimants. The reorganization plan to be submitted to the Bankruptcy Court for
approval will contemplate that the U.S. Bankruptcy Court in Delaware would issue
an injunction in favor of Honeywell that would channel to the Bendix 524(g)
trust all present and future asbestos claims relating to Honeywell's Bendix
business. The 524(g) trust created for the benefit of the Bendix claimants would
receive the rights to proceeds from Honeywell's Bendix related insurance
policies and would make these proceeds available to the Bendix claimants.
Honeywell would have no obligation to contribute any additional amounts toward
the settlement or resolution of Bendix related asbestos claims.
In the fourth quarter of 2002, we recorded a charge of $167 million
consisting of a $131 million reserve for the sale of Bendix to Federal-Mogul,
our estimate of asbestos related liabilities net of insurance recoveries and
costs to complete the anticipated transaction with Federal-Mogul. Completion of
the transaction contemplated by the LOI is subject to the negotiation of
definitive agreements, the confirmation of Federal-Mogul's plan of
reorganization by the Bankruptcy Court, the issuance of a final, non-appealable
524(g) channeling injunction permanently enjoining any Bendix related asbestos
claims against Honeywell, and the receipt of all required governmental
approvals. We do not believe that completion of such transaction would have a
material adverse impact on our consolidated results of operations or financial
position. There can be no assurance, however, that the transaction contemplated
by the LOI will be completed. Honeywell presently has $2 billion of insurance
coverage remaining with respect to Bendix related asbestos claims. Although it
is impossible to predict the outcome of pending or future claims, in light of
our potential exposure, our prior experience in resolving these claims, and our
insurance coverage, we do not believe that the Bendix related asbestos claims
will have a material adverse effect on our consolidated results of operations or
financial position.
Another source of claims is refractory products (high temperature bricks and
cement) sold largely to the steel industry in the East and Midwest by North
American Refractories Company (NARCO), a business we owned from 1979 to 1986.
Less than 2 percent of NARCO's products contained asbestos.
When we sold the NARCO business in 1986, we agreed to indemnify NARCO with
respect to personal injury claims for products that had been discontinued prior
to the sale (as defined in the sale agreement). NARCO retained all liability for
all other claims. NARCO had resolved approximately 176,000 claims through
January 4, 2002, the date NARCO filed for reorganization under Chapter 11 of the
U.S. Bankruptcy Code, at an average cost per claim of two thousand two hundred
dollars. Of those claims, 43 percent were dismissed on the ground that there was
insufficient evidence that NARCO was responsible for the claimant's asbestos
exposure. As of the date of NARCO's bankruptcy filing, there were approximately
116,000 remaining claims pending against NARCO, including approximately 7
percent in which Honeywell was also named as a defendant. Since 1983, Honeywell
and our insurers have contributed to the defense and settlement costs associated
with NARCO claims. We have approximately $2 billion of insurance remaining that
can be specifically allocated to NARCO related liability.
As a result of the NARCO bankruptcy filing, all of the claims pending
against NARCO are automatically stayed pending the reorganization of NARCO. In
addition, because the claims pending against Honeywell necessarily will impact
the liabilities of NARCO, because the insurance policies held by Honeywell are
essential to a successful NARCO reorganization, and because Honeywell has
offered to commit the value of those policies to the reorganization, the
bankruptcy court has temporarily enjoined any claims against Honeywell, current
or future, related to NARCO. Although the stay has been extended eleven times
since January 4, 2002, there is no assurance that such stay will remain in
effect. In connection with NARCO's bankruptcy filing, we paid NARCO's parent
company $40 million and agreed to provide NARCO with up to $20 million in
financing. We also agreed to pay $20 million to NARCO's parent company upon the
filing of a plan of reorganization for NARCO acceptable to Honeywell, and to pay
NARCO's parent company $40 million, and to forgive any outstanding NARCO
indebtedness, upon the confirmation and consummation of such a plan.
As a result of ongoing negotiations with counsel representing NARCO related
asbestos claimants regarding settlement of all pending and potential NARCO
related asbestos claims against Honeywell,
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we have reached definitive agreements or agreements in principle with
approximately 236,000 claimants, which represents approximately 90 percent of
the approximately 260,000 current claimants who are now expected to file a claim
as part of the NARCO reorganization process. We are also in discussions with the
NARCO Committee of Asbestos Creditors on Trust Distribution Procedures for
NARCO. We believe that, as part of the NARCO plan of reorganization, a trust
will be established pursuant to these Trust Distribution Procedures for the
benefit of all asbestos claimants, current and future. If the trust is put in
place and approved by the court as fair and equitable, Honeywell as well as
NARCO will be entitled to a permanent channeling injunction barring all present
and future individual actions in state or federal courts and requiring all
asbestos related claims based on exposure to NARCO products to be made against
the federally-supervised trust. As part of its ongoing settlement negotiations,
Honeywell is seeking to cap its annual contributions to the trust with respect
to future claims at a level that would not have a material impact on Honeywell's
operating cash flows. Given the substantial progress of negotiations between
Honeywell and NARCO related asbestos claimants and between Honeywell and the
Committee of Asbestos Creditors during the fourth quarter of 2002, Honeywell has
developed an estimated liability for settlement of pending and future asbestos
claims.
During the fourth quarter 2002, Honeywell recorded a charge of $1.4 billion
for NARCO related asbestos litigation charges, net of insurance recoveries. This
charge consists of the estimated liability to settle current asbestos related
claims, the estimated liability related to future asbestos related claims
through 2018 and obligations to NARCO's parent, net of insurance recoveries of
$1.8 billion.
The estimated liability for current claims is based on terms and conditions,
including evidentiary requirements, in definitive agreements or agreements in
principle with approximately 90 percent of current claimants. Once finalized,
settlement payments with respect to current claims are expected to be made over
approximately a four-year period.
The liability for future claims estimates the probable value of future
asbestos related bodily injury claims asserted against NARCO over a 15 year
period and obligations to NARCO's parent as discussed above. In light of the
uncertainties inherent in making long-term projections we do not believe that we
have a reasonable basis for estimating asbestos claims beyond 2018 under
Statement of Financial Accounting Standard No. 5 'Accounting for Contingencies.'
Honeywell retained the expert services of Hamilton, Rabinovitz and Alschuler,
Inc. (HR&A) to project the probable number and value, including trust claim
handling costs, of asbestos related future liabilities. The methodology used to
estimate the liability for future claims has been commonly accepted by numerous
courts and is the same methodology that is utilized by the expert who is
routinely retained by the asbestos claimants committee in asbestos related
bankruptcies. The valuation methodology includes an analysis of the population
likely to have been exposed to asbestos containing products, epidemiological
studies to estimate the number of people likely to develop asbestos related
diseases, NARCO claims filing history and the pending inventory of NARCO
asbestos related claims.
Honeywell has substantial insurance that reimburses it for portions of the
costs incurred to settle NARCO related claims and court judgments as well as
defense costs. This coverage is provided by a large number of insurance policies
written by dozens of insurance companies in both the domestic insurance market
and the London excess market. Over one-half of this coverage is with Equitas and
other London-based insurance companies with a majority of this coverage subject
to a coverage-in-place agreement. Coverage-in-place agreements are settlement
agreements between policyholders and the insurers specifying the terms and
conditions under which coverage will be applied as claims are presented for
payment. These agreements govern such things as what events will be deemed to
trigger coverage, how liability for a claim will be allocated among insurers and
what procedures the policyholder must follow in order to obligate the insurer to
pay claims. We conducted an analysis to determine the amount of insurance that
we estimate is probable that we will recover in relation to payment of current
and projected future claims. While the substantial majority of our insurance
carriers are solvent, some of our individual carriers are insolvent, which has
been considered in our analysis of probable recoveries. Some of our insurance
carriers have challenged our right to enter into settlement agreements resolving
all NARCO related asbestos claims against Honeywell. However, we believe there
is no factual or legal basis for such challenges and we believe that it is
probable that we will prevail in the resolution of, or in any litigation that is
brought regarding these disputes and have recognized approximately $900 million
in probable insurance recoveries from these carriers. We made
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judgments concerning insurance coverage that we believe are reasonable and
consistent with our historical dealings with our insurers, our knowledge of any
pertinent solvency issues surrounding insurers and various judicial
determinations relevant to our insurance programs. Based on our analysis, we
recorded insurance recoveries that are deemed probable through 2018 of
$1.8 billion.
Projecting future events is subject to many uncertainties that could cause
the NARCO related asbestos liabilities to be higher or lower than those
projected and recorded. There is no assurance that ongoing settlement
negotiations will be successfully completed, that a plan of reorganization will
be proposed or confirmed, that insurance recoveries will be timely or whether
there will be any NARCO related asbestos claims beyond 2018. Given the inherent
uncertainty in predicting future events, we plan to review our estimates
periodically, and update them based on our experience and other relevant
factors. Similarly we will reevaluate our projections concerning our probable
insurance recoveries in light of any changes to the projected liability or other
developments that may impact insurance recoveries.
OTHER MATTERS -- We are subject to a number of other lawsuits,
investigations and claims (some of which involve substantial amounts) arising
out of the conduct of our business. With respect to all these other matters,
including those relating to commercial transactions, government contracts,
product liability and non-environmental health and safety matters, while the
ultimate results of these lawsuits, investigations and claims cannot be
determined, we do not expect that these matters will have a material adverse
effect on our consolidated results of operations or financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of Honeywell, listed as follows, are elected annually
by the Board of Directors. There are no family relationships among them.
<Table>
<Caption>
NAME, AGE,
DATE FIRST
ELECTED AN
EXECUTIVE OFFICER BUSINESS EXPERIENCE
----------------- -----------------------------------------------------------
<S> <C>
David M. Cote (a), 50 Chairman of the Board and Chief Executive Officer since
2002 July 2002. President and Chief Executive Officer from
February 2002 to June 2002. Chairman of the Board,
President and Chief Executive Officer of TRW
(manufacturer of aerospace and automotive products) from
August 2001 to February 2002. President and Chief
Executive Officer of TRW from February 2001 to July 2001.
President and Chief Operating Officer of TRW from
November 1999 to January 2001. Senior Vice President of
General Electric Company and President and Chief
Executive Officer of GE Appliances from June 1996 to
November 1999.
Dr. Nance K. Dicciani, 55 President and Chief Executive Officer Specialty Materials
2001 since November 2001. Senior Vice President and Business
Group Executive of Chemical Specialties and Director,
European Region of Rohm and Haas (chemical company) from
June 1998 until October 2001. Vice President and General
Manager of Monomers Division of Rohm and Haas from May
1996 until May 1998.
</Table>
- ---------
(a) Also a Director.
14
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<Table>
<Caption>
NAME, AGE,
DATE FIRST
ELECTED AN
EXECUTIVE OFFICER BUSINESS EXPERIENCE
----------------- -----------------------------------------------------------
<S> <C>
Robert J. Gillette, 43 President and Chief Executive Officer Transportation and
2001 Power Systems since July 2001. President of Garrett
Engine Boosting Systems from July 2000 until June 2001.
Vice President and General Manager of Engineering
Plastics from December 1996 until June 2000.
J. Kevin Gilligan, 48 President and Chief Executive Officer Automation and
2001 Control Solutions since July 2001. President of Home and
Building Control from January 2000 until June 2001.
President of Home and Building Control's Solutions and
Services business from October 1997 until December 1999.
Robert D. Johnson, 55 President and Chief Executive Officer Aerospace since July
1998 2001. Chief Operating Officer and Executive Vice
President, Aerospace, from December 1999 to June 2001.
President and Chief Executive Officer of AlliedSignal
Aerospace from April 1999 to November 1999.
President -- Aerospace Marketing, Sales and Services from
January 1999 to March 1999. President -- Aerospace
Electronic & Avionics Systems from October 1997 to
December 1998.
Larry E. Kittelberger, 54 Senior Vice President Administration and Chief Information
2001 Officer since August 2001. Senior Vice President and
Chief Information Officer of Lucent Technologies Inc.
from November 1999 until August 2001. Senior Vice
President and Chief Information Officer of AlliedSignal
Inc from February 1999 until November 1999. Vice
President and Chief Information Officer from August 1995
to January 1999.
Peter M. Kreindler, 57 Senior Vice President and General Counsel since
1992 March 1992. Secretary from December 1994 through
November 1999.
Richard F. Wallman, 51 Senior Vice President and Chief Financial Officer since
1995 March 1995.
Thomas W. Weidenkopf, 44 Senior Vice President Human Resources and Communications
2002 since April 2002. Vice President of Human Resources of
Aerospace from March 1999 to March 2002. Vice President,
Human Resources -- Aerospace Marketing, Sales & Services
from March 1997 to February 1999.
</Table>
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PART II.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market and dividend information for Honeywell's common stock is included in
Note 25 of Notes to Financial Statements of our 2002 Annual Report to
Shareowners which is incorporated herein by reference.
The number of record holders of our common stock at December 31, 2002 was
89,758.
ITEM 6. SELECTED FINANCIAL DATA
Selected Financial Data on page 25 of our 2002 Annual Report to Shareowners
is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
'Management's Discussion and Analysis' on pages 26 through 39 of our 2002
Annual Report to Shareowners is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information relating to market risk is included under the caption 'Financial
Instruments' in 'Management's Discussion and Analysis' on pages 36 and 37 of our
2002 Annual Report to Shareowners, and such information is incorporated herein
by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Our consolidated financial statements, together with the report thereon of
PricewaterhouseCoopers LLP dated February 6, 2003, appearing on pages 40 through
66 of our 2002 Annual Report to Shareowners, are incorporated herein by
reference. With the exception of the aforementioned information and the
information incorporated by reference in Items 1, 5, 6, 7 and 7A, the 2002
Annual Report to Shareowners is not to be deemed filed as part of this
Form 10-K Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not Applicable.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information relating to the Directors of Honeywell, as well as information
relating to compliance with Section 16(a) of the Securities Exchange Act of
1934, will be contained in our definitive Proxy Statement involving the election
of the Directors which will be filed with the Securities and Exchange Commission
pursuant to Regulation 14A not later than 120 days after December 31, 2002, and
such information is incorporated herein by reference. Certain other information
relating to the Executive Officers of Honeywell appears in Part I. of this Form
10-K Annual Report under the heading 'Executive Officers of the Registrant'.
We maintain an internet website at http://www.honeywell.com. Our Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on
Form 8-K, and any amendments to those reports, are available free of charge on
our website under the heading 'Investor Relations' (see 'SEC Filings') as soon
as reasonably practicable after they are filed with, or furnished to, the
Securities and Exchange Commission. Honeywell's Code of Business Conduct,
Corporate Governance Guidelines and Charters of the Committees of the Board of
Directors are also available, free of charge, on our website under the heading
'Investor Relations' (see 'Corporate Governance'). Honeywell's Code of Business
Conduct applies to all Honeywell directors, officers (including the Chief
Executive Officer, Chief Financial Officer and Controller) and employees.
Amendments to or waivers of the Code of
16
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Business Conduct will be published on our website within five business days of
such amendment or waiver.
The members of the Audit Committee of our Board of Directors are: Russell E.
Palmer (Chair), Hans W. Becherer, Marshall N. Carter, Ann M. Fudge, James J.
Howard, John R. Stafford, and Michael W. Wright. The Board has determined that
each of the members of the Audit Committee satisfies the financial literacy
requirements of the New York Stock Exchange and that Mr. Palmer satisfies the
'audit committee financial expert' criteria established by the Securities and
Exchange Commission and the 'financial expert' criteria proposed by the New York
Stock Exchange. Mr Palmer is 'independent' as that term is used in Item
7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act.
ITEM 11. EXECUTIVE COMPENSATION
Information relating to executive compensation is contained in the Proxy
Statement referred to above in 'Item 10. Directors and Executive Officers of the
Registrant,' and such information is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Information relating to security ownership of certain beneficial owners and
management and equity compensation plans is contained in the Proxy Statement
referred to above in 'Item 10. Directors and Executive Officers of the
Registrant,' and such information is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information relating to certain relationships and related transactions is
contained in the Proxy Statement referred to above in 'Item 10. Directors and
Executive Officers of the Registrant,' and such information is incorporated
herein by reference.
ITEM 14. CONTROLS AND PROCEDURES
Within the 90 days prior to the filing of this report, Honeywell management,
including the Chief Executive Officer and Chief Financial Officer, conducted an
evaluation of the effectiveness of our disclosure controls and procedures
pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the Chief
Executive Officer and the Chief Financial Officer concluded that such disclosure
controls and procedures are effective in alerting them on a timely basis to
material information relating to Honeywell required to be included in
Honeywell's periodic filings under the Exchange Act. There have been no
significant changes in internal controls or in factors that could significantly
affect internal controls, including any corrective actions with regard to
significant deficiencies and material weaknesses, subsequent to the date the
Chief Executive Officer and Chief Financial Officer completed their evaluation.
ITEM 15. [RESERVED]
ITEM 16. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information relating to fees paid to and services performed by
PricewaterhouseCoopers LLP in 2002 and 2001 and our Audit Committee's
pre-approval policies and procedures with respect to non-audit services are
contained in the Proxy Statement referred to above in 'Item 10. Directors and
Executive Officers of the Registrant,' and such information is incorporated
herein by reference.
17
<Page>
PART IV.
ITEM 17. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
<Table>
<Caption>
PAGE NUMBER IN
ANNUAL REPORT
TO SHAREOWNERS
--------------
<S> <C>
(a)(1.) Consolidated Financial Statements:
Incorporated by reference to the 2002 Annual
Report to Shareowners:
Consolidated Statement of Operations for the
years ended December 31, 2002, 2001 and
2000 40
Consolidated Balance Sheet at December 31,
2002 and 2001 41
Consolidated Statement of Cash Flows for the
years ended December 31, 2002, 2001 and
2000 42
Consolidated Statement of Shareowners'
Equity for the years ended December 31,
2002, 2001 and 2000 43
Notes to Financial Statements 44
Report of Independent Accountants 66
</Table>
<Table>
<Caption>
PAGE NUMBER
IN FORM 10-K
------------
<S> <C>
(a)(2.) Consolidated Financial Statement Schedules:
Report of Independent Accountants on Financial
Statement Schedule 25
Schedule II -- Valuation and Qualifying Accounts 26
</Table>
All other financial statement schedules have been omitted because they are
not applicable to us or the required information is shown in the consolidated
financial statements or notes thereto.
(a)(3.) Exhibits
See the Exhibit Index on pages 22 through 24 of this Form 10-K Annual
Report.
(b) Reports on Form 8-K
During the three months ended December 31, 2002, a Current Report on Form
8-K was filed on December 30, reporting the contribution of $700 million of our
stock to our U.S. pension plans.
18
<Page>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this annual report to be
signed on its behalf by the undersigned, thereunto duly authorized.
HONEYWELL INTERNATIONAL INC.
March 6, 2003 By: /s/ JOHN J. TUS
-----------------------------------
John J. Tus
Vice President and Controller
Pursuant to the requirements of the Securities Exchange Act of 1934, this
annual report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated:
NAME
----
*
-------------------------------------------
David M. Cote
Chairman of the Board,
Chief Executive Officer
and Director
*
-------------------------------------------
Hans W. Becherer
Director
*
-------------------------------------------
Gordon M. Bethune
Director
*
-------------------------------------------
Marshall N. Carter
Director
*
-------------------------------------------
Jaime Chico Pardo
Director
*
-------------------------------------------
Ann M. Fudge
Director
/s/ RICHARD F. WALLMAN
-------------------------------------------
Richard F. Wallman
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
*By: /s/ RICHARD F. WALLMAN
------------------------------------------
(Richard F. Wallman
Attorney-in-fact)
*
-------------------------------------------
James J. Howard
Director
*
-------------------------------------------
Bruce Karatz
Director
*
-------------------------------------------
Robert P. Luciano
Director
*
-------------------------------------------
Russell E. Palmer
Director
*
-------------------------------------------
Ivan G. Seidenberg
Director
*
-------------------------------------------
John R. Stafford
Director
*
-------------------------------------------
Michael W. Wright
Director
/s/ JOHN J. TUS
-------------------------------------------
John J. Tus
Vice President and Controller
(Principal Accounting Officer)
March 6, 2003
19
<Page>
CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, David M. Cote, Chief Executive Officer, certify that:
1. I have reviewed this annual report on Form 10-K of Honeywell
International Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the 'Evaluation Date'); and
(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date.
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent
function):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: March 6, 2003 By: /s/ DAVID M. COTE
.................................
David M. Cote
Chief Executive Officer
20
<Page>
CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Richard F. Wallman, Chief Financial Officer, certify that:
1. I have reviewed this annual report on Form 10-K of Honeywell
International Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the 'Evaluation Date'); and
(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date.
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent
function):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: March 6, 2003 By: /s/ RICHARD F. WALLMAN
.................................
Richard F. Wallman
Chief Financial Officer
21
<Page>
EXHIBIT INDEX
<Table>
<Caption>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
2 Omitted (Inapplicable)
3(i) Restated Certificate of Incorporation of Honeywell
(incorporated by reference to Exhibit 3(i) to Honeywell's
Form 8-K filed December 3, 1999)
3(ii) By-laws of Honeywell, as amended (incorporated by reference
to Exhibit 3(ii) to Honeywell's Form 10-Q for the quarter
ended September 30, 2001)
4 Honeywell is a party to several long-term debt instruments
under which, in each case, the total amount of securities
authorized does not exceed 10% of the total assets of
Honeywell and its subsidiaries on a consolidated basis.
Pursuant to paragraph 4(iii)(A) of Item 601(b) of
Regulation S-K, Honeywell agrees to furnish a copy of such
instruments to the Securities and Exchange Commission upon
request.
9 Omitted (Inapplicable)
10.1 Master Support Agreement, dated February 26, 1986, as
amended and restated January 27, 1987, as further amended
July 1, 1987 and as again amended and restated
December 7, 1988, by and among Honeywell, Wheelabrator
Technologies Inc., certain subsidiaries of Wheelabrator
Technologies Inc., The Henley Group, Inc. and Henley Newco
Inc. (incorporated by reference to Exhibit 10.1 to
Honeywell's Form 10-K for the year ended December 31,
1988)
10.2* Deferred Compensation Plan for Non-Employee Directors of
AlliedSignal Inc., as amended (incorporated by reference
to Exhibit 10.2 to Honeywell's Form 10-K for the year
ended December 31, 1996)
10.3* Stock Plan for Non-Employee Directors of AlliedSignal Inc.,
as amended (incorporated by reference to Exhibit C to
Honeywell's Proxy Statement, dated March 10, 1994, filed
pursuant to Rule 14a-6 of the Securities Exchange Act of
1934)
10.4* 1985 Stock Plan for Employees of AlliedSignal Inc. and its
Subsidiaries, as amended (incorporated by reference to
Exhibit 19.3 to Honeywell's Form 10-Q for the quarter
ended September 30, 1991)
10.5* AlliedSignal Inc. Incentive Compensation Plan for Executive
Employees, as amended (incorporated by reference to
Exhibit B to Honeywell's Proxy Statement, dated March 10,
1994, filed pursuant to Rule 14a-6 of the Securities
Exchange Act of 1934, and to Exhibit 10.5 to Honeywell's
Form 10-Q for the quarter ended June 30, 1999)
10.6* Supplemental Non-Qualified Savings Plan for Highly
Compensated Employees of Honeywell International Inc. and
its Subsidiaries, as amended and restated (filed herewith)
10.7* AlliedSignal Inc. Severance Plan for Senior Executives, as
amended and restated (incorporated by reference to
Exhibit 10.7 to Honeywell's Form 10-K for the year ended
December 31, 2000)
10.8* Salary and Incentive Award Deferral Plan for Selected
Employees of Honeywell International Inc. and its
Affiliates, as amended and restated (filed herewith)
</Table>
22
<Page>
<Table>
<Caption>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
10.9* 1993 Stock Plan for Employees of Honeywell International
Inc. and its Affiliates (incorporated by reference to
Exhibit A to Honeywell's Proxy Statement, dated March 10,
1994, filed pursuant to Rule 14a-6 of the Securities
Exchange Act of 1934)
10.10 364-Day Credit Agreement dated as of November 27, 2002 among
Honeywell, the initial lenders named therein, Citibank,
N.A., as administrative agent, JPMorgan Chase Bank,
Deutsche Bank AG, New York Branch, Bank of America, N.A.
and Barclays Bank PLC, as syndication agents, and Salomon
Smith Barney Inc., as lead arranger and book manager, as
amended (filed herewith)
10.11 Amendment No. 1 to the Five-Year Credit Agreement dated as
of November 27, 2002 among Honeywell, the initial lenders
named therein, Citibank, N.A., as administrative agent,
JPMorgan Chase Bank, Deutsche Bank AG and Bank of America,
N.A., as syndication agents, and Salomon Smith Barney
Inc., as lead arranger and book manager (filed herewith)
10.12* Honeywell International Inc. Supplemental Pension Plan, as
amended and restated (incorporated by reference to
Exhibit 10.13 to Honeywell's Form 10-K for the year ended
December 31, 2000)
10.13* Employment Agreement dated as of December 1, 1999 between
Honeywell and Michael R. Bonsignore (incorporated by
reference to Exhibit 10.14 to Honeywell's Form 8-K filed
December 3, 1999)
10.14* Long Term Performance Plan for Key Executives of Honeywell
International Inc. (incorporated by reference to Exhibit
10.16 to Honeywell's Form 10-Q for the quarter ended
March 31, 2000)
10.15* Honeywell International Inc. Supplemental Executive
Retirement Plan for Executives in Career Band 6 and Above
(incorporated by reference to Exhibit 10.16 to Honeywell's
Form 10-K for the year ended December 31, 2000)
10.16* Honeywell Supplemental Defined Benefit Retirement Plan, as
amended and restated (incorporated by reference to
Exhibit 10.17 to Honeywell's Form 10-K for the year ended
December 31, 2000)
10.17* Form of Escrow Agreement used to secure certain supplemental
retirement benefits for certain executive officers of
Honeywell (incorporated by reference to Exhibit 10.18 to
Honeywell's Form 10-K for the year ended December 31,
2000)
10.18* Form of Promissory Note representing loans to certain
executive officers of Honeywell of required withholding
taxes relating to the securing of certain supplemental
retirement benefits (incorporated by reference to Exhibit
10.19 to Honeywell's Form 10-K for the year ended
December 31, 2000)
10.19* Honeywell International Inc. Severance Plan for Corporate
Staff Employees (Involuntary Termination Following a
Change in Control), as amended and restated (filed
herewith)
10.20* Employment Agreement dated as of July 3, 2001 between
Honeywell and Lawrence A. Bossidy (incorporated by
reference to Exhibit 10.21 to Honeywell's Form 10-Q for
the quarter ended June 30, 2001)
</Table>
23
<Page>
<Table>
<Caption>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
10.21* Early Retirement Agreement dated as of July 3, 2001 between
Honeywell and Michael R. Bonsignore (incorporated by
reference to Exhibit 10.22 to Honeywell's Form 10-Q for
the quarter ended June 30, 2001)
10.22* Settlement Agreement between Honeywell International Inc.,
Honeywell Europe S.A. and their affiliates and
Giannantonio Ferrari, dated July 27, 2001 (incorporated
by reference to Exhibit 10.23 to Honeywell's Form 10-Q for
the quarter ended September 30, 2001)
10.23* Employment Agreement dated as of February 18, 2002 between
Honeywell and David M. Cote (incorporated by reference to
Exhibit 10.24 to Honeywell's Form 8-K filed March 4, 2002)
10.24* Employment Separation Agreement and Release dated
February 18, 2002, between Honeywell and Dr. Barry C.
Johnson (incorporated by reference to Exhibit 10.25 to
Honeywell's Form 10-Q for the quarter ended March 31,
2002)
11 Omitted (Inapplicable)
12 Statement re: Computation of Ratio of Earnings to Fixed
Charges (filed herewith)
13 Pages 25 through 66 of Honeywell's 2002 Annual Report to
Shareowners (filed herewith)
16 Omitted (Inapplicable)
18 Omitted (Inapplicable)
21 Subsidiaries of the Registrant (filed herewith)
22 Omitted (Inapplicable)
23 Consent of PricewaterhouseCoopers LLP (filed herewith)
24 Powers of Attorney (filed herewith)
99.1 Certification of Principal Executive Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
99.2 Certification of Principal Financial Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
</Table>
- ---------
The Exhibits identified above with an asterisk(*) are management contracts
or compensatory plans or arrangements.
24
<Page>
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and Shareowners of
HONEYWELL INTERNATIONAL INC.
Our audits of the consolidated financial statements referred to in our
report dated February 6, 2003, appearing in the 2002 Annual Report to
Shareowners of Honeywell International Inc. (which report and consolidated
financial statements are incorporated by reference in this Annual Report on
Form 10-K) also included an audit of the Financial Statement Schedule listed in
Item 17(a)(2) of this Form 10-K. In our opinion, the Financial Statement
Schedule presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements.
/s/ PricewaterhouseCoopers LLP
Florham Park, New Jersey
February 6, 2003
25
<Page>
HONEYWELL INTERNATIONAL INC
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
THREE YEARS ENDED DECEMBER 31, 2002
(IN MILLIONS)
<Table>
<S> <C>
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
Balance December 31, 1999................................... $ 84
Provision charged to income............................. 52
Deductions from reserves(1)............................. (37)
----
Balance December 31, 2000................................... 99
Provision charged to income............................. 84
Deductions from reserves(1)............................. (55)
----
Balance December 31, 2001................................... 128
Provision charged to income............................. 109
Deductions from reserves(1)............................. (90)
----
Balance December 31, 2002................................... $147
----
----
</Table>
- ---------
(1) Represents uncollectible accounts written off, less recoveries, translation
adjustments and reserves acquired.
26
STATEMENT OF DIFFERENCES
------------------------
The British pound sterling sign shall be expressed as.................. 'L'
The Japanese Yen sign shall be expressed as............................ 'Y'
The Euro sign shall be expressed as.................................... 'E'
The registered trademark symbol shall be expressed as.................. 'r'
Characters normally expressed as subscript shall be preceded by........ [u]
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>ex10-6.txt
<DESCRIPTION>EXHIBIT 10.6
<TEXT>
<PAGE>
EXHIBIT 10.6
SUPPLEMENTAL NON-QUALIFIED SAVINGS PLAN FOR HIGHLY COMPENSATED
EMPLOYEES OF HONEYWELL INTERNATIONAL INC. AND ITS SUBSIDIARIES (Career
Band 6 and above)
(As Amended and Restated as of January 1, 2002)
1. Eligibility
Those highly compensated employees ("HCEs") of Honeywell International Inc.
(the "Corporation") and its subsidiaries within the meaning of Section 414(q) of
the Internal Revenue Code of 1986 (the "Code") in Career Band 6 and above who
are eligible to participate in any of the qualified (as determined under Code
Section 401(a)) savings plans maintained by the Corporation or its subsidiaries,
other than any such plan maintained by Pittway Corporation and its affiliates or
by Honeywell Inc. prior to April 1, 2000, (the "Qualified Savings Plans") are
eligible to participate in the Supplemental Non-Qualified Savings Plan for
Highly Compensated Employees of Honeywell International Inc. and its
Subsidiaries (Career Band 6 and above) (the "Plan").
2. Definitions
Capitalized terms not otherwise defined in the Plan have the respective
meanings set forth in the applicable Qualified Savings Plans.
3. Participation
(a) Time and Form of Election. Any eligible employee may become a
participant in the Plan (a "Participant") as of the beginning of the next
available pay period, by executing a written or electronic notice of election to
participate and filing such notice with the Plan Administrator (as defined in
Section 10(a)) prior to the beginning of such pay period. Such notice may direct
that a portion (determined in accordance with paragraph 4(a)) of the base annual
salary exclusive of shift differentials, overtime or other premium pay, bonus,
incentive or other extra compensation, but inclusive of severance pay (unless
otherwise specifically excluded by the severance pay plan) or salary deferred
under this Plan or otherwise ("Base Annual Salary"), which would have been
payable to such Participant during such pay period and succeeding pay periods,
in lieu of such payment, be credited to a deferred compensation account
maintained under the Plan as an unfunded book entry stated as a cash balance
(the "Participant's Account"). Amounts so credited to the Participant's Account
shall constitute "Participant Deferred Contributions." A Participant's election
to direct that a portion of his or her Base Annual Salary be credited to the
Participant's Account shall continue in effect until the Participant terminates
such election, the Participant is no longer an HCE or the Participant is no
longer eligible to contribute to the Qualified Savings Plans. Any such
termination shall be effective only with respect to the Participant's Base
Annual Salary payable after the end of the pay period in which one of the events
in the preceding sentence occurs. Amounts credited to the Participant's Account
prior to the effective date of the termination of the election shall not be
affected and shall be distributed only in accordance with the terms of the Plan
and Participant's distribution election thereunder.
<PAGE>
(b) Change or Resumption of Amount Deferred. A Participant may elect at any
time to modify the amount of Base Annual Salary to be credited to the
Participant's Account under the Plan, which modification shall be effective for
the next available pay period following his or her election. Amounts credited to
the Participant's Account prior to the effective date of such change shall not
be affected by such change and shall be distributed only in accordance with the
terms of the Plan.
4. Contributions to Participants' Accounts
(a) Participant Deferred Contributions. Unless the Plan Administrator shall
have established a lesser amount, a Participant may elect to defer an aggregate
amount equal to the difference between (i) a full percentage of such
Participant's Base Annual Salary from 1% to the maximum percentage permitted
under the Qualified Savings Plans and Code Section 415(c)(1)(B) for Before-Tax
Contributions by an individual who is not an HCE and who is eligible to
participate in the Qualified Savings Plans, without regard to any other
limitations which may apply under the Code and without regard to any After-Tax
Contributions which might be made under the Qualified Savings Plans, and (ii)
the full amount of Before-Tax Contributions made by such Participant under the
Qualified Savings Plans; provided, however, that a Participant who elects to
defer any amount hereunder shall be required to make the maximum Before-Tax
Contributions permissible under the Qualified Savings Plans for the applicable
Plan Year (after giving effect to deferrals under the Plan or otherwise).
(b) Plan Employer Contributions. There shall be credited to the
Participant's Account employer contributions under the Plan ("Plan Employer
Contributions") in an aggregate amount equal to (i) minus (ii), where (i) is 50%
(for participants entitled to a 50% Employer Contribution in the Qualified
Savings Plans) or 100% (for participants entitled to a 100% Employer
Contribution in the Qualified Savings Plans) of the lesser of (x) 8% of the
Participant's Base Annual Salary, or (y) the sum of the Participant's
Participant Contributions under the Qualified Savings Plans and Participant
Deferred Contributions under the Plan, expressed as a percentage of Base Annual
Salary, and (ii) is the total amount of Employer Contributions made with respect
to the Participant under the Qualified Savings Plans; provided, however, that in
no event shall the combined Plan Employer Contributions and Employer
Contributions made with respect to the Participant exceed 8% of the
Participant's Base Annual Salary, and provided, further, that Plan Employer
Contributions shall not be made with respect to a Participant during any period
of suspension of Employer Contributions with respect to such Participant under
the terms of the Qualified Savings Plans, whether or not such Participant
continues to make Participant Contributions under the Qualified Savings Plans
during the period of such suspension. Notwithstanding the preceding sentence,
there shall be credited to the Participant's Account an amount equal to the
product of (i) the number of whole shares of common stock of Honeywell
International Inc. ("Common Stock") credited to such Participant's Account under
Section 5(b) on December 29, 2000, and (ii) $0.08 (such product rounded to the
nearest full dollar). The amount determined under the preceding sentence shall
be credited to the Participant's Account as Plan Employer Contributions in
accordance with Section 5(a) and shall be credited to such Account no later than
December 31, 2000.
(c) Vesting. Participant Deferred Contributions, Plan Employer
Contributions (collectively "Total Contribution Amounts") and all amounts
accrued with respect to Total Contribution Amounts in accordance with Section 5,
shall be vested at the time such amounts are credited to the Participant's
Account.
-2-
<PAGE>
(d) All Contributions Prorated. Total Contribution Amounts shall be
credited to a Participant's Account each pay period.
5. The Participant's Account
(a) Crediting of Participant's Accounts. Participant Deferred Contributions
shall be credited to the Participant's Account under the Plan as unfunded book
entries stated as cash balances. Participant Deferred Contributions credited to
the Participant's Account prior to January 1, 1994 or after the Participant has
terminated employment shall accrue amounts (to be posted each Valuation Date)
equivalent to interest, compounded daily, at a rate based upon the cost to the
Corporation of borrowing at a fixed rate for a 15-year term. Such rate shall be
determined annually by the Chief Financial Officer of the Corporation in
consultation with the Treasurer of the Corporation. Participant Deferred
Contributions credited to the Participant's Account on or after January 1, 1994,
but before a Participant terminates employment, shall accrue amounts (to be
posted each Valuation Date) equivalent to interest, compounded daily, at a rate
determined annually by the Management Development and Compensation Committee
(the "Committee") of the Board of Directors (the "Board") of the Corporation.
The rate established in the preceding sentence shall not exceed the greater of
(i) 10%, or (ii) 200% of the 10-year U.S. Treasury Bond rate at the time of
determination and, once established for a calendar year, shall remain in effect
with respect to all Participant Deferred Contributions credited to the
Participant's Account during such calendar year until such amounts are
distributed. Plan Employer Contributions shall be credited to the Participant's
Account under the Plan as unfunded book entries stated as shares of Common Stock
(including fractional shares). The number of shares of Common Stock credited to
a Participant's Account shall be determined by dividing the equivalent cash
amount (as determined under Section 4(b)) by the closing price of Common Stock
on the day that such Plan Employer Contributions are credited to the
Participant's Account. Amounts equivalent to the dividends that would have been
payable in respect of the Common Stock shall be credited to the Participant's
Account as if reinvested in Common Stock, with the number of shares credited
determined by dividing the equivalent cash dividend amount by the closing price
of Common Stock on the date the dividends would have been payable. Amounts
credited to the Participant's Account shall accrue amounts equivalent to
interest and dividends, as the case may be, until distributed in accordance with
the Plan.
(b) Transition Rule for Plan Employer Contributions. The balance of each
Participant's Account attributable to Plan Employer Contributions, determined as
of the close of business on the day prior to the effective date of the amendment
and restatement of the Plan and adjusted to reflect all gains, losses and
dividends that have been credited to such Participant's Account through the day
prior to such effective date, shall be converted into the equivalent number of
shares of Common Stock by dividing such balance by the closing price of Common
Stock on the trading date next preceding such effective date. Such amount shall
be an unfunded book entry only and shall (i) thereafter be credited with
equivalent dividend amounts in accordance with Section 5(a), and (ii) be
distributed in accordance with Section 6(a)(ii).
6. Distribution from Accounts
(a) Form of Election.
(i) Participant Deferred Contributions. At the time a Participant makes an
election pursuant to Section 3(a), the Participant shall also make an election
with respect to the
-3-
<PAGE>
distribution of the aggregate amount of the Participant Deferred Contributions,
plus earnings credited thereon pursuant to Section 5 (collectively the
"Participant Deferred Contribution Amounts"), credited to the Participant's
Account pursuant to such election. A Participant may elect to receive such
amount in one lump-sum payment or in a number of annual installments (up to
fifteen installments). The lump-sum payment or the first installment shall be
paid in cash as soon as practicable during the month of January of such future
calendar year as the Participant may designate or, if the Participant so
elects, as soon as practicable during the month of January of the calendar
year immediately following the later of the year in which the Participant last
contributed to the Plan or the year in which the Participant terminates
employment with the Corporation or any of its subsidiaries (whether by reason
of Retirement or otherwise). Except as otherwise provided in Section 8,
subsequent installments shall be paid in cash as soon as practicable during
the month of January of each succeeding calendar year until the entire amount of
the Participant Deferred Contribution Amounts shall have been paid. The amount
of each installment shall be determined by multiplying the balance of the
Participant Deferred Contribution Amounts each year by a fraction, the numerator
of which is one and the denominator of which is (A) the number of installments
elected, reduced by (B) one for each annual installment previously received.
(ii) Plan Employer Contributions. The distribution election made pursuant
to subsection (i) above shall also apply to the timing of the distribution of
the aggregate number of shares of Common Stock representing the Plan Employer
Contributions plus reinvested dividends pursuant to Section 5 (collectively the
"Plan Employer Contribution Amounts") credited to the Participant's Account
pursuant to Section 5. Except to the extent otherwise provided with respect to
fractional shares, all distributions of Plan Employer Contribution Amounts shall
be made in Common Stock. A Participant may elect to receive such Plan Employer
Contribution Amounts in one lump-sum payment or in a number of annual
installments (up to fifteen installments). The lump-sum payment or the first
installment shall be paid as soon as practicable during the month of January of
such future calendar year as the Participant may designate, or, if the
Participant so elects, as soon as practicable during the month of January of the
calendar year immediately following the later of the year in which the
Participant last contributed to the Plan or the year in which the Participant
terminates employment with the Corporation or any of its subsidiaries (whether
by reason of Retirement or otherwise). Except as otherwise provided in Section
8, subsequent installments shall be paid as soon as practicable during the month
of January of each succeeding calendar year until the entire amount of the Plan
Employer Contribution Amounts shall have been paid. The amount of each
installment shall be determined by (A) multiplying the balance of the Plan
Employer Contribution Amounts on the last Valuation Date of each year by a
fraction, the numerator of which is one and the denominator of which is (x) the
number of installments elected, reduced by (y) one for each annual installment
previously received, and (B) rounding the result down to the next whole share of
Common Stock; provided, however, the amount of the last installment shall be
determined without regard to the rounding requirement of the preceding portion
of this sentence. Any fractional shares of Common Stock shall be paid in an
equivalent cash amount, as determined using the closing price of Common Stock on
the trading date next preceding the distribution date.
(b) Adjustment of Method of Distribution. Prior to the beginning of any
calendar year, a Participant may elect to change the timing and method of
distribution of the Participant Deferred Contribution Amounts and Plan Employer
Contribution Amounts credited to the Participant's Account commencing with
such calendar year. Participant Deferred Contribution Amounts and Plan
Employer Contribution Amounts credited to the Participant's Account prior to
the effective date of such change (the "Prior Balance"), and all amounts
thereafter accrued with
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<PAGE>
respect to the Prior Balance, shall not be affected by such change and, except
as otherwise provided in this Section 6 or as determined by the Plan
Administrator pursuant to Section 8, shall be distributed only in accordance
with the election in effect at the time such Prior Balance was credited to the
Participant's Account.
(c)(i) Distribution Default for Participant Deferred Contribution Amounts.
Any Participant Deferred Contribution Amounts credited to a Participant's
Account which are not covered by a timely distribution election under
subsections (a) and (b) above shall be distributed to the Participant in one
lump-sum cash payment as soon as practicable during the month of January of the
calendar year immediately following the later of the year in which the
Participant last contributed to the Plan or the year in which the Participant
terminates his employment with the Corporation or any of its subsidiaries
(whether by reason of Retirement or otherwise); provided, however, if the
Participant has made an election pursuant to Sections 9(a)(i) or 9(a)(ii), the
lump sum payment shall be made within the 90-day period following a Change in
Control, as defined in Section 9(c).
(c)(ii) Distribution Default for Plan Employer Contribution Amounts. Any
Plan Employer Contribution Amounts credited to a Participant's Account which are
not covered by a timely distribution election under subsections (a) and (b)
above shall be distributed to the Participant in Common Stock as soon as
practicable during the month of January of the calendar year immediately
following the later of the year in which the Participant last contributed to the
Plan or the year in which the Participant terminates his employment with the
Corporation or any of it subsidiaries (whether by reason of Retirement or
otherwise); provided, however, if the Participant has made an election pursuant
to Sections 9(a)(i) or (ii), the distribution shall be made within the 90-day
period following a Change in Control, as defined in Section 9(c). Any fractional
shares of Common Stock shall be paid in an equivalent cash amount, as determined
using the closing price of Common Stock on the trading date next preceding the
distribution date.
(d) Changing Prior Distribution Elections. The Plan Administrator may from
time to time allow Participants to request new elections with respect to the
distribution of a Participant's Prior Balance under the Plan (other than any
portion of such Prior Balance for which distributions have already commenced).
The Plan Administrator shall reserve the right to accept or reject any such
request at any time and such election shall be subject to such restrictions and
limitations as the Plan Administrator shall determine in its sole discretion,
provided that any new election shall generally be required to be made at least
twelve (12) months prior to any scheduled payment date. The Plan Administrator
may also allow a Participant to request an immediate distribution of all or a
portion of such Participant's Prior Balance (including any portion of such Prior
Balance for which distributions have already commenced) and any Deferred
Contribution Amounts and Plan Employer Contribution Amounts credited to the
Participant's Account immediately prior to such request. Any such immediate
distribution shall be subject to a penalty equal to six percent (6%) of the
amount requested to be distributed and shall be subject to such other
restrictions or conditions as may be established by the Plan Administrator from
time to time.
(e) Special Distribution Provision. Notwithstanding any provision in this
Plan to the contrary, if all or a portion of a Participant's Account is
determined to be includible in the Participant's gross income and subject to
income tax at any time prior to the time such Account would otherwise be paid,
the Participant's Account or that portion of the Participant's Account shall
be distributed to the Participant. For this purpose, an amount is determined
to be includible in the Participant's gross income upon the earliest of: (i) a
final determination by the
-5-
<PAGE>
Internal Revenue Service addressed to the Participant which is not appealed,
(ii) a final determination by the United States Tax Court or any other federal
court affirming an IRS determination, or (iii) an opinion addressed to the
Corporation by the tax counsel for the Corporation that, by reason of the
Code, Treasury Regulations, published Internal Revenue Service rulings, court
decisions or other substantial precedent, the amount is subject to federal
income tax prior to payment.
7. Distribution on Death
(a) Participant Deferred Contribution Amounts. If a Participant should die
before all Participant Deferred Contribution Amounts credited to the
Participant's Account have been paid in accordance with the election referred to
in Sections 6(a) or 6(b), the balance of the Participant Deferred Contribution
Amounts in such Participant's Account shall be paid in cash as soon as
practicable following the Participant's death to the beneficiary designated in
writing by the Participant and filed with the Plan Administrator; provided,
however, if the Participant has made an election pursuant to Sections 9(a)(i) or
9(a)(ii), such amount shall be paid within the 90-day period following a Change
in Control, as defined in Section 9(c). If (i) no beneficiary designation has
been made, or (ii) the designated beneficiary shall have predeceased the
Participant and no further designation has been made, then such balance shall be
paid to the estate of the Participant. A Participant may change the designated
beneficiary at any time during the Participant's lifetime by filing a subsequent
designation in writing with the Plan Administrator.
(b) Plan Employer Contribution Amounts. If a Participant should die before
all Plan Employer Contribution Amounts credited to the Participant's Account
have been paid in accordance with the election referred to in Sections 6(a) or
6(b), the balance of the Plan Employer Contribution Amounts in such
Participant's Account shall be paid in Common Stock as soon as practicable
following the Participant's death to the beneficiary designated in writing by
the Participant and filed with the Plan Administrator; provided, however, if the
Participant has made an election pursuant to Sections 9(a)(i) or 9(a)(ii), such
amount shall be paid within the 90-day period following a Change in Control, as
defined in Section 9(c). If (i) no such beneficiary designation has been made,
or (ii) the designated beneficiary shall have predeceased the Participant and no
further designation has been made, then such balance shall be paid to the estate
of the Participant. A Participant may change the designated beneficiary at any
time during the Participant's lifetime by filing a subsequent designation in
writing with the Plan Administrator. Any fractional shares of Common Stock shall
be paid in an equivalent cash amount, as determined using the closing price of
Common Stock on the trading date next preceding the distribution date.
8. Payment in the Event of Hardship
Upon receipt of a request from a Participant, delivered in writing to the
Plan Administrator along with a Certificate of Unavailability of Resources form,
the Plan Administrator, or his designee, may cause the Corporation to accelerate
(or require the subsidiary of the Corporation which employs or employed the
Participant to accelerate) payment of all or any part of the amount credited to
the Participant's Account, including accrued amounts, if it finds in its sole
discretion that payment of such amounts in accordance with the Participant's
prior election under Sections 6(a) or 6(b) would result in severe financial
hardship to the Participant, and such hardship is the result of an unforeseeable
emergency caused by circumstances beyond the control of the Participant.
Acceleration of payment may not be made under this Section 8 to the extent
that such hardship is or may be relieved (a) through reimbursement or
compensation by insurance or otherwise, (b) by liquidation of the Participant's
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<PAGE>
assets, to the extent the liquidation of assets would not itself cause severe
financial hardship, or (c) by cessation of deferrals under this Plan or any
tax-qualified savings plan of the Corporation or its subsidiaries. Any
distribution of Participant Deferred Contribution Amounts pursuant to this
Section 8 shall be made in cash, while any distribution of Plan Employer
Contribution Amounts pursuant to this Section 8 shall be made in Common Stock.
Any fractional shares of Common Stock shall be paid in an equivalent cash
amount, as determined using the closing price of Common Stock on the trading
date next preceding the distribution date.
9. Change in Control
(a)(i) Initial Lump-Sum Payment Election. Notwithstanding any election made
pursuant to Section 6, any person who becomes eligible to participate in the
Plan may file a written election with the Plan Administrator at the time the
individual makes an election to participate pursuant to Section 3(a) to have the
aggregate amount credited to the Participant's Account (commencing with the date
on which such written election is filed) paid in one-lump sum payment as soon as
practicable following a Change in Control, but in no event later than 90 days
after such Change in Control. Any distribution of Participant Deferred
Contribution Amounts pursuant to this Section 9 shall be made in cash, while any
distribution of Plan Employer Contribution Amounts pursuant to this Section 9
shall be made in Common Stock (or the common stock of any successor corporation
issued in exchange for, or with respect to, Common Stock incident to the Change
in Control). Any fractional shares of Common Stock (or the common stock of any
successor corporation issued in exchange for, or with respect to, Common Stock
incident to the Change in Control) shall be paid in an equivalent cash amount.
(a)(ii) Subsequent Lump-Sum Payment Election. A Participant who did not
make an election pursuant to Section 9(a)(i) or who has revoked, pursuant to
Section 9(a)(iii), an election previously made under Section 9(a)(i) or this
Section 9(a)(ii) may, prior to the earlier of a Change in Control or the
beginning of the calendar year in which the election is to take effect, elect to
have the aggregate amount credited to the Participant's Account for all calendar
years commencing with the first calendar year beginning after the date the
election is made, paid in one lump-sum payment as soon as practicable following
a Change in Control, but in no event later than 90 days after such Change in
Control. Amounts credited to the Participant's Account prior to the effective
date of the election made pursuant to this Section 9(a)(ii) shall not be
affected by such election and shall be distributed following a Change in Control
in accordance with any prior election in effect under Sections 9(a)(i) or
9(a)(ii).
(a)(iii) Revocation of Prior Change in Control Payment Elections. A
Participant may, prior to a Change in Control, file an election revoking any
election made pursuant to Sections 9(a)(i) or 9(a)(ii) or file a new lump sum
payment election under this Section 9 with respect to amounts previously
credited to the Participant's Account. Any such revocation or new election shall
be made at the time specified by the Plan Administrator and shall be subject to
such restrictions and limitations as the Plan Administrator shall determine from
time to time.
(b) Interest Equivalents. Notwithstanding anything to the contrary in the
Plan, after a Change in Control, the Plan may not provide, or be amended to
provide, interest accruals with respect to Participant Deferred Contributions at
rates lower than the rates in effect under Section 5 immediately prior to the
Change in Control.
(c) Definition of Change in Control. For purposes of the Plan, a Change in
Control is deemed to occur at the time (i) when any entity, person or group
(other than the Corporation, any subsidiary or any savings, pension or other
benefit plan for the benefit of employees of the
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<PAGE>
Corporation or its subsidiaries) which therefore beneficially owned less than
30% of the common stock then outstanding acquires shares of Common Stock in a
transaction or series of transactions that results in such entity, person or
group directly or indirectly owning beneficially 30% or more of the outstanding
Common Stock, (ii) of the purchase of shares of Common Stock pursuant to a
tender offer or exchange offer (other than an offer by the Corporation) for all,
or any part of, the Common Stock, (iii) of a merger in which the Corporation
will not survive as an independent, publicly owned corporation, a consolidation,
or a sale, exchange or other disposition of all or substantially all of the
Corporation's assets, (iv) of a substantial change in the composition of the
Board during any period of two consecutive years such that individuals who at
the beginning of such period were members of the Board cease for any reason to
constitute at least a majority thereof, unless the election, or the nomination
for election by the stockholders of the Corporation, of each new director was
approved by a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of the period, or (v) of any
transaction or other event which the Corporate Governance Committee of the
Board, in its discretion, determines to be a Change in Control for purposes of
the Plan.
10. Administration
(a) Plan Administrator. The Plan Administrator and "named fiduciary" for
purposes of ERISA shall be the Senior Vice President-Human Resources and
Communications of the Corporation (or the person acting in such capacity in the
event such position is abolished, restructured or renamed). The Plan
Administrator shall have the authority to appoint one or more other named
fiduciaries of the Plan and to designate persons, other than named fiduciaries,
to carry out fiduciary responsibilities under the Plan, pursuant to Section
405(c)(1)(B) of ERISA. Any person acting on behalf of the Plan Administrator
shall serve without additional compensation. The Plan Administrator shall keep
or cause to be kept such records and shall prepare or cause to be prepared such
returns or reports as may be required by law or necessary for the proper
administration of the Plan.
(b) Powers and Duties of Plan Administrator. The Plan Administrator shall
have the full discretionary power and authority to construe and interpret the
Plan (including, without limitation, supplying omissions from, correcting
deficiencies in, or resolving inconsistencies or ambiguities in, the language of
the Plan); to determine all questions of fact arising under the Plan, including
questions as to eligibility for and the amount of benefits; to establish such
rules and regulations (consistent with the terms of the Plan) as it deems
necessary or appropriate for administration of the Plan; to delegate
responsibilities to others to assist it in administering the Plan; to retain
attorneys, consultants, accountants or other persons (who may be employees of
the Corporation and its subsidiaries) to render advice and assistance as it
shall determine to be necessary to effect the proper discharge of any duty for
which it is responsible; and to perform all other acts it believes reasonable
and proper in connection with the administration of the Plan. The Plan
Administrator shall be entitled to rely on the records of the Corporation and
its subsidiaries in determining any Participant's entitlement to and the amount
of benefits payable under the Plan. Any determination of the Plan Administrator,
including interpretations of the Plan and determinations of questions of fact,
shall be final and binding on all parties.
(c) Indemnification. To the extent permitted by law, the Corporation shall
indemnify the Plan Administrator from all claims for liability, loss, or damage
(including payment of expenses in connection with defense against such claims)
arising from any act or failure to act in connection with the Plan.
- --------------------------------------------------------------------------------
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<PAGE>
11. Claims Procedures and Appeals
(a) Any request or claim for Plan benefits must be made in writing and
shall be deemed to be filed by a Participant when a written request is made by
the claimant or the claimant's authorized representative which is reasonably
calculated to bring the claim to the attention of the Plan Administrator.
(b) The Plan Administrator shall provide notice in writing to any
Participant when a claim for benefits under the Plan has been denied in whole or
in part. Such notice shall be provided within 90 days of the receipt by the Plan
Administrator of the Participant's claim or, if special circumstances require,
and the Participant is so notified in writing, within 180 days of the receipt by
the Plan Administrator of the Participant's claim. The notice shall be written
in a manner calculated to be understood by the claimant and shall:
(i) set forth the specific reasons for the denial of benefits;
(ii) contain specific references to Plan provisions relative to the
denial;
(iii) describe any material and information, if any, necessary for the
claim for benefits to be allowed, that had been requested, but not received by
the Plan Administrator; and
(iv) advise the Participant that any appeal of the Plan
Administrator's adverse determination must be made in writing to the Plan
Administrator within 60 days after receipt of the initial denial notification,
and must set forth the facts upon which the appeal is based.
(c) If notice of the denial of a claim is not furnished within the time
periods set forth above, the claim shall be deemed denied and the claimant shall
be permitted to proceed to the review procedures set forth below. If the
Participant fails to appeal the Plan Administrator's denial of benefits in
writing and within 60 days after receipt by the claimant of written notification
of denial of the claim (or within 60 days after a deemed denial of the claim),
the Plan Administrator's determination shall become final and conclusive.
(d) If the Participant appeals the Plan Administrator's denial of benefits
in a timely fashion, the Plan Administrator shall re-examine all issues relevant
to the original denial of benefits. Any such claimant, or his or her duly
authorized representative, may review any pertinent documents, as determined by
the Plan Administrator, and submit in writing any issues or comments to be
addressed on appeal.
(e) The Plan Administrator shall advise the Participant and such
individual's representative of its decision, which shall be written in a manner
calculated to be understood by the claimant, and include specific references to
the pertinent Plan provisions on which the decision is based. Such response
shall be made within 60 days of receipt of the written appeal, unless special
circumstances require an extension of such 60-day period for not more than an
additional 60 days. Where such extension is necessary, the claimant shall be
given written notice of the delay. If the decision on review is not furnished
within the time set forth above, the claim shall be deemed denied on review.
(f) Any dispute, controversy, or claim arising out of or relating to any
Plan benefit, including, without limitation, any dispute, controversy or claim
as to whether the decision of the Plan Administrator respecting the benefits
under this Plan or interpretation of this Plan is arbitrary and capricious, that
is not settled in accordance with the procedures outlined in this
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<PAGE>
Section 11, shall be settled by final and binding arbitration in accordance with
the American Arbitration Association Employment Dispute Resolution or other
applicable Rules. Before resorting to arbitration, an aggrieved Participant must
first follow the review procedure outlined in this Section of the Plan. If there
is still a dispute after the procedures in this Section have been exhausted, the
Participant must request arbitration in writing within six (6) months after the
Plan Administrator issues, or is deemed to have issued, its determination under
subparagraph (e) above.
The arbitrator shall be selected by mutual agreement of the parties,
if possible. If the parties fail to reach agreement upon appointment of an
arbitrator within 30 days following receipt by one party of the other party's
notice of desire to arbitrate, the arbitrator shall be selected from a panel or
panels of persons submitted by the American Arbitration Association (the "AAA").
The selection process shall be that which is set forth in the AAA Employment
Dispute Resolution Rules, except that, if the parties fail to select an
arbitrator from one or more panels, AAA shall not have the power to make an
appointment but shall continue to submit additional panels until an arbitrator
has been selected.
All fees and expenses of the arbitration, including a transcript if
requested, will be borne by the Corporation. The arbitrator shall have no power
to amend, add to or subtract from this Plan. The award shall be admissible in
any court or agency action seeking to enforce or render unenforceable this Plan
or any portion thereof. Any action to enforce or vacate the arbitrator's award
shall be governed by the Federal Arbitration Act if applicable.
12. Miscellaneous
(a) Anti-Alienation. The right of a Participant to receive any amount
credited to the Participant's Account shall not be transferable or assignable by
the Participant, except by will or by the laws of descent and distribution. To
the extent that any person acquires a right to receive any amount credited to a
Participant's Account hereunder, such right shall be no greater than that of an
unsecured general creditor of the Corporation. Except as expressly provided
herein, any person having an interest in any amount credited to a Participant's
Account under the Plan shall not be entitled to payment until the date the
amount is due and payable. No person shall be entitled to anticipate any payment
by assignment, pledge or transfer in any form or manner prior to actual or
constructive receipt thereof.
(b) Unsecured General Creditor. Neither the Corporation nor any of its
subsidiaries shall be required to reserve or otherwise set aside funds, Common
Stock or other assets for the payment of its obligations hereunder. However, the
Corporation or any subsidiary may, in its sole discretion, establish funds for
payment of its obligations hereunder. Any such funds shall remain assets of the
Corporation or such subsidiary, as the case may be, and subject to the claims of
its general creditors. Such funds, if any, shall not be deemed to be assets of
the Plan. The Plan is intended to be unfunded for tax purposes and for purposes
of Title I of the Employee Retirement Income Security Act of 1974, as amended.
(c) Withholding. The Corporation shall withhold from any distribution made
from Participant Deferred Contribution Amounts the amount necessary to satisfy
applicable federal, state and local tax withholding requirements. With respect
to distributions of Plan Employer Contribution Amounts, the delivery of the
shares of Common Stock shall be delayed until the Participant makes
arrangements, pursuant to procedures to be adopted by the Plan Administrator,
to satisfy the applicable federal, state and local tax withholding requirements.
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<PAGE>
(d) Termination and Amendment. The Corporation may at any time amend or
terminate the Plan. No amendment or termination shall impair the rights of a
Participant with respect to amounts then credited to the Participant's Account.
(e) Benefit Statements. Each Participant will receive periodic statements
(not less frequently than annually) regarding the Participant's Account. Each
such statement shall indicate the amount of the balances credited to the
Participant's Account as of the end of the period covered by such statement.
(f) Legal Interpretation. This Plan and its provisions shall be construed
in accordance with the laws of the State of Delaware to the extent such Delaware
law is not inconsistent with the provisions of ERISA. The text of this Plan
shall, to the extent permitted by law, govern the determination of the rights
and obligations created or referred to herein. Headings to the Sections,
paragraphs and subparagraphs are for reference purposes only and do not limit or
extend the meaning of any of the Plan's provisions.
(g) Employment. The adoption and maintenance of this Plan shall not be
deemed to constitute a contract between the Corporation or its subsidiaries and
any employee or to be a consideration for or condition of employment of any
person. No provision of the Plan shall be deemed to give any employee the right
to continue in the employ of the Corporation or its subsidiaries or to interfere
with the right of the Corporation or its subsidiaries to discharge any employee
at any time without regard to the effect which such discharge might have upon
the employee's participation in the Plan or benefits under it.
(h) Fiduciary Capacities. Any person or group of persons may serve in more
than one fiduciary capacity with respect to the Plan. For purposes of this
Section 12(h), the term "fiduciary" shall have the same meaning as in ERISA.
(i) Participants Subject to Section 16. Notwithstanding anything herein to
the contrary, if any request, election or other action under the Plan affecting
a Participant subject to Section 16 of the Securities Exchange Act of 1934
should require the approval of the Committee to exempt such request, election or
other action from potential liability under Section 16, then the approval of the
Committee shall be obtained in lieu of the approval of the Plan Administrator.
-11-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>ex10-8.txt
<DESCRIPTION>EXHIBIT 10.8
<TEXT>
<PAGE>
EXHIBIT 10.8
Salary and Incentive Award Deferral Plan
for
Selected Employees of Honeywell International Inc. and its
Affiliates
Amended and Restated
as of January 1, 2002
<PAGE>
-2-
1. Eligibility
Those employees of Honeywell International Inc. (the "Corporation") and its
affiliates who are designated by the Management Development and Compensation
Committee (the "Committee") shall be eligible to participate in this
supplemental non-qualified Salary and Incentive Award Deferral Plan for Selected
Employees of Honeywell International Inc. and its Affiliates (the "Plan").
2. Participation
An eligible employee may become a participant in the Plan (a "Participant")
by filing a timely written deferral election with the Corporation. Such election
shall request that a portion of the compensation elements described in paragraph
3(a) and paragraph 3(b) be credited to an unfunded deferred compensation account
maintained for the Participant under the Plan (the "Participant Account" or
"Account"). A Participant's direction, if accepted by the Corporation, shall
become effective for the pay period or payment date in the next succeeding
calendar year (or for a newly eligible Participant, for the next succeeding pay
period or payment date after the receipt of the direction by the Corporation),
and shall continue in effect until the Participant terminates such direction,
effective as of the end of the calendar year, or is no longer eligible to be a
Participant. Any modification of Participant's direction shall be effective only
with respect to compensation payable with respect to pay periods in the calendar
year next following the date such direction is received by the Corporation.
3. Contributions to Participant Accounts
(a) Base Annual Salary. A Participant in Career Band 6 and above (or a
Participant who occupies a position equivalent thereto) may, prior to the
beginning of any calendar year (and with respect to a newly eligible
Participant, within thirty days after first becoming so eligible) elect to defer
an aggregate amount of base annual salary otherwise payable in such subsequent
calendar year (or with respect to a newly eligible Participant, in the remainder
of the calendar year), exclusive of any bonus or any other compensation or
allowance paid or payable by the Corporation or its affiliates (the "Base Annual
Salary"). The amount deferred under this paragraph 3(a) shall not be greater
than fifty percent (50%) of the Participant's Base Annual Salary for such pay
period.
(b) Incentive Awards. A Participant may, to the extent that the Honeywell
International Inc. Incentive Compensation Plan For Executive Employees (the
"Incentive Plan") (or any successor plan) permits deferrals of an incentive
award (the "Incentive Award") payable thereunder, elect to defer an amount not
greater than one hundred percent of such Incentive Award. Any amount so deferred
shall be deemed to be deferred under this Plan but shall, to the extent the
provisions of the Incentive Plan are not inconsistent with this Plan, otherwise
be subject to the terms of the Incentive Plan. Any deferral of an Incentive
Award shall be made by filing an appropriate deferral election with the
Corporation not later than the date established by the Corporation from time to
time.
<PAGE>
-3-
(c) Deferral Amounts. All amounts determined under this paragraph 3 which
are the subject of a written deferral election (the "Deferral Amounts") shall,
in accordance with the relevant Participant direction, be credited to a
Participant Account maintained under the Plan on the same day the Base Annual
Salary or Incentive Award would otherwise have been payable.
4. Deferral Requirements
Amounts may be deferred under this Plan for a minimum period of three years
or such shorter period as may be approved by the Committee. Except as otherwise
provided in paragraphs 9 or 10 or as approved by Committee, no amount shall be
withdrawn from a Participant Account prior to the earlier of: three years
following the last day of the calendar year in which the Deferral Amounts were
earned; the date the Participant reaches normal retirement age and is eligible
to receive a benefit under a pension plan of the Corporation or one of its
affiliates; the date of Participant's death; or the date the Participant ceases
to be employed by the Corporation or any of its affiliates. Notwithstanding the
preceding provisions of this Section 4, a Participant may request an immediate
withdrawal of all or a portion of such Participant's Account prior to any date
described above or prior to the date the Account has been completely withdrawn,
provided that such a request and withdrawal shall be subject to such penalties,
restrictions or conditions as may be established by the Corporation from time to
time. The penalty shall be a percentage of the amount requested to be withdrawn,
calculated as the difference between (a) 6%, and (b) 50% of the amount, if any,
by which 10% exceeds the interest rate on 10-year U.S. Treasury Bonds on the
first business day of the calendar quarter during which the withdrawal request
is made.
5. Interest Equivalents
Deferral Amounts shall accrue additional amounts equivalent to interest
("Interest Equivalents"), compounded daily, from the date the Deferral Amount is
credited to the Account to the date of distribution. A single rate for
calculating Interest Equivalents shall be established by the Committee, in its
sole discretion, for all Deferral Amounts credited to Participant Accounts in
each calendar year. The rate established by the Committee shall not exceed the
greater of (i) 10% or (ii) 200% of the 10-year U.S. Treasury Bond rate at the
time of determination. Such Interest Equivalents, once established for a
calendar year, shall remain in effect with respect to Deferral Amounts credited
to Participant Accounts during the calendar year until the Deferral Amounts are
distributed.
The rate of notional interest established by the Committee shall be set
forth on Schedule A attached hereto and made a part hereof. Any portion of such
rate designated as the "Contingent Rate" shall become nonforfeitable only if the
Participant is still employed by the Corporation or any affiliate at the end of
the third full calendar year following the calendar year in which the Deferral
Amount relates, provided, however, in the event a Participant terminates
employment with the Corporation or an affiliate prior to such date for reasons
other than gross cause, the Committee shall treat such portion as nonforfeitable
in the event the Participant's employment with the Corporation or Affiliate is
involuntarily terminated (including a termination for "good reason" under any
applicable severance plan of the Corporation or affiliate) or is terminated for
such reasons as the Committee may determine from time to time in its
<PAGE>
-4-
sole discretion. Notwithstanding the preceding sentence, in the event a
Participant withdraws any portion of the Deferral Amount prior to the end of the
third full calendar year following the calendar year to which the Deferral
Amount relates, the amount of Contingent Rate interest credited with respect to
such Deferred Amount at the time of withdrawal shall remain credited to such
Account subject to the provisions of the preceding sentence but shall not be
credited with any Interest Equivalents after such date ("Frozen Contingent
Interest"). The rate established by the Committee and set forth on Schedule A
shall remain in effect until superceded by action of the Committee and amendment
of such Schedule A.
Notwithstanding anything in the Plan to the contrary, from and after the
occurrence of a Change in Control, the rate at which Deferral Amounts accrue
Interest Equivalents may not be decreased.
6. Participant Accounts
All amounts credited to a Participant's Account pursuant to paragraphs 3
and 4 shall be unfunded general obligations of the Corporation, and no
Participant shall have any claim to or security interest in any asset of the
Corporation on account thereof.
7. Distribution from Accounts
At the time a Participant makes an election pursuant to paragraph 3, the
Participant shall also make an election with respect to the distribution of the
Deferral Amounts and Interest Equivalents accrued thereon which are credited to
the Participant's Account pursuant to such election. A Participant may elect to
receive such distribution in one lump-sum payment or in a number of
approximately equal annual payments (provided the payment period may not include
more than fifteen such installments). The lump-sum or the first installment
shall be paid as soon as practicable during the month of January of the calendar
year designated by the Participant. Except as otherwise provided in paragraphs
8, 9 and 10, all installment payments following the initial installment payment
shall be paid in cash as soon as practicable during the month of January of each
succeeding calendar year until the entire amount in the Account shall have been
paid. Notwithstanding the foregoing, in the event a Participant's employment
with the Company is terminated either voluntarily (other than on account of
retirement as defined in the qualified pension plan in which the Participant
participates or for "good reason" under any applicable severance plan of the
Company) or for "gross cause" (as defined in the AlliedSignal Inc. Severance
Plan for Senior Executives), the nonforfeitable portion of such Participant's
Deferred Amounts for performance years beginning after 1997 for amounts deferred
under paragraph 3(b) or after 1998 for amount deferred under paragraph 3(a)
(including the vested portion of any applicable notional interest credited
thereto) shall be distributed in a lump sum as soon as practicable in January of
the calendar year following such termination of employment. Any Frozen
Contingent Interest credited to the Participant's Account shall be payable to
the Participant in one lump sum after the date the Frozen Contingent Interest
becomes nonforfeitable pursuant to Paragraph 5.
The Corporation may from time to time allow Participants to request
new elections with respect to the distribution of all Deferral Amounts and
Interest Equivalents accrued thereon that are credited to such Participant under
the Plan (other than any
<PAGE>
-5-
such amounts currently payable to a Participant). The Corporation shall reserve
the right to accept or reject any such request at any time and such election
shall be subject to such restrictions and limitations as the Corporation shall
determine in its sole discretion, provided that any new election shall generally
be required to be made at least twelve (12) months prior to any scheduled
payment date.
Notwithstanding any provision in this Plan to the contrary, if all or a
portion of a Participant's Account is determined to be includible in the
Participant's gross income and subject to income tax at any time prior to the
time such Account would otherwise be paid, the Participant's Account or that
portion of the Participant's Account shall be distributed to the Participant.
For this purpose, an amount is determined to be includible in the Participant's
gross income upon the earliest of: (i) a final determination by the Internal
Revenue Service addressed to the Participant which is not appealed, (ii) a final
determination by the United States Tax Court or any other federal court
affirming an IRS determination, or (iii) an opinion addressed to the Corporation
by the tax counsel for the Corporation that, by reason of the Code, Treasury
Regulations, published Internal Revenue Service rulings, court decisions or
other substantial precedent, the amount is subject to federal income tax prior
to payment.
8. Distribution on Death
If a Participant should die before all amounts credited to the
Participant's Account have been distributed, the balance in the Account shall be
paid as soon as practical thereafter to the beneficiary designated in writing by
the Participant. Payment to a beneficiary pursuant to a designation by a
Participant shall be made in one lump sum to the designated beneficiary as soon
as practicable following the death of the Participant. Such beneficiary
designations shall be effective when received by the Corporation, and shall
remain in effect until rescinded or modified by the Participant by an
appropriate written direction. If no beneficiary is properly designated by the
Participant or if the designated beneficiary shall have predeceased the
Participant, such balance in the Account shall be paid to the estate of the
Participant.
9. Payment in the Event of Hardship
Upon receipt of a request from a Participant, delivered in writing to the
Corporation along with a Certificate of Unavailability of Other Resources form,
the Committee, the Senior Vice President - Human Resources and Communications,
or his designee, may cause the Corporation to accelerate (or require the
subsidiary of the Corporation which employs or employed the Participant to
accelerate) payment of all or any part of the Deferral Amount and Interest
Equivalents credited to the Participant's Account, if it finds in its sole
discretion that payment of such amounts in accordance with the Participant's
prior election under paragraph 3 would result in severe financial hardship to
the Participant and such hardship is the result of an unforeseeable emergency
caused by circumstances beyond the control of the Participant. Acceleration of
payment may not be made under this paragraph 9 to the extent that such hardship
is or may be relieved (i) through reimbursement or compensation by insurance or
otherwise, (ii) by liquidation of the Participant's assets, to the extent the
liquidation of assets would not itself cause severe financial hardship or (iii)
by cessation of deferrals under this Plan or any tax-qualified savings plan of
the Corporation.
<PAGE>
-6-
10. Change in Control
(a) Initial Lump Sum Election. Notwithstanding any election made pursuant
to paragraph 7, a Participant may file a written election with the Corporation
to have the Deferral Amounts and Interest Equivalents accrued thereon which are
credited thereafter to the Participant's Account paid in one lump-sum payment as
soon as practicable following a Change in Control, but in no event later than 90
days after such Change in Control. The Interest Equivalents on any Deferred
Amount payable pursuant to this paragraph 10(a) shall include the "Contingent
Rate" credited to such Deferred Amount without regard to whether such amount has
become nonforfeitable as provided in paragraph 5 at the time payment is made
under this paragraph 10(a).
(b) Revocation of Lump-Sum Election. A Participant may revoke an election
made pursuant to paragraph 10(a) (including an election not to be paid in one
lump sum upon a Change in Control) by filing an appropriate written notice with
the Corporation. A revocation notice filed pursuant to this paragraph 10(b)
shall be subject to such terms and conditions as the Corporation shall establish
and shall be effective with respect to any or all of the Participant's Deferral
Amounts and Interest Equivalents accrued thereon which are credited to such
Participant under the Plan. Any such election shall be subject to such
restrictions and limitations as the Corporation shall determine in its sole
discretion.
(c) Limitation on Elections. Any election made pursuant to paragraph 10(a)
or 10(b) shall not be effective unless filed with the Corporation at least 90
days prior to a Change in Control.
(d) Definition of Change in Control. For purposes of the Plan, a Change in
Control is deemed to occur at the time (i) when an entity, person or group
(other than the Corporation, any subsidiary or savings, pension or other benefit
plan for the benefit of employees of the Corporation or its subsidiaries) which
theretofore beneficially owned less than 30% of the Corporation's common stock
(the "Common Stock") then outstanding, acquires shares of Common Stock in a
transaction or a series of transactions that results in such entity, person or
group directly or indirectly owning beneficially 30% or more of the outstanding
Common Stock, (ii) of the purchase of Common Stock pursuant to a tender offer or
exchange offer (other than an offer by the Corporation) for all, or any part of,
the Common Stock (iii) of a merger in which the Corporation will not survive as
an independent, publicly owned corporation, a consolidation, a sale, exchange or
other disposition of all or substantially all of the Corporation's assets, (iv)
of a substantial change in the composition of the Board during any period of two
consecutive years such that individuals who at the beginning of such period were
members of the Board cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election by the shareowners
of the Corporation, of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of the period, or (v) of any transaction or other event which the
Committee, in its sole discretion, determines to be a Change in Control for
purposes of the Plan.
<PAGE>
-7-
11. Miscellaneous
(a) No Alienation of Benefits. Except insofar as may otherwise be required
by law, no amount payable at any time under the Plan shall be subject in any
manner to alienation by anticipation, sale, transfer, assignment, bankruptcy,
pledge, attachment, charge, or encumbrance of any kind nor in any manner be
subject to the debts or liabilities of any person and any attempt to so alienate
or subject any such amount, whether presently or thereafter payable, shall be
void. If any person shall attempt to, or shall alienate, sell, transfer, assign,
pledge, attach, charge, or otherwise encumber any amount payable under the Plan,
or any part thereof, or if by reason of such person's bankruptcy or other event
happening at any such time such amount would be made subject to the person's
debts or liabilities or would otherwise not be enjoyed by that person, then the
Corporation, if it so elects, may direct that such amount be withheld and that
same or any part thereof be paid or applied to or for the benefit of such
person, the person's spouse, children or other dependents, or any of them, in
such manner and proportion as the Corporation may deem proper.
(b) No Right or Interest in Corporation's Assets. Neither the Corporation
nor any of its Affiliates shall be required to reserve or otherwise set aside
funds for the payment of obligations arising under this Plan. The Corporation
may, in its sole discretion, establish funds, segregate assets or take such
other action as it shall determine necessary or appropriate to secure the
payment of its obligations arising under this Plan. This Plan is intended to be
unfunded for tax purposes and for purposes of Title I of the Employee Retirement
Income Security Act of 1974, as amended. Nothing contained herein, and no action
taken pursuant to the provisions of this Plan shall create or be construed to
create a trust of any kind, or a fiduciary relationship between the Corporation
and any Participant or any other person. To the extent that any person acquires
a right to receive payments under this Plan, such right shall be no greater than
the right of an unsecured creditor of the Corporation.
(c) Administration. The Corporation shall have sole discretion and
authority to administer the Plan, including the authority to interpret its
terms, promulgate regulations thereunder, determine eligibility to participate
in the Plan and make any finding of fact which may be necessary to determine the
obligation of the Plan with respect to the payment of benefits.
(d) Amendment. The Corporation may amend, modify or terminate the Plan at
any time, or from time to time; provided, however, that no change to the Plan
shall impair the right of any Participant with respect to amounts then credited
to an Account; and further provided that during a Potential Change in Control
Period (as defined in Section 11(h) hereof) and from and after the occurrence of
a Change in Control, the Plan may not, without the consent of the Participant,
be amended in any manner which would adversely affect such Participant's rights
and expectations with respect to Deferred Amounts credited to such Participant's
Account immediately prior to such amendment.
(e) Accounting. Each Participant shall receive periodic statements (not
less frequently than annually) setting forth the cumulative Deferral Amounts and
Interest Equivalents credited to, and any distributions from, the Participant's
Account.
<PAGE>
-8-
(f) Facility of Payments. If the Corporation shall find that any person to
whom any amount is payable under the plan is unable to care for his or her
affairs because of illness or accident, or is a minor, or has died, then any
payment due the person or the person's estate (unless a prior claim therefore
has been made by a duly appointed legal representative), may, if the Corporation
so elects in its sole discretion, be paid to the person's spouse, a child, a
relative, an institution having custody of such person, or any other person
deemed by the Corporation to be a proper recipient on behalf of such person
otherwise entitled to payment. Any such payment shall be a complete discharge of
the liability of the Corporation and the Plan therefore.
(g) Governing Law. The Plan is intended to constitute an unfunded deferred
compensation arrangement for a select group of management or highly compensated
personnel and all rights thereunder shall be governed by and construed in
accordance with the laws of New York.
(h) Potential Change in Control Period. A "Potential Change in Control
Period" shall commence when: (i) the Corporation enters into an agreement, the
consummation of which would result in the occurrence of a Change in Control;
(ii) the Corporation or any person or group publicly announces an intention to
take or to consider taking actions which, if consummated, would result in a
Change in Control; (iii) any person or group (other than the Corporation, any
subsidiary or any savings, pension or other benefit plan for the benefit of
employees of the Corporation or its subsidiaries) becomes the beneficial owner,
directly or indirectly, of securities of the Corporation representing 15% or
more of either the then outstanding shares of common stock of the Corporation or
the combined voting power of the Corporation's then outstanding securities (not
including in the securities beneficially owned by such person or group any
securities acquired directly from the Corporation or its affiliates); or (iv)
the Board adopts a resolution to the effect that, for purposes of the Plan, a
Potential Change in Control Period has commenced. The Potential Change in
Control Period shall continue until the earlier of (A) a Change in Control, or
(B) the adoption by the Board of a resolution stating that, for purposes of the
Plan, the Potential Change in Control Period has expired.
<PAGE>
-9-
SCHEDULE A
Notional Interest Rate
Deferred Incentive Awards (Band 6 and Above)
Year Award Earned Vested Rate Contingent Rate Total Rate
- ----------------- ---------------- --------------- ----------------
1975 - 1992 Treasury bills + N/A Treasury bills +
3%* 3%*
1993 - 1997 10% N/A 10%
1998 - 2000 8% 3% 11%
2001 + 7% 3% 10%
*/Three-month Treasury bill average rate for the immediately preceding calendar
quarter as reported by the Federal Reserve Bank; rate changes each calendar
quarter.
Deferred Incentive Awards (Band 5 and Below)
Year Award Earned Vested Rate Contingent Rate Total Rate
- ----------------- ---------------- --------------- ----------------
1975 - 1997 Treasury bills + N/A Treasury bills +
3%* 3%*
1998 + 6% 3% 9%
*/Three-month Treasury bill average rate for the immediately preceding calendar
quarter as reported by the Federal Reserve Bank; rate changes each calendar
quarter.
Deferred Salary (Band 6 and Above)
Year Salary Earned Vested Rate Contingent Rate Total Rate
- ------------------ ----------- --------------- ----------
1994 - 1998 10% N/A 10%
1999 - 2001 8% 3% 11%
2002 + 7% 3% 10%
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>ex10-10.txt
<DESCRIPTION>EXHIBIT 10.10
<TEXT>
<PAGE>
EXHIBIT 10.10
364-DAY CREDIT AGREEMENT
Dated as of November 27, 2002
HONEYWELL INTERNATIONAL INC., a Delaware corporation (the "Company"),
the banks, financial institutions and other institutional lenders (the "Initial
Lenders") listed on the signature pages hereof, and CITIBANK, N.A. ("Citibank"),
as administrative agent (the "Agent") for the Lenders (as hereinafter defined),
JPMORGAN CHASE BANK, DEUTSCHE BANK AG, NEW YORK BRANCH, BANK OF AMERICA, N.A.
and BARCLAYS BANK PLC, as syndication agents, and SALOMON SMITH BARNEY INC., as
lead arranger book manager, hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms.
As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
"Advance" means a Revolving Credit Advance or a Competitive Bid
Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of Voting Stock, by contract or otherwise.
"Agent's Account" means (a) in the case of Advances denominated in
Dollars, the account of the Agent maintained by the Agent at Citibank at
its office at 388 Greenwich Street, New York, New York 10013, Account No.
36852248, Attention: Janet Wallace, (b) in the case of Advances denominated
in any Foreign Currency, the account of the Sub-Agent designated in writing
from time to time by the Agent to the Company and the Lenders for such
purpose and (c) in any such case, such other account of the Agent as is
designated in writing from time to time by the Agent to the Company and the
Lenders for such purpose.
"Alternate Currency" means any lawful currency other than Dollars and
the Major Currencies that is freely transferrable and convertible into
Dollars.
<PAGE>
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance and
such Lender's Eurocurrency Lending Office in the case of a Eurocurrency
Rate Advance and, in the case of a Competitive Bid Advance, the office of
such Lender notified by such Lender to the Agent as its Applicable Lending
Office with respect to such Competitive Bid Advance.
"Applicable Margin" means (a) for Base Rate Advances, 0% per annum and
(b) for Eurocurrency Rate Advances, as of any date, a percentage per annum
determined by reference to the Public Debt Rating in effect on such date as
set forth below:
- -----------------------------------------------------------------------
Applicable Margin for
Applicable Margin for Eurocurrency Rate
Eurocurrency Rate Advances On and After
Public Debt Rating Advances Prior to Term Term Loan Conversion
S&P/Moody's Loan Conversion Date Date
- -----------------------------------------------------------------------
Level 1
A+ or A1 or above 0.200% 0.550%
- -----------------------------------------------------------------------
Level 2
Lower than Level 1 but 0.240% 0.600%
at least A or A2
- -----------------------------------------------------------------------
Level 3
Lower than Level 2 but 0.280% 0.700%
at least A- or A3
- -----------------------------------------------------------------------
Level 4
Lower than Level 3 but 0.400% 0.875%
at least BBB+ or Baa1
- -----------------------------------------------------------------------
Level 5
Lower than Level 4 0.625% 1.375%
- -----------------------------------------------------------------------
"Applicable Percentage" means, as of any date prior to the Term Loan
Conversion Date, a percentage per annum determined by reference to the
Public Debt Rating in effect on such date as set forth below:
- -------------------------------------------------------
Public Debt Rating Applicable
S&P/Moody's Percentage
- -------------------------------------------------------
Level 1
A+ or A1 or above 0.050%
- -------------------------------------------------------
Level 2 Lower than Level 1 but at
least A or A2 0.060%
- -------------------------------------------------------
Level 3
Lower than Level 2 but at 0.070%
least A- or A3
- -------------------------------------------------------
2
<PAGE>
- -------------------------------------------------------
Level 4
Lower than Level 3 but at 0.100%
least BBB+ or Baa1
- -------------------------------------------------------
Level 5
Lower than Level 4 0.125%
- -------------------------------------------------------
"Applicable Utilization Fee" means, as of any date prior to the Term
Loan Conversion Date that the aggregate Advances exceed 50% of the
aggregate Commitments, a percentage per annum determined by reference to
the Public Debt Rating in effect on such date as set forth below:
- -------------------------------------------------------
Public Debt Rating Applicable
S&P/Moody's Utilization Fee
- -------------------------------------------------------
Level 1
A+ or A1 or above 0.050%
- -------------------------------------------------------
Level 2
Lower than Level 1 but at 0.050%
least A or A2
- -------------------------------------------------------
Level 3
Lower than Level 2 but at 0.100%
least A- or A3
- -------------------------------------------------------
Level 4
Lower than Level 3 but at 0.125%
least BBB+ or Baa1
- -------------------------------------------------------
Level 5
Lower than Level 4 0.125%
- -------------------------------------------------------
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the Agent, in
substantially the form of Exhibit C hereto.
"Assuming Lender" means an Eligible Assignee not previously a Lender
that becomes a Lender hereunder pursuant to Section 2.16.
"Assumption Agreement" means an agreement in substantially the form of
Exhibit D hereto by which an Eligible Assignee agrees to become a Lender
hereunder pursuant to Section 2.16, in each case agreeing to be bound by
all obligations of a Lender hereunder.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the
highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate;
3
<PAGE>
(b) the sum (adjusted to the nearest 1/32 of 1% or, if there is
no nearest 1/32 of 1%, to the next higher 1/32 of 1%) of (i) 1/2 of 1%
per annum, plus (ii) the rate obtained by dividing (A) the latest
three-week moving average of secondary market morning offering rates
in the United States for three-month certificates of deposit of major
United States money market banks, such three-week moving average
(adjusted to the basis of a year of 360 days) being determined weekly
on each Monday (or, if such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal Reserve
Bank of New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates received by
Citibank from three New York certificate of deposit dealers of
recognized standing selected by Citibank, by (B) a percentage equal to
100% minus the average of the daily percentages specified during such
three-week period by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve
requirement (including, but not limited to, any emergency,
supplemental or other marginal reserve requirement) for Citibank with
respect to liabilities consisting of or including (among other
liabilities) three-month Dollar non-personal time deposits in the
United States, plus (iii) the average during such three-week period of
the annual assessment rates estimated by Citibank for determining the
then current annual assessment payable by Citibank to the Federal
Deposit Insurance Corporation (or any successor) for insuring Dollar
deposits of Citibank in the United States; and
(c) 1/2 of one percent per annum above the Federal Funds Rate.
"Base Rate Advance" means a Revolving Credit Advance denominated in
Dollars that bears interest as provided in Section 2.07(a)(i).
"Borrower" means the Company or any Designated Subsidiary, as the
context requires.
"Borrowing" means a Revolving Credit Borrowing or a Competitive Bid
Borrowing.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in New York City and, if the applicable
Business Day relates to any Eurocurrency Rate Advance or LIBO Rate Advance,
on which dealings are carried on in the London interbank market and banks
are open for business in London and in the country of issue of the currency
of such Eurocurrency Rate Advance or LIBO Rate Advance (or, in the case of
an Advance denominated in Euros, on which the Trans-European Automated
Real-Time Gross Settlement Express Transfer (TARGET) System is open) and,
if the applicable Business Day relates to any Local Rate Advance, on which
banks are open for business in the country of issue of the currency of such
Local Rate Advance.
4
<PAGE>
"Change of Control" means that (i) any Person or group of Persons
(within the meaning of Section 13 or 14 of the Securities Exchange Act of
1934, as amended (the "Act")) (other than the Company, any Subsidiary of
the Company or any savings, pension or other benefit plan for the benefit
of employees of the Company or its Subsidiaries) which theretofore
beneficially owned less than 30% of the Voting Stock of the Company then
outstanding shall have acquired beneficial ownership (within the meaning of
Rule 13d-3 promulgated by the Securities and Exchange Commission under the
Act) of 30% or more in voting power of the outstanding Voting Stock of the
Company or (ii) during any period of twelve consecutive calendar months
commencing at the Effective Date, individuals who at the beginning of such
twelve-month period were directors of the Company shall cease to constitute
a majority of the Board of Directors of the Company.
"Commitment" means as to any Lender (i) the Dollar amount set forth
opposite its name on the signature pages hereof, (ii) if such Lender has
become a Lender hereunder pursuant to an Assumption Agreement, the Dollar
amount set forth as its Commitment in such Assumption Agreement or (iii) if
such Lender has entered into any Assignment and Acceptance, the Dollar
amount set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 9.07(d), in each case as the same
may be terminated or reduced, as the case may be, pursuant to Section 2.05.
"Competitive Bid Advance" means an advance by a Lender to any Borrower
as part of a Competitive Bid Borrowing resulting from the competitive
bidding procedure described in Section 2.03 and refers to a Fixed Rate
Advance, a LIBO Rate Advance or a Local Rate Advance (each of which shall
be a "Type" of Competitive Bid Advance).
"Competitive Bid Borrowing" means a borrowing consisting of
simultaneous Competitive Bid Advances from each of the Lenders whose offer
to make one or more Competitive Bid Advances as part of such borrowing has
been accepted under the competitive bidding procedure described in Section
2.03.
"Competitive Bid Note" means a promissory note of any Borrower payable
to the order of any Lender, in substantially the form of Exhibit A-2
hereto, evidencing the indebtedness of such Borrower to such Lender
resulting from a Competitive Bid Advance made by such Lender to such
Borrower.
"Competitive Bid Reduction" has the meaning specified in Section 2.01.
"Consenting Lenders" has the meaning specified in Section 2.16(b).
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Consolidated Subsidiary" means, at any time, any Subsidiary the
accounts of which are required at that time to be included on a
Consolidated basis in the Consolidated financial statements of the Company,
assuming that such financial statements are prepared in accordance with
GAAP.
5
<PAGE>
"Convert", "Conversion" and "Converted" each refers to a conversion of
Revolving Credit Advances of one Type into Revolving Credit Advances of the
other Type pursuant to Section 2.08 or 2.11.
"Debt" means, with respect to any Person: (i) indebtedness of such
Person, which is not limited as to recourse to such Person, for borrowed
money (whether by loan or the issuance and sale of debt securities) or for
the deferred (for 90 days or more) purchase or acquisition price of
property or services; (ii) indebtedness or obligations of others which such
Person has assumed or guaranteed; (iii) indebtedness or obligations of
others secured by a lien, charge or encumbrance on property of such Person
whether or not such Person shall have assumed such indebtedness or
obligations; (iv) obligations of such Person in respect of letters of
credit (other than performance letters of credit, except to the extent
backing an obligation of any Person which would be Debt of such Person),
acceptance facilities, or drafts or similar instruments issued or accepted
by banks and other financial institutions for the account of such Person;
and (v) obligations of such Person under leases which are required to be
capitalized on a balance sheet of such Person in accordance with GAAP.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
"Designated Subsidiary" means any corporate Subsidiary of the Company
designated for borrowing privileges under this Agreement pursuant to
Section 9.08.
"Designation Letter" means, with respect to any Designated Subsidiary,
a letter in the form of Exhibit E hereto signed by such Designated
Subsidiary and the Company.
"Disclosed Litigation" has the meaning specified in Section 3.01(b).
"Dollars" and the "$" sign each mean lawful money of the United States
of America.
"Domestic Lending Office" means, with respect to any Initial Lender,
the office of such Lender specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto and, with respect to any other
Lender, the office of such Lender specified as its "Domestic Lending
Office" in the Assumption Agreement or in the Assignment and Acceptance
pursuant to which it became a Lender, or such other office of such Lender
as such Lender may from time to time specify to the Company and the Agent.
"Domestic Subsidiary" means any Subsidiary whose operations are
conducted primarily in the United States excluding any Subsidiary whose
assets consist primarily of the stock of Subsidiaries whose operations are
conducted outside the United States of America.
"Effective Date" has the meaning specified in Section 3.01.
6
<PAGE>
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender;
(iii) a commercial bank organized under the laws of the United States, or
any State thereof, and having total assets in excess of $10,000,000,000;
(iv) a savings and loan association or savings bank organized under the
laws of the United States, or any State thereof, and having a net worth of
at least $500,000,000, calculated in accordance with GAAP; (v) a commercial
bank organized under the laws of any other country that is a member of the
Organization for Economic Cooperation and Development or has concluded
special lending arrangements with the International Monetary Fund
associated with its General Arrangements to Borrow, or a political
subdivision of any such country, and having total assets in excess of
$10,000,000,000, so long as such bank is acting through a branch or agency
located in the country in which it is organized or another country that is
described in this clause (v); and (vi) the central bank of any country that
is a member of the Organization for Economic Cooperation and Development.
"Environmental Action" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or
potential liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, Environmental
Permit or Hazardous Materials or arising from alleged injury or threat of
injury to health, safety or the environment, including, without limitation,
(a) by any governmental or regulatory authority for enforcement, cleanup,
removal, response, remedial or other actions or damages and (b) by any
governmental or regulatory authority or any third party for damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment, decree or
judicial or agency interpretation, policy or guidance relating to pollution
or protection of the environment, health, safety or natural resources,
including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"Equivalent" in Dollars of any Foreign Currency on any date means the
equivalent in Dollars of such Foreign Currency determined by using the
quoted spot rate at which the Sub-Agent's principal office in London offers
to exchange Dollars for such Foreign Currency in London prior to 4:00 P.M.
(London time) (unless otherwise indicated by the terms of this Agreement)
on such date as is required pursuant to the terms of this Agreement, and
the "Equivalent" in any Foreign Currency of Dollars means the equivalent in
such Foreign Currency of Dollars determined by using the quoted spot rate
at which the Sub-Agent's principal office in London offers to exchange such
Foreign Currency for Dollars in London prior to 4:00 P.M. (London time)
(unless otherwise indicated by the terms of this Agreement) on such date as
is required pursuant to the terms of this Agreement.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" of any Person means any other Person that for
purposes of Title IV of ERISA is a member of such Person's controlled
group, or under common control with such Person, within the meaning of
Section 414 of the Internal Revenue Code.
"ERISA Event" with respect to any Person means (a) (i) the occurrence
of a reportable event, within the meaning of Section 4043 of ERISA, with
respect to any Plan of such Person or any of its ERISA Affiliates unless
the 30-day notice requirement with respect to such event has been waived by
the PBGC, or (ii) the requirements of subsection (1) of Section 4043(b) of
ERISA are met with respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan of such Person or any of its ERISA
Affiliates, and an event described in paragraph (9), (10), (11), (12) or
(13) of Section 4043(c) of ERISA is reasonably expected to occur with
respect to such Plan within the following 30 days; (b) the application for
a minimum funding waiver with respect to a Plan of such Person or any of
its ERISA Affiliates; (c) the provision by the administrator of any Plan of
such Person or any of its ERISA Affiliates of a notice of intent to
terminate such Plan in a distress termination pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (d) the cessation of
operations at a facility of such Person or any of its ERISA Affiliates in
the circumstances described in Section 4062(e) of ERISA; (e) the withdrawal
by such Person or any of its ERISA Affiliates from a Multiple Employer Plan
during a plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (f) the conditions for the imposition of a
lien under Section 302(f) of ERISA shall have been met with respect to any
Plan of such Person or any of its ERISA Affiliates; (g) the adoption of an
amendment to a Plan of such Person or any of its ERISA Affiliates requiring
the provision of security to such Plan pursuant to Section 307 of ERISA; or
(h) the institution by the PBGC of proceedings to terminate a Plan of such
Person or any of its ERISA Affiliates pursuant to Section 4042 of ERISA, or
the occurrence of any event or condition described in Section 4042 of ERISA
that constitutes grounds for the termination of, or the appointment of a
trustee to administer, such Plan.
"Escrow" means an escrow established with an independent escrow agent
pursuant to an escrow agreement reasonably satisfactory in form and
substance to the Person or Persons asserting the obligation of one or more
Borrowers to make a payment to it or them hereunder.
"EURIBO Rate" means, for any Interest Period for each Eurocurrency
Rate Advance comprising part of the same Borrowing, the rate per annum
appearing on Page 248 of the Telerate Service (or on any successor or
substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided
on such page of such Service, as determined by the Agent from
8
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time to time for purposes of providing quotations of interest rates
applicable to deposits in Euro by reference to the Banking Federation of
the European Union Settlement Rates for deposits in Euro) at approximately
10:00 a.m., London time, two Business Days prior to the commencement of
such Interest Period, as the rate for deposits in Euros with a maturity
comparable to such Interest Period or, if for any reason such rate is not
available, the average (rounded upward to the nearest whole multiple of
1/16 of 1% per annum, if such average is not such a multiple) of the
respective rates per annum at which deposits in Euros are offered by the
principal office of each of the Reference Banks in London, England to prime
banks in the London interbank market at 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
substantially equal to such Reference Bank's Eurocurrency Rate Advance
comprising part of such Borrowing to be outstanding during such Interest
Period and for a period equal to such Interest Period (subject, however, to
the provisions of Section 2.07).
"Euro" means the lawful currency of the European Union as constituted
by the Treaty of Rome which established the European Community, as such
treaty may be amended from time to time and as referred to in the EMU
legislation.
"Eurocurrency Lending Office" means, with respect to any Initial
Lender, the office of such Lender specified as its "Eurocurrency Lending
Office" opposite its name on Schedule I hereto and, with respect to any
other Lender, the office of such Lender specified as its "Eurocurrency
Lending Office" in the Assumption Agreement or in the Assignment and
Acceptance pursuant to which it became a Lender (or, if no such office is
specified, its Domestic Lending Office), or such other office of such
Lender as such Lender may from time to time specify to the Company and the
Agent.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurocurrency Rate" means, for any Interest Period for each
Eurocurrency Rate Advance comprising part of the same Revolving Credit
Borrowing, an interest rate per annum equal to the rate per annum obtained
by dividing (a) (i) in the case of any Advance denominated in Dollars or
any Major Currency other than Euros, the rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) appearing on the applicable
Telerate Page as the London interbank offered rate for deposits in Dollars
or in the relevant Major Currency at approximately 11:00 A.M. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period or, if for any reason such rate is not
available, the average (rounded upward to the nearest whole multiple of
1/32 of 1% per annum, if such average is not such a multiple) of the rate
per annum at which deposits in Dollars or in the relevant Major Currency
are offered by the principal office of each of the Reference Banks in
London, England to prime banks in the London interbank market at 11:00 A.M.
(London time) two Business Days before the first day of such Interest
Period in an amount substantially equal to such Reference Bank's
Eurocurrency Rate Advance comprising part of such Revolving Credit
Borrowing to be outstanding during such Interest Period and for a period
equal to such Interest Period or, (ii) in the case of any Advance
denominated in Euros, the EURIBO Rate by (b) a percentage equal to 100%
minus the Eurocurrency Rate Reserve Percentage
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<PAGE>
for such Interest Period. If the Telerate Page is unavailable, the
Eurocurrency Rate for any Interest Period for each Eurocurrency Rate
Advance comprising part of the same Revolving Credit Borrowing shall be
determined by the Agent on the basis of applicable rates furnished to and
received by the Agent from the Reference Banks two Business Days before the
first day of such Interest Period, subject, however, to the provisions of
Section 2.08.
"Eurocurrency Rate Advance" means a Revolving Credit Advance
denominated in Dollars or in a Major Currency that bears interest as
provided in Section 2.07(a)(ii).
"Eurocurrency Rate Reserve Percentage" for any Interest Period for all
Eurocurrency Rate Advances or LIBO Rate Advances comprising part of the
same Borrowing means the reserve percentage applicable two Business Days
before the first day of such Interest Period under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York
City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate
on Eurocurrency Rate Advances or LIBO Rate Advances is determined) having a
term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Extension Date" has the meaning specified in Section 2.16(a).
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by
it.
"Fixed Rate Advance" has the meaning specified in Section 2.03(a)(i),
which Advance shall be denominated in Dollars or in any Foreign Currency.
"Foreign Currency" means any Major Currency or any Alternate Currency.
"GAAP" has the meaning specified in Section 1.03.
"Hazardous Materials" means (a) petroleum and petroleum products,
byproducts or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and
(b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law.
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"Insufficiency" means, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
ERISA.
"Interest Period" means, for each Eurocurrency Rate Advance comprising
part of the same Revolving Credit Borrowing and each LIBO Rate Advance
comprising part of the same Competitive Bid Borrowing, the period
commencing on the date of such Eurocurrency Rate Advance or LIBO Rate
Advance or the date of the Conversion of any Base Rate Advance into such
Eurocurrency Rate Advance and ending on the last day of the period selected
by the Borrower requesting such Borrowing pursuant to the provisions below
and, thereafter, with respect to Eurocurrency Rate Advances, each
subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by such
Borrower pursuant to the provisions below. The duration of each such
Interest Period shall be one, two, three or six months and, if available to
all Lenders, nine months, as the Borrower requesting the Borrowing may,
upon notice received by the Agent not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the first day of such Interest
Period, select; provided, however, that:
(i) such Borrower may not select any Interest Period that ends
after the scheduled Termination Date or, if the Revolving Credit
Advances have been converted to a term loan pursuant to Section 2.06
prior to such selection, that ends after the Maturity Date;
(ii) Interest Periods commencing on the same date for
Eurocurrency Rate Advances comprising part of the same Revolving
Credit Borrowing or for LIBO Rate Advances comprising part of the same
Competitive Bid Borrowing shall be of the same duration;
(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided, however, that, if such extension would cause
the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day; and
(iv) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Lenders" means, collectively, (i) Initial Lenders, (ii) each Assuming
Lender that shall become a party hereto pursuant to Section 2.16 and (iii)
each Eligible Assignee that shall become a party hereto pursuant to Section
9.07(a), (b) and (c).
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<PAGE>
"LIBO Rate" means, for any Interest Period for all LIBO Rate Advances
comprising part of the same Competitive Bid Borrowing, an interest rate per
annum equal to the rate per annum obtained by dividing (a) (i) in the case
of any Advance denominated in Dollars or any Foreign Currency other than
Euro, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on the applicable Telerate Page as the London
interbank offered rate for deposits in Dollars or in the relevant Foreign
Currency at approximately 11:00 A.M. (London time) two Business Days prior
to the first day of such Interest Period or, if for any reason such rate is
not available, the average (rounded upward to the nearest whole multiple of
1/32 of 1% per annum, if such average is not such a multiple) of the rate
per annum at which deposits in Dollars or in the relevant Foreign Currency
are offered by the principal office of each of the Reference Banks in
London, England to prime banks in the London interbank market at 11:00 A.M.
(London time) two Business Days before the first day of such Interest
Period in an amount substantially equal to the amount that would be the
Reference Banks' respective ratable shares of such Borrowing if such
Borrowing were to be a Revolving Credit Borrowing to be outstanding during
such Interest Period and for a period equal to such Interest Period or,
(ii) in the case of any Advance denominated in Euros, the EURIBO Rate by
(b) a percentage equal to 100% minus the Eurocurrency Rate Reserve
Percentage for such Interest Period. If the Telerate Page is unavailable,
the LIBO Rate for any Interest Period for each LIBO Rate Advance comprising
part of the same Competitive Bid Borrowing shall be determined by the Agent
on the basis of applicable rates furnished to and received by the Agent
from the Reference Banks two Business Days before the first day of such
Interest Period, subject, however, to the provisions of Section 2.08.
"LIBO Rate Advance" means a Competitive Bid Advance denominated in
Dollars or in any Foreign Currency and bearing interest based on the LIBO
Rate.
"Lien" means any lien, mortgage, pledge, security interest or other
charge or encumbrance of any kind.
"Local Rate Advance" means a Competitive Bid Advance denominated in
any Foreign Currency sourced from the jurisdiction of issuance of such
Foreign Currency and bearing interest at a fixed rate.
"Major Currencies" means lawful currency of the United Kingdom of
Great Britain and Northern Ireland, lawful currency of Japan and Euros.
"Majority Lenders" means at any time Lenders holding at least 51% of
the then aggregate principal amount (based on the Equivalent in Dollars at
such time) of the Revolving Credit Advances owing to Lenders, or, if no
such principal amount is then outstanding, Lenders having at least 51% of
the Commitments.
"Material Adverse Change" means any material adverse change in the
financial condition or results of operations of the Company and its
Consolidated Subsidiaries taken as a whole.
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<PAGE>
"Material Adverse Effect" means a material adverse effect on (a) the
financial condition or results of operations of the Company and its
Consolidated Subsidiaries taken as a whole, (b) the rights and remedies of
the Agent or any Lender under this Agreement or any Note or (c) the ability
of the Borrowers to perform their obligations under this Agreement or any
Note.
"Maturity Date" means the earlier of (a) the first anniversary of the
Termination Date and (b) the date of termination in whole of the aggregate
Commitments pursuant to Section 2.05 or 6.01.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" of any Person means a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, to which such Person or any of its
ERISA Affiliates is making or accruing an obligation to make contributions,
or has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" of any Person means a single employer plan,
as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of such Person or any of its ERISA Affiliates and at least one
Person other than such Person or any of its ERISA Affiliates or (b) was so
maintained and in respect of which such Person or any of its ERISA
Affiliates could have liability under Section 4064 or 4069 of ERISA in the
event such plan has been or were to be terminated.
"Net Tangible Assets of the Company and its Consolidated
Subsidiaries", as at any particular date of determination, means the total
amount of assets (less applicable reserves and other properly deductible
items) after deducting therefrom (a) all current liabilities (excluding any
thereof which are by their terms extendible or renewable at the option of
the obligor thereon to a time more than 12 months after the time as of
which the amount thereof is being computed) and (b) all goodwill, trade
names, trademarks, patents, unamortized debt discount and expense and other
like intangible assets, as set forth in the most recent balance sheet of
the Company and its Consolidated Subsidiaries and computed in accordance
with GAAP.
"Non-Consenting Lender" has the meaning specified in Section 2.16(b).
"Note" means a Revolving Credit Note or a Competitive Bid Note.
"Notice of Competitive Bid Borrowing" has the meaning specified in
Section 2.03(a).
"Notice of Revolving Credit Borrowing" has the meaning specified in
Section 2.02(a).
"Obligations" has the meaning specified in Section 7.01(b).
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<PAGE>
"Payment Office" means, for any Foreign Currency, such office of
Citibank as shall be from time to time selected by the Agent and notified
by the Agent to the Borrowers and the Lenders.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture, limited liability company or other entity, or a government
or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Process Agent" has the meaning specified in Section 9.13(a).
"Public Debt Rating" means, as of any date, the highest rating that
has been most recently announced by either S&P or Moody's, as the case may
be, for any class of non-credit enhanced long-term senior unsecured debt
issued by the Company. For purposes of the foregoing, (a) if only one of
S&P and Moody's shall have in effect a Public Debt Rating, the Applicable
Margin, the Applicable Utilization Fee and the Applicable Percentage shall
be determined by reference to the available rating; (b) if neither S&P nor
Moody's shall have in effect a Public Debt Rating, the Applicable Margin,
the Applicable Utilization Fee and the Applicable Percentage will be set in
accordance with Level 5 under the definition of "Applicable Margin",
"Applicable Utilization Fee" or "Applicable Percentage", as the case may
be; (c) if the ratings established by S&P and Moody's shall fall within
different levels, the Applicable Margin, the Applicable Utilization Fee and
the Applicable Percentage shall be based upon the higher rating, provided
that if the lower of such ratings is more than one level below the higher
of such ratings, the Applicable Margin, the Applicable Utilization Fee and
the Applicable Percentage shall be determined by reference to the level
that is one level above such lower rating; (d) if any rating established by
S&P or Moody's shall be changed, such change shall be effective as of the
date on which such change is first announced publicly by the rating agency
making such change; and (e) if S&P or Moody's shall change the basis on
which ratings are established, each reference to the Public Debt Rating
announced by S&P or Moody's, as the case may be, shall refer to the then
equivalent rating by S&P or Moody's, as the case may be.
"Rating Condition" has the meaning specified in Section 2.05(c)(ii).
"Rating Condition Notice" has the meaning specified in Section
2.05(c)(ii).
"Reference Banks" means Citibank, Bank of America, N.A., JPMorgan
Chase Bank and Deutsche Bank AG New York Branch.
"Register" has the meaning specified in Section 9.07(d).
"Restricted Property" means (a) any property of the Company located
within the United States of America that, in the opinion of the Company's
Board of Directors, is a
14
<PAGE>
principal manufacturing property or (b) any shares of capital stock or Debt
of any Subsidiary owning any such property.
"Revolving Credit Advance" means an advance by a Lender to any
Borrower as part of a Revolving Credit Borrowing and refers to a Base Rate
Advance or a Eurocurrency Rate Advance (each of which shall be a "Type" of
Revolving Credit Advance).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by each of the
Lenders pursuant to Section 2.01.
"Revolving Credit Note" means a promissory note of any Borrower
payable to the order of any Lender, delivered pursuant to a request made
under Section 2.17 in substantially the form of Exhibit A-1 hereto,
evidencing the aggregate indebtedness of such Borrower to such Lender
resulting from the Revolving Credit Advances made by such Lender to such
Borrower.
"Sale and Leaseback Transaction" means any arrangement with any Person
(other than the Company or a Subsidiary of the Company), or to which any
such Person is a party, providing for the leasing to the Company or to a
Subsidiary of the Company owning Restricted Property for a period of more
than three years of any Restricted Property that has been or is to be sold
or transferred by the Company or such Subsidiary to such Person, or to any
other Person (other than the Company or a Subsidiary of the Company) to
which funds have been or are to be advanced by such Person on the security
of the leased property. It is understood that arrangements pursuant to
Section 168(f)(8) of the Internal Revenue Code of 1954, as amended, or any
successor provision having similar effect, are not included within this
definition of "Sale and Leaseback Transaction".
"Single Employer Plan" of any Person means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of such Person or any of its ERISA Affiliates and no Person other
than such Person and its ERISA Affiliates or (b) was so maintained and in
respect of which such Person or any of its ERISA Affiliates could have
liability under Section 4069 of ERISA in the event such plan has been or
were to be terminated.
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw
Hill Companies, Inc.
"Sub-Agent" means Citibank International plc.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interest in the capital or
profits of such
15
<PAGE>
limited liability company, partnership or joint venture or (c) the
beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Telerate Page" means, as applicable, page 3740 or 3750 (or any
successor pages, respectively) of Telerate Service of Bridge Information
Services.
"Term Loan Conversion Date" means the Termination Date on which all
Revolving Credit Advances outstanding on such date are converted into a
term loan pursuant to Section 2.06.
"Term Loan Election" has the meaning specified in Section 2.06.
"Termination Date" means the earlier of (a) November 26, 2003, or such
later date to which it may be extended pursuant to Section 2.16, and (b)
the date of termination in whole of the Commitments pursuant to Section
2.05(a) or Section 6.01 or, if all Lenders elect to terminate their
Commitments as provided therein, Section 2.05(d).
"Threatened" means, with respect to any action, suit, investigation,
litigation or proceeding, a written communication to the Company or a
Designated Subsidiary, as the case may be, expressing an intention to
immediately bring such action, suit, investigation, litigation or
proceeding.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening of
such a contingency.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle
E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed, and all financial computations and
determinations pursuant hereto shall be made, in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(e) ("GAAP"); provided,
however, that, if any changes in accounting principles from those used in the
preparation of such financial statements have been required by the rules,
regulations, pronouncements or opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) and have been adopted by the Company
with the agreement of its independent certified public accountants, the Lenders
agree to consider a request by the Company to amend this Agreement to take
account of such changes.
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ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Revolving Credit Advances. Each Lender severally
agrees, on the terms and conditions hereinafter set forth, to make Revolving
Credit Advances to any Borrower from time to time on any Business Day during the
period from the Effective Date until the Termination Date in an aggregate amount
(based in respect of any Revolving Credit Advance denominated in a Major
Currency on the Equivalent in Dollars determined on the date of delivery of the
applicable Notice of Revolving Credit Borrowing), not to exceed at any time
outstanding such Lender's Commitment, provided that the aggregate amount of the
Commitments of the Lenders shall be deemed used from time to time to the extent
of the aggregate amount (based in respect of any Competitive Bid Advance
denominated in a Foreign Currency on the Equivalent in Dollars at such time) of
the Competitive Bid Advances then outstanding and such deemed use of the
aggregate amount of the Commitments shall be allocated among the Lenders ratably
according to their respective Commitments (such deemed use of the aggregate
amount of the Commitments being a "Competitive Bid Reduction"). Each Revolving
Credit Borrowing shall be in an aggregate amount not less than $10,000,000 (or
the Equivalent thereof in any Major Currency determined on the date of delivery
of the applicable Notice of Revolving Credit Borrowing) or an integral multiple
of $1,000,000 (or the Equivalent thereof in any Major Currency determined on the
date of delivery of the applicable Notice of Revolving Credit Borrowing) in
excess thereof and shall consist of Revolving Credit Advances of the same Type
made on the same day by the Lenders ratably according to their respective
Commitments; provided, however, that if there is no unused portion of the
Commitment of one or more Lenders at the time of any requested Revolving Credit
Borrowing such Borrowing shall consist of Revolving Credit Advances of the same
Type made on the same day by the Lender or Lenders who do then have an unused
portion of their Commitments ratably according to the unused portion of such
Commitments. Notwithstanding anything herein to the contrary, no Revolving
Credit Borrowing may be made in a Major Currency if, after giving effect to the
making of such Revolving Credit Borrowing, the Equivalent in Dollars of the
aggregate amount of outstanding Revolving Credit Advances denominated in Major
Currencies, together with the Equivalent in Dollars of the aggregate amount of
outstanding Competitive Bid Advances denominated in Foreign Currencies, would
exceed $500,000,000. Within the limits of each Lender's Commitment, any Borrower
may borrow under this Section 2.01, prepay pursuant to Section 2.09 and reborrow
under this Section 2.01.
SECTION 2.02. Making the Revolving Credit Advances. (a) Each Revolving
Credit Borrowing shall be made on notice, given not later than (x) 10:00 A.M.
(New York City time) on the third Business Day prior to the date of the proposed
Revolving Credit Borrowing in the case of a Revolving Credit Borrowing
consisting of Eurocurrency Rate Advances denominated in any Major Currency, (y)
11:00 A.M. (New York City time) on the third Business Day prior to the date of
the proposed Revolving Credit Borrowing in the case of a Revolving Credit
Borrowing consisting of Eurocurrency Rate Advances denominated in Dollars or (z)
9:00 A.M. (New York City time) on the day of the proposed Revolving Credit
Borrowing in the case of a Revolving Credit Borrowing consisting of Base Rate
Advances, by any Borrower to the Agent (and the Agent shall, in the case of a
Revolving Credit Borrowing consisting of Eurocurrency Rate Advances, immediately
relay such notice to the Sub-Agent), which shall give
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to each Lender prompt notice thereof by telecopier or telex. Each such notice of
a Revolving Credit Borrowing (a "Notice of Revolving Credit Borrowing") shall be
by telephone, confirmed immediately in writing, or telecopier or telex in
substantially the form of Exhibit B-1 hereto, specifying therein the requested
(i) date of such Revolving Credit Borrowing, (ii) Type of Advances comprising
such Revolving Credit Borrowing, (iii) aggregate amount of such Revolving Credit
Borrowing, and (iv) in the case of a Revolving Credit Borrowing consisting of
Eurocurrency Rate Advances, initial Interest Period and currency for each such
Revolving Credit Advance. Each Lender shall, before 11:00 A.M. (New York City
time) on the date of such Revolving Credit Borrowing, in the case of a Revolving
Credit Borrowing consisting of Advances denominated in Dollars, and before 11:00
A.M. (London time) on the date of such Revolving Credit Borrowing, in the case
of a Revolving Credit Borrowing consisting of Eurocurrency Rate Advances
denominated in any Major Currency, make available for the account of its
Applicable Lending Office to the Agent at the applicable Agent's account, in
same day funds, such Lender's ratable portion (as determined in accordance with
Section 2.01) of such Revolving Credit Borrowing. After the Agent's receipt of
such funds and upon fulfillment of the applicable conditions set forth in
Article III, the Agent will make such funds available to the Borrower requesting
the Revolving Credit Borrowing at the Agent's aforesaid address or at the
applicable Payment Office, as the case may be.
(b) Anything in subsection (a) above to the contrary notwithstanding,
a Borrower may not select Eurocurrency Rate Advances for any proposed Revolving
Credit Borrowing if the obligation of the Lenders to make Eurocurrency Rate
Advances shall then be suspended pursuant to Section 2.08 or 2.11.
(c) Each Notice of Revolving Credit Borrowing of any Borrower shall be
irrevocable and binding on such Borrower. In the case of any Revolving Credit
Borrowing that the related Notice of Revolving Credit Borrowing specifies is to
be comprised of Eurocurrency Rate Advances, the Borrower requesting such
Revolving Credit Borrowing shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure by such Borrower to
fulfill on or before the date specified in such Notice of Revolving Credit
Borrowing for such Revolving Credit Borrowing the applicable conditions set
forth in Article III, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Revolving Credit Advance to be made by such Lender as part of such Revolving
Credit Borrowing when such Revolving Credit Advance, as a result of such
failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Lender prior to
the date of any Revolving Credit Borrowing that such Lender will not make
available to the Agent such Lender's ratable portion of such Revolving Credit
Borrowing, the Agent may assume that such Lender has made such portion available
to the Agent on the date of such Revolving Credit Borrowing in accordance with
subsection (a) of this Section 2.02 and the Agent may, in reliance upon such
assumption, make available to the Borrower proposing such Revolving Credit
Borrowing on such date a corresponding amount. If and to the extent that such
Lender shall not have so made such ratable portion available to the Agent, such
Lender and such Borrower severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to such Borrower
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until the date such amount is repaid to the Agent, at (i) in the case of such
Borrower, the higher of (A) the interest rate applicable at the time to
Revolving Credit Advances comprising such Revolving Credit Borrowing and (B) the
cost of funds incurred by the Agent in respect of such amount and (ii) in the
case of such Lender, (A) the Federal Funds Rate in the case of Advances
denominated in Dollars or (B) the cost of funds incurred by the Agent in respect
of such amount in the case of Advances denominated in any Major Currency. If
such Lender shall repay to the Agent such corresponding amount, such amount so
repaid shall constitute such Lender's Revolving Credit Advance as part of such
Revolving Credit Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Revolving Credit Advance to
be made by it as part of any Revolving Credit Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its Revolving Credit
Advance on the date of such Revolving Credit Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Revolving Credit
Advance to be made by such other Lender on the date of any Revolving Credit
Borrowing.
SECTION 2.03. The Competitive Bid Advances. (a) Each Lender severally
agrees that any Borrower may request Competitive Bid Borrowings under this
Section 2.03 from time to time on any Business Day during the period from the
date hereof until the date occurring seven days prior to the Termination Date in
the manner set forth below; provided that, following the making of each
Competitive Bid Borrowing, the aggregate amount (based in respect of any Advance
denominated in a Foreign Currency on the Equivalent in Dollars on such Business
Day) of the Advances then outstanding shall not exceed the aggregate amount of
the Commitments of the Lenders (computed without regard to any Competitive Bid
Reduction). Notwithstanding anything herein to the contrary, no Competitive Bid
Borrowing may be made in a Foreign Currency if, after giving effect to the
making of such Revolving Credit Borrowing, the Equivalent in Dollars of the
aggregate amount of outstanding Competitive Bid Advances denominated in Foreign
Currencies, together with the Equivalent in Dollars of the aggregate amount of
outstanding Revolving Credit Advances denominated in Major Currencies, would
exceed $500,000,000.
(i) Any Borrower may request a Competitive Bid Borrowing under this
Section 2.03 by delivering to the Agent (and the Agent shall, in the case
of a Competitive Bid Borrowing not consisting of Fixed Rate Advances or
LIBO Rate Advances to be denominated in Dollars, immediately notify the
Sub-Agent), by telecopier or telex, a notice of a Competitive Bid Borrowing
(a "Notice of Competitive Bid Borrowing"), in substantially the form of
Exhibit B-2 hereto, specifying therein the requested (A) date of such
proposed Competitive Bid Borrowing, (B) aggregate amount of such proposed
Competitive Bid Borrowing, (C) interest rate basis and day count convention
to be offered by the Lenders, (D) currency of such proposed Competitive Bid
Borrowing, (E) in the case of a Competitive Bid Borrowing consisting of
LIBO Rate Advances, Interest Period of each Competitive Bid Advance to be
made as part of such Competitive Bid Borrowing, or in the case of a
Competitive Bid Borrowing consisting of Fixed Rate Advances or Local Rate
Advances, maturity date for repayment of each Fixed Rate Advance or Local
Rate Advance to be made as part of such Competitive Bid Borrowing (which
maturity date may not be earlier than the date occurring five days after
the date of
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such Competitive Bid Borrowing or later than the Termination Date), (F)
interest payment date or dates relating thereto, (G) location of such
Borrower's account to which funds are to be advanced, and (H) other terms
(if any) to be applicable to such Competitive Bid Borrowing, not later than
(w) 10:00 A.M. (New York City time) at least one Business Day prior to the
date of the proposed Competitive Bid Borrowing, if such Borrower shall
specify in its Notice of Competitive Bid Borrowing that the rates of
interest to be offered by the Lenders shall be fixed rates per annum (each
Advance comprising any such Competitive Bid Borrowing being referred to
herein as a "Fixed Rate Advance") and that the Advances comprising such
proposed Competitive Bid Borrowing shall be denominated in Dollars, (x)
10:00 A.M. (New York City time) at least four Business Days prior to the
date of the proposed Competitive Bid Borrowing, if such Borrower shall
instead specify in its Notice of Competitive Bid Borrowing that the
Advances comprising such Competitive Bid Borrowing shall be LIBO Rate
Advances denominated in Dollars, (y) 3:00 P.M. (New York City time) at
least three Business Days prior to the date of the proposed Competitive Bid
Borrowing, if such Borrower shall specify in the Notice of Competitive Bid
Borrowing that the Advances comprising such proposed Competitive Bid
Borrowing shall be either Fixed Rate Advances denominated in any Foreign
Currency or Local Rate Advances denominated in any Foreign Currency and (z)
3:00 P.M. (New York City time) at least five Business Days prior to the
date of the proposed Competitive Bid Borrowing, if such Borrower shall
instead specify in its Notice of Competitive Bid Borrowing that the
Advances comprising such Competitive Bid Borrowing shall be LIBO Rate
Advances denominated in any Foreign Currency. Each Notice of Competitive
Bid Borrowing shall be irrevocable and binding on such Borrower. Any Notice
of Competitive Bid Borrowing by a Designated Subsidiary shall be given to
the Agent in accordance with the preceding sentence through the Company on
behalf of such Designated Subsidiary. The Agent shall in turn promptly
notify each Lender of each request for a Competitive Bid Borrowing received
by it from such Borrower by sending such Lender a copy of the related
Notice of Competitive Bid Borrowing.
(ii) Each Lender may, if, in its sole discretion, it elects to do so,
irrevocably offer to make one or more Competitive Bid Advances to the
Borrower proposing the Competitive Bid Borrowing as part of such proposed
Competitive Bid Borrowing at a rate or rates of interest specified by such
Lender in its sole discretion, by notifying the Agent (which shall give
prompt notice thereof to such Borrower and to the Sub-Agent, if
applicable), (A) before 9:30 A.M. (New York City time) on the date of such
proposed Competitive Bid Borrowing, in the case of a Competitive Bid
Borrowing consisting of Fixed Rate Advances denominated in Dollars, (B)
before 10:00 A.M. (New York City time) three Business Days before the date
of such proposed Competitive Bid Borrowing, in the case of a Competitive
Bid Borrowing consisting of LIBO Rate Advances denominated in Dollars, (C)
before 10:00 A.M. (New York City time) on the second Business Day prior to
the date of such proposed Competitive Bid Borrowing, in the case of a
Competitive Bid Borrowing consisting of either Fixed Rate Advances
denominated in any Foreign Currency or Local Rate Advances denominated in
any Foreign Currency and (D) before 10:00 A.M. (New York City time) four
Business Days before the date of such proposed Competitive Bid Borrowing,
in the case of a Competitive Bid Borrowing consisting of LIBO Rate Advances
denominated in any Foreign Currency, of the
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minimum amount and maximum amount of each Competitive Bid Advance which
such Lender would be willing to make as part of such proposed Competitive
Bid Borrowing (which amounts, or the Equivalent thereof in Dollars, as the
case may be, may, subject to the proviso to the first sentence of this
Section 2.03(a), exceed such Lender's Commitment, if any), the rate or
rates of interest therefor and such Lender's Applicable Lending Office with
respect to such Competitive Bid Advance; provided that if the Agent in its
capacity as a Lender shall, in its sole discretion, elect to make any such
offer, it shall notify such Borrower of such offer at least 30 minutes
before the time and on the date on which notice of such election is to be
given to the Agent, by the other Lenders. If any Lender shall elect not to
make such an offer, such Lender shall so notify the Agent, before 10:00
A.M. (New York City time) (and the Agent shall notify the Sub-Agent, if
applicable) on the date on which notice of such election is to be given to
the Agent by the other Lenders, and such Lender shall not be obligated to,
and shall not, make any Competitive Bid Advance as part of such Competitive
Bid Borrowing; provided that the failure by any Lender to give such notice
shall not cause such Lender to be obligated to make any Competitive Bid
Advance as part of such proposed Competitive Bid Borrowing.
(iii) The Borrower proposing the Competitive Bid Advance shall, in
turn, (A) before 10:30 A.M. (New York City time) on the date of such
proposed Competitive Bid Borrowing, in the case of a Competitive Bid
Borrowing consisting of Fixed Rate Advances denominated in Dollars, (B)
before 11:00 A.M. (New York City time) three Business Days before the date
of such proposed Competitive Bid Borrowing, in the case of a Competitive
Bid Borrowing consisting of LIBO Rate Advances denominated in Dollars, (C)
before 10:00 A.M. (New York City time) on the Business Day prior to the
date of such Competitive Bid Borrowing, in the case of a Competitive Bid
Borrowing consisting of either Fixed Rate Advances denominated in any
Foreign Currency or Local Rate Advances denominated in any Foreign Currency
and (D) before 10:00 A.M. (New York City time) three Business Days before
the date of such proposed Competitive Bid Borrowing, in the case of a
Competitive Bid Borrowing consisting of LIBO Rate Advances denominated in
any Foreign Currency, either:
(x) cancel such Competitive Bid Borrowing by giving the Agent
notice to that effect, or
(y) accept one or more of the offers made by any Lender or
Lenders pursuant to paragraph (ii) above, in its sole discretion, by
giving notice to the Agent (and the Agent shall give notice to the
Sub-Agent, if applicable) of the amount of each Competitive Bid
Advance (which amount shall be equal to or greater than the minimum
amount, and equal to or less than the maximum amount, notified to such
Borrower by the Agent on behalf of such Lender for such Competitive
Bid Advance pursuant to paragraph (ii) above) to be made by each
Lender as part of such Competitive Bid Borrowing, and reject any
remaining offers made by Lenders pursuant to paragraph (ii) above by
giving the Agent notice to that effect; provided, however, that such
Borrower shall not accept any offer in excess of the requested bid
amount for any maturity. Such Borrower shall accept the offers made by
any Lender or Lenders to make Competitive Bid
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Advances in order of the lowest to the highest rates of interest
offered by such Lenders. If two or more Lenders have offered the same
interest rate, the amount to be borrowed at such interest rate will be
allocated among such Lenders in proportion to the amount that each
such Lender offered at such interest rate.
(iv) If the Borrower proposing the Competitive Bid Borrowing notifies
the Agent that such Competitive Bid Borrowing is canceled pursuant to
paragraph (iii)(x) above, the Agent shall give prompt notice thereof to the
Lenders and such Competitive Bid Borrowing shall not be made.
(v) If the Borrower proposing the Competitive Bid Borrowing accepts
one or more of the offers made by any Lender or Lenders pursuant to
paragraph (iii)(y) above, the Agent shall in turn promptly notify (A) each
Lender that has made an offer as described in paragraph (ii) above, of the
date and aggregate amount of such Competitive Bid Borrowing and whether or
not any offer or offers made by such Lender pursuant to paragraph (ii)
above have been accepted by the Borrower, (B) each Lender that is to make a
Competitive Bid Advance as part of such Competitive Bid Borrowing, of the
amount of each Competitive Bid Advance to be made by such Lender as part of
such Competitive Bid Borrowing, and (C) each Lender that is to make a
Competitive Bid Advance as part of such Competitive Bid Borrowing, upon
receipt, that the Agent has received forms of documents appearing to
fulfill the applicable conditions set forth in Article III. Each Lender
that is to make a Competitive Bid Advance as part of such Competitive Bid
Borrowing shall, before 11:00 A.M. (New York City time), in the case of
Competitive Bid Advances to be denominated in Dollars or 11:00 A.M. (London
time), in the case of Competitive Bid Advances to be denominated in any
Foreign Currency, on the date of such Competitive Bid Borrowing specified
in the notice received from the Agent pursuant to clause (A) of the
preceding sentence or any later time when such Lender shall have received
notice from the Agent pursuant to clause (C) of the preceding sentence,
make available for the account of its Applicable Lending Office to the
Agent (x) in the case of a Competitive Bid Borrowing denominated in
Dollars, at its address referred to in Section 9.02, in same day funds,
such Lender's portion of such Competitive Bid Borrowing in Dollars, and (y)
in the case of a Competitive Bid Borrowing in a Foreign Currency, at the
Payment Office for such Foreign Currency as shall have been notified by the
Agent to the Lenders prior thereto, in same day funds, such Lender's
portion of such Competitive Bid Borrowing in such Foreign Currency. Upon
fulfillment of the applicable conditions set forth in Article III and after
receipt by the Agent of such funds, the Agent will make such funds
available to such Borrower's account at the location specified by such
Borrower in its Notice of Competitive Bid Borrowing. Promptly after each
Competitive Bid Borrowing the Agent will notify each Lender of the amount
of such Competitive Bid Borrowing, the consequent Competitive Bid Reduction
and the dates upon which such Competitive Bid Reduction commenced and will
terminate.
(vi) If the Borrower proposing the Competitive Bid Borrowing notifies
the Agent that it accepts one or more of the offers made by any Lender or
Lenders pursuant to paragraph (iii)(y) above, such notice of acceptance
shall be irrevocable and binding on such Borrower. Such Borrower shall
indemnify each Lender against any loss, cost or
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expense incurred by such Lender as a result of any failure by such Borrower
to fulfill on or before the date specified in the related Notice of
Competitive Bid Borrowing for such Competitive Bid Borrowing the applicable
conditions set forth in Article III, including, without limitation, any
loss (including loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Competitive Bid Advance to be made by
such Lender as part of such Competitive Bid Borrowing when such Competitive
Bid Advance, as a result of such failure, is not made on such date.
(b) Each Competitive Bid Borrowing shall be in an aggregate amount not
less than $10,000,000 (or the Equivalent thereof in any Foreign Currency,
determined as of the time of the applicable Notice of Competitive Bid Borrowing)
or an integral multiple of $1,000,000 (or the Equivalent thereof in any Foreign
Currency, determined as of the time of the applicable Notice of Competitive Bid
Borrowing) in excess thereof and, following the making of each Competitive Bid
Borrowing, the Borrower that has borrowed such Competitive Bid Borrowing shall
be in compliance with the limitation set forth in the proviso to the first
sentence of subsection (a) above.
(c) Within the limits and on the conditions set forth in this Section
2.03, any Borrower may from time to time borrow under this Section 2.03, repay
or prepay pursuant to subsection (d) below, and reborrow under this Section
2.03, provided that a Competitive Bid Borrowing shall not be made within three
Business Days of the date of any other Competitive Bid Borrowing.
(d) Any Borrower that has borrowed through a Competitive Bid Borrowing
shall repay to the Agent for the account of each Lender that has made a
Competitive Bid Advance, on the maturity date of such Competitive Bid Advance
(such maturity date being that specified by such Borrower for repayment of such
Competitive Bid Advance in the related Notice of Competitive Bid Borrowing
delivered pursuant to subsection (a)(i) above and provided in the Competitive
Bid Note evidencing such Competitive Bid Advance), the then unpaid principal
amount of such Competitive Bid Advance. Such Borrower shall have no right to
prepay any principal amount of any Competitive Bid Advance unless, and then only
on the terms, specified by such Borrower for such Competitive Bid Advance in the
related Notice of Competitive Bid Borrowing delivered pursuant to subsection
(a)(i) above and set forth in the Competitive Bid Note evidencing such
Competitive Bid Advance.
(e) Each Borrower that has borrowed through a Competitive Bid
Borrowing shall pay interest on the unpaid principal amount of each Competitive
Bid Advance comprising such Competitive Bid Borrowing from the date of such
Competitive Bid Advance to the date the principal amount of such Competitive Bid
Advance is repaid in full, at the rate of interest for such Competitive Bid
Advance specified by the Lender making such Competitive Bid Advance in its
notice with respect thereto delivered pursuant to subsection (a)(ii) above,
payable on the interest payment date or dates specified by such Borrower for
such Competitive Bid Advance in the related Notice of Competitive Bid Borrowing
delivered pursuant to subsection (a)(i) above, as provided in the Competitive
Bid Note evidencing such Competitive Bid Advance. Upon the occurrence and during
the continuance of an Event of Default under Section 6.01(a), such Borrower
shall pay interest on the amount of unpaid principal of and interest on each
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Competitive Bid Advance owing to a Lender, payable in arrears on the date or
dates interest is payable thereon, at a rate per annum equal at all times to 1%
per annum above the rate per annum required to be paid on such Competitive Bid
Advance under the terms of the Competitive Bid Note evidencing such Competitive
Bid Advance unless otherwise agreed in such Competitive Bid Note.
(f) The indebtedness of any Borrower resulting from each Competitive
Bid Advance made to such Borrower as part of a Competitive Bid Borrowing shall
be evidenced by a separate Competitive Bid Note of the Borrower payable to the
order of the Lender making such Competitive Bid Advance.
SECTION 2.04. Fees. (a) Facility Fee. The Company agrees to pay to the
Agent for the account of each Lender a facility fee on the aggregate amount of
such Lender's Commitment from the date hereof in the case of each Initial Lender
and from the effective date specified in the Assumption Agreement or the
Assignment and Acceptance, as the case may be, pursuant to which it became a
Lender in the case of each other Lender until the Termination Date at a rate per
annum equal to the Applicable Percentage in effect from time to time, payable in
arrears quarterly on the last day of each March, June, September and December,
commencing December 31, 2002, and on the Termination Date.
(b) Agent's Fees. The Company shall pay to the Agent for its own
account such fees, and at such times, as the Company and the Agent may
separately agree.
SECTION 2.05. Termination or Reduction of the Commitments. (a)
Optional Ratable Termination or Reduction. The Company shall have the right,
upon at least three Business Days' notice to the Agent, to terminate in whole or
reduce ratably in part the unused portions of the respective Commitments of the
Lenders, provided that each partial reduction shall be in an aggregate amount
not less than $10,000,000 or an integral multiple of $1,000,000 in excess
thereof and provided further that the aggregate amount of the Commitments of the
Lenders shall not be reduced to an amount that is less than the sum of the
aggregate principal amount of the Competitive Bid Advances denominated in
Dollars then outstanding plus the Equivalent in Dollars (determined as of the
date of the notice of prepayment) of the aggregate principal amount of the
Competitive Bid Advances denominated in Foreign Currencies then outstanding. The
aggregate amount of the Commitments, once reduced as provided in this Section
2.05(a), may not be reinstated.
(b) Non-Ratable Termination by Assignment. The Company shall have the
right, upon at least ten Business Days' written notice to the Agent (which shall
then give prompt notice thereof to the relevant Lender), to require any Lender
to assign, pursuant to and in accordance with the provisions of Section 9.07,
all of its rights and obligations under this Agreement and under the Notes to an
Eligible Assignee selected by the Company; provided, however, that (i) no Event
of Default shall have occurred and be continuing at the time of such request and
at the time of such assignment; (ii) the assignee shall have paid to the
assigning Lender the aggregate principal amount of, and any interest accrued and
unpaid to the date of such assignment on, the Note or Notes of such Lender;
(iii) the Company shall have paid to the assigning Lender any and all facility
fees and other fees payable to such Lender and all other accrued and unpaid
amounts owing to such Lender under any provision of this Agreement
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(including, but not limited to, any increased costs or other additional amounts
owing under Section 2.10 and any indemnification for Taxes under Section 2.13)
as of the effective date of such assignment; and (iv) if the assignee selected
by the Company is not an existing Lender, such assignee or the Company shall
have paid the processing and recordation fee required under Section 9.07(a) for
such assignment; provided further that the Company shall have no right to
replace more than three Lenders in any calendar year pursuant to this Section
2.05(b); and provided further that the assigning Lender's rights under Sections
2.10, 2.13 and 9.04, and its obligations under Section 8.05, shall survive such
assignment as to matters occurring prior to the date of assignment.
(c) Non-Ratable Reduction. (i) The Company shall have the right, at
any time other than during any Rating Condition, upon at least ten Business
Days' notice to a Lender (with a copy to the Agent), to terminate in whole such
Lender's Commitment (determined without giving effect to any Competitive Bid
Reduction). Such termination shall be effective, (i) with respect to such
Lender's unused Commitment, on the date set forth in such notice, provided,
however, that such date shall be no earlier than ten Business Days after receipt
of such notice and (ii) with respect to each Advance outstanding to such Lender,
on the last day of the then current Interest Period relating to such Advance;
provided further, however, that such termination shall not be effective, if,
after giving effect to such termination, the Company would, under this Section
2.05(c), reduce the Lenders' Commitments in any calendar year by an amount in
excess of the Commitments of any three Lenders or $480,000,000, whichever is
greater on the date of such termination. Notwithstanding the preceding proviso,
the Company may terminate in whole the Commitment of any Lender in accordance
with the terms and conditions set forth in Section 2.05(b) or 2.16(b). Upon
termination of a Lender's Commitment under this Section 2.05(c), the Company
will pay or cause to be paid all principal of, and interest accrued to the date
of such payment on, Advances owing to such Lender and pay any facility fees or
other fees payable to such Lender pursuant to the provisions of Section 2.04,
and all other amounts payable to such Lender hereunder (including, but not
limited to, any increased costs or other amounts owing under Section 2.10 and
any indemnification for Taxes under Section 2.13); and upon such payments, the
obligations of such Lender hereunder shall, by the provisions hereof, be
released and discharged; provided, however, that such Lender's rights under
Sections 2.10, 2.13 and 9.04, and its obligations under Section 8.05 shall
survive such release and discharge as to matters occurring prior to such date.
The aggregate amount of the Commitments of the Lenders once reduced pursuant to
this Section 2.05(c) may not be reinstated.
(ii) For purposes of this Section 2.05(c) only, the term "Rating
Condition" shall mean a period commencing with notice (a "Rating Condition
Notice") by the Agent to the Company and the Lenders to the effect that the
Agent has been informed that the rating of the senior public Debt of the Company
is unsatisfactory under the standard set forth in the next sentence, and ending
with notice by the Agent to the Company and the Lenders to the effect that such
condition no longer exists. The Agent shall give a Rating Condition Notice
promptly upon receipt from the Company or any Lender of notice stating, in
effect, that both of S&P and Moody's (or any successor by merger or
consolidation to the business of either thereof), respectively, then rate the
senior public Debt of the Company lower than BBB- and Baa3. The Company agrees
to give notice to the Agent forthwith upon any change in a rating by either such
organization of the senior public Debt of the Company; the Agent shall have no
duty whatsoever to verify the accuracy of any such notice from the Company or
any Lender or to monitor
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independently the ratings of the senior public Debt of the Company and no Lender
shall have any duty to give any such notice. The Agent shall give notice to the
Lenders and the Company as to the termination of a Rating Condition promptly
upon receiving a notice from the Company to the Agent (which notice the Agent
shall promptly notify to the Lenders) stating that the rating of the senior
public Debt of the Company does not meet the standard set forth in the second
sentence of this clause (ii), and requesting that the Agent notify the Lenders
of the termination of the Rating Condition. The Rating Condition shall terminate
upon the giving of such notice by the Agent.
(d) Termination by a Lender. In the event that a Change of Control
occurs, each Lender may, by notice to the Company and the Agent given not later
than 50 calendar days after such Change of Control, terminate its Commitment,
which Commitment shall be terminated effective as of the later of (i) the date
that is 60 calendar days after such Change of Control or (ii) the end of the
Interest Period for any Advance outstanding at the time of such Change of
Control or for any Advance made pursuant to the next sentence of this Section
2.05(d). Upon the occurrence of a Change of Control, each Borrower's right to
make a Borrowing under this Agreement shall be suspended for a period of 60
calendar days, except for Advances having an interest period ending not later
than 90 calendar days after such Change of Control. A notice of termination
pursuant to this Section 2.05(d) shall not have the effect of accelerating any
outstanding Advance of such Lender and the Notes of such Lender.
(e) Mandatory Reduction. On the Termination Date, if the Company has
made the Term Loan Election in accordance with Section 2.06 prior to such date,
and from time to time thereafter upon each prepayment of the Revolving Credit
Advances, the Commitments of the Lenders shall be automatically and permanently
reduced on a pro rata basis by an amount equal to the amount by which (i) the
aggregate Commitments immediately prior to such reduction exceeds (ii) the
aggregate unpaid principal amount of all Revolving Credit Advances outstanding
at such time.
SECTION 2.06. Repayment of Advances. (a) Revolving Credit Advances.
Each Borrower shall, subject to the next succeeding sentence, repay to the Agent
for the ratable account of the Lenders on the Termination Date the aggregate
principal amount of the Revolving Credit Advances then outstanding. The Company
may, upon not less than 15 days' notice to the Agent, elect (the "Term Loan
Election") to convert all of the Revolving Credit Advances outstanding on the
Termination Date in effect at such time into a term loan which the Borrowers
shall repay in full ratably to the Lenders on the Maturity Date; provided that
the Term Loan Election may not be exercised if on the date of notice of the Term
Loan Election or on the date on which the Term Loan Election is to be effected
(x) a Default has occurred and is continuing or (y) the representations and
warranties in Section 4.01 (other than the representations set forth in the last
sentence of subsection (e) thereof and in subsections (f), (h)-(l) and (n)
thereof) are not true and correct as though made on and as of such date. All
Revolving Credit Advances converted into a term loan pursuant to this Section
2.06(a) shall continue to constitute Revolving Credit Advances except that the
Borrowers may not reborrow pursuant to Section 2.01 after all or any portion of
such Revolving Credit Advances have been prepaid pursuant to Section 2.09.
(b) Competitive Bid Advances. Each Borrower shall repay to the
Administrative Agent, for the account of each Lender that has made a Competitive
Bid Advance, the aggregate outstanding principal amount of each Competitive Bid
Advance made to such
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Borrower and owing to such Lender on the earlier of (i) the maturity date
therefor, specified in the related Notice of Competitive Bid Borrowing delivered
pursuant to Section 2.03(a)(i) and (ii) the Termination Date.
SECTION 2.07. Interest on Revolving Credit Advances. (a) Scheduled
Interest. Each Borrower shall pay interest on the unpaid principal amount of
each Revolving Credit Advance owing by such Borrower to each Lender from the
date of such Revolving Credit Advance until such principal amount shall be paid
in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Revolving Credit
Advance is a Base Rate Advance, a rate per annum equal at all times to the
sum of (x) the Base Rate in effect from time to time plus (y) the
Applicable Margin in effect from time to time plus (z) the Applicable
Utilization Fee in effect from time to time, payable in arrears quarterly
on the last day of each March, June, September and December during such
periods and on the date such Base Rate Advance shall be paid in full.
(ii) Eurocurrency Rate Advances. During such periods as such Revolving
Credit Advance is a Eurocurrency Rate Advance, a rate per annum equal at
all times during each Interest Period for such Revolving Credit Advance to
the sum of (x) the Eurocurrency Rate for such Interest Period for such
Revolving Credit Advance plus (y) the Applicable Margin in effect from time
to time plus (z) the Applicable Utilization Fee in effect from time to
time, payable in arrears on the last day of such Interest Period and, if
such Interest Period has a duration of more than three months, on each day
that occurs during such Interest Period every three months from the first
day of such Interest Period and on the date such Eurocurrency Rate Advance
shall be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the continuance
of an Event of Default under Section 6.01(a), each Borrower shall pay interest
on (i) the unpaid principal amount of each Revolving Credit Advance owing by
such Borrower to each Lender, payable in arrears on the dates referred to in
clause (a)(i) or (a)(ii) above, at a rate per annum equal at all times to 1% per
annum above the rate per annum required to be paid on such Revolving Credit
Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest
extent permitted by law, the amount of any interest, fee or other amount payable
hereunder by such Borrower that is not paid when due, from the date such amount
shall be due until such amount shall be paid in full, payable in arrears on the
date such amount shall be paid in full and on demand, at a rate per annum equal
at all times to 1% per annum above the rate per annum required to be paid on
such Revolving Credit Advance pursuant to clause (a)(i) or (a)(ii) above.
SECTION 2.08. Interest Rate Determination. (a) Each Reference Bank
agrees to furnish to the Agent timely information for the purpose of determining
each Eurocurrency Rate and each LIBO Rate if the applicable Telerate Page is
unavailable. If any one or more of the Reference Banks shall not furnish such
timely information to the Agent for the purpose of determining any such interest
rate, the Agent shall determine such interest rate on the basis of timely
information furnished by the remaining Reference Banks. The Agent shall give
prompt notice to the Company and the Lenders of the applicable interest rate
determined by the Agent
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for purposes of Section 2.07(a)(i) or (ii), and the rate, if any, furnished by
each Reference Bank for the purpose of determining the interest rate under
Section 2.07(a)(ii).
(b) If, with respect to any Eurocurrency Rate Advances, the Majority
Lenders notify the Agent that (i) they are unable to obtain matching deposits in
the London interbank market at or about 11:00 A.M. (London time) on the second
Business Day before the making of a Borrowing in sufficient amounts to fund
their respective Revolving Credit Advances as part of such Borrowing during its
Interest Period or (ii) the Eurocurrency Rate for any Interest Period for such
Advances will not adequately reflect the cost to such Majority Lenders of
making, funding or maintaining their respective Eurocurrency Rate Advances for
such Interest Period, the Agent shall forthwith so notify each Borrower and the
Lenders, whereupon (A) the Borrower will, on the last day of the then existing
Interest Period therefor, (1) if such Eurocurrency Rate Advances are denominated
in Dollars, either (x) prepay such Advances or (y) Convert such Advances into
Base Rate Advances and (2) if such Eurocurrency Rate Advances are denominated in
any Major Currency, either (x) prepay such Advances or (y) redenominate such
Advances into an Equivalent amount of Dollars and Convert such Advances into
Base Rate Advances, and (B) the obligation of the Lenders to make Eurocurrency
Rate Advances in the same currency as such Eurocurrency Rate Advances shall be
suspended until the Agent shall notify each Borrower and the Lenders that the
circumstances causing such suspension no longer exist.
(c) If any Borrower, in requesting a Revolving Credit Borrowing
comprised of Eurocurrency Rate Advances, shall fail to select the duration of
the Interest Period for such Eurocurrency Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Agent will forthwith so notify the Borrower and the Lenders and such Advances
will (to the extent such Eurocurrency Rate Advances remain outstanding on such
day) automatically, on the last day of the then existing Interest Period
therefor, (i) if such Eurocurrency Rate Advances are denominated in Dollars,
Convert into Base Rate Advances and (ii) if such Eurocurrency Rate Advances are
denominated in any Major Currency, be redenominated into an Equivalent amount of
Dollars and be Converted into Base Rate Advances.
(d) Upon the occurrence and during the continuance of any Event of
Default under Section 6.01(a), (i) each Eurocurrency Rate Advance will (to the
extent such Eurocurrency Rate Advance remains outstanding on such day)
automatically, on the last day of the then existing Interest Period therefor,
(A) if such Eurocurrency Rate Advance is denominated in Dollars, be Converted
into a Base Rate Advance and (B) if such Eurocurrency Rate Advance is
denominated in any Major Currency, be redenominated into an Equivalent amount of
Dollars and Converted into a Base Rate Advance and (ii) the obligation of the
Lenders to make Eurocurrency Rate Advances shall be suspended.
(e) If the applicable Telerate Page is unavailable and fewer than two
Reference Banks furnish timely information to the Agent for determining the
Eurocurrency Rate or LIBO Rate for any Eurocurrency Rate Advances or LIBO Rate
Advances, as the case may be,
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(i) the Agent shall forthwith notify the relevant Borrower and the
Lenders that the interest rate cannot be determined for such Eurocurrency
Rate Advances or LIBO Rate Advances, as the case may be,
(ii) with respect to Eurocurrency Rate Advances, each such Advance
will (to the extent such Eurocurrency Rate Advance remains outstanding on
such day) automatically, on the last day of the then existing Interest
Period therefor, (A) if such Eurocurrency Rate Advance is denominated in
Dollars, be prepaid by the applicable Borrower or be automatically
Converted into a Base Rate Advance and (B) if such Eurocurrency Rate
Advance is denominated in any Major Currency, be prepaid by the applicable
Borrower or be automatically redenominated into an Equivalent amount of
Dollars and Converted into a Base Rate Advance (or if such Advance is then
a Base Rate Advance, will continue as a Base Rate Advance), and
(iii) the obligation of the Lenders to make Eurocurrency Rate Advances
or LIBO Rate Advances shall be suspended until the Agent shall notify the
Borrowers and the Lenders that the circumstances causing such suspension no
longer exist.
SECTION 2.09. Prepayments of Revolving Credit Advances. (a) Optional
Prepayments. Each Borrower may, upon notice to the Agent stating the proposed
date and aggregate principal amount of the prepayment, given not later than
11:00 A.M. (New York City time) on the second Business Day prior to the date of
such proposed prepayment, in the case of Eurocurrency Rate Advances, and not
later than 11:00 A.M. (New York City time) on the day of such proposed
prepayment, in the case of Base Rate Advances, and, if such notice is given,
such Borrower shall, prepay the outstanding principal amount of the Revolving
Credit Advances comprising part of the same Revolving Credit Borrowing in whole
or ratably in part, together with accrued interest to the date of such
prepayment on the principal amount prepaid; provided, however, that (x) each
partial prepayment shall be in an aggregate principal amount not less than
$10,000,000 or the Equivalent thereof in a Major Currency (determined on the
date notice of prepayment is given) or an integral multiple of $1,000,000 or the
Equivalent thereof in a Major Currency (determined on the date notice of
prepayment is given) in excess thereof and (y) in the event of any such
prepayment of a Eurocurrency Rate Advance other than on the last day of the
Interest Period therefor, such Borrower shall be obligated to reimburse the
Lenders in respect thereof pursuant to Section 9.04(c). Each notice of
prepayment by a Designated Subsidiary shall be given to the Administrative Agent
through the Company.
(b) Mandatory Prepayments. (i) If, on any date, the sum of (A) the
aggregate principal amount of all Advances denominated in Dollars then
outstanding plus (B) the Equivalent in Dollars (determined on the third Business
Day prior to such date) of the aggregate principal amount of all Advances
denominated in Foreign Currencies then outstanding exceeds 103% of the aggregate
Commitments of the Lenders on such date, the Company and each other Borrower, if
any, shall thereupon promptly prepay the outstanding principal amount of any
Advances owing by such Borrower in an aggregate amount sufficient to reduce such
sum to an amount not to exceed 100% of the aggregate Commitments of the Lenders
on such date, together with any interest accrued to the date of such prepayment
on the principal amounts prepaid and, in the case of any prepayment of a
Eurocurrency Rate Advance, a LIBO Rate Advance or a Local Rate Advance on a date
other than the last day of an Interest Period or at its maturity, any
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additional amounts which such Borrower shall be obligated to reimburse to the
Lenders in respect thereof pursuant to Section 9.04(c). The Agent shall give
prompt notice of any prepayment required under this Section 2.09(b)(i) to the
Borrowers and the Lenders.
(ii) If, on any date, the sum of (A) the Equivalent in Dollars of the
aggregate principal amount of all Eurocurrency Rate Advances denominated in
Major Currencies then outstanding plus (B) the Equivalent in Dollars of the
aggregate principal amount of all Competitive Bid Advances denominated in
Foreign Currencies then outstanding, shall exceed 110% of $500,000,000, the
Company and each other Borrower shall prepay the outstanding principal amount of
any such Eurocurrency Rate Advances or any such LIBO Rate Advances owing by such
Borrower, on the last day of the Interest Periods relating to such Advances, in
an aggregate amount sufficient to reduce such sum to an amount not to exceed
$500,000,000, together with any interest accrued to the date of such prepayment
on the principal amounts prepaid. The Agent shall give prompt notice of any
prepayment required under this Section 2.09(b)(ii) to the Borrowers and the
Lenders.
SECTION 2.10. Increased Costs. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority including, without limitation, any agency
of the European Union or similar monetary or multinational authority (whether or
not having the force of law), there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining Eurocurrency Rate
Advances or LIBO Rate Advances (excluding for purposes of this Section 2.10 any
such increased costs resulting from (i) Taxes or Other Taxes (as to which
Section 2.13 shall govern) and (ii) changes in the basis of taxation of overall
net income or overall gross income by the United States or by the foreign
jurisdiction or state under the laws of which such Lender is organized or has
its Applicable Lending Office or any political subdivision thereof), then the
Borrower of such Advances shall from time to time, upon demand by such Lender
(with a copy of such demand to the Agent), pay to the Agent for the account of
such Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost, submitted
to such Borrower and the Agent by such Lender, shall be conclusive and binding
for all purposes, absent manifest error.
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority including, without limitation, any agency of the European
Union or similar monetary or multinational authority (whether or not having the
force of law) affects or would affect the amount of capital required or expected
to be maintained by such Lender or any corporation controlling such Lender and
that the amount of such capital is increased by or based upon the existence of
such Lender's commitment to lend hereunder and other commitments of this type,
then, upon demand by such Lender (with a copy of such demand to the Agent), the
Company shall pay to the Agent for the account of such Lender, from time to time
as specified by such Lender, additional amounts sufficient to compensate such
Lender or such corporation in the light of such circumstances, to the extent
that such Lender reasonably determines such increase in capital to be allocable
to the existence of such Lender's commitment to lend hereunder. A certificate as
to such amounts submitted to the Company and the Agent by such Lender shall be
conclusive and binding for all purposes, absent manifest error.
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(c) Any Lender claiming any additional amounts payable pursuant to
this Section 2.10 shall, upon the written request of the Company delivered to
such Lender and the Agent, assign, pursuant to and in accordance with the
provisions of Section 9.07, all of its rights and obligations under this
Agreement and under the Notes to an Eligible Assignee selected by the Company;
provided, however, that (i) no Default shall have occurred and be continuing at
the time of such request and at the time of such assignment; (ii) the assignee
shall have paid to the assigning Lender the aggregate principal amount of, and
any interest accrued and unpaid to the date of such assignment on, the Note or
Notes of such Lender; (iii) the Company shall have paid to the assigning Lender
any and all facility fees and other fees payable to such Lender and all other
accrued and unpaid amounts owing to such Lender under any provision of this
Agreement (including, but not limited to, any increased costs or other
additional amounts owing under this Section 2.10, and any indemnification for
Taxes under Section 2.13) as of the effective date of such assignment and (iv)
if the assignee selected by the Company is not an existing Lender, such assignee
or the Company shall have paid the processing and recordation fee required under
Section 9.07(a) for such assignment; provided further that the assigning
Lender's rights under Sections 2.10, 2.13 and 9.04, and its obligations under
Section 8.05, shall survive such assignment as to matters occurring prior to the
date of assignment.
SECTION 2.11. Illegality. Notwithstanding any other provision of this
Agreement, if any Lender shall notify the Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes it unlawful,
or any central bank or other governmental authority asserts that it is unlawful,
for any Lender or its Eurocurrency Lending Office to perform its obligations
hereunder to make Eurocurrency Rate Advances in Dollars or any Major Currency or
LIBO Rate Advances in Dollars or in any Foreign Currency or to fund or maintain
Eurocurrency Rate Advances in Dollars or in any Major Currency or LIBO Rate
Advances in Dollars or in any Foreign Currency hereunder, (a) each such
Eurocurrency Rate Advance or such LIBO Rate Advance, as the case may be, will
automatically, upon such demand, (i) if such Eurocurrency Rate Advance or LIBO
Rate Advance is denominated in Dollars, be Converted into a Base Rate Advance or
an Advance that bears interest at the rate set forth in Section 2.07(a)(i), as
the case may be, and (ii) if such Eurocurrency Rate Advance or LIBO Rate Advance
is denominated in any Foreign Currency, be redenominated into an Equivalent
amount of Dollars and Converted into a Base Rate Advance or an Advance that
bears interest at the rate set forth in Section 2.07(a)(i), as the case may be,
and (b) the obligation of the Lenders to make such Eurocurrency Rate Advances or
such LIBO Rate Advances shall be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no
longer exist.
SECTION 2.12. Payments and Computations. (a) Each Borrower shall make
each payment hereunder and under any Notes, except with respect to principal of,
interest on, and other amounts relating to, Advances denominated in a Foreign
Currency, not later than 11:00 A.M. (New York City time) on the day when due in
Dollars to the Agent at the applicable Agent's Account in same day funds. Each
Borrower shall make each payment hereunder and under any Notes with respect to
principal of, interest on, and other amounts relating to Advances denominated in
a Foreign Currency not later than 12:00 Noon (at the Payment Office for such
Foreign Currency) on the day when due in such Foreign Currency to the Agent in
same day funds by deposit of such funds to the applicable Agent's Account. The
Agent will promptly thereafter cause to be distributed like funds relating to
the payment of principal or interest or
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facility fees ratably (other than amounts payable pursuant to Section 2.03,
2.05(b), 2.05(c), 2.10, 2.13, 2.16 or 9.04(c)) to the Lenders for the account of
their respective Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such Lender for the account
of its Applicable Lending Office, in each case to be applied in accordance with
the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information contained therein in the Register pursuant to
Section 9.07(c), from and after the effective date specified in such Assignment
and Acceptance, the Agent shall make all payments hereunder and under any Notes
in respect of the interest assigned thereby to the Lender assignee thereunder,
and the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves. Upon any Assuming Lender becoming a Lender hereunder as a
result of the effectiveness of an extension of the Termination Date pursuant to
Section 2.16, and upon the Agent's receipt of such Lender's Assumption Agreement
and recording the information contained therein in the Register, from and after
the Increase Date or the Extension Date, as the case may be, the Agent shall
make all payments hereunder and under any Notes in respect of the interest
assumed thereby to the Assuming Lender.
(b) All computations of interest based on the Base Rate and of
facility fees shall be made by the Agent on the basis of a year of 365 or 366
days, as the case may be, all computations of interest based on the Eurocurrency
Rate or the Federal Funds Rate shall be made by the Agent on the basis of a year
of 360 days and all computations in respect of Competitive Bid Advances shall be
made by the Agent or the Sub-Agent, as the case may be, as specified in the
applicable Notice of Competitive Bid Borrowing (or, in each case of Advances
denominated in Foreign Currencies where market practice differs, in accordance
with market practice), in each case for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest or facility fees are payable. Each determination by the Agent of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.
(c) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or facility fee, as the case
may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurocurrency Rate Advances or LIBO Rate Advances to
be made in the next following calendar month, such payment shall be made on the
next preceding Business Day.
(d) Unless the Agent shall have received notice from any Borrower
prior to the date on which any payment is due to the Lenders hereunder that such
Borrower will not make such payment in full, the Agent may assume that such
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent such Borrower shall not have so made such payment in full to the Agent,
each Lender shall repay to the Agent forthwith on demand such amount distributed
to such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at (i) the Federal
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Funds Rate in the case of Advances denominated in Dollars or (ii) the cost of
funds incurred by the Agent in respect of such amount in the case of Advances
denominated in Foreign Currencies.
SECTION 2.13. Taxes. (a) Any and all payments by any Borrower
(including the Company in its capacity as a guarantor under Article VII hereof)
hereunder or under the Notes shall be made, in accordance with Section 2.12,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and the Agent, net income
taxes imposed by the United States and taxes imposed on its overall net income,
and franchise taxes imposed on it in lieu of net income taxes, by the
jurisdiction under the laws of which such Lender or the Agent (as the case may
be) is organized or any political subdivision thereof and, in the case of each
Lender, taxes imposed on its overall net income, and franchise taxes imposed on
it in lieu of net income taxes, by the jurisdiction of such Lender's Applicable
Lending Office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities in
respect of payments hereunder or under the Notes being hereinafter referred to
as "Taxes"). If any Borrower (including the Company in its capacity as a
guarantor under Article VII hereof) shall be required by law to deduct any Taxes
from or in respect of any sum payable hereunder or under any Note to any Lender
or the Agent, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.13) such Lender or the Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) such Borrower shall make such deductions and
(iii) such Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, each Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or under the Notes or
from the execution, delivery or registration of, performing under, or otherwise
with respect to, this Agreement or the Notes (hereinafter referred to as "Other
Taxes").
(c) Each Borrower shall indemnify each Lender and the Agent for the
full amount of Taxes or Other Taxes (including, without limitation, any taxes
imposed by any jurisdiction on amounts payable under this Section 2.13) imposed
on or paid by such Lender or the Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto; provided, however, that a Borrower shall not be obligated to pay any
amounts in respect of penalties, interest or expenses pursuant to this paragraph
that are payable solely as a result of (i) the failure on the part of the
pertinent Lender or the Agent to pay over those amounts received from the
Borrowers under this clause (c) or (ii) the gross negligence or willful
misconduct on the part of the pertinent Lender or the Agent. This
indemnification shall be made within 30 days from the date such Lender or the
Agent (as the case may be) makes written demand therefor. Each Lender agrees to
provide reasonably prompt notice to the Agent, the Company and any Borrower of
any imposition of Taxes or Other Taxes against such Lender; provided that
failure to give such notice shall not affect such Lender's rights to
indemnification hereunder. Each Lender agrees that it will, promptly upon a
request by the Company or a Borrower having made an indemnification payment
hereunder, furnish to the Company or such Borrower, as the case may be, such
evidence as is reasonably available to such
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Lender as to the payment of the relevant Taxes or Other Taxes, and that it will,
if requested by the Company or such Borrower, cooperate with the Company or such
Borrower, as the case may be, in its efforts to obtain a refund or similar
relief in respect of such payment.
(d) Within 30 days after the date of any payment of Taxes, each
Borrower shall furnish to the Agent, at its address referred to in Section 9.02,
the original or a certified copy of a receipt evidencing payment thereof. In the
case of any payment hereunder or under the Notes by or on behalf of any Borrower
through an account or branch outside the United States or by or on behalf of any
Borrower by a payor that is not a United States person, if such Borrower
determines that no Taxes are payable in respect thereof, such Borrower shall
furnish, or shall cause such payor to furnish, to the Agent, at such address, an
opinion of counsel acceptable to the Agent stating that such payment is exempt
from Taxes. For purposes of this subsection (d) and subsection (e), the terms
"United States" and "United States person" shall have the meanings specified in
Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Initial Lender and on the date of the Assignment
and Acceptance or the Assumption Agreement, as the case may be, pursuant to
which it becomes a Lender in the case of each other Lender, and from time to
time thereafter as requested in writing by any Borrower (but only so long as
such Lender remains lawfully able to do so), shall provide the Agent and each
Borrower with two original Internal Revenue Service forms W-8ECI or W-8BEN, as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that such Lender is exempt from or entitled to a reduced
rate of United States withholding tax on payments pursuant to this Agreement or
the Notes. In addition, each Lender further agrees to provide any Borrower with
any form or document as any Borrower may request which is required by any taxing
authority outside the United States in order to secure an exemption from, or
reduction in the rate of, withholding tax. If the forms provided by a Lender at
the time such Lender first becomes a party to this Agreement indicates a United
States interest withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from Taxes unless and until such Lender
provides the appropriate forms certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such form; provided, however, that, if at the date of
the Assignment and Acceptance or the Assumption Agreement, as the case may be,
pursuant to which a Lender becomes a party to this Agreement, such Lender was
entitled to payments under subsection (a) in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in Taxes) United
States withholding tax, if any, applicable with respect to such Lender on such
date. If any form or document referred to in this subsection (e) requires the
disclosure of information, other than information necessary to compute the tax
payable and information required on the date hereof by Internal Revenue Service
form W-8ECI or W-8BEN, that a Lender reasonably considers to be confidential,
such Lender shall give notice thereof to each Borrower and shall not be
obligated to include in such form or document such confidential information.
(f) For any period with respect to which a Lender has failed to
provide each Borrower with the appropriate form described in Section 2.13(e)
(other than if such failure is due
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to a change in law occurring subsequent to the date on which a form originally
was required to be provided, or if such form otherwise is not required under the
first sentence of subsection (e) above), such Lender shall not be entitled to
indemnification under Section 2.13(a) or (c) with respect to Taxes imposed by
the United States by reason of such failure; provided, however, that should a
Lender become subject to Taxes because of its failure to deliver a form required
hereunder, each Borrower shall take such steps as such Lender shall reasonably
request to assist such Lender to recover such Taxes.
(g) If any Borrower is required to pay any additional amount to any
Lender or to the Agent or on behalf of any of them to any taxing authority
pursuant to this Section 2.13, such Lender shall, upon the written request of
the Company delivered to such Lender and the Agent, assign, pursuant to and in
accordance with the provisions of Section 9.07, all of its rights and
obligations under this Agreement and under the Notes to an Eligible Assignee
selected by the Company; provided, however, that (i) no Default shall have
occurred and be continuing at the time of such request and at the time of such
assignment; (ii) the assignee shall have paid to the assigning Lender the
aggregate principal amount of, and any interest accrued and unpaid to the date
of such assignment on, the Note or Notes of such Lender; (iii) the Company shall
have paid to the assigning Lender any and all facility fees and other fees
payable to such Lender and all other accrued and unpaid amounts owing to such
Lender under any provision of this Agreement (including, but not limited to, any
increased costs or other additional amounts owing under Section 2.10, and any
indemnification for Taxes under this Section 2.13) as of the effective date of
such assignment; and (iv) if the assignee selected by the Company is not an
existing Lender, such assignee or the Company shall have paid the processing and
recordation fee required under Section 9.07(a) for such assignment; provided
further that the assigning Lender's rights under Sections 2.10, 2.13 and 9.04,
and its obligations under Section 8.05, shall survive such assignment as to
matters occurring prior to the date of assignment.
SECTION 2.14. Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
setoff, or otherwise) on account of the Revolving Credit Advances owing to it
(other than pursuant to Section 2.03, 2.05(b), 2.05(c), 2.10, 2.13, 2.16 or
9.04(c)) in excess of its ratable share of payments on account of the Revolving
Credit Advances obtained by all the Lenders, such Lender shall forthwith
purchase from the other Lenders such participations in the Revolving Credit
Advances owing to them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them; provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. Each Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.14
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of setoff) with respect to such participation as fully as
if such Lender were the direct creditor of such Borrower in the amount of such
participation.
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SECTION 2.15. Use of Proceeds. The proceeds of the Advances shall be
available (and each Borrower agrees that it shall use such proceeds) for general
corporate purposes of such Borrower and its Subsidiaries, including, without
limitation, backstop of commercial paper.
SECTION 2.16. Extension of Termination Date. (a) At least 45 (but no
earlier than 60) days prior to the Termination Date then in effect and provided
all representations and warranties are true and correct in all material respects
and no Event of Default has occurred and is continuing, the Company may, at its
option, by written notice to the Agent, request that the Lenders extend the
Termination Date for an additional 364 days from the Termination Date then in
effect; provided, however, that the Company shall not have made the Term Loan
Election for Revolving Credit Advances outstanding on such Termination Date
prior to such time. Each Lender, in its sole discretion, shall consent or not
consent to such extension and shall notify the Agent of its consent or
nonconsent to such extension within 20 Business Days of notice of such request
from the Agent. If all of the Lenders consent in writing, the then applicable
Termination Date shall, effective as at such Termination Date (the "Extension
Date"), be extended for a period of 364 days from such Extension Date.
(b) If not all of the Lenders consent, pursuant to subsection (a) of
this Section 2.16, to an extension of the Termination Date then in effect (the
Lenders so consenting in writing being the "Consenting Lenders", and any Lender
not so consenting being a "Non-Consenting Lender"), the Company may:
(i) arrange for one or more Consenting Lenders or other Eligible
Assignees as Assuming Lenders to assume, effective on the Extension Date,
any Non-Consenting Lender's Commitment and all of the obligations of such
Lender under this Agreement thereafter arising, and effective on such
Extension Date, each such Consenting Lender or such Assuming Lender will be
substituted for such Non-Consenting Lender under this Agreement; provided,
however, that the amount of the Commitment of any such Assuming Lender as a
result of such substitution shall in no event be less than $10,000,000;
provided further that (i) any such Consenting Lender or Assuming Lender
shall have paid to such Non-Consenting Lender the aggregate principal
amount of, and any interest accrued and unpaid to the date of the
assignment on, the Advances of such Non-Consenting Lender; (ii) the Company
shall have paid to such Non-Consenting Lender any and all facility fees and
other fees payable to such Non-Consenting Lender and all other accrued and
unpaid amounts owing to such Non-Consenting Lender under any provision of
this Agreement (including, but not limited to, any increased costs or other
additional amounts owing under Section 2.10, and any indemnification for
Taxes under this Section 2.13) as of the effective date of such assignment;
and (iii) with respect to any such Assuming Lender, such Assuming Lender or
the Company shall have paid the applicable processing and recordation fee
required under Section 9.07(a) for such assignment; provided further that
such Non-Consenting Lender's rights under Sections 2.10, 2.13 and 9.04, and
its obligations under Section 8.05, shall survive such substitution as to
matters occurring prior to the date of substitution; provided further that,
on or prior to the tenth day prior to the Extension Date, (x) any such
Assuming Lender shall have delivered to the Company and the Agent an
Assumption Agreement in substantially the form of Exhibit D hereto, duly
executed by such Assuming Lender, such Non-Consenting
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Lender and the Company, (y) any such Consenting Bank shall have delivered
confirmation in writing satisfactory to the Agent as to its increased
Commitment and (z) each Non-Consenting Lender being replaced pursuant to
this clause (i) shall have delivered to the Agent any Revolving Credit Note
or Notes held by such Non-Consenting Lender; and provided further that, if
requested by any Assuming Lender, each Borrower, at its own expense, shall
have executed and delivered to the Agent no later than 10:00 A.M. (New York
City time) on the Extension Date, Revolving Credit Notes payable to the
order of each such Assuming Lender, if any, dated as of the Extension Date
and substantially in the form of Exhibit A-1 hereto; or
(ii) subject to the giving of notice to such Non-Consenting Lender at
least four days prior to the Extension Date, pay, prepay or cause to be
prepaid, on and effective as of the Extension Date, all principal of, and
interest accrued to the date of such payment on, Advances and all other
amounts owing to such Non-Consenting Lender hereunder (including, but not
limited to, any increased costs or other additional amounts owing under
Section 2.10 and any indemnification for Taxes under Section 2.13) and
terminate in whole any Non-Consenting Lender's Commitment, notwithstanding
the provisions of Section 2.05; and, upon such payment or prepayment, the
obligations of such Non-Consenting Lender hereunder shall, by the
provisions hereof, be released and discharged; provided, however, that such
Non-Consenting Lender's rights under Sections 2.10, 2.13 and 9.04, and its
obligations under Section 8.05 shall survive such release and discharge as
to matters occurring prior to the Extension Date.
(c) In the event that, on or prior to the then applicable Extension
Date, all Non-Consenting Lenders shall have been superseded by Consenting
Lenders or Assuming Lenders or shall have had their Commitments terminated
pursuant to subsection (b)(i) or (b)(ii) above, the Termination Date then in
effect shall be extended for the additional one-year period as described in
subsection (a) above, each Non-Consenting Lender shall have no further
Commitment hereunder, and each Assuming Lender, if any, shall thereafter be
substituted as a party to this Agreement and be a Lender for the purposes of
this Agreement, without any further acknowledgment by or the consent of the
Lenders. The Agent shall thereupon promptly deliver the new Revolving Credit
Notes to the respective Assuming Lenders requesting such Notes and record in the
Register the relevant information with respect to each Consenting Lender and
each such Assuming Lender.
(d) In the event that (x) as to a Non-Consenting Lender, neither
procedure contemplated by subsection (b)(i) or (b)(ii) above is implemented in a
timely basis or (y) the Company shall, by written notice to the Agent at least
four days prior to the Extension Date, withdraw its request for the extension of
the Termination Date then in effect, such request by the Company shall be deemed
not to have been made, all actions theretofore taken under subsection (b)(i) or
(b)(ii) above shall be deemed to be of no effect, the Agent shall return any
Revolving Credit Notes received from any Non-Consenting Lender to such
Non-Consenting Lender and all the rights and obligations of the parties shall
continue as if no such request had been made.
SECTION 2.17. Evidence of Debt. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of each Borrower to such Lender resulting from each Revolving
Credit Advance owing to such Lender
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from time to time, including the amounts of principal and interest payable and
paid to such Lender from time to time hereunder in respect of Revolving Credit
Advances. Each Borrower agrees that upon request of any Lender to such Borrower
(with a copy of such notice to the Agent) that such Lender receive a Revolving
Credit Note to evidence (whether for purposes of pledge, enforcement or
otherwise) the Revolving Credit Advances owing to, or to be made by, such
Lender, such Borrower shall promptly execute and deliver to such Lender a
Revolving Credit Note payable to the order of such Lender in a principal amount
up to the Commitment of such Lender.
(b) The Register maintained by the Agent pursuant to Section 9.07(d)
shall include a control account, and a subsidiary account for each Lender, in
which accounts (taken together) shall be recorded (i) the date and amount of
each Borrowing made hereunder, the Type of Advances comprising such Borrowing
and, if appropriate, the Interest Period applicable thereto, (ii) the terms of
each Assumption Agreement and each Assignment and Acceptance delivered to and
accepted by it, (iii) the amount of any principal or interest due and payable or
to become due and payable from each Borrower to each Lender hereunder and (iv)
the amount of any sum received by the Agent from each Borrower hereunder and
each Lender's share thereof.
(c) Entries made in good faith by the Agent in the Register pursuant
to subsection (b) above, and by each Lender in its account or accounts pursuant
to subsection (a) above, shall be prima facie evidence of the amount of
principal and interest due and payable or to become due and payable from the
Borrowers to, in the case of the Register, each Lender and, in the case of such
account or accounts, such Lender, under this Agreement, absent manifest error;
provided, however, that the failure of the Agent or such Lender to make an
entry, or any finding that an entry is incorrect, in the Register or such
account or accounts shall not limit or otherwise affect the obligations of any
Borrower under this Agreement.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Sections 2.01
and 2.03. Sections 2.01 and 2.03 of this Agreement shall become effective on and
as of the first date (the "Effective Date") on which the following conditions
precedent have been satisfied:
(a) There shall have occurred no Material Adverse Change since
December 31, 2001, except as otherwise publicly disclosed prior to the date
hereof.
(b) There shall exist no action, suit, investigation, litigation or
proceeding affecting the Company or any of its Subsidiaries pending or to
the knowledge of the Company Threatened before any court, governmental
agency or arbitrator that (i) is reasonably likely to have a Material
Adverse Effect, other than the matters described on Schedule 3.01(b) hereto
(the "Disclosed Litigation") or (ii) purports to affect the legality,
validity or enforceability of this Agreement or any Note of the Company or
the consummation of the transactions contemplated hereby, and there shall
have been no adverse change in the status, or financial effect on the
Company or any of its Subsidiaries, of the Disclosed Litigation from that
described on Schedule 3.01(b) hereto.
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(c) The Company shall have paid all accrued fees and expenses of the
Agent and the Lenders in respect of this Agreement.
(d) On the Effective Date, the following statements shall be true and
the Agent shall have received a certificate signed by a duly authorized
officer of the Company, dated the Effective Date, stating that:
(i) The representations and warranties contained in Section 4.01
are correct on and as of the Effective Date, and
(ii) No event has occurred and is continuing that constitutes a
Default.
(e) The Agent shall have received on or before the Effective Date the
following, each dated such day, in form and substance satisfactory to the
Agent:
(i) The Revolving Credit Notes of the Company to the order of the
Lenders to the extent requested by any Lender pursuant to Section
2.17.
(ii) Certified copies of the resolutions of the Board of
Directors of the Company approving this Agreement and the Notes of the
Company, and of all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to this
Agreement and such Notes.
(iii) A certificate of the Secretary or an Assistant Secretary of
the Company certifying the names and true signatures of the officers
of the Company authorized to sign this Agreement and the Notes of the
Company and the other documents to be delivered hereunder.
(iv) A favorable opinion of Gail E. Lehman, Assistant General
Counsel of the Company, substantially in the form of Exhibit G hereto
and as to such other matters as any Lender through the Agent may
reasonably request.
(v) A favorable opinion of Shearman & Sterling, counsel for the
Agent, substantially in the form of Exhibit I hereto.
(vi) Such other approvals, opinions or documents as any Lender,
through the Agent, may reasonably request.
SECTION 3.02. Conditions Precedent to Initial Borrowing. The
obligation of each Lender to make an Advance on the occasion of the initial
Borrowing hereunder is subject to the following conditions precedent:
(a) The Effective Date shall have occurred.
(b) The Company shall have terminated all outstanding commitments of
lenders (and paid in full all outstanding debt under the related credit
agreements) which backstop commercial paper issuance, other than
commitments made by parties which are not Lenders hereunder.
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(c) The Company shall have paid all accrued fees and expenses of the
Agent (including the billed fees and expenses of counsel to the Agent).
SECTION 3.03. Initial Loan to Each Designated Subsidiary. The
obligation of each Lender to make an initial Advance to each Designated
Subsidiary following any designation of such Designated Subsidiary as a Borrower
hereunder pursuant to Section 9.08 is subject to the Agent's receipt on or
before the date of such initial Advance of each of the following, in form and
substance satisfactory to the Agent and dated such date, and (except for the
Revolving Credit Notes) in sufficient copies for each Lender:
(a) The Revolving Credit Notes of such Borrower to the order of the
Lenders to the extent requested by any Lender pursuant to Section 2.17.
(b) Certified copies of the resolutions of the Board of Directors of
such Borrower (with a certified English translation if the original thereof
is not in English) approving this Agreement and the Notes of such Borrower,
and of all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement and such
Notes.
(c) A certificate of the Secretary or an Assistant Secretary of such
Borrower certifying the names and true signatures of the officers of such
Borrower authorized to sign this Agreement and the Notes of such Borrower
and the other documents to be delivered hereunder.
(d) A certificate signed by a duly authorized officer of the Company,
dated as of the date of such initial Advance, certifying that such Borrower
shall have obtained all governmental and third party authorizations,
consents, approvals (including exchange control approvals) and licenses
required under applicable laws and regulations necessary for such Borrower
to execute and deliver this Agreement and the Notes and to perform its
obligations thereunder.
(e) The Designation Letter of such Designated Subsidiary,
substantially in the form of Exhibit E hereto.
(f) Evidence of the Process Agent's acceptance of its appointment
pursuant to Section 9.13(a) as the agent of such Borrower, substantially in
the form of Exhibit F hereto.
(g) A favorable opinion of counsel to such Designated Subsidiary,
dated the date of such initial Advance, substantially in the form of
Exhibit H hereto.
(h) Such other approvals, opinions or documents as any Lender, through
the Agent, may reasonably request.
SECTION 3.04. Conditions Precedent to Each Revolving Credit Borrowing.
The obligation of each Lender to make a Revolving Credit Advance on the occasion
of each Revolving Credit Borrowing shall be subject to the conditions precedent
that the Effective Date shall have occurred and on the date of such Revolving
Credit Borrowing (a) the following
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statements shall be true (and each of the giving of the applicable Notice of
Revolving Credit Borrowing and the acceptance by the Borrower requesting such
Revolving Credit Borrowing of the proceeds of such Revolving Credit Borrowing
shall constitute a representation and warranty by such Borrower that on the date
of such Borrowing such statements are true):
(i) the representations and warranties of the Company contained in
Section 4.01 (except the representations set forth in the last sentence of
subsection (e) thereof and in subsections (f), (h)-(l) and (n) thereof) are
correct on and as of the date of such Revolving Credit Borrowing, before
and after giving effect to such Revolving Credit Borrowing and to the
application of the proceeds therefrom, as though made on and as of such
date, and additionally, if such Revolving Credit Borrowing shall have been
requested by a Designated Subsidiary, the representations and warranties of
such Designated Subsidiary contained in its Designation Letter are correct
on and as of the date of such Revolving Credit Borrowing, before and after
giving effect to such Revolving Credit Borrowing and to the application of
the proceeds therefrom, as though made on and as of such date, and
(ii) no event has occurred and is continuing, or would result from
such Revolving Credit Borrowing or from the application of the proceeds
therefrom, that constitutes a Default;
and (b) the Agent shall have received such other approvals, opinions or
documents as any Lender through the Agent may reasonably request.
SECTION 3.05. Conditions Precedent to Each Competitive Bid Borrowing.
The obligation of each Lender that is to make a Competitive Bid Advance on the
occasion of a Competitive Bid Borrowing to make such Competitive Bid Advance as
part of such Competitive Bid Borrowing is subject to the conditions precedent
that (i) the Agent shall have received the written confirmatory Notice of
Competitive Bid Borrowing with respect thereto, (ii) on or before the date of
such Competitive Bid Borrowing, but prior to such Competitive Bid Borrowing, the
Agent shall have received a Competitive Bid Note payable to the order of such
Lender and substantially in the form of Exhibit A-2 hereto for each of the one
or more Competitive Bid Advances to be made by such Lender as part of such
Competitive Bid Borrowing, in a principal amount equal to the principal amount
of the Competitive Bid Advance to be evidenced thereby and otherwise on such
terms as were agreed to for such Competitive Bid Advance in accordance with
Section 2.03, and (iii) on the date of such Competitive Bid Borrowing the
following statements shall be true (and each of the giving of the applicable
Notice of Competitive Bid Borrowing and the acceptance by the Borrower
requesting such Competitive Bid Borrowing of the proceeds of such Competitive
Bid Borrowing shall constitute a representation and warranty by such Borrower
that on the date of such Competitive Bid Borrowing such statements are true):
(a) the representations and warranties of the Company contained in
Section 4.01 (except the representations set forth in the last sentence of
subsection (e) thereof and in subsections (f), (h)-(l) and (n) thereof) are
correct on and as of the date of such Competitive Bid Borrowing, before and
after giving effect to such Competitive Bid Borrowing and to the
application of the proceeds therefrom, as though made on and as of such
date, and, if such Competitive Bid Borrowing shall have been requested by a
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Designated Subsidiary, the representations and warranties of such
Designated Subsidiary contained in its Designation Letter are correct on
and as of the date of such Competitive Bid Borrowing, before and after
giving effect to such Competitive Bid Borrowing and to the application of
the proceeds therefrom, as though made on and as of such date,
(b) no event has occurred and is continuing, or would result from such
Competitive Bid Borrowing or from the application of the proceeds
therefrom, that constitutes a Default, and
(c) no event has occurred and no circumstance exists as a result of
which the information concerning such Borrower that has been provided to
the Agent and each Lender by such Borrower in connection herewith would
include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements contained therein, in the
light of the circumstances under which they were made, not misleading,
and (iv) the Agent shall have received such other approvals, opinions or
documents as any Lender through the Agent may reasonably request.
SECTION 3.06. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the date that the Company,
by notice to the Lenders, designates as the proposed Effective Date, specifying
its objection thereto. The Agent shall promptly notify the Lenders of the
occurrence of the Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Company. The
Company represents and warrants as follows:
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
(b) The execution, delivery and performance by the Company of this
Agreement and the Notes of the Company, and the consummation of the
transactions contemplated hereby, are within the Company's corporate
powers, have been duly authorized by all necessary corporate action, and do
not and will not cause or constitute a violation of any provision of law or
regulation or any provision of the Certificate of Incorporation or By-Laws
of the Company or result in the breach of, or constitute a default or
require any consent under, or result in the creation of any lien, charge or
encumbrance upon any of the properties, revenues, or assets of the Company
pursuant to, any indenture or other agreement or instrument to which the
Company is a party or by which the Company or its property may be bound or
affected.
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(c) No authorization, consent, approval (including any exchange
control approval), license or other action by, and no notice to or filing
or registration with, any governmental authority, administrative agency or
regulatory body or any other third party is required for the due execution,
delivery and performance by the Company of this Agreement or the Notes of
the Company.
(d) This Agreement has been, and each of the Notes when delivered
hereunder will have been, duly executed and delivered by the Company. This
Agreement is, and each of the Notes of the Company when delivered hereunder
will be, the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with their respective terms, except to
the extent that such enforcement may be limited by applicable bankruptcy,
insolvency and other similar laws affecting creditors' rights generally.
(e) The Consolidated balance sheet of the Company and its Consolidated
Subsidiaries as at December 31, 2001, and the related Consolidated
statements of income and cash flows of the Company and its Consolidated
Subsidiaries for the fiscal year then ended (together with the notes to the
financial statements of the Company and its Consolidated Subsidiaries and
the Consolidated statements of cash flows of the Company and its
Consolidated Subsidiaries), accompanied by an opinion of one or more
nationally recognized firms of independent public accountants, and the
Consolidated balance sheet of the Company and its Consolidated Subsidiaries
as at September 30, 2002, and the related Consolidated statements of income
and cash flows of the Company and its Consolidated Subsidiaries for the
nine months then ended, duly certified by the principal financial officer
of the Company, copies of which have been furnished to each Lender, are
materially complete and correct, and fairly present, subject, in the case
of said balance sheet as at September 30, 2002, and said statements of
income and cash flows for the nine months then ended, to year-end audit
adjustments, the Consolidated financial condition of the Company and its
Consolidated Subsidiaries as at such dates and the Consolidated results of
the operations of the Company and its Consolidated Subsidiaries for the
periods ended on such dates, all in accordance with GAAP consistently
applied, except as otherwise noted therein; the Company and its
Consolidated Subsidiaries do not have on such date any material contingent
liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in such
balance sheet or the notes thereto as at such date. No Material Adverse
Change has occurred since December 31, 2001, except as otherwise publicly
disclosed prior to the date hereof.
(f) There is no action, suit, investigation, litigation or proceeding,
including, without limitation, any Environmental Action, pending or to the
knowledge of the Company Threatened affecting the Company or any of its
Subsidiaries before any court, governmental agency or arbitrator that (i)
is reasonably likely to have a Material Adverse Effect (other than the
Disclosed Litigation), or (ii) purports to affect the legality, validity or
enforceability of this Agreement or any Note or the consummation of the
transactions contemplated hereby, and there has been no adverse change in
the status, or financial effect on the Company or any of its Subsidiaries,
of the Disclosed Litigation from that described on Schedule 3.01(b) hereto.
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(g) Following application of the proceeds of each Advance, not more
than 25 percent of the value of the assets (either of the Borrower of such
Advance or of such Borrower and its Subsidiaries on a Consolidated basis)
subject to the provisions of Section 5.02(a) or subject to any restriction
contained in any agreement or instrument between such Borrower and any
Lender or any Affiliate of any Lender relating to Debt and within the scope
of Section 6.01(e) will be margin stock (within the meaning of Regulation U
issued by the Board of Governors of the Federal Reserve System).
(h) The Company and each wholly-owned direct Subsidiary of the Company
have, in the aggregate, met their minimum funding requirements under ERISA
with respect to their Plans in all material respects and have not incurred
any material liability to the PBGC, other than for the payment of premiums,
in connection with such Plans.
(i) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan of the Company or any of its ERISA Affiliates that
has resulted in or is reasonably likely to result in a material liability
of the Company or any of its ERISA Affiliates.
(j) The Schedules B (Actuarial Information) to the 2001 annual reports
(Form 5500 Series) with respect to each Plan of the Company or any of its
ERISA Affiliates, copies of which have been filed with the Internal Revenue
Service (and which will be furnished to any Bank through the Administrative
Agent upon the request of such Bank through the Administrative Agent to the
Company), are complete and accurate in all material respects and fairly
present in all material respects the funding status of such Plans at such
date, and since the date of each such Schedule B there has been no material
adverse change in funding status.
(k) Neither the Company nor any of its ERISA Affiliates has incurred
or reasonably expects to incur any Withdrawal Liability to any
Multiemployer Plan in an annual amount exceeding 6% of Net Tangible Assets
of the Company and its Consolidated Subsidiaries.
(l) Neither the Company nor any of its ERISA Affiliates has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of
Title IV of ERISA. No such Multiemployer Plan is reasonably expected to be
in reorganization or to be terminated, within the meaning of Title IV of
ERISA, in a reorganization or termination which might reasonably be
expected to result in a liability of the Company in an amount in excess of
$5,000,000.
(m) The Company is not, and immediately after the application by the
Company of the proceeds of each Loan will not be, (a) an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended, or (b) a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(n) To the best of the Company's knowledge, the operations and
properties of the Company and its Subsidiaries taken as a whole comply in
all material respects with all Environmental Laws, all necessary
Environmental Permits have been applied for or have been obtained and are
in effect for the operations and properties of the Company and its
Subsidiaries and the Company and its Subsidiaries are in compliance in all
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material respects with all such Environmental Permits. To the best of the
Company's knowledge no circumstances exist that would be reasonably likely
to form the basis of an Environmental Action against the Company or any of
its Subsidiaries or any of their properties that could have a Material
Adverse Effect.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Company
will:
(a) Compliance with Laws, Etc. Comply, and cause each Designated
Subsidiary to comply with all applicable laws, rules, regulations and
orders, such compliance to include, without limitation, compliance with
ERISA and Environmental Laws as provided in Section 5.01(j), if failure to
comply with such requirements would have a Material Adverse Effect.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each
Designated Subsidiary to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or on its income or profits
or upon any of its property; provided, however, that neither the Company
nor any of its Subsidiaries shall be required to pay or discharge any such
tax, assessment, charge or claim that is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained.
(c) Maintenance of Insurance. Maintain, and cause each Designated
Subsidiary to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is
usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Company or such
Subsidiary operates.
(d) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each Designated Subsidiary to preserve and maintain, its
corporate existence and all its material rights (charter and statutory)
privileges and franchises; provided, however, that the Company and each
Designated Subsidiary may consummate any merger, consolidation or sale of
assets permitted under Section 5.02(b).
(e) Visitation Rights. At any reasonable time and from time to time,
permit the Agent or any of the Lenders or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, the Company and any
Designated Subsidiary, and to discuss the affairs, finances and accounts of
the Company and any Designated Subsidiary with any of their officers or
directors and with their independent certified public accountants.
(f) Keeping of Books. Keep, and cause each Designated Subsidiary to
keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of
the Company and each Designated
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Subsidiary in accordance with generally accepted accounting principles in
effect from time to time.
(g) Maintenance of Properties, Etc. Maintain and preserve, and cause
each Designated Subsidiary to maintain and preserve, all of its properties
that are used or useful in the conduct of its business in good working
order and condition, ordinary wear and tear excepted; provided, however,
that neither the Company nor any of its Designated Subsidiaries shall be
required to maintain or preserve any property if the failure to maintain or
preserve such property shall not have a Material Adverse Effect.
(h) Reporting Requirements. Furnish to the Agent (with a copy for each
Lender) and the Agent shall promptly forward the same to the Lenders:
(i) as soon as available and in any event within 60 days after
the end of each of the first three quarters of each fiscal year of the
Company, a Consolidated balance sheet of the Company and its
Consolidated Subsidiaries as of the end of such quarter and a
Consolidated statement of income and cash flows of the Company and its
Consolidated Subsidiaries for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, setting
forth in each case in comparative form the corresponding figures as of
the corresponding date and for the corresponding period of the
preceding fiscal year, all in reasonable detail and certified by the
principal financial officer, principal accounting officer, the
Vice-President and Treasurer or an Assistant Treasurer of the Company,
subject, however, to year-end auditing adjustments, which certificate
shall include a statement that such officer has no knowledge, except
as specifically stated, of any condition, event or act which
constitutes a Default;
(ii) as soon as available and in any event within 120 days after
the end of each fiscal year of the Company, a Consolidated balance
sheet of the Company and its Consolidated Subsidiaries as of the end
of such fiscal year and the related Consolidated statements of income
and cash flows of the Company and its Consolidated Subsidiaries for
such fiscal year setting forth in each case in comparative form the
corresponding figures as of the close of and for the preceding fiscal
year, all in reasonable detail and accompanied by an opinion of
independent public accountants of nationally recognized standing, as
to said financial statements and a certificate of the principal
financial officer, principal accounting officer, the Vice-President
and Treasurer or an Assistant Treasurer of the Company stating that
such officer has no knowledge, except as specifically stated, of any
condition, event or act which constitutes a Default;
(iii) copies of the Forms 8-K and 10-K reports (or similar
reports) which the Company is required to file with the Securities and
Exchange Commission of the United States of America, promptly after
the filing thereof;
(iv) copies of each annual report, quarterly report, special
report or proxy statement mailed to substantially all of the
stockholders of the Company, promptly after the mailing thereof to the
stockholders;
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(v) immediate notice of the occurrence of any Default of which
the principal financial officer, principal accounting officer, the
Vice-President and Treasurer or an Assistant Treasurer of the Company
shall have knowledge;
(vi) as soon as available and in any event within 15 days after
the Company or any of its ERISA Affiliates knows or has reason to know
that any ERISA Event has occurred, a statement of a senior officer of
the Company with responsibility for compliance with the requirements
of ERISA describing such ERISA Event and the action, if any, which the
Company or such ERISA Affiliate proposes to take with respect thereto;
(vii) at the request of any Lender, promptly after the filing
thereof with the Internal Revenue Service, copies of Schedule B
(Actuarial Information) to each annual report (Form 5500 series) filed
by the Company or any of its ERISA Affiliates with respect to each
Plan;
(viii) promptly after receipt thereof by the Company or any of
its ERISA Affiliates, copies of each notice from the PBGC stating its
intention to terminate any Plan or to have a trustee appointed to
administer any Plan;
(ix) promptly after such request, such other documents and
information relating to any Plan as any Lender may reasonably request
from time to time;
(x) promptly and in any event within five Business Days after
receipt thereof by the Company or any of its ERISA Affiliates from the
sponsor of a Multiemployer Plan, copies of each notice concerning (A)
(x) the imposition of Withdrawal Liability in an amount in excess of
$5,000,000 with respect to any one Multiemployer Plan or in an
aggregate amount in excess of $25,000,000 with respect to all such
Multiemployer Plans within any one calendar year or (y) the
reorganization or termination, within the meaning of Title IV of
ERISA, of any Multiemployer Plan that has resulted or might reasonably
be expected to result in Withdrawal Liability in an amount in excess
of $5,000,000 or of all such Multiemployer Plans that has resulted or
might reasonably be expected to result in Withdrawal Liability in an
aggregate amount in excess of $25,000,000 within any one calendar year
and (B) the amount of liability incurred, or that may be incurred, by
the Company or any of its ERISA Affiliates in connection with any
event described in such subclause (x) or (y);
(xi) promptly after the commencement thereof, notice of all
actions and proceedings before any court, governmental agency or
arbitrator affecting the Borrower or any Designated Subsidiary of the
type described in Section 4.01(f); and
(xii) from time to time such further information respecting the
financial condition and operations of the Company and its Subsidiaries
as any Lender may from time to time reasonably request.
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(i) Authorizations. Obtain, and cause each Designated Subsidiary to
obtain, at any time and from time to time all authorizations, licenses,
consents or approvals (including exchange control approvals) as shall now
or hereafter be necessary or desirable under applicable law or regulations
in connection with its making and performance of this Agreement and, upon
the request of any Lender, promptly furnish to such Lender copies thereof.
(j) Compliance with Environmental Laws. Comply, and cause each of its
Subsidiaries and all lessees and other Persons operating or occupying its
properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew and cause
each of its Subsidiaries to obtain and renew all Environmental Permits
necessary for its operations and properties; and conduct, and cause each of
its Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action
necessary to remove and clean up all Hazardous Materials from any of its
properties, in accordance with the requirements of all Environmental Laws;
provided, however, that neither the Company nor any of its Subsidiaries
shall be required to undertake any such cleanup, removal, remedial or other
action to the extent that its obligation to do so is being contested in
good faith and by proper proceedings and appropriate reserves are being
maintained with respect to such circumstances.
(k) Change of Control. If a Change of Control shall occur, within ten
calendar days after the occurrence thereof, provide the Agent with notice
thereof, describing therein in reasonable detail the facts and
circumstances giving rise to such Change in Control.
SECTION 5.02. Negative Covenants. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Company will not:
(a) Liens, Etc. Issue, assume or guarantee, or permit any of its
Subsidiaries owning Restricted Property to issue, assume or guarantee, any
Debt secured by Liens on or with respect to any Restricted Property without
effectively providing that its obligations to the Lenders under this
Agreement and any of the Notes shall be secured equally and ratably with
such Debt so long as such Debt shall be so secured, except that the
foregoing shall not apply to:
(i) Liens affecting property of the Company or any of its
Subsidiaries existing on the Effective Date in effect as of the date
hereof or of any corporation existing at the time it becomes a
Subsidiary of the Company or at the time it is merged into or
consolidated with the Company or a Subsidiary of the Company;
(ii) Liens on property of the Company or its Subsidiaries
existing at the time of acquisition thereof or incurred to secure the
payment of all or part of the purchase price thereof or to secure Debt
incurred prior to, at the time of or within 24 months after
acquisition thereof for the purpose of financing all or part of the
purchase price thereof;
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(iii) Liens on property of the Company or its Subsidiaries (in
the case of property that is, in the opinion of the Board of Directors
of the Company, substantially unimproved for the use intended by the
Company) to secure all or part of the cost of improvement thereof, or
to secure Debt incurred to provide funds for any such purpose;
(iv) Liens which secure only Debt owing by a Subsidiary of the
Company to the Company or to another Subsidiary of the Company;
(v) Liens in favor of the United States of America, any State,
any foreign country, or any department, agency, instrumentality, or
political subdivisions of any such jurisdiction, to secure partial,
progress, advance or other payments pursuant to any contract or
statute or to secure any Debt incurred for the purpose of financing
all or any part of the purchase price or cost of constructing or
improving the property subject thereto, including, without limitation,
Liens to secure Debt of the pollution control or industrial revenue
bond type; or
(vi) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any
Lien referred to in the foregoing clauses (i) to (v) inclusive of any
Debt secured thereby, provided that the principal amount of Debt
secured thereby shall not exceed the principal amount of Debt so
secured at the time of such extension, renewal or replacement, and
that such extension, renewal or replacement Lien shall be limited to
all or part of the property which secured the Lien extended, renewed
or replaced (plus improvements on such property);
provided, however, that, the Company and any one or more Subsidiaries
owning Restricted Property may issue, assume or guarantee Debt secured by
Liens which would otherwise be subject to the foregoing restrictions in an
aggregate principal amount which, together with the aggregate outstanding
principal amount of all other Debt of the Company and its Subsidiaries
owning Restricted Property that would otherwise be subject to the foregoing
restrictions (not including Debt permitted to be secured under clause (i)
through (vi) above) and the aggregate value of the Sale and Leaseback
Transactions in existence at such time, does not at any one time exceed 10%
of the Net Tangible Assets of the Company and its Consolidated
Subsidiaries; and provided further that the following type of transaction,
among others, shall not be deemed to create Debt secured by Liens: Liens
required by any contract or statute in order to permit the Company or any
of its Subsidiaries to perform any contract or subcontract made by it with
or at the request of the United States of America, any foreign country or
any department, agency or instrumentality of any of the foregoing
jurisdictions.
(b) Mergers, Etc. Merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to, any Person; provided, however, that the
Company may merge or consolidate with any other Person so long as the
Company is the surviving corporation and so long as no Default shall have
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occurred and be continuing at the time of such proposed transaction or
would result therefrom.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) Any Borrower shall fail to pay: (i) any principal of any Advance
when the same becomes due and payable; (ii) any facility fees or any
interest on any Advance payable under this Agreement or any Note within
three Business Days after the same becomes due and payable; or (iii) any
other fees or other amounts payable under this Agreement or any Notes
within 30 days after the same becomes due and payable other than those fees
and amounts the liabilities for which are being contested in good faith by
such Borrower and which have been placed in Escrow by such Borrower; or
(b) Any representation or warranty made (or deemed made) by any
Borrower (or any of its officers) in connection with this Agreement or by
any Designated Subsidiary in the Designation Letter pursuant to which such
Designated Subsidiary became a Borrower hereunder shall prove to have been
incorrect in any material respect when made (or deemed made); or
(c) The Company shall repudiate its obligations under, or shall
default in the due performance or observance of, any term, covenant or
agreement contained in Article VII of this Agreement; or
(d) (i) The Company shall fail to perform or observe any other term,
covenant or agreement contained in Section 5.02(a) and such failure shall
remain unremedied for a period of 30 days after any Lender shall have given
notice thereof to the Company (through the Agent), or (ii) the Company or
any other Borrower shall fail to perform or to observe any other term,
covenant or agreement contained in this Agreement on its part to be
performed or observed and such failure shall remain unremedied for a period
of 30 days after any Lender shall have given notice thereof to the relevant
Borrower or, in the case of the Company, any of the principal financial
officer, the principal accounting officer, the Vice-President and Treasurer
or an Assistant Treasurer of the Company, and in the case of any other
Borrower, a responsible officer of such Borrower, first has knowledge of
such failure; or
(e) (i) The Company or any of its Consolidated or Designated
Subsidiaries shall fail to pay any principal of or premium or interest on
any Debt (other than Debt owed to the Company or its Subsidiaries or
Affiliates) that is outstanding in a principal amount of at least
$150,000,000 in the aggregate (but excluding Debt outstanding hereunder and
Debt owed by such party to any bank, financial institution or other
institutional lender to the extent the Borrower or any Subsidiary has
deposits with such bank, financial institution or other institutional
lender sufficient to repay such Debt) of
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the Company or such Subsidiary (as the case may be), when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after
the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt, or (ii) any other event shall occur or
condition shall exist under any agreement or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity
of such Debt, or (iii) any such Debt shall be declared to be due and
payable, or required to be prepaid or redeemed (other than by a regularly
scheduled required prepayment or redemption), purchased or defeased, or an
offer to prepay, redeem, purchase or defease such Debt shall be required to
be made, in each case prior to the stated maturity thereof; provided,
however, that, for purposes of this Section 6.0l(e), in the case of (x)
Debt of any Person (other than the Company or one of its Consolidated
Subsidiaries) which the Company has guaranteed and (y) Debt of Persons
(other than the Company or one of its Consolidated Subsidiaries) the
payment of which is secured by a Lien on property of the Company or such
Subsidiary, such Debt shall be deemed to have not been paid when due or to
have been declared to be due and payable only when the Company or such
Subsidiary, as the case may be, shall have failed to pay when due any
amount which it shall be obligated to pay with respect to such Debt;
provided further, however, that any event or occurrence described in this
subsection (e) shall not be an Event of Default if (A) such event or
occurrence relates to the Debt of any Subsidiary of the Company located in
China, India, the Commonwealth of Independent States or Turkey
(collectively, the "Exempt Countries"), (B) such Debt is not guaranteed or
supported in any legally enforceable manner by any Borrower or by any
Subsidiary or Affiliate of the Company located outside the Exempt
Countries, (C) such event or occurrence is due to the direct or indirect
action of any government entity or agency in any Exempt Country and (D) as
of the last day of the calendar quarter immediately preceding such event or
occurrence, the book value of the assets of such Subsidiary does not exceed
$150,000,000 and the aggregate book value of the assets of all Subsidiaries
of the Company located in Exempt Countries the Debt of which would cause an
Event of Default to occur but for the effect of this proviso does not
exceed $500,000,000; or
(f) The Company or any of its Designated or Consolidated Subsidiaries
shall generally not pay its debts as such debts become due, or shall admit
in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Company or any such Subsidiaries seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property and, in
the case of any such proceeding instituted against it (but not instituted
by it), either such proceeding shall remain undismissed or unstayed for a
period of 30 days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against,
or the appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property) shall occur;
or the Company or any such Subsidiaries shall take any corporate action to
authorize any of the
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actions set forth above in this subsection (f); provided, however, that any
event or occurrence described in this subsection (f) shall not be an Event
of Default if (A) such event or occurrence relates to any Subsidiary of the
Company located in an Exempt Country, (B) the Debt of such Subsidiary is
not guaranteed or supported in any legally enforceable manner by any
Borrower or by any Subsidiary or Affiliate of the Company located outside
the Exempt Countries, (C) such event or occurrence is due to the direct or
indirect action of any government entity or agency in any Exempt Country
and (D) as of the last day of the calendar quarter immediately preceding
such event or occurrence, the book value of the assets of such Subsidiary
does not exceed $150,000,000 and the aggregate book value of the assets of
all Subsidiaries of the Company located in Exempt Countries with respect to
which the happening of the events or occurrences described in this
subsection (f) would cause an Event of Default to occur but for the effect
of this proviso does not exceed $500,000,000; or
(g) Any judgment or order for the payment of money in excess of
$150,000,000 shall be rendered against the Company or any of its
Subsidiaries and enforcement proceedings shall have been commenced by any
creditor upon such judgment or order and there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
provided, however, that any such judgment or order shall not be an Event of
Default under this Section 6.01(g) if (A) such judgment or order is
rendered against any Subsidiary of the Company located in an Exempt
Country, (B) the Debt of such Subsidiary is not guaranteed or supported in
any legally enforceable manner by any Borrower or by any Subsidiary or
Affiliate of the Company located outside the Exempt Countries, (C) such
judgment or order is due to the direct or indirect action of any government
entity or agency in any Exempt Country and (D) as of the last day of the
calendar quarter immediately preceding the tenth consecutive day of the
stay period referred to above, the book value of the assets of such
Subsidiary does not exceed $150,000,000 and the aggregate book value of the
assets of all Subsidiaries of the Company located in Exempt Countries the
judgments and orders against which would cause an Event of Default to occur
but for the effect of this proviso does not exceed $500,000,000; or
(h) Any non-monetary judgment or order shall be rendered against the
Company or any of its Subsidiaries that is reasonably likely to have a
Material Adverse Effect, and enforcement proceedings shall have been
commenced by any Person upon such judgment or order and there shall be any
period of 10 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect; or
(i) Any license, consent, authorization or approval (including
exchange control approvals) now or hereafter necessary to enable the
Company or any Designated Subsidiary to comply with its obligations herein
or under any Notes of such Borrower shall be modified, revoked, withdrawn,
withheld or suspended; or
(j) (i) Any ERISA Event shall have occurred with respect to a Plan of
any Borrower or any of its ERISA Affiliates and the sum (determined as of
the date of
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occurrence of such ERISA Event) of the Insufficiency of such Plan and the
Insufficiency of any and all other Plans of the Borrowers and their ERISA
Affiliates with respect to which an ERISA Event shall have occurred and
then exist (or the liability of the Borrowers and their ERISA Affiliates
related to such ERISA Event) exceeds $150,000,000; or (ii) any Borrower or
any of its ERISA Affiliates shall be in default, as defined in Section
4219(c)(5) of ERISA, with respect to any payment of Withdrawal Liability
and the sum of the outstanding balance of such Withdrawal Liability and the
outstanding balance of any other Withdrawal Liability that any Borrower or
any of its ERISA Affiliates has incurred exceeds 6% of Net Tangible Assets
of the Company and its Consolidated Subsidiaries; or (iii) any Borrower or
any of its ERISA Affiliates shall have been notified by the sponsor of a
Multiemployer Plan of such Borrower or any of its ERISA Affiliates that
such Multiemployer Plan is in reorganization or is being terminated, within
the meaning of Title IV of ERISA, and as a result of such reorganization or
termination the aggregate annual contributions of the Borrowers and their
ERISA Affiliates to all Multiemployer Plans that are then in reorganization
or being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding $150,000,000;
or
then, and (i) in any such event (except as provided in clause (ii) below), the
Agent (A) shall at the request, or may with the consent, of the Majority
Lenders, by notice to the Company, declare the obligation of each Lender to make
Advances to be terminated, whereupon the same shall forthwith terminate, and (B)
shall at the request, or may with the consent, of the Majority Lenders, by
notice to the Company, declare the Advances, all interest thereon and all other
amounts payable under this Agreement to be forthwith due and payable, whereupon
the Advances, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrowers
and (ii) in the case of the occurrence of any Event of Default described in
clause (i) or (ii) of Section 6.01(a), the Agent shall, at the request, or may
with the consent, of the Lenders which have made or assumed under this Agreement
at least 66-2/3% of the aggregate principal amount (based in respect of
Competitive Bid Advances denominated in Foreign Currencies on the Equivalent in
Dollars on the date of such request) of Competitive Bid Advances then
outstanding and to whom such Advances are owed, by notice to the Company,
declare the full unpaid principal of and accrued interest on all Competitive Bid
Advances hereunder and all other obligations of the Borrowers hereunder to be
immediately due and payable, whereupon such Advances and such obligations shall
be immediately due and payable, without presentment, demand, protest or other
further notice of any kind, all of which are hereby expressly waived by the
Borrowers; provided, however, that in the event of an actual or deemed entry of
an order for relief with respect to any Borrower under the United States
Bankruptcy Code of 1978, as amended, (x) the obligation of each Lender to make
Advances shall automatically be terminated and (y) the Advances, all such
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrowers.
ARTICLE VII
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GUARANTEE
SECTION 7.01. Unconditional Guarantee. For valuable consideration,
receipt whereof is hereby acknowledged, and to induce each Lender to make
Advances to the Designated Subsidiaries and to induce the Agent to act
hereunder, the Company hereby unconditionally and irrevocably guarantees to each
Lender and the Agent that:
(a) the principal of and interest on each Advance to each Designated
Subsidiary shall be promptly paid in full when due (whether at stated
maturity, by acceleration or otherwise) in accordance with the terms
hereof, and, in case of any extension of time of payment, in whole or in
part, of such Advance, that all such sums shall be promptly paid when due
(whether at stated maturity, by acceleration or otherwise) in accordance
with the terms of such extension; and
(b) all other amounts payable hereunder by any Designated Subsidiary
to any Lender or the Agent or the Sub-Agent, as the case may be, shall be
promptly paid in full when due in accordance with the terms hereof (the
obligations of the Designated Subsidiaries under these subsections (a) and
(b) of this Section 7.01 being the "Obligations").
In addition, the Company hereby unconditionally and irrevocably agrees that upon
default in the payment when due (whether at stated maturity, by acceleration or
otherwise) of any principal of, or interest on, any Advance to any Designated
Subsidiary or such other amounts payable by any Designated Subsidiary to any
Lender or the Agent, the Company will forthwith pay the same, without further
notice or demand.
SECTION 7.02. Guarantee Absolute. The Company guarantees that the
Obligations will be paid strictly in accordance with the terms of this
Agreement, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of any Lender or
the Agent with respect thereto. The liability of the Company under this
guarantee shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of this Agreement or any
other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to departure from this Agreement (including,
without limitation, any extension of the Termination Date pursuant to
Section 2.16);
(c) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any other
guaranty, for all or any of the Obligations; or
(d) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Company, any Borrower or a guarantor.
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This guarantee shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by any of the Lenders or the Agent upon the insolvency,
bankruptcy or reorganization of the Company or any Borrower or otherwise, all as
though such payment had not been made.
SECTION 7.03. Waivers. The Company hereby expressly waives diligence,
presentment, demand for payment, protest, any requirement that any right or
power be exhausted or any action be taken against any Designated Subsidiary or
against any other guarantor of all or any portion of the Advances, and all other
notices and demands whatsoever.
SECTION 7.04. Remedies. Each of the Lenders and the Agent may pursue
its respective rights and remedies under this Article VII and shall be entitled
to payment hereunder notwithstanding any other guarantee of all or any part of
the Advances to the Designated Subsidiaries, and notwithstanding any action
taken by any such Lender or the Agent to enforce any of its rights or remedies
under such other guarantee, or any payment received thereunder. The Company
hereby irrevocably waives any claim or other right that it may now or hereafter
acquire against any Designated Subsidiary that arises from the existence,
payment, performance or enforcement of the Company's obligations under this
Article VII, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Agent or the Lenders against any
Designated Subsidiary, whether or not such claim, remedy or right arises in
equity or under contract, statute or common law, including, without limitation,
the right to take or receive from the Designated Subsidiary, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right. If any amount
shall be paid to the Company in violation of the preceding sentence at any time
when all the Obligations shall not have been paid in full, such amount shall be
held in trust for the benefit of the Lenders and the Agent and shall forthwith
be paid to the Agent for its own account and the accounts of the respective
Lenders to be credited and applied to the Obligations, whether matured or
unmatured, in accordance with the terms of this Agreement, or to be held as
collateral for any Obligations or other amounts payable under this Agreement
thereafter arising. The Company acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by this Agreement
and that the waiver set forth in this section is knowingly made in contemplation
of such benefits.
SECTION 7.05. No Stay. The Company agrees that, as between (a) the
Company and (b) the Lenders and the Agent, the Obligations of any Designated
Subsidiary guaranteed by the Company hereunder may be declared to be forthwith
due and payable as provided in Article VI hereof for purposes of this Article
VII by declaration to the Company as guarantor notwithstanding any stay,
injunction or other prohibition preventing such declaration as against such
Designated Subsidiary and that, in the event of such declaration to the Company
as guarantor, such Obligations (whether or not due and payable by such
Designated Subsidiary), shall forthwith become due and payable by the Company
for purposes of this Article VII.
SECTION 7.06. Survival. This guarantee is a continuing guarantee and
shall (a) remain in full force and effect until payment in full (after the
Termination Date) of the Obligations and all other amounts payable under this
guaranty, (b) be binding upon the Company, its successors and assigns, (c) inure
to the benefit of and be enforceable by each
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Lender (including each Assuming Lender and each assignee Lender pursuant to
Section 9.07) and the Agent and their respective successors, transferees and
assigns and (d) shall be reinstated if at any time any payment to a Lender or
the Agent hereunder is required to be restored by such Lender or the Agent.
Without limiting the generality of the foregoing clause (c), each Lender may
assign or otherwise transfer its interest in any Advance to any other person or
entity, and such other person or entity shall thereupon become vested with all
the rights in respect thereof granted to such Lender herein or otherwise.
ARTICLE VIII
THE AGENT
SECTION 8.01. Authorization and Action. Each Lender hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to this Agreement or applicable law. The Agent agrees to give to
each Lender prompt notice of each notice given to it by any Borrower pursuant to
the terms of this Agreement.
SECTION 8.02. Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent: (a) may treat the
Lender that made any Advance as the holder of the Debt resulting therefrom until
the Agent receives and accepts an Assignment and Acceptance entered into by such
Lender, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 9.07; (b) may consult with legal counsel (including counsel for the
Company), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (c)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations (whether written
or oral) made in or in connection with this Agreement; (d) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of this Agreement on the part of any Borrower
or to inspect the property (including the books and records) of any Borrower;
(e) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant hereto; and (f) shall incur
no liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
telegram or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
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SECTION 8.03. Citibank and Affiliates. With respect to its Commitment,
the Advances made by it and the Note issued to it, Citibank shall have the same
rights and powers under this Agreement as any other Lender and may exercise the
same as though it were not the Agent; and the term "Lender" or "Lenders" shall,
unless otherwise expressly indicated, include Citibank in its individual
capacity. Citibank and its Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, accept investment banking engagements from
and generally engage in any kind of business with, the Company, any of its
Subsidiaries and any Person who may do business with or own securities of the
Company or any such Subsidiary, all as if Citibank were not the Agent and
without any duty to account therefor to the Lenders.
SECTION 8.04. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender and
based on the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 8.05. Indemnification. The Lenders agree to indemnify the
Agent (to the extent not reimbursed by a Borrower), ratably according to the
respective principal amounts of the Revolving Credit Advances then owed to each
of them (or if no Revolving Credit Advances are at the time outstanding, ratably
according to the respective amounts of their Commitments), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against the Agent in
any way relating to or arising out of this Agreement or any action taken or
omitted by the Agent under this Agreement, provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's gross negligence or willful misconduct. Without limitation of
the foregoing, each Lender agrees to reimburse the Agent promptly upon demand
for its ratable share of any out-of-pocket expenses (including counsel fees)
incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, to the extent that the Agent
is not reimbursed for such expenses by a Borrower.
SECTION 8.06. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Company and may be removed
at any time with or without cause by the Majority Lenders. The Company may at
any time, by notice to the Agent, propose a successor Agent (which shall meet
the criteria described below) specified in such notice and request that the
Lenders be notified thereof by the Agent with a view to their removal of the
Agent and their appointment of such successor Agent; the Agent agrees to forward
any such notice to the Lenders promptly upon its receipt by the Agent. Upon any
such resignation or removal, the Majority Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed by
the Majority Lenders, and shall have accepted such appointment, within 30 days
after the retiring Agent's giving of notice of resignation or the
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Majority Lenders' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent, which shall be a commercial
bank organized under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $500,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
SECTION 8.07. Sub-Agent. The Sub-Agent has been designated under this
Agreement to carry out duties of the Agent. The Sub-Agent shall be subject to
each of the obligations in this Agreement to be performed by the Sub-Agent, and
each of the Borrowers and the Lenders agrees that the Sub-Agent shall be
entitled to exercise each of the rights and shall be entitled to each of the
benefits of the Agent under this Agreement as relate to the performance of its
obligations hereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or the Revolving Credit Notes, nor consent to any departure by
any Borrower therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Majority Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders, do any of the following: (a)
increase the Commitments of the Lenders or subject the Lenders to any additional
obligations, (b) reduce the principal of, or interest on, the Revolving Credit
Advances or any fees or other amounts payable hereunder, (c) postpone any date
fixed for any payment of principal of, or interest on, the Revolving Credit
Advances or any fees or other amounts payable hereunder (other than as permitted
by Section 2.16 to the extent any Lender consents thereunder), (d) release the
Company from any of its obligations under Article VII, (e) require the duration
of an Interest Period to be nine months if such period is not available to all
Lenders or (f) amend this section 9.01; and provided further that no amendment,
waiver or consent shall, unless in writing and signed by the Agent in addition
to the Lenders required above to take such action, affect the rights or duties
of the Agent under this Agreement or any Note.
SECTION 9.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic or
telex communication) and mailed (return receipt requested), telecopied,
telegraphed, telexed or delivered, if to the Company or to any Designated
Subsidiary, at the Company's address at 101 Columbia Road, Morristown, New
Jersey 07962-1219, Attention: Assistant Treasurer; if to any Initial Lender, at
its Domestic Lending Office specified opposite its name on Schedule I hereto; if
to any other Lender, at its Domestic Lending Office specified in the Assumption
Agreement or the Assignment and Acceptance pursuant to which it became a Lender;
and if to the Agent, at its
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address at Two Penns Way, New Castle, Delaware 19720, Attention: Bank Loan
Syndications Department, with a copy to 388 Greenwich Street, New York, New York
10013, Attention: Carolyn Sheridan; or, as to any Borrower or the Agent, at such
other address as shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Company and the Agent. All
such notices and communications shall, when mailed, telecopied, telegraphed or
telexed, be effective when deposited in the mails, telecopied, delivered to the
telegraph company or confirmed by telex answerback, respectively, except that
notices and communications to the Agent pursuant to Article II, III or VIII
shall not be effective until received by the Agent. Delivery by telecopier of an
executed counterpart of any amendment or waiver of any provision of this
Agreement or the Notes or of any Exhibit hereto to be executed and delivered
hereunder shall be effective as delivery of a manually executed counterpart
thereof.
SECTION 9.03. No Waiver; Remedies. No failure on the part of any
Lender or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. Costs and Expenses. (a) The Company agrees to pay on
demand all costs and expenses of the Agent in connection with the
administration, modification and amendment of this Agreement, the Notes and the
other documents to be delivered hereunder, including, without limitation, (i)
all due diligence, syndication (including printing, distribution and bank
meetings), transportation, computer, duplication, appraisal, consultant, and
audit expenses and (ii) the reasonable fees and expenses of counsel for the
Agent with respect thereto. The Company further agrees to pay on demand all
costs and expenses of the Agent and the Lenders, if any (including, without
limitation, reasonable counsel fees and expenses), in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of
this Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, reasonable fees and expenses of counsel for the
Agent and each Lender in connection with the enforcement of rights under this
Section 9.04(a).
(b) Each Borrower agrees to indemnify and hold harmless the Agent and
each Lender and each of their Affiliates and their officers, directors,
employees, agents and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of, or in connection with the
preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with the Notes, this Agreement, any
of the transactions contemplated herein or the actual or proposed use of the
proceeds of the Advances whether or not such investigation, litigation or
proceeding is brought by the Company, its directors, shareholders or creditors
or an Indemnified Party or any other Person or any Indemnified Party is
otherwise a party thereto and whether or not the transactions contemplated
hereby are consummated, except to the extent any such claim, damage, loss,
liability or expense has resulted from such Indemnified Party's gross negligence
or willful misconduct.
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The Company also agrees not to assert any claim against any Indemnified Party on
any theory of liability for special, indirect, consequential or punitive damages
arising out of or otherwise relating to the Notes, this Agreement, any of the
transactions contemplated herein or the actual or proposed use of the proceeds
of the Advances.
(c) If any payment of principal of, or Conversion of, any Eurocurrency
Rate Advance or LIBO Rate Advance is made by the Borrower to or for the account
of a Lender other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.03(d), 2.05(b),
2.09(a) or (b), 2.11 or 2.16, acceleration of the maturity of the Notes pursuant
to Section 6.01 or for any other reason, the Borrower shall, upon demand by such
Lender (with a copy of such demand to the Agent), pay to the Agent for the
account of such Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses that it may reasonably incur as a result of
such payment or Conversion, including, without limitation, any loss (including
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any Lender to
fund or maintain such Advance.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
Sections 2.10, 2.13 and 9.04 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the Notes and the
termination in whole of any Commitment hereunder.
SECTION 9.05. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 6.01,
each Lender and each of its Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender or such
Affiliate to or for the credit or the account of any Borrower against any and
all of the obligations of such Borrower now or hereafter existing under this
Agreement and the Note of such Borrower held by such Lender, whether or not such
Lender shall have made any demand under this Agreement or such Note and although
such obligations may be unmatured. Each Lender agrees promptly to notify the
relevant Borrower after any such set-off and application, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender and its Affiliates under this Section are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender and its Affiliates may have.
SECTION 9.06. Binding Effect. This Agreement shall become effective
(other than Sections 2.01 and 2.03, which shall only become effective upon
satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been executed by the Company and the Agent and when the Agent shall
have been notified by each Initial Lender that such Initial Lender has executed
it and thereafter shall be binding upon and inure to the benefit of each
Borrower, the Agent and each Lender and their respective successors and assigns,
except that no Borrower shall not have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Lenders.
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SECTION 9.07. Assignments and Participations. (a) Each Lender may at
any time, with notice to the Company prior to making any proposal to any
potential assignee and with the consent of the Company, which consent shall not
be unreasonably withheld (and shall at any time, if requested to do so by the
Company pursuant to Section 2.05(b), 2.10 or 2.13) assign to one or more Persons
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Revolving Credit
Advances owing to it and the Revolving Credit Note or Notes held by it);
provided, however, that (i) the Company's consent shall not be required (A) in
the case of an assignment to an Affiliate of such Lender, provided that notice
thereof shall have been given to the Company and the Agent, or (B) in the case
of an assignment of the type described in subsection (g) below; (ii) each such
assignment shall be of a constant, and not a varying, percentage of all rights
and obligations under this Agreement (other than any right to make Competitive
Bid Advances, Competitive Bid Advances owing to it and Competitive Bid Notes);
(iii) except in the case of an assignment to a Person that, immediately prior to
such assignment, was a Lender or an assignment of all of a Lender's rights and
obligations under this Agreement, the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall in
no event be less than $10,000,000 or an integral multiple of $1,000,000 in
excess thereof; (iv) each such assignment shall be to an Eligible Assignee, (v)
each such assignment made as a result of a demand by the Company pursuant to
this Section 9.07(a) shall be arranged by the Company after consultation with,
and subject to the approval of, the Agent, and shall be either an assignment of
all of the rights and obligations of the assigning Lender under this Agreement
or an assignment of a portion of such rights and obligations made concurrently
with another such assignment or other such assignments that together cover all
of the rights and obligations of the assigning Lender under this Agreement, (vi)
no Lender shall be obligated to make any such assignment as a result of a demand
by the Borrower pursuant to this Section 9.07(a) unless and until such Lender
shall have received one or more payments from either the Borrower or one or more
Eligible Assignees in an aggregate amount at least equal to the aggregate
outstanding principal amount of the Advances owing to such Lender, together with
accrued interest thereon to the date of payment of such principal amount and all
other amounts payable to such Lender under this Agreement and all of the
obligations of the Borrower to such Lender shall have been satisfied; and (vii)
the parties to each such assignment shall execute and deliver to the Agent, for
its acceptance and recording in the Register, an Assignment and Acceptance,
together with a processing and recordation fee of $3,500 and, if the assigning
Lender is not retaining a Commitment hereunder, any Revolving Credit Note
subject to such assignment. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto, provided, however, that such assigning Lender's rights under Sections
2.10, 2.13 and 9.04, and its obligations under Section 8.05, shall survive such
assignment as to matters occurring prior to the effective date of such
assignment).
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(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
any other instrument or document furnished pursuant hereto or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other instrument or document furnished pursuant hereto; (ii)
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Borrower or the
performance or observance by such Borrower of any of its obligations under this
Agreement or any other instrument or document furnished pursuant hereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Section 4.01 and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Agent, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Lender.
(c) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Revolving Credit Note or Notes subject to such assignment, the
Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Company and to each other Borrower.
(d) The Agent shall maintain at its address referred to in Section
9.02 a copy of each Assumption Agreement and each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lenders and the Commitment of, and principal amount of the
Advances owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Company, each other Borrower, the Agent and the Lenders
may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Company, any other Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Each Lender may sell participations to one or more banks or other
entities (other than the Company or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances owing to it and any
Note or Notes held by it); provided, however,
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that (i) such Lender's obligations under this Agreement (including, without
limitation, its Commitment to the Company and the other Borrowers hereunder)
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) such Lender
shall remain the holder of any such Note for all purposes of this Agreement,
(iv) the Company, any other Borrower, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, (v) no participant under
any such participation shall have any right to approve any amendment or waiver
of any provision of this Agreement or any Note, or any consent to any departure
by any Borrower therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation, or postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation and (vi) within 30 days of the
effective date of such participation, such Lender shall provide notice of such
participation to the Company.
(f) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 9.07, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Company or any Borrower furnished to such Lender by
or on behalf of such Borrower; provided that, prior to any such disclosure, the
assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any confidential information relating to such
Borrower received by it from such Lender.
(g) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time assign or create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and any Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
SECTION 9.08. Designated Subsidiaries (a) Designation. The Company may
at any time, and from time to time, by delivery to the Agent of a Designation
Letter duly executed by the Company and the respective Subsidiary and
substantially in the form of Exhibit E hereto, designate such Subsidiary as a
"Designated Subsidiary" for purposes of this Agreement and such Subsidiary shall
thereupon become a "Designated Subsidiary" for purposes of this Agreement and,
as such, shall have all of the rights and obligations of a Borrower hereunder.
The Agent shall promptly notify each Lender of each such designation by the
Company and the identity of the respective Subsidiary.
(b) Termination. Upon the payment and performance in full of all of
the indebtedness, liabilities and obligations under this Agreement and the Notes
of any Designated Subsidiary then, so long as at the time no Notice of Revolving
Credit Borrowing or Notice of Competitive Bid Borrowing in respect of such
Designated Subsidiary is outstanding, such Subsidiary's status as a "Designated
Subsidiary" shall terminate upon notice to such effect from the Agent to the
Lenders (which notice the Agent shall give promptly upon its receipt of a
request therefor from the Company). Thereafter, the Lenders shall be under no
further obligation to make any Advance hereunder to such Designated Subsidiary.
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<PAGE>
SECTION 9.09. Confidentiality. Each of the Lenders and the Agent
hereby agrees that it will use reasonable efforts (e.g., procedures
substantially comparable to those applied by such Lender or the Agent in respect
of non-public information as to the business of such Lender or the Agent) to
keep confidential any financial reports and other information from time to time
supplied to it by the Company hereunder to the extent that such information is
not and does not become publicly available and which the Company indicates at
the time is to be treated confidentially, provided, however, that nothing herein
shall affect the disclosure of any such information (i) by the Agent to any
Lender, (ii) to the extent required by law (including statute, rule, regulation
or judicial process), (iii) to counsel for any Lender or the Agent or to their
respective independent public accountants, (iv) to bank examiners and auditors
and appropriate government examining authorities, (v) to the Agent or any other
Lender, (vi) in connection with any litigation to which any Lender or the Agent
is a party, (vii) to actual or prospective assignees and participants as
contemplated by Section 9.07(f) or (viii) to any Affiliate of the Agent or any
Lender or to such Affiliate's officers, directors, employees, agents and
advisors, provided that, prior to any such disclosure, such Affiliate or such
Affiliate's officers, directors, employees, agents or advisors, as the case may
be, shall agree to preserve the confidentiality of any confidential information
relating to the Company received by it; a determination by a Lender or the Agent
as to the application of the circumstances described in the foregoing clauses
(i)-(viii) being conclusive if made in good faith; and each of the Lenders and
the Agent agrees that it will follow procedures which are intended to put any
transferee of such confidential information on notice that such information is
confidential.
SECTION 9.10. Mitigation of Yield Protection. Each Lender hereby
agrees that, commencing as promptly as practicable after it becomes aware of the
occurrence of any event giving rise to the operation of Section 2.10(a), 2.11 or
2.13 with respect to such Lender, such Lender will give notice thereof through
the Agent to the respective Borrower. A Borrower may at any time, by notice
through the Agent to any Lender, request that such Lender change its Applicable
Lending Office as to any Advance or Type of Advance or that it specify a new
Applicable Lending Office with respect to its Commitment and any Advance held by
it or that it rebook any such Advance with a view to avoiding or mitigating the
consequences of an occurrence such as described in the preceding sentence, and
such Lender will use reasonable efforts to comply with such request unless, in
the opinion of such Lender, such change or specification or rebooking is
inadvisable or might have an adverse effect, economic or otherwise, upon it,
including its reputation. In addition, each Lender agrees that, except for
changes or specifications or rebookings required by law or effected pursuant to
the preceding sentence, if the result of any change or change of specification
of Applicable Lending Office or rebooking would, but for this sentence, be to
impose additional costs or requirements upon the respective Borrower pursuant to
Section 2.10(a), Section 2.11 or Section 2.13 (which would not be imposed absent
such change or change of specification or rebooking) by reason of legal or
regulatory requirements in effect at the time thereof and of which such Lender
is aware at such time, then such costs or requirements shall not be imposed upon
such Borrower but shall be borne by such Lender. All expenses incurred by any
Bank in changing an Applicable Lending Office or specifying another Applicable
Lending Office of such Lender or rebooking any Advance in response to a request
from a Borrower shall be paid by such Borrower. Nothing in this Section 9.10
(including, without limitation, any failure by a Lender to give any notice
contemplated in the first sentence hereof) shall limit, reduce or postpone any
obligations of the respective Borrower under Section 2.10(a), Section 2.11 or
Section 2.13, including any obligations payable
64
<PAGE>
in respect of any period prior to the date of any change or specification of a
new Applicable Lending Office or any rebooking of any Advance.
SECTION 9.11. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 9.12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9.13. Jurisdiction, Etc. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or the Notes, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. Each Designated Subsidiary hereby agrees that service of
process in any such action or proceeding brought in the any such New York State
court or in such federal court may be made upon CT Corporation System at its
offices at 1633 Broadway, New York, New York 10019 (the "Process Agent") and
each Designated Subsidiary hereby irrevocably appoints the Process Agent its
authorized agent to accept such service of process, and agrees that the failure
of the Process Agent to give any notice of any such service shall not impair or
affect the validity of such service or of any judgment rendered in any action or
proceeding based thereon. Each Borrower hereby further irrevocably consents to
the service of process in any action or proceeding in such courts by the mailing
thereof by any parties hereto by registered or certified mail, postage prepaid,
to such Borrower at its address specified pursuant to Section 9.02. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to serve legal process in any
other manner permitted by law or to bring any action or proceeding relating to
this Agreement or the Notes in the courts of any jurisdiction. To the extent
that each Designated Subsidiary has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, each Designated Subsidiary
hereby irrevocably waives such immunity in respect of its obligations under this
Agreement.
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the Notes in any New
York State or federal court. Each of the parties hereto
65
<PAGE>
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
SECTION 9.14. Substitution of Currency. If a change in any Foreign
Currency occurs pursuant to any applicable law, rule or regulation of any
governmental, monetary or multi-national authority, this Agreement (including,
without limitation, the definitions of Eurocurrency Rate and LIBO Rate) will be
amended to the extent determined by the Agent (acting reasonably and in
consultation with the Company) to be necessary to reflect the change in currency
and to put the Lenders and the Borrowers in the same position, so far as
possible, that they would have been in if no change in such Foreign Currency had
occurred.
SECTION 9.15. Final Agreement. This written agreement represents the
full and final agreement between the parties with respect to the matters
addressed herein and supercedes all prior communications, written or oral, with
respect thereto. There are no unwritten agreements between the parties.
SECTION 9.16. Judgment. (a) If for the purposes of obtaining judgment
in any court it is necessary to convert a sum due hereunder or under the Notes
in any currency (the "Original Currency") into another currency (the "Other
Currency"), the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could purchase the Original
Currency with the Other Currency at 9:00 A.M. (New York City time) on the first
Business Day preceding that on which final judgment is given.
(b) The obligation of each Borrower in respect of any sum due in the
Original Currency from it to any Lender or the Agent hereunder or under the
Revolving Credit Note or Revolving Credit Notes held by such Lender shall,
notwithstanding any judgment in any Other Currency, be discharged only to the
extent that on the Business Day following receipt by such Lender or the Agent
(as the case may be) of any sum adjudged to be so due in such Other Currency,
such Lender or the Agent (as the case may be) may in accordance with normal
banking procedures purchase Dollars with such Other Currency; if the amount of
Dollars so purchased is less than the sum originally due to such Lender or the
Agent (as the case may be) in the Original Currency, such Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Lender or the Agent (as the case may be) against such loss, and if the amount of
Dollars so purchased exceeds the sum originally due to any Lender or the Agent
(as the case may be) in the Original Currency, such Lender or the Agent (as the
case may be) agrees to remit to such Borrower such excess.
66
<PAGE>
SECTION 9.17. Waiver of Jury Trial. Each Borrower, the Agent and each
Lender hereby irrevocably waive all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to this Agreement or the Notes or the actions of the
Agent or any Lender in the negotiation, administration, performance or
enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
HONEYWELL INTERNATIONAL INC.
By:/s/ James V. Gelly
------------------------------------
Name: James V. Gelly
Title: Vice President and Treasurer
CITIBANK, N.A., as Agent
By /s/ Carolyn A. Kee
------------------------------------
Name: Carolyn A. Kee
Title: Vice President
COMMITMENT ARRANGER AND ADMINISTRATIVE AGENT
$126,333,333 CITIBANK, N.A.
By: /s/ Carolyn A. Kee
------------------------------------
Name: Carolyn A. Kee
Title: Vice President
CO-SYNDICATION AGENTS
$70,000,000 JPMORGAN CHASE BANK
By: /s/ Randolph Cates
------------------------------------
Name: Randolph Cates
Title: Vice President
$94,000,000 BANK OF AMERICA, N.A.
By /s/ John W. Pocalyko
------------------------------------
Name: John W. Pocalyko
Title: Managing Director
67
<PAGE>
$94,000,000 BARCLAYS BANK PLC
By:/s/ Douglas Bernegger
------------------------------------
Name: Douglas Bernegger
Title: Director
$94,000,000 DEUTSCHE BANK AG, NEW YORK BRANCH
By:/s/ Jean M. Hannigan
------------------------------------
Name: Jean M. Hannigan
Title: Director
By:/s/ Ping Chen
------------------------------------
Name: Ping Chen
Title: Associate
MANAGING AGENTS
$55,000,000 BNP PARIBAS
By:/s/ Christopher Criswell
------------------------------------
Name: Christopher Criswell
Title: Managing Director
By:/s/ Bruno Lavole
------------------------------------
Name: Bruno Lavole
Title: Managing Director
$55,000,000 BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By:/s/ Spencer Hughes
------------------------------------
Name: Spencer Hughes
Title: Vice President
$55,000,000 HSBC BANK USA
By:/s/Diane M. Zieske
------------------------------------
Name: Diane M. Zieske
Title: First Vice President
68
<PAGE>
$55,000,000 ABN AMRO BANK N.V.
By:/s/ James S. Kreitler
------------------------------------
Name: James S. Kreitler
Title: Senior Vice President
By:/s/ Todd J. Miller
------------------------------------
Name: Todd J. Miller
Title: Assistant Vice President
$50,000,000 BANK ONE, NA
By:/s/ Mahua Thakurta
------------------------------------
Name: Mahua Thakurta
Title: Associate Director
$50,000,000 THE NORTHERN TRUST COMPANY
By:/s/ Ashish S. Bhagwat
------------------------------------
Name: Ashish S. Bhagwat
Title: Vice President
CO-AGENTS
$21,666,667 SUMITOMO MITSUI BANKING
CORPORATION
By:/s/ Robert H. Riley III
------------------------------------
Name: Robert H. Riley III
Title: Senior Vice President
$25,000,000 WELLS FARGO BANK, NATIONAL
ASSOCIATION
By:/s/ Peter M. Angelica
------------------------------------
Name: Peter M. Angelica
Title: Vice President
$25,000,000 ROYAL BANK OF CANADA
By:/s/ Scott Umbs
------------------------------------
Name: Scott Umbs
Title: Manager
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<PAGE>
$25,000,000 UNICREDITO ITALIANO
By:/s/ Christopher Eldin
------------------------------------
Name: Christopher Eldin
Title: FVP & Deputy Manager
By:/s/ Charles Michael
------------------------------------
Name: Charles Michael
Title: Vice President
LENDERS
$15,000,000 ALLIED IRISH BANKS PLC
By:/s/ Niamh Carolan
------------------------------------
Name: Niamh Carolan
Title: Vice President
$15,000,000 BANCO BILBAO VIZCAYA ARGENTARIA S.A.
By:/s/ Miguel Lara
------------------------------------
Name: Miguel Lara
Title: VP, Global Corporate
Banking
By:/s/ Phillip Paddack
---------------------------------
Name: Phillip Paddack
Title: Senior VP, Branch Manager
$15,000,000 WESTPAC BANKING CORPORATION
By:/s/ Lisa Porter
------------------------------------
Name: Lisa Porter
Title: Vice President
$15,000,000 THE BANK OF NOVA SCOTIA
By:/s/ KCC Clarke
------------------------------------
Name: KCC Clarke
Title: Managing Director
$15,000,000 CREDIT AGRICOLE INDOSUEZ
By:/s/ Richard A. Drennan
------------------------------------
Name: Richard A. Drennan
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<PAGE>
Title: Vice President
Sr. Relationship Manager
By:/s/ Theodore D. Tice
------------------------------------
Theodore D. Tice
Title: Vice President
Sr. Relationship Manager
$15,000,000 INTESA BCI
By:/s/ F. Maffei
------------------------------------
Name: F. Maffei
Title: Vice President
By:/s/ C. Dougherty
------------------------------------
Name: C. Dougherty
Title: Vice President
$15,000,000 SOCIETE GENERALE
By:/s/ Ambrish D. Thanawala
------------------------------------
Name: Ambrish D. Thanawala
Title: Director Corporate Banking
$1,000,000,000 TOTAL OF COMMITMENTS
71
<PAGE>
SCHEDULE I
APPLICABLE LENDING OFFICES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
NAME OF INITIAL LENDER DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
ABN AMRO Bank N.V. 208 South LaSalle Street 208 South LaSalle Street
Suite 1500 Suite 1500
Chicago, IL 60604 Chicago, IL 60604
Attn: Credit Administration Attn: Credit Administration
Phone: (312) 992-51521 Phone: (312) 992-51521
Fax: (312) 992-5157 Fax: (312) 992-5157
- ----------------------------------------------------------------------------------------------------
Allied Irish Banks, plc AIB Business Support Unit, AIB Business Support Unit,
BankCentre BankCentre
8 Ballsbridge 8 Ballsbridge
Dublin 4, Ireland Dublin 4, Ireland
Attn: C.M. McCabe Attn: C.M. McCabe
T: 3531 641 3998 T: 3531 641 3998
F: 3531 660 3529 F: 3531 660 3529
- ----------------------------------------------------------------------------------------------------
Banco Bilbao Vizcaya 1345 Avenue of the Americas 1345 Avenue of the Americas
Argentarie S.A. 45th Floor 45th Floor
New York, NY 10105 New York, NY 10105
Attn: Miguel Lara Attn: Miguel Lara
Phone: (212) 728-1664 Phone: (212) 728-1664
Fax: (212) 333-2904 Fax: (212) 333-2904
- ----------------------------------------------------------------------------------------------------
Bank of America, N.A. 101 N. Tryon Street 101 N. Tryon Street
Charlotte, NC 28255 Charlotte, NC 28255
Attn: Carrie Cunder Attn: Carrie Cunder
Phone: (704) 386-8382 Phone: (704) 386-8382
Fax: (704) 409-0064 Fax: (704) 409-0064
- ----------------------------------------------------------------------------------------------------
The Bank of Tokyo-Mitsubishi 1251 Avenue of the Americas 1251 Avenue of the Americas
12th Floor 12th Floor
New York, NY 10020 New York, NY 10020
Attn: William Derasmo Attn: William Derasmo
Phone: (212) 782-4359 Phone: (212) 782-4359
Fax: (212) 782-6445 Fax: (212) 782-6445
- ----------------------------------------------------------------------------------------------------
Bank One, NA One Bank One Plaza One Bank One Plaza
Chicago, IL 60670 Chicago, IL 60670
Attn: Claudia Kech Attn: Claudia Kech
Phone: (312) 732-1031 Phone: (312) 732-1031
Fax: (312) 732-4840 Fax: (312) 732-4840
- ----------------------------------------------------------------------------------------------------
The Bank of Nova Scotia One Liberty Plaza One Liberty Plaza
New York, NY 10006 New York, NY 10006
Attn: Todd Meller Attn: Todd Meller
Phone: (212) 225-5096 T: 212 225-5096
- ----------------------------------------------------------------------------------------------------
Barclays Bank PLC 222 Broadway - 7th Floor 222 Broadway - 7th Floor
New York, NY 10038 New York, NY 10038
Attn: Chima Michael Attn: Chima Michael
Phone: (212) 412-3161 Phone: (212) 412-3161
Fax: (212) 412-5306 / 7 / 8 Fax: (212) 412-5306 / 7 / 8
- ----------------------------------------------------------------------------------------------------
</TABLE>
72
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
BNP Paribas 499 Park Avenue 499 Park Avenue
New York, NY 10022 New York, NY 10022
Attn: Andree Mitton/Robin Attn: Andree Mitton/Robin Jackson-
Jackson-Bogner Bogner
Phone: (212) 415-9617/9616 Phone: (212) 415-9617/9616
Fax: (212) 415-9606 Fax: (212) 415-9606
- ----------------------------------------------------------------------------------------------------
Citibank, N.A. 388 Greenwich Street 388 Greenwich Street
New York, NY 10013 New York, NY 10013
Attn: Carolyn Sheridan Attn: Carolyn Sheridan
Phone: (212) 559-3245 Phone: (212) 559-3245
Fax: (212) 826-2371 Fax: (212) 826-2371
- ----------------------------------------------------------------------------------------------------
Credit Agricole Indosuez 55 East Monroe 47th Floor 55 East Monroe 47th Floor
Chicago, IL 60603 Chicago, IL 60603
Attn: Kimberly WSilp Attn: Kimberly WSilp
T: (312) 917-7450 T: (312) 917-7450
F: (312) 372-4421 F: (312) 372-4421
- ----------------------------------------------------------------------------------------------------
Deutsche Bank AG, New York 31 West 52nd Street 31 West 52nd Street
Branch New York, NY 10019 New York, NY 10019
Attn: Colin T. Taylor Attn: Colin T. Taylor
Phone: (212) 474-7904 Phone: (212) 474-7904
Fax: (212) 474-8212 Fax: (212) 474-8212
- ----------------------------------------------------------------------------------------------------
HSBC Bank USA Agent Servicing Dept. 26th Floor Agent Servicing Dept. 26th Floor
One HSBC Center One HSBC Center
Buffalo, NY 14203 Buffalo, NY 14203
Attn: Tansia Hunter Attn: Tansia Hunter
Phone: (716) 841-1930 Phone: (716) 841-1930
Fax: (716) 841-0269 Fax: (716) 841-0269
- ----------------------------------------------------------------------------------------------------
Intesa BCI 1 S William Street 1 S William Street
New York, NY 10004 New York, NY 10004
Attn: Frank Maffei Attn: Frank Maffei
- ----------------------------------------------------------------------------------------------------
JPMorgan Chase Bank One Chase Manhattan Plaza One Chase Manhattan Plaza
New York, NY 10081 New York, NY 10081
Attn: Lenora Kiernan Attn: Lenora Kiernan
Phone: (212) 552-7309 Phone: (212) 552-7309
Fax: (212) 552-5650 Fax: (212) 552-5650
- ----------------------------------------------------------------------------------------------------
The Northern Trust Company 50 S. LaSalle Street 50 S. LaSalle Street
Chicago, IL 60675 Chicago, IL 60675
Attn: Linda Honda Attn: Linda Honda
Phone: (312) 444-3532 Phone: (312) 444-3532
Fax: (312) 630-1566 Fax: (312) 630-1566
- ----------------------------------------------------------------------------------------------------
</TABLE>
73
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Royal Bank of Canada One Liberty Plaza, 3rd Floor One Liberty Plaza, 3rd Floor
165 Broadway 165 Broadway
New York, NY 10006 New York, NY 10006
Attn: Karim Amr Attn: Karim Amr
Phone: (212) 428-6369 Phone: (212) 428-6369
Fax: (212) 428-2372 Fax: (212) 428-2372
with a copy to: with a copy to:
Attn: L. Litterini Attn: L. Litterini
Phone: (212) 428-6502 Phone: (212) 428-6502
Fax: (212) 428-2319 Fax: (212) 428-2319
- ----------------------------------------------------------------------------------------------------
Societe Generale 1221 Avenue of the America 1221 Avenue of the America
New York, NY 10020 New York, NY 10020
Attn: Maria Manesis-Iarriccio Attn: Maria Manesis-Iarriccio
Phone: (212) 278-5396 Phone: (212) 278-5396
Fax: (212) 278-7862 Fax: (212) 278-7862
- ----------------------------------------------------------------------------------------------------
Sumitomo Mitsui Banking 277 Park Avenue 277 Park Avenue
Corporation New York, NY 10172 New York, NY 10172
Attn: Edward McColly Attn: Edward McColly
Phone: (212) 224-4139 Phone: (212) 224-4139
Fax: (212) 224-4384 Fax: (212) 224-4384
- ----------------------------------------------------------------------------------------------------
Unicredito Italiano 375 Park Avenue 375 Park Avenue
New York, NY 10152 New York, NY 10152
Attn: Evangeline Blanco Attn: Evangeline Blanco
Phone: (212) 546-9615 Phone: (212) 546-9615
Fax: (212) 546-9675 Fax: (212) 546-9675
- ----------------------------------------------------------------------------------------------------
Wells Fargo Bank, National 70 East 55th Street 70 East 55th Street
Association 11th Floor 11th Floor
New York City, NY 10022-3222 New York City, NY 10022-3222
Attn: Peter M. Angelica\ Attn: Peter M. Angelica\
Phone: (212) 836-4141 Phone: (212) 836-4141
Fax: (212) 593-5241 Fax: (212) 593-5241
- ----------------------------------------------------------------------------------------------------
Westpac Banking Corporation GMO Nightshift Operations GMO Nightshift Operations
255 Elizabeth St. 3rd Floor 255 Elizabeth St. 3rd Floor
Sydney, NSW 2000 Sydney, NSW 2000
Australia Australia
Attn: Matt Healey Attn: Matt Healey
Phone: 011 612 9284-8241 Phone: 011 612 9284-8241
Fax: 011 44 207 621 7608 Fax: 011 44 207 621 7608
- ----------------------------------------------------------------------------------------------------
</TABLE>
74
<PAGE>
SCHEDULE 3.01(b)
DISCLOSED LITIGATION
While not giving an opinion as to whether any item is "reasonably
likely to have a Material Adverse Effect," we hereby disclose the litigation
matters as stated in our Form 10-Q for the quarter ended September 30, 2002,
under the heading "Legal Proceedings," the relevant portions of which are
attached.
SHAREOWNER LITIGATION - Honeywell and seven of its current and former
officers were named as defendants in several purported class action lawsuits
filed in the United States District Court for the District of New Jersey (the
Securities Law Complaints). The Securities Law Complaints principally allege
that the defendants violated federal securities laws by purportedly making false
and misleading statements and by failing to disclose material information
concerning Honeywell's financial performance, thereby allegedly causing the
value of Honeywell's stock to be artificially inflated. The purported class
period for which damages are sought is December 20, 1999 to June 19, 2000. On
January 15, 2002, the District Court dismissed the consolidated complaint
against four of Honeywell's current and former officers.
We believe that there is no factual or legal basis for the allegations in
the Securities Law Complaints. Although it is not possible at this time to
predict the result of these cases, we expect to prevail. However, an adverse
outcome could be material to our consolidated financial position or results of
operations. As a result of the uncertainty regarding the outcome of this matter,
no provision has been made in our financial statements with respect to this
contingent liability.
ENVIRONMENTAL MATTERS - We are subject to various federal, state and local
government requirements relating to the protection of employee health and safety
and the environment. We believe that, as a general matter, our policies,
practices and procedures are properly designed to prevent unreasonable risk of
environmental damage and personal injury to our employees and employees of our
customers and that our handling, manufacture, use and disposal of hazardous or
toxic substances are in accord with environmental laws and regulations. However,
mainly because of past operations and operations of predecessor companies, we,
like other companies engaged in similar businesses, have incurred remedial
response and voluntary cleanup costs for site contamination and are a party to
lawsuits and claims associated with environmental matters, including past
production of products containing toxic substances. Additional lawsuits, claims
and costs involving environmental matters are likely to continue to arise in the
future.
With respect to environmental matters involving site contamination, we
continually conduct studies, individually at our owned sites, and jointly as a
member of industry groups at non-owned sites, to determine the feasibility of
various remedial techniques to address environmental matters. It is our policy
to record appropriate liabilities for environmental matters when environmental
assessments are made or remedial efforts or damage claim payments are probable
and the costs can be reasonably estimated. With respect to site contamination,
the timing of these accruals is generally no later than the completion of
feasibility studies. We expect that we will be able to fund expenditures for
these matters from operating cash flow. The timing of cash expenditures depends
on a number of factors, including the timing of litigation and settlements of
<PAGE>
personal injury and property damage claims, regulatory approval of cleanup
projects, remedial techniques to be utilized and agreements with other parties.
Although we do not currently possess sufficient information to reasonably
estimate the amounts of liabilities to be recorded upon future completion of
studies, litigation or settlements, and neither the timing nor the amount of the
ultimate costs associated with environmental matters can be determined, they
could be material to our consolidated results of operations. However,
considering our past experience and existing reserves, we do not expect that
these matters will have a material adverse effect on our consolidated financial
position.
ASBESTOS MATTERS - Like more than a thousand other industrial companies,
Honeywell is a defendant in personal injury actions related to asbestos. Our
involvement is limited because we did not mine or produce asbestos, nor did we
make or sell insulation products or other construction materials that have been
identified as the primary cause of asbestos-related disease in the vast majority
of claimants. Rather, we made several products that contained small amounts of
asbestos.
Honeywell's Bendix Friction Materials business manufactured automotive
brake pads that included asbestos in an encapsulated form. There is a limited
group of potential claimants consisting largely of professional brake mechanics.
From 1981 through September 30, 2002, we have resolved approximately 56,000
Bendix claims at an average cost per claim of approximately one thousand two
hundred dollars. Through the second quarter of 2002, Honeywell had no
out-of-pocket costs for these cases since its insurance deductible was satisfied
many years ago. There are currently approximately 50,000 claims pending and we
have no reason to believe that the historic rate of dismissal will change. We
have $2 billion of insurance remaining, which we expect to cover the vast
majority of claims. Although it is impossible to predict the outcome of pending
or future claims, in light of our potential exposure, our prior experience in
resolving these claims, and our insurance coverage, we do not believe that the
Bendix asbestos-related claims will have a material adverse effect on our
consolidated results of operations or financial position.
Another source of claims is refractory products (high temperature bricks
and cement) sold largely to the steel industry in the East and Midwest by North
American Refractories Company (NARCO), a business we owned from 1979 to 1986.
Less than 2 percent of NARCO's products contained asbestos.
When we sold the NARCO business in 1986, we agreed to indemnify NARCO with
respect to personal injury claims for products that had been discontinued prior
to the sale (as defined in the sale agreement). NARCO retained all liability for
all other claims. NARCO has resolved approximately 176,000 claims through
January 4, 2002 at an average cost per claim of two thousand two hundred
dollars. Of those claims, 43 percent were dismissed on the ground that there was
insufficient evidence that NARCO was responsible for the claimant's asbestos
exposure. There are approximately 116,000 claims currently pending against
NARCO, including approximately 7 percent in which Honeywell is also named as a
defendant. During the past 18 years, Honeywell and our insurers have contributed
to the cost of the NARCO defense. We have
2
<PAGE>
approximately $2 billion of insurance remaining that can be specifically
allocated to NARCO-related liability.
On January 4, 2002, NARCO filed for reorganization under Chapter 11 of the
U.S. Bankruptcy Code. As a result, all of the claims pending against NARCO are
automatically stayed pending the reorganization of NARCO. In addition, because
the claims pending against Honeywell necessarily will impact the liabilities of
NARCO, because the insurance policies held by Honeywell are essential to a
successful NARCO reorganization, and because Honeywell has offered to commit the
value of those policies to the reorganization, the bankruptcy court has
temporarily enjoined any claims against Honeywell, current or future, related to
NARCO. Although the stay has been extended eight times since January 4, 2002,
there is no assurance that such stay will remain in effect. In connection with
NARCO's bankruptcy filing, we paid NARCO's parent company $40 million and agreed
to provide NARCO with up to $20 million in financing. We also agreed to pay $20
million to NARCO's parent company upon the filing of a plan of reorganization
for NARCO acceptable to Honeywell, and to pay NARCO's parent company $40
million, and to forgive any outstanding NARCO indebtedness, upon the
confirmation and consummation of such a plan.
We are involved in ongoing negotiations with counsel representing more than
75% of the NARCO-related asbestos claimants regarding settlement of all pending
and potential NARCO-related asbestos claims against Honeywell. We believe that,
as part of the NARCO plan of reorganization, a trust will be established for the
benefit of all asbestos claimants, current and future. If the trust is put in
place and approved by the court as fair and equitable, Honeywell as well as
NARCO will be entitled to a permanent channeling injunction barring all present
and future individual actions in state or federal courts and requiring all
asbestos-related claims based on exposure to NARCO products to be made against
the federally-supervised trust. As part of its ongoing settlement negotiations,
Honeywell is seeking to cap its annual contributions to the trust with respect
to future claims at a level that would not have a material impact on Honeywell's
operating cash flows. Although there is no assurance that ongoing settlement
negotiations will be successfully completed or that a plan of reorganization
will be proposed or confirmed, the cost of securing a settlement which would
resolve all future, as well as all pending, NARCO-related asbestos claims could
exceed the value of our existing insurance and reserves plus the existing NARCO
assets. While any such settlement could have a material adverse impact on our
consolidated operating results or operating cash flows in the periods recognized
or paid, we do not believe that it would have a material adverse impact on our
consolidated financial position.
3
<PAGE>
EXHIBIT A-1 - FORM OF
REVOLVING CREDIT
PROMISSORY NOTE
Dated: _______________, 200_
FOR VALUE RECEIVED, the undersigned, [NAME OF BORROWER], a
_________________________ corporation (the "Borrower"), HEREBY PROMISES TO PAY
to the order of _________________________ (the "Lender") for the account of its
Applicable Lending Office on the Termination Date (each as defined in the Credit
Agreement referred to below) the aggregate principal amount of the Revolving
Credit Advances made by the Lender to the Borrower pursuant to the 364-Day
Credit Agreement dated as of November 27, 2002 among Honeywell International
Inc., the Lender and certain other lenders parties thereto, and Citibank, N.A.,
as Agent for the Lender and such other lenders (as amended or modified from time
to time, the "Credit Agreement"; the terms defined therein being used herein as
therein defined) outstanding on such date.
The Borrower promises to pay interest on the unpaid principal amount
of each Revolving Credit Advance from the date of such Revolving Credit Advance
until such principal amount is paid in full, at such interest rates, and payable
at such times, as are specified in the Credit Agreement.
Both principal and interest in respect of each Revolving Credit
Advance (i) in Dollars are payable in lawful money of the United States of
America to Citibank, N.A., as Agent, at 388 Greenwich Street, New York, New
York, 10013, in same day funds and (ii) in any Major Currency are payable in
such currency at the applicable Payment Office in same day funds. Each Revolving
Credit Advance owing to the Lender by the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded by the Lender and, prior to any transfer hereof, endorsed on the grid
attached hereto which is part of this Promissory Note.
This Promissory Note is one of the Revolving Credit Notes referred to
in, and is entitled to the benefits of, the Credit Agreement. The Credit
Agreement, among other things, (i) provides for the making of Revolving Credit
Advances by the Lender to the Borrower from time to time in an aggregate amount
not to exceed at any time outstanding the Dollar amount first above mentioned or
the Equivalent thereof in one or more Major Currencies, the indebtedness of the
Borrower resulting from each such Revolving Credit Advance being evidenced by
this Promissory Note, (ii) contains provisions for determining the Dollar
Equivalent of Revolving Credit Advances denominated in Major Currencies and
(iii) contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.
<PAGE>
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
This promissory note shall be governed by, and construed in accordance
with the laws of the State of New York.
[NAME OF BORROWER]
By
-------------------------------
Name:
Title:
2
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------
Amount of Amount of
Advance in Principal Unpaid
Type of Relevant Interest Paid Principal Notation
Date Advance Currency Rate or Prepaid Balance Made By
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
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3
<PAGE>
EXHIBIT A-2 - FORM OF
COMPETITIVE BID
PROMISSORY NOTE
Dated: _______________, 200_
FOR VALUE RECEIVED, the undersigned, [NAME OF BORROWER], a
_________________________ corporation (the "Borrower"), HEREBY PROMISES TO PAY
to the order of _________________________ (the "Lender") for the account of its
Applicable Lending Office (as defined in the 364-Day Credit Agreement dated as
of November 27, 2002 among Honeywell International Inc., the Lender and certain
other lenders parties thereto, and Citibank, N.A., as Agent for the Lender and
such other lenders (as amended or modified from time to time, the "Credit
Agreement"; the terms defined therein being used herein as therein defined)), on
_______________, the principal amount of [U.S.$_______________] [for a
Competitive Bid Advance in a Foreign Currency, list currency and amount of such
Advance].
The Borrower promises to pay interest on the unpaid principal amount
hereof from the date hereof until such principal amount is paid in full, at the
interest rate and payable on the interest payment date or dates provided below:
Interest Rate: [____% per annum (calculated on the basis of a year of
_____ days for the actual number of days elapsed)].
Interest Payment Date or Dates: ______________
Both principal and interest are payable in lawful money of
___________________ to Citibank, N.A., as Agent, for the account of the Lender
at the office of _________________________, at _________________________ in same
day funds.
This Promissory Note is one of the Competitive Bid Notes referred to
in, and is entitled to the benefits of, the Credit Agreement. The Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events.
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
<PAGE>
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York.
[NAME OF BORROWER]
By
----------------------------------
Name:
Title:
2
<PAGE>
EXHIBIT B-1 - FORM OF NOTICE OF
REVOLVING CREDIT BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
Two Penns Way
New Castle, Delaware 19720 [Date]
Attention: Bank Loan Syndication
Ladies and Gentlemen:
The undersigned, [Name of Borrower], refers to the 364-Day Credit
Agreement, dated as of November 27, 2002 (as amended or modified from time to
time, the "Credit Agreement", the terms defined therein being used herein as
therein defined), among the undersigned, certain Lenders parties thereto, and
Citibank, N.A., as Agent for said Lenders, and hereby gives you notice,
irrevocably, pursuant to Section 2.02 of the Credit Agreement that the
undersigned hereby requests a Revolving Credit Borrowing under the Credit
Agreement, and in that connection sets forth below the information relating to
such Revolving Credit Borrowing (the "Proposed Revolving Credit Borrowing") as
required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Revolving Credit Borrowing is
_______________.
(ii) The Type of Advances comprising the Proposed Revolving Credit
Borrowing is [Base Rate Advances] [Eurocurrency Rate Advances].
(iii) The aggregate amount of the Proposed Revolving Credit Borrowing
is [$_______________] [for a Revolving Credit Borrowing in a Major Currency,
list currency and amount of Revolving Credit Borrowing].
[(iv) The initial Interest Period for each Eurocurrency Rate Advance
made as part of the Proposed Revolving Credit Borrowing is _____ month[s].]
The undersigned hereby certifies that the conditions precedent to this
Revolving Credit Borrowing set forth in Section 3.04 of the Credit Agreement
have been satisfied and the applicable statements contained therein are true on
the date hereof, and will be true on the date of the Proposed Revolving Credit
Borrowing.
<PAGE>
Very truly yours,
[NAME OF BORROWER]
By
---------------------------------
Name:
Title:
2
<PAGE>
EXHIBIT B-2 - FORM OF NOTICE OF
COMPETITIVE BID BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
Two Penns Way
New Castle, Delaware 19720 [Date]
Attention: Bank Loan Syndication
Ladies and Gentlemen:
The undersigned, [Name of Borrower], refers to the 364-Day Credit
Agreement, dated as of November 27, 2002 (as amended or modified from time to
time, the "Credit Agreement", the terms defined therein being used herein as
therein defined), among Honeywell International Inc., certain Lenders parties
thereto and Citibank, N.A., as Agent for said Lenders, and hereby gives you
notice, irrevocably, pursuant to Section 2.03 of the Credit Agreement that the
undersigned hereby requests a Competitive Bid Borrowing under the Credit
Agreement, and in that connection sets forth the terms on which such Competitive
Bid Borrowing (the "Proposed Competitive Bid Borrowing") is requested to be
made:
(A) Date of Competitive Bid Borrowing __________________
(B) Aggregate Amount of Competitive Bid Borrowing __________________
(C) [Maturity Date] [Interest Period] __________________
(D) Interest Rate Basis __________________
(E) Day Count Convention __________________
(F) Interest Payment Date(s) __________________
(G) [Currency] __________________
(H) Borrower's Account Location __________________
(I) ___________________ __________________
The undersigned hereby certifies that the conditions precedent to this
Competitive Bid Borrowing set forth in Section 3.05 of the Credit Agreement have
been satisfied and the applicable statements contained therein are true on the
date hereof, and will be true on the date of the Proposed Competitive Bid
Borrowing.
<PAGE>
The undersigned hereby confirms that the Proposed Competitive Bid
Borrowing is to be made available to it in accordance with Section 2.03(a)(v) of
the Credit Agreement.
Very truly yours,
[NAME OF BORROWER]
By
---------------------------------
Name:
Title:
2
<PAGE>
EXHIBIT C - FORM OF
ASSIGNMENT AND ACCEPTANCE
Dated: _____________
Reference is made to the 364-Day Credit Agreement dated as of November
27, 2002 (as amended or modified from time to time, the "Credit Agreement")
among Honeywell International Inc., a Delaware corporation (the "Borrower"), the
Lenders (as defined in the Credit Agreement), and Citibank, N.A., as agent (the
"Agent") for the Lenders. Terms defined in the Credit Agreement are used herein
with the same meaning.
____________ (the "Assignor") and ____________ (the "Assignee") agree
as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and to
the Assignor's rights and obligations under the Credit Agreement as of the date
hereof (other than in respect of Competitive Bid Advances and Competitive Bid
Notes) equal to the percentage interest specified on Schedule 1 hereto of all
outstanding rights and obligations under the Credit Agreement (other than in
respect of Competitive Bid Advances and Competitive Bid Notes). After giving
effect to such sale and assignment, the Assignee's Commitment and the amount of
the Revolving Credit Advances in each relevant currency owing to the Assignee
will be as set forth on Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or any other instrument or document furnished pursuant thereto or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Agreement or any other instrument or document furnished pursuant thereto;
(iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any Borrower or the performance or
observance by such Borrower of any of its obligations under the Credit Agreement
or any other instrument or document furnished pursuant thereto; [and (iv)
attaches the Revolving Credit Note held by the Assignor and requests that the
Agent obtain from the Borrower a new Revolving Credit Note payable to the order
of the Assignee with respect to the aggregate principal amount of the Revolving
Credit Advances assumed by such Assignee pursuant hereto, substantially in the
form of Exhibit A-1 to the Credit Agreement].
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01(e) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) confirms
<PAGE>
that it is an Eligible Assignee; (iv) appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under the Credit Agreement as are delegated to the Agent by the terms thereof,
together with such powers and discretion as are reasonably incidental thereto;
(v) agrees that it will perform in accordance with their terms all of the
obligations that by the terms of the Credit Agreement are required to be
performed by it as a Lender; and (vi) attaches any U.S. Internal Revenue Service
forms required under Section 2.13 of the Credit Agreement.
4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement, provided, however,
that the Assignor's rights under Sections 2.10, 2.13 and 9.04 of the Credit
Agreement, and its obligations under Section 8.05 of the Credit Agreement, shall
survive the assignment pursuant to this Assignment and Acceptance as to matters
occurring prior to the Effective Date.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Revolving Credit Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and facility
fees with respect thereto) to the Assignee. The Assignor and Assignee shall make
all appropriate adjustments in payments under the Credit Agreement and any
Revolving Credit Notes for periods prior to the Effective Date directly between
themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
1 to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
2
<PAGE>
Schedule 1
to
Assignment and Acceptance
Dated: ______________
Section 1.
Percentage interest assigned: _____%
Assignee's Commitment: $_____
Section 2.
(a) Assigned Advances
Aggregate outstanding principal amount of Revolving Credit
Advances in Dollars assigned: $_____
Aggregate outstanding principal amount of Revolving Credit
Advances in lawful currency of the United Kingdom of Great
Britain and Northern Ireland assigned: 'L'_____
Aggregate outstanding principal amount of Revolving Credit
Advances in lawful currency of Japan assigned: 'Y'_____
Aggregate outstanding principal amount of Revolving Credit
Advances in Euros assigned: 'E'_____
(b) Retained Advances
Aggregate outstanding principal amount of Revolving Credit
Advances in Dollars retained: $_____
Aggregate outstanding principal amount of Revolving Credit
Advances in lawful currency of the United Kingdom of Great
Britain and Northern Ireland retained: 'L'_____
Aggregate outstanding principal amount of Revolving Credit
Advances in lawful currency of Japan retained: 'Y'_____
3
<PAGE>
Aggregate outstanding principal amount of Revolving Credit
Advances in Euros retained: 'E'_____
Effective Date(1): _______________
[NAME OF ASSIGNOR], as Assignor
By
---------------------------
Title:
Dated:
------------------------
[NAME OF ASSIGNEE], as Assignee
By
---------------------------
Title:
Dated:
------------------------
Domestic Lending Office:
[Address]
Eurocurrency Lending Office:
[Address]
Consented to this __________ day
of _______________
[NAME OF BORROWER]
By ]
Name:
Title:
EXHIBIT D - FORM OF ASSUMPTION AGREEMENT
Dated:________
Honeywell International Inc.
P.O. Box 12l9
101 Columbia Road
- ----------
(1) This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Agent.
4
<PAGE>
Morristown, New Jersey 07960
Attention: Treasurer
Citibank, N.A.,
as Agent
Two Penns Way
New Castle, Delaware 19720
Attention: Bank Loan Syndication
Ladies and Gentlemen:
Reference is made to the 364-Day Credit Agreement dated as of November
27, 2002 among Honeywell International Inc. (the "Company"), the Lenders parties
thereto, and Citibank, N.A. as Agent (the "Credit Agreement"; terms defined
therein being used herein as therein defined), for such Lenders.
The undersigned ("Assuming Lender") proposes to become an Assuming
Lender pursuant to Section 2.16 of the Credit Agreement and, in that connection,
hereby agrees that it shall become a Lender for purposes of the Credit Agreement
on [applicable Extension Date], assuming on such date the Commitment (without
giving effect to assignments thereof which have not yet become effective and
without regard to any Competitive Bid Commitment Reduction) as in effect on
[applicable Extension Date] of [name of applicable Non-Consenting Lender] (the
"Assignor") in the amount of $____________ and the Advances (without giving
effect to assignments thereof which have not yet become effective) owing to the
Assignor on [applicable Extension Date] in the amount of [indicate amounts and
currencies of various assigned Advances].
The Assignor (i) represents and warrants that as of the date hereof
its Commitment (without giving effect to assignments thereof which have not yet
become effective and without regard to any Competitive Bid Commitment Reduction)
is $______ and the outstanding principal amount of Advances owing to it (without
giving effect to assignments thereof which have not yet become effective) (A) in
Dollars is $______, (B) in lawful currency of Japan is 'Y'____, (C) in lawful
currency of the United Kingdom of Great Britain and Northern Ireland is
'L' ____, (D) in Euros is 'E' ____ [, and (F) indicate amounts of Advances
in other Foreign Currencies, if any]; (ii) represents and warrants that it is
the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim; (iii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other instrument or document furnished pursuant thereto
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; and (iv) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Company or any
other Borrower or the performance or observance by the Company or any other
Borrower
2
<PAGE>
of any of its obligations under the Credit Agreement or any other instrument or
document furnished pursuant thereto.
The Assuming Lender (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 4.01(e) thereof, the most recent financial statements referred to in
Section 5.01(h) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assumption Agreement; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers under the Credit Agreement as are
delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (iv) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender; (v) specifies as its
Lending Office (and address for notices) the offices set forth beneath its name
on the signature pages hereof; and (vi) attaches the forms prescribed by the
Internal Revenue Service of the United States required under Section 2.13 of
Credit Agreement.
The Assuming Lender requests that the Company deliver to the Agent (to
be promptly delivered to the Assuming Lender) Revolving Credit Notes payable to
the order of the Assuming Lender, dated as of the Extension Date and
substantially in the form of Exhibit A-1 to the Credit Agreement.
The effective date for this Assumption Agreement shall be [applicable
Extension Date]. Upon delivery of this Assumption Agreement to the Company and
the Agent, and satisfaction of all conditions imposed under Section 2.16 as of
[date specified above], the undersigned shall be a party to the Credit Agreement
and have the rights and obligations of a Lender thereunder and the Assignor
shall relinquish its rights and be released from its obligations under the
Credit Agreement. As of [date specified above], the Agent shall make all
payments under the Credit Agreement in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and
commitment fees) to the Assuming Lender.
This Assumption Agreement may be executed in counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart by
telecopier shall be effective as delivery of a manually executed counterpart of
this Assumption Agreement.
3
<PAGE>
This Assumption Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
Very truly yours,
[NAME OF ASSUMING LENDER]
By
----------------------------------
Name:
Title:
Domestic Lending Office
(and address for notices):
[Address]
Eurodollar Lending Office
[NAME OF ASSIGNOR](2)
By
----------------------------------
Name:
Title:
[Address]
Above Acknowledged and Agreed to:
HONEYWELL INTERNATIONAL INC.
By
---------------------------------
Name:
Title:
- ----------
(2) Use only in connection with Section 2.16.
4
<PAGE>
EXHIBIT E - FORM OF DESIGNATION LETTER
[DATE]
To each of the Lenders
parties to the
Credit Agreement (as defined
below) and to Citibank, N.A.,
as Agent for such Lenders
Ladies and Gentlemen:
Reference is made to the 364-Day Credit Agreement dated as of November
27, 2002 among Honeywell International Inc. (the "Company"), the Lenders named
therein, and Citibank, N.A., as Agent for said Lenders (the "Credit Agreement").
For convenience of reference, terms used herein and defined in the Credit
Agreement shall have the respective meanings ascribed to such terms in the
Credit Agreement.
Please be advised that the Company hereby designates its undersigned
Subsidiary, ____________ ("Designated Subsidiary"), as a "Designated Subsidiary"
under and for all purposes of the Credit Agreement.
The Designated Subsidiary, in consideration of each Lender's agreement
to extend credit to it under and on the terms and conditions set forth in the
Credit Agreement, does hereby assume each of the obligations imposed upon a
"Designated Subsidiary" and a "Borrower" under the Credit Agreement and agrees
to be bound by the terms and conditions of the Credit Agreement. In furtherance
of the foregoing, the Designated Subsidiary hereby represents and warrants to
each Lenders as follows:
1. The Designated Subsidiary is a corporation duly incorporated,
validly existing and in good standing under the laws of __________________
and is duly qualified to transact business in all jurisdictions in which
such qualification is required.
2. The execution, delivery and performance by the Designated
Subsidiary of this Designation Letter, the Credit Agreement, its Notes and
the consummation of the transactions contemplated thereby, are within the
Designated Subsidiary's corporate powers, have been duly authorized by all
necessary corporate action, and do not and will not cause or constitute a
violation of any provision of law or regulation or any provision of the
charter or by-laws of the Designated Subsidiary or result in the breach of,
or constitute a default or require any consent under, or result in the
creation of any lien, charge or encumbrance upon any of the properties,
revenues, or assets of the Designated Subsidiary pursuant to, any indenture
or other agreement or instrument to which the Designated Subsidiary is a
party or by which the Designated Subsidiary or its property may be bound or
affected.
3. This Designation Agreement and each of the Notes of the Designated
Subsidiary, when delivered, will have been duly executed and delivered, and
this
<PAGE>
Designation Letter, the Credit Agreement and each of the Notes of the
Designated Subsidiary, when delivered, will constitute a legal, valid and
binding obligation of the Designated Subsidiary enforceable against the
Designated Subsidiary in accordance with their respective terms except to
the extent that such enforcement may be limited by applicable bankruptcy,
insolvency and other similar laws affecting creditors' rights generally.
4. There is no action, suit, investigation, litigation or proceeding
including, without limitation, any Environmental Action, pending or to the
knowledge of the Designated Subsidiary Threatened affecting the Designated
Subsidiary before any court, governmental agency or arbitration that (i) is
reasonably likely to have a Material Adverse Effect, or (ii) purports to
effect the legality, validity or enforceability of this Designation Letter,
the Credit Agreement, any Note of the Designated Subsidiary or the
consummation of the transactions contemplated thereby.
5. No authorizations, consents, approvals, licenses, filings or
registrations by or with any governmental authority or administrative body
are required in connection with the execution, delivery or performance by
the Designated Subsidiary of this Designation Letter, the Credit Agreement
or the Notes of the Des