As filed with the Securities and Exchange Commission on December 19, 2002
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
____________________________
PRAXAIR, INC.
(Exact name of registrant as specified in its charter)
Delaware 06-124-9050
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
39 Old Ridgebury Road
Danbury, Connecticut 06810-5113
(203) 837-2000
(Address, including zip code, and telephone
number, including area code, of
registrant's principal executive
offices)
David H. Chaifetz
Vice President, General Counsel and Secretary
Praxair, Inc.
(Same address and telephone number as above)
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
________________________________
Copies to:
W. Leslie Duffy Sarah Jones Beshar
Cahill Gordon & Reindel Davis Polk & Wardwell
80 Pine Street 450 Lexington Avenue
New York, NY 10005 New York, NY 10017
(212) 701-3000 (212) 450-4000
________________________________
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
________________________________________
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Proposed Maximum Proposed Maximum
Securities to Be Registered Amount to Be Offering Price Aggregate Amount of
Registered (1) Per Unit Offering Price Registration Fee
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Debt Securities................................. (2)(3) (2) (2)
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Preferred Stock (par value $.01 per share)...... (2)(4) (2) (2)
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Common Stock (par value $.01 per share)......... (2)(5) (2) (2)
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Preferred Stock Purchase Rights(6).............. (2) (2) (2)
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Total........................................... $1,375,000,000(7) 100% $1,375,000,000(2) $32,750(8)
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(1) Exclusive of accrued interest or dividends, if any. Estimated solely for
the purpose of calculating the registration fee in accordance with Rule
457(o) under the Securities Act of 1933, as amended (the "Securities Act").
(2) In no event will the aggregate maximum offering price of all securities
issued, from time to time, pursuant to this Registration Statement exceed
$1,375,000,000. The proposed maximum offering price per unit will be
determined from time to time by us in connection with the issuance by us of
the securities registered hereunder. Any securities registered hereunder
may be sold separately or as units with other securities registered
hereunder.
(3) Subject to footnote (2), there is being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold, from time
to time, for our account. If any Debt Securities are being issued at an
original discount, then the offering price may be in such greater principal
amount as shall result in the aggregate initial offering price not to
exceed $1,375,000,000, less the dollar amount of any securities previously
issued hereunder.
(4) Subject to footnote (2), there is being registered hereunder an
indeterminate number of shares of our Preferred Stock as may be sold, from
time to time, for our account. There is also being registered hereunder a
presently indeterminate number of additional shares of Preferred Stock as
may be issued on conversion of the Debt Securities, if and to the extent
Debt Securities issued hereunder are convertible into our Preferred Stock.
(5) Subject to footnote (2), there is being registered hereunder a presently
indeterminate number of shares of our Common Stock as may be sold from time
to time by us, including shares or other classes or series of our stock
that may be issued upon reclassification of our unissued authorized stock.
There is also being registered hereunder an indeterminate number of shares
of our Common Stock, including shares of other classes or series of our
stock that may be issued upon reclassification of our unissued, authorized
stock, as shall be issuable upon conversion of the Preferred Stock or Debt
Securities, if and to the extent Preferred Stock and Debt Securities issued
hereunder are convertible into Common Stock, and for which no separate
consideration will be received.
(6) The Preferred Stock Purchase Rights currently trade with our Common Stock.
Until the occurrence of certain prescribed events the Preferred Stock
Purchase Rights are not exercisable. The Preferred Stock Purchase Rights
are evidenced by the certificates of Common Stock and will be transferred
along with and on1y with the Common Stock. Thereafter, separate rights
certificates will be issued representing one Preferred Stock Purchase Right
for each share of Common Stock held, subject to adjustment pursuant to
anti-dilution provisions.
(7) Of the $1,375,000,000 of securities being registered hereunder, pursuant to
Rule 429(b) under the Securities Act, an aggregate of $375,000,000 of
securities are being carried forward from the registrant's prior
registration statement on Form S-3 (File No. 333-57386), filed with the
Commission on March 21, 2001.
(8) Pursuant to Rule 457(p), this fee does not include registration fees of
$93,750 previously paid with respect to $375,000,000 of securities of the
registrant pursuant to registration statement on Form S-3 (File No.
333-57386), filed with the Commission on March 21, 2001, which securities
are being carried forward herewith.
The Company hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Company shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED DECEMBER 19, 2002
PROSPECTUS
$1,375,000,000
PRAXAIR, INC.
Common Stock
Preferred Stock
and
Debt Securities
We may offer, from time to time, in one or more series:
o shares of our common stock;
o shares of our preferred stock;
o unsecured senior debt securities; and
o unsecured subordinated debt securities.
The securities:
o will have a maximum aggregate offering price of $1,375,000,000;
o will be offered at prices and on terms to be set forth in one or more
prospectus supplements;
o may be denominated in U.S. dollars or in other currencies or currency
units;
o may be offered separately or together with other securities as units,
or in separate series; and
o may be listed on a national securities exchange, if specified in the
applicable prospectus supplement.
The aggregate initial offering price of all securities sold under this
prospectus will not exceed $1,375,000,000.
Our common stock is listed on the New York Stock Exchange under the symbol
"PX".
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_________________
The securities may be sold from time to time directly, through agents or
through underwriters and/or dealers. If any agent of the issuer or any
underwriter is involved in the sale of the securities, the name of such agent or
underwriter and any applicable commission or discount will be set forth in the
accompanying prospectus supplement.
_________________
This prospectus may not be used unless accompanied by a prospectus supplement.
_________________
The date of this prospectus is , 2002.
TABLE OF CONTENTS
Page
About This Prospectus.........................................................1
Note Regarding Forward-Looking Statements.....................................1
The Company...................................................................2
Use of Proceeds...............................................................2
Ratio of Earnings To Fixed Charges and Ratio of Earnings To Combined
Fixed Charges and Preferred Stock Dividends.................................3
Description of Capital Stock..................................................3
Description of Debt Securities................................................8
Plan of Distribution.........................................................21
Legal Matters................................................................23
Experts......................................................................23
Where You Can Find More Information..........................................23
Incorporation of Certain Documents by Reference..............................24
i
ABOUT THIS PROSPECTUS
This prospectus is part of a "shelf" registration statement filed with the
United States Securities and Exchange Commission by us. By using a shelf
registration statement, we may sell up to $1,375,000,000 offering price of any
combination of the securities described in this prospectus from time to time and
in one or more offerings. This prospectus only provides you with a general
description of the securities that we may offer. Each time we sell securities,
we will provide a supplement to this prospectus that contains specific
information about the terms of the securities. The prospectus supplement may
also add, update or change information contained in this prospectus. Before
purchasing any securities, you should carefully read both this prospectus and
any prospectus supplement, together with the additional information described
under the heading "Where You Can Find More Information".
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. If anyone provides you
with different or inconsistent information, you should not rely on it. We are
not making an offer of the securities in any jurisdiction where the offer is not
permitted. You should not assume that the information in this prospectus or any
prospectus supplement is accurate as of any date other than the date on the
front of those documents.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
The forward-looking statements contained in this prospectus and any
prospectus supplement (including the documents incorporated herein or therein by
reference) concerning development and commercial acceptance of new products and
services, financial outlook, earnings growth, and other financial goals, involve
risks and uncertainties, and are subject to change based on various factors.
These forward looking statements are identified by the words "believe,"
"anticipate," "estimate," "project," "plan," "expect," "intend," "will likely
result," or "will continue" or words of similar import. These include the impact
of changes in worldwide and national economies, the cost and availability of
electric power and other energy and the ability to achieve price increases to
offset cost increases, development of operational efficiencies, changes in
foreign currencies, changes in interest rates, changes in pension asset returns,
the continued timely development and acceptance of new products and services,
the impact of competitive products and pricing, and the impact of tax and other
legislation and regulation in the jurisdictions in which we operate and other
risks discussed in this prospectus (including information incorporated by
reference), the applicable prospectus supplement (including information
incorporated by reference) and our filings with the SEC.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of these
forward-looking statements. We are under no duty and do not intend to update any
of the forward-looking statements after the date of this prospectus or to
conform our prior statements to actual results.
1
THE COMPANY
Praxair was the first company in the United States to commercially produce
oxygen from air using a cryogenic process. We have been, and continue to be, a
major technological innovator in the industrial gases industry and have done
much to create value for our customers by developing new applications for
industrial gases and to open new markets by lowering the cost of supply. By
using the gases that we produce and, in many cases, the proprietary processes
that we invent, customer value is created through improved product quality,
increased productivity, conservation of energy, and the attainment of
environmental improvement objectives.
Praxair is the largest industrial gases company in North and South America
and the third largest worldwide. We are also the world's largest supplier of
carbon dioxide. Our primary products for our industrial gases business are
atmospheric gases (oxygen, nitrogen, argon, rare gases), process gases (carbon
dioxide, helium, hydrogen, electronic gases, specialty gases, acetylene), and we
also design, engineer and build equipment that produces industrial gases (for
internal use and external sale). Our subsidiary, Praxair Surface Technologies,
Inc., supplies wear-resistant and high-temperature corrosion-resistant metallic
and ceramic coatings and powders. Total company sales were $5,158 million,
$5,043 million and $4,639 million for 2001, 2000 and 1999, respectively, and
$3,831 million for the nine months ended September 30, 2002, with industrial
gases and related products and services accounting for 92% of sales in 2001,
2000 and 1999 and for the nine months ended September 30, 2002, and surface
technologies accounting for the balance.
Gases produced by us find wide use in the aerospace, chemicals,
electronics, energy, food & beverage, healthcare, manufacturing and metals
industries. We have done much to increase the use of our industrial gases to
support the manufacture of other products and for many other uses. Historically,
consumption of industrial gases has increased at approximately 1.5 times local
industrial production growth in countries in which we do business.
We (including our predecessor companies) were founded in 1907 and were
incorporated in Delaware in 1988. Our principal offices are located at 39 Old
Ridgebury Road in Danbury, Connecticut 06810-5113 and our telephone number is
(203) 837-2000.
USE OF PROCEEDS
Except as otherwise described in the applicable prospectus supplement, we
will use the net proceeds from the sale or sales of our securities for general
corporate purposes, which may include, without limitation, the repayment of
outstanding indebtedness, working capital increases and capital expenditures,
and acquisitions of companies in a similar line of business. Prior to their
application, the proceeds may be invested in short-term investments. Reference
is made to our financial statements incorporated by reference herein for a
description of the terms of our outstanding indebtedness.
2
RATIO OF EARNINGS TO FIXED CHARGES
AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS
The following table sets forth our ratio of earnings to fixed charges and
ratio of earnings to combined fixed charges and preferred stock dividends for
the periods indicated:
Nine Months
Ended
Year Ended December 31, September 30,
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2001 2000 1999 1998 1997 2002
------- ------ ------ ------ ----- ------
Ratio of Earnings to Fixed Charges(a)................ 3.1 2.7 3.3 2.8 3.2 3.8
Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends(b)..................... 3.1 2.6 3.2 2.7 3.1 3.8
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(a) For the purpose of computing the ratio of earnings to fixed charges,
earnings are comprised of income of consolidated companies before provision
for income taxes, less capitalized interest, plus depreciation of
capitalized interest, dividends from companies accounted for using the
equity method, and fixed charges. Fixed charges are comprised of interest
on long-term and short-term debt plus capitalized interest and rental
expense representative of an interest factor.
(b) For the purpose of computing the ratio of earnings to combined fixed
charges and preferred stock dividends, earnings are comprised of income of
consolidated companies before provision for income taxes, less capitalized
interest, plus depreciation of capitalized interest, dividends from
companies accounted for using the equity method, and fixed charges as
defined in (a). Combined fixed charges and preferred stock dividends are
comprised of fixed charges as defined in (a) plus the amount of pre-tax
income needed to provide an after-tax income amount equal to the amount of
preferred stock dividends.
DESCRIPTION OF CAPITAL STOCK
Authorized Capital Stock
Under the Restated Certificate of Incorporation of the Company the total
number of shares of all classes of stock that the Company has authority to issue
is 525,000,000, of which 25,000,000 may be shares of preferred stock, par value
$.01 per share, and 500,000,000 may be shares of common stock, par value $.01
per share. As of September 30, 2002, 173,514,977 shares of our common stock were
issued (of which 161,712,423 shares were outstanding and 11,802,554 shares were
held in treasury) and 27,784,426 shares reserved for issuance pursuant to
employee benefit plans.
Common Stock
Holders of the Company's common stock are entitled to receive ratably
dividends, if any, subject to the prior rights of holders of outstanding shares
of preferred stock, as are declared by the board of directors of the Company out
of the funds legally available for the payment of dividends. Except as otherwise
provided by law, each holder of common stock is entitled to one vote per share
of
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common stock on each matter submitted to a vote of a meeting of stockholders.
The common stock does not have cumulative voting rights in the election of
directors.
In the event of any liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, after all liabilities and liquidation
preference, if any, of preferred stock have been paid in full, the holders of
the Company's common stock are entitled to receive any remaining assets of the
Company.
The Company's common stock has no preemptive or conversion rights or other
subscription rights. There are no redemption or sinking fund provisions
applicable to our common stock. Each outstanding share of the Company's common
stock is accompanied by a right to purchase one one-hundredth of a share of
participating preferred stock at a price of $300 subject to certain
anti-dilution adjustments. This right is described in more detail below under
the heading "Rights Agreement".
The Company is authorized to issue additional shares of common stock
without further stockholder approval (except as may be required by applicable
law or stock exchange regulations). With respect to the issuance of common
shares of any additional series, the board of directors of the Company is
authorized to determine, without any further action by the holders of the
Company's common stock, the dividend rights, dividend rate, conversion rights,
voting rights and rights and terms of redemption, as well as the number of
shares constituting such series and the designation thereof. Should the board of
directors of the Company elect to exercise its authority, the rights and
privileges of holders of the Company's common stock could be made subject to
rights and privileges of any such other series of common stock. The Company has
no present plans to issue any common stock of a series other than the Company's
common stock currently issued and outstanding.
The transfer agent and registrar for the shares of our common stock is
Registrar and Transfer Company, 10 Commerce Drive, Cranford, New Jersey
07016-3572.
Preferred Stock
The Company's board of directors may issue up to 25,000,000 shares of
preferred stock in one or more series and, subject to the Delaware corporation
law, may:
o fix the rights, preferences, privileges and restrictions of the
preferred stock;
o fix the number of shares and designation of any series of preferred
stock; and
o increase or decrease the number of shares of any series of preferred
stock but not below the number of outstanding shares.
The Company's board of directors has the power to issue our preferred stock
with voting and conversion rights that could negatively affect the voting power
or other rights of our common stockholders, and the board of directors could
take that action without stockholder approval. The issuance of our preferred
stock could delay or prevent a change in control of the Company.
4
At September 30, 2002, no shares of our preferred stock, series A, and no
shares of our preferred stock, series B, were outstanding.
If the Company offers any series of preferred stock, whether separately, or
together with, or upon the conversion of, or in exchange for, other securities,
certain terms of that series of preferred stock will be described in the
applicable prospectus supplement, including, without limitation, the following:
o the designation;
o the number of authorized shares of the series in questions;
o voting rights, if any;
o the dividend rate, period and/or payment dates or method of
calculation;
o the relative ranking and preferences of the preferred stock as to
dividend rights and rights upon the liquidation, dissolution or
winding up of the Company's affairs;
o any limitations on the issuance of any class or series of preferred
stock ranking senior to or on parity with the class or series of
preferred stock as to dividend rights and rights upon liquidation,
dissolution or winding up of the affairs of the Company;
o the terms and conditions, if any, upon which the preferred stock will
be convertible into or exchangeable for other securities;
o any redemption provisions;
o any sinking fund provisions; and
o any other specific terms, preferences, rights, limitations or
restrictions of the preferred stock.
No Preemptive Rights
No holder of any stock of any class of the Company has any preemptive right
to subscribe for any securities of any kind or class.
Rights Agreement
Pursuant to a stockholder protection rights agreement, dated as of June 30,
2002, holders of the Company's common stock as of June 28, 2002 received on July
1, 2002 one stockholder protection right for every share of common stock that
they held on June 28, 2002. Each share of common stock of the Company issued
after the close of business on June 28, 2002 also will be issued one
corresponding right. The rights are evidenced by the Company's common stock
certificates. After the separation time, which is described below, each right
will entitle the holder to purchase from the
5
Company one one-hundredth of a share of participating preferred stock, no par
value, at a purchase price of $300 per interest, subject to adjustment. The
rights also entitle holders to acquire common stock of an acquiror in the
circumstances described below.
The rights serve as an anti-takeover device and encourage third parties who
may be interested in acquiring the Company to negotiate directly with our board
of directors. The rights will not prevent a takeover of the Company. However, as
described below, the rights may cause substantial dilution to a person or group
that acquires 15% or more of the Company's common stock unless the rights are
first redeemed by our board of directors. Nevertheless, the rights should not
interfere with a transaction that is in the best interests of the Company and
its stockholders because the rights may be redeemed on or prior to the close of
business on the flip-in date that is described below, before the consummation of
such a transaction.
The terms of the rights are included in the rights agreement, which has
been filed as an exhibit to the registration statement of which this prospectus
forms a part. The description below is a summary of certain of the provisions of
the rights agreement, and is qualified in its entirety by reference to the
rights agreement.
Events causing the exercisability of the rights
The rights will become exercisable upon the occurrence of the "separation
time", which is defined in the rights agreement as the earlier to occur of:
o the tenth business day (or a later date as determined by the board of
directors of the Company) after the date on which any person commences
a tender or exchange offer which, if consummated, would result in that
person's becoming an "acquiring person" under the rights agreement,
which generally means a person or group that has become the beneficial
owner of 15% or more of the Company's outstanding common stock, and
o the "flip-in date", which is the tenth business day after the first
date (or a later date as determined by the board of directors of the
Company) of
o a public announcement by the Company that any person has become
an acquiring person or
o the date and time on which any acquiring person becomes the
beneficial owner of more than 25% of the outstanding shares of
the Company's common stock.
Until the separation time, the rights may be transferred only with the
Company's common stock.
The Company's board of directors may redeem or exchange the rights
The Company's board of directors may redeem the rights at a price of $.001
per right at any time prior to the close of business on a flip-in date.
6
In the event that a flip-in date occurs prior to the expiration of the
rights, each right (other than rights owned by an acquiring person, its
affiliates or transferees, which will become void) will thereafter constitute
the right to receive, upon exercise for the exercise price of $300, subject to
adjustment, that number of shares of the Company's common stock (or, in certain
circumstances, cash, property or other securities of the Company) having a value
equal to two times the exercise price. However, the Company's board of directors
may exchange the rights (other than rights owned by the acquiror, which will
become void) at any time after a flip-in date, in whole or in part, at an
exchange ratio per right equal to one times the exercise price.
Until a right is exercised or exchanged, the holder of the right, by virtue
of being a right holder, will have no rights as a stockholder of the Company,
including, for example, the right to vote or to receive dividends.
Exercise of rights for shares of an acquiring company
If before the expiration of the rights the Company enters into, consummates
or permits to occur a transaction or series of transactions on or after a
flip-in date in which, directly or indirectly:
o the Company will consolidate, merge or participate in a share exchange
with any other person if, at the time of that transaction, an
acquiring person is the beneficial owner of 90% or more of the
outstanding shares of the Company's common stock or controls the board
of directors of the Company and either
o any term of or arrangement concerning the treatment of shares of
capital stock in that transaction relating to the acquiring
person is not identical to the terms and arrangements relating to
other holders of the Company's common stock or
o the person with whom such transaction occurs is the acquiring
person (or one of its affiliates or associates), or
o the Company or a subsidiary sells or otherwise transfers more than 50%
of its assets or assets that generate more than 50% of the operating
income or cash flow of the Company and its subsidiaries to any other
person or group
and, at the time the Company enters into an agreement with respect to such a
transaction, the acquiring person or its affiliates or associates controls the
board of directors of the Company, then the Company must take all required
actions so that upon consummation or occurrence of the transaction:
o each right will thereafter constitute the right to purchase from the
acquiring entity that number of shares of common stock of the
acquiring entity having an aggregate market price on the date of the
transaction equal to twice the exercise price of the right, for an
amount in cash equal to the then current exercise price of the right,
and
o the acquiring person will thereafter be liable for, and assume, all
the obligations and duties of the Company pursuant to the rights
agreement.
7
Adjustments to exercise price
The exercise price for each right and the number of shares of participating
preferred stock (or other securities or property) issuable upon exercise of the
rights are subject to adjustment from time to time to prevent dilution.
Amendments to terms of the rights
Any of the provisions of the rights agreement may be amended by the
Company's board of directors prior to the close of business on the flip-in date.
After the rights are no longer redeemable, the provisions of the rights
agreement may be amended by the Company's board of directors in order to cure
any ambiguity, defect or inconsistency, or to make changes that do not adversely
affect the interests of holders of rights.
Redemption
The board of directors of the Company may, at its option, at any time prior
to the close of business on the flip-in date, redeem all (but not less than all)
the then outstanding rights at a price of $.001 per right. The rights will then
terminate immediately and each right, whether or not previously exercised, will
thereafter represent only the right to receive the redemption price in cash or
securities, as determined by the board of directors.
Term
The rights will expire at the close of business on June 30, 2012, unless
earlier redeemed, exercised or exchanged by the Company as described above.
DESCRIPTION OF DEBT SECURITIES
Senior Debt Securities may be issued either separately, or together with,
or upon the conversion of, or in exchange for, other securities, from time to
time in one or more series, under an Indenture dated July 15, 1992 (the "Senior
Indenture") between the Company and State Street Bank and Trust Company as the
ultimate successor trustee to Bank of America Illinois (formerly Continental
Bank, National Association), as trustee (the "Senior Trustee"), which is filed
as an exhibit to the Registration Statement of which this prospectus is a part.
Subordinated Debt Securities may be issued either separately, or together
with, or upon the conversion or, or in exchange for, other securities, from time
to time in series under an indenture (the "Subordinated Indenture") between the
Company and a trustee to be identified in the related prospectus supplement (the
"Subordinated Trustee"). The Subordinated Indenture is filed as an exhibit to
the Registration Statement of which this prospectus is a part. The Senior
Indenture and the Subordinated Indenture are sometimes referred to collectively
as the "Indentures," and the Senior Trustee and the Subordinated Trustee are
sometimes referred to collectively as the "Debt Trustees." The following
statements under this caption are summaries of certain provisions contained or,
in the case of the Subordinated Indenture, to be contained in the Indentures, do
not purport to be complete and are qualified in their entirety by reference to
the Indentures, including the definitions therein of certain terms.
8
Capitalized terms used herein and not defined shall have the meanings assigned
to them in the related Indenture. The particular terms of the Debt Securities
and any variations from such general provisions applicable to any series of Debt
Securities will be set forth in the prospectus supplement applicable to such
series.
At September 30, 2002, approximately $2,275 million principal amount of
Senior Debt Securities were outstanding under the Senior Indenture and there
were no Subordinated Debt Securities outstanding under the Subordinated
Indenture.
General
Each Indenture provides or, in the case of the Subordinated Indenture, will
provide for the issuance of Debt Securities in one or more series with the same
or various maturities. Neither Indenture limits the amount of Debt Securities
that can be issued thereunder and each provides that the Debt Securities may be
issued in series up to the aggregate principal amount which may be authorized
from time to time by the Company. The Debt Securities will be unsecured.
Reference is made to the prospectus supplement for the following terms, if
applicable, of the Debt Securities offered thereby:
(1) the designation, aggregate principal amount, currency or composite
currency and denominations;
(2) the price at which such Debt Securities will be issued and, if an
index formula or other method is used, the method for determining
amounts of principal or interest;
(3) the maturity date and other dates, if any, on which principal will be
payable;
(4) the interest rate (which may be fixed or variable), if any;
(5) the date or dates from which interest will accrue and on which
interest will be payable, and the record dates for the payment of
interest;
(6) the manner of paying principal or interest;
(7) the place or places where principal and interest will be payable;
(8) the terms of any mandatory or optional redemption by the Company;
(9) the terms, if any, upon which the debt securities may be convertible
into or exchangeable for other securities;
(10) the terms of any redemption at the option of holders;
9
(11) whether such Debt Securities are to be issuable as registered Debt
Securities, bearer Debt Securities, or both, and whether and upon what
terms any registered Debt Securities may be exchanged for bearer Debt
Securities and vice versa;
(12) whether such Debt Securities are to be represented in whole or in part
by a Debt Security in global form and, if so, the identity of the
depositary for any global Debt Security;
(13) any tax indemnity provisions;
(14) if the Debt Securities provide that payments of principal or interest
may be made in a currency other than that in which Debt Securities are
denominated, the manner for determining such payments;
(15) the portion of principal payable upon acceleration of a Discounted
Debt Security (as defined below);
(16) whether and upon what terms Debt Securities may be defeased;
(17) any events of default or restrictive covenants in addition to or in
lieu of those set forth in the Indentures;
(18) provisions for electronic issuance of Debt Securities or for Debt
Securities in uncertificated form; and
(19) any additional provisions or other special terms not inconsistent with
the provisions of the Indentures, including any terms that may be
required or advisable under United States or other applicable laws or
regulations, or advisable in connection with the marketing of the Debt
Securities.
If the principal of, premium, if any, or interest on Debt Securities of any
series are payable in a foreign or composite currency, any material risks
relating to an investment in such Debt Securities will be described in the
prospectus supplement relating to that series.
Debt Securities of any series may be issued as registered Debt Securities,
bearer Debt Securities or uncertificated Debt securities, as specified in the
terms of the series. Unless otherwise indicated in the applicable prospectus
supplement, registered Debt Securities will be issued in denominations of $1,000
and whole multiples thereof and bearer Debt Securities will be issued in
denominations of $5,000 and whole multiples thereof. The Debt Securities of a
series may be issued in whole or in part in the form of one or more global Debt
Securities that will be deposited with, or on behalf of, a depositary identified
in the prospectus supplement relating to the series. Unless otherwise indicated
in the prospectus supplement relating to a series, the terms of the depositary
arrangement with respect to any Debt Securities of a series specified in the
prospectus supplement as being represented by global Debt Securities will be as
set forth below under "Global Debt Securities."
10
In connection with its original issuance, no bearer Debt Security will be
offered, sold, resold, or mailed or otherwise delivered to any location in the
United States and a bearer Debt Security in definitive form may be delivered in
connection with its original issuance only if the person entitled to receive the
bearer Debt Security furnishes certification as described in United States
Treasury regulation section 1.163-5(c)(2)(i)(D)(iii). If there is a change in
the relevant provisions or interpretation of United States laws, the foregoing
restrictions will not apply to a series if the Company determines that such
provisions no longer apply to the series or that failure to so comply would not
have an adverse tax effect on the Company or on holders or cause the series to
be treated as "registration-required" obligations under United States law.
For purposes of this prospectus, unless otherwise indicated, "United
States" means the United States of America (including the States and the
District of Columbia), its territories and possessions and all other areas
subject to its jurisdiction. "United States person" means a citizen or resident
of the United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States or a political subdivision
thereof or any estate or trust the income of which is subject to United States
federal income taxation regardless of its source. Any special United States
federal income tax considerations applicable to bearer Debt Securities will be
described in the prospectus supplement relating thereto.
To the extent set forth in the applicable prospectus supplement, except in
special circumstances set forth in the applicable Indenture, principal and
interest on bearer Debt Securities will be payable only upon surrender of bearer
Debt Securities and coupons at a paying agency of the Company located outside of
the United States. During any period thereafter for which it is necessary in
order to conform to United States tax law or regulations, the Company will
maintain a paying agent outside the United States to which the bearer Debt
Securities and coupons may be presented for payment and will provide the
necessary funds therefor to the paying agent upon reasonable notice.
Registration of transfer of registered Debt Securities may be requested
upon surrender thereof at any agency of the Company maintained for that purpose
and upon fulfillment of all other requirements of the agent. Bearer Debt
Securities and the coupons related thereto will be transferable by delivery.
Debt Securities may be issued under the Indentures as Discounted Debt
Securities to be offered and sold at a discount from the principal amount
thereof. Special United States federal income tax and other considerations
applicable thereto will be described in the applicable prospectus supplement
relating to such Discounted Debt Securities. "Discounted Debt Security" means a
Debt Security where the amount of principal due upon acceleration is less than
the stated principal amount.
Ranking of Debt Securities
The Senior Debt Securities will be unsecured and will rank on a parity with
other unsecured and unsubordinated debt of the Company.
At September 30, 2002, the Company had outstanding approximately $2,627
million in long-term debt (net of current maturities) consisting of Senior
Indebtedness (as defined below).
11
The obligations of the Company pursuant to any Subordinated Debt Securities
will be subordinate in right of payment to all Senior Indebtedness of the
Company. "Senior Indebtedness" of the Company is defined to mean the principal
of (and premium, if any) and interest on (a) any and all indebtedness and
obligations of the Company (including indebtedness of others guaranteed by the
Company) other than the Subordinated Debt Securities, whether or not contingent
and whether outstanding on the date of the Subordinated Indenture or thereafter
created, incurred or assumed, which (i) are for money borrowed; (ii) are
evidenced by any bond, note, debenture or similar instrument; (iii) represent
the unpaid balance on the purchase price of any property, business, or asset of
any kind; (iv) are obligations of the Company as lessee under any and all leases
of property, equipment or other assets required to be capitalized on the balance
sheet of the lessee under generally accepted accounting principles; (v) are
reimbursement obligations of the Company with respect to letters of credit; and
(b) any deferrals, amendments, renewals, extensions, modifications and
refundings of any indebtedness or obligations of the types referred to above;
provided that Senior Indebtedness shall not include (i) the Subordinated Debt
Securities; (ii) any indebtedness or obligation of the Company which, by its
express terms or the express terms of the instrument creating or evidencing it,
is not superior in right of payment to the Subordinated Debt Securities; or
(iii) any indebtedness or obligation incurred by the Company in connection with
the purchase of assets, materials or services in the ordinary course of business
and which constitutes a trade payable.
The Subordinated Indenture will not contain any limitation on the amount of
Senior Indebtedness which may be hereafter incurred by the Company.
The Subordinated Indenture will provide that where notice of certain
defaults in respect of Senior Indebtedness has been given to the Company, no
payment with respect to the principal of or interest on the Subordinated Debt
Securities will be made by the Company unless and until such default has been
cured or waived. Upon any payment or distribution of the Company's assets to
creditors of the Company in a liquidation or dissolution of the Company, or in a
reorganization, bankruptcy, insolvency, receivership or similar proceeding
relating to the Company or its property, whether voluntary or involuntary, the
holders of Senior Indebtedness will first be entitled to receive payment in full
of all amounts due thereon before the holders of the Subordinated Debt
Securities will be entitled to receive any payment upon the principal of or
premium, if any, or interest on the Subordinated Debt Securities. By reason of
such subordination, in the event of insolvency of the Company, holders of Senior
Indebtedness of the Company may receive more, ratably, and holders of the
Subordinated Debt Securities may receive less, ratably, than the other creditors
of the Company. Such subordination will not prevent the occurrence of any event
of default in respect of the Subordinated Debt Securities.
Certain Covenants
The Senior Indenture contains, among others, the covenants summarized
below, which will be applicable (unless waived or amended) so long as any of the
Senior Debt Securities are outstanding, unless otherwise stated in the
applicable prospectus supplement.
The Debt Securities will not be secured by any properties or assets and
will represent unsecured debt of the Company. Because secured debt ranks ahead
of unsecured debt with respect to the assets securing such secured debt, the
limitation on liens and the limitation on sale-leaseback transac-
12
tions place some restrictions on the Company's ability to incur additional
secured debt or its equivalent when the asset securing the debt is a material
manufacturing facility in the United States. The limitations are subject to a
number of qualifications and exceptions described below. There can be no
assurance that a facility subject to the limitations at any time will continue
to be subject to those limitations at a later time.
Unless otherwise indicated in a prospectus supplement, the covenants
contained in the Senior Indenture and the Senior Debt Securities do not afford
holders of the Senior Debt Securities protection in the event of a highly
leveraged or other transaction involving the Company that may adversely affect
holders of the Senior Debt Securities.
Definitions
"Attributable Debt" for a lease means, as of the date of determination, the
present value of net rent for the remaining term of the lease. Rent shall be
discounted to present value at a discount rate that is compounded semi-annually.
The discount rate shall be 10% per annum or, if the Company elects, the discount
rate shall be equal to the weighted average Yield to Maturity of the Senior Debt
Securities under the Senior Indenture. Such average shall be weighted by the
principal amount of the Senior Debt Securities of each series or, in the case of
Discounted Senior Debt Securities, the amount of principal that would be due as
of the date of determination if payment of the Senior Debt Securities were
accelerated on that date.
Rent is the lesser of (a) rent for the remaining term of the lease assuming
it is not terminated or (b) rent from the date of determination until the first
possible termination date plus the termination payment then due, if any. The
remaining term of a lease includes any period for which the lease has been
extended. Rent does not include (1) amounts due for maintenance, repairs,
utilities, insurance, taxes, assessments and similar charges or (2) contingent
rent, such as that based on sales. Rent may be reduced by the discounted present
value of the rent that any sublessee must pay from the date of determination for
all or part of the same property. If the net rent on a lease is not definitely
determinable, the Company may estimate it in any reasonable manner.
"Consolidated Net Tangible Assets" means total assets less (a) total
current liabilities (excluding short-term Debt and payments due within one year
on long-term Debt) and (b) goodwill, as reflected in the Company's most recent
consolidated balance sheet preceding the date of a determination under clause
(9) of the "Limitation on Liens" covenant of the Senior Indenture.
"Debt" means any debt for borrowed money or any guarantee of such a debt.
"Lien" means any mortgage, pledge, security interest or lien.
"Long-Term Debt" means Debt that by its terms matures on a date more than
12 months after the date it was created or Debt that the obligor may extend or
renew without the obligee's consent to a date more than 12 months after the date
the Debt was created.
"Principal Property" means (i) any manufacturing facility, whether now or
hereafter owned, located in the United States (excluding territories and
possessions), except any such facility that in the
13
opinion of the board of directors of the Company or any authorized committee of
the board is not of material importance to the total business conducted by the
Company and its consolidated Subsidiaries, and (ii) any shares of stock of a
Restricted Subsidiary. At December 31, 2001, our Principal Properties were our
production facilities in Northern Indiana (air separation/hydrogen/carbon
dioxide), Houston, Texas (air separation) and Detroit, Michigan (air
separation/hydrogen), and, to the extent owned by us, Gulf Coast
(hydrogen/carbon monoxide) and Louisiana (hydrogen/carbon monoxide).
"Restricted Subsidiary" means a Wholly-Owned Subsidiary that has
substantially all of its assets located in the United States (excluding
territories or possessions) or Puerto Rico and owns a Principal Property.
"Sale-Leaseback Transaction" means an arrangement pursuant to which the
Company or a Restricted Subsidiary now owns or hereafter acquires a Principal
Property, transfers it to a person, and leases it back from the person.
"Subsidiary" means a corporation a majority of whose Voting Stock is owned
by the Company or a Subsidiary.
"Voting Stock" means capital stock having voting power under ordinary
circumstances to elect directors.
"Wholly-Owned Subsidiary" means a corporation all of whose Voting Stock is
owned by the Company or a Wholly-Owned Subsidiary, the accounts of which are
consolidated with those of the Company in its consolidated financial statements.
"Yield to Maturity" means the yield to maturity on a Security at the time
of its issuance or at the most recent determination of interest on the Security.
Limitation on Liens
The Company will not, and will not permit any Restricted Subsidiary to,
incur a Lien on Principal Property to secure a Debt unless:
1. the Lien equally and ratably secures the Senior Debt Securities and
the Debt. The Lien may equally and ratably secure the Senior Debt
Securities and any other obligation of the Company or a Subsidiary.
The Lien may not secure an obligation of the Company that is
subordinated to the Senior Debt Securities;
2. the Lien secures Debt incurred to finance all or some of the purchase
price or the cost of construction or improvement of property of the
Company or a Restricted Subsidiary. The Lien may not extend to any
other Principal Property owned by the Company or a Restricted
Subsidiary at the time the Lien is incurred. However, in the case of
any construction or improvement, the Lien may extend to unimproved
real property used for the construction or improvement. The Debt
secured by the Lien may not be incurred more than one year after the
later of the (a) acquisition, (b) completion of
14
construction or improvement or (c) commencement of full operation, of
the property subject to the Lien;
3. the Lien is on property of a corporation at the time the corporation
merges into or consolidates with the Company or a Restricted
Subsidiary;
4. the Lien is on property at the time the Company or a Restricted
Subsidiary acquires the property;
5. the Lien is on property of a corporation at the time the corporation
becomes a Restricted Subsidiary;
6. the Lien secures Debt of a Restricted Subsidiary owing to the Company
or another Restricted Subsidiary;
7. the Lien is in favor of a government or governmental entity and
secures (a) payments pursuant to a contract or statute or (b) Debt
incurred to finance all or some of the purchase price or cost of
construction or improvement of the property subject to the Lien;
8. the Lien extends, renews or replaces in whole or in part a Lien
("existing Lien") permitted by any of clauses (1) through (7). The
Lien may not extend beyond (a) the property subject to the existing
Lien and (b) improvements and construction on such property. However,
the Lien may extend to property that at the time is not a Principal
Property. The Debt secured by the Lien may not exceed the Debt secured
at the time by the existing Lien unless the existing Lien or a
predecessor Lien was incurred under clause (1) or (6); or
9. the Debt plus all other Debt secured by Liens on Principal Property at
the time does not exceed 10% of Consolidated Net Tangible Assets.
However, the following Debt shall be excluded from all other Debt in
the determination: (a) Debt secured by a Lien permitted by any of
clauses (1) through (8) and (b) Debt secured by a Lien incurred prior
to the date of the Senior Indenture that would have been permitted by
any of those clauses if the Senior Indenture had been in effect at the
time the Lien was incurred. Attributable Debt for any lease permitted
by clause (4) of the "Limitation on Sale and Leaseback" covenant of
the Senior Indenture must be included in the determination and treated
as Debt secured by a Lien on Principal Property not otherwise
permitted by any of clauses (1) through (8).
In general, clause (9) above, sometimes called a "basket" clause, permits
Liens to be incurred that are not permitted by any of the exceptions enumerated
in clauses (1) through (8) above if the Debt secured by all such additional
Liens does not exceed 10% of Consolidated Net Tangible Assets at the time. At
September 30, 2002, Consolidated Net Tangible Assets were approximately $5,450
million. At that date, additional Liens securing Debt equal to 10% of that
amount could have been incurred under clause (9).
15
Limitation on Sale and Leaseback
The Company will not, and will not permit any Restricted Subsidiary to,
enter into a Sale-Leaseback Transaction unless:
1. the lease has a term of three years or less;
2. the lease is between the Company and a Restricted Subsidiary or
between Restricted Subsidiaries;
3. the Company or a Restricted Subsidiary under clauses (2) through (8)
of the "Limitation on Liens" covenant could create a Lien on the
property to secure Debt at least equal in amount to the Attributable
Debt for the lease;
4. the Company or a Restricted Subsidiary under clause (9) of the
"Limitation on Liens" covenant could create a Lien on the property to
secure Debt at least equal in amount to the Attributable Debt for the
lease; or
5. the Company or a Restricted Subsidiary within 180 days of the
effective date of the lease retires Long-Term Debt of the Company or a
Restricted Subsidiary at least equal in amount to the Attributable
Debt for the lease. A Debt is retired when it is paid or cancelled.
However, the Company or a Restricted Subsidiary may not receive credit
for retirement of: Debt of the Company that is subordinated to the
Senior Debt Securities; or Debt, if paid in cash, that is owned by the
Company or a Restricted Subsidiary.
In clauses (3) and (4) above, Sale-Leaseback Transactions and Liens are
treated as equivalents. Thus, if the Company or a Restricted Subsidiary could
create a Lien on a property, it may enter into a Sale-Leaseback Transaction to
the same extent.
Limitation on Debt of Restricted Subsidiaries
The Company will not permit any Restricted Subsidiary to incur any Debt
unless:
1. such Restricted Subsidiary could create Debt secured by Liens in
accordance with the "Limitation on Liens" covenant in an amount equal
to such Debt, without equally and ratably securing the Senior Debt
Securities;
2. the Debt is owed to the Company or another Restricted Subsidiary;
3. the Debt is Debt of a corporation at the time the corporation becomes
a Restricted Subsidiary;
4. the Debt is Debt of a corporation at the time the corporation merges
into or consolidates with a Restricted Subsidiary or at the time of a
sale, lease or other disposition of its properties as an entirety or
substantially as an entirety to a Restricted Subsidiary;
16
5. the Debt is incurred to finance all or some of the purchase price or
the cost of construction or improvement of property of the Restricted
Subsidiary. The Debt may not be incurred more than one year after the
later of the (a) acquisition, (b) completion of construction or
improvement or (c) commencement of full operation, of the property;
6. the Debt is incurred for the purpose of extending, renewing or
replacing in whole or in part Debt permitted by any of clauses (1)
through (5); or
7. the Debt plus all other Debt of Restricted Subsidiaries at the time
does not exceed 10% of Consolidated Net Tangible Assets. However, the
following Debt shall be excluded from all other Debt in the
determination: (a) Debt permitted by any of clauses (1) through (6)
and (b) Debt incurred prior to the date of the Senior Indenture that
would have been permitted by any of those clauses if the Senior
Indenture had been in effect at the time the Debt was incurred.
Successor Obligor
The Indentures provide or, in the case of the Subordinated Indenture, will
provide that the Company will not consolidate with or merge into, or transfer
all or substantially all of its assets to, any person, unless (1) the person is
organized under the laws of the United States or a State thereof; (2) the person
assumes by supplemental indenture all the obligations of the Company under the
applicable Indenture, the Debt Securities issued under such Indenture and any
coupons pertaining thereto; (3) immediately after the transaction no default
exists; and (4) if, as a result of the transaction, a Principal Property would
become subject to a Lien not permitted by the "Limitation on Liens" covenant of
the Senior Indenture, the Company or such person secures the Senior Debt
Securities equally and ratably with or prior to all obligations secured by the
Lien.
The successor will be substituted for the Company, and thereafter all
obligations of the Company under the applicable Indenture, the Debt Securities
issued under such Indenture and any coupons shall terminate.
Exchange of Securities
Registered Debt Securities may be exchanged for an equal aggregate
principal amount of registered Debt Securities of the same series and date of
maturity in such authorized denominations as may be requested upon surrender of
the registered Debt Securities at an agency of the Company maintained for such
purpose and upon fulfillment of all other requirements of the agent.
To the extent permitted by the terms of a series of Debt Securities
authorized to be issued in registered form and bearer form, bearer Debt
Securities may be exchanged for an equal aggregate principal amount of
registered or bearer Debt Securities of the same series and date of maturity in
such authorized denominations as may be requested upon surrender of the bearer
Debt Securities with all unpaid coupons relating thereto (except as may
otherwise be provided in the Debt Securities) at an agency of the Company
maintained for such purpose and upon fulfillment of all other requirements of
the agent. As of the date of this prospectus, it is expected that the terms of a
series of Debt Securities will not permit registered Debt Securities to be
exchanged for bearer Debt Securities.
17
Defaults and Remedies
An "event of default" with respect to any series of Debt Securities will
occur if:
1. the Company defaults in any payment of interest on any Debt Securities
of the series when the same becomes due and payable and the default
continues for a period of 10 days;
2. the Company defaults in the payment of the principal of any Debt
Securities of the series when the same becomes due and payable at
maturity or upon redemption, acceleration or otherwise;
3. the Company defaults in the performance of any of its other agreements
applicable to the series and the default continues for 90 days after
the notice specified below;
4. the Company pursuant to or within the meaning of any Bankruptcy Law:
o commences a voluntary case,
o consents to the entry of an order for relief against it in an
involuntary case,
o consents to the appointment of a custodian for it or for all or
substantially all of its property, or
o makes a general assignment for the benefit of its creditors;
5. a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
o is for relief against the Company in an involuntary case,
o appoints a custodian for the Company or for all or substantially
all of its property, or
o orders the liquidation of the Company;
6. and the order or decree remains unstayed and in effect for 60 days; or
7. any other event of default provided for in the series.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or State law for the relief of debtors. The term "custodian" means any receiver,
trustee, assignee, liquidator or a similar official under any Bankruptcy Law.
A default under clause (3) is not an event of default until the applicable
Debt Trustee or the holders of at least 25% in principal amount of the series
notify the Company of the default and the Company does not cure the default
within the time specified after receipt of the notice. The applicable
18
Debt Trustee may require indemnity satisfactory to it before it enforces the
applicable Indenture or the Debt Securities of the series. Subject to certain
limitations, holders of a majority in principal amount of the Debt Securities of
the series may direct the applicable Debt Trustee in its exercise of any trust
or power. A Debt Trustee may withhold from holders of the series notice of any
continuing default (except a default in payment of principal or interest) if it
determines that withholding notice is in their interest.
The Indentures do not have or, in the case of the Subordinated Indenture,
will not have cross-default provisions. Thus, a default by the Company or a
Subsidiary on any other debt would not constitute an event of default.
Amendments and Waivers
Unless the resolution establishing the terms of a series otherwise
provides, the applicable Indenture and the Debt Securities or any coupons of the
series may be amended, and any default may be waived as follows: The Debt
Securities and the applicable Indenture may be amended with the consent of the
holders of a majority in principal amount of the Debt Securities of all series
affected voting as one class. A default on a series may be waived with the
consent of the holders of a majority in principal amount of the Debt Securities
of the series. However, without the consent of each holder affected, no
amendment or waiver may (1) reduce the amount of Debt Securities whose holders
must consent to an amendment or waiver, (2) reduce the interest on or change the
time for payment of interest on any Debt Security, (3) change the fixed maturity
of any Debt Security, (4) reduce the principal of any non-Discounted Debt
Security or reduce the amount of principal of any Discounted Debt Security that
would be due on acceleration thereof, (5) change the currency in which principal
or interest on a Debt Security is payable, (6) waive any default in payment of
interest on or principal of a Debt Security or (7) change certain provisions of
the applicable Indenture regarding waiver of past defaults and amendments with
the consent of holders other than to increase the principal amount of Debt
Securities required to consent. Without the consent of any holder, the
applicable Indenture, the Debt Securities or any coupons may be amended to cure
any ambiguity, omission, defect or inconsistency; to provide for assumption of
Company obligations to holders in the event of a merger or consolidation
requiring such assumption; to provide that specific provisions of the applicable
Indenture not apply to a series of Debt Securities not previously issued; to
create a series and establish its terms; to provide for a separate Debt Trustee
for one or more series; or to make any change that does not materially adversely
affect the rights of any holder.
Legal Defeasance and Covenant Defeasance
Debt Securities of a series may be defeased in accordance with their terms
and, unless the resolution establishing the terms of the series otherwise
provides, as set forth below. The Company at any time may terminate as to a
series all of its obligations (except for certain obligations with respect to
the defeasance trust and obligations to register the transfer or exchange of a
Debt Security, to replace destroyed, lost or stolen Debt Securities and coupons
and to maintain agencies in respect of the Debt Securities) with respect to the
Debt Securities of the series and any related coupons and the applicable
Indenture ("legal defeasance"). The Company at any time may terminate as to a
series its obligations with respect to the Debt Securities and coupons of the
series under the covenants described under "Certain Covenants" ("covenant
defeasance").
19
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option, a series may not be accelerated because of an event of
default. If the Company exercises its covenant defeasance option, a series may
not be accelerated by reference to the covenants described under "Certain
Covenants."
To exercise either option as to a series, the Company must deposit in trust
(the "defeasance trust") with the applicable Debt Trustee money or U.S.
Government Obligations for the payment of principal, premium, if any, and
interest on the Debt Securities of the series to redemption or maturity and must
comply with certain other conditions. In particular, the Company must obtain an
opinion of tax counsel that the defeasance will not result in recognition for
Federal income tax purposes of any gain or loss to holders of the series. "U.S.
Government Obligations" are direct obligations of the United States of America
which have the full faith and credit of the United States of America pledged for
payment and which are not callable at the issuer's option, or certificates
representing an ownership interest in such obligations.
Global Debt Securities
Global Debt Securities may be issued in registered, bearer or
uncertificated form and in either temporary or permanent form. If Debt
Securities of a series are to be issued as global Debt Securities, one or more
global Debt Securities will be issued in a denomination or aggregate
denominations equal to the aggregate principal amount of outstanding Debt
Securities of the series to be represented by such global Debt Security or
Securities.
Ownership of beneficial interests in global Debt Securities will be limited
to participants and to persons that have accounts with the depositary
("participants") or persons that may hold interests through participants.
Ownership interests in global Debt Securities will be shown on, and the transfer
of that ownership interest will be effected only through, records maintained by
the depositary or its nominee for such global Debt Securities (with respect to a
participant's interest) and records maintained by participants (with respect to
interests of persons other than participants).
Unless otherwise indicated in a prospectus supplement, payment of principal
of and any premium and interest on the book-entry Debt Securities represented by
a global Debt Security will be made to the depositary or its nominee, as the
case may be, as the sole registered owner and the sole holder of the book-entry
Debt Securities represented thereby for all purposes under the applicable
Indenture. Neither the Company or the applicable Debt Trustee, nor any agent of
the Company or the applicable Debt Trustee, will have any responsibility or
liability for any acts or omissions of the depositary for any records of the
depositary relating to beneficial ownership interests in any global Debt
Security for any transactions between a depositary and beneficial owners.
Upon receipt of any payment of principal of or any premium or interest on a
global Debt Security, the depositary will immediately credit, on its book-entry
registration and transfer system, the accounts of participants with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such global Debt Security as shown on the records of the depositary.
Payments by participants to owners of beneficial interests in global Debt
Securities held through such participants will be governed by standing
instructions and customary practices, as is now the case
20
with securities held for customer accounts registered in "street name," and will
be the sole responsibility of such participants.
Unless otherwise stated in a prospectus supplement, global Debt Securities
will not be transferred except as a whole by the depositary to a nominee of the
depositary. Global Debt Securities will be exchangeable only if (i) the
depositary notifies the Company that it is unwilling or unable to continue as
depositary for such global Debt Securities or if at any time the depositary
ceases to be a clearing agency registered under the Exchange Act, (ii) the
Company in its sole discretion determines that such global Debt Securities shall
be exchangeable for definitive Debt Securities in registered form, or (iii) an
event of default with respect to the series of Debt Securities represented by
such global Debt Securities has occurred and is continuing. Any global Debt
Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Registered Debt Securities issuable in denominations of $1,000
and integral multiples thereof and registered in such names as the depositary
holding such global Debt Security shall direct. Subject to the foregoing, the
global Debt Security is not exchangeable, except for a global Debt Security of
like denomination to be registered in the name of the depositary or its nominee.
So long as the depositary for global Debt Securities of a series, or its
nominee, is the registered owner of such global Debt Securities, such depositary
or such nominee, as the case may be, will be considered the sole holder of Debt
Securities represented by such global Debt Securities for the purposes of
receiving payment on such global Debt Securities, receiving notices and for all
other purposes under the applicable Indenture and such global Debt Securities.
Except as provided above, owners of beneficial interests in global Debt
Securities of a series will not be entitled to receive physical delivery of Debt
Securities of such series in definitive form and will not be considered the
holders thereof for any purpose under the applicable Indenture. Accordingly,
each person owning a beneficial interest in a global Debt Security must rely on
the procedures of the depositary and, if such person is not a participant, on
the procedures of the participant through which such person owns its interest,
to exercise any rights of a holder under the applicable Indenture. The
depositary may grant proxies and otherwise authorize participants to give or
take any request, demand, authorization, direction, notice, consent, waiver or
other action which a holder is entitled to give or take under the applicable
Indenture. The Company understands that under existing industry practices, in
the event that the Company requests any action of holders or that an owner of a
beneficial interest in such a global Debt Security desires to give or take any
action which a holder is entitled to give or take under the applicable
Indenture, the depositary would authorize the participants holding the relevant
beneficial interests to give or take such action, and such participants would
authorize beneficial owners owning through such participants to give or take
such action or would otherwise act upon the instructions of beneficial owners
owning through them.
Unless otherwise specified in a prospectus supplement relating to Debt
Securities of a series to be issued as global Debt Securities, The Depository
Trust Company will be the depositary. DTC has advised the Company that it is a
limited-purpose trust company organized under the law of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered under the Exchange Act. DTC was created to hold the securities of its
participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical move-
21
ment of securities certificates. DTC's participants include securities brokers
and dealers (which may include the underwriters, dealers or agents with respect
to the Debt Securities), banks, trust companies, clearing corporations, and
certain other organizations some of whom (and/or their representatives) own DTC.
Access to DTC's book-entry system is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a participant either directly or indirectly.
Conversion and Exchange
The terms, if any, on which debt securities of any series are convertible
into or exchangeable for our common stock, preferred stock, or other debt
securities will be set forth in the applicable prospectus supplement and a
supplemental indenture. Those terms may include provisions for conversion or
exchange, whether mandatory, at the option of the holders or at our option.
Trustee
State Street Bank and Trust Company, as the ultimate successor trustee to
Bank of America Illinois (formerly Continental Bank, National Association), will
act as Senior Trustee for Debt Securities issued under the Senior Indenture. The
Subordinated Trustee for Debt Securities issued under the Subordinated Indenture
will be identified in the related prospectus supplement. The Senior Trustee is
one of several banks which provide credit and banking services to the Company.
PLAN OF DISTRIBUTION
The Company may sell securities in any of the following ways:
(1) through underwriters or dealers;
(2) directly to one or more purchasers;
(3) through agents or
(4) through a combination of any such methods of sale.
Any of these underwriters, dealers or agents may be deemed to be an underwriter
within the meaning of the Securities Act. The prospectus supplement with respect
to the securities being offered thereby will set forth the terms of the offering
of such securities, including the name or names of any underwriters or agents,
the purchase price of such securities and the proceeds to the Company from such
sale, any underwriting discounts, commissions and other items constituting
underwriters' compensation, any initial public offering price and any discounts
or concessions allowed or reallowed or paid to dealers and any securities
exchanges on which such securities may be listed.
If underwriters are used in the sale of securities, such securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The securities may be offered to the public either through underwriting
syndicates
22
(which may be represented by managing underwriters designated by the Company),
or directly by one or more underwriters acting alone. Unless otherwise set forth
in the prospectus supplement, the obligations of the underwriters to purchase
the securities offered thereby will be subject to certain conditions precedent,
and the underwriters will be obligated to purchase all such securities if any
are purchased. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
The securities may be sold directly by the Company or through agents
designated by the Company from time to time. The prospectus supplement with
respect to any securities sold in this manner will set forth the name of any
agent involved in the offer or sale of the securities as well as any commissions
payable by the Company to such agent. Unless otherwise indicated in the
prospectus supplement, any such agent is acting on a best efforts basis for the
period of its appointment.
If dealers are utilized in the sale of any securities, the Company will
sell the securities to the dealers, as principals. Any dealer may then resell
the securities to the public at varying prices to be determined by the dealer at
the time of resale. The name of any dealer and the terms of the transaction will
be set forth in the prospectus supplement with respect to the securities being
offered thereby.
If so indicated in the prospectus supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase securities from the Company at the public offering
price set forth in the prospectus supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future.
Such contracts will be subject only to those conditions set forth in the
prospectus supplement and the prospectus supplement will set forth the
commission payable for the solicitation of such contracts.
In connection with the offering of the securities, underwriters may engage
in transactions that stabilize, maintain or otherwise effect the price of the
securities. Specifically, the underwriters may overallot in connection with the
offerings of the securities, creating a syndicate short position. In addition,
underwriters may bid for, and purchase, securities in the open market to cover
syndicate shorts or to stabilize the price of the securities. Finally, the
underwriting syndicate may reclaim selling concessions allowed for distributing
the securities in the offering of the securities, if the syndicate repurchases
previously distributed securities in syndicate covering transactions, syndicate
transactions or otherwise. Any of these activities may stabilize or maintain the
market prices of the securities above independent market levels. The
underwriters are not required to engage in any of these activities, and may end
any of them at any time.
It has not been determined whether any securities will be listed on a
securities exchange. Underwriters will not be obligated to make a market in any
securities. The Company cannot predict the activity of trading in, or liquidity
of, any securities.
Agents, underwriters and dealers may be entitled, under agreements entered
into with the Company, to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act or to contribution
with respect to payments which the agents, underwriters or dealers may be
required to make in respect thereof. Agents, underwriters and dealers may be
customers of, engage in transactions with, or perform services for the Company
in the ordinary course of business.
23
LEGAL MATTERS
Certain legal matters in connection with the securities will be passed upon
for the Company by Cahill Gordon & Reindel, New York, New York, and for the
agents, underwriters and dealers by Davis Polk & Wardwell of New York, New York.
EXPERTS
The audited consolidated financial statements incorporated in this
Prospectus by reference to the Annual Report on Form 10-K of Praxair, Inc. for
the year ended December 31, 2001 have been so incorporated in reliance on the
report (which contains an explanatory paragraph relating to the adoption of new
accounting standards for derivative instruments and hedging activities in 2001
and for costs of start-up activities in 1999) of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC under the Securities and Exchange Age of 1934. Our SEC
filings are available to the public over the Internet at the SEC's web site at
http://www.sec.gov or at our web site at http://www.praxair.com. You may also
read and copy any document we file at the Public Reference Room of the SEC, 450
Fifth Street, N.W., Room 10024, Washington, D.C. 20549, at prescribed rates, as
well as at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005, where our common stock is listed under the symbol "PX."
You may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-732-0330 for further information about the public
reference rooms.
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act of 1933, as amended, with respect to the securities that may be
offered. This prospectus, which forms a part of the registration statement, does
not contain all of the information set forth in the registration statement and
the exhibits and schedules thereto, parts of which are omitted in accordance
with the rules and regulations of the SEC. For more information about us and the
securities, you should see the registration statement and its exhibits and
schedules. Any statement made in this prospectus concerning the provisions of
documents is a summary and you should refer to the copy of that document filed
as an exhibit to the registration statement with the SEC.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means we are assumed to have disclosed important information to
you when we refer you to documents that are on file with the SEC. The
information we have incorporated by reference is an important part of this
prospectus, and information that we file later with the SEC will automatically
update and supersede this information. We incorporate by reference the documents
listed below and all documents we subsequently file with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until we sell
all of the securities covered by this prospectus.
24
o Our Annual Report on Form 10-K for the year ended December 31, 2001.
o Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
2002, June 30, 2002 and September 30, 2002.
o Our Current Reports on Form 8-K dated April 23, 2002, June 13, 2002
and August 12, 2002.
o Our Registration Statement on Form 8-A dated June 27, 2002.
You may request a copy of any or all of the documents that we have
incorporated by reference at no cost by writing to or calling us at the
following address:
Praxair, Inc.
39 Old Ridgebury Road
Danbury, Connecticut 06810-5113
Attn: Assistant Corporate Secretary
Telephone: (203) 837-2000.
25
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.*
SEC filing fee............................. $ 32,750.00
Accounting fees and expenses............... 40,000.00
Legal fees and expenses.................... 200,000.00
Rating agency fees......................... 200,000.00
Debt Trustee's fees and expenses........... 30,000.00
Printing and engraving expenses............ 100,000.00
Miscellaneous.............................. 47,250.00
-------------
Total...................................... $ 650,000.00
_______________
* Except for SEC filing fee, all expenses are estimated. Please refer to the
applicable prospectus supplement for the specific expenses related to any
particular offering.
Item 15. Indemnification of Directors and Officers.
The Company
The Company is incorporated under the laws of the State of Delaware.
Sections 102 and 145 of the Delaware General Corporation Law, or Delaware code,
set forth the conditions and limitations governing the indemnification of
officers, directors and other persons by Delaware corporations.
Generally, Section 145 of the Delaware code provides that a Delaware
corporation shall have the power to indemnify any person who was or is a party
or is threatened to be made a party to any action, suit or proceeding (except
actions by or in the right of the corporation) by reason of the fact that such
person is or was a director, officer, employee or agent of the corporation
against all expenses, judgments, fines and amounts paid in settlement actually
and reasonably incurred by him or her in connection with such action, suit or
proceeding if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. In addition, a Delaware corporation may
similarly indemnify such person for expenses actually and reasonably incurred by
him or her in connection with the defense or settlement of any action or suit by
or in the right of the corporation, provided such person acted in good faith and
in a manner he or she reasonably believed to be in the best interests of the
corporation, and, in the case of claims, issues and matters as to which such
person shall have been adjudged liable to the corporation, provided that the
Court of Chancery of the State of Delaware or the court in which such action or
suit was brought shall have determined upon application that, despite the
adjudication of liability but in view of all of the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which such court shall deem proper. To the extent that a present or former
director or officer of a Delaware corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding described above, or in
defense of any claim issue or matter therein, such person shall be indemnified
against expenses actually and reasonably incurred by such person in connection
therewith.
II-1
Generally, Section 102(b)(7) of the Delaware code provides that the
certificate of incorporation of a Delaware corporation may contain provisions
eliminating or limiting the personal liability of a director to a corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director; provided that such provision may not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or knowing violation of law, (iii) under
section 174 of Title VIII, or (iv) for any transaction from which the director
derived an improper person benefit. No such provision may eliminate or limit the
liability of a director for any act or omission occurring prior to the date
which such provisions become effective.
Article VIII of our Restated Certificate of Incorporation eliminates the
personal liability for monetary damages of directors under certain circumstances
and provides that each person who is or was a director or officer of us, and
each such person who is or was serving at our request as a director or officer
of another corporation, or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans maintained
or sponsored by us (including the heirs, executors, administrators and estate of
such person) shall be indemnified and advanced expenses by us to the fullest
extent permitted from time to time by the Delaware code or any applicable laws
as presently or hereafter in effect.
Section 145 of the Delaware code provides that a Delaware corporation shall
have the power to purchase and maintain insurance on behalf of any person who is
or was a director, officer, employee or agent of the corporation against any
liability asserted against such person and incurred by such person in any such
capacity, or arising out of such person's status as such, whether or not the
corporation would have the power to indemnify such person against the same
pursuant to the provisions of the Delaware code.
Our directors and officers are covered by insurance policies indemnifying
against certain liabilities, including certain liabilities arising under the
Act, which might be incurred by them in such capacities and against which they
may not be indemnified by us.
The Standard Underwriting Agreement Provisions (Exhibit 1.1) provide for
indemnification by the underwriters of the Company and its officers, directors
and controlling persons under certain circumstances.
For a statement of our undertakings with respect to indemnification of
directors and officers, see Item 17 below.
II-2
Item 16. Exhibits.
Exhibit
No. Description of Document
--------- -----------------------------------------------------------------
1.1 Form of Standard Underwriting Agreement Provisions (including Form of
Terms Agreement) (incorporated herein by reference to Exhibit 1.1 to
the Company's Form S-3 Registration Statement, Registration No.
333-304).
3.1 Restated Certificate of Incorporation (incorporated by reference to
Exhibit 3.01 to the Company's Registration Statement on Form 10,
Filing No. 1-11037).
3.2 Amended By-laws (incorporated by reference to Exhibit 3.02 to the
Company's Registration Statement on Form 10, Filing No. 1-11037).
4.1 Indenture dated as of July 15, 1992 between the Company and State
Street Bank and Trust Company as the ultimate successor trustee to
Bank of America Illinois (formerly Continental Bank, National
Association) (incorporated herein by reference to Exhibit 4 to the
Company's Form 10-Q for the quarter ended June 30, 1992, File No.
1-11307).
4.2 Forms of Senior Debt Securities (see Exhibits A and B to Exhibit 4.1
above).
4.3 Instrument of Resignation, Appointment and Acceptance, dated as of
January 16, 1996 among the Company, First Trust of Illinois, National
Association (as successor to Bank of America Illinois, formerly
Continental Bank, National Association) as resigning trustee, and
State Street Bank and Trust Company, as successor trustee
(incorporated herein by reference to Exhibit 4.3 to the Company's Form
S-3 Registration Statement, Registration No. 333-304).
4.4 Form of Subordinated Indenture (incorporated herein by reference to
Exhibit 4.4 to the Company's Form S-3 Registration Statement,
Registration No. 333-304).
4.5 Forms of Subordinated Debt Securities (see Exhibits A and B to Exhibit
4.4 above).
4.6 Rights Agreement between the Company and Registrar and Transfer
Company, as Rights Agent (incorporated herein by reference to Exhibit
99.1 to the Company's Registration Statement on Form 8-A, File No.
1-11037).
5.1* Opinion of Cahill Gordon & Reindel.
12.1* Statement re Computation of Ratio of Earnings to Fixed Charges and
Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividends of the Company - Five Years ended December 31, 2001 and Nine
Months ended September 30, 2002.
23.1* Consent of PricewaterhouseCoopers LLP, independent certified public
accountants.
II-3
Exhibit
No. Description of Document
--------- -----------------------------------------------------------------
23.2* Consent of Cahill Gordon & Reindel (included in Exhibit 5.1).
24.1* Powers of attorney (included on the signature pages hereof).
25.1 Form T-1 Statement of Eligibility of State Street Bank and Trust
Company as the ultimate successor trustee to Bank of America Illinois
(formerly Continental Bank, National Association), as Trustee under
the Indenture dated July 15, 1992 between the Company and Bank of
America Illinois (incorporated herein by reference to Exhibit 25.1 to
the Company's Form S-3 Registration Statement, Registration No.
333-304). __________________
* Filed herewith.
Item 17. Undertakings.
The undersigned hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with the Commission by
the undersigned pursuant to section 13 or 15(d) of the Exchange Act that
are incorporated by reference in the registration statement.
II-4
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
4. That, for purposes of determining any liability under the
Securities Act, each filing of an annual report pursuant to Section 13(a)
or 15(d) of the Exchange Act that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
5. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the undersigned pursuant to the provisions described under Item
15 above, or otherwise, the undersigned have been advised that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the undersigned of expenses incurred or paid by a director,
officer or controlling person of the undersigned in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
undersigned will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
The undersigned hereby undertakes to file an application for the purpose of
determining the eligibility of the applicable trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act, as amended, in accordance with
the rules and regulations prescribed by the Commission under Section 305(b)(2)
of that act.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Praxair, Inc.
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Danbury, Connecticut, on December 19, 2002.
PRAXAIR, INC.
By: /s/ James S. Sawyer
----------------------------------
Name: James S. Sawyer
Title: Vice President &
Chief Financial Officer
Each person whose signature appears below appoints each of James S. Sawyer
and Michael J. Allan, his attorney-in-fact and agent, with full power of
substitution and resubstitution, to sign and file with the Securities and
Exchange Commission any amendments to the registration statement (including
post-effective amendments), any registration statement permitted under Rule
462(b) under the Securities Act of 1933 and any amendments thereto and to file
with the Securities and Exchange Commission one or more supplements to any
prospectus included in any of the foregoing, and generally to do anything else
necessary or proper in connection therewith.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ Patrick M. Clark Vice President and Controller December 19, 2002
------------------------------- (principal accounting officer)
Patrick M. Clark
/s/ Dennis H. Reilley Chairman of the Board and December 19, 2002
------------------------------- President and Chief Executive
Dennis H. Reilley Officer
/s/ James S. Sawyer Vice President and Chief Financial December 19, 2002
------------------------------- Officer
James S. Sawyer
/s/ Alejandro Achaval Director December 19, 2002
-------------------------------
Alejandro Achaval
/s/ Dale F. Frey Director December 19, 2002
-------------------------------
Dale F. Frey
II-6
Signature Title Date
--------- ----- ----
/s/ Claire W. Gargalli Director December 19, 2002
-------------------------------
Claire W. Gargalli
/s/ Ronad L. Kuehn, Jr. Director December 19, 2002
-------------------------------
Ronald L. Kuehn, Jr.
/s/ Raymond W. LeBoeuf Director December 19, 2002
-------------------------------
Raymond W. LeBoeuf
/s/ Benjamin F. Payton Director December 19, 2002
-------------------------------
Benjamin F. Payton
/s/ G. Jackson Ratcliffe, Jr. Director December 19, 2002
-------------------------------
G. Jackson Ratcliffe, Jr.
/s/ Wayne T. Smith Director December 19, 2002
-------------------------------
Wayne T. Smith
/s/ H. Mitchell Watson, Jr. Director December 19, 2002
-------------------------------
H. Mitchell Watson, Jr.
/s/ William A Wise Director December 19, 2002
-------------------------------
William A. Wise
II-7
EXHIBIT 5.1
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
December 19, 2002
(212) 701-3000
Praxair, Inc.
39 Old Ridgebury Road
Danbury, Connecticut 06810-5113
Ladies and Gentlemen:
We have acted as special counsel to Praxair, Inc., a Delaware corporation
(the "Company"), in connection with the filing of a Registration Statement on
Form S-3 (the "Registration Statement") with the Securities and Exchange
Commission (the "Commission"), relating to the registration pursuant to the
Securities Act of 1933, as amended (the "Act"), of securities of the Company
(the "Securities") consisting of (i) senior debt securities (the "Senior Debt
Securities"), (ii) subordinated debt securities (the "Subordinated Debt
Securities" and together with the Senior Debt Securities, the "Debt
Securities"), (iii) common stock, par value $.01 per share, including preferred
stock purchase rights (the "Common Stock") and (iv) preferred stock, par value
$.01 per share (the "Preferred Stock") to be issued from time to time pursuant
to Rule 415 under the Act, for an aggregate initial offering price of up to
$1,375,000,000 and, pursuant to Rule 429(b) under the Act, acting as a
post-effective amendment to the Registration Statement (File No. 333-57386),
filed with the Commission on March 21, 2001, relating to $375,000,000 aggregate
principal amount of remaining unsold securities registered thereunder.
The Subordinated Debt Securities are proposed to be issued under an
indenture (the "Subordinated Indenture") to be executed between the Company and
a trustee to be selected by the Company at such time as the Company elects to
issue Subordinated Debt Securities.
The Senior Debt Securities are proposed to be issued under an indenture
dated as of July 15, 1992 (the "Senior Indenture") between the Company and State
Street Bank and Trust Company (as the ultimate successor to Bank of America
Illinois, formerly Continental Bank, National Association), as trustee.
In connection with this opinion, we have assumed that (i) the Registration
Statement, and any amendments thereto (including post effective amendments),
will have become effective; (ii) a prospectus supplement will have been prepared
and filed with the Commission describing the Securities offered thereby; (iii)
all Securities will be issued and sold in compliance with applicable federal and
state securities laws and in the manner stated in the Registration Statement and
the appropriate prospectus supplement; and (iv) a definitive purchase,
underwriting or similar agreement with respect to
any Securities offered will have been duly authorized and validly executed and
delivered by the Company and the other parties thereto.
We are of the opinion that:
1. With respect to shares of Common Stock, when certificates representing
the shares of Common Stock have been duly executed, countersigned, registered
and delivered either (a) in accordance with the applicable definitive purchase,
underwriting or similar agreement approved by the Board of Directors of the
Company (the "Board") upon payment of the consideration therefor (not less than
the par value of the Common Stock) provided for therein, or (b) upon conversion,
exchange or exercise of any other Security in accordance with the terms of such
Security or the instrument governing such Security providing for such
conversion, exchange or exercise as approved by the Board, for the consideration
approved by the Board (not less than the par value of the Common Stock), the
shares of Common Stock will be duly authorized, validly issued, fully paid and
nonassessable.
2. With respect to shares of Preferred Stock, when certificates
representing the shares of Preferred Stock have been duly executed,
countersigned, registered and delivered either (a) in accordance with the
applicable definitive purchase, underwriting or similar agreement approved by
the Board upon payment of the consideration therefor (not less than the par
value of the Preferred Stock) provided for therein, or (b) upon conversion,
exchange or exercise of any other Security in accordance with the terms of such
Security or the instrument governing such Security providing for such
conversion, exchange or exercise as approved by the Board, for the consideration
approved by the Board (not less than the par value of the Preferred Stock), the
shares of Preferred Stock will be duly authorized, validly issued, fully paid
and nonassessable.
3. With respect to the Senior Debt Securities to be issued under the Senior
Indenture, when (i) the Board has taken all necessary corporate action to
approve the issuance and terms of such Senior Debt Securities, the terms of the
offering thereof and related matters; and (ii) such Senior Debt Securities have
been duly executed, authenticated, issued and delivered in accordance with the
provisions of the Senior Indenture and in accordance with the applicable
definitive purchase, underwriting or similar agreement approved by the Board
upon payment of the consideration therefor provided for therein, such Debt
Securities will be legally issued and will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as such enforcement is subject to any applicable bankruptcy,
insolvency, reorganization, fraudulent transfer or other law relating to or
affecting creditors' rights generally and general principles of equity and will
be entitled to the benefits of the Senior Indenture.
4. With respect to the Subordinated Debt Securities to be issued under the
Subordinated Indenture, when (i) the Subordinated Indenture has been duly
qualified under the Trust Indenture Act of 1939, as amended; (ii) the Board has
taken all necessary corporate action to approve the issuance and terms of such
Subordinated Debt Securities, the terms of the offering thereof and related
matters; and (iii) such Subordinated Debt Securities have been duly executed,
authenticated, issued and delivered in accordance with the provisions of the
Subordinated Indenture and in accordance with the applicable definitive
purchase, underwriting or similar agreement approved by the Board upon payment
of the consideration therefor provided for therein, such Subordinated Debt
Securities will be legally issued and will constitute valid and binding
obligations of the Company, enforce-
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able against the Company in accordance with their terms, except as such
enforcement is subject to any applicable bankruptcy, insolvency, reorganization,
fraudulent transfer or other law relating to or affecting creditors' rights
generally and general principles of equity and will be entitled to the benefits
of the Subordinated Indenture.
We hereby consent to the use of our firm's name under the caption "Legal
Matters" and to the filing of this opinion with the Commission as an exhibit to
the aforesaid Registration Statement. In giving such consent we do not hereby
admit that we are within the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ Cahill Gordon & Reindel
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EXHIBIT 12.1
PRAXAIR, INC. AND SUBSIDIARIES
Ratio of Earnings to Fixed Charges and Ratio of Earnings to
Combined Fixed Charges and Preferred Stock Dividends
(Millions of dollars, except ratios)
Nine Months
Ended
Year Ended December 31, September 30,
------------------------------------ -------------
2001 2000 1999 1998 1997 2002
---- ---- ---- ---- ---- ----
EARNINGS
Income of consolidated companies before provision for income
taxes.................................................... $576 $483 $627 $596 $622 $535
Capitalized interest......................................... (17) (24) (30) (36) (32) (8)
Depreciation of capitalized interest......................... 11 10 9 7 7 9
Dividends from equity investees.............................. 5 3 1 2 1 6
Total earnings, net of fixed charges......................... $575 $472 $607 $569 $598 $542
FIXED CHARGES
Interest on long-term and short-term debt.................... $224 $224 $204 $260 $216 $161
Capitalized interest......................................... 17 24 30 36 32 8
Rental expenses representative of an interest factor......... 37 34 32 27 23 23
Total fixed charges.......................................... $278 $282 $266 $323 $271 $192
Total adjusted earnings available for payment of fixed
charges.................................................. $853 $754 $873 $892 $869 $734
Preferred stock dividend requirements(b)..................... $2 $4 $8 $8 $8 $1
RATIO OF EARNINGS TO FIXED CHARGES........................... 3.1 2.7 3.3 2.8 3.2 3.8
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED
STOCK DIVIDENDS.......................................... 3.1 2.6 3.2 2.7 3.1 3.8
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b The amount of preferred stock dividend requirements in each period
represents the amount of pre-tax income needed to provide an after-tax
income amount (calculated using the Company's effective income tax rate)
equal to the amount of preferred stock dividends.
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EXHIBIT 23.1
Consent of Independent Accountants
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 12, 2002 relating to the
financial statements, which appears in the 2001 Annual Report to Shareholders,
which is incorporated by reference in Praxair, Inc.'s Annual Report on Form 10-K
for the year ended December 31, 2001. We also consent to the reference to us
under the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Stamford, CT
December 19, 2002