Registration Statement No
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form S-2
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
Farmland Industries, Inc.
(Exact name of registrant as specified in its charter)
Kansas 44-0209330
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12200 North Ambassador Drive, Kansas City, Missouri 64163-1244
816-713-7000
(Address, including zip code, and telephone number, including area code, of registrant's principal executive
offices)
John F. Berardi
Executive Vice President and Chief Financial Officer
Farmland Industries, Inc.
12200 North Ambassador Drive, Kansas City, Missouri 64163-1244
816-713-6348
(Name, Address, including zip code, and telephone number, including area code, of agent for service)
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of
this Registration Statement, as determined by market conditions.
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 check the following box. [ ]
If the registrant elects to deliver its latest annual report to security holders, or a complete and legible
facsimile thereof, pursuant to Item 11(a)(1) of this Form, check the following box: {X}
I
f 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 this Form is a post-effective amendment filed pursuant to Rule 462(d) 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 [ ]
CALCULATION OF REGISTRATION FEE
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Proposed Maximum
Aggregate Offering or Amount of
Title of Each Class of Security Being Registered Exchange Price Registration Fee
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Demand Loan Certificates $ 100,000,000
Subordinated Debenture Bonds $ 260,000,000
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Total $ 360,000,00 $ 92,367
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The fee is calculated pursuant to rule 457(o). Pursuant to Rule 429, the combined prospectus filed as a part of
this Registration Statement will relate as well to the Registrant's Form S-1 Registration Statement No.
333-94929. This Registration Statement shall constitute a post-effective amendment on Form S-2 to Registration
Statement No. 333-94929. The amount of securities registered in Registration Statement No. 333-94929 which were
not sold and which are carried forward in this combined Registration Statement and the related fee calculated at a
rate of .000264 are: amount of securities - $169,091,000, amount of fee - $44,640. As a result, the fee paid
herewith relates to $190,909,000 of securities and amounts to $47,727, calculated at a rate of .00025.
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The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of
1933 or until the Registration statement shall become effective on such date as the Commission, acting pursuant to
said Section 8(a), may determine.
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[OBJECT OMITTED]
The following is a red herring that is landscaped and reads as follows:
The information in this prospectus is not complete and may be amended.
We may not sell these securities until the registration statement filed
with the SEC is effective. This prospectus is not an offer to sell nor
is it seeking any offer to buy these securities in any state where the
offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED NOVEMBER 27, 2001
Prospectus
Farmland Industries, Inc.
$100,000,000 Demand Loan Certificates
$260,000,000 Subordinated Debenture Bonds
Minimum
Initial Investment
Demand Loan Certificates $ 1,000
Subordinated Debenture Bonds
Ten-Year, Series A.................................$ 1,000
Ten-Year, Series B ................................$ 100,000
Five-Year, Series C................................$ 1,000
Five-Year, Series D................................$ 100,000
Ten-Year Monthly Income, Series E..................$ 5,000
Ten-Year Monthly Income, Series F..................$ 100,000
Five-Year Monthly Income, Series G.................$ 5,000
Five-Year Monthly Income, Series H.................$ 100,000
For interest rate information, call 1-800-821-8000, ext. 6360.
Terms of Sale
If all the securities offered are sold, we will receive $100.0 million from the sale of demand loan certificates and $260.0 million
from the sale of subordinated debenture bonds. However, we will exchange subordinated debenture bonds with a face amount of up to
$80.0 million for other subordinated debt securities. Cash proceeds will be reduced by the face amount of subordinated debenture
bonds exchanged. Also, if more than $180.0 million is sold for cash a lesser amount will be available for exchange. We will pay
approximately $7.6 million in commissions and $1.5 million in other expenses. The agent is not required to sell any specific number
or dollar amount of debt securities but will use its best efforts to sell the debt securities offered.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities
or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
See "Risk Factors" beginning on page 6 for a description of certain risk factors that you should consider
before you invest in these securities.
Farmland Securities Company
Agent
November 21, 2001
You should rely only on the information contained in this prospectus or any prospectus supplement. We have not authorized anyone
to provide you with any information that is different. This prospectus is not an offer to sell nor is it seeking an offer to buy
these securities in any state or jurisdiction where the offer or sale is not permitted. Furthermore, 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.
TABLE OF CONTENTS
Page
Information Available About Farmland........................................1
Incorporation Of Certain Documents By Reference.............................1
Prospectus Summary..........................................................2
Risk Factors................................................................6
Ratios Of Earnings To Fixed Charges.........................................9
Determination Of Interest Rates.............................................9
Use Of Proceeds............................................................10
Plan Of Distribution.......................................................11
Exchange Offer.............................................................12
How To Accept Exchange Offer...............................................13
How To Transfer Ownership..................................................13
Description Of Debt Securities.............................................14
Legal Matters..............................................................32
Experts....................................................................32
Qualified Independent Underwriter..........................................32
Information Available About Farmland
Information Available from the SEC
The Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires our company to file annual and quarterly reports, as
well as certain other information, with the Securities and Exchange Commission ("SEC"). These reports may be read and copied at the
SEC's public reference rooms in Washington, D.C., New York, New York and Chicago, Illinois. You can request copies of these
documents, upon payment of a duplication fee, by writing to the Public Reference Section of the SEC, 450 Fifth Street N.W.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference
rooms. Our SEC filings are also available to the public on the SEC Internet site (http://www.sec.gov).
Information Available From Farmland
You also may request a copy of our latest annual report as filed with the SEC, at no cost, by writing or telephoning us at the
address shown below on this page.
Information Available From NASD
The National Association of Securities Dealers, Inc. ("NASD") has a program which provides information regarding the disciplinary
history of NASD members and their associated persons. You may obtain an investor brochure which includes information describing this
program by contacting the NASD. The NASD hotline number is 1-800-289-9999. The NASD website is http://www.nasdr.com/2000.htm.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We "incorporate by reference" into this prospectus selected information that we have previously filed with the SEC, which means that
we can disclose important information to you by referring you directly to those documents. The information that we file by reference
is considered part of this prospectus. Information contained in this prospectus automatically updates and supersedes information
contained in any document which we incorporate by reference. Also, information in any document incorporated by reference updates and
supersedes information in any earlier document which we incorporated by reference.
The following document, filed by Farmland with the SEC pursuant to the Exchange Act, is incorporated by reference into this
prospectus:
Annual Report on Form 10-K for the year ended August 31, 2001.
You may request a copy of this filing, at no cost, by writing to or telephoning us at the following address:
Farmland Industries, Inc.
P.O. Box 20111
Kansas City, Missouri 64195
816-713-7000, extension 6360
Attached to and constituting a part of this prospectus is a copy of our latest Annual Report on Form 10-K.
Prospectus Summary
This summary does not contain all the information that may be important to you. You should read the entire prospectus before making
an investment decision.
Kansas City, Missouri is the location of our world headquarters. Our mailing address and telephone number are as follows:
Farmland Industries, Inc.
P.O. Box 20111
Kansas City, Missouri 64195
816-713-7000
Farmland's Business
Farmland Industries, Inc., founded in 1929 and formally incorporated in Kansas in 1931, is a farm supply cooperative and a processing
and marketing cooperative. In this prospectus, unless the context suggests differently, "Farmland", "we", "us", or "our" refers to
Farmland Industries, Inc. and its consolidated subsidiaries and all references to year or years are to fiscal years ended August 31.
Farmland operates on a cooperative basis and is primarily owned by its members. Members will receive patronage refunds distributed
by Farmland from the member-sourced portion of its annual net earnings to the extent our Board of Directors approves the payment,
either in cash or equity, of patronage refunds.
As of August 31, 2001, Farmland's membership, associate membership and holders of capital credits consisted of approximately 2,400
cooperative associations of farmers and ranchers and 8,800 pork or beef producers or associations of such producers.
Based on sales, we are one of the largest cooperatives in the United States. In 2001, we had sales of $11.8 billion, including sales
of approximately $1.7 billion to customers outside of the United States.
Farmland competes with many companies, including other cooperatives. These competitors are of various sizes and have various levels
of vertical integration. We sell to a large number of customers, and with the exception of Agriliance and Country Energy, no single
customer is material to our business. Agriliance, a 25%-owned affiliate, is a crop nutrient and crop protection marketing venture.
We sell all of our crop nutrient production to Agriliance. Agriliance, in turn, sells our product and product it obtains from other
suppliers to numerous local cooperatives and other crop protection and crop nutrient retailers.
In November 2001, we sold our interest in our petroleum products marketing venture, Country Energy, to Cenex Harvest States
Cooperatives. As a part of this transaction, for an initial period of two years, we will sell all refined products produced at our
Coffeyville, Kansas refinery to Cenex Harvest States. Cenex Harvest States, in turn, will sell our products and products it obtains
from other suppliers to numerous local cooperatives and other petroleum products retailers.
Our business is focused on two areas: agricultural inputs and outputs.
Agricultural Inputs
In this area, we operate as a farm supply cooperative. Our three main farm supply product divisions are as follows:
o Crop Production
o Petroleum
o Feed
In 2001, our sales of farm supply products were $2.5 billion. Approximately 54% of these farm supply products were manufactured in
plants owned or operated by Farmland. Member cooperative associations purchased approximately 57% of the farm supply products we
sold in 2001. These cooperatives distribute products primarily to farmers and ranchers who are the end users of the farm supply
products we sell.
Agricultural Outputs
In this area, we operate as a processing and marketing cooperative. Our agricultural outputs operations are as follows:
o The processing and marketing of meat products (Refrigerated Foods)
o The origination, storage and marketing of grain (World Grain)
In 2001, our members supplied about 79% of the hogs we processed, 32% of the cattle we processed and 59% of the grain that we
marketed domestically. Substantially all of the pork and beef products we sold in 2001 were processed in plants we own.
THE OFFERING
Description of Securities
We are offering $100.0 million of Demand Loan Certificates. We are offering $260.0 million of Subordinated Debenture Bonds for sale
or to exchange for certain Farmland subordinated debt securities. All Demand Loan Certificates and Subordinated Debenture Bonds
offered by this prospectus will be issued in uncertificated form. This means we do not issue a certificate for any of our debt
securities that you may purchase. Rather, your investment in our debt securities will be evidenced by an entry on our records. To
facilitate your recordkeeping, we will issue to you a receipt and a bond instruction which will state the amount of securities you
own and we will periodically send to you a statement of your account. The terms and conditions of the debt securities which we are
offering for sale or exchange are more fully described in the section "Description of Debt Securities" which begins on page 14.
The Demand Loan Certificates are available with a minimum investment of $1,000. The Subordinated Debenture Bonds are available in
several series, as follows:
Minimum
Series Initial Investment
Ten-Year, Series A.....................................................$ 1,000
Ten-Year, Series B ....................................................$ 100,000
Five-Year, Series C....................................................$ 1,000
Five-Year, Series D....................................................$ 100,000
Ten-Year Monthly Income, Series E......................................$ 5,000
Ten-Year Monthly Income, Series F......................................$ 100,000
Five-Year Monthly Income, Series G.....................................$ 5,000
Five-Year Monthly Income, Series H.....................................$ 100,000
Maturity
o Demand Loan Certificates are payable upon demand.
o Subordinated Debenture Bonds of Series A and Series B mature 10 years from the date of original issuance.
o Subordinated Debenture Bonds of Series C and Series D mature 5 years from the date of original issuance.
o Monthly Income Subordinated Debenture Bonds of Series E and Series F mature 10 years from the date of original issuance.
o Monthly Income Subordinated Debenture Bonds of Series G and Series H mature 5 years from the date of original issuance.
Interest Rates
The interest rates we pay on the various debt securities we are selling can be found under the heading "Determination of Interest
Rates" on page 9. Also, you may obtain information about the interest rates we pay by calling Farmland Securities Company,
1-800-821-8000, Extension 6360.
Interest Payment
Interest on the Demand Loan Certificates is payable in one of the following ways at the option of the purchaser:
a) six months after the date of original issuance, and at the end of each and every six month period thereafter until the
Demand Loan Certificate is surrendered for redemption, or
b) only at the date of redemption, with interest compounded semi-annually at the effective Certificate Interest Rate.
The interest payment option on the Demand Loan Certificate is selected by the purchaser at the time of purchase and is irrevocable.
Interest on the Subordinated Debenture Bonds (Series A, Series B, Series C and Series D) is paid semi-annually on January 1 and July
1 or at the holder's election may be left to accumulate semi-annually. See the sub-heading "Interest Payments" found within the
headings "Ten-Year, Series A and B" beginning on page 18 and "Five-Year, Series C and D" beginning on page 19.
Interest on Monthly Income Subordinated Debenture Bonds (Series E, Series F, Series G and Series H) is paid on the first day of each
month. See the sub-heading "Interest Payments" found within the headings "Ten-Year Monthly Income, Series E and F" beginning on page
22 and "Five-Year Monthly Income, Series G and H" beginning on page 23 of this prospectus.
Provisions for Early Redemption at the Option of Holders
1. We will redeem the Ten-Year Series A and Series B and Five-Year Series C and Series D Subordinated Debenture Bonds held by a
trustee or custodian in an individual retirement account ("IRA") as necessary to satisfy mandatory withdrawals from the IRA.
2. We will redeem the Ten-Year Series A and Series B, and Five-Year Series C and Series D Subordinated Debenture Bonds upon
notice of the death of the holder.
3. We will redeem limited amounts of Subordinated Debenture Bonds of Series A, Series B, Series C and Series D before they
mature if certain restrictive conditions are satisfied. The limited amount of Subordinated Debenture Bonds that we will redeem
before maturity is explained under the caption "Limited Redemption Prior to Maturity of Subordinated Debenture Bonds" beginning
on page 20 of this prospectus. A summary of the other limitations on the redemption before maturity of Subordinated Debenture
Bonds of Series A, Series B, Series C and Series D follows:
o Except when held by a trustee or custodian in an IRA as stated in (1) above, the Ten-Year Subordinated Debenture Bonds
(Series A and Series B) must have been held for at least 3 years.
o Except when held by a trustee or custodian in an IRA as stated in (1) above, the Five-Year Subordinated Debenture Bonds
(Series C and Series D) must have been held for at least 2 years.
4. We will redeem the Ten-Year Monthly Income Subordinated Debenture Bonds (Series E and Series F), and Five-Year Monthly
Income Subordinated Debenture Bonds (Series G and Series H) before maturity only upon notice of the death of the holder.
Provisions for Early Redemption at the Option of Farmland
Subordinated Debenture Bonds of Ten-Year Series A and Series B, and Five-Year Series C and Series D, may be called at the option of
Farmland two years after the date of issue.
Monthly Income Subordinated Debenture Bonds of Ten-Year Series E and Series F, and Five-Year Series G and Series H, cannot be called
by Farmland.
Subordination
The rights of holders of the Subordinated Debenture Bonds to receive payments of principal and interest are subordinated in right of
payment to all existing and future holders of Senior Indebtedness. Senior Indebtedness includes, among other things, Demand Loan
Certificates, obligations of Farmland for money borrowed from or guaranteed to banks, trust companies, insurance companies or pension
trusts, and indebtedness created after the date of the Subordinated Indenture under instruments which state that such indebtedness is
Senior Indebtedness.
The Subordinated Debenture Bonds and the Demand Loan Certificates are also structurally subordinated to all obligations of Farmland's
subsidiaries.
Underwriting Discounts and Commissions
We will pay Farmland Securities Company a commission not to exceed 4% of the aggregate sales price of the Subordinated Debenture
Bonds and Demand Loan Certificates offered. We also pay Farmland Securities Company for all expenses it incurs related to the sale
of these securities. However, this additional payment is limited to no more than 3% of the aggregate sales price of the securities
being offered.
Purpose of the Exchange Offer
The purpose of the exchange offer is to extend the period of time we utilize funds borrowed from an investor in our Subordinated
Debenture Bonds. For additional information regarding the exchange offer, including how to accept the exchange offer, please see
"Exchange Offer" on page 12 of this prospectus.
Selling Price
The debt securities, if sold for cash, will be sold for 100% of the face amount.
Use of Proceeds
Proceeds received from the sale of the debt securities will be used for general corporate purposes, including repayment of debt and
the funding of capital expenditures.
RISK FACTORS
You should consider carefully the following risk factors in addition to the other information contained in or incorporated by
reference into this prospectus.
Risks Relating to the Offering
The Subordinated Debenture Bonds are contractually subordinate to our Senior Indebtedness; in addition, both the Subordinated
Debenture Bonds and the Demand Loan Certificates are structurally subordinated to the liabilities of our subsidiaries.
The Subordinated Debenture Bonds offered by this prospectus for sale and for exchange are unsecured obligations of Farmland and are
subordinated in right of payment to all existing and future Senior Indebtedness of Farmland. As a result, no payment of principal or
interest will be made on the Subordinated Debenture Bonds until payment has been made on the amounts then due on Senior
Indebtedness. See "Description of Debt Securities - Subordination" on page 24 of this prospectus.
In addition, both the Subordinated Debenture Bonds and the Demand Loan Certificates are structurally subordinated to all liabilities
of Farmland's subsidiaries. Any right of Farmland to receive assets from any subsidiary which liquidates will be subject to the
claims of such subsidiary's creditors. As a result, the right of holders of the Subordinated Debenture Bonds and Demand Loan
Certificates to participate in those assets is subject to the claims of such subsidiary's creditors. Accordingly, the Subordinated
Debenture Bonds and the Demand Loan Certificates are structurally subordinated to all indebtedness and other liabilities, including
trade accounts payable, of our subsidiaries.
As of August 31, 2001:
1. Farmland had $293.2 million of outstanding liabilities which constitute Senior Indebtedness; in addition, Senior
Indebtedness includes obligations for future payments under long-term leases of approximately $249.6 million through
December 2004;
2. Farmland had outstanding $535.4 million aggregate principal amount of subordinated indebtedness; and
3. Certain Farmland subsidiaries had outstanding $272.0 million aggregate principal amount of indebtedness, of which $256.5
million was nonrecourse to Farmland or Farmland's other affiliates.
The Indenture under which the Subordinate Debenture Bonds and Demand Loan Certificates are issued do not restrict the incurrence of
indebtedness and various other transactions.
The indentures under which the debt securities are issued do not contain any provision that would limit the ability of Farmland or
any of its affiliates to incur indebtedness of any type or that would provide holders of the debt securities protection in the event
of a highly leveraged transaction, restructuring, change in control, merger, sale of substantially all of our assets or similar
transaction involving Farmland. In the event of these transactions, we cannot assure you that Farmland or any successor would be
able to repay holders of our debt securities either from continuing operations or from proceeds of any such transaction.
Credit Facility provisions could restrict our ability to repay our subordinated debt.
Our Credit Facility with a group of banks and other lenders is Senior Indebtedness and contains affirmative, negative and financial
covenants. Violation of these covenants or any other breach relating to this indebtedness, including payment defaults, would create
a default on our Senior Indebtedness. If default occurs, we will not make payments of principal and interest on the Subordinated
Debenture Bonds, as well as our other subordinated debt. Payments may begin again when the breach or violation is resolved.
We cannot assure you that we will have sufficient funds available to pay interest and principal.
We have not and do not intend to establish special cash reserves, escrow accounts or trusts for payment of principal or interest on
the debt securities offered in this prospectus. We have relied on, and plan to continue to rely on, general corporate funds provided
through operations, sale of assets and other borrowings to make all principal and interest payments when due.
Restricted redemption rights of holders of Subordinated Debenture Bonds may make these bonds an unsuitable investment for you.
Holders of Subordinated Debenture Bonds may redeem their investments prior to maturity only under restricted conditions. These
restricted conditions are more fully described under the caption "Limited Redemption Prior to Maturity of Subordinated Debenture
Bonds" beginning on page 20 of this prospectus. Depending on your investment objectives, these restricted redemption rights may make
the Subordinated Debenture Bonds an unsuitable investment for you.
You may be unable to sell your debt security because there is no trading market for our debt securities.
A trading market does not exist for our debt securities. Also, it is highly unlikely that a secondary market for these securities
will develop. We do not plan to list any of the debt securities on any securities exchange.
These securities are offered through our wholly-owned subsidiary, which has received a partial exemption from regulatory requirements.
Farmland Securities Company ("FSC") is our wholly-owned subsidiary. FSC's business is limited to the offer and sale of securities
issued by us. Because FSC is wholly-owned by Farmland, the offering requires a partial exemption from requirements of Rule 2720 of
the NASD. This partial exemption requires, among other things, that a minimum of 80 percent of the dollar amount of debt security
sales be to a defined group as approved by the NASD. Only persons associated with us or FSC participated in determining the terms,
including price, of the securities offered in this prospectus.
Risks Relating To Our Business And Industry
We have suffered losses in our operations in recent years and our earnings are volatile due to factors not within our control.
In our fiscal year ended August 31, 2001, we suffered a net loss of $90.0 million. In our fiscal year ended August 31, 2000, we
suffered a net loss of $29.3 million. We operate in the crop production, petroleum, feed, refrigerated foods and grain businesses.
Our sales, gross margins, and net income depend, to a large extent, on conditions in agriculture and may be volatile due to factors
beyond our control, such as weather, crop failures, federal agricultural programs, production efficiencies, and currency
fluctuations, tariffs and other factors affecting U.S. imports and exports. In addition, various federal and state regulations to
protect the environment encourage farmers to reduce the use of fertilizers and other chemicals. Global variables which affect
supply, demand and price of crude oil, refined fuels, natural gas and other commodities may impact our operations. Historically,
changes in the cost of raw materials used in the manufacture of Farmland's finished products have not necessarily resulted in
corresponding changes in the prices at which such products have been sold. For example, over the last few years, the results of our
crop production business have been adversely affected by a combination of high natural gas prices and competition from imports.
Also, changes in the prices of crude oil and refined fuels have caused, and will continue to cause, significant variations in the
results of our petroleum business. Management cannot determine the extent to which the factors mentioned above may impact our future
operations.
Potential environmental liabilities related to both current and former operations may adversely impact our financial results.
Farmland is subject to various federal, state and local environmental laws and regulations, including those governing the use,
storage, discharge and disposal of hazardous materials, which may impose significant liability for cleanup of environmental
contamination. Farmland uses hazardous materials and generates hazardous wastes in the ordinary course of our manufacturing
processes.
Our business is subject to unpredictable changes in agricultural production and market conditions.
Our financial success depends largely on factors which affect agricultural production and market conditions. These factors, which
are outside of Farmland's control, often change agricultural production and market conditions in an unpredictable manner. Therefore,
we cannot determine the future impact on our operations from changes in these external factors. We expect demand for our products to
continue to be volatile as agricultural conditions change.
As a cooperative, we have limited ability to raise equity in the capital markets.
As a cooperative, we cannot sell our voting common equity to traditional public or private markets. Instead, equity is raised
largely from payment of the noncash portion of patronage refunds with common stock, associate member common stock and capital
credits, from offerings of preferred stock and from net income on transactions with nonmembers.
For additional information regarding risk factors, you should refer to our Form 10-K for the year ended August 31, 2001 which is
attached to this prospectus.
RATIOs OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratios of earnings to fixed charges for the periods shown. The ratios of earnings
to fixed charges have been computed by dividing fixed charges into the sum of (a) income (loss) before taxes for Farmland as a whole,
less capitalized interest and with adjustments to appropriately reflect our majority-owned, 50%-owned, and less-than-50%-owned
affiliates, and (b) fixed charges. Fixed charges consist of interest on all indebtedness (including amortization of debt issuance
expenses) and the component of operating rents determined to be interest, with adjustments as appropriate to reflect our 50%-owned
and less-than-50%-owned affiliates.
Fiscal Years Ended August 31,
--------------------------------------
------- ------- ------ ------- -------
1997 1998 1999 2000 2001
Ratio of Earnings to Fixed Charges........................ 3.0 1.6 1.2 (1) (1)
(1) Income was inadequate to cover fixed charges for the fiscal years ended August 31, 2000 and 2001. The dollar amounts of the
coverage deficiencies were $24.8 million and $113.3 million, respectively.
DETERMINATION OF INTEREST RATES
The Certificate Interest Rate is the interest rate per year for Demand Loan Certificates as determined, from time to time, by
Farmland. Each Demand Loan Certificate will earn interest at the Certificate Interest Rate in effect on the date of issuance of such
Demand Loan Certificate for a period of six (6) months. If during such six (6) month period the Certificate Interest Rate for Demand
Loan Certificates is increased to a rate higher than that currently in effect for a Demand Loan Certificate, then each such Demand
Loan Certificate will earn interest at the increased rate from the effective date of the increase to the end of such Demand Loan
Certificate's then current six (6) month period. Six (6) months from the date of issuance of each Demand Loan Certificate and each
six (6) month anniversary date after the issuance date, such Demand Loan Certificate will, if not redeemed, earn interest at the
Certificate Interest Rate for Demand Loan Certificates in effect on such anniversary date, but only for a six (6) month period from
such anniversary date, subject to the escalation provisions previously set forth. A decrease in the Certificate Interest Rate for
Demand Loan Certificates will have no effect on the Certificate Interest Rate of any Demand Loan Certificate issued prior to the
decrease unless such decreased rate is in effect on the first day of the next subsequent six (6) month period of such outstanding
Demand Loan Certificate. If redeemed by a Farmland voting member cooperative during a one (1) month period or by any other purchaser
during a six (6) month period immediately following the date of original issuance, the Demand Loan Certificates will bear interest
from the date of original issuance to the date of redemption at a rate 2% below the Certificate Interest Rate (the "Demand Rate").
Thus, if the Certificate Interest Rate were 6% per year, the Demand Rate would be 4% per year for any Demand Loan Certificate so
redeemed.
The Bond Interest Rate with respect to any series of Subordinated Debenture Bonds is the interest rate per year for such Series, as
determined by Farmland, from time to time, after giving consideration to the current rates of interest established by various money
markets, and Farmland's need for funds. Any change in the Bond Interest Rate will not affect the Bond Interest Rate on any
Subordinated Debenture Bonds for which the full purchase price was received prior to the change.
On the date of this prospectus, the Certificate Interest Rate on Demand Loan Certificates and the Bond Interest Rate on Subordinated
Debenture Bonds is as follows:
Minimum Certificate
Initial Investment Interest Rate
Demand Loan Certificates .......................................$ 1,000 __.__%
Bond
Subordinated Debenture Bonds:Interest Rates
Ten-Year, Series A..............................................$ 1,000 _.__%
Ten-Year, Series B .............................................$ 100,000 _.__%
Five-Year, Series C.............................................$ 1,000 _.__%
Five-Year, Series D.............................................$ 100,000 _.__%
Ten-Year Monthly Income, Series E...............................$ 5,000 _.__%
Ten-Year Monthly Income, Series F...............................$ 100,000 _.__%
Five-Year Monthly Income, Series G..............................$ 5,000 _.__%
Five-Year Monthly Income, Series H..............................$ 100,000 _.__%
Whenever the Certificate Interest Rate or Bond Interest Rate is changed, we will amend this prospectus to specify the interest rate
in effect after the date of the change. Whenever the Certificate Interest Rate or the Bond Interest Rate is changed, Farmland will
mail a notice to holders of Demand Loan Certificates and Subordinated Debenture Bonds of the change. Information concerning the
Certificate Interest Rate and Bond Interest Rate can be obtained from the prospectus or from Farmland Securities Company, Post Office
Box 20087, Dept. 98, Kansas City, Missouri 64195-0087 (telephone 1-800-822-8263, extension 6360).
USE OF PROCEEDS
This offering of Farmland debt securities is made on a best efforts basis with no established minimum amount that must be sold.
However, assuming that all of the Subordinated Debenture Bonds and Demand Loan Certificates (the "Offered Debt Securities") offered
are sold, the proceeds to Farmland, net of expenses, will be approximately $351 million. To the extent Subordinated Debenture Bonds
are exchanged pursuant to the exchange offer, net cash proceeds will be reduced by the face amount of Subordinated Debenture Bonds
exchanged, up to $80 million. We intend to use the proceeds of this offering as follows:
Description Amount
Capital Expenditures & Investments in Ventures.................. $ 127 million
Refinance Subordinated Debt..................................... 40 million
Fund General Corporate Requirements............................. 184 million
Total........................................................... $ 351 million
The subordinated debt which we propose to refinance has interest rates ranging from 6.5% to 10% and matures at various times prior to
February 2014.
If proceeds from the sale of these securities are less than amounts required for these purposes, additional funds may be obtained
from operations, from banks or other borrowings or from other financing arrangements.
PLAN OF DISTRIBUTION
The securities offered by this prospectus for cash and for exchange are offered by Farmland Securities Company ("FSC") and may be
offered by other broker-dealers selected by Farmland. FSC's commitment is to use its best efforts to solicit orders for the
securities being offered. FSC has not made a firm commitment and is not obligated to solicit offers for any specified amount of debt
securities. There is no requirement that any minimum amount of securities must be sold. The offering is for an indeterminate period
of time not expected to be in excess of two years.
FSC, located at 12200 North Ambassador Drive, Kansas City, Missouri, is a wholly-owned subsidiary of Farmland organized for the sole
purpose of offering Farmland's Demand Loan Certificates and Subordinated Debenture Bonds for sale to the general public and/or for
exchange and to solicit offers which are subject to acceptance by Farmland. FSC is a member of the NASD and the Securities Investor
Protection Corporation (SIPC). FSC's involvement in this offering is in compliance with terms of a partial exemption from
requirements of Rule 2720 of the NASD because no persons, other than persons associated with Farmland or FSC, participated in
determining the price and other terms of the securities offered by this prospectus. Farmland will pay commissions to FSC not to
exceed 4% of the aggregate price of the Offered Debt Securities. Farmland will pay all expenses and liabilities incurred by FSC,
limited to an amount not to exceed 3% of the aggregate sales price of the Offered Debt Securities. FSC is a registered broker-dealer
under the Exchange Act but has only limited authority to engage in the offer and sale of securities issued by Farmland. Farmland
will indemnify FSC for certain liabilities under the Securities Act of 1933, as amended (the "Securities Act").
FSC and other brokers-dealers, if any, selected by Farmland have agreed or will agree to deliver to prospective investors at the time
of or prior to any offering of such certificates for sale or for exchange a current prospectus relating to the Offered Debt
Securities, our latest Annual Report on Form 10-K, and our latest Quarterly Report on Form 10-Q.
Farmland may engage other broker-dealers that are qualified to offer and sell Offered Debt Securities in a particular state and that
are members of the NASD. Each broker-dealer participating in this offering is responsible for complying with all statutes, rules and
regulations of all jurisdictions in which each participating broker-dealer offers the Offered Debt Securities for sale. Farmland
will pay to other selected broker-dealers, for their services, a sales commission of not more than 4% of the face amount of
Subordinated Debenture Bonds sold and not more than 1/2 of 1% of the face amount of Demand Loan Certificates sold. In addition,
Farmland may pay to selected broker-dealers an unallocated due diligence and marketing fee of not more than 1/2 of 1% of the face
amount of the Subordinated Debt Securities sold. Farmland may indemnify selected broker-dealers for certain liabilities arising out
of violations by Farmland of blue sky laws or the Securities Act.
First Union Securities, Inc., a member of the NASD, participated as a qualified independent underwriter in the "due diligence" review
with respect to the preparation of this prospectus and received approximately $50,000 for such participation. First Union Securities,
Inc. will not participate in the pricing of the Offered Debt Securities.
EXCHANGE OFFER
Farmland is offering:
1) to the owners of its Subordinated Capital Investment Certificates, its Ten-Year Bonds and its Five-Year Bonds, the right to
exchange such securities for an equivalent principal amount of any Monthly Income Bond ($5,000 minimum) which, at the
time of the exchange, is being offered by this prospectus. The option to exchange a Subordinated Capital Investment
Certificate, Ten-Year Bond or Five-Year Bond into a Monthly Income Bond is not affected by the period of time the
Subordinated Capital Investment Certificate, Ten-Year Bond or Five-Year Bond has been held. Farmland will not redeem
Monthly Income Bonds prior to maturity except upon death of the owner.
2) to the owners of its Subordinated Capital Investment Certificates, its Ten-Year Bonds and its Five-Year Bonds which have
been held until eligible for redemption prior to maturity at the option of the owner, the right to exchange such
securities for an equivalent principal amount of any Ten-Year Bond or Five-Year Bond which, at the time of the exchange,
is being offered by this prospectus. This option to exchange into Ten-Year Bonds or Five-Year Bonds is affected by the
period of time the outstanding security has been held. The required holding period is as follows:
If, at the time of issuance, the Then, to be eligible for
maturity period of the exchange, the certificate must
certificate held was: have been held for:
---------------------------------- ----------------------------------
(In Years) (In Years)
5 2
10 3
For certificated Subordinated Capital Investment Certificates, Ten-Year Bonds and Five-Year Bonds, an exchange will be made effective
on the day certificates or bonds eligible for exchange are received by Farmland Securities Company's office in Kansas City, Missouri
or by a registered representative of Farmland Securities Company. For uncertificated Ten-Year Bonds and Five-Year Bonds, an exchange
will be made effective on the day a properly signed bond instruction requesting exchange of a security eligible for exchange is
received by Farmland Securities Company's office in Kansas City, Missouri or by a registered representative of Farmland Securities
Company. However, for any certificate, bond or bond instruction received within a fifteen (15) day period preceding the record date
of such security, the exchange will be effective as of the first day following such record date. The exchange is irrevocable after
the effective date, but is revocable at any time prior to the effective date. Notice of an owner's revocation may be in writing,
delivered to the address given below (see "How to Accept Exchange Offer" included in this prospectus) or by telephone to (816)
713-6360. This exchange offer will expire at 12:00 P.M. Eastern Standard Time on December 31, 2002, unless terminated prior to such
date. We will mail a notice to holders of certificates or bonds eligible for exchange at least 30 days prior to the effective date
of Farmland's termination of this exchange offer.
Any interest accrued on a security being exchanged will be paid on the day the exchange is made effective.
The following discussion is a brief summary of the principal United States Federal income tax consequences under current Federal
income tax laws relating to exchanges of debt securities. This summary is the opinion of Robert B. Terry, General Counsel for
Farmland, is not intended to be exhaustive and, among other things, does not describe any state, local or foreign income and other
tax consequences. Owners of these debt securities should seek advice from their tax advisor before accepting the exchange offer.
Generally, the exchange of debt securities would be considered as taxable exchanges, although it is possible that certain exchanges
may be considered as non-taxable exchanges. The basis for determining a taxable gain or loss on a taxable exchange for an owner to
take into account as gain or loss is the difference between the fair market value of the security being received and his basis
(usually cost) in the security being exchanged. As a practical matter, most owners should have no gain or loss since the
certificates and bonds were sold at 100% of face amount and the fair market value of the bonds received in the exchange should be
considered 100% of the face amount of the certificates or bonds exchanged. However, since it is possible for a prior owner to have
sold his certificate or bond to another person at a cost which is more or less than he had paid for it, a subsequent owner could have
a different cost from the cost at the time of original issuance. Any gain or loss recognized on a taxable exchange generally would
be taken into account for purpose of federal income taxes as a gain or loss from the sale or disposition of a capital asset except
that, if an owner purchased a debt security at a "market discount" (i.e., at a price less than its face amount), all or a portion of
the owner's gain may be treated as ordinary income, rather than capital gain, for federal income tax purposes. Characterization of
any capital gain or loss as short-term or long-term will depend on the length of time the debt security had been held by the owner as
of the date of the exchange. Again, we emphasize that owners of these debt securities should seek advice from their tax advisor
before accepting the exchange offer.
HOW TO ACCEPT EXCHANGE OFFER
Registered holders may accept the exchange offer by delivering the certificate or bond evidencing the debt security which is eligible
for exchange (or , in the case of uncertificated bonds, a bond instruction for the debt security which is eligible for exchange),
(see "Exchange Offer" immediately above), to Farmland Securities Company, P.O. Box 20087, Dept. 98, Kansas City, Missouri 64195-0087
or to a registered representative of Farmland Securities Company for execution. The certificate, bond or bond instruction should be
assigned to Farmland Securities Company in the transfer section and endorsed by all of the persons whose names appear on the face of
the certificate, bond or bond instruction. Should any registered owner be incapable of endorsing the certificate, bond or bond
instruction, additional documentation may be necessary. Call (816) 713-6360 or write to the above address for specific information.
Should registered owners wish to have the new certificate or bond issued to persons other than the person in whose name the
certificate or bond being exchanged was registered, the endorsement signatures must be guaranteed by a bank, stockbroker, savings and
loan association or credit union with membership in an approved signature guarantee Medallion Program, pursuant to S.E.C. Rule
17Ad-15. A United States Treasury Form W-9, Backup Withholding Certificate must be completed and signed by the principal owner of the
new bond.
HOW TO TRANSFER OWNERSHIP
To transfer ownership of the Offered Debt Securities, you must sign a bond instruction transferring the applicable debt security to
the new owner(s). You or the new owner must than deliver the signed bond instruction to Farmland Securities Company, P.O. Box
20087, Dept. 98, Kansas City, Missouri 64195-0087. Should any registered owner be incapable of signing the bond instruction,
additional documentation may be necessary. Call (816) 713-6360 or write Farmland Securities Company, P.O. Box 20087, Kansas City,
Mo. 64195-0087 Dept. 98 for specific information. All transfer requests require that signatures be guaranteed by a bank,
stockbroker, savings and loan association or credit union with membership in an approved signature guarantee Medallion Program,
pursuant to S.E.C. Rule 17Ad-15. A United States Treasury Form W-9 Backup Withholding Certificate must be completed and signed by
the new principal owner.
The transfer will be made effective on the day a properly signed bond instruction is received at Farmland Securities Company's office
in Kansas City, Missouri or received by a registered representative of Farmland Securities Company. However, for any bond
instruction received within a fifteen (15) day period preceding the record date of the applicable debt security, the transfer will be
effective as of the first day following such record date.
DESCRIPTION OF debt securities
Under this prospectus, Farmland is offering the following Offered Debt Securities, namely:
Demand Loan Certificates, with a minimum initial investment of $1,000.
Subordinated Debenture Bonds issuable in series, as follows:
Minimum
Series Initial Investment
Ten-Year, Series A.....................................................$ 1,000
Ten-Year, Series B ....................................................$ 100,000
Five-Year, Series C....................................................$ 1,000
Five-Year, Series D....................................................$ 100,000
Ten-Year Monthly Income, Series E......................................$ 5,000
Ten-Year Monthly Income, Series F......................................$ 100,000
Five-Year Monthly Income, Series G.....................................$ 5,000
Five-Year Monthly Income, Series H.....................................$ 100,000
The Demand Loan Certificates are called the "Demand Loan Certificates" and the various series of Subordinated Debenture Bonds
referred to above are collectively called the "Subordinated Debenture Bonds". All Demand Loan Certificates and Subordinated
Debenture Bonds offered through this prospectus will be issued in uncertificated form. That means we do not issue a certificate for
any of our debt securities that you may purchase. Rather, your investment in our debt securities will be evidenced by an entry on
our records.
The Demand Loan Certificates will rank equally with all other unsecured and unsubordinated debt of Farmland and will be issued under
the indenture dated December 4, 1997 between Farmland and UMB Bank (the "Senior Indenture"). The Demand Loan Certificates are direct
obligations of Farmland. As described below, the Senior Indenture permits the issuance of unsubordinated debt in series, of which
the Demand Loan Certificates are a series. For information as to the structural subordination of the Demand Loan Certificates , see
"Risk Factors - The Subordinated Debenture Bonds are contractually subordinate to our Senior Indebtedness; in addition, both the
Subordinated Debenture Bonds and the Demand Loan Certificates are structurally subordinated to the liabilities of our subsidiaries"
beginning on page 6.
Each series of Subordinated Debenture Bonds will be subordinate and junior in right of payment to all Senior Indebtedness (as defined
below) of Farmland and will be issued under the indenture dated December 4, 1997 between Farmland and Commerce Bank (the
"Subordinated Indenture"). The Senior Indenture and the Subordinated Indenture are each referred to in this prospectus as an
"Indenture". As described below, the Subordinated Indenture permits the issuance of subordinated debt in series, of which each series
of Subordinated Debenture Bonds offered by this prospectus is a series.
The unsubordinated debt issuable under the Senior Indenture and the subordinated debt issuable under the Subordinated Indenture are
referred to collectively as the "Debt Securities".
Each series of Debt Securities issued pursuant to an Indenture will be issued pursuant to an amendment or supplemental indenture or
pursuant to an Officers' Certificate, in each case delivered pursuant to resolutions of the Board of Directors of Farmland and in
accordance with the provisions of Section 3.01 of the applicable Indenture. The terms of the Debt Securities include those stated in
the applicable Indenture and those made part of the applicable Indenture by reference to the Trust Indenture Act of 1939, as amended
(the "TIA"). The Debt Securities are subject to all such terms and the Holders of Debt Securities are referred to the Indentures and
the TIA for a statement of such terms.
The following summaries of certain provisions of each Indenture and of the Debt Securities and the Offered Debt Securities are not
complete and are qualified in their entirety by reference to the provisions of the applicable Indenture, including the definitions of
capitalized terms used in this prospectus without definition. Numerical references in parentheses are to sections in the applicable
Indenture and, unless otherwise indicated, capitalized terms have the meanings given them in the Indentures.
General
Neither Indenture limits the amount of Debt Securities, debentures, notes or other evidences of indebtedness that may be issued by
Farmland or any of its subsidiaries. Furthermore, neither Indenture affords Holders of Debt Securities protection in the event of a
highly leveraged transaction, restructuring, change in control, merger or similar transaction involving Farmland that may adversely
affect Holders of Debt Securities.
Each Indenture provides that Debt Securities may be issued from time to time in one or more series. Under each Indenture, Farmland
has the authority to establish as to each series:
1) the title of the Debt Securities of the series;
2) any limit upon the aggregate principal amount of the Debt Securities of the series;
3) the date or dates on which the principal of or premium, if any, on the Debt Securities of the series shall be payable or the
methods for the determination of principal or premium;
4) the rate or rates at which such Debt Securities will bear interest, if any, or the method or methods of calculating such
rate or rates of interest, the date or dates from which such interest shall accrue or the method or methods by which such date or
dates shall be determined, the interest payment dates on which any such interest shall be payable, the right, if any, of Farmland
to defer or extend an interest payment date, the record date, if any, for the interest payable on any Interest Payment Date, and
the basis upon which interest shall be calculated if other than that of a 365-day year;
5) the place or places where such Debt Securities shall be payable or surrendered for registration of transfer or exchange;
6) the period or periods within which, the price or prices at which, and the other terms and conditions upon which, such Debt
Securities may be redeemed, in whole or in part, at the option of Farmland;
7) the obligation, if any, of Farmland to redeem or purchase such Debt Securities pursuant to any sinking fund or analogous
provisions or upon the happening of a specified event or at the option of a Holder and the period or periods within which, the
price or prices at which and the other terms and conditions upon which, such Debt Securities shall be redeemed or purchased, in
whole or in part, pursuant to such obligation;
8) the denominations in which such Debt Securities shall be issuable;
9) if other than the entire principal amount of the Debt Security, the portion of the principal amount of Debt Securities of
the series which shall be payable upon declaration of acceleration upon an event of default;
10) provisions, if any, granting special rights to the holders of Debt Securities of the series upon the occurrence of specified
events;
11) any deletions from, modifications of or additions to the events of default specified in the applicable Indenture or
covenants of Farmland specified in the applicable Indenture;
12) the forms of such Debt Securities and interest coupons, if any, of the series;
13) the applicability, if any, to the Debt Securities and interest coupons, if any, of the series of defeasance provisions;
14) if other than Farmland, the identity of the Registrar and any Paying Agent;
15) any restrictions on the registration, transfer or exchange of such Debt Securities; and
16) any other terms of the series including any terms which may be required by or advisable under United States laws or
regulations or advisable (as determined by Farmland) in connection with the marketing of Debt Securities of the series. (Section
3.01)
Unless otherwise indicated as to a series of Debt Securities, the Debt Securities will be issued only in uncertificated form.
Debt Securities denominated in U.S. dollars will be issued in denominations of not less than $1,000. (Section 3.02)
Unless otherwise indicated as to a series of Debt Securities, the principal of, and any premium or interest on, any series of Debt
Securities will be payable at the principal executive offices of Farmland in Kansas City, Missouri, provided that, at the option of
Farmland, payment of interest may be made by check mailed to the address of the Holder entitled thereto as it appears in the related
security register or by electronic funds transfer or similar means to an account maintained by the Holder entitled thereto as it
appears in the related security register. (Sections 3.05, 3.07, 6.02). The office address of Farmland is 12200 North Ambassador
Drive, Kansas City, Missouri, 64163-1244.
Farmland will issue the Offered Debt Securities on the day (the "Date of Original Issuance") on which it receives (or is deemed to
receive) and has accepted payment of the full purchase price. Any payments (other than by electronic funds transfer or similar
means) received after noon shall be deemed received by Farmland on the next business day. Electronic funds transfers are effective
when funds are received. No Offered Debt Security shall be valid or obligatory for any purpose unless registered on the register.
Demand Loan Certificates
Interest
If purchased and held by a Farmland voting member cooperative for a one (1) month period or by any other purchaser for a six (6)
month period immediately following the Date of Original Issuance of the Demand Loan Certificates, the principal amount of the Demand
Loan Certificates will bear interest at the interest rate, as determined by Farmland, from time to time (the "Certificate Interest
Rate"). Each Demand Loan Certificate will earn interest at the Certificate Interest Rate in effect on the Date of Original Issuance
of such Demand Loan Certificate for a period of six (6) months. If during such six (6) month period the Certificate Interest Rate is
increased to a rate higher than that currently in effect for the Demand Loan Certificates, then each such Demand Loan Certificate
will earn interest at the increased rate from the effective date of the increase to the end of such Demand Loan Certificate's then
current six (6) month period. Commencing six (6) months from the Date of Original Issuance of each Demand Loan Certificate and on
each six (6) month anniversary date thereafter, such Demand Loan Certificate will, if not redeemed, earn interest at the Certificate
Interest Rate in effect on such anniversary date, but only for a six (6) month period from such anniversary date, subject to the
escalation provisions previously set forth. A decrease in the Certificate Interest Rate will have no effect on any Demand Loan
Certificate issued prior to the decrease until the first day of the next subsequent six (6) month period of such outstanding Demand
Loan Certificate. Holders of Demand Loan Certificates are notified of the effective date of any change of the Certificate Interest
Rate which affects the Demand Loan Certificates held. If redeemed by a Farmland voting member cooperative during a one (1) month
period or by any other purchaser during a six (6) month period immediately following the Date of Original Issuance, the Demand Loan
Certificates shall bear interest from Date of Original Issuance to date of redemption at a rate 2% below the Certificate Interest
Rate (the "Demand Rate"). Thus, if the Certificate Interest Rate is 6% per year, the Demand Rate would be 4% per year for any Demand
Loan Certificate so redeemed. Interest on the principal amount of any Demand Loan Certificates held longer than six (6) months will
be computed at the effective Certificate Interest Rate and is payable in one of the following ways at the option of the purchaser:
(a) six (6) months after the Date of Original Issuance and at the end of each and every six (6) month period thereafter until the
Demand Loan Certificate is surrendered for redemption, or (b) only at the date of redemption compounded semi-annually at the
effective Certificate Interest Rate. The interest payment option on the Demand Loan Certificates is selected by the purchaser at the
time of the purchase and is irrevocable.
Any interest not punctually paid or duly provided for ("Defaulted Interest") on any Demand Loan Certificate will not be payable to
the Holder thereof on the applicable payment date but instead may either be paid to the person in whose name such Demand Loan
Certificate is registered at the close of business on a special record date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice of which shall be given to the Holder of such Demand Loan Certificate not less than ten (10) days prior to such
special record date, or may be paid at any time in any other lawful manner, all as more completely provided in the Senior Indenture.
(Section 3.07)
Redemption
The Demand Loan Certificates cannot be called for redemption by Farmland at any time prior to maturity.
Farmland will redeem the Demand Loan Certificates at any time upon written request of the Holder when accompanied by a bond
instruction, properly endorsed. No partial redemptions will be permitted. If the Demand Loan Certificate is surrendered for
redemption by a Farmland voting member cooperative during a one (1) month period or by any other Holder during a six (6) month period
immediately following the Date of Original Issuance, interest computed at the applicable Demand Rate from Date of Original Issuance
to date of redemption will be paid at the time of redemption of the Demand Loan Certificate. If the Demand Loan Certificate is held
for a period longer than six (6) months from Date of Original Issuance, interest from the last previous date on which interest was
paid to the date of redemption computed at the applicable Certificate Interest Rate will be paid upon redemption. Any interest held
for compounding by Farmland in accordance with an interest option made by the purchaser will be paid upon redemption of the Demand
Loan Certificate.
Subordinated Debenture Bonds
To ensure accuracy, much of the language in this section has been taken directly from the Indentures. This language may be
legalistic and complex. To help you understand the provisions, we have provided summaries, immediately following this paragraph, of
characteristics of the subordinated debt securities. The summaries are not meant to be complete. If you have questions regarding
the meaning or intent of any section, please contact your selling agent or Farmland Securities Company. Farmland Securities Company
may be contacted by calling (816) 713-6360 or writing to:
Farmland Securities Company
P.O. Box 20087
Kansas City, Missouri 64195-0087
Ten-Year, Series A and B
Maturity Date
The maturity date for Subordinated Debenture Bonds, Ten-Year, Series A and Ten- Year, Series B (referred to in this prospectus
individually as "Series A Bonds" and "Series B Bonds" and collectively as the "Ten-Year Bonds") is ten (10) years from the Date of
Original Issuance.
Bond Interest Rates
The Bond Interest Rate for the Ten-Year, Series A and Ten-Year, Series B will be determined by Farmland, from time to time.
Series A Bonds
The Bond Interest Rate for any Series A Bonds issued will be the rate per year stated in the prospectus or prospectus supplement
effective as of the Date of Original Issuance. The Series A Bonds will bear interest at the applicable Bond Interest Rate as in
effect on the Date of Original Issuance, but any change of the Bond Interest Rate for later issued Series A Bonds will not affect the
Bond Interest Rate on any Series A Bond for which the full purchase price was received prior to the change. The Series A Bonds
require a minimum initial investment of $1,000.
Series B Bonds
The Bond Interest Rate for any Series B Bonds issued will be the rate per year stated in the prospectus or prospectus supplement
effective as of the Date of Original Issuance. The Series B Bonds will bear interest at the applicable Bond Interest Rate as in
effect on the Date of Original Issuance. Farmland anticipates that the Bond Interest Rate for Series B Bonds on a particular day may
exceed by up to1/4of 1% per year the Bond Interest Rate on such day for Series A Bond. Any change of the Bond Interest Rate for
later issued Series B Bonds will not affect the Bond Interest Rate on any Series B Bonds for which the full purchase price was
received prior to the change. The Series B Bonds require a minimum initial investment of $100,000.
Interest Payments
Interest is payable on the principal of the Ten-Year Bonds from the Date of Original Issuance at the election of the purchaser, made
at the time of purchase, in one of the following ways:
1) semiannually on January 1 and July 1, to Holders of record on the last preceding December 15 and June 15, respectively (or,
if originally issued between the record date and the payment date, to the Holder on the Date of Original Issuance); or
2) at maturity or at the date of redemption if redeemed prior to maturity, compounded semiannually, on December 31 and June 30
at the applicable Bond Interest Rate.
Any election to receive payment of the interest semiannually is irrevocable. The election to receive payment of the interest at
maturity, or at the date of redemption if redeemed prior to maturity, will be terminated upon written request of the Holder, such
termination to be effective as of the last previous interest compounding date. Such termination is irrevocable and, at the same
time, is an election to receive payment of the interest semiannually thereafter. Any interest attributable to periods starting with
the Date of Original Issuance and ending with the effective date of the termination will be paid upon receipt of the written request
to terminate the election. Farmland shall have the right at any time by notice to the Holder to terminate any obligation to continue
retaining the interest of any Holder. Such termination shall be effective as of the opening of business on the day following the
first interest compounding date after such notice is mailed to the Holder, and the Holder will be paid all the interest accrued to
the Holder's account on the effective date.
Any Defaulted Interest on any Ten-Year Bond will not be payable to the Holder on the applicable record date but instead may either be
paid to the person in whose name such Ten-Year Bond is registered at the close of business on a special record date for the payment
of such Defaulted Interest to be fixed by the Trustee, notice of which shall be given to the Holder of such Ten-Year Bond not less
than ten (10) days prior to such special record date, or may be paid at any time in any other lawful manner, all as more completely
provided in the Subordinated Indenture. (Section 3.07)
Redemption by Farmland
The Ten-Year Bonds may be redeemed, after two (2) years from the Date of Original Issuance, at the option of Farmland at any time
prior to maturity, on at least fifteen (15) days written notice, at face value plus accrued interest to the date of redemption. The
Subordinated Indenture permits Farmland to select in any manner at its discretion the bonds to be redeemed. (Section 4.01)
Redemption by the Holder
Farmland will redeem limited amounts of the Ten-Year, Series A Bonds and Series B Bonds prior to maturity at the option of the Holder
as described under the caption "Limited Redemption Prior to Maturity of Subordinated Debenture Bonds" beginning on page 22.
Five-Year, Series C and D
Maturity Date
The maturity date for Subordinated Debenture Bonds, Five-Year, Series C and Five-Year, Series D (referred to in this prospectus
individually as "Series C Bonds" and "Series D Bonds" and collectively as the "Five-Year Bonds") is five (5) years from the Date of
Original Issuance.
Series C Bonds
The Bond Interest Rate for any Series C Bonds issued will be the rate per year stated in the prospectus or prospectus supplement
effective as of the Date of Original Issuance. The Series C Bonds will bear interest at the applicable Bond Interest Rate as in
effect on the Date of Original Issuance, but any change of the Bond Interest Rate for later issued Series C Bonds will not affect the
Bond Interest Rate on any Series C Bond for which the full purchase price was received prior to the change. The Series C Bonds
require a minimum initial investment of $1,000.
Series D Bonds
The Bond Interest Rate for any Series D Bonds issued will be the rate per year stated in the prospectus or prospectus supplement
effective as of the Date of Original Issuance. The Series D Bonds will bear interest at the applicable Bond Interest Rate as in
effect on the Date of Original Issuance. Farmland anticipates that the Bond Interest Rate for Series D Bonds on a particular day may
exceed by up to1/4of 1% per year the Bond Interest Rate on such day for any Series C Bond. Any change of the Bond Interest Rate for
later issued Series D Bonds will not affect the Bond Interest Rate on any Series D Bonds for which the full purchase price was
received prior to the change. The Series D Bonds require a minimum initial investment of $100,000.
Interest Payments
Interest is payable on the principal of the Five-Year Bonds from the Date of Original Issuance at the election of the purchaser, made
at the time of purchase, in one of the following ways:
1) semiannually on January 1 and July 1, to Holders of record on the last preceding December 15 and June 15, respectively (or,
if originally issued between the record date and the payment date, to the Holder on the Date of Original Issuance); or
2) at maturity or at the date of redemption if redeemed prior to maturity, compounded semiannually, on December 31 and June 30
at the applicable Bond Interest Rate.
Any election to receive payment of the interest semiannually is irrevocable. The election to receive payment of the interest at
maturity, or at the date of redemption if redeemed prior to maturity, will be terminated upon written request of the Holder, such
termination to be effective as of the last previous interest compounding date. Such termination is irrevocable and, at the same
time, is an election to receive payment of the interest semiannually thereafter. Any interest attributable to periods starting with
the Date of Original Issuance and ending with the effective date of the termination will be paid upon receipt of the written request
to terminate the election. Farmland shall have the right at any time by notice to the Holder to terminate any obligation to continue
retaining the interest of any Holder. Such termination shall be effective as of the opening of business on the day following the
first interest compounding date after such notice is mailed to the Holder and the Holder will be paid all the interest accrued to the
Holder's account on the effective date.
Any Defaulted Interest on any Five-Year Bonds will not be payable to the Holder on the applicable record date but instead may either
be paid to the person in whose name such Five-Year Bond is registered at the close of business on a special record date for the
payment of such Defaulted Interest to be fixed by the Trustee, notice of which shall be given to the Holder of such Five-Year Bond
not less than ten (10) days prior to such special record date, or may be paid at any time in any other lawful manner, all as more
completely provided in the Subordinated Indenture. (Section 3.07)
Redemption by Farmland
The Five-Year Bonds may be redeemed, after two (2) years from the Date of Original Issuance, at the option of Farmland at any time
prior to maturity, on at least fifteen (15) days written notice, at face value plus accrued interest to the date of redemption only.
The Subordinated Indenture permits Farmland to select in any manner at its discretion the bonds to be redeemed. (Section 4.01)
Redemption by the Holder
Farmland will redeem, at face amount plus accrued interest to the date of redemption, limited amounts of the Five-Year Bonds prior to
maturity at the option of the Holder as described under the caption "Limited Redemption Prior to Maturity of Subordinated Debenture
Bonds".
Limited Redemption Prior to Maturity of Subordinated Debenture Bonds
1. Farmland will redeem each month, on a first come, first served basis (as evidenced by the time stamped or otherwise recorded
as received by Farmland), a limited amount of Ten-Year, Series A, Ten-Year, Series B, Five-Year, Series C and Five-Year,
Series D Bonds prior to maturity. To be eligible for redemption, a Ten-Year, Series A or Ten-Year, Series B Bond must have
been held three (3) years from Date of Original Issuance and a Five-Year, Series C or Five-Year, Series D Bond must have
been held two (2) years from Date of Original Issuance. Subject to the carryover discussed below, the aggregate maximum
amount that Farmland will redeem each month of Ten-Year, Series A Bonds, Ten-Year, Series B Bonds, Five-Year, Series C
Bonds, Five-Year, Series D Bonds and other subordinated debt that Farmland elects to include in this redemption limit and
which, in each case, meets the requirements for redemption prior to maturity, will be the greater of:
a) $1,500,000 or,
b) 1/2 of 1% of the combined total principal balance outstanding of all such Ten-Year Bonds, Five-Year Bonds and other bonds
included in this redemption limit as specified above.
If the amount determined pursuant to the above formula in any month (including any carryover from the prior month) exceeds
the total amount requested for redemption prior to maturity in that month, such excess is carried over to the next month and
added to the amount available for redemption prior to maturity in that month. Any excess, however, will not be carried
beyond the end of Farmland's fiscal year.
If any series eligible for early redemption under the above provision has a total balance outstanding of less than
$5,000,000 at the end of any month, then the subordinated debt securities of that series will be redeemed at the request of
the Holder without regard to the above dollar limitation.
2. In addition to the amounts made available for redemption prior to maturity as described in (1) above, redemption will be
made in the case of death of a Holder of Ten-Year Bonds and Five-Year Bonds upon written request and delivery of
satisfactory proof of death and other documentation and in accordance with applicable laws.
3. IRA Redemption
In addition to the amounts made available for redemption prior to maturity as described in (1) and (2) above, if Ten-Year
Bonds or Five-Year Bonds are held in an Individual Retirement Account (an "IRA") established under Section 408 of the
Internal Revenue Code of 1986, as amended (the "IRC"), Farmland will redeem, upon written request, such Ten-Year Bonds and
Five-Year Bonds to the extent necessary to satisfy mandatory withdrawals from the IRA which are required by the IRC. Such
redemption will be made only upon sufficient proof to Farmland that a mandatory withdrawal from the IRA is required. In
general, as presently in effect, the IRC requires mandatory withdrawals from an IRA to commence on April 1 following the
calendar year in which the beneficiary reaches the age of seventy and one-half (70 1/2) years.
4. The foregoing redemption privileges described in this section are subject to the conditions, as provided under the
subordination provisions applicable to the Subordinated Debenture Bonds, that Farmland cannot redeem any of the Subordinated
Debenture Bonds if, at the time of or immediately after giving effect to such redemption, there shall exist under any
indenture or loan or other agreement pursuant to which any Senior Indebtedness is issued any default or any condition, event
or act, which with notice or lapse of time, or both, would constitute a default.
Redemption prior to maturity will be made upon presentation of a bond instruction for eligible Ten-Year Bonds and Five-Year
Bonds properly endorsed and accompanied by written requests for early redemption to Farmland. Redemption prior to maturity
will be made at the face value of the bonds plus accrued interest to the date of redemption. Amounts available for
redemption prior to maturity are not set aside in a separate fund.
Ten-Year Monthly Income, Series E and F
Maturity Date
The maturity date for Subordinated Debenture Bonds, Ten-Year Monthly Income, Series E and Ten-Year Monthly Income, Series F (referred
to in this prospectus individually as the "Series E Bonds" and the "Series F Bonds" and collectively as the "Ten-Year Monthly Income
Bonds") is ten (10) years from the Date of Original Issuance.
Bond Interest Rates
The Bond Interest Rate for the Ten-Year Monthly Income Bonds will be determined by Farmland, from time to time.
Series E Bonds
The Bond Interest Rate for any Series E Bonds issued will be the rate per year stated in the prospectus or prospectus supplement
effective as of the Date of Original Issuance. The Series E Bonds will bear interest at the applicable Bond Interest Rate as in
effect on the Date of Original Issuance, but any change of the Bond Interest Rate for later issued Series E Bonds will not affect the
Bond Interest Rate on any Series E Bond for which the full purchase price was received prior to the change. Series E Bonds require
an initial minimum investment of $5,000 and subsequent investments require a minimum investment of $1,000.
Series F Bonds
The Bond Interest Rate for any Series F Bonds issued will be the rate per year stated in the prospectus or prospectus supplement
effective as of the Date of Original Issuance. The Series F Bonds will bear interest at the applicable Bond Interest Rate as in
effect on the Date of Original Issuance. Farmland anticipates that the Bond Interest Rate for Series F Bonds on a particular day may
exceed by up to1/4of 1% per year the Bond Interest Rate on such day for any Series E Bond. Any change of the Bond Interest Rate for
later issued Series F Bonds will not affect the Bond Interest Rate on any Series F Bonds for which the full purchase price was
received prior to the change. Series F Bonds require a minimum initial investment of $100,000.
Interest Payments
Interest on the principal sum is payable monthly on the first day of each month to Holders of record on the last day of the preceding
month, commencing on the first day of the month following the month in which a Ten-Year Monthly Income Bond is issued.
Any Defaulted Interest on any Ten-Year Monthly Income Bonds will not be payable to the Holder on the applicable record date but
instead may either be paid to the person in whose name such Ten-Year Monthly Income Bond is registered at the close of business on a
special record date for the payment of such Defaulted Interest to be fixed by the Trustee, notice of which shall be given to the
Holder of such Ten-Year Monthly Income Bond not less than ten (10) days prior to such special record date, or may be paid at any time
in any other lawful manner, all as more completely provided in the Subordinated Indenture. (Section 3.07)
Redemption by Farmland
The Ten-Year Monthly Income Bonds cannot be called for redemption by Farmland any time prior to maturity.
Redemption by the Holder
Except as provided in this paragraph, Farmland will not redeem the Ten-Year Monthly Income Bonds prior to maturity upon the request
of the Holder. Redemptions will be made in the case of death of a Holder of Ten-Year Monthly Income Bonds, upon written request and
delivery of satisfactory proof of death and other documentation and in accordance with applicable laws. Redemptions prior to
maturity will be made at the face value of the bonds plus accrued interest to the date of redemption only. Amounts available for
redemption prior to maturity are not set aside in a separate fund. (Section 5.01)
IRA Redemption
The Ten-Year Monthly Income Bonds will not, under any circumstances, be sold to an IRA and an IRA trustee or custodian will not be
permitted to be the registered owner of a Ten-Year Monthly Income Bond. Therefore, unlike the Ten-Year Bonds and the Five-Year
Bonds, the Ten-Year Monthly Income Bonds do not contain any special redemption rights for the benefit of an IRA or its trustee or
custodian.
Five-Year Monthly Income, Series G and H
Maturity Date
The maturity date for Subordinated Debenture Bonds, Five-Year Monthly Income, Series G and Five-Year Monthly Income, Series H
(referred to individually as the "Series G Bonds" and the "Series H Bonds" and collectively as the "Five-Year Monthly Income Bonds")
is five (5) years from the Date of Original Issuance.
Bond Interest Rates
The interest rates for the Five-Year Monthly Income Bonds will be determined by Farmland, from time to time.
Series G Bonds
The Bond Interest Rate for any Series G Bonds issued will be the rate per year stated in the prospectus or prospectus supplement
effective as of the Date of Original Issuance. The Series G Bonds will bear interest at the applicable Bond Interest Rate as in
effect on the Date of Original Issuance, but any change of the Bond Interest Rate for later issued Series G Bonds will not affect the
Bond Interest Rate on any Series G Bond for which the full purchase price was received prior to the change. Series G Bonds require
an initial minimum initial investment of $5,000, and subsequent investments require a minimum investment of $1,000.
Series H Bonds
The Bond Interest Rate for any Series H Bonds issued will be the rate per year stated in the prospectus or prospectus supplement
effective as of the Date of Original Issuance. The Series H Bonds will bear interest at the applicable Bond Interest Rate as in
effect on the Date of Original Issuance. Farmland anticipates that the Bond Interest Rate for Series H Bonds on a particular day may
exceed by up to1/4of 1% per year the Bond Interest Rate on such day for any Series G Bond. Any change of the Bond Interest Rate for
later issued Series H Bonds will not affect the Bond Interest Rate on any Series H Bonds for which the full purchase price was
received prior to the change. Series H Bonds require a minimum initial investment of $100,000.
Interest Payments
Interest on the principal sum is payable monthly on the first day of each month to Holders of record on the last day of the preceding
month, commencing on the first day of the month following the month in which a Five-Year Monthly Income Bond is issued.
Any Defaulted Interest on any Five-Year Monthly Income Bonds will not be payable to the Holder on the applicable record date but
instead may either be paid to the person in whose name such Five-Year Monthly Income Bond is registered at the close of business on a
special record date for the payment of such Defaulted Interest to be fixed by the Trustee, notice of which shall be given to the
Holder of such Five-Year Monthly Income Bond not less than ten (10) days prior to such special record date, or may be paid at any
time in any other lawful manner, all as more completely provided in the Subordinated Indenture. (Section 3.07)
Redemption by Farmland
The Five-Year Monthly Income Bonds cannot be called for redemption by Farmland any time prior to maturity.
Redemption by the Holder
Except as provided in this paragraph, Farmland will not redeem the Five-Year Monthly Income Bonds prior to maturity upon the request
of the Holder. Redemptions will be made in the case of death of a Holder of Five-Year Monthly Income Bonds, upon written request and
delivery of satisfactory proof of death and other documentation and in accordance with applicable laws. Redemptions prior to
maturity will be made at the face value of the bonds plus accrued interest to the date of redemption only. Amounts available for
redemption prior to maturity are not set aside in a separate fund. (Section 5.01)
IRA Redemption
The Five-Year Monthly Income Bonds will not, under any circumstances, be sold to an IRA and an IRA trustee or custodian will not be
permitted to be the registered owner of a Five-Year Monthly Income Bond. Therefore, unlike the Ten-Year Bonds and the Five-Year
Bonds, the Five-Year Monthly Income Bonds do not contain any special redemption rights for the benefit of an IRA or its trustee or
custodian.
Subordination
The payment of the principal of (and premium, if any) and interest on Subordinated Debenture Bonds is, to the extent set forth in the
Subordinated Indenture, subordinated in right of payment to the prior payment in full of all Senior Indebtedness, whether currently
outstanding or subsequently incurred. "Senior Indebtedness" includes:
a) the principal of (and premium, if any) and interest on indebtedness of Farmland (other than the indebtedness of Farmland
with respect to its Subordinated Capital Investment Certificates issued under an indenture dated November 8, 1984; and with
respect to Subordinated Monthly Income Capital Investment Certificates issued under an indenture dated November 8, 1984, and
under an indenture dated November 11, 1985; and with respect to its Subordinated Individual Retirement Account Certificates
issued under an indenture dated November 8, 1984; and with respect to its Subordinated Debenture Bonds issued under an indenture
dated December 4, 1997) for money borrowed from or guaranteed to banks, trust companies, insurance companies, or pension trusts
or evidenced by securities issued under the provisions of an indenture or similar instrument between Farmland and a bank or trust
company other than indebtedness evidenced by instruments which expressly provide that such indebtedness is not superior in right
of payment to the Debt Securities issued under the Subordinated Indenture;
b) indebtedness created after the date of the Subordinated Indenture, as to which the instrument creating or evidencing the
indebtedness provides that such indebtedness is superior in right of payment to Debt Securities issued under the Subordinated
Indenture; and
c) the Demand Loan Certificates.
By reason of the subordination provisions of the Subordinated Indenture, no payment on account of principal of (or premium, if any)
or interest on the Subordinated Debenture Bonds shall be made, and no Subordinated Debenture Bonds shall be purchased, either
directly or indirectly, by Farmland or any of its subsidiaries, unless full payment of amounts then due for principal of (and
premium, if any) and interest (including interest on overdue principal and interest, to the extent permitted by law) on Senior
Indebtedness has been made or duly provided for. In addition, no payment on account of principal of (or premium, if any) or interest
on the Subordinated Debenture Bonds shall be made, and no Subordinated Debenture Bonds shall be purchased, either directly or
indirectly, by Farmland or any of its subsidiaries, if, at the time of such payment or purchase or immediately after giving effect to
such payment or purchase, there shall exist under any Senior Indebtedness or any indenture or agreement pursuant to which any Senior
Indebtedness is issued any default or any condition, event or act, which, with notice or lapse of time, or both, would constitute a
default.
In the event that any Subordinated Debenture Bond is declared due and payable before its stated maturity because of an Event of
Default or upon any other acceleration of payment of the principal of the Subordinated Debenture Bonds because of an Event of Default
and upon any payment or distribution of assets of Farmland to creditors upon any dissolution, winding up, total or partial
liquidation, reorganization, assignment for the benefit of creditors, or other marshaling of assets, whether voluntary or involuntary
or in bankruptcy, insolvency, receivership or other proceedings, all principal of (and premium, if any) and interest (including
interest on overdue principal and interest) due or to become due upon all Senior Indebtedness shall first be paid in full before the
Holders of Subordinated Debenture Bonds, or the Trustee under the Subordinated Indenture, shall be entitled to retain any assets
(other than shares of stock of Farmland as reorganized or readjusted or securities of Farmland or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is subordinated, at least to the same extent as the Subordinated
Debenture Bonds, to the payment of all Senior Indebtedness which at the time may be outstanding, provided that the rights of the
owners of the Senior Indebtedness are not altered by such reorganization or readjustment) so paid or distributed in respect of the
Subordinated Debenture Bonds (for principal, premium, if any, or interest); and upon any such dissolution, winding up, liquidation,
reorganization, assignment or marshaling, any payment or distribution of assets of Farmland, whether in cash, property or securities
(other than as set forth above), to which the Holders of Subordinated Debenture Bonds or the Trustee would otherwise be entitled,
shall be paid by Farmland or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other person making such payment
or distribution, or by the Holders of Subordinated Debenture Bonds or the Trustee under the Subordinated Indenture if received by
them or it, directly to the owners of Senior Indebtedness (pro rata to each such owner on the basis of the respective amounts of
Senior Indebtedness held by such owner) or their representatives, to the extent necessary to pay all Senior Indebtedness in full,
after giving effect to any concurrent payment or distribution to or for the owners of Senior Indebtedness, before any payment or
distribution is made to the Holders of Subordinated Debenture Bonds or to the Trustee under the Subordinated Indenture. By reason of
such subordination, in the event of Farmland's insolvency, holders of Senior Indebtedness may receive more, ratably, and Holders of
Subordinated Debenture Bonds may receive less, ratably, than other creditors of Farmland.
In addition, both the Subordinated Debenture Bonds and the Demand Loan Certificates are structurally subordinated to all liabilities
of Farmland's subsidiaries. Any right of Farmland to receive assets from any subsidiary which liquidates will be subject to the
claims of such subsidiary's creditors. As a result, the right of holders of the Subordinated Debenture Bonds and Demand Loan
Certificates to participate in those assets is subject to the claims of such subsidiary's creditors. Accordingly, the Subordinated
Debenture Bonds and the Demand Loan Certificates are structurally subordinated to all indebtedness and other liabilities, including
trade accounts payable, of our subsidiaries.
The Subordinated Indenture does not limit the amount of Senior Indebtedness that may be issued by Farmland. As of August 31, 2001:
1) Farmland had $293.2 million aggregate principal amount of Senior Indebtedness outstanding. In addition, Senior Indebtedness
includes obligations for future payments under long-term leases of approximately $249.6 million through December 2004;
2) Farmland had outstanding $535.4 million aggregate principal amount of subordinated indebtedness; and
3) Certain of Farmland's subsidiaries had outstanding $272.0 million aggregate principal amount of indebtedness, of which
$256.5 million was nonrecourse to Farmland or Farmland's other affiliates.
See "Risk Factors-- "The Subordinated Debenture Bonds are contractually subordinate to our Senior Indebtedness; in addition, both
the Subordinated Debenture Bonds and the Demand Loan Certificates are structurally subordinated to the liabilities of our
subsidiaries" beginning on page 6.
Events of Default
Each Indenture provides that the following shall constitute "Events of Default" with respect to any series of Debt Securities issued
(including, as applicable, the Demand Loan Certificates and the Subordinated Debenture Bonds):
a) failure to pay principal of (or any installment of the principal of) or any premium on any Debt Securities of that series,
after such principal or premium shall have become due and payable;
b) failure to pay interest of any Debt Securities of that series for a period of 60 days after such interest shall have become
due or payable;
c) certain events of bankruptcy, insolvency or reorganization;
d) failure to perform any other covenant or agreement contained in the Indenture or in any supplemental indenture or in any
Debt Security of that series for a period of 90 days following the mailing by the Trustee to Farmland of a written demand that
such failure be cured, such failure not having been cured in the meantime, and
e) any other Event of Default established for the series as contemplated by Section 3.01 with respect to Debt Securities of
that series (the Offered Debt Securities have no additional Events of Default of the type permitted by this clause (e)).
No Event of Default with respect to a particular series of Debt Securities issued under either Indenture necessarily constitutes an
Event of Default with respect to any other series of Debt Securities issued under either Indenture. (Section 8.01)
Each Indenture provides that if an Event of Default specified therein shall occur and be continuing, either the Trustee or the
Holders of at least 50% in aggregate principal amount of the Debt Securities of the affected series then outstanding may declare the
principal amount of the Debt Securities of such series and all interest accrued thereon to be due and payable immediately upon
written notice to farmland. Notwithstanding the above, in the case of an Event of Default arising from certain events of bankruptcy,
insolvency or reorganization with respect to Farmland, all Debt Securities will become due and payable without further action or
notice. (Section 8.03)
The agreements governing certain of Farmland's outstanding indebtedness contain provisions to the effect that certain Events of
Default under each Indenture would constitute an event of default under such agreements which, among other things, could cause an
acceleration of the indebtedness under those agreements.
Each Indenture provides that if an Event of Default specified therein shall occur and be continuing, either the Trustee or the
Holders of at least 50% in aggregate principal amount of the Debt Securities of such series then outstanding may declare the
principal amount of the Debt Securities of such series and all interest accrued thereon to be due and payable immediately upon
written notice to Farmland. Notwithstanding the above, in the case of an Event of Default arising from certain events of bankruptcy,
insolvency or reorganization with respect to Farmland, all Debt Securities will become due and payable without further action or
notice. (Section 8.03)
Each Indenture provides that the Trustee shall within 90 days after the occurrence of a default, not including periods of grace, give
the Holders of the affected series notice of all defaults known to it unless such defaults have been cured; provided that, except in
the case of default in the payment of principal of or interest on any of the Debt Securities, the Trustee shall be protected in
withholding such notice if and so long as the Trustee determines that the withholding of such notice is in the interests of such
Holders. (Section 8.02)
Each Indenture provides that the Trustee may sue Farmland in the case of default in payment of the principal of any Debt Security
when the same shall become due and payable, or in the case of a default in the payment of the interest on any Debt Security for any
period of 60 days after such interest shall become due and payable. (Section 8.04) Each Indenture further provides that the right
of any Holder to receive payment of the principal of and interest on any Debt Security, or to institute a suit for the enforcement of
such payment, may not be impaired without the consent of such Holder, unless, with regard to overdue interest payments, 75% in
aggregate principal amount of the outstanding Debt Securities of the affected series consent on behalf of the Holders of all the Debt
Securities of the affected series to the postponement of such overdue interest payment. (Sections 8.05 and 8.06). Each Indenture
also provides that the Holders of not less than a majority in aggregate principal amount of the outstanding Debt Securities of each
series have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or to
consent, on behalf of the Holders of all Debt Securities of such series, to the waiver of any past default and its consequences,
except for a default in the payment of principal or interest. (Section 8.06)
Each Indenture requires Farmland to file with the Trustee annually an Officers' Certificate as to the absence of certain defaults
under the terms of the applicable Indenture. (Section 7.05)
Concerning the Trustees
UMB Bank, National Association, Kansas City, Missouri, is the Trustee under the Senior Indenture and Commerce Bank of Kansas City,
National Association, Kansas City, Missouri, is the Trustee under the Subordinated Indenture. Each Trustee is to perform only the
duties as are specifically set forth in the applicable Indenture and in the case of an Event of Default (which has not been cured) to
exercise such of the rights and powers vested in it by the applicable Indenture. Each trustee is also required to use the same
degree of care and skill in the exercise of rights and powers as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
Each Trustee, before taking any action under the applicable Indenture, may require that satisfactory indemnity be furnished to it by
the Holders of the Debt Securities or other persons for the reimbursement of all reasonable costs and expenses to which it may be put
and to protect it against all liability which it may incur in or by reason of such action, except liability which is adjudicated to
have resulted from its negligence or willful misconduct.
Consolidation or Merger of or with Farmland
Nothing contained in either Indenture prevents any consolidation or merger of Farmland with or into any other corporation or
corporations (whether or not affiliated with Farmland), or successive consolidations or mergers in which Farmland or its successor or
successors shall be a party or parties, or prevents any sale or conveyance of the property of Farmland as an entirety or
substantially as an entirety to any other corporation (whether or not affiliated with Farmland) authorized to acquire and operate the
same; provided, however, that upon any such consolidation, merger, sale or conveyance, the due and punctual payment of the principal
of and interest on all the Debt Securities (including the Demand Loan Certificates and the Subordinated Debenture Bonds) and the due
and punctual performance and observance of all of the covenants and conditions under each Indenture to be performed or observed by
Farmland, shall be expressly assumed, by supplemental indentures satisfactory in form to the Trustees and executed and delivered to
the Trustees by the corporation formed by such consolidation, or into which Farmland shall have been merged, or by the corporation
which shall have acquired such property. In case of any such consolidation, merger, sale or conveyance and upon any such assumption
by the successor corporation, such successor corporation shall succeed to and be substituted for Farmland, as if it had been the
signatory to the Indentures. (Sections 13.01, 13.02)
Modification of the Indenture
Each Indenture contains provisions permitting Farmland and the Trustee to enter into one or more supplemental indentures without the
consent of the Holders of any of the Debt Securities issued (including, as applicable, the Demand Loan Certificates and the
Subordinated Debenture Bonds) in order:
a) to evidence the succession of another corporation to Farmland and the assumption by any such successor of the covenants and
obligations of Farmland, including the Debt Securities issued and any related interest;
b) to add to the covenants of Farmland for the benefit of the Holders of all or any series of Debt Securities issued under the
Indenture (and if such covenants are to be for the benefit of less than all series of Debt Securities, stating that such
covenants are expressly being included solely for the benefit of such series) or to surrender any right or power conferred upon
Farmland;
c) to add any additional Events of Default with respect to all or any series of Debt Securities issued under the Indenture;
d) to change or eliminate any of the provisions of the Indentures in respect of one or more series of Debt Securities issued
under the Indenture, provided that any such change or elimination shall become effective only when there are no Debt Securities
outstanding of any series created prior to the execution of such supplemental indenture which is entitled to the benefit of such
provision;
e) to establish the form or terms of Debt Securities of any series issued under the Indenture;
f) to evidence and provide for the acceptance of appointment by a successor Trustee with respect to the issued Debt Securities
and to add to or change any of the provisions of the Indenture as shall be necessary to provide for or facilitate the
administration of the trusts by more than one Trustee;
g) to cure any ambiguity, to correct or supplement any provision in the Indenture which may be inconsistent with any other
provision in the Indenture or to make any other provisions with respect to matters or questions arising under the Indenture which
shall not be inconsistent with the provisions of such Indenture, provided such action does not adversely affect in any material
respect the interests of the Holders of any series issued under the Indenture;
h) to modify, eliminate or add to the provisions of the Indenture to such extent as shall be necessary to effect the
qualification of the Indenture under the Trust Indenture Act or under any similar federal statute subsequently enacted, and to
add to the Indenture such other provisions as may be expressly required under the Trust Indenture Act; or
i) to enable the issuance of uncertificated Debt Securities and to permit registration, transfer and exchange of Debt
Securities by book-entry. (Section 12.01)
Each Indenture also contains provisions permitting Farmland and the respective Trustee, with the consent of the Holders of a majority
in aggregate principal amount of the outstanding Debt Securities of each series thereunder and affected by such supplemental
indenture, to execute supplemental indentures adding any provisions to or changing or eliminating any of the provisions of such
Indenture or any supplemental indenture or modifying the rights of the Holders of such series, except that, without the consent of
the each Holder so affected, no such supplemental indenture may:
a) change the stated maturity of the principal of, or premium, if any, on, or any installment of principal of or premium, if
any, or interest on, any such Debt Security, or reduce the principal amount of the Debt Security, or the interest rate or any
premium payable upon redemption, or change the manner in which the amount of principal or premium, if any, or interest is
determined, or impair the right to institute suit for the enforcement of any such payment on or after the stated maturity (or, in
the case of redemption, on or after the redemption date);
b) reduce the percentage in principal amount of the outstanding Debt Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with
certain provisions of each Indenture or of certain defaults hereunder and their consequences) provided for in such Indenture;
c) change any obligation of Farmland to maintain an office or agency in the places at which Debt Securities may be presented
for transfer, exchange, redemption and payment, and where notices and demand to or upon Farmland may be served; or
d) modify the provisions that set forth the provisions in each Indenture that may not be changed without the consent of the
Holder of each Debt Security affected.
The Subordinated Indenture also provides that certain provisions with respect to the subordination of outstanding Debt Securities may
not be modified in a manner adverse to the Holders without the consent of each Holder of affected outstanding Debt Securities.
(Section 12.02)
Satisfaction, Discharge and Defeasance
Each Indenture provides that it ceases to be of further effect with respect to the Debt Securities of, or within, any series (except
for certain specified surviving obligations, including certain obligations to register, transfer or exchange Debt Securities; and the
rights of Holders of Debt Securities to receive payments of principal and interest upon the stated maturity of the Debt Securities)
upon the satisfaction of certain conditions, including that:
a) all Debt Securities of such series not previously delivered to the Trustee for cancellation
(1) have become due and payable,
(2) will become due and payable at their stated maturity within one year, or
(3) are to be called for redemption within one year, and
b) Farmland has irrevocably deposited or caused to be deposited with the Trustee money in an amount sufficient to pay and
discharge the entire indebtedness on such Debt Securities for principal, premium, if any, and interest to the date of such
deposit (in the case of Debt Securities which have become due and payable) or to the stated maturity or redemption date, as the
case may be. (Section 14.01)
Each Indenture also contains defeasance provisions under which, unless otherwise specified with respect to the Debt Securities of any
series issued under the Indenture, Farmland, at its option:
a) will be discharged from any and all obligations in respect of the Debt Securities of such series (except with regard to
certain specified surviving obligations, including
(1) certain obligations to register, transfer or exchange Debt Securities and
(2) the rights of Holders of Debt Securities to receive payments of principal and interest upon the stated maturity), or
b) will not be subject to certain covenants and Events of Default,
in each case, upon the compliance with certain conditions, including the deposit with the relevant Trustee, in trust, of money and/or
Government Obligations which through the payment of interest and principal in accordance with their terms will provide money in an
amount sufficient to pay the principal of, premium, if any, and each installment of interest on such Debt Securities at the maturity
of such payments and any mandatory sinking fund payments applicable to such series on the day on which such payments are due and
payable in accordance with the terms of the applicable Indenture and such Debt Securities. (Sections 14.03, 14.04, 14.05, 14.06)
Tax Consequence of Interest Election
Holders of Demand Loan Certificates and Subordinated Debenture Bonds should be aware that the election to receive interest on the
payment date or to have the interest compounded semi-annually and paid at the date of redemption of the related security will not
affect the reporting of interest for federal income tax purposes. All interest whether paid on the payment date or left to
accumulate and be paid at the date of redemption of the related security will be credited to the Holder's account on the payment or
compounding date. All interest credited to the Holder's account will be reported on a Form 1099 INT to the Holder and the Internal
Revenue Service ("IRS") as interest income for the calendar year in which such interest is credited to the Holder's account
regardless of the Holder's method of accounting for federal income tax purposes. Therefore, a Holder who elects to have interest
paid at the date of redemption of the related security would have taxable income for a year and not receive such interest income in
cash. However, the Holder could terminate the election to have interest paid at the date of redemption, and on the effective date of
such termination, the Holder would receive payment of all interest accumulated through the date of termination.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995
Farmland is including the following cautionary statement in this prospectus to make applicable and take advantage of the "Safe
Harbor" provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statement made by, or on behalf of,
Farmland. The factors identified in this cautionary statement are important factors (but not necessarily all important factors) that
could cause actual results to differ materially from those expressed in any forward-looking statement made by, or on behalf of,
Farmland. Where any such forward-looking statement includes a statement of the assumptions or basis underlying the forward-looking
statement, Farmland cautions that, while it believes the assumptions or basis to be reasonable and makes them in good faith, the
assumed facts or basis almost always vary from actual results and the differences between the assumed facts or basis and actual
results can be material, depending upon the circumstances. Where, in any forward-looking statement, Farmland, or its management,
expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a
reasonable basis, but there can be no assurance that the statement of expectation or belief will result or be achieved or
accomplished. Such forward looking statements include, without limitation, statements regarding the ability to repay principal and
interest on our debt securities from continuing operations and the use of proceeds from the offering. Discussion containing these
forward-looking statements is found in the material set forth under "Risk Factors" and "Use of Proceeds", as well as within this
prospectus generally.
Taking into account the foregoing, the following are identified as important factors that could cause actual results to differ
materially from those expressed in any forward-looking statement made by, or on behalf of, Farmland
1. Weather patterns (flood, drought, frost, etc.) or crop failure.
2. Federal or state regulations regarding agricultural programs and production efficiencies.
3. Federal or state regulations regarding the amounts of fertilizer and other chemical applications used by farmers.
4. Factors affecting the export of United States agricultural products (including foreign trade and monetary policies, laws and
regulations, political and governmental changes, inflation and exchange rates, taxes, operating conditions and world demand).
5. Factors affecting supply, demand and price of crude oil, refined fuels, natural gas and other commodities.
6. Regulatory delays and other unforeseeable obstacles beyond our control that may affect growth strategies through
unification, acquisitions and investments in ventures.
7. Competitors in various segments which may be larger than Farmland, offer more varied products or possess greater resources.
8. Technological changes that are more difficult or expensive to implement than anticipated.
9. Unusual or unexpected events such as, among other things, litigation settlements, adverse rulings or judgments and
environmental remediation costs in excess of amounts accrued.
10. Material adverse changes in financial, banking or capital markets.
11. Federal or state regulations regarding environmental matters.
12. Terrorist attacks which have disrupted the financial and credit markets and have negatively impacted the United States
economy and other economies.
LEGAL MATTERS
Robert B. Terry, Executive Vice President, General Counsel and Corporate Secretary of Farmland, has given an opinion upon the
legality of the Offered Debt Securities.
EXPERTS
The Consolidated Financial Statements of Farmland as of August 31, 2000 and 2001 and for each of the years in the three-year period
ended August 31, 2001 are incorporated by reference in this prospectus and have been incorporated in reliance upon the report of KPMG
LLP, independent certified public accountants, upon the authority of such firm as experts in accounting and auditing.
QUALIFIED INDEPENDENT UNDERWRITER
First Union Securities, Inc., a member of the NASD, has participated as a qualified independent underwriter in the "due diligence"
review with respect to the preparation of this prospectus. See "Plan of Distribution", beginning on page 11, regarding the exception
from pricing by the qualified independent underwriter.
Exhibit No. Description of Exhibits
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses (excluding commissions) to be incurred in connection with the issuance and distribution of the securities to be offered
are estimated as follows and will be borne by Farmland:
Estimated
Item Expense
Federal and state registration fees............... $ 163,000
State taxes and fees.............................. 7,000
Printing and engraving............................ 92,000
Accounting and legal.............................. 20,000
Trustee fee....................................... 54,000
Advertising and administration.................... 1,196,000
$ 1,532,000
Item 15. Indemnification of Directors and Officers
Section 6002(b) of Chapter 17 of the Kansas Statutes, permits the following provision to be included in the articles of incorporation
of Farmland:
a provision eliminating or limiting the personal liability of a director to the corporation or its stockholders,
policyholders or members for monetary damages for breach of fiduciary duty as a director, provided that such
provision shall not eliminate or limit the liability of a director (A) for any breach of the director's duty of
loyalty to the corporation or its stockholders, policyholders or members, (B) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law, (C) under the provision of K.S.A.
17-6424, and amendments thereto, or (D) for any transaction from which the director derived an improper personal
benefit. No such provision shall eliminate or limit the liability of a director for any act or omission occurring
prior to the date when such provision becomes effective. All references in this subsection to a director shall be
deemed also to refer to a member of the governing body of a corporation which is not authorized to issue capital
stock.
Section 6002(c) provides that "It shall not be necessary to set forth in the articles of incorporation any of the powers conferred on
corporations by this act."
Article VII of the Articles of Incorporation of Farmland reads as follows:
ARTICLE VII - Indemnification
Section 1. Indemnification. The Association may agree to the terms and conditions upon which any director, officer,
employee or agent accepts his office or position and in its bylaws, by contract or in any other manner may agree to
indemnify and protect any director, officer, employee or agent of the Association, or any person who serves at the
request of the Association as a director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, to the fullest extent permitted by the laws of the State of Kansas.
Section 2. Limitation of Liability. Without limiting the generality of the foregoing provisions of this ARTICLE VII, to
the fullest extent permitted or authorized by the laws of the State of Kansas, including, without limitation, the
provisions of subsection (b)(8) of Kan. Stat. Ann. Sec. 17-6002 (1981) as now in effect and as it may from time to time
hereafter be amended, no person who is currently or shall hereinafter become a director of the Association shall have
personal liability to the Association for monetary damages for breach of fiduciary duty as a director for any act or
omission occurring subsequent to the date this provision becomes effective. If the Kansas General Corporation Code is
amended after approval of this provision by the shareholders of the Association, to authorize corporate action further
limiting or eliminating the personal liability of directors, then the liability of a director of the Association shall
be limited or eliminated to the fullest extent permitted by the Kansas General Corporation Code, as so amended.
Item 16. Exhibits, Financial Statement Schedules
(A) Exhibits
The following exhibits are filed as a part of this Form S-2 Registration Statement. Certain of these exhibits are incorporated by
reference. Items marked with an asterisk (*) are filed with this registration statement.
Exhibit No. Description of Exhibits
1. Underwriting Agreement between Farmland Industries, Inc. and Farmland Securities Company, dated December 6, 1989
(Incorporated by Reference - Form S-1, No. 33-56821, filed December 12, 1994)
1.A Amendment, dated December 5, 1994, to the agreement, dated December 6, 1989 between Farmland Industries, Inc. and
Farmland Securities Company (Incorporated by Reference - Form S-1, No. 33-56821, filed December 12, 1994)
2.B Master Lease between Farmland Industries, Inc. and ADM/Farmland, Inc., and Archer Daniels Midland Company, dated May
4, 2001 (Incorporated by Reference - Form 8-K, filed May 21, 2001)
Instruments Defining the Rights of Security Holders, including Indentures**:
4.(i)A Form of Trust Indenture with UMB Bank, National Association, providing for issuance of unsubordinated debt
securities, including form of Demand Loan Certificates (Incorporated by Reference - Form S-1, No. 33-40759,
effective December 31, 1997)
4.(i)B Form of Trust Indenture with Commerce Bank, National Association, providing for issuance of Subordinated Debenture
Bonds, including forms of Ten-Year Bond, Series A, Ten-Year Bond, Series B, Five-Year Bond, Series C, Five-Year
Bond, Series D, Ten-Year Monthly Income Bond, Series E, Ten-Year Monthly Income Bond, Series F, Five-Year Monthly
Income Bond, Series G and Five-Year Monthly Income Bond, Series H (Incorporated by Reference - Form S-1, No.
33-40759, effective December 31, 1997)
* 4.(i)C Form of receipt, for issuance of Demand Loan Certificates in uncertificated form
* 4.(i)D Form of receipt, for issuance of Ten-Year Bond, Series A, Ten-Year Bond, Series B, in uncertificated form
* 4.(i)E Five-Year Bond, Series C, Five-Year Bond, Series D, in uncertificated form
* 4.(i)F Ten-Year Monthly Income Bond, Series E, Ten-Year Monthly Income Bond, Series F, Five-Year Monthly Income Bond,
Series G and Five-Year Monthly Income Bond, Series H, in uncertificated form
4.(i)G Certificate of Designation for a Series of Preferred Shares Designated as 8% Series A Cumulative Redeemable
Preferred Shares, dated December 19, 1997 (Incorporated by Reference - Form S-2, filed April 3, 1998)
4.(ii)A Syndicated Credit Facility between Farmland Industries, Inc. and various banks dated May 10, 2000 (Incorporated by
Reference - Form 10-Q, filed July 17, 2000)
4.(ii)B Second Amendment to Credit Agreement dated April 12, 2001 (Incorporated by Reference - Form 10-Q, filed April 16,
2001)
4.(ii)C Third Amendment to Syndicated Credit Agreement Facility, between Farmland Industries, Inc. and various banks, dated
November 9, 2001 (Incorporated by Reference - Form 10-K, filed November 20, 2001)
* 5 Opinion of Robert B. Terry, Executive Vice President, General Counsel and Corporate Secretary of Farmland
Industries, Inc. re Legality
Material Contracts:
Management Remunerative Plans:
10.(iii)A Employee Variable Compensation Plan (September 1, 2001 - August 31, 2002) (Incorporated by Reference - Form 10-K,
filed November 20, 2001)
10.(iii)B Board of Directors Insurance (Incorporated by Reference - Form 10-K, filed
November 22, 2000)
10.(iii)C Farmland Industries, Inc. Supplemental Executive Retirement Plan (As Amended and Restated Effective September 1,
1999) (Incorporated by Reference - Form 10-K, filed November 19, 1999)
10.(iii)C(1) Resolution Approving the Revision of Appendix A and Appendix A (Incorporated by Reference - Form 10-K, filed
November 27, 1996)
10.(iii)D Farmland Industries, Inc. Executive Deferred Compensation Plan (As Amended and Restated Effective November 1, 1996)
(Incorporated by Reference - Form 10-K, filed November 27, 1996)
10.(iii)E Employment agreement between Farmland and Mr. Robert W. Honse, dated August 1, 2000 (Incorporated by Reference -
Form 10-K, filed November 22, 2000)
10.(iii)F Employment agreement between Farmland and Mr. William Fielding, dated January 31, 2000 (Incorporated by Reference -
Form 10-Q, filed April 14, 2000)
10.(iii)G Summary of severance and retention bonus plan for certain management employees of Farmland, dated June 7, 1999
(Incorporated by Reference - Form 10-Q, filed July 14, 1999)
10.(iii)H Employment agreement between Farmland and Mr. Robert Terry, dated December 1, 2000 (Incorporated by Reference - Form
10-Q, filed April 16, 2001)
10.(iii)I Employment agreement between Farmland and Mr. John Berardi, dated April 6, 2001 (Incorporated by Reference - Form
10-Q, filed April 16, 2001)
10.(iii)J Long Term Incentive Plan dated February 22, 2001 (Incorporated by Reference - Form 10-Q, filed April 16, 2001)
* 12 Computation of Ratios
* 23.A Independent Auditors' Consent
* 23.B Consent of Qualified Independent Underwriter
* 23.C Consent of Robert B. Terry, Executive Vice President, General Counsel and Corporate Secretary of Farmland
Industries, Inc. (Included in Exhibit 5)
* 24 Power of Attorney
* 25.A Statement of Eligibility of Trustee and Qualification of UMB Bank, National Association, as Trustee, Form T-1
* 25.B Statement of Eligibility of Trustee and Qualification of Commerce Bank, National Association, as Trustee, Form T-1
* Filed with this registration statement.
** Long-term debt instruments pursuant to which the debt issuable thereunder does not exceed 10% of Farmland's total assets have not
been filed. At the Commission's request, we agree to furnish a copy of such instruments or agreements.
(B) Financial Statement Schedules
All schedules are omitted as the required information is inapplicable or the information is presented in the Consolidated Financial
Statements or related notes incorporated herein by reference to Form 10-K filed November 20, 2001.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii) 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)
(Section 230.424(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;
(iii) 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;
(b) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment
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.
(c) 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.
(d) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Farmland Industries, Inc. certifies that is has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-2 and has duly caused this registration statement on Form S-2 to
be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Kansas City, State of Missouri on November 27,
2001.
FARMLAND INDUSTRIES, INC.
By /s/ JOHN F. BERARDI
John F. Berardi
Executive Vice President and
Chief Financial Officer
By /s/ ROBERT B. TERRY
Robert B. Terry
Executive Vice President, General Counsel and
Corporate Secretary
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 dates indicated.
Signature Title Date
Signature Title Date
* Chairman of Board November 27, 2001
Albert J. Shivley and Director
* Vice Chairman of Board November 27, 2001
Jody Bezner Vice President and Director
* Director November 27, 2001
Lyman L. Adams, Jr.
* Director November 27, 2001
Ronald J. Amundson
* Director November 27, 2001
Baxter Ankerstjerne
* Director November 27, 2001
* Director November 27, 2001
Larry Dahlsten
* Director November 27, 2001
Steven Erdman
* Director November 27, 2001
Harry Fehrenbacher
* Director November 27, 2001
Donald Gales
* Director November 27, 2001
Warren Gerdes
* Director November 27, 2001
Thomas H. Gist
* Director November 27, 2001
Ben Griffith
* Director November 27, 2001
Barry Jensen
* Director November 27, 2001
Ron Jurgens
* Director November 27, 2001
William F. Kuhlman
* Director November 27, 2001
Greg Pfenning
* Director November 27, 2001
Monte Romohr
* Director November 27, 2001
Joe Royster
* Director November 27, 2001
E. Kent Stamper
* Director November 27, 2001
Eli F. Vaughn
* Director November 27, 2001
Frank Wilson
/s/ ROBERT W. HONSE President and November 27, 2001
Robert W. Honse Chief Executive Officer
/s/ JOHN F. BERARDI Executive Vice President November 27, 2001
John F. Berardi and Chief Financial Officer
(Principal Financial Officer)
/s/ STEVEN R. RHODES Vice President and November 27, 2001
Steven R. Rhodes Controller
(Principal Accounting Officer)
*BY /s/ JOHN F. BERARDI
John F. Berardi
Attorney-In-Fact
Exhibit No. Description of Exhibits
1. Underwriting Agreement between Farmland Industries, Inc. and Farmland Securities Company, dated December 6, 1989
(Incorporated by Reference - Form S-1, No. 33-56821, filed December 12, 1994)
1.A Amendment, dated December 5, 1994, to the agreement, dated December 6, 1989 between Farmland Industries, Inc. and
Farmland Securities Company (Incorporated by Reference - Form S-1, No. 33-56821, filed December 12, 1994)
2.B Master Lease between Farmland Industries, Inc. and ADM/Farmland, Inc., and Archer Daniels Midland Company, dated May
4, 2001 (Incorporated by Reference - Form 8-K, filed May 21, 2001)
Instruments Defining the Rights of Security Holders, including Indentures**:
4.(i)A Form of Trust Indenture with UMB Bank, National Association, providing for issuance of unsubordinated debt
securities, including form of Demand Loan Certificates (Incorporated by Reference - Form S-1, No. 33-40759,
effective December 31, 1997)
4.(i)B Form of Trust Indenture with Commerce Bank, National Association, providing for issuance of Subordinated Debenture
Bonds, including forms of Ten-Year Bond, Series A, Ten-Year Bond, Series B, Five-Year Bond, Series C, Five-Year
Bond, Series D, Ten-Year Monthly Income Bond, Series E, Ten-Year Monthly Income Bond, Series F, Five-Year Monthly
Income Bond, Series G and Five-Year Monthly Income Bond, Series H (Incorporated by Reference - Form S-1, No.
33-40759, effective December 31, 1997)
* 4.(i)C Form of receipt, for issuance of Demand Loan Certificates in uncertificated form
* 4.(i)D Form of receipt, for issuance of Ten-Year Bond, Series A, Ten-Year Bond, Series B, in uncertificated form
* 4.(i)E Five-Year Bond, Series C, Five-Year Bond, Series D, in uncertificated form
* 4.(i)F Ten-Year Monthly Income Bond, Series E, Ten-Year Monthly Income Bond, Series F, Five-Year Monthly Income Bond,
Series G and Five-Year Monthly Income Bond, Series H, in uncertificated form
4.(i)G Certificate of Designation for a Series of Preferred Shares Designated as 8% Series A Cumulative Redeemable
Preferred Shares, dated December 19, 1997 (Incorporated by Reference - Form S-2, filed April 3, 1998)
4.(ii)A Syndicated Credit Facility between Farmland Industries, Inc. and various banks dated May 10, 2000 (Incorporated by
Reference - Form 10-Q, filed July 17, 2000)
4.(ii)B Second Amendment to Credit Agreement dated April 12, 2001 (Incorporated by Reference - Form 10-Q, filed April 16,
2001)
4.(ii)C Third Amendment to Syndicated Credit Agreement Facility, between Farmland Industries, Inc. and various banks, dated
November 9, 2001 (Incorporated by Reference - Form 10-K, filed November 20, 2001)
* 5 Opinion of Robert B. Terry, Executive Vice President, General Counsel and Corporate Secretary of Farmland
Industries, Inc. re Legality
Material Contracts:
Management Remunerative Plans:
10.(iii)A Employee Variable Compensation Plan (September 1, 2001 - August 31, 2002) (Incorporated by Reference - Form 10-K,
filed November 20, 2001)
10.(iii)B Board of Directors Insurance (Incorporated by Reference - Form 10-K, filed
November 22, 2000)
10.(iii)C Farmland Industries, Inc. Supplemental Executive Retirement Plan (As Amended and Restated Effective September 1,
1999) (Incorporated by Reference - Form 10-K, filed November 19, 1999)
10.(iii)C(1) Resolution Approving the Revision of Appendix A and Appendix A (Incorporated by Reference - Form 10-K, filed
November 27, 1996)
10.(iii)D Farmland Industries, Inc. Executive Deferred Compensation Plan (As Amended and Restated Effective November 1, 1996)
(Incorporated by Reference - Form 10-K, filed November 27, 1996)
10.(iii)E Employment agreement between Farmland and Mr. Robert W. Honse, dated August 1, 2000 (Incorporated by Reference -
Form 10-K, filed November 22, 2000)
10.(iii)F Employment agreement between Farmland and Mr. William Fielding, dated January 31, 2000 (Incorporated by Reference -
Form 10-Q, filed April 14, 2000)
10.(iii)G Summary of severance and retention bonus plan for certain management employees of Farmland, dated June 7, 1999
(Incorporated by Reference - Form 10-Q, filed July 14, 1999)
10.(iii)H Employment agreement between Farmland and Mr. Robert Terry, dated December 1, 2000 (Incorporated by Reference - Form
10-Q, filed April 16, 2001)
10.(iii)I Employment agreement between Farmland and Mr. John Berardi, dated April 6, 2001 (Incorporated by Reference - Form
10-Q, filed April 16, 2001)
10.(iii)J Long Term Incentive Plan dated February 22, 2001 (Incorporated by Reference - Form 10-Q, filed April 16, 2001)
* 12 Computation of Ratios
* 23.A Independent Auditors' Consent
* 23.B Consent of Qualified Independent Underwriter
* 23.C Consent of Robert B. Terry, Executive Vice President, General Counsel and Corporate Secretary of Farmland
Industries, Inc. (Included in Exhibit 5)
* 24 Power of Attorney
* 25.A Statement of Eligibility of Trustee and Qualification of UMB Bank, National Association, as Trustee, Form T-1
* 25.B Statement of Eligibility of Trustee and Qualification of Commerce Bank, National Association, as Trustee, Form T-1
* Filed with this registration statement.
EXHIBIT 4(i)C
FARMLAND INDUSTRIES, INC
12200 NORTH AMBASSADOR DRIVE
KANSAS CITY, MO 641631244
DEMAND LOAN RECEIPT
Description of Bond
ACCOUNT NUMBER:
NAME OF OWNER
PRINCIPAL AMOUNT: ISSUE DATE:
BOND TYPE: BOND NUMBER:
INTEREST RATE: MATURITY DATE:
TOD/POD:
Preface
This Demand Loan Receipt sets forth certain terms and conditions of the Demand
Loan as might be contained in a certificate for the Demand Loan. For the
convenience and protection of the Holder and Farmland Industries, Inc., the
Demand Loan is being issued only in book entry form on the books and records of
Farmland, to which further reference is made. The Demand Loan is no longer being
issued in certificated form. Farmland retains the same duties and
responsibilities to pay principal and interest to the Holder of the Demand Loan
without a certificate being issued.
This Receipt is not a certificate for any security. The Receipt confers no
rights, interests, obligations, duties, responsibilities or otherwise on any
party, and acts only as a memorandum of the uncertificated Demand Loan
referenced above. This Receipt is not a negotiable instrument, and the Demand
Loan referenced is subject to all provisions of law regarding uncertificated
securities.
Terms and Conditions
Farmland is obligated to pay to the Holder named above or registered assigns as
indicated on its books and records (the "Holder"), the principal amount shown
above in such coin or currency of the United States of America as at the time of
payment shall be legal tender for payment of public and private debt, and to pay
interest per annum from the date of issuance (the "Date of Original Issuance")
until date of redemption on said principal sum at the interest rate per annum
(the "Demand Loan Interest Rate") as described herein, unless this Demand Loan
is redeemed within a one (1) month period by a member cooperative of Farmland or
within a six (6) month period by any other Holder, in which case the Demand Loan
shall bear interest at a demand rate 2% below the Demand Loan Interest Rate.
Such interest payments are to be made in one of the following ways at the option
of the purchaser made at the time of purchase and irrevocable as to the
purchaser: (i) six (6) months after the Date of Original Issuance and at the end
of each and every six (6) month period thereafter until surrendered for
redemption, or (ii) only at the date of redemption compounded semiannually at
the Demand Loan Interest Rate. In addition, to the extent permitted by law,
Farmland shall pay interest on overdue interest at the applicable Demand Loan
Interest Rate.
Farmland does not have a right to call any outstanding Demand Loans for
redemption at any time.
This Demand Loan is one of a duly authorized issue of Demand Loans of Farmland
designated as its Demand Loans (herein referred to as the "Demand Loans"), to be
issued in amounts of $1,000 or more. The Demand Loan Interest Rate is the
interest rate for the Demand Loans as determined, from time to time, by
Farmland. Except as hereinafter provided, each Demand Loan shall earn interest
at the Demand Loan Interest Rate in effect on the Date of Original Issuance of
the Demand Loan for a period of six (6) months only; provided, however, that if
during such six (6) month period the Demand Loan Interest Rate is increased to a
rate higher than that currently in effect for this Demand Loan, then this Demand
Loan shall earn interest at the increased rate from the effective date of the
increase to the end of such Demand Loan's then current six (6) month period. Six
(6) months from the Date of Original Issue of this Demand Loan and each six (6)
month anniversary date thereafter, this Demand Loan shall, if not redeemed, earn
interest at the Demand Loan Interest Rate in effect on such anniversary date,
but only for a six (6) month period from such anniversary date, subject to the
escalation provisions previously set forth. A decrease in the Demand Loan
Interest Rate will have no effect on any Demand Loan issued prior to the
decrease until the first day of the next subsequent six month period of such
outstanding Demand Loan. The Demand Loans may be redeemed, at the unpaid
principal amount plus interest on the date of redemption, at the option of the
Holder, at any time. If redeemed by a Farmland member cooperative purchaser
during a one (1) month period or by any other Holder during a six (6) month
period immediately following the Date of Original Issuance, the Demand Loan
shall bear interest from Date of Original Issuance to date of redemption at a
demand rate 2% below the Demand Loan Interest Rate. Interest on the principal
amount of the Demand Loan is payable in one of the following ways at the option
of the purchaser, made at the time of purchase and irrevocable as to the
purchaser: (i) six (6) months after the Date of Original Issuance and at the end
of each and every six (6) month period thereafter until this Demand Loan is
surrendered for redemption, or (ii) only at the date of redemption compounded
semiannually at the effective Demand Loan Interest Rate. Farmland shall have the
right at any time by notice to the Holder to terminate any obligation to
continue retaining the interest of any Holder pursuant to a Holder's option,
which termination shall be effective as of the opening of business on the day
following the first interest compounding date after such notice is mailed to the
Holder and the Holder will be paid all the interest in the Holder's account on
the effective date.
The Demand Loan is one of a duly authorized issue of securities (hereinafter
called the "Securities") of Farmland issued and to be issued under an Indenture
dated as of December 4, 1997 (herein called the "Indenture") between Farmland
and UMB Bank, National Association, Kansas City, Missouri, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which the Indenture and all indentures supplemental thereto and
the Officers' Certificate (as defined in the Indenture) setting forth the terms
of this series of Securities reference is hereby made for a statement of the
respective rights, limitation of rights, duties and immunities thereunder of
Farmland, the Trustee and the Holders and the terms upon which the Demand Loans
are, and are to be, issued. This Demand Loan is one of the series of securities
designated as Demand Loans. The Demand Loans may bear different dates and
interest rates, and may otherwise vary.
Any interest which is payable, but is not punctually paid or duly provided for,
on any interest payment date and, to the extent permitted by law, interest on
such defaulted interest at the then applicable interest rate born by this Demand
Loan (such defaulted interest and interest thereon herein collectively call
"Defaulted Interest") will not be payable to the Holder on the applicable
payment date; and such Defaulted Interest may be paid by Farmland, at its
election in each case, in the time and manner as provided for in the Indenture.
Payment of the principal of, premium, if any, and interest on this Demand Loan
will be made at the office or agency of Farmland in Kansas City, Missouri;
provided, however, that at the option of Farmland payment of interest other than
interest paid at maturity, redemption or repayment may be made by check mailed
to the address of the person entitled thereto as such address shall appear in
the Register or by electronic funds transfer or similar means to an account
maintained by the person entitled thereto as specified in the Register.
If an Event of Default (as defined in the Indenture) with respect to the Demand
Loans shall occur and be continuing, the Trustee or the Holders of not less than
a majority in principal amount of the outstanding Demand Loans may declare the
principal of and accrued interest on all of the Demand Loans due and payable in
the manner and with the effect and subject to the conditions provided in the
Indenture. Upon certain events of bankruptcy, insolvency or reorganization of
Farmland, the principal and accrued interest on all of the Demand Loans shall
become due and payable without any declaration by the Trustee or the Holders.
The Indenture contains provisions permitting Farmland and the Trustee to enter
into one or more supplemental indentures under certain situations without the
consent of the Holders of any of the Demand Loans. The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and the
modifications of the rights and obligations of Farmland and the rights of the
Holders of the Securities of each series under the Indenture to be affected at
any time by Farmland and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Outstanding Securities (as defined
in the Indenture) of each series affected thereby. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Outstanding Securities of each series under the
Indenture, on behalf of the Holders of all Securities of such series, to waive
compliance by Farmland with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of the Demand Loan shall be conclusive and binding upon such
Holder and upon all future Holders of the Demand Loan and of any Demand Loan
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not notice is given to future Holders.
No reference herein to the Indenture and no provision of this Demand Loan or of
the Indenture shall alter or impair the obligation of Farmland, which is
absolute and unconditional, to pay the principal of and interest on the Demand
Loan at the times, places, and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture, and subject to certain limitations therein set
forth, the transfer of this Demand Loan may be registered on the Register upon
submission of a written instrument of transfer in form satisfactory to Farmland
duly executed by the Holder or by his attorney duly authorized in writing for
registration of transfer at the office or agency of Farmland, in Kansas City,
Missouri, and thereupon one or more new Demand Loans of this series having the
same terms as this Demand Loan, of authorized denominations, having the same
terms and conditions and for the same aggregate principal amount, will be issued
on the books and records of Farmland to the designated transferee or
transferees.
The Demand Loans are issuable only in uncertificated form, without coupons in
minimum denominations of not less than $1,000.
No service charge will be made for any such registration of transfer or exchange
of the Demand Loan, but Farmland may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith.
Farmland, the Trustee and any agent of Farmland or the Trustee may treat the
person in whose name this Demand Loan is registered on its books and records as
the Holder hereof for all purposes, whether or not this Demand Loan is overdue,
and neither Farmland, the Trustee nor any such agent shall be affected by notice
to the contrary.
All terms used in this Demand Loan which are defined in the Indenture shall have
the meanings designated to them in the Indenture and all references in the
Indenture to "Security" or "Securities" shall be deemed to include the Demand
Loans.
EXHITIB 4.(I)D
FARMLAND INDUSTRIES, INC
12200 NORTH AMBASSADOR DRIVE
KANSAS CITY, MO 641631244
BOND RECEIPT SUBORDINATED DEBENTURE BOND TEN-YEAR ,
SERIES
Description of Bond
ACCOUNT NUMBER:
NAME OF OWNER:
PRINCIPAL AMOUNT: ISSUE DATE:
BOND TYPE: BOND NUMBER:
INTEREST RATE: MATURITY DATE:
TOD/POD:
Preface
This Bond Receipt sets forth certain terms and conditions of the Bond
as might be contained in a certificate for the Bond. For the convenience
and protection of both the Holder and Farmland Industries, Inc.
("Farmland"), the Bond is being issued only in book entry form on the books
and records of Farmland. The Bond is no longer being issued in certificated
form. Farmland retains the same duties and responsibilities to pay
principal and interest to the Holder of the Bond without a certificate
being issued. This Receipt is not a certificate for any security. The
Receipt confers no rights, interests, obligations, duties,
responsibilities, or otherwise on any party, and acts only as a memorandum
of the uncertificated Bond referenced above. This Receipt is not a
negotiable instrument, and the Bond referenced is subject to all provisions
of law regarding uncertificated securities.
Terms and Conditions
Farmland is obligated to pay to the Holder named above or registered
assigns as indicated on its books and records (the "Holder"), the principal
amount shown above on the Maturity Date specified above (except to the
extent redeemed or repaid prior to the Maturity Date), and to pay interest
thereon from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of original issuance of this Bond
(the "Date of Original Issuance") at the interest rate per annum specified
above (the "Interest Rate"), computed on the basis of a 365-day year, until
the principal hereof is paid or duly made available for payment, and to pay
interest on overdue principal and, to the extent permitted by law, overdue
interest at the Interest Rate. Payment of principal and interest shall be
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts.
Interest is payable at the option of the purchaser, made at the time
of original issuance in one of the following ways: (i) semiannually on
January 1 and July 1, to the Holders of record on the last preceding
December 15 and June 15, respectively (or, in the case of the first
interest payment date, if originally issued between the record date and the
payment date, to the Holder on the Date of Original Issuance); or (ii) at
maturity or at the date of redemption if redeemed prior to maturity,
compounded semiannually, on December 31 and June 30 at the Interest Rate.
Any election to receive payment of interest semiannually is irrevocable.
The election to receive payment of interest at maturity, or at the date of
redemption if redeemed prior to maturity, will be terminated upon written
request of the Holder, such termination to be effective as of the last
previous interest compounding date. Such termination is irrevocable and, at
the same time, is an election to receive payment of interest semiannually
thereafter. Any interest attributable to periods starting with the Date of
Original Issuance and ending with the effective date of the written request
of the Holder to terminate the election to receive payment of interest at
maturity or at the date of redemption if redeemed prior to maturity will be
paid upon receipt of the written request to terminate the election.
Farmland shall have the right at any time by notice to the Holder to
terminate any obligation to continue retaining the interest of any Holder.
Such termination shall be effective as of the opening of business on the
day following the first interest compounding date after such notice is
mailed to the Holder and the Holder will be paid all interest then accrued
and unpaid to the Holder on the effective date. If the Maturity Date (or
date of redemption or repayment) or an interest payment date falls on a day
which is not a business day, principal or interest payable with respect to
such Maturity Date (or date of redemption or repayment) or interest payment
date will be paid on the next succeeding business day with the same force
and effect as if made on such Maturity Date (or date of redemption or
repayment) or interest payment date, as the case may be, and no interest
shall accrue on the amount so payable for the period from and after such
Maturity Date (or any date of redemption or repayment) or interest payment
date.
The Bond is one of a duly authorized issue of securities (hereinafter
called the "Securities") of Farmland issued and to be issued under an
Indenture dated as of December 4, 1997 (herein called the "Indenture")
between Farmland and Commerce Bank, National Association, Kansas City,
Missouri, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which the Indenture and all
indentures supplemental thereto and the Officers' Certificate (as defined
in the Indenture) setting forth the terms of this series of Securities
reference is hereby made for a statement of the respective rights,
limitation of rights, duties, and immunities thereunder of Farmland, the
Trustee and the Holders and the terms upon which the Bonds are, and are to
be, issued. The Bonds of this series may bear different dates, mature at
different times, bear interest at different rates, be subject to different
redemption or repayment provisions and may otherwise vary and are entitled
to the benefits of the Indenture.
Any interest which is payable, but is not punctually paid or duly
provided for, on any interest payment date and, to the extent permitted by
law, interest on such defaulted interest at the Interest Rate (such
defaulted interest and interest thereon herein collectively called
"Defaulted Interest") will not be payable to the Holder on the applicable
record date; and such Defaulted Interest may be paid by Farmland, at its
election in each case, in the time and manner as provided for in the
Indenture.
Payment of the principal of, premium, if any, and interest on the Bond
will be made at the office or agency of Farmland in Kansas City, Missouri;
provided, however, that at the option of Farmland payment of interest other
than interest paid at maturity, redemption or repayment may be made by
check mailed to the address of the person entitled thereto as such address
shall appear in the Register or by electronic funds transfer or similar
means to an account maintained by the person entitled thereto as specified
in the Register.
If an Event of Default (as defined in the Indenture) with respect to
the Bonds shall occur and be continuing, the Trustee or the Holders of not
less than a majority in principal amount of the outstanding Bonds may
declare the principal of and accrued interest on all of the Bonds due and
payable in the manner and with the effect and subject to the conditions
provided in the Indenture. Upon certain events of bankruptcy, insolvency or
reorganization of Farmland, the principal of and accrued interest on all of
the Bonds shall become due and payable without any declaration by the
Trustee or the Holders.
The Indenture contains provisions permitting Farmland and the Trustee
to enter into one or more supplemental indentures under certain situations
without the consent of the Holders of any of the Bonds. The Indenture
permits, with certain exceptions as therein provided, the amendment thereof
and the modification of the rights and obligations of Farmland and the
rights of the Holders of the Securities of each series under the Indenture
to be affected at any time by Farmland and the Trustee with the consent of
the Holders of a majority in aggregate principal amount of the Outstanding
Securities (as defined in the Indenture) of each series affected thereby.
The Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Outstanding Securities of
each series under the Indenture, on behalf of the Holders of all Securities
of such series, to waive compliance by Farmland with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of the Bond shall be
conclusive and binding upon such Holder and upon all future Holders of the
Bond and of any Bond issued upon the registration of transfer hereof or in
exchange thereof or in lieu thereof, whether or not notice is given to
future Holders.
No reference herein to the Indenture and no provision of the Bond or
of the Indenture shall alter or impair the obligation of Farmland, which is
absolute and unconditional, to pay the principal of and interest on the
Bond at the times, places, and rate, and in the coin or currency, herein
prescribed.
The Bond may be redeemed, after two (2) years from Date of Original
Issuance, at the option of Farmland at any time prior to maturity, on at
least fifteen (15) days written notice, at face value plus accrued interest
to the date of redemption only. The Indenture permits Farmland to select in
any manner at its discretion the Bonds to be redeemed.
Subject to the conditions hereinafter set forth, the Bond may be
redeemed at the option of the Holder. (1) At any time three (3) years after
the Date of Original Issuance, the Holder may request redemption of the
Bond from Farmland. Farmland will redeem prior to maturity each month, on a
first come, first serve basis (as evidenced by the time stamped or
otherwise recorded as the time of receipt by Farmland) a limited amount of
Redemption Eligible Bonds. Subject to the carryover discussed below, the
aggregate maximum amount of Redemption Eligible Bonds, as a group, that
Farmland will redeem each month will be the greater of: (a) $1,500,000 or
b) 1/2 of 1% of the combined total principal balance outstanding of all
Redemption Eligible Bonds outstanding at the end of the prior month. For
purposes of the foregoing, "Redemption Eligible Bonds" mean Ten-Year,
Series A Bonds, Ten-Year, Series B Bonds, Five-Year, Series C Bonds, and
Five-Year, Series D Bonds issued under the Indenture and any other
subordinated debt that Farmland elects to designate as a "Redemption
Eligible Bond". If the amount determined pursuant to the foregoing formula
in any month (including any carryover from the prior month) exceeds the
total amount requested for redemption prior to maturity in that month, such
excess is carried over to the next month and added to the amount available
for redemption prior to maturity in that month; provided, however, that any
excess will not be carried beyond the end of Farmland's fiscal year.If the
total balance of outstanding Bonds of this series is less than $5,000,000
at the end of any month, then in the following month any Bonds of this
series which have been held at least three (3) years from the Date or
Original Issuance will be redeemed at the request of the Holder without
regard to the above dollar limitation.
(2) In addition to the amounts made available for redemption prior to
maturity at the option of the Holder as described in (1) above, redemption
will be made in the case of death of Holder upon written request and
delivery of satisfactory proof of death and other documentation and in
accordance with applicable laws.
(3) In addition to the amounts made available for redemption prior to
maturity at the option of the Holder as described in (1) and (2) above, if
the Bond is held in an Individual Retirement Account (an "IRA") established
under Section 408 of the Internal Revenue Code of 1986, as amended (the
"IRC"), Farmland will redeem the Bond, upon written request, to the extent
necessary to satisfy mandatory withdrawals from the IRA which are required
by the IRC. Such redemption will be made only upon sufficient proof to
Farmland that a mandatory withdrawal from the IRA is required.
(4) The foregoing redemption privileges described in (1), (2) and (3)
above are subject to the condition as provided under the subordination
provisions applicable to the Subordinated Debenture Bonds, that Farmland
cannot redeem any of the Subordinated Debenture Bonds if, at the time of or
immediately after giving effect to such redemption, there shall exist under
any Senior Indebtedness or any indenture or agreement pursuant to which any
Senior Indebtedness is issued any default or any condition, event or act,
which, with notice or lapse of time, or both, would constitute a default.
Redemption prior to maturity will be made, subject to the
aforementioned conditions, upon submission to Farmland of a written
instrument of transfer in form satisfactory to Farmland and duly executed
by the Holder or by his attorney duly authorized in writing, accompanied by
written requests for early redemption to Farmland. Redemption prior to
maturity will be made at the unpaid principal amount of the Bond plus
accrued interest to the date of redemption. Amounts available for
redemption prior to maturity are not set aside in a separate fund.
The Bond shall be subordinate, to the extent and in the manner
provided in the Indenture, in right of payment to the prior payment in full
of all Senior Indebtedness (as defined in the Indenture) and the Bond is
issued subject to the provisions of the Indenture with respect thereto.
Each Holder of the Bond, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee on his or
her or its behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and (c) appoints
the Trustee his or her or its attorney-in-fact for any and all such
purposes.
As provided in the Indenture, and subject to certain limitations
therein set forth, the transfer of the Bond may be registered on the
Register upon submission of a written instrument of transfer in form
satisfactory to Farmland duly executed by the Holder or by his attorney
duly authorized in writing for registration of transfer at the office or
agency of Farmland, in Kansas City, Missouri, and thereupon the bond will
be transferred on the books and records of Farmland to the designated
transferee or transferees.
The Bonds are issuable only in uncertificated form, without coupons.
No service charge will be made for any such registration of transfer
or exchange of the Bond, but Farmland may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.
Farmland, the Trustee and any agent of Farmland or the Trustee may
treat the person in whose name the Bond is registered on its books and
records as the Holder hereof for all purposes, whether or not the Bond is
overdue, and neither Farmland, the Trustee nor any such agent shall be
affected by notice to the contrary.
All terms used in the Bond which are defined in the Indenture shall
have the meanings designated to them in the Indenture and all references in
the Indenture to "Security" or "Securities" shall be deemed to include the
Bonds.
EXHIBIT 4.(i)E
FARMLAND INDUSTRIES, INC
12200 NORTH AMBASSADOR DRIVE
KANSAS CITY, MO 641631244
BOND RECEIPT
SUBORDINATED DEBENTURE BOND
FIVE-YEAR, SERIES
Description of Bond
ACCOUNT NUMBER:
NAME OF OWNER
PRINCIPAL AMOUNT: ISSUE DATE:
BOND TYPE: BOND NUMBER:
INTEREST RATE: MATURITY DATE:
TOD/POD:
Preface
This Bond Receipt sets forth certain terms and conditions of the Bond as
might be contained in a certificate for the Bond. For the convenience and
protection of both the Holder and Farmland Industries, Inc. ("Farmland"), the
Bond is being issued only in book entry form on the books and records of
Farmland. The Bond is no longer being issued in certificated form. Farmland
retains the same duties and responsibilities to pay principal and interest to
the Holder of the Bond without a certificate being issued. This Receipt is not a
certificate for any security. The Receipt confers no rights, interests,
obligations, duties, responsibilities or otherwise on any party, and acts only
as a memorandum of the uncertificated Bond referenced above. This Receipt is not
a negotiable instrument, and the Bond referenced is subject to all provisions of
law regarding uncertificated securities.
Terms and Conditions
Farmland is obligated to pay to the Holder named above or registered
assigns as indicated on its books and records (the "Holder"), the principal
amount shown above on the Maturity Date specified above (except to the extent
redeemed or repaid prior to the Maturity Date), and to pay interest thereon from
the most recent date to which interest has been paid or, if no interest has been
paid, from the date of original issuance of this Bond (the "Date of Original
Issuance") at the interest rate per annum specified above (the "Interest Rate"),
computed on the basis of a 365-day year, until the principal hereof is paid or
duly made available for payment, and to pay interest on overdue principal and,
to the extent permitted by law, overdue interest at the Interest Rate. Payment
of principal and interest shall be in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
Interest is payable at the option of the purchaser, made at the time of
original issuance in one of the following ways: (i) semiannually on January 1
and July 1, to the Holders of record on the last preceding December 15 and June
15, respectively (or, in the case of the first interest payment date, if
originally issued between the record date and the payment date, to the Holder on
the Date of Original Issuance); or (ii) at maturity or at the date of redemption
if redeemed prior to maturity, compounded semiannually, on December 31 and June
30 at the Interest Rate. Any election to receive payment of interest
semiannually is irrevocable. The election to receive payment of interest at
maturity, or at the date of redemption if redeemed prior to maturity, will be
terminated upon written request of the Holder, such termination to be effective
as of the last previous interest compounding date. Such termination is
irrevocable and, at the same time, is an election to receive payment of interest
semiannually thereafter. Any interest attributable to periods starting with the
Date of Original Issuance and ending with the effective date of the written
request of the Holder to terminate the election to receive payment of interest
at maturity or at the date of redemption if redeemed prior to maturity will be
paid upon receipt of the written request to terminate the election. Farmland
shall have the right at any time by notice to the Holder to terminate any
obligation to continue retaining the interest of any Holder. Such termination
shall be effective as of the opening of business on the day following the first
interest compounding date after such notice is mailed to the Holder and the
Holder will be paid all interest then accrued and unpaid to the Holder on the
effective date. If the Maturity Date (or date of redemption or repayment) or an
interest payment date falls on a day which is not a business day, principal or
interest payable with respect to such Maturity Date (or date of redemption or
repayment) or interest payment date will be paid on the next succeeding business
day with the same force and effect as if made on such Maturity Date (or date of
redemption or repayment) or interest payment date, as the case may be, and no
interest shall accrue on the amount so payable for the period from and after
such Maturity Date (or any date of redemption or repayment) or interest payment
date. The Bond is one of a duly authorized issue of securities (hereinafter
called the "Securities") of Farmland issued and to be issued under an Indenture
dated as of December 4, 1997 (herein called the "Indenture") between Farmland
and Commerce Bank, National Association, Kansas City, Missouri, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which the Indenture and all indentures supplemental thereto
and the Officers' Certificate (as defined in the Indenture) setting forth the
terms of this series of Securities reference is hereby made for a statement of
the respective rights, limitation of rights, duties, and immunities thereunder
of Farmland, the Trustee and the Holders and the terms upon which the Bonds are,
and are to be, issued. The Bonds of this series may bear different dates, mature
at different times, bear interest at different rates, be subject to different
redemption or repayment provisions and may otherwise vary and are entitled to
the benefits of the Indenture.
Any interest which is payable, but is not punctually paid or duly provided
for, on any interest payment date and, to the extent permitted by law, interest
on such defaulted interest at the Interest Rate (such defaulted interest and
interest thereon herein collectively called "Defaulted Interest") will not be
payable to the Holder on the applicable record date; and such Defaulted Interest
may be paid by Farmland, at its election in each case, in the time and manner as
provided for in the Indenture.
Payment of the principal of, premium, if any, and interest on the Bond will
be made at the office or agency of Farmland in Kansas City, Missouri; provided,
however, that at the option of Farmland payment of interest other than interest
paid at maturity, redemption or repayment may be made by check mailed to the
address of the person entitled thereto as such address shall appear in the
Register or by electronic funds transfer or similar means to an account
maintained by the person entitled thereto as specified in the Register.
If an Event of Default (as defined in the Indenture) with respect to the
Bonds shall occur and be continuing, the Trustee or the Holders of not less than
a majority in principal amount of the outstanding Bonds may declare the
principal of and accrued interest on all of the Bonds due and payable in the
manner and with the effect and subject to the conditions provided in the
Indenture. Upon certain events of bankruptcy, insolvency or reorganization of
Farmland, the principal of and accrued interest on all of the Bonds shall become
due and payable without any declaration by the Trustee or the Holders.
The Indenture contains provisions permitting Farmland and the Trustee to
enter into one or more supplemental indentures under certain situations without
the consent of the Holders of any of the Bonds. The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of Farmland and the rights of the
Holders of the Securities of each series under the Indenture to be affected at
any time by Farmland and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Outstanding Securities (as defined
in the Indenture) of each series affected thereby. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Outstanding Securities of each series under the
Indenture, on behalf of the Holders of all Securities of such series, to waive
compliance by Farmland with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of the Bond shall be conclusive and binding upon such Holder and
upon all future Holders of the Bond and of any Bond issued upon the registration
of transfer hereof or in exchange thereof or in lieu thereof, whether or not
notice is given to future Holders.
No reference herein to the Indenture and no provision of the Bond or of the
Indenture shall alter or impair the obligation of Farmland, which is absolute
And unconditional, to pay the principal of and interest on the Bond at the
times, places, and rate, and in the coin or currency, herein prescribed.
The Bond may be redeemed, after two (2) years from Date of Original
Issuance, at the option of Farmland at any time prior to maturity, on at least
fifteen (15) days written notice, at face value plus accrued interest to the
date of redemption only. The Indenture permits Farmland to select in any manner
at its discretion the Bonds to be redeemed.
Subject to the conditions hereinafter set forth, the Bond may be
redeemed at the option of the Holder. (1) At any time two (2) years
after the Date of Original Issuance, the Holder may request redemption
of the Bond from Farmland. Farmland will redeem prior to maturity each
month, on a first come, first serve basis (as evidenced by the time
stamped or otherwise recorded as the time of receipt by Farmland) a
limited amount of Redemption Eligible Bonds. Subject to the carryover
discussed below, the aggregate maximum amount of Redemption Eligible
Bonds, as a group, that Farmland will redeem each month will be the
greater of: (a) $1,500,000 or(b) 1/2 of 1% of the combined total
principal balance outstanding of all Redemption Eligible Bonds
outstanding at the end of the prior month. For purposes of the
foregoing, "Redemption Eligible Bonds" mean Ten-Year, Series A Bonds,
Ten-Year, Series B Bonds, Five-Year, Series C Bonds, and Five-Year,
Series D Bonds issued under the Indenture and any other subordinated
debt that Farmland elects to designate as a "Redemption Eligible
Bond". If the amount determined pursuant to the foregoing formula in
any month (including any carryover from the prior month) exceeds the
total amount requested for redemption prior to maturity in that month,
such excess is carried over to the next month and added to the amount
available for redemption prior to maturity in that month; provided,
however, that any excess will not be carried beyond the end of
Farmland's fiscal year. If the total balance of outstanding Bonds of
this series is less than $5,000,000 at the end of any month, then in
the following month any Bonds of this series which have been held at
least two (2) years from the Date or Original Issuance will be
redeemed at the request of the Holder without regard to the above
dollar limitation. (2) In addition to the amounts made available for
redemption prior to maturity at the option of the Holder as described
in (1) above redemption will be made in the case of death of Holder
upon written request and delivery of satisfactory proof of death and
other documentation and in accordance with applicable laws. (3) In
addition to the amounts made available for redemption prior to
maturity at the option of the Holder as described in (1) and (2)
above, if the Bond is held in an Individual Retirement Account (an
"IRA") established under Section 408 of the Internal Revenue Code of
1986, as amended (the "IRC"), Farmland will redeem the Bond, upon
written request, to the extent necessary to satisfy mandatory
withdrawals from the IRA which are required by the IRC. Such
redemption will be made only upon sufficient proof to Farmland that a
mandatory withdrawal from the IRA is required. (4) The foregoing
redemption privileges described in (1), (2) and (3) above are subject
to the condition as provided under the subordination provisions
applicable to the Subordinated Debenture Bonds, that Farmland cannot
redeem any of the Subordinated Debenture Bonds if, at the time of or
immediately after giving effect to such redemption, there shall exist
under any Senior Indebtedness or any indenture or agreement pursuant
to which any Senior Indebtedness is issued any default or any
condition, event or act, which, with notice or lapse of time, or both,
would constitute a default.
Redemption prior to maturity will be made, subject to the aforementioned
conditions, upon submission to Farmland of a written instrument of transfer in
form satisfactory to Farmland and duly executed by the Holder or by his attorney
duly authorized in writing, accompanied by written requests for early redemption
to Farmland. Redemption prior to maturity will be made at the unpaid principal
amount of the Bond plus accrued interest to the date of redemption. Amounts
available for redemption prior to maturity are not set aside in a separate fund.
The Bond shall be subordinate, to the extent and in the manner provided in
the Indenture, in right of payment to the prior payment in full of all Senior
Indebtedness (as defined in the Indenture) and the Bond is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of the Bond, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her or its behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her or its
attorney-in-fact for any and all such purposes.
As provided in the Indenture, and subject to certain limitations therein set forth, the transfer of the Bond
may be registered on the Register upon
submission of a written instrument of transfer in form satisfactory to Farmland duly executed by the Holder or by
his attorney duly authorized in writing for
registration of transfer at the office or agency of Farmland, in Kansas City, Missouri, and thereupon the bond
will be transferred on the books and records of
Farmland to the designated transferee or transferees.
The Bonds are issuable only in uncertificated form,without coupons.
No service charge will be made for any such registration of transfer or exchange of the Bond,
but Farmland may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection therewith.
Farmland, the Trustee,
and any agent of Farmland or the Trustee may treat the person in whose name the Bond is registered on its books
and records as
the Holder hereof for all purposes, whether or not the Bond is overdue, and neither Farmland, the Trustee nor any
such agent shall be affected by notice to the
contrary.
All terms used in the Bond which are defined in the Indenture shall have the meanings
designated to them in the Indenture and all references in the
Indenture to "Security" or "Securities" shall be deemed to include the Bonds.
EXHIBIT 4.(i)F
FARMLAND INDUSTRIES, INC
12200 NORTH AMBASSADOR DRIVE
KANSAS CITY, MO 641631244
BOND RECEIPT
SUBORDINATED DEBENTURE BOND
- YEAR MONTHLY INCOME, SERIES
Description of Bond
ACCOUNT NUMBER:
NAME OF OWNER
PRINCIPAL AMOUNT: ISSUE DATE:
BOND TYPE: BOND NUMBER:
INTEREST RATE: MATURITY DATE:
TOD/POD:
Preface
This Bond Receipt sets forth certain terms and conditions of the Bond as
might be contained in a certificate for the Bond. For the convenience and
protection of both the Holder and Farmland Industries, Inc. ("Farmland"), the
Bond is being issued only in book entry form on the books and records of
Farmland. The Bond is no longer being issued in certificated form. Farmland
retains the same duties and responsibilities to pay principal and interest to
the Holder of the Bond without a certificate being issued.
This Receipt is not a certificate for any security. The Receipt confers no
rights, interests, obligations, duties, responsibilities or otherwise on any
party, and acts only as a memorandum of the uncertificated Bond referenced
above. This Receipt is not a negotiable instrument, and the Bond referenced is
subject to all provisions of law regarding uncertificated securities.
Terms and Conditions
Farmland is obligated to pay to the Holder named above or registered
assigns as indicated on its books and records (the "Holder"), the principal
amount shown above on the Maturity Date specified above (except to the extent
redeemed or repaid prior to the Maturity Date), and to pay interest thereon from
the most recent date to which interest has been paid or, if no interest has been
paid, from the date of original issuance of this Bond (the "Date of Original
Issuance") at the interest rate per annum specified above (the "Interest Rate"),
computed on the basis of a 365-day year, until the principal hereof is paid or
duly made available for payment, and to pay interest on overdue principal and,
to the extent permitted by law, overdue interest at the Interest Rate. Payment
of principal and interest shall be in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
Interest on the principal sum is payable monthly on the first day of each
month following the month in which the Bond is issued to the Holder of record on
the last day of the preceding month. If the Maturity Date (or any date of
redemption or repayment) or an interest payment date falls on a day which is not
a business day, principal or interest payable with respect to such Maturity Date
(or date of redemption or repayment) or interest payment date will be paid on
the next succeeding business day with the same force and effect as if made on
such Maturity Date (or date of redemption or repayment) or interest payment
date, as the case may be, and no interest shall accrue on the amount so payable
for the period from and after such Maturity Date (or any date of redemption or
repayment) or interest payment date.
The Bond is one of a duly authorized issue of securities (hereinafter
called the "Securities") of Farmland issued and to be issued under an Indenture
dated as of December 4, 1997 (herein called the "Indenture") between Farmland
and Commerce Bank, National Association, Kansas City, Missouri, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which the Indenture and all indentures supplemental thereto
and the Officers' Certificate (as defined in the Indenture) setting forth the
terms of this series of Securities reference is hereby made for a statement of
the respective rights, limitation of rights, duties, and immunities thereunder
of Farmland, the Trustee and the Holders and the terms upon which the Bonds are,
and are to be, issued. The Bonds of this series may bear different dates, mature
at different times, bear interest at different rates, be subject to different
redemption or repayment provisions and may otherwise vary and are entitled to
the benefits of the Indenture.
Any interest which is payable, but is not punctually paid or duly provided
for, on any interest payment date and, to the extent permitted by law, interest
on such defaulted interest at the Interest Rate (such defaulted interest and
interest thereon herein collectively called "Defaulted Interest") will not be
payable to the Holder on the applicable record date; and such Defaulted Interest
may be paid by Farmland, at its election in each case, in the time and manner as
provided for in the Indenture.
Payment of the principal of, premium, if any, and interest on the Bond will
be made at the office or agency of Farmland in Kansas City, Missouri; provided,
however, that at the option of Farmland payment of interest other than interest
paid at maturity, redemption or repayment may be made by check mailed to the
address of the person entitled thereto as such address shall appear in the
Register or by electronic funds transfer or similar means to an account
maintained by the person entitled thereto as specified in the Register.
If an Event of Default (as defined in the Indenture) with respect to the
Bonds shall occur and be continuing, the Trustee or the Holders of not less than
a majority in principal amount of the outstanding Bonds may declare the
principal of and accrued interest on all of the Bonds due and payable in the
manner and with the effect and subject to the conditions provided in the
Indenture. Upon certain events of bankruptcy, insolvency or reorganization of
Farmland, the principal of and accrued interest on all of the Bonds shall become
due and payable without any declaration by the Trustee or the Holders. The
Indenture contains provisions permitting Farmland and the Trustee to enter into
one or more supplemental indentures under certain situations without the consent
of the Holders of any of the Bonds. The Indenture permits, with certain
exceptions as therein provided, the amendment thereof and the modification of
the rights and obligations of Farmland and the rights of the Holders of the
Securities of each series under the Indenture to be affected at any time by
Farmland and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Outstanding Securities (as defined in the
Indenture) of each series affected thereby. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Outstanding Securities of each series under the
Indenture, on behalf of the Holders of all Securities of such series, to waive
compliance by Farmland with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of the Bond shall be conclusive and binding upon such Holder and
upon all future Holders of the Bond and of any Bond issued upon the registration
of transfer hereof or in exchangethereof or in lieu thereof, whether or not
notice is given to future Holders.
No reference herein to the Indenture and no provision of the Bond or of the
Indenture shall alter or impair the obligation of Farmland, which is absolute
and unconditional, to pay the principal of and interest on the Bond at the
times, places, and rate, and in the coin or currency, herein prescribed.
The Bond cannot be called for redemption by Farmland any time prior to maturity.
Except as hereinafter provided, the Bond cannot be redeemed at the option
of the Holder prior to Maturity. In the case of death of the Holder, Farmland
will redeem the bond upon written request to Farmland and delivery of
satisfactory proof of death and other documentation and in accordance with
applicable law. Redemptions will be made at the unpaid principal amount of the
Bond plus accrued interest to the date of redemption only. Redemption on death
of the Holder is subject to the condition, as provided under the subordination
provisions applicable to the Subordinated Debenture Bonds, that Farmland cannot
redeem any of the Subordinated Debenture Bonds if, at the time of or immediately
after giving effect to such redemption, there shall exist under any Senior
Indebtedness or any indenture or agreement pursuant to which any Senior
Indebtedness is issued any default or any condition, event or act, which, with
notice or lapse of time, or both, would constitute a default.
The Bond shall be subordinate, to the extent and in the manner provided in
the Indenture, in right of payment to the prior payment in full of all Senior
Indebtedness (as defined in the Indenture) and the Bond is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of the Bond, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her or its behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her or its
attorney-in-fact for any and all such purposes.
As provided in the Indenture, and subject to certain limitations therein
set forth, the transfer of the Bond may be registered on the Register upon
submission of a written instrument of transfer in form satisfactory to Farmland
duly executed by the Holder or by his attorney duly authorized in writing for
registration of transfer at the office or agency of Farmland, in Kansas City,
Missouri, and thereupon the Bond will be transferred on the books and records of
Farmland to the designated transferee or transferees.
The Bonds are issuable only in uncertificated form, without coupons.
No service charge will be made for any such registration of transfer or
exchange of the Bond, but Farmland may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith.
Farmland, the Trustee and any agent of Farmland or the Trustee may treat
the person in whose name the Bond is registered on its books and records as the
Holder hereof for all purposes, whether or not the Bond is overdue, and neither
Farmland, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in the Bond which are defined in the Indenture shall have
the meanings designated to them in the Indenture and all references in the
Indenture to "Security" or "Securities" shall be deemed to include the Bonds.
EXHIBIT 5
Farmland Industries, Inc.
12200 N. Ambassador Dr.
Kansas City, Missouri 64163-1244
Gentlemen:
I
am acting as the General Counsel for Farmland Industries, Inc., a Kansas
corporation (the “Company”), in connection with the Registration
Statement on Form S-2 (the “Registration Statement”) under the
Securities Act of 1933, as amended (the “Securities Act”), with
respect to the contemplated issuance by the Company from time to time of Demand
Loan Certificates and Subordinated Debenture Bonds of the Company, which with
respect to Demand Loan Certificates may be issued pursuant to an Indenture
entered into between the Company and UMB Bank, National Association, and with
respect to Subordinated Debenture Bonds may be issued under an Indenture entered
into between the Company and Commerce Bank, National Association, as trustee.
Said Demand Loan Certificates and Subordinated Debenture Bonds, when issued and
sold in accordance with this Registration Statement presently to be filed with
the Securities and Exchange Commission, Washington, D.C., and registered in
accordance with the laws of the States in which the Demand Loan Certificates and
Subordinated Debenture Bonds are and will be sold, will constitute valid and
binding obligations according to their tenor and effect. Capitalized terms used
herein have the meanings set forth in the Registration Statement, unless
otherwise defined herein.
I
have examined the originals, or certified, conformed or reproduction copies of
all records, agreements, instruments and documents as I have deemed relevant or
necessary as the basis for the opinions hereinafter expressed. In all such
examinations, I have assumed the genuineness of all signatures on original or
certified copies and the conformity to original or certified copies of all
copies submitted to me as conformed or reproduction copies. As to various
questions of fact relevant to such opinions, I have relied upon, and assumed the
accuracy of, certificates and statements and other information of public
officials, officers or representatives of the Company and others.
Based
upon the foregoing, and subject to the limitations set forth herein, I hereby
confirm the opinions attributed to me in the Registration Statement.
I
hereby consent to the filing of this opinion as an exhibit to the Registration
Statement (including any Amendment thereto) and to the references to me under
the captions “Legal Matters” in the Prospectus and “Legal
Matters” in any Prospectus Supplement forming a part of the Registration
Statement. In giving these consents, I do not hereby admit that I am in the
category of persons whose consent is required under Section 7 of the Securities
Act.
Very truly yours,
Robert B. Terry
November 27, 2001
EXHIBIT 12
FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
Year Ended August 31
-----------------------------------------------------------
1997 1998 1999 2000 2001
---------- --------- ---------- ---------- ------------
(Amounts in Thousands)
Earnings:
Pretax Income (Loss) .......... $ 163,672 $ 55,025 $ 5,822 $ (50,732) $(137,540)
Minority Owners' Interest in
Income of Consolidated
Subsidiary that has
Fixed Charges .............. 10,586 8,346 17,727 24,996 23,164
Minority Owners' Interest in
Loss of
Consolidated Subsidiary .... (1,902) (1,341) -0- -0- -0-
Equity in net (income) loss of
Investees (A) .............. (868) (56,531) (65,510) (56,891) (27,457)
Distributions from
Investees (A) .............. 5 57,620 59,715 58,962 28,774
Total Fixed Charges
(excluding interest
capitalized, net of
amortization) .............. 79,247 $ 94,960 $ 113,611 $ 140,252 $ 167,331
--------- --------- --------- --------- ---------
Total Earnings ................... $ 250,740 $ 158,079 $ 131,365 $ 116,587 $ 54,272
========= ========= ========= ========= =========
Fixed Charges:
Interest (including amounts
capitalized and amortization
of debt issuance costs) .... $ 68,099 $ 79,421 $ 93,686 $ 119,770 $ 139,649
Estimated Interest Component
of Rentals ................. 15,127 19,483 19,925 $ 21,623 $ 27,932
--------- --------- --------- --------- ---------
Total Combined Fixed Charges ..... $ 83,226 $ 98,904 $ 113,611 $ 141,393 $ 167,581
========= ========= ========= ========= =========
Ratio of Earnings to
Combined Fixed Charges ........ 3.0 1.6 1.2 0.8 0.3
(A) For 1997, equity interest and distributions shown represent less-than-50%-owned Investees. For 1998 through
2001, equity interest and distributions shown represent 50%-owned and less-than-50%-owned Investees.
EXHIBIT 23.A
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Farmland Industries, Inc.:
We consent to the use of our reports, incorporated herein by reference, and to the reference to our firm under
the headingExperts in the Prospectus. Our report on the consolidated financial statements refers to a change in
accounting method for derivative instruments and hedging activities and to a change in accounting method for
planned major maintenance costs from the accrue-in-advance method to the direct expense method.
KPMG PEAT MARWICK LLP
Kansas City, Missouri
November 27, 2001
EXHIBIT 23.B
CONSENT OF QUALIFIED INDEPENDENT UNDERWRITER
Farmland Industries, Inc.:
We consent to the references to our firm under the caption "Qualified Independent Underwriter" in the Prospectus.
James H. Glen, Jr.
First Union Securities, Inc.
November 27, 2001
Exhibit 24
POWER OF
ATTORNEY
KNOW
ALL MEN BY THESE PRESENTS
, that each person whose name appears below
constitutes and appoints Robert B. Terry and John F. Berardi, and each of them,
his true and lawful attorney-in-fact and agent with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, as well as any related registration statement
(or amendments thereto) filed pursuant to Rule 462(b) promulgated under the
Securities Act of 1933, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
This
Power of Attorney may be executed in multiple counterparts, each of which shall
be deemed an original, but which taken together shall constitute one instrument.
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 dates
indicted.
Signature Title Date
---------------------------- ------------------ -----------------
ALBERT J. SHIVLEY Chairman of Board October 24, 2001
-----------------------------
Albert J. Shivley and Director
JODY BEZNER Vice Chairman of Board October 24, 2001
-----------------------------
Jody Bezner and Director
LYMAN L. ADAMS, JR. Director October 24, 2001
-----------------------------
Lyman L. Adams, Jr.
RONALD J. AMUNDSON Director October 24, 2001
-----------------------------
Ronald J. Amundson
BAXTER ANKERSTIERNE Director October 24, 2001
-----------------------------
Baxter Ankerstjerne
DONALD H. ANTHONY Director October 24, 2001
-----------------------------
Donald H. Anthony
LARRY DAHLSTEN Director October 24, 2001
-----------------------------
Larry Dahlsten
STEVEN ERDMAN Director October 24, 2001
-----------------------------
Steven Erdman
HARRY FEHRENBACHER Director October 24, 2001
-----------------------------
Harry Fehrenbacher
DONALD GALES Director October 24, 2001
-----------------------------
Donald Gales
WARREN GERDES Director October 24, 2001
-----------------------------
Warren Gerdes
THOMAS H. GIST Director October 24, 2001
-----------------------------
Thomas H. Gist
BEN GRIFFITH Director October 24, 2001
-----------------------------
Ben Griffith
BARRY JENSEN Director October 24, 2001
-----------------------------
Barry Jensen
RON JURGENS Director October 24, 2001
-----------------------------
Ron Jurgens
WILLIAM F. KUHLMAN Director October 24, 2001
-----------------------------
William F. Kuhlman
GREG PFENNING Director October 24, 2001
-----------------------------
Greg Pfenning
MONTE ROMOHR Director October 24, 2001
-----------------------------
Monte Romohr
JOE ROYSTER Director October 24, 2001
-----------------------------
Joe Royster
E. KENT STAMPER Director October 24, 2001
-----------------------------
E. Kent Stamper
ELI F. VAUGHN Director October 24, 2001
-----------------------------
Eli F. Vaughn
FRANK WILSON Director October 24, 2001
-----------------------------
Frank Wilson
EXHIBIT 25A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
UMB BANK, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
44-0201230
(I.R.S. Employer
Identification No.)
1010 Grand Blvd., Kansas City, Missouri.....................64106
(Address of principal executive offices) (Zip Code)
FARMLAND INDUSTRIES, INC.
(Exact name of obligor as specified in its charter)
KANSAS 42-0209330
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification No.)
12200 N. Ambassador Drive
Kansas City, Missouri 64163
(Address of principal executive offices) (Zip Code)
DEMAND LOAN CERTIFICATES
Dated: November 20, 1981
(Title of the indenture securities)
Item 1.General Information
(a) Name and address of each examining or supervising authority to which the
Trustee is subject is as follows:
The Comptroller of the Currency Mid-Western District 2345 Grand Avenue,
Suite 700 Kansas City, Missouri 64108
Federal Reserve Bank of Kansas City
Federal Reserve P.O. Station
Kansas City, Missouri 64198
Supervising Examiner
Federal Deposit Insurance Corporation
720 Olive Street, Suite 2909
St. Louis, Missouri 63101
(b) The Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with obligor and underwriters. The Obligor is not
affiliated with the Trustee. No person, who is not an affiliate of
the Obligor, has served as an underwriter for the Obligor.
Item 3. Voting securities of the Trustee.
The following information as to each class of voting securities
of the Trustee is furnished as December 1999:
Column A Column B
Title of Amount
Class Outstanding
Common 660,000
Item 4. Trusteeships under other indentures. The Trustee is not a trustee
under another indenture under which any other securities, or
certificates of interest or participation in other securities, of the
Obligor are outstanding.
Item 5. Interlocking directorates and similar relationships with the
obligor or underwriters. Neither the Trustee nor any of its directors
or officers is a director, officer, partner, employee, appointee, or
representative of the Obligor. No person, who is not an affiliate of
the Obligor, has served as an underwriter for the Obligor.
Item 6. Voting securities of the trustee owned by the obligor or its
officials.
No voting securities of the Trustee are owned beneficially by the Obligor
or its directors and executive officers as of October 11, 2001.
Item 7. Voting securities of the trustee owned by underwriters or their
officials. Not applicable
Item 8. Securities of the obligor owned or held by the trustee. No
securities of Obligor are owned beneficially or held as collateral
security for obligations in default by the Trustee as of October 11,
2001.
Item 9. Securities of the underwriters owned or held by the trustee.
Not applicable
Item 10. Ownership or holdings by the trustee of voting
securities of certain affiliates or security holders of the
obligor.
The Trustee neither owns beneficially nor holds as collateral
security for obligations in default any voting securities of a
person who, to the knowledge of the Trustee, (1) owns 10 percent
or more of the voting securities of the Obligor, or (2) is an
affiliate, other than a subsidiary of Obligor, as October 11,
2001.
Item 11. Ownership or holdings by the trustee of any securities
of a person owning 50 percent or more of the voting
securities of the obligor.
The Trustee neither owns beneficially nor holds as collateral
security for obligations in default any securities of a person
who, to the knowledge of the Trustee, owns 50 percent or more of
the voting shares of the Obligor as of October 11, 2001.
Item 12. Indebtedness of the Obligor to the Trustee.
None
Item 13. Defaults of the Obligor.
There has been no default with respect to the securities under this
Indenture.
Item 14. Affiliations with the Underwriters.
Not Applicable
Item 15. Foreign Trustee.
Not Applicable
Item 16. List of exhibits.
Listed below are all exhibits filed as a part of this statement of
eligibility and qualification.
Exhibit No. Exhibit
1. Articles of Association of the Trustee, as now in effect.
2. Certificate of Authority from the Comptroller of the
Currency evidencing a change of the corporate title of the
Association. Incorporated by Reference - In the Statement of
Eligibility and Qualification of United Missouri Bank,
National Association, as Trustee, Form T-1 #22-21530, Filed
on FORM SE dated December 19, 1991.
3. Certificate from the Comptroller of the Currency evidencing
authority to exercise corporate trust powers and a letter
evidencing a change of the corporate title of the
Association. Incorporated by Reference - In the Statement of
Eligibility and Qualification of United Missouri Bank,
National Association, as Trustee, Form T-1 #22-21530, Filed
on FORM SE dated December 19, 1991.
4. Bylaws, as amended, of the Trustee.
5. N/A
6. Consent of the Trustee required by Section 321 (b) of the
Act.
7. Report of Condition of the Trustee as of June 30, 2001.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939,
the Trustee, UMB Bank, National Association, a national bank
organized and existing under the laws of the United States of
America, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly
authorized, all in the city of Kansas City, and State of
Missouri, on the 11th day of October, 2001.
UMB BANK, NATIONAL ASSOCIATION
BY: ________________________________________
Frank C. Bramwell, Senior Vice President
T-1 Exhibit 6
Consent of Trustee
Pursuant to Section 321(B) of the Trust Indenture Act of 1939,
UMB Bank, National Association, a national bank organized under
the laws of the United States, hereby consents that reports of
examinations by the Comptroller of the Currency, of the Federal
Deposit Insurance Corporation, and any other federal, state,
territorial or district authorities may be furnished by such
authorities to the Securities and Exchange Commission upon
request therefor.
UMB BANK, NATIONAL ASSOCIATION
By:
Frank C. Bramwell, Senior Vice President
Date: October 11, 2001
UMB BANK, NATIONAL ASSOCIATION
RESTATED ARTICLES OF ASSOCIATION
FIRST: The title of this Association shall be "UMB Bank, National
Association" (amended as of October 1, 1994).
SECOND: The main office shall be in the City of Kansas City,
County of Jackson, State of Missouri. The general business of
this Association, and its operations of discount and deposit,
shall be conducted at its main office.
THIRD: The Board of Directors of this Association shall consist
of not less than five nor more than twenty-five shareholders, the
exact number of Directors within such minimum and maximum limits
to be fixed and determined from time to time by resolution of a
majority of the full Board of Directors or by resolution of the
shareholders at any annual or special meeting thereof. Unless
otherwise provided by the laws of the United States, any vacancy
in the Board of Directors for any reason, including an increase
in the number thereof, may be filled by action of the Board of
Directors.
FOURTH: The regular annual meeting of the shareholders for the
election of directors and the transaction of whatever other
business which may be brought before said meeting shall be held
at the main office, or at such other place as the Board of
Directors may designate, on the day of each year specified
therefor in the By-Laws of the Association, but if no election be
held on that day it may be held on any subsequent day according
to the provisions of law.
FIFTH: The amount of authorized capital stock of this Association
shall be Sixteen Million Five Hundred Thousand Dollars
($16,500,000), divided into 660,000 shares of common stock of the
par value of Twenty-Five Dollars ($25) each; but said capital
stock may be increased or decreased from time to time in
accordance with the provisions of the laws of the United States.
If the capital stock is increased by the sale of additional
shares thereof, each shareholder shall be entitled to subscribe
for such additional shares in proportion to the number of shares
of said capital stock owned by him at the time the increase is
authorized by the shareholders, unless another time subsequent to
the date of the shareholders' meeting is specified in a
resolution adopted by the shareholders at the time the increase
is authorized. The Board of Directors shall have the power to
prescribe a reasonable period of time within which the
pre-emptive rights to subscribe to the new shares of capital
stock must be exercised.
If the capital stock is increased by a stock dividend, each
shareholder shall be entitled to his proportion of the amount of
such increase in accordance with the number of shares of capital
stock owned by him at the time the increase is authorized by the
shareholders, unless another time subsequent to the date of the
shareholders' meeting is specified in a resolution adopted by the
shareholders at the time the increase is authorized.
SIXTH: The Board of Directors shall appoint one of its members to
be President of this Association. The Board of Directors may
appoint one of its members to be Chairman of the Board, who shall
perform such duties as the Board of Directors may designate.
The Board of Directors shall have the power to appoint one or
more Vice Presidents and to appoint a Cashier and such other
officers and employees as may be required to transact the
business of the Association.
The Board of Directors shall have the power to define the duties
of the officers and employees of the Association; to fix the
salaries to be paid to them; to dismiss them; to require bonds
from them and to fix the penalty thereof; to regulate the manner
in which any increase in the capital of the Association shall be
made; to manage and administer the business and affairs of the
Association; to make all By-Laws that it may be lawful for them
to make; and generally to do and perform all acts that it may be
legal for the Board of Directors to do and perform.
The Board of Directors, without the approval of the shareholders,
but subject to the approval of the Comptroller of the Currency,
shall have the power to change the location of the main office of
the Association to any other place within the limits of Kansas
City, Missouri and to establish or change the location of any
branch or branches to any other location permitted under
applicable law.
SEVENTH: The corporate existence of this Association shall
continue until terminated in accordance with the laws of the
United States.
EIGHTH: The Board of Directors of this Association, or any three
or more shareholders owning, in the aggregate, not less than ten
percentum (10%) of the stock of this Association, may call a
special meeting of the shareholders at any time; provided,
however, that unless otherwise provided by law, not less than ten
(10) days prior to the date fixed for any such meeting, a notice
of the time, place and purpose of the meeting shall be given by
first class mail, postage prepaid, to all shareholders of record
at their respective addresses as shown upon the books of the
Association.
Subject to the provisions of the laws of the United States, these
Articles of Association may be amended at any meeting of the
shareholders, for which adequate notice has been given, by the
affirmative vote of the owners of two-thirds of the stock of this
Association, voting in person or by proxy.
NINTH: Any person, his heirs, executors, or administrators, may
be indemnified or reimbursed by the Association for reasonable
expenses actually incurred in connection with any action, suit,
or proceeding, civil or criminal, to which he or they shall be
made a party by reason of his being or having been a director,
officer, or employee of the Association or any firm, corporation,
or organization which he served in any capacity at the request of
the Association; provided, however, that no person shall be so
indemnified or reimbursed in relation to any matter in such
action, suit, or proceeding as to which he shall finally be
adjudged to have been guilty of or liable for gross negligence or
willful misconduct or criminal acts in the performance of his
duties to the Association; and, provided further, that no person
shall be so indemnified or reimbursed in relation to any matter
in such action, suit, or proceeding which has been made the
subject of a compromise settlement except with the approval of a
court of competent jurisdiction, or the holders of record of a
majority of the outstanding shares of the Association, or the
Board of Directors, acting by vote of directors not parties to
the same or substantially the same action, suit, or proceeding,
constituting a majority of the whole number of the directors. The
foregoing right of indemnification or reimbursement shall not be
exclusive of other rights to which such person, his heirs,
executors, or administrators, may be entitled as a matter of law.
T-1 Exhibit 2
Certificate, dated January 10th, 1934, of the Office of
Comptroller of the Currency authorizing the City National Bank
and Trust Company of Kansas City to Commence the business of
Banking.
C E R T I F I C A T E
For and on behalf of UMB Bank, National Association, a national
banking association organized under the laws of the United States
of America (formerly named The City National Bank and Trust
Company of Kansas City and the United Missouri Bank of Kansas
City, National Association and United Missouri Bank, National
Association), the undersigned, R. William Bloemker, Assistant
Secretary of said Association, hereby certifies that attached
hereto are the following:
1) A true and correct copy of the certificate of the
Comptroller of the Currency, dated December 19,
1972, evidencing a change in corporate title from
The City National Bank and Trust Company of Kansas
City to United Missouri Bank of Kansas City,
National Association;
2) A true and correct copy of the letter of
authorization from the Comptroller of the Currency,
dated April 9, 1991, authorizing the Association to
adopt the name United Missouri Bank, National
Association; and
3) Certified Resolution evidencing recordation of
change of the name of the Association to UMB Bank,
National Association.
Certified under the corporate seal of said Association this 11th day of
October, 2001.
Assistant Secretary
Certificate, dated December 19, 1972, of the Comptroller of the
Currency evidencing change in corporate title from the City National Bank
and Trust Company of Kansas City to United Missouri Bank of Kansas City,
National Association.
Letter, dated April 9, 1991, from the Comptroller of the currency,
authorizing the Association to adopt the name United Missouri Bank,
National Association.
CERTIFIED RESOLUTION
I hereby certify that the following is an excerpt from a letter dated
October 3, 1994 from the Office of the Comptroller of the Currency (OCC)
confirming the Bank's change of name:
The OCC has recorded that as of October 1, 1994, the title of United
Missouri Bank, National Association, Charter No. 13936, was changed to "UMB
Bank, National Association."
Assistant Secretary
[SEAL]
T-l Exhibit 3
C E R T I F I C A T E
For and on behalf of UMB Bank, National Association, a national
banking association under the laws of the United States of America, the
undersigned, R. William Bloemker, Assistant Secretary of said Association,
hereby certifies that the attached document is a true and correct copy of
the certificate issued by the Comptroller of the Currency of the United
States evidencing its authority to exercise fiduciary powers under the
statutes of the United States.
Certified under the corporate seal of said Association this 11th day
of October, 2001.
Assistant Secretary
Certificate, dated December 31, 1972, of the Comptroller of the
Currency evidencing the authority of the Association to exercise fiduciary
powers under the statutes of the United States.
T-l Exhibit No. 4
TO WHOM IT MAY CONCERN
The attached ByLaws are the ByLaws for the UMB Bank, National
Association and are current as of this date.
Assistant Secretary
October 11, 2001
[SEAL]
UMB BANK, NATIONAL ASSOCIATION BY-LAWS
ARTICLE I
Meetings of Shareholders
Section 1.1 - Where Held. All meetings of shareholders of this
Association shall be held at its main banking house in Kansas City, Jackson
County, Missouri, or at such other place as the Board of Directors may from
time to time designate.
Section 1.2 - Annual Meeting. The annual meeting of shareholders shall
be held at 11 o'clock in the forenoon, or at such other time as shall be
stated in the notice thereof, on the third Wednesday of January in each
year or, if that day be a legal holiday, on the next succeeding banking
day, for the purpose of electing a Board of Directors and transacting such
other business as may properly come before the meeting.
Section 1.3 - Special Meetings. Except as otherwise provided by law,
special meetings of shareholders may be called for any purpose, at any
time, by the Board of Directors or by any three or more shareholders
owning, in the aggregate, not less than ten percent (10%) of the
outstanding stock in the Association.
Section 1.4 - Notice of Meetings. Written notice of the time, place,
and purpose of any meeting of shareholders shall be given to each
shareholder (a) by delivering a copy thereof in person to the shareholder,
or (b) by depositing a copy thereof in the U.S. mails, postage prepaid,
addressed to the shareholder at his address appearing on the books of the
Association, in either case at least ten (10) days prior to the date fixed
for the meeting.
Section 1.5 - Quorum. A majority of the outstanding capital stock,
represented in person or by proxy, shall constitute a quorum for the
transaction of business at any meeting or shareholders, unless otherwise
provided by law. A majority of the votes cast shall decide every question
or matter submitted to the shareholders at any meeting, unless otherwise
provided by law or by the Articles of Association.
Section 1.6 - Adjournment. Any meeting of shareholders may, by
majority vote of the shares represented at such meeting, in person or by
proxy, though less than a quorum, be adjourned from day to day or from time
to time, not exceeding, in the case of elections of directors, sixty (60)
days from such adjournment, without further notice, until a quorum shall
attend or the business thereof shall be completed. At any such adjourned
meeting, any business may be transacted which might have been transacted at
the meeting as originally called.
Section 1.7 - Voting. Each shareholder shall be entitled to one (1)
vote on each share of stock held, except that in the election of directors
each shareholder shall have the right to cast as many votes, in the
aggregate, as shall equal the number of shares owned by him, multiplied by
the number of directors to be elected, and said votes may be cast for one
director or distributed among two (2) or more candidates. Voting may be in
person or by proxy, but no officer or employee of this Association shall
act as proxy. Authority to vote by proxy shall be by written instrument,
dated and filed with the records of the meeting, and shall be valid only
for one meeting, to be specified therein, and any adjournments of such
meeting.
ARTICLE II
Directors
Section 2.1 - Number and Qualifications. The Board of Directors
(hereinafter sometimes referred to as the "Board") shall consist of not
less than five (5) nor more than twenty-five (25) shareholders, the exact
number, within such limits, to be fixed and determined from time to time by
resolution of a majority of the full Board of Directors or by resolution of
the shareholders at any meeting thereof; provided, however, that a majority
of the full Board of Directors shall not increase the number of directors
to a number which: (a) exceeds by more than two (2) the number of directors
last elected by shareholders where such number was fifteen (15) or less; or
(b) exceeds by more than four (4) the number of directors last elected by
shareholders where such number was sixteen (16) or more. No person who has
attained the age of seventy (70) shall be eligible for election to the
Board of Directors unless such person is actively engaged in business at
the time of his election, but any person not so disqualified at the time of
his election as a director shall be entitled to serve until the end of his
term. All directors shall hold office for one (1) year and until their
successors are elected and qualified.
Section 2.2 - Advisory Directors. The Board of Directors may appoint
Advisory Directors, chosen from former directors of the Association or such
other persons as the Board shall select. The Advisory Directors shall meet
with the Board at all regular and special meetings of the Board and may
participate in such meetings but shall have no vote. They shall perform
such other advisory functions and shall render such services as may from
time to time be directed by the Board.
Section 2.3 - Powers. The Board shall manage and administer the
business and affairs of the Association. Except as expressly limited by
law, all corporate powers of the Association shall be vested in and may be
exercised by said Board. It may not delegate responsibility for its duties
to others, but may assign the authority and responsibility for various
functions to such directors, committees and officers or other employees as
it shall see fit.
Section 2.4 - Vacancies. In case of vacancy occurring on the Board
through death, resignation, disqualification, disability or any other
cause, such vacancy may be filled at any regular or special meeting of the
Board by vote of a majority of the surviving or remaining directors then in
office. Any director elected to fill a vacancy shall hold office for the
unexpired term of the director whose place was vacated and until the
election and qualification of his successor.
Section 2.5 - Organization Meeting. Following the annual meeting
of shareholders, the Corporate Secretary shall notify the directors
elect of their election and of the time and place of the next regular
meeting of the Board, at which the new Board will be organized and the
members of the Board will take the oath required by law, after which
the Board will appoint committees and the executive officers of the
Association, and transact such other business as may properly come
before the meeting; provided, however, that if the organization
meeting of the Board shall be held immediately following the annual
meeting of shareholders, no notice thereof shall be required except an
announcement thereof at the meeting of directors.
Section 2.6 - Regular Meetings. The regular meetings of the Board
of Directors shall be held, without notice except as provided for the
organization meeting, on the third Wednesday of each month at the main
banking house in Kansas City, Jackson County, Missouri. When any
regular meeting of the Board falls upon a holiday, the meeting shall
be held on the next banking day, unless the Board shall designate some
other day. A regular monthly meeting of the Board may, by action of
the Board at its preceding meeting, be postponed to a later day in the
same month.
Section 2.7 - Special Meetings. Special meetings of the Board may
be called by the Corporate Secretary on direction of the President or
of the Chairman of the Board, or at the request of three (3) or more
directors. Each member of the Board shall be given notice, by
telegram, letter, or in person, stating the time, place and purpose of
such meeting.
Section 2.8 - Quorum. Except when otherwise provided by law, a
majority of the directors shall constitute a quorum for the
transaction of business at any meeting, but a lesser number may
adjourn any meeting, from time to time, and the meeting may be held,
as adjourned, without further notice.
Section 2.9 - Voting. A majority of the directors present and
voting at any meeting of the Board shall decide each matter
considered. A director may not vote by proxy.
Section 2.10 - Compensation of Directors. The compensation to be
paid the directors of the Association for their services shall be
determined from time to time by the Board.
ARTICLE III
Committees Appointed by the Board
Section 3.1 - Standing Committees. The standing committees of
this Association shall be the Management Committee, Executive
Committee, the Officers' Salary Committee, the Discount Committee, the
Bond Investment Committee, the Trust Policy Committee, the Bank
Examining Committee and the Trust Auditing Committee. The members of
the standing committees shall be appointed annually by the Board of
Directors at its organization meeting, or, on notice, at any
subsequent meeting of the Board, to serve until their respective
successors shall have been appointed. The President and the Chairman
of the Board shall be, ex officio, members of all standing committees
except the Bank Examining Committee and the Trust Auditing Committee.
Each standing committee shall keep minutes of its meetings, showing
the action taken on all matters considered. A report of all action so
taken shall be made to the Board, and a copy of such minutes shall be
available for examination by members of the Board.
Section 3.2 - Management Committee. The Management Committee
shall consist of such executive officers of the Association as shall
be designated by the Board. One of the members of the Committee shall
be designated by the Board as Chairman. The Committee may adopt
policies (not inconsistent with policies and delegations of authority
prescribed by these By-Laws or by the Board) with respect to the
executive and administrative functions of the Association, and in
general, it shall coordinate the performance of such functions in and
among the various departments of the Association, assisting and
advising the executive officers or department heads upon matters
referred to it by such officers or department heads. The Committee
shall make reports and recommendations to the Board upon such policies
or other matters as it deems advisable or as may be referred to it by
the Board, and shall have such other powers and duties as may be
delegated or assigned to it by the Board from time to time. The
secretary of the Committee may be designated by the Board, or, in
default thereof, by the Committee, and may but need not be a member
thereof.
Section 3.3 - Executive Committee. The Executive Committee shall
consist of such executive officers of the Association as shall be
designated by the Board. One of the members of the Committee shall be
designated by the Board as Chairman. The Committee shall carry out
such responsibilities and duties as the Management Committee shall
delegate to it, from time to time.
Section 3.4 - Officers' Salary Committee. The Officers' Salary
Committee shall consist of such directors and officers of the
Association as may be designated by the Board. It shall study and
consider the compensation to be paid to officers of the Association
and shall make recommendations to the Board with respect thereto and
with respect to such other matters as may be referred to it by the
Board.
Section 3.5 - Discount Committee. The Discount Committee shall
consist of such directors and officers as shall be designated by the
Board of Directors. It shall have the power to discount and purchase
bills, notes and other evidences of debt; to buy and sell bills of
exchange; to examine and approve loans and discounts; and to exercise
authority regarding loans and discounts held by the Association. At
each regular meeting of the Board, the Board shall approve or
disapprove the report filed with it by the Discount Committee and
record its actions in the minutes of its meeting. The powers and
authority conferred upon the Discount Committee by this Section may,
with the approval of the Board of Directors, be assigned or delegated
by it, to officers of the Association, subject to such limits and
controls as the Committee may deem advisable.
Section 3.6 - Bond Investment Committee. The Bond Investment
Committee shall consist of such directors and officers as shall be
designated by the Board of Directors. It shall have power to buy and
sell bonds, to examine and approve the purchase and sale of bonds, and
to exercise authority regarding bonds held by the Association. At each
regular meeting of the Board, the Board shall approve or disapprove
the report filed with it by the Bond Investment Committee and record
its action in the minutes of its meeting.
Section 3.7 - Trust Policy Committee. The Trust Policy Committee
shall consist of such directors and officers of the Association as
shall be designated by the Board of Directors. Such committee shall
have and exercise such of the Bank's fiduciary powers as may be
assigned to it by the Board, with power to further assign, subject to
its control, the exercise of such powers to other committees, officers
and employees. The action of the Trust Policy Committee shall, at all
times, be subject to control by the Board.
Section 3.8 - Bank Examining Committee. The Bank Examining
Committee shall consist of such directors of the Association as shall
be designated by the Board, none of whom shall be an active officer of
the Association. It shall make suitable examinations at least once
during each period of twelve (12) months of the affairs of the
Association or cause a suitable audit to be made by auditors
responsible only to the Board of Directors. The result of such
examinations shall be reported in writing, to the Board at the next
regular meeting thereafter and shall state whether the Association is
in a sound and solvent condition, whether adequate internal controls
and procedures are being maintained, and shall recommend to the Board
such changes as the Committee shall deem advisable. The Bank Examining
Committee, with the approval of the Board of Directors, may employ a
qualified firm of certified public accountants to make an examination
and audit of the Association. If such a procedure is followed, the
annual examination of directors, will be deemed sufficient to comply
with the requirements of this section of the By-Laws.
Section 3.9 - Trust Auditing Committee. The Trust Auditing
Committee shall consist of such directors of the Association as shall
be designated by the Board, none of whom shall be an active officer of
the Association. At least once during each calendar year, and within
fifteen (15) months of the last such audit, the Trust Auditing
Committee shall make suitable audits of the Trust Departments or cause
suitable audit to be made by auditors responsible only to the Board of
Directors, and t such time shall ascertain whether the Departments
have been administered in accordance with law, the Regulations of the
Comptroller and sound fiduciary practices. As an alternative, in lieu
of such periodic audits, the Board may elect to adopt an adequate
continuous audit system.
Section 3.10 - Other Committees. The Board may appoint, from time
to time, from its own members or from officers of the Association, or
both, other committees of one or more persons for such purposes and
with such powers as the Board may determine.
Section 3.11 - Compensation of Committee Members. The Board shall
determine the compensation to be paid to each member of any committee
appointed by it for services on such committee, but no such
compensation shall be paid to any committee member who shall at the
time be receiving a salary from the Association as an officer thereof.
ARTICLE IV
Officers and Employees
Section 4.1 - Chairman of the Board. The Board of Directors shall
appoint one of its members (who may, but need not, be President of the
Association) as Chairman of the Board. He shall preside at all meeting
of the Board of Directors and shall have general executive powers and
such further powers and duties as from time to time may be conferred
upon, or assigned to, him by the Board of Directors. He shall be, ex
officio, a member of all standing committees except the Bank Examining
Committee and the Trust Auditing Committee.
Section 4.2 - President. The Board of Directors shall appoint one
of its members to be the President of this Association. The President
shall be the chief executive officer of the Association, except as the
Board of Directors may otherwise provide, and shall have and may
exercise any and all other powers and duties pertaining to such
office. He shall also have and may exercise such further powers and
duties as from time to time may be conferred upon, or assigned to, him
by the Board of Directors. He shall be, ex officio, a member of all
standing committees except the Bank Examining Committee and the Trust
Auditing Committee.
Section 4.3 - Chairman of the Executive Committee. The Board of
Directors may appoint a Chairman of the Executive Committee, who shall
have general executive powers and shall have and may exercise such
further powers and duties as from time to time may be conferred upon,
or assigned to, him by the Board of Directors.
Section 4.4 - Vice Presidents. The Board of Directors shall
appoint one or more Vice Presidents. Each Vice President shall have
such powers and duties as may be assigned to him by the Board and may
be given such descriptive or functional titles as the Board may
designate.
Section 4.5 - Trust Officers. The Board of Directors shall
appoint one or more Trust Officers. Each Trust Officer shall have such
powers and duties as may be assigned to him by the Board of Directors
in accordance with the provisions of Article V. The Trust Officers may
be given such descriptive or functional titles as the Board may
designate.
Section 4.6 - Corporate Secretary. The Board of Directors shall
appoint a Corporate Secretary. The Corporate Secretary shall be
responsible for the minutes book of the Association, in which he shall
maintain and preserve the organization papers of the Association, the
Articles of Association, the By-Laws, minutes of regular and special
meetings of the shareholders and of the Board of Directors, and
reports by officers and committees of the Association to the
shareholders and to the Board of Directors. He shall attend all
meetings of the shareholders and of the Board of Directors and shall
act as the clerk of such meetings and shall prepare and sign the
minutes of such meetings. He shall have custody of the corporate seal
of the Association and of the stock transfer books, except as given to
the Comptroller's Department or the Corporate Trust Department to act
as transfer agent and registrar of the Association's capital stock,
and of such other documents and records as the Board of Directors
shall entrust to him. The Secretary shall give such notice of meetings
of the shareholders and of the Board of Directors as is required by
law, the Articles of the Association and the By-Laws. In addition, he
shall perform such other duties as may be assigned to him from time to
time by the Board of Directors. The Assistant Secretaries shall render
the Corporate Secretary such assistance as he shall require in the
performance of his office. During his absence or inability to act, the
Assistant Secretaries shall be vested with the powers and perform the
duties of the Corporate Secretary.
Section 4.7 - Cashier. The Board of Directors may appoint a
Cashier. He shall have such powers and shall perform such duties as
may be assigned to him by resolution of the Board of Directors.
Section 4.8 - Comptroller. The Board of Directors shall appoint a
Comptroller. The Comptroller shall institute and maintain the
accounting policies and practices established by the Board of
Directors. He shall maintain, or cause to be maintained, adequate
records of all transactions of the Association. He shall be
responsible for the preparation of reports and returns to taxing and
regulatory authorities, and at meetings of the Board of Directors
shall furnish true and correct statements of condition and statements
of operations of the Association and such further information and
data, and analyses thereof, as the Board of Directors may require. He
shall have custody of the Association's insurance policies. In
addition, the Comptroller shall perform such other duties as may be
assigned to him, from time to time by the Board of Directors. The
Assistant Comptroller(s) shall render the Comptroller such assistance
as he shall require in the performance of the duties of his office
and, during his absence or inability to act, the Assistant
Comptroller(s), in the order designated by the Board of Directors,
shall be vested with the powers and perform the duties of the
Comptroller.
Section 4.9 - Auditor. The Board of Directors shall appoint an
Auditor of the Association. He shall see that adequate audits of the
Association are currently and regularly made and that adequate audit
systems and controls are established and maintained. He shall examine
each department and activity of the Association and may inquire into
transactions affecting the Association involving any officer or
employee thereof. The Board, however, may, in lieu of appointing an
Auditor, assign the duties thereof to the Auditor of the parent
company of the Association.
Section 4.10 - Other Officers. The Board of Directors may appoint
one or more Assistant Vice Presidents, one or more Assistan Trust
Officers, one or more Assistant Secretaries, one or more Assistant
Cashiers, and such other officers and Attorneys-In-Fact as from time
to time may appear to the Board of Directors to be required or
desirable to transact the business of the Association. The power to
appoint such assistant or the additional officers may be delegated to
the Chairman of the Board or the President, or to such other executive
officer or officers as the Board may designate, but the power to
appoint any officer of the Audit Department or any Assistant Secretary
may not be so delegated. Any officer and Attorney-In-Fact appointed as
herein provided shall exercise such powers and perform such duties as
pertain to his office or as may be conferred upon or assigned to him
by the Board of Directors of by the officer authorized to make such
appointment.
Section 4.11 - Tenure of Office. The Chairman of the Board and
the President shall hold office for the current year for which Board
of Directors of which they are members was elected, unless either of
them shall resign, become disqualified or be removed, and any vacancy
occurring in either of such offices shall be filled promptly by the
Board of Directors. All other officers of the Association shall serve
at the pleasure of the Board of Directors.
Section 4.12 - Compensation of Officers. The compensation of the
officers of the Association shall be fixed and may be altered, from
time to time, by the Board of Directors or, in the case of officers
appointed by another officer, as authorized by Section 4.10 of this
Article, by the officer or officers making such appointment, subject
to the supervisory control of, and in accordance with the policies
established by, the Board.
Section 4.13 - Combining Offices. The Board of Directors, in its
discretion, may combine two or more offices and direct that they be
filled by the same individual, except that (a) the office of Corporate
Secretary shall not be combined with that of the Chairman of the Board
or of the President and (b) the office of Auditor shall not
be combined with any other office.
Section 4.14 - Succession. During the absence of the Chairman of
the Board, or such other officer designated as Chief Executive
Officer, all of the duties pertaining to his office under these
By-Laws and the resolutions of the Board of Directors shall, subject
to the supervisory control of the Board, devolve upon, and be
performed by, the officers, successively, who are next in the order of
authority as established by the Board of Directors from time to time,
or, in the absence of an order of authority so established, in the
order of Chairman of the Board, President and Chairman of the
Executive Committee as may be applicable in the particular case.
Section 4.15 - Clerks and Agents. Any one of the Chairman of the
Board, President or Chairman of the Executive Committee, or any
officer of the Association authorized by them, may appoint and dismiss
all or any clerks, agents and employees and prescribe their duties and
the conditions of their employment, and from time to time fix their
compensation.
Section 4.16 - Requiring Bond. The Board of Directors shall
require such officers and employees of the Association as it shall
designate to give bond, of suitable amount, with security to be
approved by the Board, conditioned for the honest and faithful
discharge by each such officer or employee of his respective duties.
In the discretion of the Board, such bonds may be in blanket form and
the premiums may be paid by the Association. The amount of such bonds,
form of coverage, and the company acting as surety therefor, shall be
reviewed by the Board of Directors each year.
ARTICLE V
Administration of Trust Powers
Section 5.1 - Trust Department. Organization. There shall be one
or more departments of the Association which shall perform the
fiduciary responsibilities of the Association.
Section 5.2 - Management of Department. The Board of Directors
shall be responsible for the management and administration of the
Trust Department or Departments, but is may assign or delegate such of
its powers and authority to the Trust Policy Committee and to such
other committees and officers of the Association as it may deem
advisable.
Section 5.3 - Department Heads. The Board of Directors shall
designate one of the Trust Officers as the chief executive of each
Trust Department. His duties shall be to manage, supervise and direct
all activities of such Department, subject to such supervision as may
be vested in the Trust Policy and other committees. He shall do, or
cause to be done, all things necessary or proper in carrying on the
business of such Department in accordance with provisions of law,
applicable regulations and policies established by authority of the
Board. He shall act pursuant to opinions of counsel where such opinion
is deemed necessary. He shall be responsible for all assets and
documents held by the Association in connection with fiduciary
matters, in such Department, except as otherwise provided in this
Article V.
Section 5.4 - Custody of Securities. The Board of Directors shall
designate two or more officers or employees of the Association to have
joint custody of the investments of each trust account administered by
the Trust Department or Departments.
Section 5.5 - Trust Department Files. There shall be maintained
in each Trust Department files containing all fiduciary records
necessary to assure that it fiduciary responsibilities have been
properly undertaken and discharged.
Section 5.6 - Trust Investments. Funds held in a fiduciary
capacity shall be invested in accordance with the instrument
establishing the fiduciary relationship and governing law. Where such
instrument does not specify the character and class of investments to
be made and does not vest in the Association a discretion in the
matter, funds held pursuant to such instrument shall be invested in
investments in which corporate fiduciaries may invest under the laws
of the State of Missouri and the decisions of its courts.
ARTICLE VI
Stock and Stock Certificates
Section 6.1 - Transfers. Shares of the capital stock of the
Association shall be transferable only on the books of the
Association, and a transfer book shall be kept in which all transfers
of stock shall be recorded.
Section 6.2 - Stock Certificates. Certificates of stock shall
bear the signatures of (i) the Chairman of the Board, the President or
any Vice President, and (ii) the Secretary, Cashier, any Assistant
Secretary, or any other officer appointed by the Board of Directors
for that purpose; and the seal of the Association shall be impressed,
engraved, or printed thereon. Such signatures may be manual or
engraved, printed or otherwise impressed by facsimile process; but if
both of the required signatures are by facsimile then such
certificates shall be manually countersigned by the person or persons
thereunto authorized by the Board of Directors. Certificates bearing
the facsimile signature of an authorized officer may be validly issued
even though the person so named shall have ceased to hold such office
at the time of issuance. Each certificate shall recite on its face
that the stock represented thereby is transferable only upon the books
of the Association upon the surrender of such certificate properly
endorsed.
Section 6.3 - Closing Transfer Books or Fixing Record Date. The
Board of Directors shall have power to close the transfer books of the
Association for a period not exceeding thirty (30) days preceding the
date of any meeting of shareholders, or the date of payment of any
dividend, or the date of allotment of rights, or the date when any
change or conversion of exchange of shares shall go into effect;
provided, however, that in lieu of closing the said transfer books,
the Board of Directors may fix, in advance, a date, not exceeding
thirty (30) days preceding the date of any such event, as record date
for the determination of the shareholders entitled to notice of, and
to vote at, any such meeting (and any adjournment thereof), or
entitled to receive payment of any such dividend or allotment of such
rights, or to exercise rights in respect of any such change,
conversion or exchange of shares, and in such case, only such
shareholders as shall be shareholders of record at the close of
business on the date of closing the transfer books or on the record
date so fixed shall be entitled to notice of, and to vote at, such
meeting (and any adjournment thereof), or to receive payment of such
dividend or allotment of such rights, or to exercise such rights, as
the case may be.
ARTICLE VII
Corporate Seal
Section 7.1 - Authority to Affix. The President, the Corporate
Secretary, the Cashier, and any Assistant Secretary or other officer
designated by the Board of Directors, shall have authority to affix
the corporate seal on any document requiring such seal, and to attest
the same. The seal shall be substantially in the following form:
ARTICLE VIII
Miscellaneous Provisions
Section 8.1 - Fiscal Year. The fiscal year of the Association
shall be the calendar year.
Section 8.2 - Execution of Instruments. All agreements,
indentures, mortgages, deeds, conveyances, transfers, certificates,
declarations, receipts, discharges, releases, satisfactions,
settlements, petitions, schedules, accounts, affidavits, bonds,
undertakings, proxies and other instruments or documents may be
signed, executed, acknowledged, verified, delivered or accepted on
behalf of the Association by the Chairman of the Board, the President,
any Vice President, or the Cashier; and, if in connection with the
exercise of fiduciary owers of the Association, by any of said
officers or by any authorized officer of the Trust Department or
Departments. Any such instruments may also be executed, acknowledged,
verified, delivered, or accepted on behalf of the Association in such
other manner and by such other officers as the Board of Directors may
from time to time direct. The provisions of this Section are
supplementary to any other provisions of these By-Laws.
Section 8.3 - Banking Hours. The Association shall be open for
business on such days and during such hours as may be prescribed by
resolution of the Board of Directors. Unless and until the Directors
shall prescribe other and different banking hours, this Association's
main office shall be open for business from 9:30 o'clock a.m. to 2:00
o'clock p.m. of each day, except Fridays when the hours shall be from
9:30 o'clock a.m. to 6:00 o'clock p.m., and except that the
Association shall be closed on Saturdays and Sundays, and, with the
approval of the Board on days recognized by the laws of the State of
Missouri as public holiday.
ARTICLE IX
By-Laws
Section 9.1. - Inspection. A copy of the By-Laws, with all
amendments thereto, shall at all times be kept in a convenient place
at the main office of the Association and shall be open for inspection
to all shareholders during banking hours.
Section 9.2 - Amendments. The By-Laws may be amended, altered or
repealed by vote of a majority of the entire Board of Directors at any
meeting of the Board, provided that ten (10) days' written notice of
the proposed change has been given to each Director. No amendment may
be made unless the By-Laws, as amended, is consistent with the
requirements of the laws of the United States and with the provisions
of the Articles of the Association. A certified copy of all amendments
to the By-Laws shall be forwarded to the Comptroller of the Currency
immediately after adoption.
10-1-94
T-l Exhibit 6
Consent of Trustee
Pursuant to Section 32l(b) of the Trust Indenture Act of l939,
UMB Bank, National Association, a national bank organized under the
laws of the United States, hereby consents that reports of
examinations by the Comptroller of the Currency, of the Federal
Deposit Insurance Corporation, and any other federal, state,
territorial or district authorities may be furnished by such
authorities to the Securities and Exchange Commission upon request
therefor.
UMB BANK, NATIONAL ASSOCIATION
BY:
Frank C. Bramwell, Senior Vice President
Date: October 11, 2001
T-1 Exhibit 7
Consolidated Report of Condition for Insured Commercial and State
- Chartered Savings Banks for June 30, 2001
All Schedules are to be reported in thousands of dollars. Unless
otherwise indicated, report the amount outstanding as of the last
business day of the quarter.
Schedule RC -- Balance Sheet
Dollar Amounts in Thousands
ASSETS
1.Cash and balances due from depository institutions (from Schedule RC-A)
a.Noninterest-bearing balances and currency and coin1 RCON 0081 528,042
b.Interest-bearing balances2 RCON 0071 2,234
2.Securities:
a.Held-to-maturity securities (from Schedule RC-B, column A) RCON 1754 498,337
b.Available-for-sale securities (from Schedule RC-B, column D) RCON 1773 2,126,274
3.Federal funds sold and securities purchased under agreements to resell RCON 1350 188,306
4.Loans and lease financing receivables (from Schedule RC-C):
a.Loans and leases held for sale RCON 5369 9,257
b.Loans and leases, net of unearned income RCON B528 2,452,256
c.LESS: Allowance for loan and lease losses RCON 3123 27,611
d.Loans and leases, net of unearned income and allowance (item 4.b minus
4.c) RCON B529 2,424,645
5.Trading assets (from Schedule RC-D) RCON 3545 74,597
6.Premises and fixed assets (including capitalized leases) RCON 2145 196,897
7.Other real estate owned (from Schedule RC-M) RCON 2150 6,578
8.Investments in unconsolidated subsidiaries and associated companies (from
Schedule RC-M) RCON 2130 0
9.Customers' liability to this bank on acceptances outstanding RCON 2155 15,659
10.Intangible assets:
a.Goodwill RCON 3163 41,482
b.Other intangible assets (from Schedule RC-M) RCON 0426 1,500
11.Other assets (from Schedule RC-F) RCON 2160 140,983
12.Total assets (sum of items 1 through 11) RCON 2170 6,254,791
LIABILITIES
13.Deposits:
a.In domestic offices (sum of totals of columns A and C from Schedule
RC-E) RCON 2200 4,632,442
(1)Noninterest-bearing3 RCON 6631 1,571,061
(2)Interest-bearing RCON 6636 3,061,381
b.Not applicable
14.Federal funds purchased and securities sold under agreements to repurchase RCON 2800 805,520
15.Trading liabilities (from Schedule RC-D) RCON 3548 0
16.Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases) (from Schedule RC-M) RCON 3190 158,265
17.Not applicable
18.Bank's liability on acceptances executed and outstanding RCON 2920 15,659
19.Subordinated notes and debentures4 RCON 3200 0
20.Other liabilities (from Schedule RC-G) RCON 2930 92,383
21.Total liabilities (sum of items 13 through 20) RCON 2948 5,704,269
22.Minority interest in consolidated subsidiaries RCON 3000 0
EQUITY CAPITAL
23.Perpetual preferred stock and related surplus RCON 3838 0
24.Common stock RCON 3230 16,500
25.Surplus (exclude all surplus related to preferred stock) RCON 3839 148,041
26. a.Retained earnings RCON 3632 372,915
b.Accumulated other comprehensive income5 RCON B530 13,066
27.Other equity capital components6 RCON A130 0
28.Total equity capital (sum of items 23 through 27) RCON 3210 550,522
29.Total liabilities, minority interest, and equity capital (sum of items 21,
22, and 28) RCON 3300 6,254,791
Memorandum
To be reported with the March Report of Condition.
1.Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external auditors as of any date during 2000 RCON 6724 N/A
1 = Independent audit of the bank conducted in 4 = Directors' examination of the bank conducted in
accordance with generally accepted auditing accordance with generally accepted auditing
standards by a certified public accounting firm standards by a certified public accounting firm (may
which submits a report on the bank be required by state chartering authority)
2 = Independent audit of the bank's parent holding 5 = Directors' examination of the bank performed by
company conducted in accordance with generally other external auditors (may be required by state
accepted auditing standards by a certified public chartering authority)
accounting firm which submits a report on the
consolidated holding company (but not on the bank
separately)
6 = Review of the bank's financial statements by
external auditors
7 = Compilation of the bank's financial statements by
external auditors
3 = Attestation on bank management's assertion on the 8 = Other audit procedures (excluding tax preparation
effectiveness of the bank's internal control over work)
financial reporting by a certified public accounting
firm
9 = No external audit work
---------------------------
1Includes cash items in process of collection and unposted debits.
2Includes time certificates of deposit not held for trading.
3Includes total demand deposits and noninterest-bearing time and savings deposits.
4Includes limited-life preferred stock and related surplus.
5Includes net unrealized holding gains (losses) on available-for-sale securities, accumulated net gains (losses)
on cash flow hedges, and minimum pension liability adjustments.
6Includes treasury stock and unearned Employee Stock Ownership Plan shares.
EXHIBIT 25B
FORM T - 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)______
COMMERCE BANK, NATIONAL ASSOCIATION
-----------------------------------
(exact name of trustee as specified in its charter)
NATIONAL BANKING ASSOCIATION
-----------------------------------------------
(State of incorporation if not a national bank)
44-0206815
----------
(I.R.S. employer identification No.)
1000 WALNUT STREET, KANSAS CITY, MISSOURI
-----------------------------------------
(Address of principal executive offices)
64106
-----
(Zip Code)
William E. Ekey
---------------
922 Walnut Street, Kansas City, MO 64106 (816) 234-2102
-------------------------------------------------------
(Name, Address and telephone number of agent for service)
Farmland Industries, Inc.
-------------------------
(Exact name of obligator as specified in its charter)
Kansas
------
(State or other jurisdiction of incorporation or organization)
44-0209330
----------
(I.R.S. Employer Identification No.)
12200 N. Ambassador Drive, Kansas City, Missouri
------------------------------------------------
(Address of principal executive offices)
64136
-----
(Zip Code)
Subordinated Debt Securities
(Title of the indenture securities)
ITEM 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Comptroller of the Currency,
Washington, D.C.
(b) Whether it is authorized to exercise corporation trust powers.
Yes.
ITEM 2. Affiliations with obligor and underwriters.
If the obligor or any underwriter for the obligor is an affiliate of the
trustee, describe each such affiliation.
NONE
ITEM 3. Voting securities of the trustee.
Furnish the following information as to each class of voting securities of the trustee:
As of September 30, 2001
---------------------------------------------------------------------------
COL. A. COL. B.
Title of class Amount Outstanding
-------------- ------------------
Capital Stock - par $20 900,000 Shares
[The remainder of this page was intentionally left blank]
ITEM 4. Trusteeships under other indentures.
If the trustee is a trustee under another indenture under which any other securities,
or certificates of interest or participation in any other securities, of the obligor are outstanding,
furnish the following information:
(a) Title of the securities outstanding under each such
other indenture.
Subordinated Capital Investment Certificates (under Indenture dated November 8,
1984) due 5 years from date of issue (34th Indenture)
and
Subordinated Capital Investment Certificates (under Indenture dated November 8,
1984) due 10 years from date of issue (35th Indenture)
and
Subordinated Capital Investment Certificates (under Indenture dated November 8,
1984) due 20 years from date of issue (36th Indenture)
and
Subordinated Monthly Income Capital Investment Certificates (under Indenture dated
November 8, 1984) due 10 years from date of issue (37th Indenture)
and
Subordinated Individual Retirement Account Certificates (under Indenture dated
November 8, 1984) due 10 years from date of issue (38th Indenture)
and
Subordinated Monthly Income Capital Investment Certificates (under Indenture dated
November 11, 1985) due 5 years from date of issue (39th Indenture)
and
Subordinated Debenture Bonds, Series A-H (under subordinated Indenture dated as of December
4, 1997) (41st Indenture)
(b) A brief statement of the facts relied upon as a basis for
the claim that no conflicting interest within the meaning of Section 310 (b) (1) of the
Act arises as a result of the trusteeship under any such other
indenture, including a statement as to how the securities will rank with the
securities issued under such other indenture.
The securities issued, or to be issued, under the indentures named herein are
wholly unsecured and rank equally with each other without priority.
ITEM 5. Interlocking directorates and similar relationships with
obligor or underwriters.
If the trustee or any of the directors or executive officers of he trustee is a director,
officer, partner, employee, appointee, or representative of the obligor or of any
underwriter for the obligor, identify each such person having any such connection and state
the nature of each such connection.
Robert Honse, Chief Operating Officer of Farmland Industries, Inc., is a
member of Commerce Bank's Kansas City market advisory board (non-voting
board).
ITEM 6. Voting securities of the trustee owned by the obligor or its officials.
Furnish the following information as to the voting securities of the trustee owned
beneficially by the obligor and each director, partner and executive officer of the obligor.
As of September 30, 2001
---------------------------------------------------------------------------
COL. A. COL. B. COL. C. COL. D.
Amount Percentage of voting
Name of Title of owned securities represented by
owner class beneficially amount given in Col. C.
--------- -------- ------------ -------------------------
NONE
[The remainder of this page was intentionally left blank]
ITEM 7. Voting securities owned by underwriters or their officials.
Furnish the following information as to the voting securities
of the trustee owned beneficially by each underwriter for the
obligor and each director, partner, and executive officer or
each underwriter.
As of September 30, 2001
---------------------------------------------------------------------------
COL. A. COL. B. COL. C. COL. D.
Percentage of voting
securities represented
Name of Title of Amount Owned by amount given in
owner class beneficially Col. C.
--------- -------- ------------ ----------------------
NONE
ITEM 8. Securities of the obligor owned or held by the trustee.
Furnish the following information as to the securities of the obligor owned
beneficially or held as collateral security for obligations in default by the trustee.
As of September 30, 2001
___________________________________________________________________________ COL. A. COL. B.
COL. C. COL. D.
Whether the Amount owned Percent of
securities are beneficially or held as class represented Title of voting or
non- collateral security for by amount given
class voting securities obligations in default in Col. C.
--------- ----------------- ----------------------- -----------------
NONE
ITEM 9. Securities of underwriters owned or held by the trustee.
If the trustee owns beneficially or holds collateral security
for obligations in default any securities of an underwriter
for the obligor, furnish the following information as to each
class of securities of such underwriter any of which are so
owned or held by the trustee.
As of September 30, 2001
--------------------------------------------------------------------------
COL. A. COL. B. COL. C. COL. D.
Amount owned beneficially Percent of
Name of issuer or held as collateral class represented and Amount
security for obligations by amount given
title of class outstanding in default by trustee in Col. C.
-------------- ----------- ------------------------- --------------
NONE
ITEM 10. Ownership or holdings by the trustee of voting securities of certain affiliates or security
holders of the obligor.
If the trustee owns beneficially or holds as collateral security for obligations in default
voting securities of a person who, to the knowledge of the trustee (1) owns 10 percent or
more of the voting securities or the obligor or (2) is an affiliate, other than a subsidiary
or the obligor, furnish the following information as to the voting securities of such person.
As of September 30, 2001
---------------------------------------------------------------------------
COL. A. COL. B. COL. C. COL. D.
Amount owned beneficially Percent of
Name of issuer or held as collateral class represented and Amount
security for obligations by amount given
title of class outstanding in default by trustee in Col. C.
-------------- ----------- ------------------------- -----------------
NONE
ITEM 11. Ownership or holdings by the trustee of any securities of a
person owning 50 percent or more of the voting securities of
the obligor.
If the trustee owns beneficially or holds as collateral security for obligations in default
any securities of a person who, to the knowledge of the trustee, owns 50 percent or more of
the voting securities of the obligor, furnish the following information as to each class of
securities of such person any of which are so owned or held by the trustee.
As of September 30, 2001
---------------------------------------------------------------------------
COL. A. COL. B. COL. C. COL. D.
Amount owned beneficially Percent of
Name of issuer or held as collateral class represented and Amount
security for obligations by amount given
title of class outstanding in default by trustee in Col. C.
-------------- ----------- ------------------------- -----------------
NONE
ITEM 12. Indebtedness of the Obligor to the Trustee
Except as noted in the instructions, if the obligor is indebted to the trustee, furnish the
following information:
__________________________________________________________________________ COL. A. COL.
B. COL. C
Nature of Indebtedness Amount Outstanding Date Due
---------------------- ------------------ --------
Line of Credit $16,491,736.93 November 9, 2001
ITEM 13. Defaults by the Obligor
(a) State whether there is or has been a default with respect to the securities under this
indenture. Explain the nature of any such default
There is not currently, nor has there been a default with respect to the
securities under the indentures.
(b) If the trustee is a trustee under another indenture under which any other securities, or
certificates of interest or participation in any other securities, of the obligor are
outstanding, or is trustee for more than one outstanding series of securities under the
indenture, state whether thee has been a default under any such indenture or series,
identify the indenture or series affected, and explain the nature of any such default.
There has been no default under any of the securities for which the Trustee
is a Trustee under any other indenture.
ITEM 14. Affiliations with the Underwriters
If any underwriter is an affiliate of the trustee, describe each such affiliation.
No underwriter is an affiliate of the trustee.
ITEM 15. Foreign Trustee
Identify the order or rule pursuant to which the foreign trustee is authorized to act as
sole trustee under indentures qualified or to be qualified under the Act.
Not applicable.
ITEM 16. List of Exhibits:
1. A copy of the articles of association of the trustee as
now in effect.
2. A copy of the certificate of authority of the trustee to commence business, if
not contained in the articles of association.
3. A copy of the authorization of the trustee to exercise corporate trust
powers.
4. A copy of the existing By-Laws of the trustee or instruments corresponding thereto.
5. A copy of each indenture referred to in Item 4 hereof.
6. The consents of the trustee required by Section 321(b)
of the Act.
7. A copy of the latest report of condition of the trustee published pursuant to
law or the requirements of the supervising examining authority.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee, Commerce Bank,
National Association, a banking association organized and existing under the laws of the United States, has
duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Kansas City, and State of Missouri, on the 31st day of October, 2001.
------ ---------------
COMMERCE BANK,
NATIONAL ASSOCIATION
By: /s/William E. Ekey
---------------------------
William E. Ekey
Vice-President
EXHIBIT 1
COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW IN EFFECT
ARTICLES OF ASSOCIATION
-----------------------
FIRST. The title of this Association shall be Commerce Bank, National Association.
-----
SECOND. The main office of the Association shall be in the City of Kansas City, County of Jackson,
------
State of Missouri. The general business of the Association shall be conducted at its main office and its
branches.
THIRD. The Board of Directors of this Association shall consist of not less than five nor more than
-----
twenty-five shareholders, the exact number of Directors within such minimum and maximum limits to be fixed
and determined from time to time by resolution of a majority of the full Board of Directors or by resolution
of the shareholders at any annual or special meeting thereof. Unless otherwise provided by the laws of the
United States, any vacancy in the Board of Directors for any reason, including an increase in the number
thereof, may be filled by action of the Board of Directors.
FOURTH. The annual meeting of the shareholders for the election of Directors and the transaction of
------
whatever other business may be brought before said meeting shall be held at the main office or such other
place as the Board of Directors may designate, on the day of each year specified therefor in the By-Laws, but
if no election is held on that day, it may be held on any subsequent day according to the provisions of law;
and all elections shall be held according to such lawful regulations as may be prescribed by the Board of
Directors.
Nominations for election to the Board of Directors may be made by the Board of Directors or by any
shareholder of any outstanding class of capital stock of the bank entitled to vote for election of directors.
FIFTH. The authorized amount of capital stock of this Association shall be 100,000 shares of common
-----
stock of the par value of one hundred dollars ($100.00) each; but said capital stock may be increased or
decreased from time to time, in accordance with the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the corporation shall have any preemptive
or preferential right of subscription to any shares of any class of stock of the corporation, whether now or
hereafter authorized, or to any obligations convertible into stock of the corporation, issued or sold, nor
any right of subscription to any thereof other than such, if any, as the Board of Directors, in its
discretion, may from time to time determine and at such price as the Board of Directors may from time to time
fix.
The Association, at any time and from time to time, may authorize and issue debt obligations,
whether or not subordinated, without the approval of the shareholders.
SIXTH. The Board of Directors shall appoint one of its members President of this Association, who
-----
shall be Chairman of the Board, unless the Board appoints another director to be the Chairman. The Board of
Directors shall have the power to appoint one or more Vice Presidents; and to appoint a Cashier and such
other officers and employees as may be required to transact the business of this Association.
The Board of Directors shall have the power to define the duties of the officers and employees of
the Association; to fix the salaries to be paid to them; to dismiss them; to require bonds from them and to
fix the penalty thereof; to regulate the manner in which any increase of the capital of the Association shall
be made; to manage and administer the business and affairs of the Association; to make all By-Laws that it
may be lawful for them to make; and generally to do and perform all acts that it may be legal for a Board of
Directors to do and perform.
SEVENTH. The Board of Directors shall have the power to change the location of the main office to
-------
any other place within the limits of Kansas City, Missouri, without the approval of the shareholders, and
shall have the power to establish or change the location of any branch or branches of the Association to any
other location without the approval of the shareholders but subject to the approval of the Comptroller of the
Currency.
EIGHTH. The corporate existence of this Association shall continue until terminated in accordance
------
with the laws of the United States.
NINTH. The Board of Directors of this Association, or any shareholder owning, in the aggregate, not
-----
less than 25 per cent of the stock of this Association, may call a special meeting of shareholders at any
time. Unless otherwise provided by the laws of the United States, a notice of the time, place, and purpose
of every annual and special meeting of the shareholders shall be given by first-class mail, postage prepaid,
mailed at least ten days prior to the date of such meeting to each shareholder of record at his address as
shown upon the books of this Association.
TENTH. This Association shall, to the fullest extent permissible under The General and Business
-----
Corporation Law of Missouri, (a) indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding, other than an action by or in the
right of the corporation, by reason of the fact that such person is or was a director, officer or employee of
this Association, or is or was serving at the request of this Association as a director, officer or employee
of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including
attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in
connection with such action if he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Association, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful, and (b) indemnify any person who was or is a party
or is threatened to be made a party to any threatened pending or completed action or suit by or in the right
of the Association to procure a judgment in its favor by reason of the fact that such person is or was a
director, officer or employee of the Association or is or was serving at the request of the Association as a
director, officer or employee of another corporation against expenses and amounts paid in settlement actually
and reasonably incurred by him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of
the Association, and indemnification shall be made in the event of negligence or misconduct in the
performance of duties to the corporation only to the extent that the court in which the action or suit was
brought determines upon application that the person is fairly and reasonably entitled to indemnity for such
expenses; provided, however, that no such indemnification shall be available to any person against expenses
or civil money penalties arising from final orders in an administrative proceeding or action instituted by an
appropriate bank regulatory agency assessing such civil money penalties or requiring affirmative action by an
individual or individuals in the form of payments to this Association; and, provided further, that all
advances to an officer, director or employee to indemnify such party against expenses incurred in an action
instituted by the Comptroller of the Currency shall be made subject to reimbursement if a final order is
entered assessing civil money penalties or requiring payments to be made to this Association and before any
advances are made the Board of Directors of this Association in good faith has determined in writing that all
the following conditions are met:
1. The officer, director or employee has a substantial likelihood of prevailing on the merits;
2. In the event the officer, director or employee does not prevail, he or she will have the financial
capability to reimburse this Association; and
3. Payment of expenses by this Association will not adversely affect the Association's safety and
soundness;
and provided further, the Association may purchase insurance covering the liability of its directors,
officers, or employees, and pay the premiums therefor, to the extent authorized under The General and
Business Corporation Law of Missouri, except that any such insurance shall exclude insurance coverage for a
formal order assessing civil money penalties against a bank director or employee.
ELEVENTH. These Articles of Association may be amended at any regular or special meeting of the
--------
shareholders by the affirmative vote of the holders of a majority of the stock of this Association, unless
the vote of the holders of a greater amount of stock is required by law, and in that case by the vote of the
holders of such greater amount.
EXHIBIT 2
COPY OF THE CHARTER
EXHIBIT 3
COPY OF THE AUTHORIZATION OF THE TRUSTEE
TO EXERCISE CORPORATE TRUST POWERS
BY-LAWS OF
COMMERCE BANK, NATIONAL ASSOCIATION
KANSAS CITY, MISSOURI
BY-LAWS OF
COMMERCE BANK, NATIONAL ASSOCIATION
KANSAS CITY, MISSOURI
ARTICLE I
STOCKHOLDERS' MEETING
Section 1.1 Stockholders' Annual Meeting. The annual meeting of the stockholders of
----------------------------
this Association for the election of directors and the transaction of other business shall be held
at the offices of the Association in Kansas City, Missouri, on the third Tuesday of February in each
year, and shall be convened by the Chairman of the Board or the President at the hour of ten o'clock
A.M., or in lieu thereof the stockholders may elect such directors and transact such other business
by executing a written document evidencing their unanimous consent thereto and causing such written
document to be filed in the official records of this Association by the Secretary.
Section 1.2 Special Meetings of Stockholders. Special meetings of the stockholders
--------------------------------
may be called by the Chairman of the Board or the President at any time, and shall be called
whenever so directed by resolution of the Board of Directors, or whenever stockholders holding a
majority of the capital stock issued and outstanding, request either of them in writing so to do.
Section 1.3 Notice. Notice of each annual and each special meeting of stockholders
------
shall be given by the Secretary as required by law; provided, that notice of any meeting of
stockholders may be waived by any stockholder executing a written waiver of notice either before,
during or after such meeting. The execution of a document evidencing the unanimous consent of all
stockholders shall constitute the waiver of any notice required for the taking of such action.
Section 1.4 Votes. Each share of stock shall entitle its owner to one vote, and in
-----
case of election for Directors, each stockholder shall have the right to cast as many votes in the
aggregate as shall equal the number of shares held by such stockholder, multiplied by the number of
directors to be elected, and may cast the whole number of votes, in person or by proxy, for one
candidate or distribute them among two or more.
Section 1.5 Proxies. Stockholders may vote at any meeting of the stockholders by
-------
proxies duly authorized in writing; provided, however, that each proxy shall be valid only for the
specific meeting of stockholders specified therein and at any adjournments of such meeting, and,
provided further, that no officer or employee of this Association shall act as proxy. Proxies shall
be dated and shall be filed with the records of the meeting.
ARTICLE II
DIRECTORS
Section 2.1 Board of Directors. The affairs of this Association shall be controlled
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and managed by a Board of Directors (hereinafter referred to as the "Board") consisting of not
less than five nor more than twenty-five shareholders, the exact number within such minimum and
maximum limits to be fixed and determined from time to time by resolution of a majority of the
full Board or by resolution of the shareholders at any meeting thereof; provided, however, that a
majority of the full Board may not increase the number of directors to a number which: (i)
exceeds by more than two the number of directors last elected by shareholders where such number
was fifteen or less; and (ii) exceeds by more than four the number of directors last elected by
shareholders where such number was sixteen or more, but in no event shall the number of directors
exceed twenty-five.
In addition the Board may appoint, from time to time, one or more Advisory Directors to serve in
advisory capacities only without the power of final decision in matters concerning the business of this
Association; and the Board delegates to the Chairman, Vice Chairman or President the power and authority to
appoint, from time to time, one or more Advisory Directors to serve in advisory capacities in the various
market regions of this Association and to establish compensation for such Advisory Directors.
Advisory Directors shall be subject to the same requirements relating to retirement as other
directors. Advisory Directors may also serve in an advisory capacity on any committee; provided, that an
Advisory Director may not fill any committee position which, according to these By-Laws, must be filled by a
regular member of the Board.
Section 2.2 Retirement of Directors. No person shall be elected a director of this Association
-----------------------
who shall have attained the age of 70 years, and each person serving as a director of this Association upon
attaining the age of 70 years shall be deemed to have submitted his resignation as a director of this
Association with such resignation to become effective on the day such director attains the age of 70 years.
Notwithstanding the foregoing, a director who is also an officer of this Association shall retire from the
Board on the date he shall resign, retire or otherwise terminate his services as an officer of this
Association. The election or re-election by mistake or otherwise of a director in violation of the aforesaid
policy shall not, ipso facto, void such election or re-election or nullify any actions such person might take
as a director.
Section 2.3 Board Meetings. Regular meetings of the Board shall be held at the office of the
--------------
Association in Kansas City, Missouri, or such other place as the Board shall determine, either within or
without the State of Missouri at the hour of 9:00 in the morning, on the second Monday of each month, if not
a legal holiday, and if the same be a legal holiday, then on the first day following which is not a legal
holiday. No notice shall be required for any such regular monthly meetings of the Board, and any and all
business may be transacted thereat. Meetings of the Board or any Committee of the Board may be conducted in
a manner such that members of the Board may participate by means of conference video or similar
communications equipment whereby all persons participating in the meeting can see and hear each other, and
participation in this manner shall constitute presence in person at the meeting.
At the first regular meeting of the Board following a stockholders meeting at which directors are
elected, the Board shall first proceed with the organization of the new Board and shall elect and appoint
such officers as these By-Laws or the Board may prescribe.
Section 2.4 Special Board Meetings. Special meetings of the Board may be held at any time on
----------------------
the call of the Chairman of the Board, the Chairman of the Executive Committee, if one be elected, or the
President, or any three (3) directors.
Section 2.5 Notice of Board Meetings. While no notice shall be required for any regular
------------------------
meeting of the Board, nevertheless, the Secretary, for the information of the directors, shall mail to each
director a written or printed notice specifying the time and place of such meeting, addressed to him at his
last known business address (postage prepaid), not less than twenty-four (24) hours before the hour fixed for
the meeting. Except in the case of special meetings called by reason of emergency, as hereinafter provided,
notice of the time and place of special meetings shall be given by the Secretary, in writing, delivered to,
or by telephone message communicated to, or by prepaid telegram deposited in the telegraph office at Kansas
City, Missouri, addressed to each director not less than twenty-four (24) hours before the hour fixed for the
meeting. Such notices and communications may be addressed to or communicated to such director at his last
known place of business or residence, and shall be sufficient if delivered to, addressed to, or communicated
to, such place of business or residence. If in the opinion of the Chairman of the Board, or the President,
and of three directors, the matters to be presented at such special meeting are so urgent in their character
as to constitute an emergency requiring a shorter notice, and they shall so certify in writing, notice of
such meeting may be given in the same manner as hereinbefore provided, but shall be sufficient if given at
least one (l) hour before the hour fixed for the meeting. Unless otherwise indicated in the notice thereof,
any and all business may be transacted at a special meeting.
Section 2.6 Quorum. A majority of the directors shall constitute a quorum at any meeting,
------
except when otherwise provided by law, but a lesser number may adjourn any meeting from time to time and the
meeting may be held, as adjourned, without further notice.
Section 2.7 Vacancies. When any vacancy occurs among the directors the remaining members of
---------
the Board, in accordance with the laws of the United States, may appoint a director to fill such vacancy at
any regular meeting of the Board or at a special meeting called for that purpose.
Section 2.8 Compensation of Directors. The compensation of Directors and Advisory Directors of
-------------------------
this Association for services shall be established by the Board; provided that no such compensation shall be
paid to any director who shall at the time be receiving a salary from the Association, the parent of the
Association or any other subsidiary of the parent, as an officer thereof, without express order from the
Board.
ARTICLE III
COMMITTEES
Section 3.1 Executive Committee. The Executive Committee shall consist of five (5) directors,
-------------------
of whom the Chairman of the Board, the Chairman of the Executive Committee, if one be so elected, and the
President shall be members and such other members of the Board as may be appointed, from time to time, by the
Chairman of the Board with the approval of the Board.
The Executive Committee shall have, and exercise, all the powers of the Board during the intervals
between meetings of the Board, including the power to control the conduct of the Association's business, and
full power to appoint committees and prescribe their duties, and to direct the actions of all officers,
agents and employees of the Association.
The Executive Committee shall meet at the office of the Association on such days and at such hour as
meetings of such Committee may be called, from time to time, by any three members thereof, or by the Chairman
of the Executive Committee, the Chairman of the Board, or the President. Notices of meetings shall be given
in the same manner as is provided for in the case of special emergency meetings of the Board. Three (3)
members of the Executive Committee shall constitute a quorum for the transaction of business. Unless
otherwise indicated in the notice thereof, any and all business may be transacted at any meeting of the
Committee.
Minutes of the meetings of the Executive Committee shall be recorded in chronological order in the
same Minute Book of the Association in which the minutes of the meetings of the stockholders and of the Board
are recorded, and shall be approved at the next succeeding meeting of the Board as the report of that
committee to the Board, together with any special report that said Committee may wish to make to the Board
not contained in said minutes.
Section 3.2 Other Committees. From time to time the Board may create such other committees,
----------------
consisting of such persons, as the Board may determine to be necessary or desirable and may fix the powers
and duties of any such committee.
Section 3.3 Compensation of Committee Members. The compensation of committee members for
---------------------------------
service shall be established by the Board for each meeting attended; provided, that no such compensation
shall be paid to any committee member who shall at the time be receiving a salary from the Association, the
parent of the Association or any other subsidiary of the parent, as an officer thereof, without express order
from the Board.
ARTICLE IV
OFFICERS
Section 4.1 Executive Officers. The executive officers of this Association shall be the Chairman
------------------
of the Board, the Vice Chairman of the Board, if one or more is so elected, the Chairman of the Executive
Committee, if one be so elected, the President, the Executive Vice Presidents and the Secretary. Any person
may hold two or more offices except the offices of President and Secretary.
Section 4.2 Chairman of the Board. The Board shall elect one of its members to be Chairman of
---------------------
the Board. He shall preside at all meetings of the Board and shall supervise the establishment of policies
adopted or approved by the Board. He shall have general executive powers, including, by way of illustration,
the power to fix remuneration of officers, agents and employees; to employ and dismiss any officer, agent or
employee; and to assign officers, agents and employees to duties in the various areas of the Association, as
well as the specific powers conferred by these By-Laws and shall also have and may exercise such further
powers and duties as may from time to time be conferred upon, or assigned to him by the Board.
Section 4.3 Vice Chairman of the Board. The Board may elect one or more of its members to the
--------------------------
office of Vice Chairman of the Board. In the absence of the Chairman, any Vice Chairman may preside at any
meeting of the Board. The Vice Chairman of the Board shall assist the Chairman of the Board in establishing
policies adopted or approved by the Board. A Vice Chairman of the Board shall have such general executive
powers as may be assigned by the Chairman as well as specific powers conferred by these By-Laws, and shall
also have and may exercise such further powers and duties as may from time to time be conferred upon or
assigned to him by the Board.
Section 4.4 Chairman of the Executive Committee. The Board may elect one of its members to the
-----------------------------------
office of Chairman of the Executive Committee, and such officer shall preside over all meetings of the
Executive Committee. In the absence of the Chairman or any Vice Chairman of the Board, the Chairman of the
Executive Committee shall preside at any meeting of the Board. The Chairman of the Executive Committee shall
have such general executive powers as may be assigned by the Chairman as well as specific powers conferred
upon or assigned to him by the Board.
Section 4.5 President. The Board shall elect one of its members to be President of the
---------
Association. In the absence of the Chairman, any Vice Chairman, or Chairman of the Executive Committee, the
President shall preside at any meeting of the Board. The President shall have such general executive powers
as may be assigned by the Chairman, and shall have and may exercise any and all other powers and duties
pertaining by law, regulation, or practice, to the office of President, or imposed by these By-Laws, and
shall also have and may exercise such further powers and duties as may from time to time be conferred upon or
assigned to him by the Board.
Section 4.6 Vice President. The Board shall elect one or more Vice Presidents and may classify
--------------
one or more of such Vice Presidents so elected as Executive Vice President, Senior Vice President or
otherwise as the Board may deem appropriate. The office of Executive Vice President shall be deemed
executive offices of the Association and the persons holding such office shall be authorized to participate
in the major policy making functions of the Association and shall additionally have such powers and duties as
imposed by the By-Laws or assigned or conferred from time to time by the Board, the Chairman of the Board, a
Vice Chairman or the President. Each Executive Vice President shall have and may exercise any and all powers
and duties pertaining to the office of Executive Vice President as imposed by these By-Laws and shall also
have and may exercise such further powers and duties as may from time to time be conferred upon or assigned
to him by the Board, the Chairman of the Board, a Vice Chairman or the President.
Section 4.7 Secretary. The Board shall elect a Secretary (who may also be designated as
---------
Cashier) who shall be the Secretary of the Board and of the Association. He shall attend the meetings of
stockholders, the Board, and the Executive Committee and keep minutes of said meetings and shall have custody
of the corporate records of the Association. He shall have custody of the seal of the Association and shall
have authority to affix the same to any instrument executed on behalf of the Association and also to attest
the same. He shall also attend to the giving of all notices required by these By-Laws to be given and shall
have and may exercise any and all other powers and duties pertaining by law, regulation or practice or
imposed by these By-Laws or as may be assigned to him, from time to time, by the Board. The Board may elect
one or more Assistant Secretaries, from time to time, as may appear to be Board to be required or desirable
to transact the business of the Association.
Section 4.8 General Counsel. The Board shall elect a General Counsel who shall have charge of
---------------
the legal business of the Association and shall appear or provide for proper appearances for the Association
in suits and proceedings to which it is a party. He shall advise the Board, Executive Committee, Chairman of
the Board, President and other officers of the Association concerning the affairs of the Association when by
them requested. He shall also have such other powers and duties as may be imposed by these By-Laws.
Section 4.9 Controller. The Board shall elect a Controller who shall receive and take care of
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all monies, securities and evidences of indebtedness belonging to the Association, keep full and complete
accounts of receipts and disbursements, and make reports thereof to the Executive Committee and the Board as
often as may be requested. He shall, under the direction of the Chairman of the Board, a Vice Chairman, or
the President, perform such other duties pertinent to his office as they may require.
Section 4.10 Other Officers. The Board may also elect, from time to time, one or more
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individuals as "Officers" or "Corporate Officers" of this Association and with respect to such Officers or
Corporate Officers, the Board may permit the additional use of community, market, group or division title by
such Officers or Corporate Officers. All such titles above the level of vice president shall be approved by
the Board. All titles of vice president and below shall be conferred according to procedures adopted by the
Director of Human Resources. Such title designation shall not be deemed as conferring any additional
responsibility or authority on any such individual beyond that approved in these By-Laws or by resolution of
the Board.
Section 4.11 Bonds. All officers shall be bonded with such security and approved in such manner
-----
as the Board or the Executive Committee may from time to time direct.
Section 4.12 Tenure of Office. The officers of this Association shall be elected by the Board
----------------
annually at the annual meeting of the Board and such officers as shall be elected to such offices shall
continue in office for one year and until their successors shall be elected, unless such officer shall
resign, become disqualified, or be removed. Persons may be elected officers or be promoted to a different
office at any meeting of the Board; provided, that such person so elected shall continue in office only until
the next annual meeting of the Board at which all officers are to be elected or re-elected, unless any such
person shall resign, become disqualified, or be removed. The Board shall have the power to remove any
officer at any time and, in addition, may designate by resolution, officers who shall have the authority to
dismiss any officer, agent or employee.
ARTICLE V
POWERS AND DUTIES OF OFFICERS
Section 5.1 Representation. The Chairman of the Board, any Vice Chairman, the President, the
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General Counsel, and such other officer or officers of the Association as may be empowered so to do by the
Board, or any one of them, shall have power to act for, appear in behalf of, and represent this Association
before all Departments and Courts of the United States of America, and any State, Territory or Possession
thereof, and to execute general or special powers of attorney for litigation in favor of lawyers, solicitors,
agents, or any other legal representatives, granting to them such powers and authorization, whether ordinary
or extraordinary, and with or without limitation, which any such officer may deem advisable, including the
power to settle in or out of court, or to submit to arbitrators or other adjustment, any question in which
this Association may be interested; and to employ counsel and direct the taking of any legal action in
reference to any of the foregoing, or any other matter or thing touching the interest of the Association.
Section 5.2 Real Estate Conveyances. All transfers and conveyances of real estate, including
-----------------------
releases of mortgages, deeds of trust and other real estate interests held, or purportedly held, by the
Association, may without any further order of the Board be executed and delivered by the Chairman of the
Board, any Vice Chairman, the President, or any Executive Vice President and such other Officers of the
Association as the Board, by resolution, may appoint, sealed with the corporate seal of the Association and,
if required, attested by the Secretary or one of the Assistant Secretaries of the Association.
Section 5.3 Voting of Securities. Unless otherwise ordered by the Board or the Executive
--------------------
Committee, the Chairman of the Board, any Vice Chairman, the President, any Executive Vice President, or such
other Officers of this Association as the Board, by resolution, shall appoint, shall each have full power and
authority in behalf of the Association to attend, and to act and to vote at any meeting of the stockholders
of any corporation in which the Association may hold stock, in its own capacity or in any fiduciary capacity,
and in connection with such meeting each of said officers shall possess and may exercise in behalf of the
Association any and all rights and powers incident to the ownership of such stock, including the power to
sign proxies therefor; provided, that any proxy granted with respect to stock held in a fiduciary capacity
shall be limited to a single meeting and shall either be limited to voting for trustees or directors or shall
direct how such proxy holder shall vote.
Section 5.4 Foreclosure of Collateral. The Chairman of the Board, any Vice Chairman, the
-------------------------
President, and any Executive Vice President, and such other Officers of this Association as the Board, by
resolution, shall appoint, shall each have power and authority for and on behalf of this Association to
request, order or direct the foreclosure of any mortgage, deed of trust or other security agreement in favor
of the Association held or owned by the Association (or held by this Association in trust) securing a loan or
loans or other obligations and to exercise any or all of the options and powers inuring to this Association
under the provisions of such mortgages, deeds of trust or security agreements or under the terms of the note
or notes thereby secured, including the power and authority to appoint and designate a successor trustee or
trustees as substitutes for the trustee or trustees named in any such mortgage or deed of trust.
Section 5.5 Refusal to Serve as Trustee. The Chairman of the Board, any Vice Chairman, the
---------------------------
President, and any Executive Vice President, or such Officers as the Board, by resolution, shall appoint,
shall each have power and authority to act for the Association in refusing or declining to act as trustee
under any mortgage or deed of trust securing a loan on real or personal property in which this Association is
named or designated as trustee, and/or to resign as such trustee, and to make, execute and deliver in the
name of, and for and in behalf of the Association, appropriate instruments, in writing, evidencing such
refusal or declination to so act or such resignation.
Section 5.6 Authentication of Securities. The Chairman of the Board, any Vice Chairman, the
----------------------------
President, any Executive Vice President, or such Officers as the Board, by resolution shall approve, shall
each have authority to countersign or authenticate bonds or certificates on behalf of this Association as
Trustee, and to sign, in behalf of this Association as Trustee, authentications or certifications of this
Association as Trustee under any mortgage, deed of trust or other agreement securing an issue of bonds,
debentures, notes or other obligations of any corporation, association or individual, or as registrar or
transfer agent, and also certificates of deposit for stock, bonds, debentures, notes or other obligations,
interim certificates and trust certificates. The Chairman of the Board, any Vice Chairman, the President,
any Executive Vice President, and such Officers as the Board, by resolution, shall appoint, or the Secretary
and any Assistant Secretary shall each have authority to countersign or authenticate bonds or certificates on
behalf of this Association where this Association is the direct purchaser of the issue and to execute any
closing documents required for the purchase of such bonds.
Section 5.7 Trust Division. The Chairman of the Board shall assign an Officer who shall have
--------------
and may exercise, subject to the control of the Chairman, a Vice Chairman or the President, general
supervision over the Trust Division. Such Officer together with such other Officers designated by the Board
and assigned to the Trust Division and each of them, may represent the Association in any of the business
of said division. All securities and funds held by the Association in a fiduciary capacity and the accounts
of each trust or other fiduciary relationship shall be held separate and apart from those of every other and
entirely separate and apart from the assets of the Association, and such securities shall be subject to the
joint control of two Officers or, if designated by the Officer having general supervision of the Trust
Division, employees of the Trust Division.
Section 5.8 Trusts. The Chairman of the Board, any Vice Chairman, the President, any Executive
------
Vice President, the Officer having general supervision of the Trust Division, or such other Officers as the
Board may designate within the Trust Division shall each have authority, for and on behalf of this
Association, to accept or reject any and all trusts or other fiduciary duties or responsibilities which may
be offered to this Association, and in connection therewith to execute, on behalf of this Association, all
trust agreements or other appropriate instruments and the Secretary, or any Assistant Secretary of this
Association, is authorized to affix the seal of this Association to any such trust agreement or other
instrument which has been duly signed by any such officer.
Section 5.9 Substitution of Attorney-in-Fact. Whenever this Association has been, or may be
--------------------------------
appointed Attorney-in-Fact, with power of substitution in and about the transfer of shares of capital stock,
bonds or other instruments commonly referred to as securities of any corporation or other entity, the
Chairman of the Board, any Vice Chairman, the President, or any Executive Vice President or such other
Officers as the Board shall, by resolution, designate, may substitute, by a proper written instrument, an
attorney-in-fact to act in the place and stead of this Association in and about such transfer.
Section 5.10 Purchase or Transfer of Securities. The Chairman of the Board, any Vice Chairman,
----------------------------------
the President, and any Executive Vice President, the Controller or such other Officers as the Board shall, by
resolution, designate, shall each have authority for and in behalf of the Association, and in its name, to
sell, assign and transfer, or to purchase or otherwise acquire, directly or through a cash account of this
Association established or maintained with a brokerage firm selected by such person, any and all shares of
the capital stock, bonds, or other instruments commonly referred to as securities, and notes, mortgages and
deeds of trust issued by any corporation or other entity and held or to be held by this Association in its
own capacity or in any fiduciary capacity; and the Chairman of the Board, any Vice Chairman or the President
may designate, in writing, from time to time, such other officers or employees as shall be authorized to
exercise the powers granted by this Section.
Section 5.11 Banking Relationships. The Chairman of the Board, any Vice Chairman and the
---------------------
President shall each have authority for and in behalf of the Association to designate from time to time
institutions with which this Association may maintain checking or other depository accounts, safekeeping
accounts, clearing accounts or such other form of account as may be deemed necessary or appropriate for the
conduct of the Association's business, whether any such account shall be in the name of this Association or
in the name of this Association in any custodial or fiduciary capacity, and to designate from time to time
such individuals, who may be officers or employees of this Association, as shall be authorized to effect
transactions with respect thereto, and with respect to any and all accounts or transactions with the Federal
Reserve Bank , including, without limitation, the signing of checks, drafts or other orders with respect to
any depository account to effect the deposit or withdrawal of funds, securities, instruments or other
documents held in or subject to any such account, including delivery instructions with respect to any
safekeeping, clearing or other form of account, and any such transactions as may be effected by a designated
individual shall include authority to effect transfers of funds, securities, instruments or other documents
subject to any such account by wire or telephone instruction.
ARTICLE VI
STOCK
Section 6.1 Stock Certificates--Transferred. The capital stock of this Association shall be
-------------------------------
represented by certificates signed by the Chairman of the Board, any Vice Chairman, the President, or any
Executive Vice President, and attested by the Secretary or an Assistant Secretary, with the corporate seal
affixed, and shall be transferable only on the books of the Association, in person or by attorney duly
authorized according to law; and when stock is transferred, the certificate therefor shall be returned to the
Association and canceled, and new certificate issued.
Section 6.2 Stockholders Recognized. Until stock shall be transferred, as provided in Section
-----------------------
6.l, no person shall be recognized by this Association as the owner of said stock, except the person to whom
the same was issued, and in whose name the same stands on the books of the Association, except as provided by
law in case of executor, administrator, guardian or trustee.
Section 6.3 Record Date. With respect to each meeting of stockholders, each declaration and
-----------
payment of a dividend or distribution, or each declaration and grant of allotment of rights, the Board may
fix a date preceding the date on which such event affecting the rights of any stockholder shall occur as a
record date for the determination of the stockholders entitled to notice of and to vote at any such meeting
or entitled to receive payment of any such dividend or to any such allotment of rights or to exercise the
rights in respect of any change, conversion or exchange of capital stock, and in such case such stockholders
and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to
notice of and to vote at such meeting or to receive payment of such dividend or to receive such allotment of
rights or to exercise such rights, as the case may be, notwithstanding any transfer of any stock on the books
of the Association after any such record date fixed as aforesaid. Any such date as may be fixed by the Board
as the record date shall not precede the date of any meeting of stockholders, the date for the payment of any
dividend or the date for allotment of rights or the date when any change, conversion or exchange of capital
stock shall go into effect by more than fifty days. If the Board shall not have set a record date for the
determination of its stockholders entitled to participate in the event for which a record date be
established, the date on which notice of the meeting is mailed or the date such dividend is declared or other
right announced shall be the record date for such determination of stockholders so entitled to participate.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Fiscal Year. The fiscal year of this Association shall end on the 31st day of
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December in each year, and at the close of each fiscal year it shall be the duty of the Board to cause a
complete and accurate statement of the financial condition of the Association to be made forthwith from the
books thereof, a copy of which shall be submitted to the stockholders at the annual meeting.
Section 7.2 Seal. The Association shall have a corporate seal which shall have inscribed
----
around the upper circumference thereof "Commerce Bank" and around the lower circumference thereof "National
Association" and elsewhere thereon shall bear the word "Seal".
Section 7.3 Business Hours. The main office and all other facilities of the Association shall
--------------
be open for the transaction of business on such days and during such hours as the Board or the Executive
Committee may in its discretion determine. The Board of Directors, or the Executive Committee, however, may
in its discretion change said hours and days, or close the office entirely, whenever the interests of the
Association will be best served thereby, or circumstances shall render the same proper.
Section 7.4 Amendments. The Board shall have the power to make, alter, amend, or repeal the
----------
By-Laws of this Association from time to time.
Exhibit 5
COPIES OF INDENTURE
Exhibit 5
Copies of the Indentures referred to in Item 4 hereof have heretofore been filed with the Securities and
Exchange Commission under the Securities Act of 1933 and the Securities Exchange Act of 1934 as Exhibits to
the Registration Settlements of the Farmland Industries, Inc. The copies of Indentures listed in this
Exhibit 5 hereof are hereby incorporated by reference to the Exhibits to the Registration Statements which
are listed as items (a) through (g) as follows:
(a) Trust Indenture dated November 8, 1984.
(Form S-1, No. 2-94400 effective December 31, 1984).
5-Year Subordinated Capital Investment Certificates
(b) Trust Indenture dated November 8, 1984.
(Form S-1, No. 2-94400 effective December 31, 1984).
10-Year Subordinated Capital Investment Certificates
(c) Trust Indenture dated November 8, 1984.
(Form S-1, No. 2-94400 effective December 31, 1984).
20-Year Subordinated Capital Investment Certificates
(d) Trust Indenture dated November 8, 1984
(Form S-1, No. 2-9440 effective December 31, 1984)
10-Year Subordinated Monthly Income Capital Investment Certificates
(e) Trust Indenture dated November 8, 1984
(Forms S1, No. 2-94400 effective December 31, 1984)
10-year IRA Certificates
(f) Trust Indenture dated November 11, 1985
(Form S-1, No. 33-1970, effective December 3, 1985)
5-Year Subordinated Monthly Income Capital Investment
Certificates
(g) Subordinated Indenture dated as of December 4, 1997
(Form S-1, No. 333-40759, effective December 15, 1997)
[The remainder of this page was intentionally left blank]
Exhibit 6
CONSENTS OF THE TRUSTEE REQUIRED
BY SECTION 321(B) OF THE ACT
Exhibit 6
CONSENT OF THE TRUSTEE
----------------------
Pursuant to Section 321(b) of the Trust Indenture Act, Commerce Bank, National Association,
hereby consents to the release of reports of examinations by Federal, State, Territorial or District
authorities to the Securities and Exchange Commission upon request therefor. Dated this 31st day of
------
October, 2001.
-------------
COMMERCE BANK,
NATIONAL ASSOCIATION, Trustee
By: /s/ William E.
-----------------------------------------------------------
Ekey
-------------------------------------------------------
William E. Ekey
Vice-President
EXHIBIT 7
COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS
OF THE SUPERVISING EXAMINING AUTHORITY
COMMERCE BANK, N.A. (MISSOURI)
STATEMENT OF CONDITION
SEPTEMBER 30, 2001
ASSETS
----------------------------------------------------------------------------------------------------------------
Loans, less allowance for loan losses $ 6,663,931,000
Investment Securities:
US Government and Federal Agency Obligations $ 540,822,000
Obligation of States and Political Subdivisions 16,465,000
Other Securities 1,534,119,000 2,091,406,000
--------------------
Federal Funds Sold and Securities Purchased Under
Agreement to Resell 306,850,000
Trading Account Securities 56,335,000
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Net Earning Assets $ 9,118,522,000
Cash and Due From Banks 788,137,000
Land, Buildings, and Equipment 242,182,000
Customer's Acceptance Liability 4,607,000
Other Assets 210,099,000
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Total Assets $ 10,363,547,000
==========================
LIABILITIES AND STOCKHOLDER'S EQUITY
----------------------------------------------------------------------------------------------------------------
Deposits:
Demand $1,154,389,000
Savings and Interest Bearing Demand 4,798,940,000
Time 2,282,772,000 $ 8,236,101,000
--------------------
Federal Funds Purchased and Securities Sold Under
Agreements to Repurchase 697,858,000
Accrued Expenses and Other Liabilities 593,317,000
Acceptances Outstanding 4,607,000
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Total Liabilities $ 9,531,883,000
Minority Interest in Consolidated Subsidiaries $ 110,000
Stockholders' Equity:
Capital Stock 10,000,000
Capital Surplus 551,606,000
Undivided Profits 269,948,000
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Total Stockholder's Equity 831,554,000
--------------------------
Total Liabilities and Stockholders' Equity $ 10,363,547,000
==========================