<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 13, 1998
REGISTRATION NO. 333-47707
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
LEXMARK INTERNATIONAL GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 22-3074422
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
---------------
ONE LEXMARK CENTRE DRIVE
LEXINGTON, KENTUCKY 40550
(606) 232-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
VINCENT J. COLE, ESQ.
LEXMARK INTERNATIONAL GROUP, INC.
ONE LEXMARK CENTRE DRIVE
LEXINGTON, KENTUCKY 40550
(606) 232-2700
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE
OF AGENT FOR SERVICE)
COPIES TO:
<TABLE>
<CAPTION>
PAUL S. BIRD, ESQ. DAVID B. HARMS, ESQ. KEITH F. HIGGINS, ESQ.
<S> <C> <C>
DEBEVOISE & PLIMPTON SULLIVAN & CROMWELL ROPES & GRAY
875 THIRD AVENUE 125 BROAD STREET ONE INTERNATIONAL PLACE
NEW YORK, NEW YORK 10022 NEW YORK, NEW YORK 10004 BOSTON, MASSACHUSETTS 02110
(212) 909-6000 (212) 558-4000 (617) 951-7000
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with a dividend or
interest reinvestment plans, check the following box: [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
---------------
CALCULATION OF REGISTRATION FEE
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- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
AMOUNT PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE(3)
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<S> <C> <C> <C> <C>
Class A Common Stock, par value
$.01 per share(4)................... 8,475,035 $43.56 $369,172,524.60 $108,906
</TABLE>
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- -------------------------------------------------------------------------------
(1)Includes up to 770,458 shares subject to the Underwriters' over-allotment
options.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933 based on the
average of the high and low prices of the Class A Common Stock as
reported in the consolidated reporting system on March 6, 1998.
(3) Includes $99,006 paid on March 10, 1998.
(4)Includes the Series A Junior Participating Preferred Stock purchase rights
associated with the Class A Common Stock.
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 THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
EXPLANATORY NOTE
This Registration Statement contains two forms of prospectuses: one to be
used in connection with a United States offering (the "U.S. Prospectus") and
one to be used in a concurrent international offering (the "International
Prospectus"). The U.S. Prospectus and the International Prospectus are
identical in all respects except that they contain different front, inside
front, and back cover pages and different descriptions of the plan of
distribution (contained under the caption "Underwriting" in both the U.S.
Prospectus and the International Prospectus), and the International Prospectus
also contains an additional section under the caption "Certain United States
Tax Consequences to Non-United States Holders." Pages for the International
Prospectus are separately designated.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MARCH 13, 1998
7,704,577 SHARES
LEXMARK INTERNATIONAL GROUP, INC.
CLASS A COMMON STOCK
(PAR VALUE $.01 PER SHARE)
-----------
Of the 7,704,577 shares of Class A Common Stock offered, 6,164,577 shares are
being offered hereby in the United States and 1,540,000 shares are being
offered in a concurrent international offering outside the United States. The
public offering price and the aggregate underwriting discount per share will be
identical for both offerings. See "Underwriting". As of April 3, 1998 each
share of Class A Common Stock, including the shares offered hereby, will have
associated with it one right to purchase, under the Company's Rights Agreement,
one one-hundredth of a share of the Company's Series A Junior Participating
Preferred Stock at a stipulated price in certain circumstances relating to
changes in ownership of the Company.
All the shares of Class A Common Stock are being sold by the Selling
Stockholders. See "Selling Stockholders". The Company will not receive any of
the proceeds from the sale of the shares. In addition, the Company will
repurchase from certain of the Selling Stockholders 2,000,000 shares of Class A
Common Stock less any shares sold pursuant to the over-allotment options
referred to below, at a price per share described herein. See "Certain
Transactions and Relationships".
The last reported sale price of the Class A Common Stock, which is listed
under the symbol "LXK", on the New York Stock Exchange on March 12, 1998 was
$44.94 per share. See "Price Range of Class A Common Stock and Dividend
Policy".
SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR CERTAIN CONSIDERATIONS RELEVANT TO
AN INVESTMENT IN THE CLASS A COMMON STOCK.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-----------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO SELLING
OFFERING PRICE DISCOUNT(1) STOCKHOLDERS(2)
-------------- ------------ -------------------
<S> <C> <C> <C>
Per Share....................... $ $ $
Total(3)........................ $ $ $
</TABLE>
- -----
(1) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933. See "Underwriting".
(2) Expenses of approximately $55,000 and $900,000 are payable by the Company
and the Selling Stockholders, respectively, in connection with the
offerings.
(3) The Selling Stockholders have granted the U.S. Underwriters an option for
30 days to purchase up to an additional 616,458 shares at the public
offering price per share, less the underwriting discount, solely to cover
over-allotments. The Selling Stockholders have granted the International
Underwriters a similar option with respect to an additional 154,000 shares
as part of the concurrent international offering. If such options are
exercised in full, the total initial public offering price, underwriting
discount and proceeds to Selling Stockholders will be $ ,
$ and $ , respectively. See "Underwriting".
-----------
The shares offered hereby are offered severally by the U.S. Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that the
shares will be ready for delivery in New York, New York, on or about March ,
1998, against payment therefor in immediately available funds.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
SALOMON SMITH BARNEY
-----------
The date of this Prospectus is March , 1998.
<PAGE>
[COLOR PHOTOS OF SELECTED LEXMARK PRODUCTS]
2
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
and Exchange Act of 1934, as amended ( the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices located at Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, 7th
Floor, New York, New York 10048. Copies of such materials may also be obtained
upon written request from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C., 20549, at prescribed rates. The
Commission also maintains a Web Site at http://www.sec.gov. which contains
reports and other information regarding registrants that file electronically
with the Commission. In addition, such material may also be inspected and
copied at the offices of the New York Stock Exchange, Inc. (the "NYSE"), 20
Broad Street, New York, New York, 10005, on which the Class A Common Stock is
listed.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the shares (the "Shares") of its Class A
Common Stock, par value $.01 per share (the "Class A Common Stock"), being
offered hereby. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. Statements made
in this Prospectus as to the contents of any contract, agreement or other
document are not necessarily complete; with respect to each such contract,
agreement or other document filed as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description of the matter
involved, and each such statement shall be deemed qualified in its entirety by
such reference. For further information with respect to the Company and the
Shares, reference is hereby made to the Registration Statement.
----------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant to
the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
2. The description of the Common Stock (as defined herein) of the Company,
which is contained in the Company's Registration Statement on Form 8-A
filed with the Commission on October 27, 1995, including any amendments
or reports filed for the purpose of updating such description.
3. The description of certain preferred stock purchase rights that have
attached to the Common Stock (as defined herein), which is contained in
the Company's Registration Statement on Form 8-A filed with the
Commission on February 27, 1998, including any amendments or reports
filed for the purpose of updating such description.
4. All other documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offerings of the Shares.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any or all of the
documents which are incorporated herein by reference, other than exhibits to
such information (unless such exhibits are specifically incorporated by
reference into such documents). Requests should be directed to the Company,
One Lexmark Centre Drive, Lexington, Kentucky 40550, Attention: Office of the
Secretary, telephone (606) 232-2700.
----------------
3
<PAGE>
Any statement contained in a document or a portion thereof which is
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed document
or portion thereof which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any statement so modified shall
not be deemed to constitute a part of this Prospectus except as so modified,
and any statement so superseded shall not be deemed to constitute part of this
Prospectus.
----------------
CERTAIN PERSONS PARTICIPATING IN THE OFFERINGS MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE CLASS A COMMON
STOCK, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS
IN SUCH SECURITIES AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE
OFFERINGS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING".
4
<PAGE>
Lexmark International Group, Inc. ("LIG") is a Delaware corporation that has
as its only significant asset all the outstanding common stock of Lexmark
International, Inc., a Delaware corporation ("Lexmark International").
Hereinafter, "the Company" and "Lexmark" will refer to LIG, or to LIG and
Lexmark International, including its subsidiaries, as the context requires.
Unless otherwise indicated, all information set forth in this Prospectus
assumes no exercise of the over-allotment options to be granted to the
Underwriters by the Selling Stockholders. References herein to the "Common
Stock" refer to the Company's Class A Common Stock and its non-voting Class B
Common Stock, par value $.01 per share (the "Class B Common Stock"), and to
the "IPO" refer to the Company's initial public offering of Class A Common
Stock on November 15, 1995.
THE COMPANY
Lexmark is a global developer, manufacturer and supplier of laser and inkjet
printers and associated consumable supplies for the office and home markets.
Lexmark also sells dot matrix printers for printing single and multi-part
forms by business users. In 1997, revenues from the sale of printers and
associated printer supplies increased 10% from 1996 and accounted for 81% of
total Company revenues of approximately $2.5 billion.
The Company's installed base of printers supports a large and profitable
printer supplies business. Because consumable supplies must be replaced on
average one to three times a year, depending on type of printer and usage,
demand for laser and inkjet print cartridges is increasing at a higher rate
than their associated printer shipments. This is a relatively high margin,
recurring business that management expects to contribute to the stability of
Lexmark's earnings over time.
In addition to its core printer business, Lexmark develops, manufactures and
markets a broad line of other office imaging products which include supplies
for International Business Machines Corporation ("IBM") branded printers,
after-market supplies for original equipment manufacturer ("OEM") products,
and typewriters and typewriter supplies that are sold under the IBM trademark.
In 1997, revenues from the sale of other office imaging products decreased 7%
from 1996, primarily as a result of lower typewriter sales and lower
typewriter and impact printing supplies volume reflecting the continuing
decline of these markets, and accounted for 19% of total Company revenues.
Revenues derived from international sales, including exports from the United
States, represent over half of the Company's revenues. Lexmark's products are
sold in over 150 countries in North and South America, Europe, the Middle
East, Africa, Asia, the Pacific Rim and the Caribbean. As of December 31,
1997, the Company had approximately 8,000 employees worldwide.
The Company's principal executive offices are located at One Lexmark Centre
Drive, Lexington, Kentucky 40550. Telephone: (606) 232-2000.
PRINTERS AND ASSOCIATED SUPPLIES
Lexmark competes primarily in the markets for office desktop laser and color
inkjet printers--two of the fastest growing printer categories. Sales of
office desktop laser and color inkjet printers and their associated supplies
together represented approximately 86% and 87% of Lexmark's total printer and
associated supplies revenues in 1996 and 1997, respectively.
The Company's critical technology and manufacturing capabilities have
allowed Lexmark to effectively manage quality and to reduce its typical new
product introduction cycle times, for example, in the case of laser printers
from 24 months to approximately 12 to 16 months. Management believes its cycle
times are among the fastest in the industry and that these capabilities have
contributed to the Company's success over the last several years.
5
<PAGE>
LASER PRINTERS. Network laser printer growth is being driven by the office
migration from large mainframe computers to local area networks that link
various types of computers using a variety of protocols and operating systems.
This shift has created strong demand for office desktop laser printers with
network connectivity attributes. Laser printers that print at speeds of 11-30
pages per minute ("ppm") are referred to herein as "office desktop" or
"network" printers, while lower-speed (1-10 ppm) laser printers and inkjet
printers are referred to herein as "personal" printers. The Company's laser
printers primarily compete in the office desktop segment, which the Company
believes is one of the fastest growing segments of the laser printer market.
Lexmark develops and owns most of the technology for its desktop laser
printers and consumable supplies, which differentiates the Company from a
number of its major competitors, including Hewlett-Packard Company ("HP")
which purchases its laser engines from third parties. Lexmark's integration of
research and development, manufacturing and marketing has enabled the Company
to design laser printers with features desired by specific customer groups and
has resulted in substantial market presence for Lexmark within certain
industry segments such as banking, retail/pharmacy, automobile distribution
and health care.
INKJET PRINTERS. The color inkjet printer market, the fastest growing
segment of the personal printer market, is expanding rapidly due to growth in
personal computers at home and in business and the development of easy-to-use
color inkjet technology with high quality color and black print capability at
low prices. Based on data from industry analysts, management believes that the
inkjet market grew from 4 million units in 1992 to 33 million units in 1997
and will continue to grow substantially as a result of the increase in the
number of personal computers and as the inkjet market continues to shift from
monochrome to color and as inkjet printers continue to replace low-speed laser
printers. Lexmark introduced its first color inkjet printer using its own
technology in 1994 and has experienced strong sales growth through retail
outlets. The Company has increased its product distribution through retail
outlets, with the number of such outlets worldwide rising from approximately
5,000 retail outlets in 1995 to more than 15,000 in 1996, and remaining
relatively constant during 1997. The Company's ability to increase or maintain
its presence in the retail marketplace with its branded products may be
adversely affected as the Company becomes more successful in its sales and
marketing efforts for OEM opportunities. The Company made substantial capital
investments in its inkjet production capacity in 1995 and 1996 to address the
growing demand for its color inkjet printers.
SUPPLIES. The Company is currently the exclusive source for new print
cartridges for the laser and inkjet printers it manufactures. Management
expects that an increasing percentage of future Company earnings will come
from its consumable supplies business due to the consumer's continual usage
and replacement of cartridges. In 1996, the Company substantially expanded its
inkjet cartridge manufacturing capacity in both North America and Europe.
STRATEGY. Lexmark's laser printer strategy is to target fast growing
segments of the network printer market and to increase market share by
providing high quality, technologically advanced products at competitive
prices. To promote Lexmark brand awareness and market penetration, Lexmark
will continue to identify and focus on customer segments where Lexmark can
differentiate itself by supplying laser printers with features that meet
specific customer needs and represent the best total cost of printing
solution. Management intends to continue to develop and market products with
more functions and capabilities than comparably priced HP printers. The
Company's inkjet printer strategy is to generate demand for the Lexmark color
inkjet printer by offering high-quality products at competitive prices to
retail, business and OEM customers. Management expects that the Company's
associated printer supplies business will continue to grow as its installed
base of laser and inkjet printers increases.
OTHER OFFICE IMAGING PRODUCTS
The Company's other office imaging products category includes many mature
products such as supplies for IBM printers, typewriters and typewriter
supplies and other impact supplies that require
6
<PAGE>
little investment but provide a significant source of cash flow. The Company
introduced its after-market laser cartridges in May 1995 for the large
installed base of a range of laser printers sold by other manufacturers.
Management believes that the potential for an after-market laser cartridge
business is significant. The Company's strategy for other office imaging
products is to pursue the after-market OEM laser supplies opportunity while at
the same time managing its mature businesses for cash flow.
BACKGROUND
LIG was formed in 1990 by Clayton, Dubilier & Rice, Inc., a private
investment firm ("CD&R"), in connection with the acquisition (the
"Acquisition") of IBM Information Products Corporation (renamed Lexmark
International) from IBM. The Acquisition was completed in March 1991. Upon
completion of the Offerings (as defined herein) and the Share Repurchase (as
defined herein), it is currently expected that The Clayton & Dubilier Private
Equity Fund IV Limited Partnership ("C&D Fund IV"), a private investment fund
managed by CD&R, will no longer own any shares of Class A Common Stock.
Since the Acquisition, Lexmark has made a successful transition from being a
division within a large corporation to an independent company with its own
line of Lexmark-branded products, its own sales and marketing relationships
and more efficient development and manufacturing processes. Important
achievements since the Acquisition include reducing cycle time for most new
product announcements by 30% to 50% and achieving a position of technological
leadership for laser printers while reducing debt from $940 million to $75
million as of December 31, 1997.
THE OFFERINGS
The offering of 6,164,577 shares of Class A Common Stock being offered in
the United States (the "United States Offering") and the offering of 1,540,000
shares of Class A Common Stock being offered outside the United States (the
"International Offering") are referred to herein collectively as the
"Offerings". The closing of the International Offering is conditional upon the
closing of the United States Offering, and vice versa.
<TABLE>
<S> <C>
Class A Common Stock offered by the Selling Stockholders.... 7,704,577 shares
U.S. Offering.............................................. 6,164,577 shares
International Offering..................................... 1,540,000 shares
Class A Common Stock to be outstanding after the
Offerings(1)................................................ 68,281,134 shares
NYSE Symbol................................................. LXK
</TABLE>
- --------
(1) Based upon shares outstanding at February 28, 1998. Does not include
7,420,582 shares of Class A Common Stock issuable pursuant to options and
does not give effect to the Share Repurchase.
The Company will not receive any of the proceeds from the sale of Shares in
the Offerings. See "Selling Stockholders".
The Company has agreed to repurchase from certain of the Selling
Stockholders 2,000,000 shares of Class A Common Stock less any shares of Class
A Common Stock sold pursuant to the over-allotment options, at a price per
share equal to the lowest of $44.25 (the closing price of the Class A Common
Stock on the NYSE on March 6, 1998) and the net proceeds per share to the
Selling Stockholders (such repurchase, the "Share Repurchase"). The Share
Repurchase is conditioned upon at least 6,000,000 shares of Class A Common
Stock being sold. See "Certain Transactions and Relationships".
- --------
Lexmark(TM) is a registered trademark of Lexmark International. HP(R) is a
registered trademark of Hewlett-Packard Company. Apple(R) is a registered
trademark of Apple Computer, Inc. Canon(R) is a registered trademark of Canon
Kabushiki Kaisha. IBM(R) is a registered trademark of IBM. Xerox(R) is a
registered trademark of Xerox Corporation.
7
<PAGE>
RISK FACTORS
Prospective investors should consider carefully the following factors
relating to the Company and the Offerings, together with the information and
financial data set forth elsewhere in this Prospectus, prior to making an
investment decision.
COMPETITION
The markets for printers and associated supplies are highly competitive,
especially with respect to pricing and the introduction of new products and
features. The office desktop laser printer market is dominated by HP, which
has a widely recognized brand name and has been estimated to have an
approximate 65% to 70% market share. Several other large manufacturers such as
Canon, Inc. ("Canon"), Apple Computer, Inc. ("Apple"), Xerox Corporation
("Xerox") and IBM also compete in the laser printer market.
The Company's strategy is to target fast growing segments of the network
printer market and to increase market share by providing high quality,
technologically advanced products at competitive prices. This strategy
requires that the Company continue to develop and market new and innovative
products at competitive prices. New product announcements by the Company's
principal competitors, however, can have and in the past have had a material
adverse effect on the Company's financial results. Such new product
announcements can quickly undermine any technological competitive edge that
one manufacturer may enjoy over another and set new market standards for
quality, speed and function. Knowledge in the marketplace about pending new
product announcements by the Company's competitors may also have a material
adverse effect on the Company inasmuch as purchasers of printers may defer
purchasing decisions until the announcement and subsequent testing of such new
products.
In recent years, the Company and its principal competitors, all of which
have significantly greater financial, marketing and technological resources
than the Company, have regularly lowered prices on printers and are expected
to continue to do so. The Company is vulnerable to these pricing pressures
which, if not mitigated by cost and expense reductions, may result in lower
profitability and could jeopardize the Company's ability to increase or
maintain market share and build an installed base of Lexmark printers. The
Company expects that, as it competes more successfully with its larger
competitors, the Company's increased market presence may attract more frequent
challenges, both legal and commercial, from its competitors, including claims
of possible intellectual property infringement.
HP is also the market leader in the personal color inkjet printer market
and, with Canon and Seiko Epson Corporation ("Epson"), has been estimated to
account for approximately 80% to 90% of worldwide personal color inkjet
printer sales. As with laser printers, if pricing pressures are not mitigated
by cost and expense reductions, the Company's ability to maintain or build
market share and its profitability could be adversely affected. In addition,
as a relatively new entrant to the retail marketplace with a less widely
recognized brand name, the Company must compete with HP, Canon and Epson for
retail shelf space for its inkjet printers. The Company's ability to increase
or maintain its presence in the retail marketplace with its branded products
may be adversely affected as the Company becomes more successful in its sales
and marketing efforts for OEM opportunities.
Like certain of its competitors (including Xerox), the Company is a supplier
of after-market laser cartridges for laser printers utilizing certain models
of Canon engines. There is no assurance that the Company will be able to
compete effectively for a share of the after-market cartridge business for its
competitors' base of laser printers. The Company's participation in this
market may have an adverse effect on the Company's relations with certain of
its suppliers. Although Lexmark is currently the exclusive supplier of new
print cartridges for its laser printers, there can be no assurance that other
companies will not develop new compatible cartridges for Lexmark laser
printers. In addition, refill and
8
<PAGE>
remanufactured alternatives for the Company's cartridges are available from
independent suppliers and, although generally offering lower print quality,
compete with the Company's supplies business. As the installed base of laser
and inkjet printers grows and ages, the Company expects competitive refill and
remanufacturing activity to increase.
CHANGING TECHNOLOGIES
To compete effectively in the printer and associated supplies markets, the
Company must continue to introduce new products and features that address the
needs and preferences of its target markets. The printer market is
characterized by short product development cycles that are driven by rapidly
changing technology and consumer preferences as well as declining product
prices. There can be no assurance that the Company will be able to continue to
introduce new competitively priced products, that the market will be receptive
to its new products or features or that its competitors will not introduce
advancements ahead of Lexmark. Furthermore, there can be no assurance that the
Company will have access to new competitive technology to permit it to
introduce new products and features for its target markets. In addition, the
Company must make strategic decisions from time to time as to which new
technologies will produce products in market segments that will experience the
greatest future growth. If the Company is not successful in continuing to
introduce new products in the growing segments of the market, there could be a
material adverse effect on the Company's business and financial results.
OTHER OFFICE IMAGING PRODUCTS
The Company's traditional other office imaging products business includes
consumable supplies for IBM and other OEM products, typewriters and typewriter
supplies. This business accounted for 23%, 22% and 19% of the Company's
revenues in 1995, 1996 and 1997, respectively. Although the Company is less
dependent on revenue and profitability from its other office imaging products
business than it has been historically and intends to focus on the growing
portions of that market, such as the after-market laser cartridge supplies
category, there is no assurance that the Company will be able to compete in
the after-market supplies business effectively or that the declining market
areas in its other office imaging products business will not adversely affect
the Company's operating results.
KEY SUPPLIES AND SUPPLIERS
The Company procures a wide variety of components for the manufacture of its
products, some of which are sourced from preferred suppliers. The Company
generally must place commitments for its projected component needs
approximately three to six months in advance and occasionally faces capacity
constraints when there has been more demand for its printers and associated
supplies than initially projected. Certain finished products, certain print
engines and certain components of the Company's products are only available
from one supplier and should such products, print engines and components not
be available, there can be no assurance that production of the Company's
products would not be disrupted for significant periods of time or that
certain of the Company's products would be available. Such a disruption could
interfere with the Company's ability to manufacture and sell products and
materially adversely affect the Company's financial results.
DEPENDENCE ON KEY PERSONNEL
As is typical of technology based companies, the Company is dependent on
certain key personnel, including senior members of its research and
development staff. The future success of the Company's research and
development efforts depends on its continuing ability to attract and retain
highly qualified technical personnel. Competition for such personnel is
intense, and there can be no assurance that the Company will be successful in
attracting and retaining such personnel. The loss of the services of such key
personnel, or the inability to attract additional qualified personnel, could
have a material adverse effect on the Company's business.
9
<PAGE>
INTERNATIONAL OPERATIONS
Revenues derived from international sales, including exports from the United
States, represent over half of the Company's consolidated revenues, with
European revenues accounting for about 69% of international revenues. While
currency translation has significantly affected international revenues and
cost of revenues, it did not have a material impact on operating income
through 1997. Although the Company manages its net exposure to exchange rate
fluctuations through operational hedges, such as pricing actions and product
sourcing changes, and financial instruments, such as forward exchange
contracts and currency options, there can be no assurances that currency
fluctuations will not have a material impact on operating income in the
future. As the Company's international operations continue to grow, more
management effort will be required to focus on the operation and expansion of
the Company's global business and to manage the cultural, language and legal
differences inherent in international operations. In addition, the Company
believes that international operations in new geographic markets will be less
profitable than operations in U.S. and European markets as a result, in part,
of the higher investment levels for marketing, selling and distribution
required to enter these markets. Although the current economic conditions in
some of the Asian markets may adversely affect the Company's growth in that
region, management does not expect the impact will result in the Company's not
being able to achieve its 1998 operating income growth objective.
INTELLECTUAL PROPERTY RIGHTS
The Company's success depends in part on its ability to obtain patents,
copyrights and trademarks, maintain trade secret protection and operate
without infringing the proprietary rights of others.
As is typical in technology industries, the Company receives notices from
time to time by third parties claiming infringement of certain patent and/or
other intellectual property rights of others. As the Company competes more
successfully with its larger competitors, the Company's increased market
presence may attract more frequent legal challenges from its competitors,
including claims of possible intellectual property infringement. If the
Company were infringing the intellectual property rights of others and were
unable to obtain licenses to use the protected technology, the Company could
incur substantial costs to redesign its products or to defend against
infringement actions. The Company's inability to obtain such licenses on
favorable terms or a finding of infringement could have a material adverse
effect on the Company.
In addition, the Company also relies on trade secrets, technical know-how
and other unpatented proprietary information relating to its product
development and manufacturing activities which it seeks to protect, in part,
through confidentiality agreements. There can be no assurance that these
agreements will not be breached, that the Company would have adequate remedies
for any such breach or that the Company's trade secrets and know-how will not
otherwise become known or independently discovered by others. The Company
could also incur significant expenses in enforcing its intellectual property
rights against others.
RISKS ASSOCIATED WITH ACQUISITION STRATEGY
Part of the Company's business strategy is to expand its business through
the acquisition of related businesses. There can be no assurance that suitable
acquisitions can be accomplished on terms favorable to the Company. Further,
there can be no assurance that the Company will be able to operate profitably
any businesses or other assets it may acquire, effectively integrate the
operations of such acquisitions or otherwise achieve the intended benefits of
such acquisitions.
CERTAIN PROVISIONS RELATING TO CHANGES IN CONTROL
Although the Offerings will not constitute a "change of control", several of
the patent cross-licenses that the Company considers to be material to its
business, including those that permit the
10
<PAGE>
Company to manufacture its current design of laser and inkjet printers and
after-market laser cartridges for OEM printers, terminate as to future
products upon certain "changes of control" of the Company. Similarly, a
trademark license agreement and other agreements entered into by the Company
with IBM permit IBM to terminate those agreements upon certain "changes of
control" of the Company. Although the definition of "change of control" in the
Company's cross-licenses and trademark license agreement vary from agreement
to agreement, generally in order for a "change of control" to occur under such
agreements either (a) more than 50% of the voting stock of the Company must be
acquired by an unaffiliated party which, in some instances, must be engaged in
the business of manufacturing or marketing printers or related products or (b)
a third party must obtain the power to control or direct the affairs of the
Company, either through the ownership of voting stock or otherwise, except
that a change of control can be deemed to occur, in very limited
circumstances, upon an acquisition of substantially less than 50% of the
Company's voting shares. Such provisions could discourage potential acquirors
from making a bid to acquire control of the Company. In addition, the
Company's Rights Agreement may also have the effect of making an acquisition
of the Company more difficult.
11
<PAGE>
PRICE RANGE OF CLASS A COMMON STOCK AND DIVIDEND POLICY
Since November 15, 1995, as part of the Company's IPO, the Class A Common
Stock has been traded on the NYSE under the symbol "LXK". The following table
sets forth the high and low reported sale prices for the Class A Common Stock
as quoted by the NYSE for the periods indicated.
<TABLE>
<CAPTION>
MARKET PRICE
------------- ---
<S> <C> <C> <C>
HIGH LOW
------ ------
1995
Fourth Quarter (from November 15, 1995).................... $22.38 $15.50
1996
First Quarter.............................................. $23.25 $16.00
Second Quarter............................................. $23.13 $17.88
Third Quarter.............................................. $20.88 $13.38
Fourth Quarter............................................. $27.75 $18.88
1997
First Quarter.............................................. $29.63 $22.00
Second Quarter............................................. $30.50 $19.13
Third Quarter.............................................. $36.31 $26.88
Fourth Quarter............................................. $38.00 $29.56
1998
First Quarter (through March 12, 1998)..................... $45.13 $35.00
</TABLE>
The last reported sale price for the Class A Common Stock by the NYSE on
March 12, 1998 was $44.94 per share. As of December 31, 1997 the Company had
approximately 67,539,935 shares of Class A Common Stock outstanding (excluding
6,438,114 shares held in treasury) and 410,537 shares of Class B Common Stock
outstanding. As of December 31, 1997, there were approximately 1,207 holders
of record of the Class A Common Stock, and five holders of record of the Class
B Common Stock.
Other than the dividend to stockholders of record on April 3, 1998 of one
right to purchase under certain circumstances one one-hundredth of a share of
Series A Junior Participating Preferred Stock, the Company has never declared
or paid any dividends on the Class A Common Stock and has no current plans to
pay cash dividends on the Class A Common Stock. The payment of any future cash
dividends will be determined by the Board of Directors in light of conditions
then existing, including the Company's earnings, financial condition and
capital requirements, restrictions in financing agreements, business
conditions, certain corporate law requirements and other factors.
The Company is a holding company and thus its ability to pay cash dividends
on the Class A Common Stock depends on the Company's subsidiaries' ability to
pay cash dividends to the Company.
12
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated cash and cash equivalents,
short-term debt and capitalization of the Company as of December 31, 1997.
This table should be read in conjunction with the Consolidated Financial
Statements and the notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
DECEMBER 31,
1997
-------------
(IN MILLIONS)
<S> <C>
CASH AND CASH EQUIVALENTS........................................ $ 43.0
======
SHORT-TERM DEBT.................................................. $ 18.0
======
LONG-TERM DEBT
Term loan...................................................... $ 37.0
Other.......................................................... 20.0
------
Total long-term debt......................................... 57.0
STOCKHOLDERS' EQUITY(1):
Preferred stock, $.01 par value, 1,600,000 shares authorized,
no
shares outstanding............................................ --
Class A common stock, $.01 par value, 160,000,000 shares autho-
rized,
67,539,935 outstanding........................................ 0.7
Class B common stock, $.01 par value, 10,000,000 shares autho-
rized,
410,537 outstanding(2)........................................ --
Additional paid-in capital..................................... 537.2
Retained earnings.............................................. 168.8
Accumulated translation adjustment............................. (23.8)
Treasury stock, at cost........................................ (182.2)
------
Total stockholders' equity................................... 500.7
------
Total capitalization......................................... $557.7
======
</TABLE>
- --------
(1) In April 1996, the Company's board of directors authorized the repurchase
of up to $50 million of its Class A Common Stock. In May 1997, the
Company's board of directors authorized the repurchase of an additional
$150 million of its Class A Common Stock. The repurchase authority allows
the Company to selectively repurchase its stock from time to time in the
open market or in privately negotiated transactions depending upon market
price and other factors. As of December 31, 1997, the Company had
repurchased 6,438,114 shares at prices ranging from $21.25 to $33.75 per
share for an aggregate cost of approximately $182 million, including
3,000,000 shares of Class A Common Stock repurchased by the Company from
certain of its stockholders, including one of the Selling Stockholders, at
a price equal to $29.90 per share (the "1997 Share Repurchase"). In
February 1998, the Company's board of directors authorized the repurchase
of up to an additional $200 million of its Class A Common Stock. This
repurchase authority, like the prior authorizations, allows the Company at
management's discretion to selectively repurchase its stock from time to
time in the open market or in privately negotiated transactions depending
upon market price and other factors. The Company has agreed to repurchase
from certain of the Selling Stockholders 2,000,000 shares of Class A
Common Stock less any shares of Class A Common Stock sold pursuant to the
over-allotment options, at a price per share equal to the lowest of $44.25
(the closing price of the Class A Common Stock on the NYSE on March 6,
1998) and the net proceeds per share to the Selling Stockholders. The
Company expects to use available borrowings under its existing credit
facilities to finance the Share Repurchase. See "Certain Transactions and
Relationships."
(2) As of February 12, 1998, all of the outstanding shares of Class B Common
Stock had been converted into Class A Common Stock.
13
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
(IN MILLIONS, EXCEPT SHARE DATA)
The following table sets forth selected financial data of the Company on a
consolidated basis. The statement of earnings data for the years ended
December 31, 1993, 1994, 1995, 1996 and 1997 and the statement of financial
position data as of December 31, 1993, 1994, 1995, 1996 and 1997 were derived
from the audited Consolidated Financial Statements of the Company.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------
1993 1994 1995(1) 1996 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS
DATA:
Revenues................ $ 1,675.7 $ 1,852.3 $ 2,157.8 $ 2,377.6 $ 2,493.5
Cost of revenues........ 1,107.4 1,298.8 1,487.9 1,630.2 1,623.5
---------- ---------- ---------- ---------- ----------
Gross profit............ 568.3 553.5 669.9 747.4 870.0
Research and
development............. 111.7 101.0 116.1 123.9 128.9
Selling, general and
administrative......... 322.0 292.9 359.1 388.0 466.5
---------- ---------- ---------- ---------- ----------
Operating income before
option compensation
related to IPO and
amortization of
intangibles............ 134.6 159.6 194.7 235.5 274.6
Option compensation
related to IPO......... -- -- 60.6 -- --
Amortization of
intangibles(2)......... 64.0 44.7 25.6 5.1 --
---------- ---------- ---------- ---------- ----------
Operating income........ 70.6 114.9 108.5 230.4 274.6
Interest expense........ 63.9 50.6 35.1 20.9 10.8
Amortization of deferred
financing costs and
other expense.......... 13.1 13.6 10.1 7.9 9.1
---------- ---------- ---------- ---------- ----------
Earnings (loss) before
income taxes and
extraordinary item..... (6.4) 50.7 63.3 201.6 254.7
Provision for income
taxes.................. 3.0 6.1 15.2 73.8 91.7
---------- ---------- ---------- ---------- ----------
Earnings (loss) before
extraordinary item..... (9.4) 44.6 48.1 127.8 163.0
Extraordinary loss(3)... -- -- (15.7) -- (14.0)
---------- ---------- ---------- ---------- ----------
Net earnings (loss)..... $ (9.4) $ 44.6 $ 32.4 $ 127.8 $ 149.0
========== ========== ========== ========== ==========
Diluted earnings (loss)
per common share before
extraordinary item(4).. $ (0.35) $ (0.48) $ 0.65 $ 1.69 $ 2.17
Diluted net earnings
(loss) per common
share(4)............... $ (0.35) $ (0.48) $ 0.44 $ 1.69 $ 1.98
Shares used in diluted
earnings per share
calculation............ 58,880,761 58,853,416 74,200,279 75,665,734 75,168,776
<CAPTION>
AS OF DECEMBER 31,
---------------------------------------------------------
1993 1994 1995 1996 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
STATEMENT OF FINANCIAL
POSITION DATA:
Working capital......... $ 293.6 $ 237.5 $ 227.7 $ 343.8 $ 228.6
Total assets............ 1,215.0 960.9 1,142.9 1,221.5 1,208.2
Total long-term debt
(including current
portion)................ 650.7 290.0 195.0 165.3 75.0
Redeemable senior
preferred stock(5)...... 85.0 -- -- -- --
Stockholders'
equity(5)............... 173.7 295.5 390.2 540.3 500.7
</TABLE>
- --------
(1) The Company recognized a non-cash compensation charge of $60.6 ($38.5 net
of tax benefit) in the fourth quarter of 1995 and will recognize
additional amounts totalling $2.2 ($1.4 net of tax benefit) in the years
1996-2000, resulting from the vesting of certain of the Company's
outstanding employee stock options at the time of the IPO.
(2) Acquisition-related intangibles were fully amortized at March 31, 1996.
(3) Represents extraordinary after-tax loss caused by early extinguishments of
debt related to the refinancing of the Company's term loan in April 1995
and prepayment of the Company's senior subordinated notes in March 1997.
(4) Earnings per share amounts have been calculated and presented under the
provisions of SFAS No. 128. Diluted earnings (loss) per common share are
net of dividends of $11.5 and $11.8 paid on the Company's redeemable
senior preferred stock in 1993 and 1994, respectively. Earnings
attributable to common stock in 1994 are also net of a $61.3 preferred
stock redemption premium related to the exchange of redeemable senior
preferred stock for Class A Common Stock on December 30, 1994. No senior
preferred stock is currently outstanding.
(5) Redeemable senior preferred stock with a liquidation preference of $85.0
was exchanged for 9,750,000 shares of Class A Common Stock on December 30,
1994. As of December 31, 1997, the Company had repurchased 6,438,114
shares of Class A Common Stock in the open market for an aggregate cost of
approximately $182.2 million.
14
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
Selling Stockholders and their beneficial ownership of the Class A Common
Stock as of February 28, 1998 and as adjusted to reflect the sale of the Class
A Common Stock offered by the Selling Stockholders hereby, and other than as
noted below, includes information with respect to positions, offices or other
material relationships of the Selling Stockholders with the Company or any
predecessor or affiliate thereof, other than as a stockholder thereof, during
the past three years. For information with respect to material relationships
during the past three years between the Company and C&D Fund IV, see "Certain
Transactions and Relationships". Unless otherwise indicated, each Selling
Stockholder named has sole voting and dispositive power with respect to its
shares.
The information presented in the preceding discussion and in the following
table assumes that the over-allotment options are exercised in full, but does
not give effect to the Share Repurchase.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY SHARES
OWNED BENEFICIALLY OWNED
NAME AND ADDRESS OF PRIOR TO NUMBER OF AFTER
BENEFICIAL OWNER OFFERINGS(1) SHARES OFFERINGS(1)(3)
------------------- ----------------- --------- ---------------------
NUMBER PERCENT OFFERED NUMBER PERCENT
--------- ------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
The Clayton & Dubilier
Private Equity
Fund IV Limited
Partnership................. 6,654,829 9.7 5,811,681 843,148 1.2
270 Greenwich Avenue
Greenwich, CT 06830
Mellon Bank, N.A., as trustee
for First
Plaza Group Trust(2)........ 3,049,748 4.5 2,663,354 386,394 *
One Mellon Bank Center
Pittsburgh, PA 15258
- ---------------------------
</TABLE>
* Less than 1%
(1) The percentage of the issued and outstanding shares of Common Stock of the
Company held by each individual or group has been calculated on the basis
of 68,281,134 shares of Class A Common Stock issued and outstanding
(excluding 6,438,114 shares held in treasury) on February 28, 1998.
(2) Mellon Bank, N.A., acts as the trustee (the "Trustee") for First Plaza
Group Trust ("FPGT"), a trust under and for the benefit of certain
employee benefit plans for General Motors Corporation ("GM") and its
subsidiaries. These shares may be deemed to be owned beneficially by
General Motors Investment Management Corporation ("GMIMCo"), a wholly-
owned subsidiary of GM. GMIMCo's principal business is providing
investment advice and investment management services with respect to the
assets of certain employee benefit plans of GM and its subsidiaries and
with respect to the assets of certain direct and indirect subsidiaries of
GM and associated entities. GMIMCo is serving as FPGT's investment manager
with respect to these shares and in that capacity it has the sole power to
direct the Trustee as to the voting and disposition of these shares.
Because of the Trustee's limited role, beneficial ownership of the shares
by the Trustee is disclaimed.
(3) Pursuant to the Share Repurchase, the Company will repurchase from certain
of the Selling Stockholders, an aggregate of 2,000,000 shares of Class A
Common Stock less any shares of Class A Common Stock sold pursuant to the
over-allotment options, at a price per share equal to the lowest of $44.25
(the closing price of the Class A Common Stock on the NYSE on March 6,
1998) and the net proceeds to the Selling Stockholders. The Share
Repurchase is conditioned upon at least 6,000,000 shares of Class A Common
Stock being sold. C&D Fund IV has the right to assign its rights and
obligations pursuant to the Stock Disposition Agreement (as defined
herein) to any other Selling Stockholder. Upon completion of the Offerings
and the Share Repurchase, it is currently expected that C&D Fund IV will
no longer own any shares of Class A Common Stock.
15
<PAGE>
CERTAIN TRANSACTIONS AND RELATIONSHIPS
CD&R AND C&D FUND IV
C&D Fund IV, which is the Company's largest stockholder, is a private
investment fund managed by CD&R. Amounts contributed to C&D Fund IV by its
limited partners are invested at the discretion of the general partner in
equity or equity-related securities of entities formed to effect leveraged
buy-out transactions and in the equity of corporations where the infusion of
capital coupled with the provision of managerial assistance by CD&R can be
expected to generate returns on investments comparable to returns historically
achieved in leveraged buy-out transactions. The general partner of C&D Fund IV
is Clayton & Dubilier Associates IV Limited Partnership ("Associates IV"). B.
Charles Ames, Donald J. Gogel, Andrall E. Pearson and Joseph L. Rice, III,
each of whom is a principal of CD&R and a general partner of Associates IV,
have served as directors of the Company since the Acquisition. Messrs. Pearson
and Rice resigned from the Board of Directors in February 1997. LIG was formed
by CD&R to effect the Acquisition. C&D Fund IV currently owns 6,654,829 shares
of Class A Common Stock of which 5,283,346 shares are being offered hereby.
See "Selling Stockholders".
The Company paid CD&R a fee of $500,000 during each of 1995, 1996, and 1997,
respectively, for advisory, management consulting and monitoring services. The
Company will pay CD&R a fee of $125,000 for services rendered for the first
three months of 1998, after which time the Company will cease paying such fee.
None of the principals of CD&R who serve as directors of the Company receive
directors' fees. Two principals of CD&R, Messrs. Ames and Gogel, continue to
serve as Class II directors.
The Company paid fees to the law firm of Debevoise & Plimpton during 1996
and 1997 for legal services rendered. Franci J. Blassberg, Esq., a member of
Debevoise & Plimpton, is married to Joseph L. Rice, III, who was until
February 1997 a director of the Company and who is currently a general partner
of the general partner of C&D Fund IV.
The Company has entered into an indemnification agreement with CD&R and C&D
Fund IV pursuant to which the Company has agreed, subject to certain
exceptions, to indemnify the members of its boards of directors, as well as
CD&R, C&D Fund IV and certain of their associates and affiliates (the
"Indemnitees"), to the fullest extent allowable under applicable Delaware law,
and to indemnify the Indemnitees against any suits, claims, damages or
expenses which may be made against or incurred by them under applicable
securities laws in connection with offerings of securities of the Company,
including the Offerings, liabilities to third parties arising out of any
action or failure to act by the Company, and, except in cases of gross
negligence or intentional misconduct, the provision by CD&R of advisory,
management consulting and monitoring services.
1997 SHARE REPURCHASE
On October 21, 1997, the Company entered into an agreement with C&D Fund IV
(the "1997 Stock Disposition Agreement") pursuant to which the Company agreed
concurrently with the consummation in November 1997 of a secondary offering
(the "1997 Secondary Offering"), to repurchase from C&D Fund IV 3,000,000
shares of Class A Common Stock at a price per share equal to the lesser of
$34.8125 and the initial public offering price of the 1997 Secondary Offering
net of the underwriting discount. Although C&D Fund IV had the right to assign
its rights and obligations pursuant to the 1997 Stock Disposition Agreement to
other selling stockholders participating in the 1997 Secondary Offering, the
Company repurchased substantially all of such shares from C&D Fund IV on
November 4, 1997 at a price equal to $29.90 per share, the initial offering
price for the 1997 Secondary Offering net of the underwriting discount.
SHARE REPURCHASE FROM CERTAIN SELLING STOCKHOLDERS
The Company has entered into an agreement, dated as of March 9, 1998 (the
"Stock Disposition Agreement"), with C&D Fund IV pursuant to which the Company
has agreed to repurchase from C&D
16
<PAGE>
Fund IV 2,000,000 shares of Class A Common Stock less any shares sold pursuant
to the over-allotment options, at a price per share equal to the lowest of
$44.25 (the closing price of the Class A Common Stock on the NYSE on March 6,
1998) and the net proceeds per share to the Selling Stockholders. The Share
Repurchase is conditioned upon at least 6,000,000 shares of Class A Common
Stock being sold. C&D Fund IV has the right to assign its rights and
obligations pursuant to the Stock Disposition Agreement to any other Selling
Stockholder.
HOLDBACK ARRANGEMENTS
The Selling Stockholders and the directors and executive officers (as
defined in Section 16 of the Exchange Act) of the Company who own Class A
Common Stock and certain other stockholders of the Company have each agreed
not to enter into any agreement providing for, or to effect, any public sale,
distribution or other disposition of any shares of Common Stock, including
sales pursuant to Rule 144 or Rule 144A under the Securities Act, or grant any
public option for any such sale, or otherwise cause the Company to register
any securities of the Company pursuant to any registration rights previously
granted to them, for a period of 60 days after the date of this Prospectus
without the prior written consent of Goldman, Sachs & Co. on behalf of the
Underwriters, except for the shares of Class A Common Stock offered in
connection with the Offerings. After the expiration of such 60-day period,
such stockholders will in general be entitled to dispose of their shares that
are currently outstanding pursuant to Rule 144 under the Securities Act and
those who are not "affiliates" of the Company may do so without regard to the
volume limit and certain other requirements of Rule 144. Approximately
3,000,000 shares of Class A Common Stock will be available for sale pursuant
to Rule 144 under the Securities Act upon expiration of such 60-day period.
VALIDITY OF THE SHARES
The validity of the shares of Class A Common Stock offered hereby will be
passed upon for the Company by Debevoise & Plimpton, New York, New York, and
for the Underwriters by Sullivan & Cromwell, New York, New York. Debevoise &
Plimpton also acts and may hereafter act as counsel to CD&R and its affiliates
and to the Company and its affiliates. Franci J. Blassberg, Esq., a member of
Debevoise & Plimpton, is married to Joseph L. Rice, III, who was until
February 1997 a director of the Company and who is currently a general partner
of the general partner of C&D Fund IV.
EXPERTS
The consolidated statements of financial position as of December 31, 1996
and 1997 and the consolidated statements of earnings, cash flows and
stockholders' equity for each of the three years in the period ended December
31, 1997 incorporated by reference in this Prospectus from the Company's
Annual Report on Form 10-K for the year ended December 31, 1997 have been
incorporated by reference herein in reliance on the report of Coopers &
Lybrand L.L.P., independent accountants, given on the authority of that firm
as experts in accounting and auditing.
FORWARD LOOKING STATEMENTS
Certain statements in this Prospectus and in documents incorporated by
reference herein contain forward-looking statements that are based on current
expectations, estimates and projections and management's beliefs and
assumptions. Words such as "believes", "expects", "intends", "plans",
"estimates", or variations of such words and similar expressions, are intended
to identify such forward-looking statements. These statements are not
guarantees of future performance and involve certain risks and uncertainties
which are difficult to predict. Therefore, actual outcomes and results may
differ materially from what is expressed or forecasted in such forward-looking
statements. The Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise.
17
<PAGE>
Such risks and uncertainties include, but are not limited to, the impact of
competitive products and pricing, increased investment to support product
introductions and enter new markets, currency fluctuations, market acceptance
of new products and programs, product transitions by the Company and its
competitors, management of inventory levels, production and supply
difficulties, intellectual property infringement claims and expenses, the
outcome of pending and future litigation or governmental proceedings, changes
in a country's or region's political or economic conditions, and other risks
described herein and in other filings by the Company with the Commission.
18
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Selling Stockholders have agreed to sell to each of the U.S. Underwriters
named below, and each of such U.S. Underwriters has severally agreed to
purchase from the Selling Stockholders, the respective number of shares of
Class A Common Stock set forth opposite its name below:
<TABLE>
<CAPTION>
NUMBER OF
SHARES
OF CLASS
A
COMMON
UNDERWRITER STOCK
----------- ---------
<S> <C>
Goldman, Sachs & Co. ..............................................
Lehman Brothers Inc. ..............................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................................................
Morgan Stanley & Co. Incorporated..................................
Smith Barney Inc...................................................
---------
Total............................................................ 6,164,577
=========
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the U.S.
Underwriters are committed to take and pay for all of the shares offered
hereby, if any are taken.
The U.S. Underwriters propose to offer the shares of Class A Common Stock in
part directly to the public at the initial public offering price set forth on
the cover page of this Prospectus, and in part to certain securities dealers
at such price less a concession of $ per share. The U.S. Underwriters may
allow, and such dealers may reallow, a concession not in excess of $ per
share to certain brokers and dealers. After the shares of Class A Common Stock
are released for sale to the public, the offering price and other selling
terms may from time to time be varied by the U.S. Underwriters.
The Company and the Selling Stockholders have entered into an underwriting
agreement (the "International Underwriting Agreement") with the underwriters
of the International Offering (the "International Underwriters" and, together
with the U.S. Underwriters, the "Underwriters") providing for the concurrent
offer and sale of an aggregate of 1,540,000 shares of Class A Common Stock in
an international offering outside the United States. The public offering price
and underwriting discounts and commissions per share for the two offerings are
identical. The closing of the offering made hereby is a condition to the
closing of the International Offering, and vice versa. The several
International Underwriters are Goldman Sachs International, Lehman Brothers
International (Europe), Merrill Lynch International, Morgan Grenfell & Co.
Limited, Morgan Stanley & Co. International Limited and Smith Barney Inc.
Pursuant to an Agreement between the U.S. and International Underwriting
Syndicates (the "Agreement Between") relating to the two offerings, each of
the U.S. Underwriters named herein has agreed that, as a part of the
distribution of the shares offered hereby and subject to certain exceptions,
it will offer, sell or deliver the shares of Class A Common Stock, directly or
indirectly, only in the United States of America (including the States and the
District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction (the "United States") and to U.S. persons, which
term shall mean, for purposes of this paragraph: (a) any individual who is a
resident of the United States or (b) any corporation, partnership or other
entity organized in or under the laws of the United States or any political
subdivision thereof and whose office most directly involved with the purchase
is located in the United States. Each of the International Underwriters has
agreed pursuant to the Agreement Between that, as a part of the distribution
of the shares offered in the International Offering, and subject to certain
exceptions, it will not, directly or indirectly, offer, sell or deliver shares
of Class A Common Stock in the United States or to any U.S. persons.
U-1
<PAGE>
Pursuant to the Agreement Between, sales may be made between the U.S.
Underwriters and the International Underwriters of such number of shares of
Class A Common Stock as may be mutually agreed. The price of any shares so
sold shall be the public offering price, less an amount not greater than the
selling concession.
The Selling Stockholders have granted the U.S. Underwriters an option
exercisable for 30 days after the date of this Prospectus to purchase up to an
aggregate of 616,458 additional shares of Class A Common Stock solely to cover
over-allotments, if any. If the U.S. Underwriters exercise their over-
allotment option, the U.S. Underwriters have severally agreed, subject to
certain conditions, to purchase approximately the same percentage thereof that
the number of shares to be purchased by each of them, as shown in the
foregoing table, bears to the 6,164,577 shares of Class A Common Stock
initially offered hereby. The Selling Stockholders have granted the
International Underwriters a similar option exercisable for up to an aggregate
of 154,000 additional shares of Class A Common Stock.
The Company and the Selling Stockholders have each agreed, for a period of
60 days after the date of this Prospectus, not to file a registration
statement with respect to, enter into any agreement providing for or effect
any public sale, distribution or other disposition (including, without
limitation, any sale pursuant to Rule 144 or Rule 144A under the Securities
Act and any sale in a broker's transaction or through a market maker) of,
except as provided under the Underwriting Agreement and under the
International Underwriting Agreement, any Class A Common Stock, Class B Common
Stock or securities of the Company that are substantially similar to the Class
A Common Stock or Class B Common Stock, including but not limited to any
securities that are convertible into or exchangeable for, or that represent
the right to receive, Class A Common Stock, Class B Common Stock or any such
substantially similar securities (other than pursuant to employee benefit or
incentive plans existing on, or upon the conversion or exchange of convertible
or exchangeable securities outstanding as of, the date of this Prospectus),
without the prior written consent of Goldman, Sachs & Co. In addition, the
Selling Stockholders and certain other stockholders of the Company have
entered into "holdback" agreements with the Underwriters. See "Holdback
Arrangements".
In connection with the Offerings, the Underwriters may purchase and sell the
Class A Common Stock in the open market. These transactions may include over-
allotment and stabilizing transactions and purchases to cover syndicate short
positions created in connection with the Offerings. Stabilizing transactions
consist of certain bids or purchases for the purpose of preventing or
retarding a decline in the market price of the Class A Common Stock, and
syndicate short positions involve the sale by the Underwriters of a greater
number of shares of Class A Common Stock than they are required to purchase
from the Company in the Offerings. The Underwriters also may impose a penalty
bid, whereby selling concessions allowed to syndicate members or other broker-
dealers in respect of the Class A Common Stock sold in the Offerings for their
account may be reclaimed by the syndicate if such Class A Common Stock is
repurchased by the syndicate in stabilizing or covering transactions. These
activities may stabilize, maintain or otherwise affect the market price of the
Class A Common Stock, which may be higher than the price that might otherwise
prevail in the open market, and these activities, if commenced, may be
discontinued at any time. These transactions may be effected on the New York
Stock Exchange, in the over-the-counter market or otherwise.
The Class A Common Stock is traded on the New York Stock Exchange.
The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities under
the Securities Act of 1933.
U-2
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 3
Incorporation of Certain Documents by
Reference................................................................. 3
The Company................................................................ 5
The Offerings.............................................................. 7
Risk Factors............................................................... 8
Price Range of Class A Common Stock and Dividend Policy.................... 12
Capitalization............................................................. 13
Selected Consolidated Financial Data....................................... 14
Selling Stockholders....................................................... 15
Certain Transactions and Relationships..................................... 16
Holdback Arrangements...................................................... 17
Validity of the Shares..................................................... 17
Experts.................................................................... 17
Forward Looking Statements................................................. 17
Underwriting............................................................... U-1
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
7,704,577 SHARES
LEXMARK
INTERNATIONAL GROUP, INC.
CLASS A COMMON STOCK
(PAR VALUE $.01 PER SHARE)
---------------
LOGO LEXMARK(TM)
---------------
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
SALOMON SMITH BARNEY
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MARCH 13, 1998
7,704,577 SHARES
LEXMARK INTERNATIONAL GROUP, INC.
CLASS A COMMON STOCK
(PAR VALUE $.01 PER SHARE)
-----------
Of the 7,704,577 shares of Class A Common Stock offered, 1,540,000 shares are
being offered hereby in an international offering outside the United States and
6,164,577 shares are being offered in a concurrent offering in the United
States. The public offering price and the aggregate underwriting discount per
share will be identical for both offerings. See "Underwriting". As of April 3,
1998 each share of Class A Common Stock, including the shares offered hereby,
will have associated with it one right to purchase, under the Company's Rights
Agreement, one one-hundreth of a share of the Company's Series A Junior
Participating Preferred Stock at a stipulated price in certain circumstances
relating to changes in ownership of the Company.
All the shares of Class A Common Stock are being sold by the Selling
Stockholders. See "Selling Stockholders". The Company will not receive any of
the proceeds from the sale of the shares. In addition, the Company will
repurchase from certain of the Selling Stockholders 2,000,000 shares of Class A
Common Stock less any shares sold pursuant to the over-allotment options
referred to below at a price per share described herein. See "Certain
Transactions and Relationships".
The last reported sale price of the Class A Common Stock, which is listed
under the symbol "LXK", on the New York Stock Exchange on March 12, 1998 was
$44.94 per share. See "Price Range of Class A Common Stock and Dividend
Policy".
SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR CERTAIN CONSIDERATIONS RELEVANT TO
AN INVESTMENT IN THE CLASS A COMMON STOCK.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-----------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO SELLING
OFFERING PRICE DISCOUNT(1) STOCKHOLDERS(2)
-------------- ------------ -------------------
<S> <C> <C> <C>
Per Share....................... $ $ $
Total(3)........................ $ $ $
</TABLE>
- -----
(1) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933. See "Underwriting".
(2) Expenses of approximately $55,000 and $900,000 are payable by the Company
and the Selling Stockholders, respectively, in connection with the
offerings.
(3) The Selling Stockholders have granted the International Underwriters an
option for 30 days to purchase up to an additional 154,000 shares at the
public offering price per share, less the underwriting discount, solely to
cover over-allotments. The Selling Stockholders have granted the U.S.
Underwriters a similar option with respect to an additional 616,458 shares
as part of the concurrent offering in the United States. If such options
are exercised in full, the total initial public offering price,
underwriting discount and proceeds to Selling Stockholders will be $ ,
$ and $ , respectively. See "Underwriting".
-----------
The shares offered hereby are offered severally by the International
Underwriters, as specified herein, subject to receipt and acceptance by them
and subject to their right to reject any order in whole or in part. It is
expected that the shares will be ready for delivery in New York, New York, on
or about March , 1998, against payment therefor in immediately available
funds.
GOLDMAN SACHS INTERNATIONAL
DEUTSCHE MORGAN GRENFELL
LEHMAN BROTHERS
MERRILL LYNCH INTERNATIONAL
MORGAN STANLEY DEAN WITTER
SALOMON SMITH BARNEY
-----------
The date of this Prospectus is March , 1998.
<PAGE>
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
Any statement contained in a document or a portion thereof which is
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed document
or portion thereof which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any statement so modified shall
not be deemed to constitute a part of this Prospectus except as so modified,
and any statement so superseded shall not be deemed to constitute part of this
Prospectus.
----------------
IN CONNECTION WITH THESE OFFERINGS, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS
A COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN
THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY
BE DISCONTINUED AT ANY TIME.
CERTAIN PERSONS PARTICIPATING IN THE OFFERINGS MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE CLASS A COMMON
STOCK, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS
IN SUCH SECURITIES AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE
OFFERINGS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING".
4
<PAGE>
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
CERTAIN UNITED STATES TAX
CONSEQUENCES TO NON-U.S. HOLDERS
The following is a general discussion of certain United States Federal
income and estate tax consequences of the ownership and disposition of Class A
Common Stock by a person other than (i) a citizen or resident of the United
States, (ii) a corporation, partnership or other entity created or organized
in the United States or under the laws of the United States or of any State of
the United States, (iii) an estate whose income is includable in gross income
for United States Federal income tax purposes regardless of its source or (iv)
a trust if (x) a court within the United States is able to exercise primary
supervision over the administration of the trust and (y) at least one United
States person has authority to control all substantial decisions of the trust
(referred to hereafter as a "non-U.S. holder"). Recently enacted legislation
authorizes the issuance of Treasury regulations that, under certain
circumstances, could reclassify as a non-U.S. partnership a partnership that
would otherwise be treated as a U.S. partnership, or could reclassify as a
U.S. partnership a partnership that would otherwise be treated as a non-U.S.
partnership. Such regulations would apply only to partnerships created or
organized after the date that proposed regulations are filed with the Federal
Register (or, if earlier, the date of issuance of a notice substantially
describing the expected contents of the regulations).
The discussion is based on provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), and administrative and judicial interpretations as of
the date hereof, all of which are subject to change, possibly with retroactive
effect. Furthermore, this discussion does not consider specific facts and
circumstances that may be relevant to a particular holder's tax position.
Prospective purchasers are urged to consult a tax adviser with respect to the
United States Federal income and estate tax consequences of owning and
disposing of Class A Common Stock, as well as any tax consequences under the
laws of any other taxing jurisdiction.
INCOME TAX
Dividends. Generally, dividends paid on Class A Common Stock to a non-U.S.
holder will be subject to U.S. Federal income tax. Except in the case of
dividends that are effectively connected with the holder's conduct of a trade
or business within the United States, this tax is imposed and withheld at the
rate of 30% of the amount of the dividend, unless reduced by an applicable
income tax treaty. Currently, dividends paid to an address in a foreign
country are presumed to be paid to a resident of such country in determining
the applicability of a treaty for such purposes.
However, under recently finalized United States Treasury regulations
relating to withholding of tax on non-U.S. holders, which by their terms apply
to dividend and other payments made after December 31, 1998 (the "Final
Withholding Regulations"), a non-U.S. holder who is the beneficial owner
(within the meaning of the Final Withholding Regulations) of dividends paid on
Class A Common Stock and who wishes to claim the benefit of an applicable
treaty is generally required to satisfy certain certification and
documentation requirements. Certain special rules apply to claims for treaty
benefits made by non-U.S. holders that are entities rather than individuals
and to beneficial owners (within the meaning of the Final Withholding
Regulations) of dividends paid to entities in which such beneficial owners are
interest holders.
Except as may be otherwise provided in an applicable income tax treaty,
dividends paid on Class A Common Stock to a non-U.S. holder that are
effectively connected with the non-U.S. holder's conduct of a trade or
business within the United States are subject to Federal income tax on a net
income basis, which tax is not collected by withholding (except as described
below under "Backup Withholding and Information Reporting"). All or part of
any effectively connected dividends received by a non-U.S. corporation may
also, under certain circumstances, be subject to an additional "branch
profits" tax at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty. A non-U.S. holder of Class A Common Stock who
wishes to claim an exemption from withholding for effectively connected
dividends is generally required to satisfy certain certification and
documentation requirements.
18
<PAGE>
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
A non-U.S. holder that is eligible for a reduced rate of U.S. withholding
tax pursuant to a tax treaty may obtain a refund of any excess amounts
withheld by filing an appropriate claim for refund with the United States
Internal Revenue Service (the "IRS").
Disposition of Class A Common Stock. Generally, non-U.S. holders will not be
subject to United States Federal income tax (including withholding tax) in
respect of gain recognized on a disposition of Class A Common Stock unless (i)
the gain is effectively connected with the non-U.S. holder's conduct of a
trade or business within the United States (in which case the "branch profits"
tax described above may also apply if the holder is a non-U.S. corporation);
(ii) in the case of a non-U.S. holder who is a non-resident alien individual
and holds Class A Common Stock as a capital asset, such holder is present in
the United States for 183 or more days in the taxable year of the sale and
certain other conditions are met; or (iii) the Company is or has been a
"United States real property holding corporation" for Federal income tax
purposes (which the Company does not believe it has been or is currently) and
the non-U.S. holder has held directly or constructively more than 5% of the
outstanding Class A Common Stock within the five-year period ending on the
date of the disposition.
ESTATE TAX
If an individual non-U.S. holder owns, or is treated as owning, Class A
Common Stock at the time of his or her death, such stock would be subject to
U.S. Federal estate tax imposed on the estates of non-resident aliens, in the
absence of a contrary provision contained in any applicable tax treaty.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Dividends. Under current law, dividends paid on Class A Common Stock to a
non-U.S. holder at an address outside the United States are generally exempt
from backup withholding tax and U.S. information reporting requirements (but
not from 30% withholding tax discussed above). Under the Final Withholding
Regulations, for dividends paid after December 31, 1998, a non-U.S. holder
must generally provide proper documentation indicating non-U.S. status to a
withholding agent in order to avoid backup withholding tax. However, dividends
paid to certain exempt recipients (not including individuals) will not be
subject to backup withholding even if such documentation is not provided if
the withholding agent is allowed to rely on certain regulatory presumptions of
the recipient's non-U.S. status (including payment to an address outside the
United States).
Broker Sales. Payments of proceeds from the sale of Class A Common Stock by
a non-U.S. holder made to or through a non-U.S. office of a broker generally
will not be subject to information reporting or backup withholding. However,
payments made to or through (i) a non-U.S. office, of a U.S. broker, or (ii) a
non-U.S. office of a non-U.S. broker that is (x) a controlled foreign
corporation for Federal income tax purposes, (y) a person 50% or more of whose
gross income from all sources for a certain specified period is effectively
connected with a U.S. trade or business, or (z) (effective beginning January
1, 1999) a foreign partnership if, at any time during its tax year, one or
more of its partners are U.S. persons (as defined in U.S. Treasury
regulations) who, in the aggregate, hold more than 50% of the income or
capital interest in the partnership or if, at any time during its tax year,
such foreign partnership is engaged in a U.S. trade or business, are generally
subject to information reporting (but not backup withholding) unless the
holder certifies its non-U.S. status under penalties of perjury or otherwise
establishes its entitlement to an exemption. Payments of proceeds from the
sale of Class A Common Stock by a non-U.S. holder made to or through a U.S.
office of a broker are generally subject to both information reporting and
backup withholding at a rate of 31% unless the holder certifies its non-U.S.
status under penalties of perjury or otherwise establishes an exemption.
A non-U.S. holder may obtain a refund of any excess amounts withheld under
the backup withholding rules by filing the appropriate claim for refund with
the IRS.
19
<PAGE>
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
VALIDITY OF THE SHARES
The validity of the shares of Class A Common Stock offered hereby will be
passed upon for the Company by Debevoise & Plimpton, New York, New York, and
for the Underwriters by Sullivan & Cromwell, New York, New York. Debevoise &
Plimpton also acts and may hereafter act as counsel to CD&R and its affiliates
and to the Company and its affiliates. Franci J. Blassberg, Esq., a member of
Debevoise & Plimpton, is married to Joseph L. Rice, III, who until February
1997 was a director of the Company and who is currently a general partner of
the general partner of C&D Fund IV.
EXPERTS
The consolidated statements of financial position as of December 31, 1996
and 1997 and the consolidated statements of earnings, cash flows and
stockholders' equity for each of the three years in the period ended December
31, 1997 incorporated by reference in this Prospectus from the Company's
Annual Report on Form 10-K for the year ended December 31, 1997 have been
incorporated by reference herein in reliance on the report of Coopers &
Lybrand L.L.P., independent accountants, given on the authority of that firm
as experts in accounting and auditing.
FORWARD LOOKING STATEMENTS
Certain statements in this Prospectus and in documents incorporated by
reference herein contain forward-looking statements that are based on current
expectations, estimates and projections and management's beliefs and
assumptions. Words such as "believes", "expects", "intends", "plans",
"estimates", or variations of such words and similar expressions, are intended
to identify such forward-looking statements. These statements are not
guarantees of future performance and involve certain risks and uncertainties
which are difficult to predict. Therefore, actual outcomes and results may
differ materially from what is expressed or forecasted in such forward-looking
statements. The Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise.
Such risks and uncertainties include, but are not limited to, the impact of
competitive products and pricing, increased investment to support product
introductions and enter new markets, currency fluctuations, market acceptance
of new products and programs, product transitions by the Company and its
competitors, management of inventory levels, production and supply
difficulties, intellectual property infringement claims and expenses, the
outcome of pending and future litigation or governmental proceedings, changes
in a country's or region's political or economic conditions, and other risks
described herein and in other filings by the Company with the Commission.
20
<PAGE>
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Selling Stockholders have agreed to sell to each of the International
Underwriters named below, and each of such International Underwriters has
severally agreed to purchase from the Selling Stockholders, the respective
number of shares of Class A Common Stock set forth opposite its name below:
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
CLASS A
COMMON
UNDERWRITER STOCK
----------- ---------
<S> <C>
Goldman Sachs International.......................................
Lehman Brothers International (Europe)............................
Merrill Lynch International.......................................
Morgan Grenfell & Co. Limited.....................................
Morgan Stanley & Co. International Limited........................
Smith Barney Inc. ................................................
---------
Total........................................................... 1,540,000
=========
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
International Underwriters are committed to take and pay for all of the shares
offered hereby, if any are taken.
The International Underwriters propose to offer the shares of Class A Common
Stock in part directly to the public at the initial public offering price set
forth on the cover page of this Prospectus, and in part to certain securities
dealers at such price less a concession of $ per share. The International
Underwriters may allow, and such dealers may reallow, a concession not in
excess of $ per share to certain brokers and dealers. After the shares of
Class A Common Stock are released for sale to the public, the offering price
and other selling terms may from time to time be varied by the International
Underwriters.
The Company and the Selling Stockholders have entered into an underwriting
agreement (the "U.S. Underwriting Agreement") with the underwriters of the
United States Offering (the "U.S. Underwriters" and, together with the
International Underwriters, the "Underwriters") providing for the concurrent
offer and sale of an aggregate of 6,164,577 shares of Class A Common Stock in
an offering in the United States. The public offering price and underwriting
discounts and commissions per share for the two offerings are identical. The
closing of the offering made hereby is a condition to the closing of the
United States Offering, and vice versa. The several U.S. Underwriters are
Goldman, Sachs & Co., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Morgan Stanley & Co. Incorporated and Smith Barney Inc.
Pursuant to an Agreement between the U.S. and International Underwriting
Syndicates (the "Agreement Between") relating to the two offerings, each of
the U.S. Underwriters named herein has agreed that, as a part of the
distribution of the shares offered hereby and subject to certain exceptions,
it will offer, sell or deliver the shares of Class A Common Stock, directly or
indirectly, only in the United States of America (including the States and the
District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction (the "United States") and to U.S. persons, which
term shall mean, for purposes of this paragraph: (a) any individual who is a
resident of the United States or (b) any corporation, partnership or other
entity organized in or under the laws of the United States or any political
subdivision thereof and whose office most directly involved with the purchase
is located in the United States. Each of the International Underwriters has
agreed pursuant to the Agreement Between that, as a part of the distribution
of the shares offered in the International Offering, and subject to certain
exceptions, it will not, directly or indirectly, offer, sell or deliver shares
of Class A Common Stock in the United States or to any U.S. persons.
U-1
<PAGE>
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
Pursuant to the Agreement Between, sales may be made between the U.S.
Underwriters and the International Underwriters of such number of shares of
Class A Common Stock as may be mutually agreed. The price of any shares so
sold shall be the public offering price, less an amount not greater than the
selling concession.
The Selling Stockholders have granted the International Underwriters an
option exercisable for 30 days after the date of this Prospectus to purchase
up to an aggregate of 154,000 additional shares of Class A Common Stock solely
to cover over-allotments, if any. If the International Underwriters exercise
their over-allotment option, the International Underwriters have severally
agreed, subject to certain conditions, to purchase approximately the same
percentage thereof that the number of shares to be purchased by each of them,
as shown in the foregoing table, bears to the 1,540,000 shares of Class A
Common Stock initially offered hereby. The Selling Stockholders have granted
the U.S. Underwriters a similar option exercisable for up to an aggregate of
616,458 additional shares of Class A Common Stock.
The Company and the Selling Stockholders have each agreed, for a period of
60 days after the date of this Prospectus, not to file a registration
statement with respect to, enter into any agreement providing for or effect
any public sale, distribution or other disposition (including, without
limitation, any sale pursuant to Rule 144 or Rule 144A under the Securities
Act and any sale in a broker's transaction or through a market maker) of,
except as provided under the Underwriting Agreement and under the U.S.
Underwriting Agreement, any Class A Common Stock, Class B Common Stock or
securities of the Company that are substantially similar to the Class A Common
Stock or Class B Common Stock, including but not limited to any securities
that are convertible into or exchangeable for, or that represent the right to
receive, Class A Common Stock, Class B Common Stock or any such substantially
similar securities (other than pursuant to employee benefit or incentive plans
existing on, or upon the conversion or exchange of convertible or exchangeable
securities outstanding as of, the date of this Prospectus), without the prior
written consent of Goldman Sachs & Co. In addition, the Selling Stockholders
and certain other stockholders of the Company have entered into "holdback"
agreements with the Underwriters. See "Holdback Arrangements".
Each International Underwriter has also agreed that (a) it has not offered
or sold and, prior to the expiry of the period of six months from the Closing
Date, will not offer or sell any shares of Class A Common Stock to persons in
the United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995 of Great Britain, (b) it has complied and will comply with
all applicable provisions of the Financial Services Act 1986 of Great Britain
with respect to anything done by it in relation to the shares of Class A
Common Stock in, from or otherwise involving the United Kingdom, and (c) it
has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the shares
of Class A Common Stock to a person who is of a kind described in Article
11(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1996 of Great Britain or is a person to whom such document
may otherwise lawfully be issued or passed on.
Buyers of shares of Class A Common Stock offered hereby may be required to
pay stamp taxes and other charges in accordance with the laws and practice of
the country of purchase in addition to the initial public offering price.
In connection with the Offerings, the Underwriters may purchase and sell the
Class A Common Stock in the open market. These transactions may include over-
allotment and stabilizing transactions and purchases to cover syndicate short
positions created in connection with the Offerings. Stabilizing
U-2
<PAGE>
transactions consist of certain bids or purchases for the purpose of
preventing or retarding a decline in the market price of the Class A Common
Stock, and syndicate short positions involve the sale by the Underwriters of a
greater number of shares of Class A Common Stock than they are required to
purchase from the Company in the Offerings. The Underwriters also may impose a
penalty bid, whereby selling concessions allowed to syndicate members or other
broker-dealers in respect of the Class A Common Stock sold in the Offerings
for their account may be reclaimed by the syndicate if such Class A Common
Stock is repurchased by the syndicate in stabilizing or covering transactions.
These activities may stabilize, maintain or otherwise affect the market price
of the Class A Common Stock, which may be higher than the price that might
otherwise prevail in the open market, and these activities, if commenced, may
be discontinued at any time. These transactions may be effected on the New
York Stock Exchange, in the over-the-counter market or otherwise. In the
United Kingdom, any such transactions will be effected by Goldman Sachs
International.
The Class A Common Stock is traded on the New York Stock Exchange.
The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities under
the Securities Act of 1933.
U-3
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 3
Incorporation of Certain Documents by
Reference................................................................. 3
The Company................................................................ 5
The Offerings.............................................................. 7
Risk Factors............................................................... 8
Price Range of Class A Common Stock
and Dividend Policy....................................................... 12
Capitalization............................................................. 13
Selected Consolidated Financial Data....................................... 14
Selling Stockholders....................................................... 15
Certain Transactions and Relationships..................................... 16
Holdback Arrangements...................................................... 17
Certain United States Tax Consequences to Non-U.S. Holders................. 18
Validity of the Shares..................................................... 20
Experts.................................................................... 20
Forward Looking Statements................................................. 20
Underwriting............................................................... U-1
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
7,704,577 SHARES
LEXMARK
INTERNATIONAL GROUP, INC.
CLASS A COMMON STOCK
(PAR VALUE $.01 PER SHARE)
---------------
LOGO LEXMARK(TM)
---------------
GOLDMAN SACHS INTERNATIONAL
DEUTSCHE MORGAN GRENFELL
LEHMAN BROTHERS
MERRILL LYNCH INTERNATIONAL
MORGAN STANLEY DEAN WITTER
SALOMON SMITH BARNEY
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following are the estimated expenses of the issuance and distribution of
the shares of Class A Common Stock being registered, including fees and
expenses incurred by the Company and the Selling Stockholders, other than any
underwriting compensation.
Fees and expenses incurred by the Company:
<TABLE>
<S> <C>
National Association of Securities Dealers, Inc. filing fee........ $ 30,500
Miscellaneous expenses............................................. $ 24,500
--------
Total............................................................ $ 55,000
========
Fees and expenses incurred by the Selling Stockholders:
Registration fee................................................... $108,906
Accounting fees and expenses....................................... $125,000
Legal fees and expenses............................................ $100,000
Printing and engraving............................................. $170,000
Transfer Agent's fees.............................................. $ 10,000
Blue Sky fees and expenses (including counsel fees)................ $ 10,000
Miscellaneous expenses............................................. $385,994
--------
Total............................................................ $909,900
========
</TABLE>
All of the above expenses of the Offering will be borne by the Company and
the Selling Stockholders as contemplated by the Registration and Participation
Agreement entered into at the time of the Acquisition.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Law") empowers a Delaware corporation to indemnify any persons who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
such corporation), by reason of the fact that such person was an officer or
director of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation
or enterprise. The indemnity may include expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding,
provided that such officer or director acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the corporation's best
interests, and, for criminal proceedings, had no reasonable cause to believe
his conduct was illegal. A Delaware corporation may indemnify officers and
directors in an action by or in the right of the corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the
corporation in the performance of his duty. Where an officer or director is
successful on the merits or otherwise in the defense of any action referred to
above, the corporation must indemnify him against the expenses which such
officer or director actually and reasonably incurred.
Article VI of the Company's By-Laws provides for indemnification by the
Company of its directors and officers to the full extent permitted by the
Delaware Law. Pursuant to Section 145 of the Delaware Law, the Company has
purchased insurance on behalf of its present and former directors and officers
against any liability asserted against or incurred by them in such capacity or
arising out of their status as such.
II-1
<PAGE>
Pursuant to specific authority granted by Section 102 of the Delaware Law,
Article FIFTH of the Company's Third Restated Certificate of Incorporation
contains the following provision regarding limitation of liability of
directors and officers:
"(e) No director of the Corporation shall be liable to the Corporation or
its stockholders for monetary damages for breach of his or her fiduciary
duty as a director, provided that nothing contained in this Third Restated
Certificate of Incorporation shall eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of the
law, (iii) under Section 174 of the General Corporation Law of the State of
Delaware or (iv) for any transaction from which the director derived an
improper personal benefit."
The Company has entered into an Indemnification Agreement with C&D Fund IV
(together with its respective affiliates, directors and officers, the
"Indemnitees"). Pursuant to the Indemnification Agreement and under the Third
Restated Certificate of Incorporation, the Company has agreed to indemnify the
members of the Company's Board of Directors to the fullest extent allowable
under applicable Delaware law. In addition, the Company has agreed to
indemnify the Indemnitees against any suits, claims, damages or expenses that
may be made against or incurred by them under applicable securities laws in
connection with offerings of securities of the Company. However, the Company
will not be obligated to indemnify any Indemnitee in the event that any such
suit, claim, damage or expense is based upon an untrue statement or agreements
related to such offerings of securities in reliance upon written information
furnished by such Indemnitee specifically for use in such documents, contracts
and agreements. See "Underwriting".
Reference is hereby made to Sections 9 and 10 of the Underwriting Agreements
filed as Exhibits 1.1 and 1.2 hereto, for certain indemnification
arrangements.
II-2
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
1. (A) EXHIBITS
<TABLE>
<CAPTION>
NUMBER DESCRIPTION OF EXHIBITS
------ -----------------------
<C> <S>
1.1 Form of Underwriting Agreement (U.S. Version).
1.2 Form of Underwriting Agreement (International Version).
Form of Agreement between U.S. and International Underwriting
1.3 Syndicates.
4.1 Third Restated Certificate of Incorporation of Lexmark International
Group, Inc. (the
"Company").(1)
4.2 By-Laws of the Company, as amended and restated as of October 26, 1995,
and amended by Amendment No. 1 dated as of February 13, 1997.(3)
4.3 Registration and Participation Agreement, dated as of March 27, 1991,
among the Company, The Clayton & Dubilier Private Equity Fund IV ("C&D
Fund IV") and the stockholders of the Company named therein.(2)
4.4 Amendment, Waiver and Consent Under Registration and Participation
Agreement, dated as of December 21, 1994, executed by C&D Fund IV,
Leeway & Co., Mellon Bank N.A., as Trustee for First Plaza Group Trust
("Mellon Bank", and with Leeway & Co., the "Institutional Investors")
and the Equitable Investors.(2)
4.5 Registration Agreement, dated as of March 27, 1991, among the Company,
Lexmark International, the Equitable Investors and the Institutional
Investors.(2)
4.6 Amendment No. 1 to Registration Agreement, dated as of December 31,
1991, among the Company, Lexmark International, the Equitable Investors
and the Institutional Investors.(2)
4.7 Securities Purchase Agreement, dated as of March 27, 1991, among the
Company and the Institutional Investors.(2)
4.8 Amendment No. 1 to Securities Purchase Agreement, dated as of March 27,
1991, among the Company and the Institutional Investors.(2)
4.9 Amendment No. 2 to Securities Purchase Agreement, dated as of December
21,
1992, among the Company and the Institutional Investors.(2)
4.10 Specimen of Class A Common Stock certificate.(1)
4.11 Rights Agreement, dated as of February 18, 1998, between the Company
and ChaseMellon Shareholder Services, L.L.C., as Rights Agent.(4)
5 Opinion of Debevoise & Plimpton regarding the validity of the
securities being registered.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Debevoise & Plimpton (included in the Opinion of Debevoise &
Plimpton filed as Exhibit 5).
24 Powers of Attorney.(5)
</TABLE>
- --------
(1) Incorporated herein by reference to the Company's Form S-1 Registration
Statement, Amendment No. 1 (Registration No. 33-97218) filed with the
Commission on October 27, 1995.
(2) Incorporated herein by reference to the Company's Form S-1 Registration
Statement (Registration No. 33-97218) filed with the Commission on
September 22, 1995.
(3) Incorporated herein by reference to the Company's Annual Report on Form
10-K (File No. 1-14050) for the Fiscal Year ended December 31, 1996.
(4) Incorporated herein by reference to the Company's Current Report on Form
8-K (File No. 1-14050) dated February 27, 1998.
(5) Previously filed.
II-3
<PAGE>
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") 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 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.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Act, the information
omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration statement as of
the time it was declared effective;
(2) For the purpose of determining any liability under the Act, each post-
effective amendment that contains a form of prospectus shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(3) For purposes of determining any liability under the Act, each filing of
the registrant's annual report pursuant to section 13(a) or section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THE REGISTRANT CERTIFIES
THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT NO. 1
TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF LEXINGTON, STATE OF KENTUCKY, ON
MARCH 13, 1998.
Lexmark International Group, Inc.
By /s/ Marvin L. Mann
---------------------
NAME: MARVIN L. MANN
TITLE: Chairman of the Board
&
Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS AMENDMENT NO. 1 TO
THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE FOLLOWING CAPACITIES AND ON MARCH 13, 1998.
SIGNATURE TITLE
/s/ Marvin L. Mann Chairman of the
- ----------------------------- Board/Chief
MARVIN L. MANN Executive Officer
(Principal
Executive Officer)
/s/ Gary E. Morin Vice President/Chief
- ----------------------------- Financial Officer
GARY E. MORIN (Principal
Financial Officer)
/s/ David L. Goodnight Corporate Controller
- ----------------------------- (Principal
DAVID L. GOODNIGHT Accounting Officer)
/s/ B. Charles Ames* Director
- -----------------------------
B. CHARLES AMES
/s/ Roderick H. Carnegie* Director
- -----------------------------
RODERICK H. CARNEGIE
/s/ Frank T. Cary* Director
- -----------------------------
FRANK T. CARY
/s/ Paul J. Curlander* Director
- -----------------------------
PAUL J. CURLANDER
/s/ William R. Fields* Director
- -----------------------------
WILLIAM R. FIELDS
II-5
<PAGE>
SIGNATURE TITLE
/s/ Donald J. Gogel* Director
- ----------------------------
DONALD J. GOGEL
/s/ Ralph E. Gomory* Director
- ----------------------------
RALPH E. GOMORY
/s/ Stephen R. Hardis* Director
- ----------------------------
STEPHEN R. HARDIS
/s/ Michael J. Maples* Director
- ----------------------------
MICHAEL J. MAPLES
/s/ Martin D. Walker* Director
- ----------------------------
MARTIN D. WALKER
* By: /s/ Vincent J. Cole
------------------------
VINCENT J. COLE
ATTORNEY-IN-FACT
II-6
<PAGE>
EXHIBIT 1.1
Lexmark International Group, Inc.
Class A Common Stock
(par value $.01 per share)
------------
Underwriting Agreement
(U.S. Version)
----------------------
March __, 1998
Goldman, Sachs & Co.,
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
Smith Barney Inc.
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Certain stockholders named in Schedule II hereto (the "Selling Stockholders")
of Lexmark International Group, Inc., a Delaware corporation (the "Company"),
propose, subject to the terms and conditions stated herein, to sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
_______ shares (the "Firm Shares") and, at the election of the Underwriters, up
to _______ additional shares (the "Optional Shares") of Class A Common Stock
(par value $.01 per share) ("Stock") of the Company (the Firm Shares and the
Optional Shares that the Underwriters elect to purchase pursuant to Section 2
hereof are herein collectively called the "Shares").
It is understood and agreed to by all parties that the Company and the Selling
Stockholders are concurrently entering into an agreement (the "International
Underwriting Agreement") providing for the sale by the Selling Stockholders of
up to a total of _______ shares of Stock (the "International Shares"), including
the overallotment option thereunder, through arrangements with certain
underwriters outside the United States (the "International Underwriters"), for
whom Goldman Sachs International [INSERT NAME(S) OF CO-REPRESENTATIVES] are
acting as lead managers. Anything herein or therein to the contrary
notwithstanding, the respective closings under this Agreement and the
International Underwriting Agreement are hereby expressly made conditional on
one another. The Underwriters hereunder and the International Underwriters are
simultaneously entering into an Agreement between U.S. and International
Underwriting Syndicates (the "Agreement between Syndicates") which provides,
among other things, for the transfer of shares of Stock between the two
syndicates. Two forms of prospectus are to be used in connection with the
offering and sale of shares of Stock contemplated by the foregoing, one relating
to the Shares hereunder and the other relating to the International Shares. The
latter form of prospectus will be identical to the former except for certain
substitute pages as included in the registration statement and amendments
thereto as mentioned below. Except as used in Sections 2, 3, 4, 9 and 11 herein,
and except as the context may otherwise require, references hereinafter to the
Shares shall include all the shares of Stock which may be sold pursuant to
either this Agreement or the International Underwriting Agreement, and
references herein to any prospectus whether in preliminary or final form, and
whether as amended or supplemented, shall include both the U.S. and the
international versions thereof.
<PAGE>
1. (a) The Company represents and warrants to, and agrees with, each of the
Underwriters and each of the Selling Stockholders that:
(i) A registration statement on Form S-3 (File No. 333-________) (the
"Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in the
form heretofore delivered to you, and, excluding exhibits thereto but
including all documents incorporated by reference in the prospectus contained
therein, to you for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the Securities
Act of 1933, as amended (the "Act"), which became or will become effective
upon filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore been
filed with the Commission; and no stop order suspending the effectiveness of
the Initial Registration Statement, any post-effective amendment thereto or
the Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) of the rules
and regulations of the Commission under the Act, is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including (i) the information contained in the form of
final prospectus filed with the Commission pursuant to Rule 424(b) under the
Act in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the Initial Registration Statement at the time it
was declared effective and (ii) the documents incorporated by reference in
the prospectus contained in the Initial Registration Statement at the time
such part of the Initial Registration Statement became effective, each as
amended at the time such part of the Initial Registration Statement became
effective or such part of the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective, are hereinafter collectively called
the "Registration Statement"; such final prospectus, in the form first filed
pursuant to Rule 424(b) under the Act, is hereinafter called the
"Prospectus"; and any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the
date of such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed after
the date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and incorporated by reference in such Preliminary Prospectus or Prospectus,
as the case may be; and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after
the effective date of the Registration Statement that is incorporated by
reference in the Registration Statement);
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material respects
to the requirements of the Act and the rules and regulations of the
Commission thereunder, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing
to the Company
2
<PAGE>
by an Underwriter through Goldman, Sachs & Co. expressly for use therein or
by a Selling Stockholder expressly for use in the preparation of the answers
therein to Item 7 of Form S-3;
(iii) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus or
any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will conform
in all material respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission thereunder and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through Goldman, Sachs & Co. expressly for
use therein;
(iv) The Registration Statement conforms, and any further amendments or
supplements to the Registration Statement will conform, in all material
respects to the requirements of the Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable effective
date of the Registration Statement and any amendment thereto, contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Goldman, Sachs & Co. expressly for use therein or by a
Selling Stockholder expressly for use in the preparation of the answers
therein to Item 7 to Form S-3;
(v) The Prospectus conforms, and any further amendments or supplements to
the Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder and do not
and will not, as of the applicable filing date of the Prospectus and any
amendment or supplement thereto, contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Goldman, Sachs & Co. expressly for use therein or by a
Selling Stockholder expressly for use in the preparation of the answers
therein to Item 7 to Form S-3;
(vi) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or incorporated
by reference in the Prospectus any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree, which loss or interference has had a material adverse effect or
would reasonably be expected to have a material adverse effect on the general
affairs, financial position, stockholders' equity or consolidated results of
operations of the Company and its subsidiaries taken as a whole (a "Material
Adverse Effect"), otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there has not been any
change in the capital stock (other than pursuant to any employee incentive or
benefit plan in existence on the date of this Agreement) or increase in the
3
<PAGE>
long-term debt of the Company or any of its subsidiaries in excess of
$75,000,000, or any material adverse change, or any development that would
reasonably be expected to involve a material adverse change, in or affecting
the general affairs, management, financial position, stockholders' equity or
results or operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus;
(vii) The Company, Lexmark International, Inc. and Lexmark
International, S.N.C. (the latter two companies, the "Material Subsidiaries")
have good title to all principal real properties (including, without
limitation, all such properties described under the caption "Item 2:
Properties" in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 (the "10-K") incorporated by reference in the
Prospectus) and good title to all personal property owned by them, in each
case free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as, individually or in the aggregate, do
not and would not reasonably be expected to have a Material Adverse Effect;
and all principal real properties and buildings held under lease by the
Company and its Material Subsidiaries (including, without limitation, all
such properties and buildings described under the caption "Item 2:
Properties" in the 10-K incorporated by reference in the Prospectus) are held
by them under valid, subsisting and enforceable leases with such exceptions
as, individually or in the aggregate, do not and would not reasonably be
expected to have a Material Adverse Effect;
(viii) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such qualification,
except where the failure to possess such power or authority, or to be so
qualified or in good standing, would not have a Material Adverse Effect; and
each Material Subsidiary of the Company has been duly incorporated and is
validly existing as a corporation, or a societe en nom collectif, as the case
may be, in good standing under the laws of its jurisdiction of incorporation;
(ix) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholders hereunder and
under the International Underwriting Agreement and the shares of the
Company's Class B Common Stock (par value $.01 per share) ("Class B Stock"))
have been duly and validly authorized and issued, are fully paid and non-
assessable and conform to the description of the Stock or Class B Stock, as
the case may be, contained in the Prospectus; all of the issued shares of
capital stock of Lexmark International, Inc. have been duly and validly
authorized and issued, are fully paid and non-assessable and (except for
directors' qualifying shares and except as set forth in the Prospectus) are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims; and all of the equity interests of Lexmark
International, S.N.C. have been duly and validly authorized and issued and
are fully paid and (except for directors' qualifying shares and except as set
forth in the Prospectus) are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims;
(x) The compliance by the Company with all of the provisions of this
Agreement and the International Underwriting Agreement and the consummation
of the transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the
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property or assets of the Company or any of its subsidiaries is subject, nor
will such action result in any violation of the provisions of the Third
Restated Certificate of Incorporation or By-laws of the Company or any
statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its subsidiaries or
any of their properties, except, in each case (other than with respect to the
Third Restated Certificate of Incorporation or By-Laws of the Company), for
such conflicts, violations, breaches or defaults which would not,
individually or in the aggregate, have a Material Adverse Effect or impair
the Company's ability to perform its obligations hereunder or under the
International Underwriting Agreement; and no consent, approval,
authorization, order, registration or qualification of or with any such court
or governmental agency or body is required for the consummation by the
Company of the transactions contemplated by this Agreement and the
International Underwriting Agreement, except the registration under the Act
of the Shares and such consents, approvals, authorizations, registrations or
qualifications as may be required under state or foreign securities or Blue
Sky laws in connection with the purchase and distribution of the Shares by
the Underwriters and the International Underwriters;
(xi) Neither the Company nor any of its subsidiaries is in violation of
its Certificate of Incorporation or By-laws or in default in the performance
or observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement lease or
other agreement or instrument to which it is a party or by which it or any of
its properties may be bound except, in each case (other than, in the case of
the Company, with respect to its Third Restated Certificate of Incorporation
and By-laws), for such conflicts, violations, breaches or defaults which do
not have or would not reasonably be expected to have a Material Adverse
Effect or impair the Company's ability to perform its obligations hereunder
or under the International Underwriting Agreement;
(xii) The statements set forth in the description of the Common Stock of
the Company, which is contained in the Company's Registration Statement on
Form 8-A filed with the Commission on October 27, 1995 incorporated by
reference in the Prospectus, including any amendments or reports filed for
the purpose of updating such description, and the description of certain
preferred stock purchase rights that have attached to the Common Stock, which
is contained in the Company's Registration Statement on Form 8-A filed with
the Commission on February 27, 1998 incorporated by reference in the
Prospectus, including any amendments or reports filed for the purpose of
updating such description, insofar as they purport to constitute a summary of
the terms of the Stock, constitute in all material respects a fair summary of
such terms;
(xiii) The statements set forth in the international version of the
Prospectus under the caption "Certain United States Tax Consequences to Non-
U.S. Holders", insofar as such statements purport to summarize certain United
States federal income and estate tax consequences of the ownership and
dispensation of the Stock by certain non-U.S. holders (as such term is
defined in such Prospectus) of the Shares, provide a fair summary of such
consequences under current law;
(xiv) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, individually or in the aggregate,
have had, or, if determined adversely to the Company or any of its
subsidiaries, would reasonably be expected to have, a Material Adverse
Effect; and, to the best knowledge of the Company, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
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(xv) The Company is not and, after giving effect to the offering and sale
of the Shares, will not be an "investment company" or an entity "controlled"
by an "investment company", as such terms are defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act");
(xvi) To the best knowledge of the Company, Coopers & Lybrand L.L.P.,
who have certified certain financial statements of the Company and its
subsidiaries, are independent public accountants as required by the Act and
the rules and regulations of the Commission thereunder; and
(xvii) Except as disclosed in the Prospectus, the Company and its
subsidiaries own or possess or are licensed to use the patents, patent
licenses, trademarks, trade names, service marks, service names, copyrights
and other intellectual property rights (collectively, the "Intellectual
Property") necessary to carry on their business as presently conducted and as
proposed to be conducted, without any conflict with or infringement of the
rights of others except for any such conflicts or infringements that,
individually or in the aggregate, do not or would not reasonably be expected
to have a Material Adverse Effect; to the best knowledge of the Company, none
of the technology employed by the Company or its subsidiaries has been
obtained or is being used by the Company or its subsidiaries in violation of
any contractual or fiduciary obligation binding on the Company, its
subsidiaries or any of their respective directors, employees or consultants
or otherwise in violation of the rights of any person except for any such
violations that, individually or in the aggregate, do not or would not
reasonably be expected to have a Material Adverse Effect; except as disclosed
in the Prospectus, neither the Company nor any of its subsidiaries has
received any notice of infringement or violation of or conflict with (and
knows of no such infringement or conflict with) asserted rights of others
with respect to any Intellectual Property or any trade secrets, proprietary
information, inventions, know-how, processes and procedures owned, used by or
licensed to the Company or any such subsidiary which, individually or in the
aggregate, if the subject of any unfavorable decision, ruling or finding,
would reasonably be expected to have a Material Adverse Effect.
(b) Each of the Selling Stockholders severally represents and warrants to,
and agrees with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary for the
execution and delivery by such Selling Stockholder of this Agreement and the
International Underwriting Agreement, and for the sale and delivery of the
Shares to be sold by such Selling Stockholder hereunder and under the
International Underwriting Agreement, have been obtained; and such Selling
Stockholder has full right, power and authority to enter into this Agreement
and the International Underwriting Agreement and to sell, assign, transfer
and deliver the Shares to be sold by such Selling Stockholder hereunder and
under the International Underwriting Agreement;
(ii) With respect to each Selling Stockholder that has executed a Power
of Attorney and Custody Agreement hereinafter referred to, all consents,
approvals, authorizations and orders necessary for the execution and delivery
by such Selling Stockholder of the Power of Attorney and Custody Agreement
have been obtained, and such Selling Stockholder has full right, power and
authority to enter into the Power of Attorney and Custody Agreement and to
authorize the attorneys-in-fact to sell, assign, transfer and deliver the
Shares to be sold by such Selling Stockholder hereunder and under the
International Underwriting Agreement;
(iii) The sale of the Shares to be sold by such Selling Stockholder
hereunder and under the International Underwriting Agreement and the
compliance by such Selling Stockholder with all of the provisions of this
Agreement, the International Underwriting Agreement, the Power of Attorney
and the Custody Agreement and the consummation of the transactions herein and
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therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder is bound, or to which any of the property or
assets of such Selling Stockholder is subject, nor will such action result in
any violation of the provisions of the Certificate of Incorporation or By-
laws of such Selling Stockholder if such Selling Stockholder is a
corporation, the Partnership Agreement of such Selling Stockholder if such
Selling Stockholder is a partnership or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over such Selling Stockholder or the property of such Selling Stockholder;
(iv) Such Selling Stockholder has, and immediately prior to each Time of
Delivery (as defined in Section 4 hereof) such Selling Stockholder will have,
good and valid title to the Shares to be sold by such Selling Stockholder
hereunder and under the International Underwriting Agreement, free and clear
of all liens, encumbrances, equities or claims; and, upon delivery of such
Shares and payment therefor pursuant hereto and thereto, good and valid title
to such Shares, free and clear of all liens, encumbrances, equities or
claims, will pass to the several Underwriters or the International
Underwriters, as the case may be (assuming that the several Underwriters and
the several International Underwriters are without notice of any adverse
claim, as defined in the Uniform Commercial Code as adopted in the State of
New York (the "Code") and are otherwise protected purchasers for the purposes
of the Code and that such Underwriters' and the International Underwriters'
rights are not limited by subsection (c) of Section 8-302 of the Code);
(v) During the period beginning on the date hereof and continuing to and
including the date 60 days after the date of the Prospectus, such Selling
Stockholder will not (A) enter into any agreement providing for, or effect,
any public sale, distribution or other disposition (including, without
limitation any sale pursuant to Rule 144, Rule 144A or Regulation S under the
Act, and any sale in a broker's transaction or through a market maker) of any
Class A Common Stock, Class B Common Stock or other equity securities of the
Company or any security convertible into or exchangeable or exercisable for
any equity security of the Company or to grant any public option for any such
sale, in any case without the prior written consent of Goldman, Sachs & Co.,
as representatives of the Underwriters; (B) sell, pledge, transfer or
otherwise dispose of any such securities in any private transaction exempt
from the registration requirements of the Act unless, prior to the
consummation thereof, the person to whom such securities are sold, pledged,
transferred or otherwise disposed of (including without limitation any
affiliate of the Selling Stockholder) delivers to you a letter signed by such
person substantially in the form of this paragraph; and (C) request
registration of any securities of the Company pursuant to any registration
rights that have been granted to the Selling Stockholder, without the prior
written consent of Goldman, Sachs & Co., as representatives of the
Underwriters;
(vi) Such Selling Stockholder has not taken and will not take, directly
or indirectly, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares;
(vii) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in conformity
with written information furnished to the Company by such Selling Stockholder
expressly for use therein, such Preliminary Prospectus and the Registration
Statement did not, and the Prospectus and any further amendments or
supplements to the Registration Statement and the Prospectus, when they
become effective or are filed with the
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Commission, as the case may be, will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; provided
further that, for all purposes of this Agreement and the International
Underwriting Agreement (including Sections 8(a), 8(b) and 8(g) hereof and
thereof), the only information furnished to the Company by such Selling
Stockholder expressly for use in any Preliminary Prospectus, the Registration
Statement, the Prospectus or any amendment or supplement thereto, are the
statements pertaining to the number of shares owned, the manner in which such
shares are held (whether beneficially or otherwise) and the number of shares
proposed to be sold by such Selling Stockholder under the caption "Selling
Stockholders";
(viii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to you prior to or at the
First Time of Delivery (as hereinafter defined) a properly completed and
executed United States Treasury Department Form W-9 (or other applicable form
or statement specified by Treasury Department regulations in lieu thereof);
(ix) Certificates in negotiable form representing all of the Shares to be
sold by such Selling Stockholder hereunder and under the International
Underwriting Agreement have been placed in custody under a custody agreement
between each Selling Stockholder, in the form heretofore furnished to you
(the "Custody Agreement"), duly executed and delivered by such Selling
Stockholder to ChaseMellon Shareholders Services, as custodian (the
"Custodian"), and such Selling Stockholder has duly executed and delivered a
Power of Attorney, in the form heretofore furnished to you (the "Power of
Attorney"), appointing the persons indicated in Schedule II hereto, and each
of them, as such Selling Stockholder's attorneys-in-fact (the "Attorneys-in-
Fact") with authority to execute and deliver this Agreement and the
International Underwriting Agreement on behalf of such Selling Stockholder,
to determine the purchase price to be paid by the Underwriters and the
International Underwriters to the Selling Stockholders as provided in Section
2 hereof, to authorize the delivery of the Shares to be sold by such Selling
Stockholder hereunder and otherwise to act on behalf of such Selling
Stockholder in connection with the transactions contemplated by this
Agreement, the International Underwriting Agreement and the Custody
Agreement;
(x) The Shares to be sold by such Selling Stockholder hereunder and under
the International Underwriting Agreement and represented by the certificates
held in custody for such Selling Stockholder under the Custody Agreement are
subject to the interests of the Underwriters hereunder and the International
Underwriters under the International Underwriting Agreement; the arrangements
made by such Selling Stockholder for such custody, and the appointment by
such Selling Stockholder of the Attorneys-in-Fact by the Power of Attorney,
are to that extent irrevocable; the obligations of the Selling Stockholders
hereunder shall not be terminated by operation of law, whether by the death
or incapacity of any individual Selling Stockholder or, in the case of an
estate or trust, by the death or incapacity of any executor or trustee or the
termination of such estate or trust, or in the case of a partnership or
corporation, by the dissolution of such partnership or corporation, or by the
occurrence of any other event; if any individual Selling Stockholder or any
such executor or trustee should die or become incapacitated, or if any such
estate or trust should be terminated, or if any such partnership or
corporation should be dissolved, or if any other such event should occur,
before the delivery of the Shares hereunder, certificates representing the
Shares shall be delivered by or on behalf of the Selling Stockholders in
accordance with the terms and conditions of this Agreement, of the
International Underwriting Agreement and of the Custody Agreements; and
actions taken by the Attorneys-in-Fact pursuant to the Powers of Attorney
shall be as valid as if such death,
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incapacity, termination, dissolution or other event had not occurred,
regardless of whether or not the Custodian, the Attorneys-in-Fact, or any of
them, shall have received notice of such death, incapacity, termination,
dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) each of the
Selling Stockholders agrees, severally and not jointly, to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from each of the Selling Stockholders, at a purchase price per share of
$_____, the number of Firm Shares (to be adjusted by you so as to eliminate
fractional shares) determined, in each case, by multiplying the aggregate number
of Firm Shares to be sold by such Selling Stockholder as set forth opposite its
name in Schedule II hereto by a fraction, the numerator of which is the
aggregate number of Firm Shares to be purchased by such Underwriter as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the aggregate number of Firm Shares to be purchased by all of the
Underwriters from all of the Selling Stockholders hereunder, and (b) in the
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Shares as provided below, each of the Selling Stockholders
agrees, severally and not jointly, to sell to each of the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase from each of
the Selling Stockholders, at the purchase price per share set forth in clause
(a) of this Section 2, that portion of the number of Optional Shares as to which
such election shall have been exercised (to be adjusted by you so as to
eliminate fractional shares) determined, in each case, by multiplying such
number of Optional Shares by a fraction, the numerator of which is the maximum
number of Optional Shares which such Underwriter is entitled to purchase as set
forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum number of Optional Shares that all of the
Underwriters are entitled to purchase hereunder.
The Selling Stockholders, as and to the extent indicated in Schedule II
hereto, hereby grant, severally and not jointly, to the Underwriters the right
to purchase at their election up to _______ Optional Shares, at the purchase
price per share set forth in the paragraph above, for the sole purpose of
covering overallotments in the sale of the Firm Shares. Any such election to
purchase Optional Shares shall be made in proportion to the number of Optional
Shares to be sold by each Selling Stockholder. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the
Attorneys-in-Fact, given within a period of 30 calendar days after the date of
this Agreement and setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the Attorneys-in-Fact otherwise
agree in writing, earlier than two or later than ten business days after the
date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) Certificates in definitive form for the Shares to be purchased by
each Underwriter hereunder and in such authorized denominations and registered
in such names as Goldman, Sachs & Co. may request upon at least forty-eight
hours' prior notice to the Selling Stockholders, shall be delivered by or on
behalf of the Selling Stockholders to Goldman, Sachs & Co., through the
facilities of The Depository Trust Company ("DTC"), for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by wire transfer of same day funds payable to the order
of the Custodian, as their interests may appear. The Company will cause the
certificates representing the Shares to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery (as defined
below) with respect thereto at the office of DTC or its designated custodian
(the "Designated Office"). The time and date of such delivery and payment shall
be, with respect to the Firm Shares, 9:30 a.m., New York City time, on March __,
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1998, or on such other time and date as Goldman, Sachs & Co. and the Selling
Stockholders may agree upon in writing, and, with respect to the Optional
Shares, 9:30 a.m., New York City time, on the date specified by Goldman, Sachs &
Co. in the written notice given by Goldman, Sachs & Co. of the Underwriters'
election to purchase such Optional Shares, or such other time and date as
Goldman, Sachs & Co. and the Selling Stockholders may agree upon in writing.
Such time and date for delivery of the Firm Shares is herein called the "First
Time of Delivery", such time and date for delivery of the Optional Shares, if
not the First Time of Delivery, is herein called the "Second Time of Delivery",
and each such time and date for delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Shares and any additional documents requested by the Underwriters
pursuant to Section 7(k) hereof, will be delivered at the offices of Sullivan &
Cromwell, 125 Broad Street, New York, New York 10004 (the "Closing Location"),
and the Shares will be delivered at the Designated Office, or at the Closing
Location or elsewhere in The City of New York, as directed by Goldman, Sachs &
Co. not later than the New York Business Day before the Time of Delivery, all at
each Time of Delivery. A meeting will be held at the Closing Location at 11:00
a.m., New York City time, on the New York Business Day next preceding each Time
of Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the parties
hereto. For the purposes of this Section 4, "New York Business Day" shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Underwriters and, to the extent
provided in Sections 5(a), 5(d), 5(e) and 5(h), each of the Selling Stockholders
(it being understood that you, and not the Selling Stockholders, shall have the
right to consent to the actions referred to therein):
(a) To prepare the Prospectus in a form approved by you; to file the
Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's
close of business on the second business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Act; to make no further amendment or any
supplement to the Registration Statement or Prospectus which shall be
disapproved by you promptly after reasonable notice thereof; to advise you,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish you
copies thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date of the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Shares; to advise you,
promptly after it receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus, of the suspension of the qualification of
the Shares for offering or sale in any jurisdiction, of the initiation or (to
the Company's knowledge) threatening of any proceeding for any such purpose, or
of any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the withdrawal of such
order;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Shares for offering and sale under the securities laws of
such jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Shares, provided
that
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in connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process, or
subject itself to taxation, in any jurisdiction;
(c) Prior to 12:00 noon, New York City Time, on the New York Business Day
next succeeding the date of this Agreement, and thereafter, to furnish the
Underwriters with copies of the Prospectus in New York City in such quantities
as you may reasonably request, and, if the delivery of a prospectus is required
at any time prior to the expiration of nine months after the time of issue of
the Prospectus in connection with the offering or sale of the Shares and if at
such time any events shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made
when such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such period to amend or supplement the Prospectus
or to file under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act or the Exchange Act, to notify you
and upon your request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies as you
may from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or omission or
effect such compliance, and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Shares at any time nine months
or more after the time of issue of the Prospectus, upon your request but at the
expense of such Underwriter, to prepare and deliver to such Underwriter as many
copies as you may request of an amended or supplemented Prospectus complying
with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158);
(e) During the period beginning from the date hereof and continuing to and
including the date 60 days after the date of the Prospectus, not to file a
registration statement with respect to, enter into any agreement providing for,
or effect, any public sale, distribution or other disposition (including,
without limitation, any sale pursuant to Rule 144 or Rule 144A under the Act and
any sale in a broker's transaction or through a market maker) of, except as
provided hereunder and under the International Underwriting Agreement, any
Stock, Class B Stock or securities of the Company that are substantially similar
to the Stock or Class B Stock, including but not limited to any securities that
are convertible into or exchangeable for, or that represent the right to
receive, Stock, Class B Stock or any such substantially similar securities
(other than pursuant to employee benefit or incentive plans existing on, or upon
the conversion or exchange of convertible or exchangeable securities outstanding
as of, the date of this Agreement), without the prior written consent of
Goldman, Sachs & Co.;
(f) To furnish to its stockholders as soon as practicable after the end of
each fiscal year an annual report (including a balance sheet and statements of
income, stockholders' equity and cash flows of the Company and its consolidated
subsidiaries certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial information of the
Company and its subsidiaries for such quarter in reasonable detail;
(g) During a period of three years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
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statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
(h) To use its best efforts to enforce the obligations of the stockholders
under their respective agreements described in Section 7(i) hereof; and
(i) If the Company elects to rely upon Rule 462(b), the Company shall file a
Rule 462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 P.M., Washing ton, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act.
6. The Company and each of the Selling Stockholders covenant and agree with
one another and with the several Underwriters that (a) the Company will pay or
cause to be paid the following: (i) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the registration of the
Shares under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, the
International Underwriting Agreement, the Agreement between Syndicates, the
Selling Agreements, the Blue Sky Memorandum, closing documents and any other
documents in connection with the offering, purchase, sale and delivery of the
Shares; (iii) all expenses in connection with the qualification of the Shares
for offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky surveys;
(iv) all fees and expenses in connection with listing the Shares on the New York
Stock Exchange; (v) the filing fees incident to, and the fees and disbursements
of counsel for the Underwriters in connection with, securing any required review
by the National Association of Securities Dealers, Inc. of the terms of the sale
of the Shares; (vi) the cost of preparing stock certificates; (vii) the cost and
charges of any transfer agent or registrar; (viii) the fees, disbursement
expenses of one counsel selected and retained by the Selling Stockholders as a
group in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ix) the fees and expenses of the
Attorneys-in-Fact and the Custodian, if any; and (x) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section; and (b) each Selling
Stockholder will pay or cause to be paid all costs and expenses incurred by such
Selling Stockholder incident to the performance of such Selling Stockholder's
obligations hereunder which are not otherwise specifically provided for in this
Section, including (i) any fees and expenses of any counsel for such Selling
Stockholder in addition to the counsel referred to in clause (a)(viii), and (ii)
all expenses and taxes incident to the sale and delivery of the Shares to be
sold by such Selling Stockholder to the Underwriters hereunder. In connection
with Clause (b) (ii) of the preceding sentence, Goldman, Sachs & Co. agrees to
pay New York State stock transfer tax, and the Selling Stockholder agrees to
reimburse Goldman, Sachs & Co. for associated carrying costs if such tax payment
is not rebated on the day of payment and for any portion of such tax payment not
rebated. It is understood, however, that except as provided in this Section,
and Sections 8 and 11 hereof, the Underwriters will pay all of their own costs
and expenses,
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including the fees of their counsel, stock transfer taxes on resale of any of
the Shares by them, and any advertising expenses connected with any offers they
may make.
7. The obligations of the Selling Stockholders hereunder to sell and deliver
Shares at a Time of Delivery shall be subject, in their discretion, to the
conditions set forth in Sections 7(a), 7(c), 7(d), 7(f) and 7(k) hereof (it
being understood that you, and not the Selling Stockholders, shall have the
right to determine whether the form and substance of the documents referred to
in Sections 7(c), 7(d), 7(f) and 7(k) are satisfactory), to the condition that
all representations and warranties and other statements of the Company herein
are, at and as of such Time of Delivery, true and correct, and to the condition
that the Company shall have performed all of its obligations hereunder
theretofore to be performed. The obligations of the Underwriters hereunder, as
to the Shares to be delivered at each Time of Delivery, shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company and of the Selling Stockholders herein are, at
and as of such Time of Delivery, true and correct, and to the condition that the
Company and the Selling Stockholders shall have performed all of its and their
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 5(a) hereof;
if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall have furnished
to you such opinion or opinions, dated such Time of Delivery, with respect to
the matters covered in paragraphs (i), (ii), (iv) and (vi) of subsection (c)
below as well as the Registration Statement and Prospectus and such other
related matters as you may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to enable
them to pass upon such matters;
(c) Debevoise & Plimpton, counsel for the Company, shall have furnished to
you their written opinions, dated such Time of Delivery, in the forms attached
hereto as Annexes 1(a) and 1(b), to the effect that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business
as described in the Prospectus or documents incorporated by reference
therein;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
(including the Shares being delivered at such Time of Delivery) have been
duly and validly authorized and issued and are fully paid and non-assessable;
and the Shares conform as to legal matters in all material respects to the
description of the Stock contained in the Prospectus;
(iii) Each Material Subsidiary of the Company has been duly incorporated
and is validly existing as a corporation, or a societe en nom collectif, as
the case may be, in good standing under the laws of its jurisdiction of
incorporation; and all of the issued shares of capital stock of Lexmark
International, Inc. have been duly and validly authorized and issued, are
fully paid and non-assessable, and are owned directly or indirectly by the
Company, free and clear (except as set forth in the Prospectus) of all liens,
encumbrances, equities or claims; and all of the equity interests of Lexmark
International, S.N.C. have been duly and validly authorized and issued and
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<PAGE>
are fully paid and are owned directly or indirectly by the Company, free and
clear (except as set forth in the Prospectus) of all liens, encumbrances,
equities or claims (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company or its
subsidiaries, provided that such counsel shall provide copies of such
opinions and certificates to you and shall state that they believe that both
you and they are justified in relying upon such opinions and certificates);
(iv) This Agreement and the International Underwriting Agreement have
been duly authorized, executed and delivered by the Company;
(v) No consent, approval, authorization, order, registration or
qualification of or with any State of New York or Delaware or U.S. Federal
court or governmental agency or body is required for the consummation by the
Company of the transactions contemplated by this Agreement and the
International Underwriting Agreement, except the registration under the Act
of the Shares, and such consents, approvals, authorizations, registrations or
qualifications as may be required under state or foreign securities or Blue
Sky laws in connection with the purchase and distribution of the Shares by
the Underwriters and the International Underwriters (as to which such counsel
need not express an opinion);
(vi) The statements set forth in the description of the Common Stock of
the Company, which is contained in the Company's Registration Statement on
Form 8-A filed with the Commission on October 27, 1995 incorporated by
reference in the Prospectus, including any amendments or reports filed for
the purpose of updating such description, and the description of certain
preferred stock purchase rights that have attached to the Common Stock, which
is contained in the Company's Registration Statement on Form 8-A filed with
the Commission on February 27, 1998 incorporated by reference in the
Prospectus, including any amendments or reports filed for the purpose of
updating such description, insofar as they purport to constitute a summary of
the terms of such stock, constitute in all material respects a fair summary
of such terms;
(vii) The statements set forth in the international version of the
Prospectus under the caption "Certain United States Tax Consequences to Non-
U.S. Holders", insofar as such statements purport to summarize certain United
States federal income and estate tax consequences of the ownership and
disposition of the Stock by certain non-U.S. holders (as such term is defined
in such Prospectus) of the Shares, provide a fair summary of such
consequences under current law;
(viii) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act; and
(ix) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to such Time of
Delivery (other than the financial statements, related schedules and other
financial and statistical information contained therein, as to which such
counsel need express no opinion) comply as to form in all material respects
with the requirements of the Act and the rules and regulations thereunder.
In addition to the matters set forth above, such opinion shall also include a
statement to the effect that such counsel has not checked the accuracy or
completeness of, or otherwise verified, and is not passing upon and assumes no
responsibility for the accuracy or completeness of, the information contained in
the Registration Statement or the Prospectus, or any amendment or supplement
thereto, except to the limited extent set forth in the concluding clause of
Section 7(c)(ii) above, that in the course of the preparation of the
Registration Statement and the Prospectus by the Company, such counsel
participated in conferences with representatives of the Company, the independent
public accountants of the Company, the Representatives and their counsel with
respect thereto and that such counsel's examination of the Registration
Statement and the Prospectus and such counsel's participation in the above-
mentioned conferences did not cause such counsel to believe that the
Registration Statement or any amendment thereto (except as to the financial
statements and related schedules and other financial and statistical information
contained therein, as to which such counsel need not express a belief), at the
time the Registration Statement or amendment became effective, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that the Prospectus
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<PAGE>
or any amendment or supplement thereto (except as to the financial statements
and related schedules and other financial and statistical information contained
therein, as to which such counsel need not express a belief), at the time it was
filed pursuant to Rule 424(b) or on the Closing Date, contained or contains an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may state that they express no opinion
as to the laws of any jurisdiction other than as to the laws of State of New
York, the General Corporation Law of the State of Delaware and the Federal laws
of the United States;
(d) Vincent J. Cole, General Counsel for the Company, shall have furnished
to you his written opinion, dated such Time of Delivery, in the form attached
hereto as Annex I(c), to the effect that:
(i) Lexmark International, Inc. has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus;
(ii) The Company has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business
so as to require such qualification, except where the failure to so qualify
would not, individually or in the aggregate, have a Material Adverse Effect;
(iii) To the best of such counsel's knowledge and other than as set
forth or contemplated in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is a
party or of which any property of the Company or any of its subsidiaries is
the subject which, individually or in the aggregate, have had, or, if
determined adversely to the Company or any of its subsidiaries, would
reasonably be expected to have, a Material Adverse Effect; and, to the best
of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(iv) The compliance by the Company with all of the provisions of this
Agreement and the International Underwriting Agreement and the consummation
of the transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to which the
Company or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action result in
any violation of the provisions of the Third Restated Certificate of
Incorporation or By-laws of the Company or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of
their properties, except, in each case (other than with respect to the Third
Restated Certificate of Incorporation or By-Laws of the Company), for such
conflicts, violations, breaches or defaults which would not, individually or
in the aggregate, have a Material Adverse Effect or impair the Company's
ability to perform its obligations hereunder or under the International
Underwriting Agreement;
(v) Neither the Company nor Lexmark International, Inc. is in violation
of its Certificate of Incorporation or By-laws or in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument known to such counsel to which it is a party or
by which it or any of its properties may be bound, except, in each case
(other than with respect to such Certificate of Incorporation and By-Laws),
for such conflicts, violations, breaches
15
<PAGE>
or defaults which would not have a Material Adverse Effect or impair the
Company's ability to perform its obligations hereunder or under the
International Underwriting Agreement;
(vi) To the best of such counsel's knowledge, other than as set forth in
the Prospectus: (a) the Company has not received notice of any claim of
infringement or violation of or conflict with rights or claims of others with
respect to any patents, patent rights or other Intellectual Property owned,
licensed or used by the Company except for any such conflicts or
infringements that, individually or in the aggregate, do not or would not
reasonably be expected to have a Material Adverse Effect; (b) and such
counsel is not aware of any research or licensing agreements, royalty
arrangements, patents, patent rights or other Intellectual Property of others
which are infringed by the Company's products or processes in such a manner
which would, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect;
(vii) The documents incorporated by reference in the Prospectus or any
further amendment or supplement thereto made by the Company prior to such
Time of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may be, complied as
to form in all material respects with the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder; and such counsel has no reason to believe that any of such
documents, when such documents became effective or were so filed, as the case
may be, contained, in the case of a registration statement which became
effective under the Act, an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or, in the case of other documents which
were filed under the Exchange Act with the Commission, an untrue statement of
a material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made when such documents were so filed, not misleading; and
(viii) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related schedules and other
financial and statistical information contained therein, as to which such
counsel need express no opinion) comply as to form in all material respects
with the requirements of the Act and the rules and regulations thereunder.
In addition to the matters set forth above, such opinion shall also include a
statement to the effect that such counsel has not checked the accuracy or
completeness of, or otherwise verified, and is not passing upon and assumes no
responsibility for the accuracy or completeness of, the information contained in
the Registration Statement or the Prospectus, or any amendment or supplement
thereto, that in the course of the preparation of the Registration Statement and
the Prospectus by the Company, such counsel participated in conferences with
representatives of the Company, the independent public accountants of the
Company, the Representatives and their counsel with respect thereto and that
such counsel's examination of the Registration Statement and the Prospectus and
such counsel's participation in the above-mentioned conferences did not cause
such counsel to believe that the Registration Statement or any amendment thereto
(except as to the financial statements and related schedules and other financial
and statistical information contained therein, as to which such counsel need not
express a belief), at the time the Registration Statement or amendment became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus or any amendment or
supplement thereto (other than the financial statements and related schedules
and other financial and statistical information contained therein, as to which
such counsel need not express a belief), at the time it was filed pursuant to
Rule 424(b) or on the Closing Date, contained or contains an untrue statement of
a material fact or omitted to state
16
<PAGE>
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
In rendering such opinion, such counsel may state that he expresses no opinion
as to the laws of any jurisdiction other than as to the laws of the State of New
York, the General Corporation Law of the State of Delaware and the Federal laws
of the United States;
(e) Ropes & Gray, counsel for the Selling Stockholders, as indicated in
Schedule II hereto, shall have furnished to you their written opinion with
respect to each of the Selling Stockholders, dated such Time of Delivery, in the
form attached hereto as Annex I(d), to the effect that:
(i) A Power of Attorney has been duly executed and delivered by or on
behalf of each Selling Stockholder and a Custody Agreement has been duly
executed and delivered by each Selling Stockholder, and such Agreements
constitute valid and binding agreements of such Selling Stockholder in
accordance with their terms;
(ii) This Agreement and the International Underwriting Agreement have
been duly executed and delivered by or on behalf of each Selling Stockholder;
and the sale of the Shares to be sold by such Selling Stockholder hereunder
and thereunder and the compliance by such Selling Stockholder with all of the
provisions of this Agreement and the International Underwriting Agreement,
the Power of Attorney and the Custody Agreement will not conflict with or
result in any violation of the provisions of the Certificate of Incorporation
or By-laws of such Selling Stockholder if such Selling Stockholder is a
corporation, the Partnership Agreement of such Selling Stockholder if such
Selling Stockholder is a partnership or any order, rule or regulation known
to such counsel of any court or governmental agency or body having
jurisdiction over such Selling Stockholder;
(iii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement and the International
Underwriting Agreement in connection with the Shares to be sold by such
Selling Stockholder hereunder or thereunder, except such as have been
obtained under the Act and such as may be required under state or foreign
securities or Blue Sky laws in connection with the purchase and distribution
of such Shares by the Underwriters or the International Underwriters;
(iv) Immediately prior to the Time of Delivery, each Selling Stockholder
was the sole registered owner of the Shares to be sold by such Selling
Stockholder. Upon registration of the Shares in the names of the
Underwriters in the stock records of the Company (or in the name of a nominee
for DTC in such stock records, with appropriate entries to the account of the
Underwriters having been made in the records of DTC) the Underwriters will
have acquired the Shares, free of any claim by any other person that such
person has a property interest in the Shares and that it is a violation of
such other person's rights for the Underwriters to hold, transfer or deal
with the Shares (assuming that the Underwriters are without notice of any
adverse claim); and
(v) This Agreement and the International Underwriting Agreement have been
duly executed and delivered by or on behalf of The Clayton & Dubilier Private
Equity Fund IV Limited Partnership (the "Fund"); and the sale of the Shares
to be sold by the Fund hereunder and thereunder and the compliance by the
Fund with all of the provisions of this Agreement and the International
Underwriting Agreement, the Power of Attorney and the Custody Agreement and
the consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any terms or provisions
of, or constitute a default under, any statute, indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such counsel
to which the Fund is a party or by which the Fund is bound, or to which
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any of the property or assets of the Fund is subject, nor will such action
result in any violation of the provisions of the Partnership Agreement or
similar instrument of the Fund or any statute known to such counsel or any
order, rule or regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the Fund, except for such conflicts,
breaches, violations or defaults as would not, individually or in the
aggregate, impair the Fund's ability to perform its obligations hereunder and
under the International Underwriting Agreement.
In rendering such opinion, Ropes & Gray may state that they express no opinion
as to the laws of any jurisdiction other than as to the laws of the Commonwealth
of Massachusetts, the General Corporation Law of the State of Delaware and the
Federal laws of the United States, and in rendering certain of the opinions in
subparagraphs (i), (ii), (iii) and (v), Ropes & Gray may rely exclusively on
opinions of other counsels for each of the Selling Stockholders, provided that
Ropes & Gray shall provide copies of such opinions to you and shall state that
they are not aware of anything to suggest that such other counsels are not
competent to render such opinions, and in rendering the opinion in subparagraph
(iv), Ropes & Gray may rely upon a certificate of such Selling Stockholder in
respect of matters of fact as to ownership of, and liens, encumbrances, equities
or claims on the Shares sold by such Selling Stockholder, provided that Ropes &
Gray shall provide a copy of such certificate to you and shall state that they
believe that both you and they are justified in relying upon such certificate;
(f) On the effective date of the Registration Statement, on the date of the
Prospectus at a time prior to the execution of this Agreement, at 9:30 a.m., New
York City time, on the effective date of any post-effective amendment to the
Registration Statement filed subsequent to the date of this Agreement and also
at each Time of Delivery, Coopers & Lybrand L.L.P. shall have furnished to you a
letter or letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you (the executed copy of the letter delivered prior
to the execution of this Agreement is attached as Annex II(a) hereto and a draft
of the form of the letter to be delivered on the effective date of any post
effective amendment to the Registration Statement and as of each Time of
Delivery is attached as Annex II(b) hereto);
(g) (i) Neither the Company nor any of its subsidiaries shall have sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus, and
(ii) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock (other than
pursuant to any employee benefit or incentive plan in existence on the date of
this Agreement) or increase in the long-term debt of the Company or any of its
subsidiaries in excess of $75,000,000, or any change, or any development that
would reasonably be expected to involve a change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole, otherwise than
as set forth or contemplated in the Prospectus, the effect of which, in any such
case described in Clause (i) or (ii), is in the reasonable judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(h) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such event
specified in this Clause (iv) in the judgment of the Representatives makes it
impracticable or
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inadvisable to proceed with the public offering or the delivery of the Shares
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(i) The Company has obtained and delivered to the Underwriters executed copies
of holdback agreements from each of the stockholders of the Company listed on
Exhibit I hereto in the form previously provided to you;
(j) The Company and the Selling Stockholders shall have furnished or caused to
be furnished to you at such Time of Delivery certificates of officers of the
Company and of the Selling Stockholders, respectively, satisfactory to you as to
the accuracy of the representations and warranties of the Company and the
Selling Stockholders, respectively, herein at and as of such Time of Delivery,
as to the performance by the Company and the Selling Stockholders of all of
their respective obligations hereunder to be performed at or prior to such Time
of Delivery, and as to such other matters as you may reasonably request, and the
Company shall have furnished or caused to be furnished certificates as to the
matters set forth in subsections (a) and (g) of this Section, and as to such
other matters as you may reasonably request; and
(k) The Company shall have complied with the provisions of Section 5(c) hereof
with respect to the furnishing of prospectuses on the New York Business Day next
succeeding the date of this Agreement.
8. (a) The Company will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Goldman, Sachs & Co. expressly for use therein; and provided, further,
that the Company shall not be liable to any Underwriter under the indemnity
agreement in this subsection (a) with respect to any Preliminary Prospectus to
the extent that any such loss, claim, damage or liability of such Underwriter
results from the fact that such Underwriter sold Shares to a person to whom
there was not sent by commercially reasonable means, at or prior to the written
confirmation of such sale, a copy of the Prospectus, where such delivery is
required by the Act, if the Company has previously furnished sufficient copies
thereof to such Underwriter and the loss, claim, damage or liability of such
Underwriter results from an untrue statement or omission of a material fact
contained in the Preliminary Prospectus and corrected in the Prospectus.
(b) The Company will indemnify and hold harmless each Selling Stockholder
against any losses, claims, damages or liabilities, joint or several, to which
such Selling Stockholder may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a fact contained in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a fact required to
be stated therein or necessary to make the statements therein not
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misleading; and will reimburse each Selling Stockholder for any legal or other
expenses reasonably incurred by such Selling Stockholder in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Selling
Stockholder expressly for use therein, or that arises out of or is based on such
Selling Stockholder's failure to deliver a copy of the Registration Statement,
Preliminary Prospectus or Prospectus, or any amendment or supplement thereto.
(c) Each of the Selling Stockholders will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company or the
Underwriters by such Selling Stockholder expressly for use therein; and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that no
Selling Stockholder shall be liable to any Underwriter under the indemnity
agreement in this subsection (c) with respect to any Preliminary Prospectus to
the extent that any such loss, claim, damage or liability of such Underwriter
results from the fact that such Underwriter sold Shares to a person to whom
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the Prospectus, where such delivery is required by the Act, if
the Company has previously furnished sufficient copies thereof to such
Underwriter and the loss, claim, damage or liability of such Underwriter results
from an untrue statement or omission of a material fact contained in the
Preliminary Prospectus which was identified in writing at such time to such
Underwriter and corrected in the Prospectus; and provided, further, that the
liability of a Selling Stockholder pursuant to this subsection (c) shall not
exceed the net amount received by such Selling Stockholder (after deducting any
underwriting discount) from the sale of the Shares pursuant to the Prospectus.
(d) Each of the Selling Stockholders will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company or the Underwriters by such Selling Stockholder
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that no Selling Stockholder shall be liable in any such
20
<PAGE>
case to the extent that any such loss, claim, damage or liability arises out of
or is based on the Underwriters' failure to deliver a copy of the Registration
Statement, Preliminary Prospectus or Prospectus, or any amendment or supplement
thereto; and provided, further, that the liability of a Selling Stockholder
pursuant to this subsection (d) shall not exceed the net amount received by such
Selling Stockholder (after deducting any underwriting discount) from the sale of
the Shares pursuant to the Prospectus.
(e) Each Underwriter will indemnify and hold harmless the Company and each
Selling Stockholder against any losses, claims, damages or liabilities to which
the Company or such Selling Stockholder may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through Goldman, Sachs & Co. expressly for use therein; and will
reimburse the Company and each Selling Stockholder for any legal or other
expenses reasonably incurred by the Company or such Selling Stockholder in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(f) Promptly after receipt by an indemnified party under subsection (a), (b),
(c), (d) or (e) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (which shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on all claims that were or could have been made by all parties to
such action or claim, arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(g) If the indemnification provided for in this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a), (b),
(c), (d) or (e) above in respect of any losses, claims, damages or liabilities
(or actions in respect thereof) referred to therein, then, in every case (except
as specifically provided below), each indemnifying party shall contribute to the
amount paid
21
<PAGE>
or payable by such indemnified party as a result of such losses, claims, damages
or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other from the
offering of the Shares (except, solely in any case where the Company is required
hereunder to indemnify a Selling Stockholder or vice versa, in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and such Selling Stockholder on the other from the offering of the
Shares). If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (f) above, then, in every case
(except as specifically provided below), each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Stockholders on the one hand
and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations
(except, solely in any case where the Company is required hereunder to indemnify
a Selling Stockholder or vice versa, in such proportion as is appropriate to
reflect not only such relative benefits as would apply in such case as provided
above but also the relative fault of the Company on the one hand and such
Selling Stockholder on the other in connection with such statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations). The
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Shares purchased
under this Agreement (before deducting expenses) received by the Company and the
Selling Stockholders bear to the total underwriting discounts and commissions
received by the Underwriters with respect to the Shares purchased under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company and the Selling Stockholders on
the one hand and the Underwriters on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Selling Stockholders on
the one hand or the Underwriters on the other, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, each of the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (g) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (g). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (g) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (g), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(g) to contribute are several in proportion to their respective underwriting
obligations and not joint. Notwithstanding the foregoing, a Selling Stockholder
shall not be required to contribute under this subsection (g) except to the
extent and under such circumstances as such Selling Stockholder would have been
liable pursuant to Section 8(c) or (d) hereof had indemnification been
enforceable under applicable law.
22
<PAGE>
(h) The obligations of the Company and the Selling Stockholders under this
Section 8 shall be in addition to any liability which the Company and the
respective Selling Stockholders may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his or her consent is named in the Registration Statement as about to
become a director of the Company) and to each person, if any, who controls the
Company or any Selling Stockholder within the meaning of the Act. The
obligations of the Company under Section 8(b) hereof shall extend upon the same
terms and conditions, to each of the Selling Stockholders' directors, officers,
employees, fund managers (if it is an investment fund) or fiduciaries (if it is
a pension or trust fund), and to each person, if any, who controls any Selling
Stockholder within the meaning of the Act. The obligations of the Selling
Stockholders under Section 8(d) hereof shall extend, upon the same terms and
conditions, to each director and officer of the Company and to each person, if
any, who controls the Company within the meaning of the Act.
(i) The Company and the Selling Stockholders hereby agree that, with respect
to the transactions contemplated by this agreement, the provisions of Sections
8(b), 8(d), 8(f) and 8(g) hereof supersede the provisions of Sections 3.7(a),
3.7(b), 3.7(c) and 3.7(e) of the Registration and Participation Agreement, dated
as March 27, 1991, as amended, among the Company and the Selling Stockholders.
9. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after
such default by any Underwriter you do not arrange for the purchase of such
Shares, then the Selling Stockholders shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Shares on such terms. In the event that,
within the respective prescribed periods, you notify the Selling Stockholders
that you have so arranged for the purchase of such Shares, or the Selling
Stockholders notify you that they have so arranged for the purchase of such
Shares, you or the Selling Stockholders shall have the right to postpone such
Time of Delivery for a period of not more than five New York Business Days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the Shares
of a defaulting Underwriter or Underwriters by you and the Selling Stockholders
as provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
of the Shares to be purchased at such Time of Delivery, then the Selling
Stockholders shall have the right to require each non-defaulting Underwriter to
purchase the number of Shares which such Underwriter agreed to purchase
hereunder at such Time of Delivery and, in addition, to require each non-
defaulting Underwriter to purchase its pro rata share (based on the number of
Shares which such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the Shares
of a defaulting Underwriter or Underwriters by you and the Selling Stockholders
as provided in subsection (a) above,
23
<PAGE>
the aggregate number of such Shares which remains unpurchased exceeds one-
eleventh of the aggregate number of all of the Shares to be purchased at such
Time of Delivery, or if the Selling Stockholders shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Selling Stockholders to sell the Optional
Shares) shall thereupon terminate, without liability on the part of any non-
defaulting Underwriter or the Company or the Selling Stockholders, except for
the expenses to be borne by the Company and the Selling Stockholders and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or any of the Selling Stockholders, or any officer
or director or controlling person of the Company, or any controlling person of
any Selling Stockholder, and shall survive delivery of and payment for the
Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Stockholders shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if for any other reason any Shares are not delivered by or on behalf of the
Selling Stockholders as provided herein, the Company and each of the defaulting
Selling Stockholders, if any, pro rata (with the Company's portion based on the
number of Shares to be sold by all non-defaulting Selling Stockholders hereunder
and the defaulting Selling Stockholders' portion based on the number of shares
to be sold by such defaulting Selling Stockholders, if any, hereunder) will
reimburse the Underwriters through you for all out-of-pocket expenses approved
in writing by you, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of the Shares not so delivered, but the Company and the Selling
Stockholders shall then be under no further liability to any Underwriter in
respect of the Shares not so delivered except as provided in Sections 6 and 8
hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives; and in all dealings with any Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Stockholder made or given by any
or all of the Attorneys-in-Fact for such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Goldman, Sachs &
Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department; if to any Selling Stockholder shall be delivered or sent by mail,
telex or facsimile transmission to counsel for such Selling Stockholder at its
address set forth in Schedule II hereto; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 8(f) hereof shall
be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire or telex
constituting such Questionnaire, which address will be supplied to the Company
or the Selling Stockholders by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
24
<PAGE>
13. This Agreement shall be binding upon, and inure solely to the benefit of,
the Underwriters, the Company and the Selling Stockholders and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company, any Selling Stockholder or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of this Agreement. As used herein, the term
"business day" shall mean any day when the Commission's office in Washington,
D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us ten counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters, the Company and
each of the Selling Stockholders. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters (U.S. Version), the form of
which shall be submitted to the Company and the Selling Stockholders for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
25
<PAGE>
Any person executing and delivering this Agreement as Attorney-in-Fact for a
Selling Stockholder represents by so doing that, to the best of his knowledge,
he has been duly appointed as Attorney-in-Fact by such Selling Stockholder
pursuant to a validly existing and binding Power of Attorney which authorizes
such Attorney-in-Fact to take such action.
Very truly yours,
Lexmark International Group, Inc.
By: _________________________________________
Name: Gary E. Morin
Title: Vice President and Chief Financial
Officer
26
<PAGE>
The Clayton & Dubilier Private Equity Fund IV
Limited Partnership
[INSERT NAMES OF OTHER SELLING STOCKHOLDERS]
By: _____________________________________________
Name:
Title: Attorney-In-Fact
As Attorney-in-Fact acting on behalf of the
Selling Stockholders named above.
27
<PAGE>
Accepted as of the date hereof:
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
SMITH BARNEY INC.
By: _____________________________________
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
28
<PAGE>
SCHEDULE I
TOTAL
NUMBER NUMBER OF OPTIONAL
OF SHARES TO BE
FIRM SHARES PURCHASED IF
TO BE MAXIMUM OPTION
PURCHASED EXERCISED
------------ ------------------
Underwriter
-----------
Goldman, Sachs & Co. .....................
-------- --------
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
Smith Barney Inc..........................
---------- ----------
Total .....................
========== ==========
29
<PAGE>
SCHEDULE II
NUMBER OF
OPTIONAL
SHARES TO BE
TOTAL NUMBER OF SOLD IF
FIRM SHARES MAXIMUM OPTION
TO BE SOLD EXERCISED
--------------- --------------
The Selling Stockholders:
The Clayton & Dubilier Private Equity Fund IV
Limited Partnership(a) ..........................
---------- ----------
[INSERT NAMES OF OTHER SELLING STOCKHOLDERS] .....
---------- ----------
---------- ----------
Total ..................................
========== ==========
(a) This Selling Stockholder is represented by Ropes & Gray, One
International Place, Boston, Massachusetts, and has appointed Donald J. Gogel as
the Attorney-in-Fact for such Selling Stockholder.
[INSERT NAMES OF AND COUNSEL AND ATTORNEYS-IN-FACT FOR OTHER SELLING
STOCKHOLDERS]
30
<PAGE>
EXHIBIT I
Selling Stockholders
- --------------------
The Clayton & Dubilier Private Equity Fund IV
Limited Partnership
[INSERT NAMES OF OTHER SELLING STOCKHOLDERS]
Non-Selling Stockholders
- ------------------------
[INSERT NAMES OF NON-SELLING STOCKHOLDERS]
31
<PAGE>
ANNEX I
[Form of opinions of regular and corporate counsel for the Company and counsel
for the Selling Stockholders]
1
<PAGE>
ANNEX II
[Executed accountants' comfort letter, dated the effective date, and form of
bring-down comfort letter]
2
<PAGE>
EXHIBIT 1.2
Lexmark International Group, Inc.
Class A Common Stock
(par value $.01 per share)
------------
Underwriting Agreement
(International Version)
-----------------------
March __, 1998
Goldman Sachs International,
Lehman Brothers International (Europe)
Merrill Lynch International
Morgan Grenfell & Co. Limited
Morgan Stanley & Co. International
Limited
Smith Barney Inc.
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman Sachs International,
Peterborough Court,
133 Fleet Street,
London EC4A 2BB, England.
Ladies and Gentlemen:
Certain stockholders named in Schedule II hereto (the "Selling Stockholders")
of Lexmark International Group, Inc., a Delaware corporation (the "Company"),
propose, subject to the terms and conditions stated herein, to sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
_______ shares (the "Firm Shares") and, at the election of the Underwriters, up
to _______ additional shares (the "Optional Shares") of Class A Common Stock
(par value $.01 per share) ("Stock") of the Company (the Firm Shares and the
Optional Shares which the Underwriters elect to purchase pursuant to Section 2
hereof are herein collectively called the "Shares").
It is understood and agreed to by all parties that the Company and the
Selling Stockholders are concurrently entering into an agreement, a copy of
which is attached hereto (the "U.S. Underwriting Agreement"), providing for the
sale by the Selling Stockholders of up to a total of _______ shares of Stock
(the "U.S. Shares"), including the overallotment option thereunder, through
arrangements with certain underwriters in the United States (the "U.S.
Underwriters"), for whom Goldman, Sachs & Co. [INSERT NAME(S) OF CO-
REPRESENTATIVES] are acting as representatives. Anything herein or therein to
the contrary notwithstanding, the respective closings under this Agreement and
the U.S. Underwriting Agreement are hereby expressly made conditional on one
another. The Underwriters hereunder and the U.S. Underwriters are
simultaneously entering into an Agreement between U.S. and International
Underwriting Syndicates (the "Agreement between Syndicates") which provides,
among other things, for the transfer of shares of Stock between the two
syndicates and for consultation by the Lead Managers hereunder with Goldman,
Sachs & Co. prior to exercising the rights of the Underwriters under Section 7
hereof. Two forms of prospectus are to be used in connection with the offering
and sale of shares of Stock contemplated by the foregoing, one relating to the
Shares hereunder and the other relating to the U.S. Shares. The latter form of
prospectus will be identical to the former except for certain substitute pages
as included in the registration statement and amendments thereto as mentioned
below. Except as used in
<PAGE>
Sections 2, 3, 4, 9 and 11 herein, and except as the context may otherwise
require, references hereinafter to the Shares shall include all of the shares of
Stock which may be sold pursuant to either this Agreement or the U.S.
Underwriting Agreement and references herein to any prospectus, whether in
preliminary or final form, and whether as amended or supplemented, shall include
both the U.S. and the international versions thereof.
In addition, this Agreement incorporates by reference certain provisions from
the U.S. Underwriting Agreement (including the related definitions of terms,
which are also used elsewhere herein) and, for purposes of applying the same,
references (whether in these precise words or their equivalent) in the
incorporated provisions to the "Underwriters" shall be to the Underwriters
hereunder, to the "Shares" shall be to the Shares hereunder as just defined, to
"this Agreement" (meaning therein the U.S. Underwriting Agreement) shall be to
this Agreement (except where this Agreement is already referred to or as the
context may otherwise require) and to the representatives of the Underwriters or
to Goldman, Sachs & Co. shall be to the addressees of this Agreement and to
Goldman Sachs International ("GSI"), and, in general, all such provisions and
defined terms shall be applied mutatis mutandis as if the incorporated
provisions were set forth in full herein having regard to their context in this
Agreement as opposed to the U.S. Underwriting Agreement.
1. The Company and each of the several Selling Stockholders hereby make to
the Underwriters the same respective representations, warranties and agreements
as are set forth in Section 1 of the U.S. Underwriting Agreement, which Section
is incorporated herein by this reference.
2. Subject to the terms and conditions herein set forth, (a) each of the
Selling Stockholders agrees, severally and not jointly, to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from each of the Selling Stockholders, at a purchase price per share of
$_____, the number of Firm Shares (to be adjusted by you so as to eliminate
fractional shares) determined, in each case, by multiplying the aggregate number
of Firm Shares to be sold by such Selling Stockholder as set forth opposite its
name in Schedule II hereto by a fraction, the numerator of which is the
aggregate number of Firm Shares to be purchased by such Underwriter as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the aggregate number of Firm Shares to be purchased by all the
Underwriters from all the Selling Stockholders hereunder, and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, each of the Selling Stockholders agrees,
severally and not jointly, to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from each of the
Selling Stockholders, at the purchase price per share set forth in clause (a) of
this Section 2, that portion of the number of Optional Shares as to which such
election shall have been exercised (to be adjusted by you so as to eliminate
fractional shares) determined, in each case, by multiplying such number of
Optional Shares by a fraction the numerator of which is the maximum number of
Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of Optional Shares that all of the Underwriters
are entitled to purchase hereunder.
The Selling Stockholders, as and to the extent indicated in Schedule II
hereto, hereby grant, severally and not jointly, to the Underwriters the right
to purchase at their election up to
2
<PAGE>
_______ Optional Shares, at the purchase price per share set forth in the
paragraph above, for the sole purpose of covering overallotments in the sale of
the Firm Shares. Any such election to purchase Optional Shares shall be made in
proportion to the number of Optional Shares to be sold by each Selling
Stockholder. Any such election to purchase Optional Shares may be exercised only
by written notice from you to the Attorneys-in-Fact, given within a period of 30
calendar days after the date of this Agreement and setting forth the aggregate
number of Optional Shares to be purchased and the date on which such Optional
Shares are to be delivered, as determined by you but in no event earlier than
the First Time of Delivery (as defined in Section 4 hereof) or, unless you and
the Attorneys-in-Fact otherwise agree in writing, earlier than two or later than
ten business days after the date of such notice.
3. Upon the authorization by GSI of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus and in the forms of Agreement among
Underwriters (International Version) and Selling Agreements, which have been
previously submitted to the Company by you. Each Underwriter hereby makes to
and with the Company and the Selling Stockholders the representations and
agreements of such Underwriter as a member of the selling group contained in
Sections 3(d) and 3(e) of the form of Selling Agreements.
4. (a) Certificates in definitive form for the Shares to be purchased by
each Underwriter hereunder and in such authorized denominations and registered
in such names as Goldman, Sachs & Co. may request upon at least forty-eight
hours' prior notice to the Selling Stockholders, shall be delivered by or on
behalf of the Selling Stockholders to Goldman, Sachs & Co., through the
facilities of The Depository Trust Company ("DTC"), for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by wire transfer of same day funds payable to the order
of the Custodian, as their interests may appear. The Company will cause the
certificates representing the Shares to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery (as defined
below) with respect thereto at the office of DTC or its designated custodian
(the "Designated Office"). The time and date of such delivery and payment shall
be, with respect to the Firm Shares, 9:30 a.m., New York City time, on March __,
1998, or on such other time and date as Goldman, Sachs & Co. and the Selling
Stockholders may agree upon in writing, and, with respect to the Optional
Shares, 9:30 a.m., New York City time, on the date specified by Goldman, Sachs &
Co. in the written notice given by Goldman, Sachs & Co. of the Underwriters'
election to purchase such Optional Shares, or such other time and date as
Goldman, Sachs & Co. and the Selling Stockholders may agree upon in writing.
Such time and date for delivery of the Firm Shares is herein called the "First
Time of Delivery", such time and date for delivery of the Optional Shares, if
not the First Time of Delivery, is herein called the "Second Time of Delivery",
and each such time and date for delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at Time of Delivery by or on behalf of the
parties hereto pursuant to Section 7 of the U.S. Underwriting Agreement,
including the cross-receipt for the Shares and any additional documents
requested by the Underwriters pursuant to Section 7(k) of the U.S. Underwriting
Agreement, will be delivered at the offices of Sullivan & Cromwell, 125 Broad
Street, New York, New York 10004 (the "Closing Location"), and the Shares will
be delivered at the Designated Office, or at the Closing Location or elsewhere
in The City of New York as directed by GSI not later than the New York Business
Day before the Time of Delivery, all at each Time of Delivery. A meeting will be
held at the Closing Location at
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11:00 a.m., New York City time, on the New York Business Day next preceding Time
of Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the parties
hereto. For the purposes of this Section 4, "New York Business Day" shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company hereby makes with the Underwriters and to the extent provided
in Sections 5(a), 5(d), 5(e) and 5(h) of the U.S. Underwriting Agreement, each
of the Selling Stockholders (it being understood that you and not the Selling
Stockholders, shall have the right to consent to the actions referred to
therein) the same agreements as are set forth in Section 5 of the U.S.
Underwriting Agreement, which Section is incorporated herein by this reference.
6. The Company, each of the Selling Stockholders, and the Underwriters hereby
agree with respect to certain expenses on the same terms as are set forth in
Section 6 of the U.S. Underwriting Agreement, which Section is incorporated
herein by this reference.
7. The obligations of the Selling Stockholders hereunder to sell and deliver
Shares at a Time of Delivery shall be subject, in their discretion, to the
conditions set forth in Sections 7(a), 7(c), 7(d), 7(f) and 7(k) of the U.S.
Underwriting Agreement (it being understood that you, and not the Selling
Stockholders, shall have the right to determine whether the form and substance
of the documents referred to in Sections 7(c), 7(d), 7(f) and 7(k) of the U.S.
Underwriting Agreement are satisfactory), to the condition that all
representations and warranties and other statements of the Company herein are,
at and as of such Time of Delivery, true and correct, and to the condition that
the Company shall have performed all of its obligations hereunder theretofore to
be performed. Subject to the provisions of the Agreement between Syndicates,
the obligations of the Underwriters hereunder shall be subject, in their
discretion, at each Time of Delivery to the condition that all representations
and warranties and other statements of the Company, and the Selling Stockholders
herein are, at and as of such Time of Delivery, true and correct, the condition
that the Company and the Selling Stockholders shall have performed all of their
respective obligations hereunder theretofore to be performed, and additional
conditions identical to those set forth in Section 7 of the U.S. Underwriting
Agreement, which Section is incorporated herein by this reference.
8. (a) The Company will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
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through GSI expressly for use therein; and provided, further, that the Company
shall not be liable to any Underwriter under the indemnity agreement in this
subsection (a) with respect to any Preliminary Prospectus to the extent that any
such loss, claim, damage or liability of such Underwriter results from the fact
that such Underwriter sold Shares to a person to whom there was not sent by
commercially reasonable means, at or prior to the written confirmation of such
sale, a copy of the Prospectus, where such delivery is required by the Act, if
the Company has previously furnished sufficient copies thereof to such
Underwriter and the loss, claim, damage or liability of such Underwriter results
from an untrue statement or omission of a material fact contained in the
Preliminary Prospectus and corrected in the Prospectus.
(b) The Company will indemnify and hold harmless each Selling Stockholder
against any losses, claims, damages or liabilities, joint or several, to which
such Selling Stockholder may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a fact contained in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a fact required to
be stated therein or necessary to make the statements therein not misleading;
and will reimburse each Selling Stockholder for any legal or other expenses
reasonably incurred by such Selling Stockholder in connection with investigating
or defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the Prospectus
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Selling Stockholder
expressly for use therein, or that arises out of or is based on such Selling
Stockholder's failure to deliver a copy of the Registration Statement,
Preliminary Prospectus or Prospectus, or any amendment or supplement thereto.
(c) Each of the Selling Stockholders will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company or the
Underwriters by such Selling Stockholder expressly for use therein; and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that no
Selling Stockholder shall be liable to any Underwriter under the indemnity
agreement in this subsection (c) with respect to any Preliminary Prospectus to
the extent that any such loss, claim, damage or liability of such Underwriter
results from the fact that such Underwriter sold Shares to a person to whom
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the Prospectus, where such delivery is required by
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the Act, if the Company has previously furnished sufficient copies thereof to
such Underwriter and the loss, claim, damage or liability of such Underwriter
results from an untrue statement or omission of a material fact contained in the
Preliminary Prospectus which was identified in writing at such time to such
Underwriter and corrected in the Prospectus; and provided, further, that the
liability of a Selling Stockholder pursuant to this subsection (c) shall not
exceed the net amount received by such Selling Stockholder (after deducting any
underwriting discount) from the sale of the Shares pursuant to the Prospectus.
(d) Each of the Selling Stockholders will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company or the Underwriters by such Selling Stockholder
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that no Selling Stockholder shall be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
on the Underwriters' failure to deliver a copy of the Registration Statement,
Preliminary Prospectus or Prospectus, or any amendment or supplement thereto;
and provided, further, that the liability of a Selling Stockholder pursuant to
this subsection (d) shall not exceed net amount received by such Selling
Stockholder (after deducting any underwriting discount) from the sale of the
Shares pursuant to the Prospectus.
(e) Each Underwriter will indemnify and hold harmless the Company and each
Selling Stockholder against any losses, claims, damages or liabilities to which
the Company or such Selling Stockholder may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through GSI expressly for use therein; and will reimburse the
Company and each Selling Stockholder for any legal or other expenses reasonably
incurred by the Company or such Selling Stockholder in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(f) Promptly after receipt by an indemnified party under subsection (a), (b),
(c), (d) or (e) above of notice of the commencement of any action, such
indemnified party shall, if a claim in
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respect thereof is to be made against an indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (which shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on all claims
that were or could have been made by all parties to such action or claim,
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(g) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a), (b),
(c), (d) or (e) above in respect of any losses, claims, damages or liabilities
(or actions in respect thereof) referred to therein, then, in every case (except
as specifically provided below), each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other from the offering of the Shares (except, solely in any case where the
Company is required hereunder to indemnify a Selling Stockholder or vice versa,
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and such Selling Stockholder on the other from
the offering of the Shares). If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (f) above,
then, in every case (except as specifically provided below), each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company and the Selling Stockholders on the
one hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations (except, solely in any case where the Company is required
hereunder to indemnify a Selling Stockholder or vice versa, in such proportion
as is appropriate to reflect not only such relative benefits as would apply in
such case as provided above but also the relative fault of the Company on the
one hand and such Selling Stockholder on the other in connection with such
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations). The relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters
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on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Shares purchased under this Agreement (before
deducting expenses) received by the Company and the Selling Stockholders bear to
the total underwriting discounts and commissions received by the Underwriters
with respect to the Shares purchased under this Agreement, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault of
the Company and the Selling Stockholders on the one hand and the Underwriters on
the other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Selling Stockholders on the one hand or the Underwriters on the other,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, each
of the Selling Stockholders and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this subsection (g) were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (g). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (g) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (g), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (g) to contribute are several in proportion to
their respective underwriting obligations and not joint. Notwithstanding the
foregoing, a Selling Stockholder shall not be required to contribute under this
subsection (g) except to the extent and under such circumstances as such Selling
Stockholder would have been liable pursuant to Section 8(c) or (d) hereof, had
indemnification been enforceable under applicable law.
(h) The obligations of the Company and the Selling Stockholders under this
Section 8 shall be in addition to any liability which the Company and the
respective Selling Stockholders may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his or her consent is named in the Registration Statement as about to
become a director of the Company) and to each person, if any, who controls the
Company or any Selling Stockholder within the meaning of the Act. The
obligations of the Company under Section 8(b) hereof shall extend upon the same
terms and conditions, to each of the Selling Stockholders' directors, officers,
employees, fund managers (if it is an investment fund) or fiduciaries (if it is
a pension or trust fund), and to each person, if any, who controls any Selling
Stockholder within the meaning of the Act. The obligations of the Selling
Stockholders under Section 8(d) hereof shall extend, upon the same terms and
conditions, to each director and officer of the Company and to each person, if
any, who controls the Company within the meaning of the Act.
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(i) The Company and the Selling Stockholders hereby agree that, with respect
to the transactions contemplated by this agreement, the provisions of Sections
8(b), 8(d), 8(f) and 8(g) hereof supersede the provisions of Sections 3.7(a),
3.7(b), 3.7(c) and 3.7(e) of the Registration and Participation Agreement, dated
as March 27, 1991, as amended, among the Company and the Selling Stockholders.
9. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Shares,
then the Selling Stockholders shall be entitled to a further period of thirty-
six hours within which to procure another party or other parties satisfactory to
you to purchase such Shares on such terms. In the event that, within the
respective prescribed periods, you notify the Selling Stockholders that you have
so arranged for the purchase of such Shares, or the Selling Stockholders notify
you that they have so arranged for the purchase of such Shares, you or the
Selling Stockholders shall have the right to postpone Time of Delivery for a
period of not more than five New York Business Days, in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees to
file promptly any amendments to the Registration Statement or the Prospectus
which in your opinion may thereby be made necessary. The term "Underwriter" as
used in this Agreement shall include any person substituted under this Section
with like effect as if such person had originally been a party to this Agreement
with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Selling
Stockholders as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased does not exceed one-eleventh of the aggregate
number of all the Shares to be purchased at such Time of Delivery, then the
Selling Stockholders shall have the right to require each non-defaulting
Underwriter to purchase the number of shares which such Underwriter agreed to
purchase hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Shares which such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Selling
Stockholders as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased exceeds one-eleventh of the aggregate number of
all the Shares to be purchased at such Time of Delivery, or if the Selling
Stockholders shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Shares of a defaulting
Underwriter or Underwriters, then this Agreement (or, with respect to the Second
Time of Delivery, the obligations of the Underwriters to purchase and of the
Selling Stockholders to sell the Optional Shares) shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter or the Company
or the Selling Stockholders, except for the expenses to be borne by the Company
and the Selling Stockholders and the Underwriters as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
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10. The respective indemnities, agreements, representations, warranties and
other statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company or any of the Selling Stockholders, or any officer
or director or controlling person of the Company or any controlling person of
any Selling Stockholders, and shall survive delivery of and payment for the
Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Stockholders shall then be under any
liability to any Underwriter except as provided in Section 6 and Section 8
hereof; but, if for any other reason, Shares are not delivered by or on behalf
of the Selling Stockholders as provided herein, the Company and each of the
defaulting Selling Stockholders, if any, pro rata (with the Company's portion
based on the number of Shares to be sold by all non-defaulting Selling
Stockholders hereunder and the defaulting Selling Stockholders' portion based on
the number of shares to be sold by such defaulting shareholders, if any,
hereunder) will reimburse the Underwriters through GSI for all out-of-pocket
expenses approved in writing by GSI, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company and
the Selling Stockholders shall then be under no further liability to any
Underwriter in respect of the Shares not so delivered except as provided in
Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by GSI on behalf of you as the representatives of the
Underwriters; and in all dealings with any Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Stockholder made or given by any
or all of the Attorneys-in-Fact for such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the Underwriters in care of GSI, Peterborough Court,
133 Fleet Street, London EC4A 2BB, England, Attention: Equity Capital Markets,
Telex No. 94012165, facsimile transmission No. (0171) 774-1550; if to any
Selling Stockholder shall be delivered or sent by mail, telex or facsimile
transmission to counsel for such Selling Stockholder at its address set forth in
Schedule II hereto; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(f) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company or the Selling
Stockholders by GSI upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and the Selling Stockholders and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each person who controls the Company, any Selling Stockholder or any
Underwriter, and their respective heirs, executors,
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administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA.
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us ten counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters, the Company and
each of the Selling Stockholders. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters (International Version), the
form of which shall be furnished to the Company and the Selling Stockholders for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
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Any person executing and delivering this Agreement as Attorney-in-Fact for a
Selling Stockholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing and
binding Power of Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
Lexmark International Group, Inc.
By:__________________________
Name: Gary E. Morin
Title: Vice President and Chief
Financial Officer
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<PAGE>
The Clayton & Dubilier Private Equity Fund IV
Limited Partnership
[INSERT NAMES OF OTHER SELLING STOCKHOLDERS]
By:__________________________________________
Name:
Title: Attorney-in-fact
As Attorney-in-Fact acting on behalf of the
Selling Stockholders named above.
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<PAGE>
Accepted as of the date hereof:
GOLDMAN SACHS INTERNATIONAL
LEHMAN BROTHERS INTERNATIONAL (EUROPE)
MERRILL LYNCH INTERNATIONAL
MORGAN GRENFELL & CO. LIMITED
MORGAN STANLEY & CO. INTERNATIONAL
LIMITED
SMITH BARNEY INC.
By: Goldman Sachs International
By:______________________________________
(Attorney-in-fact)
On behalf of each of the Underwriters
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<PAGE>
SCHEDULE I
TOTAL
NUMBER NUMBER OF OPTIONAL
OF SHARES TO BE
FIRM SHARES PURCHASED IF
TO BE MAXIMUM OPTION
PURCHASED EXERCISED
------------ ------------------
Underwriter
-----------
Goldman, Sachs & Co.......................
---------- ----------
Lehman Brothers International (Europe)
Merrill Lynch International
Morgan Grenfell & Co. Limited
Morgan Stanley & Co. International
Limited
Smith Barney Inc......................... ---------- ----------
Total...........................
========== ==========
15
<PAGE>
SCHEDULE II
NUMBER OF
OPTIONAL
SHARES TO BE
TOTAL NUMBER OF SOLD IF
FIRM SHARES MAXIMUM OPTION
TO BE SOLD EXERCISED
--------------- --------------
The Selling Stockholders:
The Clayton & Dubilier Private Equity Fund IV
Limited Partnership(a).............................
---------- ----------
[INSERT NAMES OF OTHER SELLING STOCKHOLDERS]........
---------- ----------
---------- ----------
Total.....................................
========== ==========
(a) This Selling Stockholder is represented by Ropes & Gray, One
International Place, Boston, Massachusetts, and has appointed Donald J. Gogel as
the Attorney-in-Fact for such Selling Stockholder.
[INSERT NAMES OF AND COUNSEL AND ATTORNEYS-IN-FACT FOR OTHER SELLING
STOCKHOLDERS]
16
<PAGE>
EXHIBIT 1.3
LEXMARK INTERNATIONAL GROUP, INC.
CLASS A COMMON STOCK
(PAR VALUE $.01 PER SHARE)
AGREEMENT BETWEEN U.S. AND
INTERNATIONAL UNDERWRITING SYNDICATES
-------------------------------------
March __, 1998
This Agreement is made between (a) Goldman, Sachs & Co., Lehman Brothers
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.
Incorporated, Smith Barney, Inc. as representatives (the "U.S. Representatives")
for the United States underwriters (the "U.S. Underwriters") listed in Schedule
I to the Underwriting Agreement (U.S. Version) (the "U.S. Underwriting
Agreement") dated the date hereof with Lexmark International Group, Inc. (the
"Company"), and the Selling Stockholders named therein, and (b) Goldman Sachs
International ("GSI") Lehman Brothers International (Europe), Merrill Lynch
International, Morgan Grenfell & Co. Limited, Morgan Stanley & Co. International
Limited, Smith Barney, Inc. as Lead Managers (the "Lead Managers") for the
international underwriters (the "International Underwriters") listed in Schedule
I to the Underwriting Agreement (International Version) (the "International
Underwriting Agreement") dated the date hereof with the Company and the Selling
Stockholders named therein. The U.S. Underwriters and the International
Underwriters are herein collectively called the "Underwriters", each such group
of Underwriters is sometimes separately called a "syndicate", and each of
Goldman, Sachs & Co. and GSI is sometimes called a "syndicate representative" of
the U.S. Underwriters and International Underwriters, respectively.
The U.S. Underwriters, pursuant to the U.S. Underwriting Agreement, have
agreed to purchase _______ Firm Shares and, at the option of the U.S.
Underwriters, up to an additional _______ Optional Shares (collectively, the
"U.S. Shares") and the International Underwriters, pursuant to the International
Underwriting Agreement, have agreed to purchase _______ Firm Shares and, at the
option of the International Underwriters, up to an additional _______ Optional
Shares (collectively, the "International Shares"). In respect of these
offerings, the U.S. Underwriters have entered into an Agreement among
Underwriters (U.S. Version) (the "U.S. AAU") and the International Underwriters
have entered into an Agreement among Underwriters (International Version) (the
"International AAU") (each separately referred to as an "AAU"). The U.S.
Underwriters and the International Underwriters deem it necessary and advisable
in connection therewith that certain of their respective activities be
coordinated pursuant to this Agreement. The U.S. Shares and the International
Shares are hereinafter referred to collectively as the "Shares", and the
"overall underwriting proportion" and the "syndicate underwriting proportion" of
any Underwriter or group of Underwriters shall be that proportion which is to be
underwritten by such Underwriter or Underwriters of either all the Shares or of
all the Shares of the relevant syndicate (in each case exclusive of Optional
Shares, except as the U.S. Representatives and the Lead Managers may mutually
agree). Terms not defined herein are used as defined in the underwriting
agreements referred to above.
<PAGE>
1. The U.S. Underwriters, acting through Goldman, Sachs & Co., and the
International Underwriters, acting through GSI, agree that from time to time
until the termination of certain provisions of the U.S. AAU they will consult
with and advise each other as to the availability for sale of Shares purchased
pursuant to the U.S. Underwriting Agreement or the International Underwriting
Agreement and remaining unsold. From time to time, at the direction of or with
the consent of Goldman, Sachs & Co., in consultation with GSI, the Underwriters
may purchase and sell from one syndicate to the other some or all of such unsold
Shares.
Unless otherwise determined by mutual agreement of the U.S. Representatives
and the Lead Managers, the price and currency settlement of any Shares so
purchased or sold shall be the original public offering price, in United States
dollars, less an amount not greater than the selling concession. Settlement
with respect to any Shares transferred hereunder prior to a Time of Delivery
shall be made on such Time of Delivery if feasible but in no event later than
five business days after the transfer date. Certificates representing the Shares
so purchased shall be delivered on the respective settlement dates or other
mutually satisfactory settlement shall be made. The liability for payment to
the Selling Stockholders of the purchase price of the Shares being purchased
under the respective underwriting agreements shall not be affected by the
provisions of this Agreement.
In connection with the purchase or sale of Shares from one syndicate to the
other pursuant to this Section 1, the obligations of each Underwriter, subject
to the availability of unsold Shares in the case of a sale by an Underwriter's
syndicate, shall be in accordance with the syndicate underwriting proportion of
each Underwriter; provided, however, that an Underwriter, with the consent of
its syndicate representative, may agree to purchase or sell more or fewer Shares
than would constitute its syndicate underwriting proportion and the number of
Shares to be purchased or sold by the other Underwriters in the same syndicate
shall be computed after giving effect to such variance. Except as provided in
this paragraph, the allocation of rights and obligations of Underwriters in
respect of any purchase of Shares from or sale to the other syndicate shall be
governed by the applicable provisions of the respective syndicate's AAU.
2. All stabilization transactions, whether in the United States or
otherwise, shall be conducted at the direction of and subject to the control of
Goldman, Sachs & Co., so that stabilization activities worldwide shall be
coordinated and conducted in compliance with any applicable laws and
regulations.
Subject to the limitations set forth in the AAU of each syndicate as to the
net commitment for long or short account of any Underwriter as the result of
certain transactions, all such stabilization transactions shall be for the
respective accounts of the U.S. Underwriters and the International Underwriters
in accordance with their respective overall underwriting proportions.
3. Goldman, Sachs & Co., on behalf of the U.S. Representatives, and GSI, on
behalf of the Lead Managers, shall have responsibility for the actions of the
U.S. Underwriters and the International Underwriters, respectively, regarding
overallotments in arranging for sales of Shares; provided, however, that GSI
shall not make any such overallotments without the prior approval of Goldman,
Sachs & Co. Overallotments shall be subject to the limitations set forth in the
AAU of each syndicate as to the net commitment for long or short account of any
Underwriter as the result of certain transactions. GSI shall not exercise on
behalf of the International Underwriters the overallotment option granted to
them by the Selling Stockholders without the prior approval of Goldman, Sachs &
Co. and shall exercise such option if, when and to the extent directed by
Goldman, Sachs & Co. Each syndicate shall be solely responsible for profits and
losses arising from its overallotments; provided, however, that to the extent
that
2
<PAGE>
one syndicate may be accorded an overallotment option that is disproportionate
to its aggregate underwriting commitment at the expense of the size of the
overallotment option of the other syndicate, Goldman, Sachs & Co. may reallocate
between the syndicates profits and losses arising from overallotments.
4. The U.S. Underwriters agree for the benefit of the International
Underwriters to comply with the U.S. AAU and the International Underwriters
agree for the benefit of the U.S. Underwriters to comply with the International
AAU, including the related Selling Agreements, and to reconfirm the geographic
selling restrictions applicable to the offerings, as summarized in Annex A
hereto.
5. The U.S. Representatives and the Lead Managers agree that:
Time of Delivery is not on the day provided in the U.S. Underwriting Agreement
and in the International Underwriting Agreement, they will mutually agree on a
postponed date within the time permitted by such underwriting agreements and the
settlement dates herein provided shall be adjusted accordingly;
(b) Changes in the public offering price or in the selling concession
and reallowance to dealers will be made only after consultation among them,
but in accordance with the direction of Goldman, Sachs & Co., during the
consultation period specified in the first sentence of Section 1 hereof;
(c) Each syndicate, through the respective syndicate representative,
will keep the other fully informed of the progress of the offering and
distribution of the Shares; and
(d) The Lead Managers shall not terminate the International Underwriting
Agreement pursuant to the conditions set forth in Section 7 thereof except
after consultation with Goldman, Sachs & Co. on behalf of the U.S.
Representatives.
6. The obligations of the Underwriters set forth in Sections 1, 2, 3 and
4 hereof shall terminate upon the termination of certain provisions (including
the geographic selling restrictions) of the U.S. AAU pursuant to Section 10
thereof, which termination shall be on the thirtieth full business day after the
Firm Shares are released by Goldman, Sachs & Co. for sale to the public, unless
earlier terminated by Goldman, Sachs & Co. as provided therein. GSI shall cause
the termination of the corresponding provisions of the International AAU
simultaneously with such termination of provisions of the U.S. AAU.
7. Any global advertising with respect to the offering shall be under the
control of Goldman, Sachs & Co. Any regional advertising with respect to the
offering shall be as agreed between Goldman, Sachs & Co. and the Lead Managers.
8. The U.S. Representatives and the Lead Managers shall agree as to the
expenses which will constitute expenses of the underwriting and distribution of
the Shares common to the U.S. Underwriters and the International Underwriters,
which expenses shall be allocated between the U.S. Underwriters, on the one
hand, and the International Underwriters, on the other, in accordance with their
respective overall underwriting commitments. It is hereby agreed that the fees
and expenses of counsels to the Underwriters and the costs of global
advertising, if any, shall be common expenses. Except with respect to such
common expenses, the International Underwriters will pay the aggregate expenses
incurred in connection with the purchase, carrying or sale of the International
Shares, and the U.S. Underwriters will pay the aggregate expenses incurred in
connection with the purchase, carrying or sale of the U.S. Shares.
Reimbursements for expenses, if any, received by either
3
<PAGE>
syndicate from the Company or the Selling Stockholders shall be for the account
of such syndicate.
9. Neither the U.S. Representatives nor the Lead Managers shall, by
virtue of executing this Agreement, have any liability to any other Underwriter
for the failure of another Underwriter to perform its obligations under either
underwriting agreement or either AAU. The duties of Goldman, Sachs & Co.
hereunder shall be administrative and not fiduciary in nature.
10. This Agreement may be amended before or after any Time of Delivery by
mutual written agreement of the undersigned U.S. Representatives and Lead
Managers.
11. This Agreement may be signed in any number of counterparts, which
together shall constitute one and the same instrument, and shall be binding upon
and inure to the benefit of all of the Underwriters.
12. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA.
IN WITNESS WHEREOF, this Agreement has been executed as of the date and year
first above written by the undersigned for themselves and for the Underwriters
as set forth above.
Acting on behalf of themselves and the other
U.S. Underwriters:
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
SMITH BARNEY INC.
By:
__________________________
(Goldman, Sachs & Co.)
Acting on behalf of themselves and the other
International Underwriters:
GOLDMAN SACHS INTERNATIONAL
LEHMAN BROTHERS INTERNATIONAL (EUROPE)
MERRILL LYNCH INTERNATIONAL
MORGAN GRENFELL & CO. LIMITED
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
SMITH BARNEY INC.
By: Goldman Sachs International
By:
__________________________
(Attorney-in-Fact)
4
<PAGE>
ANNEX A
SUMMARY OF GEOGRAPHIC SELLING RESTRICTIONS
U.S. UNDERWRITERS (AS SET FORTH IN SECTION 4 OF THE U.S. AAU):
U.S. Underwriters may sell only:
(a) in the United States of America (including the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction
(the "United States"); and
(b) to "U.S. Persons", meaning
(i) individuals resident in the United States, and
(ii) corporations, partnerships or other entities organized in or under
the laws of the United States or any political subdivision thereof
and whose office most directly involved in the purchase is located
in the United States (including any such entity constituting an
investment adviser acting with discretionary authority for a non-
U.S. Person);
subject to the following exceptions:
(a) sales by offices of Goldman, Sachs & Co. acting as agent for GSI, and
(b) with the prior written approval of GSI, sales by a foreign branch of a
U.S. Underwriter acting on behalf of an affiliated International
Underwriter.
INTERNATIONAL UNDERWRITERS (AS SET FORTH IN SECTION 3(A) OF THE SELLING
AGREEMENTS AND REFERRED TO IN SECTION 4 OF THE INTERNATIONAL AAU):
International Underwriters may sell only outside the United States to non-U.S.
Persons (including any such entity constituting an investment adviser located
outside the United States acting with discretionary authority for a U.S.
Person).
5
<PAGE>
[EXHIBIT 5]
[LETTER OF DEBEVOISE & PLIMPTON]
March 11, 1998
Lexmark International Group, Inc.
One Lexmark Centre Drive
Lexington, Kentucky 40550
LEXMARK INTERNATIONAL GROUP, INC.
REGISTRATION STATEMENT ON FORM S-3
Dear Sirs:
We have acted as counsel to Lexmark International Group, Inc., a Delaware
corporation (the "Registrant"), in connection with a Registration Statement on
Form S-3 (the "Registration Statement") filed by the Registrant with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Act of 1933, as amended (the "Act"), relating to (a) 7,704,577 shares (the "Firm
Shares") of the Registrant's Class A Common Stock, par value $.01 per share (the
"Class A Common Stock"), being offered by the Selling Stockholders referred to
in the Registration Statement and (b) up to an additional 770,458 shares of
Class A Common Stock that may be sold by the Selling Stockholders (the "Option
Shares") pursuant to the exercise of the underwriters' over-allotment options
(such Option Shares, together with the Firm Shares, the "Selling Stockholder
Shares").
In so acting, we have examined and relied upon the originals, or copies
certified or otherwise identified to our satisfaction, of such records,
documents, certificates and other instruments as in our judgement are
necessary or appropriate to enable us to render the opinion expressed below.
We are of the opinion that the Selling Stockholder Shares are duly
authorized, validly issued, fully paid and non-assessable under the laws of the
State of Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption
"Validity of the Shares" in the Prospectuses forming a part thereof. In giving
such consent, we do not thereby concede that we are within the category of
person whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission thereunder.
Very truly yours,
/s/ Debevoise & Plimpton
<PAGE>
[EXHIBIT 23.1]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Amendment No. 1 to the
Registration Statement on Form S-3 of our reports dated February 18, 1998, on
our audits of the consolidated financial statements and financial statement
schedule of Lexmark International Group, Inc. and subsidiaries as of December
31, 1996 and 1997, and for the years ended December 31, 1995, 1996 and 1997. We
also consent to the reference to our firm under the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
Lexington, Kentucky
March 12, 1998
