<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 5, 1998
REGISTRATION NO. 333-50609
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
PRE-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
<TABLE>
<S> <C>
LEXMARK INTERNATIONAL GROUP, INC. LEXMARK INTERNATIONAL, INC.
(Exact Names of Registrants as Specified in Their Charters)
Delaware Delaware
(States or Other Jurisdictions of Incorporation or Organization)
22-3074422 06-1308215
(I.R.S. Employer Identification Nos.)
</TABLE>
--------------------------
ONE LEXMARK CENTRE DRIVE
LEXINGTON, KENTUCKY 40550
(606) 232-2000
(Address, including zip code, and telephone number, including area code, of
Registrants' 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:
DAVID B. HARMS, ESQ.
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
(212) 558-4000
--------------------------
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: / /
--------------------------
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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PROSPECTUS Subject to Completion Dated April 30, 1998
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.
<PAGE>
[LOGO]
LEXMARK INTERNATIONAL, INC.
$150,000,000
% SENIOR NOTES DUE 2008
FULLY AND UNCONDITIONALLY GUARANTEED BY
LEXMARK INTERNATIONAL GROUP, INC.
INTEREST PAYABLE AND
ISSUE PRICE: %
Interest on the % Senior Notes due 2008 (the "Notes") of Lexmark
International, Inc., a Delaware corporation (the "Issuer"), offered hereby is
payable semi-annually on and of each year, beginning , 1998. The
Notes are fully and unconditionally guaranteed (the "Guarantee") as to payments
of all amounts in respect thereof by Lexmark International Group, Inc., a
Delaware corporation (the "Company" or the "Guarantor"). The Notes are
redeemable, in whole or in part, at the option of the Issuer at any time at a
redemption price equal to the greater of (i) 100% of the principal amount of the
Notes to be redeemed or (ii) as determined by the Quotation Agent (as defined
herein), the sum of the present values of the remaining scheduled payments of
principal and interest thereon (not including any portion of such payments of
interest accrued to the date of redemption) discounted to the date of redemption
on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate (as defined herein) plus basis
points, plus, in each case (i) and (ii), accrued interest thereon to the date of
redemption. The Notes will not be entitled to the benefits of any sinking fund.
See "Description of Notes and Guarantee."
The Notes will be represented by one or more global securities (collectively,
the "Global Note") registered in the name of The Depository Trust Company
("DTC") or its nominee. Beneficial interests in the Global Note will be shown
on, and transfers thereof will be effected only through, records maintained by
DTC and its participants. Except as provided herein, Notes in definitive form
will not be issued. See "Description of Notes and Guarantee."
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>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) ISSUER(1)(3)
<S> <C> <C> <C>
Per Note % % %
Total $ $ $
</TABLE>
(1) Plus accrued interest, if any, from , 1998.
(2) The Issuer and the Guarantor have agreed, severally and jointly, to
indemnify the Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended. See
"Underwriting."
(3) Before deducting expenses payable by the Issuer, estimated at $344,250.
The Notes are offered, subject to prior sale, when, as and if delivered to and
accepted by the Underwriters and subject to their right to reject any order in
whole or in part and to approval of certain legal matters. It is expected that
delivery of the Notes will be made on or about , 1998 through the
facilities of DTC, against payment therefor in immediately available funds.
J.P. MORGAN & CO.
SALOMON SMITH BARNEY
NATIONSBANC MONTGOMERY SECURITIES LLC
, 1998
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE NOTES. SPECIFICALLY,
THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING, AND MAY BID FOR
AND PURCHASE THE NOTES IN THE OPEN MARKET. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus or incorporated by reference herein, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company, the Issuer or any Underwriter. This Prospectus does not
constitute an offer to sell or the solicitation of an offer to buy the Notes by
anyone in any jurisdiction in which such offer or solicitation is not authorized
or in which the person making such offer or solicitation is not qualified to do
so or to any person to whom it is unlawful to make such offer or solicitation.
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 or the Issuer since the date hereof or that the
information contained or incorporated by reference herein is correct as of any
time subsequent to the date of such information.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
Available Information.................. 3
Incorporation of Certain Documents by
Reference............................ 3
The Company............................ 4
Recent Developments.................... 6
Capitalization......................... 7
Use of Proceeds........................ 8
<CAPTION>
PAGE
---
<S> <C>
Selected Consolidated Financial Data... 9
Summarized Financial Data For the
Issuer............................... 11
Description of Notes and Guarantee..... 12
Underwriting........................... 22
Forward Looking Statements............. 23
Validity of Notes and Guarantee........ 23
Experts................................ 23
</TABLE>
2
<PAGE>
AVAILABLE INFORMATION
Lexmark International Group, Inc. (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 Company's Class A Common Stock, par value $.01 per share (the "Class A
Common Stock"), is listed.
The Company and the Issuer have filed with the Commission a joint 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 Notes 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, the Issuer and the Notes,
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, as amended by the Company's Annual Report on Form 10-K/A dated
March 23, 1998, including portions incorporated therein of the Company's
definitive Proxy Statement dated March 26, 1998.
2. The Company's Current Reports on Form 8-K, dated April 20, 1998 and April
21, 1998.
3. 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: Investor Relations, telephone (606)
232-5108.
------------------------
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.
3
<PAGE>
THE COMPANY HAS AS ITS ONLY SIGNIFICANT ASSET ALL THE OUTSTANDING COMMON STOCK
OF THE ISSUER. HEREINAFTER, "THE COMPANY" AND "LEXMARK" WILL REFER TO THE
COMPANY, THE ISSUER AND ITS SUBSIDIARIES, TAKEN TOGETHER, UNLESS THE CONTEXT
REQUIRES OTHERWISE.
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.
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")
4
<PAGE>
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
healthcare.
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 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.
- ------------------------
Lexmark-TM- is a registered trademark of Lexmark International, Inc.
HP-Registered Trademark- is a registered trademark of Hewlett- Packard Company.
Apple-Registered Trademark- is a registered trademark of Apple Computer, Inc.
Canon-Registered Trademark- is a registered trademark of Canon Kabushiki Kaisha.
IBM-Registered Trademark- is a registered trademark of IBM. Xerox-Registered
Trademark- is a registered trademark of Xerox Corporation.
5
<PAGE>
RECENT DEVELOPMENTS
FIRST QUARTER OPERATING RESULTS. On April 20, 1998, Lexmark reported record
revenues for the first quarter of 1998 of $672 million, an increase of 15% over
the first quarter of 1997, reflecting strong growth of printers and associated
supplies. Earnings increased 61% to $50 million, with diluted earnings per share
increasing 72% to $0.69 (in each case before extraordinary charges in the first
quarter of 1997).
NEW REVOLVING CREDIT FACILITY. On January 27, 1998, Lexmark entered into a new
$300 million unsecured revolving credit and competitive advance facility with a
group of banks (the "New Credit Facility"). Upon entering into the New Credit
Facility, the Issuer used borrowings under the New Credit Facility to repay the
amounts outstanding under its existing term loan and revolving credit facility
(the "Prior Credit Facility"), which was then terminated. The New Credit
Facility matures on January 27, 2003.
SHARE REPURCHASES. As of December 31, 1997, the Company had repurchased
6,438,114 shares of its Class A Common Stock in open market and other
transactions, at prices ranging from $21.25 to $33.75 per share for an aggregate
cost of approximately $182 million, under previous board authorizations for
repurchases totaling $200 million. 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
Class A Common Stock from time to time in the open market or in privately
negotiated transactions depending upon market price and other factors. During
the first quarter of 1998, the Company repurchased 2,000,000 shares of Class A
Common Stock from certain stockholders at a price per share equal to $43.38 per
share, leaving approximately $131 million remaining under the existing board
authorizations as of March 31, 1998. These 1998 repurchases were financed with
borrowings under the New Credit Facility.
6
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the Company
(a) at December 31, 1997, (b) as adjusted to give effect to (i) the repurchase
of 2,000,000 shares of Class A Common Stock during the first quarter of 1998,
(ii) repayment of the Prior Credit Facility and (iii) borrowing under the New
Credit Facility to finance the purchase in (i) and the repayment in (ii) ((i),
(ii) and (iii), collectively, the "Reflected Events") and (c) as adjusted to
give effect to the Reflected Events, the sale of the Notes offered hereby and
the application of the estimated net proceeds therefrom to repay borrowings
under the New Credit Facility (with the remaining proceeds added to cash or cash
equivalents), as described under "Use of Proceeds." The information in this
table should be read in conjunction with the consolidated historical financial
statements and related notes of the Company incorporated by reference herein.
See "Use of Proceeds."
<TABLE>
<CAPTION>
DECEMBER 31, 1997
<S> <C> <C> <C>
(IN MILLIONS)
-----------------------------------------------
<CAPTION>
AS ADJUSTED FOR
THE REFLECTED
AS ADJUSTED FOR EVENTS
THE REFLECTED AND THE OFFERING
ACTUAL EVENTS OF THE NOTES
--------- --------------- -------------------
<S> <C> <C> <C>
CASH AND CASH EQUIVALENTS.......................................... $ 43.0 $ 43.0 $ 47.9
--------- ------- -------
--------- ------- -------
SHORT-TERM DEBT.................................................... $ 18.0 $ 18.0 $ 18.0
--------- ------- -------
LONG-TERM DEBT
% Senior Notes due 2008........................................ -- -- 150.0
Prior Credit Facility
Term Loan.................................................... 37.0 -- --
Revolving Credit Facility.................................... 20.0 -- --
New Credit Facility.............................................. -- 143.8(1) --
--------- ------- -------
Total long-term debt....................................... 57.0 143.8(1) 150.0
--------- ------- -------
STOCKHOLDERS' EQUITY(2):
Preferred stock, $.01 par value, 1,600,000 shares authorized, no
shares outstanding............................................. -- -- --
Class A common stock, $.01 par value, 160,000,000 shares
authorized, 67,539,935 outstanding............................. 0.7 0.7 0.7
Class B common stock, $.01 par value, 10,000,000 shares
authorized, 410,537 outstanding(3)............................. -- -- --
Additional paid-in capital....................................... 537.2 537.2 537.2
Retained earnings................................................ 168.8 168.8 168.8
Accumulated translation adjustment............................... (23.8) (23.8) (23.8)
Treasury stock, at cost.......................................... (182.2) (269.0) (269.0)
--------- ------- -------
Total stockholders' equity................................. 500.7 413.9 413.9
--------- ------- -------
Total capitalization....................................... $ 575.7 $ 575.7 $ 581.9
--------- ------- -------
--------- ------- -------
</TABLE>
- ------------------------
(1) Does not reflect working capital borrowings under the New Credit Facility
since December 31, 1997.
(2) As of December 31, 1997, the Company had repurchased 6,438,114 shares of
Class A Common Stock in open market and other transactions at prices ranging
from $21.25 to $33.75 per share for an aggregate cost of approximately $182
million, under board authorizations permitting repurchases totaling up to
$200 million. 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 prices and other factors. During the first quarter of
1998, the Company repurchased 2,000,000 shares of Class A Common Stock from
certain stockholders at a price per share equal to $43.38 per share, leaving
approximately $131 million remaining under the existing authorizations as of
March 31, 1998. These 1998 repurchases were financed with borrowings under
the New Credit Facility.
(3) As of February 12, 1998, all of the outstanding shares of Class B Common
Stock had been converted into Class A Common Stock.
7
<PAGE>
USE OF PROCEEDS
The net proceeds from the offering of the Notes are estimated to be
approximately $ million (after deducting expenses and underwriting
discounts and commissions paid by the Issuer). The Issuer expects to use a
portion of the net proceeds from the offering and sale of the Notes to repay all
of its borrowings under the New Credit Facility, which matures on January 27,
2003. Any remaining net proceeds will be used for general corporate purposes.
The indebtedness to be repaid bears interest at a weighted average rate of
approximately 6.1% as of April 30, 1998. It is expected that up to approximately
20% of the net proceeds of the offering of the Notes will be applied to
repayment of loans made to the Issuer by Morgan Guaranty Trust Company of New
York and NationsBank of Texas, N.A., both of which are lenders under the New
Credit Facility and are affiliates of J.P. Morgan Securities Inc. and
NationsBanc Montgomery Securities LLC, respectively, both of which are
Underwriters of the Notes. See "Underwriting."
8
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth selected financial data of the Company on a
consolidated basis. The statement of earnings data and the statement of
financial position data at and for the years ended December 31, 1997, 1996,
1995, 1994 and 1993 have been derived from the Company's audited consolidated
financial statements. The selected financial data set forth below should be read
in conjunction with, and are qualified in their entirety by reference to, the
Company's consolidated financial statements and notes thereto incorporated
herein by reference.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1997 1996 1995(1) 1994 1993
------------- ------------- ------------- ------------- -------------
<CAPTION>
(IN MILLIONS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS DATA:
Revenues............................. $ 2,493.5 $ 2,377.6 $ 2,157.8 $ 1,852.3 $ 1,675.7
Cost of revenues..................... 1,623.5 1,630.2 1,487.9 1,298.8 1,107.4
------------- ------------- ------------- ------------- -------------
Gross profit......................... 870.0 747.4 669.9 553.5 568.3
Research and development............. 128.9 123.9 116.1 101.0 111.7
Selling, general and administrative.. 466.5 388.0 359.1 292.9 322.0
------------- ------------- ------------- ------------- -------------
Operating income before option
compensation related to IPO and
amortization of intangibles........ 274.6 235.5 194.7 159.6 134.6
Option compensation related to IPO... -- -- 60.6 -- --
Amortization of intangibles(2)....... -- 5.1 25.6 44.7 64.0
------------- ------------- ------------- ------------- -------------
Operating income..................... 274.6 230.4 108.5 114.9 70.6
Interest expense..................... 10.8 20.9 35.1 50.6 63.9
Amortization of deferred financing
costs and other expense............ 9.1 7.9 10.1 13.6 13.1
------------- ------------- ------------- ------------- -------------
Earnings (loss) before income taxes
and extraordinary item............. 254.7 201.6 63.3 50.7 (6.4)
Provision for income taxes........... 91.7 73.8 15.2 6.1 3.0
------------- ------------- ------------- ------------- -------------
Earnings (loss) before extraordinary
item............................... 163.0 127.8 48.1 44.6 (9.4)
Extraordinary loss(3)................ (14.0) -- (15.7) -- --
------------- ------------- ------------- ------------- -------------
Net earnings (loss).................. $ 149.0 $ 127.8 $ 32.4 $ 44.6 $ (9.4)
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Diluted earnings (loss) per common
share before extraordinary
item(4)............................ $ 2.17 $ 1.69 $ 0.65 $ (0.48) $ (0.35)
Diluted net earnings (loss) per
common share(4).................... $ 1.98 $ 1.69 $ 0.44 $ (0.48) $ (0.35)
Shares used in diluted earnings per
share calculation.................. 75,168,776 75,665,734 74,200,279 58,853,416 58,880,761
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1997 1996 1995(1) 1994 1993
------------- ------------- ------------- ------------- -------------
<CAPTION>
(IN MILLIONS, EXCEPT SHARE DATA AND RATIOS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF FINANCIAL POSITION DATA:
Cash and cash equivalents............ $ 43.0 $ 119.3 $ 150.5 $ 42.0 $ 105.0
Trade receivables, net............... 318.9 304.7 213.6 191.1 221.4
Inventories.......................... 353.8 271.0 296.3 279.0 307.5
Prepaid expenses and other current
assets............................. 60.4 70.1 55.3 45.6 72.7
------------- ------------- ------------- ------------- -------------
Total current assets........... 776.1 765.1 715.7 557.7 706.6
Property, plant and equipment, net... 409.6 434.1 361.2 337.1 357.2
Other assets......................... 22.5 22.3 66.0 66.1 151.2
------------- ------------- ------------- ------------- -------------
Total assets................... $ 1,208.2 $ 1,221.5 $ 1,142.9 $ 960.9 $ 1,215.0
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Short-term debt (including current
portion of long-term debt)-term.... $ 18.0 $ 2.1 $ 20.0 $ -- $ 139.0
Accounts payable..................... 302.0 197.2 209.6 138.3 121.3
Accrued liabilities.................. 227.5 222.0 258.4 181.9 152.7
------------- ------------- ------------- ------------- -------------
Total current liabilities...... 547.5 421.3 488.0 320.2 413.0
Long-term debt....................... 57.0 163.2 175.0 290.0 511.7
Other liabilities.................... 103.0 96.7 89.7 55.2 31.6
Redeemable senior preferred
stock(5)........................... -- -- -- -- 85.0
Stockholders' equity................. 500.7 540.3 390.2 295.5 173.7
------------- ------------- ------------- ------------- -------------
Total liabilities and
stockholders' equity......... $ 1,208.2 $ 1,221.5 $ 1,142.9 $ 960.9 $ 1,215.0
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
OTHER DATA:
Working capital...................... $ 228.6 $ 343.8 $ 227.7 $ 237.5 $ 293.6
Ratio of earnings to fixed
charges(6)......................... 8.1 5.5 2.1 1.6 0.9
Debt to total capital ratio.......... 13% 23% 33% 50% 72%
Depreciation and amortization........ $ 77.5 $ 69.2 $ 99.1 $ 127.3 $ 139.1
Capital expenditures................. $ 69.5 $ 145.0 $ 106.8 $ 58.1 $ 62.4
</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 through
2000, resulting from the vesting of certain of the Company's outstanding
employee stock options at the time of the Company's initial public offering
in November 1995.
(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.
(6) The ratios of earnings to fixed charges were computed by dividing (i) the
sum of (a) net income, before deducting extraordinary items and the
provision for income taxes and (b) fixed charges (excluding capitalized
interest), by (ii) total fixed charges. Fixed charges (including capitalized
interest) consist of interest on debt, including amortization of deferred
financing costs and gross rental expense.
10
<PAGE>
SUMMARIZED FINANCIAL DATA FOR THE ISSUER
Set forth below is summarized financial information for the Issuer, as of and
for each of the three years in the period ended December 31, 1997 which has been
derived from the Company's audited consolidated financial statements. Such
information should be read in conjunction with, and is qualified in its entirety
by reference to, the Company's consolidated financial statements and notes
thereto incorporated herein by reference. This information is substantially the
same as the financial information reported for the Company because: (i) the
operations of the Company are conducted by the Issuer and the direct and
indirect subsidiaries of the Issuer; (ii) the Company has no material assets
other than all of the ownership interest in the Issuer; and (iii) substantially
all of the assets and liabilities shown in the consolidated financial statements
for the Company are assets and liabilities of the Issuer and its direct and
indirect subsidiaries.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
(IN MILLIONS)
STATEMENT OF EARNINGS DATA:
Revenues....................................................................... $ 2,493.5 $ 2,377.6 $ 2,157.8
Gross profit................................................................... 870.0 747.4 669.9
Earnings before extraordinary item............................................. 163.0 127.8 48.1
Net earnings................................................................... 149.0 127.8 32.4
--------- --------- ---------
STATEMENT OF FINANCIAL POSITION DATA:
Total current assets........................................................... 776.1 765.1 715.7
Noncurrent assets.............................................................. 432.1 456.4 427.2
Total current liabilities...................................................... 551.4 423.9 490.5
Noncurrent liabilities......................................................... 160.0 259.9 264.7
</TABLE>
11
<PAGE>
DESCRIPTION OF NOTES AND GUARANTEE
The Notes are to be issued under an Indenture, to be dated as of , 1998
(the "Indenture"), among the Issuer, the Company, as guarantor (the
"Guarantor"), and The Bank of New York, as Trustee (the "Trustee"), a copy of
which is filed as an exhibit to the Registration Statement. The following
summaries of certain provisions of the Indenture do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all the
provisions of the Indenture, including the definitions therein of certain terms.
Wherever particular Sections or defined terms of the Indenture are referred to,
such Sections or defined terms are incorporated herein by reference. All
references in this section, "Description of Notes and Guarantee," to the
"Guarantor" refer solely to Lexmark International Group, Inc. and not Lexmark
International Group, Inc. and its consolidated subsidiaries, and all references
to the "Issuer" refer solely to Lexmark International, Inc. and not to Lexmark
International, Inc. and its consolidated subsidiaries.
GENERAL; GUARANTEE
The Notes will be unsecured and unsubordinated obligations of the Issuer and
will rank PARI PASSU, without any preference or priority of payment, with all
other unsecured and unsubordinated indebtedness of the Issuer. The Notes will be
limited to $150,000,000 aggregate principal amount and will mature on at
100% of their principal amount, unless earlier redeemed pursuant to the terms
thereof. See "Optional Redemption." The Notes will have the benefit of a
guarantee (the "Guarantee") from the Guarantor. Pursuant to the Guarantee, the
Guarantor will unconditionally guarantee the due and punctual payment of
principal, interest and any other amount that the Issuer is obligated to pay in
respect of the Notes, as and when the same shall become due and payable, whether
at Stated Maturity, by declaration of acceleration, call for redemption or
otherwise. The Guarantee will be an unsecured and unsubordinated obligation of
the Guarantor and will rank PARI PASSU, without any preference or priority of
payment, with all other present and future unsecured and unsubordinated
indebtedness of the Guarantor. The Guarantee will remain in effect until all
amounts payable in respect of the Notes have been paid in full. Except as
described under "Restrictive Covenants," the Indenture does not limit other
indebtedness or securities which may be incurred or issued by the Guarantor, the
Issuer or any of their subsidiaries or contain financial or similar restrictions
on the Guarantor, the Issuer or any of their subsidiaries. The Guarantor's and
the Issuer's rights and the rights of their creditors, including holders of the
Notes, to participate in any distribution of assets of any subsidiary of the
Guarantor (other than the Issuer) upon the subsidiary's liquidation or
reorganization or otherwise are effectively subordinated to the claims of the
subsidiary's creditors, except to the extent that the Guarantor or the Issuer or
any of their creditors may itself be a creditor of that subsidiary.
INTEREST AND PAYMENTS
The Notes will bear interest at the rate per annum shown on the front cover of
this Prospectus from , 1998 or from the most recent Interest Payment Date
to which interest has been paid or provided for, payable semi-annually on
and of each year, commencing , 19 , to the Person in whose name
the Note (or any predecessor Note) is registered (a "Holder") at the close of
business on the preceding or , as the case may be (the "Record
Dates"). (SectionSection 301 and 308). Interest on the Notes will be computed on
the basis of a 360-day year of twelve 30-day months.
As described below, the Notes will be issued in global (I.E., book-entry) form
and all payments in respect of global Notes will be made through the facilities
of The Depository Trust Company ("DTC"), as depositary for such Notes. (Section
305). Payment procedures, including those applicable to any Notes that in the
future may be issued in certificated (i.e., non book-entry) form, are described
under "Form, Denomination, Transfer and Book-Entry Procedures." Any payment
required to be made on a date that is not a Business Day need not be made on
such day, but may be made on the next succeeding Business Day with the same
force and effect as if made on such date. As used herein, the term "Business
Day" means any day, other than a Saturday or Sunday, on which banks in The City
of New York are not required or authorized by law or executive order to be
closed.
The Notes are not entitled to the benefits of any sinking fund.
12
<PAGE>
FORM, DENOMINATION, TRANSFER AND BOOK-ENTRY PROCEDURES
The Notes will be issued only in fully registered form, without coupons, in
minimum denominations of $1,000 and any integral multiple thereof. (Section
302). Notes will be issued at the closing for the offering of the Notes only
against payment in immediately available funds.
GLOBAL NOTE
The Notes will be represented by one or more Notes in registered, global form
without interest coupons (collectively, the "Global Note"). The Global Note will
be deposited upon issuance with the Trustee as custodian for The Depository
Trust Company (the "Initial Depositary"), in New York, New York, and registered
in the name of DTC or its nominee, in each case for credit to an account of a
direct or indirect participant in DTC as described below. (Section 305).
Transfers of beneficial interests in the Global Note will be subject to the
applicable rules and procedures of DTC and its direct or indirect participants,
which may change from time to time. Except as set forth below, the Global Note
may be transferred, in whole and not in part, only to DTC, another nominee of
DTC or to a successor of DTC or its nominee. Beneficial interests in the Global
Note may not be exchanged for Notes in certificated form except in the limited
circumstances described below. See "--Exchange of Book-Entry Notes for
Certificated Notes."
EXCHANGE OF GLOBAL NOTE FOR CERTIFICATED NOTES
A beneficial interest in the Global Note may not be exchanged for a Note in
certificated (i.e., non-book-entry) form unless (i) DTC (x) notifies the Issuer
that it is unwilling or unable to continue as Depositary for the Global Note and
the Issuer thereupon fails to appoint a successor Depositary or (y) has ceased
to be a clearing agency registered under the Exchange Act or (ii) there shall
have occurred and be continuing an Event of Default (as defined below) with
respect to the Notes. In all cases, certificated Notes delivered in exchange for
the Global Note or beneficial interests therein will be registered in the names,
and issued in any approved denominations, requested by or on behalf of the
Depositary (in accordance with its customary procedures).
Unless otherwise specified, the following procedures for payment and
registration of transfer will apply to any certificated Note that may be issued
in the future. Payments of principal, interest and other amounts due on such a
Note at maturity will be made to the registered Holder on the payment date upon
surrender of such Note at the office of the Paying Agent, by check drawn on, or
by transfer to an account maintained by the Holder at, a bank located in New
York City (PROVIDED that the interest that is payable on any Interest Payment
Date shall be paid to the Person in whose name a Note is registered at the close
of business on the Regular Record Date for such interest). Payments of interest
due at other times will be made by the Paying Agent by check of this type mailed
to the Holder at its address as it appears in the Security Register.
Notwithstanding the foregoing, a Holder of at least $1,000,000 in aggregate
principal amount of Notes will be entitled to receive payment of any amount due
on such Notes on any date by wire transfer of immediately available funds to an
account maintained by a bank located in New York City, if appropriate wire
transfer instructions have been given to the Issuer or its agent at least 10
Business Days prior to the due date (and any such instructions, once given, will
remain in effect with regard to payments due on all future dates unless properly
revoked).
Any certificated Note may be presented for registration of transfer and exchange
at the office of the Paying Agent. No service charge will be made for any
registration of transfer or exchange of any Note, but the Issuer may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. (Section 306).
CERTAIN BOOK-ENTRY PROCEDURES FOR GLOBAL NOTES
The description of the operations and procedures of DTC that follows is provided
solely as a matter of convenience. These operations and procedures are solely
within the control of DTC and are subject to change from
13
<PAGE>
time to time. The Issuer and the Guarantor take no responsibility for these
operations and procedures and urge investors to contact DTC or its participants
directly to discuss these matters.
DTC has advised the Issuer that DTC is a limited-purpose trust company created
to hold securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
in accounts of its Participants. The Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. Access to DTC's system is also available to other entities such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly
(collectively, the "Indirect Participants"). Persons who are not Participants
may beneficially own securities held by or on behalf of DTC only through the
Participants or the Indirect Participants. The ownership interest and transfer
of ownership interest of each actual purchaser of each security held by or on
behalf of DTC are recorded on the records of the Participants and Indirect
Participants.
DTC has also advised the Issuer that pursuant to procedures established by it,
(i) upon deposit of the Global Note, DTC will credit, on its internal system,
the accounts of Participants designated by the Underwriters with portions of the
principal amount of the Global Note and (ii) ownership of such interests in the
Global Note will be shown on, and the transfer of ownership thereof will be
effected only through, records maintained by DTC (with respect to the
Participants) or by the Participants and the Indirect Participants (with respect
to other owners of beneficial interests in the Global Note).
Investors in the Global Note may hold their interests therein directly through
DTC, if they are Participants in such system, or indirectly through
organizations which are participants in such system. All interests in the Global
Note may be subject to the procedures and requirements of DTC. Transfers and
exchange of interests in the Global Note will also be subject to the
restrictions described above under "--Exchange of Book-Entry Notes for
Certificated Notes."
The laws of some states require that certain persons take physical delivery in
definitive form of securities that they own. Consequently, the ability to
transfer beneficial interests in the Global Note to such persons may be limited
to that extent. Because DTC can act only on behalf of Participants, which in
turn act on behalf of Indirect Participants and certain banks, the ability of a
person having beneficial interests in the Global Note to pledge such interests
to persons or entities that do not participate in the Depositary system, or
otherwise take actions in respect of such interests, may be affected by the lack
of a physical certificate evidencing such interests.
As long as DTC or its nominee is the registered Holder of the Global Note, DTC
or such nominee, as the case may be, will be considered the sole owner and
Holder of the Notes represented by the Global Note for all purposes under the
Indenture, the Notes and the Guarantee. Except as described above, owners of
interests in the Global Note will not have Notes registered in their names, will
not receive physical delivery of Notes in certificated form and will not be
considered the registered owners or holders thereof under the Indenture, the
Notes or the Guarantee for any purpose.
Payments in respect of the principal of (and premium, if any) and interest on
the Global Note will be made to DTC or its nominee in its capacity as the
registered Holder under the Indenture. The Issuer expects that DTC, upon receipt
of any payment in respect of the Global Note, will credit the accounts of the
relevant Participants with the payment on the payment date, in amounts
proportionate to their respective beneficial interests in the Global Note as
shown on the records of DTC. The Issuer also expects that payments by the
Participants and the Indirect Participants to the beneficial owners of the
Global Note will be governed by standing instructions and customary practices
and will be the responsibility solely of the Participants or the Indirect
Participants. Neither the Issuer, the Guarantor nor the Trustee will be liable
for any delay by DTC or any of its Participants in identifying the beneficial
owners of the Global Note, and the Issuer, the Guarantor and the Trustee may
conclusively rely on and will be protected in relying on instructions from DTC
or its nominee as the registered owner of the Global Note for all purposes.
14
<PAGE>
Interests in the Global Note will trade in DTC's Same-Day Funds Settlement
System and secondary market trading activity in such interests will therefore
settle in immediately available funds, subject in all cases to the rules and
procedures of DTC and its Participants. Transfers between Participants in DTC
will be effected in accordance with DTC's procedures, and will be settled in
same-day funds.
DTC has advised the Issuer that it will take any action permitted to be taken by
a Holder of Notes only at the direction of one or more Participants to whose
account with DTC interests in the Global Note are credited and only in respect
of such portion of the aggregate principal amount of the Notes as to which such
Participant or Participants has or have given such direction. However, if there
is an Event of Default under the Notes, DTC reserves the right to exchange the
Global Note for Notes in certificated form, and to distribute such Notes to its
Participants.
Neither the Issuer, the Guarantor nor the Trustee will have any responsibility
for the performance by DTC or its participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations, including maintaining, supervising and reviewing the records related
to, and payments made on account of, beneficial ownership interests in the
Global Note, and any other action taken by any such depositary, participant or
indirect participant.
OPTIONAL REDEMPTION
The Notes will be redeemable, in whole or in part, at the option of the Issuer
at any time at a redemption price equal to the greater of (i) 100% of the
principal amount of the Notes to be redeemed or (ii) as determined by the
Quotation Agent, the sum of the present values of the remaining scheduled
payments of principal and interest thereon (not including any portion of such
payments of interest accrued to the date of redemption) discounted to the date
of redemption on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate plus basis points,
plus, in each case (i) or (ii), accrued interest thereon to the date of
redemption. (Section 1101).
Notice of any redemption will be mailed at least 30 days but not more than 60
days before the date fixed for redemption to each holder of the Notes to be
redeemed. Unless the Issuer defaults in payment of the redemption price, on and
after the date fixed for redemption, interest will cease to accrue on the Notes
or portions thereof called for redemption. (Section 1105).
RESTRICTIVE COVENANTS
LIMITATION ON LIENS
The Guarantor will not, and will not permit any Subsidiary to, incur any Lien on
property or assets owned on or acquired after the date of the Indenture to
secure Debt without making, or causing such Subsidiary to make, effective
provision for securing the Notes (and, if the Guarantor may so determine, any
other Debt of the Guarantor or such Subsidiary that is not subordinated in right
of payment to the Notes) (x) equally and ratably with such Debt as to such
property or assets for as long as such Debt will be so secured or (y) in the
event such Debt is subordinated in right of payment to the Notes, prior to such
Debt as to such property for as long as such Debt will be so secured. (Section
1008).
The foregoing restrictions will not apply to Liens existing on the date of the
Indenture or to: (i) Liens securing only the Notes; (ii) Liens in favor of only
one or more of the Guarantor and its Subsidiaries; (iii) any Lien on property of
a Person existing immediately prior to the time such Person is merged with or
into or consolidated with the Guarantor or any Subsidiary of the Guarantor or
otherwise becomes a Subsidiary of the Guarantor (PROVIDED that such Lien is not
incurred in anticipation of such transaction and does not extend beyond the
property subject thereto, or secure any Debt that is not secured thereby,
immediately prior to such transaction); (iv) any Lien on property existing
immediately prior to the time of acquisition thereof (PROVIDED that such Lien is
not incurred in anticipation of such acquisition and does not extend beyond the
property subject thereto, or secure any Debt that is not secured thereby,
immediately prior to such acquisition); (v) Liens to secure Debt
15
<PAGE>
incurred for the purpose of financing all or any part of the purchase price of,
or the cost of construction on or improvement of, the property subject to such
Liens, PROVIDED, HOWEVER, that (a) the principal amount of any Debt secured by
such a Lien does not exceed 100% of such price or cost, (b) such Lien does not
extend to or cover any other property other than such item of property and any
improvements on such item, and (c) such Lien must be created no later than the
270th day after such purchase or the completion of such construction or
installation of such improvements; (vi) Liens on property of the Guarantor or
any Subsidiary of the Guarantor in favor of the United States of America or any
state thereof, or any instrumentality of either, to secure payments to be made
pursuant to any contract or statute; (vii) (a) Liens for taxes or assessments or
other governmental charges or levies or (b) any statutory Liens of a carrier,
warehouseman, mechanic, materialman or other like Liens imposed by law incurred
in the ordinary course of business that, in either case (a) or (b), are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and for which such reserve or other appropriate provision,
if any, as may be required in accordance with generally accepted accounting
principles has been made; (viii) Liens to secure obligations under workmen's
compensation, unemployment insurance or other social security laws or similar
legislation; (ix) Liens incurred to secure the performance of statutory
obligations, surety or appeal bonds, performance or return-of-money bonds or
other obligations of a like nature incurred in the ordinary course of business;
(x) any Lien in favor of the Trustee in respect of expenses incurred or services
rendered pursuant to the Indenture; (xi) any Lien that may be deemed to arise
from a Permitted Receivables Financing; (xii) Liens securing obligations arising
under easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of the Guarantor or any Subsidiary; and (xiii) Liens to secure Debt
incurred to extend, renew, refinance or refund (or successive extensions,
renewals, refinancings or refundings), in whole or in part, Debt secured by any
Lien referred to in the foregoing clauses (iii), (iv) or (v) as long as such
Lien does not extend to any other property and the Debt so secured is not
increased except for increases in the amount of interest, premiums or fees and
associated costs payable in connection with such extensions, renewals,
refinancings or refundings. (Section 1008).
In addition to the foregoing, the Guarantor and its Subsidiaries may, without
equally and ratably securing the Notes, incur a Lien to secure Debt or enter
into a Sale and Leaseback Transaction if, after giving effect thereto, the sum
of: (i) the amount of all Debt secured by all Liens incurred on or after the
date of the Indenture and otherwise prohibited by the Indenture and (ii) the
Attributable Value of Sale and Leaseback Transactions entered into on or after
the date of the Indenture and otherwise prohibited by the Indenture does not
exceed 15% of Consolidated Net Tangible Assets. (Section 1008).
In the event the Issuer ceases to be a Subsidiary of the Guarantor, the
covenants described above will apply not only to the Guarantor but also to the
Issuer, as if it became the Guarantor.
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS
The Guarantor will not, and will not permit any Subsidiary to, enter into any
Sale and Leaseback Transaction (except for a period not exceeding 36 months)
unless (i) the Guarantor or such Subsidiary would be entitled to enter into such
Sale and Leaseback Transaction pursuant to the provisions described in the third
paragraph under "Limitation on Liens" without equally and ratably securing the
Notes; (ii) the Guarantor or a Subsidiary of the Guarantor applies, within 180
days after the related Sale Transaction, an amount equal to the Net Available
Proceeds of such Sale Transaction to the redemption of Notes or other debt of
the Issuer that ranks PARI PASSU with the Notes in right of payment; or (iii)
the transaction is solely between the Guarantor and a Wholly Owned Subsidiary or
between Wholly Owned Subsidiaries for as long as such Subsidiaries are Wholly
Owned Subsidiaries. (Section 1009).
In the event the Issuer ceases to be a Subsidiary of the Guarantor, the
covenants described above will apply not only to the Guarantor but also to the
Issuer, as if it became the Guarantor.
16
<PAGE>
CERTAIN DEFINITIONS
The Indenture will include, among others, the following definitions:
"Adjusted Treasury Rate" means, with respect to any redemption date, the rate
per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such date.
"Attributable Value" means, as to any lease under which any Person is at the
time liable, other than a Capital Lease Obligation, and at any date as of which
the amount thereof is to be determined, the total net amount of rent required to
be paid by such Person under such lease during the remaining term thereof as
determined in accordance with generally accepted accounting principles,
discounted from the last date of such term to the date of determination at a
rate per annum equal to the discount rate that would be applicable to a Capital
Lease Obligation with like term in accordance with generally accepted accounting
principles. The net amount of rent required to be paid under any such lease for
any such period will be the aggregate amount of rent payable by the lessee with
respect to such period after excluding amounts required to be paid on account of
insurance, taxes, assessments, utility, operating and labor costs and similar
charges. In the case of any lease that is terminable by the lessee upon the
payment of a penalty, such net amount will also include the amount of such
penalty, but no rent will be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated. "Attributable
Value" means, as to a Capital Lease Obligation under which any Person is at the
time liable and at any date as of which the amount thereof is to be determined,
the capitalized amount thereof that would appear on the face of a balance sheet
of such Person in accordance with generally accepted accounting principles.
"Capital Lease Obligation" of any Person means the obligation to pay rent or
other payment amounts under a lease of (or other Debt arrangements conveying the
right to use) real or personal property of such Person that is required to be
classified and accounted for as a capital lease or a liability on the face of a
balance sheet of such Person in accordance with generally accepted accounting
principles. The stated maturity of such obligation will be deemed to be the date
of the last payment of rent or any other amount due under such lease prior to
the first date upon which such lease may be terminated by the lessee without
payment of a penalty.
"Comparable Treasury Issue" means the United States Treasury security selected
by the Quotation Agent as having a maturity comparable to the remaining term of
the Notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of such Notes.
"Comparable Treasury Price" means, with respect to any redemption date, (i) the
average of the Reference Treasury Dealer Quotations for such date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(ii) if the Trustee obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations.
"Consolidated Net Tangible Assets" means all assets, less (i) all current
liabilities (excluding any indebtedness for borrowed money having a maturity of
less than 12 months from the date of the most recent consolidated balance sheet
of the Guarantor but which by its terms is renewable or extendable beyond 12
months from such date at the option of the borrower), (ii) the net book value of
all licenses, patents, patent applications, copyrights, trademarks, trade names,
goodwill, non-compete agreements, organizational expenses and other like
intangibles, (iii) all unamortized Debt discount and expense, and (iv) all
proper reserves, including all reserves for depreciation, obsolescence,
depletion and amortization of properties, of the Guarantor and its subsidiaries
after eliminating inter-company items and including appropriate deductions for
any minority interest, as determined on a consolidated basis in accordance with
generally accepted accounting principles; PROVIDED, HOWEVER, that no effect will
be given to any adjustments on or after the date of the Indenture to the
accounting books and records of the Guarantor in accordance with Accounting
Principles Board Opinions Nos. 16 and 17 (or successor opinions thereto) or
otherwise resulting from the acquisition of control of the Guarantor by another
Person.
17
<PAGE>
"Debt" means (without duplication), with respect to any Person, (i) every
obligation of such Person for money borrowed, (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses, (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person, (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business), (v) every Capital Lease Obligation of such Person, and (vi) all
Guaranties by such Person of every obligation of the type referred to in Clauses
(i) through (v) of another Person.
"Guaranty" by any Person means any obligation, contingent or otherwise, of such
Person guaranteeing any Debt of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and includes any obligation of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such Debt, (ii) to purchase
property, securities or services for the purpose of assuring the holder of such
Debt of the payment of such Debt, or (iii) to maintain working capital, equity
capital or other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Debt (and "Guaranteed,"
"Guaranteeing" and "Guarantor" have meanings correlative to the foregoing);
PROVIDED, HOWEVER, that a Guaranty by any Person will not include endorsements
by such Person for collection or deposit, in either case in the ordinary course
of business.
"Lien" means, with respect to any property or assets, any mortgage or deed of
trust, pledge, hypothecation, assignment, security interest, lien, charge,
encumbrance, easement or other security agreement of any kind or nature
whatsoever on or with respect to such property or assets (including any
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).
"Net Available Proceeds" from any Sale Transaction by any Person means cash or
readily marketable cash equivalents received (including by way of sale or
discounting of a note, installment receivable or other receivable, but excluding
any consideration received in the form of assumption of Debt or other
obligations by others or received in any other noncash form) therefrom by such
Person, net of (i) all legal, title and recording tax expenses, commissions and
other fees and expenses incurred and all federal, state, provincial, foreign and
local taxes required to be accrued as a liability as a consequence of such Sale
Transaction, (ii) all payments made by such Person or its Subsidiaries on any
Debt that is secured by a Lien on the property or assets so disposed of in
accordance with the terms of such Lien or that must, by the terms of such Lien,
or in order to obtain a necessary consent to such Sale Transaction, or by
applicable law, be repaid out of the proceeds from such Sale Transaction, and
(iii) all distributions and other payments made to third parties (other than
Subsidiaries) in respect of minority or joint venture interests as a result of
such Sale Transaction.
"Permitted Receivables Financing" means any program for the transfer without
recourse (other than customary limited recourse) by the Guarantor or any of its
Subsidiaries to any buyer, purchaser or lender of interests in accounts
receivable, so long as (a) such program is intended by the parties thereto to be
treated (whether or not such treatment is ultimately disallowed) as an "off
balance sheet" transaction and (b) the aggregate outstanding amount of
receivables transferred by the Guarantor and its Subsidiaries pursuant to such
program shall not exceed $500,000,000 at any one time.
"Quotation Agent" means the Reference Treasury Dealer appointed by the Issuer to
serve as Quotation Agent.
"Reference Treasury Dealer" means (i) J.P. Morgan Securities Inc., Salomon
Brothers Inc, NationsBanc Montgomery Securities LLC and their respective
successors; PROVIDED, HOWEVER, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Issuer shall substitute therefor another Primary Treasury Dealer,
and (ii) any other Primary Treasury Dealer selected by the Issuer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Issuer, of the bid and asked prices for the Comparable Treasury
18
<PAGE>
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day (as defined in the Indenture) preceding such redemption date.
"Sale and Leaseback Transaction" of any Person means an arrangement with any
lender or investor or to which such lender or investor is a party providing for
the leasing by such Person of any property or assets of such Person which has
been or is being sold, conveyed, transferred or otherwise disposed of by such
Person more than 270 days after the acquisition thereof or the completion of
construction or commencement of operation thereof to such lender or investor or
to any person to whom funds have been or are to be advanced by such lender or
investor on the security of such property or assets. The stated maturity of such
arrangement will be deemed to be the date of the last payment of rent or any
other amount due under such arrangement prior to the first date on which such
arrangement may be terminated by the lessee without payment of a penalty.
"Sale Transaction" means any sale, conveyance, transfer or other disposition of
the kind referred to in the first sentence of the definition of "Sale and
Leaseback Transaction."
"Subsidiary" of any Person means any corporation, partnership, limited liability
company, trust or other entity as to which more than 50% of the voting power of
its outstanding capital stock or other ownership interests is owned, directly or
indirectly, by such Person, by one or more other Subsidiaries of such Person or
by such Person and one or more other Subsidiaries of such Person. Unless
otherwise indicated, any reference to a Subsidiary means a Subsidiary of the
Guarantor.
"Wholly Owned Subsidiary" of any Person means any corporation, partnership,
limited liability company, trust or other entity as to which 100% of the voting
power of its outstanding capital stock or other ownership interests is owned,
directly or indirectly, by such Person, by one or more other Wholly Owned
Subsidiaries of such Person or by such Person and one or more other Wholly Owned
Subsidiaries of such Person. Unless otherwise indicated, any reference to a
Wholly Owned Subsidiary means a Wholly Owned Subsidiary of the Guarantor.
(Section 101).
CONSOLIDATION, MERGER AND SALE OF ASSETS
Each of the Guarantor and the Issuer will not merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or substantially all of its assets (determined on a
consolidated basis with respect to the Guarantor or the Issuer, as the case may
be, and its Subsidiaries taken as a whole), unless (i) either (x) the Guarantor
or the Issuer, as the case may be, is the continuing Person or (y) the
continuing Person is a corporation, partnership, trust, limited liability
company or other entity organized and validly existing under the laws of any
domestic jurisdiction and expressly assumes the Guarantor's or the Issuer's, as
the case may be, obligations on the Notes and under the Indenture, (ii)
immediately after giving effect to the transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event of
Default, with respect to the Notes shall have occurred and be continuing, (iii)
if, as a result of the transaction, property of the Guarantor or the Issuer, as
the case may be, or any Subsidiary would become subject to a Lien, the
incurrence of which would not be permitted under the limitation on Liens
described above under "Restrictive Covenants," the Guarantor or the Issuer, as
the case may be, takes such steps as are necessary to cause the Notes to be
secured equally and ratably with (or prior to) the Debt secured by such Lien as
provided in such limitation, and (iv) certain other conditions set forth in the
Indenture are met. (Section 801).
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the Indenture
with respect to Notes: (a) failure by the Issuer to pay principal of or any
premium on any Note when due, PROVIDED that failure by the Issuer to make such a
payment will not constitute an Event of Default if the Guarantor makes such
payment as required when due; (b) failure by the Issuer to pay any interest on
any Notes when due, continued for 30 days, PROVIDED that failure by the Issuer
to make such a payment will not constitute an Event of Default if the Guarantor
makes such payment as required during such 30-day period; (c) failure to perform
any other covenant of the Guarantor or the Issuer in the Indenture, continued
for 90 days after written notice has been given by the Trustee, or the Holders
of at least 25% in principal amount of the Outstanding Notes, as provided in the
Indenture; (d) a default or
19
<PAGE>
defaults under any note(s) or other evidence(s) of Debt, or any agreement(s) or
instrument(s) under which there may be issued or by which there may be secured
or evidenced any Debt, of the Guarantor or any Subsidiary having a principal
amount outstanding, individually or in the aggregate, of at least $25 million,
and whether existing on or created after the date of the Indenture, which
default or defaults (i) constitute a failure to pay at least $25 million of the
principal of such Debt when due (unless such default is waived or cured within
30 days after the expiration of any applicable grace period) or (ii) have
resulted in acceleration of any portion of such Debt having an aggregate
principal amount equal to or in excess of $25 million, in each case (i) and
(ii), without the overdue or accelerated portion of such Debt having been
discharged, or without such acceleration having been rescinded or annulled,
within 30 days after written notice has been given by the Trustee or the Holders
of at least 25% in aggregate principal amount of the Outstanding Notes as
provided in the Indenture; and (e) certain events in bankruptcy, insolvency or
reorganization. (Section 501).
If an Event of Default (other than an Event of Default described in clause (e)
above) with respect to the Notes at the time Outstanding shall occur and be
continuing, either the Trustee or the Holders of at least 25% in aggregate
principal amount of the Outstanding Notes by notice as provided in the Indenture
may declare the principal amount of (together with accrued interest on) all the
Notes to be due and payable immediately. If an Event of Default described in
clause (e) above with respect to the Notes at the time Outstanding shall occur,
the principal amount of (together with accrued interest on) all the Notes will
automatically, and without any action by the Trustee or any Holder, become
immediately due and payable. After any such acceleration, but before a judgment
or decree based on acceleration, the Holders of a majority in aggregate
principal amount of the Outstanding Notes may, under certain circumstances,
rescind and annul such acceleration if all Events of Default, other than the
non-payment of accelerated principal, have been cured or waived as provided in
the Indenture. (Section 502). For information as to waiver of defaults, see
"Modification and Waiver."
Subject to the provisions of the Indenture relating to the duties of the Trustee
in case an Event of Default shall occur and be continuing, the Trustee will be
under no obligation to exercise any of its rights or powers under the Indenture
at the request or direction of any of the Holders, unless such Holders have
offered to the Trustee reasonable indemnity. (Section 603). Subject to such
provisions for the indemnification of the Trustee, the Holders of a majority in
aggregate principal amount of the Outstanding Notes will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee. (Section 512).
No Holder of a Note will have any right to institute any proceeding with respect
to the Indenture, or for the appointment of a receiver or a trustee, or for any
other remedy thereunder, unless (i) such Holder has previously given to the
Trustee written notice of a continuing Event of Default with respect to the
Notes, (ii) the Holders of at least 25% in aggregate principal amount of the
Outstanding Notes have made written request, and such Holder or Holders have
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and (iii) the Trustee has failed to institute such proceeding, and has
not received from the Holders of a majority in aggregate principal amount of the
Outstanding Notes a direction inconsistent with such request, within 90 days
after such notice, request and offer. However, such limitations do not apply to
a suit instituted by a Holder of a Note for the enforcement of payment of the
principal of or any premium or interest on such Note on or after the applicable
due date specified in such Note. (Sections 507 and 508).
DEFEASANCE AND COVENANT DEFEASANCE
The Issuer may elect, at its option at any time, to have the provisions of
Section 1202, relating to defeasance and discharge of indebtedness, or Section
1203, relating to defeasance of certain restrictive covenants in the Indenture,
applied to the Notes. (Section 1201).
DEFEASANCE AND DISCHARGE
The Indenture will provide that, upon the Issuer's exercise of its option to
have Section 1202 applied to the Outstanding Notes, the Issuer and the Guarantor
will be discharged from all their obligations with respect to such Notes (except
for certain obligations to exchange or register the transfer of Notes, to
replace stolen, lost or mutilated Notes to maintain paying agencies and to hold
moneys for payment in trust) upon the deposit in trust for the benefit of the
Holders of such Notes of money or U.S. Government Obligations, or both, which,
through
20
<PAGE>
the payment of principal and interest in respect thereof in accordance with
their terms, will provide money in an amount sufficient to pay the principal of
and interest on such Notes on the Stated Maturity in accordance with the terms
of the Indenture and the Notes. Such defeasance or discharge may occur only if,
among other things, the Issuer has delivered to the Trustee an Opinion of
Counsel to the effect that the Issuer has received from, or there has been
published by, the United States Internal Revenue Service a ruling, or there has
been a change in tax law, in either case to the effect that Holders of such
Notes will not recognize gain or loss for federal income tax purposes as a
result of such deposit, defeasance and discharge and will be subject to federal
income tax on the same amount, in the same manner and at the same times as would
have been the case if such deposit, defeasance and discharge were not to occur.
(SectionSection 1202 and 1204).
DEFEASANCE OF CERTAIN COVENANTS
The Indenture will provide that, upon the Issuer's exercise of its option to
have Section 1203 applied to the Outstanding Notes, the Issuer and the Guarantor
may omit to comply with the restrictive covenants described above under
"Restrictive Covenants" and such omission will be deemed not to be an Event of
Default with respect to the Notes. The Issuer, in order to exercise such option,
will be required to deposit, in trust for the benefit of the Holders of such
Notes, money or U.S. Government Obligations, or both, which, through the payment
of principal and interest in respect thereof in accordance with their terms,
will provide money in an amount sufficient to pay the principal of and interest
on such Notes on the Stated Maturity in accordance with the terms of the
Indenture and the Notes. The Issuer will also be required, among other things,
to deliver to the Trustee an Opinion of Counsel to the effect that Holders of
such Notes will not recognize gain or loss for federal income tax purposes as a
result of such deposit and defeasance of certain obligations and will be subject
to federal income tax on the same amount, in the same manner and at the same
times as would have been the case if such deposit and defeasance were not to
occur. In the event the Issuer exercised this option with respect to the
Outstanding Notes and such Notes were declared due and payable because of the
occurrence of any Event of Default, the amount of money and U.S. Government
Obligations so deposited in trust would be sufficient to pay amounts due on such
Notes at the Stated Maturity but may not be sufficient to pay amounts due on
such Notes upon any acceleration resulting from such Event of Default. In such
case, the Issuer and the Guarantor would remain liable for such payments.
(SectionSection 1203 and 1204).
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Issuer and the
Guarantor with the consent of the Holders of a majority in aggregate principal
amount of the Outstanding Notes; PROVIDED, HOWEVER, that no such modification or
amendment may, without the consent of the Holder of each Outstanding Note
affected thereby, (a) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, (b) reduce the principal amount of, or
interest on, any Note, (c) change the place or currency of payment of principal
of, or interest on, any Note, (d) impair the right to institute suit for the
enforcement of any payment on or with respect to any Note, (e) reduce the
above-stated percentage of Outstanding Notes necessary to modify or amend the
Indenture, (f) reduce the percentage of aggregate principal amount of
Outstanding Notes necessary for waiver of compliance with certain provisions of
the Indenture or for waiver of certain defaults or (g) change the obligations of
the Guarantor under the Guarantee with respect to any of the obligations of the
Issuer that may not be modified or amended without the consent of each Holder as
aforesaid. (Section 902).
The Holders of a majority in aggregate principal amount of the Outstanding Notes
may waive compliance by the Company with certain restrictive provisions of the
Indenture. (Section 1011). The Holders of a majority in aggregate principal
amount of the Outstanding Notes may waive any past default under the Indenture,
except a default in the payment of principal or interest. (Section 513).
The Guarantor and the Issuer may amend or supplement the Indenture without
notice to or the consent of any Holder, in order, among other things: (1) to
cure any ambiguity, defect or inconsistency in the Indenture, PROVIDED that such
amendments or supplements shall not materially and adversely affect the
interests of the Holders; (2) to comply with any requirements of the Commission
in connection with the qualification of the Indenture under the Trust Indenture
Act; (3) to evidence and provide for the acceptance of appointments under the
Indenture with respect to the Securities by a successor Trustee; and (4) to make
any change that does not materially and adversely affect the interests of the
Holders.
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<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement,
dated , 1998 (the "Underwriting Agreement"), the Issuer has agreed to
sell to each of the underwriters named below (the "Underwriters"), and each of
such Underwriters has severally agreed to purchase from the Issuer the
respective principal amount of Notes set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OF NOTES
<S> <C>
--------------
NAME
- --------------------------------------------------------------------------------------------------
J.P. Morgan Securities Inc........................................................................
Salomon Brothers Inc..............................................................................
NationsBanc Montgomery Securities LLC.............................................................
--------------
Total............................................................................................. $ 150,000,000
--------------
--------------
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the Underwriters
are committed to take and pay for all of the Notes, if any are taken.
The Company and the Issuer have been advised by the Underwriters that they
initially propose to offer the Notes directly to the public at the public
offering price set forth on the cover page of this Prospectus and to certain
dealers at such price less a concession not in excess of % of the principal
amount of the Notes. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of % of the principal amount of the Notes on sales
to certain other dealers. After the initial public offering of the Notes, the
public offering price and such concessions to dealers may be changed by the
Underwriters.
The Notes are a new issue of securities with no established trading market. The
Company and the Issuer have been advised by the Underwriters that the
Underwriters currently intend to make a market for the Notes, but are not
obligated to do so and may discontinue market making at any time without notice.
No assurance can be given as to the liquidity of the trading market for the
Notes.
It is expected that in the aggregate up to approximately 20% of the net proceeds
of the offering of the Notes will be used to repay loans made to the Issuer by
Morgan Guaranty Trust Company of New York, an affiliate of J.P. Morgan
Securities Inc., and NationsBank, N.A., an affiliate of NationsBanc Montgomery
Securities LLC, under the Issuer's New Credit Facility. See "Use of Proceeds."
Under the Conduct Rules of the National Association of Securities Dealers, Inc.
(the "NASD"), special considerations apply to a public offering of securities
where more than 10% of the net proceeds thereof will be paid to a participating
underwriter or any of its affiliates. Therefore, the offering of the Notes is
being conducted pursuant to Rule 2710(c)(8) of the NASD Conduct Rules, which
establishes certain procedural safeguards in connection with offerings in such
circumstances in which NASD member firms intend to participate and where more
than 10% of the offering proceeds are to be paid to such member firms or their
affiliates.
The Company and the Issuer have agreed, severally and jointly, to indemnify the
Underwriters against certain liabilities, including civil liabilities under the
Securities Act, or to contribute to payments which the Underwriters may be
required to make in respect thereof.
In connection with the offering of the Notes, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Notes. Specifically, the Underwriters may overallot in connection with the
offering of the Notes, creating a syndicate short position. In addition, the
Underwriters may bid for, and purchase, Notes in the open market to cover
syndicate short positions or to stabilize the price of the Notes. Finally, the
underwriting syndicate may reclaim selling concessions allowed for distributing
the Notes in the offering of the Notes, if the syndicate repurchases previously
distributed Notes in syndicate covering transactions, stabilization transactions
or otherwise. Any of these activities may stabilize or maintain the market price
of the Notes above
22
<PAGE>
independent market levels. The Underwriters are not required to engage in any of
these activities, and may end any of them at any time.
In the ordinary course of their respective businesses, the Underwriters and
their affiliates have engaged, are engaging and may in the future engage, in
commercial banking and investment banking transactions with the Company, the
Issuer and their respective affiliates.
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. Neither the Company nor the Issuer undertakes any 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.
VALIDITY OF NOTES AND GUARANTEE
The validity of the Notes and the Guarantee will be passed upon for the Company
by Vincent J. Cole, Esq., General Counsel of the Issuer and the Guarantor, and
for the Underwriters by Sullivan & Cromwell, New York, New York.
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 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.
23
<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
Notes being registered, including fees and expenses incurred by the Company and
the Issuer, other than any underwriting compensation.
<TABLE>
<CAPTION>
<S> <C>
Registration fee............................................................................ $ 44,250
Accounting fees and expenses................................................................ $ 40,000
Rating agency fees.......................................................................... $ 150,000
Printing and engraving...................................................................... $ 50,000
Trustee's fees and expenses................................................................. $ 10,000
Blue Sky fees and expenses (including counsel fees)......................................... $ 35,000
Miscellaneous expenses...................................................................... $ 15,000
----------
Total................................................................................. $ 344,250
----------
----------
</TABLE>
All of the above expenses of the Offering will be borne by the Issuer.
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 By-Laws of the Company and the Issuer provide for
indemnification by the Company or the Issuer, as the case may be, of its
directors and officers to the full extent permitted by the Delaware Law.
Pursuant to Section 145 of the Delaware Law, the Company's and the Issuer's
present and former directors and officers are insured against any liability
asserted against or incurred by them in such capacity or arising out of their
status as such.
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
II-1
<PAGE>
the General Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal benefit."
Pursuant to specific authority granted by Section 102 of the Delaware Law,
Article SEVENTH of the Issuer's Certificate of Incorporation contains the
following provision regarding limitation of liability of directors and officers:
"No director shall be personally liable to the Corporation or any of its
stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (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 law, (iii) pursuant to Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived
an improper personal benefit.
Pursuant to an indemnification agreement with certain former stockholders, 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.
Reference is hereby made to Section 7 of the Underwriting Agreement filed as
Exhibit 1.1 for certain indemnification arrangements.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
1. (A) EXHIBITS
<TABLE>
<CAPTION>
NUMBER DESCRIPTION OF EXHIBITS
- ----------- --------------------------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement.(3)
3.1 Third Restated Certificate of Incorporation of Lexmark International Group, Inc. (the "Company").(3)
3.2 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.(2)
3.3 Certificate of Incorporation of Lexmark International, Inc. (the "Issuer"), as amended.(3)
3.4 By-Laws of the Issuer, as amended and restated as of October 26, 1995, and amended by Amendment No. 1
dated as of February 13, 1997.(3)
4.1 Form of Indenture among the Company, the Issuer and The Bank of New York, as Trustee.(3)
4.2 Form of Senior Note due 2008 (included in Exhibit 4.1).(3)
4.3 Form of Guarantee of Senior Note due 2008 (included in Exhibit 4.1).(3)
5 Opinion of Vincent J. Cole, Esq. regarding the validity of the securities being registered.(3)
12.1 Computation of ratio of earnings to fixed charges.(3)
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Vincent J. Cole, Esq. (included in the Opinion of Vincent J. Cole, Esq. filed as
Exhibit 5).(3)
24 Powers of Attorney.
25 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as
Trustee under the Indenture.(3)
</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 Annual Report on Form 10-K
(File No. 1-14050) for the Fiscal Year ended December 31, 1996.
(3) Filed previously.
II-2
<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 registrants pursuant to the foregoing provisions, or otherwise, the
registrants have 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 registrants of expenses incurred
or paid by a director, officer or controlling person of the registrants 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 registrants will, unless in the opinion of their counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by them is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned registrants hereby undertake 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 registrants 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 annual report of Lexmark International Group, Inc. 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-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Company 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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lexington, Commonwealth of Kentucky, on May 5, 1998.
LEXMARK INTERNATIONAL GROUP, INC.
By /s/ PAUL J. CURLANDER
-----------------------------------------
Name: Paul J. Curlander
Title: Director & Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Registration Statement
has been signed below by the following persons in the following capacities on
May 5, 1998.
SIGNATURE TITLE
- ------------------------------ ---------------------------
/s/ PAUL J. CURLANDER Director & Chief Executive
- ------------------------------ Officer (Principal
Paul J. Curlander Executive Officer)
/s/ MARVIN L. MANN Chairman of the Board
- ------------------------------
Marvin L. Mann
Vice President/Chief
/s/ GARY E. MORIN Financial Officer
- ------------------------------ (Principal Financial
Gary E. Morin Officer)
/s/ DAVID L. GOODNIGHT Corporate Controller
- ------------------------------ (Principal Accounting
David L. Goodnight Officer)
/s/ B. CHARLES AMES* Director
- ------------------------------
B. Charles Ames
/s/ FRANK T. CARY* Director
- ------------------------------
Frank T. Cary
/s/ WILLIAM R. FIELDS* Director
- ------------------------------
William R. Fields
/s/ RALPH E. GOMORY* Director
- ------------------------------
Ralph E. Gomory
/s/ STEPHEN R. HARDIS* Director
- ------------------------------
Stephen R. Hardis
II-4
<PAGE>
SIGNATURE TITLE
- ------------------------------ ---------------------------
/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-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Issuer 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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lexington, Commonwealth of Kentucky, on May 5, 1998.
LEXMARK INTERNATIONAL, INC.
By /s/ PAUL J. CURLANDER
-----------------------------------------
Name: Paul J. Curlander
Title: Director & Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Registration Statement
has been signed below by the following persons in the following capacities on
May 5, 1998.
SIGNATURE TITLE
- ------------------------------ ---------------------------
/s/ PAUL J. CURLANDER Director & Chief Executive
- ------------------------------ Officer (Principal
Paul J. Curlander Executive Officer)
/s/ MARVIN L. MANN Chairman of the Board
- ------------------------------
Marvin L. Mann
Vice President/Chief
/s/ GARY E. MORIN Financial Officer
- ------------------------------ (Principal Financial
Gary E. Morin Officer)
/s/ DAVID L. GOODNIGHT Corporate Controller
- ------------------------------ (Principal Accounting
David L. Goodnight Officer)
/s/ B. CHARLES AMES* Director
- ------------------------------
B. Charles Ames
/s/ FRANK T. CARY* Director
- ------------------------------
Frank T. Cary
/s/ WILLIAM R. FIELDS* Director
- ------------------------------
William R. Fields
/s/ RALPH E. GOMORY* Director
- ------------------------------
Ralph E. Gomory
/s/ STEPHEN R. HARDIS* Director
- ------------------------------
Stephen R. Hardis
II-6
<PAGE>
SIGNATURE TITLE
- ------------------------------ ---------------------------
/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-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ----------- ------------------------------------------------------------------------------------------------- -----------
<C> <S> <C>
1.1 Form of Underwriting Agreement.(3)
3.1 Third Restated Certificate of Incorporation of Lexmark International Group, Inc. (the
"Company").(1)
3.2 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.(2)
3.3 Certificate of Incorporation of Lexmark International, Inc. (the "Issuer"), as amended.(3)
3.4 By-Laws of the Issuer, as amended and restated as of October 26, 1995, and amended by Amendment
No. 1 dated as of February 13, 1997.(3)
4.1 Form of Indenture among the Company, the Issuer and The Bank of New York, as Trustee.(3)
4.2 Form of Senior Note due 2008 (included in Exhibit 4.1).(3)
4.3 Form of Guarantee of Senior Note due 2008 (included in Exhibit 4.1).(3)
5 Opinion of Vincent J. Cole, Esq. regarding the validity of the securities being registered.(3)
12.1 Computation of ratio of earnings to fixed charges.(3)
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Vincent J. Cole, Esq. (included in the Opinion of Vincent J. Cole, Esq. filed as
Exhibit 5).(3)
24 Powers of Attorney.
25 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York,
as Trustee under the Indenture.(3)
</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 Annual Report on Form 10-K
(File No. 1-14050) for the Fiscal Year ended December 31, 1996.
(3) Filed previously.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Amendment No. 2 to the
Registration Statement on Form S-3 (File No. 333-50609) 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.
Coopers & Lybrand L.L.P.
Lexington, Kentucky
May 4, 1998
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of Lexmark International Group, Inc., a
Delaware corporation ("LIG"), and Lexmark International, Inc., a Delaware
corporation ("LII"), does hereby constitute and appoint Marvin L. Mann, Gary
E. Morin and Vincent J. Cole, and each of them, with full power of
substitution, as his true and lawful attorneys and agents, to execute in his
name and on his behalf:
(a) one or more Registration Statements on an appropriate form
proposed to be filed with the Securities and Exchange Commission ("SEC")
for the purpose of registering under the Securities Act of 1933, as
amended (the "Securities Act"), (i) such principal amount of debt
securities of LII as shall be determined pursuant to a resolution of the
Board of Directors of LII or any dully authorized committee thereof and
(ii) such guarantee by LIG of the obligations of LII under such debt
securities as shall be determined pursuant to a resolution of the Board
of Directors of LIG or any duly authorized committee thereof;
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments and any subsequent registration
statements pursuant to Rule 462(b) under the Securities Act) to such
Registration Statements; and
(c) any and all other documents and instruments which such attorneys
and agents deem necessary or advisable to enable the Company to comply
with (i) the Securities Act and the other federal securities laws of the
United States of America (including, without limitation, the Exchange
Act) and the rules, regulations and requirements of the SEC in respect of
any thereof, (ii) the securities or Blue Sky laws of any state or other
governmental subdivision of the United States of America, (iii) the rules
and regulations of the New York Stock Exchange, Inc. or any other
national or foreign securities exchange or authorized interdealer
quotation system, (iv) the requirements of the National Association of
Securities Dealers, Inc. and (v) the securities laws of any foreign
jurisdiction; and the undersigned does hereby ratify and confirm as his
own acts and deeds all that such attorneys-in-fact and agents, and each
of them, shall do or cause to be done by virtue hereof. Each one of such
attorneys-in-fact and agents shall have, and may exercise, all of the
powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto this power of attorney
this 29 day of April, 1998.
/s/ MARTIN D. WALKER
------------------------------
Martin D. Walker
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of Lexmark International Group, Inc., a
Delaware corporation ("LIG"), and Lexmark International, Inc., a Delaware
corporation ("LII"), does hereby constitute and appoint Marvin L. Mann, Gary
E. Morin and Vincent J. Cole, and each of them, with full power of
substitution, as his true and lawful attorneys and agents, to execute in his
name and on his behalf:
(a) one or more Registration Statements on an appropriate form
proposed to be filed with the Securities and Exchange Commission ("SEC")
for the purpose of registering under the Securities Act of 1933, as
amended (the "Securities Act"), (i) such principal amount of debt securities
of LII as shall be determined pursuant to a resolution of the Board of
Directors of LII or any duly authorized committee thereof and (ii) such
guarantee by LIG of the obligations of LII under such debt securities as
shall be determined pursuant to a resolution of the Board of Directors of
LIG or any duly authorized committee thereof;
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments and any subsequent registration
statements pursuant to Rule 462(b) under the Securities Act) to such
Registration Statements; and
(c) any and all other documents and instruments which such attorneys
and agents deem necessary or advisable to enable the Company to comply
with (i) the Securities Act and the other federal securities laws of the
United States of America (including, without limitation, the Exchange Act)
and the rules, regulations and requirements of the SEC in respect of any
thereof, (ii) the securities or Blue Sky laws of any state or other
governmental subdivision of the United States of America, (iii) the rules
and regulations of the New York Stock Exchange, Inc. or any other national
or foreign securities exchange or authorized interdealer quotation system,
(iv) the requirements of the National Association of Securities Dealers,
Inc. and (v) the securities laws of any foreign jurisdiction; and the
undersigned does hereby ratify and confirm as his own acts and deeds all
that such attorneys-in-fact and agents, and each of them, shall do or cause
to be done by virtue hereof. Each one of such attorneys-in-fact and agents
shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto this power of attorney
this 29th day of April, 1998.
/s/ Michael J. Maples
------------------------
Michael J. Maples
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of Lexmark International Group, Inc., a
Delaware corporation ("LIG"), and Lexmark International, Inc., a Delaware
corporation ("LII"), does hereby constitute and appoint Gary E. Morin and
Vincent J. Cole, and each of them, with full power of substitution, as his
true and lawful attorneys and agents, to execute in his name and on his
behalf:
(a) one or more Registration Statements on an appropriate form
proposed to be filed with the Securities and Exchange Commission ("SEC")
for the purpose of registering under the Securities Act of 1933, as
amended (the "Securities Act"), (i) such principal amount of debt securities
of LII as shall be determined pursuant to a resolution of the Board of
Directors of LII or any duly authorized committee thereof and (ii) such
guarantee by LIG of the obligations of LII under such debt securities as
shall be determined pursuant to a resolution of the Board of Directors of
LIG or any duly authorized committee thereof;
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments and any subsequent registration
statements pursuant to Rule 462(b) under the Securities Act) to such
Registration Statements; and
(c) any and all other documents and instruments which such attorneys
and agents deem necessary or advisable to enable the Company to comply
with (i) the Securities Act and the other federal securities laws of the
United States of America (including, without limitation, the Exchange Act)
and the rules, regulations and requirements of the SEC in respect of any
thereof, (ii) the securities or Blue Sky laws of any state or other
governmental subdivision of the United States of America, (iii) the rules
and regulations of the New York Stock Exchange, Inc. or any other national
or foreign securities exchange or authorized interdealer quotation system,
(iv) the requirements of the National Association of Securities Dealers,
Inc. and (v) the securities laws of any foreign jurisdiction; and the
undersigned does hereby ratify and confirm as his own acts and deeds all
that such attorneys-in-fact and agents, and each of them, shall do or cause
to be done by virtue hereof. Each one of such attorneys-in-fact and agents
shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto this power of attorney
this 29th day of April, 1998.
/s/ Marvin L. Mann
------------------------
Marvin L. Mann
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of Lexmark International Group, Inc., a
Delaware corporation ("LIG"), and Lexmark International, Inc., a Delaware
corporation ("LII"), does hereby constitute and appoint Marvin L. Mann, Gary
E. Morin and Vincent J. Cole, and each of them, with full power of
substitution, as his true and lawful attorneys and agents, to execute in his
name and on his behalf:
(a) one or more Registration Statements on an appropriate form
proposed to be filed with the Securities and Exchange Commission ("SEC")
for the purpose of registering under the Securities Act of 1933, as
amended (the "Securities Act"), (i) such principal amount of debt securities
of LII as shall be determined pursuant to a resolution of the Board of
Directors of LII or any duly authorized committee thereof and (ii) such
guarantee by LIG of the obligations of LII under such debt securities as
shall be determined pursuant to a resolution of the Board of Directors of
LIG or any duly authorized committee thereof;
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments and any subsequent registration
statements pursuant to Rule 462(b) under the Securities Act) to such
Registration Statements; and
(c) any and all other documents and instruments which such attorneys
and agents deem necessary or advisable to enable the Company to comply
with (i) the Securities Act and the other federal securities laws of the
United States of America (including, without limitation, the Exchange Act)
and the rules, regulations and requirements of the SEC in respect of any
thereof, (ii) the securities or Blue Sky laws of any state or other
governmental subdivision of the United States of America, (iii) the rules
and regulations of the New York Stock Exchange, Inc. or any other national
or foreign securities exchange or authorized interdealer quotation system,
(iv) the requirements of the National Association of Securities Dealers,
Inc. and (v) the securities laws of any foreign jurisdiction; and the
undersigned does hereby ratify and confirm as his own acts and deeds all
that such attorneys-in-fact and agents, and each of them, shall do or cause
to be done by virtue hereof. Each one of such attorneys-in-fact and agents
shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto this power of attorney
this 29th day of April, 1998.
/s/ Stephen R. Hardis
------------------------
Stephen R. Hardis
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of Lexmark International Group, Inc., a
Delaware corporation ("LIG"), and Lexmark International, Inc., a Delaware
corporation ("LII"), does hereby constitute and appoint Marvin L. Mann, Gary
E. Morin and Vincent J. Cole, and each of them, with full power of
substitution, as his true and lawful attorneys and agents, to execute in his
name and on his behalf:
(a) one or more Registration Statements on an appropriate form
proposed to be filed with the Securities and Exchange Commission ("SEC")
for the purpose of registering under the Securities Act of 1933, as
amended (the "Securities Act"), (i) such principal amount of debt securities
of LII as shall be determined pursuant to a resolution of the Board of
Directors of LII or any duly authorized committee thereof and (ii) such
guarantee by LIG of the obligations of LII under such debt securities as
shall be determined pursuant to a resolution of the Board of Directors of
LIG or any duly authorized committee thereof;
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments and any subsequent registration
statements pursuant to Rule 462(b) under the Securities Act) to such
Registration Statements; and
(c) any and all other documents and instruments which such attorneys
and agents deem necessary or advisable to enable the Company to comply
with (i) the Securities Act and the other federal securities laws of the
United States of America (including, without limitation, the Exchange Act)
and the rules, regulations and requirements of the SEC in respect of any
thereof, (ii) the securities or Blue Sky laws of any state or other
governmental subdivision of the United States of America, (iii) the rules
and regulations of the New York Stock Exchange, Inc. or any other national
or foreign securities exchange or authorized interdealer quotation system,
(iv) the requirements of the National Association of Securities Dealers,
Inc. and (v) the securities laws of any foreign jurisdiction; and the
undersigned does hereby ratify and confirm as his own acts and deeds all
that such attorneys-in-fact and agents, and each of them, shall do or cause
to be done by virtue hereof. Each one of such attorneys-in-fact and agents
shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto this power of attorney
this 29th day of April, 1998.
/s/ Ralph E. Gomory
------------------------
Ralph E. Gomory
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of Lexmark International Group, Inc., a
Delaware corporation ("LIG"), and Lexmark International, Inc., a Delaware
corporation ("LII"), does hereby constitute and appoint Marvin L. Mann, Gary
E. Morin and Vincent J. Cole, and each of them, with full power of
substitution, as his true and lawful attorneys and agents, to execute in his
name and on his behalf:
(a) one or more Registration Statements on an appropriate form
proposed to be filed with the Securities and Exchange Commission ("SEC")
for the purpose of registering under the Securities Act of 1933, as
amended (the "Securities Act"), (i) such principal amount of debt securities
of LII as shall be determined pursuant to a resolution of the Board of
Directors of LII or any duly authorized committee thereof and (ii) such
guarantee by LIG of the obligations of LII under such debt securities as
shall be determined pursuant to a resolution of the Board of Directors of
LIG or any duly authorized committee thereof;
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments and any subsequent registration
statements pursuant to Rule 462(b) under the Securities Act) to such
Registration Statements; and
(c) any and all other documents and instruments which such attorneys
and agents deem necessary or advisable to enable the Company to comply
with (i) the Securities Act and the other federal securities laws of the
United States of America (including, without limitation, the Exchange Act)
and the rules, regulations and requirements of the SEC in respect of any
thereof, (ii) the securities or Blue Sky laws of any state or other
governmental subdivision of the United States of America, (iii) the rules
and regulations of the New York Stock Exchange, Inc. or any other national
or foreign securities exchange or authorized interdealer quotation system,
(iv) the requirements of the National Association of Securities Dealers,
Inc. and (v) the securities laws of any foreign jurisdiction; and the
undersigned does hereby ratify and confirm as his own acts and deeds all
that such attorneys-in-fact and agents, and each of them, shall do or cause
to be done by virtue hereof. Each one of such attorneys-in-fact and agents
shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto this power of attorney
this 29th day of April, 1998.
/s/ William R. Fields
------------------------
William R. Fields
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned, a director of Lexmark International Group, Inc., a
Delaware corportion ("LIG"), and Lexmark International, Inc., a Delaware
corporation ("LII"), does hereby constitute and appoint Marvin L. Mann, Gary
E. Morin and Vincent J. Cole, and each of them, with full power of
substitution, as his true and lawful attorneys and agents, to execute in his
name and on his behalf:
(a) one or more Registration Statements on an appropriate form
proposed to be filed with the Securities and Exchange Commission ("SEC")
for the purpose of registering under the Securities Act of 1933, as
amended (the "Securities Act"), (i) such principal amount of debt
securities of LII as shall be determined pursuant to a resolution of the
Board of Directors of LII or any duly authorized committee thereof and
(ii) such guarantee by LIG of the obligations of LII under such debt
securities as shall be determined pursuant to a resolution of the Board of
Directors of LIG or any duly authorized committee thereof.
(b) any and all supplments and amendments (including, without
limitation, post-effective amendments and any subsequent registration
statements pursuant to Rule 462(b) under the Securities Act) to such
Registration Statements; and
(c) any and all other documents and instruments which such attorneys
and agents deem necessary or advisable to enable the Company to comply
with (i) the Securities Act and the other federal securities laws of the
United States of America (including, without limitation, the Exchange Act)
and the rules, regulations and requirements of the SEC in respect of any
thereof, (ii) the securities or Blue Sky laws of any state or other
govermental subdivision of the United States of America, (iii) the rules
and regulations of the New York Stock Exchange, Inc. or any other national
or foreign securities exchange or authorized interdealer quotation
system, (iv) the requirements of the National Association of Securities
Dealers, Inc. and (v) the securities laws of any foreign jurisdiction; and
the undersigned does hereby ratify and confirm as his own acts and deeds
all that such attorneys-in-fact and agents, and each of them, shall do or
cause to be done by virtue hereof. Each one of such attorneys-in-fact and
agents shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the udnersigned has hereunto this power of attorney
this 29th day of April, 1998.
/s/ Paul J. Curlander
---------------------
Paul J. Curlander
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of Lexmark International Group, Inc., a
Delaware corportion ("LIG"), and Lexmark International, Inc., a Delaware
corporation ("LII"), does hereby constitute and appoint Marvin L. Mann, Gary
E. Morin and Vincent J. Cole, and each of them, with full power of
substitution, as his true and lawful attorneys and agents, to execute in his
name and on his behalf:
(a) one or more Registration Statements on an appropriate form
proposed to be filed with the Securities and Exchange Commission ("SEC")
for the purpose of registering under the Securities Act of 1933, as
amended (the "Securities Act"), (i) such principal amount of debt
securities of LII as shall be determined pursuant to a resolution of the
Board of Directors of LII or any duly authorized committee thereof and
(ii) such guarantee by LIG of the obligations of LII under such debt
securities as shall be determined pursuant to a resolution of the Board of
Directors of LIG or any duly authorized committee thereof.
(b) any and all supplments and amendments (including, without
limitation, post-effective amendments and any subsequent registration
statements pursuant to Rule 462(b) under the Securities Act) to such
Registration Statements; and
(c) any and all other documtnets and instruments which such attorneys
and agents deem necessary or advisable to enable the Company to comply
with (i) the Securities Act and the other federal securities laws of the
United States of America (including, without limitation, the Exchange Act)
and the rules, regulations and requirements of the SEC in respect of any
thereof, (ii) the securities or Blue Sky laws of any state or other
govermental subdivision of the United States of America, (iii) the rules
and regulations of the New York Stock Exchange, Inc. or any other national
or foreign securities exchange or authorized interdealer quotation
system, (iv) the requirements of the National Association of Securities
Dealers, Inc. and (v) the securities laws of any foreign jurisdiction; and
the undersigned does hereby ratify and confirm as his own acts and deeds
all that such attorneys-in-fact and agents, and each of them, shall do or
cause to be done by virtue hereof. Each one of such attorneys-in-fact and
agents shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the udnersigned has hereunto this power of attorney
this 29th day of April, 1998.
/s/ B. Charles Ames
-------------------
B. Charles Ames
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of Lexmark International Group, Inc., a
Delaware corportion ("LIG"), and Lexmark International, Inc., a Delaware
corporation ("LII"), does hereby constitute and appoint Marvin L. Mann, Gary
E. Morin and Vincent J. Cole, and each of them, with full power of
substitution, as his true and lawful attorneys and agents, to execute in his
name and on his behalf:
(a) one or more Registration Statements on an appropriate form
proposed to be filed with the Securities and Exchange Commission ("SEC")
for the purpose of registering under the Securities Act of 1933, as
amended (the "Securities Act"), (i) such principal amount of debt
securities of LII as shall be determined pursuant to a resolution of the
Board of Directors of LII or any duly authorized committee thereof and
(ii) such guarantee by LIG of the obligations of LII under such debt
securities as shall be determined pursuant to a resolution of the Board of
Directors of LIG or any duly authorized committee thereof.
(b) any and all supplments and amendments (including, without
limitation, post-effective amendments and any subsequent registration
statements pursuant to Rule 462(b) under the Securities Act) to such
Registration Statements; and
(c) any and all other documtnets and instruments which such attorneys
and agents deem necessary or advisable to enable the Company to comply
with (i) the Securities Act and the other federal securities laws of the
United States of America (including, without limitation, the Exchange Act)
and the rules, regulations and requirements of the SEC in respect of any
thereof, (ii) the securities or Blue Sky laws of any state or other
govermental subdivision of the United States of America, (iii) the rules
and regulations of the New York Stock Exchange, Inc. or any other national
or foreign securities exchange or authorized interdealer quotation
system, (iv) the requirements of the National Association of Securities
Dealers, Inc. and (v) the securities laws of any foreign jurisdiction; and
the undersigned does hereby ratify and confirm as his own acts and deeds
all that such attorneys-in-fact and agents, and each of them, shall do or
cause to be done by virtue hereof. Each one of such attorneys-in-fact and
agents shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the udnersigned has hereunto this power of attorney
this 29th day of April, 1998.
/s/ Frank T. Cary
-----------------
Frank T. Cary
