<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 22, 1999
REGISTRATION NO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE DIAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 51-0374887
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
15501 NORTH DIAL BOULEVARD
SCOTTSDALE, AZ 85260-1619
(480) 754-3425
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
MALCOLM JOZOFF
CHAIRMAN OF THE BOARD OF DIRECTORS, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
THE DIAL CORPORATION
15501 NORTH DIAL BOULEVARD
SCOTTSDALE, AZ 85260-1619
(480) 754-3425
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES OF ALL COMMUNICATIONS, INCLUDING COMMUNICATIONS SENT TO AGENT FOR
SERVICE, SHOULD BE SENT TO:
<TABLE>
<S> <C>
JANE E. OWENS, ESQ. STEVEN D. PIDGEON, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL SNELL & WILMER L.L.P.
THE DIAL CORPORATION ONE ARIZONA CENTER
15501 NORTH DIAL BOULEVARD PHOENIX, AZ 85004-0001
SCOTTSDALE, AZ 85260-1619 (602) 382-6252
(480) 754-3425
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time 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, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PRICE(1)(2) REGISTRATION FEE(3)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Debt Securities........................... $200,000,000 $200,000,000 $52,800
- ------------------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par value.............. (4) -- --
- ------------------------------------------------------------------------------------------------------------------------
Total..................................... $200,000,000 $200,000,000 $52,800
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) In U.S. dollars or the equivalent thereof in foreign currencies, composite
currencies or currency units.
(2) Exclusive of accrued interest and distributions, if any.
(3) Calculated pursuant to Rule 457.
(4) Also includes an indeterminate number of shares of common stock that may be
issued upon conversion of or exchange for debt securities.
------------------------
Pursuant to Rule 429 under the Securities Act of 1933, this Registration
Statement contains a combined prospectus relating to the $200,000,000 principal
amount of securities registered hereby and $300,000,000 principal amount of
securities registered on March 5, 1998 pursuant to Registration Statement No.
333-47355, of which $100,000,000 remains available for issuance thereunder. A
filing fee of $88,500 was paid in connection with Registration Statement No.
333-47355, of which $29,500 was attributable to the $100,000,000 in securities
that remain subject to such Registration Statement.
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 OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(a), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
Subject to completion, dated December 22, 1999
PROSPECTUS
$300,000,000
[DIAL CORPORATION LOGO]
DEBT SECURITIES
-------------------------
We are a consumer products company that markets our products primarily
under such well-known household brand names as Dial(R) soaps, Purex(R)
detergents, Renuzit(R) air fresheners and Armour(R) canned meats. We also market
specialty personal care products under the brand names Freeman(R), Sarah
Michaels(R) and Nature's Accents(R).
-------------------------
We will provide the specific terms of debt securities we offer in
supplements to this prospectus. You should read this prospectus and the
accompanying prospectus supplement carefully before you invest.
WE URGE YOU TO CAREFULLY READ THE "RISK FACTORS" SECTION BEGINNING ON PAGE
1 BEFORE MAKING AN INVESTMENT IN OUR DEBT SECURITIES.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is December 22, 1999.
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE SUBJECT
TO AMENDMENT. WE CANNOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS
IS NOT AN OFFER TO SELL SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Dial Corporation........................................ 1
Risk Factors................................................ 1
Special Note of Caution Regarding Forward-looking
Statements................................................ 5
Use of Proceeds............................................. 5
Ratio of Earnings to Fixed Charges.......................... 5
Description of Debt Securities.............................. 6
Plan of Distribution........................................ 22
Where You Can Find More Information......................... 23
Legal Matters............................................... 25
Experts..................................................... 25
</TABLE>
i
<PAGE> 4
THE DIAL CORPORATION
We manufacture and sell consumer products. We market our products primarily
under such well-known household brand names as Dial(R) soaps, Purex(R)
detergents, Renuzit(R) air fresheners and Armour(R) canned meats. We also market
specialty personal care products under the brand names Freeman(R), Sarah
Michaels(R) and Nature's Accents(R). We believe that our brand names have
contributed to our products achieving leading market positions.
We were incorporated in the State of Delaware on June 3, 1996. Our
corporate headquarters and principal executive offices are located at 15501
North Dial Boulevard, Scottsdale, Arizona 85260-1619, telephone number (480)
754-3425.
RISK FACTORS
You should carefully consider the following risk factors and other
information in this Prospectus before investing in our debt securities.
- - WE FACE INTENSE COMPETITION IN A MATURE INDUSTRY THAT MAY REQUIRE US TO
INCREASE EXPENDITURES AND LOWER PROFIT MARGINS TO PRESERVE OR MAINTAIN OUR
MARKET SHARE.
Currently, we depend primarily on sales generated in U.S. markets (89% of
sales in 1998). U.S. markets for consumer products are mature and characterized
by high household penetration, particularly with respect to our most significant
product categories, including detergents and bar soaps. We may not be able to
succeed in implementing our strategies to increase domestic revenues. Our unit
sales growth in domestic markets will depend on increasing usage by consumers,
product innovation and capturing market share from competitors.
The consumer products industry, particularly the detergent, personal care
and air freshener categories, is intensely competitive. To protect our existing
market share or to capture increased market share, we may need to increase
expenditures for promotions and advertising and to introduce and establish new
products. Additional expenditures could lower our profit margins. Moreover,
these additional measures and increased expenditures may not prove successful in
maintaining or enhancing our market share. Many of our competitors are large
companies, including The Procter & Gamble Company, Lever Brothers Co.,
Colgate-Palmolive Company, and S.C. Johnson & Son, Inc., that have greater
financial resources than us. They could outspend us in an attempt to take market
share from us.
- - PRICE-CUTTING MEASURES IN RESPONSE TO COMPETITIVE PRESSURES COULD RESULT IN
DECREASED PROFIT MARGINS.
Consumer products, particularly those that are value-priced, are subject to
significant price competition. From time to time, we may need to reduce the
prices for some of our products to respond to competitive and consumer pressures
and to maintain market share. If our sales volumes fail to grow sufficiently to
offset any reduction in margins, our results of operations would be materially
adversely effected.
- - OUR INABILITY TO PROVIDE PRICE CONCESSIONS OR TRADE TERMS THAT ARE ACCEPTABLE
TO OUR TRADE CUSTOMERS COULD ADVERSELY AFFECT OUR SALES AND PROFITABILITY.
Because of the competitive environment facing retailers, we face pricing
pressure from these customers. Many of our trade customers, particularly our
high-volume retail store customers, have increasingly sought to reduce inventory
levels and obtain pricing concessions or better trade terms. If we are unable to
maintain price or trade terms that
1
<PAGE> 5
are acceptable to our trade customers, they could increase product purchases
from our competitors, which would adversely affect our sales and profitability.
Our performance is also dependent upon the general health of the retail
environment and could be materially affected by changes affecting retailing and
by the financial difficulties of retailers.
- - LOSS OF ONE OF OUR PRINCIPAL CUSTOMERS COULD SIGNIFICANTLY DECREASE OUR SALES
AND PROFITABILITY.
Our top ten customers accounted for 40% of net sales in 1998. Wal-Mart was
our largest customer, accounting for 17% of net sales in 1998. The loss of or a
substantial decrease in the volume of purchases by Wal-Mart or any of the our
other top customers could have a material adverse effect on sales and
profitability.
- - PRICE INCREASES IN CERTAIN RAW MATERIALS COULD ADVERSELY AFFECT OUR PROFIT
MARGINS.
Rapid increases in the prices of certain raw materials could materially
impact our profit margins. For example, tallow (a key ingredient in Dial bar
soaps) has experienced price fluctuations within the range of $0.15 and $0.28
per pound from January 1, 1995 to December 31, 1998. Recently, the price of
tallow has been trading at the lower end of this historical range. If prices
were to increase, we may not be able to increase the prices of our Dial bar
soaps to offset these increases as readily as many competitors, which tend to
use less tallow in their products. In addition, we depend on a single supplier
for Triclosan, the antibacterial agent that is the active ingredient used in
Liquid Dial products. Although we have an adequate supply of Triclosan for our
current and foreseeable needs, a significant disruption in this supply could
have a short-term material adverse impact on our financial results.
- - OUR INTERNATIONAL EXPANSION EFFORTS MAY PROVE UNSUCCESSFUL.
In 1998, 89% of our sales were generated in U.S. markets. To reduce our
dependence on domestic revenues, we have adopted a strategy to further penetrate
international markets. However, there can be no assurance that we will succeed
in increasing our international business in a profitable manner. In implementing
this strategy, we face barriers to entry and the risk of competition from local
and other companies that already have established global businesses, risks
generally associated with conducting business internationally, including
exposure to currency fluctuations, limitations on foreign investment,
import/export controls, nationalization, unstable governments and legal systems
and the additional expense and risks inherent in operating in geographically and
culturally diverse locations. Because we plan to develop our international
business through acquisitions as well as joint ventures, co-packaging
arrangements and/or other alliances, we may also be subject to risks associated
with such arrangements, including those relating to the marriage of different
corporate cultures and shared decision-making. In addition, since our current
international distribution capabilities are extremely limited, we will also need
to acquire a distribution network or enter into alliances with existing
distributors before we can effectively conduct operations in new markets.
- - THE FDA COULD IMPOSE STANDARDS THAT NEGATIVELY IMPACT OUR ABILITY TO MARKET
SOME OF OUR PRODUCTS AS ANTIBACTERIAL.
Since the 1970's, the Food and Drug Administration has regulated
antibacterial soaps and hand washes under a proposed regulation. Although the
proposed regulation has not been finalized, the FDA ultimately could set
standards that result in limiting or even precluding soap manufacturers from
using some current antibacterial ingredients or making antibacterial claims for
some product forms, such as bar soap. Dial, which uses the
2
<PAGE> 6
antibacterial ingredient Triclosan in liquid Dial and Triclocarban in Dial bar
soap, emphasizes the antibacterial properties of its soap products in its
marketing campaigns and product labeling. Any final FDA regulation that limits
or precludes this type of advertising could require Dial to develop new
marketing campaigns, develop new products or utilize different antibacterial
ingredients in its products, all of which could materially adversely effect our
business.
- - WE COULD BECOME THE SUBJECT OF ADVERSE PUBLICITY OR PRODUCT RECALLS WHICH
NEGATIVELY IMPACTS OUR OPERATIONS.
Adverse publicity regarding our products could impact the sales of our
products. Some news broadcasts by major U.S. television and radio networks have
focused on the use of antibacterial agents to kill germs on various surfaces.
Triclosan, the active ingredient in Liquid Dial, has also been a focus of these
broadcasts. Although none of the broadcasts disputed that Triclosan kills germs
on the skin, some third party experts did question whether it provides any
additional protection beyond that provided by non-antibacterial soap products.
Although we have test results that we believe prove that Triclosan provides
consumers with additional protection in limiting exposure to bacteria-related
diseases, there can be no assurance that our Triclosan products, or other
products, will not be the subject of adverse publicity in the future.
From time to time, consumer product companies, including Dial, have had to
recall certain products for various reasons. The costs of recall or other
related liabilities could materially lower our profit margins. Adverse publicity
regarding any product recalls could also materially affect our sales.
We share the use of the Armour trademark for food products with ConAgra
Inc., the manufacturer of Armour-branded non-canned meat products. Accordingly,
we face the added risk that consumer preferences and perceptions with respect to
any of our Armour products may be influenced by adverse publicity affecting any
of the Armour-branded products of ConAgra, Inc.
- - WE MAY INCUR UNEXPECTED EXPENSES DUE TO ENVIRONMENTAL CONCERNS REGARDING A
DETERGENT COMPOUND.
Nonlyphenol ethoxylate is an ingredient used in our liquid and powder
detergent products. Certain environmental and regulatory groups have raised
concerns regarding the toxicity of compounds produced from nonlyphenol
ethoxylate as it decomposes and the adverse impact on the reproductive health of
certain aquatic animals exposed to those compounds. Although to our knowledge
none of the studies undertaken on nonlyphenol ethoxylate has demonstrated a link
between the compound and such effect in the environment or in human beings,
there can be no assurance that subsequent studies will not in fact demonstrate
such a link or demonstrate other adverse environmental consequences. Current
government regulations do not impose any restrictions on the use of nonlyphenol
ethoxylate, or impose any liability on any of the businesses that utilize
nonlyphenol ethoxylate in the products they manufacture. We believe, however,
that a number of governmental agencies in North America and Europe are
discussing formal regulation of nonlyphenol ethoxylate in the environment. We
are in the process of reformulating our detergents to eliminate this compound as
an ingredient.
- - WE MAY INCUR UNEXPECTED EXPENSES DUE TO ENVIRONMENTAL MATTERS.
We are subject to a variety of environmental and health and safety laws in
each jurisdiction in which we operate. These laws and regulations pertain to our
present and
3
<PAGE> 7
past operations. Although we currently do not anticipate that the costs to
comply with environmental laws and regulations will have a material adverse
effect on our capital expenditures, earnings or competitive position, the
emergence of unforeseen claims or liabilities or the imposition of increasingly
stringent laws, regulations and enforcement policies could result in material,
unreserved costs in the future. Since 1980, we have received notices or requests
for information with respect to "Superfund" sites under the federal
Comprehensive Environmental Response, Compensation and Liability Act, five of
which are currently active. As of December 31, 1998, we have accrued in our
financial statements approximately $3 million in reserves for expenses related
to Superfund sites and the clean-up of closed plant sites. We believe our
reserves are adequate, but these costs are difficult to predict with certainty.
- - LOSS OF KEY MANAGERIAL PERSONNEL COULD NEGATIVELY IMPACT OUR OPERATIONS.
Our operation requires managerial expertise. Of our key personnel, only the
Chief Executive Officer has an employment contract with us. There can be no
assurance that any of our key employees will remain in our employ. The loss of
key personnel could have a material adverse effect on our operations.
- - WE MAY MAKE ACQUISITIONS THAT PROVE UNSUCCESSFUL OR STRAIN OR DIVERT OUR
RESOURCES.
We recently acquired two consumer products companies, Freeman Cosmetic
Corporation and Sarah Michaels, and formed a joint venture company with Henkel
KGaA. In addition, the joint venture company formed with Henkel recently
acquired the Custom Cleaner(R) home drycleaning business. We may acquire or make
substantial investments in complementary businesses or products in the future.
The Freeman, Sarah Michaels and Custom Cleaner acquisitions entailed, and any
future acquisitions or investments would entail, various risks, including the
difficulty of assimilating the operations and personnel of the acquired
businesses or products, the potential disruption of our ongoing business and,
generally, our potential inability to obtain the desired financial and strategic
benefits from the acquisition or investment. These factors could have a material
adverse effect on our financial results. Our future acquisitions and investments
could also result in substantial cash expenditures, potentially dilutive
issuances of equity securities, the incurrence of additional debt and contingent
liabilities, and amortization expenses related to goodwill and other intangible
assets, which could adversely affect our financial results and condition.
- - WE COULD SUFFER YEAR 2000 COMPUTER PROBLEMS THAT COULD DISRUPT OUR OPERATIONS.
We could be affected by failures of our business systems, as well as those
of our suppliers and vendors, due to the year 2000 problem. Our date critical
functions related to the year 2000 and beyond, such as sales, distribution,
manufacturing, purchasing, inventory control, trade promotion management,
planning and replenishment, facilities and financial systems, may be materially
adversely affected unless these computer systems are or become year 2000
compliant. Based upon representations we have received from information
technology vendors, we currently believe that our systems are in all material
respects year 2000 compliant and will not pose significant operational problems.
However, we are unable to assess with any certainty whether our third-party
vendors, including vendors in international markets, will timely become year
2000 compliant. If all of our year 2000 issues are not properly identified and
remediated, including with respect to our third-party and international vendors,
our results of operations could be adversely affected.
4
<PAGE> 8
SPECIAL NOTE OF CAUTION REGARDING
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. When used
in this prospectus, the words "anticipates," "intends," "plans," "believes,"
"estimates" and similar expressions are intended to identify forward-looking
statements. These statements are based on management's beliefs, as well as on
assumptions made by and information currently available to management, and
involve various risks and uncertainties, certain of which are described under
"Risk Factors" in this prospectus and certain of which are beyond our control.
Our actual results could differ materially from those expressed in any
forward-looking statements made by or on behalf of us. In light of these risks
and uncertainties, there can be no assurance that the forward-looking
information included or incorporated by reference in this prospectus will in
fact transpire.
USE OF PROCEEDS
We intend to use the proceeds from the sale of the debt securities for
general corporate purposes, which may include capital expenditures, the
repayment of indebtedness, the funding of working capital, acquisitions and
stock repurchases. The use of proceeds from the sale of the debt securities will
be set forth in a prospectus supplement relating to each offering of debt
securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows our ratio of earnings to fixed charges for the
periods indicated. For purposes of this ratio, earnings consist of earnings
before income taxes plus fixed charges. Fixed charges consist of interest
expense and the estimated interest portion of rent expense. Prior to August 15,
1996, we were a subsidiary of another public company, Viad Corp. Interest
expense during that period was incurred primarily on advances from our former
parent company that bore interest at the prime lending rate. The average balance
of interest bearing advances from our former parent company prior to the
spin-off were approximately $160 million, $240 million, and $163 million for
1996, 1995 and 1994, respectively.
<TABLE>
<CAPTION>
NINE
MOS.
ENDED FISCAL YEAR ENDED
------- -------------------------------------------------------
OCT. 2, DEC. 31, JAN. 3, DEC. 28, DEC. 30, DEC. 31,
1999 1998 1998 1996 1995 1994
------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges........ 7.14 9.63 6.98 3.01(1) (1)(2) 9.48
</TABLE>
- -------------------------
(1) Includes restructuring charges, asset write-downs and spin-off transaction
costs of $60 million in 1996 and restructuring charges and asset write-downs
of $156 million in 1995.
(2) In 1995, fixed charges exceeded earnings by approximately $47 million.
5
<PAGE> 9
DESCRIPTION OF DEBT SECURITIES
The following is a description of the general terms of debt securities that
we may offer through this prospectus and related prospectus supplement. The
particular terms of any debt securities offered (the "Offered Debt Securities")
and the extent, if any, to which the general provisions described below will
apply to the Offered Debt Securities will be described in the applicable
prospectus supplement.
The Offered Debt Securities are to be issued in one or more series under an
Indenture that is currently between us and Norwest Bank Arizona, N.A., as
Trustee. The Indenture provides that there may be more than one Trustee, each
with respect to one or more series of the debt securities. The term "Trustee"
means Norwest Bank Arizona, N.A. and, if at any time there is more than one
Trustee acting under the Indenture, the Trustee with respect to the debt
securities of any particular series shall mean the Trustee with respect to the
debt securities of any particular series shall mean the Trustee with respect to
the Offered Debt Securities of such series. The Indenture is an exhibit to the
registration statement. The following summaries of provisions of the Indenture
and the Offered Debt Securities do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all provisions of the
Indenture, including the definitions of terms therein and of those terms made a
part thereof by the Trust Indenture Act of 1939. Wherever particular provisions
or defined terms of the Indenture are referred to in this prospectus, they are
incorporated herein by reference from the Indenture. Certain defined terms in
the Indenture are capitalized in this prospectus.
GENERAL
The debt securities will be unsecured obligations. Unless otherwise stated
in a prospectus supplement, the debt securities will rank on a parity in right
of payment with all of our other unsecured and unsubordinated indebtedness. We
may issue debt securities which are subordinated in right of payment, in the
manner and to the extent described in the applicable prospectus supplement, to
all existing and future Senior Indebtedness, as defined in the applicable
prospectus supplement.
The debt securities to be offered by this prospectus are limited to
$300,000,000 in aggregate initial public offering price. The Indenture does not
limit the amount of debt securities that may be issued and provides that debt
securities may be issued from time to time in one or more series. All debt
securities of one series need not be issued at the same time and, unless
otherwise provided, a series may be reopened, without the consent of any Holder,
for issuances of additional debt securities of such series. The Indenture
provides that there may be more than one Trustee thereunder, each with respect
to one or more series of debt securities.
We refer you to the prospectus supplement relating to the Offered Debt
Securities for the following terms, where applicable, of the Offered Debt
Securities:
- the title of the Offered Debt Securities or series of which they are a
part;
- the aggregate principal amount of the Offered Debt Securities and any
limit on the aggregate principal amount of the Offered Debt Securities;
- the Person to whom any interest on an Offered Debt Security of that
series will be payable, if other than the Person in whose name that the
Offered Debt Security is registered at the close of business on the
Regular Record Date for such series;
6
<PAGE> 10
- the date or dates (or the method or methods, if any, by which such date
or dates shall be determined) on which the principal of the Offered Debt
Securities will be payable;
- the price or prices (expressed as a percentage of the aggregate principal
amount thereof) at which the Offered Debt Securities will be issued;
- the rate or rates (which may be fixed, floating or adjustable), or the
method of determination thereof, at which the Offered Debt Securities
will bear interest, if any; the date or dates from which such interest
will accrue; the Interest Payment Dates on which any such interest will
be payable; the Regular Record Date for any such interest payable on any
Interest Payment Date and the basis upon which interest shall be
calculated if other than that of a 360-day year of twelve 30-day months;
- the place or places where the principal of and any premium and interest
on the Offered Debt Securities will be payable;
- the period or periods within which, the price or prices at which, the
currency or currencies, currency unit or composite currency in which, and
the other terms and conditions upon which the Offered Debt Securities may
be redeemed, in whole or in part, at our option;
- our obligation, if any, to redeem, repay or purchase any of the Offered
Debt Securities pursuant to any sinking fund or analogous provisions or
at the option of a Holder thereof, and the period or periods within
which, the price or prices at which and the terms and conditions on which
any of the Offered Debt Securities will be redeemed, repaid or purchased,
in whole or in part, pursuant to any such obligation;
- the denominations in which the Offered Debt Securities will be issuable,
if other than denominations of $1,000 and any integral multiple thereof;
- if other than the currency of the United States of America, the currency,
currencies, composite currencies or currency units in which the principal
of or any premium or interest on the Offered Debt Securities will be
payable (and the manner in which the equivalent of the principal amount
thereof in the currency of the United States of America is to be
determined for any purpose, including for the purpose of determining the
principal amount deemed to be outstanding at any time);
- if the amount of payments of principal of or any premium or interest on
the Offered Debt Securities may be determined with reference to an index,
pursuant to a formula or pursuant to other methods, the manner in which
such amounts will be determined;
- if the principal of or any premium or interest on the Offered Debt
Securities is to be payable (at our election or the election of a Holder)
in one or more currencies, composite currencies or currency units other
than those in which the Offered Debt Securities are stated to be payable,
the currency, currencies or currency units in which payment of any such
amount as to which such election is made will be payable, and the periods
within which and the terms and conditions upon which such election is to
be made;
- if other than the principal amount thereof, the portion of the principal
amount of the Offered Debt Securities which will be payable upon
declaration of acceleration of the Maturity thereof pursuant to the
Indenture or, if applicable, the portion of
7
<PAGE> 11
the principal amount of Offered Debt Securities that is convertible into
or exchangeable for our common stock or other securities or the method by
which such portion will be determined;
- if applicable, any terms subjecting the Offered Debt Securities to
defeasance or covenant defeasance different from the provisions in the
Indenture and any limitations on application of the terms of the
Indenture described below under "Satisfaction, Discharge and Defeasance;"
- if applicable, any terms governing conversion or exchangeability of the
Offered Debt Securities into or for our common stock or other securities
and the terms and conditions upon which such conversion or exchange will
be effected;
- any terms regarding the issuance of any Offered Debt Securities of the
series, in whole or in part, in book-entry form and, if applicable, the
depositary for such book-entry securities and the circumstances, if any,
in addition to the circumstances, if applicable, described below under
"Book-Entry Debt Securities," under which any such book-entry debt
securities may be registered in the name of a Person other than such
depositary or its nominee;
- provisions, if any, granting special rights to the Holders of the Offered
Debt Securities upon the occurrence of such events as may be specified;
- any addition to, or modification or deletion of, any Events of Default or
covenants provided for with respect to the Offered Debt Securities;
- the terms, if any, pursuant to which the Offered Debt Securities will be
made subordinate and subject in right of payment to the prior payment in
full of all of our Senior Indebtedness; and the definition of any such
Senior Indebtedness;
- the application, if any, of judgments in respect of any specified
currency, to the Offered Debt Securities;
- whether the payment of principal, premium and interest, if any, and other
amounts due under the Indenture, and performance of our other obligations
under the Indenture, will be guaranteed by one or more guarantors,
including any of our subsidiaries; and
- any other terms of the Offered Debt Securities not inconsistent with the
provisions of the Indenture.
Unless otherwise indicated in the prospectus supplement relating to Offered
Debt Securities, the principal of, premium, if any, or interest on the debt
securities will be payable, and the debt securities will be exchangeable and
transfers thereof will be registrable, at the principal office of the Trustee,
provided that, at our option, payment of interest may be made by check mailed to
the address of the Person entitled thereto as it appears in the Security
Register or by wire transfer to an account maintained by the payee located in
the United States. Any payment of principal, premium or interest required to be
made on a date which is not a Business Day may be made on the next succeeding
Business Day with the same force and effect as if made on the applicable date.
All monies paid by us to the Trustee for the payment of principal of (and
premium, if any or interest, if any, on) any debt security that remains
unclaimed by the Holder of such debt security at the end of two years after such
principal, premium or interest shall become due and payable will be repaid by
the Trustee to us on demand, and such Holder will thereafter look only to us for
payment thereof.
8
<PAGE> 12
Unless otherwise indicated in the prospectus supplement relating to Offered
Debt Securities, the debt securities will be issued only in fully registered
form, without coupons, in denominations of $1,000 or any integral multiple
thereof. No service charge will be made for any transfer or exchange of the debt
securities, but we may, subject to certain exceptions, require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Debt securities may be issued under the Indenture as Original Issue
Discount Securities (as defined below) to be offered and sold at a substantial
discount from their stated principal amount. In addition, under Treasury
Regulations it is possible that debt securities which are offered and sold at
their stated principal amount would, under certain circumstances, be treated as
issued at an original issue discount for Federal income tax purposes. Federal
income tax consequences and other special considerations applicable to any such
Original Issue Discount Securities (or other debt securities treated as issued
at an original issue discount) will be described in the prospectus supplement
relating thereto. "Original Issue Discount Security" means a security, including
any security that does not provide for the payment of interest prior to
Maturity, which is issued at a price lower than the principal amount thereof and
which provides that upon redemption or acceleration of the Stated Maturity
thereof an amount less than the principal amount thereof shall become due and
payable. Any special United States tax considerations applicable to any debt
securities which are denominated in any currencies, currency units or composite
currencies other than United States dollars will be described in the applicable
prospectus supplement.
The Indenture does not contain any provisions which may afford the Holders
of debt securities of any series protection in the event of a highly leveraged
transaction or other transaction which may occur in connection with a takeover
attempt resulting in a decline in the credit rating of the debt securities. Any
such provisions, if applicable to the debt securities of any series, will be
described in the prospectus supplement or prospectus supplements relating
thereto.
EVENTS OF DEFAULT
Unless otherwise specified in the prospectus supplement, the following are
the Events of Default under the Indenture with respect to debt securities of any
series:
- failure to pay principal of or premium, if any, on any debt security of
that series when due;
- failure to pay any interest on any debt security of that series when due,
continued for 30 days;
- failure to deposit any sinking fund payment, when due, in respect of any
debt security of that series;
- failure to perform or breach of any of our other covenants in the
Indenture (other than a covenant included in the Indenture solely for the
benefit of a series of debt securities other than that series), continued
for 60 days after written notice by the Trustee or Holders of at least
25% of the principal amount of the Outstanding Debt Securities of that
series (as provided in the Indenture);
- certain events in bankruptcy, insolvency or reorganization involving us
or a Significant Subsidiary (as defined in Regulation S-X under the
Securities Act of 1933);
9
<PAGE> 13
- default under any bond, debenture, note, mortgage, indenture or other
instrument under which there may be issued or by which there may be
secured or evidenced any indebtedness for money borrowed for which we or
a Significant Subsidiary is directly responsible or liable as obligor or
guarantor, having an aggregate principal amount outstanding of at least
$50,000,000, whether such indebtedness exists on the date of the
Indenture or shall thereafter be created, which default shall have
resulted in such indebtedness being declared due and payable prior to the
date on which it would otherwise have become due and payable, without
such indebtedness being discharged or such acceleration having been
rescinded or annulled; and
- any other Event of Default provided with respect to debt securities of
that series. Unless otherwise specified herein or in the prospectus
supplement, no Event of Default with respect to a particular series of
debt securities issued under the Indenture necessarily constitutes an
Event of Default with respect to any other series of debt securities
issued thereunder.
If an Event of Default with respect to Outstanding Debt Securities of any
series shall occur and be continuing, either the Trustee or the Holders of at
least 25% in aggregate principal amount of the Outstanding Debt Securities of
that series may declare the principal amount or, if the debt securities of that
series are Original Issue Discount Securities or Indexed Securities, such
portion of the principal amount as may be specified in the terms of that series,
of all the debt securities of that series to be due and payable immediately by
written notice to us and to the Trustee, if given by the Holders. If an Event of
Default described above with respect to the debt securities of any series at the
time outstanding shall occur, the principal amount of all the debt securities of
that series or, in the case of any such Original Issue Discount Security or
other debt security, such specified amount will automatically, and without any
action by the Trustee or any Holder, become immediately due and payable. At any
time after a declaration of acceleration with respect to debt securities of any
series has been made, but before a judgment or decree based on acceleration has
been obtained, the Holders of a majority in principal amount of the Outstanding
Debt Securities of that series may, under certain circumstances, rescind and
annul the acceleration by written notice, except a default in the payment of
principal, premium or interest and certain covenants and provisions of the
Indenture, which cannot be amended without the consent of the Holder of each
outstanding debt security of such series affected.
We refer you to the prospectus supplement relating to each series of
Offered Debt Securities which are Original Issue Discount Securities for the
particular provisions relating to acceleration of the Maturity of a portion of
the principal amount of such Original Issue Discount Securities upon the
occurrence and continuation of an Event of Default.
The Trustee shall, within 90 days after the occurrence of a default with
respect to debt securities of any series, give all Holders of debt securities of
such series then outstanding notice of all uncured defaults known to it,
provided that, except in the case of a default in the payment of principal of
(or any premium or interest on) any debt security of any series, or in the
payment of any sinking fund installment with respect to debt securities of any
series, the Trustee shall be protected in withholding such notice if it, in good
faith, determines that the withholding of such notice is in the interest of all
Holders of debt securities of such series then outstanding.
The Indenture provides that the Trustee will be under no obligation
(subject to the duty of the Trustee during a default to act with the required
standard of care) to exercise
10
<PAGE> 14
any of its rights or powers under the Indenture at the request or direction of
any of the Holders of the debt securities of any series, unless such Holders
shall have offered to the Trustee reasonable security or indemnity against
costs, expense and liabilities which might be incurred by it in compliance with
such request. Subject to such provisions for indemnification of the Trustee, the
Holders of a majority in principal amount of the Outstanding Debt Securities of
any series 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, with respect to the debt securities
of that series.
Under the Indenture, we will be required to furnish to the Trustee annually
a statement by certain of our officers to the effect that, to the best of their
knowledge, we are not in default in the fulfillment of any of our obligations
under the Indenture or, if there has been a default in the fulfillment of any
such obligation, specifying such default.
No Holder of any debt securities of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to debt securities
of that series, the Holders of at least 25% in aggregate principal amount of the
Outstanding Debt Securities of that series shall have made written request, and
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a majority
in aggregate principal amount of the Outstanding Debt Securities of that series
a direction inconsistent with such request and shall have failed to institute
such proceeding within 60 days. However, such limitations do not apply to a suit
instituted by a Holder of an Outstanding Debt Security of that series for
enforcement of payment of the principal of, or any premium or interest on, such
debt security on or after the respective due dates expressed in such debt
security.
COVENANTS
The particular covenants, if any, relating to any series of debt securities
will be described in the prospectus supplement relating to such series. Unless
otherwise specified in the prospectus supplement, the "covenant defeasance"
provisions described below will apply to any such covenants described in the
prospectus supplement.
CONSOLIDATION, MERGER AND TRANSFER OF ASSETS
Unless otherwise specified in an applicable prospectus supplement, under
the Indenture, without consent of the Holders, we may consolidate or merge with
or into any other corporation or entity, and we may sell, lease or convey all or
substantially all of its assets to another corporation or entity, if:
- (a) in the case of a merger, we are the surviving company in the merger,
or (b) the entity surviving the merger, formed by such consolidation or
which acquires such assets is an entity organized and existing under the
laws of the United States of America or a state thereof or the District
of Columbia and expressly assumes payment of the principal of (and any
premium and interest on) the debt securities and the performance and
observance of all of the covenants and conditions of the Indenture to be
performed or observed by us;
11
<PAGE> 15
- immediately thereafter, no Event of Default or event which, with notice
or lapse of time or both, would constitute an Event of Default shall have
occurred and shall be continuing; and
- certain other conditions are met.
In the event of any transaction (other than a lease) described in and
complying with the conditions listed in the immediately preceding paragraph in
which we are not the surviving company, the successor entity would be
substituted for us and we would be relieved of any obligations and covenants
under the Indenture and the debt securities.
SATISFACTION, DISCHARGE AND DEFEASANCE
SATISFACTION AND DISCHARGE
Unless otherwise specified in an applicable prospectus supplement, the
Indenture, with respect to any series of debt securities, except for certain
specified surviving obligations, including any rights of registration of
transfer and exchange, and rights to receive the principal, premium, if any, and
interest, if any, on the debt securities will be discharged and canceled upon
the satisfaction of certain conditions, including the following:
- all debt securities have been authenticated and delivered to the Trustee
for cancellation; or
- all debt securities of such series not delivered to the Trustee for
cancellation have become due or payable, will become due and payable at
their Maturity within one year or are to be called for redemption within
one year, and an amount sufficient to pay the principal, premium, if any,
and interest, if any, to the Stated Maturity or Redemption Date, as the
case may be, of all debt securities of such series has been deposited
with the Trustee.
DEFEASANCE AND COVENANT DEFEASANCE
Unless specified in the prospectus supplement with respect to debt
securities of any series, we:
- will be discharged from any and all obligations in respect of the debt
securities of such series, except for, among other things, certain
obligations to register the transfer or exchange of debt securities of
such series; replace stolen, lost or mutilated debt securities of such
series; maintain certain offices or agencies in each Place of Payment;
and hold moneys for payment in trust ("defeasance"); or
- will not be subject to provisions of the applicable Indenture described
above under "-- Consolidation, Merger and Transfer of Assets" and certain
other restrictive covenants included in the applicable prospectus
supplement with respect to the debt securities of such series ("covenant
defeasance"), in each case if we irrevocably deposit with the Trustee, in
trust, money or U.S. Government Obligations which through the payment of
interest thereon and principal thereof in accordance with their terms
will provide money in an amount sufficient, in the opinion of a
nationally recognized firm of independent public accountants or
investment bank which shall be delivered to the Trustee to pay all the
principal (including any mandatory sinking fund payments) of, and
premium, if any, and interest, if any, on, the debt securities of such
series on the dates such payments are due in accordance with the terms of
such debt securities.
12
<PAGE> 16
To exercise any such option, we are required, among other things, to
deliver to the Trustee:
- an opinion of counsel to the effect that the deposit and related
defeasance or covenant defeasance, as the case may be, will not cause the
Holders of the debt securities of such series to recognize income, gain
or loss for federal income tax purposes; and
- in the case of defeasance, a ruling received from or published by the
United States Internal Revenue Service or a change in U.S. income tax law
to the effect that the deposit and related defeasance will not cause the
Holders of the debt securities of such series to recognize income, gain
or loss for federal income tax purposes.
MODIFICATION AND WAIVER
Unless otherwise specified in an applicable prospectus supplement,
modifications and amendments of the Indenture may be made by us and the Trustee
with the consent of the Holders of a majority in aggregate principal amount of
the Outstanding Debt Securities of each series affected by such modification or
amendment; provided, however, that no such modification or amendment may,
without the consent of the Holder of each Outstanding Debt Security affected
thereby:
- change the Stated Maturity of the principal of or any installment of
principal of or interest on any debt security;
- reduce the principal amount of, or any premium or interest on, or the
rate of interest on, any debt security;
- reduce the amount of principal of an Original Issue Discount Security or
other debt security payable upon acceleration of the Maturity thereof;
- change the place or currency of payment of principal of, or any premium
or interest on, any debt security;
- impair the right to institute suit for the enforcement of any payment on
or after the Stated Maturity thereof (or, in the case of redemption on or
after the Redemption Date; or, in the case of repayment at the option of
the Holder, on or after the date fixed for repayment);
- reduce the percentage in principal amount of Outstanding Debt Securities
of any series, the consent of whose Holders is required for modification
or amendment of the Indenture;
- reduce the percentage in principal amount of Outstanding Debt Securities
of any series, the consent of whose Holders is required for any waiver
(of compliance with certain provisions of the Indenture or certain
defaults thereunder and their consequences) provided for in the
Indenture; or
- modify any of the provisions relating to supplemental indentures, waiver
of past defaults or waiver of certain covenants, except to increase any
such percentage or to provide that certain other provisions of the
Indenture cannot be modified or waived without the consent of the Holder
of each outstanding debt security affected thereby.
13
<PAGE> 17
Unless otherwise specified in an applicable prospectus supplement,
modifications and amendments of the Indenture may be made by us and the Trustee
without the consent of any Holder of debt securities for any of the following
purposes:
- to evidence the succession of another Person to us and the assumption by
any such successor of the covenants in the Indenture and in the debt
securities as obligor under the Indenture;
- to add covenants binding upon us for the benefit of the Holders of all or
any series of debt securities or to surrender any right or power
conferred upon us in the Indenture;
- to add Events of Default;
- to add or change any provisions of the Indenture to such extent as shall
be necessary to permit or facilitate the issuance of debt securities in
bearer form, registrable or not registrable as to principal, and with or
without interest coupons, or to permit or facilitate the issuance of debt
securities in uncertificated form; provided, that any such change shall
not adversely affect the interests of the Holders of debt securities of
such series or any other series of debt securities in any material
respect;
- to add to, change or eliminate any of the provisions of the Indenture in
respect of one or more series of debt securities, provided that, any such
addition, change or elimination (a) shall neither (1) apply to any debt
security of any series created prior to the execution of such
supplemental indenture and entitled to the benefit of such provision nor
(2) modify the rights of the Holder of any such debt security with
respect to such provision or (b) shall become effective only when there
is no such debt security outstanding;
- to evidence and provide for the acceptance of appointment under the
Indenture by a successor Trustee with respect to the debt securities of
one or more series and to add to or change any of the provisions of the
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts under the Indenture by more than one
Trustee;
- to secure the debt securities;
- to supplement any of the provisions of the Indenture to such extent as
shall be necessary to permit or facilitate the defeasance, covenant
defeasance or satisfaction and discharge of any series of debt securities
pursuant to the Indenture; provided, that any such action shall not
adversely affect the interests of the Holders of debt securities of such
series or any other series of debt securities in any material respect;
- to cure any ambiguity, to correct or supplement any provision in the
Indenture which may be inconsistent with any other provision in the
Indenture or to make any other provisions with respect to matters or
questions arising under the Indenture, provided that such action shall
not adversely affect the interests of the Holders of debt securities of
any series in any material respect;
- to add a guarantor or guarantors for any or all series of debt
securities;
- to comply with the requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the Trust Indenture
Act; and
- to establish the form or terms of any series of debt securities.
14
<PAGE> 18
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may, on behalf of the Holders of all
debt securities of that series, waive any past default under the Indenture with
respect to that series, except a default in the payment of the principal of or
any premium or interest on any debt security of that series or in respect of a
provision which under the Indenture cannot be modified or amended without the
consent of the Holder of each Outstanding Debt Security of that series affected.
CONVERSION OR EXCHANGE RIGHTS
The terms and conditions, if any, upon which the debt securities are
convertible into or exchangeable for common stock or other securities will be
set forth in the applicable prospectus supplement relating thereto. These terms
will include the conversion price or exchange ratio (or manner of calculation
thereof), the conversion or exchange period, provisions as to whether conversion
or exchange will be at our option or at the option of the Holders, the events
requiring an adjustment of the conversion price or exchange ratio and provisions
affecting conversion or exchange in the event of the redemption of such debt
securities.
GOVERNING LAW
The Indenture and the debt securities will be governed by, and construed in
accordance with, the law of the State of New York, but without regard to
principles of conflicts of law.
CONCERNING THE TRUSTEE
Unless otherwise provided in a prospectus supplement applicable to Offered
Debt Securities, Norwest Bank Arizona, N.A., with its principal offices at 100
West Washington, Phoenix, Arizona, 85003, will act as Trustee for the benefit of
the Holders of the debt securities under the Indenture.
BOOK-ENTRY DEBT SECURITIES
Debt securities of a series may be issued in whole or in part in global
form that will be deposited with, or on behalf of, a depositary identified in
the applicable prospectus supplement. Global debt securities may be issued in
either registered or bearer form and in either temporary or permanent form.
Unless otherwise provided in the applicable prospectus supplement, debt
securities that are represented by a Global Security will be issued in
denominations of $1,000 and any integral multiple thereof, and will be issued in
registered form only, without coupons. Payments of principal of and any premium
and interest on debt securities represented by a Global Security will be made by
us to the applicable Trustee, and then by such Trustee to the depositary.
We anticipate that any Global Securities will be deposited with, or on
behalf of, The Depository Trust Company ("DTC"), New York, New York, that such
Global Securities will be registered in the name of DTC's nominee, and that the
following provisions will apply to the depositary arrangements with respect to
any such Global Securities. Additional or differing terms of the depositary
arrangement will be described in the applicable prospectus supplement.
15
<PAGE> 19
So long as DTC or its nominee is the registered owner of a Global Security,
DTC or its nominee, as the case may be, will be considered the sole Holder of
the Securities represented by such Global Security for all purposes under the
Indenture. Except as provided below, owners of beneficial interests in a Global
Security will not be entitled to have debt securities represented by such Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of debt securities in certificated form and will not be
considered the owners or Holders thereof under the Indenture. The laws of some
states may require that certain purchasers of securities take physical delivery
of such securities in certificated form; such laws may limit the transferability
of beneficial interests in a Global Security.
We will issue individual debt securities of such series in certificated
form in exchange for the relevant Global Securities if:
- DTC is at any time unwilling, unable or ineligible to continue as
depositary for the debt securities of any series and a successor
depositary is not appointed by us within 90 days following notice to us;
- we determine, in our sole discretion, not to have the debt securities of
any series represented by one or more Global Securities; or
- an Event of Default under the Indenture has occurred and is continuing
with respect to the debt securities of any series.
In any such instance, an owner of a beneficial interest in a Global
Security will be entitled to physical delivery of individual debt securities in
certificated form of like tenor and rank, equal in principal amount to such
beneficial interest and to have such debt securities in certificated form
registered in its name. Unless otherwise provided in the applicable prospectus
supplement, debt securities so issued in certificated form will be issued in
denominations of $1,000 (or any integral multiple thereof) and will be issued in
registered form only, without coupons.
The following is based on information furnished by DTC:
- In the event that DTC acts as securities depositary for any debt
securities, such debt securities will be issued as fully registered
securities registered in the name of Cede & Co. (DTC's partnership
nominee). One fully registered Debt Security certificate will be issued
with respect to each $200 million of principal amount of the debt
securities of a series, and an additional certificate will be issued with
respect to any remaining principal amount of such series.
- DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement
among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-
entry changes in Participants" accounts, thereby eliminating the need for
physical movement of securities certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC
is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock
16
<PAGE> 20
Exchange, Inc. and the National Association of Securities Dealers, Inc.
Access to the DTC system is also available to others, such as securities
brokers and dealers, banks and trust companies, that clear through or
maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants"). The rules applicable to
DTC and its Participants are on file with the Commission.
- Purchases of debt securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the debt
securities on DTC's records. The ownership interest of each actual
purchaser of each Debt Security ("Beneficial Owner") is in turn recorded
on the Direct and Indirect Participants' records. A Beneficial Owner does
not receive written confirmation from DTC of its purchase, but such
Beneficial Owner is expected to receive a written confirmation providing
details of the transaction, as well as periodic statements of its
holdings, from the Direct or Indirect Participant through which such
Beneficial Owner entered into the transaction. Transfers of ownership
interests in debt securities are accomplished by entries made on the
books of Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership
interests in debt securities, except in the limited circumstances
described above.
- To facilitate subsequent transfers, the debt securities are registered in
the name of DTC's partnership nominee, Cede & Co. The deposit of the debt
securities with DTC and their registration in the name of Cede & Co.
effects no change in beneficial ownership. DTC has no knowledge of the
actual Beneficial Owners of the debt securities; DTC's records reflect
only the identity of the Direct Participants to whose accounts debt
securities are credited, which may or may not be the Beneficial Owners.
The Participants remain responsible for keeping account of their holdings
on behalf of their customers.
- Delivery of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners are
governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
- Redemption notices must be sent to Cede & Co. If less than all of the
debt securities within an issue are being redeemed, DTC's practice is to
determine by lot the amount of interest of each Direct Participant in
such issue to be redeemed.
- Neither DTC nor Cede & Co. consents or votes with respect to the debt
securities. Under its usual procedures, DTC mails a proxy (an "Omnibus
Proxy") to the issuer as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those
Direct Participants to whose accounts the debt securities are credited on
the record date (identified on a list attached to the Omnibus Proxy).
- Payments of principal of and any premium and interest on the debt
securities will be made to DTC. DTC's practice is to credit Direct
Participants' accounts on the payment date in accordance with their
respective holdings as shown on DTC's records unless DTC has reason to
believe that it will not receive payment on the payment date. Payments by
Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held
for the accounts of customers in bearer form or registered in "street
name," and will be
17
<PAGE> 21
the responsibility of such Participant and not of DTC, any Paying Agent
or us, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal and any premium and
interest to DTC will be our responsibility or the responsibility of the
applicable paying agent, disbursement of such payments to Direct
Participants will be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners will be the responsibility of Direct
and Indirect Participants.
- DTC may discontinue providing its services as securities depositary with
respect to the debt securities at any time by giving reasonable notice to
us or the applicable Paying Agent. Under such circumstances, in the event
that a successor securities depositary is not appointed, debt securities
in certificated form are required to be prepared and delivered as
described above.
- We may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor securities depositary). In that event, debt
security certificates will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources (including DTC) that we believe to be reliable.
However, neither we nor any underwriter or agent take any responsibility for its
accuracy.
Neither we nor any underwriter or agent, the applicable Trustee or any
applicable paying agent will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial interests
in a Global Security, or for maintaining, supervising or reviewing any records
relating to such beneficial interests.
DESCRIPTION OF CAPITAL STOCK
GENERAL
Under our Restated Certificate of Incorporation, we have the authority to
issue a total number of 310,000,000 shares, consisting of 10,000,000 shares of
preferred stock, and 300,000,000 shares of common stock. As of December 17,
1999, 105,462,946 shares of common stock were issued and 100,575,770 shares were
issued and outstanding (3,939,671 shares of which were held by an employee
equity trust). As part of the 10,000,000 shares of preferred stock authorized,
we have authorized and reserved for issuance 1,500,000 shares of Junior
Preferred Stock (as described below) in connection with preferred share purchase
rights issued by us in connection with our spin-off from our former parent
company.
COMMON STOCK
The holders of common stock are entitled to one vote per share on all
matters voted on by the stockholders, including the election of directors and,
except as otherwise required by law or provided in any resolution adopted by our
Board of Directors with respect to any series of preferred stock, the holders of
such common stock possess all voting power. The Certificate of Incorporation
does not provide for cumulative voting in the election of directors. Subject to
any preferential rights of any outstanding series of preferred stock, the
holders of common stock are entitled to such dividends as may be declared from
time to time by the Board from funds available therefor, and upon liquidation
are entitled to receive pro rata all of our assets available for distribution to
such holders. The common stock does not have any preemptive rights.
The common stock is traded on the NYSE under the symbol "DL."
18
<PAGE> 22
RIGHTS
In connection with our spin-off, our Board of Directors declared a dividend
of one Right, paid on August 15, 1996, in respect of each share of common stock
issued to the holder of record thereof as of the close of business on such date.
To the extent any debt securities issued are convertible into shares of common
stock, each such share of common stock issued in connection with a conversion
will also be accompanied by a Right. Each Right entitles the registered holder
thereof to purchase from us one one-hundredth of a share of our Series A Junior
Preferred Stock at a price of $75.00 per one one-hundredth of a share (the
"Purchase Price"), subject to adjustment. The terms of the Rights are set forth
in the Rights Agreement (the "Rights Agreement") between us and Wells Fargo Bank
of Arizona, N.A., as rights agent.
The Rights will be evidenced by the certificates representing shares of
common stock until the earlier to occur of:
- ten days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired
beneficial ownership of 20% or more of the then outstanding shares of the
common stock, or
- ten business days, or such later date as may be determined by action of
the Board prior to such time as any person or group becomes an Acquiring
Person, following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of which would
result in the beneficial ownership by a person or group of 20% or more of
the outstanding shares of common stock (the earlier of such dates being
called the "Rights Distribution Date").
The Rights Agreement provides that until the Rights Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the shares of common stock. As soon as practicable following
the Rights Distribution Date, separate certificates evidencing the Rights will
be mailed to holders of record of the shares of common stock as of the close of
business on the Rights Distribution Date and the separate rights certificates
alone will evidence the Rights.
The Rights will not be exercisable until the Rights Distribution Date. The
Rights will expire on August 15, 2006, unless extended or unless the Rights are
earlier redeemed or exchanged by us, in each case, as described below.
The purchase price payable, and the number of shares of Junior Preferred
Stock or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution:
- in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the shares of Junior Preferred Stock;
- upon the grant to holders of the shares of Junior Preferred Stock of
certain rights or warrants to subscribe for or purchase shares of Junior
Preferred Stock at a price, or securities convertible into shares of
Junior Preferred Stock with a conversion price, less than the
then-current market price of the shares of Junior Preferred Stock; or
- upon the distribution to holders of the shares of Junior Preferred Stock
of evidences of indebtedness or assets (excluding regular periodic cash
dividends paid out of earnings or retained earnings or dividends payable
in shares of Junior Preferred Stock) or of subscription rights or
warrants (other than those referred to above).
19
<PAGE> 23
The number of outstanding Rights and the number of one one-hundredths of
a share of Junior Preferred Stock issuable upon exercise of each Right
are also subject to adjustment in the event of a stock split of common
stock or a stock dividend on common stock payable in common stock or
subdivisions, consolidations or combinations of common stock occurring,
in any such case, prior to the Rights Distribution Date.
Shares of Junior Preferred Stock purchasable upon exercise of the Rights
will not be redeemable. Each share of Junior Preferred Stock will be entitled to
a minimum preferential quarterly dividend payment of $1.00 per share and will be
entitled to an aggregate dividend equal to 100 times the dividend declared per
share of common stock. In the event of liquidation, the holders of the Junior
Preferred Stock will be entitled to a minimum preferential liquidation payment
of $100 per share and will be entitled to an aggregate payment equal to 100
times the payment made per share of common stock. Each share of Junior Preferred
Stock will have 100 votes, and be entitled to vote with common stock. Finally,
in the event of any merger, consolidation or other transaction in which common
stock is exchanged, each share of Junior Preferred Stock will be entitled to
receive an amount equal to 100 times the amount received per share of common
stock. These rights are protected by customary antidilution provisions.
Because of the nature of the dividend, liquidation and voting rights of
Junior Preferred Stock, the value of the one one-hundredth interest in a share
of Junior Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of common stock.
In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, proper provisions will be made so that each holder
of a Right, other than Rights beneficially owned by the Acquiring Person, will
thereafter have the right to receive upon exercise thereof at the then current
exercise price that number of shares of common stock having a market value of
two times the exercise price of the Right. In the event that, at any time on or
after the date that any person has become an Acquiring Person, we are acquired
in a merger or other business combination transaction or 50% or more of its
consolidated assets or earning power are sold, proper provisions will be made so
that each holder of a Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number of
shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of the
Right.
At any time after any person or group of affiliated or associated persons
becomes an Acquiring Person and prior to the acquisition by such person or group
of 50% or more of the outstanding shares of common stock, the Board may exchange
the Rights, other than Rights owned by such person or group which will have
become void, in whole or in part, at an exchange ratio of one share of common
stock, or one one-hundredth of a share of Junior Preferred Stock, per Right,
subject to adjustment.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price.
At any time prior to the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 20% or more of the outstanding
shares of common stock, the Board may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price"). The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as our Board of Directors in its sole
20
<PAGE> 24
discretion may establish. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board without the consent of
the holders of the Rights, including an amendment to:
- lower the threshold at which a person or group of affiliated or
associated persons becomes an Acquiring Person; and
- lower the percentage of common stock proposed to be acquired in a tender
or exchange offer that would cause the Rights Distribution Date to occur,
to not less than the greater of (a) the sum of .001% and the largest
percentage of the outstanding shares of common stock then known to us to
be beneficially owned by any person or group of affiliated or associated
persons and (b) 10%, except that from and after such time as any person
or group of affiliated or associated persons becomes an Acquiring Person
no such amendment may adversely affect the interests of the holders of
the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder, including, without limitation, the right to vote or to
receive dividends. In the event that the Rights become exercisable, we will
register the shares of the Junior Preferred Stock for which the Rights may be
exercised, in accordance with applicable law.
The Rights have certain antitakeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire us and
thereby effect a change in the composition of the Board on terms not approved by
the Board, including by means of a tender offer at a premium to the market
price, other than an offer conditioned on a substantial number of Rights being
acquired. The Rights should not interfere with any merger or business
combination approved by the Board since the Rights may be redeemed by us at the
Redemption Price prior to the time that a person or group has become an
Acquiring Person.
21
<PAGE> 25
PLAN OF DISTRIBUTION
We may sell Offered Debt Securities:
- through agents;
- through underwriters or dealers;
- directly to one or more purchasers; or
- through some combination of these methods.
BY AGENTS
Offered Debt Securities may be sold through agents we designate. Except as
otherwise set forth in a prospectus supplement, the agents will agree to use
their reasonable best efforts to solicit purchases for the period of their
appointment.
BY UNDERWRITERS
If underwriters are used in the sale, the underwriters will acquire the
Offered Debt Securities for their own account. The underwriters may resell the
Offered Debt Securities in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The obligations of the underwriters to purchase the Offered
Debt Securities will be subject to conditions. The underwriters will be
obligated to purchase all of the Offered Debt Securities of the series offered
if any of the Offered Debt Securities are purchased. Any public offering price
and any discounts or concessions allowed or re-allowed or paid to dealers may be
changed from time to time.
BY DEALERS
If dealers are used in the sale, we will sell the Offered Debt Securities
to the dealers, as principal. The dealers may then resell the Offered Debt
Securities to the public at varying prices to be determined by them at the time
of sale.
DIRECT SALES
We may also sell the Offered Debt Securities directly to the public. In
this case, no underwriters, dealers or agents would be involved.
GENERAL INFORMATION
Underwriters, dealers and agents that participate in the distribution of
the Offered Debt Securities may be deemed underwriters under the Securities Act
of 1933, and any discounts or commissions they receive from us or commissions
from purchasers of the Offered Debt Securities may be treated as underwriting
discounts, concessions or commissions under the Securities Act of 1933. Any
underwriter, dealer or agent will be identified and their compensation described
in the applicable prospectus supplement.
We may have agreements with the underwriters, dealers and agents to
indemnify them against certain civil liabilities, including liabilities under
the Securities Act, or to contribute to payments that the underwriters, dealers
or agents may be required to make.
Certain of the underwriters or agents and their affiliates may be customers
of, engage in transactions with and perform investment banking, commercial
banking and other financial services for us and our affiliates in the ordinary
course of business.
22
<PAGE> 26
Each series of Offered Debt Securities will be a new issue with no
established trading market. We do not intend to list any of the Offered Debt
Securities on a national securities exchange or quotation system. It is possible
that one or more underwriters or broker-dealers may make a market in the Offered
Debt Securities, but they will not be obligated to do so and may discontinue any
market making at any time without notice. Therefore, we can give you no
assurance as to the existence or liquidity of a trading market for any of the
Offered Debt Securities.
In connection with an offering of Offered Debt Securities, underwriters,
dealers or agents may purchase and sell them in the open market. These
transactions may include stabilizing transactions and purchases to cover
syndicate short positions created in connection with the offering. Stabilizing
transactions consist of certain bids or purchases for the purpose of preventing
or slowing a decline in the market price of the Offered Debt Securities; and
syndicate short positions involve the sale by the underwriters, dealers or
agents, as the case may be, of a greater number of Offered Debt Securities than
they are required to purchase from us in the offering. Underwriters also may
impose a penalty bid, which means that the underwriting syndicate may reclaim
selling concessions allowed to syndicate members or other broker dealers who
sell Offered Debt Securities in the offering for their account if the syndicate
repurchases the securities in stabilizing or covering transactions. These
activities may stabilize, maintain or otherwise affect the market price of the
Offered Debt Securities, which may be higher than the price that might otherwise
prevail in the open market. These activities, if commenced, may be discontinued
at any time without notice. These transactions may be effected on any securities
exchange on which the Offered Debt Securities may be listed, in the
over-the-counter market or otherwise.
WHERE YOU CAN FIND MORE INFORMATION
OUR SEC FILINGS
We file annual, quarterly and special reports and other information with
the SEC. Our SEC filings are available to the public over the internet at the
SEC's web site at http://www.sec.gov. You may also read and copy any documents
we file at the SEC's public reference rooms in Washington, D.C., New York, New
York, and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms.
OUR REGISTRATION STATEMENT RELATING TO THE PROSPECTUS
We have filed a registration statement on Form S-3 with the SEC covering
the debt securities described in this prospectus. For further information with
respect to us and those securities, you should refer to our registration
statement and its exhibits. You may inspect and copy the registration statement,
including exhibits, at the SEC's Public Reference Rooms or Web site. We have
summarized certain key provisions of contracts and other documents that we refer
to in this prospectus. Because a summary may not contain all the information
that is important to you, you should review the full text of each document. We
have included copies of these documents as exhibits to our registration
statement.
DOCUMENTS WE INCORPORATE BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those
23
<PAGE> 27
documents. The information incorporated by reference is an important part of
this prospectus, and information that we file later with the SEC will
automatically update and supersede this information. We incorporate by reference
our Annual Report on form 10-K for the fiscal year ended December 31, 1998, our
Quarterly Report on Form 10-Q for the quarter ended April 3, 1999, our Quarterly
Report on Form 10-Q for the quarter ended July 3, 1999, our Quarterly Report on
Form 10-Q for the quarter ended October 2, 1999, our Current Report on Form 8-K
dated April 20, 1999, our Current Report on Form 8-K dated July 20, 1999, our
Current Report on Form 8-K dated August 6, 1999, our Current Report on Form 8-K
dated October 19, 1999, and any future filings made by us with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
we or our underwriters sell all of the securities that we have registered.
You may request a copy of our filings at no cost by writing or telephoning
us at the following address:
The Dial Corporation
Attention: Investor Relations
15501 North Dial Boulevard
Scottsdale, Arizona 85260-1619
Telephone: (480) 754-3425
You should rely only on the information incorporated by reference or
provided in this prospectus, any prospectus supplement, or any pricing
supplement. We have not authorized anyone else to provide you with different
information. You should not assume that the information in this prospectus, any
prospectus supplement, or any document incorporated by reference is accurate as
of any date other than the date on the front of the specific document.
SOME HISTORICAL INFORMATION
The following information is qualified in its entirety by the more detailed
information and financial statements and notes thereto appearing elsewhere in or
incorporated by reference into this prospectus. Prior to August 15, 1996, our
business was operated as the consumer products business of Viad Corp (then known
as The Dial Corp). On August 15, 1996, our former parent distributed to its
stockholders all of our then outstanding common stock causing us to become a
separate publicly-traded company. Unless otherwise indicated:
- all references in this prospectus for periods prior to the spin-off refer
to the consumer products business of our former parent and for periods
following the spin-off refer to us and our consolidated subsidiaries;
- all financial information included or incorporated by reference in this
prospectus has been prepared as if we have always been a separate
operating company;
- the industry data included or incorporated by reference in this
prospectus are derived from publicly available industry trade journals
and reports, including, with respect to market rank and market share,
reports published by Information Resources, Inc., and other publicly
available sources which we have not independently verified but which we
believe to be reliable;
- references to years and periods are to fiscal years and periods and, with
respect to comparative industry data, years are to calendar years; and
24
<PAGE> 28
- all market share data as of any particular date are as of the 52 weeks
then ended and are based on sales in the U.S. market, which with respect
to soap products is measured by ounces sold, with respect to detergent
products is measured by standard cases sold and with respect to air
fresheners and canned meats is measured by units sold.
LEGAL MATTERS
Our counsel, Snell & Wilmer L.L.P., Phoenix, Arizona, will issue a legal
opinion concerning the validity of the Offered Debt Securities. Counsel named in
the applicable prospectus supplement will advise the underwriters.
EXPERTS
The financial statements incorporated in this prospectus by reference from
our Annual Report on Form 10-K for the year ended December 31, 1998 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
25
<PAGE> 29
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 52,800
Printing expenses........................................... 300,000
Rating agency fees.......................................... 250,000
Trustee's fees.............................................. 15,000
Legal fees and expenses..................................... 90,000
Accounting expenses......................................... 90,000
Blue Sky fees and expenses.................................. 15,000
Other....................................................... 12,200
--------
Total.................................................. $825,000
========
</TABLE>
- -------------------------
* Except for the Securities and Exchange Commission registration fee, all of the
foregoing expenses have been estimated.
ITEM 15. INDEMNIFICATION OF DIRECTOR AND OFFICERS
CERTIFICATE OF INCORPORATION AND BYLAWS
The Certificate of Incorporation provides that each person who is or was or
had agreed to become a director or officer of us, or each such person who is or
was serving or who had agreed to serve at our request as a director or officer
of another corporation, partnership, joint venture, trust or other enterprise
(each "Another Enterprise") (including the heirs, executors, administrators or
estate of such person), will be indemnified by us, in accordance with our
Restated Bylaws (the "Bylaws"), to the fullest extent permitted from time to
time by the Delaware General Corporation Law (the "DGCL"), as the same exists or
may hereafter be amended but, if permitted by applicable law, in the case of any
such amendment, only to the extent that such amendment permits us to provide
broader indemnification rights than said law permitted us to provide prior to
such amendment or any other applicable laws as presently or hereafter in effect.
We may, by action of the Board, provide indemnification to employees and agents
of us, and to persons serving as employees or agents of Another Enterprise, at
our request, with the same scope and effect as the foregoing indemnification of
directors and officers. We shall be required to indemnify any person seeking
indemnification in connection with any action, suit, or proceeding, whether
civil, criminal, administrative, or investigative (a "Proceeding"), initiated by
such person only if such Proceeding was authorized by the Board or is a
proceeding to enforce such person's claim to indemnification pursuant to the
rights granted by the Certificate of Incorporation or otherwise by us. In
addition, pursuant to the Certificate of Incorporation, we have entered into
agreements with certain persons providing for indemnification greater or
different than that provided in the Certificate of Incorporation. See
"-- Indemnification Agreements."
The Bylaws provide that each person who was or is made a party or is
threatened to be made a party to or is involved in any Proceeding, by reason of
the fact that he or she or a person of whom he or she is the legal
representative is or was a director or officer of us or is or was serving at the
request of us as a director or officer of another corporation or of
II-1
<PAGE> 30
Another Enterprise, including service with respect to employee benefit plans,
whether the basis of such Proceeding is alleged action in an official capacity
as a director or officer or in any other capacity while serving as a director or
officer, will be indemnified and held harmless by us to the fullest extent
authorized by the DGCL as the same exists or may in the future be amended but,
if permitted by applicable law, in the case of any such amendment, only to the
extent that such amendment permits us to provide broader indemnification rights
than said law permitted us to provide prior to such amendment, against all
expense, liability and loss including attorneys' fees, judgments, fines,
Employee Retirement Income Security Act of 1974, excise taxes or penalties and
amounts paid or to be paid in settlement reasonably incurred or suffered by such
person in connection therewith and such indemnification will continue as to a
person who has ceased to be a director or officer and will inure to the benefit
of his or her heirs, executors and administrators; provided, however, except as
described in the second following paragraph with respect to Proceedings to
enforce rights to indemnification, we will indemnify any such person seeking
indemnification in connection with a Proceeding initiated by such person only if
such Proceeding was authorized by the Board.
The Bylaws provide, to obtain indemnification, a claimant is to submit to
us a written request for indemnification. Upon such written request by a
claimant, a determination, if required by applicable law, with respect to the
claimant's entitlement to indemnification will be made, (i) if requested by the
claimant, by independent legal counsel, or (ii) if the claimant does not so
request, by the Board (a) by a majority vote of the disinterested directors even
though less than a quorum, (b) if there are no disinterested directors or the
disinterested directors so direct, by independent legal counsel in a written
opinion to the Board, or (c) if the disinterested directors so direct, by our
stockholders. In the event the determination of entitlement to indemnification
is to be made by independent legal counsel at the request of the claimant, the
independent legal counsel will be selected by the Board unless there shall have
occurred within two years prior to the date of the commencement of the action,
suit or proceeding for which indemnification is claimed a "Change in Control"
(as defined in our 1996 Stock Incentive Plan), in which case the independent
counsel shall be selected by the claimant unless the claimant requests that such
selection be made by the Board.
The Bylaws provide, if a claim for indemnification is not paid in full by
us within 30 days after a written claim for indemnification has been received by
us, the claimant may at any time thereafter bring suit against us to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant
will be entitled to be paid also the expense of prosecuting such claim. The
Bylaws provide that it will be a defense to any such action other than an action
brought to enforce a claim for expenses incurred in defending any Proceeding in
advance of its final disposition where the required undertaking, if any is
required, has been tendered to us that the claimant has not met the standard of
conduct which make it permissible under the DGCL for us to indemnify the
claimant for the amount claimed, but the burden of proving such defense will be
on us. Neither the failure of us, including, without limitation, the
disinterested directors, independent legal counsel or stockholders, to have made
a determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standards in the DGCL, nor an actual determination by us, including
the disinterested directors, independent legal counsel or stockholders, that the
claimant has not met such applicable standard of conduct, will be a defense to
the action or create a presumption that the claimant has not met the applicable
standard of conduct in the DGCL. However, we will be bound by a
II-2
<PAGE> 31
determination pursuant to the procedures set forth in the Bylaws that the
claimant is entitled to indemnification in any judicial proceeding commenced
pursuant to the Bylaws.
The Bylaws provide that the right to indemnification and the payment of
expenses incurred in defending a Proceeding in advance of its final disposition
conferred in the Bylaws will not be exclusive of any other right which any
person may have or may in the future acquire under any statute, provision of the
Certificate of Incorporation, the Bylaws, agreement, vote of stockholders or
disinterested directors or otherwise. The Bylaws permit us to maintain
insurance, at our expense, to protect us and any of our directors, officers,
employees or agents or Another Enterprise against any expense, liability or
loss, whether or not we would have the power to indemnify such person against
such expense, liability or loss under the DGCL. We have obtained directors' and
officers' liability insurance providing coverage to its directors and officers.
In addition, the Bylaws authorize us, to the extent authorized from time to time
by the Board, to grant rights to indemnification and rights to be paid by us for
the expenses incurred in defending any Proceeding in advance of its final
disposition, to any of our employees or agents to the fullest extent of the
provisions of the Bylaws with respect to the indemnification and advancement of
expenses of our directors and officers.
The Bylaws provide that the right to indemnification conferred therein is a
contract right and includes the right to be paid by us for the expenses incurred
in defending any Proceeding in advance of its final disposition, except that if
the DGCL requires, the payment of such expenses incurred by a director or
officer in his or her capacity as a director or officer and not in any other
capacity in which service was or is rendered by such person while a director or
officer, including, without limitation, service to an employee benefit plan, in
advance of the final disposition of a Proceeding, will be made only upon
delivery to us of an undertaking by or on behalf of such director or officer, to
repay all amounts so advanced if it is ultimately determined that such director
or officer is not entitled to be indemnified under the Bylaws or otherwise.
FIDUCIARY DUTIES
The Certificate of Incorporation provides that our directors will not be
personally liable to us or our 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 us or our stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the DGCL, which concerns unlawful payments of
dividends, stock purchases or redemptions, or (iv) for any transaction from
which the director derived an improper personal benefit.
While the Certificate of Incorporation provides directors with protection
from awards for monetary damages for breaches of their duty of care, it does not
eliminate such duty. Accordingly, the Certificate of Incorporation will have no
effect on the availability of equitable remedies such as an injunction or
rescission based on a director's breach of his or her duty of care.
INDEMNIFICATION AGREEMENTS
We are party to indemnification agreements with each of our directors and
officers (each, an "Indemnification Agreement," and, collectively, the
"Indemnification Agreements"). The Indemnification Agreements, among other
things, require us to indemnify the directors and such officers to the fullest
extent permitted by law, and to advance to the directors all related expenses,
subject to reimbursement if it is subsequently determined
II-3
<PAGE> 32
that indemnification is not permitted. We must also indemnify and advance all
expenses incurred by directors seeking to enforce their rights under the
Indemnification Agreements, and cover directors and officers under our
directors' and officers' liability insurance. Although the Indemnification
Agreements will offer substantially the same scope of coverage afforded by
provisions in the Certificate of Incorporation and the Bylaws, they provide
greater assurance to directors and officers that indemnification will be
available, because, as contracts, they cannot be modified unilaterally in the
future by the Board or by the stockholders to eliminate the rights provided, an
action that is possible with respect to the relevant provisions of the Bylaws,
at least as to prospective elimination of such rights.
There has not been in the past and there is not presently pending any
litigation or proceeding involving a director, officer, employee or agent of us
which indemnification would be required or permitted by the Indemnification
Agreements. In addition, the Board is not aware of any threatened litigation or
proceeding which may result in a claim for indemnification under any
Indemnification Agreement.
The DGCL provides that a contract between a corporation and a director
thereof is not void or voidable solely because the interested director is
present at the meeting authorizing the contract if the material facts relating
to the contract are known to the board of directors and the board of directors
in good faith authorizes the contract by the affirmative vote of a majority of
the disinterested directors, or the material facts relating to the contract are
known to the stockholders and the stockholders in good faith authorize the
contract, or the contract is fair to the corporation at the time it is
authorized or approved.
STATE LAW PROVISIONS
We incorporated under the laws of the State of Delaware. Section 145(a) of
the DGCL provides that a Delaware corporation may indemnify any person who was,
is or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation), by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation or is or was serving at the request of such corporation as a
director, officer, employee or agent of Another Enterprise. The indemnity may
include expenses, including attorney's fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, provided such person acted in good faith and in
a manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 145(b) of the DGCL provides that a Delaware corporation may
indemnify any person who was, is or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation by reason of the fact that such person acted in any of the
capacities set forth above, against expenses, including attorney's fees,
actually and reasonably incurred by such person in connection with the defense
or settlement of such action or suit, provided such person acted in good faith
and in a manner such person reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification is permitted
in respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
court in which such action or suit was brought shall determine that, despite the
adjudication of liability, such person is fairly and reasonably entitled to be
indemnified for such expenses which the court shall deem proper.
II-4
<PAGE> 33
Section 145 of the DGCL further provides that to the extent a director or
officer of a corporation has been successful in the defense of any action, suit
or proceeding referred to in subsections 145(a) and 145(b) or in the defense of
any claim, issue or matter therein, such person shall be indemnified against
expenses actually and reasonably incurred in connection therewith; that
indemnification provided for by Section 145 of the DGCL shall not be deemed
exclusive of any other rights to which the indemnified party may be entitled;
and that the corporation may purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
him or incurred by him in any such capacity or arising out of his status as such
whether or not the corporation would have the power to indemnify him against
such liabilities under such Section 145 of the DGCL.
UNDERWRITING AGREEMENTS
The form of Underwriting Agreement incorporated as Exhibit 1.1 hereto
provides for the indemnification of us, our controlling persons, our directors
and officers by the underwriters of any offering pursuant to the registration
statement against liabilities, including liabilities under the Securities Act.
ITEM 16. EXHIBITS
Set forth below is a list of the exhibits included as part of this
Registration Statement.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
1.1 Form of Underwriting Agreement (incorporated by reference to
Exhibit 1.1 to the Company's Registration Statement on Form
S-3, dated March 5, 1998 (File No. 333-47355)).
3.1 Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3(a) to the Company's
Form 10, dated July 30, 1996 (File No. 001-11733)).
3.2 Restated Bylaws of the Company (incorporated by reference to
Exhibit 3(b) to the Company's Annual Report on Form 10-K for
the year ended December 31, 1998).
4.1 Form of Indenture relating to the debt securities
(incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-3, dated March 5, 1998
(File No. 333-47355)).
4.2 Rights Agreement (incorporated by reference to Exhibit 4 to
the Company's Form 10, dated July 30, 1996 (File No.
001-11733)).
5.1 Opinion of Snell & Wilmer L.L.P., as to the validity of the
securities being registered.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Snell & Wilmer L.L.P. (included in Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney (included on signature pages).
25.1 Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of Norwest Bank Arizona, N.A.
(incorporated by reference to Exhibit 25.1 to the Company's
Registration Statement on Form S-3, dated March 5, 1998
(File No. 333-47355)).
</TABLE>
II-5
<PAGE> 34
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities Act of
1933 if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement; provided, however, that the undertakings set forth in
paragraphs (1)(i) and (ii) above do not apply if the information
required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in this registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of
II-6
<PAGE> 35
expenses incurred or paid by a director, officer, or controlling person of the
registrant in the successful defense of any action, suit, or proceeding) is
asserted by such director, officer, or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-7
<PAGE> 36
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, The
Dial Corporation has certified 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 Scottsdale and the State of Arizona, on December
22, 1999.
THE DIAL CORPORATION
By: /s/ MALCOLM JOZOFF
-----------------------------------
Malcolm Jozoff
Chairman of the Board, President
and
Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that the persons whose signatures
appear below, constitute and appoint Malcolm Jozoff and Susan J. Riley, and each
of them, as their true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for them and in their names, places, and
steads, in any and all capacities, to sign the Registration Statement on Form
S-3 to be filed in connection with the offering of debt securities of The Dial
Corporation and any and all amendments (including post-effective amendments) to
the Registration Statement, and any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as they might or could do in person,
thereby ratifying and confirming all that said attorney-in-fact and agent, or
any of them, or their or his or her substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities on December 22, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ MALCOLM JOZOFF Chairman of the Board, President and
- --------------------------------------------------- Chief Executive Officer (Principal
Malcolm Jozoff Executive Officer)
/s/ SUSAN J. RILEY Executive Vice President and Chief
- --------------------------------------------------- Financial Officer (Principal
Susan J. Riley Financial Officer and Principal
Accounting Officer)
/s/ JOY A. AMUNDSON Director
- ---------------------------------------------------
Joy A. Amundson
/s/ HERBERT M. BAUM Director
- ---------------------------------------------------
Herbert M. Baum
</TABLE>
II-8
<PAGE> 37
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ JOE T. FORD Director
- ---------------------------------------------------
Joe T. Ford
/s/ THOMAS L. GOSSAGE Director
- ---------------------------------------------------
Thomas L. Gossage
/s/ DONALD E. GUINN Director
- ---------------------------------------------------
Donald E. Guinn
/s/ MICHAEL T. RIORDAN Director
- ---------------------------------------------------
Michael T. Riordan
/s/ BARBARA S. THOMAS Director
- ---------------------------------------------------
Barbara S. Thomas
/s/ SALVADOR M. VILLAR Director
- ---------------------------------------------------
Salvador M. Villar
</TABLE>
II-9
<PAGE> 38
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
1.1 Form of Underwriting Agreement (incorporated by reference to
Exhibit 1.1 to the Company's Registration Statement on Form
S-3, dated March 5, 1998 (File No. 333-47355)).
3.1 Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3(a) to the Company's
Form 10, dated July 30, 1996 (File No. 001-11733)).
3.2 Restated Bylaws of the Company (incorporated by reference to
Exhibit 3(b) to the Company's Annual Report on Form 10-K for
the year ended December 31, 1998).
4.1 Form of Indenture relating to the debt securities
(incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-3, dated March 5, 1998
(File No. 333-47355)).
4.2 Rights Agreement (incorporated by reference to Exhibit 4 to
the Company's Form 10, dated July 30, 1996 (File No.
001-11733)).
5.1 Opinion of Snell & Wilmer L.L.P., as to the validity of the
securities being registered.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Snell & Wilmer L.L.P. (included in Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney (included on signature pages).
25.1 Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of Norwest Bank Arizona, N.A.
(incorporated by reference to Exhibit 25.1 to the Company's
Registration Statement on Form S-3, dated March 5, 1998
(File No. 333-47355)).
</TABLE>
<PAGE> 1
EXHIBIT 5.1
[SNELL & WILMER LETTERHEAD]
December 22, 1999
The Dial Corporation
15501 North Dial Boulevard
Scottsdale, Arizona 85260-1619
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form S-3
(the "Registration Statement") relating to the registration and sale from time
to time by you of up to an aggregate of $300,000,000 of debt securities, notes
and/or other evidences of indebtedness ("Debt Securities") of The Dial
Corporation in amounts, at prices, and on terms to be determined at the time of
offering. We have also examined the Indenture which was executed and delivered
on March 5, 1998, such corporate records, certificates and other documents and
such questions of law as we have considered necessary or appropriate for the
purposes of this opinion. Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to them in the Registration Statement.
Based upon the foregoing, we advise you that, in our opinion, when the
following events have occurred:
(a) The Registration Statement has become effective under the Securities
Act of 1933, as amended;
(b) The due authorization, execution and delivery of the Supplemental
Indenture to the Indenture pursuant to which Debt Securities are to be issued.
(c) The due execution, registration and delivery of the certificate or
certificates evidencing the Debt Securities; and
(d) The Debt Securities have been established, issued and sold in the
manner specified in the Registration Statement and the exhibits thereto, in
accordance with corporate and governmental authorities and not in violation of
any applicable law, agreement or instrument; then
<PAGE> 2
The Dial Corporation
December 22, 1999
Page 2
1. The Debt Securities to be issued by you will be legally issued under
the Registration Statement, will be legally issued and binding obligations upon
you, subject to the effect of (a) applicable reorganization or similar laws and
court decisions affecting creditors' rights and remedies generally and (b) the
application of general principles of equity (whether such enforceability is
considered in a proceeding in equity or at law).
You have informed us that you intend to issue the Debt Securities from
time to time on a delayed or continuous basis. Accordingly, this opinion is
subject to the laws, including the rules and regulations, as in effect on the
date hereof. We understand that prior to issuing any Debt Securities you will
advise us in writing of the terms thereof, will afford us an opportunity to
review the operative documents pursuant to which such Debt Securities are to be
issued (including the applicable Prospectus Supplement) and will file such
supplement or amendment to this opinion (if any) as we reasonably consider
necessary or appropriate by reason of the terms of the Debt Securities.
This opinion is intended solely for the use of The Dial Corporation in
connection with the Registration Statement. It may not be relied upon by any
other person or for any other purpose, or reproduced or filed publicly by any
person, without the written consent of this firm.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement, and we further consent to the use of our name under the
caption "Legal Matters" in the Registration Statement and in the Prospectus and
the form of Prospectus Supplement.
Very truly yours,
SNELL & WILMER L.L.P.
<PAGE> 1
THE DIAL CORPORATION
EXHIBIT 12.1 - COMPUTATION OF RATIO OF FIXED CHARGES
(000s omitted, except for ratios)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
OCT. 2, 1999 1998 1997 1996 1995 1994
------------ -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Income (loss) before income taxes.............. $134,457 $160,577 $133,935 $42,423 $(47,016) $147,540
FIXED CHARGES:
Interest expense .............................. 19,880 15,907 20,449 19,973 25,683 16,409
Amortization of debt expense .................. -- -- -- -- -- --
Interest portion of rent expense .............. 2,023 2,697 1,960 1,139 970 996
Preferred stock dividend requirements ......... -- -- -- -- -- --
------------------------------------------------------------------------------
TOTAL FIXED CHARGES ........................... 21,903 18,604 22,409 21,112 26,653 17,405
------------------------------------------------------------------------------
ADJUSTED EARNINGS (LOSS) ...................... $156,360 $179,181 $156,344 $63,535 $(20,363) $164,945
==============================================================================
RATIO OF ADJUSTED EARNINGS TO FIXED CHARGES ... 7.14 9.63 6.98 3.01 (1) 9.48
</TABLE>
(1) In the fiscal year 1995, fixed charges exceeded adjusted earnings by
approximately $47.0 million.
<PAGE> 1
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
The Dial Corporation on Form S-3 of our report dated January 29, 1999,
appearing in the Annual Report on Form 10-K of The Dial Corporation for the
year ended December 31, 1998, and to the reference to us under the heading
"Experts" in the Prospectus, which is part of such Registration Statement.
DELOITTE & TOUCHE LLP
Phoenix, Arizona
December 17, 1999
