As filed with the Securities and Exchange Commission on July 12, 1995
Registration No. 33-59729
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 to
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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UNITED STATES SURGICAL CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
A Delaware Corporation 13-2518270
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
150 Glover Avenue, Norwalk, Connecticut 06856
(203) 845-1000
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Principal Executive Offices)
------------------------
Donald F. Crane, Jr. Esq.
Senior SEC Counsel
United States Surgical Corporation
150 Glover Avenue, Norwalk, Connecticut 06856
(203) 845-4490
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
With copies to:
Vincent J. Pisano, Esq. Robert Rosenman, Esq.
Skadden, Arps, Slate, Meagher & Flom Cravath, Swaine & Moore
919 Third Avenue 825 Eighth Avenue
New York, New York 10022 New York, New York 10019
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Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this registration statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box : / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box : /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box: /X/
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<PAGE>
-----------------------
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
- ----------------
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of any offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION. DATED JULY 12, 1995
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PROSPECTUS
UNITED STATES SURGICAL CORPORATION
Debt Securities, Preferred Stock, Depositary Shares,
Common Stock and Warrants
United States Surgical Corporation (the "Company") may offer from time
to time, together or separately, (i) its debt securities (the "Debt
Securities"), which may be either senior debt securities (the "Senior Debt
Securities") or subordinated debt securities (the "Subordinated Debt
Securities"), consisting of notes, debentures or other unsecured evidences of
indebtedness in one or more series, (ii) shares of its preferred stock, par
value $5.00 per share (the "Preferred Stock"), which may be issued in the form
of depositary shares evidenced by depositary receipts (the "Depositary Shares");
(iii) shares of its common stock, par value $.10 per share (the "Common Stock"),
and (iv) warrants to purchase Debt Securities, Preferred Stock, Depositary
Shares, or Common Stock or any combination thereof, as shall be designated by
the Company at the time of the offering (the "Warrants") in amounts, at prices
and on terms to be determined at the time of the offering. The Debt Securities,
Preferred Stock, the Depositary Shares, Common Stock, and Warrants are
collectively called the "Securities".
The Securities may be offered as separate series or issuances at an
aggregate initial public offering price not to exceed $200,000,000 or, if
applicable, the equivalent thereof in one or more foreign currencies, currency
units, composite currencies or in amounts determined by reference to an index as
shall be designated by the Company, in amounts, at prices and on terms to be
determined in light of market conditions at the time of sale and set forth in
the applicable Prospectus Supplement.
Unless otherwise specified in a Prospectus Supplement, the Senior Debt
Securities, when issued, will be unsecured and will rank on a parity with all
other unsecured and unsubordinated indebtedness of the Company. The Subordinated
Debt Securities, when issued, will be subordinated in right of payment to all
Senior Debt (as hereinafter defined) of the Company.
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Certain specific terms of the particular Securities in respect of which
this Prospectus is being delivered will be set forth in the applicable
Prospectus Supplement, including, where applicable, (i) in the case of Debt
Securities, the title, aggregate principal amount, denominations, maturity, any
interest rate (which may be fixed or variable) and time of payment of any
interest, any terms for redemption at the option of the Company or the holder,
any terms for sinking fund payments, any terms for conversion or exchange into
other Securities, currency or currencies of denomination and payment, if other
than U S. dollars, any listing on a securities exchange and any other terms in
connection with the offering and sale of the Debt Securities in respect of which
this Prospectus is delivered, as well as the initial public offering price; (ii)
in the case of Preferred Stock and Depositary Shares, the specific title, the
aggregate amount, any dividend (including the method of calculating payment of
dividends), seniority, liquidation, redemption, voting and other rights, any
terms for any conversion or exchange into other Securities, any listing on a
securities exchange, the initial public offering price and any other terms,
(iii) in the case of Common Stock, the number of shares of Common Stock and the
terms of offering thereof; and (iv) in the case of Warrants, the designation and
number, the exercise price, any listing of the Warrants or the underlying
Securities on a securities exchange and any other terms in connection with the
offering, sale and exercise of the Warrants.
The Company's Common Stock is listed on the New York Stock Exchange
under the trading symbol "USS". Any Common Stock sold pursuant to a Prospectus
Supplement will be listed on such exchange, subject to official notice of
issuance.
The Securities may be sold directly, through agents, underwriters or
dealers as designated from time to time, or through a combination of such
methods. See "Plan of Distribution". If agents of the Company or any dealers or
underwriters are involved in the sale of the Securities in respect of which this
Prospectus is being delivered, the names of such agents, dealers or underwriters
and any applicable commissions or discounts will be set forth in or may be
calculated from the Prospectus Supplement with respect to such Securities. The
net proceeds to the Company from such sale also will be set forth in the
applicable Prospectus Supplement.
See Discussion of Risk Factors, beginning on page 6.
------------------------
This Prospectus may not be used to consummate sales of securities unless
accompanied by a Prospectus Supplement.
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THESE SECURlTIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURlTIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is _________________, _____,1995.
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No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, the accompanying
Prospectus Supplement or the documents incorporated or deemed incorporated by
reference herein, and any information or representations not contained herein or
therein must not be relied upon as having been authorized by the Company or by
any agent, dealer or underwriter. This Prospectus or Prospectus Supplement does
not constitute an offer to sell or a solicitation of an offer to buy the
securities in any circumstances in which such offer or solicitation is unlawful.
The delivery of this Prospectus or any Prospectus Supplement at any time does
not imply that the information herein or therein is correct as of any time
subsequent to the date of such information.
See discussion of the Company, beginning on page 9.
RISK FACTORS
Competition
There is intense competition in the markets in which the Company
engages in business. Products competitive with the Company's staplers and clip
appliers include various absorbable and non-absorbable sutures, clips and tape,
as well as disposable and steel stapling instruments, disposable loading units
("DLUs") and some hand loaded staplers. Many major companies that compete with
the Company, such as Johnson & Johnson, Minnesota Mining and Manufacturing
Company ("3M") and Davis & Geck, a unit of American Home Products Corporation,
have a wider range of other medical products and dominate much of the markets
for these other products. Ethicon, Inc. ("Ethicon"), a Johnson & Johnson
subsidiary, markets, in addition to sutures and other wound closure products,
disposable skin staplers, clip appliers, and internal staplers. 3M markets
disposable skin staplers and internal stapling instruments. Davis & Geck markets
disposable skin staplers, clip appliers and suture materials. The Company
believes that these major companies will continue their efforts to develop and
market competitive devices.
The market for products for minimally invasive surgery is highly
competitive. Ethicon markets a line of endoscopic instruments directly
competitive with the Company's products and is its principal competitor. The
Company believes that Ethicon devotes considerable resources to research and
development and sales efforts in this field. Numerous other companies
manufacture and distribute disposable endoscopic instruments. In addition,
manufacturers of reusable trocars and other reusable endoscopic instruments,
including Richard Wolf Medical Instruments Corp. (a subsidiary of Richard Wolf,
GmbH) and Karl Storz Endoscopy-American Inc. (a subsidiary of Karl Storz, GmbH),
compete directly with the Company.
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Industry studies show Ethicon currently has approximately 80% of the
suture market, while Davis & Geck has about 13% of this market. The Company
expects that, because the size of the total suture market is relatively stable,
any increase in the Company's market share in this area will have to be earned
at the expense of the other current market participants.
The Company's principal methods of competing are the development of
innovative products, the performance and breadth of its products, its
technically trained sales force, educational services, including sponsorship of
training programs in advanced laparoscopic techniques, and more recently,
assisting hospital management with cost containment and marketing programs. The
Company's major competitors have greater financial resources than the Company.
Some of its competitors, particularly Ethicon, have engaged in substantial price
discounting and other significant efforts to gain market share, including
bundled contracts for a wide variety of healthcare products with group
purchasing organizations. In the current health care environment, cost
containment has become the predominant factor in purchasing decisions by
hospitals. As a result, the Company's traditional reliance on the quality of its
products for marketing purposes has been impacted. While the Company believes
that the advantages of its various products will continue to provide the best
value to its customers, there is considerable competition in the industry and no
assurance can be given as to the Company's competitive position. The impact of
competition will likely have a continuing effect on sales volumes and on prices
charged by the Company.
Health Care Market
The health care industry continues to undergo change, led primarily by
market forces which are demanding greater efficiencies and reduced costs.
Government proposed health care mandates in the United States have not occurred,
and it is unclear whether, and to what extent, any government mandate will
affect the domestic health care market. Industry led changes are expected to
continue irrespective of any governmental efforts toward health care reform. The
scope and timing of any further government sponsored proposals for health care
reform are presently unclear.
The primary trend in the industry is toward cost containment. Payors
have been able to exercise greater influence through managed treatment and
hospitalization patterns, including a shift from reimbursement on a cost basis
to per capita limits for patient treatment. Hospitals have been severely
impacted by the resulting cost restraints. The increasing use of managed care,
centralized purchasing decisions, consolidations among hospitals and hospital
groups, and integration of health care providers, are continuing to affect
purchasing patterns in the health care system. Purchasing decisions are often
shared by a coalition of surgeons, nursing staff, and hospital administrators,
with purchasing decisions
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taking into account whether a product reduces the cost of treatment and/or
attracts additional patients to a hospital. All of these factors have
contributed to reductions in prices for the Company's products, to a reduction
in the volume of hospital purchasing and, in the near term, slower acceptance of
more advanced surgical procedures in which the Company's products are used,
given hospital and surgeon concerns as to the costs of training and
reimbursement by payors. While the Company is implementing programs to assist
hospitals in cost containment through more efficient surgical practices and
application of minimally invasive surgery, there can be no assurance that the
Company will not continue to be adversely affected by these matters.
The Company believes it could, over the long term, benefit from this
focus on cost containment. Stapling and laparoscopy decrease operating room
time, including anesthesia, and patient recovery time, and in many cases are
highly cost effective. Doctors, patients, employers and payors all value
decreased patient recovery time. This could lead to potential increases in
volume as surgical stapling and laparoscopic procedures are selected over
alternative techniques. However, an undue focus on discrete costs or other
limits which fail to consider the overall value of stapling and laparoscopy
could adversely impact the Company, and there can be no assurance as to the
impact of cost containment on future operations. Some hospitals may also lose
per night revenues through reduced post-operative care requirements as to
procedures performed by laparoscopy, which could influence their acceptance of
newer procedures. The rapid changes in the market for surgical devices, along
with competition, could affect both prices and volumes of sales, despite these
efforts.
Government Regulation
The Company's business is subject to varying degrees of governmental
regulation in the countries in which it operates. In the United States, the
Company's products are subject to regulation as medical devices by the United
States Food and Drug Administration (the "FDA"), as well as by other federal and
state agencies. These regulations pertain to the manufacturing, labeling,
development and testing of the Company's devices as well as to the maintenance
of required records. An FDA regulation also requires prompt reporting by all
medical device manufacturers of an event or malfunction involving a medical
device where such device caused or contributed to death or serious injury or is
likely to do so.
Federal law provides for several routes by which the FDA reviews
medical devices prior to their entry into the marketplace. To date, all the
Company's new products have been cleared by the FDA under the most expedited
form of pre-market review, but the Company, along with the rest of the industry,
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continues to experience lengthy delays in the FDA approval process. Timely
product approval is important to the Company's maintaining its technological
competitive advantages.
In foreign countries, the degree of government regulation affecting the
Company varies considerably among countries, ranging from stringent testing and
approval procedures in certain locations to simple registration procedures in
others, while in some countries there is virtually no regulation of the sale of
the Company's products. In general, the Company has not encountered material
delays or unusual regulatory impediments in marketing its products
internationally. Establishment of uniform regulations for European Community
nations took place on January 1, 1995. The Company believes it will be subject
to a single regulatory scheme for all the participating countries and has taken
the necessary steps to assure ongoing compliance with these new, more rigorous
regulations, including obtaining International Standards Organization ("ISO")
certification for its manufacturing operations which will allow the Company to
market products in Europe with a single registration applicable to all
participating countries.
Leverage
As of March 31, 1995, the Company's consolidated indebtedness and off
balance sheet financing approximate 45% of the sum of its stockholders' equity
and consolidated indebtedness (including such off balance sheet financing). This
degree of leverage increases the Company's vulnerability to adverse general
economic and health care industry conditions and to increased competitive
pressures, including pricing pressure from better capitalized competitors.
Issuance of additional debt would increase this degree of leverage and,
therefore, could exacerbate the Company's vulnerability to such market
conditions.
THE COMPANY
The Company is a Delaware corporation primarily engaged in developing,
manufacturing and marketing a proprietary line of technologically advanced
surgical wound management products to hospitals throughout the world. The
Company's principal executive offices are located at 150 Glover Avenue, Norwalk,
Connecticut 06856; telephone (203) 845-1000. The Company currently operates
domestically and internationally through subsidiaries, branches and
distributors. Except where the context otherwise requires, the term Company
includes the Company's divisions and subsidiaries.
The Company manufactures and markets innovative mechanical products for
the wound closure market. In this category, its principal products consist of a
series of surgical stapling instruments (both disposable and reusable),
disposable surgical clip appliers and DLUs for use
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with stapling instruments. The instruments are an alternative to manual suturing
techniques utilizing needle/suture combinations and enable surgeons to reduce
blood loss, tissue trauma and operating time while joining internal tissue,
reconstructing or sealing off organs, removing diseased tissue, occluding blood
vessels and closing skin, either with titanium, stainless steel, or absorbable
POLYSORB TM copolymer staples or with titanium, stainless steel, or absorbable,
POLYSURGICLIP TM copolymer clips. Surgical stapling also makes possible several
surgical procedures which cannot be achieved with surgical needles and suturing
materials. The disposable instruments and DLUs are expended after a single use
or, in the case of reloadable disposable instruments, after a single surgical
procedure.
The Company manufactures and markets specialized wound management
products designed for use in the field of laparoscopic (also referred to as
endoscopic) surgery. This minimally invasive surgical technique requires
incisions in the patient of up to one half inch through which various procedures
are performed using laparoscopic instruments inserted through ports known as
trocars, and optical devices, known as laparoscopes, for viewing inside the body
cavity. Laparoscopy generally provides patients with significant reductions in
post-operative hospital stay, pain, recuperative time and hospital costs,
improved cosmetic results, and the ability to return to work and normal life in
a shorter time frame. The Company has developed and markets disposable surgical
clip appliers and stapling instruments designed for laparoscopic uses in a
variety of sizes and configurations. The Company's products in this area also
include trocars and a line of instruments which allows the surgeon to see, cut,
clamp, retract or otherwise manipulate tissue during a laparoscopic procedure.
The Company also designs and markets laparoscopes. Applications for minimally
invasive surgery currently include cholecystectomy (gall bladder removal),
hysterectomy, hernia repair, anti-reflux procedures for correction of heartburn,
and various forms of bowel, stomach, gynecologic, urologic, and thoracic (chest)
surgery.
Disposable instruments, as described in the immediately preceding
paragraphs, reduce the user's capital investment, eliminate the risks and costs
associated with maintenance, sterilizing and repair of reusable instruments, and
provide the surgeon with a new sterile instrument for each procedure, offering
more efficacious and safer practice for both patients and operating room
personnel.
The Company continues to expand manufacturing and marketing of its line
of suture products, which was introduced in 1991. The Company believes that
sutures, which represent a major portion of the wound closure market, are a
natural complement to its other wound management products. This market is
currently dominated by other manufacturers. The Company's market share is
increasing but, because of competitive pressures, there can be no assurance that
market share will continue to increase or that the Company will realize
significant market share in the near future.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements, and other information filed
by the Company can be inspected and copied at the public reference facilities of
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the Commission:
7 World Trade Center, 13th Floor, New York, New York 10048; and Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material can be obtained from the Public Reference Section of the
Commission, Washington, D.C. 20549, at prescribed rates. Certain securities of
the Company are listed on, and reports, proxy statements and other information
concerning the Company can be inspected and copied at the offices of, the New
York Stock Exchange, Inc. ("New York Stock Exchange"), 20 Broad Street, New
York, New York 10005.
The Company has filed with the Commission a registration statement on
Form S-3 under the Securities Act of 1933 (the "Securities Act") with respect to
the Securities offered hereby (the "Registration Statement"). This Prospectus
and the accompanying Prospectus Supplement does not contain all information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. Reference is made
to the Registration Statement and to the exhibits relating thereto for further
information with respect to the Company and the Securities offered hereby.
--------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act (File No. 1-9776) are incorporated herein by
reference:
(1) Annual Report on Form 10-K for the year ended December 31, 1994;
(2) Quarterly Report on Form 10-Q for the quarter ended March 31, 1995;
(3) Current Report on Form 8-K filed on July 10, 1995;
(4) the description of the Company's Common Stock, par value $.10 per share (the
"Common Stock"), contained in the Company's Registration Statement on Form 8-B,
dated August 3, 1990.
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All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the filing of a posteffective amendment which
indicates the termination of the offering of the Securities made by this
Prospectus shall be deemed to be incorporated by reference in this Prospectus
and to be a part of this Prospectus from the date of filing of such documents.
Any statement contained in a document, all or a portion of which is incorporated
or deemed to be incorporated by reference herein, or contained in this
Prospectus, shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any and all of the documents referred to above which have been
or may be incorporated by reference in this Prospectus (without exhibits to such
documents other than exhibits specifically incorporated by reference into such
documents). Such written or oral request should be directed to United States
Surgical Corporation, 150 Glover Avenue, Norwalk, Connecticut 06856, Attention:
Investor Relations Department (203) 845-1333.
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars," "U.S.
dollars" or "U.S.$").
RATIOS OF EARNINGS TO FIXED CHARGES AND OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS (Unaudited)
The following table sets forth the Company's ratios of consolidated earnings
to total fixed charges and capitalized interest and consolidated earnings to
combined fixed charges, capitalized interest and preferred stock dividends
for the periods indicated.
<TABLE>
<CAPTION>
QUARTER
ENDED YEARS ENDED DECEMBER 31,
MARCH 31, --------------------------------------------------------------------
1995 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges
and capitalized interest (1) 3.53 2.13 - (2) 7.43 7.51 5.56
Ratio of earnings to combined
fixed charges, capitalized interest
and preferred stock dividends (1) 1.75 1.18 - (2) 7.43 7.51 5.56
</TABLE>
(1) The ratios of earnings to fixed charges and capitalized interest and to
combined fixed charges, capitalized interest and preferred stock dividends are
computed by dividing the sum of earnings before provision for income taxes and
fixed charges (excluding capitalized interest) by total fixed charges and
capitalized interest, or by the sum of total fixed charges, capitalized
interest and preferred stock dividends. Total fixed charges and capitalized
interest includes all interest (including capitalized interest) and the
interest factor of all rentals, assumed to be one-third of consolidated rent
expense. Preferred stock dividends have been increased to an amount
representing the pretax earnings which would be required to cover such
dividend requirements, assuming a statutory tax rate of 35%.
(2) Earnings are inadequate to cover fixed charges. The dollar amount of the
deficiency at December 31, 1993 was $146.9 million. If restructuring charges of
$137.6 million were excluded from the calculation, the dollar amount of the
deficiency would have been $9.3 million.
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USE OF PROCEEDS
The net proceeds to be received from the sale of the Securities offered
hereby will be used for general corporate purposes, including possible
acquisitions of the stock or assets of other companies, repurchase of shares of
the Company's Common Stock, retirement of short-term or long-term indebtedness,
or expenditures for property, plant and equipment, or for such other uses as may
be set forth in a prospectus supplement.
DESCRIPTION OF DEBT SECURlTIES
The following description sets forth certain general terms and
provisions of the Debt Securities to which any Prospectus Supplement may relate.
The particular terms of the Debt Securities offered by any Prospectus Supplement
and the extent, if any, to which such general provisions may not apply to the
Debt Securities so offered will be described in the Prospectus Supplement
relating to such Debt Securities.
The Senior Debt Securities will be issued under an Indenture (the
"Senior Indenture"), to be entered into between the Company and the trustee
named in the Indenture. The Subordinated Debt Securities will be issued under a
separate Indenture (the "Subordinated Indenture"), to be entered into between
the Company and the trustee named in the Indenture. The Senior Indenture and the
Subordinated Indenture are sometimes referred to collectively as the
"Indentures." Copies of the forms of the Senior Indenture and the Subordinated
Indenture have been filed as exhibits to the Registration Statement. The
trustees under the Senior Indenture and under the Subordinated Indenture are
referred to herein as the "Trustees."
The following summaries of certain provisions of the Senior Debt
Securities, the Subordinated Debt Securities and the Indentures do not purport
to be complete and are subject to, and qualified in their entirety by reference
to, all the provisions of the Indenture applicable to a particular series of
Debt Securities, including the definitions therein of certain terms. Wherever
particular Sections, Articles or defined terms of the Indentures are referred to
herein or in a Prospectus Supplement, it is intended that such Sections,
Articles or defined terms shall be incorporated by reference herein or therein,
as the case may be. Section and Article references used herein are references to
the applicable Indenture. Except as otherwise indicated, the terms of the Senior
Indenture and the Subordinated Indenture are identical. Capitalized terms not
otherwise defined herein shall have the meanings given to them in the applicable
Indenture.
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General
The Indentures will not limit the aggregate principal amount of Debt
Securities which may be issued thereunder, and each Indenture provides that Debt
Securities may be issued thereunder from time to time in one or more series up
to the aggregate amount from time to time authorized by the Company for each
series. (Section 3.1) Unless otherwise specified in the Prospectus Supplement,
the Senior Debt Securities when issued will be unsecured and unsubordinated
obligations of the Company and will rank equally and ratably with all other unit
and unsubordinated indebtedness of the Company. The Subordinated Debt Securities
when issued will be unsecured obligations of the Company, subordinated in right
of payment to the prior payment in full of all Senior Debt (as defined in the
Subordinated Indenture) of the Company as described in the applicable Prospectus
Supplement. (Section 16.1 of the Subordinated Indenture)
Reference is made to the Prospectus Supplement relating to the
particular series of Debt Securities offered thereby for a description of the
following terms or additional provisions of the Debt Securities: (1) the title
of the Debt Securities; (2) whether the Debt Securities are Senior Debt
Securities or Subordinated Debt Securities; (3) any limit on the aggregate
principal amount of the Debt Securities; (4) whether the Debt Securities are to
be issuable as Registered Securities or Bearer Securities or both, whether any
of the Debt Securities shall be issuable in whole or in part in temporary or
permanent global form or in the form of Book-Entry Securities and, if so, the
circumstances under which any such global securities or Book-Entry Securities
may be exchanged for Debt Securities registered in the name of, and any transfer
of such global or Book-Entry Securities may be registered to, a Person other
than the depository for such temporary or permanent global securities or
Book-Entry Securities or its nominee; (5) the price or prices (expressed as a
percentage of the aggregate principal amount thereof) at which the Debt
Securities will be issued; (6) the date or dates on which the Debt Securities
will mature; (7) the rate or rates per annum at which the Debt Securities will
bear interest, if any, and the date from which any such interest will accrue;
(8) the Interest Payment Dates on which any such interest on the Debt Securities
will be payable, the Regular Record Date for any interest payable on any Debt
Securities which are Registered Securities on any Interest Payment Date and the
extent to which, or the manner in which, any interest payable on a temporary
global Security on an Interest Payment Date will be paid; (9) any mandatory or
optional sinking fund or analogous provisions; (10) each office or agency where,
subject to the terms of the applicable Indenture as described below under
"Payment and Paying Agents," the principal of and any premium and interest on
the Debt Securities will be payable and each office or agency where, subject to
the terms of the applicable Indenture as described below under "Form, Exchange,
Registration and Transfer," the Debt Securities may be
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presented for registration of transfer or exchange; (11) the date, if any,
after which and the price or prices at which the Debt Securities may, pursuant
to any optional or mandatory redemption provisions, be redeemed, in whole or
in part, and the other detailed terms and provisions of any such optional or
mandatory redemption provisions, which may include with respect to a
particular series or particular Debt Securities within a series, a redemption
option of Holders upon certain conditions, as defined in the applicable
Indenture; (12) the denominations in which any Debt Securities which are
Registered Securities will be issuable, if other than denominations of $1,000
and any integral multiple thereof, and the denomination or denominations in
which any Debt Securities which are Bearer Securities will be issuable, if
other than the denomination of $5,000; (13) the currency or currency units of
payment of the principal of (and premium, if any) and interest on the Debt
Securities; (14) any index used to determine the amount of payments of the
principal of (and premium, if any) and interest on the Debt Securities and the
manner in which such amounts shall be determined; (15) the terms and
conditions, if any, pursuant to which such Debt Securities are convertible or
exchangeable into a security or securities of the Company; (16) the terms
pursuant to which such Debt Securities are subject to defeasance and (17) any
other terms of the Debt Securities not inconsistent with the provisions of the
applicable Indenture. Any such Prospectus Supplement will also describe any
special provisions for the payment of additional amounts with respect to the
Debt Securities. Debt Securities may also be issued under the Indenture upon
the exercise of Warrants. See "Description of Warrants."
Debt Securities may be issued as Original Issue Discount Securities. An
Original Issue Discount Security is a Debt Security, including any Zero-Coupon
Security, which is issued at a price lower than the amount payable upon the
Stated Maturity thereof and which provides that upon redemption or acceleration
of the maturity, an amount less than the amount payable upon the Stated
Maturity, determined in accordance with the terms of such Debt Security, shall
become due and payable. (Section 5.2) Certain special United States federal
income tax considerations applicable to Debt Securities sold at an original
issue discount will be described in the Prospectus Supplement relating thereto.
In addition, certain special United States federal income tax or other
considerations applicable to any Debt Securities which are denominated in a
currency or currency unit other than United States dollars may be described in
the applicable Prospectus Supplement relating thereto.
Form, Exchange, Registration and Transfer
Debt Securities of a series may be issuable in definitive form solely
as Registered Securities, solely as Bearer Securities or as both Registered
Securities and Bearer Securities. (Section 3.1) Unless otherwise indicated in an
applicable Prospectus Supplement, Bearer Securities will have interest coupons
attached. (Section 2.1) The Indentures also will provide that Debt Securities of
a series may be issuable in temporary
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or permanent global form and may be issued as Book-Entry Securities that will be
deposited with, or on behalf of, The Depository Trust Company (the "Depository")
or another depository named by the Company and identified in a Prospectus
Supplement with respect to such series. See "Global and Book-Entry Debt
Securities."
In connection with its original issuance, no Bearer Security (including
a Debt Security exchangeable for a Bearer Security or a Debt Security in global
form that is either a Bearer Security or exchangeable for Bearer Securities)
shall be mailed or otherwise delivered to any location in the United States (as
defined under "Limitations on Issuance of Bearer Securities") and a Bearer
Security may be delivered in connection with its original issuance only if the
Person entitled to receive such Bearer Security furnishes written certification
of the beneficial ownership of the Bearer Security as required by Treasury
Regulation Section 1.163-5(c)(2)(i)(D)(3) (or any comparable successor
provisions). In the case of a Bearer Security in permanent global form, such
certification must be given in connection with notation of a beneficial owner's
interest therein in connection with the original issuance of such Debt Security.
See "Global and Book-Entry Debt Securities" and "Limitations on Issuance of
Bearer Securities."
Registered Securities of any series will be exchangeable for other Registered
Securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor. In addition, if Debt Securities of any
series are issuable as both Registered Securities and Bearer Securities, at
the option of the Holder upon request confirmed in writing, and subject to the
terms of the applicable Indenture, Bearer Securities (with all unmatured
coupons, except as provided below, and all matured coupons in default) of such
series will be exchangeable into Registered Securities of the same series of
any authorized denominations and of a like aggregate principal amount and
tenor. Bearer Securities surrendered in exchange for Registered Securities
between a Regular Record Date or a Special Record Date and the relevant date
for payment of interest shall be surrendered without the coupon relating to
such date for payment of interest and interest accrued as of such date will
not be payable in respect of the Registered Security issued in exchange for
such Bearer Security, but will be payable only to the Holder of such coupon
when due in accordance with the terms of the applicable Indenture. Registered
Securities will not be issued in exchange for Bearer Securities. (Section 3.5)
Each Bearer Security, and any coupon attached thereto, other than a temporary
global Bearer Security will bear the following legend: "Any United States
person who holds this obligation will be subject to limitations under the
United States income tax laws, including the limitations provided in Sections
165(j) and 1287(a) of the United States Internal Revenue Code." A Book-Entry
Security may not be registered for transfer or exchange (other than as a whole
by the Depository to a nominee or by such nominee to such Depository) unless
the Depository or such nominee notifies the Company that it is unwilling or
unable to continue as Depository or the Depository ceases to be
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qualified as required by the applicable Indenture or the Company instructs the
Trustee in accordance with the applicable Indenture that such Book-Entry
Securities shall be so registrable and exchangeable or there shall have occurred
and be continuing an Event of Default or an event which after notice or lapse of
time would be an Event of Default with respect to the Debt Securities evidenced
by such Book-Entry Securities or there shall exist such other circumstances if
any, as may be specified in the applicable Prospectus Supplement.
Debt Securities may be presented for exchange as provided above, and
Registered Securities may be presented or surrendered for registration of
transfer or for exchange (with the form of transfer endorsed thereon duly
executed), at the office of the Security Registrar or at the office of any
transfer agent designated by the Company for such purpose with respect to any
series of Debt Securities and referred to in an applicable Prospectus
Supplement, without service charge and upon payment of any taxes and other
governmental charges as described in the applicable Indenture. Such transfer
or exchange will be effected upon the Security Registrar or such transfer
agent, as the case may be, being satisfied with the documents of title and
identity of the person making the request. (Section 3.5) If a Prospectus
Supplement refers to any transfer agents (in addition to the Security
Registrar) initially designated by the Company with respect to any series of
Debt Securities, the Company may at any time rescind the designation of any
such transfer agent or approve a change in the location through which any such
transfer agent acts, except that, if Debt Securities of a series are issuable
solely as Registered Securities, the Company will be required to maintain a
transfer agent in each Place of Payment for which series and, if Debt
Securities of a series are issuable as Bearer Securities, the Company will be
required to maintain (in addition to the Security Registrar) a transfer agent
in a Place of Payment for such series located outside the United States. The
Company may at any time designate additional transfer agents with respect to
any series of Debt Securities. (Section 10.2)
In the event of any redemption in part, the Company shall not be
required to (i) issue, register the transfer of or exchange Debt Securities of
any series during a period beginning at the opening of business 15 days before
any selection of Debt Securities of that series to be redeemed and ending at the
close of business on (A) if Debt Securities of the series are issuable only as
Registered Securities, the day of mailing of the relevant notice of redemption
and (B) if Debt Securities of the series are issuable as Bearer Securities, the
day of the first publication of the relevant notice of redemption or, if Debt
Securities of the series are also issuable as Registered Securities and there is
no publication, the mailing of the relevant notice of redemption; (ii) register
the transfer of or exchange any Registered Security being redeemed in part,
except the unredeemed portion of any Registered Security being redeemed in part;
or (iii) exchange any Bearer Security so selected for redemption, except that
such Bearer Security may be exchanged for a
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Registered Security of that series and like tenor provided, that such Registered
Security shall be simultaneously surrendered for redemption. (Section 3.5)
Payment and Paying Agents
Unless otherwise indicated in an applicable Prospectus Supplement,
payment of the principal of (and premium, if any) and interest on, Bearer
Securities will be payable, subject to any applicable laws and regulations, at
the offices of such Paying Agents outside the United States as the Company may
designate from time to time, at the option of the Holder, by check or by
transfer to an account maintained by the payee with a bank located outside the
United States. Unless otherwise indicated in an applicable Prospectus
Supplement, payment of interest on Bearer Securities on any Interest Payment
Date will be made only against surrender to the Paying Agent of such coupon
relating to such Interest Payment Date. (Section 10.1) No payment with respect
to any Bearer Security will be made at any office or agency of the Company in
the United States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States.
Notwithstanding the foregoing, payments of the principal of (and premium, if
any) and interest on Bearer Securities denominated and payable in U.S. dollars
will be made at the office of the Company's Paying Agent in the Borough of
Manhattan, The City of New York, if (but only if) payment of the full amount
thereof in U.S. dollars at all offices or agencies outside the United States
is illegal or effectively precluded by exchange controls or other similar
restrictions. (Section 10.2)
Unless otherwise indicated in an applicable Prospectus Supplement,
payment of the principal of (and premium, if any) and interest on Registered
Securities will be made at the office of such Paying Agent or Paying Agents as
the Company may designate from time to time, except that at the option of the
Company payment of any interest may be made by check mailed to the address of
the person entitled thereto as such address shall appear in the Security
Register. Unless otherwise indicated in an applicable Prospectus Supplement,
payment of any installment of interest on Registered Securities will be made to
the Person in whose name such Registered Security is registered at the close of
business on the Regular Record Date for such interest. (Section 3.7)
Unless otherwise indicated in an applicable Prospectus Supplement, the
Corporate Trust Office of the Trustee in The City of New York will be designated
as a Paying Agent for the Company for payments with respect to Debt Securities
which are issuable solely as Registered Securities and the Company will maintain
a Paying Agent outside of the United States for payments with respect to Debt
Securities (subject to the limitations described above in the case of Bearer
Securities) which are issuable solely as Bearer
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Securities or both Registered Securities and Bearer Securities.
(Section 10.2) Any Paying Agents outside the United States and any other
Paying Agent in the United States initially designated by the Company for the
Debt Securities will be named in an applicable Prospectus Supplement. The
Company may at any time designate additional Paying Agents or rescind the
designation of any Paying Agent or approve a change in the office through
which any Paying Agent acts, except that, if Debt Securities of a series are
issuable solely as Registered Securities, the Company will be required to
maintain a Paying Agent in each Place of Payment for such series and, if Debt
Securities of a series are issuable as Bearer Securities, the Company will be
required to maintain (i) a Paying Agent in the Borough of Manhattan, The City
of New York for payments with respect to any Registered Securities of the
series (and for payments with respect to Bearer Securities of the series in
the circumstances described above, but not otherwise), and (ii) a Paying Agent
in a Place of Payment located outside the United States where Debt Securities
of such series and any coupons appertaining thereto may be presented and
surrendered for payment; provided that if the Debt Securities of such series
are listed on The Stock Exchange of the United Kingdom and the Republic of
Ireland or the Luxembourg Stock Exchange or any other stock exchange located
outside the United States and such stock exchange shall so require, the
Company will maintain a Paying Agent in London or Luxembourg or any other
required city located outside the United States, as the case may be, for the
Debt Securities of such series. (Section 10.2)
Payments of the principal of (and premium, if any) and interest on
Book-Entry Securities registered in the name of any Depository or its nominee
will be made to the Depository or its nominee, as the case may be, as the
registered owner of the global security representing such Book-Entry Securities.
The Company expects that the Depository, upon receipt of any payment of the
principal of (and premium, if any) or interest, will credit immediately
participants' accounts with payments in amounts proportionate to their
respective beneficial interests as shown on the records of such Depository or
its nominee. Neither the Company, the Trustee, any Paying Agent nor the
Securities Registrar for such Debt Securities will have any responsibility or
liability for any aspects of the records relating to, or payments made on
account of, such beneficial ownership interests in the Book-Entry Securities or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
All moneys paid by the Company to a Paying Agent for the payment of
the principal of (and premium, if any) or interest on any Debt Securities
which remain unclaimed at the end of two years after such principal, premium
or interest shall have become due and payable will be repaid to the Company
and the Holder of such Debt Security or any coupon will thereafter, as an
unsecured general creditor, look only to the Company for payment thereof.
(Section 10.3)
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Global and Book-Entry Debt Securities
If so specified in an applicable Prospectus Supplement, the portion
of the Debt Securities of a series which are issuable as Bearer Securities
will initially be represented by one or more temporary or permanent global
Debt Securities, without interest coupons, to be deposited with a common
depositary in London for the benefit of Euro-clear System ("Euro-clear") and
CEDEL BANK, Societe Anonyme ("CEDEL") for credit to the respective accounts of
the beneficial owners of such Debt Securities (or to such other accounts as
they may direct). (Section 3.4) Unless otherwise indicated by an applicable
Prospectus Supplement, on or after 40 days following its issuance, each such
temporary global Debt Security will be exchangeable for definitive Bearer
Securities, definitive Registered Securities or all or a portion of a
permanent global Debt Security, or any combination thereof, as specified in an
applicable Prospectus Supplement, only upon written certification in the form
and to the effect described under "Form, Exchange, Registration and Transfer."
No Bearer Security (including a Debt Security in permanent global form)
delivered in exchange for a portion of a temporary or permanent global Debt
Security shall be mailed or otherwise delivered to any location in the United
States in connection with such exchange. (Section 3.5)
A person having a beneficial interest in a permanent global Debt
Security will, except with respect to payment of the principal of (and premium,
if any) and interest on such permanent global Debt Security, be treated as a
Holder of such principal amount of Outstanding Debt Securities represented by
such permanent global Debt Security as shall be specified in a written statement
of the Holder of such permanent global Debt Security or, in the case of a
permanent global Debt Security in bearer form, of the operator of Euro-clear or
CEDEL which is provided to the Trustee by such Person. (Section 2.3)
If Debt Securities to be sold in the United States are designated by
the Company in a Prospectus Supplement as Book-Entry Securities, a global
security representing the Book-Entry Securities will be deposited in the name of
Cede & Co., as nominee for the Depository representing the securities to be sold
in the United States. Upon such deposit of the Book-Entry Securities, the
Depository shall credit an account maintained or designated by an institution to
be named by the Company or any purchaser of the Debt Securities represented by
the Book-Entry Securities with an aggregate amount of Debt Securities equal to
the total number of Debt Securities that have been so purchased. The specific
terms of any depository arrangement with respect to any portion of a series of
Debt Securities to be represented by one or more global securities will be
described in the applicable Prospectus Supplement. Beneficial interests in such
Debt Securities will only be evidenced by, and transfers thereof will only be
effected through, records maintained by the Depository and the institutions that
are Depository participants.
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Subordination of Subordinated Debt Securities
Unless otherwise indicated in the Prospectus Supplement, the following
provisions will apply to the Subordinated Debt Securities.
The Subordinated Debt Securities will, to the extent set forth in the
Subordinated Indenture, be subordinate in right of payment to the prior
payment in full of all Senior Debt. (Section 16.1 of the Subordinated
Indenture) In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, or (b) any liquidation, dissolution or
other winding up of the Company, whether voluntary or involuntary and whether
or not involving insolvency or bankruptcy, or (c) any assignment for the
benefit of creditors or any other marshaling of assets and liabilities of the
Company, then and in any such event the holders of Senior Debt shall be
entitled to receive payment in full of all amounts due or to become due on or
in respect of all Senior Debt, or provision shall be made for such payment in
cash, before the Holders of Subordinated Debt Securities are entitled to
receive any payment on account of principal of (or premium, if any) or
interest on Subordinated Debt Securities, and to that end the holders of
Senior Debt shall be entitled to receive, for application to the payment
thereof, any payment or distribution of any kind or character, whether in
cash, property or securities, including any such payment or distribution which
may be payable or deliverable by reason of the payment of any other
indebtedness of the Company being subordinated to the payment of Subordinated
Debt Securities, which may be payable or deliverable in respect of the
Subordinated Debt Securities in any such case, proceeding, dissolution,
liquidation or other winding up event. (Section 16.2 of the Subordinated
Indenture)
By reason of such subordination, in the event of liquidation or
insolvency, creditors of the Company may recover less, ratably, than Holders of
Senior Debt and may recover more, ratably, than the Holders of the Subordinated
Debt Securities.
In the event of the acceleration of the maturity of any Subordinated
Debt Securities, the Holders of all Senior Debt outstanding at the time of such
acceleration will first be entitled to receive payment in full of all amounts
due thereon before the Holders of the Subordinated Debt Securities will be
entitled to receive any payment upon the principal of (and premium, if any) or
interest on, the Subordinated Debt Securities. (Section 16.3 of the Subordinated
Indenture)
No payments on account of the principal of (and premium, if any) or
interest in respect of the Subordinated Debt Securities may be made if there
shall have occurred and be continuing a default in any payment with respect to
Senior Debt, or an event of default with respect to any Senior Debt resulting in
the acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default. (Section 16.4 of the Subordinated
Indenture) For purposes of the subordination provisions, the payment, issuance
and delivery of cash, property or securities (other than stock and certain
subordinated securities of the Company) upon conversion of a Subordinated Debt
Security will be deemed to constitute payment on account of the principal of
such Subordinated Debt Security. (Section 16.15 of the Subordinated Indenture)
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The Subordinated Indenture does not limit or prohibit the incurrence of
additional Senior Debt, which may include indebtedness that is senior to the
Subordinated Debt Securities, but subordinate to other obligations of the
Company. The Senior Debt Securities constitute Senior Debt under the
Subordinated Indenture.
"Senior Debt" is defined to include the principal of (and premium, if
any) and interest (including interest accrued on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company to the
extent that such claim for past-petition interest is allowed in such proceeding)
on all indebtedness of the Company (including indebtedness of others guaranteed
by the Company), other than the Subordinated Debt Securities, whether
outstanding on the date of the Subordinated Indenture or thereafter created,
incurred or assumed, which is (i) for money borrowed, (ii) evidenced by a note
or similar instrument given in connection with the acquisition of any
businesses, properties or assets of any kind, (iii) obligations and liabilities
(contingent or otherwise) in respect of the Company's manufacturing facilities
located at North Haven, Connecticut, under a lease agreement and participation
agreement, each dated January 14, 1993, or (iv) obligations of the Company as
lessee under leases required to be capitalized on the balance sheet of the
lessee under generally accepted accounting principles or leases of property or
assets made as part of any sale and leaseback transaction to which the Company
is a party, including amendments, renewals, extensions, modifications and
refundings of any such indebtedness or obligation, unless in any case the
instrument creating or evidencing any such indebtedness or obligation or
pursuant to which the same is outstanding is provided that such indebtedness or
obligation is not superior in right of payment to the Subordinated Debt
Securities. (Section 1.1 of the Subordinated Indenture)
The Prospectus Supplement may further describe the provisions, if any,
applicable to the subordination of the Subordinated Debt Securities of a
particular series.
Conversion or Exchange Rights
The terms on which Debt Securities of any series are convertible into
or exchangeable for Common Stock or other securities of the Company will be set
forth in the Prospectus Supplement relating thereto. Such terms will include
provisions as to whether conversion or exchange is mandatory, at the option of
the Holder or at the option of the Company, and may include provisions pursuant
to which the number of shares of Common Stock or other securities of the Company
to be received by the Holders of Debt Securities would be subject to adjustment.
(Section 3.1 and Article XV)
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Covenants
Unless otherwise provided in the applicable Prospectus Supplement,
pursuant to the Senior Indenture the Company will covenant not to create,
assume or suffer to exist any lien on any Restricted Property (described
below) to secure any debt of the Company, any subsidiary or any other person,
or permit any subsidiary so to do, without securing the Senior Debt Securities
of any series having the benefit of the covenant by such lien equally and
ratably with such debt for so long as such debt shall be so secured, subject
to certain exceptions specified in the Indenture. Exceptions include: (a)
existing liens or liens on property owned or leased by corporations at the
time they become subsidiaries; (b) liens existing on property when acquired,
or incurred to finance the purchase price, construction or improvement
thereof; (c) certain liens in favor of or required by contracts with
governmental entities; and (d) liens otherwise prohibited by such covenant,
securing indebtedness which, together with the aggregate amount of outstanding
indebtedness secured by liens otherwise prohibited by such covenant and the
value of certain sale and leaseback transactions, does not exceed 10% of the
Company's Consolidated Net Tangible Assets (defined in the Indentures as total
assets less current liabilities and goodwill). (Section 10.7)
Unless otherwise provided in the Senior Debt Securities, the Company
will also covenant not to, and not to permit any subsidiary to, enter into any
sale and leaseback transaction covering any Restricted Property unless (a) the
Company or each subsidiary would be entitled under the provisions described
above to incur debt, in a principal amount at least equal to the value of such
sale and leaseback transaction, secured by liens on the property to be leased,
without equally and ratably securing the Debt Securities, or (b) the Company,
during the six months following the effective date of such sale and leaseback
transaction, applies an amount equal to the value of such sale and leaseback
transaction to the voluntary retirement of long-term indebtedness or to the
acquisition of Restricted Property. (Section 10.8)
The Senior Indenture defines Restricted Property as (a) any
manufacturing facility (or portion thereof) owned or leased by the Company and
any subsidiary which, in the opinion of the Board of Directors, is of material
importance to the business of the Company and its subsidiaries taken as a
whole, but no such manufacturing facility (or portion thereof) shall be deemed
of material importance if its gross book value (before deducting accumulated
depreciation) is less than 5% of the Company's Consolidated Net Tangible
Assets, or (b) any shares of capital stock or indebtedness of any subsidiary
owning any such manufacturing facility.
There are no liens prohibited by the covenants described above on, or
any sale and leaseback transactions prohibited by such covenants covering, any
property which would qualify as Restricted
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Property. The Company will amend this Prospectus to disclose or disclose in any
Prospectus Supplement the existence of any lien on or any sale and leaseback
transaction covering any Restricted Property, which would require the Company
to secure the Debt Securities or apply certain amounts to retirement of
indebtedness or acquisitions of property, as provided in such covenants.
Unless so specified in the Prospectus Supplement, there is not any
other provision with respect to the applicable Securities and the Indentures
contain no other restrictive covenants, including any that would afford
holders of the Debt Securities protection in the event of a highly leveraged
transaction involving the Company or any of its affiliates, or any covenants
relating to total indebtedness, interest coverage, stock repurchases,
recapitalizations, dividends and distributions to shareholders, current ratios
and acquisitions and divestitures.
Consolidation, Merger, Sale of Assets or Highly Leveraged Transaction
The Company, without the consent of the Holders of any of the
Outstanding Debt Securities under the applicable Indenture, may consolidate with
or merge with or into, or sell, lease, transfer or otherwise dispose of its
assets substantially as an entirety to, any Person which is a corporation,
partnership or trust organized and validly existing under the laws of any
domestic jurisdiction, or may permit any such Person to consolidate with or
merge with or into the Company or sell, lease, transfer or otherwise dispose of
its assets substantially as an entirety to the Company, provided that, among
other things, any successor Person assumes the Company's obligations on the Debt
Securities and under the applicable Indenture, that after giving effect to the
transaction no Event of Default, and no event which, after notice or lapse of
time, would become an Event of Default, shall have occurred and be continuing,
and that certain other conditions are met. (Section 8.1) Other than the
covenants and provisions in the Indenture described above, and provisions below
relating to Redemption at the Option of Holders upon a Change in Control (except
as approved by the Continuing Directors), there are no covenants or provisions
in the Indenture which would provide the Holders of the Debt Securities with
any special protection or rights in the event the Company is involved in a
Change in Control, as hereinafter defined, or other change in control, highly
leveraged transaction, reorganization, restructuring or merger, or similar
transaction involving the Company that may adversely affect Holders of the Debt
Securities.
Redemption at the Option of Holders Upon Change in Control
In the event of any Change in Control (as hereinafter defined) of the
Company, prior to maturity of the Debt Securities, that has not been approved by
the Continuing Directors (as hereinafter defined) of the Company, Debt
Securities may be submitted for redemption, on and after the Exchange Date in
the case of Debt Securities of any series issuable as Bearer Securities or at
any time in the case of all other Debt Securities, at the option of the Holders,
unless, prior to the expiration of ten days following such Change in Control,
the Company, if permitted to do so by the terms of the Debt Securities of a
series, shall have called all of the Debt Securities of such series for
redemption. (Sections 14.2 and 14.3) Bearer Securities may be so redeemed only
in whole and Registered Securities in whole or in part in increments of $1,000.
Any Debt Securities to be so submitted must be submitted during a period (the
"Exercise Period")
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commencing on the date of the Company's notice described below to Holders of
such Change in Control and expiring on the 20th business day after such notice
is given.
Debt Securities submitted for redemption will be redeemed on a
Redemption Date that will be the 15th day after expiration of the Exercise
Period, at a redemption price of 100% of the principal amount of the Debt
Security, plus accrued interest to the Redemption Date. Exercise of this
redemption option by the Holder of a Debt Security will be irrevocable.
On or before the tenth day after a Change in Control, the Company is
obligated, unless the Continuing Directors have approved such Change in
Control prior to such date, to give notice to Holders as set forth under
"Notices" below, and, on or before the ninth day after a Change of Control,
written notice to the Trustee, regarding the Change in Control, the date of
expiration of the Exercise Period, the applicable Redemption Date, the
Redemption Price and the procedure which the Holder must follow to exercise
this option. (Section 14.3) To exercise this option, the Holder must deliver
on or before the expiration of the Exercise Period to one of the Paying Agents
referred to below written notice of the Holder's exercise of such option,
together with the Debt Securities with respect to which the option is being
exercised, duly endorsed (in the case of Registered Securities) for transfer.
Each Bearer Security delivered for redemption must be delivered with all
coupons maturing after the Redemption Date. If the Redemption Date falls
between any Regular Record Date and the next succeeding Payment Date,
Registered Securities must be accompanied by payment of an amount equal to the
interest thereon which the registered Holder is to receive on such Interest
Payment Date.
As used herein, a "Change in Control" of the Company shall be deemed
to have occurred at such time or times as (a) the Company determines that any
person or related group of persons is the beneficial owner, directly or
indirectly, of 25% or more of the outstanding Common Stock of the Company or
(b) individuals who constitute the Continuing Directors cease for any reason
to constitute at least a majority of the Company's directors. "Continuing
Director" means any director who is a director on the date of the applicable
indenture and any director who is nominated or elected by a majority of
Continuing Directors who are then directors. (Section 1.1)
In the future, the Company could enter into certain transactions,
including certain recapitalizations or leveraged transactions of the Company,
that would not constitute a Change in Control or would constitute a Change of
Control but would not trigger the Change of Control purchase feature of the Debt
Securities if approved by the Continuing Directors and would increase the amount
of the Company's indebtedness outstanding at such time. If a Change in Control
were to occur, there can be no assurance that the Company would have sufficient
funds to pay the Change in Control purchase price for all Debt
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Securities tendered by the Holders thereof. In addition, the Company's ability
to purchase Debt Securities with cash may be limited by the terms of its then
existing borrowing agreements. A default by the Company on its obligation to pay
the Change in Control purchase price or a breach of its covenant would result in
an Event of Default and could result in acceleration of the maturity of other
indebtedness of the Company at the time outstanding pursuant to cross default
provisions. The Company will comply with the provisions of Rule 13e-4, Rule
14e-1 and any other tender offer rules under the Exchange Act which may then be
applicable and will file a Schedule 13E-4 or any other schedule required
thereunder and will otherwise comply with all federal or state securities laws,
as required, in connection with any of the Debt Securities providing for
redemption at the option of Holders.
Events of Default
Any one of the following events will constitute an Event of Default
under the applicable Indenture with respect to Debt Securities of any series:
(a) failure to pay any interest on any Debt Security of that series when due,
continued for 30 days (in the case of the Subordinated Indenture, whether or not
such payment is prohibited by the subordination provisions); (b) failure to pay
the principal of (or premium, if any) on any Debt Security of that series when
due (in the case of the Subordinated Indenture, whether or not such payment is
prohibited by the subordination provisions); (c) failure to deposit any sinking
fund payment, when due, in respect of any Debt Security of that series (in the
case of the Subordinated Indenture, whether or not such deposit is prohibited by
the subordination provisions); (d) failure to perform any other covenant of the
Company in the applicable Indenture or such Debt Security (other than a covenant
included in the applicable Indenture solely for the benefit of a series of Debt
Securities other than that series), continued for 60 days after written notice
has been given as provided in the applicable Indenture; (e) certain events in
bankruptcy, insolvency or reorganization involving the Company; or (f) any other
Event of Default provided with respect to the Debt Securities of that series.
(Section 5.1)
If an Event of Default with respect to the Debt Securities of any
series at the time Outstanding occurs and is continuing, then in every such case
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debt Securities of that series by notice as provided in the
applicable Indenture may declare the principal amount of the Debt Securities of
that series (or, if any of the Debt Securities of that series are Original Issue
Discount Securities, such portion of the principal amount of such Debt
Securities, as may be specified in the terms thereof) to be due and payable
immediately. At any time after a declaration of acceleration with respect to
Debt Securities of any series has been made and before a judgment or decree for
payment of money due has been obtained by the Trustee, the Holders of a
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majority in principal amount of the Outstanding Debt Securities of that series
may, under certain circumstances, rescind and annul such declaration. (Section
5.2)
The Indentures will provide that, subject to the duty of the Trustee
during default to act with the required standard of care, the Trustee will be
under no obligation to exercise any of its rights or powers under the
applicable Indenture at the request or direction of any of the Holders, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity. (Section 6.1) Subject to such provisions for the indemnification of
the Trustee, the Holders of a majority in aggregate 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 Trustees or exercising any trust or power conferred on the Trustee,
with respect to the Debt Securities of that series. (Section 5.12)
The Company will be required to furnish to the applicable Trustee
annually a statement as to the performance of certain of its obligations under
the applicable Indenture and as to any default in such performance. (Section
10.9)
Defeasance and Discharge
If so specified with respect to any particular series of Debt
Securities, the Company may discharge its indebtedness and its obligations or
certain of its obligations under the applicable Indenture with respect to such
series by depositing funds or obligations issued or guaranteed by the United
States of America with the Trustee. (Section 4.3)
The Indentures will provide that, if so specified with respect to the
Debt Securities of any series, the Company will be discharged from any and all
obligations in respect of the Debt Securities of such series (including, in the
case of Subordinated Debt Securities, the subordination provisions described
under "Subordination of Subordinated Debt Securities" herein and, except for
certain obligations relating to temporary Debt Securities and exchange of Debt
Securities, registration of transfer or exchange of Debt Securities of such
series, replacement of stolen, lost or mutilated Debt Securities of such series,
maintenance of paying agencies, to hold monies for payment in trust and payment
of additional amounts, if any, required in consequence of United States
withholding taxes imposed on payments to non-United States persons) upon the
deposit with the Trustee, in trust, of money and/or U S. Government Obligations
which through the payment of interest and principal in respect thereof in
accordance with their terms will provide money in an amount sufficient to pay
the principal of (and premium, if any), each installment of interest on, and any
sinking fund payments on, the Debt Securities of such series on the Stated
Maturity of
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such payments in accordance with (Section 4.6 of the Senior Indenture; Section
4.3 of the Subordinated Indenture) the terms of the applicable Indenture and
the Debt Securities of such series. Such a trust may only be established if,
among other things, (a) the Company has delivered to the applicable Trustee an
Opinion of Counsel to the effect that (i) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling, or (ii)
since the date of the applicable Indenture there has been a change in
applicable federal income tax law, in either case to the effect that, and
based thereon such Opinion of Counsel shall confirm that, the Holders of Debt
Securities of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit, defeasance and discharge, and
will be subject to federal income tax on the same amounts and in the same
manner and at the same times as would have been the case if such deposit,
defeasance and discharge had not occurred; (b) the Debt Securities of such
series, if then listed on any domestic or foreign securities exchange, will
not be delisted as a result of such deposit, defeasance and discharge; and (c)
in the case of the Subordinated Debt Securities, (x) no default in the payment
of the principal of (and premium, if any) or any interest on any Senior Debt
beyond any applicable grace period shall have occurred and be continuing, or
(y) no other default with respect to any Senior Debt shall have occurred and
be continuing and shall have resulted in the acceleration of such Senior Debt.
In the event of any such defeasance and discharge of Debt Securities of such
series, Holders of Debt Securities of such series would be able to look only
to such trust fund for payment of principal of and any premium and any
interest on their Debt Securities until Maturity. (Section 4.6 of the Senior
Indenture; Section 4.3 of the Subordinated Indenture)
Defeasance of Certain Obligations
The Senior Indenture will provide that, if so specified with respect
to the Senior Debt Securities of any series, the Company may omit to comply
with the restrictive covenants described under "Covenants" above and any other
covenants applicable to such Senior Debt Securities which are subject to
covenant defeasance and any such omission shall not be an Event of Default
with respect to the Debt Securities of such series, upon the irrevocable
deposit with the Trustee, in trust, of money and/or U S. Government
Obligations which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount
sufficient to pay the principal of (and premium, if any), each installment of
interest on and any sinking fund payments on thereof in accordance with their
terms will provide money in an amount sufficient to pay the principal of (and
premium, if any), and each installment of principal (and premium, if any) and
interest on the Senior Debt Securities of such series on the Stated Maturity
of such payments or upon optional redemption and any mandatory sinking fund
payments or analogous payments on the Senior Debt Securities of such series on
the day on which such payments are due and payable in accordance with the
terms of the Senior Indenture and the Senior Debt Securities of such series.
(Sections 4.5 and 4.6 of the Senior Indenture) The obligations of the Company
under the Senior Indenture and the Senior Debt Securities of such series
other than with respect to such covenants shall remain in full force and
effect. (Section 4.5 of the Senior Indenture) Such a trust may be
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established only if, among other things, the Company has delivered to the
Trustee an Opinion of Counsel to the effect that (i) the Holders of the Senior
Debt Securities of such series will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit, defeasance and
discharge of certain obligations and will be subject to federal income tax on
the same amount and in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge had not occurred and (ii) the
Senior Debt Securities of such series, if then listed on any domestic or foreign
securities exchange, will not be delisted as a result of such deposit,
defeasance and discharge. (Section 4.6 of the Senior Indenture)
In the event the Company exercises its option to omit compliance with
the covenants described under "Covenants" above with respect to the Senior Debt
Securities of any series as described above and the Senior Debt Securities of
such series are declared due and payable because of the occurrence of any Event
of Default, then the amount of money and U.S. Government Obligations on deposit
with the Trustee will be sufficient to pay amounts due on the Senior Debt
Securities of such series at the time of their Stated Maturity but may not be
sufficient to pay amounts due on the Senior Debt Securities of such series at
the time of the acceleration resulting from such Default. The Company shall in
any event remain liable for such payments as provided in the Senior Indenture.
The Trustee must deliver or pay to the Company from time to time,
upon request of the Company, any amounts held by it with respect to any
Securities which, in the opinion of a nationally recognized firm of
independent public accountants, are in excess of the amount which would then
be required to be deposited to effect a satisfaction, discharge or defeasance,
as the case may be, with respect to such Securities.
Meetings, Modification and Waiver
Modifications and amendments of the Indentures may be made by the
Company and the Trustee under the applicable Indenture only with the consent of
the Holders of not less than a majority in principal amount of the Outstanding
Debt Securities issued under the applicable Indenture and affected by such
modification or amendment unless a greater percentage of such principal amount
is specified in the applicable Prospectus Supplement; provided, however, that no
such modification or amendment may, without the consent of each Holder of such
Outstanding Debt Security affected thereby, (a) change the Stated Maturity of
the principal of, or any installment of principal of or interest on, any such
Debt Security, (b) reduce the principal amount of (and premium, if any) or
interest on, any such Debt Security, (c) change any obligation of the Company to
pay additional amounts, (d) reduce the amount of principal of an Original Issue
Discount Security or any other Debt Security payable upon acceleration of the
maturity thereof, (e) change the coin or currency in which any Debt Security or
any premium or interest thereon is payable, (f) impair the right to institute
suit for the enforcement of any payment on or with respect to any such Debt
Security, (g) adversely change the right to convert or exchange, including
decreasing the conversion rate or increasing the conversion price of, such Debt
Security (if applicable), (h) in the case of the Subordinated Indenture, modify
the subordination provisions in a manner adverse to the Holders of the
Subordinated Debt Securities, (i) reduce the percentage in principal amount of
Outstanding Debt Securities
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of any series, the consent of whose Holders is required for modification or
amendment of the applicable Indenture or for waiver of compliance with certain
provisions of the applicable Indenture or for waiver of certain defaults, (j)
reduce the requirements contained in the applicable Indenture for quorum or
voting, (k) change any obligations of the Company to maintain an office or
agency in the places and for the purposes required by the Indentures, or (l)
modify any of the above provisions. (Section 9.2)
The Holders of at least a majority in principal amount of the
Outstanding Debt Securities of each series may, on behalf of the Holders of all
the Debt Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the applicable
Indenture and, if applicable, such Debt Securities, unless a greater percentage
of such principal amount is specified in the applicable Prospectus Supplement.
The Holders of not less than a majority in principal amount of the Outstanding
Debt Securities of each series may, on behalf of all Holders of Debt Securities
of that series and any coupons pertaining thereto, waive any past default under
the applicable Indenture, except a default (a) in the payment of principal of
(and premium, if any) or any interest on any Debt Security of such series, and
(b) in respect of a covenant or provision of the applicable Indenture and, if
applicable, such Debt Securities which cannot be modified or amended without the
consent of the Holder of each Outstanding Debt Security of such series affected.
(Section 5.13)
The applicable Indenture will provide that in determining whether the
Holders of the requisite principal amount of the Outstanding Debt Securities
have given any request, demand, authorization, direction, notice, consent or
waiver thereunder or are present at a meeting of Holders of Debt Securities for
quorum purposes, (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be Outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination upon
acceleration of the Maturity thereof, and (ii) the principal amount of a Debt
Security denominated in a foreign currency or currency units shall be the U.S.
dollar equivalent, determined on the date of original issuance of such Debt
Security, of the principal amount of such Debt Security or, in the case of an
Original Issue Discount Security, the U.S. dollar equivalent, determined on the
date of original issuance of such Debt Security, of the amount determined as
provided in (i) above.
The applicable Indenture will contain provisions for convening meetings
of the Holders of Debt Securities of a series if Debt Securities of that series
are issuable as Bearer Securities. A meeting may be called at any time by the
Trustee, and also, upon request, by the Company or the Holders of at least 25%
in principal amount of the Outstanding Debt Securities of such series, in any
such case upon notice given in accordance with "Notices" below. (Sections 13.1
and 13.2) Except for any consent which must be given by the Holder of each
Outstanding Debt Security affected thereby, as described above, any
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resolution presented at a meeting or adjourned meeting at which a quorum is
present may be adopted by the affirmative vote of the Holders of a majority in
principal amount of the Outstanding Debt Securities of that series; provided,
however, that, except for any consent which must be given by the Holder of
each Outstanding Debt Security affected thereby, as described above, any
resolution with respect to any consent or waiver which may be given by the
Holders of not less than a majority in principal amount of the Outstanding
Debt Securities of a series may be adopted at a meeting or an adjourned
meeting at which a quorum is present only by the affirmative vote of a
majority in principal amount of the Outstanding Debt Securities of that
series; and provided, further, that, except for any consent which must be
given by the Holder of each Outstanding Debt Security affected thereby, as
described above, any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action which may be
made, given or taken by the Holders of a specified percentage, which is less
than or greater than a majority in principal amount of the Outstanding Debt
Securities of a series may be adopted at a meeting or adjourned meeting duly
reconvened at which a quorum is present by the affirmative vote of the Holders
of such specified percentage in the principal amount of the Outstanding Debt
Securities of that series. Any resolution passed or decision taken at any
meeting of Holders of Debt Securities of any series duly held in accordance
with the applicable Indenture will be binding on all Holders of Debt
Securities of that series and the related coupons. The quorum at any meeting
called to adopt a resolution or with respect to a consent or waiver which may
be given by the Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of a series, and at any reconvened meeting, will
be persons holding or representing a majority in principal amount of the
Outstanding Debt Securities of a series. (Section 13.4)
Notices
Except as otherwise provided in the applicable Indenture, notices to
Holders of Bearer Securities will be given by publication at least twice in a
daily newspaper in The City of New York and in such other city or cities as may
be specified in such Debt Securities Notices to Holders of Registered Securities
will be given by mail to the address of such Holders as they appear in the
Security Register. (Section 1.6)
Title
Title to any temporary global Debt Security, any Bearer Securities
(including Bearer Securities in permanent global form) and any coupons
appertaining thereto will pass by delivery. The Company, the Trustee and any
agent of the Company or the Trustee may treat the bearer of any Bearer Security
and the bearer of any coupon and the registered owner of any Registered Security
as the absolute owner thereof
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(whether or not such Debt Security or coupon shall be overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all other purposes. (Section 3.8)
Replacement of Debt Securities and Coupons
Any mutilated Debt Security or a Debt Security with a mutilated coupon
appertaining thereto will be replaced by the Company at the expense of the
Holder upon surrender of such Debt Security to the Trustee. Debt Securities or
coupons that became destroyed, stolen or lost will be replaced by the Company at
the expense of the Holder upon delivery of the Trustee of the Debt Security and
coupons or evidence of the destruction, loss or theft thereof satisfactory to
the Company and the Trustee; in the case of any coupon which becomes destroyed,
stolen or lost, such coupon will be replaced by issuance of a new Debt Security
in exchange for the Debt Security to which such coupon appertains. In the case
of a destroyed, lost or stolen Debt Security or coupon, an indemnity
satisfactory to the Trustee and the Company may be required at the expense of
the Holder of such Debt Security or coupon before a replacement Debt Security
will be issued.
(Section 3.6)
Governing Law
The Indentures, the Debt Securities and the coupons will be governed
by, and construed in accordance with, the laws of the State of New York without
regard to principles of conflicts of laws. (Section 1.13)
Regarding the Trustee
The Indentures contain limitations on the right of the Trustee, as a
creditor of the Company, to obtain payment of claims in certain cases or to
realize on certain property received in respect of any such claim as security or
otherwise. (Section 6.10) In addition, the Trustee may be deemed to have a
conflicting interest and may be required to resign as Trustee if at the time of
a default under one of the Indentures it is a creditor of the Company. (Section
6.8) The Company may from time to time maintain deposit accounts and conduct its
banking transactions with a Trustee in the ordinary course of business. (Section
6.3)
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 250,000,000
shares of common stock, $.10 par value per share (the "Common Stock"), and
2,000,000 shares of preferred stock, $5.00 par value (the "Preferred Stock").
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At March 31, 1995, there were outstanding (a) 56,900,891 shares of
Common Stock, excluding 8,130,028 shares held as Treasury shares, (b) employee
stock options to purchase an aggregate of approximately 13,791,717 shares of
Common Stock, and (c) 177,400 shares of Series A Convertible Preferred Stock
(Dividend Enhanced Convertible Securities, referred to as the "DECS"),
represented by 8,870,000 Depositary Shares (the "Depositary Shares"), each
Depositary Share representing a 1/50 interest in a share of the DECS. (See
"Preferred Stock Outstanding", below).
DESCRIPTION OF PREFERRED STOCK
The following summary contains a description of certain general terms
of the Company's Preferred Stock to which any Prospectus Supplement may relate.
Certain terms of any series of Preferred Stock offered by any Prospectus
Supplement will be described in the Prospectus Supplement relating thereto. If
so indicated in the Prospectus Supplement, the terms of any series may differ
from the terms set forth below. The description of certain provisions of the
Company's Preferred Stock does not purport to be complete and is subject to and
qualified in its entirety by reference to the provisions of the Company's
Certificate of Incorporation, and the Certificate of Designation (the
"Certificate of Designation") relating to each particular series of Preferred
Stock which will be filed or incorporated by reference, as the case may be, as
an exhibit to the Registration Statement of which this Prospectus is a part at
or prior to the time of the issuance of such Preferred Stock.
General
Under the Company's Certificate of Incorporation, the Board of
Directors of the Company is authorized, without further stockholder action, to
provide for the issuance of up to 2,000,000 shares of Preferred Stock, of which
177,400 have been issued. (See "Preferred Stock Outstanding") The Preferred
Stock may be issued in one or more series, with such designations of titles;
dividend rates; any redemption provisions; special or relative rights in the
event of liquidation, dissolution, distribution or winding up of the Company;
any sinking fund provisions; any conversion provisions; any voting rights
thereof; and any other preferences, privileges, powers, rights, qualifications,
limitations and restrictions, as shall be set forth as and when established by
the Board of Directors of the Company. The shares of any series of Preferred
Stock will be, when issued, fully paid and non-assessable and holders thereof
will have no preemptive rights in connection therewith.
Rank
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Any series of Preferred Stock will, with respect to rights on
liquidation, winding up and dissolution, rank (i) senior to all classes of
Common Stock and to all equity securities issued by the Company, the terms of
which specifically provide that such equity securities will rank junior to such
series of Preferred Stock; (ii) on a parity with all equity securities issued by
the Company, the terms of which specifically provide that such equity securities
will rank on a parity with such series of Preferred Stock (see "Preferred Stock
Outstanding"); (iii) junior to all equity securities issued by the Company, the
terms of which specifically provide that such equity securities will rank senior
to such series of Preferred Stock. In addition, any series of Preferred Stock
will, with respect to dividend rights, rank (i) senior to all equity securities
issued by the Company, the terms of which specifically provide that such equity
securities will rank junior to such series of Preferred Stock and, to the extent
provided in the applicable Certificate of Designation, to Common Stock, (ii) on
a parity with all equity securities issued by the Company, the terms of which
specifically provide that such equity securities will rank on a parity with such
series of Preferred Stock and, to the extent provided in the applicable
Certificate of Designation, to Common Stock, and (iii) junior to all equity
securities issued by the Company, the terms of which specifically provide that
such equity securities will rank senior to such series of Preferred Stock. As
used in any Certificate of Designation for these purposes, the term "equity
securities" will not include debt securities convertible into or exchangeable
for equity securities.
Dividends
Holders of each series of Preferred Stock will be entitled to receive,
when, as and if declared by the Board of Directors of the Company out of funds
legally available therefor, cash dividends at such rates and on such dates as
are set forth in the Prospectus Supplement relating to such series of Preferred
Stock. Such rate may be fixed or variable or both. Dividends will be payable to
holders of record of Preferred Stock as they appear on the books of the Company
(or, if applicable, the records of the Depositary referred to below under
"Description of Depositary Shares") on such record dates as shall be fixed by
the Board of Directors. Dividends on any series of Preferred Stock may be
cumulative or noncumulative.
No full dividends may be declared or paid on funds set apart for the
payment of dividends on any series of Preferred Stock unless dividends shall
have been paid or set apart for such payment on equity securities ranking on a
parity with respect to dividends with such series of Preferred Stock. If full
dividends are not so paid, such series of Preferred Stock shall share dividends
pro rata with such other equity securities.
Conversion and Exchange
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The Prospectus Supplement for any series of Preferred Stock will state
the terms, if any, on which shares of that series are convertible into shares of
another series of Preferred Stock or Common Stock or exchangeable for another
series of Preferred Stock, Common Stock or Debt Securities of the Company. The
Common Stock of the Company is described below under "Description of Common
Stock."
Redemption
A series of Preferred Stock may be redeemable at any time, in whole or
in part, at the option of the Company or the holder thereof and may be subject
to mandatory redemption pursuant to a sinking fund or otherwise upon terms and
at the redemption prices set forth in the Prospectus Supplement relating to such
series.
In the event of partial redemptions of Preferred Stock, whether by
mandatory or optional redemption, the shares to be redeemed will be determined
by lot or pro rata, as may be determined by the Board of Directors of the
Company, or by any other method determined to be equitable by the Board of
Directors.
On and after a redemption date, unless the Company defaults in the
payment of the redemption price, dividends will cease to accrue on shares of
Preferred Stock called for redemption and all rights of holders of such shares
will terminate except for the right to receive the redemption price.
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or winding
up of the Company, holders of each series of Preferred Stock will be entitled to
receive out of assets of the Company available for distribution to shareholders,
before any distribution is made on any securities ranking junior with respect to
liquidation, including Common Stock, distributions upon liquidation in the
amount set forth in the Prospectus Supplement relating to such series of
Preferred Stock, plus an amount equal to any accrued and unpaid dividends. If,
upon any voluntary or involuntary liquidation, dissolution or winding up of the
Company, the amounts payable with respect to the Preferred Stock of any series
and any other securities ranking on a parity with respect to liquidation rights
are not paid in full, the holders of the Preferred Stock of such series and such
other securities will share ratably in any such distribution of assets of the
Company in proportion to the full liquidation preferences to which each is
entitled. After payment of the
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full amount of the liquidation preference to which they are entitled, the
holders of such series of Preferred Stock will not be entitled to any further
participation in any distribution of assets of the Company.
Voting Rights
Except as set forth in the Prospectus Supplement relating to a
particular series of Preferred Stock or except as expressly required by
applicable law, the holders of shares of Preferred Stock will have no voting
rights.
Transfer Agent and Registrar
The transfer agent for each series of Preferred Stock will be described
in the applicable Prospectus Supplement.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below of certain provisions of the Deposit
Agreement (as defined below) and of the Depositary Shares and Depositary
Receipts (as defined below) does not purport to be complete and is subject to
and qualified in its entirety by reference to the forms of Deposit Agreement and
Depositary Receipt relating to the Preferred Stock, which will be filed or
incorporated by reference, as the case may be, as exhibits to the Registration
Statement of which this Prospectus is a part.
General
The Company may, at its option, elect to offer fractional shares of
Preferred Stock, rather than full shares of Preferred Stock. In such event, the
Company will issue receipts for Depositary Shares, each of which will represent
a fraction (to be set forth in the Prospectus Supplement relating to a
particular series of Preferred Stock) of a share of a particular series of
Preferred Stock as described below.
The shares of any series of Preferred Stock represented by Depositary
Shares will be deposited under a Deposit Agreement (the "Deposit Agreement")
between the Company and a bank or trust company selected by the Company having
its principal office in the United States and having a combined capital and
surplus of at least $60,000,000 (the "Depositary"). Subject to the terms of the
Deposit Agreement, each owner of a Depositary Share will be entitled, in
proportion to the applicable fraction of a share of Preferred
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Stock represented by such Depositary Share, to all the rights and preferences of
the Preferred Stock represented thereby (including dividend, voting, redemption,
conversion and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement (the "Depositary Receipts"). Depositary
Receipts will be distributed to those persons purchasing the fractional shares
of Preferred Stock in accordance with the terms of the offering.
Pending the preparation of definitive Depositary Receipts, the
Depositary may, upon the written order of the Company or any holder of deposited
Preferred Stock, execute and deliver temporary Depositary Receipts which are
substantially identical to, and entitle the holders thereof to all the rights
pertaining to, the definitive Depositary Receipts. Depositary Receipts will be
prepared thereafter without unreasonable delay, and temporary Depositary
Receipts will be exchangeable for definitive Depositary Receipts.
Dividends and Other Distributions
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the deposited Preferred Stock to the record
holders of Depositary Shares relating to such Preferred Stock in proportion to
the numbers of such Depositary Shares owned by such holders.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto. If the Depositary determines that it is not feasible to make
such distribution, it may, with the approval of the Company, sell such property
and distribute the net proceeds from such sale to such holders.
Redemption of Stock
If a series of Preferred Stock represented by Depositary Shares is to
be redeemed, the Depositary Shares will be redeemed from the proceeds received
by the Depositary resulting from the redemption, in whole or in part, of such
series of Preferred Stock held by the Depositary. The Depositary Shares will be
redeemed by the Depositary at a price per Depositary Share equal to the
applicable fraction of the redemption price per share payable in respect of the
shares of Preferred Stock so redeemed. Whenever the Company redeems shares of
Preferred Stock held by the Depositary, the Depositary will redeem as of the
same date the number of Depositary Shares representing shares of Preferred Stock
so redeemed. If fewer than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected
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by the Depositary by lot or pro rata or by any other equitable method as may be
determined by the Depositary.
Withdrawal of Stock
Any holder of Depositary Shares may, upon surrender of the Depositary
Receipts at the corporate trust office of the Depositary (unless the related
Depositary Shares have previously been called for redemption), receive the
number of whole shares of the related series of Preferred Stock and any money or
other property represented by such Depositary Receipts. Holders of Depositary
Shares making such withdrawals will be entitled to receive whole shares of
Preferred Stock on the basis set forth in the related Prospectus Supplement for
such series of Preferred Stock, but holders of such whole shares of Preferred
Stock will not thereafter be entitled to deposit such Preferred Stock under the
Deposit Agreement or to receive Depositary Receipts therefor. If the Depositary
Shares surrendered by the holder in connection with such withdrawal exceed the
number of Depositary Shares that represent the number of whole shares of
Preferred Stock to be withdrawn, the Depositary will deliver to such holder at
the same time a new Depositary Receipt evidencing such excess number of
Depositary Shares.
Voting Deposited Preferred Stock
Upon receipt of notice of any meeting at which the holders of any
series of deported Preferred Stock are entitled to vote, the Depositary will
mail the information contained in such notice of meeting to the record holders
of the Depositary Shares relating to such series of Preferred Stock. Each record
holder of such Depositary Shares on the record date (which will be the same date
as the record date for the relevant series of Preferred Stock) will be entitled
to instruct the Depositary as to the exercise of the voting rights pertaining to
the amount of the Preferred Stock represented by such holder's Depositary
Shares. The Depositary will endeavor, insofar as practicable, to vote the amount
of such series of Preferred Stock represented by such Depositary Shares in
accordance with such instructions, and the Company will agree to take all
reasonable actions that may be deemed necessary by the Depositary in order to
enable the Depositary to do so. The Depositary will abstain from voting shares
of the Preferred Stock to the extent it does not receive specific instructions
from the holder of Depositary Shares representing such Preferred Stock.
Amendment and Termination of the Deposit Agreement
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The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any amendment which materially
and adversely alters the rights of the holders of the Depositary Shares
representing Preferred Stock of any series will not be effective unless such
amendment has been approved by the holders of at least the amount of the
Depositary Shares then outstanding representing the minimum amount of Preferred
Stock of such series necessary to approve any amendment that would materially
and adversely affect the rights of the holders of the Preferred Stock of such
series. Every holder of an outstanding Depositary Receipt at the time any such
amendment becomes effective, or any transferee of such holder, shall be deemed,
by continuing to hold such Depositary Receipt, or by reason of the acquisition
thereof, to consent and agree to such amendment and to be bound by the Deposit
Agreement as amended thereby. The Deposit Agreement automatically terminates if
(i) all outstanding Depositary Shares have been redeemed; or (ii) each share of
Preferred Stock has been converted into other preferred stock or Common Stock or
has been changed for debt securities; or (iii) there has been a final
distribution in respect of the Preferred Stock in connection with any
liquidation, dissolution or winding up of the Company and such distribution has
been distributed to the holders of Depositary Shares.
Charges of Depositary
The Company will pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary arrangements. The
Company will pay all charges of the Depositary in connection with the initial
deposit of the relevant series of Preferred Stock and any redemption of such
Preferred Stock. Holders of Depositary Receipts will pay other transfer and
other taxes and governmental charges and such other charges or expenses as are
expressly provided in the Deposit Agreement to be for their accounts.
Resignation and Removal of Depositary
The Depositary may resign at any time by delivering to the Company
notice of its intent to do so, and the Company may at any time remove the
Depositary, any such resignation or removal to take effect upon the appointment
of a successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $60,000,000.
Miscellaneous
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The Depositary will forward all reports and communications from the
Company which are delivered to the Depositary and which the Company is required
to furnish to the holders of the deposited Preferred Stock.
Neither the Depositary nor the Company will be liable if it is
prevented or delayed by law or any circumstances beyond its control in
performing its obligations under the Deposit Agreement. The obligations of the
Company and the Depositary under the Deposit Agreement will be limited to
performance in good faith of their duties thereunder and they will not be
obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares, Depositary Receipts or shares of Preferred Stock unless
satisfactory indemnity is furnished. They may rely upon written advice of
counsel or accountants, or upon information provided by holders of Depositary
Receipts or other persons believed to be competent and on documents believed to
be genuine.
PREFERRED STOCK OUTSTANDING
The Company has issued and outstanding 177,400 shares of DECS. The DECS
rank senior to the Common Stock as to the payment of dividends and distributions
of assets on liquidation, dissolution or winding up of the Company. Dividends on
the DECS are cumulative at the annual rate of $110.00 per share, or $2.20 per
Depositary Share, payable quarterly in arrears on January 1, April 1, July 1,
and October 1 in each year until mandatory conversion or redemption thereof, but
only if, when and as declared by the Board of Directors. Accrued and unpaid
dividends, whether or not declared, are payable out of funds legally available
therefor on April 1, 1998, the date of mandatory conversion of the DECS. At any
time after April 1, 1997, subject to certain limitations, the Company may redeem
each share of DECS for 50 shares of Common Stock together with an additional
cash dividend of up to $27.50 per share, declining ratably after April 1, 1997
to $0 by March 1, 1998. On April 1, 1998, each share of DECS outstanding will
automatically convert into 50 shares of Common Stock of the Company, subject to
adjustments in certain cases, and prior to this date each share may be converted
into 47.65 shares of Common Stock at any time at the option of the holder.
Each share of DECS has a liquidation preference equal to the sum of (i)
the per share price to investors ($1,127.50) and (ii) the amount of accrued and
unpaid dividends on each share of DECS.
As long as any shares of DECS are outstanding, no dividends (other than
dividends payable in shares of, or warrants, rights or options exercisable for
or convertible into shares of, any capital stock, including, without limitation,
the Common Stock, of the Company ranking junior to the shares of DECS
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as to the payment of dividends and the distribution of assets upon liquidation
(collectively "Junior Stock") and cash in lieu of fractional shares in
connection with any such dividend) will be paid or declared in cash or
otherwise, nor will any other distribution be made (other than a distribution
payable in Junior Stock and cash in lieu of fractional shares in connection with
any such distribution), on any Junior Stock unless: (i) full dividends on
Preferred Stock ranking on a parity with the DECS ("Parity Preferred Stock")
have been paid, or declared and set aside for payment, for all dividend periods
terminating on or prior to the date of such Junior Stock dividend or
distribution payment to the extent such dividends are cumulative; (ii) dividends
in full for the current quarterly dividend period have been paid, or declared
and set aside for payment, on all Parity Preferred Stock to the extent such
dividends are cumulative; (iii) the Company has paid or set aside all amounts,
if any, then or theretofore required to be paid or set aside for all purchase,
retirement, and sinking funds, if any, for any Parity Preferred Stock; and (iv)
the Company is not in default on any of its obligations to redeem any Parity
Preferred Stock.
In addition, as long as any shares of DECS are outstanding, no shares
of any Junior Stock may be purchased, redeemed or otherwise acquired by the
Company or any of its subsidiaries (except in connection with a reclassification
or exchange of any Junior Stock through the issuance of other Junior Stock (and
cash in lieu of fractional shares in connection therewith)) or the purchase,
redemption or other acquisition of any Junior Stock with any Junior Stock (and
cash in lieu of fractional shares in connection therewith), nor may any funds be
set aside or made available for any sinking fund for the purchase, redemption or
acquisition of any Junior Stock unless: (i) full dividends on Parity Preferred
Stock have been paid, or declared and set aside for payment, for all dividend
periods terminating on or prior to the date of such purchase, redemption,
acquisition, setting aside or making available to the extent such dividends are
cumulative; (ii) dividends in full for the current quarterly dividend period
have been paid, or declared and set aside for payment, on all Parity Preferred
Stock to the extent such dividends are cumulative; (iii) the Company has paid or
set aside all amounts, if any, then or theretofore required to be paid or set
aside for all purchase, retirement, and sinking funds, if any, for any Parity
Preferred Stock; and (iv) the Company is not in default on any of its
obligations to redeem any Parity Preferred Stock.
Subject to the provisions described above, such dividends or other
distributions (payable in cash, property, or Junior Stock) as may be determined
by the Board of Directors may be declared and paid on shares of any Junior Stock
from time to time and Junior Stock may be purchased, redeemed or otherwise
acquired by the Company or any of its subsidiaries, and funds may be set aside
or make available for that purpose, from time to time. In the event of the
declaration and payment of any such dividends or other distributions, the
holders of such Junior Stock will be entitled, to the exclusion of holders of
the Parity Preferred Stock, to share therein according to their respective
interests.
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As long as any shares of DECS are outstanding, dividends or other
distributions may not be declared or paid on any Parity Preferred Stock (other
than dividends or other distributions payable in Junior Stock and cash in lieu
of fractional shares in connection therewith), and the Company may not purchase,
redeem or otherwise acquire any Parity Preferred Stock (except with any Junior
Stock and cash in lieu of fractional shares in connection therewith and except
with the right, subject to clause (b) of this paragraph and any similar
requirement of any other Preferred Stock, to receive accrued and unpaid
dividends), unless either: (a)(i) full dividends on Parity Preferred Stock have
been paid, or declared and set aside for payment, for all dividend periods
terminating on or prior to the date of such Parity Preferred Stock dividend,
distribution, redemption, purchase or acquisition payment to the extent such
dividends are cumulative; (ii) dividends in full for the current quarterly
dividend period have been paid, or declared and set aside for payment, on all
Parity Preferred Stock to the extent such dividends are cumulative; (iii) the
Company has paid or set aside all amounts, if any, then or theretofore required
to be paid or set aside for all purchase, retirement, and sinking funds, if any,
for any Parity Preferred Stock; and (iv) the Company is not in default on any of
its obligations to redeem any Parity Preferred Stock; or (b) with respect to the
declaration and payment of dividends only, any such dividends are declared and
paid pro rata so that the amounts of any dividends declared and paid per share
of DECS and each other share of Parity Preferred Stock will in all cases bear to
each other the same ratio that accrued and unpaid dividends (including any
accumulation with respect to unpaid dividends for prior dividend periods, if
such dividends are cumulative) per share of DECS and such other share of Parity
Preferred Stock bear to each other.
DESCRIPTION OF COMMON STOCK
General
Subject to the rights of the holders of any shares of the Company's
Preferred Stock, including the DECS which may at the time be outstanding,
holders of Common Stock are entitled to receive such dividends as may be
declared from time to time by the Board of Directors out of funds legally
available therefor.
The holders of Common Stock are entitled to one vote per share on all
matters submitted to a vote of shareholders and do not have cumulative voting
rights. Holders of Common Stock are entitled to receive, upon any liquidation of
the Company, all remaining assets available for distribution to shareholders
after satisfaction of the Company's liabilities and the preferential rights of
any preferred stock that may then be issued and outstanding. The outstanding
shares of Common Stock are, and the shares
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offered hereby will be, fully paid and nonassessable. The holders of Common
Stock have no preemptive, conversion or redemption rights. The Common Stock is
listed on the New York Stock Exchange. The registrar and transfer agent for the
Common Stock is First Chicago Trust Company of New York.
Certain Provisions
The Board of Directors, generally without further action by the
shareholders, is authorized to issue Preferred Stock in one or more series and
to designate as to any such series the dividend rate, redemption prices,
preferences on liquidation or dissolution, conversion rights, voting rights and
any other preferences, and relative, participating, optional or other special
rights and qualifications, limitations and restrictions. The rights of the
holders of Common Stock will be subject to, and may be adversely affected by,
the rights of the holders of any Preferred Stock that may be issued in the
future. Issuance of a new series of Preferred Stock, while providing desirable
flexibility in connection with possible acquisitions or other corporate
purposes, could have the effect of making it more difficult for a third party to
acquire, or discouraging a third party from acquiring, a majority of the
outstanding voting stock of the Company.
Generally, Section 203 of the Delaware General Corporation Law
prohibits a publicly held Delaware corporation from engaging in any "business
combination" with any "interested stockholder" for a period of three years
following the date that such stockholder became an interested stockholder,
unless (i) prior to such date either the business combination or the transaction
which resulted in the stockholder being an interested stockholder is approved by
the board of directors of the corporation, (ii) upon consummation of the
transaction which resulted in the stockholder becoming an interested
stockholder, the interested stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction commenced, excluding
for purposes of determining the number of shares outstanding those shares owned
(A) by persons who are both directors and officers and (B) certain employee
stock plans, or (iii) on or after such date the business combination is approved
by the board and authorized at an annual or special meeting of stockholders, and
not by written consent, by the affirmative vote of at least 66 2/3% of the
outstanding voting stock which is not owned by the interested stockholder. A
"business combination" includes certain mergers, consolidations, asset sales,
transfers and other transactions resulting in a financial benefit to the
interested stockholder. An "interested stockholder" is a person who, together
with affiliates and associates, owns (or within the preceding three years, did
own) 15% or more of the corporation's voting stock.
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The overall effect of these provisions may be to deter or discourage
hostile takeover attempts by making it more difficult for a person who has
gained a substantial equity interest in the Company effectively to exercise
control.
DESCRIPTION OF WARRANTS
The Company may issue Warrants, including Warrants to purchase Debt
Securities ("Debt Warrants"), Preferred Stock, including Preferred Stock
represented by Depositary Shares ("Preferred Stock Warrants"), Common Stock
("Common Stock Warrants"), or any combination thereof. Warrants may be issued
independently or together with any Securities and may be attached to or separate
from such Securities. The Warrants are to be issued under warrant agreements
(each a "Warrant Agreement") to be entered into between the Company and a bank
or trust company, as warrant agent (the "Warrant Agent"), all as shall be set
forth in the Prospectus Supplement relating to Warrants being offered pursuant
thereto.
Debt Warrants
The applicable Prospectus Supplement will describe the terms of Debt
Warrants offered thereby, the Warrant Agreement relating to such Debt Warrants
and the certificates representing such Debt Warrants, including the following:
(1) the title of such Debt Warrants; (2) the aggregate number of such Debt
Warrants; (3) the price or prices at which such Debt Warrants will be issued;
(4) the currency or currencies, including composite currencies or currency
units, in which the price of such Debt Warrants may be payable; (5) the
designation, aggregate principal amount and terms of the Debt Securities
purchasable upon exercise of such Debt Warrants, and the procedures and
conditions relating to the exercise of such Debt Warrants; (6) the designation
and terms of any related Debt Securities with which such Debt Warrants are
issued, and the number of such Debt Warrants issued with each such Debt
Security; (7) the currency or currencies, including composite currencies or
currency units, in which the principal of or any premium or interest on the Debt
Securities purchasable upon exercise of such Debt Warrants will be payable; (8)
the date, if any, on and after which such Debt Warrants and the related Debt
Securities will be separately transferable; (9) the principal amount of Debt
Securities purchasable upon exercise of each Debt Warrant, and the price at
which and the currency or currencies, including composite currencies or currency
units, in which such principal amount of Debt Securities may be purchased upon
such exercise; (10) the date on which the right to
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exercise such Debt Warrants will commence, and the date on which such right will
expire; (11) the maximum or minimum number of such Debt Warrants which may be
exercised at any time; (12) a discussion of any material federal income tax
considerations; and (13) any other terms of such Debt Warrants and terms,
procedures and limitations relating to the exercise of such Debt Warrants.
Certificates representing Debt Warrants will be exchangeable for new
certificates representing Debt Warrants of different denominations, and Debt
Warrants may be exercised at the corporate trust office of the Warrant Agent or
any other office indicated in the Prospectus Supplement. Prior to the exercise
of their Debt Warrants, holders of Debt Warrants will not have any of the rights
as holders of the Debt Securities purchasable upon such exercise and will not be
entitled to payment of principal of or any premium or interest on the Debt
Securities purchasable upon such exercise.
Preferred Stock Warrants
The applicable Prospectus Supplement will describe the terms of
Preferred Stock Warrants offered thereby, the Warrant Agreement relating to such
Preferred Stock Warrants and the certificates representing such Preferred Stock
Warrants, including the following: (1) the title of such Preferred Stock
Warrants; (2) the aggregate number of such Preferred Stock Warrants; (3) the
price or prices at which such Preferred Stock Warrants will be issued; (4) the
currency or currencies, including composite currencies or currency units, in
which the price of such Preferred Stock Warrants may be payable; (5) the
designation, number of shares and terms (including, among others, dividend,
liquidation, redemption and voting rights) of the Preferred Stock (including
Preferred Stock represented by Depositary Shares) purchasable upon exercise of
such Preferred Stock Warrants, and the procedures and conditions relating to the
exercise of such Preferred Stock Warrants; (6) the designation and terms of any
related Securities of the Company with which such Warrants are issued, and the
number of such Preferred Stock Warrants issued with each such Security; (7) the
date, if any, on and after which such Preferred Stock Warrants and the related
Securities will be separately transferable; (8) the maximum or minimum number of
Preferred Stock Warrants which may be exercised at any time; (9) if applicable,
a discussion of any material federal income tax considerations; and (10) any
other terms of such Preferred Stock Warrants, including terms, procedures and
limitations relating to the exchange and exercise of such Preferred Stock
Warrants.
Certificates representing Preferred Stock Warrants will be exchangeable
for new certificates representing Preferred Stock Warrants of different
denominations, and Preferred Stock Warrants may be exercised at the corporate
trust office of the Warrant Agent or any office indicated in the Prospectus
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Supplement. Prior to the exercise of their Preferred Stock Warrants, holders of
such Preferred Stock Warrants will not have any of the rights as holders of the
Preferred Stock purchasable upon such exercise and will not be entitled to any
dividend payments, liquidation premiums or voting rights of the Preferred Stock
(including Preferred Stock represented by Depositary Shares) purchasable upon
such exercise.
Common Stock Warrants
The applicable Prospectus Supplement will describe the terms of any
Common Stock Warrants, the Warrant Agreement relating to such Common Stock
Warrants and the certificates representing such Common Stock Warrants in respect
of which this Prospectus is being delivered which may include: (1) the title of
such Common Stock Warrants; (2) the aggregate number of such Common Stock
Warrants; (3) the price or prices at which such Common Stock Warrants will be
issued; (4) the currency or currencies, including composite currencies or
currency units, in which the price of such Common Stock Warrants may be payable;
(5) if applicable, the designation and terms of any related Security with which
such Common Stock Warrants are issued, and the number of such Common Stock
Warrants issued with each such related Security; (6) if applicable, the date on
and after which such Common Stock Warrants and the related Security will be
separately transferable; (7) the date on which the right to exercise such Common
Stock Warrants will commence, and the date on which such right will expire; (8)
the maximum or minimum number of such Common Stock Warrants which may be
exercised at any time; (9) if applicable, a discussion of any material federal
income tax considerations; and (10) any other terms of such Common Stock
Warrants, including terms, procedures and limitations relating to the exchange
and exercise of such Common Stock Warrants.
Certificates representing Common Stock Warrants will be exchangeable
for new certificates representing Common Stock Warrants of different
denominations, and Common Stock Warrants may be exercised at the corporate trust
office of the Warrant Agent or any other office indicated in the Prospectus
Supplement. Prior to the exercise of their Common Stock Warrants, holders of
Common Stock Warrants will not have any of the rights as holders of Common Stock
purchasable upon such exercise and will not be entitled to dividend payments, if
any, or voting rights of the Common Stock purchasable upon such exercise.
Exercise of Warrants
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Each Warrant will entitle the holder to purchase for cash such
principal amount of Debt Securities or number of shares of Preferred Stock or
Common Stock at such exercise price as shall in each case be set forth in, or be
determinable as set forth in, the Prospectus Supplement relating to the Warrants
offered thereby. Warrants may be exercised at any time up to the close of
business on the expiration date set forth in the Prospectus Supplement relating
to the Warrants offered thereby. After the close of business on the expiration
date, unexercised Warrants will become void.
Warrants may be exercised as set forth in the Prospectus Supplement
relating to the Warrants offered thereby. Upon receipt of payment and the
certificate representing the Warrant properly completed and duly executed at the
corporate trust office of the Warrant Agent or any other office indicated in the
Prospectus Supplement, the Company will, as soon as practicable, forward the
Securities purchasable upon such exercise. If less than all of the Warrants
represented by such certificate are exercised, a new certificate will be issued
for the remaining Warrants.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax laws and regulations,
Bearer Securities (including Debt Securities that are exchangeable for Bearer
Securities and Debt Securities in permanent global form that are either Bearer
Securities or exchangeable for Bearer Securities) may not be offered, sold,
resold or delivered in connection with their original issuance in the United
States or to United States persons (each as defined below) except as otherwise
permitted by Treasury Regulation Section 1.163-5(c)(2)(i)(D) including offers
and sales to offices located outside the United States of United States
financial institutions (as defined in Treasury Regulation Section
1.165-12(c)(1)(v)) which agree in writing to comply with the requirements of
Section 165(j)(3)(A),(B) or (C) of the Code, as defined below, and the
regulations thereunder, and any underwriters, agents and dealers participating
in the offering of Debt Securities must agree in writing that they will not
offer, sell or resell any Bearer Securities to persons within the United States
or to United States persons (except as described above) nor deliver Bearer
Securities within the United States. In addition, any such underwriters, agents
and dealers must represent in writing that they have in effect, in connection
with the offer and sale of the Debt Securities, procedures reasonably designed
to ensure that their employees or agents who are directly engaged in selling the
Debt Securities are aware that Bearer Securities cannot be offered or sold to a
person who is within the United States or is a United States person except as
otherwise permitted by Treasury Regulation Section 1.163-5(c)(2)(i)(D).
Furthermore, the owner of the obligation (or the financial institution or
clearing organization through which the owner holds the obligation) must certify
to the Company that the owner is not a United States Person. Bearer Securities
and any coupons attached hereto will bear the following legend: "Any United
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States person who holds this obligation will be subject to limitations under the
United States income tax laws, including the limitations provided in Sections
165(j) and 1287(a) of the United States Internal Revenue Code." Purchasers of
Bearer Securities may be affected by certain limitations under United States tax
laws. The applicable Prospectus Supplement or Prospectus Supplements will
describe such limitations for any Bearer Securities relating thereto.
As used herein, "United States person" means (i) an individual who is,
for United States Federal income tax purposes, a citizen or resident of the
United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof, or (iii) an estate or trust the income of which is subject
to United States Federal income taxation regardless of its source, and "United
States" means the United States of America (including the States and the
District of Columbia), its territories and its possessions.
PLAN OF DISTRIBUTION
The Company may sell Securities to or through underwriters or dealers,
directly to other purchasers, or through agents. The Prospectus Supplement with
respect to the Securities will set forth the terms of the offering of the
Securities, including the name or names of any underwriters, dealers or agents,
the price of the offered Securities and the net proceeds to the Company from
such sale, any delayed delivery arrangements, any underwriting discounts or
other items constituting underwriters' compensation, any discounts or
concessions allowed or reallowed or paid to dealers and any securities exchanges
on which the Securities may be listed.
If underwriters are used in the sale, the Securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
price or at varying prices determined at the time of sale. The underwriter or
underwriters with respect to a particular underwritten offering of Securities
will be named in the Prospectus Supplement relating to such offering, and if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover of such Prospectus Supplement. Unless otherwise set forth
in the Prospectus Supplement, the obligations of the underwriters or agents to
purchase the Securities will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all the Securities if any are
purchased. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
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If a dealer is utilized in the sale of any Securities in respect of
which this Prospectus is delivered, the Company will sell such Securities to the
dealer, as principal. The dealer may then resell such Securities to the public
at varying prices to be determined by such dealer at the time of resale. The
name of the dealer and the terms of the transaction will be set forth in the
Prospectus Supplement relating thereto.
Securities may be sold directly by the Company to one or more
institutional purchasers, or through agents designated by the Company from time
to time, at a fixed price or prices, which may be changed, or at varying prices
determined at time of sale. Any agent involved in the offer or sale of the
Securities will be named, and any commissions payable by the Company to such
agent will be set forth, in the Prospectus Supplement relating thereto. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be acting
on a best efforts basis for the period of its appointment.
In connection with the sale of the Securities, underwriters or agents
may receive compensation from the Company or from purchasers of Securities for
whom they may act as agents in the form of discounts, concessions, or
commissions. Underwriters, agents, and dealers participating in the distribution
of the Securities may be deemed to be underwriters, and any discounts or
commissions received by them from the Company and any profit on the resale of
the Securities by them may be deemed to be underwriting discounts or commissions
under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase Securities from the Company at the public offering
price set forth in such Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future.
Such contracts will be subject only to those conditions set forth in the
Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Each underwriter, dealer and agent participating in the distribution of
any Debt Securities which are issuable in bearer form will agree that it will
not offer, sell or deliver, directly or indirectly, Debt Securities in bearer
form in the United States or to United States persons except as otherwise
permitted by Treasury Regulation Section 1.163-5(c)(2)(i)(D). See "Limitations
on Issuance of Bearer Securities."
The Securities may not be offered or sold directly or indirectly in
Great Britain other than to persons whose ordinary business it is to buy or sell
shares or debentures (except in circumstances which do not constitute an offer
to the public within the meaning of the Companies Act of 1985), and this
Prospectus and any Prospectus Supplement or any other offering material relating
to the Securities may not
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be distributed in or from Great Britain other than to persons whose business
involves the acquisition and disposal, or the holding, of securities whether as
principal or as agent.
Each series of Securities will be a new issue with no established
trading market, other than the Common Stock which is listed on the New York
Stock Exchange. Any Common Stock sold pursuant to a Prospectus Supplement will
be listed on the New York Stock Exchange, subject to official notice of
issuance. Any underwriters to whom Securities are sold by the Company for public
offering and sale may make a market in such Securities, but such underwriters
will not be obligated to do so and may discontinue any market making at any time
without notice. No assurance can be given as to the liquidity of the trading
market for any Securities.
Agents, dealers, and underwriters may be entitled under agreements
entered into with the Company to indemnification by the Company against certain
civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments that such agents, dealers, or underwriters
may be required to make with respect thereto. Underwriters, dealers, or agents
and their associates may be customers of, engage in transactions with and
perform services for, the Company in the ordinary course of business.
LEGAL OPINIONS
The validity of the Securities will be passed upon Thomas R. Bremer,
Senior Vice President and General Counsel of the Company. Certain other legal
matters in connection with any offering of Securities will be passed upon for
the Company by Skadden, Arps, Slate, Meagher & Flom, counsel for the Company,
and certain legal matters will be passed upon for any underwriters or agents, by
Cravath, Swaine & Moore, counsel for such underwriters or agents.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 1994, and the Income Statement of the
Surgical Division of Century Medical, Inc. for the year ended March 31, 1995,
incorporated in this prospectus by reference from the Company's Current Report
on Form 8-K filed on July 10, 1995, have been audited, respectively, by Deloitte
& Touche LLP, and Deloitte Touche Tohmatsu, independent auditors, as stated in
their reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firms given upon their
authority as experts in accounting and auditing.
50
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Securities and Exchange Commission Registration Fee $ 68,966
Transfer Agents, Trustees and Depositary's
Fees and Expenses 15,000*
Printing and Engraving Fees and Expenses 50,000*
Accounting Fees and Expenses 50,000*
Blue Sky Fees and Expenses 25,000*
Legal Fees $ 50,000*
Rating Agency Fees 50,000*
Miscellaneous (including Listing
Fees, if applicable) 11,034*
------------
TOTAL $ 320,000*
*Estimated
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware Corporation Law empowers a corporation to
indemnify its directors and officers or former directors and officers and to
purchase insurance with respect to liability arising out of their capacity or
status as directors and officers. Such law provides further that the
indemnification permitted thereunder shall not be deemed exclusive of any other
rights to which the directors and officers may be entitled under a corporation's
Certificate of Incorporation, Bylaws, any agreement or otherwise.
Article Eight of the Company's Certificate of Incorporation, as
amended, provides that, to the fullest extent permitted by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, a director of
the Company shall not be liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director. Article XI of the Company's
By-laws provides for indemnification of officers and directors to the fullest
extent provided by law.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been advised that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
The Company has purchased certain liability insurance for its officers
and directors as permitted by Section 145(g) of the Delaware General Corporation
Law and has entered into indemnity agreements with certain directors and
officers providing indemnification in addition to that provided under the
Delaware General Corporation Law, as permitted by Section 145(f) of the Delaware
General Corporation Law.
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Item l6. Exhibits
The following is a list of all exhibits filed as a part of this
Registration Statement on Form S-3, including those incorporated herein by
reference.
Exhibit
Number Description of Exhibit
1(a) Form of Underwriting Agreement.*
4(a) Form of Indenture for Senior Debt Securities between United
States Surgical Corporation and Trustee, to be named.*
4(b) Form of Indenture for Subordinated Debt Securities between
United States Surgical Corporation and Trustee, to be named.*
4(c) The form or forms of Securities with respect to each
particular series of Securities registered hereunder will be
filed as an exhibit to a Current Report of the Registrant on
Form 8-K and incorporated herein by reference.
5 Opinion of Thomas R. Bremer.*
12(a) Statements re: Computation of Ratios of Earnings to Fixed
Charges and of Earnings to Combined Fixed Charges and
Preferred Stock Dividends.*
15 Letter re Unaudited Interim Financial Information.*
23(a) Consent of Deloitte & Touche LLP and Deloitte Touche Tohmatsu,
Independent Public Accountants.
23(b) Consent of Thomas R. Bremer (included in Exhibit 5).
24 Powers of Attorney.*
25(a) The Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of the Trustee for the Senior
Indenture will be filed as an exhibit to a Current Report of
the Registrant on Form 8-K and incorporated herein by
reference.
25(b) The Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of the Trustee for the
Subordinated Indenture will be filed as an exhibit to a
Current Report of the Registrant on Form 8-K and incorporated
herein by reference.
*Previously Filed.
Item 17. Undertakings
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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 the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement; notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
registration statement; (iii) To include any material information with respect
to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement' provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to section 13 or section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the 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 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 herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
53
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The undersigned Registrant hereby undertakes that (i) for purposes of
determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration statement as of
the time it was declared effective and (ii) for the purpose of determining any
liability under the Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
The undersigned Registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
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 provisions set forth in Item 15, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Norwalk, State of Connecticut, on July 11, 1995.
UNITED STATES SURGICAL CORPORATION
(Registrant)
By
/s/ Thomas R. Bremer
Senior Vice President and General Counsel
54
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Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signatures Title Date
Chairman of the Board, President July 11, 1995
Leon C. Hirsch* Chief Executive Officer and Director
(Principal Executive Officer)
Julie K. Blake* Director July 11, 1995
John A. Bogardus, Jr.* Director July 11, 1995
/s/ Thomas R. Bremer Director July 11, 1995
Turi Josefsen* Director July 11, 1995
Douglas L. King* Director July 11, 1995
William F. May* Director July 11, 1995
Marianne Scipione* Director July 11, 1995
55
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Howard M. Rosenkrantz* Senior Vice President, Finance and July 11, 1995
Chief Financial Officer and Director
(Principal Financial Officer)
John R. Silber* Director July 11, 1995
/s/ Joseph C. Scherpf Vice President and Controller July 11, 1995
(Principal Accounting Officer)
* By Power of Attorney
56
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 33-59729 of United States Surgical Corporation on
Form S-3 of our report dated January 24, 1995, except for Note C, as to which
the date is February 1, 1995 appearing in the Annual Report on Form 10-K of
United States Surgical Corporation for the year ended December 31, 1994 and of
our report dated May 25, 1995 appearing in Form 8-K of the Surgery Division
("SDV") of Century Medical, Inc. and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Stamford, Connecticut
/s/ Deloitte Touche
Tohmatsu
Deloitte Touche Tohmatsu
Tokyo, Japan
July 10, 1995
