<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 8, 1994
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
ZENITH ELECTRONICS CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 36-1996520
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
</TABLE>
1000 MILWAUKEE AVENUE
Glenview, Illinois 60025
708-391-7000
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
John Borst, Jr.
General Counsel
Zenith Electronics Corporation
1000 Milwaukee Avenue
Glenview, Illinois 60025
708-391-7000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------------
COPY TO:
Thomas A. Cole
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
reinvestment plans, check the following box. /X/
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE OFFERING PRICE FEE
<S> <C> <C> <C> <C>
Common Stock, $1.00 par value..................... 5,000,000 $11.6875(1) $58,437,500(1) $20,151
Common Stock Purchase Rights...................... 5,000,000(2) -- (2) -- (2) -- (2)
<FN>
(1) Estimated solely for the purpose of calculating the registration fee and
based upon the average of the high and low sale price of Common Stock of
the Registrant on the New York Stock Exchange on March 2, 1994.
(2) Rights are initially carried and traded with the Common Stock of the
Registrant. Value attributable to such Rights, if any, is reflected in the
market price of the Common Stock.
</TABLE>
--------------------------
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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PROSPECTUS
5,000,000 SHARES [LOGO]
ZENITH ELECTRONICS CORPORATION
COMMON STOCK
($1.00 PAR VALUE)
------------------------
Zenith Electronics Corporation ("Zenith" or the "Company") has registered
5,000,000 shares of its Common Stock, $1.00 par value (the "Common Stock"),
which may be offered by this Prospectus from time to time at prices and on terms
to be determined at the time of a sale or sales. The Common Stock may be sold on
a negotiated or competitive bid basis to or through underwriters, dealers or
agents designated from time to time. In addition, the Common Stock may be sold
by the Company to other purchasers directly or through agents. See "Plan of
Distribution."
Certain additional terms of the Common Stock in respect of which this Prospectus
is being delivered, including, where applicable, the names of the underwriters,
dealers or agents, the public offering price, the proceeds to the Company from
such sale, and any applicable commissions, discounts and other items
constituting compensation to such underwriters, dealers or agents, will (unless
otherwise set forth under "Plan of Distribution") be set forth in a Prospectus
Supplement (the "Prospectus Supplement").
The Common Stock is listed on the New York and Chicago Stock Exchanges under the
symbol "ZE" and is also registered on the Basel, Geneva and Zurich, Switzerland
Stock Exchanges. On March 7, 1994, the last reported sale price of the Common
Stock on the New York Stock Exchange was $11.375 per share. See "Price Range of
Common Stock."
SEE "INVESTMENT CONSIDERATIONS" FOR A DISCUSSION OF FACTORS THAT SHOULD BE
CONSIDERED BY INVESTORS BEFORE PURCHASING THE SHARES OF COMMON STOCK OFFERED
HEREBY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is March , 1994.
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT(S) IN CONNECTION WITH
THE OFFER MADE BY THIS PROSPECTUS AND PROSPECTUS SUPPLEMENT(S) AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY AGENT, UNDERWRITER OR DEALER. NEITHER THIS
PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY OR THEREBY
IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN
SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR THAT THE INFORMATION
CONTAINED OR INCORPORATED BY REFERENCE HEREIN OR THEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Certain information, as
of particular dates, concerning the Company's directors and officers, their
compensation, the principal holders of securities of the Company and any
material interests of such persons in transactions with the Company is discussed
in proxy statements of the Company distributed to stockholders of the Company
and filed with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549; and at the following regional offices of the Commission:
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and 13th Floor, Seven World Trade Center, New York, New York
10048. Copies of such materials may be obtained from the Public Reference Branch
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. In addition, such reports, proxy statements and other
information can be inspected at the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005 and the Chicago Stock Exchange, 440 South
LaSalle Street, Chicago, Illinois 60605.
The Company has filed with the Commission in Washington, D.C. a Registration
Statement on Form S-3 under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement and exhibits thereto, as permitted by the rules and regulations of the
Commission. For further information pertaining to the Company and the securities
offered hereby, reference is made to the Registration Statement and the exhibits
thereto, which may be examined without charge at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and copies thereof may be obtained from the Public Reference Branch of the
Commission upon payment at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents which have been filed by the Company with the
Commission are incorporated by reference in this Prospectus:
(a)the Company's Annual Report on Form 10-K for the year ended December
31, 1993; and
(b)the Company's Current Reports on Form 8-K, dated January 11, 1994,
January 13, 1994, January 31, 1994, February 4, 1994, February 8,
1994, February 10, 1994, February 15, 1994 and March 1, 1994.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of securities contemplated hereby shall be deemed to
be incorporated by reference in this Prospectus or any Prospectus Supplement and
to be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated by reference or deemed to be incorporated
by reference in this Prospectus or any Prospectus Supplement shall be deemed to
be modified or superseded for all purposes of this Prospectus or such Prospectus
Supplement to the extent that a statement contained herein, therein or in any
subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein or in such Prospectus Supplement 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 or any Prospectus Supplement.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been 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 in this Prospectus by reference (other than exhibits to
such documents, unless such exhibits are specifically incorporated by reference
therein). Requests for such copies should be directed to: David S. Levin,
Secretary, Zenith Electronics Corporation, 1000 Milwaukee Avenue, Glenview,
Illinois 60025; telephone number (708) 391-8048.
2
<PAGE>
THE COMPANY
Zenith was founded in 1918 and has been a leader in consumer electronics,
first in radio and later in monochrome and color television and other video
products.
Zenith operations involve a dominant industry segment, the design,
development, and manufacture of video products (including color television sets
and other consumer products) along with parts and accessories for such products.
These products along with purchased video cassette recorders are sold
principally to retail dealers and wholesale distributors in the United States,
Canada and other foreign countries. Independently owned and operated
distributors sell to retail dealers who, in turn, sell to consumers. The Company
sells directly to retail dealers, buying groups, private label customers and the
lodging, health care and rent-to-own industries.
Zenith's video products also include color picture tubes that are produced
for and sold to other manufacturers; video monitors which are primarily produced
for and sold to computer manufacturers; and cable and subscription television
products which are sold primarily to cable television operators. The Company
also makes power supplies and high-security electronic equipment.
During 1993, the monochrome video monitor business was sold and the Company
reached an agreement (subject to certain contingencies) to sell the power supply
business in early 1994.
The Company has reported substantial losses from its continuing operations
for each of the last nine years. These results reflect the cumulative effect of
frequent and significant color TV price reductions during the 1980s and, in more
recent years, also reflect recessionary conditions in the United States. In
addition, the Company has invested significant amounts in engineering and
research in recent years, which amounts have been expensed as incurred.
The Company, which is incorporated under the laws of the State of Delaware,
has its principal executive offices at 1000 Milwaukee Avenue, Glenview, Illinois
60025. Its telephone number is (708) 391-7000.
RECENT DEVELOPMENTS
The Company entered into a Fourth Amendment (the "Fourth Amendment") dated
as of January 28, 1994 to its Credit Agreement dated as of May 21, 1993 with
General Electric Capital Corporation, as Agent and Lender, The Bank of New York
Commercial Corporation, as Lender, and Congress Financial Corporation, as
Lender, as amended (the "Credit Agreement"). The Fourth Amendment revised
certain financial covenants (restrictions on capital expenditures, quarterly
minimum net worth test and quarterly ratio of liabilities to net worth
requirement) as of December 31, 1993. See "Credit Agreement." The Fourth
Amendment was negotiated as a result of the Company's December 15, 1993
announcement of its plan to take a fourth quarter 1993 special charge of
approximately $30 million, primarily for non-cash fixed assets and inventory
write downs, as well as re-engineering and severance costs. The special charge
related to the Company's plan to restructure certain product areas and re-
engineer its core consumer electronics and cable business. The restructuring
will affect computer monitors and magnetics, product areas in which the Company
is downsizing production capacity to be more in line with expected reduced
levels of business.
On January 13, 1994, the Company redeemed all $34.5 million outstanding
principal amount of its 12 1/8% Notes due January 15, 1995 at a redemption price
equal to par plus accrued interest.
In November 1993, the Company issued and sold $55 million aggregate
principal amount of its 8.5% Senior Subordinated Convertible Debentures due 2000
(the "Debentures due 2000") in two separate private placements pursuant to a
purchase agreement dated as of November 19, 1993, as amended (the "First
Agreement"). The Debentures due 2000 are convertible into shares of Common Stock
at the conversion price of $9.76 per share, subject to adjustment to prevent
dilution. In January
3
<PAGE>
1994, the Company issued and sold $12 million aggregate principal amount of its
8.5% Senior Subordinated Convertible Debentures due 2001 (the "Debentures due
2001" and, collectively with the Debentures due 2000, the "8.5% Debentures") in
another private placement pursuant to a purchase agreement dated as of January
11, 1994 (the "Second Agreement" and, collectively with the First Agreement, the
"Debenture Agreements"). The Debentures due 2001 are convertible into shares of
Common Stock at the conversion price of $10.00 per share, subject to adjustment
to prevent dilution. Based upon the initial conversion prices of the 8.5%
Debentures, 6,835,246 shares of Common Stock (approximately 19.5% of the shares
of Common Stock outstanding on January 13, 1994) would be issuable upon
conversion of all of the 8.5% Debentures. The net proceeds from the sales of the
8.5% Debentures were used to repay borrowings under the Credit Agreement and to
redeem the 12 1/8% Notes on January 13, 1994.
INVESTMENT CONSIDERATIONS
THE FOLLOWING FACTORS SHOULD BE CAREFULLY CONSIDERED IN EVALUATING AN
INVESTMENT IN ANY SHARES OF COMMON STOCK OFFERED HEREBY:
LOSSES FROM CONTINUING OPERATIONS. The Company has reported substantial
losses from its continuing operations for each of the last nine years. The color
television market in the United States has been under intense pricing pressure
for many years and color television prices have dropped sharply in the past
several years. Price competition continued into the first quarter of 1994, and
the Company selectively reduced color television prices to maintain its
historical competitive price position. This, along with other factors, has
resulted in substantially reduced profit margins for the Company. Although the
Company has benefitted from major cost-reduction programs, lower prices and
inflationary cost increases have more than offset such cost reduction benefits.
In recent years, operating results have also been adversely affected by
significant restructuring charges, start-up costs for new programs and costs
related to downsizing certain non-consumer businesses. The Company reported a
net loss of $36 million for the fourth quarter of 1993 (after accounting for a
special fourth quarter charge of $31 million (see "Recent Developments")) and a
net loss of $97 million for the full year 1993 despite record industry unit
volume. There can be no assurance that the Company's net operating losses will
not continue for the foreseeable future.
LIQUIDITY. Cash decreased from $56 million at December 31, 1990 to $21
million at December 31, 1993. (Due to the seasonal nature of the Company's
business, cash available peaks after year ends). The decrease consisted of $53
million of cash used by operating activities and $75 million (net) used to
purchase fixed assets. These uses of cash were offset by $93 million of cash
provided from financing activities which included the issuance of long-term debt
and sales of Common Stock. The Company's borrowings during this period have
increased, and the Company entered into its current Credit Agreement in May,
1993. The maximum commitment of funds available for borrowing under the Credit
Agreement is $90 million, but is limited by a defined borrowing base formula
related to eligible accounts and eligible inventory (each as defined in the
Credit Agreement). As of March 7, 1994, the Company had outstanding borrowings
under the Credit Agreement of approximately $1 million. The Credit Agreement
terminates on December 31, 1994 (unless extended by agreement of the lenders),
at which time all outstanding indebtedness thereunder would have to be
refinanced. There can be no assurance that the Credit Agreement will be extended
or refinanced. See "Credit Agreement." Although the Company believes that its
Credit Agreement, together with extended-term payables expected to be available
from a foreign supplier and its continuing efforts to obtain other financing
sources, including sales of Common Stock pursuant to this Prospectus, will be
adequate to meet its seasonal working capital and other needs in 1994, there can
be no assurance that the Company will not experience liquidity problems in the
future because of adverse market conditions or other unfavorable events. In such
event, the Company would be required to seek other sources of liquidity, if
available.
BUSINESS STRATEGY. The goals of the Company's business strategy are to
improve profitability, to introduce new products (such as home theater TVs), to
develop new products (such as digital cable products incorporating the
Company-developed transmission technology selected in February 1994 by
4
<PAGE>
the HDTV Grand Alliance and the FCC Advisory Committee review panel), and to
re-engineer operations. This strategy is expected to continue to involve
significant expenditures by the Company in 1994 and beyond. There can be no
assurance that the Company will achieve the goals of its business strategy,
including an expected improvement in financial results.
COMPETITION. The Company's major product areas, including the color
television market, are highly competitive. The Company's major competitors are
foreign-owned global giants, generally with greater worldwide television volume
and overall resources. In efforts to increase market share or achieve higher
production volumes, the Company's competitors have aggressively lowered their
selling prices in the past several years. Some of the Company's foreign
competitors have been capable of offsetting the effects of U.S. price reductions
through sales at higher margins in their home markets and through direct
governmental supports. There can be no assurance that such competition will not
continue to adversely affect the Company's performance or that the Company will
be able to maintain its market share in the face of such competition. Price
competition continued into the first quarter of 1994, and the Company
selectively reduced color television prices to maintain its historical
competitive price position.
DILUTION: CONVERSION OF CONVERTIBLE SECURITIES. The Debentures due 2000 and
the Debentures due 2001 are convertible into Common Stock at an initial
conversion price of $9.76 and $10.00 per share, respectively, subject in each
case to adjustment in certain events. If all of the 8.5% Debentures were
converted into Common Stock at the initial conversion prices, 6,835,246 shares
of Common Stock would be issued. No prediction can be made as to the effect, if
any, that the conversion of the 8.5% Debentures into Common Stock or the fact
that the 8.5% Debentures are outstanding and unconverted will have on the market
price of Common Stock prevailing from time to time. The conversion of 8.5%
Debentures into Common Stock could adversely affect prevailing market prices of
the Common Stock. The Company's 6 1/4% Convertible Subordinated Debentures due
2011 are convertible at $31.25 per share, subject to adjustment in certain
events.
Assuming no conversion of convertible securities, the net tangible book
value per share at December 31, 1993, after giving effect to the issuance of
shares of Common Stock during the period from December 31, 1993 and prior to
March 1, 1994 (see footnote 3 to "Capitalization") and the net proceeds
therefrom and prior to giving effect to any sales of Common Stock pursuant to
this Prospectus, was approximately $4.73. The net tangible book value per share
at December 31, 1993, after giving effect to the issuance of shares of Common
Stock during the period from December 31, 1993 and through March 1, 1994 and the
net proceeds therefrom and, assuming an average sale price of $11.375 per share
(the closing price of the Common Stock on the New York Stock Exchange on March
7, 1994) and $13.50 per share (the high sales price of the Common Stock on the
New York Stock Exchange in the preceding 12 months) for the shares of Common
Stock offered hereby and receipt by the Company of the estimated net proceeds of
the sale of all the shares of Common Stock offered hereby, is approximately
$5.48 and 5.71, respectively. The amount of increase in net tangible book value
per share attributable to the estimated cash payments to be made by purchasers
of Common Stock (assuming a price of $11.375 per share and $13.50 per share) is
approximately $.75 and $.98, respectively. The immediate dilution from the
assumed average sale price of $11.375 and $13.50 which would be absorbed by such
purchasers (assuming all shares of Common Stock offered hereby were sold at the
assumed prices) is approximately $5.90 and $7.79, respectively. These
calculations are based upon a range of assumed average sale prices which have
been chosen solely for the purpose of illustrating the potential dilutive effect
of the sale of shares of Common Stock offered hereby and which may or may not
reflect actual sales prices of the Common Stock made pursuant to this
Prospectus. The immediate dilution absorbed by purchasers at the time of such
sales will vary based upon, among other things, the purchase price paid by the
purchasers in such sales.
USE OF PROCEEDS
The Company's Credit Agreement requires that the net cash proceeds to the
Company from the sale of shares of Common Stock offered hereby be used first to
repay any borrowings and other
5
<PAGE>
amounts payable under the Credit Agreement. Such repayment would not reduce the
Company's ability to further borrow thereunder. As of March 7, 1994, outstanding
borrowings under the Credit Agreement were approximately $1 million and bore
interest at the rate of 7 3/4% per annum. See "Credit Agreement."
Unless otherwise specified in a Prospectus Supplement, any remaining net
proceeds will be used for reducing short-term borrowings, if any, for capital
expenditures and/or engineering and research expenses or for other general
corporate purposes. Pending such use, net proceeds not required to be used to
repay borrowings under the Credit Agreement may temporarily be invested in
short-term marketable securities.
CREDIT AGREEMENT
THE FOLLOWING IS A SUMMARY OF THE PRINCIPAL TERMS AND CONDITIONS OF THE
CREDIT AGREEMENT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE CREDIT
AGREEMENT, AS AMENDED, A COPY OF WHICH IS FILED AS AN EXHIBIT TO THE
REGISTRATION STATEMENT AND IS INCORPORATED BY REFERENCE HEREIN.
The Credit Agreement provides the Company with a credit facility having an
aggregate maximum commitment of $90 million but is limited by a defined
borrowing base formula related to eligible accounts and eligible inventory (each
as defined in the Credit Agreement). The Credit Agreement includes terms,
conditions, representations and warranties, covenants, indemnities and events of
default and other provisions which are customary in such agreements.
The Credit Agreement terminates on December 31, 1994 (unless extended by
agreement of the lenders), at which time all outstanding indebtedness thereunder
would have to be refinanced. In the event that the Company receives proceeds
from the issuance of certain debt or equity securities or from the sale of
certain material assets, such proceeds must be applied to prepay any outstanding
borrowings under the Credit Agreement. In the event of certain material asset
transactions, the Credit Agreement requires a partial reduction in the maximum
commitment of the lenders. See "Use of Proceeds."
The Credit Agreement interest rate is the Base Rate (as defined) plus 1 3/4%
per annum on the outstanding borrowings. Additionally, the Company pays a 1/2%
non-use fee on the unused portion of the credit facility. Loans under the Credit
Agreement are secured by accounts receivable, inventory, general intangibles,
trademarks and the tuning system patent license agreements of the Company and
certain of its domestic subsidiaries.
The Credit Agreement contains covenants that include, among other things,
requirements to maintain certain financial tests and ratios (including a minimum
net worth and a liabilities to net worth ratio), and certain restrictions and
limitations, including those on capital expenditures, specified dollar limits on
the amount of inventory for certain of the Company's products, changes in
control, payments of dividends, sales of assets, investments, additional
borrowings, mergers and purchases of stock and assets.
The Credit Agreement contains restrictive financial covenants that must be
maintained as of the end of each fiscal quarter, including a liabilities to net
worth ratio and a minimum net worth amount. The ratio of liabilities to net
worth and minimum net worth amount varies from quarter to quarter. The Fourth
Amendment to the Credit Agreement increased the allowed ratio of liabilities to
net worth as of December 31, 1993 from 2.29 to 1.0 to 3.70 to 1.0 and reduced
the required net worth as of December 31, 1993 from $178.0 million to $140.0
million. At December 31, 1993, the Company's actual ratio of liabilities to net
worth was 2.67 to 1.0 and actual net worth was $152.4 million. Also due to the
Fourth Amendment, at the end of each of the first three fiscal quarters of 1994,
the liabilities to net worth ratio is required to be maintained at various
levels ranging from a high of 4.95 to 1.0 to a low of 3.70 to 1.0, and minimum
net worth is required to be maintained at amounts ranging from a high of $120
million to a low of $101 million. See "Recent Developments."
The Credit Agreement prohibits dividend payments on Common Stock and any of
the Company's preferred stock, if issued. See "Dividend Policy."
6
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following consolidated results of operations data relating to the years
ended December 31, 1993, December 31, 1992 and December 31, 1991 and the
following consolidated balance sheet data at December 31, 1993 and December 31,
1992 are derived from and should be read in conjunction with the consolidated
financial statements, including the notes thereto, included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1993 and incorporated
by reference herein. The consolidated results of operations data relating to the
years ended December 31, 1990 and December 31, 1989 and the consolidated balance
sheet data at December 31, 1991, December 31, 1990 and December 31, 1989 are
derived from the Company's previously audited financial statements.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
1993(2) 1992(3) 1991 1990 1989
----------- ----------- ----------- ----------- -----------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS DATA:
Net sales............................... $ 1,228.2 $ 1,243.5 $ 1,321.6 $ 1,409.9 $ 1,548.9
----------- ----------- ----------- ----------- -----------
Cost of products sold................... 1,163.9 1,179.3 1,208.4 1,295.9 1,407.0
Selling, general and administrative..... 92.5 94.0 101.2 106.5 103.9
Engineering and research................ 47.8 55.4 54.1 55.9 51.4
Other operating expense (income), net... (25.2) (24.3) .5 (2.0) (2.7)
Restructuring and other charges......... 31.0 48.1 -- -- --
----------- ----------- ----------- ----------- -----------
Operating income (loss)................. (81.8) (109.0) (42.6) (46.4) (10.7)
Interest expense........................ (15.5) (13.7) (12.4) (12.6) (6.0)
Interest income......................... .3 .9 3.6 4.6 .8
Gain on sale of properties, and other,
net.................................... -- -- -- 1.1 1.1
----------- ----------- ----------- ----------- -----------
Income (loss) before income taxes....... (97.0) (121.8) (51.4) (53.3) (14.8)
Income taxes (credit)................... -- (15.9) .2 .9 .2
----------- ----------- ----------- ----------- -----------
Income (loss) from continuing
operations............................. (97.0) (105.9) (51.6) (54.2) (15.0)
Income (loss) from discontinued
operations(1).......................... -- -- -- (11.0) (51.4)
----------- ----------- ----------- ----------- -----------
Net income (loss)....................... $ (97.0) $ (105.9) $ (51.6) $ (65.2) $ (66.4)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
PER SHARE DATA:
Income (loss) from continuing
operations............................. $ (3.01) $ (3.59) $ (1.79) $ (2.02) $ (.56)
Income (loss) from discontinued
operations(1).......................... -- -- -- (.41) (1.92)
----------- ----------- ----------- ----------- -----------
Net income (loss) per share............. $ (3.01) $ (3.59) $ (1.79) $ (2.43) $ (2.48)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
BALANCE SHEET DATA (END OF PERIOD):
Total assets............................ $ 559.4 $ 578.6 $ 686.9 $ 722.7 $ 920.7
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
OTHER DATA (CONTINUING OPERATIONS):
Depreciation............................ $ 35.4 $ 37.7 $ 37.9 $ 38.8 $ 40.5
Capital additions, net.................. 25.7 25.7 23.9 30.8 32.9
Cash.................................... 20.8 5.8 36.3 56.3 175.7
Working capital......................... 158.6 170.6 254.3 283.8 333.1
Short-term debt......................... 34.5 10.1 -- -- 38.9
Long-term debt.......................... 170.0 149.5 149.5 151.1 150.9
Stockholders' equity.................... 152.4 210.1 308.8 345.9 404.5
<FN>
- ------------------------------
(1) On December 28, 1989, the Company sold its computer products business to
Groupe Bull and received a closing-date payment of $496.4 million in cash.
The 1990 results reflect an $11.0 million adjustment to the previously
recorded gain on such sale based upon the receipt of an additional, final
post-closing payment of $15.0 million.
(2) Includes $31.0 million of restructuring and other charges and $25.7
million of tuning system royalty income.
(3) Includes $48.1 million of restructuring and other charges, $26.0 million
of tuning system royalty income and $15.9 million of income tax credits.
</TABLE>
7
<PAGE>
CAPITALIZATION
The following table sets forth a summary of the short-term debt and
capitalization of the Company, on a consolidated basis at December 31, 1993.(1)
<TABLE>
<CAPTION>
DECEMBER
31,
1993
-------
(DOLLARS
IN
MILLIONS)
<S> <C>
SHORT-TERM DEBT:
Short-term debt........................................ $ --
Current portion of long-term debt(2)................... 34.5
-------
Total short-term debt.............................. $ 34.5
-------
-------
LONG-TERM DEBT:
6 1/4% Convertible Subordinated Debentures due 2011.... $115.0
8.5% Senior Subordinated Convertible Debentures due
2000.................................................. 55.0
-------
Total long-term debt............................... 170.0
-------
STOCKHOLDERS' EQUITY:
Preferred stock, $1 par value; 8,000,000 shares
authorized;
none outstanding...................................... --
Common stock, $1 par value; 100,000,000 shares
authorized;
35,909,617 shares issued(3)........................... 35.9
Additional paid-in capital............................. 205.1
Retained earnings (deficit)............................ (88.1)
Cost of 21,000 common shares in treasury............... (.5)
-------
Total stockholders' equity......................... 152.4
-------
Total long-term debt and stockholders' equity...... $322.4
-------
-------
<FN>
- ------------------------
(1) The table does not reflect (i) the issuance and sale by the Company of $12
million principal amount of 8.5% Debentures due 2001 and the use of the net
proceeds therefrom to repay borrowings under the Credit Agreement, (ii) the
redemption of $34.5 principal amount of the 12 1/8% Notes due 1995, and
(iii) the issuances and/or sales of Common Stock referred to in note (3)
below and the use of the net proceeds therefrom.
(2) The $34.5 million of long-term debt classified as current represents the
12 1/8% Notes due 1995 that were redeemed by the Company on January 13,
1994.
(3) Shares of Common Stock issued and outstanding as of December 31, 1993 do
not include, as of March 1, 1994, (i) 10,515,246 shares reserved for
conversion of the 8.5% Debentures and the 6 1/4% Convertible Subordinated
Debentures, (ii) 260,537 shares issued to, and 2,413,599 shares reserved
for sale to, respectively, directors, officers and key employees of the
Company under approved stock option plans, (iii) 19,864,477 shares reserved
for issuance under the Company's Stockholder Rights Plan (see "Description
of Capital Stock -- Stockholder Rights Plan") and (iv) approximately
3,579,800 shares sold by the Company through an agent by means of ordinary
broker's transactions on the New York Stock Exchange, the net proceeds of
which (approximately $34 million) were used to repay short-term borrowings,
if any, or for general corporate purposes. The Company has the ability to
sell up to 5,000,000 additional shares pursuant to this Prospectus.
</TABLE>
8
<PAGE>
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is listed on the New York and Chicago Stock
Exchanges. Set forth below are the high and low sale prices per share (as
reported on the New York Stock Exchange) for the fiscal quarters indicated.
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
1992:
First Quarter.......... 11 1/8 7 1/4
Second Quarter......... 9 3/8 6 3/4
Third Quarter.......... 8 6 1/8
Fourth Quarter......... 7 5
1993:
First Quarter.......... 8 3/8 5 7/8
Second Quarter......... 10 1/2 6 1/2
Third Quarter.......... 8 3/8 6 1/4
Fourth Quarter......... 8 1/8 6 1/4
1994:
First Quarter (through
March 7, 1994)........ 13 1/2 7
</TABLE>
The last reported sale price for the Common Stock on the New York Stock
Exchange on March 7, 1994 was $11.375 per share.
DIVIDEND POLICY
The Company has paid no cash dividends on its Common Stock since 1982 and
does not anticipate paying any in the foreseeable future. Dividends may be paid
on the Common Stock, when and if declared by the Company's Board of Directors,
out of funds legally available therefor. In general, the Credit Agreement
provides that the Company and its subsidiaries cannot pay dividends, make any
other distributions or redeem, purchase, prepay or otherwise acquire or retire
any class of stock of the Company or its subsidiaries and restricts dividend
payments on any of the Company's preferred stock, if issued. In addition, the
agreements under which the 8.5% Debentures were issued each provide that the
aggregate amount of the dividend payments, distributions or purchases or
redemptions of any class of capital stock of the Company or its subsidiaries
from and after November 19, 1993 cannot exceed the sum of (i) 80% of the
Company's cumulative consolidated operating net income (or if a loss, 100% of
such loss) plus (ii) the aggregate net proceeds received by the Company from
certain issuances of its capital stock (except redeemable stock) less the
aggregate amount of proceeds used to prepay, redeem, retire or otherwise acquire
securities subordinate in right of payment to the 8.5% Debentures.
DILUTION
The Debentures due 2000 and the Debentures due 2001 are convertible into
Common Stock at an initial conversion price of $9.76 and $10.00 per share,
respectively, subject in each case to adjustment in certain events. If all of
the 8.5% Debentures were converted into Common Stock at the initial conversion
prices, 6,835,246 shares of Common Stock would be issued. No prediction can be
made as to the effect, if any, that the conversion of the 8.5% Debentures into
Common Stock or the fact that the 8.5% Debentures are outstanding and
unconverted will have on the market price of Common Stock prevailing from time
to time. The conversion of 8.5% Debentures into Common Stock could adversely
affect prevailing market prices of the Common Stock. The Company's 6 1/4%
Convertible Subordinated Debentures due 2011 are convertible at $31.25 per
share, subject to adjustment in certain events.
Assuming no conversion of convertible securities, the net tangible book
value per share at December 31, 1993, after giving effect to the issuance of
shares of Common Stock during the period from December 31, 1993 and prior to
March 1, 1994 (see footnote 3 to "Capitalization") and the net proceeds
therefrom and prior to giving effect to any sales of Common Stock pursuant to
this Prospectus, was
9
<PAGE>
approximately $4.73. The net tangible book value per share at December 31, 1993,
after giving effect to the issuance of shares of Common Stock during the period
from December 31, 1993 and through March 1, 1994 and the net proceeds therefrom
and, assuming an average sale price of $11.375 per share (the closing price of
the Common Stock on the New York Stock Exchange on March 7, 1994) and $13.50 per
share (the high sales price of the Common Stock on the New York Stock Exchange
in the preceding 12 months) for the shares of Common Stock offered hereby and
receipt by the Company of the estimated net proceeds of the sale of all the
shares of Common Stock offered hereby, is approximately $5.48 and $5.71,
respectively. The amount of increase in net tangible book value per share
attributable to the estimated cash payments to be made by purchasers of Common
Stock (assuming a price of $11.375 per share and $13.50 per share) is
approximately $.75 and $.98, respectively. The immediate dilution from the
assumed average sale price of $11.375 and $13.50 which would be absorbed by such
purchasers (assuming all shares of Common Stock offered hereby were sold at the
assumed prices) is approximately $5.90 and $7.79, respectively. These
calculations are based upon a range of assumed average sale prices which have
been chosen solely for the purpose of illustrating the potential dilutive effect
of the sale of shares of Common Stock offered hereby and which may or may not
reflect actual sales prices of the Common Stock made pursuant to this
Prospectus. The immediate dilution absorbed by purchasers at the time of such
sales will vary based upon, among other things, the purchase price paid by the
purchasers in such sales.
DESCRIPTION OF CAPITAL STOCK
THE FOLLOWING SUMMARIES DO NOT PURPORT TO BE COMPLETE AND ARE SUBJECT TO,
AND ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO, THE FOLLOWING DOCUMENTS:
(I) THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED, (II) THE
COMPANY'S BY-LAWS, AS AMENDED TO DATE (THE "BY-LAWS"), AND (III) THE RIGHTS
AGREEMENT, AS AMENDED, BETWEEN THE COMPANY AND THE BANK OF NEW YORK, AS RIGHTS
AGENT (THE "RIGHTS AGREEMENT"). A COPY OF EACH OF THE RESTATED CERTIFICATE OF
INCORPORATION, BY-LAWS AND RIGHTS AGREEMENT IS FILED AS AN EXHIBIT TO THE
REGISTRATION STATEMENT AND IS INCORPORATED BY REFERENCE HEREIN.
The Company's Restated Certificate of Incorporation, as amended, authorizes
the issuance of 100,000,000 shares of Common Stock, par value $1.00 per share,
of which 39,728,954 shares were outstanding on March 1, 1994, and 8,000,000
shares of preferred stock, par value $1.00 per share (the "Preferred Stock"), of
which none is outstanding as of the date of this Prospectus.
PREFERRED STOCK
Under the Restated Certificate of Incorporation, the Board of Directors of
the Company is authorized, without the necessity of further action or
authorization by the stockholders (unless required in a specific case by
applicable law or regulations or stock exchange rules), to issue Preferred Stock
from time to time in one or more series and to determine all relevant terms of
each such series, including but not limited to the following: (a) the number of
shares constituting such series; (b) the dividend rates and priority, if any,
and whether the dividends would be cumulative and, if so, from what date or
dates; (c) whether the holders of the shares of such series would have full,
limited or no voting powers; (d) whether, and upon what terms, the shares of
such series would be convertible into, or exchangeable for, other securities;
(e) whether and upon what terms, the shares of such series would be redeemable;
(f) whether a sinking fund would be provided for the redemption of the shares of
such series and, if so, the terms thereof; and (g) the preference, if any, to
which shares of such series would be entitled in the event of voluntary or
involuntary liquidation of the Company. The Restated Certificate of
Incorporation, however, provides that, with respect to voting powers, holders of
a series of Preferred Stock (i) will not be entitled to more than the lesser of
(x) one vote per $100 of liquidation value or (y) one vote per share and (ii)
will not be entitled to a class vote (other than as required by law and other
than the limited right to elect two additional directors in the event of the
failure to pay in full dividends on any series of Preferred Stock for any six
quarterly dividend periods).
Even though the voting rights of any Preferred Stock that may be issued will
be limited, the issuance of Preferred Stock could be used to discourage attempts
to acquire control of the Company which the
10
<PAGE>
Board of Directors oppose. The Board of Directors has represented that it will
not authorize the Company to issue, without prior stockholder approval, any
series of Preferred Stock to any individual or group (i) for any defensive or
anti-takeover purpose, (ii) with features intended to make any attempted
acquisition of the Company more difficult or costly or (iii) for the purpose of
creating a block of voting power which has agreed to support the Board and
management on a controversial issue. This representation does not preclude the
Board from authorizing the issuance of a series of Preferred Stock in a public
offering.
COMMON STOCK
Holders of the Common Stock are entitled to one vote for each share held of
record, in person or by proxy, at all meetings of the stockholders and on all
propositions before such meetings. The Common Stock does not have cumulative
voting rights in the election of directors. Holders of the Common Stock have no
preemptive, subscription, redemption or conversion rights. All outstanding
shares of Common Stock are fully paid and nonassessable. In the event of
liquidation, dissolution or winding up of the affairs of the Company, the assets
remaining after provision for payment of creditors and after distribution in
full of the preferential amount to be distributed to the holders of shares of
any Preferred Stock, are distributable pro rata among holders of Common Stock.
The transfer agent and registrar of the Company's Common Stock is The Bank
of New York, 101 Barclay Street, New York, New York 10286.
STOCKHOLDER RIGHTS PLAN
Pursuant to a Stockholder Rights Plan adopted in 1986 and subsequently
amended, the Company distributed one common stock purchase right (collectively,
the "Rights") for each outstanding share of Common Stock and will issue a Right
with each share of Common Stock that subsequently becomes outstanding (including
shares of Common Stock offered hereby) unless the Board of Directors provides
otherwise at the time of issuance of such share. The Company will issue a Right
with each share of Common Stock offered hereby. Each Right will entitle the
holder thereof, until October 14, 1996 (or, if earlier, the redemption of the
Rights) to purchase one-half of one share of Common Stock at an exercise price
of $37.50, subject to certain antidilution adjustments. The Rights will be
represented by the Common Stock certificates and will not be exercisable, or
transferable apart from the Common Stock, until the earlier of (i) the tenth day
after the date (the "Stock Acquisition Date") of a public announcement that a
person or group of associated or affiliated persons (an "Acquiring Person") has
acquired beneficial ownership of 25% or more of the Common Stock or (ii) the
tenth day after the date of the commencement by any person or group of, or first
public announcement of the intent of any person or group to commence, a tender
or exchange offer, the consummation of which would result in such person or
group having beneficial ownership of 25% or more of the Common Stock (the
earlier of such days being referred to herein as the "Distribution Date"). The
Rights will at no time have any voting rights.
In the event that any person becomes an Acquiring Person (i.e. beneficial
owner of 25% or more of the Company's Common Stock), proper provision shall be
made so that each holder of a Right will thereafter have the right to receive
upon such exercise, that number of shares of Common Stock having a market value
of two times the exercise price of the Right. This provision is generally
referred to as the "flip-in" provision. Thus, a holder of a Right could purchase
shares of Common Stock having a market value of $75.00 upon payment of $37.50.
Notwithstanding the foregoing, following the occurrence of such event, all
Rights that are or (under certain circumstances) were beneficially owned by an
Acquiring Person will be null and void.
In the event that on or after the Stock Acquisition Date (i) the Company is
acquired in a merger or other business combination transaction or (ii) 50% or
more of its assets or earning power are sold (in one transaction or a series of
transactions), proper provision shall be made so that each holder of a Right
(other than an Acquiring Person) shall thereafter have the right to receive,
upon the exercise thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company which at the time of
such transaction would have a market value of two times the exercise price of
the Right. This provision is generally referred to as the "flip-over" provision.
11
<PAGE>
At any time until the Stock Acquisition Date, the Company may redeem the
Rights in whole, but not in part, at a price of $.05 per Right, subject to
adjustment (the "Redemption Price"). After the Stock Acquisition Date, the
Company's right of redemption will be reinstated if an Acquiring Person reduces
his beneficial ownership to 10% or less of the outstanding shares of Common
Stock in a transaction or series of transactions not involving the Company,
provided that there is no other Acquiring Person at the time.
In addition, if a bidder who does not beneficially own more than 1% (or who
owned more than 1% of the Common Stock on April 26, 1988 but does not acquire
any additional shares after such date and prior to the submission of the
proposal described below) of the Common Stock (and who has not within the past
year owned in excess of 1% (subject to the exception set forth above) of the
Common Stock and has not disclosed, or caused the disclosure of, an intention
which relates to or would result in the acquisition of influence of control of
the Company) proposes to acquire all of the Common Stock for cash at a price
which a nationally recognized investment banker selected by such bidder states
in writing is fair, and such bidder has obtained written financing commitments
(or otherwise has financing) and complies with certain procedural requirements,
then the Company, upon the request of the bidder, will hold a special
stockholders meeting to vote on a resolution requesting the Board of Directors
to accept the bidder's proposal.
If a majority of the outstanding shares entitled to vote on the proposal
vote in favor of such resolution, then for a period of 60 days after such
meeting the Rights will be automatically redeemed at the Redemption Price
immediately prior to the consummation of any tender offer for all of such shares
at a price per share in cash equal to or greater than the price offered by such
bidder; PROVIDED, HOWEVER, that no such redemption will be permitted or required
after any person has become an Acquiring Person.
Immediately upon the action of the Board of Directors of the Company
ordering redemption of the Rights or upon the effectiveness of the redemption
pursuant to the stockholder vote, the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price.
At any time after any person has become an Acquiring Person, the Board of
Directors of the Company may exchange the Rights (other than the Rights owned by
such person or group which have become void), in whole or in part, for Common
Stock at an exchange ratio of one-half of a share of Common Stock per Right
(subject to adjustment), PROVIDED, that no such exchange shall be effected
unless (i) the market value of one-half of a share of Common Stock exceeds the
Redemption Price per Right and (ii) the exchange has been approved by a majority
of the Disinterested Directors (as defined).
Prior to the Distribution Date, the Company may, without the approval of the
holders of Common Stock, amend any provision of the Rights Agreement, except
that no such amendment shall be made which reduces the Redemption Price,
shortens the "Final Expiration Date" (as defined), or increases the "Purchase
Price" (as defined) or the number of one-halves of a share of Common Stock for
which a Right is exercisable.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being acquired.
The Rights should not interfere with any merger or other business combination
approved by the Board of Directors of the Company since the Board of Directors
may, at its option, at any time prior to the Stock Acquisition Date redeem all
but not less than all the then outstanding Rights at the Redemption Price.
The Rights Agreement dated as of October 3, 1986 and as subsequently amended
between the Company and The Bank of New York, successor Rights Agent, specifies
the terms of the Rights, and the foregoing description of the Rights is
qualified in its entirety by reference to such Rights Agreement. A copy of the
Rights Agreement is available upon written request, which should be directed to
David S. Levin, Secretary, Zenith Electronics Corporation, 1000 Milwaukee
Avenue, Glenview, Illinois 60025.
12
<PAGE>
DELAWARE STATUTE
The Company is subject to Section 203 of the Delaware General Corporation
Law ("Section 203"), which restricts certain transactions and business
combinations between a corporation and an "Interested Stockholder" owning 15% or
more of the corporation's outstanding voting stock, for a period of three years
from the date the stockholder becomes an Interested Stockholder. Subject to
certain exceptions, unless the transaction is approved by the Board of Directors
and the holders of at least 66 2/3% of the outstanding voting stock of the
corporation (excluding shares held by the Interested Stockholder), Section 203
prohibits significant business transactions such as a merger with, disposition
of assets to or receipt of disproportionate financial benefits by the Interested
Stockholder, or any other transaction that would increase the Interested
Stockholder's proportionate ownership of any class or series of the
corporation's stock. The statutory ban does not apply if, upon consummation of
the transaction in which any person becomes an Interested Stockholder, the
Interested Stockholder owns at least 85% of the outstanding voting stock of the
corporation (excluding shares held by persons who are both directors and
officers or by certain employee stock plans).
PLAN OF DISTRIBUTION
The shares of Common Stock offered hereby may be sold by the Company in an
at-the-market equity offering(s) or on a negotiated or competitive bid basis
through underwriters or dealers or directly to other purchasers or through
agents. Any such underwriter, dealer or agent involved in the offer and sale of
the Common Stock and any applicable commissions, discounts and other items
constituting compensation to such underwriters, dealers or agents will, unless
otherwise set forth herein, be set forth in the Prospectus Supplement.
The distribution of the shares of Common Stock offered hereby may be
effected from time to time in one or more transactions at a fixed price or
prices, which may be changed, or at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices.
Unless otherwise indicated in the Prospectus Supplement, the obligations of
any underwriters to purchase an offering of Common Stock will be subject to
certain conditions precedent, and the underwriters will be obligated to purchase
all of the shares of Common Stock if any are purchased. If a dealer is utilized
in the sale of the Common Stock, the Company will sell the Common Stock to the
dealer as principal. The dealer may then resell the Common Stock to the public
at varying prices to be determined by the dealer at the time of sale.
If so indicated in the Prospectus Supplement, the Company may authorize
underwriters, dealers or other persons acting as the Company's agents to solicit
offers by certain institutions to purchase shares of Common Stock from the
Company pursuant to contracts providing for payment and delivery on a future
date. Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Company. The obligations of any purchaser
under any such contract will be subject to the condition that the purchase of
the shares of Common Stock shall not at the time of delivery be prohibited under
the laws of the jurisdiction to which such purchaser is subject. The
underwriters, dealers and such other persons will not have any responsibility in
respect of the validity or performance of such contracts. The Prospectus
Supplement will set forth the commission payable for solicitation of such
contracts.
Any underwriters, dealers and agents that participate in the distribution of
the Common Stock may be deemed to be underwriters as the term is defined in the
Securities Act, and any discounts or commissions received by them from the
Company and any profits on the resale of the Common Stock by them may be deemed
to be underwriting discounts and commissions under the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements entered into
with the Company, to indemnification against and contribution toward certain
civil liabilities, including liabilities under the Securities Act.
The Company and Kidder, Peabody & Co. Incorporated ("Kidder, Peabody")
intend to enter into a Sales Agency Agreement (the "Sales Agency Agreement"), a
copy of the form of which is filed as an exhibit to this Registration Statement
and is incorporated by reference herein. Subject to the terms and conditions of
the Sales Agency Agreement, the Company may issue and sell up to 2,000,000
shares of
13
<PAGE>
Common Stock from time to time through Kidder, Peabody, as exclusive sales agent
for the Company. Such sales, if any, will be made by means of ordinary brokers'
transactions on any national securities exchange, including the New York Stock
Exchange, on which such shares of Common Stock are listed. Such sales will be
effected during a series of one or more (up to a maximum of 52) pricing periods
(each a "Pricing Period"), each consisting of five consecutive calendar days in
duration. During any Pricing Period, no more than 60,000 shares ("Average Market
Shares") will be sold subject to the calculation of Net Proceeds as defined
below. The aggregate number of shares of Common Stock sold in all Pricing
Periods will not exceed 2,000,000. In addition, for each Pricing Period, an
Average Market Price (as hereinafter defined) will be computed. With respect to
any Pricing Period, "Average Market Price" shall equal the average of the
arithmetic mean of the daily high and low sale prices of the Common Stock
reported on the New York Stock Exchange for each trading day of such Pricing
Period.
The net proceeds to the Company with respect to sales of Average Market
Price Shares will equal 94.25 percent of the Average Market Price for each share
of Common Stock sold during the Pricing Period (subject to adjustment in certain
circumstances), plus Excess Proceeds (as defined below), if any. The
compensation to Kidder, Peabody for such sales in any Pricing Period will equal
the difference between the actual sale prices at which such sales are effected
and the net proceeds to the Company for such sales, but in no case will exceed
ten percent of such actual sales prices. To the extent that such actual sales
prices are less than the Average Market Price, the compensation to Kidder,
Peabody would be correspondingly reduced; to the extent that such actual sales
prices are greater than the Average Market Price, the compensation to Kidder,
Peabody will be correspondingly increased (but in no event will exceed ten
percent of the actual sales price). In the event that the average actual sales
price in any Pricing Period equals 94.25 percent of Average Market Price (or
less) for such Pricing Period, all of the proceeds from such sales would be for
the account of the Company and no compensation would be payable to Kidder,
Peabody. To the extent that Kidder, Peabody's compensation under the foregoing
formula would otherwise exceed ten percent of the actual sales prices in any
Pricing Period, the excess over ten percent will constitute additional net
proceeds to the Company (the "Excess Proceeds").
Any shares of Common Stock sold by Kidder, Peabody during the Pricing Period
on behalf of the Company other than Average Market Price Shares ("Additional
Shares") will be at a fixed commission rate of $0.125 per share for the first
200,000 Additional Shares and $0.25 per share for any Additional Shares in
excess of 200,000. In no event will the compensation to Kidder, Peabody be in
excess of any applicable National Association of Securities Dealers, Inc.
requirements.
Settlements of sales of Additional Shares will occur on the fifth business
day following the date on which such sales are made. Settlements for sales of
Average Market Price Shares will occur on a weekly basis on each Monday (or the
next succeeding business day if such Monday is not a business day) following the
end of each Pricing Period. Purchases of Common Stock from Kidder, Peabody as
sales agent for the Company will settle regular way on the national securities
exchange where such purchases were executed. Compensation to Kidder, Peabody
with respect to sales of Average Market Price Shares will be paid out of the
proceeds of such settlements. There is no arrangement for funds to be received
in an escrow, trust or similar arrangement.
After the end of each Pricing Period, the Company will file a Prospectus
Supplement under Rule 424(b)(3) promulgated under the Act, which Prospectus
Supplement will set forth the number of such shares of Common Stock sold through
Kidder, Peabody as sales agent (identifying separately the number of Average
Market Shares and any Additional Shares), the high and low prices at which
Average Market Shares were sold during such Pricing Period, the net proceeds to
the Company and the compensation payable by the Company to Kidder, Peabody with
respect to such sales pursuant to the formula set forth above. Unless otherwise
indicated in a Prospectus Supplement, Kidder, Peabody as sales agent will act on
a best efforts basis.
In connection with the sale of the Common Stock on behalf of the Company,
Kidder, Peabody may be deemed to be an "underwriter" within the meaning of the
Act, and the compensation of Kidder, Peabody may be deemed to be underwriting
commissions or discounts. The Company has agreed to provide indemnification and
contribution to Kidder, Peabody against certain civil liabilities, including
liabilities under the Securities Act of 1933, as amended. Kidder, Peabody may
engage in transactions with, or perform services for, the Company in the
ordinary course of business.
14
<PAGE>
The offering of Common Stock pursuant to the Sales Agency Agreement will
terminate upon the earlier of (i) the sale of all 2,000,000 shares of Common
Stock subject thereto and (ii) termination of the Sales Agency Agreement. The
Sales Agency Agreement may be terminated by the Company in its sole discretion
on the date occurring 60 days after the date of the Sales Agency Agreement and
every 60 days thereafter. The Company may also terminate the Sales Agency
Agreement at any time if the Company chooses to effect any offering of equity
securities or equity-related securities other than pursuant to the Sales Agency
Agreement.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby and certain legal
matters will be passed upon for the Company by John Borst, Jr., Vice
President-General Counsel of the Company or by David S. Levin, Esq., Secretary
of the Company, and by Sidley & Austin, Chicago, Illinois. As of December 31,
1993, Mr. Borst owned beneficially 4,925 shares of Common Stock (of which 2,021
shares are held in the Zenith Salaried Profit Sharing Retirement Plan (the
"Plan")) and held options to purchase 37,596 shares of Common Stock, of which
25,596 were exercisable as of such date. As of December 31, 1993, Mr. Levin
owned beneficially 2,434 shares of Common Stock (of which 1,540 shares are held
in the Plan) and held options to purchase 15,800 shares of Common Stock, of
which 13,300 were exercisable as of such date.
EXPERTS
The Consolidated Financial Statements and Schedules of Zenith Electronics
Corporation and Subsidiaries included in the Company's Annual Report on Form
10-K for the year ended December 31, 1993, which are incorporated herein by
reference in this Prospectus, have been audited by Arthur Andersen & Co.,
independent public accountants, as indicated in their reports with respect
thereto, and have been so incorporated in reliance upon the authority of said
firm as experts in accounting and auditing in giving said reports.
15
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered, other than underwriting discounts and commissions,
are estimated to be:
<TABLE>
<S> <C>
SEC Filing Fee................................................... $ 20,151
*NYSE Fee......................................................... 17,500
*Printing and Engraving........................................... 5,000
*Accounting Fees.................................................. 3,000
*Legal Fees and Expenses.......................................... 10,000
*Blue Sky Fees and Expenses....................................... 2,000
*Miscellaneous.................................................... 2,349
---------
Total......................................................... $ 60,000
---------
---------
<FN>
- ------------------------
*Estimated
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to Section 145 ("Section 145") of the Delaware General
Corporation Law of the State of Delaware (the "Delaware GCL") which provides for
indemnification of directors and officers in certain circumstances.
In accordance with Section 102(b)(7) of the Delaware GCL, the Company's
Restated Certificate of Incorporation, as amended, provides that directors shall
not be personally liable for monetary damages for breaches of their fiduciary
duty as directors except for (i) breaches of their duty of loyalty to the
Company or its stockholders, (ii) acts or omissions not in good faith or which
involve intentional misconduct or knowing violations of law, (iii) under Section
174 of the Delaware GCL (unlawful payment of dividends) or (iv) transactions
from which a director derives an improper personal benefit.
The Restated Certificate of Incorporation, as amended, of the Company
provides for indemnification of directors and officers to the full extent
provided by the Delaware GCL, as amended from time to time. It states that the
indemnification provided therein shall not be deemed exclusive. The Company may
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Company, or another corporation, partnership, joint
venture, trust or other enterprise against any expense, liability or loss,
whether or not the Company would have the power to indemnify him against such
expense, liability or loss, under the provisions of the Delaware GCL.
The Company has entered into agreements with each of its directors and
officers pursuant to which it has agreed to indemnify each such person under
certain circumstances.
Pursuant to Section 145 and the Certificate of Incorporation, the Company
maintains directors' and officers' liability insurance coverage.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
----------- ---------------------------------------------------------------------
<C> <S>
1 Form of Sales Agency Agreement between Company and Kidder, Peabody &
Co. Incorporated.*
4(a) Restated Certificate of Incorporation of the Company, as amended
(incorporated by reference to Exhibit 3(a) to the Company's Annual
Report on Form 10-K for the year ended December 31, 1992).
4(b) Certificate of Amendment to Restated Certificate of Incorporation of
the Company dated May 4, 1993 (incorporated by reference to Exhibit
4(l) of the Company's Quarterly Report on Form 10-Q quarter ended
April 3, 1993).
4(c) By-laws of the Company, as amended (incorporated by reference to
Exhibit 3 to the Company's Current Report on Form 8-K, dated January
31, 1994).
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
----------- ---------------------------------------------------------------------
<C> <S>
4(d) Specimen certificate representing Common Stock, $1.00 par value
(incorporated by reference to Exhibit 4(c) to the Company's
Registration Statement on Form S-3, Registration Number 33-15277).
4(e) Stockholder Rights Agreement, dated as of October 3, 1986
(incorporated by reference to Exhibit 4c of the Company's Quarterly
Report on Form 10-Q for the quarter ended September 28, 1991).
4(f) Amendment, dated April 26, 1988, to Stockholder Rights Agreement
(incorporated by reference to Exhibit 4(d) of the Company's
Quarterly Report on Form 10-Q for the quarter ended April 3, 1993).
4(g) Amended and Restated Summary of Rights to Purchase Common Stock
(incorporated by reference to Exhibit 4(e) of the Company's
Quarterly Report on Form 10-Q for the quarter ended July 3, 1993).
4(h) Amendment, dated July 7, 1988, to Stockholder Rights Agreement
(incorporated by reference to Exhibit 4(f) of the Company's
Quarterly Report on Form 10-Q for the quarter ended July 3, 1993).
4(i) Agreement, dated May 23, 1991, among Zenith Electronics Corporation,
The First National Bank of Boston and Harris Trust and Savings Bank
(incorporated by reference to Exhibit 1 of Form 8 dated May 30,
1991).
4(j) Amendment, dated May 24, 1991, to Stockholder Rights Agreement
(incorporated by reference to Exhibit 2 of Form 8 dated May 30,
1991).
4(k) Agreement, dated as of February 1, 1993, among Zenith Electronics
Corporation, The Bank of New York and Harris Trust and Savings Bank
(incorporated by reference to Exhibit 1 to Form 8 dated March 25,
1993).
4(l) Credit Agreement, dated as of May 21, 1993, with General Electric
Capital Corporation, as agent and lender, and the other lenders
named therein (incorporated by reference to Exhibit 4 of the
Company's Current Report on Form 8-K dated May 21, 1993).
4(m) Amendment No. 1 dated November 8, 1993 to the Credit Agreement dated
May 21, 1993, with General Electric Capital Corporation, as agent
and lender, and the other lenders named therein (incorporated by
reference to Exhibit 4(b) of the Company's Current Report on Form
8-K dated November 19, 1993).
4(n) Amendment No. 3 dated January 7, 1994 to the Credit Agreement dated
May 21, 1993, with General Electric Capital Corporation, as agent
and lender, The Bank of New York Commercial Corporation, as lender,
and Congress Financial Corporation, as lender (incorporated by
reference to Exhibit 4(b) of the Company's Current Report on Form
8-K dated January 11, 1994).
4(o) Fourth Amendment dated as of January 28, 1994 to the Credit Agreement
dated May 21, 1993, with General Electric Capital Corporation, as
agent and lender, The Bank of New York Capital Corporation, as
lender, and Congress Financial Corporation, as lender (incorporated
by reference to Exhibit 4 of the Company's Current Report on Form
8-K dated January 31, 1994).
4(p) Debenture Purchase Agreement dated as of November 19, 1993 with the
institutional investors named therein (incorporated by reference to
Exhibit 4(a) of the Company's Current Report on Form 8-K dated
November 19, 1993).
4(q) Amendment No. 1 dated as of November 24, 1993 to the Debenture
Purchase Agreement dated as of November 19, 1993 with the
institutional investor named therein (incorporated by reference to
Exhibit 4(a) of the Company's Current Report on Form 8-K dated
November 24, 1993).
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
----------- ---------------------------------------------------------------------
<C> <S>
4(r) Amendment No. 2 dated as of January 11, 1994 to the Debenture
Purchase Agreement dated as of November 19, 1993 (incorporated by
reference to Exhibit 4(c) of the Company's Current Report on Form
8-K dated January 11, 1994).
4(s) Debenture Purchase Agreement dated as of January 11, 1994 with the
institutional investor named therein (incorporated by reference to
Exhibit 4(a) of the Company's Current Report on Form 8-K dated
January 11, 1994).
5 Opinion of Sidley & Austin*
10(a) Investment Agreement dated as of March 25, 1993 between Zenith
Electronics Corporation and Fletcher Capital Markets, Inc.
(incorporated by reference to Exhibit 1 of the Company's Current
Report on Form 8-K dated March 26, 1993).
10(b) Investment Agreement dated as of July 29, 1993 between Zenith
Electronics Corporation and Fletcher Capital Markets, Inc.
(incorporated by reference to Exhibit 5(a) of the Company's Current
Report on Form 8-K dated July 29, 1993).
23(a) Consent of Arthur Andersen & Co.*
23(b) The consent of Sidley & Austin is contained in its opinion filed as
Exhibit 5 to this Registration Statement.
24 Powers of Attorney.*
<FN>
- ------------------------
*Filed herewith
</TABLE>
ITEM 17. UNDERTAKINGS.
The Company hereby undertakes (1) to file, during any period in which offers
or sales are being made, a post-effective amendment to this Registration
Statement: (i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933; (ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement; and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; provided, however, that paragraphs (1)(i) and (1)(ii) do
not apply if this 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 by the Company pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement; (2) that, for the
purpose of determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; (3)
to remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering; (4) that, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Company's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; (5) that, 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 Company pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to
be part of this
II-3
<PAGE>
Registration Statement as of the time it was declared effective; and (6) that,
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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the provisions described under Item 15 above or otherwise,
the Company 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 Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted against
the Company by such director, officer or controlling person in connection with
the securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
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 caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Glenview, State of Illinois on March 4, 1994.
ZENITH ELECTRONICS CORPORATION
By: /s/ Jerry K. Pearlman
-----------------------------------
Jerry K. Pearlman
Chairman and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below on March 4, 1994 by the
following persons in the capacities indicated:
<TABLE>
<C> <S>
/s/ Jerry K. Pearlman Director, Chairman and Chief Executive Officer
-------------------------------------------- (Principal Executive Officer)
Jerry K. Pearlman
/s/ Kell B. Benson Vice President-Finance and Chief Financial
-------------------------------------------- Officer (Principal Financial and Principal
Kell B. Benson Accounting Officer)
* Director
--------------------------------------------
Harry G. Beckner
* Director
--------------------------------------------
T. Kimball Brooker
* Director
--------------------------------------------
David H. Cohen
* Director
--------------------------------------------
Charles Marshall
* Director
--------------------------------------------
Gerald M. McCarthy
* Director
--------------------------------------------
Andrew McNally IV
* Director
--------------------------------------------
Albin F. Moschner
* Director
--------------------------------------------
Peter S. Willmott
*By: /s/ David S. Levin
----------------------------------------
David S. Levin
(Attorney-in-fact)
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION OF EXHIBIT NUMBER
- ------- --------------------------------------------------------------- ----------
<S> <C> <C>
1 Form of Sales Agency Agreement between Company and Kidder,
Peabody & Co. Incorporated.*
4(a) Restated Certificate of Incorporation of the Company, as
amended (incorporated by reference to Exhibit 3(a) to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1992).
4(b) Certificate of Amendment to Restated Certificate of
Incorporation of the Company dated May 4, 1993 (incorporated
by reference to Exhibit 4(l) of the Company's Quarterly Report
on Form 10-Q quarter ended April 3, 1993).
4(c) By-laws of the Company, as amended (incorporated by reference
to Exhibit 3 to the Company's Current Report on Form 8-K,
dated January 31, 1994).
4(d) Specimen certificate representing Common Stock, $1.00 par value
(incorporated by reference to Exhibit 4(c) to the Company's
Registration Statement on Form S-3, Registration Number
33-15277).
4(e) Stockholder Rights Agreement, dated as of October 3, 1986
(incorporated by reference to Exhibit 4c of the Company's
Quarterly Report on Form 10-Q for the quarter ended September
28, 1991).
4(f) Amendment, dated April 26, 1988, to Stockholder Rights
Agreement (incorporated by reference to Exhibit 4(d) of the
Company's Quarterly Report on Form 10-Q for the quarter ended
April 3, 1993).
4(g) Amended and Restated Summary of Rights to Purchase Common Stock
(incorporated by reference to Exhibit 4(e) of the Company's
Quarterly Report on Form 10-Q for the quarter ended July 3,
1993).
4(h) Amendment, dated July 7, 1988, to Stockholder Rights Agreement
(incorporated by reference to Exhibit 4(f) of the Company's
Quarterly Report on Form 10-Q for the quarter ended July 3,
1993).
4(i) Agreement, dated May 23, 1991, among Zenith Electronics
Corporation, The First National Bank of Boston and Harris
Trust and Savings Bank (incorporated by reference to Exhibit 1
of Form 8 dated May 30, 1991).
4(j) Amendment, dated May 24, 1991, to Stockholder Rights Agreement
(incorporated by reference to Exhibit 2 of Form 8 dated May
30, 1991).
4(k) Agreement, dated as of February 1, 1993, among Zenith
Electronics Corporation, The Bank of New York and Harris Trust
and Savings Bank (incorporated by reference to Exhibit 1 to
Form 8 dated March 25, 1993).
4(l) Credit Agreement, dated as of May 21, 1993, with General
Electric Capital Corporation, as agent and lender, and the
other lenders named therein (incorporated by reference to
Exhibit 4 of the Company's Current Report on Form 8-K dated
May 21, 1993).
4(m) Amendment No. 1 dated November 8, 1993 to the Credit Agreement
dated May 21, 1993, with General Electric Capital Corporation,
as agent and lender, and the other lenders named therein
(incorporated by reference to Exhibit 4(b) of the Company's
Current Report on Form 8-K dated November 19, 1993).
</TABLE>
II-6
<PAGE>
<TABLE>
<S> <C> <C>
4(n) Amendment No. 3 dated January 7, 1994 to the Credit Agreement
dated May 21, 1993, with General Electric Capital Corporation,
as agent and lender, The Bank of New York Commercial
Corporation, as lender, and Congress Financial Corporation, as
lender (incorporated by reference to Exhibit 4(b) of the
Company's Current Report on Form 8-K dated January 11, 1994).
4(o) Fourth Amendment dated as of January 28, 1994 to the Credit
Agreement dated May 21, 1993, with General Electric Capital
Corporation, as agent and lender, The Bank of New York
Commercial Corporation, as lender, and Congress Financial
Corporation, as lender (incorporated by reference to Exhibit 4
of the Company's Current Report on Form 8-K dated January 31,
1994).
4(p) Debenture Purchase Agreement dated as of November 19, 1993 with
the institutional investors named therein (incorporated by
reference to Exhibit 4(a) of the Company's Current Report on
Form 8-K dated November 19, 1993).
4(q) Amendment No. 1 dated as of November 24, 1993 to the Debenture
Purchase Agreement dated as of November 19, 1993 with the
institutional investor named therein (incorporated by
reference to Exhibit 4(a) of the Company's Current Report on
Form 8-K dated November 24, 1993).
4(r) Amendment No. 2 dated as of January 11, 1994 to the Debenture
Purchase Agreement dated as of November 19, 1993 (incorporated
by reference to Exhibit 4(c) of the Company's Current Report
on Form 8-K dated January 11, 1994).
4(s) Debenture Purchase Agreement dated as of January 11, 1994 with
the institutional investor named therein (incorporated by
reference to Exhibit 4(a) of the Company's Current Report on
Form 8-K dated January 11, 1994).
5 Opinion of Sidley & Austin*
10(a) Investment Agreement dated as of March 25, 1993 between Zenith
Electronics Corporation and Fletcher Capital Markets, Inc.
(incorporated by reference to Exhibit 1 of the Company's
Current Report on Form 8-K dated March 26, 1993).
10(b) Investment Agreement dated as of July 29, 1993 between Zenith
Electronics Corporation and Fletcher Capital Markets, Inc.
(incorporated by reference to Exhibit 5(a) of the Company's
Current Report on Form 8-K dated July 29, 1993).
23(a) Consent of Arthur Andersen & Co.*
23(b) The consent of Sidley & Austin is contained in its opinion
filed as Exhibit 5 to this Registration Statement.
24 Powers of Attorney.*
<FN>
- ------------------------
*Filed herewith
</TABLE>
II-7
<PAGE>
Exhibit 1
ZENITH ELECTRONICS CORPORATION
COMMON STOCK, $1.00 PAR VALUE
SALES AGENCY AGREEMENT
March __, 1994
KIDDER, PEABODY & CO. INCORPORATED,
10 Hanover Square
New York, N.Y. 10005
Gentlemen:
Zenith Electronics Corporation, a Delaware corporation (the "Company"),
confirms its agreement with Kidder, Peabody & Co. Incorporated (the "Agent"),
as follows:
1. DESCRIPTION OF SECURITIES. The Company proposes to issue and sell
through the Agent, as exclusive sales agent, up to 2,000,000 shares (the
"Maximum Amount") of common stock, $1.00 par value, on the particular terms set
forth in Section 3 hereof (the "Stock").
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, the Agent that:
(a) A registration statement on Form S-3 (Registration No. 33-_____)
with respect to the Stock, including a form of prospectus, has been
carefully prepared by the Company in conformity with the requirements of
the Securities Act of 1933 (the "Act") and the rules and regulations
("Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder and filed with the Commission and has become
effective. Such registration statement and prospectus may have been
amended or supplemented prior to the date of this Agreement. Any such
amendment or supplement was so prepared and filed, and any such amendment
filed after the effective date of such registration statement has become
effective. No stop order suspending the effectiveness of the registration
statement has been issued, and no proceeding for that purpose has been
instituted or threatened by the Commission. Copies of such registration
statement and prospectus, any such amendment or supplement and all
documents incorporated by reference therein that were filed with the
Commission on or prior to the date of this Agreement have been delivered to
the Agent. Such registration statement, as it may have heretofore been
amended, is referred to herein as the "Registration Statement," and the
final form of prospectus included in the Registration Statement, as amended
or supplemented from time to time, is referred to herein as the
"Prospectus." Any reference herein to the Registration Statement, the
Prospectus or any amendment or supplement thereto shall be deemed to refer
to and include the documents incorporated (or deemed to be incorporated) by
reference therein, and any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration Statement or
Prospectus shall be deemed to refer to and include the filing after the
execution hereof of any document with the Commission deemed to be
incorporated by reference therein.
(b) Each part of the Registration Statement, when such part became or
becomes effective, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at each
Closing Date (as hereinafter defined), conformed or will conform in all
material respects with the requirements of the Act and the Rules and
Regulations; each part of the Registration Statement, when such part became
or becomes effective, did not or will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Prospectus and any amendment or supplement thereto, on the
<PAGE>
date of filing thereof with the Commission and at each Closing Date, did
not or will not include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
except that the foregoing shall not apply to statements in or omissions
from any such document in reliance upon, and in conformity with, written
information furnished to the Company by the Agent, specifically for use in
the preparation thereof.
(c) The documents incorporated by reference in the Registration
Statement or the Prospectus, or any amendment or supplement thereto, when
they became or become effective under the Act, or were or are filed
with the Commission under the Securities Exchange Act of 1934, as
amended ("Exchange Act"), as the case may be, conformed or will conform in
all material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder.
(d) The financial statements of the Company and its subsidiaries,
together with the related notes and schedules, set forth or incorporated by
reference in the Registration Statement and Prospectus fairly present the
financial condition and the results of operations and cash flows of the
Company and its subsidiaries as of the dates indicated or for the periods
therein specified in conformity with generally accepted accounting
principles consistently applied throughout the periods involved (except as
otherwise stated therein).
(e) The Company and each of its subsidiaries has been duly
incorporated and is an existing corporation in good standing under the laws
of its jurisdiction of incorporation, has full power and authority
(corporate and other) to conduct its business as described in the
Registration Statement and Prospectus and is duly qualified to do business
in each jurisdiction in which it owns or leases real property or in which
the conduct of its business requires such qualification except where the
failure to be so qualified, considering all such cases in the aggregate,
will not have a material adverse effect on the business, properties,
financial position or results of operations of the Company and its
subsidiaries considered as a whole; and all of the outstanding shares of
capital stock of each such subsidiary have been duly authorized and validly
issued, are fully paid and non-assessable and (except for directors'
qualifying shares and except as otherwise stated in the Registration
Statement) are owned beneficially by the Company subject to no security
interest, other encumbrance or adverse claim.
(f) The outstanding shares of common stock of the Company and the
Stock have been duly authorized and are, or when issued as contemplated
hereby will be, validly issued, fully paid and non-assessable and conform,
or when so issued will conform, to the description thereof in the
Prospectus. The shareholders of the Company have no preemptive rights with
respect to the Stock.
(g) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into any transactions, not in the ordinary course of
business, that are material to the Company and its subsidiaries considered
as a whole, and there has not been on a consolidated basis, any material
change in the capital stock, or any material increase in the short-term
debt or long-term debt of the Company and its subsidiaries (other than
advances under the credit agreement dated as of May 21, 1993, as it may be
amended from time to time (the "Credit Agreement") to be used in the
ordinary course of the Company's business), or any material adverse change,
or any development involving a prospective material adverse change, in the
condition (financial or other), business, prospects, net worth or results
of operations of the Company and its subsidiaries considered as a whole.
(h) Except as set forth in the Prospectus, there is not pending or,
to the knowledge of the Company, threatened any action, suit or proceeding
to which the Company or any of its subsidiaries is a party, before or by
any court or governmental agency or body, that could reasonably be expected
to result in any material adverse change in the condition (financial or
other), business, prospects, net worth or results of operations of the
Company and its subsidiaries considered as a whole or that could reasonably
be expected to materially and adversely affect the properties or assets
thereof considered as a whole.
2
<PAGE>
(i) There are no contracts or documents of the Company or any of its
subsidiaries that are required to be filed as exhibits to the Registration
Statement or to any of the documents incorporated by reference therein by
the Act or the Exchange Act or by the rules and regulations of the
Commission thereunder that have not been so filed.
(j) The performance of this Agreement, and the consummation of the
transactions contemplated herein or therein will not result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, any statute, any agreement or instrument to which the Company is a
party or by which it is bound or to which any of the property of the
Company is subject, the Company's charter or by-laws, or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company or any of its properties; no consent, approval,
authorization or order of, or filing with, any court or governmental agency
or body is required for the consummation by the Company of the transactions
contemplated by this Agreement, in connection with the issuance or sale of
the Stock by the Company, except such as may be required by the listing of
the Stock on the New York Stock Exchange ("NYSE") or the Chicago Stock
Exchange ("CSE") or under the Act or state securities or blue sky laws; and
the Company has full power and authority to authorize, issue and sell the
Stock as contemplated by this Agreement, free of any preemptive rights.
3. SALE AND DELIVERY OF SECURITIES. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to issue and sell exclusively
through Agent, and Agent agrees to sell, as exclusive sales agent for the
Company, on a best efforts basis, up to the Maximum Amount of Stock on the terms
set forth herein.
The Stock, up to the Maximum Amount, is to be sold during one or more
pricing periods (each a "Pricing Period"), each Pricing Period consisting of
five consecutive calendar days. The Company and the Agent shall agree to any
Pricing Period and the number of shares of Stock (not to exceed 60,000 shares)
to be sold by the Agent during each such Pricing Period (the "Average Market
Price Shares"). Subject to the terms and conditions hereof, the Agent shall use
its best efforts to (i) sell all of the Average Market Price Shares during each
such Pricing Period, and (ii) sell the entire Maximum Amount during no more than
52 Pricing Periods. The Agent shall sell the shares of Stock by means of
ordinary brokers' transactions on any national securities exchange, including
the NYSE, on which such shares of Stock are listed. The Company or the Agent
may, upon notice to the other party hereto by telephone (confirmed promptly by
telecopy) suspend or terminate the offering of Stock during any Pricing Period;
PROVIDED, HOWEVER, that such suspension or termination shall not affect or
impair the parties' respective obligation with respect to shares of Stock sold
hereunder prior to the giving of such notice; provided further that the Agent
may give notice of suspension under this sentence only in the event that the
Agent in its sole discretion determines that the Registration Statement or
Prospectus may contain an untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, not misleading.
The net proceeds (the "Net Proceeds") to the Company for the Average Market
Price Shares sold by the Agent during a Pricing Period will equal the sum of (i)
the product of (x) 94.25% times (y) the average of the arithmetic mean of the
high and low sales prices of the common stock of the Company reported on the
NYSE for each trading day of such Pricing Period (the "Average Market Price"),
times (z) the number of Average Market Price Shares sold during such Pricing
Period plus (ii) Alternative Proceeds (defined below), if any, plus (iii) Excess
Proceeds (defined below), if any. Subject to adjustment as set forth in the
next two paragraphs, the compensation to the Agent with respect to the sale of
Average Market Price Shares sold hereunder shall equal the difference between
the aggregate gross sales prices at which such sales are actually effected by
the Agent and the Net Proceeds.
Prior to and from time to time during any Pricing Period, the Company may
instruct the Agent not to sell shares of Stock if such sales cannot be effected
at or above the price designated by the Company in any such instruction. If
such an instruction is given and as a result thereof the Agent is unable to sell
shares of Stock in an amount greater than or equal to the average daily number
of Average Market Price Shares actually sold during such Pricing Period, then
(i) that day's high and low sales prices of common stock of the Company reported
on the NYSE shall not be included in the calculation of Average Market Price and
(ii) the net proceeds payable to the Company (the "Alternative Proceeds") and
the compensation payable to the Agent in respect of any sales of Average
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Market Price Shares effected that day by the Agent shall be equal to 94.25% and
5.75%, respectively, of the weighted average sales prices at which the Agent has
actually effected sales of Stock during that day.
To the extent that the compensation payable to the Agent hereunder would
otherwise exceed ten percent of the aggregate gross sales prices of the Average
Market Price Shares during any Pricing Period, such excess over ten percent
shall constitute "Excess Proceeds" payable to the Company.
During any Pricing Period, the Company and the Agent may agree upon the
sale of shares ("Additional Shares") of Stock in an amount of 1,000 shares or
more, in addition to the sale of Average Market Price Shares (such Additional
Shares to be included in the Maximum Amount). The compensation to the Agent
for sales of the first 200,000 Additional Shares sold in any Pricing Period
shall be $0.125 per share, and the compensation to the Agent for sales of
Additional Shares in excess thereof during such Pricing Period shall be $0.25
per share. The sale of Additional Shares during any day shall be confirmed in
writing by the Agent to the Company following the close of business that day.
All other shares sold during a Pricing Period not so confirmed shall be deemed
Average Market Price Shares.
The Agent shall provide written confirmation to the Company following the
close of business on the final day of each Pricing Period setting forth the
number of Average Market Price Shares sold during the Pricing Period, the gross
proceeds from the sale of such shares, the high and low prices at which Average
Market Price Shares were sold during such Pricing Period, the Net Proceeds to
the Company, the amount of Excess Proceeds, if any, the amount of Alternative
Proceeds, if any, the compensation payable by the Company to the Agent with
respect to such sales and the Average Market Price for such Pricing Period. The
Agent hereby acknowledges that the Company will be relying upon such information
in preparing the Prospectus Supplement with respect to each Pricing Period.
Settlement for sales of Additional Shares will occur on the fifth business
day following the date on which such sales are made. Settlement for sales of
Average Market Price Shares will occur on a weekly basis as follows. On each
Monday (or the next succeeding business day if such Monday is not a business
day) following the end of a Pricing Period (each a "Closing Date"), the Average
Market Price Shares sold through the Agent during such Pricing Period will be
delivered by the Company to the Agent against payment of the Net Proceeds for
such Pricing Period. Settlement for all shares shall be effected via the
Depository Trust Corporation on a delivery-versus-payment basis.
At each such settlement, the Company shall affirm in writing each
representation, warranty, covenant and other agreement contained in this
Agreement. The Company covenants and agrees with Agent that within two (2)
business days of the termination of each Pricing Period, the Company will file a
Prospectus Supplement under Rule 424(b)(3) promulgated under the Act, which
Prospectus Supplement will set forth the number of such shares of Stock sold
through the Agent, the high and low prices at which Average Market Price Shares
were sold during such Pricing Period, the Net Proceeds to the Company and the
compensation payable by the Company to the Agent with respect to such sales (all
as provided in writing by the Agent for inclusion in each such Prospectus
Supplement). The obligations of the Agent to sell the Stock shall be subject to
the continuing accuracy of the representations and warranties of the Company
herein, to the performance by the Company of its obligations hereunder and to
the continuing satisfaction of the additional conditions specified in Section
5(a) through (i) of this Agreement.
4. COVENANTS. The Company covenants and agrees with Agent that:
(a) During the period in which a prospectus relating to the Stock is
required to be delivered under the Act, the Company will notify the Agent
promptly of the time when any subsequent amendment to the Registration
Statement has become effective or any subsequent supplement to the
Prospectus has been filed and of any request by the Commission for any
amendment or supplement to the Registration Statement or Prospectus or for
additional information; it will prepare and file with the Commission,
promptly upon the Agent's request, any amendments or supplements to the
Registration Statement or Prospectus that, in the Agent's reasonable
opinion, may be necessary or advisable in connection with the distribution
of the Stock by the Agent; it will file no amendment or supplement to the
Registration Statement or Prospectus (other than any prospectus supplement
relating to the offering of other securities registered under the
Registration Statement or any document required to be filed under the
Exchange Act that upon filing is
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deemed to be incorporated by reference therein) to which the Agent shall
reasonably object by notice to the Company after having been furnished a
copy a reasonable time prior to the filing; and it will furnish to the
Agent at or prior to the filing thereof a copy of any such prospectus
supplement or any document that upon filing is deemed to be incorporated by
reference in the Registration Statement or Prospectus.
(b) The Company will advise the Agent, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification of the Stock
for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceeding for any such purpose; and it will promptly
use its best efforts to prevent the issuance of any stop order or to obtain
its withdrawal if such a stop order should be issued. The Company will
advise the Agent immediately after it shall receive notice of, or obtain
knowledge of, the initiation by the Commission or its staff of a
review of any documents incorporated by reference in the Prospectus.
(c) Within the time during which a prospectus relating to the Stock
is required to be delivered under the Act, the Company will comply as far
as it is able with all requirements imposed upon it by the Act and by the
Rules and Regulations, as from time to time in force, so far as necessary
to permit the continuance of sales of or dealings in the Stock as
contemplated by the provisions hereof and the Prospectus. If during such
period any event occurs as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances then existing, not misleading, or if during
such period it is necessary to amend or supplement the Registration
Statement or Prospectus to comply with the Act, the Company will promptly
notify the Agent and will amend or supplement the Registration Statement or
Prospectus (at the expense of the Company) so as to correct such statement
or omission or effect such compliance.
(d) The Company will use its best efforts to qualify the Stock for
sale under the securities laws of such jurisdictions as you reasonably
designate and to continue such qualifications in effect so long as required
for the distribution of the Stock, except that the Company shall not be
required in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction.
(e) The Company will furnish to the Agent copies of the Registration
Statement, the Prospectus (including all documents incorporated by
reference therein) and all amendments and supplements to the Registration
Statement or Prospectus that are filed with the Commission during the
period in which a prospectus relating to the Stock is required to be
delivered under the Act (including all documents filed with the Commission
during such period that are deemed to be incorporated by reference
therein), in each case as soon as available and in such quantities as you
may from time to time reasonably request, and will also furnish copies of
the Prospectus to the NYSE in accordance with Rule 153 of the Rules and
Regulations.
(f) The Company will make generally available to its security holders
as soon as practicable, but in any event not later than 15 months after the
end of the Company's current fiscal quarter, an earnings statement (which
need not be audited) covering a 12-month period beginning after the date of
effectiveness of the Registration Statement that shall satisfy the
provisions of Section 11(a) of the Act.
(g) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay all
expenses incident to the performance of its obligations hereunder, will pay
the expenses of printing all documents relating to the offering, and will
reimburse the Agent for any expenses (including fees and disbursements of
counsel) incurred by it in connection with the matters referred to in
Section 4(d) hereof and the preparation of memoranda relating thereto and
for any filing fee of the National Association of Securities Dealers, Inc.
relating to the Stock. The Company shall not in any event be liable to the
Agent for loss of anticipated profits from the transactions covered by this
Agreement.
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(h) The Company will apply the net proceeds from the sale of the
Stock as set forth in the Prospectus.
(i) The Company will not, directly or indirectly, offer or sell, any
shares of common stock (other than the Stock) or securities convertible
into or exchangeable for, or any rights to purchase or acquire, common
stock during the period ending on the final Closing Date for the sale of
Stock hereunder (a) without giving you three business days' prior written
notice specifying the nature of the proposed sale and the date of such
proposed sale, or (b) if, following the receipt of such notice, you object
to such sale in writing prior to the date specified in such notice as the
date of such proposed sale; provided, however, that you may not object to
or prohibit the Company from (i) issuing and/or selling shares of its
common stock or warrants, options or other rights exercisable or
convertible into shares of its common stock to employees of the Company
and its subsidiaries, (ii) issuing and/or selling shares of common stock
pursuant to any employee stock option plan, stock ownership plan or
dividend reinvestment plan of the Company now or hereinafter in effect,
(iii) issuing and/or selling shares of common stock or securities
convertible into or exchangeable for, or rights to acquire common stock
pursuant to a private placement including, without limitation, pursuant
to Rule 144A of the Act, (iv) issuing and selling common stock pursuant
to its contractual obligations as in effect on the date hereof, pursuant
to the Zenith Stockholders Rights Plan, (v) issuing and contributing
shares of common stock to the Zenith Hourly and Salaried Employees Profit
Sharing and Retirement Plans, and (vi) issuing common stock issuable upon
conversion of securities or the exercise of warrants, options or other
rights in effect or outstanding on the date hereof.
(j) The Company will, at any time during the term of this Agreement,
as supplemented from time to time, advise the Agent immediately after it
shall have received notice or obtain knowledge thereof, of any information
or fact that would alter or affect any opinion, certificate, letter and
other document provided to the Agent pursuant to Section 5 herein.
5. CONDITIONS OF AGENT'S OBLIGATIONS. The obligations of the Agent to
sell the Stock as provided herein shall be subject to the accuracy, as of the
date hereof, and as of each Closing Date for any Pricing Period contemplated
under this Agreement of the representations and warranties of the Company
herein, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall
have been instituted or, to the knowledge of the Company or the Agent,
threatened by the Commission, and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to your
satisfaction.
(b) The Agent shall not have advised the Company that the
Registration Statement or Prospectus, or any amendment or supplement
thereto, contains an untrue statement of fact that in your opinion is
material, or omits to state a fact that in the Agent's opinion is material
and is required to be stated therein or is necessary to make the statements
therein not misleading.
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there shall not have been any change, on a
consolidated basis, any material change in the capital stock or any
material increase in short-term or long-term debt of the Company and its
subsidiaries (other than advances under the Credit Agreement be used in the
ordinary course of the Company's business), or any material adverse change,
or any development involving a prospective material adverse change, in the
condition (financial or other), business, prospects, net worth or results
of operations of the Company and its subsidiaries considered as a whole, or
any change in the rating assigned to any securities of the Company by
Moody's Investors Service, Standards & Poors or any similar national rating
agency, that, in the Agent's judgment, makes it impractical or inadvisable
to offer or deliver the Stock on the terms and in the manner contemplated
in the Prospectus.
(d) The Agent shall have received at the date of the commencement of
the first Pricing Period hereunder (the "Commencement Date") and at the
final Closing hereunder opinions of John Borst, Jr., Esq., general counsel
for the Company, or, if Mr. Borst is unavailable, David S. Levin, Esq.,
Secretary of the Company, dated as of the Commencement Date and dated as
of the final Closing Date, respectively, to the effect that:
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(i) The Company and each of its subsidiaries has been duly
incorporated and is an existing corporation in good standing under the
laws of its jurisdiction of incorporation, has full corporate power
and authority to conduct its business as described in the Registration
Statement and Prospectus and is duly qualified to do business in each
jurisdiction in which it owns or leases real property or in which the
conduct of its business requires such qualification except where the
failure to be so qualified, considering all such cases in the
aggregate, will not have a material adverse effect on the financial
condition, business, properties, or results of operations of the
Company and its subsidiaries considered as a whole; and all of the
outstanding shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully
paid and non-assessable and (except for director's qualifying shares
and except as otherwise stated in the Registration Statement) are
owned beneficially by the Company subject to no security interest,
other encumbrance or adverse claim;
(ii) All of the outstanding shares of Common Stock of the
Company have been duly authorized and validly issued, are fully paid
and non-assessable; the shares of Stock have been duly and validly
authorized, and, when issued and delivered to and paid for by the
purchasers thereof pursuant to the Agreement, will be fully paid and
nonassessable and conform to the description thereof in the
Prospectus; and the shareholders of the Company have no preemptive
rights with respect to the Stock;
(iii) To the best knowledge of such counsel no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been instituted or
threatened by the Commission;
(iv) The registration statement, when it became effective,
and the Prospectus and any amendment or supplement thereto, on the
date of filing thereof with the Commission (and, if applicable, at
each Closing Date on or prior to the date of the opinion), complied
(in each case other than the financial statements, financial data,
statistical data and supporting schedules contained or incorporated by
reference therein as to which such counsel need express no opinion) as
to form in all material respects with the requirements of the Act and
the Rules and Regulations; and the documents incorporated by reference
in the Registration Statement or Prospectus or any amendment or
supplement thereto (other than the financial statements, financial
data, statistical data and supporting schedules contained or
incorporated by reference therein as to which such counsel need
express no opinion), when they became effective under the Act or were
filed with the Commission under the Exchange Act, as the case may be,
complied as to form in all material respects with the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder;
(v) The description in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings, contracts
and other documents are accurate and fairly present the information
required to be shown; and such counsel do not know of any statutes or
legal or governmental proceedings required to be described in the
Prospectus that are not described as required, or of any contracts or
documents of a character required to be described in the Registration
Statement or Prospectus (or required to be filed under the Exchange
Act if upon such filing they would be incorporated by reference
therein) or to be filed as exhibits to the Registration Statement that
are not described and filed as required; and
(vi) This Agreement has been duly authorized, executed and
delivered by the Company; the performance of this Agreement and the
consummation of the transactions contemplated herein by the Company
will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any
agreement or instrument known to such counsel to which the Company is
a party or by which it is bound or to which any of the property of the
Company is subject, the Company's charter or by-laws, or any order,
rule or regulation known to such counsel of any court or governmental
agency or body having jurisdiction
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over the Company or any of its properties; and no consent, approval,
authorization or order of, or filing with, any court or governmental
agency or body is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance or sale
of the Stock by the Company, except such as have been obtained under
the Act and such as may be required by the listing of the Stock on the
NYSE and the CSE or under state securities or blue sky laws in
connection with the sale and distribution of the Stock by the Agent.
Such counsel shall also state that such counsel has participated in
conferences with officers and other representatives of the Company and
representatives of the independent public accountants of the Company
and representatives of Agent at which the contents of the Registration
Statement, the Prospectus and any amendment thereof or supplement
thereto and related matters were discussed and, although such counsel
has not independently checked the accuracy or completeness of, or
otherwise verified, and accordingly need not pass upon, and need not
assume any responsibility for, the accuracy, completeness or fairness
of the statements contained in the Registration Statement or the
Prospectus or any amendment thereof or any supplement thereto, and
that on the basis thereof and relying as to materiality to a large
extent upon the judgment of officers and other representatives of the
Company, nothing has come to such counsel's attention which causes
such counsel to believe that either the Registration Statement (other
than financial statements, financial data, statistical data and
supporting schedules included or incorporated by reference therein, as
to which such counsel need express no belief) when it became
effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus,
including any supplement thereto, (other than financial statements,
financial data, statistical data and supporting schedules included or
incorporated by reference therein, as to which such counsel need
express no belief) as of their respective dates included, or as of the
date of such opinion includes, an untrue statement or a material fact
or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the States of Illinois, the General Corporation Laws of the State
of Delaware, or the United States, to the extent he deems proper and
specified in such opinion, upon the opinion of other counsel of good
standing whom he believes to be reliable and who are satisfactory to
counsel for Agent and (B) as to matters of fact, to the extent he
deems proper, on certificates of responsible officers of the Company
and public officials. References to the Prospectus in this subsection
include any supplements thereto.
(e) The Agent shall have received at the Commencement Date at the
final Closing hereunder opinions of Sidley & Austin, counsel for the
Company, dated as of the Commencement Date and dated as of the final
Closing Date, respectively, to the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State of
Delaware;
(ii) All of the outstanding shares of Common Stock of the
Company have been duly and validly authorized and issued and are fully
paid and nonassessable; the shares of Stock have been duly and validly
authorized, and, when issued and delivered to and paid for by the
purchasers thereof pursuant to the Agreement, will be fully paid and
nonassessable, conform to the description thereof in the Prospectus,
and the shareholders of the Company are not entitled to preemptive
rights with respect to the Stock;
(iii) The Registration Statement has become effective under
the Act; (if applicable-the filing of the Prospectus Supplements
pursuant to Rule 424(b) have been made in the manner and within the
time period required by Rule 424(b)); to the knowledge of such counsel
no stop order
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suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been instituted or
threatened by the Commission; the Registration Statement and the
Prospectus at the time the Registration Statement became effective (if
applicable-and the Prospectus Supplements) (in each case other than
the financial statements, financial data, statistical data and
supporting schedules contained or incorporated by reference therein as
to which such counsel need express no opinion) complied as to the form
in all material respects with the requirements of the Act and the
Rules and Regulations; The documents incorporated by reference in the
Registration Statement or Prospectus or any amendment or supplement
thereto (other than financial statements, financial data, statistical
data and supporting schedules contained or incorporated by reference
therein as to which such counsel need express no opinion) when they
became effective under the Act or were filed with the Commission under
the Exchange Act or were amended subsequent to filing, as the case may
be, complied as to form in all material respects with the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder;
(iv) The Agreement has been duly authorized, executed and
delivered by the Company; and
(v) No consent, approval, authorization or order of any
court or governmental agency or body is required for the valid
authorization, issuance, sale and delivery of the Stock as
contemplated by this Agreement, except such as have been obtained
under the Act and such as may be required by the listing of the Stock
on the NYSE and the CSE or under the securities or blue sky laws of
any jurisdiction.
Such counsel shall also state that such counsel has participated in
conferences with officers and other representatives of the Company and
representatives of the independent public accountants of the Company
and representatives of Agent at which the contents of the Registration
Statement, the Prospectuses and any amendment thereof or supplement
thereto and related matters were discussed and, although such counsel
has not independently checked the accuracy or completeness of, or
otherwise verified, and accordingly need not pass upon, and need not
assume any responsibility for, the accuracy, completeness or fairness
of the statements contained in the Registration Statement or the
Prospectus or any amendment thereof or any supplement thereto, and
that on the basis thereof and relying as to materiality to a large
extent upon the judgment of officers and other representatives of the
Company, nothing has come to such counsel's attention which causes
such counsel to believe that either the Registration Statement (other
than financial statements, financial data, statistical data and
supporting schedules included or incorporated by reference therein, as
to which such counsel need express no belief) when it became
effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus,
including any supplement thereto, (other than financial statements,
financial data, statistical data and supporting schedules included or
incorporated by reference therein, as to which such counsel need
express no belief) as of their respective dates included, or as of the
date of such opinion includes, an untrue statement or a material fact
or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the States of Illinois and New York, the General Corporation Laws
of the State of Delaware, or the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for Agent and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers
of the Company and public officials. References to the Prospectus in
this subsection include any supplements thereto.
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(f) The Agent shall have received from Latham & Watkins, counsel for
the Agent, such opinion or opinions, dated as of the Commencement Date and
dated as of the final Closing Date contemplated by this Agreement with
respect to the incorporation of the Company, the validity of the Stock, the
Registration Statement, the Prospectus and other related matters as the
Agent reasonably may request, and such counsel shall have received such
papers and information as they request to enable them to pass upon such
matters.
(g) At or prior to (i) the Commencement Date and (ii) the date of
the filing by the Company of any Quarterly Report on Form 10-Q or any
Annual Report on Form 10-K (collectively, the "Periodic Reports") (or at a
later date that is (A) no more than five days after the date of such filing
and (B) at or prior to any Closing Date occuring on or after the date of
such filing), the Agent shall have received a letter from Arthur Andersen &
Co., dated the date of delivery thereof, substantially in the form attached
hereto as Annex I (with appropriate modifications and references relating
to such Periodic Reports).
(h) The Agent shall have received from the Company a certificate, or
certificates, signed by two authorized officers, including the principal
financial or accounting officer (unless such officer is unavailable), of
the Company, dated as of the Commencement Date and dated as of each Closing
Date contemplated by this Agreement, to the effect that, to the best of
their knowledge based upon reasonable investigation:
(i) The representations and warranties of the Company in
this Agreement are true and correct, as if made at and as of the
Commencement Date or the Closing Date for such Pricing Period (as the
case may be), and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Commencement Date and each such Closing Date (as
the case may be);
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that
purpose has been instituted or is threatened, by the Commission; and
(iii) Since the date of this Agreement there has occurred no
event required to be set forth in an amendment or supplement to the
Registration Statement or Prospectus that has not been so set forth
and there has been no document required to be filed under the Exchange
Act and the rules and regulations of the Commission thereunder that
upon such filing would be deemed to be incorporated by reference in
the Prospectus that has not been so filed.
(i) The Company shall have furnished to you such further certificates
and documents as you shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are in the form set forth
herein or, if not set forth herein, satisfactory in form and substance to the
Agent. The Company will furnish the Agent with such conformed copies of such
opinions, certificates, letters and other documents as the Agent shall
reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company will indemnify and
hold harmless the Agent against any losses, claims, damages or liabilities,
joint or several, to which Agent may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse Agent for any legal or
other expenses reasonably incurred by it in connection with investigating or
defending against such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Company shall not be liable in any
such case
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to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by the Agent specifically for use in the
preparation thereof.
(b) The Agent will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
part of the registration statement when such part became effective, or in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made therein in reliance
upon and in conformity with written information furnished to the Company by the
Agent, specifically for use in the preparation thereof, and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending against any such loss, claim, damage,
liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying party shall
not relieve it from any liability that it may have to any indemnified party
otherwise than under such subsection (except and only to the extent that such
omission so to notify results directly in actual prejudice to the Company). In
case any such action shall be brought against any indemnified party, and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent that
it shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
(d) If the indemnification provided for in this Section 6 is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above, (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Agent on the other from the offering of the Stock or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and the Agent on the other in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Agent on the
other shall be deemed to be in the same proportion as the total proceeds from
the offering of the Stock (before deducting expenses) received by the Company
bear to the total compensation or profit (before deducting expenses) received or
realized by the Agent from the sale of the Stock on behalf of the Company. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Agent and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Company and the Agent agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were to be determined
by pro rata allocations or by any other method of allocation that does not take
account of the equitable considerations referred to in the first sentence of
this subsection (d). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
against any action or claim that is the subject of this subsection (d).
Notwithstanding
11
<PAGE>
the provisions of this subsection (d), the Agent shall not be required to
contribute any amount in excess of the amount by which the total actual sales
price at which the Stock sold by the Agent exceeds the amount of any damages
that Agent has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The obligations of the Company under this Section 6 shall be in
addition to any liability that the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Agent within the meaning of the Act; and the obligations of the Agent under this
Section 6 shall be in addition to any liability that the Agent may otherwise
have and shall extend, upon the same terms and conditions, to each director of
the Company (including any person who, with his consent, is named in the
Registration Statement as about to become a director of the Company), to each
officer of the Company who has signed the Registration Statement and to each
person, if any, who controls the Company within the meaning of the Act.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the Agent
contained in Section 6 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Agent or any
controlling persons, or the Company or any of its officers, directors or any
controlling persons, and shall survive delivery of and payment for the Stock.
8. [This section is reserved.]
9. TERMINATION.
(a) The Agent shall have the right by giving notice as hereinafter
specified at any time at or prior to any Closing Date, to terminate this
Agreement if (i) the Company shall have failed, refused or been unable, at or
prior to the Closing Date, to perform any agreement on its part to be performed
hereunder, (ii) any other condition of the Agent's obligations hereunder is not
fulfilled, (iii) trading on the New York Stock Exchange or the American Stock
Exchange shall have been wholly suspended, (iv) a banking moratorium shall have
been declared by Federal or New York authorities, or (v) an outbreak of major
hostilities in which the United States is involved, a declaration of war by
Congress, any other substantial national or international calamity or any other
event or occurrence of a similar character shall have occurred since the
execution of this Agreement that, in your judgment, makes it impractical or
inadvisable to proceed with the completion of the sale of and payment for the
Stock to be sold by the Agent on behalf of the Company. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 4(g) and Section 6 hereof shall at all times be effective.
If the Agent elects to terminate this Agreement as provided in this Section, the
Agent shall provide the required notice promptly by telephone, telex or
telecopy, confirmed by letter.
(b) The Company shall have the right, by giving notice as hereinafter
specified, to terminate this Agreement in its sole discretion on the date
occurring sixty (60) days after the date of this Agreement and every sixty (60)
days thereafter. Notwithstanding the foregoing, if the Company chooses to
effect any offering of equity securities or equity-related securities (other
than the offering of securities contemplated hereby) before the completion of
the offering contemplated hereby, the Company may terminate this Agreement at
any time. Any termination shall be without liability of any party to any other
party except that the provisions of Section 4(g) and Section 6 hereof shall at
all times be effective. If the Company elects to terminate this Agreement as
provided in this Section, the Company shall provide the required notice promptly
by telephone, telex, or telecopy, confirmed by letter.
12
<PAGE>
(c) Any termination of this Agreement shall be effective on the date
specified in such notice of termination; provided that such termination shall
not be effective until the close of business on the date of receipt of such
notice by the Agent. If such termination shall occur during a Pricing Period,
any Additional Shares and Average Market Price Shares shall settle in accordance
with the provisions of the second to last paragraph of Section 3 hereof.
10. NOTICES. All notices or communications hereunder shall be in writing
and if sent to the Agent shall be mailed, delivered, telexed or telecopied and
confirmed to the Agent at Kidder, Peabody & Co. Incorporated, 10 Hanover Square,
New York, New York 10005, c/o Peter Klein, 17th Floor, or if sent to the
Company, shall be mailed, delivered, telexed or telecopied and confirmed to the
Company at 1000 Milwaukee Avenue, Glenview, Illinois 60025-2993, Attention:
John Borst, Jr., General Counsel, with a copy to Sidley & Austin, One First
National Plaza, Chicago, Illinois 60603, Attention: Thomas A. Cole, Esq. Each
party to this Agreement may change such address for notices by sending to the
parties to this Agreement written notice of a new address for such purpose.
11. PARTIES. This Agreement shall inure to the benefit of and be binding
upon the Company and the Agent and their respective successors and the
controlling persons, officers and directors referred to in Section 6 hereof, and
no other person will have any right or obligation hereunder.
12. APPLICABLE LAW. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York without regard to
the principles of conflicts of laws.
13
<PAGE>
If the foregoing correctly sets forth the understanding between the Company
and the Agent, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company
and the Agent. Alternatively, the execution of this Agreement by the Company
and its acceptance by or on behalf of the Agent may be evidenced by an exchange
of telegraphic or other written communications.
Very truly yours,
ZENITH ELECTRONICS CORPORATION
By: __________________________
Title: _______________________
ACCEPTED as of the date first above written
KIDDER, PEABODY & CO. INCORPORATED
By: ____________________________
Title: _________________________
14
<PAGE>
Exhibit 5
March 4, 1994
Zenith Electronics Corporation
1000 Milwaukee Avenue
Glenview, Illinois 60025
Re: 5,000,000 Shares of Common Stock,
$1.00 par value per share, and
Associated Stock Purchase Rights
Gentlemen:
We refer to the Registration Statement on Form S-3 (the "Registration
Statement") filed by Zenith Electronics Corporation (the "Company") with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Securities Act"), relating to the registration of 5,000,000 shares of
Common Stock, $1.00 par value per share (the "New Shares"), of the Company and
associated Common Stock Purchase Rights (the "Rights").
We are familiar with the proceedings to date with respect to the proposed
issuance and sale of the New Shares and the Rights and have examined such
records, documents and questions of law, and satisfied ourselves as to such
matters of fact, as we have considered relevant and necessary as a basis for
this opinion.
Based on the foregoing, we are of the opinion that:
1. The Company is duly incorporated and validly existing under the laws
of the State of Delaware.
2. The New Shares will be legally issued, fully paid and non-assessable
and the associated Rights will be validly issued, in each case when (i) the
Registration Statement, as finally amended, shall have become effective under
the Securities Act; (ii) the Company's Board of Directors or a duly authorized
committee thereof shall have duly adopted final resolutions authorizing, or a
duly authorized officer of the Company shall have authorized, the issuance and
sale of the New Shares as contemplated by the Registration Statement; and (iii)
certificates representing the New Shares shall have been duly executed,
countersigned and registered and duly delivered to the purchasers thereof
against payment of the agreed consideration therefor.
This opinion is limited to the General Corporation Law of the State of
Delaware. We do not find it necessary for the purposes of this opinion to
cover, and accordingly we express no opinion as to, the application of the
securities or blue sky laws of the various states to the sale of the New
Shares.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to all references to our firm included in or made a
part of the Registration Statement. In giving such consent, we do not thereby
admit that we are within the category of persons whose consent is required by
Section 7 of the Securities Act or the related Rules promulgated by the
Securities and Exchange Commission.
Very truly yours,
/s/ Sidley & Austin
<PAGE>
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-3 of our reports dated
February 14, 1994, included in Zenith Electronics Corporation's Annual Report
on Form 10-K for the year ended December 31, 1993, and to all references to our
Firm included in this Registration Statement.
/s/ Arthur Andersen & Co.
ARTHUR ANDERSEN & CO.
Chicago, Illinois,
March 4, 1994
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints John Borst, Jr., Kell B. Benson and David S.
Levin, and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution for him and in his name, place
and stead, in any and all capacities to sign a registration statement on
Form S-3 relating to the Common Stock and accompanying Common Stock
Purchase Rights of Zenith Electronics Corporation, and any and all amendments
(including post-effective amendments) to such registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and any documents
relating to the qualification or registration under state blue Sky or
securities laws of such securities, granting unto such attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes he might or could do in person,
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 4th day of
March, 1994.
/s/ Harry G. Beckner
----------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints John Borst, Jr., Kell B. Benson and David S.
Levin, and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution for him and in his name, place
and stead, in any and all capacities to sign a registration statement on
Form S-3 relating to the Common Stock and accompanying Common Stock Purchase
Rights of Zenith Electronics Corporation, and any and all amendments
(including post-effective amendments) to such registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and any documents
relating to the qualification or registration under state blue Sky or
securities laws of such securities, granting unto such attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes he might or could do in person,
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 1st day of
March, 1994.
/s/ T. Kimball Brooker
----------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints John Borst, Jr., Kell B. Benson and David S.
Levin, and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution for him and in his name, place
and stead, in any and all capacities to sign a registration statement on
Form S-3 relating to the Common Stock and accompanying Common Stock
Purchase Rights of Zenith Electronics Corporation, and any and all amendments
(including post-effective amendments) to such registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and any documents
relating to the qualification or registration under state blue Sky or
securities laws of such securities, granting unto such attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes he might or could do in person,
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 1st day of
March, 1994.
/s/ David H. Cohen
----------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints John Borst, Jr., Kell B. Benson and David S.
Levin, and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution for him and in his name, place
and stead, in any and all capacities to sign a registration statement on
Form S-3 relating to the Common Stock and accompanying Common Stock Purchase
Rights of Zenith Electronics Corporation, and any and all amendments
(including post-effective amendments) to such registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and any documents
relating to the qualification or registration under state blue Sky or
securities laws of such securities, granting unto such attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes he might or could do in person,
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 1st day of
March, 1994.
/s/ Charles Marshall
----------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints John Borst, Jr., Kell B. Benson and David S.
Levin, and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution for him and in his name, place
and stead, in any and all capacities to sign a registration statement on
Form S-3 relating to the Common Stock and accompanying Common Stock Purchase
Rights of Zenith Electronics Corporation, and any and all amendments
(including post-effective amendments) to such registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and any documents
relating to the qualification or registration under state blue Sky or
securities laws of such securities, granting unto such attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes he might or could do in person,
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 1st day of
March, 1994.
/s/ Gerald M. McCarthy
----------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints John Borst, Jr., Kell B. Benson and David S.
Levin, and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution for him and in his name, place
and stead, in any and all capacities to sign a registration statement on
Form S-3 relating to the Common Stock and accompanying Common Stock Purchase
Rights of Zenith Electronics Corporation, and any and all amendments
(including post-effective amendments) to such registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and any documents
relating to the qualification or registration under state blue Sky or
securities laws of such securities, granting unto such attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes he might or could do in person,
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 1st day of
March, 1994.
/s/ Andrew McNally IV
----------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints John Borst, Jr., Kell B. Benson and David S.
Levin, and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution for him and in his name, place
and stead, in any and all capacities to sign a registration statement on
Form S-3 relating to the Common Stock and accompanying Common Stock Purchase
Rights of Zenith Electronics Corporation, and any and all amendments
(including post-effective amendments) to such registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and any documents
relating to the qualification or registration under state blue Sky or
securities laws of such securities, granting unto such attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes he might or could do in person,
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 1st day of
March, 1994.
/s/ Albin F. Moschner
----------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints John Borst, Jr., Kell B. Benson and David S.
Levin, and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution for him and in his name, place
and stead, in any and all capacities to sign a registration statement on
Form S-3 relating to the Common Stock and accompanying Common Stock Purchase
Rights of Zenith Electronics Corporation, and any and all amendments
(including post-effective amendments) to such registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and any documents
relating to the qualification or registration under state blue Sky or
securities laws of such securities, granting unto such attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes he might or could do in person,
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 1st day of
March, 1994.
/s/ Jerry K. Pearlman
----------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints John Borst, Jr., Kell B. Benson and David S.
Levin, and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution for him and in his name, place
and stead, in any and all capacities to sign a registration statement on
Form S-3 relating to the Common Stock and accompanying Common Stock Purchase
Rights of Zenith Electronics Corporation, and any and all amendments
(including post-effective amendments) to such registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and any documents
relating to the qualification or registration under state blue Sky or
securities laws of such securities, granting unto such attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes he might or could do in person,
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 1st day of
March, 1994.
/s/ Peter S. Willmott
----------------------------
