<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 16, 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)
Richard F. Vitkus
Senior Vice President
and
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, Esq.
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 MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, $1.00 par value..... 6,500,000 $12.063(1) $78,409,500(1) $27,038
Common Stock Purchase Rights...... (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 December 9, 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 [LOGO]
6,500,000 SHARES
ZENITH ELECTRONICS CORPORATION
COMMON STOCK
($1.00 PAR VALUE)
------------------------
Zenith Electronics Corporation ("Zenith" or the "Company") has registered
6,500,000 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 December 13, 1994, the last reported sale price of the
Common Stock on the New York Stock Exchange was $12.25 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 , 199 .
<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: Citicorp
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;
(b) the Company's Quarterly Reports on Form 10-Q for the quarters ended
April 2, 1994, July 2, 1994 and October 1, 1994; and
(c) 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, March 1, 1994, April 20, 1994, April
21, 1994, May 16, 1994, July 21, 1994, August 1, 1994 and August 19, 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 and Network Systems products such as cable
and telecommunication set-top devices, interactive television and data
communication products which are sold primarily to cable television operators
and other commercial users of these products.
The Company has sold or downsized its non-core business activities. The
Company sold its monochrome video monitor business in 1993 and its power supply
business in April 1994. Its activities in color video monitors sold to computer
manufacturers and high-security electronic equipment have been scaled back in
1994 and will cease in the near future.
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 the
early 1990's, also reflected 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.
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 in 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. In recent years the Company has benefitted from
major cost-reduction programs, but lower prices and inflationary cost increases
have more than offset such cost reduction benefits. In the first nine months of
1994 the benefits of increased sales volume, cost reductions, reduced duty costs
related to the North American Free Trade Agreement ("NAFTA") and reduced
activities in non-core businesses have exceeded the effect of lower prices and
inflationary cost increases. These factors, along with real estate sales,
resulted in a net profit of $9 million for the third quarter of 1994. However, a
net loss of $11 million was incurred for the nine months ended October 1, 1994
and a net loss of $97 million was incurred for the full year 1993 despite record
industry unit volume in each period. 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 over the three
years consisted of $53 million of cash used by operating activities and $75
3
<PAGE>
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. Cash decreased $21 million
during the nine months ended October 1, 1994. The decrease consisted of $96
million of cash used by operating activities and $20 million (net of $22 million
proceeds from real estate sales) used to purchase fixed assets. These uses of
cash were offset by $95 million (net) of cash provided from financing activities
which included sales of the Company's Common Stock in the amount of $83 million,
borrowings under the Credit Agreement (as defined) in the amount of $34 million
and the issuance of long-term debt in the amount of $12 million offset by cash
used for the redemption of the Company's 12 1/8% Notes due January 1995 in the
amount of $35 million. The Company's borrowings since 1990 have increased, and
in 1993 the Company entered into its current 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 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
December 13, 1994, the Company had outstanding borrowings under the Credit
Agreement of approximately $15 million. The Credit Agreement terminates on June
30, 1996 (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, capital expenditure and other requirements in 1994 and 1995,
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. In addition, the Company is reviewing possible capital
investment projects over the next three years (which may require an amendment to
the Credit Agreement) and options for additional financing that would be
required to support these projects. If undertaken, the projects are expected to
reduce the costs and increase production capacity primarily in the Company's
picture tube operations.
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 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 1995 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 in 1994, and the Company selectively reduced color
television prices to maintain its historical competitive price position.
DILUTION: CONVERSION OF CONVERTIBLE SECURITIES. The Company's $55 million
aggregate principal amount of 8.5% Senior Subordinated Convertible Debentures
due 2000 (the "Debentures due 2000") and $12 million aggregate principal amount
of 8.5% Senior Subordinated Convertible Debentures due 2001 (the "Debentures due
2001" and, collectively with the Debentures due 2000, the "8.5% Debentures") are
convertible into Common Stock at an initial conversion price of $9.76 and $10.00
per share,
4
<PAGE>
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 October 1, 1994 was approximately $5.01. The net tangible
book value per share at October 1, 1994, assuming an average sale price of
$12.25 per share (the closing price of the Common Stock on the New York Stock
Exchange on December 13, 1994) and $14.125 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 $5.92 and $6.16, 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 $12.25 per share
and $14.125 per share) is approximately $.91 and $1.15, respectively. The
immediate dilution from the assumed average sale price of $12.25 and $14.125
which would be absorbed by such purchasers (assuming all shares of Common Stock
offered hereby were sold at the assumed prices) is approximately $6.33 and
$7.97, 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 amounts payable under the Credit Agreement. Such
repayment would not reduce the Company's ability to further borrow thereunder.
As of December 13, 1994, outstanding borrowings under the Credit Agreement were
approximately $15 million and bore interest at the rate of 10 1/4% 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
investment projects to reduce the costs and increase production capacity
primarily in the Company's picture tube operations and/or for engineering and
research expenses or for other general corporate purposes. An amendment to the
Credit Agreement may be necessary to the extent that any capital expenditures
for capital investment projects would exceed the current limitations contained
in the Credit Agreement. There can be no assurance that the lenders under the
Credit Agreement will approve such an amendment, if requested by the Company.
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.
5
<PAGE>
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. COPIES OF THE CREDIT AGREEMENT AND THE AMENDMENTS THERETO
ARE FILED AS EXHIBITS TO THE REGISTRATION STATEMENT AND ARE 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 June 30, 1996 (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. As of October
1, 1994, the ratio of liabilities to net worth was required to be not greater
than 4.95 to 1.0 and was actually 2.11 to 1.0, and net worth was required to be
equal to or greater than $108.0 million and was actually $224.8 million. At the
end of each fiscal quarter through March 30, 1996, the liabilities to net worth
ratio is required to be maintained at various levels ranging from a high of 4.40
to 1.0 to a low of 3.50 to 1.0, and minimum net worth is required to be
maintained at amounts ranging from a high of $166.0 million to a low of $143.0
million. The Credit Agreement restricts the amount of capital expenditures by
the Company in each fiscal year. For the fiscal years 1994 and 1995, the Company
is permitted to make capital expenditures (as defined in the Credit Agreement)
of up to $68.0 and $38.0 million, respectively. In the event the Company plans
to undertake capital investment projects in 1995 which would exceed the
permitted expenditures, the Company would need to seek an amendment to the
Credit Agreement. There can be no assurance that the lenders under the Credit
Agreement will approve such an amendment, if requested by the Company.
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 October 1, 1994.
<TABLE>
<CAPTION>
OCTOBER 1, 1994
---------------
(DOLLARS IN
MILLIONS)
<S> <C>
SHORT-TERM DEBT:
Total short-term debt.............................. $ 34.0
-------
-------
LONG-TERM DEBT:
6 1/4% Convertible Subordinated Debentures due 2011.... $115.0
8.5% Senior Subordinated Convertible Debentures due
2000.................................................. 55.0
8.5% Senior Subordinated Convertible Debentures due
2001.................................................. 12.0
-------
Total long-term debt............................... 182.0
-------
STOCKHOLDERS' EQUITY:
Preferred stock, $1 par value; 8,000,000 shares
authorized;
none outstanding...................................... --
Common stock, $1 par value; 100,000,000 shares
authorized;
44,933,674 shares issued(1)........................... 44.9
Additional paid-in capital............................. 279.4
Retained earnings (deficit)............................ (99.0)
Cost of 21,000 common shares in treasury............... (.5)
-------
Total stockholders' equity......................... 224.8
-------
Total long-term debt and stockholders' equity...... $406.8
-------
-------
<FN>
- ------------------------
(1) Shares of Common Stock issued and outstanding as of October 1, 1994 do not
include, as of December 13, 1994, (i) 10,515,246 shares reserved for
conversion of the 8.5% Debentures and the 6 1/4% Convertible Subordinated
Debentures, (ii) approximately 2,200,000 shares reserved for sale to,
directors, officers and key employees of the Company under approved stock
option plans and (iii) approximately 22,500,000 shares reserved for
issuance under the Company's Stockholder Rights Plan (see "Description of
Capital Stock -- Stockholder Rights Plan").
</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.............................. 13 1/2 7
Second Quarter............................. 10 1/2 8 1/4
Third Quarter.............................. 12 1/8 8 5/8
Fourth Quarter (through December 13,
1994)..................................... 14 1/8 10 5/8
</TABLE>
The last reported sale price for the Common Stock on the New York Stock
Exchange on December 13, 1994 was $12.25 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.
9
<PAGE>
Assuming no conversion of convertible securities, the net tangible book
value per share at October 1, 1994 was approximately $5.01. The net tangible
book value per share at October 1, 1994, assuming an average sale price of
$12.25 per share (the closing price of the Common Stock on the New York Stock
Exchange on December 13, 1994) and $14.125 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 $5.92 and $6.16, 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 $12.25 per share
and $14.125 per share) is approximately $.91 and $1.15, respectively. The
immediate dilution from the assumed average sale price of $12.25 and $14.125
which would be absorbed by such purchasers (assuming all shares of Common Stock
offered hereby were sold at the assumed prices) is approximately $6.33 and
$7.97, 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 approximately 45,000,000 shares were outstanding on December 13, 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.
13
<PAGE>
The Company and ("Agent") 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 the 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 shares of
Common Stock from time to time through , 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 . 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 Agent 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 Agent would be
correspondingly reduced; to the extent that such actual sales prices are greater
than the Average Market Price, the compensation to Agent 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 Agent. To the extent that Agent'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 Agent 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 Agent 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 Agent as sales agent
for the Company will settle regular way on the national securities exchange
where such purchases were executed. Compensation to Agent 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
Agent 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 Agent with respect to such sales
pursuant to the formula set forth above. Unless otherwise indicated in a
Prospectus Supplement, as sales agent will act on a best efforts
basis.
14
<PAGE>
In connection with the sale of the Common Stock on behalf of the Company,
may be deemed to be an "underwriter" within the meaning of the
Act, and the compensation of Agent may be deemed to be underwriting commissions
or discounts. The Company has agreed to provide indemnification and contribution
to Agent against certain civil liabilities, including liabilities under the
Securities Act of 1933, as amended. Agent may engage in transactions with, or
perform services for, the Company in the ordinary course of business.
The offering of Common Stock pursuant to the Sales Agency Agreement will
terminate upon the earlier of (i) the sale of all 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 Richard F. Vitkus, Senior Vice
President-General Counsel of the Company, and by Sidley & Austin, Chicago,
Illinois. As of December 13, 1994, Mr. Vitkus owned beneficially 3,000 shares of
Common Stock and held options to purchase 8,000 shares of Common Stock, of which
none 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 LLP,
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......................... $ 27,038
*NYSE Fee............................... 3,000
*Printing and Engraving................. 5,000
*Accounting Fees........................ 3,000
*Legal Fees and Expenses................ 10,000
*Blue Sky Fees and Expenses............. 2,000
*Miscellaneous.......................... 1,962
--------
Total............................... $ 52,000
--------
--------
<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(a) Form of Sales Agency Agreement between the Company and .*
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) Fifth Amendment dated April 21, 1994 to 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 April 21, 1994).
4(q) 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).
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ -----------------------------------------------------------------------
<C> <S>
4(r) 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(s) 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(t) 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).
4(u) Indenture dated as of April 1, 1986 between Zenith Electronics
Corporation and The First National Bank of Boston, as trustee, with
respect to the 6 1/4% Convertible Subordinated Debentures due 2011
(incorporated by reference to Exhibit 1 of the Company's Quarterly
Report on Form 10-Q for the quarter ended March 30, 1991).
5 Opinion of Richard F. Vitkus, Senior Vice President and General Counsel
of the Company.**
23(a) Consent of Arthur Andersen LLP**
23(b) The consent of Richard F. Vitkus, Senior Vice President and General
Counsel of the Company is contained in his opinion filed as Exhibit 5
to this Registration Statement.
24 Powers of Attorney.**
<FN>
- ------------------------
*To be filed by amendment
**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
II-3
<PAGE>
Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed
to be part of this 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 Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Glenview, State of Illinois on December 15, 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
Registration Statement has been signed below on December 15, 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 Senior Vice President-Finance and Chief
-------------------------------------------- Financial Officer (Principal Financial and
Kell B. Benson Principal Accounting Officer)
* Director
--------------------------------------------
Harry G. Beckner
* Director
--------------------------------------------
T. Kimball Brooker
* Director
--------------------------------------------
David H. Cohen
* Director
--------------------------------------------
Ilene S. Gordon
* Director
--------------------------------------------
Charles Marshall
* Director
--------------------------------------------
Gerald M. McCarthy
* Director
--------------------------------------------
Andrew McNally IV
* Director
--------------------------------------------
Albin F. Moschner
* Director
--------------------------------------------
Peter S. Willmott
*By: /s/ Kell B. Benson
----------------------------------------
Kell B. Benson
(Attorney-in-fact)
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION OF EXHIBIT NUMBER
- ------ ----------------------------------------------------------- ----------
<S> <C> <C>
1(a) Form of Sales Agency Agreement between the Company and
.*
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 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) Fifth Amendment dated April 21, 1994 to 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 April 21, 1994).
4(q) 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(r) 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(s) 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(t) 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).
4(u) Indenture dated as of April 1, 1986 between Zenith
Electronics Corporation and The First National Bank of
Boston, as trustee, with respect to the 6 1/4% Convertible
Subordinated Debentures due 2011 (incorporated by
reference to Exhibit 1 of the Company's Quarterly Report
on Form 10-Q for the quarter ended March 30, 1991).
5 Opinion of Richard F. Vitkus, Senior Vice President and
General Counsel of the Company.**
23(a) Consent of Arthur Andersen LLP**
23(b) The consent of Richard F. Vitkus, Senior Vice President and
General Counsel of the Company is contained in his opinion
filed as Exhibit 5 to this Registration Statement.
24 Powers of Attorney.**
<FN>
- ------------------------
*To be filed by amendment
**Filed herewith
</TABLE>
II-7
<PAGE>
Exhibit 5
December 15, 1994
Zenith Electronics Corporation
1000 Milwaukee Avenue
Glenview, Illinois 60025
Re: 6,500,000 Shares of Common Stock,
$1.00 par value per share, and
Associated Stock Purchase Rights
Gentlemen:
I 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 6,500,000 shares of
Common Stock, $1.00 par value per share (the "New Shares"), of the Company and
associated Common Stock Purchase Rights (the "Rights").
I am 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 myself as to such matters
of fact, as I have considered relevant and necessary as a basis for this
opinion.
Based on the foregoing, I am 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.
I do not find it necessary for the purposes of this opinion to cover, and
accordingly I 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.
I hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to all references to myself included in or made a
part of the Registration Statement. In giving such consent, I do not thereby
admit that I am 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/ Richard F. Vitkus
Senior Vice President and
General Counsel
<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.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
December 15, 1994
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Richard F. Vitkus, Kell B. Benson and
David S. Levin, and each of them, the undersigned's true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's 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 the undersigned
might or could do in person, ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney
this 13th day of December, 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 Richard F. Vitkus, Kell B. Benson and
David S. Levin, and each of them, the undersigned's true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's 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 the undersigned
might or could do in person, ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney
this 13th day of December, 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 Richard F. Vitkus, Kell B. Benson and
David S. Levin, and each of them, the undersigned's true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's 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 the undersigned
might or could do in person, ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney
this 13th day of December, 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 Richard F. Vitkus, Kell B. Benson and
David S. Levin, and each of them, the undersigned's true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's 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 the undersigned
might or could do in person, ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney
this 13th day of December, 1994.
/s/ Ilene S. Gordon
---------------------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Richard F. Vitkus, Kell B. Benson and
David S. Levin, and each of them, the undersigned's true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's 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 the undersigned
might or could do in person, ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney
this 13th day of December, 1994.
/s/ Charles Marshall
---------------------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Richard F. Vitkus, Kell B. Benson and
David S. Levin, and each of them, the undersigned's true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's 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 the undersigned
might or could do in person, ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney
this 13th day of December, 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 Richard F. Vitkus, Kell B. Benson and
David S. Levin, and each of them, the undersigned's true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's 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 the undersigned
might or could do in person, ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney
this 13th day of December, 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 Richard F. Vitkus, Kell B. Benson and
David S. Levin, and each of them, the undersigned's true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's 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 the undersigned
might or could do in person, ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney
this 13th day of December, 1994.
/s/ Albin F. Moschner
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<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Richard F. Vitkus, Kell B. Benson and
David S. Levin, and each of them, the undersigned's true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's 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 the undersigned
might or could do in person, ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney
this 12th day of December, 1994.
/s/ Peter S. Willmott
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