<PAGE>
RULE NO. 424(b)(5)
REGISTRATION NO. 33-51217
PROSPECTUS SUPPLEMENT
(To Prospectus Dated December 16, 1993)
$200,000,000
CHAMPION INTERNATIONAL CORPORATION
7.35% DEBENTURES DUE NOVEMBER 1, 2025
Interest on the Debentures is payable on May 1 and November 1 of each year,
commencing May 1, 1996. The Debentures do not provide for any sinking fund.
The Debentures may be redeemed at the option of the Company at any time on or
after November 1, 1996, in whole or in part, at a redemption price equal to
the greater of (i) 100% of the principal amount of such Debentures and (ii)
the sum of the present values of the remaining scheduled payments of principal
and interest thereon discounted to the date of redemption on a semiannual
basis at the Treasury Rate plus 25 basis points, plus in each case accrued
interest thereon to the date of redemption.
The Debentures offered hereby will be represented by one or more Global
Securities representing Book-Entry Securities and will be registered in the
name of Cede & Co., the nominee of The Depository Trust Company, which will
act as Depositary. Beneficial interests in Book-Entry Securities will be shown
on, and transfers thereof will be effected only through, records maintained by
the Depositary (with respect to participants' interests) and its participants.
Except as described in the Prospectus under "Description of Debt Securities--
Book-Entry Securities", Debentures in certificated form will not be issued in
exchange for the Global Securities and owners of beneficial interests in a
Global Security will not be considered the Holders thereof. Settlement for the
Debentures will be made in immediately available funds. The Debentures will
trade in the Depositary's Same-Day Funds Settlement System until maturity, and
secondary market trading activity for the Debentures will therefore settle in
immediately available funds. All payments of principal and interest will be
made by the Company in immediately available funds. See "Description of
Debentures--Same-Day Funds Settlement System and Payment" and "Description of
Debt Securities".
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 THE PROSPECTUS OR THIS PROSPECTUS SUPPLEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
- --------------------------------------------------------------------------------
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
<S> <C> <C> <C>
Per Debenture........................... 99.452% .875% 98.577%
Total................................... $198,904,000 $1,750,000 $197,154,000
- --------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from November 10, 1995.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting estimated expenses of $165,000 payable by the Company.
The Debentures are offered severally by the Underwriters, as specified herein,
subject to receipt and acceptance by them and subject to their right to reject
any order in whole or in part. It is expected that the Debentures will be
ready for delivery in book-entry form only through the facilities of The
Depository Trust Company on or about November 10, 1995 against payment
therefor in immediately available funds.
SALOMON BROTHERS INC GOLDMAN, SACHS & CO.
The date of this Prospectus Supplement is November 7, 1995.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES
OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement under the Securities Act of 1933, as
amended (the "1933 Act"), with respect to the Debt Securities described in the
Prospectus. Neither this Prospectus Supplement nor the Prospectus contains all
the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the Debt
Securities, reference is hereby made to such Registration Statement, including
the exhibits filed as part thereof.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports, proxy statements and other information with the Commission. The
Registration Statement (with exhibits), as well as such reports, proxy
statements and other information, can be inspected and copied at the public
reference facilities maintained by the Commission at its principal offices at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Commission's regional offices located at: Northwestern Atrium Center, 500 West
Madison Street, Chicago, Illinois 60661; and 7 World Trade Center, Suite 1300,
New York, New York 10048. Copies of such material can also be obtained from
the Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, copies
of such material and other information about the Company are available for
inspection at the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
THE COMPANY
Champion International Corporation (the "Company") is one of the leading
domestic manufacturers of paper for business communications, commercial
printing, publications and newspapers. In addition, the Company has plywood
and lumber manufacturing operations and, as of October 31, 1995, owned or
controlled approximately 5,100,000 acres of timberlands in the United States.
The Company's Canadian and Brazilian subsidiaries also own or control
significant timber resources supporting their operations.
The Company, after its merger with St. Regis Corporation in 1984, redefined
its business strategy to become primarily a producer of pulp and paper with a
particular emphasis on printing and writing papers. In 1994, over 79% of the
Company's sales were generated by the Company's paper business.
The Company was incorporated under the laws of the State of New York in
1937. The principal executive offices of the Company are located at One
Champion Plaza, Stamford, Connecticut 06921; telephone number (203) 358-7000.
S-2
<PAGE>
USE OF PROCEEDS
The Company intends to apply the net proceeds from the sale of the 7.35%
Debentures due November 1, 2025 (the "Debentures") offered hereby to the
payment at maturity of a portion of the Company's commercial paper and short-
term notes which are classified as long-term debt for balance sheet purposes.
The proceeds from such commercial paper and notes were used for general
corporate purposes. The debt to be repaid with the proceeds of the Debentures
bears interest at rates ranging from 5.81% to 5.93% and matures from November
10 through November 16, 1995. Prior to such application, such proceeds may be
invested in short-term investments.
DESCRIPTION OF DEBENTURES
The following description of the particular terms of the Debentures offered
hereby (referred to in the Prospectus as "Debt Securities") supplements, and
to the extent inconsistent therewith replaces, the description of the general
terms and provisions of Debt Securities set forth in the Prospectus, to which
description reference is hereby made. The particular terms of the Debentures
offered by this Prospectus Supplement are described herein. Capitalized terms
not otherwise defined herein shall have the meanings given to them in the
Prospectus.
The Debentures will be limited to $200,000,000 aggregate principal amount
and will mature on November 1, 2025. The Debentures will bear interest at the
rate per annum shown on the cover of this Prospectus Supplement from November
10, 1995 or from the most recent Interest Payment Date to which interest has
been paid or provided for, payable semiannually on May 1 and November 1 of
each year, commencing May 1, 1996, to the person in whose name a Debenture (or
any predecessor Debenture) is registered at the close of business on the April
15 or October 15, as the case may be, next preceding such Interest Payment
Date. The Debentures do not provide for any sinking fund. The covenants
contained in the Indenture and the Debentures would not necessarily afford
holders of the Debentures protection in the event of a highly leveraged or
other transaction involving the Company that may adversely affect holders of
the Debentures.
OPTIONAL REDEMPTION
The Debentures will be redeemable as a whole or in part, at the option of
the Company at any time on or after November 1, 1996, at a redemption price
equal to the greater of (i) 100% of the principal amount of such Debentures
and (ii) the sum of the present values of the remaining scheduled payments of
principal and interest thereon discounted to the redemption date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate plus 25 basis points, plus in each case accrued interest
thereon to the date of redemption.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed
as a percentage of its principal amount) equal to the Comparable Treasury
Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable
to the remaining term of the Debentures to be redeemed that would be utilized,
at the time of selection and in accordance with customary financial practice,
in pricing new issues of corporate debt securities of comparable maturity to
the remaining term of such Debentures. "Independent Investment Banker" means
one of the Reference Treasury Dealers appointed by the Trustee after
consultation with the Company.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal
Reserve Bank of New York and
S-3
<PAGE>
designated "Composite 3:30 p.m. Quotations for U.S. Government Securities" or
(ii) if such release (or any successor release) is not published or does not
contain such prices on such business day, (A) the average of the Reference
Treasury Dealer Quotations for such redemption date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations, or (B) if the
Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the
average of all such Quotations. "Reference Treasury Dealer Quotations" means,
with respect to each Reference Treasury Dealer and any redemption date, the
average, as determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m. on the third business day preceding such redemption date.
"Reference Treasury Dealer" means each of Salomon Brothers Inc, Goldman,
Sachs & Co., J.P. Morgan Securities Inc. and UBS Securities Inc. and their
respective successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), the Company shall substitute therefor another
Primary Treasury Dealer.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Debentures to be
redeemed.
Unless the Company defaults in payment of the redemption price, on and after
the redemption date interest will cease to accrue on the Debentures or
portions thereof called for redemption.
BOOK-ENTRY SYSTEM
Except as described in the Prospectus under "Description of Debt
Securities--Book-Entry Securities", owners of beneficial interests in a Global
Security will not be considered the Holders thereof and will not be entitled
to receive physical delivery of Debentures in definitive form, and no Global
Security will be exchangeable except for another Global Security of like
denomination and terms to be registered in the name of the Depositary or its
nominee.
The Depositary has advised the Company that the Depositary is a limited-
purpose trust company organized under the laws of the State of New York, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered under the Exchange Act. The Depositary was created to hold the
securities of its participants and to facilitate the clearance and settlement
of securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers (including
the Underwriters), banks, trust companies, clearing corporations, and certain
other organizations some of whom (and/or their representatives) own the
Depositary. Access to the Depositary's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly. Persons who are not participants may beneficially own securities
held by the Depositary only through participants.
SAME-DAY FUNDS SETTLEMENT SYSTEM AND PAYMENT
Settlement for the Debentures will be made by the Underwriters in
immediately available funds. All payments of principal and interest will be
made by the Company in immediately available funds.
Secondary trading in long-term debentures of corporate issuers is generally
settled in clearing-house or next-day funds. In contrast, the Debentures will
trade in the Depositary's Same-Day Funds Settlement System until maturity, and
secondary market trading activity in the Debentures will therefore be required
by the Depositary to settle in immediately available funds. No assurance can
be given as to the effect, if any, of settlement in immediately available
funds on trading activity in the Debentures.
S-4
<PAGE>
CAPITALIZATION
The following table sets forth the short-term debt and capitalization of the
Company and consolidated subsidiaries (a) as of September 30, 1995 and (b) as
adjusted to give effect to the sale of the Debentures offered hereby, and the
application of the net proceeds therefrom to the payment at maturity of a
portion of the Company's commercial paper and short-term notes classified as
long-term debt. See "Use of Proceeds".
<TABLE>
<CAPTION>
OUTSTANDING AS ADJUSTED
------------ ------------
(IN THOUSANDS OF DOLLARS)
(UNAUDITED)
<S> <C> <C>
Total short-term debt (a)........................... $ 363,798 $ 363,798
============ ============
Long-term debt:
Debentures offered hereby......................... $ -- $ 200,000
Secured, 9.9% average rate, payable through 2007.. 2,505 2,505
Unsecured, 7.7% average rate, payable through 2028
(b).............................................. 2,484,589 2,284,589
Long-term lease obligations, 6.8% average rate, pay-
able through 2029.................................. 285,625 285,625
Long-term other contractual obligations, 5.9% aver-
age rate, payable through 1998..................... 3,840 3,840
------------ ------------
Total long-term debt and obligations (exclusive
of current installments) (c)................... 2,776,559 2,776,559
------------ ------------
Deferred income taxes............................... 1,165,406 1,165,406
------------ ------------
Minority interest in subsidiaries................... 100,774 100,774
------------ ------------
Shareholders' equity................................ 3,495,429 3,495,429
------------ ------------
Total long-term obligations and shareholders'
equity......................................... $ 7,538,168 $ 7,538,168
============ ============
</TABLE>
- --------
(a) Includes current installments of long-term debt of $253 million, but
excludes the $215 million of U.S. commercial paper, other current
maturities of long-term debt and other short-term obligations referred to
in footnote (b) below.
(b) Unsecured debt includes borrowings which are payable in less than one
year. The Company has the ability to refinance these borrowings through
the expiration dates of its credit agreements provided that the Company
continues to meet required conditions. At September 30, 1995, the Company
had $215 million of U.S. commercial paper, other current maturities of
long-term debt and other short-term obligations outstanding, all of which
are classified as long-term debt, down from $382 million at year-end 1994.
In addition, at September 30, 1995, the Company had $76 million of notes
outstanding under its U.S. bank lines of credit, up from $65 million at
year-end 1994.
(c) The annual principal payment requirements under the terms of all long-term
debt agreements for the period from October 1 through December 31, 1995
are $200 million and for the years 1996 through 1999 are $78 million, $136
million, $377 million and $573 million, respectively.
S-5
<PAGE>
SELECTED FINANCIAL INFORMATION
The following tables set forth certain selected financial information of the
Company and its consolidated subsidiaries and the ratio of earnings to fixed
charges for, and as of the end of, each of the five years in the period ended
December 31, 1994 and each of the nine-month periods ended September 30, 1995
and September 30, 1994. The selected financial information is qualified by
reference to the audited consolidated financial statements and other
information and data included in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 and its Quarterly Reports on Form 10-Q
for the quarters ended March 31 and June 30, 1995. See such reports for the
Company's complete consolidated statement of income and consolidated balance
sheet for such periods. The selected financial information provided below is
not necessarily indicative of the future results of operations or financial
performance for the Company.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
---------------------------------------------------------- ----------------------
1990 1991 1992 1993 1994 1994 1995
---- ---- ---- ---- ---- ---- ----
OPERATING RESULTS
- ----------------- (IN THOUSANDS OF DOLLARS, EXCEPT RATIO DATA) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales............... $5,089,944 $4,786,403 $4,926,471 $5,068,833 $5,318,192 $3,852,818 $5,231,120
Provision for
restructuring (a)...... 42,860 -- -- -- -- -- --
Income from operations.. 490,515 179,184 73,371 66,392 266,000 102,004 1,044,980
Interest and debt
expense................ 156,417 210,527 206,295 224,658 235,086 175,601 172,239
Other (income) expense--
net (b)................ (85,489) (109,541) (142,516) 7,410 (57,342) (19,392) (35,288)
Income (loss) before
extraordinary item and
cumulative effect of
accounting changes..... 222,623 40,343 13,920 (134,454) 63,305 (38,967) 554,341
Extraordinary item--loss
on early retirement of
debt--net of taxes..... -- -- -- (14,266) -- -- --
Cumulative effect of
accounting changes,
net of tax (c)......... -- -- (454,314) (7,523) -- -- --
Net income (loss)....... 222,623 40,343 (440,394) (156,243) 63,305 (38,967) 554,341
Ratio of earnings to
fixed charges (d)...... 2.44 1.08 -- -- 1.29 -- 5.76
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
---------------------------------------------------------- ----------------------
1990 1991 1992 1993 1994 1994 1995
---- ---- ---- ---- ---- ---- ----
BALANCE SHEET DATA
- ------------------ (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Total assets............ $8,351,409 $8,655,877 $9,381,432 $9,142,769 $8,963,628 $8,983,321 $9,383,580
Short-term debt......... 157,444 141,497 131,260 176,310 399,106 171,010 363,798
Long-term debt.......... 2,688,620 2,977,873 3,290,875 3,316,165 2,889,252 3,246,806 2,776,559
$92.50 Preference Stock. 300,000 300,000 300,000 300,000 300,000 300,000 --
Shareholders' equity.... 3,679,890 3,671,144 3,158,803 2,950,118 2,960,745 2,882,490 3,495,429
</TABLE>
- -------
(a) The 1990 provision for restructuring included $33 million for equipment
abandonment, severance and other costs related to implementation of the
Company's project to address environmental issues at its mill in Canton, North
Carolina. The restructuring charge also included a provision for obsolescence
at other facilities principally due to modernization projects.
(b) For a description of the items constituting Other (income) expense--net
for the years ended December 31, 1992, 1993 and 1994 see Note 11 to the
consolidated financial statements incorporated by reference in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1994.
(c) During the fourth quarter of 1993, the Company adopted, retroactive to
January 1, 1993, Statement of Financial Accounting Standards ("SFAS") No. 112,
"Employers' Accounting for Postemployment Benefits". During the fourth quarter
of 1992, the Company adopted, retroactive to January 1, 1992, SFAS No. 106,
"Employers Accounting for Postretirement Benefits Other Than Pensions," and
SFAS No. 109, "Accounting for Income Taxes."
The cumulative catch-up adjustment of SFAS 112, as of January 1, 1993,
resulted in a one-time charge of $8 million to 1993 earnings after reduction
of approximately $5 million for income tax effects. The cumulative catch-up
adjustment of SFAS 106, as of January 1, 1992, resulted in a one-time charge
of $213 million to 1992 earnings after reduction of approximately $126 million
for income tax effects. The cumulative catch-up adjustment of SFAS 109, as of
January 1, 1992, resulted in a one-time after-tax charge of $242 million to
1992 earnings.
(d) For the purpose of these ratios, earnings have been determined by adding
fixed charges and income taxes to net income and deducting therefrom (i)
undistributed income of affiliates which are not wholly-owned and which are
accounted for on an equity basis and (ii) capitalized interest. Fixed charges
consist of (i) interest on indebtedness, including capitalized interest and
amortization of debt discount and premium; (ii) the estimated portion of rent
expense which approximates an interest factor; and (iii) preferred stock
dividend requirements of a consolidated subsidiary.
S-6
<PAGE>
RECENT DEVELOPMENTS
THIRD QUARTER 1995 OPERATING RESULTS
The Company reported third quarter earnings of $2.44 per share fully
diluted. This compares with fully-diluted earnings of 18c per share for the
third quarter of 1994 and $1.79 per share for the second quarter of 1995.
The Company's paper segment reported third quarter operating income of $423
million. This compares with income of $36 million in the year-ago quarter and
$344 million for the second quarter of 1995. The improvement from last quarter
was due primarily to higher prices for newsprint, uncoated free sheet and
coated publication papers, and market pulp. The significant improvement from
the third quarter of 1994 reflected price increases for all of the Company's
major pulp and paper grades.
The Company's wood products segment reported third quarter income from
operations of $34 million compared to $61 million in the year-ago quarter and
$28 million in the second quarter of 1995. The decline from last year was due
primarily to lower prices for lumber.
STOCK PURCHASE PROGRAM
On August 17, 1995, the Board of Directors of the Company authorized the
purchase of up to 5,000,000 shares of the Company's Common Stock from time to
time on the open market and through privately negotiated transactions. The
Company has purchased 325,000 shares through November 6, 1995.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated August 29, 1995 and in the related Pricing Agreement dated November 7,
1995, the Company has agreed to sell to each of the Underwriters named below,
and each of the Underwriters has severally agreed to purchase, the principal
amount of the Debentures set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
UNDERWRITERS OF DEBENTURES
------------ -------------
<S> <C>
Salomon Brothers Inc .......................................... $ 85,000,000
Goldman, Sachs & Co. .......................................... 85,000,000
J.P. Morgan Securities Inc. ................................... 20,000,000
UBS Securities Inc. ........................................... 10,000,000
------------
Total...................................................... $200,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement and the Pricing
Agreement, the Underwriters are committed to take and pay for all of the
Debentures, if any are taken.
The Underwriters propose to offer the Debentures in part directly to retail
purchasers at the initial public offering price set forth on the cover page of
this Prospectus Supplement, and in part to certain securities dealers at such
price less a concession of 0.50% of the principal amount of the Debentures.
The Underwriters may allow, and such dealers may reallow, a concession not to
exceed 0.25% of the principal amount of the Debentures to certain brokers and
dealers. After the Debentures are released for sale to the public, the
offering price and other selling terms may from time to time be varied by the
Underwriters.
The Debentures are a new issue of securities with no established trading
market. The Company has been advised by the Underwriters that they intend to
make a market in the Debentures but are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Debentures.
Settlement for the Debentures will be made in immediately available funds
and all secondary trading in the Debentures will settle in immediately
available funds. See "Description of Debentures--Same-Day Funds Settlement
System and Payment".
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
S-7
<PAGE>
LEGAL OPINIONS
The validity of the Debentures will be passed upon for the Company by
Lawrence A. Fox, Esq., Vice President and Secretary of the Company, and for
the Underwriters by Sullivan & Cromwell, New York, New York. Mr. Fox holds
options to acquire 9,050 shares of the Company's Common Stock and, as of
October 31, 1995, 2,326 shares of the Company's Common Stock were held for his
account under an employee benefit plan.
EXPERTS
The audited financial statements and schedules incorporated by reference
into the Prospectus have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and
are incorporated therein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports.
S-8
<PAGE>
CHAMPION INTERNATIONAL CORPORATION
DEBT SECURITIES
----------------
Champion International Corporation (the "Company") may offer and sell from
time to time up to $500,000,000 aggregate principal amount of its debt
securities, consisting of debentures, notes and/or other nonconvertible,
unsecured evidences of indebtedness (the "Debt Securities"). The Debt
Securities may be offered as separate series on terms to be determined at the
time of sale. The specified designation, aggregate principal amount,
denominations, maturity, premium, if any, rate (which may be fixed or
variable) and time of payment of any interest, terms for any redemption at the
option of the Company or the holder, terms for any sinking fund payments,
initial public offering price and other terms in connection with the offering
and sale of the Debt Securities in respect of which this Prospectus is being
delivered are set forth in the accompanying Prospectus Supplement (the
"Prospectus Supplement"). Debt Securities may be denominated in United States
dollars or, at the option of the Company if so specified in the applicable
Prospectus Supplement, in any other currency or in composite currencies or in
amounts determined by reference to an index.
The Company may sell Debt Securities to or through underwriters, and also
may sell Debt Securities directly to other purchasers or through agents. See
"Plan of Distribution". Such underwriters may include Goldman, Sachs & Co.,
J.P. Morgan Securities Inc., Salomon Brothers Inc or another underwriter
acting alone or may be a group of underwriters represented by firms including
Goldman, Sachs & Co., J.P. Morgan Securities Inc. or Salomon Brothers Inc. The
accompanying Prospectus Supplement sets forth the names of any underwriters or
agents involved in the sale of the Debt Securities in respect of which this
Prospectus is being delivered, the principal amounts, if any, to be purchased
by underwriters and the compensation, if any, of such underwriters or agents.
----------------
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 December 16, 1993.
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
AND, WITH RESPECT TO PARTICULAR OFFERED DEBT SECURITIES (AS HEREINAFTER
DEFINED), THE PROSPECTUS SUPPLEMENT RELATING THERETO, 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 AN OFFER TO BUY ANY OF THE SECURITIES OFFERED THEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. THE DELIVERY OF THIS PROSPECTUS AND, WITH RESPECT TO PARTICULAR
OFFERED DEBT SECURITIES, THE PROSPECTUS SUPPLEMENT AT ANY TIME DOES NOT IMPLY
THAT INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE HEREOF OR THEREOF.
----------------
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement under the Securities Act of 1933, as
amended (the "1933 Act"), with respect to the Debt Securities. This Prospectus
does not contain all the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information with respect to the
Company and the Debt Securities, reference is hereby made to such Registration
Statement, including the exhibits filed as part thereof.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports, proxy statements and other information with the Commission. The
Registration Statement (with exhibits), as well as such reports, proxy
statements and other information, can be inspected and copied at the public
reference facilities maintained by the Commission at its principal offices at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Commission's regional offices located at: Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center,
13th Floor, New York, New York 10048. Copies of such material can also be
obtained from the Public Reference Section of the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In
addition, copies of such material and other information about the Company are
available for inspection at the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
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INCORPORATION OF DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1992 and the Company's Quarterly Reports on Form 10-Q for the three month
periods ended March 31, 1993, June 30, 1993 and September 30, 1993 which have
been filed by the Company under the 1934 Act are incorporated by reference
herein.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the 1934 Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference herein and to be part hereof from the date of filing
of such documents. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement as modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom this Prospectus is delivered, upon written or oral request of such
person, a copy of any and all of the documents referred to above which have
been or may be incorporated by reference herein, other than exhibits thereto
(unless such exhibits are specifically incorporated by reference in such
documents). Requests for such copies should be directed to Lawrence A. Fox,
Esq., Vice President and Secretary, Champion International Corporation, One
Champion Plaza, Stamford, Connecticut 06921; telephone number (203) 358-7000.
THE COMPANY
Champion International Corporation (the "Company") is one of the leading
domestic manufacturers of paper for business communications, commercial
printing, publications and newspapers. In addition, the Company has plywood
and lumber manufacturing operations and owns or controls approximately
5,100,000 acres of timberlands in the United States. The Company's Canadian
and Brazilian subsidiaries also own or control significant timber resources
supporting their operations.
The Company, after its merger with St. Regis Corporation in 1984, redefined
its business strategy to become primarily a producer of pulp and paper with a
particular emphasis on printing and writing papers. In 1992, over 75% of the
Company's sales were generated by the Company's paper business.
The Company was incorporated under the laws of the State of New York in
1937. The principal executive offices of the Company are located at One
Champion Plaza, Stamford, Connecticut 06921; telephone number (203) 358-7000.
USE OF PROCEEDS
Unless otherwise specified in a Prospectus Supplement, the net proceeds from
the sale of the Debt Securities will be added to the Company's general
corporate funds and may be used to pay at maturity a portion of the Company's
commercial paper and short-term notes which are classified as long-term debt
for balance sheet purposes, to reduce or refinance long-term debt or for
general corporate purposes. Prior to such application, all or a portion of the
net proceeds may be invested in short-term investments.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratios of earnings
to fixed charges for the periods shown.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, NINE MONTHS
-------------------------------------------------- ENDED
1988 1989 1990 1991 1992(1) SEPTEMBER 30, 1993(2)
---- ---- ---- ---- ------- ---------------------
<S> <C> <C> <C> <C> <C>
4.85 4.30 2.44 1.08 -- --
</TABLE>
- --------
(1) For the twelve month period ended December 31, 1992, fixed charges
exceeded earnings by $34.8 million.
(2) For the nine month period ended September 30, 1993, fixed charges
exceeded earnings by $168.7 million.
For the purpose of these ratios, earnings have been determined by adding
fixed charges and income taxes to income from continuing operations and
deducting therefrom (i) undistributed income of affiliates which are not
wholly-owned and which are accounted for on an equity basis and (ii)
capitalized interest. Fixed charges consist of (i) interest on indebtedness,
including capitalized interest and amortization of debt discount and premium;
(ii) the estimated portion of rent expense which approximates an interest
factor; and (iii) preferred stock dividend requirements of a consolidated
subsidiary.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement (the "Offered Debt Securities") will be
described in the Prospectus Supplement relating to such Offered Debt
Securities.
The Debt Securities are to be issued under an Indenture (the "Indenture"),
dated as of May 1, 1992, between the Company and Chemical Bank, a corporation
organized under the laws of the State of New York, as Trustee (the "Trustee").
A copy of the form of Indenture is filed as an exhibit to the Registration
Statement. The following summaries of certain provisions of the Debt
Securities and the Indenture do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, all the provisions of the
Indenture, including the definitions therein of certain terms. Whenever
particular provisions or defined terms in the Indenture are referred to, such
provisions or defined terms are incorporated herein by reference. Section
references used herein are references to the Indenture. Capitalized terms not
otherwise defined herein shall have the meaning given to them in the
Indenture.
GENERAL
The Debt Securities will be nonconvertible, unsecured obligations of the
Company.
The Debt Securities of any series may be issued in definitive form or, if
provided in the Prospectus Supplement relating thereto, may be represented in
whole or in part by a Global Security or Securities, registered in the name of
a Depositary designated by the Company. Each Debt Security represented by a
Global Security is referred to herein as a "Book-Entry Security".
The Indenture does not limit the amount of Debt Securities that may be
issued thereunder and provides that Debt Securities may be issued thereunder
from time to time in one or more series.
Reference is made to the Prospectus Supplement relating to the particular
series of Offered Debt Securities offered thereby for the following terms of
the Offered Debt Securities: (i) the title of the Offered Debt Securities;
(ii) any limit upon the aggregate principal amount of the Offered Debt
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Securities; (iii) the date or dates on which the principal of the Offered Debt
Securities is payable; (iv) the rate or rates (which may be fixed or variable)
per annum at which the Offered Debt Securities will bear interest, if any, the
date or dates from which such interest will accrue, or the method by which
such date or dates shall be determined, the date on which payment of such
interest will commence, the Interest Payment Dates on which such interest will
be payable and the Regular Record Date for the interest payable on any
Interest Payment Date; (v) the place or places where the principal of,
premium, if any, and interest on the Offered Debt Securities will be payable;
(vi) the period or periods within which, the price or prices at which and the
terms and conditions upon which the Offered Debt Securities will, pursuant to
any mandatory sinking fund provisions, or may, pursuant to any optional
sinking fund provisions, be redeemed in whole or in part by the Company; (vii)
the period or periods within which, the price or prices at which and the terms
and conditions upon which the Offered Debt Securities may be repaid, in whole
or in part, at the option of the Holder thereof; (viii) the right, if any, of
the Company to issue Offered Debt Securities in lieu of Offered Debt
Securities theretofore redeemed or repaid; (ix) if other than denominations of
$1,000 and any integral multiple thereof, the denominations in which the
Offered Debt Securities will be issuable; (x) if other than the principal
amount thereof, the portion of the principal amount of the Offered Debt
Securities which shall be payable upon declaration of acceleration of the
Maturity thereof; (xi) the currency of payment of principal of and premium, if
any, and interest on the Offered Debt Securities; (xii) any index used to
determine the amount of payments of principal of and premium, if any, and
interest on the Offered Debt Securities; (xiii) whether the Offered Debt
Securities will be issued in whole or in part in the form of one or more
Global Securities and, in such case, the Depositary for such Global
Securities; and (xiv) any other terms of the Offered Debt Securities.
(Section 301)
Unless otherwise provided in a Prospectus Supplement and except with respect
to Book-Entry Securities, principal, premium, if any, and interest, if any,
will be payable, and the Debt Securities will be transferable, at the office
or agency of the Company maintained for such purposes in the Borough of
Manhattan, The City of New York, which will be the office of the Trustee, at
55 Water Street, New York, New York 10041, or at such other places in the
Borough of Manhattan, The City of New York, as the Company may designate.
Unless other arrangements are made, interest will be paid by checks mailed to
the Holders at their addresses as they appear in the Security Register.
(Sections 202, 305 and 1002) For a description of payments of principal of,
premium, if any, and interest on, and transfer of, Book-Entry Securities, and
exchanges of Global Securities representing Book-Entry Securities, see "Book-
Entry Securities".
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders may be given in writing to the Trustee at its Corporate Trust
Office, Attention: Corporate Trust Department,55 Water Street, New York, New
York 10041 or at any Place of Payment. (Section 105)
Unless otherwise indicated in the Prospectus Supplement relating thereto and
except with respect to Book-Entry Securities, the Debt Securities will be
issued only in fully registered form, without coupons, in denominations of
$1,000 and any integral multiple thereof. (Section 302) No service charge will
be made for any registration of transfer or exchange of the Debt Securities,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith. (Section 305)
Debt Securities may be issued under the Indenture as Original Issue Discount
Securities to be offered and sold at a substantial discount below their stated
principal amount. Federal income tax consequences and other special
considerations applicable to any such Original Issue Discount Securities and
to any other securities which are issued with original issue discount for
federal income tax purposes will be described in the Prospectus Supplement
relating thereto. "Original Issue Discount Security" means any security which
provides for an amount less than the principal amount thereof to be due and
payable upon the declaration of acceleration of the maturity thereof upon the
occurrence of an Event of Default and the continuation thereof. (Section 101)
Unless otherwise indicated in a Prospectus Supplement, the covenants
contained in the Indenture and the Debt Securities would not necessarily
afford Holders of the Debt Securities protection in the
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event of a highly leveraged or other transaction involving the Company that
may adversely affect Holders.
RESTRICTIONS ON SECURED DEBT
The Company covenants in the Indenture that it will not, nor will it permit
any United States Subsidiary to, create, assume or incur any Lien (except any
existing on the date of the Indenture) upon any of its or their Principal
Properties, whether owned at such date or thereafter acquired, as security for
any indebtedness without making effective provision, and the Company covenants
in the Indenture that in any such case effective provision will be made,
whereby the Debt Securities shall be secured equally and ratably with (or
prior to) any and all other obligations and indebtedness thereby secured;
provided, however, that the foregoing restriction shall not apply to: (a)
Liens upon any property or assets owned by any Subsidiary when it became a
Subsidiary; (b) Liens upon any property acquired after the date of the
Indenture, securing the purchase price thereof or created or incurred
simultaneously with (or within 180 days after) such acquisition to finance the
acquisition of such property or existing on such property at the time of such
acquisition, or Liens on improvements made after such date, in each case
subject to certain conditions and provided that the principal amount of the
obligation or indebtedness secured by such Lien shall not exceed 100% of the
cost or fair value (as determined in good faith by the Board of Directors),
whichever shall be lower, of the property or improvements at the time of the
acquisition or completion thereof; (c) certain renewals, extensions or
replacements of the Liens referred to in clauses (a) and (b); (d) certain tax
Liens or governmental charges and materialmen's, mechanics', landlords' or
other like Liens arising in the ordinary course of business and securing
obligations not overdue or which shall be contested in good faith; (e) certain
pledges or deposits; (f) any lease; (g) Liens on, and created or arising
solely in connection with the tax-exempt financing of, certain facilities; (h)
easements or similar encumbrances, the existence of which do not impair the
use of the property subject thereto for the purposes for which it is held or
was acquired; and (i) Liens arising out of any final judgment for the payment
of money aggregating not in excess of $10,000,000 or Liens arising out of any
judgments which are being contested in good faith. Certain of the Company's
subsidiaries, including its Canadian and Brazilian subsidiaries, are not
subject to the foregoing restriction.
Notwithstanding the above, the Company or any United States Subsidiary may
create, assume or incur any Lien that would otherwise be subject to the
foregoing restriction, provided that at no time shall the aggregate amount of
all outstanding obligations and indebtedness secured by Liens that would
otherwise be prohibited by the above, plus the aggregate amount of
Attributable Debt in respect of sale and leaseback transactions described in
the next succeeding paragraph (other than any such transactions to the extent
that the cash portion of the net proceeds of the sale of such property shall
have been applied in compliance with clause (b) of the following paragraph),
exceed 10% of Consolidated Net Tangible Assets at the end of the next
preceding fiscal year of the Company. (Section 1007)
RESTRICTIONS ON SALE AND LEASEBACK TRANSACTIONS
The Company covenants in the Indenture that it will not, and will not permit
any United States Subsidiary to, directly or indirectly, sell or transfer
(other than to the Company or a United States Subsidiary) any Principal
Property (other than property sold or transferred to an industrial development
corporation or governmental instrumentality in connection with a revenue or
pollution control financing) owned on the date of the Indenture or thereafter
acquired with the intention that the Company or any United States Subsidiary
shall take back a lease thereof (other than a lease for a term of not more
than three years or a lease entered into solely for tax purposes) unless (a)
the net proceeds of such sale shall at least be equal to the fair value (as
determined in good faith by the Board of Directors) of such Principal
Property, and either (b) an amount equal to the cash portion of the net
proceeds of such sale shall be applied within 180 days either before or after
the effective date of any such transaction (i) to the retirement of Funded
Indebtedness (other than any thereof owed to the Company or any Subsidiary) or
(ii) to the retirement of Debt Securities or (iii) to the purchase of
property, facilities or equipment (other than the property, facilities or
equipment involved in such sale) having a value at least equal to the cash
portion of the net proceeds of such sale or (c) the property, facilities or
equipment involved in such sale could have been subjected to a Lien to secure
indebtedness in a
6
<PAGE>
principal amount equal to the aggregate amount of Attributable Debt in respect
of such sale without equally and ratably securing the Debt Securities pursuant
to the preceding paragraph. (Section 1008)
RESTRICTIONS ON TRANSFER OF PRINCIPAL PROPERTIES
The Company covenants in the Indenture that it will not, and will not permit
any United States Subsidiary to, transfer (whether by merger, consolidation or
otherwise) any Principal Property to any Subsidiary other than a United States
Subsidiary unless the Company or such United States Subsidiary receives fair
value therefor (as determined in good faith by the Board of Directors) or
unless within 120 days of the effective date of such transfer Funded
Indebtedness of the Company or a United States Subsidiary, which by its terms
is not subordinated to the Debt Securities and is in a principal amount equal
to such fair value, is retired (other than any mandatory retirement). (Section
1009)
CERTAIN DEFINITIONS
"Attributable Debt" means, as to any particular lease entered into after the
date of the Indenture under which any Person is at the time liable and at any
date as of which the amount thereof is to be determined, the total net amount
of rent required to be paid by such Person under such lease during the
remaining term thereof, discounted to present values as of such time in
accordance with generally accepted accounting principles from the respective
due dates thereof to such date.
"Consolidated Net Tangible Assets" means the total amount of assets of the
Company and its consolidated Subsidiaries (less applicable reserves) after
deducting therefrom: (a) all current liabilities of the Company and its
consolidated Subsidiaries and (b) goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, such assets
and exclusions and deductions therefrom to be in such amounts, if any, as
would appear on a consolidated balance sheet of the Company and its
consolidated Subsidiaries as of the date of computation, prepared in
accordance with generally accepted accounting principles applied on a
consistent basis.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind.
"Principal Property" means (a) any building, structure or other facility
used primarily for manufacturing and located in the United States (other than
facilities financed with tax-exempt bonds), in each case the net book value of
which on the date as of which the determination is being made shall exceed 1%
of Consolidated Net Tangible Assets, and (b) any timberlands in the United
States owned in fee or under contract for the purchase of the fee by the
Company or any United States Subsidiary other than such timberlands in the
aggregate not exceeding 10% of the timberlands acreage in the United States
owned in fee or under contract for the purchase of the fee by the Company or
any United States Subsidiary on the date as of which any determination shall
be made; provided, however, that the term "Principal Property" shall not
include any timberlands, buildings, structures, facilities or any portion of
any of the foregoing which, in the opinion of the Board of Directors of the
Company, shall not be of material importance to the total business conducted
by the Company and its Subsidiaries taken as an entirety; and provided,
further, that the term "Principal Property" shall not include any timberlands
designated by the Board of Directors as being held primarily for development
and/or sale, or any timberlands held for the exploitation of minerals or
mineral rights.
"United States Subsidiary" means any Subsidiary other than a Subsidiary
which: (a) is not organized under the laws of the United States or any state
thereof and does not regularly maintain more than 50% of its operating assets
within the continental limits of the United States; (b) is principally engaged
in the business of financing; (c) is principally engaged in the business of
owning, buying, selling, leasing, dealing in or developing real property; or
(d) is principally engaged in exporting goods or merchandise from or importing
goods or merchandise into the United States. (Section 101)
MERGERS AND SALES OF ASSETS BY THE COMPANY
The Company may not consolidate with or merge into any other corporation or
transfer its properties and assets substantially as an entirety to any Person
unless (a) the corporation formed by
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<PAGE>
such consolidation or into which the Company is merged or the Person to which
the properties and assets of the Company are so transferred shall be a
corporation organized and existing under the laws of the United States, any
State thereof or the District of Columbia and shall expressly assume the
payment of the principal of (and premium, if any) and interest on the Debt
Securities and the performance of the other covenants of the Company under the
Indenture, (b) immediately after giving effect to such transaction, no Event
of Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing, (c) such
surviving corporation or such Person, as the case may be, shall not
immediately thereafter have outstanding indebtedness secured by any Lien not
permitted by the Indenture or shall have secured the Debt Securities equally
and ratably with (or prior to) any indebtedness secured thereby, and (d) the
Company has delivered to the Trustee an Officers' Certificate and an Opinion
of Counsel, each stating that such consolidation, merger, conveyance or
transfer and any supplemental indenture comply with the Indenture and the
conditions precedent therein relating to any such transaction have been
complied with. (Section 801)
The Company may not lease its properties and assets substantially as an
entirety to any Person. (Section 803)
EVENTS OF DEFAULT
The Indenture defines an Event of Default with respect to any series of Debt
Securities as being any one of the following events: (i) default for 30 days
in any payment of interest on any Debt Security of such series; (ii) default
in the payment of principal of, premium, if any, on any Debt Security of such
series when due; (iii) default in the deposit of any sinking fund payment with
respect to any Debt Security of such series when due; (iv) default, for 60
days after appropriate notice, in performance of any other covenant or
warranty in the Indenture (other than a covenant or warranty included in the
Indenture solely for the benefit of series of Debt Securities other than that
series); (v) certain events of bankruptcy, insolvency or reorganization; or
(vi) any other Event of Default provided with respect to Debt Securities of
that series. In case an Event of Default shall occur and be continuing with
respect to any series of Debt Securities, the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Debt Securities of that
series may declare the principal amount of such series (or, if the Debt
Securities of that series are Original Issue Discount Securities, such portion
of the principal as may be specified in the terms of that series) to be due
and payable immediately. Any Event of Default with respect to a particular
series of Debt Securities may be waived by the Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of such series,
except in the event of a failure to pay principal of, premium, if any, or
interest on such Debt Security or in respect of a covenant or provision which
under the Indenture cannot be modified or amended without the consent of the
Holder of each Outstanding Debt Security of each series affected by such
modification or covenant. Upon receipt by the Trustee of any notice pursuant
to (iv) above with respect to the Debt Securities of a series all or part of
which is represented by a Book-Entry Security, the Trustee shall establish a
record date for determining Holders of Outstanding Debt Securities of such
series entitled to join in such notice, which record date shall be at the
close of business on the day the Trustee receives such notice. (Sections 501,
502 and 513)
Reference is made to the Prospectus Supplement relating to each series of
Offered Debt Securities which are Original Issue Discount Securities for the
particular provisions relating to acceleration of the maturity of a portion of
the principal amount of such Original Issue Discount Securities upon the
occurrence of an Event of Default and the continuation thereof.
The Indenture requires the Company to file annually with the Trustee an
officers' certificate as to the absence of defaults under the terms of the
Indenture. (Section 1011) The Indenture provides that the Trustee may withhold
notice to the Holders of the Debt Securities of any default (except in payment
of principal or premium, if any, or interest or any sinking fund instalment)
if it considers such to be in the interest of the Holders of the Debt
Securities. (Section 602)
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Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the
Indenture provides that the Trustee shall be under no obligation to exercise
any of its rights or powers under the Indenture at the request, order or
direction of the Holders of the Debt Securities unless such Holders shall have
offered to the Trustee reasonable indemnity. (Sections 601 and 603) Subject to
such provisions for indemnification and certain other rights of the Trustee,
the Indenture provides that the Holders of a majority in principal amount of
the Outstanding Debt Securities of any series affected shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee with respect to the Debt Securities of such series. In the case of
Book-Entry Securities, the Indenture requires the Trustee to establish a
record date for purposes of determining which Holders are entitled to join in
such direction. (Sections 512 and 603)
No Holder of any Debt Security of any series will have the right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless (i) such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to Debt
Securities of that series, (ii) the Holders of at least 25% in principal
amount of the Outstanding Debt Securities of that series shall have made
written request to the Trustee to institute such proceeding as Trustee, (iii)
such Holder or Holders shall have offered to the Trustee reasonable indemnity,
(iv) the Trustee shall have failed to institute such proceeding within 60
days, and (v) the Trustee shall not have received from the Holders of a
majority in aggregate principal amount of the Outstanding Debt Securities of
that series a direction inconsistent with such request. (Section 507) However,
the Holder of any Debt Security will have an absolute right to receive payment
of the principal of and premium (if any) and interest on such Debt Security on
or after the due dates expressed in such Debt Security and to institute suit
for the enforcement of any such payment. (Section 508)
MODIFICATION AND WAIVER
Certain modifications and amendments of the Indenture may be made by the
Company and the Trustee only with the consent of the Holders of not less than
66 2/3% in principal amount of the Outstanding Debt Securities of each series
affected by the modification or amendment, provided that no such modification
or amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby: (i) change the Stated Maturity of the principal of,
or any instalment of principal of or interest on, any such Debt Security; (ii)
reduce the principal amount of, or the premium, if any, or the interest on,
any such Debt Security (including in the case of an Original Issue Discount
Security the amount payable upon acceleration of the maturity thereof); (iii)
change the place of payment where, or the coin or currency in which, any
principal of (and premium, if any) and interest on, any such Debt Security is
payable; (iv) impair the right to institute suit for the enforcement of any
such payment on or with respect to any such Debt Security; (v) reduce the
above-stated percentage of Outstanding Debt Securities of any series the
consent of the Holders of which is necessary to modify or amend the Indenture;
or (vi) modify the foregoing requirements or reduce the percentage of
aggregate principal amount of Outstanding Debt Securities of any series
necessary for waiver of compliance with certain provisions of the Indenture or
for waiver of certain defaults. The Company may, but shall not be obligated
to, fix a record date for the purpose of determining the Persons entitled to
consent to any modification or amendment to the Indenture. (Section 902)
The Holders of not less than 66 2/3% in principal amount of the Outstanding
Debt Securities of any series may on behalf of the Holders of all Debt
Securities of that series waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the
Indenture. The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Persons entitled to waive compliance with
any covenant or condition under the Indenture. (Section 1012) The Holders of a
majority in principal amount of the Outstanding Debt Securities of any series
may on behalf of the Holders of all Debt Securities of that series
waive any past default under the Indenture with respect to that series, except
a default in the payment of the principal of, premium, if any, or interest on
any Debt Security of that series or in respect of a provision which under the
Indenture cannot be modified or amended without the consent of the Holder of
each Outstanding Debt Security of that series affected. (Section 513)
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DEFEASANCE OF OFFERED DEBT SECURITIES OR CERTAIN COVENANTS IN CERTAIN
CIRCUMSTANCES
Satisfaction and Discharge. Upon the request of the Company, the Indenture
will cease to be of further effect (except for certain obligations to register
the transfer or exchange of Debt Securities, rights of Holders to receive pay-
ments of principal, premium, if any, and interest on the Debt Securities, any
other rights of such Holders with respect to amounts deposited with the
Trustee in accordance with this paragraph, and the obligations of the Company
to the Trustee and any Authenticating Agent), if, among other things, (i) all
Outstanding Debt Securities (other than Debt Securities which have been de-
stroyed, lost or stolen and which have been replaced or paid and Debt Securi-
ties for whose payment money has been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or dis-
charged from such trust) have been delivered to the Trustee for cancellation;
or (ii) all such Debt Securities not delivered to the Trustee for cancellation
(A) have become due and payable, or (B) will become due and payable at their
Stated Maturity within one year, or (C) are to be called for redemption within
one year, or (D) are deemed paid and discharged pursuant to the following par-
agraph, as applicable, and the Company, in the case of (A), (B) or (C) above,
has deposited or caused to be deposited with the Trustee in trust for such
purpose an amount of money, or in the case of (B) or (C) above and if no Debt
Securities of any series Outstanding are subject to repayment at the option of
Holders, (I) U.S. Government Obligations which through the payment of interest
and principal in respect thereof in accordance with their terms will provide
not later than one day before the Stated Maturity or Redemption Date, as the
case may be, money in an amount, or (II) a combination of money or U.S. Gov-
ernment Obligations as provided in (I) above, in each case sufficient to pay
and discharge the entire indebtedness on such Debt Securities, for principal,
premium, if any, and interest to the date of such deposit (in the case of Debt
Securities which have become due and payable) or to the Stated Maturity or Re-
demption Date, as the case may be. (Section 401)
Defeasance and Discharge. The Indenture provides that the Company will be
discharged from any and all obligations in respect of the Debt Securities of
any series (except for certain obligations to register the transfer or
exchange of Debt Securities of such series, to replace stolen, lost or
mutilated Debt Securities of such series, to maintain paying agencies and hold
moneys for payment in trust) on the 91st day after the date of deposit with
the Trustee, in trust, of money and/or U.S. Government Obligations, which
through the payment of interest and principal in respect thereof in accordance
with their terms will provide money, in an amount sufficient to pay each
instalment of principal, premium, if any, and interest on and any mandatory
sinking fund payments in respect of the Debt Securities of such series on the
Stated Maturity of such payments, or until a Redemption Date designated by the
Company, in accordance with the terms of the Indenture and such Debt
Securities. Such discharge may only occur if, among other things, (i) the
Company has received from, or there has been published by, the United States
Internal Revenue Service a ruling to the effect that Holders of the Debt
Securities of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit, defeasance and discharge and
will be subject to federal income tax on the same amount and in the same
manner and at the same times, as would have been the case if such deposit,
defeasance and discharge had not occurred, and (ii) such deposit, defeasance
and discharge will not cause any Debt Securities of such series then listed on
the New York Stock Exchange or other securities exchange to be delisted.
(Section 403)
The Indenture provides that the Company may effect a discharge of the Debt
Securities of any series and the Indenture notwithstanding any prior
defeasance of certain of the Company's obligations under the Indenture in
accordance with the following paragraph. (Section 403)
Defeasance of Certain Covenants. The Indenture provides that with respect to
any series of Debt Securities the Company may elect to omit to comply with the
restrictive covenants of the Indenture described herein under "Restrictions on
Secured Debt", "Restrictions on Sale and Leaseback Transactions" and
"Restrictions on Transfer of Principal Properties" if the Company deposits
with the Trustee, in trust, money and/or U.S. Government Obligations, which
through the payment of interest and principal in respect thereof in accordance
with their terms will provide money, in an amount
10
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sufficient to pay each instalment of principal, premium, if any, and interest
on and any mandatory sinking fund payments in respect of the Debt Securities
of such series on the Stated Maturity of such payments, or until a Redemption
Date designated by the Company, in accordance with the terms of the Indenture
and such Debt Securities. Such a trust may only be established if, among other
things, the Company has delivered to the Trustee an Opinion of Counsel (who
may be an employee of or counsel for the Company) to the effect that the
Holders of the Debt Securities of such series will not recognize income, gain
or loss for federal income tax purposes as a result of such deposit and
defeasance of certain covenants and will be subject to federal income tax on
the same amount and in the same manner and at the same times, as would have
been the case if such deposit and defeasance had not occurred. (Section 1010)
Defeasance and Events of Default. In the event the Company omits to comply
with certain covenants of the Indenture with respect to any series of Debt
Securities as described above and the Debt Securities of such series are
declared due and payable because of the occurrence of any Event of Default,
the amount of money and U.S. Government Obligations on deposit with the
Trustee will be sufficient to pay amounts due on the Debt Securities of such
series at the time of their Stated Maturity, or until a Redemption Date
designated by the Company, but may not be sufficient to pay amounts due on the
Debt Securities of such series at the time of the acceleration resulting from
such Event of Default. However, the Company shall remain liable for such
payments.
The Prospectus Supplement may describe any modifications to the provisions
described above, with respect to the Debt Securities or a particular series
thereof.
BOOK-ENTRY SECURITIES
The following description of Book-Entry Securities will apply to any series
of Debt Securities issued in whole or in part in the form of a Global Security
or Securities except as otherwise provided in the Prospectus Supplement
relating thereto.
Upon issuance, all Book-Entry Securities of like tenor and having the same
date of original issue will be represented by a single Global Security. Each
Global Security representing Book-Entry Securities will be deposited with, or
on behalf of, the Depositary, which will be a clearing agent registered under
the 1934 Act. The Global Security will be registered in the name of the
Depositary or a nominee of the Depositary which will be identified in the
Prospectus Supplement.
Ownership of beneficial interest in a Global Security representing Book-
Entry Securities will be limited to institutions that have accounts with the
Depositary or its nominee ("participants") or persons that may hold interests
through participants. In addition, ownership of beneficial interests by
participants in such a Global Security will only be evidenced by, and the
transfer of that ownership interest will only be effected through, records
maintained by the Depositary or its nominee for such Global Security.
Ownership of beneficial interest in such a Global Security by persons that
hold through participants will only be evidenced by, and the transfer of that
ownership interest within such participant will only be effected through,
records maintained by such participant. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such
securities in definitive form. Such laws may impair this ability to transfer
beneficial interests in such a Global Security.
Payment of principal of, premium, if any, and interest on Book-Entry
Securities represented by any Global Security registered in the name of or
held by the Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owners and Holder of the Global
Security representing such Book-Entry Securities. None of the Company, the
Trustee or any agent of the Company or the Trustee will have any
responsibility or liability for any aspect of the Depositary's records or any
participant's records relating to or payments made on account of beneficial
ownership interests in a Global Security representing such Book-Entry
Securities or for maintaining, supervising or reviewing any of the
Depositary's records or any participant's records relating to such beneficial
ownership interests. Payments by participants to owners of beneficial
interests in a Global Security
11
<PAGE>
held through such participants will be governed by the Depositary's
procedures, as is now the case with securities held for the accounts of
customers registered in "street name," and will be the sole responsibility of
such participants.
No Global Security described above may be transferred except as a whole by
the Depositary for such Global Security to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary.
A Global Security representing Book-Entry Securities is exchangeable for
definitive Debt Securities in registered form, of like tenor and of an equal
aggregate principal amount, only if (a) the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time the Depositary ceases to be a clearing agency
registered under the 1934 Act, (b) the Company in its sole discretion
determines that such Global Security shall be exchangeable for definitive Debt
Securities in registered form or (c) there shall have occurred and be
continuing an Event of Default with respect to the Debt Securities. Any Global
Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable in whole for definitive Debt Securities in registered form, of
like tenor and of an equal aggregate principal amount, and, unless otherwise
specified in the Prospectus Supplement relating thereto, in denominations of
$1,000 and integral multiples thereof. Such definitive Debt Securities shall
be registered in the name or names of such person or persons as the Depositary
shall instruct the Trustee. It is expected that such instructions may be based
upon directions received by the Depositary from its participants with respect
to ownership of beneficial interests in such Global Security.
Except as provided above, owners of beneficial interests in such Global
Security will not be entitled to receive physical delivery of Debt Securities
in definitive form and will not be considered the Holders thereof for any
purpose under the Indenture, and no Global Security representing Book-Entry
Securities shall be exchangeable, except for another Global Security of like
denomination and tenor to be registered in the name of the Depositary or its
nominee. Accordingly, each person owning a beneficial interest in such Global
Security must rely on the procedures of the Depositary and, if such person is
not a participant, on the procedures of the participant through which such
person owns its interest, to exercise any rights of a Holder under the
Indenture. The Company understands that under existing industry practices, in
the event that the Company requests any action of Holders or an owner of a
beneficial interest in such Global Security desires to give or take any action
that a Holder is entitled to give or take under the Indenture, the Depositary
would authorize the participants holding the relevant beneficial interests to
give or take such action, and such participants would authorize beneficial
owners owning through such participant to give or take such action or would
otherwise act upon the instructions of beneficial owners owning through them.
CERTAIN INFORMATION REGARDING THE TRUSTEE
The Trustee and its affiliates provide credit to the Company and its
subsidiaries from time to time. The largest amount of borrowings by the
Company and its subsidiaries from the Trustee and its affiliates outstanding
at any time during 1992 was $25,000,000. In addition, commercial paper issued
by a subsidiary of the Company, the largest amount of which outstanding at any
time during 1992 was $21,400,000, is secured by a letter of credit issued by
an affiliate of the Trustee. The Trustee acts as trustee under two indentures
relating to tax-exempt financings of the Company. Also, two members of the
Company's Board of Directors serve as members of the board of directors of the
Trustee's parent corporation and the Trustee; one of these individuals is the
Chairman and Chief Executive Officer of the Company and the other is the
President and Chief Operating Officer (who will become Chairman and Chief
Executive Officer on January 1, 1994) of the Trustee's parent corporation and
the Trustee. In addition, a third member of the Company's Board of Directors
serves as a member of the board of directors of an affiliate of the Trustee.
Additionally, affiliates of the Trustee provide other banking services to the
Company, including pension fund investment management and cash management
services. The Company anticipates that it and its subsidiaries will continue
to conduct banking transactions with, and utilize other banking services of,
the Trustee and affiliates of the Trustee in the normal course of their
business.
12
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through underwriters and also may
sell Debt Securities directly to other purchasers or through agents. Such
underwriters may include Goldman, Sachs & Co., J.P. Morgan Securities Inc. and
Salomon Brothers Inc or another underwriter acting alone or may be a group of
underwriters represented by firms including one or more of Goldman, Sachs &
Co., J.P. Morgan Securities Inc. and Salomon Brothers Inc. Unless otherwise
indicated in the Prospectus Supplement, any underwriters will be obligated to
purchase all of the Offered Debt Securities if any are purchased. Only
underwriters named in each Prospectus Supplement are deemed to be underwriters
in connection with the Debt Securities offered thereby.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sales of Debt Securities, underwriters or agents may
receive compensation from the Company or from purchasers of Debt Securities
for whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters may sell Debt Securities to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers and agents that participate
in the distribution of Debt Securities may be deemed to be underwriters, and
any discounts or commissions received by them and any profit on the resale of
Debt Securities by them may be deemed to be underwriting discounts and
commissions, under the 1933 Act. Any such underwriter or agent will be
identified, and any such compensation received from the Company will be
described, in the Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of Debt Securities may
be entitled to indemnification by the Company against certain liabilities,
including liabilities under the 1933 Act, or to contribution with respect to
payments which the underwriters, dealers or agents may be required to make in
respect thereof.
Goldman, Sachs & Co. has acted as financial advisor to the Company and has
performed services in connection with the underwriting and sale of securities
on behalf of the Company for which it has received fees. The Company
anticipates that Goldman, Sachs & Co. will provide similar services in the
future. John L. Weinberg, a director of the Company and a member of the
Committee on Board Affairs and the Compensation and Stock Option Committee of
the Company's Board of Directors, was Senior Partner of The Goldman Sachs
Group, L.P. and its principal affiliate Goldman, Sachs & Co., until November
30, 1990, when he retired as a general partner and became Senior Chairman of
The Goldman Sachs Group, L.P. In July 1991, Mr. Weinberg became Senior
Chairman of Goldman, Sachs & Co.
Salomon Brothers Inc has performed services in connection with the
underwriting of securities on behalf of the Company for which it has received
fees. The Company anticipates that Salomon Brothers Inc will provide similar
services in the future. A director of Salomon Brothers Inc is also Chairman of
the Board and Chief Executive Officer of Berkshire Hathaway Inc., affiliates
of which own 300,000 shares of Preference Stock, $92.50 Cumulative Convertible
Series, $1.00 par value, of the Company, which are convertible into
approximately eight percent of the Common Stock of the Company outstanding on
September 30, 1993 after giving effect to such conversion.
VALIDITY OF DEBT SECURITIES
Unless otherwise specified in a Prospectus Supplement, the validity of the
Debt Securities will be passed upon for the Company by Lawrence A. Fox, Esq.,
Vice President and Secretary of the
13
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Company, and, if sold to or through underwriters, by Sullivan & Cromwell, New
York, New York. Mr. Fox holds options to acquire 18,850 shares of the
Company's Common Stock and, as of September 30, 1993, 2,024 shares of the
Company's Common Stock were held for his account under an employee benefit
plan.
EXPERTS
The audited financial statements and schedules incorporated by reference in
this Prospectus have been audited by Arthur Andersen & Co., independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm
as experts in accounting and auditing in giving said reports.
14
<PAGE>
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUPPLEMENT
OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN
ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
Available Information....................................................... S-2
The Company................................................................. S-2
Use of Proceeds............................................................. S-3
Description of Debentures................................................... S-3
Capitalization.............................................................. S-5
Selected Financial Information.............................................. S-6
Recent Developments......................................................... S-7
Underwriting................................................................ S-7
Legal Opinions.............................................................. S-8
Experts..................................................................... S-8
PROSPECTUS
Available Information....................................................... 2
Incorporation of Documents by Reference..................................... 3
The Company................................................................. 3
Use of Proceeds............................................................. 3
Ratio of Earnings to Fixed Charges.......................................... 4
Description of Debt Securities.............................................. 4
Plan of Distribution........................................................ 13
Validity of Debt Securities................................................. 13
Experts..................................................................... 14
</TABLE>
$200,000,000
CHAMPION INTERNATIONAL
CORPORATION
7.35% DEBENTURES DUE
NOVEMBER 1, 2025
SALOMON BROTHERS INC
GOLDMAN, SACHS & CO.
PROSPECTUS SUPPLEMENT
DATED NOVEMBER 7, 1995
