<PAGE>
RULE NO. 424(b)(5)
REGISTRATION NO. 33-62819
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED NOVEMBER 17, 1995
$200,000,000
CHAMPION INTERNATIONAL CORPORATION
7.20% DEBENTURES DUE NOVEMBER 1, 2026
----------------
Interest on the Debentures is payable on May 1 and November 1 of each year,
commencing May 1, 1997. The Debentures will not be redeemable at the option of
the Company prior to maturity and do not provide for any sinking fund. The
registered holder of each Debenture may elect to have that Debenture, or any
portion of the principal amount thereof that is a multiple of $1,000, repaid
on November 1, 2011 at 100% of the principal amount thereof, together with
accrued interest to November 1, 2011. Such election, which is irrevocable when
made, must be made within the period commencing on September 1, 2011 and
ending at the close of business on October 1, 2011. The Debentures will be
issued only in registered form in denominations of $1,000 and integral
multiples thereof. See "Description of Debentures".
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 each
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>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT(2) COMPANY(1)(3)
----------------- ------------ -------------
<S> <C> <C> <C>
Per Debenture...................... 99.943% 0.750% 99.193%
Total.............................. $199,886,000 $1,500,000 $198,386,000
</TABLE>
- --------
(1) Plus accrued interest from November 1, 1996.
(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 6, 1996 against payment
therefor in immediately available funds.
GOLDMAN, SACHS & CO.
SALOMON BROTHERS INC
CHASE SECURITIES INC.
J.P. MORGAN & CO.
----------------
The date of this Prospectus Supplement is November 1, 1996.
<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, as amended (the "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. If available, such reports and other information may
also be accessed through the Commission's electronic data gathering, analysis
and retrieval system (EDGAR) via electronic means, including the Commission's
web site on the Internet (http://www.sec.gov). 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 market
pulp, plywood and lumber manufacturing operations and, as of June 30, 1996,
owned or controlled approximately 5,300,000 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 1995, over 86% 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 7.20%
Debentures due November 1, 2026 (the "Debentures") offered hereby to the
payment at maturity of the Company's commercial paper which is classified as
long-term debt for balance sheet purposes and to the prepayment of a portion of
the Company's bank term loans. The proceeds from such commercial paper and term
loans were used for general corporate purposes. It is anticipated that the
commercial paper to be paid at maturity with the proceeds of the Debentures
will bear interest at its maturity on November 6, 1996 at a rate of
approximately 5.69%. The Company's term loans bear interest at rates currently
ranging from 5.5906% to 5.7031% and mature from February 25, 1997 to January 3,
1999. The Company, however, has not yet identified which of these term loans
will be prepaid. Prior to such applications, 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, 2026. The Debentures will bear interest at the rate
per annum shown on the cover of this Prospectus Supplement from November 1,
1996 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, 1997, 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 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.
The Debentures will not be redeemable at the option of the Company prior to
maturity and do not provide for any sinking fund.
OPTIONAL REPAYMENT
The Debentures may be repaid on November 1, 2011, at the option of the
registered holders of the Debentures, at 100% of their principal amount,
together with accrued interest to November 1, 2011. In order for a holder to
exercise this option, the Company must receive at its office or agency in New
York, New York, during the period beginning on September 1, 2011 and ending at
5:00 p.m. (New York City time) on October 1, 2011 (or, if October 1, 2011 is
not a Business Day, the next succeeding Business Day), the Debenture with the
form entitled "Option to Elect Repayment on November 1, 2011" on the reverse of
the Debenture duly completed. Any such notice received by the Company during
the period beginning on September 1, 2011 and ending at 5:00 p.m. (New York
City time) on October 1, 2011 shall be irrevocable. See "Book-Entry System",
below. The repayment option may be exercised by the holder of a Debenture for
less than the entire principal amount of the Debentures held by such holder, so
long as the principal amount that is to be repaid is equal to $1,000 or an
integral multiple of $1,000. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any Debenture for
repayment will be determined by the Company, whose determination will be final
and binding.
Failure by the Company to repay the Debentures when required as described in
the preceding paragraph will result in an Event of Default under the Indenture.
S-3
<PAGE>
As long as the Debentures are represented by a Global Security, the
Depositary's nominee will be the registered holder of the Debentures and
therefore will be the only entity that can exercise a right to repayment. See
"Book-Entry System", below.
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.
So long as the Debentures are represented by a Global Security, the
Depositary's nominee will be the only entity that can exercise a right to
repayment pursuant to the Holder's option to elect repayment of its Debentures.
Notice by Participants or by owners of beneficial interests in a Global
Security held through such Participants of the exercise of the option to elect
repayment of beneficial interests in Debentures represented by a Global
Security must be transmitted to the Depositary in accordance with its
procedures on a form required by the Depositary and provided to Participants.
In order to ensure that the Depositary's nominee will timely exercise a right
to repayment with respect to a particular Debenture, the beneficial owner of
such Debenture must instruct the broker or other Participant through which it
holds an interest in such Debenture to notify the Depositary of its desire to
exercise a right to repayment. Different firms have different cut-off times for
accepting instructions from their customers and, accordingly, each beneficial
owner should consult the broker or other Participant through which it holds an
interest in a Debenture in order to ascertain the cut-off time by which such an
instruction must be given in order for timely notice to be delivered to the
Depositary. The Company will not be liable for any delay in delivery of such
notice to the Depositary.
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 June 30, 1996 and (b) as
adjusted to give effect to (i) the sale of the Escambia County, Florida
Pollution Control Revenue Bonds (Champion International Corporation Project)
Series 1996 (the "Escambia Bonds") on September 18, 1996, (ii) bank term loans
to the Company's Brazilian subsidiary in September 1996 (the "Bank Term Loans")
and (iii) the sale of the Debentures offered hereby, and the application of the
net proceeds therefrom to the payment at maturity of the Company's commercial
paper classified as long-term debt and prepayment of a portion of the Company's
bank term loans. See "Use of Proceeds".
<TABLE>
<CAPTION>
OUTSTANDING AS ADJUSTED
------------ ------------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C>
Total short-term debt (a)........................... $ 289,524 $ 289,524
============ ============
Long-term debt:
Debentures offered hereby......................... $ -- $ 200,000
Escambia Bonds.................................... -- 45,685
Bank Term Loans................................... -- 102,587
Secured, 10.1% average rate, payable through 2007. 2,370 2,370
Unsecured fixed rate, 8.0% average rate, payable
through 2028..................................... 2,271,083 2,271,083
Unsecured variable rate, 5.7% average rate, pay-
able through 2012 (b)............................ 301,331 55,646
Long-term lease obligations, 6.8% average rate, pay-
able through 2029.................................. 285,660 285,660
Long-term other contractual obligations, 6.0% aver-
age rate, payable through 1998..................... 1,921 1,921
------------ ------------
Total long-term debt and obligations (exclusive
of current installments) (c)................... 2,862,365 2,964,952
------------ ------------
Deferred income taxes............................... 1,313,179 1,313,179
------------ ------------
Minority interest in subsidiaries................... 112,613 112,613
------------ ------------
Shareholders' equity................................ 3,726,145 3,726,145
------------ ------------
Total long-term obligations and shareholders'
equity......................................... $ 8,014,302 $ 8,116,889
============ ============
</TABLE>
- --------
(a) Includes current installments of long-term debt of $155 million, but
excludes the $93 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 variable rate 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 June 30, 1996, the
Company had $93 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, up from $58 million at year-end
1995. At June 30, 1996, the Company had no notes outstanding under its U.S.
bank lines of credit, compared to $40 million at year-end 1995.
(c) The annual principal payment requirements under the terms of all long-term
debt agreements for the period July 1 through December 31, 1996 are $25
million and for the years 1997 through 2000 are $230 million, $330 million,
$298 million and $205 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, 1995 and each of the six-month periods ended June 30, 1996 and
June 30, 1995. The selected financial information is qualified by reference to
the 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, 1995 and its Quarterly Reports on Form 10-Q for the quarters ended March
31 and June 30, 1996. 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 of the Company.
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE
YEARS ENDED DECEMBER 31, 30,
---------------------------------------------------------- ----------------------
1991 1992 1993 1994 1995 1995 1996
---- ---- ---- ---- ---- ---- ----
OPERATING RESULTS
- ----------------- (IN THOUSANDS OF DOLLARS, EXCEPT RATIO DATA) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales............... $4,786,403 $4,926,471 $5,068,833 $5,318,192 $6,972,038 $3,390,456 $2,977,766
Interest and debt
expense................ 210,527 206,295 224,658 235,086 226,016 114,528 108,178
Other (income) expense--
net (a)................ (109,541) (142,516) 7,410 (57,342) (33,089) (31,253) (19,856)
Income (loss) before
extraordinary item and
cumulative effect of
accounting changes..... 40,343 13,920 (134,454) 63,305 771,835 318,758 99,201
Extraordinary item--loss
on early retirement of
debt, net of taxes..... -- -- (14,266) -- -- -- --
Cumulative effect of
accounting changes,
net of taxes (b)....... -- (454,314) (7,523) -- -- -- --
Net income (loss)....... 40,343 (440,394) (156,243) 63,305 771,835 318,758 99,201
Ratio of earnings to
fixed charges (c)...... 1.08 -- -- 1.29 5.92 5.14 2.17
<CAPTION>
DECEMBER 31, JUNE 30,
---------------------------------------------------------- ----------------------
1991 1992 1993 1994 1995 1995 1996
---- ---- ---- ---- ---- ---- ----
BALANCE SHEET DATA
- ------------------ (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Total assets............ $8,655,877 $9,381,432 $9,142,769 $8,963,628 $9,543,302 $9,154,062 $9,660,078
Short-term debt......... 141,497 131,260 176,310 399,106 227,827 487,516 289,524
Long-term debt.......... 2,977,873 3,290,875 3,316,165 2,889,252 2,828,509 2,994,790 2,862,365
$92.50 Preference Stock. 300,000 300,000 300,000 300,000 -- -- --
Shareholders' equity.... 3,671,144 3,158,803 2,950,118 2,960,745 3,646,691 3,095,635 3,726,145
</TABLE>
- -------
(a) For a description of the items constituting Other (income) expense--net
for the years ended December 31, 1993, 1994 and 1995 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, 1995.
(b) 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 No. 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 No. 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 No.
109, as of January 1, 1992, resulted in a one-time after-tax charge of $242
million to 1992 earnings.
(c) 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 1996 RESULTS
The Company reported third quarter net income of $32 million or 33 cents per
share. This compares to net income of $236 million or $2.44 per share fully
diluted in the third quarter of 1995 and net income of $16 million or 16 cents
per share in the second quarter of 1996.
The Company's paper segment reported third quarter operating income of $58
million compared to $419 million for the third quarter of 1995 and $44 million
for the second quarter of 1996. The decline from last year was due to sharply
lower prices for all of the Company's pulp and paper grades. Compared to the
second quarter of 1996, results for the third quarter of 1996 reflected higher
prices for pulp and lower prices for newsprint and publication paper grades.
Prices for a number of the Company's key paper grades, particularly newsprint
and publication papers, continued to decline throughout the second quarter.
The Company's wood products segment reported third quarter operating income
of $42 million compared to $34 million in the third quarter of 1995 and $29
million in the second quarter of 1996. The improvement from last year was
attributable primarily to higher prices for lumber. The improvement from the
second quarter of 1996 was due mainly to higher prices for lumber and increased
West Coast timber sales.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated February 14, 1996 and in the related Pricing Agreement dated November 1,
1996, 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
UNDERWRITER OF DEBENTURES
----------- -------------
<S> <C>
Goldman, Sachs & Co. .......................................... $ 60,000,000
Salomon Brothers Inc .......................................... 60,000,000
Chase Securities Inc. ......................................... 40,000,000
J.P. Morgan Securities Inc. ................................... 40,000,000
------------
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 0.45% 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".
S-7
<PAGE>
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
Chase Securities Inc., one of the Underwriters, is a wholly-owned subsidiary
of The Chase Manhattan Corporation. Walter V. Shipley, a director of the
Company and Chairman of the Audit Committee and a member of the Committee on
Board Affairs of the Company's Board of Directors is Chairman and Chief
Executive Officer of The Chase Manhattan Corporation. The Chase Manhattan Bank,
an affiliate of Chase Securities Inc., participates on a regular basis in
various general financing and banking transactions and services (including
certain trusteeships) for the Company.
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 12,250 shares of the Company's Common Stock and, as of October 31,
1996, 2,443 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 $600,000,000 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 November 17, 1995.
<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.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1994 and the Company's Quarterly Reports on Form 10-Q for the three month
periods ended March 31, 1995, June 30, 1995 and September 30, 1995, 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.
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<PAGE>
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 is a major
manufacturer of market pulp, plywood and lumber 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 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.
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
1990 1991 1992(1) 1993(2) 1994 SEPTEMBER 30, 1995
---- ---- ------- ------- ---- ------------------
<S> <C> <C> <C> <C> <C>
2.44 1.08 -- -- 1.29 5.76
</TABLE>
- --------
(1) For the twelve month period ended December 31, 1992, fixed charges
exceeded earnings by $34.8 million.
(2) For the twelve month period ended December 31, 1993, fixed charges
exceeded earnings by $204 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.
3
<PAGE>
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 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 450 West 33rd
Street, New York, New York 10001, 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,450 West 33rd Street, New York,
New York 10001 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)
4
<PAGE>
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 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)
5
<PAGE>
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 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.
Certain of the Company's subsidiaries, including its Canadian and Brazilian
subsidiaries, are not subject to the foregoing restriction. (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). Certain
of the Company's subsidiaries, including its Canadian and Brazilian
subsidiaries, are not subject to the foregoing restriction. (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
6
<PAGE>
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 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)
7
<PAGE>
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)
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
8
<PAGE>
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)
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 Out-
standing Debt Securities (other than Debt Securities which have been destroyed,
lost or stolen and which have been replaced or paid and Debt Securities 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 discharged 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 paragraph, as ap-
plicable, 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. Government 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 in-
terest to the date of such deposit (in the case of Debt Securities which have
become due and payable) or to the Stated Maturity or Redemption 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)
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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 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
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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 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 1994 was $19,000,000. In addition, commercial paper issued by a
subsidiary of the Company, the largest amount of which outstanding at any time
during 1994 was $19,000,000, was 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
Chairman and Chief Executive Officer of the Trustee's parent corporation and
the Trustee. Additionally, affiliates of the Trustee provide other banking
services to the Company and its subsidiaries, including pension fund investment
management and cash management
11
<PAGE>
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.
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.
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 Company, and, if sold to or through
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 in
this Prospectus have been audited by Arthur Andersen LLP, 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.
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTA-
TIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPEC-
TUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RE-
LIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PRO-
SPECTUS 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 SUP-
PLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECU-
RITIES 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.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<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.................................... 2
The Company................................................................ 3
Use of Proceeds............................................................ 3
Ratio of Earnings to Fixed Charges......................................... 3
Description of Debt Securities............................................. 3
Plan of Distribution....................................................... 12
Validity of Debt Securities................................................ 12
Experts.................................................................... 12
</TABLE>
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$200,000,000
CHAMPION INTERNATIONAL
CORPORATION
7.20% DEBENTURES DUE NOVEMBER 1, 2026
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PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO.
SALOMON BROTHERS INC
CHASE SECURITIES INC.
J.P. MORGAN & CO.
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