<PAGE>
P_R_O_S_P_E_C_T_U_S
$500,000,000
[LOGO]
7 1/2% NOTES DUE AUGUST 8, 2005
--------------
Interest will be payable on February 8 and August 8 of each year,
commencing February 8, 2001. The notes will mature on August 8, 2005. We may
redeem the notes in whole or part at any time at the redemption price described
on page 10. The notes are unsecured and will rank equally with all of our other
unsecured unsubordinated indebtedness, but will be effectively subordinate to
the indebtedness of our subsidiaries.
The notes will not be listed on any national securities exchange.
Currently, there is no public market for the notes.
------------------
<TABLE>
<CAPTION>
PER NOTE TOTAL
-------- -----
<S> <C> <C>
Public offering price (1)........................... 99.721% $498,605,000
Underwriting discount............................... .6% $3,000,000
Proceeds, before expenses, to Computer Sciences
Corporation....................................... 99.121% $495,605,000
</TABLE>
(1) Plus accrued interest from August 8, 2000, if settlement occurs after
that date
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The notes will be ready for delivery on or about August 8, 2000.
------------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
MORGAN STANLEY DEAN WITTER
-----------
The date of this prospectus is August 3, 2000.
<PAGE>
No person is authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
prospectus, and, if given or made, such information or representations must not
be relied upon as having been authorized. This prospectus does not constitute an
offer to sell or the solicitation of an offer to buy any securities other than
the securities described in this prospectus 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,
nor any sale made hereunder, shall, under any circumstances, create any
implication that there has been no change in our affairs since the date hereof
or that the information contained or incorporated by reference herein is correct
as of any time subsequent to the date of such information.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
WHERE YOU CAN FIND MORE INFORMATION......................... 1
FORWARD-LOOKING STATEMENTS.................................. 2
THE COMPANY................................................. 3
RECENT DEVELOPMENTS......................................... 5
USE OF PROCEEDS............................................. 6
CAPITALIZATION.............................................. 7
RATIO OF EARNINGS TO FIXED CHARGES.......................... 8
SELECTED FINANCIAL DATA..................................... 8
DESCRIPTION OF THE NOTES.................................... 10
UNDERWRITING................................................ 19
LEGAL MATTERS............................................... 21
EXPERTS..................................................... 21
</TABLE>
WITHIN THIS PROSPECTUS, WE SOMETIMES REFER TO YEARS WITHOUT SPECIFYING A
MONTH OR DAY. IN ALL SUCH CASES, UNLESS WE SPECIFICALLY REFER TO A CALENDAR
YEAR, THE REFERENCE IS TO OUR FISCAL YEAR ENDED ON THE FRIDAY CLOSEST TO
MARCH 31 OF SUCH YEAR. WHENEVER WE REFER TO THE "COMPANY" OR TO "US," OR USE THE
TERMS "WE" OR "OUR" IN THIS PROSPECTUS, WE ARE REFERRING TO COMPUTER SCIENCES
CORPORATION AND ITS SUBSIDIARIES. HOWEVER, FOR PURPOSES OF THE SECTION ENTITLED
"DESCRIPTION OF THE NOTES," WHENEVER WE REFER TO THE "COMPANY" OR TO "US," OR
USE THE TERMS "WE" OR "OUR," WE ARE REFERRING ONLY TO COMPUTER SCIENCES
CORPORATION.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission (the "SEC"). You may
read and copy any document we file at the SEC's public reference rooms in
Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-732-0330 for further information on the public reference rooms. You may
also obtain copies of these materials from the public reference section of the
SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Our
SEC filings are also available to the public from the SEC's web site at
http://www.sec.gov. You may also read and copy reports and other information we
file at the office of the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005. Information about our company is also available to the
public from our website at http://www.csc.com.
We have filed a registration statement on Form S-3 with the SEC under the
Securities Act of 1933, as amended. This prospectus does not contain all of the
information set forth in the registration statement. You should read the
registration statement for further information about us and the notes. You may
inspect the registration statement and its exhibits without charge at the office
of the SEC at 450 Fifth Street, N.W., in Washington, D.C. 20549, and you may
obtain copies from the SEC at prescribed rates.
The SEC allows us to "incorporate by reference" the information that we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus. The information filed by us with the
SEC in the future will update and supersede this information. We incorporate by
reference the documents listed below and any future filings made by us with the
SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended, until we sell all the notes:
1. Our Amended Annual Report on Form 10-K for the fiscal year ended
March 31, 2000; and
2. Our Current Report on Form 8-K dated June 20, 2000.
You may request a copy of these filings, at no cost, by writing or calling
us at the following address or telephone number:
Investor Relations
Computer Sciences Corporation
2100 East Grand Avenue
El Segundo, California 90245
(310) 615-0311
1
<PAGE>
FORWARD-LOOKING STATEMENTS
This prospectus contains or incorporates by reference statements that do not
directly or exclusively relate to historical facts. Such statements are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. You can typically identify forward-looking
statements by the use of forward-looking words, such as "may," "will," "could,"
"project," "believe," "anticipate," "expect," "estimate," "continue,"
"potential," "plan," "forecasts," and the like. These statements represent our
intentions, plans, expectations and beliefs and are subject to risks,
uncertainties and other factors. Many of these factors are outside our control
and could cause actual results to differ materially from such forward-looking
statements. These factors include, among others:
- competitive pressures
- our ability to consummate strategic acquisitions and alliances
- our ability to attract and retain key personnel
- changes in the demand for information technology outsourcing and business
process outsourcing
- changes in U.S. federal government spending levels for information
technology services
- our ability to continue to develop and expand our service offerings to
address emerging business demands and technological trends
- changes in the financial condition of our commercial customers
- the future profitability of our customer contracts
- general economic conditions and fluctuations in currency exchange rates in
countries in which we do business
2
<PAGE>
THE COMPANY
GENERAL
We are one of the world leaders in the information technology ("IT")
services industry. For forty-one years, we have helped our clients use IT more
efficiently, thus improving their operations and profitability. We do not have
exclusive agreements with hardware or software providers, and we believe that
our "vendor neutrality" enables us to better identify and manage solutions
specifically tailored to each client's needs.
We offer a broad array of professional services to clients in the global
commercial and government markets, specializing in the application of advanced
and complex IT to achieve our customers' strategic objectives. Our services
include:
- OUTSOURCING--Operating all or a portion of a client's technology
infrastructure, including systems analysis, applications development,
network operations, desktop computing and data center management, or
managing a client's non-core business functions, such as claims
processing, credit checking, or customer call centers
- SYSTEMS INTEGRATION--Designing, developing, implementing and integrating
complete information systems
- IT AND MANAGEMENT CONSULTING--Advising clients on the acquisition and
strategic use of IT, and on business strategy, operations, change
management and business process reengineering
- END-TO-END E-BUSINESS SOLUTIONS--Providing solutions that adjust to the
needs of large commercial and government clients and new e-commerce
entrants
For the fiscal year ended March 31, 2000, we had revenues of $9.37 billion
and net income of $402.9 million. We provide services primarily in global
commercial industries and to the U.S. Federal Government.
During the last three fiscal years, our revenue mix was as follows:
<TABLE>
<CAPTION>
2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
U.S. Commercial................................... 39% 40% 41%
Europe............................................ 27 28 25
Other International............................... 10 6 6
--- --- ---
Global Commercial................................... 76 74 72
U.S. Federal Government............................. 24 26 28
--- --- ---
Total Revenues...................................... 100% 100% 100%
=== === ===
</TABLE>
We provide services to global commercial clients in a number of industries,
including the following:
- aerospace
- automotive
- chemical and energy
- consumer goods
- financial services
- healthcare
- manufacturing
- media
3
<PAGE>
- public sector
- retail and distribution
- telecommunications
- traffic and transportation
- travel and hospitality
- utilities
We have approximately 58,000 employees, and operate from over 700 offices in
34 countries. We are incorporated under the laws of Nevada. Our principal
executive offices are located at 2100 East Grand Avenue, El Segundo, California
90245, and our telephone number is (310) 615-0311.
4
<PAGE>
RECENT DEVELOPMENTS
RECENT CONTRACT AWARDS
In April 2000, Saab AB hired us to manage its IT operations in Sweden that
support its aerospace products and systems. To provide these services, we will
combine our existing global resources and assets with those we will acquire
through our purchase of Combitech Network AB, Saab AB's IT subsidiary. Combitech
Network AB, which employs over 230 IT professionals, provides IT infrastructure
and security services to Saab and other IT-security customers in Sweden.
In April 2000, we entered into a seven-year outsourcing agreement with AT&T
Corporation. The agreement calls for us to manage application development and
maintenance for AT&T's Consumer Services organization in the areas of billing,
credit and collections, ordering, provisioning and customer care.
In May 2000, the United States Army selected us as one of twelve prime
contractors to participate in the U.S. Army Aviation and Missile Command OMNIBUS
Support Services program. The program's three major functional areas--technical,
logistics and programmatics--will be supported by separate multi-award,
task-order contracts. As a prime technical contractor, we will provide a wide
range of services, including modeling and simulation, systems engineering and
integration, guidance and control, software support, logistics and management
expertise.
In May 2000, we entered into a seven-year agreement with The Broken Hill
Proprietary Company Limited, under which we will provide a full range of
information technology services, including consulting, systems integration and
outsourcing. In connection with the outsourcing component, we will acquire BHP
Information Technology Proprietary Ltd., a wholly owned IT subsidiary of The
Broken Hill Proprietary Company that provides IT services to The Broken Hill
Proprietary Company and other commercial and industrial clients in Australia.
In June 2000, AMP Limited expanded its existing outsourcing agreement with
us following its acquisition of GIO Australia. Under the expanded five-year
agreement, we will manage AMP Limited's and GIO Australia's Australian IT
infrastructure, which includes all network, desktop, mainframe and selected
mid-range services. The expanded agreement replaces the final three years of our
original agreement with AMP Limited that was to have ended in 2003.
In June 2000, we announced a multi-year service agreement to provide IT
infrastructure services to DuPont Pharmaceuticals Company, a wholly owned
subsidiary of E.I. du Pont de Nemours and Company. Under the seven-year
agreement we will provide network, messaging, groupware, midrange, mainframe,
help desk, distributed systems and engineering services.
RECENT ACQUISITIONS
In the quarter ended June 30, 2000, we acquired ownership of Combitech
Network AB, Saab AB's information technology subsidiary. Combitech Network AB
provides IT infrastructure and security services to customers in Sweden.
Also in the quarter ended June 30, 2000, we launched a tender offer to
acquire all shares of Policy Management Systems Corporation, a publicly traded
South Carolina company which provides systems, services, sourcing and e-business
solutions to the global insurance and related financial services industries. The
tender offer is conditioned upon, among other things, the valid tender of at
least two-thirds of the outstanding shares of Mynd and the expiration or
termination of any applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvement Act of 1976 and similar statutes or regulations of foreign
jurisdictions. We estimate the total funds required to purchase all of the
outstanding shares of Policy Management Systems Corporation (at the per share
consideration of $16.00), to repay all of Policy Management Systems
Corporation's expected outstanding debt at the
5
<PAGE>
closing of the tender and the estimated transaction costs, will be about
$890 million. We plan to obtain these funds through the sale of commercial paper
and short-term notes bearing a market interest rate, which will be senior
unsecured obligations ranking equal with all of our other unsecured senior debt.
We intend to repay the commercial paper and notes from general corporate funds
and the proceeds of one or more capital markets transactions.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the notes
(after deducting the underwriting discounts and commissions and estimated
expenses payable by the Company) are estimated to be $494,918,000. We intend to
use the net proceeds from the sale of the notes for general corporate purposes,
including the reduction of the balance of our outstanding commercial paper when
it matures. As of May 26, 2000, the principal balance of our outstanding
commercial paper was approximately $539,271,000 at a weighted average interest
rate of 6.44%.
6
<PAGE>
CAPITALIZATION
The following table summarizes our debt and stockholders' equity (referred
to as "capitalization") as of March 31, 2000: (1) on a historical basis and
(2) as adjusted to reflect the sale by the Company of the notes and the
application of the estimated net proceeds as described under "Use of Proceeds."
You should read this table in conjunction with the consolidated financial
statements and related notes of the Company included in our Amended Annual
Report on Form 10-K for the fiscal year ended March 31, 2000, which is
incorporated herein by reference.
<TABLE>
<CAPTION>
AS OF MARCH 31, 2000
--------------------------
ACTUAL AS ADJUSTED
----------- ------------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C>
CURRENT DEBT:
Commercial paper.......................................... $ 165,575 $
Notes payable............................................. 72,563 72,563
Current maturities of long-term debt...................... 8,755 8,755
Current maturities of capitalized lease liabilities....... 2,334 2,334
---------- ----------
Total current debt...................................... 249,227 83,652
---------- ----------
LONG-TERM DEBT:
Commercial paper.......................................... 250,000
6.50% Guaranteed Notes, due November 15, 2001............. 150,000 150,000
6 1/4% Notes, due March 15, 2009.......................... 200,000 200,000
7 1/2% Notes, due August 8, 2005.......................... 500,000
Other notes payable....................................... 48,639 48,639
Capitalized lease liabilities............................. 3,728 3,728
---------- ----------
Total long-term debt.................................... 652,367 902,367
---------- ----------
STOCKHOLDERS' EQUITY:
Preferred stock, par value $1 per share; authorized
1,000,000 shares; none issued
Common stock, par value $1 per share; authorized
275,000,000 shares; issued 167,903,047 shares........... 167,903 167,903
Additional paid-in capital................................ 907,123 907,123
Earnings retained for use in business..................... 2,061,043 2,061,043
Accumulated other comprehensive income.................... (75,800) (75,800)
---------- ----------
3,060,269 3,060,269
Less common stock in treasury, at cost, 394,915 shares.... (16,140) (16,140)
Unearned restricted stock and other....................... (155) (155)
---------- ----------
Stockholders' equity, net............................... 3,043,974 3,043,974
---------- ----------
Total capitalization.................................... $3,945,568 $4,029,993
========== ==========
</TABLE>
7
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of our last five fiscal
years appears below. We computed the ratio of earnings to fixed charges by
dividing the sum of fixed charges and income before taxes by fixed charges.
Fixed charges consist of interest expense and the estimated interest component
of rent expense.
<TABLE>
<CAPTION>
FISCAL YEARS ENDED
-------------------------------------------------------
MARCH 31, APRIL 2, APRIL 3, MARCH 28, MARCH 29,
2000 1999 1998 1997 1996
--------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges................... 6.01x 5.72x 2.98x 4.23x 3.37x
</TABLE>
SELECTED FINANCIAL DATA
The selected consolidated financial data below has been derived from our
audited consolidated financial statements. You should read the financial data
presented below in conjunction with the consolidated financial statements and
accompanying notes of the Company which are included in our Amended Annual
Report on Form 10-K for the fiscal year ended March 31, 2000, which is
incorporated herein by reference.
The Company's consolidated financial statements for periods prior to
November 16, 1999 have been restated to include the financial position and
results of operations for Nichols Research Corporation ("Nichols"), which was
acquired by the Company on that date in a transaction accounted for as a pooling
of interests. The restatement combines results from Nichols' fiscal years ended
August 31, 1999 and August 31, 1998 with results from our fiscal years ended
April 2, 1999 and April 3, 1998. Therefore, our restated twelve months for
fiscal 1999 and 1998 reflect Nichols' twelve months ended August 31. Our
restated fiscal 2000 data include Nichols' results based on our fiscal year. Due
to the alignment of fiscal periods, Nichols' results of operations for the same
five months of April to August 1999 are reported in both our fiscal 2000 and
1999 data. The "Other Data" are unaudited.
<TABLE>
<CAPTION>
FISCAL YEARS ENDED
-------------------------------------------------
MARCH 31, 2000 APRIL 2, 1999 APRIL 3, 1998
--------------- -------------- --------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, RATIOS
AND PERCENTAGES)
<S> <C> <C> <C>
STATEMENT OF EARNINGS INFORMATION:
Revenues.............................................. $9,370,694 $8,111,405 $7,027,881
---------- ---------- ----------
Cost of services...................................... 7,352,544 6,349,471 5,500,478
Selling, general and administrative................... 779,367 735,756 640,624
Depreciation and amortization......................... 545,723 456,897 397,805
Interest expense...................................... 58,135 49,358 51,418
Interest income....................................... (17,612) (14,950) (10,031)
Special charges (1)................................... 41,065 233,219
---------- ---------- ----------
Total costs and expenses.............................. 8,759,222 7,576,532 6,813,513
---------- ---------- ----------
Income before taxes................................... 611,472 534,873 214,368
Taxes on income....................................... 208,600 179,371 (60,199)
---------- ---------- ----------
Net income............................................ $ 402,872 $ 355,502 $ 274,567
========== ========== ==========
Earnings per share
Basic............................................... $ 2.42 $ 2.17 $ 1.71
Diluted............................................. 2.37 2.12 1.67
OTHER DATA:
Capital expenditures.................................. $ 585,593 $ 438,926 $ 358,589
Debt as a percentage of total capitalization.......... 22.9% 27.9% 26.3%
BALANCE SHEET INFORMATION:
Cash and cash equivalents............................. $ 260,403 $ 617,879 $ 285,963
Working capital....................................... 782,369 661,489 845,804
Total assets.......................................... 5,874,124 5,260,353 4,274,131
Total debt............................................ 901,594 1,003,611 773,920
Stockholders' equity.................................. 3,043,974 2,588,521 2,171,022
</TABLE>
--------------------------
(1) We recorded a special item of $39,068 ($28,519 after tax), or 17 cents per
share after tax, during the third quarter of fiscal year 2000. This charge,
relating to our November 16, 1999 acquisition of Nichols, included
8
<PAGE>
approximately $9,304 for investment banking and transaction expenses,
$23,462 related to the write-off of capitalized software attributed to
duplicate market offerings and the write-off of other assets and
intangibles, and $6,303 related to employee severance costs and elimination
of duplicate facilities.
Also during the third quarter of fiscal year 2000, we recorded a special
item of $1,997 ($1,326 after tax) for legal and other costs, net of
recoveries, associated with the resolution of the remaining issues relating
to our fiscal year 1998 response to a failed take-over attempt.
We recognized a net special credit of $1,707, or 1 cent per share, during
the first quarter of fiscal year 1998 because of developments at CSC
Enterprises, a general partnership of which we, through an affiliate, are
the managing general partner. A tax benefit of $135,000 and an after-tax
special charge of $133,293 ($208,393 before tax) caused the net special
credit.
During the first quarter of fiscal year 1998, certain partners withdrew from
CSC Enterprises. As a result of these withdrawals, CSC Enterprises took
actions that caused us to recognize an increase in the tax basis of certain
assets. As required by Statement of Financial Accounting Standards No. 109,
this tax basis increase from the previous tax basis resulted in a deferred
tax asset of $135,000 and a corresponding reduction of our provision for
income taxes. The tax basis increase is temporary and will be realized over
time through an increase in depreciation and amortization expense for income
tax purposes.
In connection with these developments, CSC Enterprises reviewed its
operations, its market opportunities and the carrying value of its assets.
Based on this review, in the first quarter of fiscal year 1998 CSC
Enterprises initiated a plan to eliminate certain offerings and write down
assets, primarily within its telecommunications operations. As a result of
these plans, we recognized a pre-tax special charge of $208,393 ($133,293
after tax). This special charge included goodwill write-offs of $56,300
($35,000 after tax), contract termination costs of $54,300 ($34,000 after
tax), deferred contract costs and other assets of $33,093 ($20,493 after
tax), telecommunications software and accruals of $35,800 ($22,300 after
tax), telecommunications property, equipment and intangible assets of
$18,900 ($11,700 after tax), and other non-tax deductible costs of $10,000.
In the fourth quarter of fiscal year 1998, we recorded a before-tax special
charge of $20,700, or 8 cents per share after tax, for costs relating to our
response to a failed take-over attempt. The charge is comprised of $14,400
for investment banking expenses and $6,300 for other expenses such as legal
costs, public relations and shareholder communications.
During fiscal 1998, Nichols recorded special charges of $4,126, or 2 cents
per share after tax. These charges were comprised of $2,000 for purchased
in-process research and development activities, $226 for merger-related
expenses in connection with several acquisitions made during the year and
$1,900 related to the impairment of assets with Nichols' insurance line of
business.
9
<PAGE>
DESCRIPTION OF THE NOTES
The notes will be issued under an indenture to be dated as of August 8, 2000
(the "Indenture") by and between us and Citibank, N.A., as trustee. The
Indenture is subject to, and governed by, the Trust Indenture Act of 1939, as
amended. The statements made in this section relating to the notes and the
Indenture are summaries of certain provisions of the notes and the Indenture.
These summaries are not complete. For more detail you should refer to the
Indenture, which we have filed as an exhibit to the registration statement of
which this prospectus is a part. For purposes of this section "Description of
the Notes," whenever we refer to the "Company" or to "us," or use the terms "we"
or "our," we are referring only to Computer Sciences Corporation.
GENERAL
We will issue the notes in an aggregate principal amount of $500,000,000.
The notes will mature on August 8, 2005. The notes will be in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
notes are our direct, unconditional, unsecured and unsubordinated general
obligations. The notes will rank equally among themselves, without any
preference of one over the other, and at least equally with all of our other
outstanding unsecured and unsubordinated general obligations. The notes will be
effectively subordinate to the indebtedness of our subsidiaries. At March 31,
2000, our subsidiaries had outstanding indebtedness (including capitalized
leases) of $258,757,000.
The notes will bear interest at the rate of 7 1/2% per annum from August 8,
2000 or from the most recent interest payment date to which interest has been
paid or provided for. Interest will be payable on February 8 and August 8 of
each year, commencing February 8, 2001, to the holders of record at the close of
business on the date fifteen days prior to each interest payment date. Interest
on the notes will be calculated on the basis of a 360-day year consisting of
twelve 30-day months.
The notes will not be subject to any sinking fund.
If any interest payment date, redemption date or maturity date would
otherwise be a day that is not a Business Day, the related payment of principal
and interest will be made on the next succeeding Business Day as if it were made
on the date such payment was due, and no interest will accrue on the amounts so
payable for the period from and after such date to the next succeeding Business
Day.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day on
which banking institutions in The City of New York or at a place of payment are
authorized or obligated by law, regulation or executive order to remain closed.
REDEMPTION AT OUR OPTION
The notes will be redeemable as a whole or in part, at our option, at any
time, at a redemption price equal to the greater of:
- 100% of the principal amount of such notes, and
- the sum of the present values of the remaining scheduled payments of
principal and interest thereon (not including any portion of such interest
payments accrued as of the redemption date) 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 20 basis points,
plus, in either of the above cases, accrued and unpaid interest thereon to the
date of redemption.
10
<PAGE>
For purposes of this section "Redemption at Our Option," the following terms
have the following meanings:
"COMPARABLE TREASURY ISSUE" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable to
the remaining term of the notes 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 notes.
"COMPARABLE TREASURY PRICE" means, with respect to any redemption date,
(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 Reference Treasury Dealer
Quotations.
"INDEPENDENT INVESTMENT BANKER" means Merrill Lynch Government
Securities Inc., or, if such firm is unwilling or unable to select the
Comparable Treasury Issue, an independent investment institution of national
standing selected by us and appointed by the trustee.
"REFERENCE TREASURY DEALER" means each of (1) Merrill Lynch Government
Securities Inc., Goldman, Sachs & Co., Inc., J.P. Morgan Securities Inc. and
Morgan Stanley & Co. Incorporated and their successors; PROVIDED, HOWEVER, that
if any of the foregoing ceases to be a primary U.S. Government securities dealer
in New York City (a "Primary Treasury Dealer"), we shall substitute another
Primary Treasury Dealer; and (2) any other Primary Treasury Dealer selected by
us.
"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 3:30 p.m., New York
City time, on the third business day preceding such redemption date.
"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.
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 notes to be redeemed. If we
elect to partially redeem notes, the trustee will select in a fair and
appropriate manner the notes to be redeemed.
Unless we default in payment of the redemption price and accrued and unpaid
interest on the notes, on and after the redemption date, interest will cease to
accrue on the notes or portions thereof called for redemption.
LIMITATION ON OUR ABILITY TO INCUR LIENS
Other than as provided below under "We May Incur Permitted Liens and We May
Enter into Permitted Sale/Leaseback Transactions," neither we nor any of our
Subsidiaries may create, incur, assume or suffer to exist any Lien upon any of
our assets to secure any Indebtedness, except for:
- Liens existing on the date of the Indenture;
- any extension, renewal or replacement (or successive extensions, renewals
or replacements) of any Lien existing on the date of the Indenture;
- Liens on property existing at the time we or any of our Subsidiaries
acquires such property, provided that such Liens (1) are not incurred in
connection with, or in contemplation of the
11
<PAGE>
acquisition of the property acquired and (2) do not extend to or cover any
of our property or assets or any of our Subsidiaries' property or assets
other than the property so acquired;
- Liens on any property of a corporation or other entity existing at the
time such corporation or entity becomes our Subsidiary or is merged into
or consolidated with us or a Subsidiary or at the time of a sale, lease or
other disposition of the properties of such corporation or entity as an
entirety or substantially as an entirety to us or a Subsidiary; PROVIDED
that such Liens (1) are not incurred in connection with or in
contemplation of such corporation or entity becoming a Subsidiary or
merging or consolidating with us or a Subsidiary or are not incurred in
connection with or in contemplation of the sale, lease or other
disposition of the properties of such corporation or other entity and
(2) do not extend to or cover any of our property or assets or any of our
Subsidiaries' property or assets other than the property of such
corporation or other entity; and
- purchase money Liens upon or in any real or personal property (including
fixtures and other equipment) we or any of our Subsidiaries hold or have
acquired to secure the purchase price of such property or to secure
Indebtedness incurred solely to finance or refinance the acquisition or
improvement of such property and incurred within 180 days after completion
of such acquisition or improvement, PROVIDED that no such Lien will extend
to or cover any property other than the property being acquired or
improved.
For purposes of this section "Limitation on Our Ability to Incur Liens," the
following terms have the following meanings:
"INDEBTEDNESS" means, with respect to any person, and without duplication:
- any liability of such person
(1) for borrowed money, or
(2) for any letter of credit for the account of such person supporting
obligations of such person or other persons, or
(3) evidenced by a bond, note, debenture or similar instrument (including
a purchase money obligation) given in connection with the acquisition
of any businesses, properties or assets of any kind (other than a
trade payable or a current liability arising in the ordinary course
of business), or
(4) for the payment of money relating to a capitalized lease; and
- any liability of others described in the preceding bullet point that the
person has guaranteed or that is otherwise its legal liability; and
- any amendment, supplement, modification, deferral, renewal, extension or
refunding of any liability of the types referred to in the bullet points
above.
"LIEN" means any lien, security interest, charge, mortgage, pledge or other
encumbrance of any kind (including any conditional sale or other title retention
agreement, any lease in the nature thereof, and any agreement to give any
security interest other than an agreement to secure Indebtedness equally and
ratably upon the incurrence of other secured Indebtedness).
"SUBSIDIARY" means:
- a corporation a majority of whose capital stock with voting power, under
ordinary circumstances, to elect directors is at the time directly or
indirectly owned by us, by us and our Subsidiary or Subsidiaries, or by
our Subsidiary or Subsidiaries, or
12
<PAGE>
- any other person (other than a corporation) in which we, or we and our
Subsidiary or Subsidiaries, or our Subsidiary or Subsidiaries directly or
indirectly at the date of determination thereof has at least a majority
ownership interest.
LIMITATION ON OUR ABILITY TO ENTER INTO SALE/LEASEBACK TRANSACTIONS
Other than as provided below under "We May Incur Permitted Liens and We May
Enter into Permitted Sale/Leaseback Transactions," neither we nor any of our
Subsidiaries may enter into any Sale/Leaseback Transaction unless we or such
Subsidiary would be entitled, pursuant to the bullet points under "Limitation on
Our Ability to Incur Liens" above, to create, incur, assume or suffer to exist a
Lien on the property subject to such Sale/Leaseback Transaction.
For purposes of this section "Limitation on Our Ability to Enter Into
Sale/Leaseback Transactions," the following term has the following meaning:
"SALE/LEASEBACK TRANSACTION" means any arrangement with any person (other
than us or any of our Subsidiaries) providing for a capitalized lease by us or
any of our Subsidiaries of any property which has been or is to be sold or
transferred by us or any of our Subsidiaries to such person or to any person
(other than us or any of our Subsidiaries) by whom funds have been or are to be
advanced on the security of the leased property.
WE MAY INCUR PERMITTED LIENS AND WE MAY ENTER INTO PERMITTED SALE/LEASEBACK
TRANSACTIONS
Notwithstanding the restrictions set forth above under "Limitation on Our
Ability to Incur Liens" and "Limitation on our Ability to Enter into
Sale/Leaseback Transactions," we or any of our Subsidiaries may create, incur,
assume or suffer to exist any Lien or enter into any Sale/Leaseback Transactions
not otherwise permitted as described above, PROVIDED that at the time of such
event, and after giving effect to that event, the aggregate amount of all
Indebtedness secured by Liens permitted by this paragraph (excluding the Liens
permitted pursuant to the bullet points under "Limitation on Our Ability to
Incur Liens" above) and the aggregate amount of all Attributable Debt in respect
of Sale/Leaseback Transactions permitted by this paragraph (excluding the
Sale/Leaseback Transactions permitted under "Limitation on Our Ability to Enter
into Sale/Leaseback Transactions" above), measured, in each case, at the time
any such Lien is incurred or any such Sale/Leaseback Transaction is entered
into, by us or any Subsidiary does not exceed 20% of our Consolidated Net
Tangible Assets.
For purposes of this section "We May Incur Permitted Liens and We May Enter
into Permitted Sale/Leaseback Transactions," the following terms have the
following meanings:
"ATTRIBUTABLE DEBT" with respect to any Sale/Leaseback Transaction means the
present value of the minimum rental payments called for during the term of the
lease (including any period for which such lease has been extended), determined
in accordance with generally accepted accounting principles, discounted at a
rate that, at the inception of the lease, the lessee would have incurred to
borrow over a similar term the funds necessary to purchase the leased assets.
"CONSOLIDATED NET TANGIBLE ASSETS" means, as of any particular time, the
aggregate amount of our assets and the assets of our Subsidiaries (in each case,
less applicable reserves and other properly deductible items) after deducting
from such amount:
- all current liabilities other than (1) notes and loans payable,
(2) current maturities of long-term debt and (3) current maturities of
capital lease obligations, and
- intangible assets, to the extent included in such aggregate assets, all as
set forth on the then most recent consolidated balance sheet of the
Company and its consolidated subsidiaries and computed in accordance with
generally accepted accounting principles.
13
<PAGE>
LIMITATION ON OUR ABILITY TO CONSOLIDATE, MERGE AND SELL ASSETS
We, without the consent of the holders of any of the notes, may consolidate
with, or merge into, or sell, transfer, lease or convey our assets substantially
as an entirety to any domestic corporation, if:
- any successor corporation expressly assumes all of our obligations under
the notes and the Indenture,
- immediately before and after giving effect to the transaction, no Event of
Default and no event which, after notice or lapse of time or both, would
become an Event of Default, has occurred and is continuing, and
- the entity formed by or surviving any such consolidation or merger (if
other than us) or to which such sale, transfer, lease or conveyance shall
have been made, is a corporation organized and existing under the laws of
the United States of America, any state, or the District of Columbia.
EVENTS OF DEFAULT
An "Event of Default" under the notes means any of the following:
- we fail to pay any installment of interest upon any of the notes as and
when it becomes due and payable, and such default continues for a period
of 30 days; or
- we fail to pay all or any part of the principal of any of the notes as and
when it becomes due and payable, whether at maturity or otherwise; or
- we fail to observe or perform any other of our other covenants or
agreements contained in the notes or in the Indenture for a period of
30 days after the date on which written notice specifying such failure,
stating that such notice is a "Notice of Default" under the notes and
demanding that we remedy the same, has been given to us by the trustee or
to us and the trustee by the holders of at least 25% in aggregate
principal amount of the notes then outstanding; or
- any of our Indebtedness in the aggregate outstanding principal amount of
$75 million or more either (1) becomes due and payable prior to the due
date for payment of such Indebtedness by reason of acceleration of such
Indebtedness following our default or (2) is not repaid at, and remains
unpaid after, maturity as extended by any applicable period of grace or
any guarantee given by us in respect of Indebtedness of any other person
in the aggregate outstanding principal amount of $75 million or more is
not honored when, and remains dishonored after, becoming due; or
- a court or administrative or other governmental agency or body having
jurisdiction in the premises enters a decree or order for relief relating
to us in an involuntary case under any applicable bankruptcy, insolvency,
reorganization or other similar law in effect on or after the date of the
notes, or appoints a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar officer of us or ordering the winding up,
dissolution or liquidation of our affairs, or otherwise adjudicates or
finds us to be bankrupt or insolvent, and such decree or order remains
unstayed and in effect for a period of 60 consecutive days; or
- a court or administrative or other governmental agency or body having
jurisdiction in the premises enters a decree or order appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar officer for any substantial part of our properties, and such
decree or order remains unstayed and in effect for a period of 60
consecutive days; or
- we commence a voluntary case under any applicable bankruptcy, insolvency,
reorganization or other similar law in effect on or after the date of the
notes, or consent to the entry of an order for relief in an involuntary
case under any such law, or consent to the appointment or taking
possession by our receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar officer,
14
<PAGE>
or cease to carry on the whole or substantially the whole of our business,
or make any general assignment for the benefit of creditors, or take
corporate action in furtherance of any such action; or
- we consent to the appointment or taking possession by our receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar officer
for any substantial part of our property, or take corporate action in
furtherance of any such action.
In each such case, other than as provided in the next sentence, the trustee,
by notice to us, or the holders of not less than 25% in aggregate principal
amount of the notes then outstanding, by notice to us and the trustee, may
declare the unpaid principal of all the notes, and the interest accrued on the
notes, to be due and payable immediately. If an event of default specified in
the fifth or seventh bullet points under the heading "Events of Default" occurs,
such an amount shall IPSO FACTO become and be immediately due and payable
without any declaration or other act on the part of the trustee or any holder of
the notes. The holders of more than 50% in aggregate principal amount of the
then outstanding notes by written notice to the trustee may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing events of default (except nonpayment of
principal or interest that has become due solely because of the acceleration)
have been cured or waived. If, at any time after the principal of the notes has
been so declared due and payable, and before any judgment or decree for the
payment of the monies due has been obtained or entered, we pay or deposit with
the trustee a sum sufficient to pay all monies then due with respect to the
notes (other than amounts due solely because of such declaration) and cure all
other Events of Default under the notes, then the holders of more than 50% in
aggregate outstanding principal amount of the notes may waive all defaults and
rescind and annul such declaration and its consequences.
The holders of more than 50% in principal amount of the then outstanding
notes by notice to the Trustee may, on behalf of all the holders, waive an
existing default or Event of Default and its consequences except a continuing
default or Event of Default in the payment of the principal of or interest on
any note.
DEFEASANCE AND DISCHARGE
The notes and the Indenture provide that we are not required to comply with
certain covenants ("covenant defeasance") of the notes (including those
described under the caption "Limitation on Our Ability to Incur Liens" and
"Limitation on Our Ability to Enter into Sale/Leaseback Transactions"), if:
- we irrevocably deposit, in trust with a trustee for the benefit of the
holders of the notes,
(a) money in an amount, or
(b) U.S. Government Obligations (as defined in the notes) which through
the payment of interest thereon and principal thereof in accordance
with their terms will provide money in an amount,
in each case, sufficient to pay all the principal of, and interest on the
notes to maturity or redemption, as the case may be, and all other sums
payable by us under the Indenture;
- no Event of Default under the first, second, fourth, fifth, sixth, seventh
or eighth bullet points in the first paragraph under the caption "Events
of Default" has occurred and is continuing, and no event which with notice
or lapse of time or both would become such an Event of Default with
respect to the notes has occurred and is continuing, on the date of such
deposit;
- we deliver to such trustee an opinion of counsel or a ruling received from
the Internal Revenue Service to the effect that the holders of the notes
will not recognize income, gain or loss for federal income tax purposes as
a result of the exercise of such covenant defeasance and will be subject
to federal income tax in the same amount and in the same manner and at the
same times as would have been the case absent such exercise; and
15
<PAGE>
- we have delivered to such trustee a certificate signed by authorized
persons and an opinion of counsel, each stating that all conditions
precedent to satisfaction and discharge of the Indenture have been
complied with.
MODIFICATION AND AMENDMENT
We and the trustee may amend or supplement the Indenture or the notes
without the consent of any holder:
- to cure any ambiguity, defect or inconsistency;
- to provide for the assumption of our obligations to the holders of the
notes in the case of a consolidation, merger, sale, lease, conveyance of
substantially all of our assets, or assignment of our obligations under
the Indenture or the notes;
- to comply with the Trust Indenture Act;
- to provide for uncertificated notes in addition to or in place of
certificated notes; or
- to make any change that provides any additional rights or benefits to the
holders of the notes or that does not adversely affect the legal rights of
any holder under the notes or the Indenture.
Modifications and amendments to the Indenture or the notes requiring consent
of holders of the notes may be made, and future compliance or past default by us
may be waived, with our consent and the consent of holders of more than 50% in
aggregate principal amount of the notes at the time outstanding; PROVIDED THAT
no such amendment of the Indenture or any note may, without the consent of each
holder affected thereby:
- change the stated maturity of the principal of or interest on such note;
- reduce the amount of notes whose holders must consent to an amendment or
waiver;
- reduce the rate of or change the time for payment of interest, including
default interest, on any note;
- reduce the principal of or change the fixed maturity of any note or alter
the provisions with respect to redemption;
- waive a default in the payment of principal of or interest on, or
redemption payment with respect to, any note; or
- change the currency of payment of the principal of or interest on such
note.
For purposes of calculating the percentage of holders of the notes entitled
to take any action, any notes we hold will be excluded.
BOOK-ENTRY SYSTEM AND FORM OF NOTES
The notes will be represented by beneficial interests in one or more single,
permanent global notes in fully registered form without interest coupons and
will be deposited with the trustee as custodian for The Depository Trust Company
and registered in the name of a nominee of The Depository Trust Company.
Ownership of beneficial interests in a global note will be limited to The
Depository Trust Company participants or persons that may hold interests through
participants. Ownership of beneficial interests in a global note will be shown
on, and the transfer of these ownership interests will be effected only through,
records maintained by The Depository Trust Company or its nominee (with respect
to interests of participants) and the records of participants (with respect to
interests of persons other than participants).
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<PAGE>
The Depository Trust Company or its nominee, as the case may be, as
registered holder of a global note, will be considered the sole owner or holder
of the notes represented by such global note for all purposes under the notes
and the Indenture. In addition, no beneficial owner of an interest in a global
note will be able to transfer that interest except in accordance with The
Depository Trust Company's applicable procedures (in addition to those under the
Indenture).
Principal and interest payments on notes represented by a global note
registered in the name of The Depository Trust Company or its nominee will be
made to The Depository Trust Company or its nominee, as the case may be, as the
registered owner of such global note. Neither we, the trustee nor any paying
agent for such notes will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests in such global note or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
We expect that The Depository Trust Company, upon receipt of any payment of
principal or interest on a global note, will immediately credit participants'
accounts with payment in amounts proportionate to their respective beneficial
interests in the principal amount of such global note as shown on the records of
The Depository Trust Company. We also expect that payments by participants to
owners of beneficial interests in such global note held through such
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the account of customers registered
in "street names," and will be the responsibility of such participants.
The Depository Trust Company has advised us as follows: The Depository Trust
Company is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, 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 pursuant to the provisions of Section 17A of the Exchange Act. The
Depository Trust Company holds securities that its participants deposit with The
Depository Trust Company and facilitates the settlement among participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
Direct participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. Access to The
Depository Trust Company system is also available to others such as securities
brokers and dealers, banks and trust companies that clear through or maintain a
custodial relationship with a direct participant, either directly or indirectly.
The rules applicable to The Depository Trust Company and its participants are on
file with the SEC.
TRUSTEE
The trustee may resign at any time and we may remove the trustee at any time
in accordance with the bullet points below.
A resignation or removal of the trustee and appointment of a successor
trustee shall become effective only upon the successor trustee's acceptance of
appointment as provided in the Indenture.
The trustee may resign and be discharged from the trust created by the
Indenture by so notifying us. The holders of a majority in principal amount of
the then outstanding notes may remove the trustee by so notifying the trustee
and us. We may remove the trustee if:
- the trustee fails to comply with the eligibility requirements provided in
the Indenture;
- the trustee is adjudged a bankrupt or an insolvent or an order for relief
is entered with respect to the trustee under any applicable federal or
state bankruptcy law;
- a receiver, trustee, assignee, liquidator or similar official under any
applicable federal or state bankruptcy law takes charge of the trustee or
its property; or
17
<PAGE>
- the trustee becomes incapable of acting.
If the trustee resigns or is removed or if the office of trustee is
otherwise vacant, we will appoint a successor trustee in accordance with the
provisions of the Indenture.
In the ordinary course of its business, Citibank, N.A. and its affiliates
have performed, and may in the future perform, commercial banking and related
services for us and our affiliates and have received customary compensation
therefor. For example, Citibank, N.A. serves as the trustee in connection with
the 6 1/4% Notes due March 2009 issued by us, and as the fiscal agent in
connection with the 6.50% Guaranteed Notes due November 15, 2001 issued by our
affiliate, CSC Enterprises, and guaranteed by us, and as issuing and paying
agent under two of our commercial paper programs. In addition, Citicorp
USA, Inc., an affiliate of Citibank, N.A., serves as the agent for the lenders
in two commercial paper backstop credit agreements. Our affiliate, CSC Australia
Pty Ltd, has an uncommitted master bond and letter of credit facility, an
uncommitted cash advance credit facility and an uncommitted master loan facility
with Citibank N.A. (Sydney Branch), an affiliate of Citibank, N.A.
The address of the relevant corporate trust office of the trustee is
Citibank, N.A., 111 Wall Street, 5th Floor, New York, New York 10043.
GOVERNING LAW
The Indenture and the notes will be governed by and construed in accordance
with the laws of the State of New York.
18
<PAGE>
UNDERWRITING
We intend to offer the notes through the underwriters, Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., J.P. Morgan
Securities Inc. and Morgan Stanley & Co. Incorporated. Subject to the terms and
conditions contained in a purchase agreement between us and the underwriters, we
have agreed to sell to the underwriters and the underwriters severally have
agreed to purchase from us, the principal amount of the notes listed opposite
their names below. If the underwriters purchase any of the notes, they are
obligated to purchase all of the notes.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITERS AMOUNT
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...................................... $350,000,000
Goldman, Sachs & Co......................................... 50,000,000
J.P. Morgan Securities Inc.................................. 50,000,000
Morgan Stanley & Co. Incorporated........................... 50,000,000
------------
Total............................................. $500,000,000
============
</TABLE>
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, or to
contribute to payments the underwriters may be required to make in respect of
those liabilities.
The underwriters are offering the notes, subject to prior sale, when, as and
if issued to and accepted by it, subject to approval of legal matters by their
counsel, including the validity of the notes, and other conditions contained in
the purchase agreement, such as the receipt by the underwriters of officer's
certificates and legal opinions. The underwriters reserve the right to withdraw,
cancel or modify offers to the public and to reject orders in whole or in part.
COMMISSIONS AND DISCOUNTS
The underwriters have advised us that they propose initially to offer the
notes to the public at the public offering price set forth on the cover page of
this prospectus, and to dealers at that price less a concession not in excess of
.35% of the principal amount of the notes. The underwriters may allow, and the
dealers may reallow, a discount not in excess of .25% of the principal amount of
the notes to other dealers. After the initial public offering, the public
offering price, concession and discount may be changed.
The expenses of the offering, not including the underwriting discount, are
estimated to be $687,000 and are payable by us.
NO SALES OF SUBSTANTIALLY SIMILAR SECURITIES
We have agreed, with exceptions, not to sell or transfer any of our debt
securities which are substantially similar to the notes during the period from
the date of the purchase agreement between us and the underwriters to the
business day immediately following the date of initial delivery of the notes to
the underwriters, without first obtaining the written consent of Merrill Lynch.
Specifically, we have agreed during such period not to directly or indirectly:
- issue, sell, offer or contract to sell any of our debt securities which
are substantially similar to the notes;
- grant any option for the sale of any of our debt securities which are
substantially similar to the notes; or
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- otherwise transfer or dispose of any of our debt securities which are
substantially similar to the notes.
This lockup provision applies to our debt securities which are substantially
similar to the notes and to any of our securities convertible into or
exercisable or exchangeable for our debt securities which are substantially
similar to the notes.
NEW ISSUE OF NOTES
The notes are a new issue of securities with no established trading market.
We do not intend to apply for listing of the notes on any national securities
exchange or for quotation of the notes on any automated dealer quotation system.
We have been advised by the underwriters that they presently intend to make a
market in the notes after completion of the offering. However, the underwriters
are under no obligation to do so and may discontinue any market-making
activities at any time without any notice. We cannot assure the liquidity of the
trading market for the notes or that an active public market for the notes will
develop. If an active public trading market for the notes does not develop, the
market price and liquidity of the notes may be adversely affected.
PRICE STABILIZATION AND SHORT POSITIONS
In connection with the offering, the underwriters are permitted to engage in
transactions that stabilize the market price of the notes. Such transactions
consist of bids or purchases to peg, fix or maintain the price of the notes. If
the underwriters create a short position in the notes in connection with the
offering, I.E., if they sell more notes than the amount set forth on the cover
page of this prospectus, the underwriters may reduce that short position by
purchasing notes in the open market. Purchases of a security to stabilize the
price or to reduce a short position could cause the price of the security to be
higher than it might be in the absence of such purchases.
Neither we nor the underwriters make any representation or prediction as to
the direction or magnitude of any effect that the transactions described above
may have on the price of the notes. In addition, neither we nor the underwriters
make any representation that the underwriters will engage in these transactions
or that these transactions, once commenced, will not be discontinued without
notice.
OTHER RELATIONSHIPS
The underwriters and their affiliates have engaged in, and may in the future
engage in, investment banking and other commercial dealings in the ordinary
course of business with us. They have received customary fees and commissions
for these transactions. For example, in 1999, Merrill Lynch (Singapore)
Pte. Ltd., an affiliate of Merrill Lynch & Co., acted as our financial advisor
in connection with our tender offer to acquire CSA Holdings Ltd., and Merrill
Lynch & Co. acted as our financial advisor in connection with our acquisition of
Nichols Research Corporation. Morgan Guaranty Trust Company of New York, an
affiliate of J.P. Morgan Securities Inc., has entered into a contract with the
Pinnacle Alliance, a team led by us, to manage key parts of its global
technology structure. Morgan Guaranty Trust Company of New York is also a member
of the syndicate of banks providing standby support for our commercial paper
program. Goldman, Sachs & Co. is currently acting as our financial advisor in
connection with our tender offer to acquire Mynd, which is described on page 5.
In 1999, Morgan Stanley & Co. Incorporated was retained to appraise certain of
our assets.
In addition, we provide consulting and information technology services to
Merrill Lynch & Co., and to Morgan Stanley Dean Witter & Co. and Discover
Financial Services, Inc., two affiliates of Morgan Stanley & Co. Incorporated.
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LEGAL MATTERS
Gibson, Dunn & Crutcher LLP of Los Angeles, California will issue an opinion
to the Company about certain legal matters relating to the notes. Latham &
Watkins of Los Angeles, California will issue an opinion to the Underwriters
about certain legal matters relating to the notes. Latham & Watkins renders
certain legal services to the Company.
EXPERTS
The consolidated financial statements and the related financial statement
schedule of the Company as of March 31, 2000 and April 2, 1999, and for each of
the three years in the period ended March 31, 2000, incorporated in this
prospectus by reference from the Company's Amended Annual Report on Form 10-K
for the year ended March 31, 2000, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
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$500,000,000
[LOGO]
7 1/2% NOTES DUE AUGUST 8, 2005
--------------
P R O S P E C T U S
------------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
MORGAN STANLEY DEAN WITTER
AUGUST 3, 2000
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