<PAGE>
As filed with the Securities and Exchange Commission on April 8, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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ALBERTO-CULVER COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
Delaware 36-2257936
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Alberto-Culver Company Gary P. Schmidt Copy to:
2525 Armitage Avenue Alberto-Culver Company James J. Junewicz
Melrose Park, Illinois 60160 2525 Armitage Avenue Michael A. Campbell
(708) 450-3000 Melrose Park, Illinois 60160 Mayer, Brown & Platt
(708) 450-3000 190 South LaSalle
(Address, including zip code and telephone (Name, address, including zip code, and Chicago, Illinois 60603
number, including area code, of registrant's telephone number, including area code, of (312) 782-0600
principal executive offices) agent for service)
</TABLE>
Approximate date of commencement of proposed sale to the public: From time
to time after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================================================================
Title of Proposed Proposed
each Class Amount Maximum Maximum Amount of
of Securities to be Offering Price Aggregate Registration
to be Registered Registered Per Unit Offering Price (4) Fee (5)
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<S> <C> <C> <C> <C>
Debt Securities $350,000,000 (2) 100% $350,000,000 (4) $103,250
Class A Common Stock (1) (3) (3) -
Class B Common Stock (1) (3) (3) -
===============================================================================================================================
</TABLE>
(1) Includes such indeterminate number of shares of Class A Common Stock, $.22
par value per share, and/or Class B Common Stock, $.22 par value per share
(collectively, "Common Stock"), that may be issued in exchange for, or upon
conversion of, Debt Securities.
(2) Or the equivalent thereof in one or more foreign currencies or composite
currencies, including European Currency Units, or if any Debt Securities
are issued at an original issue discount, such greater amount as shall
result in a maximum aggregate initial offering price of $350,000,000.
(3) No separate consideration will be received for Common Stock that is issued
in exchange for, or upon conversion of, Debt Securities.
(4) Estimated solely for purposes of calculating the registration fee.
(5) Calculated on the basis of $295 per $1,000,000 of the proposed maximum
aggregate offering price.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay the effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED APRIL 8, 1998
Prospectus
Alberto-Culver Company
$350,000,000
Debt Securities
-------------------
Alberto-Culver Company (the "Company") may offer from time to time under
this Prospectus in one or more series its debt securities ("Debt Securities"),
which may be senior ("Senior Securities") or subordinated ("Subordinated
Securities"), with an aggregate public offering price of up to $350,000,000 or
the equivalent thereof in one or more foreign currencies or composite
currencies, on terms to be determined at the time of each offering hereunder.
The Debt Securities will be offered in amounts, at prices and on terms to be
determined at the time of sale and to be set forth in one or more supplements to
this Prospectus (a "Prospectus Supplement"). The Debt Securities may be
convertible into, or exchangeable for, shares of Class A Common Stock, $.22 par
value per share (the "Class A Common Stock"), or shares of Class B Common Stock,
$.22 par value per share (the "Class B Common Stock", together with the Class A
Common Stock, the "Common Stock"), of the Company, cash or any combination
thereof.
The specific terms of the Debt Securities in respect of which this
Prospectus is being delivered will be described in a Prospectus Supplement,
which terms will include, among others and where applicable, the specific title,
designation, rank (including any subordination provisions), aggregate principal
amount, minimum denominations, currency or currencies of denomination and
payment, maturity, premium or discount, if any, interest rate (or method of
calculation) and time of payment of interest, terms for redemption at the option
of the Company or repayment at the option of the holder, terms for sinking fund
payments, terms for conversion or exchange for or into Common Stock of the
Company, cash, or any combination thereof, and form (which may be bearer,
registered or global), provisions regarding original issue discount, including
accretion thereof, and any other terms in connection with the offer and sale of
Debt Securities. The applicable Prospectus Supplement will also contain
information, where applicable, concerning certain United States federal income
tax considerations relating to the Debt Securities and any listing on a
securities exchange or exchanges of the Debt Securities covered by such
Prospectus Supplement and about relationships between the Company and the
applicable trustee (to the extent such relationships are not already set forth
in this Prospectus). See "Description of Debt Securities."
The Debt Securities may be offered directly, through agents, to or through
underwriters or dealers, which may include affiliates of the Company, or through
any combination of the foregoing. See "Plan of Distribution." If any agents,
dealers or underwriters are involved in the sale of any of the Debt Securities,
their names, and any applicable fee, commission, purchase price or discount
arrangements with them will be set forth, or will be calculable from the
information set forth, in the applicable Prospectus Supplement.
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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 OR ANY PROSPECTUS SUPPLEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
This Prospectus may not be used to consummate sales of the Debt
Securities without delivery of one or more Prospectus Supplements.
The date of this Prospectus is _____________ , 1998
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy and information statements and other information
with the Securities and Exchange Commission (the "Commission"). Such materials
can be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
its regional offices located at Citicorp Center, Suite 1400, 500 West Madison
Street, Chicago, Illinois 60661 and 7 World Trade Center, New York, New York
10048. Copies of such material can be obtained from the Public Reference Section
of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Such materials also can be inspected at the offices of The New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005. Such material may
also be accessed electronically by means of the Commission's home page on the
Internet at http://www.sec.gov.
The Company has filed with the Commission a registration statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"). 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, reference is hereby made to the Registration Statement and exhibits
thereto. Statements contained herein concerning any such document are not
necessarily complete and, in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement. Each such
statement is qualified in its entirety by such reference.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the documents incorporated by reference into this Prospectus
(not including exhibits to the information that is incorporated by reference
unless such exhibits are specifically incorporated by reference into the
information that this Prospectus incorporates). Such written or oral request
should be directed to Alberto-Culver Company, 2525 Armitage Avenue, Melrose
Park, Illinois 60160, Attention: Corporate Secretary; telephone 708/450-3101.
Unless otherwise indicated, currency amounts in the Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars," "U.S.
dollars," or "U.S. $").
--------------
DOCUMENTS INCORPORATED BY REFERENCE
The following documents heretofore filed by the Company with the Commission
are incorporated herein by reference:
(1) The Company's annual report on Form 10-K for the fiscal year ended
September 30, 1997.
(2) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the Company's fiscal year ended
September 30, 1997.
(3) The description of the Company's Class A Common Stock and Class B
Common Stock which is contained in the Company's registration
statements filed pursuant to the Exchange Act, and any amendment or
report filed for the purpose of updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the securities offered hereby shall be deemed to
be incorporated in this Prospectus by reference and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference
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<PAGE>
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 so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
No person has been authorized to give any information or to make any
representations not contained in this Prospectus or the Prospectus Supplement
and, if given or made, such information or representation must not be relied
upon as having been authorized by the Company. This Prospectus and the
Prospectus Supplement do not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered to any person in any jurisdiction
where such offer would be unlawful. The delivery of this Prospectus or any
Prospectus Supplement or any sale of the securities made hereby or thereby does
not imply that there has been no change in the Company's affairs since the date
hereof or thereof.
This Prospectus and the Prospectus Supplement may contain forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. Such statements are based on management's current
expectations and assessments of risks and uncertainties and reflect various
assumptions concerning anticipated results, which may or may not prove to be
correct. Some of the factors that could cause actual results to differ
materially from estimates or projections contained in such forward looking
statements include the pattern of brand sales, including variations in sales
volume within periods; competition within the relevant product markets,
including pricing, promotional activities, continuing customer acceptance of
existing products and the ability to develop and successfully introduce new
products; risks inherent in acquisitions and strategic alliances; changes in
costs including changes in labor costs, raw material prices or promotional
expenses; the costs and effects of unanticipated legal or administrative
proceedings; variations in political, economic or other factors such as currency
exchange rates, inflation rates, recessionary or expansive trends, tax changes,
legal and regulatory changes or other external factors over which the Company
has no control. The Company disclaims any obligation to update any forward-
looking statement in this Prospectus, the Prospectus Supplement or any
incorporated document.
THE COMPANY
Alberto-Culver Company and its consolidated subsidiaries (herein referred
to collectively as the "Company", unless indicated otherwise) have two principal
business segments. One segment, "Consumer Products", principally includes
developing, manufacturing, distributing and marketing branded consumer products
worldwide and includes the Company's Alberto-Culver USA and Alberto-Culver
International business units. This segment also includes products intended for
end use by institutions and industries and the manufacturing of custom label
products for other companies. The second segment, "Specialty Distribution -
Sally", consists of Sally Beauty Company, a specialty distributor of
professional beauty supplies with over 1,900 stores as of February 28, 1998 in
the United States, Puerto Rico, the United Kingdom, Japan and Germany.
The Company's major health and beauty care products in the United States
include the ALBERTO VO5, TRESemme and CONSORT lines of hair care products, the
St. Ives SWISS FORMULA line of hair and skin care products, CORTEXX hair care
products, FDS feminine deodorant sprays and the TCB line of hair care products
for the ethnic market.
Food and household products sold in the United States include MRS. DASH
salt-free seasonings, MOLLY McBUTTER dairy sprinkles, SUGARTWIN sugar substitute
and STATIC GUARD anti-static spray.
The Company's consumer products are sold in more than 120 countries.
Through its Cederroth International subsidiary headquartered in Sweden, the
Company manufactures and markets health and beauty care products throughout
Scandinavia and Europe. Major products include SALVEKVICK adhesive bandages,
ALBERTO VO5 hair care products, SAMARIN antacids, SELTIN salt substitute,
LACTACYD liquid soap,
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<PAGE>
TOPZ cotton buds, BLIW liquid soaps, DATE antiperspirants and cologne for women,
FAMILY FRESH shampoo and shower products, SUKETTER artificial sweetener,
HEMANENT home permanents, St. Ives SWISS FORMULA line of hair and skin care
products, HTH and L300 skin care products and GRUMME TVATTSAPA detergents.
In the United Kingdom, the Company markets, among other products, the
ALBERTO VO5 line of hair care products, the St. Ives SWISS FORMULA line of hair
and skin care products, ALBERTO BALSAM shampoo and conditioner and the TRESemme
line of hair care products. INDOLA professional color bleaches, shampoos,
conditioners and styling products are marketed throughout Europe and other
international markets. Other major international markets include Canada, Mexico,
Puerto Rico, Australia, Italy and New Zealand.
The "Specialty Distribution - Sally" business segment represents the
operations of Sally Beauty Company, Inc. which operates a network of cash-and-
carry professional beauty supply stores and also sells professional beauty
products to hairdressers, beauticians and cosmetologists through its own full-
service distributors. Sally stores provide salon owners, hairdressers and
consumers with an extensive selection of hair care and skin care products,
cosmetics, styling appliances and other beauty items.
Alberto-Culver Company was incorporated under the laws of the State of
Delaware in 1961.
The Company's principal executive offices are located at 2525 Armitage
Avenue, Melrose Park, Illinois 60160, and its telephone number is (708) 450-
3000.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement, the net
proceeds from the sale of the Debt Securities will be added to the Company's
general funds and will be available for potential acquisitions if suitable
opportunities arise, for repurchases of Class A Common Stock under the Company's
stock repurchase program, for ongoing and new capital projects, for repayment of
any outstanding indebtedness and for general corporate purposes. Pending the
application of the net proceeds for such purposes, the Company may invest such
proceeds in short-term, marketable securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following are the unaudited consolidated ratios of earnings to fixed
charges for the quarters ended December 31, 1997 and December 31, 1996 and each
of the years in the five-year period ended September 30, 1997:
<TABLE>
<CAPTION>
Three Months
Ended Year Ended September 30
- --------------------------------- -------------------------------
December 31, December 31,
1997 1996* 1997* 1996 1995 1994 1993
- --------------- ---------------- ------ ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
5.0x 4.5x 4.8x 4.0x 4.3x 4.0x 3.8x
</TABLE>
* Excludes a non-recurring pre-tax gain of $15.6 million in the first quarter
of fiscal year 1997 resulting from a $28.0 million insurance settlement from
the loss of the Company's airplane. Including this non-recurring
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gain, the ratio of earnings to fixed charges was 6.6x for the three months ended
December 31, 1996 and 5.3x for the fiscal year ended September 30, 1997.
For the purpose of computing the ratios of earnings to fixed charges,
"earnings" consist of income from continuing operations before taxes and fixed
charges (including amortization of amounts previously capitalized). "Fixed
charges" consist of interest on all indebtedness and amortization of debt
discount and expense and that portion of rental expense which the Company
believes to be representative of interest.
A statement setting forth the computation of the unaudited ratios of
earnings to fixed charges is filed as an exhibit to the Registration Statement
of which this Prospectus is a part.
SELECTED FINANCIAL DATA
The selected financial data below should be read in conjunction with the
consolidated financial statements and notes thereto incorporated by reference
herein. The selected financial data shown below for, and as of the end of, each
of the fiscal years in the five-year period ended September 30, 1997 are derived
from audited consolidated financial statements of the Company. The selected
financial data shown below for, and as of the end of, the three months ended
December 31, 1997 and 1996 are derived from unaudited consolidated financial
statements of the Company. In the opinion of management, the unaudited
consolidated financial statements reflect all adjustments, consisting only of
normal adjustments, necessary for a fair presentation of such periods. The
results of operations for the three months ended December 31, 1997 are not
necessarily indicative of the operating results that may be expected for the
full fiscal year.
<TABLE>
<CAPTION>
Three Months Ended
December 31, Year ended September 30,
--------------------- -----------------------------------------------------
(In thousands, except per share data) 1997 1996 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Results:
Net sales $ 445,400 426,105 1,775,258 1,590,409 1,358,219 1,216,119 1,147,990
Cost of products sold 218,040 215,388 880,416 805,080 682,589 602,749 564,260
Interest expense 2,081 2,392 11,826 15,905 9,946 8,630 9,661
Earnings before non-recurring gain
and income taxes (1) 31,382 26,738 120,487 100,014 84,242 71,078 65,129
Provision for income taxes (1) 11,690 9,961 44,881 37,270 31,591 27,010 23,857
Net earnings before non-recurring gain (1) 19,692 16,777 75,606 62,744 52,651 44,068 41,272
Net earnings per share before
non-recurring gain (1) (2) (3):
Basic .35 .30 1.35 1.13 .95 .79 .72
Diluted .32 .28 1.25 1.06 .94 .79 .72
Weighted average shares
outstanding (2) (3):
Basic 56,354 55,773 55,967 55,571 55,430 56,063 57,361
Diluted 63,656 63,012 63,377 62,776 57,053 56,083 57,435
Financial Condition:
Current ratio 1.98 to 1 1.89 to 1 1.86 to 1 1.79 to 1 2.28 to 1 1.86 to 1 2.05 to 1
Working capital $ 282,553 265,344 269,007 226,123 301,706 185,747 205,050
Cash, cash equivalents and
short-term investments 63,190 113,338 87,600 71,557 146,985 50,362 73,947
Property, plant and equipment, net 199,655 167,550 190,998 175,920 157,791 132,881 124,449
Total assets 1,003,431 955,374 1,000,059 909,266 815,086 610,208 593,046
Long-term debt 48,580 60,925 49,441 61,548 83,094 42,976 80,184
Convertible subordinated debentures 100,000 100,000 100,000 100,000 100,000 --- ---
Stockholders' equity 520,977 453,928 497,004 425,096 370,903 326,970 298,857
Cash dividends per share (4) .05 .045 .195 .175 .155 .1375 .1375
</TABLE>
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(1) The operating results for the fiscal year ended September 30, 1997 and the
three months ended December 31, 1996 exclude a non-recurring gain from an
insurance settlement for the loss of the Company's corporate airplane.
For the three months ended December 31, 1996, pre-tax earnings including
the non-recurring gain were $42.4 million. Net earnings including the gain
were $26.6 million, after deducting income taxes of $15.8 million,
representing basic earnings per share of $0.48 and diluted earnings per
share of $0.44.
For the fiscal year ended September 30, 1997, pre-tax earnings including
the non-recurring gain were $136.1 million. Net earnings including the gain
were $85.4 million, after deducting income taxes of $50.7 million,
representing basic earnings per share of $1.53 and diluted earnings per
share of $1.41.
(2) Net earnings per share and weighted average shares outstanding have been
restated to reflect the 100% stock dividend on the Company's Class A and
Class B outstanding shares in February, 1997.
(3) Net earnings per share and weighted average shares outstanding have been
restated to comply with Statement of Financial Accounting Standards (SFAS)
No. 128, "Earnings Per Share", which the Company adopted in the first
quarter of fiscal year 1998.
(4) Dividends per share on Class A Common Stock and Class B Common Stock have
been equal since the Class A shares were issued in April, 1986. Dividends
paid in fiscal 1993 include a one-time extraordinary dividend of one cent
per share in recognition of the Company surpassing one billion dollars in
sales for the fiscal year ended September 30, 1992.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture (the "Indenture")
between the Company and The First National Bank of Chicago, as trustee (the
"Trustee"), a copy of which is filed as an exhibit to the Registration
Statement. The following summaries of certain provisions of 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. Wherever particular Sections or defined terms of the
Indenture are referred to, such Sections or defined terms are incorporated
herein by reference.
The following sets forth certain general terms and provisions of the Debt
Securities offered hereby. The particular terms of the Debt Securities offered
by any Prospectus Supplement (the "Offered Securities") will be described in the
Prospectus Supplement relating to such Offered Securities (the "Applicable
Prospectus Supplement").
General
The Indenture does not limit the amount of Debt Securities that may be
issued thereunder, and Debt Securities may be issued thereunder from time to
time in one or more series. The Debt Securities will be unsecured and, to the
extent not otherwise indicated in the Applicable Prospectus Supplement,
unsubordinated obligations of the Company and will rank equally and ratably with
other unsecured and, to the extent not otherwise so indicated, unsubordinated
obligations of the Company.
The Debt Securities will be effectively subordinated to (i) any secured
indebtedness of the Company to the extent of the assets securing that
indebtedness and (ii) all indebtedness for money borrowed and other
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liabilities of subsidiaries of the Company. The Debt Securities are obligations
exclusively of the Company. Since substantially all operations of the Company
are conducted through subsidiaries, the cash flow and the consequent ability to
service debt, including the Debt Securities, of the Company may be affected by
the earnings of its subsidiaries and the distribution of those earnings to, or
upon loans or other payments of funds by those subsidiaries to, the Company. The
payment of dividends and the making of loans and advances to the Company by its
subsidiaries may be subject to restrictions, are dependent upon the earnings of
those subsidiaries and are subject to various business considerations.
Unless otherwise indicated in the Applicable Prospectus Supplement,
principal of, premium, if any, and interest on the Debt Securities will be
payable, and the transfer of Debt Securities will be registrable, at the office
or agency to be maintained by the Company in New York, New York, and at any
other office or agency maintained by the Company for such purpose. Unless
otherwise indicated in the Applicable Prospectus Supplement, the Debt Securities
will be issued only in fully registered form without coupons and in
denominations of $1,000 and integral multiples thereof. 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 imposed in connection therewith.
The Applicable Prospectus Supplement will describe, when applicable, the
following terms of the Offered Securities: (1) the title of the Offered
Securities; (2) any limit on the aggregate principal amount of the Offered
Securities; (3) the person to whom any interest on the Offered Securities shall
be payable, if other than the person in whose name that Security (or one or more
Predecessor Debt Securities) is registered at the close of business on the
Regular Record Date for such interest; (4) the date or dates on which the
principal of the Offered Securities is payable; (5) the rate or rates (which may
be fixed or variable) at which the Offered Securities will bear interest, if
any, or the method by which such rate or rates will be determined, the date or
dates from which any such interest will accrue, the Interest Payment Dates on
which any such interest will be payable and the Regular Record Date for the
interest payable on any Interest Payment Date; (6) whether the interest rate or
interest rate formula for the Offered Securities may be reset at the option of
the Company or otherwise, and the date or dates on which such interest rate or
interest rate formula may be reset; (7) the place or places where the principal
of and any premium and interest on the Offered Securities will be payable; (8)
the period or periods within which, the price or prices at which and the terms
and conditions upon which the Offered Securities may be redeemed, in whole or in
part, at the option of the Company; (9) the obligation, if any, of the Company
to redeem, purchase or repay the Offered Securities pursuant to any sinking fund
or analogous provisions or at the option of a Holder thereof and the period or
periods within which, the price or prices at which and the terms and conditions
upon which the Offered Securities will be redeemed, purchased or repaid, in
whole or in part, pursuant to such obligation; (10) if other than denominations
of $1,000 and any integral multiple thereof, the denominations in which the
Offered Securities will be issuable; (11) the currency, currencies or currency
units in which payment of the principal of and any premium and interest on any
Offered Securities will be payable if other than the currency of the United
States of America; (12) if the amount of payments of principal of or any premium
or interest on any Offered Securities may be determined with reference to an
index or formula, the manner in which such amounts will be determined; (13) if
the principal of or any premium or interest on any Offered Securities is to be
payable, at the election of the Company or a Holder thereof, in one or more
currencies or currency units other than that or those in which the Offered
Securities are stated to be payable, the currency, currencies or currency units
in which payment of the principal of and any premium and interest on the Offered
Securities as to which such election is made will be payable, and the periods
within which and the terms and conditions upon which such election is to be
made; (14) the applicability, if any, of the provisions described under
"Defeasance and Covenant Defeasance"; (15) whether the Offered Securities will
be issuable, in whole or in part, in the form of one or more Book-Entry Debt
Securities as described under "Book-Entry Debt Securities," and, in such case,
the depository appointed by the Company or its nominee with respect to the
Offered Securities and the circumstances under which the Book-Entry Security may
be registered for transfer or exchange or authenticated and delivered in the
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name of a Person other than the Depository or its nominee; (16) if other than
the principal amount thereof, the portion of the principal amount of the Offered
Securities which will be payable upon declaration of acceleration of the
Maturity thereof; (17) subordination provisions of the Offered Securities; (18)
the terms and conditions, if any, upon which the Offered Securities are to be
convertible into, or exchangeable for, shares of Common Stock of the Company,
cash, or any combination thereof; and (19) any other terms of the Offered
Securities.
The Debt Securities may be issued 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 Original Issue Discount Securities and any Debt Securities treated
as having been issued with original issue discount for federal income tax
purposes will be described in the Applicable Prospectus Supplement. "Original
Issue Discount Securities" means any Debt 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.
The Indenture does not contain covenants or other provisions designed to
afford holders of the Debt Securities protection in the event of a highly
leveraged transaction, change in credit rating or other similar occurrence.
Book-Entry Debt Securities
Unless otherwise provided in the Prospectus Supplement, the Debt Securities
will be represented by one or more certificates (the "Global Securities"). The
Global Security representing Debt Securities will be deposited with, or on
behalf of, The Depository Trust Company ("DTC"), or other successor depository
appointed by the Company (DTC or such other depository being the "Depository")
and registered in the name of the Depository or its nominee. Unless otherwise
provided in the Prospectus Supplement, Debt Securities will not be issued in
definitive form. If the aggregate principal amount of any issue exceeds $200
million, one certificate will be issued with respect to each $200 million of
principal amount and an additional certificate will be issued with respect to
any remaining principal amount of such issue.
DTC 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 Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants") deposit
with DTC. DTC also 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. DTC is owned by a number
of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the DTC 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 ("Indirect Participants"). The Rules applicable to DTC and its
Participants are on file with the Commission.
Upon the issuance by the Company of Debt Securities represented by a Global
Security, purchases of Debt Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Debt Securities
on DTC's records. The ownership interest of each actual purchaser of each
Security ("Beneficial Owner") is in turn to be recorded on the Direct and
Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive
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written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Debt Securities are to be accomplished by entries made on the
books of Participants acting on behalf of Beneficial Owners. Beneficial Owners
will not receive certificates representing their ownership interests in Debt
Securities, except in the event that use of the book-entry system for the Debt
Securities is discontinued. The laws of some states require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to transfer beneficial
interests in the Global Security.
So long as the Depository for the Global Security, or its nominee, is the
registered owner of the Global Security, the Depository or its nominee, as the
case may be, will be considered the sole owner or holder of the Debt Securities
represented by such Global Security for all purposes under the Indenture. Except
as provided below, owners of beneficial interests in Debt Securities represented
by the Global Security will not be entitled to have Debt Securities represented
by such Global Security registered in their names, will not receive or be
entitled to receive physical delivery of Debt Securities in definitive form and
will not be considered the owners or holders thereof under the applicable
Indenture.
To facilitate subsequent transfers, all Debt Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Debt Securities with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Debt Securities; DTC's records
reflect only the identity of the Direct Participants to whose accounts such Debt
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers. Conveyance of notices and other communications by DTC
to Direct Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to Debt
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
Company as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Debt Securities are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Payments of principal of, premium, if any, and interest on the Debt
Securities represented by the Global Security registered in the name of DTC or
its nominee will be made by the Company through the Trustee under the Indenture
or a paying agent (the "Paying Agent"), which may also be the Trustee under the
Indenture, to DTC or its nominee, as the case may be, as the registered owner of
the Global Security. Neither the Company, the Trustee, nor the Paying Agent will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests of the Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Company has been advised that DTC, upon receipt of any payment of
principal, premium, if any, and interest in respect of a Global Security, will
credit Direct Participants' accounts on the payable date in accordance with
their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payment on the payable date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC, the Paying Agent or the
Company, subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of principal, premium, if any, and interest to DTC is
the responsibility of the Company or the
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Paying Agent, disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct and Indirect Participants.
If the Depository with respect to a Global Security is at any time
unwilling or unable to continue as Depository and a successor Depository is not
appointed by the Company within 90 days, the Company will issue certificated
notes in exchange for the Debt Securities represented by such Global Security.
The information in this section concerning the Depository and the
Depository's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
Certain Covenants of the Company
Limitation on Liens. Unless otherwise provided in the Applicable Prospectus
Supplement, the Indenture will provide that the Company will not, nor will it
permit any Restricted Subsidiary to, incur, issue, assume, guarantee or create
any Secured Funded Debt, without effectively providing concurrently with the
incurrence, issuance, assumption, guaranty or creation of any such Secured
Funded Debt that the Outstanding Securities (together with, if the Company shall
so determine, any other Indebtedness of the Company or such Restricted
Subsidiary then existing or thereafter created which is not subordinated to the
Outstanding Securities) will be secured equally and ratably with (or prior to)
such Secured Funded Debt, so long as such Secured Funded Debt will be secured by
a Lien, unless, after giving effect thereto, the sum of the aggregate amount of
all outstanding Secured Funded Debt of the Company and its Restricted
Subsidiaries together with all Attributable Debt in respect of sale and
leaseback transactions relating to a Principal Property (with the exception of
Attributable Debt which is excluded pursuant to clauses (1) to (6) described
under "Limitations on Sales and Leasebacks" below), would not exceed an amount
equal to the greater of (i) $100 million or (ii) 15% of Consolidated Net
Tangible Assets; provided, however, that this restriction will not apply to, and
there will be excluded from Secured Funded Debt in any computation under this
restriction, Funded Debt secured by: (1) Liens on property, shares of capital
stock or indebtedness of any corporation existing at the time such corporation
becomes a Subsidiary; (2) Liens on property, shares of capital stock or
indebtedness existing at the time of acquisition thereof or incurred within 270
days of the time of acquisition thereof (including, without limitation,
acquisition through merger or consolidation) by the Company or any Restricted
Subsidiary; (3) Liens on property, shares of capital stock or indebtedness
thereafter acquired (or constructed) by the Company or any Restricted Subsidiary
and created prior to, at the time of, or within 270 days after such acquisition
(including, without limitation, acquisition through merger or consolidation) (or
the completion of such construction or commencement of commercial operation of
such property, whichever is later) to secure or provide for the payment of all
or any part of the purchase price (or the construction price) thereof; (4) Liens
in favor of the Company or any Restricted Subsidiary; (5) Liens in favor of the
United States of America, any State thereof or the District of Columbia, or any
agency, department or other instrumentality thereof, to secure partial,
progress, advance or other payments pursuant to any contract or provisions of
any statute; (6) Liens incurred or assumed in connection with the issuance of
revenue bonds the interest on which is exempt from Federal income taxation
pursuant to Section 103(b) of the Internal Revenue Code; (7) Liens securing the
performance of any contract or undertaking not directly or indirectly in
connection with the borrowing of money, the obtaining of advances or credit or
the securing of Funded Debt, if made and continuing in the ordinary course of
business; (8) Liens under workers' compensation laws, unemployment insurance
laws or similar legislation, or good faith deposits in connection with bids,
tenders, contracts or deposits to secure public or statutory obligations of the
Company or any Restricted Subsidiary, or deposits of cash or obligations of the
United States of America to secure surety and appeal bonds to which the Company
or any Restricted Subsidiary is a party or in lieu of such bonds, or pledges or
deposits for similar purposes in the ordinary course of business, or Liens
imposed by law, such as laborers' or other employees', carriers',
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warehousemen's, mechanics', materialmen's and vendors' Liens, and Liens arising
out of judgments or awards against the Company or any Restricted Subsidiary with
respect to which the Company or such Restricted Subsidiary at the time shall be
prosecuting an appeal or proceedings for review and with respect to which it
shall have secured a stay of execution pending such appeal or proceedings for
review, or Liens for taxes not yet subject to penalties for nonpayment or the
amount or validity of which is being in good faith contested by appropriate
proceedings by the Company or any Restricted Subsidiary, as the case may be, or
minor survey exceptions, minor encumbrances, easements or reservations of, or
rights of others for, rights of way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other restrictions or
Liens as to the use of real properties, which Liens, exceptions, encumbrances,
easements, reservations, rights and restrictions do not, in the opinion of the
Company, in the aggregate materially detract from the value of said properties
or materially impair their use in the operation of the business of the Company
and its Restricted Subsidiaries; (9) Liens incurred to finance all or any
portion of the cost of construction, alteration or repair of any Principal
Property and improvements thereto created prior to completion of such
construction, alteration or repair; (10) Liens outstanding on the date of the
Indenture; or (11) any extension, renewal, refunding or replacement of the
foregoing.
"Attributable Debt" means, as to any particular lease under which either
the Company or any Restricted Subsidiary is at the time liable as lessee for a
term of more than 12 months and at any date as of which the amount thereof is to
be determined, the total net obligations of the lessee for rental payments
during the remaining term of the lease (including any period for which such
lease has been extended or may, at the option of the lessor, be extended)
discounted from the respective due dates thereof to such determination date at a
rate per annum equivalent to the greater of (a) the weighted-average Yield to
Maturity (as defined in the Indenture) of the Outstanding Securities, such
average being weighted by the principal amount of the Outstanding Securities of
each series or, in the case of Original Issue Discount Securities (as defined in
the Indenture), such amount to be the principal amount of such outstanding
Original Issue Discount Securities that would be due and payable as of the date
of such determination upon a declaration of acceleration of the maturity thereof
pursuant to the Indenture and (b) the interest rate inherent in such lease (as
determined in good faith by the Company), both to be compounded semi-annually.
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom, without duplication, the sum of (i) all current liabilities except
for (A) notes and loans payable, (B) current maturities of long term debt, (C)
current maturities of obligations under capital leases and (D) customer deposits
and (ii) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, which in each case under
generally accepted accounting principles would be included on a consolidated
balance sheet of the Company and its subsidiaries.
"Funded Debt" means (i) any indebtedness of the Company or a Restricted
Subsidiary maturing more than 12 months after the time of computation thereof,
(ii) guarantees of Funded Debt or of dividends of others (except guarantees in
connection with the sale or discount of accounts receivable, trade acceptances
and other paper arising in the ordinary course of business), (iii) in the case
of any Restricted Subsidiary, all preferred stock having mandatory redemption
provisions of such Restricted Subsidiary as reflected on such Restricted
Subsidiary's balance sheet prepared in accordance with U.S. generally accepted
accounting principles, and (iv) all Capital Lease Obligations (as defined in the
Indenture).
"Indebtedness" means, at any date, without duplication, (i) all obligations
for borrowed money of the Company or a Restricted Subsidiary or any other
indebtedness of the Company or a Restricted Subsidiary, evidenced by bonds,
debentures, notes or other similar instruments, and (ii) Funded Debt.
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"Liens" means such pledges, mortgages, security interests and other liens
on any Principal Property of the Company or a Restricted Subsidiary which secure
Secured Funded Debt.
"Principal Property" means any real property (including all related land
and buildings but excluding related fixtures, machinery and equipment) or
machinery and equipment located within the United States and owned by, or leased
to, the Company or any of its Subsidiaries that has a net book value (after
deduction of accumulated depreciation) in excess of 1.0% of Consolidated Net
Tangible Assets.
"Restricted Subsidiary" means any Subsidiary of the Company that owns any
Principal Property.
"Secured Funded Debt" means Funded Debt which is secured by any pledge of,
or mortgage, security interest or other lien on any (i) Principal Property
(whether owned on the date of the Indenture or thereafter acquired or created),
(ii) shares of stock owned by the Company or a Subsidiary in a Restricted
Subsidiary or (iii) indebtedness of a Restricted Subsidiary owed to the Company
or a Subsidiary.
"Subsidiary" means any corporation of which at least a majority of the
outstanding stock, which under ordinary circumstances (not dependent upon the
happening of a contingency) has voting power to elect a majority of the board of
directors of such corporation (or similar management body), is owned directly or
indirectly by the Company or by one or more Subsidiaries of the Company, or by
the Company and one or more Subsidiaries.
Limitation on Sales and Leasebacks. Unless otherwise provided in the
Applicable Prospectus Supplement, the Indenture will provide that the Company
will not, nor will it permit any Restricted Subsidiary to, enter into any
arrangement with any Person providing for the leasing by the Company or any
Restricted Subsidiary of any Principal Property of the Company or any Restricted
Subsidiary, which Principal Property has been or is to be sold or transferred by
the Company or such Restricted Subsidiary to such Person (a "sale and leaseback
transaction") unless, after giving effect thereto, the aggregate amount of all
Attributable Debt with respect to all such sale and leaseback transactions plus
all Secured Funded Debt (with the exception of Funded Debt secured by liens
which is excluded pursuant to clauses (1) to (11) described under "Limitations
on Liens" above) would not exceed an amount equal to the greater of (i) $100
million or (ii) 15% of Consolidated Net Tangible Assets. This covenant will not
apply to, and there will be excluded from Attributable Debt in any computation
under this restriction or under "Limitations on Liens" above, Attributable Debt
with respect to any sale and leaseback transaction if: (1) the Company or a
Restricted Subsidiary is permitted to create Funded Debt secured by a Lien
pursuant to clauses (1) to (11) inclusive described under "Limitations on Liens"
above on the Principal Property to be leased, in an amount equal to the
Attributable Debt with respect to such sale and leaseback transaction, without
equally and ratably securing the Outstanding Securities; (2) the Company or a
Restricted Subsidiary shall apply an amount in cash equal to the greater of (i)
the net proceeds of the sale or transfer of the Principal Property leased
pursuant to such arrangement or (ii) the fair market value of the Principal
Property so leased at the time of entering into such arrangement (as determined
by the Chief Executive Officer, the President, the Chief Financial Officer, the
Treasurer or the Controller of the Company) to the retirement of Secured Funded
Debt of the Company or any Restricted Subsidiary (other than Secured Funded Debt
owned by the Company or any Restricted Subsidiary); provided, however, that no
retirement referred to in this clause (2) may be effected by payment at maturity
or pursuant to any mandatory sinking fund payment or any mandatory prepayment
provision of Secured Funded Debt; (3) the Company or a Restricted Subsidiary
immediately applies the net proceeds of the sale or transfer of the Principal
Property leased pursuant to such transaction to investment in another Principal
Property; provided, however, that this exception shall apply only if such
proceeds invested in such other Principal Property shall not exceed the total
acquisition, repair, alteration and construction cost of the Company or any
Restricted Subsidiary in such other Principal Property less amounts secured by
any purchase money or construction mortgages on such Principal Property; (4) the
effective date of any such arrangement is within 270 days of the acquisition of
the Principal Property (including, without limitation, acquisition by merger or
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consolidation) or the completion of construction and commencement of operation
thereof, whichever is later; (5) the lease in such sale and leaseback
transaction is for a term, including renewals, of not more than three years; or
(6) the sale and leaseback transaction is entered into between the Company and a
Restricted Subsidiary or between Restricted Subsidiaries which in each case
shall include a Subsidiary which shall become a Restricted Subsidiary after
giving effect to such sale and leaseback transaction.
Events of Default
Any one of the following events will constitute an Event of Default under
the Indenture with respect to Debt Securities of any series: (a) failure to pay
any interest on any Debt Security of that series when due, continued for 30
days; (b) failure to pay principal of or any premium on any Debt Security of
that series when due; (c) failure to deposit any sinking fund or other payment,
when due, in respect of any Debt Security of that series; (d) failure to
perform, or breach of, any other covenant or warranty of the Company in the
Indenture (other than a covenant included in the Indenture solely for the
benefit of a series of Debt Securities thereunder other than that series)
continued for 90 days after written notice as provided in the Indenture; (e)
certain events in bankruptcy, insolvency or reorganization of the Company; (f)
acceleration of any indebtedness for money borrowed by the Company in an
aggregate principal amount exceeding $50,000,000 under the terms of the
instrument under which such indebtedness is issued or secured, if such
acceleration is not annulled, or such indebtedness is not discharged, within 15
business days after written notice as provided in the Indenture; or (g) any
other Event of Default provided with respect to Debt Securities of that series.
If any Event of Default with respect to the Debt Securities of any series
at the time Outstanding occurs and is continuing, either the Trustee or the
Holder or Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
the Debt Securities of that series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms thereof) of all
the Debt Securities of that series to be due and payable immediately. At any
time after a declaration of acceleration with respect to Debt Securities of any
series has been made, but before a judgment or decree based on acceleration has
been obtained, the Holders of a majority in aggregate principal amount of
Outstanding Securities of that series may, under certain circumstances, rescind
and annul such acceleration.
Reference is made to the Applicable Prospectus Supplement relating to any
series of Offered Securities that are Original Issue Discount Securities for the
particular provisions relating to acceleration of the Stated Maturity of a
portion of the principal amount of such series of Original Issue Discount
Securities upon the occurrence of an Event of Default and the continuation
thereof.
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity. Subject to such provisions for the
indemnification of the Trustee and to certain other conditions, the Holders of a
majority in aggregate principal amount of the Outstanding Securities of any
series will 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 that
series.
No Holder of any series of Debt Securities will have any right to institute
any proceeding with respect to the Indenture or for any remedy thereunder,
unless such Holder shall have previously given to the Trustee written notice of
a continuing Event of Default and unless the Holders of at least 25% in
principal amount of the Outstanding Securities of that series shall have made
written request, and offered reasonable indemnity, to the Trustee to institute
such proceeding as trustee, and the Trustee shall not have received from the
Holders of a
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majority in aggregate principal amount of the Outstanding Securities of that
series a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days. However, such limitations do not apply
to a suit instituted by a Holder of a Security for enforcement of payment of the
principal of and premium, if any, or interest on such Security on or after the
respective due dates expressed in such Security.
The Company is required to furnish to the Trustee annually a statement as
to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance.
Modification and Waiver
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holder or Holders of not less than the
majority in aggregate principal amount of the Outstanding Securities of each
series issued under the Indenture and affected by the modification or amendment;
provided, however, that no such modification or amendment may, without the
consent of the Holder or Holders of all Debt Securities affected thereby, (i)
change the Stated Maturity of the principal of, or any installment of principal
of or interest on, any Security; (ii) reduce the principal amount of, or the
premium, if any, or (except as otherwise provided in the Applicable Prospectus
Supplement) interest on, any Security (including in the case of an Original
Issue Discount Security the amount payable upon acceleration of the maturity
thereof); (iii) change the place or currency of payment of principal of, or
premium, if any, or interest on any Security; (iv) impair the right to institute
suit for the enforcement of any payment on any Security on or at the Stated
Maturity thereof (or in the case of redemption, on or after the Redemption
Date); or (v) reduce the percentage in principal amount of Outstanding
Securities of any series, the consent of whose Holders is required for
modification or amendment of the Indenture or for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults.
The Holder or Holders of at least a majority in aggregate principal amount
of the Outstanding Securities of any series may, on behalf of all Holders of
that series, waive compliance by the Company with certain restrictive provisions
of the Indenture. The Holder or Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of any series may, on behalf of
all Holders of that series, waive any past default under the Indenture, except a
default in the payment of principal, premium or interest and in respect of a
covenant or provision of the Indenture that cannot be modified or amended
without the consent of the Holder of each Outstanding Security of such series
affected thereby.
Consolidation, Merger and Sale of Assets
The Company may not consolidate with or merge into any other Person (as
defined) or transfer or lease its assets substantially as an entirety to any
Person and may not permit any Person to merge into or consolidate with the
Company or transfer or lease its assets substantially as an entirety to the
Company, unless (i) any successor or purchaser is a corporation, partnership,
trust or other entity organized under the laws of the United States of America,
any State or the District of Columbia, and any such successor or purchaser
expressly assumes the Company's obligations on the Debt Securities under a
supplemental Indenture, (ii) immediately 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, shall have occurred and be continuing, (iii)
if properties or assets of the Company or a Restricted Subsidiary or any shares
of capital stock or indebtedness of any Restricted Subsidiary become subject to
a mortgage or other encumbrance not permitted by the Indenture, the Company or
such successor entity, as the case may be, takes such steps as shall be
necessary effectively to secure the Debt Securities equally and ratably
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with (or prior to) all indebtedness secured thereby, and (iv) the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel
stating compliance with these provisions.
Defeasance and Covenant Defeasance
The Indenture provides that, if such provision is made applicable to the
Debt Securities of any series pursuant to Section 3.1 of the Indenture, the
Company, at the Company's option, (a) 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 of or exchange of Debt Securities of such
series, replace stolen, lost or mutilated Debt Securities of such series,
maintain paying agencies and hold moneys for payment in trust) or (b) need not
comply with certain restrictive covenants of the Indenture, including those
described under "Certain Covenants of the Company," and the occurrence of an
event described in clause (d) under "Events of Default" shall no longer be an
Event of Default, in each case, if the Company deposits, in trust, with the
Trustee money or U.S. Government Obligations, which, through the payment of
interest thereon and principal thereof in accordance with their terms, will
provide money in an amount sufficient to pay all the principal of, premium, if
any, and interest on the Debt Securities of such series on the dates such
payments are due (which may include one or more redemption dates designated by
the Company) in accordance with the terms of the Debt Securities of such series.
Such a trust may be established only if, among other things, (i) no Event of
Default or event which with the giving of notice or lapse of time, or both,
would become an Event of Default under the Indenture shall have occurred and be
continuing on the date of such deposit or on such later date specified in the
Indenture in the case of certain events in bankruptcy, insolvency or
reorganization of the Company, (ii) such deposit will not cause the Trustee to
have any conflicting interest with respect to other securities of the Company,
(iii) such defeasance will not result in a breach or violation of, or constitute
a default under, the Indenture or any other agreement or instrument to which the
Company is a party or by which it is bound and (iv) the Company shall have
delivered an Opinion of Counsel to the effect that the Holders will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit or defeasance and will be subject to federal income tax in the same
manner as if such defeasance had not occurred, which Opinion of Counsel, in the
case of clause (a) above, must refer to and be based upon a published ruling of
the Internal Revenue Service, a private ruling of the Internal Revenue Service
addressed to the Company, or otherwise a change in applicable federal income tax
law occurring after the date of the Indenture. In the event the Company omits to
comply with its remaining obligations under the Indenture after a defeasance of
the Indenture with respect to the Debt Securities of any series as described
under clause (b) 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 may be
insufficient 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 will remain liable in respect of such payments.
Concerning the Trustee
The First National Bank of Chicago is Trustee under the Indenture. The
First National Bank of Chicago serves as a co-agent under the Company's
Multicurrency Credit Agreement dated September 11, 1997 and performs routine
banking functions for the Company.
PLAN OF DISTRIBUTION
The Company may offer and sell the Debt Securities through agents, to or
through underwriters or dealers, which may include affiliates of the Company,
directly to one or more purchasers or through any combination of the foregoing.
The Prospectus Supplement with respect to any of the Debt Securities will set
forth the terms of the offering of such Debt Securities, including the name or
names of any underwriters, dealers or
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agents, the purchase price of such Debt Securities, the proceeds to the Company
from such sale, any underwriting discounts or agency fees and other items
constituting underwriters' or agents' compensation, the public offering price,
any discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which such Debt Securities may be listed.
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.
If underwriters or dealers are used in the sale, the Debt Securities will
be acquired by the underwriters or dealers for their own accounts and may be
resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price, which may be changed, or at
varying prices determined at the time of sale. The Debt Securities may be
offered to the public either through underwriting syndicates represented by one
or more managing underwriters or directly by one or more of such firms. Unless
otherwise specified in the applicable Prospectus Supplement, the obligations of
the underwriters to purchase such Debt Securities will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all of
such Debt Securities if any are purchased. Any public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
Underwriters, dealers and agents may be entitled, under agreements entered
into with the Company, to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contributions
with respect to payments which the underwriters, dealers or agents may be
required to make in respect thereof. Underwriters, dealers and agents, and
affiliates thereof, may be customers of, engage in transactions with, or perform
services for the Company and its affiliates in the ordinary course of business.
All Debt Securities will be issues of new securities with no established
trading market. Any underwriters to whom Debt Securities are sold by the Company
for public offering and sale may make a market in such Debt Securities, but such
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given concerning the
liquidity of the trading market for any Debt Securities.
LEGAL OPINIONS
Certain legal matters with respect to the Debt Securities will be passed
upon for the Company by Gary P. Schmidt, Esq., General Counsel of the Company
and for any underwriters or agents by Mayer, Brown & Platt, Chicago, Illinois.
Mr. Schmidt owns options to purchase 10,000 shares of Common Stock, of which no
such options are currently exercisable.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries
as of September 30, 1997 and 1996, and for each of the years in the three-year
period ended September 30, 1997 and the financial statement schedule for the
three-year period ended September 30, 1997 have been incorporated by reference
herein in reliance upon the reports of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
-16-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Set forth below is an estimate (except for the Commission Registration Fee)
of the fees and expenses payable by the registrant in connection with the
distribution of the Debt Securities:
<TABLE>
<CAPTION>
Expense
-------
<S> <C>
Securities and Exchange Commission Registration Fee.. $103,250
Rating Agency Fees................................... 190,000
Printing Costs....................................... 50,000
Legal Fees and Expenses.............................. 100,000
Accounting Fees and Expenses......................... 50,000
Blue Sky Qualification Fees and Expenses............. 15,000
Trustees' Fees and Expenses.......................... 15,000
Miscellaneous........................................ 20,000
--------
Total.............................................. $543,250
========
</TABLE>
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of Delaware authorizes
indemnification of directors, officers and employees of Delaware corporations.
Article VIII of the Registration's by-laws (i) authorizes the indemnification of
directors and officers (the "Indemnitees") under specified circumstances to the
fullest extent authorized by the General Corporation Law of Delaware, (ii)
provides for the advancement of expenses to the Indemnitees for defending any
proceedings related to specified circumstances, (iii) gives the Indemnitees the
right to bring suit against the registrant to enforce the foregoing rights to
indemnification and advancement of expenses, and (iv) authorizes the registrant
to maintain certain policies of insurance to protect itself and any of its
directors, officers or employees. The registrant currently maintains policies of
insurance under which the directors and officers of registrant are insured,
within the limits and subject to the limitations of the policies, against
certain expenses in connection with the defense of actions, suits or
proceedings, and certain liabilities which must be imposed as a result of such
actions, suits or proceedings, to which they are parties by reason of being or
having been such directors or officers.
Item 16. Exhibits.
The exhibits to this registration statement are listed in the Exhibit Index
hereto, which is incorporated herein by reference.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
II-1
<PAGE>
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post- effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c)-(g) Not applicable.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(i) Not applicable.
(j) The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of section 310 of the Trust Indenture Act ("Act") in accordance
with the rules and regulations prescribed by the Commission under section
305(b)(2) of the Act.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Melrose Park, State of Illinois on April 6, 1998.
ALBERTO-CULVER COMPANY
By /s/ Howard B. Bernick
----------------------
Howard B. Bernick
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Leonard
H. Lavin, Howard B. Bernick, William J. Cernugel and Gary P. Schmidt, or any of
them, such person's true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, to sign any or all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Leonard H. Lavin Chairman of the Board April 6, 1998
- ----------------------- and Director
Leonard H. Lavin
/s/ Howard B. Bernick President, Chief Executive April 6, 1998
- ----------------------- Officer and Director
Howard B. Bernick (Principal Executive Officer)
/s/ Bernice E. Lavin Vice Chairman, Secretary, April 6, 1998
- ----------------------- Treasurer and Director
Bernice E. Lavin
/s/ Carol L. Bernick Executive Vice President, April 6, 1998
- ----------------------- Assistant Secretary and Director
Carol L. Bernick
/s/ William J. Cernugel Senior Vice President- April 6, 1998
- ----------------------- Finance and Controller
William J. Cernugel (Principal Financial &
Accounting Officer )
/s/ A. Robert Abboud Director April 6, 1998
- -----------------------
A. Robert Abboud
/s/ A.G. Atwater, Jr. Director April 6, 1998
- -----------------------
A. G. Atwater, Jr.
/s/ Robert P. Gwinn Director April 6, 1998
- -----------------------
Robert P. Gwinn
/s/ Allan B. Muchin Director April 6, 1998
- -----------------------
Allan B. Muchin
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Robert H. Rock Director April 6, 1998
- --------------------------
Robert H. Rock
/s/ Dr. Harold M. Visotsky Director April 6, 1998
- --------------------------
Dr. Harold M. Visotsky
/s/ William W. Wirtz Director April 6, 1998
- --------------------------
William W. Wirtz
</TABLE>
II-4
<PAGE>
ALBERTO-CULVER COMPANY
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
- --- ----------------------
<C> <S>
1.1 Form of Underwriting Agreement*
4.1 Restated Certificate of Incorporation of the Company (incorporated
herein by reference to the Company's Annual Report on Form 10-K for
the year ended September 30, 1988 [File No. 1-5050])
4.2 Certificate of Amendment to Restated Certificate of Incorporation of
the Company (incorporated herein by reference to the Company's
Quarterly Report on Form 10-Q for the quarter ended December 31, 1989
[File No. 1-5050])
4.3 Certificate of Amendment to Restated Certificate of Incorporation of
the Company (incorporated herein by reference to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1997
[File No. 1-5050])
4.4 By-laws of the Company, as amended through January 17, 1990
(incorporated herein by reference to the Company's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1989 [File No. 1-5050])
4.5 Form of Indenture*
4.6 Form of Senior Security*
4.7 Form of Subordinated Security*
5.1 Opinion of Gary P. Schmidt, Esq., General Counsel of the Company.
12.1 Statement re: Computation of ratio of earnings to fixed charges
23.1 Consent of Gary P. Schmidt, Esq. (included in Exhibit 5.1).
23.2 Consent of KPMG Peat Marwick LLP
24.1 Power of attorney (contained on the signature page to the Registration
Statement)
25.1 Statement of Eligibility of The First National Bank of Chicago, as
Trustee, on Form T-1*
99.1 Quarterly Financial Data
</TABLE>
*Will be filed by pre-effective amendment to this registration
statement or as an exhibit to the registrant's report on Form 8-K or
Form 10-Q and incorporated herein by reference.
II-5
<PAGE>
EXHIBIT 5.1
April 8, 1998
Alberto-Culver Company
2525 Armitage Avenue
Melrose Park, Illinois 60160
Ladies and Gentlemen:
Registration Statement on Form S-3
I have represented Alberto-Culver Company, a Delaware corporation (the
"Company"), in connection with a registration statement on Form S-3 (the
"registration statement") filed under the Securities Act of 1933 for the purpose
of registering $350,000,000 principal amount of the Company's debt securities
(the "Securities") to be issued under an indenture between the Company and The
First National Bank of Chicago, as trustee.
In my opinion, when the Securities have been duly executed, authenticated
and delivered against payment therefore, the Securities will be validly issued
and will be legally binding obligations of the Company, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law).
I consent to the filing of this opinion as an exhibit to the registration
statement. In giving this consent I do not admit that I am within the category
of persons whose consent is required by Section 7 of the Securities Act of 1933.
Very truly yours,
/s/ Gary P. Schmidt
Gary P. Schmidt, Esq.
<PAGE>
EXHIBIT 12.1
Alberto-Culver Company
Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Three Months Ended Years Ended September 30,
-------------------------- ------------------------------------------
(In thousands) December 31, December 31,
1997 1996* 1997* 1996 1995 1994 1993
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Income from continuing operations
before income taxes $31,382 26,738 120,487 100,014 84,242 71,078 65,129
Interest expense and amortization of
debt discount, fees and expenses 2,844 3,179 11,826 15,905 9,946 8,630 9,661
Interest included in rental expense 4,964 4,411 19,857 17,645 15,784 14,726 13,410
---------------------------------------------------------------------------
Total Earnings $39,190 34,328 152,170 133,564 109,972 94,434 88,200
===========================================================================
Fixed charges:
Interest expense and amortization of
debt discount, fees and expenses $ 2,844 3,179 11,826 15,905 9,946 8,630 9,661
Interest included in rental expense 4,964 4,411 19,857 17,645 15,784 14,726 13,410
---------------------------------------------------------------------------
Total fixed charges $ 7,808 7,590 31,683 33,550 25,730 23,356 23,071
===========================================================================
Ratio of earnings to fixed charges 5.0 4.5 4.8 4.0 4.3 4.0 3.8
===========================================================================
</TABLE>
* Excludes a non-recurring pre-tax gain of $15.6 million in the first quarter of
fiscal year 1997 resulting from a $28.0 million insurance settlement from the
loss of the Company's airplane. Including this non-recurring gain, the ratio
of earnings to fixed charges was 6.6x for the three months ended December 31,
1996 and 5.3x for the fiscal year ended September 30, 1997.
<PAGE>
EXHIBIT 23.2
CONSENT OF KPMG PEAT MARWICK LLP
--------------------------------
The Board of Directors
Alberto-Culver Company:
We consent to the use of our reports dated October 23, 1997, incorporated herein
by reference, with respect to the consolidated financial statements of Alberto-
Culver Company and subsidiaries as of September 30, 1997 and 1996 and for each
of the years in the three-year period ended September 30, 1997, and the
financial statement schedule for the three-year period ended September 30, 1997,
which reports are incorporated by reference or appear in the September 30, 1997
annual report on Form 10-K of Alberto-Culver Company and to the reference to our
firm under the heading "Experts."
/s/ KPMG PEAT MARWICK
Chicago, Illinois
April 8, 1998
<PAGE>
EXHIBIT 99.1
Alberto-Culver Company
Quarterly Financial Data
Unaudited quarterly consolidated statement of earnings information for the years
ended September 30, 1997 and 1996 are summarized below (in thousands, except per
share amounts):
<TABLE>
<CAPTION>
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter
-------- ------- ------- -------
<S> <C> <C> <C> <C>
1997 As Reported:
Net sales $426,105 439,577 456,210 453,366
Cost of products sold $215,388 218,057 226,734 220,237
Net earnings $ 26,588 17,781 19,210 21,838
Earnings per share (1):
Basic $.48 .32 .34 .39
Diluted $.44 .29 .32 . 36
1997 Pro Forma (2):
Net earnings before non-recurring gain $ 16,777 17,781 19,210 21,838
Earnings per share before non-recurring gain (1):
Basic $.30 .32 .34 .39
Diluted $.28 .29 .32 . 36
1996:
Net sales $347,638 396,146 415,554 431,071
Cost of products sold $178,343 200,459 208,526 217,752
Net earnings $ 12,875 14,469 16,452 18,948
Earnings per share (1):
Basic $.23 .26 .30 .34
Diluted $.22 .24 .28 . 32
</TABLE>
(1) Earnings per share have been restated to comply with Statement of Financial
Accounting Standards (SFAS) No. 128, "Earnings Per Share", which the
company adopted in the first quarter of fiscal year 1998.
(2) Excludes a non-recurring gain in the first quarter of $9.8 million
representing $.18 basic earnings per share and $.16 diluted earnings per
share.
