<PAGE> 1
Filed pursuant to Rule 424(b)(5)
Registration Statement Nos. 333-2837 & 333-41793
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JANUARY 21, 1998
$500,000,000
ALBERTSON'S, INC.
LOGO
MEDIUM-TERM NOTES, SERIES C
DUE 9 MONTHS OR MORE FROM DATE OF ISSUE
------------------------
The Company may offer from time to time its Medium-Term Notes, Series C
(the "Notes") due 9 months or more from the date of issue, as selected by the
initial purchaser and agreed to by the Company, in an aggregate principal amount
not to exceed $500,000,000.
Interest on the Fixed Rate Notes will be payable on each June 1 and
December 1 and at maturity, unless otherwise specified in the applicable Pricing
Supplement. Interest on the Floating Rate Notes will be payable on the dates
specified therein and in the applicable Pricing Supplement. Zero Coupon Notes
will not bear interest.
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will not be redeemable or subject to repayment at the option of the Holder prior
to their Stated Maturity. If so specified in the applicable Pricing Supplement,
the Notes will be redeemable at the option of the Company at any time after the
date or dates specified therein as described therein. If so specified in the
applicable Pricing Supplement, the Notes will be subject to repayment at the
option of the Holder, in whole or in part, on the date or dates specified
therein as described therein.
Unless otherwise specified in the applicable Pricing Supplements, the Notes
offered hereby will be issued in global or definitive form in denominations of
$1,000 or any amount in excess thereof that is an integral multiple of $1,000.
If Notes are issued as Book-Entry Notes, a global security representing
Book-Entry Notes will be registered in the name of the nominee of The Depository
Trust Company, which will act as Depositary. Interests in Book-Entry Notes will
be shown on, and transfers thereof will be effected only through, records
maintained by the Depositary and its participants. Except as described herein
under "Description of Notes -- Book-Entry System", owners of beneficial
interests in a global security will not be considered the Holders thereof and
will not be entitled to receive physical delivery of Notes in definitive form,
and no global security will be exchangeable except for another global security
of like denomination and terms to be registered in the name of the Depositary or
its nominee. See "Description of Notes".
------------------------
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 SUPPLEMENT, ANY PRICING SUPPLEMENT
HERETO OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
<TABLE>
<CAPTION>
PRICE TO AGENTS' PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(2)(3)
------------------------------------------
<S> <C> <C> <C>
Per Note........................ 100% .125% - .750% 99.875% - 99.250%
Total........................... $500,000,000 $625,000 - $3,750,000 $499,375,000 - $496,250,000
</TABLE>
- ------------
(1) Notes will be issued at 100% of their principal amount, unless otherwise
specified in the applicable Pricing Supplement.
(2) The Company will pay the Agents a commission of from .125% to .750%,
depending on maturity, of the principal amount of any Notes sold through
them as agents (or sold to such Agents as principal in circumstances in
which no other discount is agreed). Commissions and discounts with respect
to Notes with maturities in excess of 30 years will be negotiated between
the Company and such Agent at the time of sale. The Company has agreed to
indemnify the Agents against certain liabilities, including liabilities
under the Securities Act of 1933.
(3) Before deducting estimated expenses of $300,000 payable by the Company.
------------------------
Offers to purchase Notes are being solicited, on a reasonable efforts
basis, from time to time by the
Agents on behalf of the Company. Notes may be sold to the Agents on their own
behalf at negotiated discounts. The Company reserves the right to sell Notes
directly on its own behalf. The Company also reserves the right to withdraw,
cancel or modify the offering contemplated hereby without notice. No termination
date for the offering of the Notes has been established. The Company may also
sell Notes to an Agent as principal for resale to investors and other purchasers
at varying prices related to prevailing market prices at the time of resale to
be determined by such Agent or, if so agreed, at a fixed public offering price.
The Company or the Agents may reject any order as a whole or in part. See
"Supplemental Plan of Distribution".
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
MERRILL LYNCH & CO.
------------------------
The date of this Prospectus Supplement is February 17, 1998
<PAGE> 2
CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES, INCLUDING OVER-
ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH NOTES, AND THE
IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE OFFERING. FOR A DESCRIPTION
OF THESE ACTIVITIES, SEE "SUPPLEMENTAL PLAN OF DISTRIBUTION".
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Notes
offered hereby for general corporate purposes, which may include the payment of
outstanding indebtedness, the financing of capital expenditures and acquisitions
and the purchase and retirement of the Company's common stock.
DESCRIPTION OF NOTES
GENERAL
The following description of the particular terms of the Notes offered
hereby (referred to in the accompanying Prospectus as "Offered Securities")
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of the Debt Securities set forth in the
accompanying Prospectus, to which description reference is hereby made.
Capitalized terms used but not defined herein or in the accompanying Prospectus
have the meanings assigned to them in the Indenture. The terms and conditions
set forth herein will apply to each Note unless otherwise specified in the
applicable Pricing Supplement delivered herewith. Section and Article references
used herein are references to the Indenture.
The Notes constitute a single series for purposes of the Indenture and may
be issued from time to time in an aggregate principal amount of up to
$500,000,000, subject to reduction as a result of the sale by the Company of
other Debt Securities referred to in the accompanying Prospectus. The foregoing
limit, however, may be increased by the Company if in the future it determines
that it may wish to sell additional Notes. For a description of the rights
attaching to different series of Debt Securities under the Indenture, see
"Description of the Debt Securities" in the accompanying Prospectus.
All Debt Securities, including the Notes, issued and to be issued under the
Indenture will be senior unsecured general obligations of the Company that will
rank on a parity with all other senior unsecured indebtedness of the Company
from time to time outstanding.
Unless previously redeemed by the Company or repaid by the Company at the
option of the Holder, a Note will mature on the date ("Stated Maturity") 9
months or more from its date of issue that is specified on the face thereof and
in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, the Notes
will be issuable in denominations of $1,000 or any amount in excess thereof that
is an integral multiple of $1,000. Interest rates offered by the Company with
respect to the Notes may differ depending upon, among other things, the
aggregate principal amount of the Notes purchased in any single transaction.
Each Note will be represented by either a global security (a "Global
Security") registered in the name of a nominee of the Depositary (each such Note
represented by a Global Security being herein referred to as a "Book-Entry
Note") or a certificate issued in definitive registered form, without coupons (a
"Certificated Note"), as set forth in the applicable Pricing Supplement. Except
as set forth under "Book-Entry System" below, Book-Entry Notes will not be
issuable in certificated form. So long as the Depositary or its nominee is the
registered owner of any Global Security, the Depositary or its nominee, as the
case may be, will be considered the sole owner or Holder of the Book-Entry Note
or Notes represented by such Global Security for all purposes under the
Indenture.
S-2
<PAGE> 3
It is currently contemplated that all of the Notes will be issued as Book-Entry
Notes. See "Book-Entry System" below.
Notes will be sold in individual issues of Notes having such interest rate
or interest rate formula, if any, Stated Maturity and date of original issuance
as shall be selected by the initial purchasers and agreed to by the Company.
Unless otherwise indicated in the applicable Pricing Supplement, each Note,
except any Zero Coupon Note, will bear interest at a fixed rate or at a rate
determined by reference to one or more of the Commercial Paper Rate, the Prime
Rate, LIBOR, the Treasury Rate, the CD Rate, the CMT Rate or the Federal Funds
Rate, as adjusted by the Spread and/or Spread Multiplier, if any, applicable to
such Note. See "Interest Rate." Zero Coupon Notes will be issued at a discount
from the principal amount payable at the Stated Maturity thereof, but Holders of
Zero Coupon Notes will not receive periodic payments of interest thereon.
The Notes may be issued as Original Issue Discount Notes. An Original Issue
Discount Note is a Note, including any Zero Coupon Note, which is issued at a
price lower than the principal amount thereof and which provides that upon
redemption or repayment or acceleration of the maturity thereof an amount less
than the principal amount thereof shall become due and payable. In the event of
redemption or repayment or acceleration of the maturity of an Original Issue
Discount Note, the amount payable to the Holder of such Note upon such
redemption or repayment or acceleration will be determined in accordance with
the terms of the Note, but will be an amount less than the amount payable at the
Stated Maturity of such Note. In addition, a Note issued at a discount may, for
federal income tax purposes, be considered an original issue discount note,
regardless of the amount payable upon redemption or repayment or acceleration of
maturity of such Note. Special considerations applicable to Original Issue
Discount Notes will be described in the applicable Pricing Supplement.
The Notes may be issued with the principal amount at Stated Maturity, or
the amount of interest payable on an Interest Payment Date, to be determined
with reference to an index or indices (e.g., commodities, financial or
non-financial indices) set forth in the applicable Pricing Supplement. Holders
of such Notes may receive a principal amount at Stated Maturity that is greater
or less than the face amount of the Notes depending upon such index. Information
as to the method for determining the principal amount payable at Stated Maturity
or the amount of interest payable on an Interest Payment Date, as the case may
be, the applicable index and certain additional tax considerations will be set
forth in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will not be redeemable prior to their Stated Maturity. If so specified in the
applicable Pricing Supplement, the Notes will be redeemable at the option of the
Company at any time after the date or dates specified therein, as described
therein. If so specified in the applicable Pricing Supplement, the Notes will be
redeemable in whole or in part at the option of the Company at any time at 100%
of the principal amount thereof, together with accrued interest, plus a
Make-Whole Premium, if any. See "Optional Redemption".
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will not be subject to repayment at the option of the Holder prior to their
Stated Maturity. If so specified in the applicable Pricing Supplement, the Notes
will be subject to repayment at the option of the Holder on the date or dates
specified therein, as described therein, at the repayment price equal to 100% of
the unpaid principal amount to be repaid, together with unpaid interest accrued
to the date of repayment. See "Repayment at the Option of the Holder".
The defeasance and covenant defeasance provisions of the Indenture
described under the caption "Description of Debt Securities -- Defeasance and
Covenant Defeasance" in the accompanying Prospectus will apply to the Notes.
S-3
<PAGE> 4
The covenant provisions of the Indenture described under the caption
"Description of Debt Securities -- Certain Covenants of the Company" in the
accompanying Prospectus will apply to the Notes.
The Notes will not be subject to any sinking fund.
Book-Entry Notes may be transferred or exchanged only through a
participating member of the Depositary. See "Book-Entry System".
Certificated Notes may be presented for registration of transfer or
exchange at the Corporate Trust Office of First Trust of New York, National
Association, in the Borough of Manhattan, The City of New York.
INTEREST RATE
Each Note, other than a Zero Coupon Note, will bear interest from its date
of issue or from the most recent Interest Payment Date to which interest on such
Note has been paid or duly provided for at the fixed rate per annum, or at the
rate per annum determined pursuant to the interest rate formula, stated therein
and in the applicable Pricing Supplement until the principal thereof is paid or
made available for payment. Interest will be payable on each Interest Payment
Date and at maturity or earlier date of redemption or repayment as specified
below under "Payment of Principal and Interest".
Each Note, other than a Zero Coupon Note, will bear interest at either (a)
a fixed rate (a "Fixed Rate Note") or (b) a variable rate determined by
reference to an interest rate formula (a "Floating Rate Note"), which may be
adjusted by adding or subtracting the Spread and/or multiplying by the Spread
Multiplier (each term as defined below). A Floating Rate Note may also have
either or both of the following: (a) a maximum numerical interest rate
limitation, or ceiling, on the rate of interest which may accrue during any
interest period (a "Maximum Rate"); and (b) a minimum numerical interest rate
limitation, or floor, on the rate of interest which may accrue during any
interest period (a "Minimum Rate"). The "Spread" is the number of basis points
specified in the applicable Pricing Supplement as being applicable to the
interest rate basis for such Note and the "Spread Multiplier" is the percentage
specified in the applicable Pricing Supplement as being applicable to the
interest rate basis for such Note. "Market Day" means (a) with respect to any
Note, any Business Day in The City of New York, and (b) with respect to any
LIBOR Note, any Business Day in The City of New York which is also a London
Business Day. The term "Business Day", as used herein with respect to any
particular location, means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in such location are authorized
or obligated by law, regulation or executive order to close. As used herein,
"London Business Day" means any day in which dealings in deposits are transacted
in the London interbank market. "Index Maturity" means, with respect to a
Floating Rate Note, the period to maturity of the instrument or obligation on
which the interest rate basis is based, as specified in the applicable Pricing
Supplement. Unless otherwise provided in the applicable Pricing Supplement,
First Trust of New York, National Association, will be the calculation agent
(the "Calculation Agent") with respect to the Floating Rate Notes.
Unless otherwise specified in the applicable Pricing Supplement, the
interest rate with respect to each Interest Rate Basis will be determined in
accordance with the applicable provisions below. Except as set forth herein or
in the applicable Pricing Supplement, the interest rate in effect on each day
shall be (i) if such day is an Interest Reset Date, the interest rate determined
as of the Interest Determination Date immediately preceding such Interest Reset
Date or (ii) if such day is not an Interest Reset Date, the interest rate
determined as of the Interest Determination Date immediately preceding the most
recent Interest Reset Date.
The applicable Pricing Supplement relating to a Fixed Rate Note will
designate a fixed rate of interest per annum payable on such Fixed Rate Note.
The applicable Pricing Supplement relating to a Floating Rate Note will
designate an interest rate basis (the "Interest Rate Basis") for such
S-4
<PAGE> 5
Floating Rate Note. The Interest Rate Basis for each Floating Rate Note will be
one or more of: (a) the Commercial Paper Rate, in which case such Note will be a
Commercial Paper Rate Note; (b) the Prime Rate, in which case such Note will be
a Prime Rate Note; (c) LIBOR, in which case such Note will be a LIBOR Note; (d)
the Treasury Rate, in which case such Note will be a Treasury Rate Note; (e) the
CD Rate, in which case such Note will be a CD Rate Note; (f) the CMT Rate, in
which case such Note will be a CMT Rate Note; (g) the Federal Funds Rate, in
which case such Note will be a Federal Funds Rate Note; or (h) such other
interest rate basis or formula as is set forth in such Pricing Supplement. The
applicable Pricing Supplement for a Floating Rate Note will specify the Interest
Rate Basis and, if applicable, the Calculation Agent, the Index Maturity, the
Spread and/or Spread Multiplier, the Maximum Rate, the Minimum Rate, the Initial
Interest Rate, the Interest Payment Dates, the Regular Record Dates, the
Calculation Date, the Interest Determination Date and the Interest Reset Date
with respect to such Note.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semiannually or annually (each an "Interest Reset
Date"), as specified in the applicable Pricing Supplement. The Interest Reset
Date will be, in the case of Floating Rate Notes which reset daily, each
Business Day; in the case of Floating Rate Notes (other than Treasury Rate
Notes) which reset weekly, the Wednesday of each week, except as provided below;
in the case of Treasury Rate Notes which reset weekly, the Tuesday of each week;
in the case of Floating Rate Notes which reset monthly, the third Wednesday of
each month; in the case of Floating Rate Notes which reset quarterly, the third
Wednesday of March, June, September and December; in the case of Floating Rate
Notes which reset semi-annually, the third Wednesday of two months of each year
as specified in the applicable Pricing Supplement; and in the case of Floating
Rate Notes which reset annually, the third Wednesday of one month of each year
as specified in the applicable Pricing Supplement; provided, however, that the
interest rate in effect from the date of issue to the first Interest Reset Date
with respect to a Floating Rate Note will be the Initial Interest Rate (as set
forth in the applicable Pricing Supplement). Each such adjusted rate shall be
applicable on and after the Interest Reset Date to which it relates, to, but not
including, the next succeeding Interest Reset Date or until the Stated Maturity,
or the date of redemption or repayment, as the case may be. If any Interest
Reset Date for any Floating Rate Note would otherwise be a day that is not a
Market Day with respect to such Floating Rate Note, the Interest Reset Date for
such Floating Rate Note shall be postponed to the next day that is a Market Day
with respect to such Floating Rate Note, except that in the case of a LIBOR
Note, if such Market Day is in the next succeeding calendar month, such Interest
Reset Date shall be the immediately preceding Market Day.
The Interest Determination Date pertaining to an Interest Reset Date for a
Commercial Paper Rate Note (the "Commercial Paper Interest Determination Date"),
for a Prime Rate Note (the "Prime Rate Interest Determination Date"), for a CD
Rate Note (the "CD Rate Interest Determination Date") and for a Federal Funds
Rate Note (the "Federal Funds Rate Interest Determination Date") will be the
second Market Day preceding such Interest Reset Date. The Interest Determination
Date pertaining to an Interest Reset Date for a LIBOR Note (the "LIBOR Interest
Determination Date") will be the second London Business Day preceding such
Interest Reset Date. The Interest Determination Date pertaining to an Interest
Reset Date for a Treasury Rate Note (the "Treasury Rate Interest Determination
Date") will be the day of the week in which such Interest Reset Date falls on
which Treasury bills would normally be auctioned. Treasury bills are usually
sold at auction on the Monday of each week, unless that day is a legal holiday,
in which case the auction is usually held on the following Tuesday, except that
such auction may be held on the preceding Friday. If, as the result of a legal
holiday, an auction is so held on the preceding Friday, such Friday will be the
Treasury Rate Interest Determination Date pertaining to the Interest Reset Date
occurring in the next succeeding week. If an auction date shall fall on any
Interest Reset Date for a Treasury Rate Note, then such Interest Reset Date
shall instead be the first Market Day immediately following such auction date.
S-5
<PAGE> 6
All percentages resulting from any calculations referred to in this
Prospectus Supplement will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point with five one-millionths of a
percentage point rounded upwards (e.g., 9.876545% (or .09876545) being rounded
to 9.87655% (or .0987655)), and all dollar amounts used or resulting from such
calculations will be rounded to the nearest cent (with one half cent being
rounded upwards).
In addition to any maximum interest rate which may be applicable to any
Floating Rate Note pursuant to the above provisions, the interest rate on the
Floating Rate Notes will in no event be higher than the maximum rate permitted
by New York law, as the same may be modified by United States law of general
application. Under present New York law the maximum rate of interest is 25% per
annum on a simple interest basis, with certain exceptions. The limit may not
apply to Floating Rate Notes in which $2,500,000 or more has been invested.
Upon the request of the Holder of any Floating Rate Note, the Calculation
Agent will provide the interest rate then in effect, and, if determined, the
interest rate which will become effective on the next Interest Reset Date with
respect to such Floating Rate Note. Unless otherwise specified in the applicable
Pricing Supplement, the "Calculation Date", if applicable, pertaining to any
Interest Determination Date will be the earlier of (i) the tenth calendar day
after such Interest Determination Date, or, if such day is not a Market Day, the
next succeeding Market Day or (ii) the Market Day immediately preceding the
applicable Interest Payment Date or the Stated Maturity, as the case may be. The
Calculation Agent's determination of any interest rate will be final and binding
in the absence of manifest error.
Commercial Paper Rate Notes
Commercial Paper Rate Notes will bear interest at the interest rates
(calculated with reference to the Commercial Paper Rate and the Spread and/or
Spread Multiplier, if any), and will be payable on the dates, specified on the
face of the Commercial Paper Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
"Commercial Paper Rate" means, with respect to any Interest Reset Date, the
Money Market Yield (calculated as described below) of the per annum rate (quoted
on a bank discount basis) on the relevant Commercial Paper Interest
Determination Date for commercial paper having the specified Index Maturity as
published by the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(519), Selected Interest Rates" or any successor
publication of the Board of Governors of the Federal Reserve System
("H.15(519)") under the heading "Commercial Paper -- Non-Financial". In the
event that such rate is not published prior to 9:00 A.M., New York City time, on
the relevant Calculation Date, then the Commercial Paper Rate with respect to
such Interest Reset Date shall be the Money Market Yield of the rate on such
Commercial Paper Interest Determination Date for commercial paper having the
specified Index Maturity as published by the Federal Reserve Bank of New York in
its daily statistical release, "Composite 3:30 P.M. Quotations for U.S.
Government Securities" or any successor publication published by the Federal
Reserve Bank of New York ("Composite Quotations") under the heading "Commercial
Paper". If by 3:00 P.M., New York City time, on such Calculation Date such rate
is not yet published in either H.15(519) or Composite Quotations, the Commercial
Paper Rate with respect to such Interest Reset Date shall be calculated by the
Calculation Agent and shall be the Money Market Yield of the arithmetic mean of
the offered per annum rates (quoted on a bank discount basis), as of 11:00 A.M.,
New York City time, on such Commercial Paper Interest Determination Date, of
three leading dealers of commercial paper in The City of New York selected by
the Calculation Agent for commercial paper having the specified Index Maturity
placed for an industrial issuer whose bond rating is "AA", or the equivalent,
from a nationally recognized rating agency; provided, however, that if fewer
than three dealers selected as aforesaid by the Calculation Agent are quoting as
mentioned in this sentence, the Commercial Paper Rate with respect to such
Interest Reset Date will be the Commercial Paper Rate in effect on such
Commercial Paper Interest Determination Date.
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<PAGE> 7
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
<TABLE>
<S> <C>
360 X D
Money Market Yield = 100 X ----------------
360 - (D X M)
</TABLE>
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the period for which accrued interest is being calculated.
Prime Rate Notes
Prime Rate Notes will bear interest at the interest rates (calculated with
reference to the Prime Rate and the Spread and/or Spread Multiplier, if any),
and will be payable on the dates, specified on the face of the Prime Rate Note
and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Interest Reset Date, the rate set forth for the
relevant Prime Rate Interest Determination Date in H.15(519) under the heading
"Bank Prime Loan". In the event that such rate is not published prior to 9:00
A.M., New York City time, on the relevant Calculation Date, then the Prime Rate
with respect to such Interest Reset Date will be the arithmetic mean of the
rates of interest publicly announced by each bank that appears on the display
designated as page USPRIME1 on the Reuters Monitor Money Rates Service (or such
other page as may replace the USPRIME1 page on that service for the purpose of
displaying prime rates or base lending rates of major United States banks)
("Reuters Screen USPRIME1 Page") as such bank's prime rate or base lending rate
as in effect for such Prime Rate Interest Determination Date as quoted on the
Reuters Screen USPRIME1 Page on such Prime Rate Interest Determination Date. If
fewer than four such rates appear on the Reuters Screen USPRIME1 Page on such
Prime Rate Interest Determination Date, the Prime Rate with respect to such
Interest Reset Date will be the arithmetic mean of the prime rates or base
lending rates (quoted on the basis of the actual number of days in the year
divided by a 360-day year) as of the close of business on such Prime Rate
Interest Determination Date by three major banks in The City of New York
selected by the Calculation Agent; provided, however, that if fewer than three
banks selected as aforesaid by the Calculation Agent are quoting as mentioned in
this sentence, the Prime Rate with respect to such Interest Reset Date will be
the Prime Rate in effect on such Prime Rate Interest Determination Date.
LIBOR Notes
LIBOR Notes will bear interest at the interest rates (calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any), and will be
payable on the dates, specified on the face of the LIBOR Note and in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, LIBOR with
respect to any Interest Reset Date will be determined by the Calculation Agent
as follows:
(i) The Calculation Agent will determine either (a) the arithmetic
mean of the offered rates for deposits in U.S. dollars for the period of
the applicable Index Maturity which appear on the Reuters Screen LIBO Page
at approximately 11:00 A.M., London time, on such LIBOR Interest
Determination Date if at least two such offered rates appear on the Reuters
Screen LIBO Page ("LIBOR Reuters"), or (b) the rate for deposits in U.S.
dollars for the period of the applicable Index Maturity that appears on the
Telerate Page 3750 as of 11:00 a.m., London time, on such LIBOR Interest
Determination Date ("LIBOR Telerate"). "Reuters Screen LIBO Page" means the
display designated as Page "LIBO" on the Reuters Monitor Money Rate Service
(or such other page as may replace the LIBO page on the service for the
purpose of displaying London interbank offered rates of major banks).
"Telerate Page 3750" means the display designated as page "3750" on the
Telerate Service (or such other page as may replace the 3750 page on
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<PAGE> 8
that service or such other service or services as may be nominated by the
British Bankers' Association for the purpose of displaying London interbank
offered rates for U.S. dollar deposits). If neither LIBOR Reuters nor LIBOR
Telerate is specified in the applicable Pricing Supplement, LIBOR will be
determined as if LIBOR Telerate had been specified. If fewer than two
offered rates appear on the Reuters Screen LIBO Page, or if no rate appears
on the Telerate Page 3750, as applicable, LIBOR in respect of that LIBOR
Interest Determination Date will be determined as if the parties had
specified the rate described in (ii) below.
(ii) If fewer than two offered rates appear on the Reuters Screen LIBO
Page or no rate appears on Telerate Page 3750, as applicable, the
Calculation Agent will request the principal London offices of each of four
major banks in the London interbank market, as selected by the Calculation
Agent, to provide the Calculation Agent with its offered quotations for
deposits in U.S. dollars for the period of the applicable Index Maturity to
prime banks in the London interbank market at approximately 11:00 A.M.,
London time, commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date, and in a principal amount
equal to an amount of not less than U.S. $1 million that is representative
of a single transaction in such market at such time. If at least two such
quotations are provided, LIBOR will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR in respect of
that LIBOR Interest Determination Date will be the arithmetic mean of rates
quoted by three major banks in the City of New York selected by the
Calculation Agent at approximately 11:00 A.M., New York City time, on such
LIBOR Interest Determination Date for loans in U.S. dollars to leading
European banks, for the period of the applicable Index Maturity and in a
principal amount equal to an amount of not less than U.S. $1 million that
is representative for a single transaction in such market at such time;
provided, however, that if fewer than three banks selected as aforesaid by
the Calculation Agent are quoting rates as mentioned in these sentences,
the rate of interest in effect for the applicable period will be the rate
of interest in effect on such LIBOR Interest Determination Date.
Treasury Rate Notes
Treasury Rate Notes will bear interest at the interest rates (calculated
with reference to the Treasury Rate and the Spread and/or Spread Multiplier, if
any), and will be payable on the dates, specified on the face of the Treasury
Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Interest Reset Date, the rate for the auction
on the relevant Treasury Rate Interest Determination Date of direct obligations
of the United States ("Treasury bills") having the specified Index Maturity as
published in H.15(519) under the heading "U.S. Government Securities/Treasury
Bills/Auction Average (Investment)" or, if not so published by 9:00 A.M., New
York City time, on the relevant Calculation Date, the auction average rate
(expressed as a bond equivalent, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) for such auction as otherwise
announced by the United States Department of the Treasury. In the event that the
results of such auction of Treasury bills having the specified Index Maturity
are not published or reported as provided above by 3:00 P.M., New York City
time, on such Calculation Date, or if no such auction is held during such week,
then the Treasury Rate shall be the rate set forth in H.15(519) for the relevant
Treasury Rate Interest Determination Date for the specified Index Maturity under
the heading "U.S. Government Securities/Treasury Bills/Secondary Market". In the
event such rate is not so published by 3:00 P.M., New York City time, on the
relevant Calculation Date, the Treasury Rate with respect to such Interest Reset
Date shall be calculated by the Calculation Agent and shall be a yield to
maturity (expressed as a bond equivalent, on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates as of approximately 3:30 P.M., New York City time, on
such Treasury Rate Interest Determination Date, of three primary United States
government securities dealers in The City of New York selected by the
Calculation Agent for the issue of Treasury bills with a remaining maturity
closest to the specified Index Maturity; provided, however, that if fewer than
three dealers selected as aforesaid by the
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Calculation Agent are quoting as mentioned in this sentence, the Treasury Rate
with respect to such Interest Reset Date will be the Treasury Rate in effect on
such Treasury Rate Interest Determination Date.
CD Rate Notes
CD Rate Notes will bear interest at the interest rates (calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any), and
will be payable on the dates, specified on the face of the CD Rate Note and in
the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "CD Rate"
means, with respect to any Interest Reset Date, the rate for the relevant CD
Rate Interest Determination Date for negotiable certificates of deposit having
the specified Index Maturity as published in H.15(519) under the heading "CDs
(Secondary Market)". In the event that such rate is not published prior to 9:00
A.M., New York City time, on the relevant Calculation Date, then the CD Rate
with respect to such Interest Reset Date shall be the rate on such CD Rate
Interest Determination Date for negotiable certificates of deposit having the
specified Index Maturity as published in Composite Quotations under the heading
"Certificates of Deposit". If by 3:00 P.M., New York City time, on such
Calculation Date, such rate is not published in either H.15(519) or Composite
Quotations, the CD Rate with respect to such Interest Reset Date shall be
calculated by the Calculation Agent and shall be the arithmetic mean of the
secondary market offered rates, as of 10:00 A.M., New York City time, on such CD
Rate Interest Determination Date, of three leading nonbank dealers of negotiable
U.S. dollar certificates of deposit in The City of New York selected by the
Calculation Agent for negotiable certificates of deposit of major United States
money market banks (in the market for negotiable certificates of deposit) with a
remaining maturity closest to the specified Index Maturity in a denomination of
U.S. $5,000,000; provided, however, that if fewer than three dealers selected as
aforesaid by the Calculation Agent are quoting as mentioned in this sentence,
the CD Rate with respect to such Interest Reset Date will be the CD Rate in
effect on such CD Rate Interest Determination Date.
CMT Rate Notes
CMT Rate Notes will bear interest at the interest rates (calculated with
reference to the CMT Rate and the Spread and/or Spread Multiplier, if any), and
will be payable on the dates, specified on the face of the CMT Rate Note and in
the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "CMT Rate"
means, with respect to any Interest Determination Date relating to a Floating
Rate Note for which the interest rate is determined with reference to the CMT
Rate (a "CMT Rate Interest Determination Date"), the rate displayed on the
Designated CMT Telerate Page under the caption ". . . Treasury Constant
Maturities . . . Federal Reserve Board Release H.15 . . . Mondays Approximately
3:45 P.M.," under the column for the Designated CMT Maturity Index for (i) if
the Designated CMT Telerate Page is 7055, the rate on such CMT Rate Interest
Determination Date and (ii) if the Designated CMT Telerate Page is 7052, the
week, or the month, as applicable, ended immediately preceding the week in which
the related CMT Rate Interest Determination Date occurs. If such rate is no
longer displayed on the relevant page or is not displayed by 3:00 P.M., New York
City time, on the related Calculation Date, then the CMT Rate for such CMT Rate
Interest Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519). If such
rate is no longer published or is not published by 3:00 P.M., New York City
time, on the related Calculation Date, then the CMT Rate on such CMT Rate
Interest Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with
respect to such Interest Reset Date as may then be published by either the Board
of Governors of the Federal Reserve System or the United States Department of
the Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate
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Page and published in the relevant H.15(519). If such information is not
provided by 3:00 P.M., New York City time, on the related Calculation Date, then
the CMT Rate on the CMT Rate Interest Determination Date will be calculated by
the Calculation Agent and will be a yield to maturity, based on the arithmetic
mean of the secondary market closing offer side prices as of approximately 3:30
P.M., New York City time, on such CMT Rate Interest Determination Date reported,
according to their written records, by three leading primary United States
government securities dealers (each, a "Reference Dealer") in The City of New
York (which may include the Agent or its affiliates) selected by the Calculation
Agent (from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for the most recently issued direct noncallable fixed rate obligations
of the United States ("Treasury Notes") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to maturity
of not less than such Designated CMT Maturity Index minus one year. If the
Calculation Agent is unable to obtain three such Treasury Note quotations, the
CMT Rate on such CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity based on the arithmetic mean
of the secondary market offer side prices as of approximately 3:30 P.M., New
York City time, on such CMT Rate Interest Determination Date of three Reference
Dealers in The City of New York (from five such Reference Dealers selected by
the Calculation Agent and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for Treasury Notes with an original maturity of
the number of years that is the next highest to the Designated CMT Maturity
Index and a remaining term to maturity closest to the Designated CMT Maturity
Index and in an amount of at least $100 million. If three or four (and not five)
of such Reference Dealers are quoting as described above, then the CMT Rate will
be based on the arithmetic mean of the offer prices obtained and neither the
highest nor the lowest of such quotes will be eliminated; provided however, that
if fewer than three Reference Dealers so selected by the Calculation Agent are
quoting as mentioned herein, the CMT Rate determined as of such CMT Rate
Interest Determination Date will be the CMT Rate in effect on such CMT Rate
Interest Determination Date. If two Treasury Notes with an original maturity as
described in the second preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the Calculation Agent will
obtain from five Reference Dealers quotations for the Treasury Note with the
shorter remaining term to maturity.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page specified in the applicable Pricing Supplement (or any other
page as may replace such page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519)) for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519). If no such
page is specified in the applicable Pricing Supplement, the Designated CMT
Telerate Page shall be 7052 for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified in the applicable Pricing Supplement with respect to which the CMT
Rate will be calculated. If no such maturity is specified in the applicable
Pricing Supplement, the Designated CMT Maturity Index shall be 2 years.
Federal Funds Rate Notes
Federal Funds Rate Notes will bear interest at the interest rates
(calculated with reference to the Federal Funds Rate and the Spread or Spread
Multiplier, if any), and will be payable on the dates, specified on the face of
the Federal Funds Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Interest Reset Date, the rate on the
relevant Federal Funds Rate Interest Determination Date for Federal Funds as
published in H.15(519) under the heading "Federal Funds (Effective)". In the
event that such rate is not published prior to 9:00 A.M., New York City time, on
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the relevant Calculation Date, then the Federal Funds Rate with respect to such
Interest Reset Date will be the rate on such Federal Funds Rate Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate". If by 3:00 P.M., New York City time, on such
Calculation Date, such rate is not published in either H.15(519) or Composite
Quotations, the Federal Funds Rate with respect to such Interest Reset Date
shall be calculated by the Calculation Agent and shall be the arithmetic mean of
the rates, as of 9:00 A.M., New York City time, on such Federal Funds Rate
Interest Determination Date for the last transaction in overnight Federal Funds
arranged by three leading brokers of Federal Funds transactions in The City of
New York selected by the Calculation Agent; provided, however, that if fewer
than three brokers selected as aforesaid by the Calculation Agent are quoting as
mentioned in this sentence, the Federal Funds Rate with respect to such Interest
Reset Date will be the Federal Funds Rate in effect on such Federal Funds Rate
Interest Determination Date.
PAYMENT OF PRINCIPAL AND INTEREST
Interest will be payable to the Person in whose name a Note is registered
(which in the case of Global Securities representing Book-Entry Notes will be
the Depositary or a nominee of the Depositary) at the close of business on the
Regular Record Date next preceding each Interest Payment Date; provided,
however, that interest payable at maturity will be payable to the Person to whom
principal shall be payable (which in the case of Global Securities representing
Book-Entry Notes will be the Depositary or a nominee of the Depositary). The
first payment of interest on any Note originally issued between a Regular Record
Date and an Interest Payment Date will be made on the Interest Payment Date
following the next succeeding Regular Record Date to the registered owner on
such next succeeding Regular Record Date. Unless otherwise indicated in the
applicable Pricing Supplement, the "Regular Record Date" with respect to any
Floating Rate Note shall be the date 15 calendar days prior to each Interest
Payment Date, whether or not such date shall be a Business Day, and the "Regular
Record Date" with respect to any Fixed Rate Note shall be the May 15 and
November 15 next preceding the June 1 and December 1 Interest Payment Dates.
Unless otherwise indicated in the applicable Pricing Supplement and except
as provided below, interest will be payable, in the case of Floating Rate Notes
which reset daily, weekly or monthly, on the third Wednesday of each month or on
the third Wednesday of March, June, September and December of each year (as
indicated in the applicable Pricing Supplement); in the case of Floating Rate
Notes which reset quarterly, on the third Wednesday of March, June, September
and December of each year; in the case of Floating Rate Notes which reset
semi-annually, on the third Wednesday of the two months of each year specified
in the applicable Pricing Supplement; and in the case of Floating Rate Notes
which reset annually, on the third Wednesday of the month specified in the
applicable Pricing Supplement (each an "Interest Payment Date"), and in each
case, at maturity or date of earlier redemption or repayment. If an Interest
Payment Date (other than at Stated Maturity, a Redemption Date or an Optional
Repayment Date) with respect to any Floating Rate Note would otherwise fall on a
day that is not a Market Day with respect to such Note, such Interest Payment
Date will be on the next succeeding Market Day (with interest accruing to but
excluding the next succeeding Market Day) (or, in the case of a LIBOR Note, if
such day falls in the next calendar month, the next preceding Market Day (with
interest accruing to but excluding the next preceding Market Day)). If the
Stated Maturity, Redemption Date or Optional Repayment Date of a Floating Rate
Note falls on a day that is not a Market Day, the required payment of principal,
premium, if any, and interest will be made on the next succeeding Market Day as
if made on the date such payment was due, and no interest will accrue on such
payment for the period from and after the Stated Maturity, Redemption Date or
Optional Repayment Date, as the case may be, to the date of such payment on the
next succeeding Market Day.
Unless otherwise specified in the applicable Pricing Supplement, interest
payments in respect of Fixed Rate Notes and Floating Rate Notes will equal the
amount of interest accrued from and including the immediately preceding Interest
Payment Date in respect of which interest has been paid or duly made available
for payment (or from and including the date of issue, if no interest has
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been paid or duly made available for payment) to but excluding the applicable
Interest Payment Date or the Stated Maturity, as the case may be.
With respect to a Floating Rate Note, accrued interest from the date of
issue or from the last date to which interest has been paid is calculated by
multiplying the face amount of such Floating Rate Note by an accrued interest
factor. Such accrued interest factor is computed by adding the interest factor
calculated for each day from the date of issue, or from the last date to which
interest has been paid, to but excluding the date for which accrued interest is
being calculated. The interest factor (expressed as a decimal) for each such day
is computed by dividing the interest rate (expressed as a decimal) applicable to
such date by 360, in the case of Commercial Paper Rate Notes, Prime Rate Notes,
LIBOR Notes, CD Rate Notes, or Federal Funds Rate Notes, or by the actual number
of days in the year, in the case of Treasury Rate Notes or CMT Rate Notes.
Interest on Fixed Rate Notes will be computed on the basis of a 360-day year of
twelve 30-day months.
Any payment on any Fixed Rate Note due on any day which is not a Market Day
need not be made on such day, but may be made on the next succeeding Market Day
with the same force and effect as if made on the due date, and no interest shall
accrue for the period from and after such date.
Payment of the principal of, premium, if any, and interest, if any, due
with respect to any Certificated Note at maturity or date of earlier redemption
or repayment will be made in immediately available funds upon surrender of such
Note at the Corporate Trust Office of First Trust of New York, N.A., acting as
Paying Agent, in the Borough of Manhattan, The City of New York, provided that
the Certificated Note is presented to the Paying Agent in time for the Paying
Agent to make such payments in such funds in accordance with its normal
procedures. Payments of interest with respect to Certificated Notes other than
at maturity or date of earlier redemption or repayment will be made by check
mailed to the address of the Person entitled thereto as it appears upon the
books maintained by the Paying Agent on the relevant Regular Record Date or by
wire transfer to such account as may have been appropriately designated in
writing no later than the Regular Record Date by such Person.
The total amount of any principal of, premium, if any, and interest, if
any, due on any Global Security representing one or more Book-Entry Notes on any
Interest Payment Date or at maturity or date of earlier redemption or repayment
will be made available to the Trustee in immediately available funds on such
date and the Trustee will make such payments from the funds so provided to The
Depository Trust Company, New York, New York (the "Depositary", which term
includes any successor Depositary on such date). The Depositary will allocate
such payments to each Book-Entry Note represented by such Global Security and
make payments to the owners or holders thereof in accordance with its existing
operating procedures. Neither the Company nor the Trustee shall have any
responsibility or liability for such payments by the Depositary. So long as the
Depositary or its nominee is the registered owner of any Global Security, the
Depositary or its nominee, as the case may be, will be considered the sole owner
or Holder of the Book-Entry Note or Notes represented by such Global Security
for all purposes under the Indenture and the Book-Entry Notes. The Company
understands, however, that under existing industry practice, the Depositary will
authorize the Persons on whose behalf it holds a Global Security to exercise
certain rights of Holders of Debt Securities. See "Book-Entry System".
OTHER/ADDITIONAL PROVISIONS; ADDENDUM
Any provisions with respect to the Notes, including the specification and
determination of one or more Interest Rate Bases, the calculation of the
interest rate applicable to a Floating Rate Note, the Interest Payment Dates,
the Stated Maturity, the Redemption Dates, the Optional Repayment Dates or any
other term relating thereto, may be modified and/or supplemented as specified
under "Other/Additional Provisions" on the face thereof or in an Addendum
relating thereto, if so specified on the face thereof. Such provisions will be
described in the applicable Pricing Supplement.
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AMORTIZING NOTES
The Company may from time to time offer Amortizing Notes. Unless otherwise
specified in the applicable Pricing Supplement, interest on each Amortizing Note
will be computed on the basis of a 360-day year of twelve 30-day months.
Payments with respect to Amortizing Notes will be applied first to interest due
and payable thereon and then to the reduction of the unpaid principal amount
thereof. Further information concerning additional terms and provisions of
Amortizing Notes will be specified in the applicable Pricing Supplement,
including a table setting forth repayment information for such Amortizing Notes.
BOOK-ENTRY SYSTEM
Upon issuance, all Book-Entry Notes bearing interest (if any) at the same
rate or pursuant to the same formula, having the same date of issuance,
redemption provisions, if any, repayment provisions, if any, Stated Maturity and
other terms will be represented by a single Global Security; provided, however,
that, if by reason of the foregoing, a single Global Security would exceed
$200,000,000 in aggregate principal amount, then one Global Security will be
issued to represent each $200,000,000 of aggregate principal amount and an
additional Global Security will be issued to represent any remaining principal
amount. Each Global Security representing Book-Entry Notes will be deposited
with, or on behalf of, the Depositary and will be registered in the name of the
Depositary or a nominee of the Depositary.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit the accounts of persons held with it with
the respective principal or face amounts of the Book-Entry Notes represented by
such Global Security. Such accounts shall be designated by the Agents with
respect to Book-Entry Notes or by the Company if such Notes are offered and sold
directly by the Company. Ownership of beneficial interests in a Global Security
will be limited to persons that have accounts with the Depositary
("participants") or persons that may hold interests through participants.
Ownership of beneficial interests by participants in a Global Security will be
shown on, and the transfer of that ownership interest will be effected only
through, records maintained by the Depositary or its nominee (with respect to
interests of participants) for such Global Security and on the records of
participants (with respect to interests of persons other than participants).
Ownership of beneficial interests in such Global Security by persons that hold
through participants will be shown on, and the transfer of that ownership
interest within such participant will be effected only through, records
maintained by such participant. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a Global Security.
Payment of principal of, premium, if any, and interest, if any, on
Book-Entry Notes represented by any such Global Security will be made to the
Depositary or its nominee, as the case may be, as the sole registered owner and
the sole Holder of the Book-Entry Notes represented thereby for all purposes
under the Indenture. Neither the Company nor the Trustee nor any agent of the
Company or the Trustee will have any responsibility or liability for any aspect
of the Depositary's records relating to or payments made on account of
beneficial ownership interests in a Global Security representing any Book-Entry
Notes or for maintaining, supervising or reviewing any of the Depositary's
records relating to such beneficial ownership interests.
The Company expects that the Depositary, upon receipt of any payment of
principal of, premium, if any, or interest, if any, on any Global Security, will
immediately credit, on its book-entry registration and transfer system, the
accounts of participants with payments in amounts proportionate to their
respective beneficial interests in the principal or face amount of such Global
Security as shown on the records of the Depositary. The Company also expects
that payments by participants to owners of beneficial interests in a Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for
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customer accounts registered in "street name", and will be the sole
responsibility of such participants.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or Holder of the Book-Entry
Notes represented by such Global Security for the purposes of receiving payment
on the Notes, receiving notices and for all other purposes under the Indenture
and the Notes. Beneficial interests in Book-Entry Notes will be evidenced only
by, and transfers thereof will be affected only through, records maintained by
the Depositary and its participants. Owners of beneficial interests in a Global
Security will not be entitled to and will not be considered the Holders thereof
for any purpose under the Indenture, except under certain circumstances
described in the Indenture. Accordingly, each Person owning a beneficial
interest in such a Global Security must rely on the procedures of the Depositary
and, if such Person is not a participant, on the procedures of the participant
through which such Person owns its interest, to exercise any rights of a Holder
under the Indenture. The Company understands that under existing industry
practices, in the event that the Company requests any action of Holders or that
an owner of a beneficial interest in such a Global Security desires to give or
take any action which a Holder is entitled to give or take under the Indenture,
the Depositary would authorize the participants holding the relevant beneficial
interests to give or take such action and such participants would authorize
beneficial owners owning through such participants to give or take such action
or would otherwise act upon the instructions of beneficial owners owning through
them.
The Depositary has advised the Company that the Depositary is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered under the Exchange Act. The Depositary was created to hold the
securities of its participants and to facilitate the clearance and settlement of
securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers (including the
Agents), banks, trust companies, clearing corporations and certain other
organizations some of whom (and/or their representatives) own the Depositary.
Access to the Depositary's book-entry system is also available to others, such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly. For a
further description of the depositary arrangement with respect to Global
Securities, see "Description of Debt Securities--Book-Entry System" in the
accompanying Prospectus.
REPAYMENT AT THE OPTION OF THE HOLDER
The Notes will be repayable by the Company at the option of the Holders
thereof prior to Stated Maturity only if one or more optional repayment dates
are specified in the applicable Pricing Supplement ("Optional Repayment Dates").
If so specified, the Notes will be subject to repayment at the option of the
Holders thereof on any Optional Repayment Date in whole or from time to time in
part in increments of $1,000 or such other minimum denomination specified in the
applicable Pricing Supplement (provided that any remaining principal amount
thereof shall be at least $1,000 or such other minimum denomination), at a
repayment price equal to 100% of the unpaid principal amount to be repaid (or,
if this Note is an Original Issue Discount Note, such lesser amount as provided
therein), together with unpaid interest accrued to the date of repayment. For
any Note to be repaid, such Note must be received, together with the form
thereon entitled "Option to Elect Repayment" duly completed, by the Trustee at
its Corporate Trust Office (or such other address of which the Company shall
from time to time notify the Holders) not more than 60 nor less than 30 calendar
days prior to the date of repayment. Exercise of such repayment option by the
Holder will be irrevocable.
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Only the Depositary may exercise the repayment option in respect of Global
Securities representing Book-Entry Notes. Accordingly, holders of beneficial
interests ("Beneficial Owners") of Global Securities that desire to have all or
any portion of the Book-Entry Notes represented by such Global Securities repaid
must instruct the participant through which they own their interest to direct
the Depositary to exercise the repayment option on their behalf by delivering
the related Global Security and duly completed election form to the Trustee as
aforesaid. In order to ensure that such Global Security and election form are
received by the Trustee on a particular day, the applicable Beneficial Owner
must so instruct the participant through which it owns its interest before such
participant's deadline for accepting instructions for that day. Different firms
may have different deadlines for accepting instructions from their customers.
Accordingly, Beneficial Owners should consult the participants through which
they own their interest for the respective deadlines for such participants. All
instructions given to participants from Beneficial Owners of Global Securities
relating to the option to elect repayment shall be irrevocable. In addition, at
the time such instructions are given, each such Beneficial Owner shall cause the
participant through which it owns its interest to transfer such Beneficial
Owner's interest in the Global Security or Securities representing the related
Book-Entry Notes, on the Depositary's records, to the Trustee. See "Book-Entry
System."
If applicable, the Company will comply with the requirements of Rule 14c-1
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
any other securities laws or regulations in connection with any such repayment.
The Company may at any time purchase Notes at any price or prices in the
open market or otherwise. Notes so purchased by the Company may, at the
discretion of the Company, be held, resold or surrendered to the Trustee for
cancellation.
OPTIONAL REDEMPTION
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will not be redeemable prior to their Stated Maturity. If so specified in the
applicable Pricing Supplement, the Notes will be redeemable at the option of the
Company at any time after the date or dates specified therein. If one or more
such dates are so specified with respect to any Note, the applicable Pricing
Supplement will also specify one or more redemption prices (expressed as a
percentage of the principal amount of such Note) ("Redemption Prices") and the
redemption period or periods ("Redemption Periods") during which such Redemption
Prices shall apply. Unless otherwise specified in the Pricing Supplement, any
such Note shall be redeemable at the option of the Company at the specified
Redemption Price applicable to the Redemption Period during which such Note is
to be redeemed, together with interest accrued to the Redemption Date.
If so specified in the applicable Pricing Supplement, the Notes will be
redeemable at the Company's option, as a whole or from time to time in part, on
any date prior to their Stated Maturity at a Redemption Price equal to 100% of
the principal amount thereof plus accrued interest to the Redemption Date
(subject to the right of Holders of record on the relevant Regular Record Date
to receive interest due on an Interest Payment Date that is on or prior to the
Redemption Date), plus a Make-Whole Premium, if any. (Sections 1101, 1104 and
1106)
The "Make-Whole Premium" in respect of any Note is intended to be the
amount, if any, which, when added to the then outstanding principal amount of
such Note, would, if invested on the Redemption Date of such Note in U.S.
Treasury securities with maturities equal to the Remaining Life of the Notes,
have a yield to maturity equal to the original yield to maturity of the Notes,
based on the initial public offering price of the Notes set forth in the
applicable Pricing Supplement. The amount of the Make-Whole Premium in respect
of the principal amount of any Note to be redeemed will be the excess, if any,
of (i) the sum of the present values, as of the Redemption Date of such Note, of
(A) the respective interest payments (exclusive of the amount of accrued
interest to the Redemption Date) on such Note that, but for such redemption,
would have been payable on their
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respective Interest Payment Dates after such Redemption Date, and (B) the
payment of such principal amount that, but for such redemption, would have been
payable on the Stated Maturity over (ii) the amount of such principal to be
redeemed. Such present values will be determined in accordance with generally
accepted principles of financial analysis by discounting the amounts of such
payments of interest and principal from their respective Stated Maturities to
such Redemption Date at a discount rate equal to the Treasury Yield.
The "Treasury Yield" in respect of any Note to be redeemed shall be
determined as of the date on which notice of redemption of such Note is sent to
the Holder thereof by reference to the most recent Federal Reserve Statistical
Release H.15 (519) (or successor publication) which has become publicly
available not more than two Business Days prior to such date (or, if such
Statistical Release (or successor publication) is no longer published or no
longer contains the applicable data, to the most recently published issue of The
Wall Street Journal (Eastern Edition) published not more than two Business Days
prior to such date that contains such data or, if The Wall Street Journal
(Eastern Edition) is no longer published or no longer contains such data, to any
publicly available source of similar market data), and shall be the most recent
weekly average yield on actively traded U.S. Treasury securities adjusted to a
constant maturity equal to the Remaining Life of the Notes and, if applicable,
converted to a bond equivalent yield basis as described below. The "Remaining
Life of the Notes" shall equal the number of years from the Redemption Date to
the Stated Maturity of the Notes; provided that if the Remaining Life of the
Notes being redeemed is not equal to the constant maturity of a U.S. Treasury
security for which a weekly average yield is specified in the applicable source,
then the Remaining Life of the Notes shall be rounded to the nearest one-twelfth
of one year and the Treasury Yield shall be obtained by linear interpolation
(computed to the fifth decimal place (one thousandth of a percentage point) and
then rounded to the fourth decimal place (one hundredth of a percentage point)),
after rounding to the nearest one-twelfth of one year, from the weekly average
yields of (a) the actively traded U.S. Treasury security with a maturity closest
to and less than the Remaining Life of the Notes and (b) the actively traded
U.S. Treasury security with a maturity closest to and greater than the Remaining
Life of the Notes, except that if the Remaining Life of the Notes is less than
three months, the weekly average yield on actively traded U.S. Treasury
securities adjusted to a constant maturity of three months shall be used. The
Treasury Yield shall, if expressed on a yield basis other than that equivalent
to a bond equivalent yield basis, be converted to a bond equivalent yield basis
and shall be computed to the fifth decimal place (one thousandth of a percentage
point) and then rounded to the fourth decimal place (one hundredth of a
percentage point).
Notice of redemption will be provided by mailing a notice of such
redemption to each Holder by first class mail, postage prepaid, at least 30 days
and not more than 60 days prior to the date fixed for redemption to the
respective address of each Holder as that address appears in the Security
Register.
The Company may purchase Notes at any price in the open market or
otherwise. Notes so purchased by the Company may, at the discretion of the
Company, be held or resold or surrendered to the Trustee for cancellation.
SUPPLEMENTAL PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in the Distribution
Agreement, dated February 17, 1998 (the "Distribution Agreement"), the Notes are
being offered on a continuing basis by the Company through Goldman, Sachs & Co.,
J.P. Morgan Securities Inc. and Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated (the "Agents"), who have agreed to use reasonable
efforts to solicit purchases of the Notes. The Company will have the sole right
to accept offers to purchase Notes and may reject any proposed purchases of
Notes as a whole or in part. The Agents shall have the right, in their
discretion reasonably exercised, to reject any offer to purchase Notes, as a
whole or in part. The Company will pay the Agents a commission of from .125% to
.750% of the principal amount of Notes, depending upon maturity, for sales made
through
S-16
<PAGE> 17
them as Agents, with commissions with respect to Notes with maturities in excess
of 30 years to be negotiated between the Company and the Agents at the time of
sale.
The Company may also sell Notes to the Agents as principals for their own
accounts at a discount to be agreed upon at the time of sale, or the purchasing
Agents may receive from the Company a commission or discount equivalent to that
set forth on the cover page hereof in the case of any such principal transaction
in which no other discount is agreed. Such Notes may be resold at prevailing
market prices, or at prices related thereto, at the time of such resale, as
determined by the Agents, or if so agreed, at a fixed public offering price. The
Agents may offer the Notes they have purchased as principal to other dealers.
The Agents may sell the Notes to any dealer at a discount and, unless otherwise
specified in an accompanying Pricing Supplement, such discount allowed to any
dealer will not be in excess of the discount received by the Agents from the
Company. After the initial public offering of Notes that are to be resold by the
Agents to investors and other purchasers, the public offering price (in the case
of Notes to be resold at a fixed public offering price), concession and discount
may be changed. The Company reserves the right to sell Notes directly on its own
behalf. No commission will be payable on any Notes sold directly by the Company.
In connection with the offering, the Agents may purchase and sell the Notes
in the open market. These transactions may include over-allotment and
stabilizing transactions and purchases to cover short positions created by the
Agents in connection with the offering. Stabilizing transactions consist of
certain bids or purchases for the purpose of preventing or retarding a decline
in the market price of the Notes, and short positions created by the Agents
involve the sale by the Agents of a greater aggregate principal amount of Notes
than they are required to purchase from the Company in the offering. The Agents
also may impose a penalty bid, whereby selling concessions allowed to broker-
dealers in respect of the Notes sold in the offering may be reclaimed by the
Agents if such Notes are repurchased by the Agents in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect the
market price of the Notes, which may be higher than the price that might
otherwise prevail in the open market, and these activities, if commenced, may be
discontinued at any time. These transactions may be effected in the
over-the-counter market or otherwise.
The Agents, as agents or principals, and any dealers who purchase Notes
from the Agents and resell them to investors, may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933 (the "Act"). The Company has
agreed to indemnify the Agents against certain liabilities, including
liabilities under the Act. The Company has agreed to reimburse the Agents for
certain expenses.
Certain of the Agents and their affiliates from time to time have been, and
certain of them continue to be, commercial lenders to the Company, and have
performed, and certain of them continue to perform, various commercial banking
and investment banking services for the Company, for which customary
compensation has been received. In this connection, as of the date of this
Prospectus Supplement, Morgan Guaranty Trust Company of New York, an affiliate
of J.P. Morgan Securities Inc., is serving as the lead agent bank for the
Company's $600 million revolving credit facility.
The Company does not intend to apply for the listing of the Notes on a
national securities exchange, but has been advised by the Agents that the Agents
intend to make a market in the Notes, as permitted by applicable laws and
regulations. The Agents are not obligated to do so, however, and the Agents may
discontinue making a market at any time without notice. No assurance can be
given as to the liquidity of any trading market for the Notes.
LEGAL MATTERS
Certain legal matters relating to the validity of the Notes offered hereby
will be passed upon for the Company by Thomas R. Saldin, Esq., Executive Vice
President, Administration and General Counsel of the Company and for the Agents
by Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto,
California.
S-17
<PAGE> 18
LOGO
ALBERTSON'S, INC.
DEBT SECURITIES
------------------------
Albertson's, Inc. (the "Company") may from time to time offer debt
securities consisting of debentures, notes and/or other unsecured evidences of
indebtedness ("Debt Securities") in one or more series with an aggregate initial
offering price not to exceed $500,000,000. The Debt Securities may be offered as
separate series in amounts, at prices and on terms to be determined at the time
of sale. The accompanying Prospectus Supplement sets forth with regard to the
series of Debt Securities in respect of which this Prospectus is being delivered
the title, aggregate principal amount, denominations, maturity, interest rate,
if any (which may be fixed or variable), and time of payment of any interest,
any terms for redemption at the option of the Company or the holder, any terms
for sinking fund payments, any listing on a securities exchange and the initial
public offering price and any other terms in connection with the offering and
sale of such Debt Securities.
The Company may sell Debt Securities to or through underwriters and may
also sell Debt Securities directly to other purchasers or through agents. The
accompanying Prospectus Supplement sets forth the names of any underwriters or
agents involved in the sale of the Debt Securities in respect of which this
Prospectus is being delivered, the principal amounts, if any, to be purchased by
underwriters, and the compensation, if any, of such underwriters or agents.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE ANY SALE OF DEBT SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
------------------------
The date of this Prospectus is January 21, 1998.
1
<PAGE> 19
AVAILABLE INFORMATION
Albertson's, Inc. ("Albertson's" or the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and, in accordance therewith, files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other information filed
by the Company may be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's Regional Offices located
at Seven World Trade Center, 13th Floor, New York, New York 10048 and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials
can be obtained by mail from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In
addition, such material may also be inspected and copied at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005 and the
Pacific Exchange, Incorporated, 301 Pine Street, San Francisco, California
94104. In addition, the Commission maintains a World Wide Web site on the
Internet at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants, such as the Company,
that file electronically with the Commission.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits thereto, referred to as
the "Registration Statement") with respect to the Debt Securities offered hereby
under the Securities Act of 1933, as amended (the "Securities Act"). This
Prospectus does not contain all of 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.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended January
30, 1997; Quarterly Report on Form 10-Q for the 13 weeks ended May 1, 1997;
Quarterly Report on Form 10-Q for the 26 weeks ended July 31, 1997; and
Quarterly Report on Form 10-Q for the 39 weeks ended October 30, 1997, each as
filed with the Commission pursuant to the Exchange Act, are incorporated herein
by reference.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference in this Prospectus.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of the Registration Statement or this Prospectus to the extent that
a statement contained herein, in a Prospectus Supplement or in any other
document subsequently filed with the Commission 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 the Registration Statement or this
Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the documents which are incorporated herein by reference,
other than exhibits to such information (unless such exhibits are specifically
incorporated by reference into such documents). Requests should be directed to
Albertson's, Inc., 250 Parkcenter Boulevard, Boise, Idaho 83706 or P.O. Box 20,
Boise, Idaho 83726, Attention: Corporate Secretary, telephone (208) 395-6200.
2
<PAGE> 20
THE COMPANY
Albertson's is one of the largest retail food-drug chains in the United
States based on sales. As of October 30, 1997, the Company operated 857 stores
in 20 Western, Midwestern and Southern states and employed approximately 90,000
people. The Company's retail operations are supported by 11 Company-owned
distribution centers.
All of the Company's stores carry a broad range of national brands and
offer private label items when they are a value to the consumer. The Company
emphasizes everyday low prices, large up-to-date facilities, first-class
perishable and specialty departments, cleanliness and customer service.
The Company operates three basic store formats:
Combination food-drug stores -- Combination stores are super
grocery/super drugstores under one roof. Most offer prescription drugs as
well as an expanded selection of cosmetics and non-foods in addition to
specialty departments such as service seafood and meat, bakery,
lobby/video, service delicatessen and floral. As of October 30, 1997, the
Company operated 746 combination food-drug stores. These stores range in
size from 35,000 to 75,000 square feet and account for approximately 91% of
the Company's total retail square footage.
Conventional supermarkets -- Conventional supermarkets are
supermarkets that offer a full selection in the basic departments of
grocery, meat, produce, dairy and limited non-food lines. Many also have
in-store bakeries and service delicatessens. As of October 30, 1997, the
Company operated 72 conventional supermarkets. These stores range in size
from 15,000 to 35,000 square feet and account for approximately 5% of the
Company's total retail square footage.
Warehouse stores -- Warehouse stores are no-frills stores that offer
shoppers the opportunity to save by buying in quantity. Special emphasis is
placed on quality meat and produce at discount prices. As of October 30,
1997, the Company operated 39 warehouse stores primarily under the name
"Max Food and Drug." These stores range in size from 17,000 to 73,000
square feet and account for approximately 4% of the Company's total retail
square footage.
The Company is committed to maintaining a modern store base, with an
emphasis on larger stores. All existing stores are continually evaluated, with
marginal performers closed and either leased, subleased or sold. As of October
30, 1997, approximately 96% of the Company's total retail square footage had
been opened or remodeled in the prior ten years. The Company currently operates
over 7 million square feet of distribution facilities that supply approximately
77% of all products purchased by the Company's retail stores.
Albertson's is a Delaware corporation organized as a successor to a
business founded by J. A. Albertson in 1939. Albertson's principal executive
offices are located at 250 Parkcenter Boulevard, Boise, Idaho 83706, and its
telephone number is (208) 395-6200.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Debt Securities for
general corporate purposes, which may include the payment of outstanding
indebtedness, the financing of capital expenditures and acquisitions and the
purchase and retirement of the Company's common stock. When a particular series
of Debt Securities is offered, the Prospectus Supplement relating thereto will
set forth the Company's intended use for the net proceeds received from the sale
of such Debt Securities.
3
<PAGE> 21
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the periods indicated. Earnings consist of earnings from continuing operations
before income taxes and fixed charges (excluding interest capitalized). Fixed
charges consist of interest and the portion of rental expense deemed
representative of the interest factor.
<TABLE>
<CAPTION>
52 WEEKS 53 WEEKS 52 WEEKS 52 WEEKS 52 WEEKS 39 WEEKS 39 WEEKS
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
JAN. 28, FEB. 3, FEB. 2, FEB. 1, JAN. 30, OCT. 31, OCT. 30,
1993 1994 1995 1996 1997 1996 1997
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges.......... 6.19x 6.96x 7.45x 8.16x 7.77x 7.50x 6.40x
</TABLE>
DESCRIPTION OF THE DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
accompanying Prospectus Supplement may relate. The particular terms and
provisions of the series of Debt Securities offered by an accompanying
Prospectus Supplement, and the extent to which the general terms and provisions
described below may apply thereto, will be described in the accompanying
Prospectus Supplement relating to such Debt Securities.
The Debt Securities will be issued under an Indenture, dated as of May 1,
1992 (the "Indenture"), between the Company and First Trust of New York,
National Association, as Trustee (the "Trustee", as successor in interest to the
corporate trust business of Morgan Guaranty Trust Company of New York), a copy
of which is filed as an exhibit to this 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 of
the provisions of the Indenture, including the definitions therein of certain
terms. Wherever particular provisions or defined terms of the Indenture are
referred to herein or in a Prospectus Supplement, such provisions or defined
terms are incorporated herein or therein by reference. Section and Article
references used herein are references to the Indenture.
GENERAL
The Debt Securities will be senior unsecured general obligations of the
Company that will rank on a parity with other senior unsecured indebtedness of
the Company from time to time outstanding. The Debt Securities offered by this
Prospectus will be limited to $500,000,000 aggregate principal amount (based on
the aggregate initial public offering price of such Debt Securities), although
the Indenture does not limit the aggregate principal amount of Debt Securities
that may be issued thereunder. The Debt Securities may be issued thereunder from
time to time in separate series up to the aggregate amount from time to time
authorized by the Company for each series.
Reference is made to the applicable Prospectus Supplement for a description
of the following terms of the series of Debt Securities ("Offered Securities")
in respect of which this Prospectus is being delivered: (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 any Offered Security
shall be payable, if other than the person in whose name the Offered Security is
registered on the Regular Record Date; (4) the date or dates on which the
Offered Securities will mature; (5) the rate or rates at which the Offered
Securities will bear interest, if any, or the method by which such rate or rates
are determined, the date or dates from which any interest will accrue, the
Interest Payment Dates on which any such interest on the Offered Securities will
be payable, and the Regular Record Dates for interest payable on any such
Interest Payment Dates; (6) the place or places where the principal of and any
premium and interest on the Offered Securities will be payable; (7) the period
or periods within which, the price or prices at which, and the terms and
conditions upon which the Offered
4
<PAGE> 22
Securities may, pursuant to any optional or mandatory provisions, be redeemed or
purchased, in whole or in part, by the Company; (8) the obligation of the
Company, if any, to redeem or repurchase the Offered Securities pursuant to any
sinking fund or analogous provisions or at the option of the Holders and the
price or prices at which and the terms and conditions upon which such Offered
Securities shall be redeemed or purchased, in whole or in part, and any
provisions for the remarketing of such Offered Securities; (9) the denominations
in which any Offered Securities will be issuable, if other than denominations of
$1,000 and any integral multiple thereof; (10) any index, formula or other
method used to determine the amount of payments of principal of and any premium
and interest on the Offered Securities; (11) if other than the principal amount
thereof, the portion of the principal amount of the Offered Securities which
will be payable upon declaration of the acceleration of the Maturity thereof;
(12) the applicability of any provisions described under "Certain Covenants of
the Company"; (13) the applicability of any provisions described under
"Defeasance and Covenant Defeasance"; (14) whether any of the Offered Securities
are to be issuable in permanent global form, and, if so, the terms and
conditions, if any, upon which interests in such Offered Securities in global
form may be exchanged, in whole or in part, for the individual Offered
Securities represented thereby; (15) any Events of Default with respect to the
Offered Securities of such series, if not otherwise set forth under "Events of
Default"; and (16) any other terms of the Offered Securities not inconsistent
with the provisions of the Indenture. (Section 301)
Debt Securities may be issued under the Indenture as Original Issue
Discount Securities to be offered and sold at a substantial discount below their
stated principal amount. (Section 301) Federal income tax consequences and other
special considerations applicable to any such Original Issue Discount Securities
will be described in the Prospectus Supplement relating thereto. "Original Issue
Discount Security" means any security that provides for an amount less than the
principal amount thereof to be due and payable upon the declaration of
acceleration of the Maturity thereof upon the occurrence of an Event of Default
and the continuation thereof. (Section 101)
EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal, premium, if any, and interest, if any, on the Debt Securities will
be payable, and the exchange of and the transfer of Debt Securities will be
registerable, at the office or agency of the Company maintained for such purpose
and at any other office or agency maintained for such purpose. (Sections 305 and
1002) Unless otherwise indicated in the applicable Prospectus Supplement, the
Debt Securities will be issued in denominations of $1,000 or integral multiples
thereof. (Section 302) No service charge will be made for any registration of
transfer or exchange of Debt Securities, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge imposed in
connection therewith. (Section 305)
All moneys paid by the Company to a Paying Agent for the payment of
principal, premium, if any, or interest, if any, on any Debt Security which
remain unclaimed for two years after such principal, premium or interest has
become due and payable may be repaid to the Company, and thereafter the Holder
of such Debt Security may look only to the Company for payment thereof. (Section
1003)
In the event of any redemption, the Company shall not be required to (i)
issue, register the transfer of or exchange Debt Securities of any series during
a period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of Debt Securities of that series to be
redeemed and ending at the close of business on the day of such mailing or (ii)
register the transfer of or exchange any Debt Security, or portion thereof,
called for redemption, except the unredeemed portion of any Debt Security being
redeemed in part. (Section 305)
5
<PAGE> 23
BOOK-ENTRY SYSTEM
The provisions set forth below in this section headed "Book-Entry System"
will apply to the Debt Securities of any series if the Prospectus Supplement
relating to such series so indicates.
The Debt Securities of such series will be represented by one or more
global securities (collectively, a "Global Security") registered in the name of
a depositary (the "Depositary") or a nominee of the Depositary identified in the
Prospectus Supplement relating to such series. Except as set forth below, a
Global Security may be transferred, in whole and not in part, only to the
Depositary or another nominee of the Depositary.
Upon the issuance of a Global Security, the Depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the Debt Securities represented by such Global Security to the accounts of
institutions that have accounts with the Depositary or its nominee
("participants"). The accounts to be credited will be designated by the
underwriters, dealers or agents. Ownership of beneficial interests in a Global
Security will be limited to participants or persons that may hold interests
through participants. Ownership of interests in such Global Security will be
shown on, and the transfer of those ownership interests will be effected only
through, records maintained by the Depositary (with respect to participants'
interests) and such participants (with respect to the owners of beneficial
interests in such Global Security). The laws of some jurisdictions may require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and laws may impair the ability to transfer
beneficial interests in a Global Security.
So long as the Depositary, or its nominee, is the registered holder and
owner of such Global Security, the Depositary or such nominee, as the case may
be, will be considered the sole owner and holder of the related Debt Securities
for all purposes of such Debt Securities and for all purposes under the
Indenture. Except as set forth below or as otherwise provided in the applicable
Prospectus Supplement, owners of beneficial interests in a Global Security will
not be entitled to have the 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 to be
the owners or holders of any Debt Securities under the Indenture or such Global
Security. (Section 305)
Accordingly, each person owning a beneficial interest in a Global Security
must rely on the procedures of the Depositary and, if such person is not a
participant, on the procedures of the participant through which such person owns
its interest, to exercise any rights of a holder of Debt Securities under the
Indenture or such Global Security. The Company understands that under existing
industry practice, in the event the Company requests any action of holders of
Debt Securities or an owner of a beneficial interest in a Global Security
desires to take any action that the Depositary, as the holder of such Global
Security, is entitled to take, the Depositary would authorize the participants
to take such action, and that the participants would authorize beneficial owners
owning through such participants to take such action or would otherwise act upon
the instructions of beneficial owners owning through them.
Payment of principal of and premium, if any, and interest, if any, on Debt
Securities represented by a Global Security will be made to the Depositary or
its nominee, as the case may be, as the registered owner and holder of such
Global Security.
The Company expects that the Depositary, upon receipt of any payment of
principal, premium, if any, or interest, if any, in respect of a Global
Security, will credit immediately participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Security as shown on the records of the Depositary. The
Company expects that payments by participants to owners of beneficial interests
in a Global Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street
6
<PAGE> 24
name," and will be the responsibility of such participants. Neither the Company
nor the Trustee nor any agent of the Company or the Trustee will have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in a Global Security
for any Debt Securities or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests or for any other aspect of the
relationship between the Depositary and its participants or the relationship
between such participants and the owners of beneficial interests in such Global
Security owning through such participants.
Unless and until it is exchanged in whole or in part for Debt Securities in
definitive form, a Global Security may not be transferred except as a whole by
the Depositary to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary.
Unless otherwise provided in the applicable Prospectus Supplement, Debt
Securities represented by a Global Security will be exchangeable for Debt
Securities in definitive form of like tenor as such Global Security in
denominations of $1,000 and in any greater amount that is an integral multiple
thereof if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Security or if at any time the
Depositary ceases to be a clearing agency registered under the Exchange Act,
(ii) the Company in its discretion at any time determines not to have all of the
Debt Securities represented by a Global Security and notifies the Trustee
thereof or (iii) an Event of Default has occurred and is continuing with respect
to the Debt Securities. (Section 305) Any Debt Security that is exchangeable
pursuant to the preceding sentence is exchangeable for Debt Securities issuable
in authorized denominations and registered in such names as the Depositary shall
direct. Subject to the foregoing, a Global Security is not exchangeable, except
for a Global Security or Global Securities of the same aggregate denominations
to be registered in the name of the Depositary or its nominee.
CERTAIN COVENANTS OF THE COMPANY
Unless otherwise indicated in the applicable Prospectus Supplement, the
Debt Securities will not have the benefit of any covenants that limit or
restrict the Company's business or operations, the pledging of the Company's
assets or the incurrence of indebtedness by the Company. If so indicated in the
applicable Prospectus Supplement, certain covenants contained in the Indenture
which are summarized below will be applicable (unless waived or amended) to the
series of Debt Securities to which such Prospectus Supplement relates so long as
any of the Debt Securities of such series are outstanding. The covenants
contained in the Indenture and any series of Debt Securities would not
necessarily afford holders of the Debt Securities protection in the event of a
highly leveraged or other transaction involving the Company that may adversely
affect holders.
Limitations on Liens
If the Company or any Subsidiary shall, directly or indirectly, create,
incur, issue, assume, guarantee or otherwise become liable for or suffer to
exist any evidence of indebtedness for money borrowed or evidenced by a bond,
debenture, note or other similar instrument, whether or not for money borrowed
("Debt"), secured by a Lien on (1) any Principal Property of the Company or of
any Subsidiary or (2) any shares of capital stock or Debt of any Subsidiary
(which Debt is then held by the Company or any Subsidiary), the Company will
secure or cause such Subsidiary to secure the Debt Securities of any series
entitled to the benefit of such covenant equally and ratably with such secured
Debt for so long as such secured Debt shall be so secured, unless the aggregate
amount of all such secured Debt, together with all Attributable Debt of the
Company and its Subsidiaries with respect to Sale and Leaseback Transactions
involving Principal Properties (with the exception of such transactions that are
excluded as described in "Limitations on Sale and Leaseback Transactions"
below), would not exceed 10% of Consolidated Net Tangible Assets.
7
<PAGE> 25
The above restriction does not apply to, and there will be excluded from
secured Debt in any computation under such restriction, Debt secured by (i)
Liens on property of, or on any shares of capital stock of or Debt of, any
corporation existing at the date of the Indenture or at the time such
corporation becomes a Subsidiary; (ii) Liens in favor of the Company or any
Wholly-owned Subsidiary; (iii) Liens in favor of governmental bodies to secure
progress, advance or certain other payments; (iv)(A) if made in the ordinary
course of business, Liens as security for the performance of contracts other
than in connection with the borrowing of money, deferred purchase price of
property or services, an advance of moneys or the securing of Debt, (B) Liens
with governmental agencies to qualify the Company or any Subsidiary to do
business, maintain self-insurance or obtain certain other benefits, (C)
mechanics' Liens, landlord Liens or statutory Liens securing obligations
incurred in the ordinary course of business not overdue or being contested in
good faith by appropriate proceedings and not incurred directly or indirectly in
connection with the borrowing of money, the deferred purchase price of property
or services or an advance of moneys, or (D) easements, exceptions, reservations
or similar encumbrances on real property that do not materially interfere with
the operation of such property or impair the value of such property for the
purposes for which such property is or may reasonably be expected to be used by
the Company or its Subsidiaries; (v) Liens for taxes, assessments or
governmental charges or levies not yet due and payable or payable without
penalty or being contested in good faith by appropriate proceedings; (vi) Liens
created by or resulting from any litigation or legal proceeding that is being
contested in good faith by appropriate proceedings, Liens arising out of
judgments or awards as to which the time for prosecuting an appeal or proceeding
for review has not expired, or Liens arising out of individual final judgments
or awards in amounts of less than $100,000, provided that the aggregate amount
of all such individual final judgments or awards shall not at any one time
exceed $1,000,000; (vii) Liens on property, shares of stock or Debt existing at
the time of acquisition thereof (including acquisition through merger or
consolidation), and purchase money and construction Liens that are entered into
within 360 days after the latest to occur of the acquisition, completion of
construction or the commencement of full operation of such property; (viii)
Liens securing industrial revenue or pollution control bonds; (ix) Liens created
in connection with a project financed with, and created to secure, a Nonrecourse
Obligation; and (x) any extension, renewal or refunding of any Lien referred to
in the foregoing clauses (i) through (ix), inclusive, to the extent the amount
of Debt secured by such Lien is not increased from the amount originally so
secured. (Section 1008)
Limitations on Sale and Leaseback Transactions
Neither the Company nor any Subsidiary may enter into any Sale and
Leaseback Transaction involving any Principal Property, unless the aggregate
amount of all Attributable Debt of the Company and its Subsidiaries with respect
to all such transactions plus all secured Debt (with the exception of secured
Debt which is excluded as described in "Limitations on Liens" above) would not
exceed 10% of Consolidated Net Tangible Assets.
This restriction does not apply to, and there shall be excluded from
Attributable Debt in any computation under such restriction, any Sale and
Leaseback Transaction if (i) the lease is for a period, including renewal
rights, not in excess of three years; (ii) the sale or transfer of the Principal
Property is made within 180 days after the latest to occur of the acquisition,
construction or the commencement of full operation of such property; (iii) the
lease secures or relates to industrial revenue or pollution control bonds; (iv)
the transaction is between the Company and a Wholly-owned Subsidiary or between
Wholly-owned Subsidiaries; (v) the lease payment obligation is created in
connection with a project financed with, and such obligation constitutes, a
Nonrecourse Obligation; or (vi) the Company or such Subsidiary, within 180 days
after the sale is completed, applies to the retirement of Funded Debt of the
Company (other than Funded Debt subordinate to the Debt Securities) or of any
Subsidiary (other than through payment at maturity or a mandatory sinking fund
or other mandatory prepayment) or to the purchase of other property which will
constitute Principal Property of a value at least equal to the value of the
Principal Property leased,
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<PAGE> 26
an amount not less than the greater of (a) the net proceeds from the sale of the
Principal Property leased or (b) the fair market value of the Principal Property
leased. (Section 1009)
Certain Definitions Applicable to Covenants
Certain terms defined in Section 101 of the Indenture and applicable to the
covenants are summarized below:
"Attributable Debt" means, as to any particular lease under which the
Company or any Subsidiary is at the time liable and at any date as of which the
amount thereof is to be determined, the total net amount of rent required to be
paid under such lease during the remaining term thereof (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 date at a
rate per annum equal to the weighted average interest rate per annum borne by
the Debt Securities of each series outstanding pursuant to the Indenture
compounded annually. The net amount of rent required to be paid under any such
lease for any such period shall be the aggregate amount of the rent payable by
the lessee with respect to such period after excluding amounts required to be
paid on account of maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges. In the case of any lease which is terminable by the
lessee upon the payment of a penalty, such net amount shall also include the
amount of such penalty, but no rent shall be considered as required to be paid
under such lease subsequent to the first date upon which it may be so
terminated.
"Capital Lease Obligations" means any rental obligations which, under
generally accepted accounting principles, are or will be required to be
capitalized on the books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expense) in accordance
with such principles.
"Consolidated Net Tangible Assets" means the net book value of all assets
of the Company and its consolidated Subsidiaries, excluding any amounts carried
as assets for shares of capital stock held in treasury, debt discount and
expense, goodwill, patents, trademarks and other intangible assets, less all
liabilities of the Company and its consolidated Subsidiaries (except Funded
Debt, minority interests in consolidated Subsidiaries, deferred taxes and
general contingency reserves of the Company and its consolidated Subsidiaries),
which in each case would be included on a consolidated balance sheet of the
Company and its consolidated Subsidiaries as of the date of determination, all
as determined on a consolidated basis in accordance with generally accepted
accounting principles.
"Funded Debt" means (a) all indebtedness of the Company and its
Subsidiaries for money borrowed, or evidenced by a bond, debenture, note or
other similar instrument, whether or not for money borrowed, maturing on, or
renewable or extendible at the option of the obligor to, a date more than one
year from the date of the determination thereof (but not including indebtedness
under any revolving credit arrangement with banks except for any indebtedness
converted pursuant to any such arrangement into a term loan which meets the
requirements of this clause (a)), (b) Capital Lease Obligations payable on a
date more than one year from the date of the determination thereof, (c)
guarantees, direct or indirect, and other contingent obligations of the Company
and its Subsidiaries in respect of, or to purchase or otherwise acquire or be
responsible or liable for (through the investment of funds or otherwise), any
obligations of the type described in the foregoing clauses (a) or (b) of others
(but not including contingent liabilities on customers' receivables sold with
recourse), and (d) amendments, renewals, extensions and refundings of any
obligations of the type described in the foregoing clauses (a), (b) or (c).
"Lien" means any mortgage, pledge, lien, security interest, charge or
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 of the
foregoing).
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<PAGE> 27
"Nonrecourse Obligation" means indebtedness or lease payment obligations
substantially related to (i) the acquisition of assets not previously owned by
the Company or any Subsidiary or (ii) the financing of a project involving the
development or expansion of properties of the Company or any Subsidiary, as to
which the obligee with respect to such indebtedness or obligation has no
recourse to the Company or any Subsidiary or any assets of the Company or any
Subsidiary other than the assets which were acquired with the proceeds of such
transaction or the project financed with the proceeds of such transaction (and
the proceeds thereof).
"Principal Property" means (a) any real property (including, without
limitation, leasehold interests) together with the improvements thereon and the
equipment, if any, constituting a part of the facility located thereon
(including, without limitation, any warehouse, service center, shopping center
or distribution center, wherever located) and (b) other equipment, in each case,
of the Company or any Subsidiary and having a book value on the date as of which
the determination is being made of more than 1% of Consolidated Net Tangible
Assets as most recently determined prior to such date; provided, however, that
for purposes of clause (a) above, separate parcels of real property which are
operated generally as part of a single facility (such as a single warehouse,
service center, shopping center or distribution center) shall be deemed to be a
single property, and for purposes of clause (b) above, separate items of
equipment that are secured by Liens shall be deemed to be a single property to
the extent they are secured by such Liens pursuant to the same financing
transaction or a series of related financing transactions.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
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 (unless such event
is specifically inapplicable to a particular series as described in the
Prospectus Supplement relating thereto): (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 payment, when due, in respect of any Debt
Security of that series; (d) failure to perform any other covenant of the
Company in the Indenture (other than a covenant included in the Indenture solely
for the benefit of a series of Debt Securities other than that series),
continued for 60 days after written notice as provided in the Indenture; (e)
default under indebtedness for money borrowed of the Company or any Significant
Subsidiary (as defined) having an aggregate outstanding principal amount of at
least $25,000,000 or under any mortgage, indenture or other instrument under
which there may be issued or by which there may be secured or evidenced any such
indebtedness of the Company or any Significant Subsidiary, which default either
(i) shall constitute a failure to make a principal payment of at least
$25,000,000 when due and payable after the expiration of any applicable grace
period with respect thereto or (ii) shall have resulted in such indebtedness
becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable, without, in either case, such
indebtedness having been discharged or such default rescinded or annulled within
10 days after notice to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 10% in aggregate principal amount of the
Outstanding Debt Securities of that series specifying such default and requiring
the Company or such Significant Subsidiary to cause such indebtedness to be
discharged or such acceleration to be rescinded or annulled; (f) certain events
of bankruptcy, insolvency or reorganization involving the Company or a
Significant Subsidiary; and (g) any other Event of Default provided with respect
to Debt Securities of that series. (Section 501) No Event of Default described
above with respect to a
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<PAGE> 28
particular series of Debt Securities necessarily constitutes an Event of Default
with respect to any other series of Debt Securities.
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default (as defined) shall occur and be continuing,
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 security or indemnity.
(Sections 601 and 603) Subject to certain provisions, including those requiring
security and indemnification of the Trustee, the Holders of a majority in
aggregate principal amount of the Outstanding Debt 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. (Section 512)
The Indenture provides that the Company will deliver to the Trustee, within
120 days after the end of each fiscal year, an Officers' Certificate, stating as
to each signer thereof that he is familiar with the affairs of the Company and
whether or not to the best of his knowledge the Company is in default in the
performance and observance of any of the Company's obligations under the
Indenture and if the Company shall be in default, specifying all such defaults
of which he has knowledge and the nature and status thereof. (Section 1004)
If an Event of Default shall occur and be continuing with respect to Debt
Securities of any series, either the Trustee or the Holders of at least 25% in
aggregate principal amount of all Outstanding Debt Securities of that series may
accelerate the maturity of all Debt Securities of that series; provided,
however, that after such acceleration, but before a judgment or decree based on
acceleration, the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of that series may, under certain circumstances,
rescind and annul such acceleration if all Events of Default, other than the
non-payment of accelerated principal, have been cured or waived as provided in
the Indenture. (Section 502) For information as to waiver of defaults, see
"Meetings, Modifications and Waiver" below.
No Holder of any Debt Security of any series 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 also the Holders of
at least 25% in aggregate principal amount of the Outstanding Debt 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 majority in aggregate principal amount
of the Outstanding Debt Securities of that series a direction inconsistent with
such request and shall have failed to institute such proceeding within 60 days.
(Section 507) However, such limitations generally do not apply to a suit
instituted by a Holder of a Debt Security for the enforcement of payment of the
principal or interest on such Security on or after the respective due dates
expressed in such Debt Security. (Section 508)
MEETINGS, MODIFICATIONS AND WAIVER
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than 66 2/3% in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the Holder of each
Outstanding Debt Security affected thereby, (a) change the Stated Maturity of
the principal of, or any installment of principal of or interest on any Debt
Security, (b) reduce the principal amount of, rate of interest on or any premium
payable upon the redemption of any Debt Security, (c) reduce the amount of
principal of an Original Issue Discount Security payable upon acceleration of
the Maturity thereof, (d) change the Place of Payment where, or the coin or
currency in which, principal, premium, if any, or interest on any Debt Security
is payable, (e) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security after the Stated Maturity or
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<PAGE> 29
Redemption Date, (f) reduce the percentage in principal amount of Outstanding
Debt 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, or (g)
modify any of the provisions set forth in this paragraph except to increase any
such percentage or to provide that certain other provisions of the Indenture may
not be modified or waived without the consent of the Holder of each Outstanding
Debt Security affected thereby. (Section 902)
The Holders of at least 66 2/3% in aggregate principal amount of the
Outstanding Debt Securities of each series may, on behalf of the Holders of all
the Debt Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the Indenture.
(Section 1010) The Holders of not less than a majority in aggregate principal
amount of the Outstanding Debt Securities of each series may, on behalf of all
Holders of Securities of that series, waive any past default under the Indenture
with respect to Securities of that series, except a default (a) in the payment
of principal of, any premium on or any interest on any Debt Security of such
series or (b) in respect of a covenant or provision of the Indenture which
cannot be modified or amended without the consent of the Holder of each
Outstanding Debt Security of such series affected thereby. (Section 513)
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given any
request, demand, authorization, direction, notice, consent or waiver thereunder
or whether a quorum is present at a meeting of Holders of Debt Securities, the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding shall be the amount of the principal thereof that would be due
and payable as of the date of such determination upon acceleration of the
Maturity thereof. (Section 101)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of the Holders of any of the Outstanding
Debt Securities under the Indenture, may consolidate with or merge into, or
transfer or lease its assets substantially as an entirety to, any Person which
is a corporation, partnership or trust organized and validly existing under the
laws of any domestic jurisdiction, or may permit any such Person to consolidate
with or merge into the Company or convey, transfer or lease its properties and
assets substantially as an entirety to the Company, provided that any successor
Person assumes the Company's obligations on the Debt Securities and under the
Indenture, that after giving effect to the transaction (treating any
indebtedness which becomes an obligation of the Company or any Subsidiary as a
result of such transaction as having been incurred by the Company or such
Subsidiary at the time of such transaction) no Event of Default, and no event
which, after notice or lapse of time, would become an Event of Default, shall
have occurred and be continuing, and that certain other conditions are met.
(Section 801)
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that, if such provision is made applicable to the
Debt Securities of any series pursuant to the provisions of the Indenture, the
Company may elect (i) to defease and be discharged from any and all obligations
in respect of such Debt Securities except for certain obligations to register
the transfer or exchange of such Debt Securities, to replace temporary,
destroyed, stolen, lost or mutilated Debt Securities, to maintain paying
agencies and to hold moneys for payment in trust ("defeasance") or (ii) (A) to
omit to comply with certain restrictive covenants in Sections 1005 through 1009
(including the covenants referred to above under "Certain Covenants of the
Company") and (B) to deem the occurrence of any event referred to in clauses (d)
(with respect to Sections 1005 through 1009 inclusive), (e) and (g) under
"Events of Default" above not to be or result in an Event of Default if, in each
case with respect to the Outstanding Debt Securities of such series as provided
in Section 1303 on or after the date the conditions set forth in Section 1304
are satisfied ("covenant defeasance"), in either case upon the deposit with the
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<PAGE> 30
Trustee (or other qualifying trustee), in trust, of money and/or U.S. Government
Obligations, which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount
sufficient to pay the principal of and any premium and interest on the Debt
Securities of such series on the respective Stated Maturities and any mandatory
sinking fund payments or analogous payments on the days payable, in accordance
with the terms of the Indenture and the Debt Securities of such series. Such a
trust may only be established if, among other things, the Company has delivered
to the Trustee an Opinion of Counsel to the effect that the Holders of the
Outstanding Debt Securities of such series will not recognize gain or loss for
Federal income tax purposes as a result of such deposit, defeasance or covenant
defeasance and will be subject to Federal income tax on the same amount, and in
the same manner and at the same times as would have been the case if such
deposit, defeasance or covenant defeasance had not occurred. Such opinion, in
the case of defeasance under clause (i) above, must refer to and be based upon a
ruling of the Internal Revenue Service or a change in applicable Federal income
tax law occurring after the date of the Indenture. The Prospectus Supplement
relating to a series may further describe the provisions, if any, permitting
such defeasance or covenant defeasance with respect to the Debt Securities of a
particular series. (Article Thirteen)
In the event the Company omits to comply with certain covenants of the
Indenture with respect to the Debt Securities of any series as described above,
and the Debt Securities of such series are declared due and payable because of
the occurrence of an Event of Default, the amount of money and U.S. Government
Obligations on deposit with the Trustee will be sufficient to pay amounts due on
the Debt Securities of such series at the time of their Stated Maturity but may
not be sufficient to pay amounts due on the Debt Securities of such series at
the time of the acceleration resulting from such Event of Default. The Company
shall, however, remain liable for such payments.
NOTICES
Notices to Holders of Debt Securities will be given by mail to the
addresses of such Holders as they appear in the Debt Security Register.
(Sections 101 and 106)
REPLACEMENT OF SECURITIES
Any mutilated Debt Security will be replaced by the Company at the expense
of the Holder upon surrender of such Debt Security to the Trustee. Debt
Securities that become destroyed, stolen or lost will be replaced by the Company
at the expense of the Holder upon delivery to the Trustee of the Debt Security
or evidence of the destruction, loss or theft thereof satisfactory to the
Company and the Trustee. In the case of a destroyed, lost or stolen Debt
Security an indemnity satisfactory to the Trustee and the Company may be
required at the expense of the Holder of such Debt Security before a replacement
Debt Security will be issued. (Section 306)
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York. (Section 112)
REGARDING THE TRUSTEE
The Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases or to realize for its own account on certain property received in
respect of any such claim as security or otherwise. (Section 613) The Trustee
will be permitted to engage in certain other transactions; however, if it
acquires any conflicting interest and there is a default under the Debt
Securities of any series for which the Trustee serves as trustee, the Trustee
must eliminate such conflict or resign. (Section 608) The Trustee currently
provides certain banking and financial services to the Company in the ordinary
course of business and may provide such services in the future.
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<PAGE> 31
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through underwriters, and also
may sell Debt Securities directly to other purchasers or through agents. The
accompanying Prospectus Supplement sets forth the names of any underwriters or
agents involved in the sale of the Debt Securities in respect of which this
Prospectus is being delivered, the principal amounts, if any, to be purchased by
underwriters, and the compensation, if any, of such underwriters or agents.
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, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Debt Securities, underwriters or agents may
receive compensation from the Company or from purchasers of Debt Securities for
whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters may sell Debt Securities to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers and agents that participate
in the distribution of Debt Securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Company and any profit on the
resale of Debt Securities by them may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from the Company will be
described, in the applicable Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Debt Securities may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Debt Securities from the
Company pursuant to contracts providing for payment and delivery on a future
date. Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Company. The obligations of any purchaser
under any such contract will be subject to the condition that the purchase of
the offered Debt Securities shall not at the time of delivery be prohibited
under the laws of the jurisdiction to which such purchaser is subject. The
underwriters and such other agents will not have any responsibility in respect
of the validity or performance of such contracts.
Certain of the underwriters who participate in the distribution of Debt
Securities and their affiliates may perform various commercial banking and
investment banking services for the Company from time to time in the ordinary
course of business.
The place and time of delivery for the Debt Securities in respect of which
this Prospectus is delivered are set forth in the applicable Prospectus
Supplement.
Unless otherwise indicated in the applicable Prospectus Supplement, each
series of Debt Securities will be a new issue of securities, will not have an
established trading market when issued and will not be listed on any securities
exchange. Any underwriters or agents to or through whom Debt Securities are sold
by the Company for public offering and sale may make a market in such Debt
Securities, but such underwriters or agents will not be obligated to do so and
may discontinue any market making at any time without notice. No assurance can
be given as to the liquidity of the trading market for any Debt Securities.
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<PAGE> 32
LEGAL MATTERS
Certain legal matters relating to the validity of the Debt Securities
offered hereby will be passed upon for the Company by Thomas R. Saldin, Esq.,
Executive Vice President, Administration and General Counsel of the Company.
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in its Annual Report on Form 10-K for the year ended January 30, 1997,
which is incorporated by reference herein, have been audited by Deloitte &
Touche LLP, independent auditors, as indicated in their report with respect
thereto, and have been so incorporated by reference herein in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
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======================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT, THE
PROSPECTUS OR ANY PRICING SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS
PROSPECTUS SUPPLEMENT, THE PROSPECTUS AND ANY PRICING SUPPLEMENT DO NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE SECURITIES DESCRIBED HEREIN AND THEREIN OR AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES
IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT, THE PROSPECTUS OR ANY PRICING SUPPLEMENT NOR ANY SALE
MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
<S> <C>
Use of Proceeds........................ S-2
Description of Notes................... S-2
Supplemental Plan of Distribution...... S-16
PROSPECTUS
Available Information.................. 2
Incorporation of Certain Documents
by Reference......................... 2
The Company............................ 3
Use of Proceeds........................ 3
Ratio of Earnings to Fixed Charges..... 4
Description of the Debt Securities..... 4
Plan of Distribution................... 14
Legal Matters.......................... 15
Experts................................ 15
============================================
</TABLE>
======================================================
$500,000,000
ALBERTSON'S, INC.
MEDIUM-TERM NOTES, SERIES C
DUE 9 MONTHS OR MORE
FROM DATE OF ISSUE
------------------------
LOGO
------------------------
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
MERRILL LYNCH & CO.
======================================================
