<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 3, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 95-3630868
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
10260 CAMPUS POINT DRIVE
SAN DIEGO, CALIFORNIA 92121
(619) 546-6000
(ADDRESS AND TELEPHONE NUMBER OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DOUGLAS E. SCOTT
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
10260 CAMPUS POINT DRIVE
SAN DIEGO, CALIFORNIA 92121
(619) 546-6000
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
------------------------
Copies to:
SARAH JONES BESHAR
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities being offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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TITLE OF EACH CLASS PROPOSED MAXIMUM
OF SECURITIES TO BE AMOUNT TO BE PROPOSED MAXIMUM AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED OFFERING PRICE(1) PRICE(1) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities......... $300,000,000 100% $300,000,000 $ 90,910
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</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(o), exclusive of accrued interest, if
any.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES
MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH
OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO THE REGISTRATION
STATEMENT OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
[LOGO]
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
DEBT SECURITIES
------------------------
Science Applications International Corporation (the "Company") may offer
from time to time unsecured debt securities ("Debt Securities") consisting of
debentures, notes and/or other evidences of unsecured indebtedness in one or
more series, or any combination of the foregoing, at an aggregate initial
offering price not to exceed $300,000,000 or its equivalent if some or all of
the Debt Securities are denominated in one or more foreign currencies, at prices
and on terms to be determined at or prior to the time of sale in light of market
conditions at the time of sale.
Specific terms of the particular Debt Securities in respect of which this
Prospectus is being delivered will be set forth in one or more accompanying
Prospectus Supplements (each a "Prospectus Supplement"), together with the terms
of the offering of the Debt Securities and the initial price and the net
proceeds to the Company from the sale thereof. The Prospectus Supplement will
set forth with regard to the particular Debt Securities, without limitation, the
following: the specific designation, aggregate principal amount, authorized
denomination, maturity, rate or method of calculation of interest and dates for
payment thereof, any exchangeability, conversion, redemption, prepayment or
sinking fund provisions, the currency or currencies or currency unit or currency
units in which principal, premium, if any, or interest, if any, is payable, any
modifications of or additions to the covenants described in this Prospectus and
any other specific terms thereof. The amounts payable by the Company in respect
of Debt Securities may be calculated by reference to the value, rate or price of
one or more specified commodities, currencies or indices to the extent set forth
in the Prospectus Supplement. The Prospectus Supplement will also contain
information, where applicable, about certain United States federal income tax
considerations relating to the Debt Securities covered by the Prospectus
Supplement.
The Company may sell the Debt Securities directly, through agents
designated from time to time or through underwriters or dealers. If any agents
of the Company or any underwriters or dealers are involved in the sale of the
Debt Securities, the names of such agents, underwriters or dealers, any
applicable commissions and discounts, and the net proceeds to the Company will
be set forth in the applicable Prospectus Supplement. See "Plan of Distribution"
for possible indemnification arrangements for agents, underwriters and dealers.
------------------------
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 sales of
Debt Securities unless accompanied by a Prospectus Supplement.
The date of this Prospectus is , 1997
<PAGE> 3
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THE OFFERING DESCRIBED HEREIN, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR BY ANY UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS
PROSPECTUS OR CHANGE IN THE AFFAIRS OF THE COMPANY AT ANY TIME SUBSEQUENT TO THE
DATE HEREOF.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
at 7 World Trade Center, 13th Floor, New York, NY 10048 and Suite 1400, 500 West
Madison Street, Chicago, Illinois 60661. Copies of such material can be obtained
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such material may also be accessed
electronically by means of the Commission's home page on the Internet at
http://www.sec.gov.
The Company has filed a registration statement on Form S-3 (herein,
together with all amendments and exhibits, referred to as the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Debt Securities being offered pursuant to this Prospectus.
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. The Registration Statement may be
inspected and copied at the public reference facilities maintained by the
Commission at the addresses set forth in the preceding paragraph. Statements
contained herein concerning the provisions of any documents are not necessarily
complete and, in each instance that a copy of such document has been filed as an
exhibit to the Registration Statement or otherwise filed with the Commission,
reference is made to the copy so filed. Each such statement is qualified in its
entirety by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents have been filed by the Company with the Commission
and are hereby incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K/A for the year ended
January 31, 1997 (which incorporates by reference portions of the
Proxy Statement for the Company's 1997 Annual Meeting of
Stockholders);
(2) The Company's Quarterly Reports on Form 10-Q for the quarters
ended April 30, 1997 and July 31, 1997; and
(3) The Company's Current Reports on Form 8-K dated June 30, 1997,
July 9, 1997, July 11, 1997, July 21, 1997, September 19, 1997 and
September 30, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act on or after the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated herein by
reference. 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 this Prospectus and the Registration Statement of which it is a
part to the extent that a statement contained herein or in any other
subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus or such Registration
Statement.
The Company undertakes to provide without charge to each person to whom a
copy of this Prospectus has been delivered, upon written or oral request of such
person, a copy of any or all of the documents which have been or may be
incorporated herein by reference, other than exhibits to such documents (unless
such exhibits are specifically incorporated by reference into such documents).
Requests for such copies should be directed to Science Applications
International Corporation, 10260 Campus Point Drive, San Diego, California
92121, Attention: Corporate Secretary (telephone: (619) 535-7323).
2
<PAGE> 4
THE COMPANY
The Company provides diversified professional and technical services
("Technical Services") and designs, develops and manufactures high-technology
products ("Products"). The Company's Technical Services and Products are
primarily sold to departments and agencies of the U.S. Government, including the
Department of Defense, Department of Energy, Department of Transportation,
Department of Veterans Affairs, Environmental Protection Agency and National
Aeronautics and Space Administration. Revenues generated from the sale of
Technical Services and Products to the U.S. Government as a prime contractor or
subcontractor accounted for approximately 79%, 83% and 86% of revenues in fiscal
years 1997, 1996 and 1995, respectively. The balance of the Company's revenues
are attributable to the sales of Technical Services and Products to foreign,
state and local governments, commercial customers and others. The percentage of
revenues attributable to Technical Services has increased since fiscal year 1995
while the percentage of revenues attributable to Products has correspondingly
decreased. Technical Services revenues and Product revenues were 94% and 6%,
respectively, for fiscal year 1997; 93% and 7%, respectively, for fiscal year
1996; and 91% and 9%, respectively, for fiscal year 1995. On March 7, 1997, the
Company sold its Science Applications International Technologies ("SAIT")
business unit, which designed, manufactured and sold certain ruggedized
computers and display products and accounted for 49% of the Company's Product
revenues in fiscal year 1997. The Company provides Technical Services primarily
in the areas of "National Security," "Health," "Environment," "Energy" and
"Other Technical Services," the last of which includes the Company's
transportation, commercial information technology and space business areas. The
percentage of Technical Services revenues attributable to National
Security-related work has gradually declined to 44% of total revenues for fiscal
year 1997. For fiscal year 1997, the Health, Environment, Energy and Other
Technical Services business areas accounted for 14%, 11%, 5% and 20%,
respectively, of total revenues.
On November 20, 1996, the Company entered into a definitive acquisition
agreement to purchase Bell Communications Research, Inc. ("Bellcore"), a
provider of telecommunications services, information networking software and
consulting services. As of December 31, 1996, Bellcore had approximately 5,500
employees and annual revenues of approximately $1 billion. The Company believes
that Bellcore's strengths in telecommunications software development and network
design will complement the Company's existing information management and
communications services businesses. The consummation of the acquisition is
subject to certain conditions and contingencies, including regulatory approvals.
The Company has no assurance that the acquisition will be completed.
The principal executive offices of the Company are located at 10260 Campus
Point Drive, San Diego, California 92121. The telephone number is (619)
546-6000.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of
the Company for the periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED JANUARY 31,
ENDED JULY 31, ----------------------------------------
1997 1997 1996 1995 1994 1993
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<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges..................... 5.4 5.0 5.0 4.5 4.2 3.9
</TABLE>
For purposes of calculating the ratio of earnings to fixed charges,
earnings consist of pretax income adjusted for fixed charges, including minority
interest in the consolidated subsidiary with fixed charges and excluding
undistributed earnings or losses of less than 50% owned companies accounted for
under the equity method. Fixed charges consist of interest on indebtedness and
the portion of rental expense the Company believes to be representative of
interest.
USE OF PROCEEDS
Except as may otherwise be disclosed in an applicable Prospectus
Supplement, the net proceeds to the Company from the sale of the Debt Securities
offered hereby are expected to be used for general corporate purposes, which may
include financing capital expenditures and working capital requirements, stock
repurchases, acquisitions or repayment or refinancing of existing indebtedness.
Pending application, proceeds may be invested in short-term, marketable
securities.
3
<PAGE> 5
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be unsecured obligations issued under an Indenture
(the "Indenture"), between the Company and The Chase Manhattan Bank, as Trustee
(the "Trustee"). The following summaries do not purport to be complete and are
subject to the detailed provisions of the Indenture, a copy of which is filed as
an exhibit to the Registration Statement. Wherever particular provisions of the
Indenture or terms defined therein are referred to, such provisions are
incorporated by reference as part of the statements made herein, and such
statements are qualified in their entirety by such reference to the provisions
of the Indenture. Capitalized terms used below and not otherwise defined are
used as defined in the Indenture. Section references are to the Indenture.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provides that the Debt Securities
may be issued from time to time in one or more series. The Debt Securities will
rank equally with all other unsecured and unsubordinated obligations of the
Company. Except as described under "-- Certain Restrictions on the Company," the
Indenture does not limit other indebtedness or securities which may be incurred
or issued by the Company or any of its subsidiaries or contain financial or
similar restrictions on the Company or any of its subsidiaries. The Company's
rights and the rights of its creditors, including holders of Debt Securities, to
participate in any distribution of assets of any subsidiary of the Company upon
the subsidiary's liquidation or reorganization or otherwise are effectively
subordinated to the claims of the subsidiary's creditors, except to the extent
that the Company or any of its creditors may itself be a creditor of that
subsidiary.
Reference is made to the applicable Prospectus Supplement for the following
terms of and information relating to the Debt Securities offered thereby (the
"Offered Debt Securities"): (i) the designation of the Offered Debt Securities;
(ii) the aggregate principal amount of the Offered Debt Securities; (iii) the
date or dates on which principal of, and premium, if any, on, the Offered Debt
Securities will be payable; (iv) the rate or rates (which may be fixed or
variable) at which the Offered Debt Securities shall bear interest, if any, or
the method by which such rate or rates shall be determined, the basis on which
such interest, if any, shall be calculated if other than a 360-day year
consisting of twelve 30-day months, the date or dates from which such interest,
if any, will accrue and on which such interest, if any, will be payable and the
related record dates; (v) if other than the offices of the Trustee, the place
where the principal of, and premium, if any, and interest, if any, on, the
Offered Debt Securities will be payable; (vi) any redemption, repayment or
sinking fund provisions; (vii) if other than denominations of $1,000 or
multiples thereof, the denominations in which the Offered Debt Securities will
be issuable; (viii) if other than the principal amount thereof, the portion of
the principal amount due upon acceleration; (ix) if other than U.S. dollars, the
currency or currencies or currency unit or currency units in which the Offered
Debt Securities will be denominated and in which principal of, and premium, if
any, and interest, if any, on, the Offered Debt Securities will or may be
payable; (x) any index used to determine the amount of payments or principal of,
and premium, if any, and interest, if any, on, the Offered Debt Securities; (xi)
the terms and conditions, if any, pursuant to which the Offered Debt Securities
may be converted or exchanged for other securities of the Company or any other
person; (xii) whether the Offered Debt Securities shall be issued in the form of
one or more Global Securities (as defined in "-- Book-Entry System"); (xiii) the
identity of any trustees, depositaries, authenticating or paying agents,
transfer agents or registrars with respect to the Offered Debt Securities and
(xiv) any other specific terms of the Offered Debt Securities.
The Debt Securities will be issued as registered securities either in
certificated form or in the form of one or more global securities under a
book-entry system, as specified in the applicable Prospectus Supplement. See
"-- Book-Entry System."
Unless otherwise specified in the applicable Prospectus Supplement,
principal and premium, if any, will be payable, and the Debt Securities will be
transferable and exchangeable without any service charge, at the office of the
Trustee. However, the Company may require payment of the sum sufficient to cover
any tax or other governmental charge, payable in connection with any such
transfer or exchange (Sections 2.09 and 3.02).
Unless otherwise specified in the applicable Prospectus Supplement,
interest on any series of Debt Securities will be payable on the interest
payment dates set forth in the applicable Prospectus Supplement to the persons
in whose names the Debt Securities are registered at the close of business on
the related record date and will be paid, at the option of the Company, by wire
transfer or by checks mailed to such persons (Sections 2.08 and 3.01).
If the Debt Securities are issued as Original Issue Discount Securities
(bearing no interest or interest at a rate which at the time of issuance is
below market rates) to be sold at a substantial discount below their stated
principal amount, the material United States federal income tax consequences and
other special considerations applicable to such Original Issue Discount
Securities will be generally described in the applicable Prospectus Supplement.
4
<PAGE> 6
If any Debt Securities are sold for any foreign currency or currency unit
or if the principal of, or premium, if any, or interest, if any, on, any Debt
Securities is payable in any foreign currency or currency unit, the
restrictions, elections, tax consequences, specific terms and other information
with respect to such Debt Securities and such foreign currency or currency unit
will be set forth in the Prospectus Supplement relating thereto.
Unless otherwise described in the applicable Prospectus Supplement, there
are no covenants or provisions contained in the Indenture which afford the
holders of the Debt Securities protection in the event of a highly leveraged
transaction involving the Company.
BOOK-ENTRY SYSTEM
If so specified in the applicable Prospectus Supplement, Debt Securities of
any series may be issued under a book-entry system in the form of one or more
global securities (each a "Global Security"). Each Global Security will be
deposited with, or on behalf of, a depositary, which, unless otherwise specified
in the applicable Prospectus Supplement, will be The Depository Trust Company,
New York, New York (the "Depositary"). The Global Securities will be registered
in the name of the Depositary or its nominee.
The Depositary has advised the Company that the Depositary is a limited
purpose trust company organized under the laws of the State of New York, a
"banking organization" within the meaning of the New York banking law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code and a "clearing agency" registered pursuant
to the provisions of Section 17A of the Exchange Act. The Depositary was created
to hold securities of its participants and to facilitate the clearance and
settlement of securities transactions among its participants 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, banks, trust companies, clearing
corporations and certain other organizations, some of which (and/or
representatives of which) 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.
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
participants. The accounts to be credited will be designated by the
underwriters, dealers or agents, if any, or by the Company, if such Debt
Securities are offered and sold directly by the Company. Ownership of beneficial
interests in a Global Security will be limited to 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) and on the
records of participants (with respect to interests of persons other than
participants). The laws of some jurisdictions may require that certain
purchasers of securities take physical delivery of such securities in
certificated form. Such laws may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depositary or its nominee is the registered owner of a
Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Debt Securities represented by such
Global Security for all purposes under the Indenture. Except as set forth below,
owners of beneficial interests in such Global Security will not be entitled to
have the Debt Securities represented thereby registered in their names, will not
receive or be entitled to receive physical delivery of certificates representing
the Debt Securities and will not be considered the owners or holders thereof
under the Indenture. Accordingly, each person owning a beneficial interest in
such Global Security must rely on the procedures of the Depositary and, if such
person is not a participant, on the procedures of the participant through which
such person owns its interest, to exercise any rights of a holder under the
Indenture.
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 the
Global Security representing such Debt Securities. None of the Company, the
Trustee, any paying agent or registrar for such Debt Securities 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
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Company expects that the Depositary or its nominee, as the case may be,
upon receipt of any payment of principal, premium or interest in respect of a
Global Security, will immediately credit 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 or its
nominee. The Company also expects that payments by participants to owners of
beneficial interests in
5
<PAGE> 7
such 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 registered in "street name," and will be the
responsibility of such participants.
A Global Security may not be transferred except as a whole by the
Depositary to its nominee or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or its nominee to a
successor of the Depositary or a nominee of such successor. If the Depositary
for a Global Security is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by the Company within 90
days, the Company will issue Debt Securities in certificated form in exchange
for all of the Global Securities representing such Debt Securities. In addition,
the Company may at any time and in its sole discretion determine not to have any
Debt Securities represented by one or more Global Securities and, in such event,
will issue Debt Securities in certificated form in exchange for all of the
Global Securities representing such Debt Securities. Further, if the Company so
specifies with respect to the Debt Securities of a series, an owner of a
beneficial interest in a Global Security representing Debt Securities of such
series may, on terms acceptable to the Company and the Depositary, receive Debt
Securities of such series in certificated form. In any such instance, an owner
of a beneficial interest in a Global Security will be entitled to physical
delivery in certificated form of Debt Securities of the series represented by
such Global Security equal in principal amount to such beneficial interest and
to have such Debt Securities registered in its name (Section 2.09).
CERTAIN RESTRICTIONS ON THE COMPANY
Limitations on Liens
The Company will not, and will not permit any Restricted Subsidiary to,
incur any Lien on property or assets owned on or acquired after the date of the
Indenture by the Company or any Restricted Subsidiary to secure Debt without
making, or causing such Restricted Subsidiary to make, effective provision for
securing the Debt Securities (and, if the Company may so determine, any other
Debt of the Company or such Restricted Subsidiary that is not subordinated in
right of payment to the Debt Securities) (x) equally and ratably with such Debt
as to such property or assets for as long as such Debt will be so secured or (y)
in the event such Debt is subordinated in right of payment to the Debt
Securities, prior to such Debt as to such property for as long as such Debt will
be so secured (Section 3.06).
The foregoing restrictions will not apply to Liens existing on the date of
the Indenture or to: (i) Liens securing only the Debt Securities; (ii) Liens in
favor of only the Company or a Restricted Subsidiary of the Company; (iii) any
Lien on property of a Person existing immediately prior to the time such Person
is merged with or into or consolidated with the Company or any Subsidiary of the
Company or otherwise becomes a Subsidiary of the Company (provided that such
Lien is not incurred in anticipation of such transaction and does not extend
beyond the property subject thereto, or secure any Debt that is not secured
thereby, immediately prior to such transaction); (iv) any Lien on property
existing immediately prior to the time of acquisition thereof (provided that
such Lien is not incurred in anticipation of such acquisition and does not
extend beyond the property subject thereto, or secure any Debt that is not
secured thereby, immediately prior to such acquisition); (v) any Lien on
property securing all or any portion of the purchase price thereof or securing
all or any portion of the cost of construction or alteration of or improvement
on any property created or assumed contemporaneously with, or within 270 days
after, such acquisition or completion of such construction or improvement
(provided that such Lien does not extend to any other property and secures Debt
in an amount that does not exceed such purchase price or cost of construction,
alteration or improvement); (vi) Liens for taxes or assessments or other
governmental charges or levies that are not delinquent, remain payable without
penalty or are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and for which such reserve or other
appropriate provision, if any, as may be required in accordance with generally
accepted accounting principles has been made; (vii) Liens to secure obligations
under workmen's compensation laws or similar legislation; (viii) Liens incurred
to secure the performance of statutory obligations or bids, surety or appeal
bonds, performance or return-of-money bonds or other obligations of a like
nature incurred in the ordinary course of business; (ix) any Lien securing Debt
owing by the Company to a Wholly Owned Subsidiary (provided that, for purposes
of this covenant and the covenant described under "-- Limitations on Sale and
Leaseback Transactions," upon either (a) the transfer or other disposition of
any Debt secured by such Lien to a Person other than another Wholly Owned
Subsidiary of the Company or (b) the issuance (other than directors' qualifying
shares), sale, lease, transfer or other disposition of capital stock of or any
other ownership interest in such Wholly Owned Subsidiary to which such secured
Debt is owed to a Person other than the Company or another Wholly Owned
Subsidiary of the Company, the provisions described in this clause (ix) will no
longer be applicable to such Lien and such Lien will be subject (if otherwise
subject) to the requirements of this covenant without regard to this clause
(ix)); (x) any Lien arising in the ordinary course of business in favor of a
customer, which Liens are inherent in the government contracting process; (xi)
any Liens on assets identified as "Restricted Cash" on the Company's balance
sheet which are payable to third parties; (xii) any Lien associated with a sale
6
<PAGE> 8
or discount of accounts receivable of the Company or its Subsidiaries provided
that such Lien (a) does not involve the creation of a Lien or negative pledge on
any accounts receivable not so sold or discounted and (b) does not involve in
the aggregate the sale or discount of accounts receivable having a book value
exceeding $100,000,000; (xiii) Liens securing obligations not exceeding
$100,000,000 in the aggregate on (a) the assets of single purpose Subsidiaries
and (b) assets of the Company or any of its Subsidiaries incurred in connection
with and related solely to the toll collection business; (xiv) any Lien in favor
of the Trustee in respect of expenses incurred or services rendered pursuant to
the Indenture and (xv) extensions, renewals or replacements (or successive
extensions, renewals, or replacements), as a whole or in part, of any Lien
referred to in the foregoing clauses (iii), (iv) and (v) so long as such Lien
does not extend to any other property and the Debt so secured is not increased
(Section 3.06).
In addition to the foregoing, the Company and its Subsidiaries may, without
equally and ratably securing the Debt Securities, incur a Lien to secure Debt or
enter into a Sale and Leaseback Transaction if, after giving effect thereto, the
sum of: (i) the amount of all Debt secured by all Liens incurred on or after the
date of the Indenture and otherwise prohibited by the Indenture and (ii) the
Attributable Value of Sale and Leaseback Transactions entered into on or after
the date of the Indenture and otherwise prohibited by the Indenture does not
exceed 15% of Consolidated Net Worth.
All Debt Securities, regardless of their series, will rank pari passu with
one another.
Limitations on Sale and Leaseback Transactions
The Company will not, and will not permit any Restricted Subsidiary to,
enter into any Sale and Leaseback Transaction (except for a period not exceeding
36 months) unless (i) the Company or such Restricted Subsidiary would be
entitled to enter into such Sale and Leaseback Transaction pursuant to the
provisions described in the second or third paragraph under "-- Limitations on
Liens" without equally and ratably securing the Debt Securities or (ii) the
Company or a Subsidiary of the Company applies, within 90 days after the related
Sale Transaction, an amount equal to the Net Available Proceeds of such Sale
Transaction (a) to the redemption of Debt Securities or, to the extent Debt
Securities are not then redeemable, to the retirement of Debt Securities, of
other Company Debt that is pari passu with the Debt Securities or of Subsidiary
Debt or, to the extent there is no such Company Debt or Subsidiary Debt, other
Company Debt or (b) to the purchase of property, securities, or other assets
(other than cash or cash equivalents) having a fair market value, determined at
the time of such purchase, at least equal to the Net Available Proceeds of such
sale and which will be used (or, in the case of any securities, are capital
stock issued by a company engaged) in the business of the Company and its
Restricted Subsidiaries as then being conducted. Debt Securities redeemed or
otherwise retired pursuant to the provision described above may not be used as
credits against any sinking fund obligations (Section 3.07).
Consolidation; Merger; Sale of Assets
With respect to the Debt Securities of any series, the Company may not
consolidate with or merge into, or convey, transfer or lease its properties and
assets substantially as an entirety to, any Person (a "successor Person"), and
may not permit any Person to merge into, or convey, transfer or lease its
properties and assets substantially as an entirety to, the Company, unless (i)
the successor Person (if any) is a corporation, partnership, trust, limited
liability company or other entity organized and validly existing under the laws
of any domestic jurisdiction and expressly assumes the Company's obligations on
the Debt Securities of such series and under the Indenture with respect thereto,
(ii) immediately after giving effect to the transaction, no Event of Default,
and no event which, after notice or lapse of time or both, would become an Event
of Default, with respect to the Debt Securities of such series shall have
occurred and be continuing, (iii) if, as a result of the transaction, property
of the Company or any Restricted Subsidiary would become subject to a Lien the
incurrence of which would not be permitted under the limitation on Liens
described above under "Restrictive Covenants," the Company takes such steps as
are necessary to cause the Debt Securities of such series to be secured equally
and ratably with (or prior to) the Debt secured by such Lien as provided in such
limitation and (iv) certain other conditions are met (Section 9.01).
CERTAIN DEFINITIONS
The Indenture will include, among others, the following definitions:
"ATTRIBUTABLE VALUE" means, as to any lease under which any Person is at
the time liable, other than a Capital Lease Obligation, and at any date as of
which the amount thereof is to be determined, the total net amount of rent
required to be paid by such Person under such lease during the remaining term
thereof as determined in accordance with generally accepted accounting
principles, discounted from the last date of such term to the date of
determination at a rate per annum equal to the discount rate that would be
applicable to a Capital Lease Obligation with like term in accordance with
generally accepted accounting principles. The net amount of rent required to be
paid under any such lease for any such period will be the
7
<PAGE> 9
aggregate amount of rent payable by the lessee with respect to such period after
excluding amounts required to be paid on account of insurance, taxes,
assessments, utility, operating and labor costs and similar charges. In the case
of any lease that is terminable by the lessee upon the payment of a penalty,
such net amount will also include the amount of such penalty, but no rent will
be considered as required to be paid under such lease subsequent to the first
date upon which it may be so terminated. "Attributable Value" means, as to a
Capital Lease Obligation under which any Person is at the time liable and at any
date as of which the amount thereof is to be determined, the capitalized amount
thereof that would appear on the face of a balance sheet of such Person in
accordance with generally accepted accounting principles.
"CAPITAL LEASE OBLIGATION" of any Person means the obligation to pay rent
or other payment amounts under a lease of (or other Debt arrangements conveying
the right to use) real or personal property of such Person that is required to
be classified and accounted for as a capital lease or a liability on the face of
a balance sheet of such Person in accordance with generally accepted accounting
principles. The stated maturity of such obligation will be deemed to be the date
of the last payment of rent or any other amount due under such lease prior to
the first date upon which such lease may be terminated by the lessee without
payment of a penalty.
"CONSOLIDATED NET WORTH" means, at any date of determination, the net worth
of the Company and its Subsidiaries on a consolidated basis in accordance with
generally accepted accounting principles.
"DEBT" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person, (i) every
obligation of such Person for money borrowed, (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses, (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person, (iv) every Capital Lease Obligation of such
Person and (v) every obligation of the type referred to in clauses (i) through
(iv) of another Person, the payment of which such Person has Guaranteed.
"LIEN" means any mortgage, pledge or lien securing any Debt.
"NET AVAILABLE PROCEEDS" from any Sale Transaction by any Person means cash
or readily marketable cash equivalents received (including by way of sale or
discounting of a note, installment receivable or other receivable, but excluding
any consideration received in the form of assumption of Debt or other
obligations by others or received in any other noncash form) therefrom by such
Person, net of (i) all legal, title and recording tax expenses, commissions and
other fees and expenses incurred and all federal, state, provincial, foreign and
local taxes required to be accrued as a liability as a consequence of such Sale
Transaction, (ii) all payments made by such Person or its Subsidiaries on any
Debt that is secured by a Lien on the property or assets so disposed of in
accordance with the terms of such Lien or that must, by the terms of such Lien,
or in order to obtain a necessary consent to such Sale Transaction, or by
applicable law, be repaid out of the proceeds from such Sale Transaction and
(iii) all distributions and other payments made to third parties (other than
Subsidiaries) in respect of minority or joint venture interests as a result of
such Sale Transaction.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company at least 50% of
whose consolidated assets are located, or at least 50% of whose consolidated
revenues during the then-latest four fiscal quarters were derived from
operations conducted, in the United States and its territories and possessions.
For this purpose, the consolidated assets or revenues of a Subsidiary will be
deemed to be the assets or revenues of such Subsidiary and its Subsidiaries,
determined on a consolidated basis in accordance with generally accepted
accounting principles.
"SALE AND LEASEBACK TRANSACTION" of any Person means an arrangement with
any lender or investor or to which such lender or investor is a party providing
for the leasing by such Person of any property or assets of such Person which
has been or is being sold, conveyed, transferred or otherwise disposed of by
such Person more than 270 days after the acquisition thereof or the completion
of construction or commencement of operation thereof to such lender or investor
or to any person to whom funds have been or are to be advanced by such lender or
investor on the security of such property or assets. The stated maturity of such
arrangement will be deemed to be the date of the last payment of rent or any
other amount due under such arrangement prior to the first date on which such
arrangement may be terminated by the lessee without payment of a penalty.
"SALE TRANSACTION" means any sale, conveyance, transfer or other
disposition of the kind referred to in the first sentence of the definition of
"SALE AND LEASEBACK TRANSACTION."
"SIGNIFICANT SUBSIDIARY" means, at any time, any Subsidiary of the Company
that qualifies at such time as a "significant subsidiary" of the Company within
the meaning of Regulation S-X promulgated by the Commission (as in effect at
such time).
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<PAGE> 10
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the
Indenture with respect to Debt Securities of any series: (a) failure to pay
principal of or any premium on any Debt Security of that series when due; (b)
failure to pay any interest on any Debt Securities of that series when due,
continued for 30 days; (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 other than that series),
continued for 90 days after written notice has been given by the Trustee, or the
Holders of at least 25% in principal amount of the Outstanding Debt Securities
of that series, as provided in the Indenture; (e) a default or defaults under
any note(s) or other evidence(s) of Debt (including Debt Securities of another
series), or any agreement(s) or instrument(s) (including the Indenture) under
which there may be issued or by which there may be secured or evidenced any Debt
of the Company or any Subsidiary having a principal amount outstanding,
individually or in the aggregate, of at least $50,000,000, and whether existing
on or created after the date of the Indenture, which default or defaults (i)
constitute a failure to pay any portion of the principal of such Debt when due
(after the expiration of any applicable grace period) or (ii) have resulted in
acceleration of any portion of such Debt having an aggregate principal amount
equal to or in excess of $50,000,000, without the overdue or accelerated portion
of such Debt having been discharged, or without such acceleration having been
rescinded or annulled by the holders of such Debt, within 30 days after written
notice has been given by the Trustee or the Holders of at least 25% in principal
amount of the Outstanding Debt Securities of such series, as provided in the
Indenture; (f) a final judgment or final judgments for the payment of money are
entered against the Company or any Subsidiary of the Company in an aggregate
amount in excess of $50,000,000 by a court or courts of competent jurisdiction,
unless such judgments are fully discharged, bonded or stayed within 60 days
after the right to appeal such judgments has expired and (g) certain events in
bankruptcy, insolvency or reorganization of the Company or any Significant
Subsidiary. Other Events of Default may apply with respect to the Debt
Securities of a particular series, as indicated in the applicable Prospectus
Supplement (Section 5.01).
If an Event of Default (other than an Event of Default described in clause
(g) above) with respect to the Debt Securities of any series at the time
Outstanding shall occur and be continuing, either the Trustee or the Holders of
at least 25% in aggregate principal amount of the Outstanding Debt Securities of
that series by notice as provided in the Indenture may declare the principal
amount of the Debt Securities of that series (or, in the case of any Debt
Security that is an Original Issue Discount Security or the principal amount of
which is not then determinable, such portion of the principal amount of such
Debt Security, or such other amount in lieu of such principal amount, as may be
specified in the terms of such Debt Security) to be due and payable immediately.
If an Event of Default described in clause (g) above with respect to the Debt
Securities of any series at the time Outstanding shall occur and be continuing,
the principal amount of all the Debt Securities of that series (or, in the case
of any such Original Issue Discount Security or other Debt Security, such
specified amount) will automatically, and without any action by the Trustee or
any Holder, become immediately due and payable. After any 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 (or other
specified amount), have been cured or waived as provided in the Indenture
(Section 5.01). For information as to waiver of defaults, see "-- Modification
and Waiver."
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the Indenture, or for the appointment of a
receiver or a trustee, or for any other remedy thereunder, unless (i) such
Holder has previously given to the Trustee written notice of a continuing Event
of Default with respect to the Debt Securities of that series, (ii) the Holders
of at least 25% in aggregate principal amount of the Outstanding Debt Securities
of that series have made written request, and such Holder or Holders have
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee and (iii) the Trustee has failed to institute such proceeding, and has
not 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, within 60 days after such notice, request and offer (Section 5.06).
MODIFICATION AND WAIVER
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Debt Securities then Outstanding of each series affected
by a supplement to the Indenture, to supplement the Indenture or any
supplemental indenture or modify the rights of the Holders of the Debt
Securities of such series, provided, that no such supplement or modification
shall (i) extend the stated maturity or reduce the principal amount of any Debt
Security or any portion thereof, reduce the rate or extend the time of payment
of interest thereon, reduce any amount payable on redemption thereof or change
the currency in which the Debt Security is
9
<PAGE> 11
payable, or reduce the amount of an Original Issue Discount Security payable
upon acceleration or the amount provable in bankruptcy, or impair or affect any
Holder's right to institute suit for payment or right of repayment or (ii)
reduce the aforesaid percentage of Debt Securities of any series, in each case
without the consent of the Holders affected thereby (Section 8.02).
The Indenture also contains provisions permitting the Company and the
Trustee to enter into supplemental indentures without the consent of the Holders
of any series of Debt Securities to (i) convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Debt Securities any property or
assets, subject to and in compliance with the terms of the Indenture, (ii)
evidence the succession of another corporation to the Company, subject to and
upon compliance with the provisions of the Indenture, and the assumption by such
successor corporation of the covenants, agreements and obligations in the Debt
Securities and in the Indenture, (iii) evidence and provide for a successor
Trustee under the Indenture with respect to one or more series of Debt
Securities, (iv) add to the covenants of the Company, (v) cure any ambiguity or
correct or supplement any provision in the Indenture that may be defective or
(vi) establish the form or terms of Debt Securities of any series (Section
8.01).
The Holders of a majority in aggregate principal amount of the Debt
Securities of any series at the time Outstanding may, on behalf of the Holders
of all Debt Securities of such series, waive compliance by the Company with
certain restrictive provisions of the Indenture (Section 5.10). The Holders of a
majority in aggregate principal amount of the Debt Securities of any series at
the time Outstanding with respect to which an Event of Default shall have
occurred and be continuing may, on behalf of the Holders of all Debt Securities
of such series, waive any past default or Event of Default under the Indenture
except a default in the payment of principal, premium or interest and certain
covenants and provisions of the Indenture which cannot be amended without the
consent of the Holder of each Outstanding Debt Security of such series affected
(Section 5.10).
Except in certain limited circumstances, the Company will be entitled to
set any day as a record date for the purpose of determining the Holders of
Outstanding Debt Securities of any series entitled to give or take any
direction, notice, consent, waiver or other action in the Indenture, in the
manner and subject to the limitations provided in the Indenture. In certain
limited circumstances, the Trustee will be entitled to set a record date for
action by the Holders. If a record date is set for any action to be taken by
Holders of a particular series, such action may be taken only by persons who are
Holders of Outstanding Debt Securities of that series on the record date
(Section 7.02).
DEFEASANCE
The Indenture provides that the Company, at its option, (i) will be
discharged from all obligations in respect of the Debt Securities of a series
(except for certain obligations to register the transfer or exchange of Debt
Securities, replace stolen, lost or destroyed Debt Securities, maintain paying
agencies and hold moneys for payment in trust) or (ii) need not comply with
certain restrictive covenants of the Indenture described under "-- Certain
Restrictions on the Company," in each case if the Company irrevocably deposits
in trust with the Trustee money, or the equivalent in securities of the
government which issued the currency in which the Debt Securities of any then
outstanding series are denominated or securities issued by government agencies
backed by the full faith and credit of such government, which through the
payment of interest thereon and principal thereof in accordance with their terms
will provide money in an amount sufficient to pay all of the principal of
(including any mandatory redemption payments), and premium, if any, and
interest, if any, on, and repurchase obligations, if any, with respect to, the
Debt Securities of such series, on the dates such payments are due in accordance
with terms of such Debt Securities. To exercise either option, the Company is
required to deliver to the Trustee an opinion of independent tax counsel (which
may be counsel to the Company) to the effect that the deposit and related
defeasance would not cause the holders of Debt Securities of such series to
recognize income, gain or loss for United States federal income tax purposes. To
exercise the option described in clause (i) above, such opinion must be based on
a ruling of the Internal Revenue Service or a change in law occurring after the
issue date of the Debt Securities of such series (Section 10.01).
CONCERNING THE TRUSTEE
Unless otherwise specified in the applicable Prospectus Supplement, The
Chase Manhattan Bank is the Trustee, paying agent and registrar under the
Indenture.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by the laws of the
State of New York.
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<PAGE> 12
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through underwriters or dealers
and also may sell Debt Securities directly to other purchasers or through
agents. Any such underwriter or agent involved in the offer and sale of Debt
Securities will be named in an applicable Prospectus Supplement.
Underwriters may offer and sell Debt Securities at a fixed price or prices,
which may be changed, or from time to time at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Company may also offer and sell Debt Securities in
exchange for one or more issues of its outstanding debt securities or
exchangeable or convertible debt securities. The Company also may, from time to
time, authorize underwriters acting as the Company's agents to offer and sell
Debt Securities upon the terms and conditions as shall be set forth in any
Prospectus Supplement. In connection with the sale of Debt Securities,
underwriters may be deemed to have received compensation from the Company in the
form of underwriting discounts or commissions and may also receive commissions
from purchasers of Debt Securities for whom they may act as agent. 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
agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Debt Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in an applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of Debt Securities may be deemed to
be underwriters, and any discounts and commissions received by them and any
profit realized by them on resale of Debt Securities may be deemed to be
underwriting discounts and commissions, under the Securities Act. Underwriters,
dealers and agents may be entitled, under agreements entered into with the
Company, to indemnification against or contribution toward certain civil
liabilities, including liabilities under the Securities Act, and to
reimbursement by the Company for certain expenses.
If so indicated in an applicable Prospectus Supplement, the Company will
authorize underwriters or dealers acting as the Company's agents to solicit
offers by certain institutions to purchase Debt Securities from the Company
pursuant to Delayed Delivery Contracts ("Contracts") providing for payment and
delivery on the date or dates stated in such Prospectus Supplement. Each
Contract will be for an amount not less than, and the aggregate principal amount
of Debt Securities sold pursuant to Contracts shall not be less nor more than,
the respective amounts stated in such Prospectus Supplement. Institutions with
which Contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutions, but in all cases will be subject
to approval of the Company. Contracts will not be subject to any conditions
except (i) the purchase by an institution of the Debt Securities covered by its
contracts shall not at the time of delivery thereof be prohibited under the laws
of any jurisdiction in the United States to which such institution is subject
and (ii) if any Debt Securities are being sold to underwriters, the Company
shall have sold to such underwriters the total principal amount of Debt
Securities less the principal amount thereof covered by Contracts. Agents and
underwriters will have no responsibility in respect of the delivery or
performance of Contracts.
All Debt Securities will be a new issue of securities with no established
trading market. 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.
Certain of the underwriters or agents and their affiliates may engage in
transactions with, and perform services for, the Company in the ordinary course
of business.
LEGAL MATTERS
The validity of the Debt Securities will be passed upon for the Company by
its special counsel, Davis Polk & Wardwell, New York, New York.
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<PAGE> 13
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-K/A of Science Applications International
Corporation for the year ended January 31, 1997 have been so incorporated in
reliance on the report of Price Waterhouse LLP, independent accountants, given
on the authority of said firm as experts in auditing and accounting.
The consolidated financial statements of Bellcore and its subsidiaries as
of December 31, 1996 and for each of the three years in the period ended
December 31, 1996, incorporated by reference in this Prospectus, have been
incorporated herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
The financial statements of the TransCore Retirement Savings Plan
incorporated by reference in this Prospectus from the Annual Report on Form
11-K, which was filed as part of the Company's Form 8-K dated June 30, 1997,
have been audited by Beard & Company, Inc., independent auditors, to the extent
and for the periods indicated in their report appearing therein, and are
incorporated in reliance upon such report and upon the authority of such firm as
experts in auditing and accounting.
12
<PAGE> 14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with the issuance
and distribution of the securities being registered, other than underwriting
discounts and commissions. All of the amounts shown are estimates, except the
SEC registration fee.
<TABLE>
<S> <C>
SEC registration fee.................................................................. $ 90,910
Printing and engraving................................................................ 30,000
Legal fees and expenses............................................................... 75,000
Fees of accountants................................................................... 27,000
Fees of trustee....................................................................... 7,500
Blue sky fees and expenses............................................................ 35,000
Rating agency fees.................................................................... 170,000
Miscellaneous......................................................................... 1,090
--------
Total....................................................................... $436,500
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to Section 102(b)(7) of the Delaware General Corporation
Law (the "DGCL"), which enables a corporation in its original certificate of
incorporation or an amendment thereto to eliminate or limit the personal
liability of a director for violations of the director's fiduciary duty, except
(i) for any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) pursuant to Section
174 of the DGCL (providing for liability of directors for the unlawful payment
of dividends or unlawful stock purchases or redemptions) or (iv) for any
transaction from which a director derived an improper personal benefit.
Section 145 of the DGCL empowers the Company to indemnify, subject to the
standards set forth therein, any person in connection with any action, suit or
proceeding brought before or threatened by reason of the fact that the person
was a director, officer, employee or agent of such company, or is or was serving
as such with respect to another entity at the request of such company. The DGCL
also provides that the Company may purchase insurance on behalf of any such
director, officer, employee or agent.
The Company's Restated Certificate of Incorporation provides in effect for
the elimination or limitation of personal liability and indemnification by the
Company of each director and elected and appointed officer of the Company to the
fullest extent permitted by applicable law.
II-1
<PAGE> 15
ITEM 16. EXHIBITS.
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -------------------------------------------------------------------------------------------------
<C> <S>
*1.1 Form of Underwriting Agreement
3.1 Restated Certificate of Incorporation of the Registrant, as amended July 19, 1990 (incorporated
by reference to Exhibit 3(a) to the Registrant's Annual Report on Form 10-K for the fiscal year
ended January 31, 1991)
3.2 Bylaws of the Registrant, as amended through April 11, 1997 (incorporated by reference to Exhibit
3(b) to the Registrant's Annual Report on Form 10-K/A for the fiscal year ended January 31, 1997)
*4.1 Indenture between the Registrant and The Chase Manhattan Bank, as Trustee
*4.2 Form of Debt Security (included in Exhibit 4.1)
5.1 Opinion of Davis Polk & Wardwell
12.1 Computation of ratio of earnings to fixed charges
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Davis Polk & Wardwell (included in Exhibit 5.1)
23.3 Consent of Coopers & Lybrand L.L.P.
23.4 Consent of Beard & Company, Inc.
24.1 Powers of Attorney (included in signature pages)
25.1 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of The
Chase Manhattan Bank, as Trustee under the Indenture
</TABLE>
- ---------------
* To be filed by amendment
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that the undertakings set forth in paragraphs (i)
and (ii) do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the
II-2
<PAGE> 16
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described in Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(d)(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this registration statement as of the
time it was declared effective.
(2) For purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
II-3
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Diego, State of California, on October 3,
1997.
SCIENCE APPLICATIONS INTERNATIONAL
CORPORATION
By: /s/ J.R. BEYSTER
------------------------------------------
J.R. Beyster
Chairman of the Board and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS
BELOW CONSTITUTES AND APPOINTS J.R. BEYSTER, J.D. HEIPT AND D.E. SCOTT HIS OR
HER TRUE AND LAWFUL ATTORNEYS-IN-FACT AND AGENTS, EACH ACTING ALONE, WITH FULL
POWERS OF SUBSTITUTION AND RESUBSTITUTION, FOR HIM OR HER AND IN HIS OR HER
NAME, PLACE AND STEAD, IN ANY AND ALL CAPACITIES, TO SIGN ANY OR ALL AMENDMENTS
TO THIS REGISTRATION STATEMENT, INCLUDING POST-EFFECTIVE AMENDMENTS, AS WELL AS
ANY RELATED REGISTRATION STATEMENT (OR AMENDMENT THERETO) FILED PURSUANT TO RULE
462 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AND TO FILE THE SAME, WITH ALL
EXHIBITS THERETO, AND OTHER DOCUMENTS IN CONNECTION THEREWITH, WITH THE
SECURITIES AND EXCHANGE COMMISSION, GRANTING UNTO SAID ATTORNEYS-IN-FACT AND
AGENTS, AND EACH OF THEM, FULL POWER AND AUTHORITY TO DO AND PERFORM EACH AND
EVERY ACT AND THING REQUISITE AND NECESSARY TO BE DONE IN AND ABOUT THE
PREMISES, AS FULLY TO ALL INTENTS AND PURPOSES AS HE OR SHE MIGHT OR COULD DO IN
PERSON, AND HEREBY RATIFIES AND CONFIRMS ALL HIS OR HER SAID ATTORNEYS-IN-FACT
AND AGENTS OR ANY OF THEM OR HIS OR HER SUBSTITUTES MAY LAWFULLY DO OR CAUSE TO
BE DONE BY VIRTUE THEREOF.
THIS POWER OF ATTORNEY MAY BE EXECUTED IN MULTIPLE COUNTERPARTS, EACH OF
WHICH SHALL BE DEEMED AN ORIGINAL, BUT WHICH TAKEN TOGETHER SHALL CONSTITUTE ONE
INSTRUMENT.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT ON FORM S-3 HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ --------------------------------- ----------------
<C> <C> <S>
/s/ J.R. BEYSTER Chairman of the Board, Chief October 3, 1997
- ------------------------------------------ Executive Officer and Director
J.R. Beyster (Principal Executive Officer)
/s/ W.A. OWENS President, Chief Operating October 3, 1997
- ------------------------------------------ Officer and Director
W.A. Owens
/s/ W.A. ROPER Chief Financial Officer October 3, 1997
- ------------------------------------------ (Principal Financial Officer)
W.A. Roper
/s/ P.N. PAVLICS Principal Accounting Officer October 3, 1997
- ------------------------------------------
P.N. Pavlics
/s/ D.P. ANDREWS Director October 3, 1997
- ------------------------------------------
D.P. Andrews
/s/ V.N. COOK Director October 3, 1997
- ------------------------------------------
V.N. Cook
</TABLE>
II-4
<PAGE> 18
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ --------------------------------- ----------------
<C> <C> <S>
/s/ C.K. DAVIS Director October 3, 1997
- ------------------------------------------
C.K. Davis
/s/ W.H. DEMISCH Director October 3, 1997
- ------------------------------------------
W.H. Demisch
/s/ W.A. DOWNING Director October 3, 1997
- ------------------------------------------
W.A. Downing
/s/ E.A. FRIEMAN Director October 3, 1997
- ------------------------------------------
E.A. Frieman
/s/ J.E. GLANCY Director October 3, 1997
- ------------------------------------------
J.E. Glancy
/s/ B.R. INMAN Director October 3, 1997
- ------------------------------------------
B.R. Inman
/s/ H.M.J. KRAEMER, JR. Director October 3, 1997
- ------------------------------------------
H.M.J. Kraemer, Jr.
/s/ W.M. LAYSON Director October 3, 1997
- ------------------------------------------
W.M. Layson
/s/ C.B. MALONE Director October 3, 1997
- ------------------------------------------
C.B. Malone
/s/ J.W. MCRARY Director October 3, 1997
- ------------------------------------------
J.W. McRary
/s/ S.D. ROCKWOOD Director October 3, 1997
- ------------------------------------------
S.D. Rockwood
/s/ E.A. STRAKER Director October 3, 1997
- ------------------------------------------
E.A. Straker
/s/ M.E. TROUT Director October 3, 1997
- ------------------------------------------
M.E. Trout
/s/ J.P. WALKUSH Director October 3, 1997
- ------------------------------------------
J.P. Walkush
/s/ J.H. WARNER, JR. Director October 3, 1997
- ------------------------------------------
J.H. Warner, Jr.
/s/ J.A. WELCH Director October 3, 1997
- ------------------------------------------
J.A. Welch
</TABLE>
II-5
<PAGE> 19
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ --------------------------------- ----------------
<C> <C> <S>
/s/ J.B. WIESLER Director October 3, 1997
- ------------------------------------------
J.B. Wiesler
/s/ A.T. YOUNG Director October 3, 1997
- ------------------------------------------
A.T. Young
</TABLE>
II-6
<PAGE> 20
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- ----------------------------------------------------------------------------------------------
<C> <S>
*1.1 Form of Underwriting Agreement
3.1 Restated Certificate of Incorporation of the Registrant, as amended July 19, 1990
(incorporated by reference to Exhibit 3(a) to the Registrant's Annual Report on Form 10-K for
the fiscal year ended January 31, 1991)
3.2 Bylaws of the Registrant, as amended through April 11, 1997 (incorporated by reference to
Exhibit 3(b) to the Registrant's Annual Report on Form 10-K/A for the fiscal year ended
January 31, 1997)
*4.1 Indenture between the Registrant and The Chase Manhattan Bank, as Trustee
*4.2 Form of Debt Security (included in Exhibit 4.1)
5.1 Opinion of Davis Polk & Wardwell
12.1 Computation of ratio of earnings to fixed charges
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Davis Polk & Wardwell (included in Exhibit 5.1)
23.3 Consent of Coopers & Lybrand L.L.P.
23.4 Consent of Beard & Company, Inc.
24.1 Powers of Attorney (included in signature pages)
25.1 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of The
Chase Manhattan Bank, as Trustee under the Indenture
</TABLE>
- ---------------
* To be filed by amendment
<PAGE> 1
EXHIBIT 5.1
[DAVIS POLK & WARDWELL LETTERHEAD]
October 3, 1997
Science Applications International Corporation
10260 Campus Point Drive
San Diego, California 92121
Ladies and Gentlemen:
We have acted as special counsel to you, Science Applications International
Corporation (the "Company"), in connection with the registration of the
Company's debt securities (the "Securities") from which the Company will receive
up to an aggregate of $300,000,000, for issuance from time to time pursuant to
Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"). We
advise that in our opinion the Company has full power and authority under the
laws of Delaware, the State of the Company's incorporation, and under the
Company's Restated Certificate of Incorporation to borrow the money and to
contract the indebtedness to be evidenced by the said Securities.
It is our further opinion that when the Indenture, between the Company and
The Chase Manhattan Bank (the "Indenture"), has been duly authorized, executed
and delivered and the Securities, as provided in the Indenture, have been duly
authorized, executed and authenticated, issued and paid for, the Securities will
be valid and legally binding obligations of the Company in accordance with, and
subject to, the terms thereof and of the Indenture.
We hereby consent to the use of the foregoing opinion as Exhibit 5.1 of the
Company's Registration Statement filed with the United States Securities and
Exchange Commission under the Securities Act, with respect to the above
mentioned Securities and to the use of our name in such Registration Statement
and in the related Prospectus Supplement(s) under the heading "Legal Opinions".
Very truly yours,
/s/ Davis Polk & Wardwell
<PAGE> 1
EXHIBIT 12.1
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
RATIO OF EARNINGS TO FIXED CHARGES
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
JULY YEAR ENDED JANUARY 31,
31, ------------------------------------------------------
1997 1997 1996 1995 1994 1993
------- -------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Income before income taxes............................. $63,998 $113,209 $102,314 $ 79,706 $69,828 $60,105
Less:
Undistributed income in equity investments........... (892) (2,252) (52) (287) (27)
Add:
Losses in equity investments......................... 736
Minority interest in consolidated subsidiary with
fixed charges ..................................... 2,695
Interest on indebtedness............................. 2,853 4,925 4,529 3,468 2,966 2,841
Portion of rent expense representative of the
interest factor.................................... 12,210 22,550 20,883 19,318 18,880 17,837
------- ------- -------- -------- ------- -------
Income, as adjusted.................................... $80,864 $138,432 $127,674 $102,205 $92,410 $80,756
======= ======= ======== ======== ======= =======
Fixed Charges:
Interest on indebtedness............................. $ 2,853 $ 4,925 $ 4,529 $ 3,468 $ 2,966 $ 2,841
Portion of rent expense representative of the
interest factor.................................... 12,210 22,550 20,883 19,318 18,880 17,837
------- ------- -------- -------- ------- -------
Fixed Charges.......................................... $15,063 $ 27,475 $ 25,412 $ 22,786 $21,846 $20,678
======= ======= ======== ======== ======= =======
Ratio of Earnings to Fixed Charges..................... 5.4 5.0 5.0 4.5 4.2 3.9
======= ======= ======== ======== ======= =======
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
April 4, 1997 appearing on page F-2 of Science Applications International
Corporation's Annual Report on Form 10-K/A for the year ended January 31, 1997.
We also consent to the incorporation by reference in such Prospectus of our
report dated February 25, 1997 appearing on page F-2 of the Annual Report of the
Science Applications International Corporation Employee Stock Purchase Plan for
the year ended January 31, 1997 appearing in the Science Applications
International Corporation's Annual Report on Form 10-K/A. In addition, we hereby
consent to the incorporation by reference in such Prospectus of our report dated
March 21, 1997 appearing on page F-2 of the Annual Report of the Science
Applications International Corporation Cash or Deferred Arrangement for the year
ended December 31, 1996 appearing in the Science Applications International
Corporation's Annual Report on Form 10-K/A. We also consent to the reference to
us under the heading "Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
San Diego, California
October 3, 1997
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of Science Applications International Corporation on Form S-3 of our report
dated February 12, 1997, on our audits of the consolidated financial statements
of Bell Communications Research, Inc. as of December 31, 1996 and 1995 and for
each of the three years in the period ended December 31, 1996, which report is
incorporated by reference in Science Applications International Corporation's
Report on Form 8-K. We also consent to the reference to our firm under the
caption "Experts".
/s/ COOPERS & LYBRAND L.L.P.
Parsippany, New Jersey
October 1, 1997
<PAGE> 1
EXHIBIT 23.4
CONSENT OF BEARD & COMPANY, INC.,
INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
of Science Applications International Corporation on Form S-3 of our report
dated June 23, 1997 on our audit of the financial statements of the TransCore
Retirement Savings Plan included in TransCore Retirement Savings Plan's Annual
Report (Form 11-K) for the year ended December 31, 1996. We also consent to the
reference to our Firm under the heading "Experts" in such Registration
Statement.
/s/ BEARD & COMPANY, INC.
Harrisburg, Pennsylvania
October 2, 1997
<PAGE> 1
EXHIBIT 25.1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2)
---------
------------------------
THE CHASE MANHATTAN BANK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
NEW YORK 13-4994650
(STATE OF INCORPORATION (I.R.S. EMPLOYER
IF NOT A NATIONAL BANK) IDENTIFICATION NO.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
WILLIAM H. MCDAVID
GENERAL COUNSEL
270 PARK AVENUE
NEW YORK, NEW YORK 10017
TEL: (212) 270-2611
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
------------------------
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 95-3630868
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
10260 CAMPUS POINT DRIVE
SAN DIEGO, CALIFORNIA 92121
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
------------------------
DEBT SECURITIES
(TITLE OF THE INDENTURE SECURITIES)
================================================================================
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
New York State Banking Department, State House, Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New
York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
1
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 1st day of October, 1997.
THE CHASE MANHATTAN BANK
By: /s/ THOMAS J. FOLEY
------------------------------------------
Thomas J. Foley
Vice President
2
<PAGE> 4
EXHIBIT 7 TO FORM T-1
BANK CALL NOTICE
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
THE CHASE MANHATTAN BANK
OF 270 PARK AVENUE, NEW YORK, NEW YORK 10017
AND FOREIGN AND DOMESTIC SUBSIDIARIES,
A MEMBER OF THE FEDERAL RESERVE SYSTEM,
AT THE CLOSE OF BUSINESS JUNE 30, 1997, IN
ACCORDANCE WITH A CALL MADE BY THE FEDERAL RESERVE BANK OF THIS
DISTRICT PURSUANT TO THE PROVISIONS OF THE FEDERAL RESERVE ACT.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
IN MILLIONS
--------------
<S> <C> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin..................................... $ 13,892
Interest-bearing balances.............................................................. 4,282
Securities:
Held to maturity securities.............................................................. 2,857
Available for sale securities............................................................ 34,091
Federal funds sold and securities purchased under agreements to resell................... 29,970
Loans and lease financing receivables:
Loans and leases, net of unearned income..................................... $124,827
Less: Allowance for loan and lease losses.................................... 2,753
Less: Allocated transfer risk reserve........................................ 13
-------
Loans and leases, net of unearned income, allowance, and reserve....................... 122,061
Trading Assets........................................................................... 56,042
Premises and fixed assets (including capitalized leases)................................. 2,904
Other real estate owned.................................................................. 306
Investments in unconsolidated subsidiaries and associated companies...................... 232
Customers' liability to this bank on acceptances outstanding............................. 2,092
Intangible assets........................................................................ 1,532
Other assets............................................................................. 10,448
--------
TOTAL ASSETS............................................................................. $280,709
========
LIABILITIES
Deposits
In domestic offices.................................................................... $ 91,249
Noninterest-bearing.......................................................... $ 38,157
Interest-bearing............................................................. 53,092
-------
In foreign offices, Edge and Agreement subsidiaries, and IBF's......................... 70,192
Noninterest-bearing.......................................................... $ 3,712
Interest-bearing............................................................. 66,480
Federal funds purchased and securities sold under agreements to repurchase............... 35,185
Demand notes issued to the U.S. Treasury................................................. 1,000
Trading liabilities...................................................................... 42,307
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less.......................................... 4,593
With a remaining maturity of more than one year through three years.................... 260
With a remaining maturity of more than three years..................................... 146
Bank's liability on acceptances executed and outstanding................................. 2,092
Subordinated notes and debentures........................................................ 5,715
Other liabilities........................................................................ 11,373
--------
TOTAL LIABILITIES........................................................................ 264,112
--------
</TABLE>
3
<PAGE> 5
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
IN MILLIONS
--------
<S> <C> <C>
EQUITY CAPITAL
Perpetual preferred stock and related surplus............................................ 0
Common stock............................................................................. 1,211
Surplus (exclude all surplus related to preferred stock)................................. 10,283
Undivided profits and capital reserves................................................... 5,280
Net unrealized holding gains (losses) on available-for-sale securities................... (193)
Cumulative foreign currency translation adjustments...................................... 16
TOTAL EQUITY CAPITAL..................................................................... 16,597
--------
TOTAL LIABILITIES AND EQUITY CAPITAL..................................................... $280,709
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
<TABLE>
<S> <C>
WALTER V. SHIPLEY
THOMAS G. LABRECQUE DIRECTORS
WILLIAM B. HARRISON, JR.
</TABLE>
4
