<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 2, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
HARCOURT GENERAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 04-1619609
(STATE OR OTHER JURISDICTION OF 27 BOYLSTON STREET (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CHESTNUT HILL, MASSACHUSETTS 02167 IDENTIFICATION NUMBER)
(617) 232-8200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
ERIC P. GELLER, ESQ.
HARCOURT GENERAL, INC.
27 BOYLSTON STREET
CHESTNUT HILL, MASSACHUSETTS 02167
(617) 232-8200
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
Copies to:
<TABLE>
<S> <C>
EDWARD A. BENJAMIN, ESQ. JOHN W. WHITE, ESQ.
ROPES & GRAY CRAVATH, SWAINE & MOORE
ONE INTERNATIONAL PLACE WORLDWIDE PLAZA
BOSTON, MASSACHUSETTS 02110-2624 825 EIGHTH AVENUE
(617) 951-7000 NEW YORK, NEW YORK 10019-7415
(212) 474-1000
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement, as
determined by market conditions and other factors.
------------------------
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, 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. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
=======================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
AMOUNT OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE PRICE PER OFFERING REGISTRATION
TO BE REGISTERED REGISTERED UNIT(1) PRICE(1)(2) FEE(3)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities........................ $550,000,000 100% $550,000,000 $166,667
=======================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee.
(2) Indicates issue price in the case of Debt Securities sold with original
issue discount. Principal amount at maturity may be greater.
(3) An additional filing fee of $62,500 was previously paid for $200,000,000
aggregate principal amount of unsold securities registered under
Registration Statement No. 33-46148.
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
included herein also relates to a total of $200,000,000 of Debt Securities of
the Registrant that are registered under Registration Statement on Form S-3 No.
33-46148, which was declared effective on April 23, 1992, and not issued. This
Registration Statement constitutes Post-Effective Amendment No. 1 to
Registration Statement on Form S-3 No. 33-46148 pursuant to which the total
amount of Debt Securities previously registered under Registration Statement on
Form S-3 No. 33-46148 may be offered and sold, together with the securities
registered hereunder, through the use of the combined Prospectus included
herein. In the event any of such previously registered Debt Securities are
offered and sold prior to the effective date of this Registration Statement, the
amount of such Debt Securities will not be included in any Prospectus hereunder.
------------------------
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 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 REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JULY 2, 1997
PROSPECTUS
$750,000,000
HARCOURT GENERAL, INC.
DEBT SECURITIES
Harcourt General, Inc. (the "Company") intends to sell from time to time
its senior debt securities, consisting of notes, debentures or other evidences
of indebtedness (the "Debt Securities"). The Debt Securities offered by the
Company hereby will have an aggregate initial public offering price not to
exceed $750,000,000. The Debt Securities may be offered as separate series in
amounts, at prices and on terms to be determined at the time of sale and to be
set forth in Supplements to this Prospectus. The Company may sell securities to
or through underwriters or dealers, directly to other purchasers or through
agents. See "Plan of Distribution."
The Debt Securities will be unsecured and will rank equally with all other
unsecured and unsubordinated indebtedness of the Company. The terms of the Debt
Securities, including where applicable the specific designation; aggregate
principal amount; denominations; maturity; premium; interest rate (which may be
fixed or variable) and time of payment of interest; terms of redemption at the
option of the Company or the holder; terms for sinking fund payments; the
initial public offering price; terms relating to temporary or permanent global
securities; special provisions and restrictions relating to Debt Securities in
bearer form or in registered form with coupons; provisions regarding
registration of transfer or exchange; special provisions and restrictions
relating to Debt Securities; the principal, premium, if any, and interest of
which is denominated and payable in a foreign currency or currency unit; and
other terms in connection with the offering and sale of the Debt Securities in
respect of which this Prospectus is being delivered, will be set forth in an
accompanying Prospectus Supplement (the "Prospectus Supplement").
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The Debt Securities may be sold directly, through agents, underwriters or
dealers as designated from time to time or through a combination of such
methods. See "Plan of Distribution." If agents of the Company or any dealers or
underwriters are involved in the sale of the Debt Securities in respect of which
this Prospectus is being delivered, the names of such agents, dealers or
underwriters and any applicable commission or discounts will be set forth in the
Prospectus Supplement with respect to such Debt Securities.
The date of this Prospectus is , 1997
<PAGE> 3
No person is authorized in connection with any offering made hereby to give
any information or to make any representation not contained or incorporated by
reference in this Prospectus, and any information or representation not
contained or incorporated herein must not be relied upon as having been
authorized by the Company or the Underwriters. This Prospectus does not
constitute an offer to sell or the solicitation of an offer to buy any security
other than the securities covered by this Prospectus, nor does it constitute an
offer or solicitation by any person in any jurisdiction in which it is unlawful
for such person to make such an offer or solicitation. Neither the delivery of
this Prospectus at any time nor any sale made hereunder shall under any
circumstance imply that the information herein is correct as of any date
subsequent to the date hereof.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Statement of Available Information............................................ 3
Incorporation of Certain Documents by Reference............................... 3
The Company................................................................... 4
Use of Proceeds............................................................... 5
Ratio of Earnings to Fixed Charges............................................ 5
Description of Debt Securities................................................ 5
Plan of Distribution.......................................................... 10
Experts....................................................................... 11
</TABLE>
------------------------
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEBT SECURITIES,
INCLUDING STABILIZING AND SYNDICATE COVERING TRANSACTIONS. FOR A DESCRIPTION OF
THESE ACTIVITIES, SEE "PLAN OF DISTRIBUTION."
2
<PAGE> 4
STATEMENT OF AVAILABLE INFORMATION
The Company is subject to the requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports, proxy and information statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy and
information statements and other information filed by the Company can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following Regional Offices of the Commission: Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and Seven World Trade Center, Suite
1300, New York, New York 10048. Copies of such material may also be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The Commission maintains a World
Wide Web site (http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding registrants, such as the Company,
that submit electronic filings to the Commission. The Company's Common Stock and
Series A Cumulative Convertible Stock are listed on the New York Stock Exchange,
and reports, proxy and information statements and other information concerning
the Company may also be inspected at the offices of the New York Stock Exchange,
Inc. 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the Debt Securities offered hereby (the "Registration Statement"). 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. Reference is made to the Registration Statement
and to the exhibits relating thereto for further information with respect to the
Company and the Debt Securities offered hereby. Statements made in this
Prospectus as to the contents of any contract, agreement or other document
referred to are not necessarily complete; and with respect to each such
contract, agreement or other document filed, or incorporated by reference, as an
exhibit to the Registration Statement, reference is made to the exhibit for a
more complete description of the matter involved and each such statement shall
be deemed qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
October 31, 1996;
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
January 31, 1997;
(3) The Company's Quarterly Report on Form 10-Q for the quarter ended April
30, 1997; and
(4) The Company's Current Reports on Form 8-K filed on November 25, 1996
and June 19, 1997.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and
prior to the termination of the offering of the Debt Securities shall be deemed
to be incorporated by reference into this Prospectus and to be a part hereof
from the date of filing such documents. 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 to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein or in the Prospectus
Supplement 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.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon a written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference into this
Prospectus (without exhibits to such documents other than exhibits specifically
incorporated by reference into such documents). Requests for such copies should
be directed to the Corporate Relations Department of the Company, 27 Boylston
Street, Chestnut Hill, Massachusetts 02167 (telephone: (617) 232-8200).
3
<PAGE> 5
THE COMPANY
The Company is primarily engaged in the businesses of publishing,
educational services and specialty retailing. The Company also has operations in
career transition and related professional services.
Publishing and Educational Services. Harcourt Brace & Company ("Harcourt
Brace"), a wholly-owned subsidiary of the Company, is among the world's largest
publishing houses, publishing books, scholarly journals and related materials in
both print and electronic media for the educational, scientific, technical,
medical, professional and trade markets. With the acquisition of National
Education Corporation ("NEC"), Harcourt Brace will expand significantly into the
for-profit educational services market.
In the educational market, Harcourt Brace is one of the largest school and
college publishers in the world and is a leading provider of a broad range of
testing and assessment materials. Through Academic Press and W.B. Saunders,
Harcourt Brace is a leading worldwide publisher of print and electronic
scientific, technical and medical information. In the professional field,
Harcourt Brace publishes print and electronic reference guides and newsletters
for accountants and tax professionals and conducts bar review and accounting
accreditation review courses. Harcourt Brace's trade division publishes
non-fiction, fiction and children's books.
In June 1997, the Company acquired NEC, a global provider of print and
interactive multimedia based products and services for the education and
training marketplace. NEC's business is conducted primarily through three
operating entities, ICS Learning Systems, Inc. ("ICS"), Steck-Vaughn Publishing
Corporation ("Steck-Vaughn") and National Education Training Group, Inc.
("NETG"). ICS provides distance learning opportunities in vocational, degree and
professional self-studies to consumers and businesses. Steck-Vaughn publishes
supplemental educational materials used in elementary, secondary and adult
education. NETG develops, markets and distributes interactive multimedia
products to train information technology professionals and end-users of
technology. Through NEC, the Company holds approximately 82% of the issued and
outstanding shares of common stock of Steck-Vaughn. The outstanding shares of
Steck-Vaughn are traded on the Nasdaq National Market under the symbol "STEK."
Specialty Retailing. The Company owns approximately 53% of the outstanding
equity of The Neiman Marcus Group, Inc. ("NMG"), which operates Neiman Marcus
Stores, Bergdorf Goodman and NM Direct. Neiman Marcus Stores is a high-end,
specialty retailer offering women's and men's apparel, fashion accessories,
shoes, cosmetics, furs, precious jewelry, decorative accessories, fine china,
crystal and silver, gourmet food products and children's apparel and gift items.
As of the date of this Prospectus, Neiman Marcus operated 30 stores in premier
retail locations in major markets nationwide. Bergdorf Goodman is a high fashion
exclusive retailer of high quality women's and men's apparel, fashion
accessories, precious jewelry, decorative home accessories, gifts and gourmet
foods. The main Bergdorf Goodman store and Bergdorf Goodman Men are both located
in Manhattan at 58th Street and Fifth Avenue. NM Direct, the Company's direct
marketing operation, offers a mix of apparel and home furnishings complementary
to the Neiman Marcus Stores merchandise. NM Direct also publishes the Horchow
Catalogues and the world famous Neiman Marcus Christmas Catalogue. The
outstanding shares of NMG are traded on the New York Stock Exchange ("NYSE")
under the symbol "NMG."
Professional Services. The Company believes that its Drake Beam Morin
("DBM") business is a leading worldwide organizational and individual transition
consulting firm. DBM assists organizations and individuals in outplacement,
employee selection, performance evaluation, career management and transition
management.
The Company's corporate headquarters are located at 27 Boylston Street,
Chestnut Hill, Massachusetts 02167 (telephone: (617) 232-8200). The outstanding
shares of the Company's Common Stock and Series A Cumulative Convertible Stock
are traded on the NYSE under the symbols "H" and "H-A," respectively.
4
<PAGE> 6
USE OF PROCEEDS
The net proceeds from the sale of the Debt Securities will be used for
general corporate purposes, which may include capital expenditures, working
capital requirements, reduction of outstanding indebtedness and acquisitions.
The precise amount and timing of the application of such proceeds will depend
upon the funding requirements of the Company and the availability and cost of
other funds. Pending such application, the net proceeds will be invested in
short-term investment grade securities.
More detailed information concerning the use of the proceeds from any
particular offering of the Debt Securities will be contained in the Prospectus
Supplement relating to such offering.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges for
the Company for the periods indicated. These ratios were computed by dividing
earnings from continuing operations, before income taxes and fixed charges, by
fixed charges. Fixed charges consist of interest expense (including amortization
of previously capitalized interest) and approximately 33.3% of rent expense
(estimated by management to be the interest component of such rent expense).
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED OCTOBER 31, APRIL 30,
------------------------------------------- --------------------
1992 1993 1994 1995 1996(2) 1996(1) 1997(1)(2)
---- ---- ---- ---- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges... 2.3 2.9 3.1 3.3 3.5 1.7 1.5
</TABLE>
- ---------------
(1) The Company's businesses are seasonal in nature, and historically the
results of operations for these periods have not been indicative of the
results for the full year.
(2) Giving effect to the $300 million of borrowings incurred in connection with
the June 1997 acquisition of NEC and without giving effect to any earnings
arising from NEC, the pro forma ratio of earnings to fixed charges for the
six months ended April 30, 1997 and for the year ended October 31, 1996
would have been 1.2 and 2.9, respectively.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will constitute senior securities of the Company. The
Debt Securities will be issued under an indenture dated as of April 23, 1992, as
supplemented by the First Supplemental Indenture (as so supplemented, the
"Indenture"), between the Company and Bankers Trust Company, as trustee (the
"Trustee").
A copy of the Indenture is incorporated by reference as an exhibit to the
registration statement relating hereto. Certain provisions of the Indenture are
referred to and summarized below. The summaries do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all the
provisions of the Indenture. Capitalized terms not otherwise defined herein
shall have the meanings given to them in the Indenture. All section references
below are to sections of the Indenture.
GENERAL
The aggregate principal amount of Debt Securities which can be issued under
the Indenture is unlimited (Section 301). As of June 20, 1997, the Company had
an aggregate of $300,000,000 in principal amount of Debt Securities outstanding
under the Indenture. The Debt Securities to which this Prospectus relates will
be issued from time to time in amounts the proceeds of which will aggregate up
to $750,000,000 and will be offered to the public on terms determined by market
conditions at the time of sale. The Debt Securities may be issued in one or more
series with the same or various maturities and may be sold at par or at an
original issue discount. Debt Securities sold at an original issue discount may
bear no interest or interest at a rate which is below market rates. The Debt
Securities will be unsecured obligations of the Company issued in fully
5
<PAGE> 7
registered form without coupons or in bearer form with coupons. The Debt
Securities will rank as to priority of payment with all other outstanding
unsubordinated and unsecured indebtedness of the Company.
Reference is made to the Prospectus Supplement for the following terms to
the extent they are applicable to the Debt Securities: (a) designation and
denomination of and any limit upon the aggregate principal amount of such Debt
Securities, (b) the percentage of principal amount at which such Debt Securities
will be issued, (c) the date on which such Debt Securities will mature, (d) the
rate or rates (which may be fixed or floating) per annum at which such Debt
Securities will bear interest, if any, or the method of determining the same,
(e) the times at which interest will be payable, (f) the terms of any redemption
provisions at the option of the Company or any repayment provisions at the
option of the holder, (g) whether such Debt Securities are to be issued in
book-entry form, and if so, the identity of the depository and information which
respect to book-entry procedures, (h) federal income tax consequences and (i)
other terms of such Debt Securities.
The Debt Securities are obligations exclusively of the Company. Because the
operations of the Company are currently conducted through subsidiaries, the cash
flow and the consequent ability to service debt of the Company, including the
Debt Securities, are dependent upon the earnings of its subsidiaries and the
distribution of those earnings to the Company or upon loans or other payments of
funds by those subsidiaries to the Company. Although the Company exerts control
over its subsidiaries as the sole ultimate stockholder of each such subsidiary
(except NMG and Steck-Vaughn, as to which the Company is the majority
stockholder), there can be no assurance that legal constraints or other
considerations will permit the Company's subsidiaries to make available to the
Company sufficient funds to satisfy the Company's payment obligations on the
Debt Securities.
The Debt Securities will be effectively subordinated to all liabilities,
including trade payables, of the Company's subsidiaries. Any right of the
Company to receive assets of any of its subsidiaries upon its liquidation or
reorganization (and the consequent right of the holders of the Debt Securities
to participate in those assets) will be effectively subordinated to the claims
of that subsidiary's creditors (including trade creditors), except to the extent
that the Company is itself recognized as a creditor of such subsidiary in which
case the claims of the Company would still be subordinate to any security
interests in the assets of such subsidiary and any indebtedness of such
subsidiary senior to that held by the Company.
MERGERS AND SALES OF ASSETS BY THE COMPANY
The Company may not consolidate with or merge into any other Person or
convey, transfer or lease all or substantially all of its assets to any other
Person, unless, among other things, (i) the resulting, surviving or transferee
Person (if other than the Company) shall be a corporation, partnership or trust
organized and validly existing under the laws of the United States or any State
thereof or the District of Columbia and shall expressly assume the Company's
obligations under the Debt Securities and the Indenture, and (ii) the Company or
such successor Person shall not immediately thereafter be in default under the
Indenture. Upon the assumption of the Company's obligations by such a Person in
such circumstances, subject to certain exceptions, the Company shall be
discharged from all its obligations under the Debt Securities and the Indenture
(Section 801).
Other than the restrictions on liens and sale and leaseback transactions
set forth in the Indenture and described below under "Certain Covenants," the
Indenture and the Debt Securities do not contain any covenants or other
provisions designed to afford holders of Debt Securities protection in the event
of a highly leveraged transaction involving the Company or any of its
subsidiaries.
AMENDMENT AND WAIVER
Other than amendments not adverse to holders of the Debt Securities,
amendments of the Indenture or the Debt Securities may be made only with the
consent of the holders of a majority in principal amount of the series of Debt
Securities affected (acting as one class). Waivers of compliance with any
provision of the Indenture or the Debt Securities with respect to any series of
Debt Securities may be made only with the consent of the holders of a majority
in principal amount of the Debt Securities of that series. The consent of all
holders of affected Debt Securities will be required to (a) change the stated
maturity thereof, (b) reduce the
6
<PAGE> 8
principal amount thereof, (c) reduce the rate, or manner of calculating the
same, or change the time or place of payment of interest thereon, or (d) impair
the right to institute suit for the payment of principal thereof or interest
thereon (Section 902). The holders of a majority in aggregate principal amount
of Debt Securities affected may waive any past default under the applicable
Indenture and its consequences, except a default (1) in the payment of the
principal of or interest on such Debt Securities, or (2) in respect of a
provision which cannot be waived or amended without the consent of all holders
of Debt Securities affected (Sections 513 and 902).
GLOBAL SECURITIES
The Debt Securities of a series may be issued in the form of a global
security which is deposited with and registered in the name of the depository
(or a nominee of the depository) specified in the accompanying Prospectus
Supplement. So long as the depository for a global security, or its nominee, is
the registered owner of the global security, the depository or its nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such global security for all purposes under the
Indenture. Except as provided in the Indenture, owners of beneficial interests
in Debt Securities represented by a global security will not (a) be entitled to
have such Debt Securities registered in their names, (b) receive or be entitled
to receive physical delivery of certificates representing such Debt Securities
in definitive form, (c) be considered the owners or holders thereof under the
Indenture or (d) have any rights under the Indenture with respect to such global
security. Unless and until it is exchanged in whole or in part for individual
certificates evidencing the Debt Securities represented thereby, a global
security may not be transferred except as a whole by the depository for such
global security to a nominee of such depository or by a nominee of such
depository to such depository or another nominee of such depository or by the
depository or any nominee to a successor depository or any nominee of such
successor. The Company, in its sole discretion, may at any time determine that
any series of Debt Securities issued or issuable in the form of a global
security shall no longer be represented by such global security and such global
security shall be exchanged for securities in definitive form pursuant to the
Indenture (Section 204).
Upon the issuance of a global security, the depository will credit, on its
book-entry registration and transfer system, the respective principal amounts of
such global security to the accounts of participants. Ownership of beneficial
interests in a global security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the depository
(with respect to interests of participants in the depository), or by
participants in the depository or persons that may hold interests through such
participants (with respect to persons other than participants in the
depository). Ownership of beneficial interests in a global security will be
limited to participants or persons that hold interests through participants. The
specific terms of the depository arrangement with respect to a series of Debt
Securities, including the manner in which principal, premium, if any, and
interest on a global security will be payable and interests in such global
security may be exchanged, will be described in the Prospectus Supplement
relating to such series.
INFORMATION CONCERNING THE TRUSTEE
The Company may have banking relationships in the ordinary course of
business with Bankers Trust Company.
CERTAIN COVENANTS
Unless otherwise provided in the Debt Securities, the Company shall not
create or assume any lien on any Principal Property (described below) of the
Company or any Restricted Subsidiary (described below) or shares of capital
stock or indebtedness of any Subsidiary (other than any Subsidiary of NMG, until
such time as NMG shall become a Restricted Subsidiary), or permit any Restricted
Subsidiary to do so, without securing the Debt Securities of any series having
the benefit of the covenant equally and ratably with such debt for so long as
such debt shall be so secured, subject to certain exceptions specified in the
Indenture. The exceptions are: (a) with respect to any series of securities, any
lien existing on the date of issuance of the series; (b) liens existing on
property owned or leased by, or shares of capital stock or indebtedness of, an
entity at the time it becomes a Restricted Subsidiary; (c) liens existing on
property at the time of the acquisition or
7
<PAGE> 9
lease thereof by the Company or a Restricted Subsidiary; (d) liens on property
of a corporation existing at the time such corporation is merged or consolidated
with the Company or a Restricted Subsidiary or at the time of a sale, lease or
other disposition of the properties of a corporation as an entirety or
substantially as an entirety to the Company or a Restricted Subsidiary; (e)
certain liens incurred on property or assets to finance the purchase price of
capital stock, property or assets; (f) certain liens incurred on property or
assets to finance the construction, alteration or improvement thereof; (g) any
lien securing debt of a Restricted Subsidiary owing to the Company or to another
Restricted Subsidiary; (h) any lien in favor of any customer arising in respect
of performance deposits and partial, progress, advance or other payments made by
or on behalf of such customer, for goods produced or to be produced for, or
services rendered or to be rendered to, such customer in the ordinary course of
business, which lien shall not exceed the amount of such deposits or payments;
(i) mechanics', workmen's, repairmen's and similar liens arising in the ordinary
course of business; (j) liens created or resulting from any litigation or
proceedings which are being contested in good faith; liens arising out of
judgments or awards against the Company or any Restricted Subsidiary with
respect to which the Company or such Restricted Subsidiary is in good faith
prosecuting an appeal or proceeding for review; or liens incurred by the Company
or any Restricted Subsidiary for the purpose of obtaining a stay or discharge in
the course of any legal proceeding to which the Company or such Restricted
Subsidiary is a party; (k) any lien for taxes or assessments or governmental
charges or levies not yet due or delinquent or which can thereafter be paid
without penalty or which are being contested in good faith by appropriate
proceedings; any landlord's lien on property held under lease and tenants'
rights under leases; easements and any other liens of a nature similar to those
hereinabove described in this clause (k) which do not, in the opinion of the
Company, materially impair the use of such property in the operation of the
business of the Company or any Restricted Subsidiary or the value of such
property for the purposes of such business; (l) any lien which may be deemed to
result from an agreement or commitment to exchange securities of a Subsidiary
for other securities of the Company, whether or not such securities of a
Subsidiary are placed in escrow for such purpose; (m) certain liens in favor of
or required by contracts with governmental entities; (n) any extension, renewal
or replacement (or successive extensions, renewals or replacements) in whole or
in part of any lien referred to in clauses (a) through (m), so long as the
principal amount of the debt secured thereby does not exceed the principal
amount of debts so secured at the time of the extension, renewal or replacement
(with certain exceptions) and the lien is limited to all or part of the same
property subject to the lien so extended, renewed or replaced (plus improvements
on the property); and (o) any lien otherwise prohibited by such covenant that
secure indebtedness which, together with the aggregate amount of outstanding
indebtedness secured by liens otherwise prohibited by such covenant and the
value of certain sale and leaseback transactions, does not at the time of
incurrence exceed 15% of the Company's Consolidated Net Assets (Section 1006).
Unless otherwise provided in the Debt Securities, the Company shall not,
and shall not permit any Restricted Subsidiary to, enter into any sale and
leaseback transaction covering any Principal Property of the Company or such
Restricted Subsidiary unless (a) the Company or such Restricted Subsidiary would
be entitled under the provisions described above to incur debt equal to the
value of such sale and leaseback transaction, secured by liens on the facilities
to be leased, without equally and ratably securing the Debt Securities, or (b)
the Company, during the 180 days following the effective date of such sale and
leaseback transaction, applies an amount equal to the value of such sale and
leaseback transaction to the voluntary retirement of long-term indebtedness,
purchases Principal Property having a fair value at least equal to the value of
such sale and leaseback transaction or cancels Debt Securities or Funded Debt
(as defined in the Indenture) in an aggregate principal amount at least equal to
the value of such sale and leaseback transaction (Section 1007).
The Indenture defines Consolidated Net Assets as the total amount of all
assets appearing on the consolidated balance sheet of the Company and its
Restricted Subsidiaries (calculated as described in the Indenture), less total
current liabilities other than long-term liabilities due within one year.
The Indenture defines Restricted Subsidiary as any Subsidiary of the
Company (which term generally includes majority-owned direct and indirect
subsidiaries) that owns or leases a Principal Property, other than NMG and its
Subsidiaries and other than a Subsidiary that is principally engaged in the
business of owning or investing in real estate (a "Real Estate Subsidiary"),
finance, credit, leasing, financial services or other similar operations
(although the Company has no such subsidiaries as of the date of this
Prospectus). The Indenture
8
<PAGE> 10
provides, however, that NMG and any Real Estate Subsidiary will become a
Restricted Subsidiary in the event that a Restricted Subsidiary merges with,
consolidates with or transfers substantially all of its assets to NMG or such
Real Estate Subsidiary, as the case may be, or in the event that NMG or such
Real Estate Subsidiary, as the case may be, becomes a wholly-owned subsidiary of
the Company.
The Indenture defines Principal Property as all land, buildings, machinery
and equipment, and leasehold interests and improvements in respect of the
foregoing, that are located in the United States of America and that would be
reflected on the consolidated balance sheet of a Person; provided that such term
shall not include any property which the Board of Directors of the Company by
resolution determines not to be of material importance to the total business
conducted by the Company and its Subsidiaries as an entirety.
There are no other restrictive covenants contained in the Indenture.
EVENTS OF DEFAULT
Events of Default with respect to any series of Debt Securities under the
Indenture include: (a) default in the payment of any principal of, or any
premium on, such series; (b) default in the payment of any installment of
interest on such series and continuance of such default for a period of 30 days;
(c) default in the performance of any other covenant in the Indenture or in the
Debt Securities and continuance of such default for a period of 90 days after
receipt by the Company of notice of such default from the Trustee or by the
Company and the Trustee from the holders of at least 25% in principal amount of
Debt Securities of such series; (d) a default under any bond, debenture, note or
other evidence of indebtedness for money borrowed by the Company or any
Restricted Subsidiary (other than the Securities), or under any mortgage,
indenture or instrument under which there may be secured or evidenced any
indebtedness for money borrowed by the Company or any Restricted Subsidiary
(other than the Securities), whether such indebtedness now exists or shall
hereafter be created, which default shall have resulted in indebtedness in
excess of $15,000,000 becoming due and payable prior to the date on which it
would otherwise have become due and payable, without such indebtedness having
been discharged or such acceleration having been rescinded or annulled within 30
days after the date on which written notice thereof is given to the Company by
the Trustee or to the Company and the Trustee by Holders of at least 25% in
principal amount of the Securities then outstanding; or (e) certain events of
bankruptcy, insolvency or reorganization in respect of the Company (Section
501). The Trustee may withhold notice to the holders of a series of Debt
Securities of any default (except in the payment of principal of, premium on or
interest on such series of Debt Securities) if it considers such withholding to
be in the interest of Holders of the Debt Securities (Section 602). Not all
Events of Default with respect to a particular series of Debt Securities issued
under the Indenture necessarily constitute Events of Default with respect to any
other series of Debt Securities.
On the occurrence of an Event of Default with respect to a series of Debt
Securities, the Trustee or the holders of at least 25% in principal amount of
Debt Securities of such series then outstanding may declare the principal (or in
the case of Debt Securities sold at an original issue discount, the amount
specified in the terms thereof) and accrued interest thereon to be due and
payable immediately (Section 502).
Within 120 days after the end of each fiscal year, an officer of the
Company must inform the Trustee whether such officer knows of any default,
describing any such default and the status thereof (Section 1004). Subject to
provisions relating to its duties in case of default, the Trustee is under no
obligation to exercise any of its rights or powers under the Indenture at the
direction of any holders of Debt Securities unless the Trustee shall have
received a satisfactory indemnity (Section 601).
DEFEASANCE
The Indenture provides that the Company, at the Company's option, (a) 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 (b) need not comply with the
provisions of one or more of Sections 501(5), 1006 and 1007 of the Indenture
(relating to cross-acceleration, the incurrence of liens and sale and leaseback
transactions, respectively), in each case if the Company irrevocably deposits in
trust with
9
<PAGE> 11
the Trustee money or obligations of or guaranteed by the United States of
America which through the payment of interest thereon and principal thereof in
accordance with their terms will provide money, in an amount sufficient to pay
all the principal of (including any mandatory sinking fund payments) and
interest on the Debt Securities of such series on the dates such payments are
due in accordance with the terms of such Debt Securities. To exercise either
option, the Company is required to deliver to the Trustee an opinion of counsel
to the effect that the deposit and related defeasance would not cause the
holders of the Debt Securities of such series to recognize income, gain or loss
for Federal income tax purposes. To exercise the option described in clause (a)
above, such opinion must be based on a ruling of the Internal Revenue Service, a
regulation of the Treasury Department or a provision of the Internal Revenue
Code (Section 403).
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities (a) directly to purchasers, (b)
through agents, (c) to dealers as principals and (d) through underwriters.
Offers to purchase Debt Securities may be solicited directly by the Company
or by agents designated by the Company from time to time. Any such agent, who
may be deemed to be an underwriter, as that term is defined in the Securities
Act, involved in the offer or sale of the Debt Securities is named, and any
commissions payable by the Company to such agent are set forth, in the
Prospectus Supplement.
If a dealer is utilized in the sale of the Debt Securities, the Company
will sell such Debt Securities to the dealer as principal. The dealer may then
resell such Debt Securities to the public at varying prices to be determined by
such dealer at the time of resale.
If an underwriter or underwriters are utilized in the sale of the Debt
Securities, the Company will enter into an underwriting agreement with such
underwriters at the time of sale to them. The names of the underwriters and the
terms of the transaction are set forth in the Prospectus Supplement, which will
be used by the underwriters to make resales of the Debt Securities.
Agents, dealers or underwriters may be entitled under agreements which may
be entered into with the Company to indemnification by the Company against
certain civil liabilities, including liabilities under the Securities Act, and
may be customers of, engage in transactions with or perform services for the
Company in the ordinary course of business.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or agents to solicit offers by certain institutions to purchase
Debt Securities from the Company at the public offering price set forth in the
Prospectus Supplement pursuant to Delayed Delivery Contracts providing for
amounts, payment and delivery as described in the Prospectus Supplement.
Institutions with whom the contracts may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutions, but shall in all cases be
subject to the approval of the Company. A commission described in the Prospectus
Supplement will be paid to underwriters and agents soliciting purchases of Debt
Securities pursuant to contracts accepted by the Company. Such contracts will
not be subject to any conditions except that (a) the purchase by an institution
of the Debt Securities covered by its contract shall not at the time of delivery
be prohibited under the laws of any jurisdiction in the United States to which
such institution is subject and (b) the Company shall have sold and delivered to
any underwriters named in the Prospectus Supplement that portion of the issue of
Debt Securities as is set forth therein. The underwriters and agents will not
have any responsibility in respect of the validity or the performance of the
contracts.
The place and time of delivery for the Debt Securities will be set forth in
the Prospectus Supplement.
If the Company sells the Debt Securities directly, it anticipates that any
of its employees who would participate in such direct sales would be exempt from
registration as a broker under federal securities laws pursuant to the exemption
set forth in Rule 3a4-1 under the Exchange Act. The Company believes that such
exemption will be available because such employees would not be compensated in
connection with their participation in such sales by the payment of commissions
or other remuneration based either directly or
10
<PAGE> 12
indirectly on transactions in securities; such persons would primarily perform
at the end of the offering substantial duties for the Company otherwise then in
connection with transactions in securities; such persons would not have been a
broker or dealer, or an associated person of a broker or dealer, within the
preceding twelve months; and such persons would not participate in selling an
offering of securities for any issuer more than once every 12 months (as
calculated pursuant to Rule 3a4-1).
Any underwriter may engage in stabilizing and syndicate covering
transactions in accordance with Rule 104 under the Exchange Act. Rule 104
permits stabilizing bids to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of the Debt Securities in the open market after
the distribution has been completed in order to cover syndicate short positions.
Stabilizing and syndicate covering transactions may cause the price of the Debt
Securities to be higher than it would otherwise be in the absence of such
transactions. These transactions, if commenced, may be discontinued at any time.
EXPERTS
The consolidated balance sheets of the Company and the consolidated
statements of earnings, shareholders' equity and cash flows and the related
financial statement schedule incorporated in this Prospectus by reference from
the Company's Annual Report on Form 10-K have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their reports, which are incorporated
herein by reference, and have been so incorporated in reliance upon the reports
of such firm given upon their authority as experts in accounting and auditing.
The financial statements of NEC as of December 31, 1996 and 1995 and for
each of the three years in the period ended December 31, 1996 incorporated in
this Prospectus by reference to the Current Report on Form 8-K of Harcourt
General, Inc., filed on June 19, 1997, have been so incorporated in reliance on
the report (which contains an explanatory paragraph relating to the change in
NEC's method of accounting for advertising costs in 1994 and its method of
accounting for impairment of long-lived and intangible assets in 1995) of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
11
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............... $166,667
Printing.......................................................... 100,000*
Legal fees and expenses........................................... 250,000*
Accounting fees and expenses...................................... 75,000*
Rating agencies' fees............................................. 150,000*
Trustee's fees and expenses....................................... 25,000*
Miscellaneous..................................................... 33,333*
--------
Total................................................... $800,000*
========
</TABLE>
- ---------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of Delaware provides that a
corporation has the power to indemnify a director, officer, employee or agent of
the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he is or is threatened to be
made a party by reason of such position, if such person shall have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, in any criminal proceeding, if such person
had no reasonable cause to believe his conduct was unlawful; provided that, in
the case of actions brought by or in the right of the corporation, no
indemnification shall be made with respect to any matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the adjudicating court determines that such indemnification is
proper under the circumstances.
The By-laws of the Registrant contain provisions to the effect that each
director or officer of the Registrant and persons serving at the request of the
Registrant as a director, officer, employee or agent of another organization
shall be indemnified by the Registrant against liabilities and expenses in
connection with any legal proceedings to which he may be made a party or with
which he may become involved or threatened by reason of his position with the
Registrant or such other organization. The provisions include indemnification
with respect to matters covered by a settlement. Any such indemnification shall
be made only if the Board of Directors determines by a majority vote of a quorum
consisting of directors who were not parties to such action (or, if such quorum
is not obtainable, or if the Board of Directors directs, by independent legal
counsel) or by the stockholders, that indemnification is proper in the
circumstances because the person seeking indemnification has met applicable
standards of conduct. It must be determined that the director, officer or other
person acting at the request of the Registrant acted in good faith with the
reasonable belief that his action was in or not opposed to the best interests of
the Registrant, and with respect to any criminal action or proceeding, he had no
reasonable cause to believe his conduct was unlawful.
The Registrant has a directors and officers liability insurance policy
covering certain liabilities that may be incurred by its directors and officers.
II-1
<PAGE> 14
ITEM 16. EXHIBITS
EXHIBIT NO. EXHIBIT
----------- -------
1.1 Form of Underwriting Agreement
4.1 Indenture dated as of April 23, 1992 between the Registrant
and Bankers Trust Company, as trustee (1)
4.2 Form of First Supplemental Indenture between the Registrant
and Bankers Trust Company, as trustee
5.1 Opinion of Ropes & Gray
12.1 Calculation of Ratio of Earnings to Fixed Charges
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Price Waterhouse LLP
23.3 Consent of Ropes & Gray (included in Exhibit 5.1)
24.1 Power of Attorney (Appears on Page II-4 and II-5)
25.1 Statement on Form T-1 of Eligibility and Qualification of
Trustee
- ---------------
(1) Previously filed with the Company's Registration Statement on Form S-3,
effective April 23, 1992 (SEC Reg. No. 33-46148) and incorporated by
reference herein.
ITEM 17. UNDERTAKINGS
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registrant Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this 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 this Registration Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement.
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), that are incorporated
by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to
II-2
<PAGE> 15
Section 15(d) of the Exchange Act) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
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 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 Registration 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 and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, the information omitted from
the form of prospectus filed as part of a registration statement in reliance
upon Rule 430A and contained in the 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.
II-3
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Chestnut Hill, Massachusetts on July 2, 1997.
HARCOURT GENERAL, INC.
By: /s/ RICHARD A. SMITH
-----------------------------------
Richard A. Smith
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Richard
A. Smith, John R. Cook and Eric P. Geller and each of them his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
in each of them, for him and in his name, place and stead, and in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement on Form S-3 of Harcourt General, Inc. 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 requisite or necessary to be done in connection
therewith, as fully as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them or their or
his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities indicated on the 2nd day of July, 1997.
SIGNATURES TITLE
---------- -----
/s/ RICHARD A. SMITH Chairman of the Board and Chief Executive
- --------------------------------- Officer
Richard A. Smith
/s/ JOHN R. COOK Senior Vice President and Chief Financial
- --------------------------------- Officer
John R. Cook
/s/ STEPHEN C. RICHARDS Vice President and Controller
- ---------------------------------
Stephen C. Richards
II-4
<PAGE> 17
<TABLE>
<CAPTION>
SIGNATURES TITLE
- --------------------------------------------- --------------------------------------------
<S> <C>
/s/ WILLIAM F. CONNELL
- ---------------------------------------------
William F. Connell Director
/s/ GARY L. COUNTRYMAN
- ---------------------------------------------
Gary L. Countryman Director
/s/ JACK M. GREENBERG
- ---------------------------------------------
Jack M. Greenberg Director
/s/ BRIAN J. KNEZ
- ---------------------------------------------
Brian J. Knez Director
/s/ JEFFREY R. LURIE
- ---------------------------------------------
Jeffrey R. Lurie Director
/s/ LYNN MORLEY MARTIN
- ---------------------------------------------
Lynn Morley Martin Director
/s/ MAURICE SEGALL
- ---------------------------------------------
Maurice Segall Director
/s/ ROBERT A. SMITH
- ---------------------------------------------
Robert A. Smith Director
/s/ PAULA STERN
- ---------------------------------------------
Paula Stern Director
/s/ HUGO UYTERHOEVEN
- ---------------------------------------------
Hugo Uyterhoeven Director
/s/ CLIFTON R. WHARTON, JR.
- ---------------------------------------------
Clifton R. Wharton, Jr. Director
</TABLE>
II-5
<PAGE> 18
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT
---------- -------
1.1 Form of Underwriting Agreement
4.1 Indenture dated as of April 23, 1992 between the Registrant
and Bankers Trust Company, as trustee(1)
4.2 Form of First Supplemental Indenture between the Registrant
and Bankers Trust Company, as trustee
5.1 Opinion of Ropes & Gray
12.1 Calculation of Ratio of Earnings to Fixed Charges
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Price Waterhouse LLP
23.3 Consent of Ropes & Gray (included in Exhibit 5.1)
24.1 Power of Attorney (Appears on Page II-4 and II-5)
25.1 Statement on Form T-1 of Eligibility and Qualification of
Trustee
- ---------------
(1) Previously filed with the Company's Registration Statement on Form S-3,
effective April 23, 1992 (SEC Reg. No. 33-46148) and incorporated by
reference herein.
<PAGE> 1
Harcourt General, Inc.
$
Underwriting Agreement
New York, New York
_________, 199_
To the Representatives
named in Schedule I
hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
Harcourt General, Inc., a Delaware corporation (the "Company"), proposes to
sell to the underwriters named in Schedule II hereto (the "Underwriters"), for
whom you (the "Representatives") are acting as representatives, the principal
amount of its Securities identified in Schedule I hereto (the "Securities"), to
be issued under an indenture, dated as of April 23, 1992, as supplemented by the
First Supplemental Indenture, dated as of ________ , 1997 (as so supplemented,
the "Indenture", between the Company and Bankers Trust Company, as trustee
(the "Trustee"). If the firm or firms listed in Schedule II hereto include only
the firm or firms listed in Schedule I hereto, then the terms "Underwriters" and
"Representatives", as used herein, shall each be deemed to refer to such firm or
firms.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to,
and agrees with, each Underwriter as set forth below in this Section 1. Certain
terms used in this Section 1 are defined in paragraph (c) hereof.
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933 (the "Act") and has filed with the Securities and
Exchange Commission (the "Commission") a registration statement (the file
number of which is set forth in Schedule I hereto) on such Form, including
a related preliminary prospectus, for the registration under the Act of the
offering and sale of the Securities. The Company may have filed one or more
amendments thereto, including the related preliminary prospectus, each of
which has previously been furnished to you. The Company will
<PAGE> 2
2
next file with the Commission one of the following: (i) prior to
effectiveness of such registration statement, a further amendment to such
registration statement, including the form of final prospectus, (ii) a
final prospectus in accordance with Rules 430A and 424(b)(1) or (4), or
(iii) a final prospectus in accordance with Rules 415 and 424(b)(2) or (5).
In the case of clause (ii), the Company has included in such registration
statement, as amended at the Effective Date, all information (other than
Rule 430A Information) required by the Act and the rules thereunder to be
included in the Prospectus with respect to the Securities and the offering
thereof. As filed, such amendment and form of final prospectus, or such
final prospectus, shall contain all Rule 430A Information, together with
all other such required information, with respect to the Securities and the
offering thereof and, except to the extent the Representatives shall agree
to a modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other substantive changes (beyond that contained
in the latest Preliminary Prospectus) as the Company has advised you, prior
to the Execution Time, will be included or made therein. If the
Registration Statement contains the undertaking specified by Regulation S-K
Item 512(a), the Registration Statement, at the Execution Time, meets the
requirements set forth in Rule 415(a)(1)(x).
(b) On the Effective Date, the Registration Statement did or will, and
when the Prospectus is first filed (if required) in accordance with Rule
424(b) and on the Closing Date, the Prospectus (and any supplements
thereto) will, comply in all material respects with the applicable
requirements of the Act, the Securities Exchange Act of 1934 (the "Exchange
Act") and the Trust Indenture Act of 1939 (the "Trust Indenture Act") and
the respective rules thereunder; on the Effective Date, the Registration
Statement did not or will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; on the
Effective Date and on the Closing Date the Indenture did or will comply in
all material respects with the requirements of the Trust Indenture Act and
the rules thereunder; and, on the Effective Date, the Prospectus, if not
filed pursuant to Rule 424(b), did not or will not, and on the date of any
filing pursuant to Rule 424(b) and
<PAGE> 3
3
on the Closing Date, the Prospectus (together with any supplement thereto)
will not, include any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that the Company makes no representations or warranties
as to (i) that part of the Registration Statement which shall constitute
the Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information contained in or
omitted from the Registration Statement or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
through the Representatives or their counsel specifically for inclusion in
the Registration Statement or the Prospectus (or any supplement thereto).
(c) The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "the Effective Date" shall mean each date
that the Registration Statement and any post-effective amendment or
amendments thereto and any Rule 462(b) Registration Statement became or
become effective. "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto. "Preliminary
Prospectus" shall mean any preliminary prospectus referred to in paragraph
(a) above and any preliminary prospectus included in the Registration
Statement at the Effective Date that omits Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the Securities that is
first filed pursuant to Rule 424(b) after the Execution Time or, if no
filing pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration
Statement at the Effective Date. "Registration Statement" shall mean the
registration statement referred to in paragraph (a) above, including
incorporated documents, exhibits and financial statements, as amended at
the Execution Time (or, if not effective at the Execution Time, in the form
in which it shall become effective) and, in the event any post-effective
amendment thereto or any Rule 462(b) Registration Statement becomes
effective prior to the Closing Date (as hereinafter defined), shall also
mean such registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be. Such term shall include any
Rule 430A Information deemed to be included therein at the Effective Date
as provided by Rule 430A. "Rule 415",
<PAGE> 4
4
"Rule 424", "Rule 430A", "Rule 462(b)", and "Regulation S-K" refer to such
rules or regulation under the Act. "Rule 430A Information" means
information with respect to the Securities and the offering thereof
permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A. "Rule 462(b) Registration Statement" shall
mean a registration statement and any amendments thereto filed pursuant to
Rule 462(b) relating to the offering covered by the initial registration
statement. Any reference herein to the Registration Statement, a
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of such
Preliminary Prospectus or the Prospectus, as the case may be; and any
reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Date of the
Registration Statement, or the issue date of any Preliminary Prospectus or
the Prospectus, as the case may be, deemed to be incorporated therein by
reference.
2. PURCHASE AND SALE. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company agrees to
sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company at a purchase price set forth in Schedule
I hereto, the principal amount of the Securities set forth opposite such
Underwriter's name in Schedule II hereto.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Securities shall
be made on the date and at the time specified in Schedule I hereto (or at such
time on such later date not later than three business days after such specified
date as the Representatives shall designate), which date and time may be
postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the
Securities being herein called the "Closing Date"). Delivery of the Securities
shall be made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same day funds to an account specified by
the Company.
<PAGE> 5
5
Delivery of the Securities shall be made through the facilities of The
Depositary Trust Company unless the Representatives and the Company otherwise
agree.
4. OFFERING BY UNDERWRITERS. It is understood that the several Underwriters
propose to offer the Securities for sale to the public as set forth in the
Prospectus.
5. AGREEMENTS. The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the Registration
Statement or supplement to the Prospectus or any Rule 462(b) Registration
Statement unless the Company has furnished you a copy for your review prior
to filing and will not file any such proposed amendment or supplement to
which you reasonably object. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectus is otherwise required under Rule 424(b),
the Company will cause the Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Representatives of such timely
filing. The Company will promptly advise the Representatives (i) when the
Registration Statement, if not effective at the Execution Time, shall have
become effective, (ii) when the Prospectus, and any supplement thereto,
shall have been filed (if required) with the Commission pursuant to Rule
424(b) or when any Rule 462(b) Registration Statement shall have been filed
with the Commission, (iii) when, prior to termination of the offering of
the Securities, any amendment to the Registration Statement shall have been
filed or become effective, (iv) of any request by the Commission for any
amendment of the Registration Statement or any Rule 462(b) Registration
Statement, or for any supplement to the Prospectus or for any additional
information, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (vi) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
<PAGE> 6
6
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act or the Exchange Act or the respective rules thereunder, the Company
promptly will prepare and file with the Commission, subject to the second
sentence of paragraph (a) of this Section 5, an amendment or supplement
which will correct such statement or omission or effect such compliance.
(c) As soon as practicable, the Company will make generally available
to its security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to such other Underwriter a copy
of the Registration Statement (without exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by the
Act, as many copies of each Preliminary Prospectus and the Prospectus and
any supplement thereto as the Representatives may reasonably request. The
Company will pay the expenses of printing or other production of all
documents relating to the offering.
(e) The Company will arrange for the qualification of the Securities
for sale under the laws of such jurisdictions as the Representatives may
designate, will maintain such qualifications in effect so long as required
for the distribution of the Securities, and will arrange for the
determination of the legality of the Securities for purchase by
institutional investors; PROVIDED that in no event shall the Company be
obligated to qualify to do
<PAGE> 7
7
business in any jurisdiction where it is not now so qualified or take any
action that would subject it to service of process in suits (other than
those arising out of the offer and sale of the Securities) in any
jurisdiction in which it is not now so subject.
(f) The Company will not, until the date set forth in Schedule I
hereto, without prior written consent of the Representatives, offer, sell
or contract to sell, or otherwise dispose of (or enter into any transaction
which is designed to, or could be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to
cash settlement or otherwise) by the Company or any affiliate of the
Company or any person in privity with the Company or any affiliate of the
Company), directly or indirectly, or announce the offering of, any debt
securities issued or guaranteed by the Company and having a maturity of
more than one year from their date of issuance (other than the Securities
or other securities covered by the Registration Statement).
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the Underwriters to purchase the Securities shall be subject to the accuracy of
the representations and warranties on the part of the Company contained herein
as of the Execution Time and the Closing Date, to the accuracy of the statements
of the Company made in any certificates pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 p.m. New York City time on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 p.m. New
York City time on such date or (ii) 9:30 a.m. on the business day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 p.m. New York City time on such date; if
filing of the Prospectus, or any supplement thereto, is required pursuant
to Rule 424(b), the Prospectus, and any supplement, will be filed in the
manner and within the time period required by Rule 424(b); and no stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for the purpose shall have been instituted
or threatened.
<PAGE> 8
8
(b) The Company shall have furnished to the Representatives the
opinion of Eric P. Geller, Senior Vice President and General Counsel of the
Company, dated the Closing Date, to the effect that:
(i) each of the Company, National Education Corporation, Harcourt
Brace & Company and The Neiman Marcus Group, Inc. (individually a
"Subsidiary" and collectively the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own its
properties and conduct its business as described in the Prospectus,
and is duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction which requires
such qualification wherein it owns or leases material properties or
conducts material business (except in those jurisdictions in which the
failure to be so qualified or in good standing would not have a
material adverse effect on the business or financial condition of the
Company and would not (after qualification) preclude the Company from
enforcing claims against any party in the courts of such
jurisdiction);
(ii) all of the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in
the Prospectus, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company either directly or through
wholly owned subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel, any other security
interests, claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization is as set
forth in the Prospectus; and the Securities conform in all material
respects to the description thereof contained in the Prospectus;
(iv) the Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust
Indenture Act, and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms (subject,
as to enforcement of remedies, to applicable bankruptcy,
reorganization,
<PAGE> 9
9
insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to equitable principles
which may limit the right to obtain the remedy of specific performance
or other injunctive relief); and the Securities have been duly
authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
Underwriters pursuant to this Agreement, will constitute legal, valid
and binding obligations of the Company entitled to the benefits of the
Indenture;
(v) to the best knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or
any of its Subsidiaries of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the
Prospectus, and there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit, which is not described or
filed as required;
(vi) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the best knowledge
of such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened and the Registration
Statement and the Prospectus (other than the financial statements and
other financial and statistical information contained therein as to
which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act, the
Exchange Act and the Trust Indenture Act and the respective rules
thereunder; and such counsel has no reason to believe (based upon his
responsibilities as an officer of the Company and his participation in
the preparation of the Registration Statement) that at the Effective
Date the Registration Statement contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to
<PAGE> 10
10
make the statements therein not misleading or that the Prospectus
includes any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading
(provided that such counsel need make no such statement regarding any
financial or statistical information or any information relating to
the Underwriters or the Trustee);
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
(viii) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated herein, except such as have been obtained
under the Act and the Trust Indenture Act and such as may be required
under the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the Underwriters and
such other approvals (specified in such opinion) as have been
obtained;
(ix) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation of, or constitute a default under any law or the
charter or by-laws of the Company or the terms of any indenture or
other agreement or instrument material to the Company and known to
such counsel and to which the Company or any of its subsidiaries is a
party or bound or any judgment, order or decree known to such counsel
to be applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or any of its
subsidiaries; and
(x) to the best of such counsel's knowledge, no holders of
securities of the Company have rights to the registration of such
securities under the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the States of Delaware and
<PAGE> 11
11
Massachusetts or the United States, to the extent they deem proper and specified
in such opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the Underwriters
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials. References to the
Prospectus in this paragraph (b) include any supplements thereto at the Closing
Date.
(c) The Company shall have furnished to the Representatives the
opinion of Ropes & Gray, counsel for the Company, dated the Closing Date,
to the effect that:
(i) the Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust
Indenture Act, and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms (subject,
as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and to
equitable principles which may limit the right to obtain the remedy of
specific performance or other injunctive relief); and the Securities
have been duly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered to and
paid for by the Underwriters pursuant to this Agreement, will
constitute legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture;
(ii) the Registration Statement has become effective under the
Act; any required filing of the Prospectus and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the best knowledge
of such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened and the Registration
Statement and the Prospectus (other than the financial statements and
other financial and statistical information contained therein as to
which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act, the
Exchange Act and the Trust Indenture Act and the respective rules
thereunder; and such counsel has no reason
<PAGE> 12
12
to believe (based upon such counsel's participation in the preparation
of the Registration Statement) that at the Effective Date the
Registration Statement contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or
that the Prospectus includes any untrue statement of a material fact
or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading (provided that such counsel need make no such statement
regarding any financial or statistical information or any information
relating to the Underwriters or the Trustee); and
(iii) this Agreement has been duly authorized, executed and
delivered by the Company.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of Massachusetts or
the United States, to the extent they deem proper and specified in such opinion,
upon the opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters and (B) as to
matters of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials. References to the Prospectus in
this paragraph (c) include any supplements thereto at the Closing Date.
(d) The Representatives shall have received from Cravath, Swaine &
Moore, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Securities, the
Indenture, the Registration Statement, the Prospectus (together with any
supplement thereto) and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel
such documents as they reasonably request for the purpose of enabling them
to pass upon such matters.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or a
President and the principal financial or accounting officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Prospectus, any
supplement to the Prospectus and this Agreement and that:
<PAGE> 13
13
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Prospectus (exclusive of
any supplement thereto), there has been no material adverse change in
the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto filed after the Rule 424(b)
Prospectus is first filed after the Execution Time).
Such certificates shall be deemed to be representations of the Company and
not of such officers personally.
(f) At the Execution Time and at the Closing Date, Deloitte & Touche
LLP shall have furnished to the Representatives a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form
and substance satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Act and the Exchange Act
and the respective applicable published rules and regulations thereunder
that they have performed a review of the unaudited interim financial
information of the Company for the -month period ended ,
19 , and as at , 19 [insert in each case the date of most
recent unaudited financial statements included in the Registration
Statement and Prospectus], in accordance with Statement on Accounting
Standards No. 71 and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules and
<PAGE> 14
14
pro forma financial statements included or incorporated in the
Registration Statement and the Prospectus and reported on by them
comply in form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; their
review, in accordance with standards established under Statement on
Auditing Standards No. 71, of the unaudited interim financial
information for the -month period ended , 19 , and as at
, 19 [insert in each case the date of most recent unaudited
financial statements included in the Registration Statement and
Prospectus], [as indicated in their report dated , 19 ;
carrying out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which would
not necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of the
meetings of the stockholders, directors and executive, compensation
and audit committees of the Company and the Subsidiaries; and
inquiries of certain officials of the Company who have responsibility
for financial and accounting matters of the Company and its
subsidiaries as to transactions and events subsequent to the date of
the most recent audited financial statements in or incorporated in
the Registration Statement and Prospectus, nothing came to their
attention which caused them to believe that:
(1) any unaudited financial statements included or incorporated
in the Registration Statement and the Prospectus do not
comply in form in all material respects with applicable
accounting requirements and with the published rules and
regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on
Form 10-Q under the Exchange Act; and said unaudited
financial statements are not in conformity with generally
accepted accounting principles applied on a basis
<PAGE> 15
15
substantially consistent with that of the audited financial
statements included or incorporated in the Registration
Statement and the Prospectus;
(2) with respect to the period subsequent to the date of the
most recent financial statements (other than capsule
information); audited or unaudited, in or incorporated in
the Prospectus, there were any changes, at a specified date
not more than five business days prior to the date of the
letter, in the long-term liabilities of the Company and its
subsidiaries or capital stock of the Company, or decreases
in the shareholders' equity of the Company as compared with
the amounts shown on the most recent consolidated balance
sheet included or incorporated in the Registration Statement
and the Prospectus, or for the period from the date of the
most recent financial statements included or incorporated in
the Prospectus to such specified date there were any
decreases, as compared with the corresponding period in the
preceding year, in total revenues or earnings from
continuing operations before income taxes and minority
interest or in total or per share amounts of net income of
the Company and its subsidiaries, except in all instances
for changes or decreases set forth in such letter, in which
case the letter shall be accompanied by an explanation by
the Company as to the significance thereof unless said
explanation is not deemed necessary by the Representatives;
(3) the information included in the Registration Statement and
Prospectus in response to Regulation S-K, Item 301 (Selected
Financial Data), Item 302 (Supplementary Financial
Information), Item 402 (Executive Compensation) and Item
503(d) (Ratio of Earnings to Fixed Charges) is not in
conformity with the applicable disclosure requirements of
Regulation S-K; and
<PAGE> 16
16
(4) the unaudited amounts included in any capsule information do
not agree with the amounts set forth in the unaudited
financial statements for the same periods or were not
determined on a basis substantially consistent with that of
the corresponding amounts in the audited financial
statements included or incorporated in the Registration
Statement and the Prospectus;
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Prospectus and in Exhibit
12 to the Registration Statement, including the information included
or incorporated in Items 1, 2, 6, 7 and 11 of the Company's Annual
Report on Form 10-K, incorporated in the Registration Statement and
the Prospectus, and the information included in the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" included or incorporated in the Company's Quarterly
Reports on Form 10-Q, incorporated in the Registration Statement and
the Prospectus, agrees with the accounting records of the Company and
its subsidiaries, excluding any questions of legal interpretation;
(iv) on the basis of a reading of the unaudited pro forma
financial statements included or incorporated in the Registration
Statement and the Prospectus (the "pro forma financial statements");
carrying out certain specified procedures; inquiries of certain
officials of the Company, National Education Corporation, Harcourt
Brace & Company, and The Neiman Marcus Group, Inc. who have
responsibility for financial and accounting matters; and proving the
arithmetic accuracy of the application of the pro forma adjustments to
the historical amounts in the pro forma financial statements, nothing
came to their attention which caused them to believe that the pro
forma financial statements do not comply in form in all material
respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments
<PAGE> 17
17
have not been properly applied to the historical amounts in the
compilation of such statements.
References to the Prospectus in this paragraph (f) include any
supplement thereto at the date of the letter.
(g) At the Execution Time and at the Closing Date, Price Waterhouse
LLP shall have furnished to the Representatives a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form
and substance satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Act and the Exchange Act
and the respective applicable published rules and regulations thereunder
and stating in effect that in their opinion the audited financial
statements and financial statement schedules of National Education
Corporation included or incorporated in the Registration Statement and the
Prospectus and reported on by them comply in form in all material respects
with the applicable accounting requirements of the Act and the Exchange Act
and the related published rules and regulations.
References to the Prospectus in this paragraph (g) include any
supplement thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in
the letter or letters referred to in paragraph (f) of this Section 6 or
(ii) any change, or any development involving a prospective change, in or
affecting the business or properties of the Company and its subsidiaries,
taken as a whole, the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the judgment of the Representatives, so material
and adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Registration
Statement (exclusive of any amendment thereof) and the Prospectus
(exclusive of any supplement thereto).
(i) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice
<PAGE> 18
18
given of any intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate the direction of
the possible change.
(j) Prior to the Closing Date, the Company shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancelation shall be given to the Company in writing or by telephone or telecopy
confirmed in writing.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 6 hereof is not satisfied, or because
of any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all reasonable out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to indemnify
and hold harmless each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls any Underwriter within
the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or the Prospectus, or in any
<PAGE> 19
19
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives or
their counsel specifically for inclusion therein. This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the Registration
Statement, and each person who controls the Company within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity from
the Company to each Underwriter, but only with reference to written information
relating to such underwriter furnished to the Company by or on behalf of such
Underwriter through the Representatives or their counsel specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. The Company acknowledges that the statements set forth in
the last paragraph of the cover page and under the heading "Underwriting" in any
Preliminary Prospectus and the Prospectus constitute the only information
furnished in writing by or on behalf of the several Underwriters for inclusion
in any Preliminary Prospectus or the Prospectus, and you, as the
Representatives, confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a), (b) or (d) under this Section 8 unless and to the
extent it did not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights or defenses and (ii)
will not, in any event, relieve the indemnifying party
<PAGE> 20
20
from any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a), (b) or (d) under this Section 8. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); PROVIDED, HOWEVER, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of one such separate counsel if (i) the use of counsel chosen by
the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential defendants in,
or targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which conflict with those available to the indemnifying party (in which
case the indemnifying party shall only be responsible for the fees, costs and
expenses of separate counsel to the extent they relate to such conflicting legal
defenses), (iii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such action or
(iv) the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding. An indemnifying party shall not be liable for any settlement
of any action, claim, suit or proceeding effected without its consent.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any
<PAGE> 21
21
reason, the Company and the Underwriters agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company and by the Underwriters from the
offering of the Securities; PROVIDED, HOWEVER, that in no case shall any
Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Securities
purchased by such underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Underwriters shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and of the Underwriters in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses), and
benefits received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Prospectus. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information provided
by the Company or the Underwriters. The Company and the Underwriters agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall fail to
purchase and pay for any of the
<PAGE> 22
22
Securities agreed to be purchased by such Underwriter or Underwriters hereunder
and such failure to purchase shall constitute a default in the performance of
its or their obligations under this Agreement, the remaining Underwriters shall
be obligated severally to take up and pay for (in the respective proportions
which the principal amount of Securities set forth opposite their names in
Schedule II hereto bears to the aggregate principal amount of Securities set
forth opposite the names of all the remaining Underwriters) the securities which
the defaulting Underwriter or Under writers agreed but failed to purchase;
PROVIDED, HOWEVER, that in the event that the aggregate principal amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate principal amount of Securities set
forth in Schedule II hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any
nondefaulting Underwriter or the Company. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding seven days, as the Representatives shall
determine in order that the required changes in the Registration Statement and
the Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to the Company and any nondefaulting Underwriter for
damages occasioned by its default hereunder.
10. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if on or after the
Execution Time and prior to such time (i) trading in the Company's Common Stock
shall have been suspended by the Commission or the New York Stock Exchange or
trading in securities generally on the New York Stock Exchange shall have been
suspended or limited or minimum prices shall have been established on such
Exchange, (ii) a banking moratorium shall have been declared either by Federal
or New York State authorities or (iii) there shall have occurred any outbreak or
escalation of hostility, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which on financial
markets in any case referred to in clause (i), (ii) or (iii) is such as to make
it, in the judgment of the Representatives, impracticable or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Prospectus (exclusive or any supplement thereto filed after the Rule 424(b)
Prospectus is first filed after the Execution Time).
<PAGE> 23
23
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of the Underwriters set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter or the Company or any of the officers,
directors or controlling persons referred to in Section 8 hereof, and will
survive delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancelation of this Agreement.
12. NOTICES. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Representatives, will be mailed, delivered
or telecopied and confirmed to them, at the address specified in Schedule I
hereto; or, if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to it at 27 Boylston Street, Chestnut Hill, Massachusetts, 02167,
attention of the General Counsel.
13. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 8 hereof, and no other
person will have any right or obligation hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, which together shall constitute but one instrument.
16. HEADINGS. The section headings used herein are for convenience only and
shall not affect the construction hereof.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us
<PAGE> 24
24
the enclosed duplicate hereof, whereupon this letter and your acceptance shall
represent a binding agreement among the Company and the several Underwriters.
Very truly yours,
Harcourt General, Inc.
By:
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
By:
By:
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule II to the foregoing
Agreement.
<PAGE> 25
SCHEDULE I
Underwriting Agreement dated:
Registration Statement No. 333-
Representatives:
Title, Purchase Price and Description of Securities:
Title:
Principal amount:
Purchase price:
Sinking fund provisions:
Redemption provisions:
Other provisions:
Closing Date, Time and Location:
Type of Offering; Delayed Offering.
Delayed Delivery Arrangements:
Fee:
Minimum principal amount of each contract:
Maximum aggregate principal amount of all contracts:
Modification of items to be covered by the letters from Deloitte & Touche LLP
and Price Waterhouse LLP delivered pursuant to Section 6(f) and Section
6(g), respectively:
Other Terms:
Date Specified in Section 5(f): [3 business days after the Closing Date]
<PAGE> 26
SCHEDULE II
<TABLE>
<CAPTION>
Principal Amount
of Securities To
Underwriters Be Purchased
- ------------ ------------
<S> <C>
$
Total..................................
</TABLE>
<PAGE> 1
FIRST SUPPLEMENTAL INDENTURE (this "First Supplemental
Indenture"), dated as of July , 1997, among HARCOURT GENERAL, INC.
(formerly known as General Cinema Corporation), a Delaware corporation
(the "Company"), and Bankers Trust Company, a banking corporation
organized and existing under the laws of the State of New York, as
trustee (the "Trustee").
WHEREAS, the Company has executed and delivered to the Trustee an Indenture
(the "Indenture"), dated as of April 23, 1992, providing for the issuance and
sale by the Company from time to time of its senior debt securities (the
"Securities"), which term shall include any Securities issued under the
Indenture after the date hereof;
WHEREAS, clause (3) of Section 901 of the Indenture permits the Company,
when authorized by a resolution of the Board of Directors of the Company, and
the Trustee, at any time and from time to time, to enter into one or more
indentures supplemental to the Indenture, in form satisfactory to the Trustee,
for the purpose of making any other provision with respect to matters or
questions arising under the Indenture and the last paragraph in Section 901
provides that, with respect to clause (3) of Section 901, no supplemental
indenture shall adversely affect the interest of the Holders of Securities of
any series;
WHEREAS, all terms used in this First Supplemental Indenture which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture;
WHEREAS, the Company has requested that the Trustee execute and deliver
this First Supplemental Indenture; and
WHEREAS, all requirements necessary to make this First Supplemental
Indenture a valid instrument in accordance with its terms and to make the
amendments provided for herein have been fulfilled, and the execution and
delivery of this First Supplemental Indenture has been duly authorized in all
respects.
NOW THEREFORE, the Company and the Trustee hereby agree that the following
Sections of this First Supplemental Indenture supplement the Indenture with
respect to Securities issued thereunder:
<PAGE> 2
2
SECTION 1. DEFINITIONS. Capitalized terms used herein and not defined
herein have the meanings ascribed to such terms in the Indenture.
SECTION 2. AMENDMENT TO "CONSOLIDATED NET ASSETS" DEFINITION. With respect
to any series of Securities issued on or after the date hereof, the definition
of "Consolidated Net Assets" in Section 101 is hereby deleted and the following
is substituted in lieu thereof:
"'Consolidated Net Assets' means the total amount of all assets
appearing on the consolidated balance sheet of the Company and its
Restricted Subsidiaries (at their net book values, after deducting
related depreciation, amortization and all other valuation reserves
which have been set aside in connection with the business conducted
and which are reflected on the aforementioned consolidated balance
sheet), less total current liabilities other than long-term
liabilities due within one year."
SECTION 3. AMENDMENT TO "RESTRICTED SUBSIDIARY" DEFINITION. With respect to
any series of Securities issued on or after the date hereof, the definition of
"Restricted Subsidiary" in Section 101 is hereby deleted and the following is
substituted in lieu thereof:
"'Restricted Subsidiary' means any Subsidiary of the Company
(other than Neiman Marcus and other than a Subsidiary that is
principally engaged in the business of owning or investing in real
estate (a 'Real Estate Subsidiary'), finance, credit, leasing,
financial services or other similar operations, or any combination
thereof), which itself, or with one or more other Restricted
Subsidiaries, owns or leases a Principal Property; PROVIDED, HOWEVER,
that in the event that (a) any Restricted Subsidiary, in a single
transaction or through a series of related transactions, shall (i) be
consolidated with or merge with or into Neiman Marcus or any of its
subsidiaries or a Real Estate Subsidiary or any of its subsidiaries or
(ii) transfer (by lease, assignment, sale or otherwise) all or
substantially all of its properties and assets to Neiman Marcus or a
Real Estate Subsidiary or (b) Neiman Marcus or a Real Estate
Subsidiary shall become a wholly owned subsidiary of the Company, then
the term 'Restricted Subsidiary' shall include Neiman Marcus or a Real
Estate Subsidiary, as applicable."
SECTION 4. AMENDMENT TO LIMITATION ON LIENS. With respect to any series of
Securities issued on or after
<PAGE> 3
3
the date hereof, Section 1006 is hereby deleted and the following is substituted
in lieu thereof:
"SECTION 1006. LIMITATION ON LIENS. The Company shall not create
or assume any Lien upon any Principal Property of the Company or any
Restricted Subsidiary or shares of capital stock or indebtedness of
any Subsidiary (other than any Subsidiary of Neiman Marcus until such
time as Neiman Marcus shall become a Restricted Subsidiary) to secure
any debt of any Person, or permit any Restricted Subsidiary so to do,
without making effective provision whereby the Securities then
outstanding and having the benefit of this Section shall be secured by
the Lien equally and ratably with such debt for so long as such debt
shall be so secured, except that the foregoing shall not prevent the
Company or any Restricted Subsidiary from creating or assuming Liens
of the following character:
(1) with respect to any series of Securities, any Lien
existing on the date of issuance of the series;
(2) any Lien existing on property owned or leased by, or
shares of capital stock or indebtedness of, a Person at the time
it becomes a Restricted Subsidiary;
(3) any Lien existing on property at the time of the
acquisition or lease thereof by the Company or a Restricted
Subsidiary;
(4) any Lien on property of a corporation existing at the
time such corporation is merged or consolidated with the Company
or a Restricted Subsidiary or at the time of a sale, lease or
other disposition of the properties of a corporation as an
entirety or substantially as an entirety to the Company or a
Restricted Subsidiary;
(5) any Lien to secure any debt on property or assets
incurred prior to, at the time of, or within 180 days after, or
pursuant to financing arrangements for which a firm commitment is
made by a bank, insurance company or other lender or investor
(not including the Company or any Restricted Subsidiary) within
180 days after, the acquisition of capital stock, property or
assets for the purpose of financing all or any part of the
purchase price thereof;
<PAGE> 4
4
(6) any Lien to secure any debt incurred prior to, at the
time of, or within 180 days after, or pursuant to financing
arrangements for which a firm commitment is made by a bank,
insurance company or other lender or investor (not including the
Company or any Restricted Subsidiary) within 180 days after, the
completion of the construction and commencement of commercial
operation, alteration, repair or improvement of property or
assets for the purpose of financing all or any part of the cost
thereof;
(7) any Lien securing debt of a Restricted Subsidiary owing
to the Company or to another Restricted Subsidiary;
(8) any Lien in favor of any customer arising in respect of
performance deposits and partial, progress, advance or other
payments made by or on behalf of such customer for goods produced
or to be produced for or services rendered or to be rendered to
such customer in the ordinary course of business, which Lien
shall not exceed the amount of such deposits or payments;
(9) mechanics', workman's, repairman's, materialman's,
carriers' and other similar Liens arising in the ordinary course
of business;
(10) any Lien created by or resulting from any litigation or
proceedings which are being contested in good faith by
appropriate proceedings; any Lien arising out of a judgment or
award against the Company and/or one or more Restricted
Subsidiaries with respect to which the Company and/or such
Restricted Subsidiary or Subsidiaries are in good faith
prosecuting an appeal or proceedings for review; or any Lien
incurred by the Company and/or Restricted Subsidiaries for the
purpose of attaining a stay or discharge in the course of any
legal proceedings to which the Company and/or Restricted
Subsidiary or Subsidiaries are a party; or
(11) any Lien for taxes or assessments or governmental
charges or levies not yet due or delinquent, or which can
thereafter be paid without penalty or which are being contested
in good faith by appropriate proceedings; any landlord's Lien on
property held under lease and tenants' rights under leases;
easements and any
<PAGE> 5
5
other liens of a nature similar to those hereinabove described in
this clause (11) which do not, in the opinion of the Company,
materially impair the use of such property in the operation of
the business of the Company or any Restricted Subsidiary or the
value of such property for the purposes of such business;
(12) any Lien which may be deemed to result from an
agreement or commitment to exchange securities of a Subsidiary
for other securities of the Company, whether or not such
securities of a Subsidiary are placed in escrow for such purpose;
(13) any Lien in favor of the United States of America or
any State thereof or any other country, or any agency,
instrumentality or political subdivision or any of the foregoing,
to secure partial, progress, advance or other payments or
performance pursuant to the provisions of any contract or
statute, or any Liens securing industrial development, pollution
control, or similar revenue bonds;
(14) any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any
Lien referred to in clauses (1) through (13) above, so long as
the principal amount of the debt secured thereby does not exceed
the principal amount of debt so secured at the time of the
extension, renewal or replacement (except that, where an
additional principal amount of debt is incurred to provide funds
for the completion of a specific project, the additional
principal amount, and any related financing costs, may be secured
by the Lien as well) and the Lien is limited to all or part of
the same property subject to the Lien so extended, renewed or
replaced (plus improvements on the property); and
(15) any Lien not permitted by clauses (1) through (14)
above securing debt which, together with the aggregate
outstanding principal amount of all other debt of the Company and
its Restricted Subsidiaries which would otherwise be subject to
the foregoing restrictions and the aggregate Value of existing
Sale and Leaseback Transactions which would be subject to the
restrictions of Section 1007 but for this clause (15), does not
at the
<PAGE> 6
6
time of incurrence exceed 15% of Consolidated Net Assets."
SECTION 5. THIS FIRST SUPPLEMENTAL INDENTURE. Nothing in this First
Supplemental Indenture shall apply to, or alter the rights and remedies
conferred by the Indenture upon, any Securities created and issued prior to the
date hereof. With respect to any series of Securities issued on or after the
date hereof, this First Supplemental Indenture shall be construed as
supplemental to the Indenture and shall form a part of it, and the Indenture is
hereby incorporated by reference herein and each is hereby ratified, approved
and confirmed.
SECTION 6. GOVERNING LAW. THIS FIRST SUPPLEMENTAL INDENTURE SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. COUNTERPARTS. This First Supplemental Indenture may be executed
in any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 8. HEADINGS. The headings of this First Supplemental Indenture are
for convenience only and shall not affect the construction hereof.
SECTION 9. SEPARABILITY. In case any provision in this First Supplemental
Indenture or in the Securities shall be invalid, illegal, or unenforceable, the
validity, legality or enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed by their respective authorized officers as of the
date first written above.
HARCOURT GENERAL, INC.,
by
-------------------------------
Name:
Title:
<PAGE> 7
7
BANKERS TRUST COMPANY,
as Trustee,
by
-------------------------------
Name:
Title:
<PAGE> 1
Exhibit 5.1
July 2, 1997
Harcourt General, Inc.
27 Boylston Street
Chestnut Hill, Massachusetts 02167
Ladies and Gentlemen:
This opinion is furnished to you in connection with a registration
statement on Form S-3 (the "Registration Statement"), filed with the Securities
and Exchange Commission under the Securities Act of 1933, as amended, for the
registration of debt securities (the "Debt Securities") of Harcourt General,
Inc., a Delaware corporation (the "Company"), that may be offered and sold by
the Company.
The Registration Statement registers the offer and sale of Debt
Securities having an aggregate public offering price of up to $550 million and
as a result of constituting Post-Effective Amendment No. 1 to Registration
Statement No. 33-46148 (the "Prior Registration Statement"), permits the offer
and sale of additional debt securities having an aggregate public offering price
of up to an additional $200 million in respect of unsold debt securities
previously registered under the Prior Registration Statement. The Debt
Securities are to be issued under an Indenture dated as of April 23, 1992 (the
"Indenture") between the Company and Bankers Trust Company, as trustee (the
"Trustee"). Certain terms of the Debt Securities remain to be fixed in
accordance with the resolutions of the Board of Directors of the Company.
We have acted as counsel for the Company in connection with the
proposed issue and sale of the Debt Securities, and the preparation and filing
of the Registration Statement. For purposes of this opinion, we have examined
and relied upon the information set forth in the Registration Statement and such
other documents, records, certificates and other instruments as we have deemed
necessary.
We express no opinion as to the applicability of, compliance with or
effect of federal law or the law of any jurisdiction other than The Commonwealth
of Massachusetts and the General Corporation Law of the State of Delaware.
Based upon the foregoing, we are of the opinion that:
When the definitive terms of each Debt Security have been determined
and approved by authorized officers of the Company in accordance with the
Indenture and the due authorization thereof by the Board of Directors of the
Company, and such Debt Security has been duly executed and authenticated as
provided in the Indenture and delivered against payment therefor, then, assuming
that the Indenture has been duly authorized, executed and delivered by the
Company and the Trustee thereunder and is the valid and binding obligation of
the Company, such Debt Security will be the valid and legally binding obligation
of the Company and will be entitled to the benefits of the Indenture, subject to
(i) bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the rights and remedies of creditors and (ii) general principles of
equity, regardless of whether applied in proceedings in equity or law.
We understand that this opinion is to be used in connection with the
Registration Statement. We hereby consent to the filing of this opinion as part
of the Registration Statement and to the use of our name in each related
prospectus supplement under the caption "Legal Opinion."
It is understood that this opinion is to be used only in connection
with the offer and sale of the Debt Securities while the Registration Statement
is in effect.
Very truly yours,
/s/ Ropes & Gray
--------------------------
Ropes & Gray
<PAGE> 1
EXHIBIT 12.1
COMPUTATION OF RATIO EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT RATIOS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED OCTOBER 31, APRIL 30,
-------------------------------------------------------- ------------------
1992 1993 1994 1995 1996 1996(2) 1997(2)
-------- -------- -------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Excess of earnings available to cover
fixed charges
Earnings from continuing operations
before income taxes $144,054 $205,732 $238,160 $269,106 $289,169 $41,041 $26,887
Add: Fixed charges 110,952 110,882 113,916 117,593 113,372 57,090 56,189
Less: Capitalized interest (577) (130) (630) (2,091) (1,657) (1,229) (91)
Earnings, as adjusted 254,429 316,484 351,446 384,608 400,884 96,902 82,985
-------- -------- -------- -------- -------- ------- -------
Fixed charges
Interest expense 85,442 84,585 86,219 88,735 82,882 41,445 41,753
Capitalized interest 577 130 630 2,091 1,657 1,229 91
Portion of rents representative
of the interest factor (1) 24,933 26,167 27,067 26,767 28,833 14,416 14,345
Fixed charges 110,952 110,882 113,916 117,593 113,372 57,090 56,189
-------- -------- -------- -------- -------- ------- -------
Excess of earnings to fixed charges $143,477 $205,602 $237,530 $267,015 $287,512 $39,812 $26,796
-------- -------- -------- -------- -------- ------- -------
Ratio of earnings to fixed charges 2.3 2.9 3.1 3.3 3.5 1.7 1.5
</TABLE>
(1) This represents approximately 33.3% of total rent expense, which
management estimates to be the interest component of such rent expense.
(2) The Company's businesses are seasonal in nature, and historically the
results of operations for these periods have not been indicative of
the results for the full year.
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Harcourt General, Inc. on Form S-3 of our reports dated December 9,
1996, appearing in and incorporated by reference into the Annual Report on Form
10-K of Harcourt General, Inc. for the year ended October 31, 1996 and to the
reference to us under the heading "Experts" in the Prospectus, which is part of
this Registration Statement.
Deloitte & Touche LLP
Boston, Massachusetts
July 2, 1997
<PAGE> 1
EXHIBIT 23.2
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 Harcourt
General, Inc. of our report dated January 28, 1997, except as to Note 17, which
is as of March 12, 1997, relating to the consolidated financial statements of
National Education Corporation, which is incorporated into the Current Report
on Form 8-K of Harcourt General, Inc. filed on June 19, 1997. We also consent
to the reference to us under the heading "Experts" in such Prospectus.
Price Waterhouse LLP
Costa Mesa, California
July 1, 1997
<PAGE> 1
- --------------------------------------------------------------------------------
UNITED STATES
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) ___________
____________________________
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of Incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification
no.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
---------------------------------
HARCOURT GENERAL, INC.
(FORMERLY GENERAL CINEMA CORPORATION)
(Exact name of obligor as specified in its charter)
DELAWARE 04-1619609
(State or other jurisdiction of (I.R.S. employer
Incorporation or organization) Identification no.)
27 BOYLSTON STREET
CHESTNUT HILL, MASSACHUSETTS 02167
(Address of principal executive offices) (Zip Code)
DEBT SECURITIES
(Title of the indenture securities)
<PAGE> 2
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.
<TABLE>
<CAPTION>
NAME ADDRESS
---- -------
<S> <C>
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
ITEM 3.-15. NOT APPLICABLE
ITEM 16. LIST OF EXHIBITS.
EXHIBIT 1 - Restated Organization Certificate of Bankers Trust
Company dated August 7, 1990, Certificate of Amendment
of the Organization Certificate of Bankers Trust Company
dated June 21, 1995 - Incorporated herein by reference
to Exhibit 1 filed with Form T-1 Statement, Registration
No. 33-65171, and Certificate of Amendment of the
Organization Certificate of Bankers Trust Company dated
March 20, 1996, copy attached.
EXHIBIT 2 - Certificate of Authority to commence business -
Incorporated herein by reference to Exhibit 2 filed with
Form T-1 Statement, Registration No. 33-21047.
EXHIBIT 3 - Authorization of the Trustee to exercise corporate trust
powers - Incorporated herein by reference to Exhibit 2
filed with Form T-1 Statement, Registration No.
33-21047.
EXHIBIT 4 - Existing By-Laws of Bankers Trust Company, as amended on
February 18, 1997, Incorporated herein by reference to
Exhibit 4 filed with Form T-1 Statement, Registration
No. 333-24509-01.
-2-
<PAGE> 3
EXHIBIT 5 - Not applicable.
EXHIBIT 6 - Consent of Bankers Trust Company required by Section
321(b) of the Act. - Incorporated herein by reference to
Exhibit 4 filed with Form T-1 Statement, Registration
No. 22-18864.
EXHIBIT 7 - A copy of the latest report of condition of Bankers
Trust Company dated as of March 31, 1997, copy attached.
EXHIBIT 8 - Not Applicable.
EXHIBIT 9 - Not Applicable.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, 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 18th day
of June, 1997.
BANKERS TRUST COMPANY
By: /s/ SUSAN JOHNSON
-------------------------------
Susan Johnson
Assistant Vice President
-4-
<PAGE> 5
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 3/31/97 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State ZIP: New York, NY 10006 11
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS MARCH 31, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
Dollar Amounts in Thousands RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A)
a. Noninterest-bearing balances and currency and coin(1) ............................... 0081 1,589,000 1.a.
b. Interest-bearing balances(2)......................................................... 0071 2,734,000 1.b.
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) .......................... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)......................... 1773 4,433,000 2.b.
3. Federal funds sold and securities purchased under agreements to resell.................... 1350 26,490,000 3
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C)....................RCFD 2122 15,941,000 4.a.
b. LESS: Allowance for loan and lease losses......................................RCFD 3123 708,000 4.b.
c. LESS: Allocated transfer risk reserve .........................................RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c) ................................. 2125 15,233,000 4.d.
5. Assets held in trading accounts........................................................... 3545 38,115,000 5.
6. Premises and fixed assets (including capitalized leases) ................................. 2145 924,000 6.
7. Other real estate owned (from Schedule RC-M) ............................................. 2150 188,000 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M).. 2130 175,000 8.
9. Customers' liability to this bank on acceptances outstanding ............................. 2155 618,000 9.
10. Intangible assets (from Schedule RC-M) ................................................... 2143 17,000 10.
11. Other assets (from Schedule RC-F)......................................................... 2160 4,424,000 11.
12. Total assets (sum of items 1 through 11).................................................. 2170 94,940,000 12.
</TABLE>
- --------------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE> 6
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 3/31/97 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State ZIP: New York, NY 10006 11
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
SCHEDULE RC--CONTINUED
<TABLE>
<CAPTION>
C400
Dollar Amounts in Thousands RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) RCON 2200 14,450,000 13.a.
(1) Noninterest-bearing(1)..........RCON 6631 2,917,000................... 13.a.(1)
(2) Interest-bearing ...............RCON 6636 11,533,000................... 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E....
part II)............................................................................. RCFN 2200 23,456,000 13.b.
(1) Noninterest-bearing ..............RCFN 6631 1,062,000 13.b.(1)
(2) Interest-bearing .................RCFN 6636 22,394,000 13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase RCFD 2800 15,195,000 14
15. a. Demand notes issued to the U.S. Treasury................................ RCON 2840 0 15.a.
b. Trading liabilities (from Schedule RC-D)................................ RCFD 3548 18,911,000
16. Other borrowed money: (includes mortgage indebtedness and obligations under
capitalized leases):
a. With original maturity of one year or less........................................ RCFD 2332 7,701,000 16.a.
b. With original maturity of more than one year...................................... RCFD 2333 4,438,000 16.b.
17. Not applicable......................................................................... 17.
18. Bank's liability on acceptances executed and outstanding .............................. RCFD 2920 618,000 18.
19. Subordinated notes and debentures...................................................... RCFD 3200 1,226,000 19.
20. Other liabilities (from Schedule RC-G)................................................. RCFD 2930 3,971,000 20.
21. Total liabilities (sum of items 13 through 20)......................................... RCFD 2948 89,966,000 21.
22. Not applicable 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.......................................... RCFD 3838 600,000 23.
24. Common stock........................................................................... RCFD 3230 1,002,000 24.
25. Surplus (exclude all surplus related to preferred stock) .............................. RCFD 3839 540,000 25.
26. a. Undivided profits and capital reserves............................................ RCFD 3632 3,241,000
26. b. Net unrealized holding gains (losses) on available-for-sale securities ........... RCFD 8434 ( 31,000) 26.b.
27. Cumulative foreign currency translation adjustments ................................... RCFD 3284 ( 378,000) 27.
28. Total equity capital (sum of items 23 through 27) ..................................... RCFD 3210 4,974,000 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22,
and 28) ............................................................................... RCFD 3300 94,940,000 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed for
the bank by independent external Number
auditors as of any date during 1996................................................... RCFD 6724 1 | M.1
</TABLE>
<TABLE>
<S> <C> <C> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
- ----------
(1) Including total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE> 7
State of New York,
Banking Department
I, PETER M. PHILBIN, Deputy Superintendent of Bank of the State of New
York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF
AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION
8005 OF THE BANKING LAW," dated March 20, 1996, providing for an increase in
authorized capital stock from $1,351,666,670 consisting of 85,166,667 shares
with a par value of $10 each designated as Common Stock and 500 shares with a
par value of $1,000,000 each designated as Series Preferred Stock to
$1,501,666,670 consisting of 100,166,667 shares with a par value of $10 each
designated as Common Stock and 500 shares with a par value of $1,000,000 each
designated as Series Preferred Stock.
WITNESS, my hand and official seal of the Banking Department at the City of New
York,
this 21ST day of MARCH in the Year of our
Lord one thousand nine hundred and NINETY-SIX.
Peter M. Philbin
------------------------------
Deputy Superintendent of Banks
<PAGE> 8
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE
OF BANKERS TRUST
Under Section 8005 of the Banking Law
-----------------------------
We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing
Director and an Assistant Secretary of Bankers Trust Company, do hereby certify:
1. The name of the corporation is Bankers Trust Company.
2. The organization certificate of said corporation was filed by the
Superintendent of Banks on the 5th of march, 1903.
3. The organization certificate as heretofore amended is hereby amended to
increase the aggregate number of shares which the corporation shall have
authority to issue and to increase the amount of its authorized capital stock in
conformity therewith.
4. Article III of the organization certificate with reference to the
authorized capital stock, the number of shares into which the capital stock
shall be divided, the par value of the shares and the capital stock outstanding,
which reads as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is One Billion, Three Hundred Fifty One Million, Six Hundred
Sixty-Six Thousand, Six Hundred Seventy Dollars ($1,351,666,670), divided
into Eighty-Five Million, One Hundred Sixty-Six Thousand, Six Hundred
Sixty-Seven (85,166,667) shares with a par value of $10 each designated as
Common Stock and 500 shares with a par value of One Million Dollars
($1,000,000) each designated as Series Preferred Stock."
is hereby amended to read as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is One Billion, Five Hundred One Million, Six Hundred Sixty-Six
Thousand, Six Hundred Seventy Dollars ($1,501,666,670), divided into One
Hundred Million, One Hundred Sixty Six Thousand, Six Hundred Sixty-Seven
(100,166,667) shares with a par value of $10 each designated as Common
Stock and 500 shares with a par value of One Million Dollars ($1,000,000)
each designated as Series Preferred Stock."
<PAGE> 9
6. The foregoing amendment of the organization certificate was authorized
by unanimous written consent signed by the holder of all outstanding shares
entitled to vote thereon.
IN WITNESS WHEREOF, we have made and subscribed this certificate this 20th
day of March , 1996.
James T. Byrne, Jr.
-------------------------------
James T. Byrne, Jr.
Managing Director
Lea Lahtinen
-------------------------------
Lea Lahtinen
Assistant Secretary
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she is an Assistant
Secretary of Bankers Trust Company, the corporation described in the foregoing
certificate; that she has read the foregoing certificate and knows the contents
thereof, and that the statements herein contained are true.
Lea Lahtinen
-------------------------------
Lea Lahtinen
Sworn to before me this 20th day of March, 1996.
Sandra L. West
- -----------------------------
Notary Public
SANDRA L. WEST Counterpart filed in the
Notary Public State of Office of the Superintendent of
New York Banks, State of New York,
No. 31-4942101 This 21st day of March, 1996
Qualified in New York
County
Commission Expires
September 19, 1996
