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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 22, 1998
REGISTRATION NO. 333-36225
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
MARYLAND 13-1898974
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
</TABLE>
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ROBERT G. ULRICH, ESQUIRE
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
2 PARAGON DRIVE
MONTVALE, NEW JERSEY 07645
(201) 573-9700
(Name, address, including zip code, and telephone number, including area code,
of registrants' principal executive offices and agent for service)
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COPY TO:
KENNETH W. ORCE, ESQUIRE
CAHILL GORDON & REINDEL
80 PINE STREET
NEW YORK, NEW YORK 10005
(212) 701-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, 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. / /
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THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT WITH RESPECT 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 STATUTE.
<PAGE>
SUBJECT TO COMPLETION, DATED JANUARY 22, 1998
$500,000,000
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
DEBT SECURITIES
AND
SECURITIES WARRANTS
The Great Atlantic & Pacific Tea Company, Inc. (the "Company") may offer,
from time to time, in one or more series, its (i) shares of its Common Stock,
par value $1.00 per share (the "Common Stock"), (ii) shares of its Preferred
Stock, no par value per share (the "Preferred Stock"), (iii) shares of Preferred
Stock represented by depositary shares (the "Depositary Shares"), (iv) unsecured
senior debt securities (the "Senior Debt Securities"), (v) unsecured
subordinated debt securities (the "Subordinated Debt Securities" and, together
with the Senior Debt Securities, the "Debt Securities"), (vi) warrants to
purchase shares of Common Stock (the "Common Stock Warrants"), and (vii)
warrants to purchase Debt Securities (the "Debt Warrants" and, together with the
Common Stock Warrants, the "Securities Warrants"). The Common Stock, the
Preferred Stock, the Depositary Shares, the Debt Securities and the Securities
Warrants are collectively referred to herein as the "Securities."
The Securities will have a maximum aggregate offering price of $500,000,000
(or the equivalent thereof in foreign currency or currency units) and will be
offered on terms to be determined by market conditions at the time of sale.
The Securities may be offered separately or together, in separate series, in
amounts and at prices and on terms to be set forth in an accompanying prospectus
supplement (a "Prospectus Supplement"). In addition, the specific terms of the
Securities in respect of which this Prospectus is being delivered, and whether
such Securities will be listed on a national securities exchange, will be set
forth in an accompanying Prospectus Supplement.
The Senior Debt Securities, if issued, will rank equally and ratably with
all other unsecured and unsubordinated indebtedness of the Company, and the
Subordinated Debt Securities, if issued, will be unsecured and subordinated to
all present and future Senior Indebtedness (as such term will be defined in an
accompanying Prospectus Supplement) of the Company. See "Description of Debt
Securities."
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
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 Securities may be sold directly, through agents from time to time or
through underwriters and/or dealers. If any agent of the Company or any
underwriter is involved in the sale of the Securities, the name of such agent or
underwriter and any applicable commission or discount will be set forth in the
accompanying Prospectus Supplement. See "Plan of Distribution."
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THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
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The date of this Prospectus is , 1998.
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CERTAIN PERSONS PARTICIPATING IN THE OFFERING OF THE SECURITIES MAY ENGAGE
IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE
SECURITIES OR ANY SECURITIES THE PRICES OF WHICH MAY BE USED TO DETERMINE
PAYMENTS ON THE SECURITIES. SPECIFICALLY, THE UNDERWRITERS OR AGENTS SPECIFIED
IN THE RELEVANT PROSPECTUS SUPPLEMENT OR PRICING SUPPLEMENT MAY OVERALLOT IN
CONNECTION WITH THE OFFERING, AND MAY BID FOR AND PURCHASE THE SECURITIES OR
SECURITIES THE PRICES OF WHICH MAY BE USED TO DETERMINE PAYMENTS ON THE
SECURITIES IN THE OPEN MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN
OF DISTRIBUTION" IN THIS PROSPECTUS AND "PLAN OF DISTRIBUTION" OR "UNDERWRITING"
IN THE RELEVANT PROSPECTUS SUPPLEMENT.
No dealer, salesman, or any other person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or any underwriter, dealer, or agent. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy Securities by
anyone in any jurisdiction in which the offer or solicitation is not authorized
or in which the person making the offer or solicitation is not qualified to do
so or to any person to whom it is unlawful to make the offer or solicitation.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission") relating to its business, financial position, results of
operations and other matters. Such reports and other information can be
inspected and copied at the Public Reference Section maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at its Regional Offices located at Northwestern Atrium Center, 500 West
Madison Street, Chicago, Illinois 60661, and 7 World Trade Center, 15th Floor,
New York, New York 10048. Copies of such material can 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 site on
the World Wide Web containing reports, proxy materials, information statements
and other items. The address is http://www.sec.gov. The Common Stock of the
Company is listed on the New York Stock Exchange and such material can also be
inspected at the office of such exchange at 20 Broad Street, New York, New York
10005.
The Company has filed with the Commission a registration statement (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the Securities covered by this Prospectus.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. Reference is made to the
Registration Statement and to the exhibits relating thereto for further
information with respect to the Company and the Securities covered by this
Prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference herein its (i) Annual Report on
Form 10-K for the fiscal year ended February 22, 1997; (ii) Quarterly Report on
Form 10-Q for the fiscal quarter ended June 14, 1997; (iii) Quarterly Report on
Form 10-Q for the fiscal quarter ended September 6, 1997; (iv) Quarterly Report
on Form 10-Q for the fiscal quarter ended November 29, 1997; and (v) Current
Report on Form 8-K filed with the Commission on June 12, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and before the
termination of the offering of the securities offered hereby shall be deemed
incorporated herein by reference, and such documents shall be deemed to be a
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part hereof from the date of filing such documents. Any statement contained
herein or 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 modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the above documents incorporated herein by reference
(other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into the documents that this Prospectus incorporates).
Written or oral requests should be directed to: Robert G. Ulrich, Esq., Senior
Vice President and General Counsel, The Great Atlantic & Pacific Tea Company,
Inc., 2 Paragon Drive, Montvale, New Jersey 07645, telephone number (201)
573-9700.
THE COMPANY
The Company has been engaged in the retail food business since 1859. Based
on reported sales for fiscal 1996, the Company believes that as of the end of
its 1996 fiscal year it was one of the ten largest retail food chains in the
United States and that it had the largest market share in metropolitan New York
and Detroit and the second largest in the Province of Ontario. As of the end of
its 1996 fiscal year, the Company operated 973 stores averaging 31,400 square
feet per store. In addition, in fiscal 1995 the Company began franchising
certain stores in Canada under its Food Basics format, which focuses its appeal
toward the more price conscious consumer. As of the end of its 1996 fiscal year,
the Company had franchised 49 Food Basics stores in Canada.
Operating under the trade names A&P, Super Fresh, Sav-A-Center, Farmer Jack,
Kohl's, Food Emporium, Waldbaum's, Food Mart, Food Bazaar, Miracle Food Mart,
Ultra Mart, Futurestore, Dominion, Compass Foods and, through its owned stores
and under franchises, under the trade name Food Basics, the Company sells
groceries, meats, fresh produce and other items commonly offered in
supermarkets. In addition, many stores have bakery, delicatessen, pharmacy,
floral, fresh fish and cheese departments. National, regional and local brands
are sold as well as private label merchandise under brands which include
America's Choice, Master Choice, Health Pride, Eight O'Clock, Bokar, Royale,
Savings Plus and Jane Parker. In support of its retail operations, the Company
also operates two coffee roasting plants, two bakeries and one delicatessen food
kitchen. The products processed in these facilities are sold under the Company's
own brand names. All products produced by A&P's food processing operations are
sold in Company stores. A&P also sells its coffee products to unaffiliated
retail outlets primarily outside of its marketing areas.
Building upon a broad base of A&P supermarkets, the Company has expanded and
diversified within the retail food business through the acquisition of other
supermarket chains and the development of several alternative store types. The
Company now operates its stores with merchandise, pricing and identities
tailored to appeal to different segments of the market, including buyers seeking
gourmet and ethnic foods, unusual produce, a wide variety of premium quality
private label goods and health and beauty aids along with the array of
traditional grocery products.
As of May 1, 1997, the Company was 54.3% owned by Tengelmann
Warenhandelsgesellschaft, a general retailer headquartered in Germany which is
one of the largest food retailers in Europe. The principal executive offices of
the Company are located at 2 Paragon Drive, Montvale, New Jersey 07645,
telephone (201) 573-9700.
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USE OF PROCEEDS
Except as otherwise described in the accompanying Prospectus Supplement, the
net proceeds from the sale or sales of the Securities will be used by the
Company for general corporate purposes, which may include (without limitation)
the reduction of outstanding indebtedness, working capital increases, capital
expenditures and acquisitions.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
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NOVEMBER 29, NOVEMBER 30, FEBRUARY 22, FEBRUARY 24, FEBRUARY 26,
1997 1996 1997 1996 FEBRUARY 25, 1995 1994 FEBRUARY 27, 1993
(40 WEEKS) (40 WEEKS) (52 WEEKS) (52 WEEKS) (52 WEEKS) (52 WEEKS) (52 WEEKS)
- --------------- --------------- --------------- --------------- ------------------- --------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
1.60x 1.70x 1.77x 1.64x * 1.06x *
</TABLE>
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* Earnings for the years ended February 25, 1995 and February 27, 1993 were
inadequate to cover fixed charges by $172 million and $129 million,
respectively.
In the calculation of the Company's ratio of earnings to fixed charges,
earnings consist of income (loss) before income taxes and cumulative effect on
prior years of changes in accounting principles, plus fixed charges. Fixed
charges consist of interest expense, plus the portion of rental expense under
leases which has been deemed by the Company to be representative of the interest
factor.
DESCRIPTION OF COMMON STOCK
The Company is authorized by its Articles of Restatement of the Certificate
of Incorporation (the "Articles of Incorporation") to issue 80 million shares of
its Common Stock with a par value of $1.00 per share. As of November 29, 1997,
there were 38,250,966 shares of Common Stock outstanding held by approximately
8,300 holders of record, excluding holders whose shares of record are held by
brokers.
GENERAL
The holders of Common Stock are entitled to cast one vote for each share on
all matters submitted to a vote of stockholders and are not entitled to cumulate
votes for the election of directors. Except in cases in which it is by statute,
by the Articles of Incorporation or by the bylaws of the Company (the "Bylaws")
otherwise provided, a majority of the votes cast is sufficient to elect and pass
any measure. Amendments to the Articles of Incorporation, mergers,
consolidations, share exchanges and the dissolution of the Company generally
require the approval of two-thirds of the outstanding shares of Common Stock.
There are no redemption or sinking fund provisions applicable to the Common
Stock. The holders of the Common Stock are not subject to further calls or
assessments by the Company. In the event of liquidation, holders of Common Stock
are entitled to share in the distribution of assets remaining after payment of
debts, liquidation preference of any outstanding preferred stock, and expenses.
The holders of Common Stock are entitled to receive dividends when and as
declared by the Board of Directors out of funds legally available therefor. The
outstanding shares of Common Stock and the shares of Common Stock to be
distributed in connection with any offerings pursuant to this Prospectus will be
fully paid and nonassessable when issued.
PREEMPTIVE RIGHTS
The holders of Common Stock have preemptive rights to subscribe for and to
purchase additional shares of stock of any class or classes of the Company,
provided, however, that no preemptive right shall in any event accrue to any
stockholder with respect to (1) shares issued for not less than their fair value
in exchange for services or property other than money, (2) shares remaining
unsubscribed after having been
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offered to stockholders, (3) treasury shares sold for not less than their fair
value, (4) shares issued or issuable pursuant to articles of merger, (5)
preferred shares without then present voting power with respect to the election
of directors issued for not less than their fair value, and (6) shares issued
and sold to the Company's officers or other employees or to the officers or
other employees of any subsidiary of the Company upon such terms and conditions
as are approved by the affirmative vote of a majority of all of the shares
entitled to vote with respect thereto at a meeting duly called and held for such
purpose. The determination of "fair value" fixed and recorded in a resolution of
the Board of Directors authorizing the issuance of any such additional shares of
stock, including the price or consideration for which such shares of stock are
to be issued, shall be conclusive in the absence of fraud or gross disparity in
such determination.
TRANSFER AGENT
American Stock Transfer and Trust Company, 40 Wall Street, New York, NY
10005 is the transfer agent and registrar for the Common Stock.
DESCRIPTION OF PREFERRED STOCK
The Company is authorized by the Articles of Incorporation to issue 3
million shares of its Preferred Stock without par value. No shares of Preferred
Stock are currently outstanding.
GENERAL
The Preferred Stock may be issued from time to time, in one or more series,
as authorized by the Board of Directors. Prior to issuance of shares of each
series, the Board of Directors is required by the Maryland General Corporation
Law ("MGCL") and the Articles of Incorporation to fix for each series, the
designations, preferences, rights, voting powers, restrictions, and
qualifications of, the dividends on, the times and prices of redemptions of, and
the conversion rights of the shares of such series as may be permitted by
Maryland law. Such rights, powers, restrictions and limitations could include
the right to receive specified dividend payments and payments on liquidation
prior to any such payments to holders of Common Stock or other stock of the
Company ranking junior to the Preferred Stock. Shares of Preferred Stock to be
distributed in connection with any offerings pursuant to this Prospectus will be
fully paid and nonassessable when issued and the holders of shares of any such
Preferred Stock will not have any preemptive right to subscribe or purchase any
new or additional issue of shares of stock of the Company. The Board of
Directors could authorize the issuance of shares of Preferred Stock with terms
and conditions that could have the effect of discouraging a takeover or other
transaction that holders of Common Stock might believe to be in their best
interests or in which holders of some, or a majority, of the shares of Common
Stock might receive a premium for their shares over the then market price of
such shares of Common Stock.
FUTURE SERIES OF PREFERRED STOCK
The following description of the Preferred Stock sets forth certain general
terms and provisions of the Preferred Stock to which any Prospectus Supplement
may relate. The statements below describing the Preferred Stock are in all
respects subject to and qualified in their entirety by reference to the
applicable provisions of the Articles of Incorporation and Bylaws and any
applicable amendment to the Articles of Incorporation designating terms of a
series of Preferred Stock (a "Designating Amendment").
Reference is made to the Prospectus Supplement relating to the Preferred
Stock offered thereby for specific terms, including:
1. The title and stated capital value of such Preferred Stock;
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2. The number of shares of such Preferred Stock offered, the liquidation
preference per share and the offering price of such Preferred Stock;
3. The dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation thereof applicable to such Preferred Stock;
4. The date from which dividends on such Preferred Stock shall accumulate, if
applicable;
5. The procedures for any auction and remarketing, if any, for such Preferred
Stock;
6. The provision for a sinking fund, if any, for such Preferred Stock;
7. The provision for redemption, if applicable, of such Preferred Stock;
8. Any listing of such Preferred Stock on any securities exchange;
9. The terms and conditions, if applicable, upon which such Preferred Stock
will be convertible into Common Stock, including the conversion price (or
manner of calculation thereof);
10. Any other specific terms, preferences, rights, limitations or restrictions
of such Preferred Stock;
11. A discussion of federal income tax considerations applicable to such
Preferred Stock;
12. The voting rights of such Preferred Stock and the relative ranking and
preference of such Preferred Stock as to dividend rights and rights upon
liquidation, dissolution or winding up of the affairs of the Company; and
13. Any limitations on issuance of any series of Preferred Stock ranking senior
to or on a parity with such series of Preferred Stock as to dividend rights
and rights upon liquidation, dissolution or winding up of the affairs of the
Company.
RANK
Unless otherwise specified in the Prospectus Supplement, the Preferred Stock
will, with respect to dividend rights and rights upon liquidation, dissolution
or winding up of the Company, rank (i) senior to all classes or series of Common
Stock, and to all equity securities ranking junior to such Preferred Stock with
respect to dividend rights or rights upon liquidation, dissolution or winding up
of the Company; (ii) on a parity with all equity securities issued by the
Company the terms of which specifically provide that such equity securities rank
on a parity with the Preferred Stock with respect to dividend rights or rights
upon liquidation, dissolution or winding up of the Company; and (iii) junior to
all equity securities issued by the Company the terms of which specifically
provide that such equity securities rank senior to the Preferred Stock with
respect to dividend rights or rights upon liquidation, dissolution or winding up
of the Company. The term "equity securities" does not include convertible debt
securities.
DIVIDENDS
Holders of the Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board of Directors of the Company, out of assets
of the Company legally available for payment, cash dividends at such rates and
on such dates as will be set forth in the applicable Prospectus Supplement. Each
such dividend shall be payable to holders of record as they appear on the share
transfer books of the Company on such record dates as shall be fixed by the
Board of Directors of the Company.
Dividends on any series of the Preferred Stock may be cumulative or
non-cumulative, as provided in the applicable Prospectus Supplement. Dividends,
if cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the Board of Directors of the Company fails
to declare a dividend payable on a dividend payment date on any series of the
Preferred Stock for which dividends are non-cumulative, then the holders of such
series of the Preferred Stock will have no right to receive a dividend in
respect of the dividend period ending on such dividend payment date, and the
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Company will have no obligation to pay the dividend accrued for such period,
whether or not dividends on such series are declared payable on any future
dividend payment date.
If Preferred Stock of any series is outstanding, no dividends will be
declared or paid or set apart for payment on any stock of the Company of any
other series ranking, as to dividends, on a parity with or junior to the
Preferred Stock of such series for any period unless (i) if such series of
Preferred Stock has a cumulative dividend, full cumulative dividends have been
or contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof is set apart for such payment on the Preferred Stock of such
series for all past dividend periods and the then current dividend period or
(ii) if such series of Preferred Stock does not have a cumulative dividend, full
dividends for the then current dividend period have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
is set apart for such payment on the Preferred Stock of such series. When
dividends are not paid in full (or a sum sufficient for such full payment is not
so set apart) upon Preferred Stock of any series and the shares of any other
series of Preferred Stock ranking on a parity as to dividends with the Preferred
Stock of such series, all dividends declared upon Preferred Stock of such series
and any other series of Preferred Stock ranking on a parity as to dividends with
such Preferred Stock shall be declared pro rata so that the amount of dividends
declared per share of Preferred Stock of such series and such other series of
Preferred Stock shall in all cases bear to each other the same ratio that
accrued dividends per share on the Preferred Stock of such series (which shall
not include any accumulation in respect of unpaid dividends for prior dividend
periods if such Preferred Stock does not have a cumulative dividend) and such
other series of Preferred Stock bear to each other. No interest, or sum of money
in lieu of interest, shall be payable in respect of any dividend payment or
payments on Preferred Stock of such series which may be in arrears.
Except as provided in the immediately preceding paragraph, unless (i) if
such series of Preferred Stock has a cumulative dividend, full cumulative
dividends on the Preferred Stock of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
is set apart for payment for all past dividend periods and the then current
dividend period, and (ii) if such series of Preferred Stock does not have a
cumulative dividend, full dividends on the Preferred Stock of such series have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof is set apart for payment for the then current dividend
period, no dividends (other than in shares of Common Stock or other shares of
stock ranking junior to the Preferred Stock of such series as to dividends and
upon liquidation) shall be declared or paid or set aside for payment nor shall
any other distribution be declared or made upon the Common Stock, or any other
stock of the Company ranking junior to or on a parity with the Preferred Stock
of such series as to dividends or upon liquidation, nor shall any shares of
Common Stock, or any other shares of stock of the Company ranking junior to or
on a parity with the Preferred Stock of such series as to dividends or upon
liquidation be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any such shares) by the Company (except by conversion into or
exchange for other stock of the Company ranking junior to the Preferred Stock of
such series as to dividends and upon liquidation).
Any dividend payment made on shares of a series of Preferred Stock shall
first be credited against the earliest accrued but unpaid dividend due with
respect to shares of such series which remains payable.
REDEMPTION
If so provided in the applicable Prospectus Supplement, the Preferred Stock
will be subject to mandatory redemption or redemption at the option of the
Company, as a whole or in part, in each case upon the terms, at the times and at
the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a series of Preferred Stock that is
subject to mandatory redemption will specify the number of shares of such
Preferred Stock that shall be redeemed by the Company in each year commencing
after a date to be specified, at a redemption price per share to be
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specified, together with an amount equal to all accrued and unpaid dividends
thereon (which shall not, if such Preferred Stock does not have a cumulative
dividend, include any accumulation in respect of unpaid dividends for prior
dividend periods) to the date of redemption. The redemption price may be payable
in cash or other property, as specified in the applicable Prospectus Supplement.
If the redemption price for Preferred Stock of any series is payable only from
the net proceeds of the issuance of shares of stock of the Company, the terms of
such Preferred Stock may provide that, if no such shares of stock shall have
been issued or to the extent the net proceeds from any issuance are insufficient
to pay in full the aggregate redemption price then due, such Preferred Stock
shall automatically and mandatorily be converted into the applicable shares of
stock of the Company pursuant to conversion provisions specified in the
applicable Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if a series of Preferred Stock has
a cumulative dividend, full cumulative dividends on all shares of such series of
Preferred Stock shall have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for payment for
all past dividend periods and the then current dividend period, and (ii) if a
series of Preferred Stock does not have a cumulative dividend, full dividends on
all shares of the Preferred Stock of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for payment for the then current dividend period, no shares of such
series of Preferred Stock shall be redeemed unless all outstanding shares of
Preferred Stock of such series are simultaneously redeemed; PROVIDED, HOWEVER,
that the foregoing shall not prevent the purchase or acquisition of Preferred
Stock of such series pursuant to a purchase or exchange offer made on the same
terms to holders of all outstanding shares of Preferred Stock of such series. In
addition, unless (i) if such series of Preferred Stock has a cumulative
dividend, full cumulative dividends on all outstanding shares of such series of
Preferred Stock have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment for all past
dividend periods and the then current dividend period, and (ii) if such series
of Preferred Stock does not have a cumulative dividend, full dividends on the
Preferred stock of such series have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
payment for the then current dividend period, the Company shall not purchase or
otherwise acquire directly or indirectly any shares of Preferred Stock of such
series (except by conversion into or exchange for shares of stock of the Company
ranking junior to the Preferred Stock of such series as to dividends and upon
liquidation); PROVIDED, HOWEVER, that the foregoing shall not prevent the
purchase or acquisition of shares of Preferred Stock of such series pursuant to
a purchase or exchange offer made on the same terms to holders of all
outstanding shares of Preferred Stock of such series.
If fewer than all of the outstanding shares of Preferred Stock of any series
are to be redeemed, the number of shares to be redeemed will be determined by
the Company and such shares may be redeemed pro rata from the holders of record
of such shares in proportion to the number of such shares held or for which
redemption is requested by such holder (with adjustments to avoid redemption of
fractional shares) or by any other equitable manner determined by the Company.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of Preferred Stock of
any series to be redeemed at the address shown on the stock transfer books of
the Company. Each notice shall state: (i) the redemption date; (ii) the number
of shares and series of the Preferred Stock to be redeemed; (iii) the redemption
price; (iv) the place or places where certificates for such Preferred Stock are
to be surrendered for payment of the redemption price; (v) that dividends on the
shares to be redeemed will cease to accrue on such redemption date; and (vi) the
date upon which the holder's conversion rights, if any, as to such shares shall
terminate. If fewer than all the shares of Preferred Stock of any series are to
be redeemed, the notice mailed to each such holder thereof shall also specify
the number of shares of Preferred Stock to be redeemed from each such holder. If
notice of redemption of any Preferred Stock has been given and if the funds
necessary for such redemption have been set aside by the Company in trust for
the benefit of the holders of any Preferred Stock so called for redemption, then
from and after the redemption date dividends will cease to accrue on
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such Preferred Stock, and all rights of the holders of such shares will
terminate, except the right to receive the redemption price.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, then, before any distribution or payment shall be
made to the holders of any Common Stock or any other class or series of stock of
the Company ranking junior to the Preferred Stock in the distribution of assets
upon any liquidation, dissolution or winding up of the Company, the holders of
each series of Preferred Stock shall be entitled to receive out of assets of the
Company legally available for distribution to stockholders liquidating
distributions in the amount of the liquidation preference per share, if any, set
forth in the applicable Prospectus Supplement, plus an amount equal to all
dividends accrued and unpaid thereon (which shall not include any accumulation
in respect of unpaid noncumulative dividends for prior dividend periods). After
payment of the full amount of the liquidating distributions to which they are
entitled, the holders of Preferred Stock will have no right or claim to any of
the remaining assets of the Company. In the event that, upon any such voluntary
or involuntary liquidation, dissolution or winding up, the available assets of
the Company are insufficient to pay the amount of the liquidating distributions
on all outstanding shares of Preferred Stock and the corresponding amounts
payable on all shares of other classes or series of stock of the Company ranking
on a parity with the Preferred Stock in the distribution of assets, then the
holders of the Preferred Stock and all other such classes or series of stock
shall share ratably in any such distribution of assets in proportion to the full
liquidating distributions to which they would otherwise be respectively
entitled.
If liquidating distributions shall have been made in full to all holders of
Preferred Stock, the remaining assets of the Company shall be distributed among
the holders of any other classes or series of stock ranking junior to the
Preferred Stock upon liquidation, dissolution or winding up, according to their
respective rights and preferences and in each case according to their respective
number of shares. For such purposes, the consolidation or merger of the Company
with or into any other corporation, trust or entity, or the sale, lease or
conveyance of all or substantially all of the property or business of the
Company, shall not be deemed to constitute a liquidation, dissolution or winding
up of the Company.
VOTING RIGHTS
Holders of the Preferred Stock will not have any voting rights, except as
set forth below or as otherwise from time to time required by law or as
indicated in the applicable Prospectus Supplement.
Unless provided otherwise for any series of Preferred Stock, so long as any
shares of Preferred Stock of a series remain outstanding, the Company will not,
without the affirmative vote or consent of the holders of at least two-thirds of
the shares of such series of Preferred Stock outstanding at the time, given in
person or by proxy, either in writing or at a meeting (such series voting
separately as a class), (i) authorize or create, or increase the authorized or
issued amount of, any class or series of stock ranking prior to such series of
Preferred Stock with respect to payment of dividends or the distribution of
assets upon liquidation, dissolution or winding up or reclassify any authorized
stock of the Company into such shares, or create, authorize or issue any
obligation or security convertible into or evidencing the right to purchase any
such shares; or (ii) amend, alter or repeal the provisions of the Articles of
Incorporation or the Designating Amendment for such series of Preferred Stock,
whether by merger, consolidation or otherwise (an "Event"), so as to materially
and adversely affect any right, preference, privilege or voting power of such
series of Preferred Stock or the holders thereof; provided, however, with
respect to the occurrence of any of the Events set forth in (ii) above, so long
as the Preferred Stock remains outstanding with the terms thereof materially
unchanged, taking into account that upon the occurrence of an Event the Company
may not be the surviving entity, the occurrence of any such Event shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting power of holders of Preferred Stock, and provided further that (x) any
increase in the amount of the authorized Preferred Stock or the
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creation or issuance of any other series of Preferred Stock, or (y) any increase
in the amount of authorized shares of such series or any other series of
Preferred Stock, in each case ranking on a parity with or junior to the
Preferred Stock of such series with respect to payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up, shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting powers.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of such series of Preferred Stock shall have
been redeemed or called for redemption and sufficient funds shall have been
deposited in trust to effect such redemption.
CONVERSION RIGHTS
The terms and conditions, if any, upon which any series of Preferred Stock
is convertible into Common Stock will be set forth in the applicable Prospectus
Supplement relating thereto. Such terms will include the number of shares of
Common Stock into which the shares of Preferred Stock are convertible, the
conversion price (or manner of calculation thereof), the conversion period,
provisions as to whether conversion will be at the option of the holders of the
Preferred Stock or the Company, the events requiring an adjustment of the
conversion price and provisions affecting conversion in the event of the
redemption of such series of Preferred Stock.
TRANSFER AGENT
The transfer agent and registrar for the Preferred Stock will be set forth
in the applicable Prospectus Supplement.
DESCRIPTION OF DEPOSITARY SHARES
The Company may, at its option, elect to offer Depositary Shares rather than
full shares of Preferred Stock. In the event such option is exercised, each of
the Depositary Shares will represent ownership of and entitlement to all rights
and preferences of a fraction of a share of Preferred Stock of a specified
series (including dividend, voting, redemption and liquidation rights). The
applicable fraction will be specified in the Prospectus Supplement. The shares
of Preferred Stock represented by the Depositary Shares will be deposited with a
Depositary (the "Depositary") named in the applicable Prospectus Supplement,
under a Deposit Agreement (the "Deposit Agreement"), among the Company, the
Depositary and the holders of the Depositary Receipts. Certificates evidencing
Depositary Shares ("Depositary Receipts") will be delivered to those persons
purchasing Depositary Shares in the offering. The Depositary will be the
transfer agent, registrar and dividend disbursing agent for the Depositary
Shares. Holders of Depositary Receipts agree to be bound by the Deposit
Agreement, which requires holders to take certain actions such as filing proof
of residence and paying certain charges.
The summary of terms of the Depositary Shares contained in this Prospectus
does not purport to be complete and is subject to, and qualified in its entirety
by, the provisions of the Deposit Agreement, the Articles of Incorporation and
the form of Designating Amendment for the applicable series of Preferred Stock.
DIVIDENDS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the series of Preferred Stock represented
by the Depositary Shares to the record holders of Depositary Receipts in
proportion to the number of Depositary Shares owned by such holders on the
relevant record date, which will be the same date as the record date fixed by
the Company for the applicable series of Preferred Stock. The Depositary,
however, will distribute only such amount as can be distributed without
attributing to any Depositary Share a fraction of one cent, and any balance not
so distributed will be added to and treated as part of the next sum received by
the Depositary for distribution to record holders of Depositary Receipts then
outstanding.
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In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Receipts
entitled thereto, in proportion, as nearly as may be practicable, to the number
of Depositary Shares owned by such holders on the relevant record date, unless
the Depositary determines (after consultation with the Company) that it is not
feasible to make such distribution, in which case the Depositary may (with the
approval of the Company) adopt any other method for such distribution as it
deems equitable and appropriate, including the sale of such property (at such
place or places and upon such terms as it may deem equitable and appropriate)
and distribution of the net proceeds from such sale to such holders.
LIQUIDATION PREFERENCE
In the event of the liquidation, dissolution or winding up of the affairs of
the Company, whether voluntary or involuntary, the holders of each Depositary
Share will be entitled to the fraction of the liquidation preference accorded
each share of the applicable series of Preferred Stock, as set forth in the
Prospectus Supplement.
REDEMPTION
If the series of Preferred Stock represented by the applicable series of
Depositary Shares is redeemable, such Depositary Shares will be redeemed from
the proceeds received by the Depositary resulting from the redemption, in whole
or in part, of Preferred Stock held by the Depositary. Whenever the Company
redeems any Preferred Stock held by the Depositary, the Depositary will redeem
as of the same redemption date the number of Depositary Shares representing the
Preferred Stock so redeemed. The Depositary will mail the notice of redemption
promptly upon receipt of such notice from the Company and not less than 30 nor
more than 60 days prior to the date fixed for redemption of the Preferred Stock
and the Depositary Shares to the record holders of the Depositary Receipts.
VOTING
Promptly upon receipt of notice of any meeting at which the holders of the
series of Preferred Stock represented by the applicable series of Depositary
Shares are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Receipts as of
the record date for such meeting. Each such record holder of Depositary Receipts
will be entitled to instruct the Depositary as to the exercise of the voting
rights pertaining to the number of shares of Preferred Stock represented by such
record holder's Depositary Shares. The Depositary will endeavor, insofar as
practicable, to vote such Preferred Stock represented by such Depositary Shares
in accordance with such instructions, and the Company will agree to take all
action which may be deemed necessary by the Depositary in order to enable the
Depositary to do so. The Depositary will abstain from voting any of the
Preferred Stock to the extent that it does not receive specific instructions
from the holders of Depositary Receipts.
WITHDRAWAL OF PREFERRED STOCK
Upon surrender of Depositary Receipts at the principal office of the
Depositary, upon payment of any unpaid amount due the Depositary, and subject to
the terms of the Deposit Agreement, the owner of the Depositary Shares evidenced
thereby is entitled to delivery of the number of whole shares of Preferred Stock
and all money and other property, if any, represented by such Depositary Shares.
Partial shares of Preferred Stock will not be issued. If the Depositary Receipts
delivered by the holder evidence a number of Depositary Shares in excess of the
number of Depositary Shares representing the number of whole shares of Preferred
Stock to be withdrawn, the Depositary will deliver to such holder at the same
time a new Depositary Receipt evidencing such excess number of Depositary
Shares. Holders of Preferred Stock thus withdrawn will not thereafter be
entitled to deposit such shares under the Deposit Agreement or to receive
Depositary Receipts evidencing Depositary Shares therefor.
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AMENDMENT AND TERMINATION OF DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time and from time to time be
amended by agreement between the Company and the Depositary. However, any
amendment which materially and adversely alters the rights of the holders (other
than any change in fees) of Depositary Shares will not be effective unless such
amendment has been approved by at least a majority of the Depositary Shares then
outstanding. No such amendment may impair the right, subject to the terms of the
Deposit Agreement, of any owner of any Depositary Shares to surrender the
Depositary Receipt evidencing such Depositary Shares with instructions to the
Depositary to deliver to the holder the Preferred Stock and all money and other
property, if any, represented thereby, except in order to comply with mandatory
provisions of applicable law. the Deposit Agreement may be terminated by the
Company or the Depositary only if (i) all outstanding Depositary Shares have
been redeemed or (ii) there has been a final distribution in respect of the
Preferred Stock in connection with any dissolution of the Company and such
distribution has been made to all the holders of Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of the
Preferred Stock and initial issuance of the Depositary Shares, and redemption of
the Preferred Stock and all withdrawals of Preferred Stock by owners of
Depositary Shares. Holders of Depositary Receipts will pay transfer, income and
other taxes and governmental charges and certain other charges as are provided
in the Deposit Agreement to be for their accounts. In certain circumstances, the
Depositary may refuse to transfer Depositary Shares, may withhold dividends and
distributions and sell the Depositary Shares evidenced by such Depositary
Receipt if such charges are not paid.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Receipts all
reports and communications from the Company which are delivered to the
Depositary and which the Company is required to furnish to the holders of the
Preferred Stock. In addition, the Depositary will make available for inspection
by holders of Depositary Receipts at the principal office of the Depositary, and
at such other places as it may from time to time deem advisable, any reports and
communications received from the Company which are received by the Depositary as
the holder of Preferred Stock.
Neither the Depositary nor the Company assumes any obligation or will be
subject to any liability under the Deposit Agreement to holders of Depositary
Receipts other than for its negligence or willful misconduct. Neither the
Depositary nor the Company will be liable if it is prevented or delayed by law
or any circumstance beyond its control in performing its obligations under the
Deposit Agreement. The obligations of the Company and the Depositary under the
Deposit Agreement will be limited to performance in good faith of their duties
thereunder, and they will not be obligated to prosecute or defend any legal
proceeding in respect of any Depositary Shares or Preferred Stock unless
satisfactory indemnity is furnished. The Company and the Depositary may rely on
written advice of counsel or accountants, on information provided by holders of
the Depositary Receipts or other persons believed in good faith to be competent
to give such information and on documents believed to be genuine and to have
been signed or presented by the proper party or parties.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Company notice of
its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
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Depositary must be appointed within 60 days after delivery of the notice for
resignation or removal and must be a bank or trust company having its principal
office in the United States of America and having a combined capital and surplus
of at least $100,000,000.
FEDERAL INCOME TAX CONSEQUENCES
Owners of Depositary Shares will be treated for Federal income tax purposes
as if they were owners of the Preferred Stock represented by such Depositary
Shares. Accordingly, such owners will be entitled to take into account, for
Federal income tax purposes, income and deductions to which they would be
entitled if they were holders of such Preferred Stock. In addition, (i) no gain
or loss will be recognized for Federal income tax purposes upon the withdrawal
of Preferred Stock in exchange for Depositary Shares, (ii) the tax basis of each
share of Preferred Stock to an exchanging owner of Depositary Shares will, upon
such exchange, be the same as the aggregate tax basis of the Depositary Shares
exchanged therefor, and (iii) the holding period for Preferred Stock in the
hands of an exchanging owner of Depositary Shares will include the period during
which such person owned such Depositary Shares.
DESCRIPTION OF DEBT SECURITIES
The Senior Debt Securities may be issued from time to time in one or more
series under an indenture (the "Senior Indenture"), dated as of January 1, 1991,
between the Company and The Chase Manhattan Bank (formerly Chemical Bank as
successor by merger to Manufacturers Hanover Trust Company), as Trustee (the
"Senior Trustee"), which is filed as an exhibit to the Registration Statement of
which this Prospectus is a part. The Subordinated Debt Securities may be issued
from time to time in one or more series under an indenture (the "Subordinated
Indenture" and, together with the Senior Indenture, the "Indentures") between
the Company and a trustee (the "Subordinated Trustee") and, together with the
Senior Trustee, the "Trustees") to be identified in the related Prospectus
Supplement a form of which is filed as an exhibit to the Registration Statement
of which this Prospectus is a part. The following summary of certain general
provisions of the Indentures and the Debt Securities does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
the provisions of the Indentures, including the definitions therein of certain
terms. The particular terms of the Debt Securities offered by any Prospectus
Supplement (the "Offered Debt Securities") and the extent, if any, to which such
general provisions may apply to the Offered Debt Securities will be described in
the Prospectus Supplement relating to such Offered Debt Securities.
GENERAL
Neither Indenture limits the amount of Debt Securities which may be issued
thereunder and each Indenture provides that Debt Securities may be issued
thereunder up to the aggregate principal amount which may be authorized from
time to time. The Debt Securities may be issued from time to time in one or more
series. The Senior Debt Securities will be unsecured and will rank on a parity
with all other unsecured and unsubordinated indebtedness of the Company. The
Subordinated Debt Securities will be unsecured and subordinated to all present
and future Senior Indebtedness (as such term will be defined in an accompanying
Prospectus Supplement) of the Company.
Reference is made to the Prospectus Supplement relating to the particular
series of Offered Debt Securities offered thereby for the following terms of the
Offered Debt Securities: (i) the designation, aggregate principal amount and
authorized denominations of the Offered Debt Securities; (ii) the price
(expressed as a percentage of the aggregate principal amount thereof) at which
the Offered Debt Securities will be issued; (iii) the date or dates on which the
Offered Debt Securities will mature; (iv) the rate per annum, if any, at which
the Offered Debt Securities will bear interest; (v) the date from which such
interest, if any, on the Offered Debt Securities will accrue, the dates on which
such interest, if any, will be payable, the date on which payment of such
interest, if any, will commence and the regular record dates for such interest
payment dates, if any; (vi) any optional or mandatory sinking fund provisions;
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(vii) the date, if any, after which and the price or prices at which the Offered
Debt Securities may, pursuant to any optional or mandatory redemption
provisions, be redeemed at the option of the Company or the Holder and any other
terms and provisions of such optional or mandatory redemptions; (viii) if other
than denominations of $1,000 and any integral multiple thereof, the
denominations in which Offered Debt Securities of the series will be issuable;
(ix) if other than the principal amount thereof, the portion of the principal
amount of Offered Debt Securities of the series which will be payable upon
declaration of acceleration of maturity thereof or provable in bankruptcy; (x)
any Events of Default with respect to the Offered Debt Securities of a
particular series, if not set forth in the applicable Indenture; (xi) the
currency or currencies, including composite currencies, in which payment of the
principal of (and premium, if any) and interest, if any, on the Offered Debt
Securities of the series will be payable (if other than the currency of the
United States of America), which unless otherwise specified will be the currency
of the United States of America as at the time of payment is legal tender for
payment of public or private debts; (xii) if the principal of (and premium, if
any), or interest, if any, on the Offered Debt Securities of the series is to be
payable, at the election of the Company or any holder thereof, in a coin or
currency other than that in which the Offered Debt Securities of the series are
stated to be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made; (xiii) if such Offered Debt
Securities are to be denominated in a currency or currencies, including
composite currencies, other than the currency of the United States of America,
the equivalent price in the currency of the United States of America for
purposes of determining the voting rights of Holders of such Debt Securities
under the applicable Indenture; (xiv) if the amount of payments of principal of
(and premium, if any), or portions thereof, or interest, if any, on the Offered
Debt Securities of the series may be determined with reference to an index,
formula or other method based on a coin or currency other than that in which the
Offered Debt Securities of the series are stated to be payable, the manner in
which such amounts will be determined; and (xv) any additional restrictive
covenants or other material terms relating to the Offered Debt Securities (which
may not be inconsistent with the applicable Indenture).
Unless otherwise indicated in the Prospectus Supplement relating thereto,
principal, premium, if any, and interest, if any, will be payable and the Debt
Securities will be transferable at the corporate trust office of the applicable
Trustee. Unless other arrangements are made, principal, premium, if any, and
interest will be paid by checks mailed to the Holders at their registered
addresses.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Debt Securities will be issued only in fully registered form without
coupons, in denominations of $1,000 or any integral multiple thereof. No service
charge will be made for any transfer or exchange of the Debt Securities, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Some or all of the Debt Securities may be issued as discounted Debt
Securities (bearing no interest or interest at a rate which at the time of
issuance is below market rates) to be sold at a substantial discount below their
stated principal amount. Federal income tax consequences and other special
considerations applicable to any such discounted Debt Securities will be
described in the Prospectus Supplement relating thereto.
RESTRICTED AND UNRESTRICTED SUBSIDIARIES
The Senior Indenture provides for Restricted Subsidiaries and Unrestricted
Subsidiaries. The Subordinated Indenture has no provisions relating to
Restricted Subsidiaries or Unrestricted Subsidiaries. Accordingly the following
provisions apply only to the Senior Indenture and the Senior Debt Securities
issuable thereunder.
The various restrictive provisions of the Senior Indenture applicable to the
Company and its Restricted Subsidiaries do not apply to Unrestricted
Subsidiaries. The assets and indebtedness of Unrestricted Subsidiaries are not
consolidated with those of the Company and its Restricted Subsidiaries
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in calculating Consolidated Net Tangible Assets under the Senior Indenture.
Investments by the Company or by its Restricted Subsidiaries in Unrestricted
Subsidiaries are excluded in computing Consolidated Net Tangible Assets.
"Unrestricted Subsidiaries" are those Subsidiaries which are designated as
Unrestricted Subsidiaries by the Board of Directors from time to time pursuant
to the Senior Indenture (in each case, unless and until designated as Restricted
Subsidiaries by the Board of Directors pursuant to the Indenture). "Restricted
Subsidiaries" are all Subsidiaries other than Unrestricted Subsidiaries. At the
date of execution of the Senior Indenture and at the date of this Prospectus,
all Subsidiaries of the Company were Restricted Subsidiaries. However, subject
to compliance with the terms of the Senior Indenture, the Company has the right
to change the designation of one or more of such Subsidiaries to Unrestricted
Subsidiaries. A "Wholly-owned Restricted Subsidiary" is a Restricted Subsidiary,
of which at least 99% of the capital stock (except directors' qualifying shares)
is owned by the Company and its other Wholly-owned Restricted Subsidiaries.
A Restricted Subsidiary may not be designated an Unrestricted Subsidiary
unless the Company and its Restricted Subsidiaries would thereafter be permitted
to incur at least $1.00 of Secured Debt under the Senior Indenture.
An Unrestricted Subsidiary may not be designated a Restricted Subsidiary if
it has any Secured Debt or Attributable Debt unless immediately thereafter the
Company and its Restricted Subsidiaries would be permitted to incur such debt
under the terms of the Senior Indenture.
"Mortgage" means and includes any mortgage, pledge, lien, security interest,
conditional sale or other title retention agreement or other similar
encumbrance.
"Principal Property" means all improved real property and improvements
thereon owned by the Company or a Restricted Subsidiary (including, without
limitation, any store, warehouse, service center, shopping center or
distribution center wherever located), and in each case having a book value
(determined by reference to the latest available quarterly or annual
consolidated balance sheet of the Company) equal to at least 1% of Consolidated
Net Tangible Assets at the date of such balance sheet. A Principal Property is
treated as having been "acquired" on the date the Principal Property is placed
in operation by the Company or a Restricted Subsidiary after the later of (a)
its acquisition from a third party, including an Unrestricted Subsidiary, (b)
completion of its original construction or (c) completion of its substantial
reconstruction, renovation, remodeling or expansion (whether or not constituting
a Principal Property prior to such reconstruction, renovation, remodeling or
expansion). The Board of Directors shall have the power to determine in good
faith (which determination, reasonably made in good faith, shall be final,
conclusive and binding on all parties) whether and when a Principal Property has
been "acquired" for purposes of the foregoing sentence. At the present time,
there are only a few Principal Properties of the Company and its Restricted
Subsidiaries.
RESTRICTIONS UPON SECURED DEBT
The Senior Indenture restricts the incurrence of Secured Debt by the
Company. The Subordinated Indenture does not restrict the incurrence of secured
debt of any kind by the Company. Accordingly, the following provisions apply
only to the Senior Indenture and the Senior Debt Securities issuable thereunder.
Neither the Company nor a Restricted Subsidiary is permitted to create,
issue, incur, assume or guarantee any Secured Debt without equally and ratably
securing the Senior Debt Securities. This restriction does not apply to certain
permitted encumbrances described in the Senior Indenture, including purchase
money mortgages, encumbrances existing on property at the time it is acquired by
the Company or a Restricted Subsidiary or created within 18 months of the date
of such acquisition, conditional sales and similar agreements and the extension,
renewal or refunding of any of the foregoing. The Senior Indenture also permits
other indebtedness secured by encumbrances not otherwise specifically permitted
which, together with Attributable Debt respecting existing Sale and Leaseback
Transactions (excluding,
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among certain others, Sale and Leaseback Transactions entered into in respect of
property acquired by the Company or a Restricted Subsidiary not more than 18
months prior to the date such Sale and Leaseback Transaction is entered into)
incurred or entered into, as the case may be, after the date of the Senior
Indenture, would not at the time exceed 10% of the Consolidated Net Tangible
Assets of the Company and its Restricted Subsidiaries.
"Capital Lease" means any lease of property which, in accordance with
generally accepted accounting principles, should be capitalized on the lessee's
balance sheet or for which the amount of asset and liability thereunder as if so
capitalized should be disclosed in a note to such balance sheet.
"Consolidated Net Tangible Assets" means (a) the total amount of assets
(less applicable reserves and other properly deductible items) which under
generally accepted accounting principles would be included on a consolidated
balance sheet of the Company and its Restricted Subsidiaries after deducting
therefrom, without duplication, the sum of (i) all liabilities and liability
items which under generally accepted accounting principals would be included on
such balance sheet, except Funded Debt, liabilities in respect of Capital Leases
(other than the current portion thereof), capital stock and surplus, surplus
reserves and provisions for deferred income taxes and (ii) all good will, trade
names, trademarks, patents, unamortized debt discount and expense and other like
intangibles, which in each case under generally accepted accounting principles
would be included on such consolidated balance sheet, less (b) the amount which
would be so included on such consolidated balance sheet for Investments (less
applicable reserves) (i) in Unrestricted Subsidiaries or (ii) in corporations
while they were Unrestricted Subsidiaries but which at the time of computation
are not Subsidiaries of the Company.
"Funded Debt" means any indebtedness for money borrowed, created, issued,
incurred, assumed or guaranteed, whether secured or unsecured, maturing more
than one year after the date of determination thereof and any indebtedness,
regardless of its term, renewable pursuant to the terms thereof or of a
revolving credit or similar agreement effective for more than one year after the
date of the creation of the indebtedness, which would, in accordance with
generally accepted accounting practice, be classified as funded debt, excluding
(i) indebtedness for which money in satisfaction thereof has been deposited in
trust, (ii) certain guarantees arising in the ordinary course of business, and
(iii) liabilities resulting from capitalization of lease rentals.
"Secured Debt" means indebtedness for money borrowed which is secured by a
Mortgage on a Principal Property of the Company or any Restricted Subsidiary. A
pledge of the stock of a Subsidiary shall not be deemed to create a Mortgage on
the property of such Subsidiary.
RESTRICTIONS UPON SALES WITH LEASES BACK
The Senior Indenture restricts Sale and Leaseback Transactions by the
Company. The Subordinated Indenture does not restrict sale and leaseback
transactions of any kind by the Company. Accordingly, the following provisions
apply only to the Senior Indenture and the Senior Debt Securities issuable
thereunder.
Under the Senior Indenture the Company is not permitted, and may not permit
a Restricted Subsidiary, to sell (except to the Company and/or one or more
Wholly-owned Restricted Subsidiaries) any Principal Property owned by the
Company or a Restricted Subsidiary with the intention that the Company or any
Restricted Subsidiaries take back a lease thereof, except a lease for a period,
including renewals, of not more than 36 months by the end of which period it is
intended that the use of such Principal Property by the lessee will be
discontinued, except (i) where the Company would be entitled under the covenant
entitled "Restrictions Upon Secured Debt" above to incur additional Secured Debt
not otherwise specifically permitted by the Senior Indenture in an amount equal
to the Attributable Debt respecting such Sale and Leaseback Transaction, (ii)
where the Sale and Leaseback Transaction is entered into in respect of property
acquired by the Company or a Restricted Subsidiary within 18 months of such
acquisition, or (iii) where the Company within 180 days of entering into the
Sale and Leaseback Transaction (or, in the
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case of (ii) below, within six months thereafter pursuant to a bona fide
commitment to acquire a Principal Property entered into within such 180-day
period) applies an amount equal to the lesser of (a) the net proceeds (net of
all costs, fees, expenses, taxes and indemnities payable as a result thereof) of
the sale of the property leased pursuant to such Transaction or (b) the fair
market value of the property so leased to (i) the retirement of secured debt of
the Company or any Restricted Subsidiaries, or Senior Debt Securities or (ii)
the acquisition of one or more Principal Properties (other than the Principal
Property involved in such sale).
RESTRICTIONS UPON MERGER AND SALE OF ASSETS
The Senior Indenture provides that no merger of the Company with or sale of
the Company's property substantially as an entirety to any other corporation
shall be made if, as a result, properties or assets of the Company would become
subject to a mortgage or lien which would not be permitted by the Senior
Indenture, unless the Senior Debt Securities shall be equally and ratably
secured with such obligations. Each Indenture provides that any successor entity
must be a corporation organized in the United States, shall expressly assume the
due and punctual payment of the principal (and premium, if any) and interest on
the Debt Securities and, immediately after giving effect to a merger or
consolidation, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have happened and be
continuing.
MODIFICATION OF THE INDENTURE
Each Indenture and the rights of the respective Holders may be modified by
the Company only with the consent of the Holders of not less than a majority in
aggregate principal amount of the outstanding Debt Securities of all series
under the respective Indenture affected by the modification (taken together as
one class); but no modification altering the terms of payment of principal or
interest, changing the place or medium of payment of principal or interest,
impairing the rights of Holders to institute suit for payment or reducing the
percentage required for modification will be effective against any Holder
without his consent.
EVENTS OF DEFAULT
Each Indenture defines an Event of Default with respect to the Debt
Securities of any series as being any one of the following events: (a) default
for 30 days in any payment of interest on that series when due, (b) default in
any payment of principal on that series when due, (c) default in the deposit of
any sinking fund payment when due, (d) default for 60 days after appropriate
notice in the performance of any other covenant in the Debt Securities or the
applicable Indenture, (e) certain events in bankruptcy, insolvency or
reorganization, or (f) certain events of default resulting in the acceleration
of the maturity of the related indebtedness aggregating in excess of $10,000,000
under any mortgages, indentures (including each Indenture) or instruments under
which the Company may have issued, or by which there may have been secured or
evidenced, any other indebtedness for money borrowed (including Debt Securities
of any series) of the Company. In case an Event of Default shall occur and be
continuing with respect to the Debt Securities of any series, the applicable
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Debt Securities then outstanding of that series may declare the principal of the
Debt Securities of such series (or, if the Debt Securities of that series were
issued as discounted Debt Securities, such portion of the principal as may be
specified in the terms of that series) and the accrued interest thereon, if any,
to be due and payable. Any Event of Default with respect to the Debt Securities
of any series which has been cured may be waived by the Holders of a majority in
aggregate principal amount of the Debt Securities of that series then
outstanding.
Each Indenture requires the Company to file annually with the Trustee a
written statement signed by two officers of the Company as to the absence of
certain defaults under the terms of such Indenture. Each Indenture provides that
the Trustee may withhold notice to the Holders of any default (except in payment
of principal or premium, if any, or interest) if it considers it in the interest
of the Holders to do so.
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Subject to the provisions of each Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, each
Indenture provides that the Trustee shall be under no obligation to exercise any
of its rights or powers under such Indenture at the request, order or direction
of Holders unless such Holders shall have offered to the Trustee reasonable
indemnity. Subject to such provisions for indemnification and certain other
rights of the Trustee, each Indenture provides that the Holders of a majority in
principal amount of the Debt Securities of any series then outstanding shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee.
DEFEASANCE AND DISCHARGE
The terms of each Indenture provide the Company with the option to be
discharged from any and all obligations in respect of the Debt Securities issued
thereunder (except for certain obligations to register the transfer or exchange
of Debt Securities, to replace stolen, lost or mutilated Debt Securities, to
maintain paying agencies and hold moneys for payment in trust) upon the deposit
with the Trustee, in trust, of money or U.S. Government Obligations (as
defined), or both, which through the payment of interest and principal thereof
in accordance with their terms will provide money in an amount sufficient to pay
any installment of principal (and premium, if any) and interest on and any
mandatory sinking fund payments in respect of the Debt Securities on the Stated
Maturity of such payments in accordance with the terms of the Debt Securities
and the Indenture governing such Debt Securities. Such option may only be
exercised if the Company has received from, or there has been published by, the
United States Internal Revenue Service a ruling to the effect that such a
discharge will not be deemed, or result in, a taxable event with respect to
Holders.
DEFEASANCE OF CERTAIN COVENANTS
The terms of the Senior Debt Securities provide the Company with the option
to omit to comply with the covenants described under the headings "Restricted
and Unrestricted Subsidiaries", "Restrictions Upon Secured Debt" and
"Restrictions Upon Sales with Leases Back" above. The Company, in order to
exercise such option, will be required to deposit with the Trustee money or U.S.
Government Obligations, or both, which through the payment of interest and
principal thereof in accordance with their terms will provide money in an amount
sufficient to pay principal (and premium, if any) and interest on any mandatory
sinking fund payments in respect of the Senior Debt Securities on the Stated
Maturity of such payments in accordance with the terms of the Senior Indenture
and such Senior Debt Securities. The Company will also be required to deliver to
the Trustee an opinion of counsel to the effect that the Company has received
from, or there has been published by, the Internal Revenue Service a ruling to
the effect that the deposit and related covenant defeasance will not cause the
Holders of such series to recognize income, gain or loss for federal income tax
purposes.
The Prospectus Supplement may further describe the provisions, if any, of
any particular series of Offered Debt Securities permitting a discharge or such
an omission to comply with certain covenants.
SENIOR TRUSTEE'S RELATIONSHIP WITH THE COMPANY
The Senior Trustee acts as a depositary of funds of, extends lines of credit
to, and performs other services for the Company in the normal course of its
business.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a depository (the "Depository") identified in the applicable Prospectus
Supplement and registered in the name of the Depository or a nominee for the
Depository. In such a case, one or more Global Securities will be issued in a
denomination or aggregate
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denominations equal to the portion of the aggregate principal amount of
outstanding Debt Securities of the series to be represented by such Global
Security or Securities. Unless and until it is exchanged in whole or in part for
Debt Securities in definitive certificated form, 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 such Depository or any such nominee
to a successor Depository for such series or a nominee of such successor
Depository and except in the circumstances, if any, described in the applicable
Prospectus Supplement.
The Company expects that the following provisions will apply to depository
arrangements with respect to any portion of a series of Debt Securities to be
represented by a Global Security. Any additional specific terms of the
depository arrangement will be described in the applicable Prospectus
Supplement.
Upon the issuance of any Global Security, and the deposit of such Global
Security with or on behalf of the Depository for such Global Security, the
Depository will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such Global
Security to the accounts of institutions ("Participants") that have accounts
with the Depository or its nominee. The accounts to be credited will be
designated by the underwriters or agents engaging in the distribution of such
Debt Securities or by the Company, if such Debt Securities are offered and sold
directly by the Company. Ownership of beneficial interests in a Global Security
will be limited to Participants or persons that may hold interest through
Participants. Ownership of beneficial interests by Participants in such Global
Security will be shown on, and the transfer of such beneficial interests will be
effected only through, records maintained by the Depository for such Global
Security or by its nominee. Ownership of beneficial interests in such Global
Security by persons that hold through Participants will be shown on, and the
transfer of such beneficial interests within such Participants will be effected
only through, records maintained by such Participants. The laws of some
jurisdictions may require that certain purchasers of securities take physical
delivery of such securities in certificated form. The foregoing limitations and
such laws may impair the ability to transfer beneficial interests in such Global
Securities.
So long as the Depository for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Unless otherwise specified in the applicable Prospectus Supplement
and except as specified below, owners of beneficial interests in such Global
Security will not be entitled to have Debt Securities of the series represented
by such Global Security registered in their names, will not receive or be
entitled to receive physical delivery of Debt Securities of such series in
certificated form and will not be considered the holders thereof for any
purposes under the Indenture. Accordingly, each person owning a beneficial
interest in such Global Security must rely on the procedures of the Depository
and, if such person is not a Participant, on the procedures of the Participant
through which such person owns its interest, to exercise any rights of a holder
under the Indenture.
The Depository may grant proxies and otherwise authorize Participants to
give or take any request, demand, authorization, direction, notice, consent,
waiver or other action which a holder is entitled to give or take under the
Indenture. The Company understands that, under existing industry practices, if
the Company requests any action of holders or any owner of a beneficial interest
in such Global Security desires to give any notice or take any action a holder
is entitled to give or take under the Indenture, the Depository would authorize
the Participants to give such notice or take such action, and Participants would
authorize beneficial owners owning through such Participants to give such notice
or take such action or would otherwise act upon the instructions of beneficial
owners owning through them.
Unless otherwise specified in the applicable Prospectus Supplement, payments
with respect to principal, premium, if any, and interest, if any, on Debt
Securities represented by a Global Security registered in the name of a
Depository or its nominee will be made by the Company to such Depository or its
nominee, as the case may be, as the registered owner of such Global Security.
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The Company expects that the Depository for any Debt Securities represented
by a Global Security, upon receipt of any payment of principal, premium or
interest, will credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security as shown on the records of such Depository. The Company
also expects that payments by Participants to owners of beneficial interests in
such Global Security held through such Participants will be governed by standing
instructions and customary practices, as is now the case with the securities
held for the accounts of customers registered in "street names", and will be the
responsibility of such Participants. None of the Company, the Trustee or any
agent of the Company or the Trustee shall have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial interests in a Global Security, or for maintaining, supervising or
reviewing any records relating to such beneficial interests.
Unless otherwise specified in the applicable Prospectus Supplement, a Global
Security of any series will be exchangeable for certificated Debt Securities of
the same series only if (i) the Depository for such Global Securities notifies
the Company that it is unwilling or unable to continue as Depository or such
Depository ceases to be a clearing agency registered under the Exchange Act (if
so required by applicable law or regulation) and, in either case, a successor
Depository is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, (ii) the Company in
its sole discretion determines that such Global Securities shall be exchangeable
for certificated Debt Securities or (iii) there shall have occurred and be
continuing an Event of Default under the Indenture with respect to the Debt
Securities of such series. Upon any such exchange, owners of beneficial
interests in such Global Security or Securities will be entitled to physical
delivery of individual Debt Securities in certificated form of like tenor and
terms equal in principal amount to such beneficial interests, and to have such
Debt Securities in certificated form registered in the names of the beneficial
owners, which names are expected to be provided by such Depository's relevant
Participants (as identified by such Depository) to the Trustee.
The following is based on information furnished to the Company:
In the event that the Depository Trust Company ("DTC") acts as Depository
for the Global Securities of any series, such Global Securities will be issued
as fully registered securities registered in the name of Cede & Co. (DTC's
partnership nominee). One fully registered Global Security will be issued with
respect to each $200 million (or such other amount as shall be permitted by DTC
from time to time) of principal amount of the Debt Securities of a series, and
an additional certificate will be issued with respect to any remaining principal
amount of such series.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its Participants deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others, such as securities brokers and
dealers and banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Commission.
To facilitate subsequent transfers, the Debt Securities are registered in
the name of DTC's nominee, Cede & Co. The deposit of the Debt Securities with
DTC and their registration in the name of Cede & Co.
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will effect no change in beneficial ownership. DTC has no knowledge of the
actual beneficial owners of the Debt Securities, DTC's records reflect only the
identity of the Direct Participants to whose accounts Debt Securities are
credited, which may or may not be the beneficial owners. The Participants remain
responsible for keeping account of their holdings on behalf of their customers.
Delivery of notices and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants, and by Direct Participants and
Indirect Participants to beneficial owners of Debt Securities are governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither DTC nor Cede & Co. consents or votes with respect to the Debt
Securities. Under its usual procedures, DTC mails a proxy (an "Omnibus Proxy")
to the issuer as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts the Debt Securities are credited on the record date (identified
on a list attached to the Omnibus Proxy).
If applicable, redemption notices shall be sent to Cede & Co. If less than
all of the Debt Securities of a series represented by Global Securities are
being redeemed, DTC's practice is to determine by lot the amount of the interest
of each Direct Participant in such issue to be redeemed.
To the extent that any Debt Securities provide for repayment or repurchase
at the option of the holders thereof, a beneficial owner shall give notice of
any option to elect to have its interest in the Global Security repaid by the
Company, through its Participant, to the Trustee, and shall effect delivery of
such interest in a Global Security by causing the Direct Participant to transfer
the Direct Participant's interest in the Global Security or Securities
representing such interest, on DTC's records, to the Trustee. The requirement
for physical delivery of Debt Securities in connection with a demand for
repayment or repurchase will be deemed satisfied when the ownership rights in
the Global Security or Securities representing such Debt Securities are
transferred by Direct Participants on DTC's records.
DTC may discontinue providing its services as securities depository with
respect to the Debt Securities at any time. Under such circumstances, in the
event that a successor securities depository is not appointed, Debt Security
certificates are required to be printed and delivered as described above.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Debt Security certificates will be printed and delivered as described above.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Debt
Securities or Common Stock. Securities Warrants may be issued independently or
together with Debt Securities or Common Stock offered by any Prospectus
Supplement and may be attached to or separate from such Debt Securities or
Common Stock. Each series of Securities Warrants will be issued under a separate
warrant agreement (a "Warrant Agreement") to be entered into between the Company
and a bank or trust company, as Warrant Agent (the "Warrant Agent"), all as set
forth in the Prospectus Supplement relating to the particular issue of offered
Securities Warrants. The Warrant Agent will act solely as an agent of the
Company in connection with the Securities Warrant certificates relating to the
Securities Warrants and will not assume any obligation or relationship of agency
or trust for or with any holders of Securities Warrant certificates or
beneficial owners of Securities Warrants. The following summaries of certain
provisions of the Warrant Agreements and Securities Warrants do not purport to
be complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Warrant Agreement and the Securities Warrant
certificates relating to each series of Securities Warrants which will be filed
with the Commission and incorporated by reference as an exhibit to the
Registration Statement of which this Prospectus is a part at or prior to the
time of the issuance of such series of Securities Warrants.
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GENERAL
If Securities Warrants are offered, the applicable Prospectus Supplement
will describe the terms of such Securities Warrants, including, in the case of
Securities Warrants for the purchase of Debt Securities, the following where
applicable:
(i) the offering price;
(ii) the denominations and terms of the series of Debt Securities
purchasable upon exercise of such Securities Warrants and whether such Debt
Securities are Senior Debt Securities or Subordinated Debt Securities;
(iii) the designation and terms of any series of Debt Securities with
which such Securities Warrants are being offered and the number of such
Securities Warrants being offered with each such Debt Security;
(iv) the date, if any, on and after which such Securities Warrants and
any related series of Debt Securities will be transferable separately;
(v) the principal amount of the series of Debt Securities purchasable
upon exercise of each such Securities Warrant and the price at which such
principal amount of Debt Securities of such series may be purchased upon
such exercise;
(vi) the date on which the right to exercise such Securities Warrants
shall commence and the date (the "Expiration Date") on which such right
shall expire;
(vii) whether the Securities Warrants will be issued in registered or
bearer form;
(viii) any special United States Federal income tax consequences;
(ix) the terms, if any, on which the Company may accelerate the date by
which the Securities Warrants must be exercised; and
(x) any other terms of such Securities Warrants.
In the case of Securities Warrants for the purchase of Common Stock, the
applicable Prospectus Supplement will describe the terms of such Securities
Warrants, including the following where applicable: (i) the offering price; (ii)
the aggregate number of shares purchasable upon exercise of such Securities
Warrants and the exercise price; (iii) the designation and terms of the series
of Debt Securities with which such Securities Warrants are being offered, if
any, and the number of such Securities Warrants being offered with each such
Debt Security; (iv) the date, if any, on and after which such Securities
Warrants and any related series of Debt Securities or Common Stock will be
transferable separately; (v) the date on which the right to exercise such
Securities Warrants shall commence and the Expiration Date; (vi) any special
United States Federal income tax consequences; (vii) the terms, if any, on which
the Company may accelerate the date by which the Securities Warrants must be
exercised; and (viii) any other terms of such Securities Warrants.
Securities Warrant certificates may be exchanged for new Securities Warrant
certificates of different denominations, may (if in registered form) be
presented for registration of transfer, and may be exercised at the corporate
trust office of the applicable Warrant Agent or any other office indicated in
the applicable Prospectus Supplement. Prior to the exercise of any Securities
Warrant to purchase Debt Securities, holders of such Securities Warrants will
not have any of the rights of Holders of the Debt Securities purchasable upon
such exercise, including the right to receive payments of principal, premium, if
any, or interest, if any, on such Debt Securities or to enforce covenants in the
applicable Indenture. Prior to the exercise of any Securities Warrants to
purchase Common Stock, holders of such Securities Warrants will not have any
rights of holders of such Common Stock, including the right to receive payments
of dividends, if any, on such Common Stock, or to exercise any applicable right
to vote.
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EXERCISE OF SECURITIES WARRANTS
Each Securities Warrant will entitle the holder thereof to purchase such
principal amount of Debt Securities or number of shares of Common Stock, as the
case may be, at such exercise price as shall in each case be set forth in, or
calculable from, the Prospectus Supplement relating to the offered Securities
Warrants. After the close of business on the Expiration Date (or such later date
to which such Expiration Date may be extended by the Company), unexercised
Securities Warrants will become void.
Securities Warrants may be exercised by delivering to the applicable Warrant
Agent payment as provided in the applicable Prospectus Supplement of the amount
required to purchase the Debt Securities or Common Stock, as the case may be,
purchasable upon such exercise together with certain information set forth on
the reverse side of the Securities Warrant certificate. Securities Warrants will
be deemed to have been exercised upon receipt of payment of the exercise price
in cash or by certified or official bank check, subject to the receipt within
five (5) business days of the Securities Warrant certificate evidencing such
Securities Warrants. Upon receipt of such payment and the Securities Warrant
certificate properly completed and duly executed at the corporate trust office
of the applicable Warrant Agent or any other office indicated in the applicable
Prospectus Supplement, the Company will, as soon as practicable, issue and
deliver the Debt Securities or Common Stock, as the case may be, purchasable
upon such exercise. If fewer than all of the Securities Warrants represented by
such Securities Warrant certificate are exercised, a new Securities Warrant
certificate will be issued for the remaining amount of Securities Warrants.
AMENDMENTS AND SUPPLEMENTS TO WARRANT AGREEMENTS
The Warrant Agreements may be amended or supplemented without the consent of
the holders of the Securities Warrants issued thereunder to effect changes that
are not inconsistent with the provisions of the Securities Warrants and that do
not adversely affect the interests of the holders of the applicable Securities
Warrants.
WARRANT ADJUSTMENTS
The applicable Prospectus Supplement will specify the manner, if any, in
which the exercise price of, and the number or amount of securities covered by,
a Common Stock Warrant are subject to adjustment in certain circumstances.
MARYLAND ANTI-TAKEOVER PROVISIONS
As of May 1, 1997, the Company was 54.3% owned by Tengelmann
Warenhandelsgesellschaft ("Tengelmann"), a general retailer headquartered in
Germany. Tengelmann established its majority ownership position in the Company
prior to the enactment of the following legislation.
MARYLAND FAIR PRICE PROVISIONS. The Maryland "fair price" statute may
discourage persons or entities from attempting to gain control of a corporation.
This law imposes certain statutory requirements with respect to "business
combinations," such as mergers and other similar transactions and specified
transfers of assets and securities, when such transactions are between a company
and an "interested stockholder" or an affiliate of an "interested stockholder"
(one who owns beneficially, directly or indirectly, 10% or more of the
outstanding voting stock of the corporation or an affiliate or associate of such
beneficial owner who was such a 10% holder at any time in the last two years).
Under the Maryland "fair price" statute, business combinations, including a
second-stage merger transaction, with an "interested stockholder" may not be
consummated for a period of five years following the most recent date on which
the "interested stockholder" becomes an "interested stockholder." After this
five-year period, unless certain value and other standards are met (in the case
of the merger-type second-stage transaction) or an exemption is available,
transactions of these types may not be consummated between a Maryland
corporation and an "interested stockholder" unless recommended by the
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board of directors of the corporation, and approved by the affirmative vote of
at least 80% of the votes entitled to be cast by the holders of outstanding
shares of voting stock and 66 2/3% of the votes entitled to be cast by the
holders of the voting stock held by stockholders other than the "interested
stockholder." A business combination with an "interested stockholder" which is
approved by the board of directors of a Maryland corporation at any time before
an "interested stockholder" first becomes an "interested stockholder" is not
subject to the special voting requirements. An amendment to a Maryland
corporation's charter electing not to be subject to the foregoing requirements
must be approved by the affirmative vote of at least 80% of the votes entitled
to be cast by all holders of outstanding voting stock and 66 2/3% of the votes
entitled to be cast by the holders of the voting stock other than the
"interested stockholders." Any such amendment is not effective until 18 months
after the vote of stockholders and does not apply to any business combination of
a corporation with a stockholder who was an "interested stockholder" on the date
of the stockholder vote. The Company has not adopted any such amendment to its
Articles of Incorporation.
MARYLAND CONTROL SHARE ACQUISITION PROVISION. Maryland law imposes
limitations on voting rights in a "control share acquisition." The Maryland
statute defines "control shares" as shares representing between 20% and
33- 1/3%, 33- 1/3% and 50%, and 50% or higher of the outstanding shares, and
requires a two-thirds stockholder vote (excluding shares owned by the acquiring
person and certain members of management) to accord voting rights to stock
acquired in a control share acquisition. The statute also requires Maryland
corporations to hold a special meeting at the request of an actual or proposed
control share acquiror generally within 50 days after a request is made with the
submission of an "acquiring person statement," but only if the acquiring person
gives a written undertaking to pay the corporation's expenses of the special
meeting. In addition, unless the charter or by-laws provide otherwise, the
statute gives the Maryland corporation, within certain time limitations, various
redemption rights if there is a stockholder vote on the issue and the grant of
voting rights is not approved, or if an "acquiring person statement" is not
delivered to the target within 10 days following a control share acquisition.
Moreover, unless the charter or by-laws provide otherwise, the statute provides
that if, before a control share acquisition occurs, voting rights are accorded
to control shares which results in the acquiring person having majority voting
power, then minority stockholders have appraisal rights. An acquisition of
shares may be exempted from the control share statute provided that a charter or
by-law provision is adopted for such purpose prior to the control share
acquisition. There are no such provisions in the Articles of Incorporation or
Bylaws of the Company.
Reference is made to the full text of the foregoing statutes for their
entire terms, and the partial summary contained herein is not intended to be
complete.
PLAN OF DISTRIBUTION
The Company may sell the Securities (i) through underwriters or dealers;
(ii) through agents; (iii) directly to purchasers; or (iv) through a combination
of any such methods of sale. Any such underwriter, dealer or agent may be deemed
to be an underwriter within the meaning of the Securities Act. The Prospectus
Supplement relating to any offering of Securities will set forth their offering
terms, including the name or names of any underwriters, the purchase price of
the Securities and the proceeds to the Company from such sale, any underwriting
discounts, commissions and other items constituting underwriters' compensation,
any initial public offering price, and any underwriting discounts, commissions
and other items allowed or reallowed or paid to dealers, and any securities
exchanges on which the Securities may be listed.
If underwriters are used in the sale, the Securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, or at prices related to such
prevailing market prices, or at negotiated prices. The Securities may be offered
to the public either through underwriting syndicates represented by one or more
managing underwriters or directly by one or more of such firms. Unless otherwise
set forth in the Prospectus Supplement, the obligations of the underwriters to
24
<PAGE>
purchase the Securities will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all the offered Securities if any are
purchased. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
Any agent involved in the offer or sale of the Securities in respect of
which this Prospectus is delivered will be named, and any commissions payable by
the Company to such agent will be set forth, in the accompanying Prospectus
Supplement. Unless otherwise indicated in the Prospectus Supplement, any such
agent will be acting on a best efforts basis for the period of its appointment.
Underwriters, dealers and agents may be entitled, under agreements entered
into with the Company, to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act or to contribution
by the Company to payments they may be required to make in respect thereof.
Certain of the underwriters, agents or dealers and their associates may
perform services for the Company in the ordinary course of business.
LEGAL MATTERS
Certain legal matters in connection with the Securities will be passed upon
for the Company by Cahill Gordon & Reindel (a partnership including a
professional corporation), New York, New York.
EXPERTS
The financial statements incorporated in this prospectus by reference from
the Company's Annual Report on Form 10-K for the year ended February 22, 1997
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report, which is incorporated herein by reference, and has been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
25
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee............................... $ 151,516
Cost of Printing.................................................................. 40,000
Independent Auditors' Fees and Expenses........................................... 15,000
Legal Services and Expenses (including Blue Sky fees and expenses)................ 50,000
Miscellaneous..................................................................... 43,484
---------
Total........................................................................... $ 300,000
---------
---------
</TABLE>
Other than the Securities and Exchange Commission Registration Fee, all
amounts set forth above are estimates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
THE COMPANY
Under the Article entitled "Corporations and Associations" of the Annotated
Code of the State of Maryland, Section 2-418, the Company is empowered to
indemnify directors, officers, agents and employees, to purchase and maintain
liability insurance on behalf of such persons and to create other and further
rights of indemnification by by-law or otherwise. The present indemnification
provisions (Article VII, Section 6) of the Company's by-laws expressly provide
indemnification for officers and directors of the Company and its subsidiary
companies. The indemnification provisions apply to both civil and criminal
actions and permit indemnification against expenses (including attorneys' fees),
judgments, fines, costs and amounts paid in settlement actually and reasonably
incurred if the director or officer acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to criminal proceedings, if he had no reason to
believe his conduct was unlawful.
THE REGISTRANTS
Reference is made to the Forms of Underwriting Agreements, to be filed as
Exhibits 1.1 and 1.2 hereto, which contain provisions for indemnification of
each of the registrants, their directors, officers and any controlling persons,
by the Underwriters against certain liabilities for information furnished by the
Underwriters.
For a statement of the registrants' undertakings with respect to
indemnification of directors and officers, see Item 17 below.
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<C> <C> <S>
1 * -- Form of Underwriting Agreement between the Company and the Underwriter(s)
4.1 -- Indenture, dated as of January 1, 1991, between the Company and The Chase
Manhattan Bank (formerly known as Chemical Bank, as successor by merger to
Manufacturers Hanover Trust Company) (incorporated by reference to Exhibit 4.1
of the Form 8-K of the Company dated as of January 1, 1991, File No. 1-4141).
4.2* -- Authorizing Resolutions relating to the Senior Debt Securities.
4.3+ -- Form of Subordinated Indenture to be entered into between the Company and the
Subordinated Trustee.
4.4* -- Authorizing Resolutions relating to the Subordinated Debt Securities.
4.5* -- Warrant Agreement between the Company and the Warrant Agent.
4.6* -- Deposit Agreement among the Company, the Depositary and holders from time to
time of the Depositary Shares.
5 * -- Opinion of Cahill Gordon & Reindel.
12 * -- Computation of ratio of earnings to fixed charges of the Company.
23.1** -- Consent of Deloitte & Touche LLP.
23.2* -- Consent of Cahill Gordon & Reindel.
24 + -- Power of Attorney (included on page II-5 of the Registration Statement as
initially filed).
25.1* -- Statement of eligibility of Senior Trustee on Form T-1.
25.2* -- Statement of eligibility of Subordinated Trustee on Form T-1.
</TABLE>
- ------------------------
* To be filed either by amendment or as an exhibit to an Exchange Act Report
of the Company and incorporated herein by reference.
** Filed herewith.
+ Previously filed.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement; notwithstanding the foregoing,
any increase or decrease in volume of securities being offered (if
the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
II-2
<PAGE>
provided, however, that the undertakings set forth in clauses (i) and (ii) of
this paragraph shall 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 Registrants pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered herein which remain unsold at the
termination of the offering.
(b) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of a
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrants pursuant to the foregoing provisions, or otherwise, the
Registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrants of expenses incurred or paid by a director, officer or
controlling person of the Registrants 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 Registrants 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 of whether
such indemnification by it is against public policy, as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(d) For purposes of determining any liability under the Securities Act of
1933, 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 Registrants pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of the registration
statement as of the time it was declared effective.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, hereunto
duly authorized in the City of New York, State of New York on the 22nd day of
January, 1998.
THE GREAT ATLANTIC AND PACIFIC TEA COMPANY,
INC.
By: /S/ FRED CORRADO
------------------------------------------
Fred Corrado
VICE CHAIRMAN OF THE BOARD
AND CHIEF FINANCIAL OFFICER
II-4
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
Chairman of the Board and
* Co-Chief Executive
- ------------------------------ Officer January 22, 1998
James Wood (Principal Executive
Officer)
President, Co-Chief
* Executive Officer and
- ------------------------------ Director (Principal January 22, 1998
Christian W.E. Haub Executive Officer)
Vice Chairman of the Board
/s/ FRED CORRADO and Chief Financial
- ------------------------------ Officer (Principal January 22, 1998
Fred Corrado Financial Officer)
*
- ------------------------------ Director January 22, 1998
John D. Barline, Esq.
*
- ------------------------------ Director January 22, 1998
Rosemarie Baumeister
*
- ------------------------------ Director January 22, 1998
Christopher F. Edley
*
- ------------------------------ Director January 22, 1998
Helga Haub
*
- ------------------------------ Director January 22, 1998
Barbara Barnes Hauptfuhrer
*
- ------------------------------ Director January 22, 1998
William A. Liffers
II-5
<PAGE>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
- ------------------------------ Director
Fritz Teelen
*
- ------------------------------ Director January 22, 1998
Robert L. "Sam" Wetzel
* Vice President and Con-
- ------------------------------ troller (Principal January 22, 1998
Kenneth A. Uhl Accounting Officer)
*By: /s/ FRED CORRADO
-------------------------
Fred Corrado
ATTORNEY-IN-FACT
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<C> <C> <S>
1 * -- Form of Underwriting Agreement between the Company and the Underwriter(s).
4.1 -- Indenture, dated as of January 1, 1991, between the Company and The Chase
Manhattan Bank (formerly known as Chemical Bank, as successor by merger to
Manufacturers Hanover Trust Company) (incorporated by reference to Exhibit 4.1
of the Form 8-K of the Company dated as of January 1, 1991, File No. 1-4141).
4.2* -- Authorizing Resolutions relating to the Senior Debt Securities.
4.3+ -- Form of Subordinated Indenture to be entered into between the Company and the
Subordinated Trustee.
4.4* -- Authorizing Resolutions relating to the Subordinated Debt Securities.
4.5* -- Warrant Agreement between the Company and the Warrant Agent.
4.6* -- Deposit Agreement among the Company, the Depositary and holders from time to
time of the Depositary Shares.
5 * -- Opinion of Cahill Gordon & Reindel.
12 * -- Computation of ratio of earnings to fixed charges of the Company.
23.1** -- Consent of Deloitte & Touche LLP.
23.2* -- Consent of Cahill Gordon & Reindel.
24 + -- Power of Attorney (included on page II-5 of the Registration Statement as
initially filed).
25.1* -- Statement of eligibility of Senior Trustee on Form T-1.
25.2* -- Statement of eligibility of Subordinated Trustee on Form T-1.
</TABLE>
- ------------------------
* To be filed either by amendment or as an exhibit to an Exchange Act Report
of the Company and incorporated herein by reference.
** Filed herewith.
+ Previously filed.
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Amendment No. 2 to
Registration Statement No. 333-36225 of The Great Atlantic & Pacific Tea
Company, Inc. on Form S-3 of our report dated April 24, 1997, appearing in the
Annual Report on Form 10-K of The Great Atlantic & Pacific Tea Company, Inc. for
the year ended February 22, 1997 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
- -----------------------
Deloitte & Touche LLP
Parsippany, New Jersey
January 22, 1998
