Filed pursuant to Rule 424(b)(2)
Registration Nos. 333-38171
333-38171-01
Prospectus Supplement to Prospectus dated February 12, 1999
[FINOVA LOGO]
$200,000,000 FINOVA Capital Corporation
6.125% Notes Due March 15, 2004 1850 N. Central Avenue
P.O. Box 2209
Phoenix, Arizona 85002-2209
TERMS OF NOTES
MATURITY RANKING
* The Notes will mature on March 15,
2004. * The Notes are unsecured. The Notes
rank equally with all of our
INTEREST existing and future senior debt and
senior to all of our existing and
* Interest paid on March 15 and future subordinated debt.
September 15, accruing from the
date we issue the Notes. LISTING
* First interest payment date on * We do not intend to list the Notes
September 15, 1999. on any securities exchange.
REDEMPTION FORM
* No redemption before maturity. No * Global security held by The
sinking fund. Depository Trust Company,
generally.
For more details, see "Note Terms" and "Description of Debt Securities."
--------------------------------------------------
TERMS OF SALE
Per Note Total
-------- -----
Price to the Public ........................ 99.749% $199,498,000
Underwriting Discounts and Commissions ...... 0.500% $ 1,000,000
Proceeds to FINOVA ........................... 99.249% $198,498,000
- ------------
Accrued interest from the issuance date will be added to the price to the
public.
--------------------------------------------------
The Notes have not been approved or
disapproved by the SEC or any state
securities commission.
None of those authorities has
determined that the Prospectus or this
Supplement is accurate or complete.
Any representation to the contrary is Book entry delivery of Notes expected
a criminal offense. on March 16, 1999, subject to
conditions.
Chase Securities Inc.
First Union Capital Markets Corp.
NationsBanc Montgomery Securities LLC
Paribas
--------------------------------------------------
The date of this Prospectus Supplement is March 11, 1999.
<PAGE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. WE HAVE AUTHORIZED NO ONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION.
WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY LOCATION WHERE THE
OFFER IS NOT PERMITTED.
YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS, INCLUDING
INFORMATION INCORPORATED BY REFERENCE, IS ACCURATE AS OF ANY DATE OTHER THAN THE
DATE ON THE FRONT OF THE PROSPECTUS.
------------------
TABLE OF CONTENTS
PAGE PAGE
PROSPECTUS SUPPLEMENT PROSPECTUS
FINOVA Capital Corporation...... S-3 Where You Can Find More
Note Terms...................... S-3 Information................... 2
Underwriting.................... S-4 The Companies................... 2
Recent Developments............. 5
Selected Financial
Information................... 6
Ratio Of Income To Total
Fixed Charges................... 6
Ratio Of Income To Combined
Fixed Charges And Preferred
Stock Dividends............... 6
Special Note Regarding
Forward-Looking Statements.... 7
Use Of Proceeds................. 7
Description Of Debt Securities.. 8
Description Of Capital Stock.... 14
Description Of Depositary
Shares........................ 19
Description Of Warrants......... 21
Plan Of Distribution............ 21
Legal Matters................... 22
Experts......................... 22
S-2
<PAGE>
FINOVA CAPITAL CORPORATION
FINOVA Capital Corporation Commercial Finance
("FINOVA" or "us") is a financial * Business Credit
services company that provides a broad * Commercial Services
range of financing and capital market * Corporate Finance
products to mid-size business, * Distribution & Channel Finance
principally in the U.S. We concentrate * Growth Finance
on lending to midsize businesses and * Rediscount Finance
have been in operation for over 43
years. Specialty Finance
* Commercial Equipment Finance
FINOVA extends revolving credit * Communications Finance
facilities, term loans, and equipment * Franchise Finance
and real estate financing primarily to * Healthcare Finance
"middle-market" businesses with * Portfolio Services
financing needs falling generally * Public Finance
between $500,000 and $35 million. * Resort Finance
* Specialty Real Estate Finance
We operate in 18 specific * Transportation Finance
industry or market niches under three
market groups. We selected those Capital Markets
groups because our expertise in * FINOVA Realty Capital
evaluating the credit-worthiness of * FINOVA Investment Alliance
prospective customers and our ability * FINOVA Loan Admistration
to provide value-added services enable
us to differentiate ourselves from our
competitors. That expertise and
ability enable us to command product
pricing that provides a satisfactory
spread over our borrowing costs.
FINOVA's principal lines of
business are detailed more fully in
the Prospectus. Those lines include:
NOTE TERMS
The following description separate series of securities under
supplements the "Description of Debt the Indenture dated as of March 20,
Securities" section in the Prospectus. 1998, between us and The First
The Notes are to be issued as a National Bank of Chicago, as Trustee.
Maximum Amount: $200,000,000 principal amount
Maturity: March 15, 2004
Interest Rate: 6.125% per year
Interest Payment Dates: March 15 and September 15, accruing from the date
we issue the Notes. First interest payment date is
September 15, 1999.
Interest Calculations: Based on a 360-day year of twelve 30-day months
Redemption or Sinking Fund: None
Form of Note: Global security, held in the name of The
Depository Trust Company, generally
Settlement and Payment: Same-day -- immediately available funds
Secondary Trading Payments: Same-day -- immediately available funds
S-3
<PAGE>
UNDERWRITING
We have entered into an ing price set forth on the cover page
Underwriting Agreement dated March 11, of this Supplement. They may offer the
1999 with Chase Securities Inc., First Notes to certain dealers at that price
Union Capital Markets Corp., less a concession of 0.300%. The
NationsBanc Montgomery Securities LLC Underwriters or those dealers may
and Paribas Corporation, as allow a discount of 0.250% on sales to
Underwriters. The agreement provides certain other dealers. After the
that Chase Securities Inc. will initial public offering of the Notes,
purchase from us $100,000,000 the Underwriters may change the public
principal amount of the Notes, First offering price, concession to dealers
Union Capital Markets Corp. and and discount.
NationsBanc Montgomery Securities LLC
will each purchase $40,000,000 of the The Notes are a new issue of
Notes and Paribas Corporation will securities with no established trading
purchase $20,000,000 of the Notes. The market. The Underwriters have advised
Underwriters will purchase all of the us that they intend to act as market
Notes if any of the Notes are makers for the Notes. They are not
purchased. They need not purchase any obligated to do so, however, and they
Notes unless certain conditions are may discontinue any market making at
satisfied. We have agreed to indemnify any time without notice. Neither we
the Underwriters against certain nor the Underwriters can assure the
liabilities, including civil liquidity of any trading market for
liabilities under the Securities Act the Notes.
of 1933, or to contribute to payments
which the Underwriters may be required The Underwriters and their
to make for those liabilities. affiliates engage in transactions with
or perform services for us in the
We must also pay the expenses of ordinary course of business. Those
this offering, which are expected to services include investment and
be $320,000. Those expenses will commercial banking transactions and
reduce the proceeds of this offering services, including serving as an
received by us. agent and/or lender on some of our
credit agreements.
The Underwriters advise us that
they propose to offer the Notes to the
public initially at the offer-
S-4
<PAGE>
PROSPECTUS FINOVA
1850 North Central Avenue
P.O. Box 2209
Phoenix, Arizona 85002-2209
THE FINOVA GROUP INC.
FINOVA CAPITAL CORPORATION
By this prospectus, we may offer up to
$2,000,000,000 of our:
DEBT SECURITIES We will provide the specific terms of
COMMON STOCK (including, for The these securities in supplements to
FINOVA Group Inc., Rights to Purchase this prospectus. You should read this
Junior Participating Preferred Stock) prospectus and the supplements
PREFERRED STOCK carefully before you invest.
DEPOSITARY SHARES
WARRANTS
FINOVA Capital Corporation is a wholly We may offer the securities directly
owned subsidiary of The FINOVA Group or through underwriters, agents or
Inc. dealers. The supplement will describe
the terms of that plan of
distribution. "Plan of Distribution"
below also provides more information
on this topic.
These securities have not been
approved or disapproved by the SEC or
any state securities commission.
None of those authorities has
determined that this prospectus is
accurate or complete.
Any representation to the contrary is
a criminal offense.
The date of this prospectus is February 12, 1999
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
The FINOVA Group Inc. ("FINOVA * Portions of the Proxy Statement
Group") and FINOVA Capital Corporation on Schedule 14A for FINOVA
("FINOVA Capital") file annual, Group's Annual Meeting of
quarterly and current reports, proxy Shareholders held on May 14,
and information statements and other 1998 that have been incorporated
information with the SEC. You may read by reference into our 10-K.
and copy any document we file at the
SEC's public reference rooms at 450 * Quarterly Reports on Form 10-Q
Fifth Street, N.W., Washington, D.C. of FINOVA Group and FINOVA
20549. Please call the SEC at Capital for the quarters ended
1-800-SEC-0330 for more information on March 31, June 30 and September
the public reference room and their 30, 1998.
copy charges. Our SEC filings are also
available to the public from the SEC's * Current Reports on Form 8-K of
web site at http://www.sec.gov, which FINOVA Group dated January 23,
may also be available on our web site April 27, July 28, and October
at http://www.finova.com. You may also 13, 1998 and January 14, 1999.
inspect our SEC reports and other
information at the New York Stock * Current Reports on Form 8-K of
Exchange, 20 Broad Street, New York, FINOVA Capital dated January 23,
New York 10005. April 27, July 30, August 7
and October 14, 1998 and
The SEC allows us to "incorporate January 15, 1999.
by reference" the information we file
with them, which means we can disclose You may request a copy of those
information to you by referring you to filings or any other information
those documents. Information incorporated by reference in this
incorporated by reference is part of prospectus, including exhibits. You
this prospectus. Later information may do so orally or in writing by
filed with the SEC updates and contacting us at:
supersedes this prospectus.
Treasurer
We incorporate by reference the The FINOVA Group Inc.
documents listed below and any future 1850 North Central Avenue
filings made with the SEC under P.O. Box 2209
Sections 13(a), 13(c), 14 or 15(d) of Phoenix, Arizona 85002-2209
the Securities Exchange Act of 1934 (602) 207-6900
until this offering is completed:
We will provide that information at no
* Annual Reports on Form 10-K of charge to you.
FINOVA Group and FINOVA Capital
for the year ended December 31,
1997.
THE COMPANIES
FINOVA Group is a financial customers and our ability to provide
services holding company. Through our value-added services enable us to
principal subsidiary, FINOVA Capital, differentiate ourselves from our
we provide a broad range of financing competitors. That expertise and
and capital market products to ability also enable us to command
mid-size business. We concentrate on pricing that provides a satisfactory
lending to mid-size businesses. FINOVA spread over our borrowing costs.
Capital has been in operation for over
43 years. We seek to maintain a high quality
portfolio and to minimize non-earning
We extend revolving credit assets and write-offs. We use clearly
facilities, term loans, and equipment defined underwriting criteria and
and real estate financing primarily to stringent portfolio management
"middle-market" businesses with techniques. We diversify our lending
financing needs falling generally activities geographically and among a
between $500,000 and $35 million. range of industries, customers and
loan products.
We operate in 18 specific industry
or market niches under three market Due to the diversity of our
groups. We selected those groups portfolio, we believe we are better
because our expertise in evaluating able to manage competitive changes in
the credit-worthiness of prospective our markets and to withstand the
impact of deteriorating economic
conditions on a regional or national
2
<PAGE>
basis. There can be no assurance, transaction sizes range from
however, that competitive changes, $100,000 to $1 million and are
borrowers' performance, economic made to small and mid-size
conditions or other factors will not businesses with annual sales
result in an adverse impact on our under $10 million.
results of operations or financial
condition. * REDISCOUNT FINANCE offers
revolving credit facilities to
We generate interest, leasing, fee the independent consumer finance
and other income through charges industry including sales,
assessed on outstanding loans, loan automobile, mortgage and premium
servicing, leasing, brokerage and finance companies. Typical
other activities. Our primary expenses transaction sizes range from $1
are the costs of funding our loan and million to $35 million.
lease business, including interest
paid on debt, provisions for credit SPECIALTY FINANCE
losses, marketing expenses, salaries
and employee benefits, servicing and * COMMERCIAL EQUIPMENT FINANCE
other operating expenses and income offers equipment leases, loans
taxes. and "turnkey" financing to a
broad range of midsize
BUSINESS GROUPS companies. Specialty markets
include the corporate aircraft
We operate the following principal and emerging growth technology
lines of business under three market industries, primarily
groups: biotechnology and electronics.
Typical transaction sizes range
COMMERCIAL FINANCE from $500,000 to $15 million.
* BUSINESS CREDIT offers * COMMUNICATIONS FINANCE
collateral-oriented revolving specializes in term financing to
credit facilities and term loans advertising and
for manufacturers, distributors, subscriber-supported businesses
wholesalers and service including radio and television
companies. Typical transaction stations, cable operators,
sizes range from $500,000 to $3 outdoor advertising firms and
million. publishers. Typical transaction
sizes range from $1 million to
* COMMERCIAL SERVICES offers full $40 million.
service factoring and accounts
receivable management services * FRANCHISE FINANCE offers
for entrepreneurial and larger equipment, real estate and
firms, primarily in the textile acquisition financing for
and apparel industries. The operators of established
annual factored volume of these franchise concepts. Transaction
companies is generally between sizes generally range from
$5 million and $25 million. This $500,000 to $15 million.
line provides accounts
receivable and inventory * HEALTHCARE FINANCE offers a full
financing and loans secured by range of working capital,
equipment and real estate. equipment and real estate
financing products for the U.S.
* CORPORATE FINANCE provides a health care industry.
full range of cash flow-oriented Transaction sizes typically
and asset-based term and range from $500,000 to $25
revolving loan products for million.
manufacturers, wholesalers,
distributors, specialty * PORTFOLIO SERVICES provides
retailers and commercial and customized receivable servicing
consumer service businesses. and collections for time-share
Typical transaction sizes range developers and other generators
from $2 million to $35 million. of consumer receivables.
* DISTRIBUTION & CHANNEL FINANCE * PUBLIC FINANCE provides
provides inbound and outbound tax-exempt term financing to
inventory financing, combined state and local governments,
inventory/accounts receivable non-profit corporations and
lines of credit and purchase entities using industrial
order financing for equipment revenue or development bonds.
distributors, value-added Typical transaction sizes range
resellers and dealers from $100,000 to $5 million.
nationwide. Transaction sizes
generally range from $500,000 to * RESORT FINANCE focuses on
$30 million. construction, acquisition and
receivables financing of
* GROWTH FINANCE provides timeshare resorts worldwide as
collateral-based working capital well as term financing for
financing primarily secured by established golf resort hotels
accounts receivable. Typical and receivables funding for
3
<PAGE>
developers of second home * FINOVA Loan Administration
communities. Typical transaction provides In-house servicing for
sizes range from $5 million to FINOVA's commercial loan
$35 million. products as well as servicing
and subservicing of other
* SPECIALTY REAL ESTATE FINANCE mortgage and consumer loans,
provides term financing for including residential real
hotel, anchored retail, office estate, mobile homes,
and owner-occupied properties. automobiles and other consumer
Typical transaction sizes range products.
from $5 million to $25 million.
Both FINOVA Group and FINOVA
* TRANSPORTATION FINANCE struc- Capital are Delaware corporations.
tures equipment loans, leases, FINOVA Group was incorporated in 1991
acquisition financing and to serve as the successor to The Dial
leveraged lease equity Corp's financial services businesses.
investments for commercial and Dial transferred those businesses to
cargo airlines worldwide, FINOVA Group in March 1992 in a
railroads and operators of other spin-off. Since that time, FINOVA
transportation related Group has increased its total assets
equipment. Typical transaction from about $2.6 billion at December
sizes range from $5 million to 31, 1992 to $8.7 billion at December
$30 million. Through FINOVA 31, 1997. Income from continuing
Aircraft Investors LLC, FINOVA operations increased from $37 million
also seeks to use its market in 1992 to $139 million in 1997. We
expertise and industry presence believe FINOVA Group ranks among the
to purchase, upgrade and resell largest independent commercial finance
used commercial aircraft. companies in the U.S., based on total
assets. The common stock of FINOVA
CAPITAL MARKETS Group is traded on the New York Stock
Exchange.
* FINOVA REALTY CAPITAL
specializes in providing capital FINOVA Capital was incorporated in
markets-funded commercial real 1965 and is the successor to a
estate financing products and California corporation that was formed
commercial mortgage banking in 1954. All of FINOVA Capital's
services. Typical transaction capital stock is owned by FINOVA
sizes range from $1 million to Group.
$5 million.
Our principal executive offices are
* FINOVA INVESTMENT ALLIANCE located at 1850 North Central Avenue,
provides equity and debt P.O. Box 2209, Phoenix, Arizona
financing for midsize businesses 85002-2209. Our telephone number is
in partnership with (602) 207-6900.
institutional investors and
selected fund sponsors. Typical
transaction sizes range from $2
million to $15 million.
4
<PAGE>
RECENT DEVELOPMENTS
In January 1999, FINOVA Capital In January 1999, FINOVA Group
Announced its earnings and related reached a definitive agreement to
financial information for 1998. FINOVA acquire Sirrom Capital Corporation
Capital's 1998 net income was $173.5 ("Sirrom") for approximately $343
million, a 21% increase over the million in FINOVA Group common stock
$143.1 million reported in 1997. (excluding conversion of options).
Additional information is contained in Sirrom is a specialty finance company
its Current Report on Form 8-K filed headquartered in Nashville, Tennessee.
with the SEC on January 19, 1999. Sirrom provides secured loans to
small, fast growing companies in the
In October 1998, FINOVA Capital U.S. and Canada with revenues between
acquired United Credit Corporation, a $5 million and $50 million, for
New York-based provider of commercial expansions, acquisitions, buyouts and
financing to small and mid-size other strategic ventures. Sirrom
businesses, and its Patriot Funding recently announced its 1998 year-end
Division. The addition formed a new financial results, which included a
division named FINOVA Growth Finance, net decrease in stockholder's equity
which provides collateral-based of $65.1 million during the fourth
working capital financing primarily quarter of 1998. The decrease was
secured by accounts receivable. The anticipated by us after our
new division provides financing examination of their loan portfolio.
ranging from $100,000 to $1 million to The decrease is not expected to impair
small and mid-size businesses with the progress of the proposed merger.
annual sales under $10 million. This The transaction must be approved by
new division is serving a market Sirrom's shareholders and is subject
segment of smaller, growth-oriented to other conditions and regulatory
customers earlier in their maturation approvals. We anticipate that the
cycle. transaction will be completed in the
first half of 1999.
In October 1998, FINOVA Capital
acquired Electronic Payment Systems,
Inc., a commercial receivables
servicing business headquartered in
Salt Lake City, Utah, to support the
activities of our Realty Capital
business.
5
<PAGE>
SELECTED FINANCIAL INFORMATION
The following information was are part of our Annual Reports on Form
derived from FINOVA Group's financial 10-K and Quarterly Reports on Form
statements. The information is only a 10-Q. You should read our financial
summary and does not provide all of statements and other information that
the information contained in our we have filed with the SEC. We have
financial statements, including the reclassified earlier information to
related notes, and Management's conform to the 1998 presentation.
Discussion and Analysis. Those items
<TABLE>
<CAPTION>
Nine months ended
September 30,
(unaudited) As of and for the Year Ended December 31,
----------------------- ---------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- ----------- -----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Interest earned from
financing transactions $ 742,877 $ 657,007 $ 897,996 $ 769,346 $ 680,912 $ 463,404 $ 255,216
Interest margins earned 343,543 300,574 408,914 340,517 287,880 216,667 124,847
Volume-based fee income 57,946 25,913 46,728 28,588 21,204 10,796 0
Provision for credit losse 44,500 48,300 69,200 41,751 37,568 10,439 5,706
Gains on sale of assets 24,243 22,407 30,261 12,949 10,889 3,877 5,439
Income from continuing
operations 123,244 100,330 139,098 116,493 93,798 73,770 37,846
Net income 123,244 100,330 139,098 117,000 97,629 74,313 37,347
Basic earnings per
share for continuing
operations $ 2.20 $ 1.86 $ 2.56 $ 2.14 $ 1.72 $ 1.48 $ 0.96
Basic earnings per share $ 2.20 $ 1.86 $ 2.56 $ 2.15 $ 1.79 $ 1.49 $ 0.95
Basic adjusted weighted
average outstanding
shares(1) 56,146,000 53,979,000 54,405,000 54,508,000 54,633,000 49,765,000 39,277,000
Diluted earnings per
share for continuing
operations $ 2.07 $ 1.76 $ 2.42 $ 2.08 $ 1.69 $ 1.46 $ 0.90
Diluted earnings per share $ 2.07 $ 1.76 $ 2.42 $ 2.09 $ 1.76 $ 1.47 $ 0.89
Diluted adjusted weighted
average shares(1) 60,947,000 58,684,000 59,161,000 56,051,000 55,469,000 50,436,000 40,552,000
Dividend declared per
common share $ 0.44 $ 0.38 $ 0.52 $ 0.46 $ 0.42 $ 0.37 $ 0.34
FINANCIAL POSITION:
Investment in financing
transactions 9,392,529 8,075,600 8,399,456 7,298,759 6,348,079 5,342,979 2,846,571
Nonaccruing assets 199,367 173,390 187,356 155,505 143,127 149,046 102,607
Reserve for credit losses 187,161 167,754 177,088 148,693 129,077 110,903 64,280
Total assets 9,835,462 8,307,720 8,719,840 7,526,734 7,036,514 5,821,343 2,834,322
Total debt 7,891,283 6,502,512 6,764,581 5,850,223 5,649,368 4,573,354 2,079,286
Company-obligated
mandatory redeemable
convertible preferred
securities of subsidiary
trust solely holding con-
vertible debentures of
FINOVA Group
("TOPrS") 111,550 111,550 111,550 111,550 -- -- --
Shareowners' equity 1,145,538 977,921 1,090,454 929,591 825,184 770,252 503,300
</TABLE>
RATIO OF INCOME TO TOTAL FIXED CHARGES
<TABLE>
<CAPTION>
Nine Months Ended
September 30, Year Ended December 31,
----------------- -----------------------------------------------
1998 1997 1997 1996 1995 1994 1993
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
FINOVA Group 1.59x 1.53x 1.54x 1.50x 1.44x 1.58x 1.53x
FINOVA Capital 1.59x 1.53x 1.54x 1.50x 1.44x 1.58x 1.50x
</TABLE>
RATIO OF INCOME TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, Year Ended December 31,
----------------- -----------------------------------------------
1998 1997 1997 1996 1995 1994 1993
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
FINOVA Group 1.56x 1.51x 1.52x 1.50x 1.44x 1.58x 1.50x
FINOVA Capital 1.59x 1.53x 1.54x 1.50x 1.44x 1.58x 1.46x
</TABLE>
- ------------
(1) Adjusted to reflect a 2-for-1 stock split on October 1, 1997.
6
<PAGE>
Variations in interest rates generally before income taxes plus fixed
do not have a substantial impact on charges. Fixed charges consist of
the ratio because fixed-rate and interest and related debt expense, and
floating-rate assets are generally a portion of rental expense determined
matched with liabilities of similar to be representative of interest.
rate and term. Income available for
fixed charges, for purposes of
computing the above ratios, consists
of income from continuing operations
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this * Actions of our competitors and
prospectus and any supplements are our ability to respond to those
"forward-looking," in that they do not actions. We seek to remain
discuss historical fact but instead competitive without sacrificing
note future expectations, projections, prudent lending standards. Doing
intentions or other items relating to business under those standards
the future. These forward-looking becomes more difficult, however,
statements include those made in when competitors offer financing
documents incorporated in this with less stringent criteria. We
prospectus by reference. seek to maintain credit quality
at the risk of growth in assets,
Forward-looking statements are if necessary.
subject to known and unknown risks,
uncertainties and other factors that * The cost of our capital. That
may cause our actual results or cost depends on many factors,
performance to differ materially from some of which are beyond our
those contemplated by the control, such as our portfolio
forward-looking statements. Many of quality, ratings, prospects and
those factors are noted in conjunction outlook.
with the forward-looking HERE IT
ISstatements. Many of those factors * Changes in government
are noted in conjunction with the regulations, tax rates and
forward-looking statements in the similar matters. For example,
text. Other important factors that government regulations could
could cause actual results to differ significantly increase the cost
include: of doing business or could
eliminate certain tax advantages
* The results of our efforts to of some of our financing
implement our business strategy. products.
Failure to fully implement our
business strategy might result * Other risks detailed in our
in decreased market penetration, other SEC reports or filings.
adverse effects on results of
operations and other adverse We do not promise to update
results. forward-looking information to reflect
actual results or changes in
* The effect of economic assumptions or other factors that
conditions and the performance could affect those statements.
of our borrowers. Economic
conditions in general or in
particular market segments could
impact the ability of our
borrowers to operate or expand
their businesses, which might
result in decreased performance
for repayment of their
obligations or reduce demand for
additional financing needs.
USE OF PROCEEDS
We intend to use the net proceeds financing transactions and capital
from the sale of the securities for expenditures. We will describe in the
general corporate purposes. Those supplement any proposed use of
purposes include the repayment or proceeds other than for general
refinancing of debt, acquisitions in corporate purposes.
the ordinary course of business,
working capital, investment in
7
<PAGE>
DESCRIPTION OF DEBT SECURITIES
DEBT SECURITIES * FINOVA Capital may discharge the
debt issued in any series at any
The following summary applies only time by depositing sufficient
to the debt securities of FINOVA funds with the Trustee to pay
Capital. If we issue debt securities the obligations when due. All
of FINOVA Group, we will describe amounts due to you on the debt
those securities and the indenture would be paid by the Trustee
under which they are issued in the from the deposited funds.
applicable supplement.
* If FINOVA Capital fails to meet
The debt securities of FINOVA its obligations on the debt, it
Capital will be issued under an will be in default. Defaults for
indenture (the "Indenture") between senior debt securities are
FINOVA Capital and one or more U.S. described on pages 12-13 of this
banking institutions (a "Trustee"). pospectus.
The Indenture may but need not have
separate Trustees for senior and GENERAL
subordinated debt.
The debt securities of FINOVA Group
The following summary of certain and FINOVA Capital offered by this
provisions of the Indenture is not prospectus will be limited to $2.0
complete. You should look at the billion principal amount. The
Indenture that is filed as an exhibit Indenture does not limit the amount of
to the Registration Statement. To debt securities FINOVA Capital could
obtain a copy of the Indenture, see offer under it. FINOVA Capital can
"Where You Can Find More Information" issue debt securities in one or more
on page 2. series, in each case as authorized by
us from time to time. Each series may
All capitalized terms have the differ as to its terms. The debt
meanings specified in the Indenture. securities will be FINOVA Capital's
unsecured general obligations and may
GENERAL INDENTURE PROVISIONS THAT or may not be subordinated to FINOVA
APPLY TO SENIOR AND SUBORDINATED DEBT Capital's other general indebtedness.
Those that are not subordinated are
* The Indenture does not limit the called "senior debt securities." The
amount of debt that FINOVA others are "subordinated debt
Capital may issue nor provide securities."
holders any protection should
there be a highly leveraged The supplement will address the
transaction involving our following terms of the debt
company. We may issue additional securities:
debt securities without your
consent. * Their title.
* If FINOVA Capital redeems debt * Any limits on the principal
which is convertible into its amounts to be issued.
capital stock or other
securities, your right to * The dates on which the principal
convert that debt into capital is payable.
stock or other securities will
expire on the redemption date. * The rates (which may be fixed or
variable) at which they shall
* The Indenture allows FINOVA bear interest, or the method for
Capital to merge or to determining rates.
consolidate with another
company, or sell all or * The dates from which the
substantially all of its assets interest will accrue and will be
to another company. If these payable, or the method of
events occur, the other company determining those dates, and any
will be required to assume record dates for the payments
FINOVA Capital's due.
responsibilities on the debt,
and FINOVA Capital will be * Any provisions for redemption,
released from all liabilities conversion or exchange, at our
and obligations. option or otherwise, including
the periods, prices and terms of
* The Indenture provides that redemption or conversion.
holders of a majority of the
total principal amount of the * Any sinking fund or similar
debt outstanding in any series provisions, whether mandatory or
may vote to change our at the holder's option, along
obligations or your rights
concerning that series of debt.
But to change the payment of
principal or interest, every
holder in that series must
consent.
8
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with the periods, prices and OWNERSHIP OF THE GLOBAL SECURITIES;
terms of redemption, purchase or BENEFICIAL OWNERSHIP. So long as the
repayment. depositary or its nominee is the
registered owner of a global security,
* The amount or percentage payable that entity will be the sole holder of
if we accelerate their maturity, the debt securities represented by
if other than the principal that instrument. The Trustee and we
amount. are only required to treat the
depositary or its nominee as the legal
* Any changes to the events of owner of those securities for all
default or covenants set forth purposes under the Indenture.
in the Indenture.
Each actual purchaser of debt
* The terms of subordination, if securities represented by a global
any. security (a "beneficial owner") will
not be entitled to receive physical
* Whether the series can be delivery of certificated securities,
reopened. will not be considered the holder of
those securities for any purpose under
* Any other terms consistent with the Indenture, and will not be able to
the Indenture. transfer or exchange the global
securities, unless this prospectus or
We may authorize and determine the the supplement provide to the
terms of a series of debt securities contrary. As a result, each beneficial
by resolution of our board of owner must rely on the procedures of
directors or one of its committees or the depositary to exercise any rights
through a supplemental Indenture. of a holder under the Indenture. In
addition, if the beneficial owner is
FORM OF DEBT SECURITIES not a direct or indirect participant
in the depositary (each a
The debt securities will be issued "participant") the beneficial owner
in registered form. Unless the must rely on the procedures of the
supplement otherwise provides, debt participant through which it owns its
securities will be issued as one or beneficial interest in the global
more global securities. This means security.
that we will not issue certificates to
each holder. We generally will issue The laws of some jurisdictions
global securities in the total require that certain purchasers of
principal amount of the debt securities take physical delivery of
securities distributed in that series. the securities in certificated form.
We will issue debt securities only in Those laws and the above conditions
denominations of $1,000 or integral may impair the ability to transfer
multiples of that amount, unless the beneficial interests in the global
supplement states otherwise. securities.
GLOBAL SECURITIES THE DEPOSITORY TRUST COMPANY
IN GENERAL. Debt securities in The following is based on
global form will be deposited with or information furnished by DTC and
on behalf of a depositary. Global applies to the extent it is the
securities are represented by one or depositary, unless otherwise stated in
more global certificates for the a supplement:
series registered in the name of the
depositary or its nominee. Debt REGISTERED OWNER. The debt
securities in global form may not be securities will be issued as fully
transferred except as a whole among registered securities in the name of
the depositary, a nominee of or a Cede & Co. (DTC's partnership
successor to the depositary and any nominee). One fully registered global
nominee of that successor. Unless security generally will be issued for
otherwise identified in the each $200 million principal amount of
supplement, the depositary will be The debt securities. The Trustee will
Depository Trust Company ("DTC"). deposit the global securities with the
depositary. The deposit of the global
NO DEPOSITARY OR GLOBAL SECURITIES. securities with DTC and its
If a depositary for a series is registration in the name of Cede & Co.
unwilling or unable to continue as will not change the beneficial
depositary, and a successor is not ownership of the securities.
appointed by us within 90 days, we
will issue debt securities of that DTC ORGANIZATION. DTC is a
series in definitive form in exchange limited-purpose trust company
for the global security or securities organized under the New York Banking
of that series. We also may determine Law, a "banking organization" within
at any time in our discretion not to the meaning of that law, a member of
use global securities for any series. the Federal Reserve System, a
In that event, we will issue debt "clearing corporation" within the
securities in definitive form.
9
<PAGE>
meaning of the New York Uniform NOTICES AMONG THE DEPOSITARY,
Commercial Code and a "clearing PARTICIPANTS AND BENEFICIAL OWNERS.
agency" registered under the Notices and other communications by
provisions of Section 17A of the the depositary, its participants and
Securities Exchange Act of 1934, as the beneficial owners will be governed
amended. by arrangements among them, subject to
any legal requirements in effect.
DTC is owned by a number of its
direct participants and by the New VOTING PROCEDURES. Neither DTC nor
York Stock Exchange, Inc., the Cede & Co. will give consents for or
American Stock Exchange, Inc. and the vote the global securities. The
National Association of Securities depositary generally mails an omnibus
Dealers, Inc. Direct participants proxy to us just after the applicable
include securities brokers and record date. That proxy assigns Cede &
dealers, banks, trust companies, Co.'s consenting or voting rights to
clearing corporations and certain the direct participants to whose
other organizations who directly accounts the securities are credited
participate in DTC (each a "direct at that time.
participant"). Other entities
("indirect participants") may access PAYMENTS. Principal and interest
DTC's system by clearing transactions payments made by us will be delivered
through or maintaining a custodial to the depositary. DTC's practice is
relationship with direct participants, to credit direct participants'
either directly or indirectly. The accounts on the applicable payment
rules applicable to DTC and its date unless it has reason to believe
participants are on file with the SEC. it will not receive payment on that
date. Payments by participants to
DTC ACTIVITIES. DTC holds beneficial owners will be governed by
securities that its participants standing instructions and customary
deposit with it. DTC also facilitates practices, as is the case with
the settlement among participants of securities held for customers in
securities transactions, such as bearer form or registered in "street
transfers and pledges, in deposited name." Those payments will be the
securities through electronic responsibility of that participant,
computerized book-entry changes in not the depositary, the Trustee or us,
participant's accounts. Doing so subject to any legal requirements in
eliminates the need for physical effect at that time.
movement of securities certificates.
We are responsible for payment of
PARTICIPANTS' RECORDS. Except as principal, interest and premium, if
otherwise provided in this prospectus any, to the Trustee, who is
or a supplement, purchases of the debt responsible to pay it to the
securities must be made by or through depositary. The depositary is
direct participants, which will responsible for disbursing those
receive a credit for the securities on payments to direct participants. The
the depositary's records. The participants are responsible for
beneficial owner's ownership interest disbursing payments to the beneficial
is in turn to be recorded on the owners.
direct and indirect participants'
records. Beneficial owners will not TRANSFER OR EXCHANGE OF SECURITIES
receive written confirmations from the
depositary of their purchase, but they You may transfer or exchange the
are expected to receive them, along debt securities (other than a global
with periodic statements of their security) without service charge at
holdings, from the direct or indirect our office designated for that purpose
participants through whom they entered or at the office of any transfer agent
into the transaction. or security registrar identified under
the Indenture. You must execute a
Transfers of interests in the proper form of transfer and pay any
global securities will be made on the taxes and other governmental charges
books of the participants on behalf of resulting from that action. You may
the beneficial owners. Certificates transfer or exchange the debt
representing the interest of the securities (other than a global
beneficial owners in the securities security) initially at our offices at
will not be issued unless the use of 1850 North Central Avenue, P.O. Box
global securities is suspended, as 2209, Phoenix, Arizona 85002-2209 or
provided above. at our office or agency established
for that purpose in New York, New
The depositary has no knowledge of York.
the actual beneficial owners of the
global securities. Its records only Debt securities in the several
reflect the identity of the direct denominations will be interchangeable
participants as owners of the without service charge, but we may
securities. Those participants may or require payment to cover taxes and
may not be the beneficial owners.
Participants are responsible for
keeping account of their holdings on
behalf of their customers.
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<PAGE>
other governmental charges. The exclude any portion of long-term debt
Trustee initially will act as maturing within one year of that date
authenticating agent under the of determination, all as reflected on
Indenture. the consolidated balance sheet of
FINOVA Capital and its consolidated
SAME-DAY SETTLEMENT AND PAYMENT subsidiaries.
Unless the supplement otherwise "LIEN" means any lien, charge,
provides, the debt securities will be claim, security interest, pledge,
settled in immediately available hypothecation, right of another under
funds. We will make payments of any conditional sale or other title
principal and interest in immediately retention agreement or any other
available funds. encumbrance affecting title to
property. Lien includes any lease
PAYMENT AND PAYING AGENT under a sale and leaseback
arrangement.
If the debt securities are not held
in global form, we will make payment "SUBSIDIARY" means any corporation
of principal and premium, if any, a majority of the Voting Stock of
against surrender of the debt which is owned, directly or
securities at the principal office of indirectly, by FINOVA Capital or by
the Trustee in New York, New York. We one or more Subsidiaries or by FINOVA
will pay any installment of interest Capital and one or more Subsidiaries.
on debt securities to the record
holder on the record date for that "RESTRICTED SUBSIDIARY" is any
interest. We can make those payments Subsidiary a majority of the Voting
through the Trustee, as noted above, Stock of which is owned directly by
by check mailed by first class mail to FINOVA Capital or by one or more
the registered holders at their Restricted Subsidiaries, or by FINOVA
registered address or by wire transfer Capital and one or more Restricted
to an eligible account of the Subsidiaries and which is designated
registered holder. as a Restricted Subsidiary by
resolution of FINOVA Capital's board
If any payments of principal, of directors.
premium or interest are not claimed
within three years of the date the "UNRESTRICTED SUBSIDIARY" means any
payment became due, those funds are to Subsidiary other than a Restricted
be repaid to us. The beneficial owners Subsidiary.
of those interests thereafter will
look only to us for payment for those "VOTING STOCK" means stock of any
amounts. class or classes (however designated)
having ordinary voting power for the
CERTAIN INDENTURE PROVISIONS election of a majority of the members
of the board of directors (or any
CERTAIN DEFINITIONS. The following governing body) of that corporation,
is a summary of certain terms defined other than stock having that power
in the Indenture and applicable only only by reason of the happening of a
to senior debt securities. Those terms contingency.
are determined in accordance with
generally accepted accounting LIMITATION ON LIENS. The Indenture
principles, unless specifically stated provides that FINOVA Capital will not
otherwise. create, assume, incur or allow to be
created, assumed or incurred or to
"Consolidated Net Tangible Assets" exist any Lien on any of its
means the total of all assets properties unless FINOVA Capital
reflected on the most recent quarterly secures the senior debt securities
or annual consolidated balance sheet equally and ratably with any other
of FINOVA Capital and its consolidated obligation secured in that manner. The
subsidiaries, at their net book values Indenture contains the following
(after deducting related depreciation, exceptions to that prohibition:
depletion, amortization and all other
valuation reserves), less the * Leases of property in the
aggregate of its current liabilities ordinary course of business or
and those of its consolidated if the property is not needed in
Subsidiaries reflected on that balance the operation of our business.
sheet. We exclude from assets
goodwill, unamortized debt discount * Purchase money security
and all other like intangible assets. interests that are non-recourse
For purposes of this definition, to FINOVA Capital or its
"current liabilities" include all Restricted Subsidiaries except
indebtedness for money borrowed, to the extent of the property so
incurred, issued, assumed or acquired or any proceeds from
guaranteed by FINOVA Capital and its that property, or both.
consolidated subsidiaries, and other
payables and accruals, in each case * Governmental deposits or
payable on demand or due within one security as a condition to the
year of the date of determination, but transaction of business or the
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<PAGE>
exercise of a privilege, or to MERGER, CONSOLIDATION AND SALE OF
maintain self-insurance, or to ASSETS. FINOVA Capital cannot merge
participate in any fund in with or into, consolidate with, sell
connection with worker's or lease all or substantially all of
compensation, unemployment its assets to or purchase all or
insurance, pensions, social substantially all the assets of
security or for appeal bonds. another corporation unless it will be
the surviving corporation or the
* Liens for taxes or assessments successor is incorporated in the U.S.
not yet due or which are payable and assumes all of FINOVA Capital's
without a penalty or are being obligations under the debt securities
contested in good faith and with and the Indenture, provided, and if
adequate reserves, so long as immediately after that transaction, no
foreclosure or similar default will exist. A purchase by a
proceedings are not commenced. Subsidiary of all or substantially all
of the assets of another corporation
* Judgment Liens that have not will not be a purchase of those assets
remained undischarged or by FINOVA Capital. If, however, any of
unstayed for more than six the transactions noted in this
months. paragraph occurs and results in a Lien
on any of FINOVA Capital's properties
* Incidental or undetermined (except as permitted above), FINOVA
construction, mechanics or Capital must simultaneously secure the
similar Liens arising in the senior debt securities equally and
ordinary course of business ratably with the debt secured by that
relating to obligations not Lien.
overdue or which are being
contested by FINOVA Capital or a MODIFICATION OF THE INDENTURE. The
Restricted Subsidiary in good Trustee and FINOVA Capital may amend
faith and deposits for releases the Indenture without consent of the
of such Liens. holders of debt securities to do
certain things, such as establishing
* Zoning restrictions, licenses, the form and terms of any series of
easements and similar debt securities. FINOVA Capital must
encumbrances or defects if obtain consent of holders of at least
immaterial. two-thirds of the outstanding debt
securities affected by a change to
* Other Liens immaterial in the amend the terms of the Indenture or
aggregate incidental to FINOVA any supplemental indenture or the
Capital's or the Restricted rights of the holders of those debt
Subsidiary's business or securities.
property, other than for
indebtedness. Unanimous consent is required for
changes to extend the fixed maturity
* Banker's liens and set off of any debt securities, reduce the
rights in the ordinary course of principal, redemption premium or rate
business. of interest, extend the time of
payment of interest, change the form
* Leasehold or purchase rights, of currency, limit the right to sue
exercisable for fair for payment on or after maturity of
consideration, arising in the the debt securities, adversely affect
ordinary course of business. the right, if any, to convert or
exchange the debt securities or
* Liens on property or securities adversely affect the subordination
existing when an entity becomes provisions, if any. Unanimous consent
a Restricted Subsidiary or is also required to reduce the level
merges with FINOVA Capital or a of consents needed to approve any such
Restricted Subsidiary, provided change. The Trustee must consent to
they are not incurred in changes modifying its rights, duties
anticipation of those events. or immunities.
* Liens on property or securities DEFAULTS. Events of default under
existing at the time of the Indenture for any series are:
acquisition.
* Failure for 30 days to pay
* Liens in a total amount less interest on any debt securities
than $25 million, excluding of that series.
Liens covered by the exceptions
noted above. * Failure to pay principal (other
than sinking fund redemptions)
* Liens securing indebtedness of or premium, if any, on debt
FINOVA Capital or a Restricted securities of that series.
Subsidiary provided those and
similar Liens on indebtedness do * Failure for 30 days to pay any
not exceed 10% of Consolidated sinking fund installment on that
Net Tangible Assets, excluding series.
certain preexisting indebtedness
and those Liens permitted above.
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<PAGE>
* Violation of a covenant under series before maturity. It may do so
the Indenture pertaining to that by depositing with the Trustee, in
series that persists for at trust for the benefit of the holders,
least 90 days after FINOVA either enough funds to pay, or direct
Capital is notified by the U.S. government obligations that,
Trustee or the holders of 25% of together with the income of those
the series. obligations (without considering any
reinvestment), will be sufficient to
* Default in other instruments or pay, the obligation of that series,
under any other series of debt including principal, premium, if any,
securities resulting in and interest. Certain other conditions
acceleration of indebtedness must be met before it may do so.
over $15 million, unless that FINOVA Capital must deliver an opinion
default is rescinded or of counsel that the holders of that
discharged within 10 days after series will have no Federal income tax
written notice by the Trustee or consequences as a result of that
the holders of 10% of that deposit.
series.
SUBORDINATION
* Bankruptcy, insolvency or
similar event. The terms and conditions of any
subordination of subordinated debt
* Any other event of default with securities to other indebtedness of
respect to the debt securities FINOVA Capital will be described in
of that series. the supplement relating to the
subordinated debt securities. The
If an event of default occurs and terms will include a description of
continues, the Trustee or the holders the indebtedness ranking senior to the
of at least 25% of the series may subordinated debt securities, the
declare those debt securities due and restrictions on payments to the
payable. FINOVA Capital is required to holders of the subordinated debt
certify to the Trustee annually as to securities while a default exists with
its compliance with the Indenture. A respect to senior indebtedness, any
default under one series does not restrictions on payments to the
necessarily mean that a default or an holders of the subordinated debt
event of default will have occurred securities following an event of
under another series under the default and provisions requiring
Indenture. holders of the subordinated debt
securities to remit certain payments
Holders of a majority of the to holders of senior indebtedness.
principal of a series may control
certain actions of the Trustee and may Because of the subordination, if
waive past defaults for that series. FINOVA Capital becomes insolvent,
Except as provided in the Indenture, holders of the subordinated debt
the Trustee will not be under any securities may recover less, ratably,
obligation to exercise any of the than other creditors of FINOVA
rights or powers vested in it by the Capital, including holders of senior
Indenture at the request, order or indebtedness.
direction of any holder unless one or
more of them shall have offered CONVERSION
reasonable indemnity to the Trustee.
Debt securities may be convertible
If an event of default occurs and into or exchangeable for common stock,
is continuing, the Trustee may preferred stock, other debt
reimburse itself for its reasonable securities, warrants or other of
compensation and expenses incurred out securities of FINOVA Capital, or
of any sums held or received by it securities of any other issuer or
before making any payments to the obligor. The supplement will describe
holders of the debt securities of the the terms of any conversion rights.
defaulted series.
CONCERNING THE TRUSTEE
The right of any holders of debt
securities of a series to commence an The Trustee may, but need not be,
action for any remedy is subject to one of the banks in one of FINOVA
certain conditions, including the Capital's credit agreements and from
requirement that the holders of at time to time may perform other
least 25% of that series request that banking, trust or related services on
the Trustee take such action, and behalf of FINOVA Capital or our
offer reasonable indemnity to the customers.
Trustee against its liabilities
incurred in doing so.
DEFEASANCE
FINOVA Capital may defease the debt
securities of a series, meaning it
would satisfy its duties under that
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DESCRIPTION OF CAPITAL STOCK
The following summary of certain action, to issue preferred stock in
provisions of the common stock, the one or more series, with the
preferred stock, the junior designations, powers, preferences,
participating preferred stock (the rights, qualifications, limitations
"Junior Preferred Stock") and the and restrictions as the board
rights to purchase the Junior determines. Thus, the board, without
Preferred Stock (the "Rights") of stockholder approval, could authorize
FINOVA Group is not complete. You the issuance of preferred stock with
should refer to the certificate of voting, conversion and other rights
incorporation and bylaws of FINOVA that could adversely affect the voting
Group, as amended, FINOVA Group's power and other rights of the holders
certificate of designations for the of the common stock or that could make
Junior Preferred Stock and the Rights it more difficult for another company
Agreement dated as of February 15, to enter into certain business
1992, as amended and restated as of combinations with FINOVA Group. See
September 14, 1995 (the "Rights "-- Certain Other Provisions of the
Agreement"), between FINOVA Group and Certificate of Incorporation, the
Harris Trust & Savings Bank, as Bylaws and Delaware Law -- Preferred
successor Rights Agent. To obtain Stock" below.
copies of those documents, see "Where
You Can Find More Information" on page SHAREHOLDER RIGHTS PLAN
2. If we issue capital stock of FINOVA
Capital, we will describe those In 1992, FINOVA Group issued one
securities in the applicable Right for each outstanding share of
supplement. common stock. FINOVA Group has and
will continue to issue one Right with
FINOVA Group is authorized by its each newly issued share of its common
certificate of incorporation to issue stock (including stock issued on
105,000,000 shares of capital stock, conversion of preferred securities).
consisting of 5,000,000 shares of The obligation to continue to issue
preferred stock, par value $.01 per the Rights, however, will terminate on
share, and 100,000,000 shares of the expiration, exchange or redemption
common stock, par value $.01 per of the Rights.
share. As of February 10, 1999, there
were 55,919,703 shares of common stock Each Right entitles the registered
outstanding (excluding 2,634,972 holder to purchase from FINOVA Group
treasury shares held by FINOVA Group) 1/200th of a share of the Junior
and no shares of preferred stock Preferred Stock. The purchase price is
outstanding. However, FINOVA Group has $67.50 per 1/200th of a share, subject
authorized 600,000 shares of Junior to adjustment under certain
Preferred Stock which have been circumstances.
reserved for issuance on the exercise
of the Rights. The Rights will trade only with the
common stock and FINOVA Group will not
COMMON STOCK issue separate certificates for the
Rights until the "Rights Distribution
The holders of the common stock are Date." That date occurs on the first
entitled to one vote per share. FINOVA to occur of the following events:
Group's certificate of incorporation
does not provide for cumulative voting * 10 days after a public
in the election of directors. The announcement (the "Share
board may declare dividends on the Acquisition Date") that a person
common stock in its discretion, if or group of persons acting
funds are legally available for those together has become the
purposes. On liquidation, common beneficial owner of at least 20%
stockholders are entitled to receive or more of FINOVA Group's common
pro rata any remaining assets of stock, directly or indirectly
FINOVA Group, after we satisfy or (becoming an "Acquiring
provide for the satisfaction of all Person"), or
liabilities as well as obligations on
our preferred stock, if any. The * 10 business days after the start
holders of common stock do not have or announcement of an intention
preemptive rights to subscribe for or to make a tender offer or
purchase any shares of capital stock exchange offer that would result
or other securities of FINOVA Group. in a person or group acting
together beneficially owning 20%
PREFERRED STOCK or more of FINOVA Group's common
stock, directly or indirectly.
Under FINOVA Group's certificate of The board, however, may extend
incorporation, the board is that 10 business day deadline
authorized, without stockholder prior to the time the person or
group becomes an Acquiring
Person.
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<PAGE>
The Rights may not be exercised may pay the redemption price in cash,
until the Rights Distribution Date. common stock or any other method
The Rights will expire on February 28, selected by the board. Upon
2002 unless we extend that date or, redemption, the right to exercise the
unless we redeem or exchange the Rights will terminate and the holders
Rights before then. will only have the right to receive
the redemption price.
The value of each 1/200th interest
in a share of Junior Preferred Stock NO RIGHTS AS A STOCKHOLDER. Rights
is intended to approximate the value holders, as Rights holders, have no
of one share of FINOVA Group common independent rights as stockholders of
stock, due to the dividend, FINOVA Group, including the right to
liquidation and voting rights of the vote or to receive dividends, until
Junior Preferred Stock, although there the Rights are exercised.
can be no assurance the value will be
the same. ANTITAKEOVER EFFECTS. The Rights
have certain antitakeover effects. The
HOW THE RIGHTS WORK. If a person or Rights will substantially dilute the
group becomes an Acquiring Person, ownership interest in our shares of
their Rights become void. The other any Acquiring Person. That dilution
Rights holders will have the right to would impair the ability of the
exercise their Rights, at the then Acquiring Person to change the
current exercise price, for FINOVA composition of our board. It also
Group common stock having a market would impact its ability to acquire
value of two times the exercise price FINOVA Group on terms not approved by
of the Right. That right to purchase, our board, including through a tender
however, will not exist if the Rights offer at a premium to the market
Distribution Date is due to a tender price, other than through an offer
or exchange offer for all of FINOVA conditioned on a substantial number of
Group's common stock and the Rights being acquired. The Rights
independent members of our board should not interfere with any merger
determine that the offer is at a fair or business combination approved by
price, on fair terms and is otherwise the board, since we may redeem the
in the best interests of FINOVA Group Rights before they become exercisable.
and its stockholders.
JUNIOR PREFERRED STOCK NOT
The other Rights holders also will REGISTERED. The Junior Preferred Stock
have the same exercise rights is not registered with the SEC or any
described above if, after a person or other securities administrator. If the
group becomes an Acquiring Person, Rights become exercisable, we intend
FINOVA Group is acquired in a merger to register with the SEC the Junior
or business combination or at least Preferred Stock exchangeable for the
half of our total assets and earning Rights.
power are sold. The exception is the
same as the one noted in the above CERTAIN OTHER PROVISIONS OF THE
paragraph, provided that the price CERTIFICATE OF INCORPORATION, THE
offered to the shareholders for each BYLAWS AND DELAWARE LAW
share of common stock is not less than
that paid in the tender or exchange FINOVA Group's certificate of
offer, and the consideration is in the incorporation and bylaws contain
same form as that paid in the tender certain provisions that could make
or exchange offer. If the requirements more difficult our acquisition by
of this exception are met, then the means of a tender offer, a proxy
Rights will expire. contest or otherwise. This description
is only a summary and does not provide
EXCHANGE OF RIGHTS. After a person all the information contained in
or group becomes an Acquiring Person FINOVA Group's certificate of
but before the Acquiring Person incorporation and bylaws. To obtain
acquires at least half of the copies of these documents, see "Where
outstanding common stock, our board You Can Find More Information" on page
may exchange all or some of the Rights 2.
at an exchange ratio of one share of
common stock for 1/200th of a share of Delaware law permits a corporation
Junior Preferred Stock per Right, to eliminate or limit the personal
subject to adjustment. liability of its directors to the
corporation or to any of its
REDEMPTION OF RIGHTS. We may redeem stockholders for monetary damages for
all the Rights, but not some of them, a breach of fiduciary duty as a
for $.005 per Right at any time before director, except (i) for breach of the
the earlier of 15 days after the Share director's duty of loyalty, (ii) for
Acquisition Date or the expiration acts or omissions not in good faith or
date noted above. The board may which involve intentional misconduct
determine the conditions, terms and or a knowing violation of law, (iii)
effective date for the redemption. We for certain unlawful dividends and
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<PAGE>
stock purchases and redemptions or NUMBER OF DIRECTORS; REMOVAL;
(iv) for any transaction from which FILLING VACANCIES. FINOVA Group's
the director derived an improper certificate of incorporation provides
personal benefit. FINOVA Group's that, subject to any rights of
certificate of incorporation provides preferred stockholders to elect
that no director will be personally additional directors under specified
liable to FINOVA Group or its circumstances, the number of directors
stockholders for monetary damages for will be fixed in the manner provided
any breach of his or her fiduciary in the bylaws. FINOVA Group's bylaws
duty as a director, except as provided provide that, subject to any rights of
by Delaware law. holders of preferred stock to elect
directors under specified
BOARD OF DIRECTORS. FINOVA Group's circumstances, the number of directors
certificate of incorporation and will be fixed from time to time
bylaws divide the board into three exclusively by directors constituting
classes of directors, with the classes a majority of the total number of
to be as nearly equal in number as directors that FINOVA Group would have
possible. The stockholders elect one if there were no vacancies on the
class of directors each year for a board, but must consist of between 3
three-year term. and 17 directors.
The classification of directors In addition, FINOVA Group's bylaws
makes it more difficult for provide that, subject to any rights of
stockholders to change the composition preferred stockholders, and unless the
of the board. At least two annual board otherwise determines, any
meetings of stockholders, instead of vacancies will be filled only by the
one, generally will be required to affirmative vote of a majority of the
change a majority of the board. That remaining directors, though less than
delay may help ensure that FINOVA a quorum. Accordingly, absent an
Group's directors, if confronted by a amendment to the bylaws, the board
proxy contest, tender or exchange could prevent any stockholder from
offer or extraordinary corporate enlarging the board and filling the
transaction, would have sufficient new directorships with that
time to review the proposal as well as stockholder's own nominees.
any available alternatives to the
proposal and to act in what they Under Delaware law, unless
believe to be the best interest of the otherwise provided in the certificate
stockholders. The classification of incorporation, directors serving on
provisions apply to every election of a classified board may only be removed
directors, regardless of whether a by the stockholders for cause. In
change in the composition of the board addition, FINOVA Group's certificate
would be beneficial to FINOVA Group of incorporation and bylaws provide
and its stockholders and whether or that directors may be removed only for
not a majority of the stockholders cause and only upon the affirmative
believe that such a change is vote of holders of at least 80% of the
desirable. voting power of all the then
outstanding shares of stock entitled
The classification provisions also to vote generally in the election of
could discourage a third party from directors, voting together as a single
initiating a proxy contest, tender class.
offer or other attempt to obtain
control of FINOVA Group, even though STOCKHOLDER ACTION BY WRITTEN
an attempt might be beneficial to CONSENT; SPECIAL MEETINGS.
FINOVA Group and its stockholders. The Stockholders of FINOVA Group must act
classification of the board thus only through an annual or special
increases the likelihood that meeting. Stockholders cannot act by
incumbent directors will retain their written consent in lieu of a meeting.
positions. In addition, because the Only the Chairman or a majority of the
classification provisions may whole board of FINOVA Group may call a
discourage accumulations of large special meeting. Stockholders of
blocks of FINOVA Group's stock by FINOVA Group are not able to call a
purchasers whose objective is to take special meeting to require that the
control of FINOVA Group and remove a board do so. At a special meeting,
majority of the board, the stockholders may consider only the
classification of the board could business specified in the notice of
reduce the likelihood of fluctuations meeting given by FINOVA Group.
in the market price of the common Preferred stockholders may be given
stock that might result from different rights from those noted
accumulations of large blocks. above.
Accordingly, stockholders could be
deprived of certain opportunities to The provisions of FINOVA Group's
sell their shares of common stock at a certificate of incorporation and
higher market price than otherwise bylaws prohibiting stockholder action
might be the case. by written consent may have the effect
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of delaying consideration of a Secretary between the 90th day before
stockholder proposal until the next the meeting and the later of the 70th
annual meeting, unless a special day before the meeting or the 10th day
meeting is called by the Chairman or after the first public announcement of
at the request of a majority of the the meeting date.
whole board. These provisions also
would prevent the holders of a A stockholder's notice proposing to
majority of stock from unilaterally nominate a person for election as a
using the written consent procedure to director must contain certain
take stockholder action. Moreover, a information, including, without
stockholder could not force limitation, the identity and address
stockholder consideration of a of the nominating stockholder, the
proposal over the opposition of the class and number of shares of stock of
Chairman and the board by calling a FINOVA Group beneficially owned by the
special meeting of stockholders prior stockholder and all information
to the time the Chairman or a majority regarding the proposed nominee that
of the whole board believes such would be required to be included in a
consideration to be appropriate. proxy statement soliciting proxies for
the proposed nominee. A stockholder's
ADVANCE NOTICE PROVISIONS FOR notice relating to the conduct of
STOCKHOLDER NOMINATIONS AND business other than the nomination of
STOCKHOLDER PROPOSALS. The bylaws directors must contain certain
establish an advance notice procedure information about that business and
for stockholders to nominate about the proposing stockholder,
directors, or bring other business including, without limitation, a brief
before an annual meeting of description of the business the
stockholders of FINOVA Group. stockholder proposes to bring before
the meeting, the reasons for
A person may not be nominated for a conducting that business at such
director position unless that person meeting, the name and address of such
is nominated by or at the direction of stockholder, the class and number of
the board or by a stockholder who has shares of stock of FINOVA Group
given appropriate notice to FINOVA beneficially owned by that stockholder
Group's Secretary during the periods and any material interest of the
noted below prior to the meeting. stockholder in the business so
Similarly, stockholders may not bring proposed. If the Chairman or other
business before an annual meeting officer presiding at a meeting
unless the stockholder has given determines that a person was not
FINOVA Group's Secretary appropriate nominated, or other business was not
notice of their or its intention to brought before the meeting, in
bring that business before the accordance with these procedures, the
meeting. FINOVA Group's Secretary must person will not be eligible for
receive the nomination or proposal election as a director, or the
between 70 and 90 days before the business will not be conducted at the
first anniversary of the prior year's meeting, as appropriate.
annual meeting. If FINOVA Group's
annual meeting date is advanced by Advance notice of nominations or
more than 20 days or delayed by more proposed business by stockholders
than 70 days from that anniversary gives the board time to consider the
date, then we must receive the notice qualifications of the proposed
between 90 days before the meeting and nominees, the merits of the proposals
the later of the 70th day before the and, to the extent deemed necessary or
meeting or 10 days after the meeting desirable by the board, to inform
date is first publicly announced. stockholders about those matters. The
board also may recommend positions
If the board increases the number regarding those nominees or proposals,
of directors and if we have not so that stockholders can better decide
publicly announced nominees for each whether to attend the meeting or to
open position within 80 days before grant a proxy regarding the nominee or
the first anniversary of the prior that business.
year's annual meeting, stockholders
may nominate directors for the new Although the bylaws do not give the
position, but only those newly created board any power to approve or
positions, if FINOVA Group's Secretary disapprove stockholder nominations for
receives the notice no later than 10 the election of directors or proposals
days following public announcement of for action, these procedures may
that change. preclude a contest for the election of
directors or the consideration of
Stockholders may nominate directors stockholder proposals if the proper
only at a special meeting by sending procedures are not followed, and of
appropriate notice for receipt by our discouraging or deterring a third
party from conducting a solicitation
of proxies to elect its own slate of
directors or to approve its own
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proposal, without regard to whether amount of voting securities,
consideration of such nominees or outstanding of at least 20%, subject
proposals might be harmful or to certain exceptions. If the approval
beneficial to FINOVA Group and its of FINOVA Group's stockholders is not
stockholders. required for the issuance of shares of
preferred stock or common stock, the
PREFERRED STOCK. FINOVA Group's board may determine not to seek
certificate of incorporation stockholder approval.
authorizes the board to establish one
or more series of preferred stock and Although the board has no intention
to determine, with respect to any at the present time of doing so, it
series of preferred stock, the terms could issue a series of preferred
and rights of such series, including stock that could, depending on its
(i) the designation of the series, terms, impede a merger, tender offer
(ii) the number of shares of the or other takeover attempt. The board
series, which the board may (except will make any determination to issue
where otherwise provided by the terms shares with those terms based on its
of such series) increase or decrease judgment as to the best interests of
(but not below the number of shares FINOVA Group and its stockholders. The
thereof then outstanding), (iii) board, in so acting, could issue
whether dividends, if any, will be preferred stock having terms that
cumulative or noncumulative and the could discourage an acquisition
dividend rate of the series, if any, attempt in which an acquiror would
(iv) the dates at which dividends, if change the composition of the board,
any, will be payable, (v) the including a tender offer or other
redemption rights and price or prices, transaction. An acquisition attempt
if any, for shares of the series, (vi) could be discouraged in this manner
the terms and amounts of any sinking even if some, or a majority, of FINOVA
fund provided for the purchase or Group's stockholders might believe it
redemption of shares of the series, to be in their best interests or in
(vii) the amounts payable on shares of which stockholders might receive a
the series in the event of any premium for their stock over the then
voluntary or involuntary liquidation, current market price of the stock.
dissolution or winding up of the
FINOVA Group's affairs, (viii) whether MERGER/SALE OF ASSETS. FINOVA
the shares of the series will be Group's certificate of incorporation
convertible into shares of any other provides that certain "business
class or series, or any other combinations" must be approved by the
security, of FINOVA Group or any other holders of at least 662|M/3% of the
corporation, and, if so, the voting power of the shares not owned
specification of another class or by an "interested shareholder", unless
series or another security, the the business combinations are approved
conversion price or prices or rate or by the "Continuing Directors" or meet
rates, any adjustments to the prices certain requirements regarding price
or rates, the date or dates as of and procedure. The terms quoted in
which the shares shall be convertible this paragraph are defined in the
and all other terms and conditions certificate of incorporation.
upon which the conversion may be made,
(ix) restrictions on the issuance of AMENDMENT OF CERTAIN PROVISIONS OF
shares of the same series or of any THE CERTIFICATE OF INCORPORATION AND
other class or series and (x) the BYLAWS. Under Delaware law,
voting rights, if any, of the holders stockholders may adopt, amend or
of shares of the series. repeal the bylaws and, with approval
of the board, the certificate of
FINOVA Group believes that the incorporation of a corporation. In
ability of the board to issue one or addition, a corporation's board may
more series of preferred stock will adopt, amend or repeal the bylaws if
provide FINOVA Group with flexibility allowed by the certificate of
in structuring possible future incorporation. FINOVA Group's
financings and acquisitions, and in certificate of incorporation requires
meeting other corporate needs which a vote of (i) at least 80% of the
might arise. The authorized shares of outstanding shares of voting stock,
preferred stock, as well as shares of voting together as a single class, to
common stock, will be available for amend provisions of the certificate of
issuance without further action by incorporation relating to the
FINOVA Group's stockholders, unless prohibition of stockholder action
approval is required by applicable law without a meeting; the number,
or the rules of any stock exchange or election and term of FINOVA Group's
automated quotation system on which directors; and the removal of
FINOVA Group's securities are listed directors; (ii) at least 662|M/3% of
or traded. The NYSE currently requires the outstanding shares of voting
stockholder approval in several stock, voting together as a single
instances, including where the present
or potential issuance of shares could
result in an increase in the number of
shares of common stock, or in the
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<PAGE>
class, to amend the provisions of the subsequent to that date, the board and
certificate of incorporation relating 66 2/3% of the outstanding voting
to approval of certain business stock not owned by the interested
combinations; and (iii) at least a stockholder approved the business
majority of the outstanding shares of combination. Except as specified by
voting stock, voting together as a Delaware law, an interested
single class, to amend all other stockholder includes (x) any person
provisions of the certificate of that is the owner of 15% or more of
incorporation. FINOVA Group's the outstanding voting stock of the
certificate of incorporation further corporation, or is an affiliate or
provides that the bylaws may be associate of the corporation and was
amended by the board or by the the owner of 15% or more of the
affirmative vote of the holders of at outstanding voting stock of the
least 80% of the voting power of the corporation, at any time within three
outstanding shares of voting stock, years immediately prior to the
voting together as a single class. relevant date, and (y) the affiliates
These supermajority voting and associates of that person.
requirements make the amendment by
stockholders of the bylaws or of any Under certain circumstances,
of the provisions of the certificate Delaware law makes it more difficult
of incorporation described above more for an "interested stockholder" to
difficult, even if a majority of enter into various business
FINOVA Group's stockholders believe combinations with a corporation for a
that amendment would be in their best three-year period, although
interests. stockholders may adopt an amendment to
a corporation's certificate of
ANTITAKEOVER LEGISLATION. Subject incorporation or bylaws excluding the
to certain exceptions, Delaware law corporation from those restrictions.
does not allow a corporation to engage However, FINOVA Group's certificate of
in a business combination with any incorporation and bylaws do not
"interested stockholder" for a exclude FINOVA Group from the
three-year period following the date restrictions imposed under Delaware
that the stockholder becomes an law. These provisions of Delaware law
interested stockholder, unless (i) may encourage companies interested in
prior to that date, the board approved acquiring FINOVA Group to negotiate in
either the business combination or the advance with the board, since the
transaction which resulted in the stockholder approval requirement would
stockholder becoming an interested be avoided if a majority of the board
stockholder, (ii) on that date, the approves either the business
interested stockholder owned at least combination or the transaction which
85% of the voting stock of the results in the stockholder becoming an
corporation outstanding at the time interested stockholder.
the transaction commenced (excluding
certain shares) or (iii) on or
DESCRIPTION OF DEPOSITARY SHARES
The following summary of certain Agreement") between us and a bank or
provisions of the Deposit Agreement, trust company selected by us having
the depositary shares and depositary its principal office in the U.S. and
receipts is not complete. You should having a combined capital and surplus
refer to the forms of Deposit of at least $50 million. Subject to
Agreement and depositary receipts the terms of the Deposit Agreement,
relating to each series of preferred each owner of depositary shares will
stock that will be filed with the SEC. be entitled, in proportion to the
To obtain copies of these documents, applicable fractional interests in
see "Where You Can Find More shares of preferred stock underlying
Information" on page 2. the depositary shares to all the
rights and preferences of the
GENERAL preferred stock underlying the
depositary shares. Those rights
We may offer fractional interests include dividend, voting, redemption,
in shares of preferred stock, instead conversion and liquidation rights.
of shares of preferred stock. If we
do, we will have a depositary issue to The depositary shares will be
the public receipts for depositary evidenced by depositary receipts
shares, each of which will represent issued under the Deposit Agreement.
fractional interests of a particular Individuals purchasing the fractional
series of preferred stock. interests in shares of the related
series of preferred stock will receive
We will deposit shares of any depositary receipts according to the
series of preferred stock underlying terms of the offering described in the
the depositary shares under a separate supplement.
Deposit Agreement (the "Deposit
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DIVIDENDS AND OTHER DISTRIBUTIONS redemption date, the number of
depositary shares representing the
The depositary will distribute all preferred stock. The depositary shares
cash dividends or other cash to be redeemed will be selected by lot
distributions received for the or pro rata as determined by the
preferred stock to the record holders depositary when less than all
of depositary shares representing the outstanding depositary shares will be
preferred stock in proportion to the redeemed.
number of depositary shares owned by
those holders on the relevant record After the redemption date, the
date. The depositary will distribute depositary shares redeemed will no
only the amount that can be longer be outstanding. When this
distributed without attributing to any occurs, all rights of the holders will
holder of depositary shares a fraction cease, except the right to receive
of one cent. The undistributed balance money, securities or other property
will be added to and treated as part payable upon such redemption and any
of the next amount received by the money, securities or other property
depositary for distribution to record that the holders of depositary shares
holders of depositary shares. were entitled to on the redemption
upon surrender to the depositary of
If there is a distribution other the depositary receipts evidencing the
than in cash, the depositary will depositary shares redeemed.
distribute property received by it to
the record holders of depositary VOTING THE PREFERRED STOCK
shares, in proportion, if possible, to
the number of depositary shares owned Upon receipt of notice of any
by those holders, unless the meeting at which the holders of the
depositary determines (after preferred stock are entitled to vote,
consulting with us) that it cannot the depositary will mail all relevant
make the distribution. If this occurs, information to the record holders of
the depositary may, with our approval, the depositary shares representing the
sell the property and distribute the preferred stock. The record holders
net proceeds from the sale to the may instruct the depositary how to
holders of depositary shares. vote the shares of preferred stock
underlying their depositary shares.
The Deposit Agreement also will The depositary will try, if practical,
state how any subscription or similar to vote the number of shares of
rights offered by us to holders of the preferred stock underlying the
preferred stock will be made available depositary shares according to the
to holders of depositary shares. instructions, and we will agree to
take all reasonable action requested
CONVERSION AND EXCHANGE by the depositary so the depositary
may follow the instructions.
If any series of preferred stock
underlying the depositary shares is AMENDMENT AND TERMINATION OF
subject to conversion or exchange, DEPOSITARY AGREEMENT
each record holder of depositary
receipts may convert or exchange the The form of depositary receipt and
depositary shares represented by those any provision of the Deposit Agreement
depositary receipts. may be amended by agreement between us
and the depositary. However, any
REDEMPTION OF DEPOSITARY SHARES amendment that materially and
adversely alters the rights of the
If a series of the preferred stock existing holders of depositary shares
underlying the depositary shares is will not be effective unless approved
subject to redemption, the depositary by the record holders of at least a
will redeem the depositary shares from majority of the depositary shares then
the proceeds received by the outstanding. We or the depositary may
depositary in the redemption, in whole only terminate the Deposit Agreement
or in part, of the series of the if (a) all related outstanding
preferred stock held by the depositary shares have been redeemed
depositary. The depositary will mail or (b) there has been a final
notice of redemption within 30 to 60 distribution of the preferred stock of
days prior to the date fixed for the relevant series in connection with
redemption to the record holders of our liquidation, dissolution or
the depositary shares to be redeemed winding up and that distribution has
at their addresses appearing in the been distributed to the holders of the
depositary's books. The redemption related depositary shares.
price per depositary share will equal
the applicable fraction of the
redemption price per share payable on
such series of the preferred stock.
Whenever we redeem shares of preferred
stock held by the depositary, the
depositary will redeem as of the same
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CHARGES OF DEPOSITARY MISCELLANEOUS
We will pay all transfer and other The depositary will send to the
taxes and governmental charges arising holders of depositary shares all
solely from the existence of the reports and communications from us
depositary arrangements. We will pay that we must furnish to the holders of
associated charges of the depositary preferred stock.
for the initial deposit of the
preferred stock and any redemption of We and the depositary will not be
the preferred stock. Holders of liable if we are prevented or delayed
depositary shares will pay transfer by law or any circumstance beyond our
and other taxes and governmental control in performing our obligations
charges and any other charges stated under the Deposit Agreement. Those
in the Deposit Agreement to be for obligations will be limited to
their accounts. performance in good faith of duties
set forth in the Deposit Agreement. We
RESIGNATION AND REMOVAL OF DEPOSITARY and the depositary will not be
obligated to prosecute or defend any
The depositary may resign by legal proceeding connected with any
delivering notice to us, and we may depositary shares or preferred stock
remove the depositary. Resignations or unless satisfactory indemnity is
removals will take effect upon the furnished. We and the depositary may
appointment and acceptance of a rely upon written advice of counsel or
successor depositary. We must appoint accountants, or information provided
a successor depositary within 60 days by persons presenting preferred stock
after delivery of the notice of for deposit, holders of depositary
resignation or removal. The successor shares, or other persons believed to
depositary must be a bank or trust be competent and on documents believed
company having its principal office in to be genuine.
the U.S. and having a combined capital
and surplus of at least $50 million.
DESCRIPTION OF WARRANTS
We may issue warrants for the solely as our agent for the warrants
purchase of debt securities, preferred and will not act for or on behalf of
stock or common stock. We may issue the holders or beneficial owners of
warrants independently or together warrants. This summary of certain
with debt securities, common stock or provisions of the warrants is not
preferred stock or attached to or complete. You should refer to the
separate from the offered securities. provisions of the Warrant Agreement
We will issue each series of warrants that will be filed with the SEC as
under a separate warrant agreement (a part of the offering of any warrants.
"Warrant Agreement") between us and a To obtain a copy of this document, see
bank or trust company, as warrant "Where You Can Find More Information"
agent. The warrant agent will act on page 2.
PLAN OF DISTRIBUTION
FINOVA Group and FINOVA Capital may liabilities under the Federal
offer securities directly or through securities laws and other laws. The
underwriters, dealers or agents. The underwriters' obligations to purchase
supplement will identify those securities will be subject to certain
underwriters, dealers or agents and conditions and generally will require
will describe the plan of them to purchase all of the securities
distribution, including commissions to if any are purchased.
be paid. If we do not name a firm in
the supplement, that firm may not Unless otherwise noted in the
directly or indirectly participate in supplement, the securities will be
any underwriting of those securities, offered by the underwriters, if any,
although it may participate in the when, as and if issued by us,
distribution of securities under delivered to and accepted by the
circumstances entitling it to a underwriters and subject to their
dealer's allowance or agent's right to reject orders in whole or in
commission. part.
Any underwriting agreement probably FINOVA Group and FINOVA Capital may
will entitle the underwriters to sell securities to dealers, as
indemnity against certain civil principals. Those dealers then may
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<PAGE>
resell the securities to the public at and penalty bids in accordance with
varying prices set by those dealers Regulation M under the Securities
from time to time. Exchange Act of 1934. Over-allotment
involves sales in excess of the
FINOVA Group and FINOVA Capital offering size, which creates a short
also may offer securities through position. Stabilizing transactions
agents. Agents generally act on a permit bids to purchase the underlying
"best efforts" basis during their security so long as the stabilizing
appointment, meaning they are not bids do not exceed a specified
obligated to purchase securities. maximum. Short covering transactions
involve purchases of the securities in
Dealers and agents may be entitled the open market after the distribution
to indemnification as underwriters by is completed to cover short positions.
us against certain liabilities under Penalty bids permit the underwriters
the Federal securities laws and other to reclaim a selling concession from a
laws. dealer when the securities originally
sold by the dealer are purchased in a
FINOVA Group and FINOVA Capital or covering transaction to cover short
the underwriters or agents may solicit positions. Those activities may cause
offers by institutions approved by us the price of the securities to be
to purchase securities under contracts higher than it would otherwise be. The
providing for future payment. underwriters may engage in any such
Permitted institutions include activities on any exchange or other
commercial and savings banks, market in which the securities may be
insurance companies, pension funds, traded. If commenced, the underwriters
investment companies, educational and may discontinue those activities at
charitable institutions and others. any time.
Certain conditions apply to those
purchases. The supplement or pricing
supplement, as applicable, will set
Any underwriter may engage in forth the anticipated delivery date of
over-allotment, stabilizing trans- the securities being sold at that
actions, short covering transactions time.
LEGAL MATTERS
Unless otherwise noted in a Counsel of FINOVA Group and FINOVA
supplement, William J. Hallinan, Esq., Capital, respectively, will pass
Senior Vice President-General Counsel on the legality of the securities
of FINOVA Group and FINOVA Capital, or offered through this prospectus and
Richard Lieberman, Esq., Vice any supplement. Brown & Wood LLP will
President-Associate/Assistant General act as counsel for any underwriters or
agents, unless otherwise noted in a
supplement.
EXPERTS
Deloitte & Touche LLP, independent financial statements are incorporated
auditors, have audited the financial into this prospectus by reference in
statements for FINOVA Group and FINOVA reliance upon their report given upon
Capital incorporated in this their authority as experts in
prospectus by reference from our accounting and auditing.
Annual Reports on Form 10-K. The
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