As filed with the Securities and Exchange Commission on July 23, 1997
Registration No. 333-29929
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-------------------------------
<TABLE>
<S> <C>
HEILIG-MEYERS COMPANY MACSAVER FINANCIAL
SERVICES, INC.
(Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its charter)
Virginia Delaware
(State or other jurisdiction of incorporation or organization) (State or other jurisdiction of incorporation or organization)
54-0558861 62-1419691
(I.R.S. employer identification number) (I.R.S. employer identification number)
2235 Staples Mill Road 2 Reads Way, Suite 224
Richmond, Virginia 23230 New Castle, Delaware 19720
(804) 359-9171 (302) 325-3841
(Address, including zip code, and telephone number, including (Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices) area code, of registrant's principal executive offices)
</TABLE>
-----------------------
David W. Robertson, Esq.
McGuire, Woods, Battle & Boothe, L.L.P.
One James Center
901 East Cary Street
Richmond, Virginia 23219
(804) 775-1000
(Name, address, including zip code, and
telephone number, including area code, of
agent for service)
-----------------------
Copies to:
Dennis C. Sullivan
Sullivan & Cromwell
1701 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this registration statement.
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<PAGE>
--------------------------
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
As permitted by Rule 429 under the Securities Act of 1933, the
Prospectus contained in this registration statement also relates to $100,000,000
of unsold and remaining unissued securities registered on the registration
statement on Form S-3 (Registration No. 333-07753).
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<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
SUBJECT TO COMPLETION, DATED JULY 23, 1997
[Logo]
$400,000,000
HEILIG-MEYERS COMPANY
COMMON STOCK AND WARRANTS
MACSAVER FINANCIAL SERVICES, INC.
(a subsidiary of Heilig-Meyers Company)
GUARANTEED DEBT SECURITIES
Unconditionally guaranteed as to payment of
principal, premium, if any, and interest, if any, by
Heilig-Meyers Company.
Heilig-Meyers Company (the "Company") may offer and sell from time to time,
together or separately, (i) shares of its common stock, $2 par value per share
(the "Common Stock") and (ii) warrants to purchase Common Stock (the
"Warrants"). MacSaver Financial Services, Inc., a wholly-owned subsidiary of the
Company ("MacSaver"), may offer and sell from time to time its debt securities
consisting of debentures, notes and/or other unsecured evidences of indebtedness
(the "Debt Securities"). The Debt Securities will be unconditionally guaranteed
(the "Guarantees") as to payment of principal of, and premium and interest on,
if any, the Debt Securities by the Company. The Common Stock, Warrants and Debt
Securities (collectively, together with the Guarantees, the "Securities") may be
offered, separately or together, at prices and terms to be set forth in one or
more supplements to this Prospectus (each a "Prospectus Supplement") up to an
aggregate initial offering price of $400,000,000 (or its equivalent, based on
the applicable exchange rate at the time of sale, in one or more foreign
currencies, currency units or composite currencies as shall be designated by the
Company or MacSaver, as the case may be).
Specific terms of the Securities for which this Prospectus is being
delivered are set forth in the accompanying Prospectus Supplement including,
where applicable, (i) in the case of Debt Securities, the specific designation,
aggregate principal amount, denominations, currency, maturity, premium, rate of
interest (or method of calculation) and time of payment thereof, terms for
redemption at the option of MacSaver or the holder, the form of the Debt
Securities (which may be in registered or permanent global form), the initial
public offering price and certain other terms of the offering and sale of the
Debt Securities and the terms of the Guarantees in respect of which this
Prospectus is being delivered; (ii) in the case of Common Stock, the number of
shares and initial public offering price of the Common Stock, and (iii) in the
case of Warrants, the number of shares of Common Stock which are issuable upon
exercise, the exercise period, the methods of distribution, the initial public
offering or purchase price and the exercise price and detachability if issued
with other Securities, of Warrants for which the Prospectus Supplement is being
delivered. The Prospectus Supplement will also contain information, as
applicable, about any listing on a securities exchange of the Securities for
which the Prospectus Supplement is being delivered.
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<PAGE>
The Securities may be sold by the Company and MacSaver directly or
indirectly through agents, underwriters or dealers as designated from time to
time or through a combination of such methods. See "Plan of Distribution." The
accompanying Prospectus Supplement sets forth the names of any underwriters,
dealers or agents involved in the sale of the Securities in respect of which
this Prospectus is being delivered and any applicable fee, commission or
discount arrangements with them.
This Prospectus may not be used to consummate sales of Securities unless
accompanied or, to the extent permitted by applicable law, preceded by a
Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is , 1997.
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<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549; and at the Commission's regional offices at
500 West Madison Street, Chicago, Illinois 60606; and 7 World Trade Center, 13th
Floor, New York, New York 10048. Copies of such material can be obtained by mail
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission also maintains a
World Wide Web site at http://www.sec.gov containing reports, proxy and
information statements and other information regarding registrants, such as the
Company, that file electronically with the Commission. The Company's common
stock is listed on the New York and Pacific Exchanges, and such material may
also be inspected at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005 and the Pacific Exchange, Inc., 301 Pine
Street, San Francisco, California 94104.
The Company and MacSaver have filed with the Commission a Registration
Statement on Form S-3 (herein, together with all amendments and exhibits,
referred to as the "Registration Statement") under the Securities Act of 1933,
as amended (the "Securities Act"), of which this Prospectus constitutes a part.
This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is made to the Registration Statement.
In accordance with Staff Accounting Bulletin No. 53, relating to financial
statement requirements in filings involving the guarantee of securities by a
parent corporation, separate financial statements for MacSaver are not included
or incorporated in this Prospectus.
The Company has received from the staff of the Commission a "no-action"
letter that it would not raise any objection if MacSaver does not file periodic
reports under Sections 13 and 15(d) of the Exchange Act. Accordingly, MacSaver
is not expected to file periodic reports under the Exchange Act. Notes to the
consolidated financial statements of the Company included in Company reports
incorporated herein contain summarized financial information regarding MacSaver.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company are hereby
incorporated by reference into this Prospectus:
(a) the annual report on Form 10-K for the fiscal year ended
February 28, 1997;
(b) the quarterly report on Form 10-Q for the quarterly period
ended May 31, 1997;
(c) the quarterly report on Form 10-Q/A, Amendment No. 1, for the
quarterly period ended May 31, 1997;
(d) the current report on Form 8-K/A dated February 19, 1997;
(e) the current report on Form 8-K dated July 17, 1997;
(f) the description of the Common Stock contained in the
Registration Statement on Form 8-A filed with the Commission
on April 26, 1983 (File No. 1-8484), as amended by amendments
on Form 8, filed with the Commission on April 9, 1985,
February 23, 1988, September 20, 1989, July 31, 1990, August
6, 1992 and July 28, 1994, respectively (File No. 1-8484); and
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<PAGE>
(g) the description of the Rights to Purchase Preferred Stock,
Series A contained in the Registration Statement on Form 8-A
filed with the Commission on February 23, 1988 (File No.
1-8484) as amended by an amendment on Form 8 filed with the
Commission on September 20, 1989 (File No. 1-8484).
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
respective dates of filing of such documents. Any statement contained herein or
in a document all or any portion of which is incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such earlier statement.
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to any person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated herein by reference (other
than certain exhibits to such documents). Requests for such copies should be
directed to HeiligMeyers Company, 2235 Staples Mill Road, Richmond, Virginia
23230; Attention: Paige H. Wilson, Secretary, telephone (804) 359-9171.
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<PAGE>
HEILIG-MEYERS COMPANY
BUSINESS
General
The Company is the nation's largest publicly held specialty retailer of
home furnishings with 1,163 stores (as of July 1, 1997) in 38 states,
Washington, D.C. and Puerto Rico. The Company currently operates stores under
five names and formats. The "Heilig-Meyers" name is associated with the
Company's historical format with a majority of the stores operating in smaller
markets with a broad line of merchandise. The Company's Heilig-Meyers stores are
primarily located in small towns and rural markets in the Southeast,
Southcentral, Midwest, West, Northwest and Southwest of the continental United
States. All of the Company's Puerto Rico stores operate under the "Berrios"
name. The Berrios format is similar to the format used by the stores operated
under the "Heilig-Meyers" name. The "Rhodes" name is used for the 99 stores
operated by Rhodes, Inc., which was acquired by the Company on December 31,
1996. The Rhodes format retailing strategy is selling quality furniture to a
broad base of middle income customers. The Rhodes stores are primarily located
in the midsized markets and metropolitan areas of 14 southern, midwestern and
western states. "The RoomStore" name and format is utilized for 18 stores in
Texas, 10 of which were acquired in February 1997 and 8 of which were converted
from former Rhodes stores. Stores using The RoomStore format display and sell
furniture in complete room packages, which are arranged by professional
designers and sell at a value if purchased as a group. The "Mattress
Discounters" name is used for 169 retail bedding stores acquired in July 1997.
The Mattress Discounters stores are located in ten states and Washington, D.C.
As a result of the acquisition of Rhodes , The RoomStore and Mattress
Discounters, the Company now has the ability to expand by matching operating
formats to markets with appropriate demographic and competitive factors. The
Company expects to expand these formats as appropriate markets are identified.
The Company's operating strategy includes: (1) offering a broad selection
of competitively priced home furnishings including furniture and bedding and in
the Heilig-Meyers and Berrios stores, consumer electronics, appliances, and
other items such as jewelry, small appliances and seasonal goods; (2) locating
Heilig-Meyers stores primarily in small towns and rural markets which are at
least 25 miles from a metropolitan area; (3) offering credit programs to provide
flexible financing to its customers; (4) utilizing centralized inventory and
distribution systems in strategic regional locations to support store inventory
and merchandise delivery operations; and (5) emphasizing customer service,
including free delivery on most major purchases in the Heilig-Meyers stores and
repair service for consumer electronics and other mechanical items.
The Company believes this strategy of offering selection, credit, delivery
and service generally allows its Heilig-Meyers stores to have the largest market
share among home furnishings retailers in most of its small-town markets.
The Company's executive offices are located at 2235 Staples Mill Road,
Richmond, Virginia 23230. The telephone number is (804) 359-9171. MacSaver is a
Delaware corporation and a wholly-owned subsidiary of the Company through which
financing is obtained for the operations of the Company and its other
subsidiaries. The executive offices of MacSaver are located at 2 Reads Way,
Suite 224, New Castle, Delaware 19720. The telephone number is (302) 325-3841.
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<PAGE>
Store Operations
General
The Company believes that locating its Heilig-Meyers stores in small towns
and rural markets provides an important competitive advantage. Currently,
approximately 80% of all Heilig-Meyers stores are located in towns with
populations under 50,000 and more than 25 miles from a metropolitan market.
Competition in these small towns largely comes from locally-owned store
operations which generally lack the financial strength to compete effectively
with the Company. The Company believes that its Heilig-Meyers stores have the
largest market share among home furnishings retailers in the majority of their
areas.
The Company's Heilig-Meyers stores generally range in size from 10,000 to
35,000 square feet, with the average being approximately 20,000 square feet. A
store's attached or nearby warehouse usually measures from 3,000 to 5,000 square
feet. A typical store is designed to give the customer an urban shopping
experience in a rural location. The Company's existing store remodeling program,
under which stores are remodeled on a rotational basis, provides the Company's
older stores with a fresh look and up-to-date displays on a periodic basis. The
existing Rhodes he RoomStore and Mattress Discounters formats average
approximately 34,000 , 25,000 and 4,000 square feet, respectively.
Distribution
The Company currently operates eight Heilig-Meyers distribution centers in
the continental U.S. and one center in Puerto Rico, each of which has cantilever
racking and computer-controlled random-access inventory storage. The Company
also operates eleven Rhodes distribution centers, which collectively have more
than 1.1 million square feet and include home delivery operations in certain
markets. The Company also operates The RoomStore's 200,000-square-foot
distribution center. The Company operates seven smaller Mattress Discounters
distribution centers which primarily provide central delivery for the Mattress
Discounters stores. Management is in the process of evaluating the distribution
function in light of recent acquisitions in order to maximize warehousing and
transportation efficiencies.
Credit Operations
The Company believes that offering flexible credit is an important part of
its business strategy which provides a significant competitive advantage. The
Company believes its credit program fosters customer loyalty and repeat
business. Historically, approximately 80% of the sales in Heilig-Meyers stores
have been made through the Company's installment credit program. Because
installment credit is administered at the store level, terms can generally be
tailored to meet the customer's ability to pay. Approximately 70% of Rhodes
sales are made through its revolving credit program.
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<PAGE>
The following table sets forth certain data regarding the Company's installment
credit operations:
<TABLE>
<CAPTION>
Fiscal Years Ended
Feb. 28 Feb. 29, Feb. 28, Feb. 28, Feb. 28,
1997 1996 1995 1994 1993
<S> <C>
Average number of installment
accounts receivable (in thousands)(1) 1,280,173 1,220,660 972,418 799,501 652,569
Average initial term of account
(in months)(2)......................... 17.4 17.2 16.6 16.7 16.6
Provision for doubtful accounts
as % of sales.......................... 6.0% 5.7% 4.8% 4.5% 4.4%
Net charge-offs as % of sales 5.2 5.0 4.6 4.1 4.1
</TABLE>
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(1) Includes securitized accounts receivable which are still serviced by
the Company.
(2) For installment contracts originated during the indicated fiscal year,
calculated at the date of origination.
Merchandising
The Company's Heilig-Meyers merchandising strategy is to offer a broad
selection of competitively priced home furnishings, including furniture and
accessories, consumer electronics, appliances, bedding, and other items such as
jewelry and seasonal goods. The table below sets forth the percentage of sales
of these items during the last five years:
<TABLE>
<CAPTION>
Fiscal Years Ended
Feb. 28. Feb. 29, Feb. 28, Feb. 28, Feb. 28,
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C>
Furniture and accessories...... 60% 58% 59% 59% 59%
Consumer electronics........... 10 12 11 12 13
Appliances..................... 8 9 8 8 8
Bedding........................ 12 11 10 10 10
Other items.................... 10 10 12 11 10
</TABLE>
The Rhodes and The RoomStore stores primarily sell mid-price point
furniture and bedding. Historically, 89% of Rhodes' sales consisted of furniture
and accessories with bedding comprising the remaining 11%. Mattress Discounters
stores sell bedding and related items at competitive prices.
Advertising and Promotion
In fiscal 1997, the Company distributed over 140 million direct mail
circulars. This included monthly circulars sent by direct mail to over nine
million households on the Company's mailing list and special private sale
circulars mailed to approximately two million of these households each month, as
well as during special promotional periods. During fiscal 1997, the Company
continued to utilize market segmentation techniques (begun in fiscal 1994) to
identify prospective customers by matching their demographics to those of
existing customers. Management believes ongoing market research and improved
mailing techniques enhance the Company's ability to place circulars in the hands
of those potential customers most likely to make a purchase. The Company
believes that availability, as well
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<PAGE>
as the terms of credit, are key determinants in the purchase decision, and
therefore, promotes credit availability by disclosing monthly payment terms in
its circulars.
Corporate Expansion
The Company has grown from 374 stores at February 28, 1992, to 1,163 stores
at July 1, 1997. Over this time period, the Company has expanded from its
traditional Southeast operating region into the Southcentral, Midwest, West,
Northwest and Southwest continental United States as well as Puerto Rico. In
addition, the Company has acquired new operating formats as a result of the
Rhodes , The RoomStore and the Mattress Discounters acquisitions. The Company
currently operates stores in Alabama, Arizona, Arkansas, California, Colorado,
the District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa,
Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan,
Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico,
North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South
Carolina, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin and
Puerto Rico. Management believes that the Company's size and geographically
diverse store locations, as well as the diversity in store formats created by
the Rhodes , The RoomStore and the Mattress Discounters acquisitions, are
competitive advantages and allow for greater stability in its operations. The
Company plans to focus its expansion efforts on its existing formats; however,
it may from time to time consider additional formats if attractive acquisition
opportunities develop.
USE OF PROCEEDS
Except as otherwise provided in the applicable Prospectus Supplement, the
net proceeds from the sale of the Securities will be used for general corporate
purposes, which may include repayment of outstanding indebtedness, capital
expenditures, working capital requirements and possible future acquisitions. The
precise amount and timing of the application of such proceeds will depend upon
the funding requirements of the Company or MacSaver, as the case may be, and the
availability and cost of other funds. Allocation of the proceeds of particular
Securities, or the principal reasons for the offering if no such allocation has
been made, will be described in the applicable Prospectus Supplement.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges for
the periods indicated:
<TABLE>
<CAPTION>
Year Ended February (28)29 Three Months Ended May 31
1997 1996 1995 1994 1993 1997 1996
---- ---- ---- ---- ---- ---- ----
<S> <C>
Ratio of Earnings to 1.51x 1.62x 2.28x 2.50x 2.26x 1.6x 1.7x
Fixed Charges
</TABLE>
For purposes of this ratio, earnings are calculated by adding fixed charges
(excluding capitalized leases) to income before income taxes and extraordinary
items. Fixed charges consist of interest on indebtedness (including amortization
of debt discount and premium) and the portion of rental expense representative
of an interest factor.
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<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions may not apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.
The Debt Securities and related Guarantees are to be issued under an
Indenture (the "Indenture"), among MacSaver, the Company and First Union
National Bank of Virginia, as trustee (the "Trustee"). The Indenture is filed as
an exhibit to the Registration Statement of which this Prospectus is a part. The
following summaries of certain provisions of the Debt Securities and the
Indenture do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all the provisions of the Indenture, including
the definitions therein of certain terms. Wherever particular Sections, Articles
or defined terms of the Indenture are referred to, such Sections, Articles or
defined terms are incorporated herein by reference. Article and Section
references used herein are references to Articles and Sections of the Indenture.
Capitalized terms not otherwise defined herein shall have the meanings given in
the Indenture.
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$", "U.S. Dollars"
or "dollars").
General
The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provides that Debt Securities may
be issued thereunder up to an aggregate principal amount which may be authorized
from time to time by MacSaver. The Debt Securities will be unsecured
unsubordinated obligations of MacSaver and will rank on a parity in right of
payment with all other unsecured and unsubordinated indebtedness of MacSaver.
The Debt Securities will be unconditionally guaranteed by the Company as to
payment of principal, premium, if any, and interest, if any. See "Guarantees."
Reference is made to the applicable Prospectus Supplement relating to the
series of Debt Securities offered thereby for specific terms, including (where
applicable): (1) the title or designation of such Debt Securities; (2) any limit
on the aggregate principal amount of such Debt Securities; (3) the price or
prices (expressed as a percentage of the principal amount thereof) at which such
Debt Securities will be issued; (4) the date or dates on which the principal of
and premium, if any, on such Debt Securities will be payable, or the method or
methods, if any, by which such date or dates will be determined; (5) the rate or
rates (which may be fixed or variable) at which such Debt Securities will bear
interest, if any, or the method or methods, if any, by which such rate or rates
are to be determined, the date or dates, if any, from which such interest will
accrue, or the method or methods, if any, by which such date or dates are to be
determined, and whether and under what circumstances Additional Amounts on such
Debt Securities will be payable, and the basis upon which interest will be
calculated if other than that of a 360- day year of twelve 30-day months; (6)
the dates on which such interest, if any, will be payable and the record dates
therefor; (7) the place or places where the principal of, premium, if any, and
interest, if any, on such Debt Securities will be payable and the place or
places where such Debt Securities may be surrendered for registration of
transfer and exchange, if other than The City of New York; (8) the date or dates
on which, the period or periods within which, the price or prices at which and
the other terms and conditions upon which such Debt Securities may be redeemed
at the option of MacSaver or are subject to repurchase at the option of the
holders; (9) the terms of any sinking fund or analogous provision; (10) if other
than U.S. dollars, the Currency for which the Debt Securities may be purchased
and the Currency in which the payment of principal thereof and premium, if any,
and interest, if any, thereon may be made, and the ability, if any, of MacSaver,
or the holders of Debt Securities to have payments made in any Currency other
than those in which the Debt Securities are stated to be payable; (11) any
addition to, or modification or deletion of, any covenant or Event of Default
with respect to such Debt Securities; (12) whether any
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<PAGE>
such Debt Securities are to be issuable in registered or bearer form or both
and, if in bearer form, the terms and conditions relating thereto and any
limitations on issuance of such Bearer Securities (including in exchange for
Registered Securities of the same series); (13) whether any such Debt Securities
will be issued in temporary or permanent global form and, if so, the identity of
the depositary for such global Debt Security; (14) the applicability, if any, of
the defeasance or covenant defeasance provisions of the Indenture applicable to
such Debt Securities; (15) the person to whom any interest on any Registered
Securities of the series shall be payable, if other than the person in whose
name the Registered Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, the manner in which, or the person to whom, any interest on any Bearer
Security of the series shall be payable, if other than upon presentation and
surrender of the coupons appertaining thereto as they severally mature, and the
extent to which, or the manner in which, any interest payable on a temporary
global Debt Security will be paid if other than in the manner provided in the
Indenture; (16) the portion of the principal amount of Debt Securities which
shall be payable upon acceleration thereof if other than the full principal
amount thereof; (17) the authorized denominations in which Debt Securities will
be issuable, if other than denominations of $1,000 and any integral multiple
thereof (in the case of Registered Securities) or $5,000 (in the case of Bearer
Securities); (18) the terms, if any, upon which Debt Securities may be
exchangeable for other Securities; (19) whether the amount of payments of
principal of, premium, if any, and interest, if any, on Debt Securities may be
determined with reference to an index, formula or other method or methods (any
Debt Securities being hereinafter called "Indexed Securities") and the manner in
which such amounts will be determined; (20) the terms of the Guarantees in
respect of which this Prospectus is being delivered; and (21) any other terms of
such Debt Securities.
As used in this Prospectus and any Prospectus Supplement relating to the
offering of any Debt Securities, references to the principal of and premium, if
any, and interest, if any, on Debt Securities will be deemed to include mention
of the payment of Additional Amounts, if any, required by the terms of Debt
Securities in such context.
Debt Securities may be issued as Original Issue Discount Securities (as
defined in the Indenture) to be sold at a substantial discount below their
principal amount. In the event of an acceleration of the maturity of any
Original Issue Discount Security, the amount payable to the holder thereof upon
such acceleration will be determined in the manner described in the applicable
Prospectus Supplement. Special United States federal income tax considerations
applicable to Debt Securities issued at an original issue discount, including
Original Issue Discount Securities, and special United States tax considerations
applicable to any Debt Securities which are denominated in a currency or
currency unit other than United States dollars, are described below under
"United States Taxation."
If the purchase price of any Debt Securities is payable in a Currency other
than U.S. dollars or if principal of, or premium, if any, or interest, if any,
on any of the Debt Securities is payable in any Currency other than U.S.
dollars, the specific terms and other information with respect to such Debt
Securities and such Foreign Currency will be specified in the Prospectus
Supplement relating thereto.
Under the Indenture, the terms of the Debt Securities of any series may
differ and MacSaver, without the consent of the holders of the Debt Securities
of any series, may reopen a previous series of Debt Securities and issue
additional Debt Securities of such series.
The Indenture does not contain any provisions which may afford the holders
of any of the Debt Securities protection in the event of a highly leveraged
transaction or similar transaction involving the Company or MacSaver. Any such
provisions, if applicable to any Debt Securities, will be described in the
Prospectus Supplement or Prospectus Supplements relating thereto.
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Guarantees; Holding Company Structure
The Company will unconditionally guarantee the due and punctual payment of
principal of, premium, if any, and interest on the Debt Securities, when and as
the same shall become due and payable, whether at the maturity date, by
declaration of acceleration, call for redemption or otherwise. The Guarantees
will remain in effect until the entire principal of, premium, if any, and
interest on the Debt Securities shall have been paid in full or otherwise
discharged in accordance with the provisions of the Indenture.
The Company conducts its operations primarily through its wholly-owned
subsidiaries, including MacSaver, and substantially all of the Company's
consolidated assets are held by its subsidiaries. Accordingly, the cash flow of
the Company and the consequent ability to service its debt, including its
obligations under the Guarantees, are largely dependent upon the earnings of
such subsidiaries.
Because the Company is a holding company, the Company's obligations under
the Guarantees will be effectively subordinated to all existing and future
indebtedness, trade payables, guarantees, lease obligations and letter of credit
obligations of the Company's subsidiaries. Therefore, the Company's rights and
the rights of its creditors, including the holders of the Debt Securities under
the Guarantees, to participate in the assets of any subsidiary (other than
MacSaver) upon the latter's liquidation or reorganization will be subject to the
prior claims of such subsidiary's creditors, except to the extent that the
Company may itself be a creditor with recognized claims against the subsidiary,
in which case the claims of the Company would still be effectively subordinate
to any security interest in, or mortgages or other liens on, the assets of such
subsidiary and would be subordinate to any indebtedness of such subsidiary
senior to that held by the Company. Although certain debt instruments to which
the Company and its subsidiaries are parties impose limitations on the
incurrence of additional indebtedness, both the Company and its subsidiaries
retain the ability to incur substantial additional indebtedness and lease and
letter of credit obligations.
Registration, Transfer, Payment and Paying Agent
Unless otherwise indicated in the applicable Prospectus Supplement, each
series of Debt Securities will be issued in registered form only, without
coupons. The Indenture, however, provides that MacSaver may also issue Debt
Securities in bearer form only, or in both registered and bearer form. Bearer
Securities may not be offered, sold, resold or delivered in connection with
their original issuance in the United States or to any United States person (as
defined below) other than offices located outside the United States of certain
United States financial institutions. As used herein, "United States person"
means any citizen or resident of the United States, any corporation, partnership
or other entity created or organized in or under the laws of the United States,
or any estate or trust, the income of which is subject to United States federal
income taxation regardless of its source, and "United States" means the United
States of America (including the states thereof and the District of Columbia),
its territories, its possessions and other areas subject to its jurisdiction.
Purchasers of Bearer Securities will be subject to certification procedures and
may be affected by certain limitations under United States tax laws. Such
procedures and limitations will be described in the Prospectus Supplement
relating to the offering of the Bearer Securities.
Unless otherwise indicated in the applicable Prospectus Supplement,
Registered Securities will be issued in denominations of $1,000 or any integral
multiple thereof, and Bearer Securities will be issued in denominations of
$5,000.
Unless otherwise indicated in the applicable Prospectus Supplement, the
principal, premium, if any, and interest, if any, of or on the Debt Securities
will be payable, and Debt Securities may be surrendered for registration of
transfer or exchange, at an office or agency to be maintained by MacSaver in the
Borough of Manhattan, The City of New York, provided that payments of interest
with respect to any Registered Security may be made at the option of MacSaver by
check mailed to the address of the person entitled thereto or by transfer to an
account maintained by the payee with a bank located in the United States. No
service charge shall be made for any registration of transfer or
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exchange of Debt Securities, but MacSaver may require payment of a sum
sufficient to cover any tax or other governmental charge and any other expenses
that may be imposed in connection therewith.
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of, premium, if any, and interest, if any, on Bearer Securities
will be made, subject to any applicable laws and regulations, at such office or
agency outside the United States as specified in the Prospectus Supplement and
as MacSaver may designate from time to time. Unless otherwise indicated in the
applicable Prospectus Supplement, payment of interest due on Bearer Securities
on any Interest Payment Date will be made only against surrender of the coupon
relating to such Interest Payment Date. Unless otherwise indicated in the
applicable Prospectus Supplement, no payment of principal, premium or interest
with respect to any Bearer Security will be made at any office or agency in the
United States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States;
provided, however, that if amounts owing with respect to any Bearer Securities
shall be payable in U.S. dollars, payment with respect to any such Bearer
Securities may be made at the Corporate Trust Office of the applicable Trustee
or at any office or agency designated by MacSaver in the Borough of Manhattan,
The City of New York, if (but only if) payment of the full amount of such
principal, premium or interest at all offices outside of the United States
maintained for such purpose by MacSaver is illegal or effectively precluded by
exchange controls or similar restrictions.
Unless otherwise indicated in the applicable Prospectus Supplement,
MacSaver will not be required to (i) issue, register the transfer of or exchange
Debt Securities of any series during a period beginning at the opening of
business 15 days before any selection of Debt Securities of that series of like
tenor to be redeemed and ending at the close of business on the day of that
selection; (ii) register the transfer of or exchange any Registered Security, or
portion thereof, called for redemption, except the unredeemed portion of any
Registered Security being redeemed in part; (iii) exchange any Bearer Security
called for redemption, except to exchange such Bearer Security for a Registered
Security of that series and like tenor that is simultaneously surrendered for
redemption; or (iv) issue, register the transfer of or exchange any Debt
Security which has been surrendered for repayment at the option of the holder,
except the portion, if any, of such Debt Security not to be so repaid.
Global Securities
The Debt Securities may be issued in whole or in part in the form of one or
more global securities that will be deposited with, or on behalf of, a
depositary (the "Depositary") identified in the Prospectus Supplement relating
to such series. Global Debt Securities may be issued in either registered or
bearer form and in either temporary or permanent form. Unless and until it is
exchanged in whole or in part for individual certificates evidencing Debt
Securities in definitive form represented thereby, a global Debt Security may
not be transferred except as a whole by the Depositary for such global Debt
Security to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor of such Depositary or a nominee of such
successor.
The specific terms of the depositary arrangement with respect to a series
of global Debt Securities and certain limitations and restrictions relating to a
series of global Bearer Securities will be described in the Prospectus
Supplement relating to such series.
Outstanding Debt Securities
In determining whether the holders of the requisite principal amount of
outstanding Debt Securities have given any request, demand, authorization,
direction, notice, consent or waiver under the Indenture, or whether a quorum is
present at a meeting of the holders thereunder, (i) the portion of the principal
amount of an Original Issue Discount Security that shall be deemed to be
outstanding for such purposes shall be that portion of the principal amount
thereof that could be declared to be due and payable upon a declaration of
acceleration thereof pursuant to the terms
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of such Original Issue Discount Security as of the date of such determination,
(ii) the principal amount of any Indexed Security that shall be deemed to be
outstanding for such purpose shall be the principal face amount of such Indexed
Security determined on the date of its original issuance, (iii) the principal
amount of a Debt Security denominated in a Currency other than U.S. dollars
shall be the U.S. dollar equivalent, determined on the date of original issue of
such Debt Security, of the principal amount of such Debt Security and (iv) any
Debt Security beneficially owned by the Company or MacSaver or by any obligor on
such Debt Security or any Affiliate of the Company or MacSaver or such other
obligor shall be deemed not to be outstanding.
Redemption and Repurchase
The Debt Securities of any series may be redeemable at the option of
MacSaver, may be subject to mandatory redemption pursuant to a sinking fund or
otherwise, or may be subject to repurchase by MacSaver at the option of the
holders, in each case upon the terms, at the times and at the prices set forth
in the applicable Prospectus Supplement.
Certain Covenants of the Company
Restricted and Unrestricted Subsidiaries. The various restrictive
provisions of the Indenture applicable to the Company and the Restricted
Subsidiaries do not apply to Unrestricted Subsidiaries. The assets of
Unrestricted Subsidiaries are not consolidated with those of the Company and the
Restricted Subsidiaries in calculating Consolidated Net Tangible Assets, and
investments by the Company or by the Restricted Subsidiaries in Unrestricted
Subsidiaries are excluded in calculating Consolidated Net Tangible Assets. A
"Restricted Subsidiary" is MacSaver or any other subsidiary of the Company or
MacSaver which is organized under the laws of the United States or any state
thereof or Canada or Puerto Rico, which conducts substantially all of its
business and has substantially all of its assets within the United States or
Canada or Puerto Rico, of which more than 80% (by number of votes) of the voting
securities or other similar ownership interests is owned by the Company and/or
one or more Restricted Subsidiaries and which is not designated by the Company
as an Unrestricted Subsidiary in accordance with the Indenture. An "Unrestricted
Subsidiary" is a subsidiary of the Company or MacSaver which is designated by
the Company as an Unrestricted Subsidiary in accordance with the Indenture or
which does not come within the definition of a Restricted Subsidiary. As of the
date of this Prospectus, there were no Unrestricted Subsidiaries.
(Section 101)
The Company may designate any Restricted Subsidiary, other than MacSaver,
as an Unrestricted Subsidiary if, immediately after such designation, (i) such
subsidiary does not hold or own, directly or indirectly, any Funded Debt or
capital stock of any Restricted Subsidiary, (ii) the Company could incur
additional Secured Funded Debt in compliance with the Indenture, (iii) neither
the Company nor any Restricted Subsidiary guarantees any obligations of such
subsidiary and (iv) no Default or Event of Default would exist. The Company may
not designate any Unrestricted Subsidiary as a Restricted Subsidiary unless,
immediately after giving effect to such designation, such subsidiary is in
compliance with all of the covenants of the Indenture applicable to Restricted
Subsidiaries, the Company could incur additional Secured Funded Debt (without
securing the Debt Securities equally and ratably) in compliance with the
Indenture and no Default or Event of Default would exist. The Company must at
all times ensure that MacSaver is a wholly-owned Restricted Subsidiary. (Section
1010)
Restrictions on Secured Funded Debt. The Company may not, and may not
permit any Restricted Subsidiary to, issue, assume, guarantee, incur, create or
otherwise become liable in respect of any Secured Funded Debt, unless the Debt
Securities are secured equally and ratably with (or prior to) such Secured
Funded Debt, except (i) Secured Funded Debt of a Restricted Subsidiary
outstanding at the date of the Indenture (there was no such Secured Funded Debt
outstanding on such date), (ii) Secured Funded Debt of a Restricted Subsidiary
payable to the Company or to a Restricted Subsidiary, (iii) Secured Funded Debt
of any corporation or other entity outstanding at the time such corporation or
other entity became a Restricted Subsidiary (and not incurred in contemplation
thereof), (iv) Secured
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Funded Debt otherwise permitted under the Indenture (see "Restrictions on
Liens"), (v) Attributable Debt otherwise permitted under the Indenture (see
"Restrictions on Sale and Leaseback Transactions"), (vi) Secured Funded Debt not
otherwise permitted by clauses (i) through (v) above, provided that, (1) at the
time of the issuance, assumption, guarantee, incurrence or creation thereof no
Default or Event of Default is continuing or would be created thereby and (2)
after giving effect thereto and to the application of the proceeds thereof, no
Default or Event of Default shall have occurred and be continuing and the
aggregate amount of all Secured Funded Debt does not exceed 5% of Consolidated
Net Tangible Assets as of the end of the immediately preceding fiscal quarter
and (vii) renewals, extensions and refundings of Secured Funded Debt permitted
by clauses (i) through (vi) above, provided that the amount of such Secured
Funded Debt is not increased unless otherwise permitted by such clauses.
(Section 1007)
"Secured Funded Debt" means Funded Debt of any Restricted Subsidiary (other
than MacSaver) or which is secured by a mortgage, security interest, pledge,
conditional sale or other title retention agreement or other lien upon any
assets of the Company, MacSaver or any other Restricted Subsidiary (other than
liabilities in connection with capital lease obligations or industrial
development bonds). (Section 101)
"Funded Debt" means Indebtedness having a final maturity of more than one
year from the date of determination thereof or which is renewable or extendible
at the option of the obligor for a period or periods more than one year from
such date of determination. (Section 101)
"Indebtedness" means all obligations of the Company, MacSaver or any other
Restricted Subsidiary which, in accordance with generally accepted accounting
principles consistently applied, are classified as liabilities on the most
recently available consolidated balance sheet of the Company and the Restricted
Subsidiaries (other than liabilities for minority interests or deferred taxes),
together with the following obligations of the Company, MacSaver or any other
Restricted Subsidiary, determined in accordance with generally accepted
accounting principles consistently applied, whether or not classified as
liabilities (other than obligations with respect to leases of real property or
interests therein that are classified as operating leases in accordance with
generally accepted accounting principles consistently applied): (i) indebtedness
for borrowed money and deferred payment obligations representing the unpaid
purchase price of property, assets or services; (ii) capitalized lease
obligations; (iii) guarantees and endorsements of obligations of others,
directly or indirectly, and all other repurchase agreements and indebtedness in
effect guaranteed through an agreement, contingent or otherwise, to purchase
such indebtedness, or to purchase or sell property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment of
the indebtedness or to assure the owner of the indebtedness against loss, or to
supply funds to or in any manner invest in the debtor, or otherwise to assure a
creditor against loss (but excluding guarantees and endorsements of notes, bills
and checks made in the ordinary course of business and of obligations of
Restricted Subsidiaries); and (iv) indebtedness secured by any mortgage, lien,
pledge, conditional sale agreement, title retention agreement, or other security
interest or encumbrance upon property owned by the Company, MacSaver or any
other Restricted Subsidiary, even though such indebtedness has not been assumed
and notwithstanding that the rights and remedies of the seller, lender or lessor
under such agreement in the event of default may be limited to repossession or
sale of such property. (Section 101)
"Attributable Debt" means the obligations incurred by MacSaver, the Company
or any other Restricted Subsidiary as lessee in connection with sale and
leaseback transactions, in each case valued at the lesser of (i) the fair market
value of the property subject to such transaction or (ii) the present value
(discounted to present value in accordance with generally accepted accounting
principles consistently applied) of the obligation of the lessee for rental
payments (other than contingent rental payments and amounts required to be paid
on account of maintenance, repairs, insurance, taxes, assessments and similar
charges) during the term of such lease. (Section 101)
"Consolidated Net Tangible Assets" means the total amount of all assets of
the Company, MacSaver and the other Restricted Subsidiaries determined on a
consolidated basis in accordance with generally accepted accounting principles
consistently applied, less the sum (without duplication) of (i) the amount, if
any, at which intangible assets
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(including goodwill, trade names, trademarks, patents, organization expenses and
other similar intangibles) and unamortized debt discount and expense appear on a
consolidated balance sheet, (ii) any write-up of tangible assets after the date
of the Indenture, (iii) all investments, loans or advances made by the Company,
MacSaver or any other Restricted Subsidiary in or to any Unrestricted Subsidiary
(valued at the book value thereof) and (iv) all liabilities other than minority
interests, deferred taxes and the aggregate amount of Funded Debt of the
Company, MacSaver and the other Restricted Subsidiaries on a consolidated basis
(eliminating intercompany items). (Section 101)
Restrictions on Liens. The Company may not, and may not permit any
Restricted Subsidiary to, create or incur, or suffer to be incurred or to exist,
any mortgage, pledge, security interest, lien, encumbrance or charge of any kind
on its or such Restricted Subsidiary's property or assets, whether now owned or
hereafter acquired, or upon any income or profits therefrom, or transfer any
property for the purpose of subjecting the same to the payment of obligations in
priority to the payment of its or any Restricted Subsidiary's general creditors,
or acquire or agree to acquire any property or assets upon conditional sale
agreements or other title retention devices, except (i) liens securing
Indebtedness existing on the date of the Indenture (the principal amount of such
Indebtedness outstanding at the end of the quarterly period immediately
preceding the date of the Indenture was $3,842,816, $2,999,505 of which was
outstanding as of May 31, 1997), (ii) liens securing Indebtedness incurred to
finance the purchase, construction or other acquisition of assets after the date
of the Indenture, provided that (A) any such lien shall attach only to such
asset and (B) at the time of acquisition of such asset, the amount remaining
unpaid on the Indebtedness secured by such lien shall not exceed 100% of the
lesser of the total purchase price or fair market value of such asset, (iii)
liens for property taxes and assessments or governmental charges or levies, and
liens securing claims or demands of mechanics, suppliers, carriers, landlords
and other like Persons, provided that payment thereof is being contested in good
faith by appropriate proceedings and adequate reserves have been set aside with
respect thereto, (iv) liens incurred or deposits made in the ordinary course of
business (A) in connection with worker's compensation, unemployment insurance,
social security and other like laws or (B) to secure the performance of letters
of credit, bids, tenders, sales contracts, leases, statutory obligations,
surety, appeal and performance bonds and other similar obligations, in each case
not incurred in connection with the borrowing of money, the obtaining of
advances or the payment of the deferred purchase price of property, (v)
attachment, judgment and other similar liens arising in connection with court
proceedings, provided that execution and other enforcement are effectively
stayed and all claims which the liens secure are being actively contested in
good faith by appropriate proceedings, (vi) liens securing Indebtedness of a
Restricted Subsidiary to the Company or to a Restricted Subsidiary, (vii) liens
on real property, interests therein or related fixtures and equipment subject to
leases that are classified as operating leases in accordance with generally
accepted accounting principles consistently applied, (viii) minor reservations,
exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions and other minor title exceptions and (ix) liens securing
Indebtedness incurred after the date of the Indenture and not otherwise
permitted by clauses (i) through (viii) above, provided that, (1) at the time of
the issuance, assumption, guarantee, incurrence or creation thereof no Default
or Event of Default is continuing or would be created thereby, and (2) after
giving effect thereto and to the application of the proceeds thereof, the
aggregate amount of all such Indebtedness does not exceed 10% of Consolidated
Net Tangible Assets as of the end of the immediately preceding fiscal quarter.
(Section 1008)
The Company, MacSaver or any other Restricted Subsidiary may subject any of
its properties to any lien or encumbrance otherwise prohibited by the foregoing
paragraph provided that, concurrently with the imposition of any such lien, the
Debt Securities are secured equally and ratably with all other obligations
secured thereby (as evidenced by an opinion of counsel). (Section 1008)
Restrictions on Sale and Leaseback Transactions. The Company may not, and
may not permit any Restricted Subsidiary to, sell any property and then lease
back that property or similar property under a lease that (i) is entered into
more than 365 days after the later of the date of acquisition of such property
by the Company, MacSaver or any other Restricted Subsidiary or the date of
completion and occupancy by the Company, MacSaver or any other Restricted
Subsidiary of improvements constructed on such property and (ii) has a term of
more than three years, or is renewable or extendible for a total term of more
than three years, unless, after giving effect to such transaction
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and to the application of the proceeds thereof, no Default or Event of Default
shall have occurred and be continuing and the aggregate amount of all
Attributable Debt does not exceed 10% of Consolidated Net Tangible Assets as of
the end of the immediately preceding fiscal quarter. (Section 1009)
Restrictions on Mergers, Consolidations, Conveyances and Transfers. The
Company may not, and may not permit any Restricted Subsidiary to, merge or
consolidate with or into any other Person or convey, transfer or lease its
properties or assets substantially as an entirety to any other Person, except
(i) any Restricted Subsidiary may merge or consolidate with or into the Company
or any other wholly-owned Restricted Subsidiary so long as, in any merger or
consolidation involving the Company, the Company is the surviving or continuing
corporation, (ii) any wholly-owned Restricted Subsidiary formed solely to
facilitate transfers of properties or assets accounted for as sales under
generally accepted accounting principles consistently applied may convey or
transfer such properties or assets substantially as an entirety to any other
Person and (iii) the Company or any Restricted Subsidiary may merge or
consolidate with or into any other Person or convey, transfer or lease its
properties or assets substantially as an entirety to any other Person if (A) the
Person into which the Company or such Restricted Subsidiary is merged or the
Person formed by such consolidation, or the Person that acquires by conveyance
or transfer, or that leases, the properties or assets of the Company or such
Restricted Subsidiary substantially as an entirety, is organized and validly
existing under the laws of the United States and expressly assumes, by written
instrument, all of the obligations of the Company or MacSaver, as the case may
be, under the Indenture, (B) at the time of such transaction and after giving
effect thereto, no Default or Event of Default shall have occurred and be
continuing and (C) certain other conditions are met. (Article VIII)
Events of Default
An Event of Default with respect to the Debt Securities of any series is
defined in the Indenture as being: (i) default for 30 days in payment of any
interest with respect to any Debt Security of such series; (ii) default in
payment of principal or any premium with respect to any Debt Security of such
series when due upon maturity, redemption or otherwise; (iii) default in making
any sinking fund payment or payment under any analogous provision when due with
respect to any Debt Security of such series; (iv) default by the Company or
MacSaver in the performance, or breach, of any other covenant or warranty in the
Indenture (other than a covenant or warranty included therein solely for the
benefit of series of Debt Securities other than that series) or any Debt
Security of such series which shall not have been remedied for a period of 60
days after notice to MacSaver and the Company by the Trustee or the holders of
not less than 25% in aggregate principal amount of the Debt Securities of such
series then outstanding; (v) certain events of bankruptcy, insolvency or
reorganization of the Company or MacSaver; (vi) any acceleration of the maturity
of any Indebtedness of the Company, MacSaver or any other Restricted Subsidiary
for borrowed money in an aggregate principal amount exceeding $20,000,000, or a
failure to pay such Indebtedness at its stated maturity; provided, that an Event
of Default shall not be deemed to occur with respect to the acceleration of the
maturity of any such Indebtedness if the event that caused such acceleration
shall be cured or such acceleration shall be rescinded within 10 days; or (vii)
any other Event of Default established for the Debt Securities of such series.
No Event of Default with respect to any particular series of Debt Securities
necessarily constitutes an Event of Default with respect to any other series of
Debt Securities. The Indenture provides that the Trustee thereunder may withhold
notice to the holders of the Debt Securities of any series of the occurrence of
a default with respect to the Debt Securities of such series (except a default
in payment of principal, premium, if any, interest, if any, or sinking fund
payments, if any) if the Trustee considers it in the interest of the holders to
do so.
The Indenture provides that if an Event of Default with respect to any
series of Debt Securities issued thereunder shall have occurred and be
continuing, either the Trustee or the holders of at least 25% in principal
amount of the Debt Securities of such series then outstanding may declare the
principal amount (or if any Debt Securities of such series are Original Issue
Discount Securities, such lesser amount as may be specified in the terms
thereof) of all the Debt Securities of such series to be due and payable
immediately; provided that in the case of certain events of bankruptcy,
insolvency or reorganization, such principal amount (or portion thereof) shall
automatically become due
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and payable. However, at any time after an acceleration with respect to the Debt
Securities of any series has occurred, but before a judgment or decree based on
such acceleration has been obtained, the holders of a majority in principal
amount of the outstanding Debt Securities of such series may, under certain
circumstances, rescind and annul such acceleration. (Section 502) For
information as to waiver of defaults, see "Description of Debt Securities --
Modification, Waiver and Meetings." Reference is made to the Prospectus
Supplement relating to each series of Debt Securities which are Original Issue
Discount Securities or Indexed Securities for the particular provisions relating
to acceleration of the Maturity of a portion of the principal amount of such
Original Issue Discount Securities or Indexed Securities upon the occurrence of
an Event of Default and the continuation thereof.
Subject to the provisions of the Trust Indenture Act of 1939 requiring the
Trustee, during an Event of Default under the Indenture, to act with the
requisite standard of care, a Trustee is under no obligation to exercise any of
its rights or powers under the Indenture at the request or direction of any of
the holders of Debt Securities of any series unless such holders have offered
such Trustee reasonable indemnity. Subject to the foregoing, holders of a
majority in principal amount of the then outstanding Debt Securities of any
series shall have the right, subject to certain limitations, to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee under the Indenture with respect to such series.
No holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the Indenture, or for the appointment of a
receiver or a trustee, or for any other remedy thereunder, unless (i) such
holder has previously given to the Trustee written notice of a continuing Event
of Default with respect to the Debt Securities of that series, (ii) the holders
of at least 25% in aggregate principal amount of the outstanding Debt Securities
of that series have made written request, and such holder or holders have
offered reasonable indemnity, to such Trustee to institute such proceeding as
trustee and (iii) such Trustee has failed to institute such proceeding, and has
not received from the holders of a majority in aggregate principal amount of the
outstanding Debt Securities of that series a direction inconsistent with such
request, within 60 days after such notice, request and offer. (Section 507)
However, such limitations do not apply to a suit instituted by a holder of a
Debt Security for the enforcement of payment of the principal of or any premium
or interest on such Debt Security on or after the applicable due date specified
in such Debt Security. (Section 508)
The Company and MacSaver each will be required to furnish to the Trustee
annually a statement by certain of its officers as to whether or not, to their
knowledge, it is in default in the performance or observance of any of the
terms, provisions and conditions of the Indenture and, if so, specifying all
such known defaults. (Section 1005)
Modification, Waivers and Meetings
The Indenture contains provisions permitting the Company or MacSaver and
the Trustee thereunder, with the consent of the holders of a majority in
principal amount of the outstanding Debt Securities of each series and affected
by a modification or amendment, to modify or amend any of the provisions of the
Indenture or of the Debt Securities of such series or the rights of the holders
of the Debt Securities of such series under the Indenture, provided that no such
modification or amendment shall, among other things, (i) change the stated
maturity of the principal of, or premium, if any, or any installment of
interest, if any, on any Debt Securities or reduce the principal amount thereof
or any premium thereon, or reduce the rate of interest thereon, or reduce the
amount of principal of any Debt Securities that would be due and payable upon an
acceleration of the maturity thereof, or adversely affect any right of repayment
at the option of any holder, or change any place where, or the Currency in
which, any Debt Securities issued under the Indenture are payable, or impair the
holder's right to institute suit to enforce the payment of any such Debt
Securities or (ii) reduce the aforesaid percentage of Debt Securities of any
series, the consent of the holders of which is required for any such
modification or amendment or the consent of whose holders is required for any
waiver (of compliance with certain provisions of the Indenture or certain
defaults thereunder and their consequences) or reduce the requirements for a
quorum or voting at a meeting of holders of such Debt Securities. The Indenture
also contains provisions permitting the Company, MacSaver, and the Trustee,
without the consent of
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the holders of any Debt Securities issued thereunder, to modify or amend the
Indenture in order to, among other things, (a) add to the Events of Default or
the covenants of the Company or MacSaver for the benefit of the holders of all
or any series of Debt Securities; (b) to add or change any provisions of the
Indenture to facilitate the issuance of Bearer Securities; (c) to establish the
form or terms of Debt Securities of any series and any related coupons; (d) to
cure any ambiguity or correct or supplement any provision therein which may be
inconsistent with other provisions therein, or to make any other provisions with
respect to matters or questions arising under the Indenture which shall not
adversely affect the interests of the holders of any series of Debt Securities
in any material respect; or (e) to amend or supplement any provision contained
in the Indenture, provided that such amendment or supplement does not apply to
any outstanding Debt Securities issued prior to the date of such amendment or
supplement and entitled to the benefits of such provision.
The holders of a majority in aggregate principal amount of the outstanding
Debt Securities of any series may waive, insofar as that series is concerned,
compliance by the Company or MacSaver with certain restrictive provisions of the
Indenture. The holders of a majority in aggregate principal amount of the
outstanding Debt Securities of any series may, on behalf of all holders of Debt
Securities of that series, waive any past default under the Indenture with
respect to Debt Securities of that series and its consequences, except a default
in the payment of the principal of, or premium, if any, or interest, if any, on
any Debt Securities of such series or in respect of a covenant or provision
which cannot be modified or amended without the consent of the holder of each
outstanding Debt Securities of such series affected.
The Indenture contains provisions for convening meetings of the holders of
Debt Securities of each series. A meeting may be called at any time by the
Trustee, and also, upon request, by MacSaver or the holders of at least 10% in
principal amount of the outstanding Debt Securities of such series, in any such
case upon notice given in accordance with the provisions of the Indenture.
Except for any consent which must be given by the holder of each outstanding
Debt Security affected thereby, as described above, any resolution presented at
a meeting or adjourned meeting duly reconvened at which a quorum (as described
below) is present may be adopted by the affirmative vote of the holders of a
majority in principal amount of the outstanding Debt Securities of that series;
provided, however, that any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action which may be
made, given or taken by the holders of a specified percentage, which is less
than a majority, in principal amount of the outstanding Debt Securities of a
series may be adopted at a meeting or adjourned meeting duly reconvened at which
a quorum is present by the affirmative vote of the holders of such specified
percentage in principal amount of the outstanding Debt Securities of that
series. Any resolution passed or decision taken at any meeting of holders of
Debt Securities of any series duly held in accordance with the Indenture will be
binding on all holders of Debt Securities of that series and the related
coupons. The quorum at any meeting called to adopt a resolution, and at any
reconvened meeting, will be persons holding or representing a majority in
principal amount of the outstanding Debt Securities of a series, subject to
certain exceptions.
Discharge, Defeasance and Covenant Defeasance
Upon the direction of MacSaver, the Indenture shall cease to be of further
effect with respect to any series of Debt Securities issued thereunder specified
by MacSaver (subject to the survival of certain provisions thereof, including
the obligation to pay Additional Amounts to the extent described below) when (i)
either (A) all outstanding Debt Securities of such series and, in the case of
Bearer Securities, all coupons appertaining thereto, have been delivered to the
Trustee for cancellation (subject to certain exceptions) or (B) all Debt
Securities of such series have become due and payable or will become due and
payable at their stated maturity within one year or are to be called for
redemption within one year and MacSaver has deposited with the Trustee, in
trust, funds in U.S. dollars or in such other currency in which such Debt
Securities are payable in an amount sufficient to pay the entire indebtedness on
such Debt Securities in respect of principal (and premium, if any) and interest,
if any, (and, to the extent that (x) the Debt Securities of such series provide
for the payment of Additional Amounts upon the occurrence of certain events of
taxation, assessment or governmental charge with respect to payments on such
Debt Securities and (y) the
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amount of any such Additional Amounts is at the time of deposit reasonably
determinable by MacSaver, any such Additional Amounts) to the date of such
deposit (if such Debt Securities have become due and payable) or to the Maturity
thereof, as the case may be, (ii) MacSaver or the Company, as the case may be,
has paid all other sums payable under the Indenture with respect to the Debt
Securities of such series, and (iii) certain other conditions are met. If the
Debt Securities of any such series provide for the payment of Additional
Amounts, MacSaver will remain obligated, following such deposit, to pay (and the
Guarantee of the Company will continue to apply to such payment of) Additional
Amounts on such Debt Securities to the extent that the amount thereof exceeds
the amount deposited in respect of such Additional Amounts as aforesaid.
Unless otherwise provided in the applicable Prospectus Supplement, MacSaver
may elect with respect to any series of Debt Securities either (a) to defease
and be discharged from any and all obligations with respect to such Debt
Securities (except for, among other things, the obligation to pay Additional
Amounts, if any, upon the occurrence of certain events of taxation, assessment
or governmental charge with respect to payments on such Debt Securities to the
extent that the amount thereof exceeds the amount deposited in respect of such
Additional Amounts as provided below, and the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or mutilated,
destroyed, lost or stolen Debt Securities, to maintain an office or agency in
respect of such Debt Securities, to hold moneys for payment in trust, and, if
applicable, to exchange or convert such Debt Securities into other securities in
accordance with their terms) ("defeasance"), or (b) to omit to comply with its
obligations with respect to certain restrictive covenants in Section 1005
(Statement as to Compliance), Section 1011 (Waiver of Certain Covenants), and,
to the extent specified pursuant to Section 301 (Amount Unlimited; Issuable in
Series), and any other covenant applicable to such Debt Securities in the
Indenture and, if indicated in the applicable Prospectus Supplement, its
obligations with respect to any other covenant applicable to the Debt Securities
of such series, and any omission to comply with such obligations shall not
constitute a Default or an Event of Default with respect to the Debt Securities
of such series ("covenant defeasance"), in either case upon the irrevocable
deposit with the Trustee (or other qualifying trustee), in trust for such
purpose, of an amount, in U.S. dollars or in such other currency in which such
Debt Securities are payable at Stated Maturity, and/or Government Obligations
(as defined in the Indenture) which through the payment of principal and
interest in accordance with their terms will provide money, in an amount
sufficient to pay the principal of and any premium and any interest on (and, to
the extent that (x) the Debt Securities of such series provide for the payment
of Additional Amounts and (y) the amount of any such Additional Amounts is at
the time of deposit reasonably determinable by MacSaver, any such Additional
Amounts with respect to) such Debt Securities, and any mandatory sinking fund or
analogous payments thereon, on the due dates therefor, whether upon maturity,
redemption or otherwise.
Such defeasance or covenant defeasance shall only be effective if, among
other things, (i) it shall not result in a breach or violation of, or constitute
a default under, the Indenture or any other material agreement to which MacSaver
or the Company is a party or is bound, and (ii) MacSaver has delivered to the
Trustee an opinion of counsel (as specified in the Indenture) to the effect that
the holders of such Debt Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such defeasance or covenant
defeasance, as the case may be, and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such defeasance or covenant defeasance had not occurred. It shall also
be a condition to the effectiveness of such defeasance (or covenant defeasance)
that no Event of Default or event which with notice or lapse of time or both
would become an Event of Default with respect to Debt Securities of such series
shall have occurred and been continuing on the date of such deposit and, with
respect to defeasance only, at any time or during the period ending on the 91st
day after the date of, such deposit into trust.
Unless otherwise provided in the applicable Prospectus Supplement, if after
MacSaver has deposited funds and/or Government Obligations to effect defeasance
or covenant defeasance with respect to Debt Securities of any series, (a) the
holder of a Debt Security of such series is entitled to, and does, elect
pursuant to the Indenture or the terms of such Debt Security to receive payment
in a Currency other than that in which such deposit has been made in respect of
such Debt Security, or (b) a Conversion Event (as defined below) occurs in
respect of the Foreign
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Currency in which such deposit has been made, the indebtedness represented by
such Debt Security shall be deemed to have been, and will be, fully discharged
and satisfied through the payment of the principal of (and premium, if any) and
interest, if any, on such Debt Security as such Debt Security becomes due out of
the proceeds yielded by converting the amount so deposited in respect of such
Debt Security into the currency in which such Debt Security becomes payable as a
result of such election or such Conversion Event based on (x) in the case of
payments made pursuant to clause (a) above, the applicable market exchange rate
for such Foreign Currency in effect on the second business day prior to such
payment date, or (y) with respect to a Conversion Event, the applicable market
exchange rate for such Foreign Currency in effect (as nearly as feasible) at the
time of the Conversion Event. "Conversion Event" means the cessation of use of
(i) a Foreign Currency both by the government of the country or the
confederation which issued such Foreign Currency and for the settlement of
transactions by a central bank or other public institutions of or within the
international banking community, (ii) the ECU both within the European Monetary
System and for the settlement of transactions by public institutions of or
within the European Union or (iii) any currency unit or composite currency other
than the ECU for the purposes for which it was established.
In the event MacSaver effects covenant defeasance with respect to any Debt
Securities and such Debt Securities are declared due and payable because of the
occurrence of any Event of Default other than an Event of Default with respect
to any other covenant as to which there has been covenant defeasance, the amount
of monies and/or Government Obligations deposited with the Trustee to effect
such covenant defeasance may not be sufficient to pay amounts due on such Debt
Securities at the time of any acceleration resulting from such Event of Default.
However, MacSaver would remain liable to make payment of such amounts due at the
time of acceleration.
The applicable Prospectus Supplement may further describe the provisions,
if any, permitting or restricting such defeasance or covenant defeasance with
respect to the Debt Securities of a particular series.
Title
The Company, MacSaver, the Trustee and any agent of any of them may treat
the person in whose name a registered Debt Security is registered as the
absolute owner thereof (whether or not such Debt Security may be overdue) for
the purpose of making payment and for all other purposes. (Section 308)
Governing Law
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York.
Regarding the Trustee
The Trust Indenture Act of 1939 contains limitations on the rights of a
trustee, should it become a creditor of the Company or MacSaver, as the case may
be, to obtain payment of claims in certain cases or to realize on certain
property received by it in respect of any such claims, as security or otherwise.
The Trustee is permitted to engage in other transactions with MacSaver, the
Company and its other subsidiaries from time to time, provided that if such
Trustee acquires any conflicting interest it must eliminate such conflict upon
the occurrence of an Event of Default under the Indenture, or else resign. In
that event, MacSaver would be required to appoint a successor Trustee.
DESCRIPTION OF COMMON STOCK
The Company has authorized 250,000,000 shares of Common Stock, par value
$2.00 per share. As of July 1, 1997, there were 56,999,511 shares of Common
Stock outstanding. The following brief description of the Common Stock does not
purport to be complete and is subject in all respects to applicable Virginia
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law and to the provisions of the Company's Restated Articles of Incorporation
and its By-laws, copies of which have been filed with the Commission.
Holders of Common Stock are entitled to such dividends as may be declared
by the Board of Directors out of funds legally available therefor after payment
of dividends on any outstanding Preferred Stock and are entitled to one vote for
each share of Common Stock held by them with respect to all matters upon which
they are entitled to vote.
The Company's Restated Articles of Incorporation contain a provision that
reduces the shareholder vote required for amending the Articles of Incorporation
in certain circumstances from the two-thirds vote generally applicable to a
simple majority vote. The majority vote will be applicable except when the
effect of the amendment is (a) to reduce the shareholder vote required to
approve a merger, a statutory share exchange, a sale of all or substantially all
of the assets of the Company or the dissolution of the Company, or (b) to delete
all or any part of such provision. In addition, the vote required by other
provisions of the Restated Articles of Incorporation is necessary if such
provisions require the approval of more than a majority of the votes entitled to
be cast.
Preferred Stock
The Company has authorized 3,000,000 shares of Preferred Stock, par value
$10.00 per share. As of July 1, 1997, there were no shares of Preferred Stock
outstanding. The Board of Directors of the Company, without further action by
the shareholders, is authorized to designate and issue in series Preferred Stock
and to fix as to any series the dividend rate, redemption prices, preferences on
dissolution, the terms of any sinking fund, conversion rights, voting right, and
any other preferences of special rights and qualifications. Shares of Common
Stock would be subject to the preferences, rights and powers of any such shares
of Preferred Stock as set forth in the Company's Restated Articles of
Incorporation and the resolutions establishing one or more series of Preferred
Stock. Holders of the Preferred Stock, if and when issued, will be entitled to
vote as required under applicable Virginia law. Such law includes provisions for
the voting of the Preferred Stock in the case of any amendment to the Restated
Articles of Incorporation affecting the rights of holders of the Preferred
Stock, the payment of certain stock dividends, merger or consolidation, sale of
all or substantially all of the Company's assets and dissolution. There are no
agreements or understandings for the designation of series of Preferred Stock or
the issuance of shares thereunder, except pursuant to the Shareholders' Rights
Plan discussed below.
Shareholders' Rights Plan
The following summary of certain provisions of the Company's Shareholders'
Rights Plan and the Rights Agreement dated as of February 17, 1988 between the
Company and Crestar Bank as Rights Agent, as amended by Supplements No. 1
through No. 4 dated as of September 15, 1989 (together, as amended, the "Rights
Agreement"), does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, including the form of Rights Certificate
attached thereto, each of which has been filed with the Commission and is
incorporated by reference herein.
On February 17, 1988 the Board of Directors of the Company declared a
dividend distribution of one preferred share purchase right (a "Right") on each
outstanding share of Common Stock pursuant to a Shareholders' Rights Plan. The
Rights are exercisable only upon the attainment of, or the commencement of a
tender offer to attain, a specified ownership interest in the Company by a
person or group. When exercisable, each Right would entitle its holder to
purchase one-hundredth of a newly issued share of cumulative Participating
Preferred Stock, Series A, par value $10.00 per share (the "Series A Preferred
Stock") at an exercise price of $75, subject to adjustment. A total of 750,000
shares of Series A Preferred Stock has been reserved. Each share of Series A
Preferred Stock will entitle the holder to 100 votes and has an aggregate
dividend rate of 100 times the amount paid to holders of the Common Stock. Upon
occurrence of certain events, each holder of a Right will become entitled to
purchase shares of Common Stock having a value of twice the Right's then current
exercise price in lieu of Series A Preferred Stock. Each share
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of Common Stock offered pursuant to this Prospectus and an accompanying
Prospectus Supplement shall have one Right attached to it.
Virginia Stock Corporation Act
The Virginia Stock Corporation Act contains provisions governing
"Affiliated Transactions." These provisions, with several exceptions discussed
below, require approval of certain material transactions between a Virginia
corporation and any beneficial holder of more than 10% of any class of its
outstanding voting shares (an "Interested Shareholder") by the holders of at
least two-thirds of the remaining voting shares. Affiliated Transactions subject
to this approval requirement include mergers, share exchanges, material
dispositions of corporate assets not in the ordinary course of business, any
dissolution of the corporation proposed by or on behalf of an Interested
Shareholder, or any reclassification, including reverse stock splits,
recapitalization or merger of the corporation with its subsidiaries which
increases the percentage of voting shares owned beneficially by an Interested
Shareholder by more than 5%.
For three years following the time that an Interested Shareholder becomes
an owner of more than 10% of the outstanding voting shares, a Virginia
corporation cannot engage in an Affiliated Transaction with such Interested
Shareholder without approval of two-thirds of the voting shares other than those
shares beneficially owned by the Interested Shareholder, and majority approval
of the "Disinterested Directors." A Disinterested Director means, with respect
to a particular Interested Shareholder, a member of the Company's Board of
Directors who was (1) a member on the date on which an Interested Shareholder
became an Interested Shareholder or (2) recommended for election by, or was
elected to fill a vacancy and received the affirmative vote of, a majority of
the Disinterested Directors then on the Board. At the expiration of the
three-year period, the statute requires approval of Affiliated Transactions by
two-thirds of the voting shares other than those beneficially owned by the
Interested Shareholder.
The principal exceptions to the special voting requirement apply to
transactions proposed after the three-year period has expired and require either
that the transaction be approved by a majority of the corporation's
Disinterested Directors or that the transaction satisfy the fair-price
requirements of the statute. In general, the fair-price requirements provide
that in a two-step acquisition transaction, the Interested Shareholder must pay
the shareholders in the second step either the same amount of cash or the same
amount and type of consideration paid to acquire the Virginia corporation's
shares in the first step.
None of the foregoing limitations and special voting requirements applies
to a transaction with an Interested Shareholder whose acquisition of shares
making such person an Interested Shareholder was approved by a majority of the
Virginia corporation's Disinterested Directors.
These provisions were designed to deter certain takeovers of Virginia
corporations. In addition, the statute provides that, by affirmative vote of a
majority of the voting shares other than shares owned by any Interested
Shareholder, a corporation can adopt an amendment to its articles of
incorporation or bylaws providing that the Affiliated Transactions provisions
shall not apply to the corporation. The Company has not "opted out" of the
Affiliated Transactions provisions.
Virginia law provides that shares acquired in a transaction that would
cause the acquiring person's voting strength to meet or exceed any of three
thresholds (20%, 33-1/3% or 50%) have no voting rights unless granted by a
majority vote of shares not owned by the acquiring person or any officer or
employee-director of the Virginia corporation. This provision empowers an
acquiring person to require the Virginia corporation to hold a special meeting
of shareholders to consider the matter within 50 days of its request. The Board
of Directors of a Virginia corporation can opt out of this provision at any time
before four days after receipt of a control share acquisition notice.
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Transfer Agent
The transfer agent for the Common Stock is Wachovia Bank of North Carolina,
N.A.
DESCRIPTION OF WARRANTS
The Company may issue (either separately or together with other Securities)
warrants for the purchase of Common Stock (the "Warrants"). The Warrants are to
be issued under warrant agreements (each a "Warrant Agreement") to be entered
into between the Company and a bank or trust company, as warrant agent ("Warrant
Agent"), all as set forth in the Prospectus Supplement relating to the
particular issue of Warrants. The form of Warrant Agreement, including the form
of certificates representing the Warrants ("Warrant Certificates"), that will be
entered into with respect to a particular offering of Warrants will be filed as
an exhibit to or incorporated by reference in the Registration Statement. The
following summary of certain provisions of the Warrant Agreement and the
Warrants and the summary of certain terms of the particular Warrant Agreement
and Warrants set forth in the applicable Prospectus Supplement do not purport to
be complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the particular Warrant Agreement and the related
Warrant Certificates, all of which are incorporated herein by reference.
The following description of the Warrants sets forth certain general terms
and provisions of the Warrants and the related Warrant Agreement to which any
Prospectus Supplement may relate. Certain other terms of any Warrants and the
related Warrant Agreement will be described in the applicable Prospectus
Supplement. If so indicated in the accompanying Prospectus Supplement, the terms
of the Warrants offered thereby and the related Warrant Agreement may differ
from the terms set forth below.
General
Reference is made to the applicable Prospectus Supplement for the terms of
the Warrants offered thereby, including (where applicable): (1) the title and
aggregate number of such Warrants; (2) the number of shares of Common Stock that
may be purchased upon exercise of each such Warrant; (3) the price, or the
manner of determining the price, at which such shares may be purchased upon such
exercise; (4) if other than cash, the property and manner in which the exercise
price of such Warrants may be paid; and any minimum number of such Warrants that
are exercisable at any one time; (5) the time or times at which, or period or
periods during which, such Warrants may be exercised and the expiration date of
such Warrants; (6) the terms of any right of the Company to redeem such
Warrants; (7) the terms of any right of the Company to accelerate the exercise
of such Warrants upon the occurrence of certain events; (8) whether such
Warrants will be sold with any other Securities, and the date, if any, on and
after which such Warrants and any such other Securities will be separately
transferable; (9) whether Warrants will be issued in registered or bearer form;
(10) a discussion of certain Federal income tax, accounting and other special
considerations, procedures and limitations relating to such Warrants; and (11)
any other terms of such Warrants.
Warrant Certificates may be surrendered for transfer or exchange for new
Warrant Certificates of authorized denominations at any office or agency of the
relevant Warrant Agent maintained for such purpose, subject to the terms of the
related Warrant Agreement. Unless otherwise specified in the applicable
Prospectus Supplement, Warrant Certificates will be issued in denominations
evidencing any whole number of Warrants. No service charge will be made for any
permitted transfer or exchange of Warrant Certificates, but the Company or the
Warrant Agent may require payment of any tax or other governmental charge
payable in connection therewith.
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Exercise of Warrants
Each Warrant will entitle the holder to purchase such number of shares of
Common Stock at such exercise price as shall in each case be set forth in, or be
determinable from, the Prospectus Supplement relating to such Warrants, by
payment of such exercise price in the Currency and in the manner specified in
the Prospectus Supplement. Warrants may be exercised at any time up to the date
and time specified in the applicable Prospectus Supplement for the expiration
thereof. After the specified expiration time on the specified date of
expiration, unexercised Warrants will become void.
Upon receipt at an office or agency indicated in the applicable Prospectus
Supplement of (i) payment of the exercise price and (ii) the Warrant Certificate
properly completed and duly executed, the Company will, as soon as practicable,
issue and deliver the shares of Common Stock purchasable upon such exercise.
Unless otherwise indicated in the applicable Prospectus Supplement, fractional
shares of Common Stock will not be issued upon the exercise of Warrants and, in
lieu thereof, the Company will make a cash payment in an amount determined as
provided in the applicable Prospectus Supplement. If less than all of the
Warrants represented by such Warrant Certificate are exercised, a new Warrant
Certificate will be issued for the remaining number of Warrants. The holder of a
Warrant will be required to pay any tax or other governmental charge that may be
imposed in connection with any transfer involved in the issuance of Common Stock
purchased upon such exercise.
Modifications
Any Warrant Agreement and the terms of the related Warrants may be modified
or amended by the Company and the applicable Warrant Agent, without the consent
of any holder of the related Warrants, for the purpose of curing any ambiguity,
or of curing, correcting or supplementing any defective or inconsistent
provision contained therein, or in any other manner that the Company deems
necessary or desirable and that will not materially and adversely affect the
interests of the holders of the related Warrants.
The Company and the applicable Warrant Agent may also modify or amend the
applicable Warrant Agreement and the terms of the related Warrants with the
consent of the holders of not less than a majority in number of the then
outstanding unexercised Warrants affected thereby; provided that no such
modification or amendment that accelerates the expiration date, increases the
exercise price, or reduces the number of outstanding Warrants the consent of
whose holders is required for any such amendment or modification, may be made
without the consent of each holder affected thereby.
No Rights as Holders
Holders of Warrants for the purchase of shares of Common Stock are not
entitled, by virtue of being such holders, to vote, consent or receive notice as
shareholders of the Company in respect of any meeting of shareholders for the
election of directors of the Company or any other matter, or to exercise any
other rights whatsoever as shareholders of the Company, or to receive any
dividends or distributions, if any, on the Common Stock.
UNITED STATES TAXATION
The following summary of the principal United States federal income tax
consequences of ownership of Debt Securities is based upon the opinion of
McGuire, Woods, Battle & Boothe, L.L.P., special tax counsel to the Company and
MacSaver. It deals only with Debt Securities held as capital assets, and not
with special classes of holders, such as dealers in securities or currencies,
banks, tax-exempt organizations, life insurance companies, persons that hold
Debt Securities that are part of a hedge or that are hedged against currency
risks or that are part of a straddle or conversion transaction, or persons whose
functional currency is not the U.S. dollar. It also does not
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deal with Holders other than original purchasers who purchase Debt Securities at
the original offering price and thus does not deal with the "market discount
rules." Moreover, the summary deals only with Debt Securities that are due to
mature not later than 30 years from the date on which they are issued. The
United States federal income tax consequences of ownership of Debt Securities
that are due to mature more than 30 years from their date of issue will be
discussed in an applicable Prospectus Supplement. The summary is based on the
Internal Revenue Code of 1986, as amended (the "Code"), its legislative history,
existing and proposed regulations thereunder, judicial decisions, and published
rulings and other administrative guidance issued by the Internal Revenue Service
(the "Service"), as currently in effect, all of which are subject to change at
any time, possibly with retroactive effect.
Prospective purchasers of Debt Securities should consult their own tax
advisors concerning the consequences of ownership of Debt Securities, in their
particular circumstances, under the Code and the applicable laws of any State,
local or foreign taxing jurisdiction.
The federal income tax consequences of ownership of other Securities,
including Common Stock and Warrants, will be discussed in an applicable
Prospectus Supplement.
United States Holders
Payments of Interest
Except as provided below under "Original Issue Discount", interest on a
Debt Security (including "qualified stated interest" on a "Discount Debt
Security", as defined below) will be taxable to a United States Holder as
ordinary income at the time it is received or accrued, depending on the holder's
method of accounting for tax purposes. A United States Holder is a beneficial
owner who or that is (i) a citizen or resident of the United States, (ii) a
domestic corporation or (iii) otherwise subject to United States federal income
taxation on a net income basis in respect of the Debt Security.
If an interest payment is denominated in, or determined by reference to, a
currency, composite currency or basket of currencies other than the U.S. dollars
(a "foreign currency"), the amount of income recognized by a cash basis United
States Holder will be the U.S. dollar value of the interest payment, based on
the exchange rate in effect on the date of receipt, regardless of whether the
payment is in fact converted into U.S. dollars.
An accrual basis United States Holder may determine the amount of income
recognized with respect to an interest payment denominated in, or determined by
reference to, a foreign currency in accordance with either of two methods. Under
the first method, the amount of income accrued will be based on the average
exchange rate in effect during the interest accrual period (or, with respect to
an accrual period that spans two taxable years, the part of the period within
the taxable year).
Under the second method, the United States Holder may elect to determine
the amount of income accrued on the basis of the exchange rate in effect on the
last day of the accrual period or, in the case of an accrual period that spans
two taxable years, the exchange rate in effect on the last day of the part of
the period within the taxable year. Additionally, if a payment of interest is
actually received within five business days of the last day of the accrual
period or taxable year, an electing accrual basis United States Holder may
instead translate such accrued interest into U.S. dollars at the exchange rate
in effect on the day of actual receipt. Any such election must apply to all debt
instruments held by the United States Holder at the beginning of the first
taxable year to which the election applies or thereafter acquired by the United
States Holder, and may not be revoked without the consent of the Service.
Upon receipt of an interest payment (including a payment attributable to
accrued but unpaid interest upon the sale or retirement of a Debt Security)
denominated in, or determined by reference to, a foreign currency, the accrual
basis United States Holder will recognize ordinary income or loss measured by
the difference between (x) the
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average exchange rate used to accrue the interest income represented by such
payment, or the exchange rate as determined under the second method described
above if the United States Holder elects that method, and (y) the exchange rate
in effect on the date of receipt, regardless of whether the payment is in fact
converted into U.S.
dollars.
Original Issue Discount
General. A Debt Security with a maturity of more than one year from the
date of issue will be treated as issued at an original issue discount (a
"Discount Debt Security") if its "stated redemption price at maturity" exceeds
its issue price by more than a "de minimis amount" (as defined below).
Generally, the issue price of a Debt Security will be the first price at which a
substantial amount of Debt Securities included in the issue of which the Debt
Security is a part are sold to persons other than bond houses, brokers, or
similar persons or organizations acting in the capacity of underwriters,
placement agents, or wholesalers. The stated redemption price at maturity of a
Debt Security is the total of all payments provided by the Debt Security that
are not payments of "qualified stated interest." A qualified stated interest
payment generally is any one of a series of stated interest payments on a Debt
Security that are unconditionally payable at least annually at a single fixed
rate (with certain exceptions for lower rates paid during some periods) applied
to the outstanding principal amount of the Debt Security. Special rules for
determining qualified stated interest payable on certain Debt Securities bearing
interest at a variable rate are described below under "Original Issue
Discount--Variable Rate Debt Securities".
In general, if a Debt Security's stated redemption price at maturity
exceeds its issue price by less than an amount equal to 1/4 of 1 percent of the
Debt Security's stated redemption price at maturity multiplied by the number of
complete years to its maturity (the "de minimis amount"), then such excess, if
any, constitutes "de minimis original issue discount" and the Debt Security is
not a Discount Debt Security. Unless the election described below under
"Election to Treat All Interest as Original Issue Discount" is made, a United
States Holder of a Debt Security with de minimis original issue discount must
include such de minimis original issue discount in income as stated principal
payments on the Debt Security are made. The includible amount with respect to
each such payment will equal the total amount of the Debt Security's de minimis
original issue discount multiplied by a fraction, the numerator of which is the
amount of the principal payment made and the denominator of which is the stated
principal amount of the Debt Security.
United States Holders of Discount Debt Securities having a maturity of more
than one year from their date of issue must, generally, include in computing
their taxable income original issue discount ("OID") calculated on a
constant-yield method before the receipt of cash attributable to such income,
and generally will have to include in income increasingly greater amounts of OID
over the life of the Debt Security. The amount of OID includible in income by a
United States Holder of a Discount Debt Security is the sum of the daily
portions of OID with respect to the Discount Debt Security for each day during
the taxable year or portion of the taxable year on which the United States
Holder holds such Discount Debt Security ("accrued OID"). The daily portion is
determined by allocating to each day in any "accrual period" a pro rata portion
of the OID allocable to that accrual period. Accrual periods with respect to a
Debt Security may be of any length selected by the United States Holder and may
vary in length over the term of the Debt Security as long as (i) no accrual
period is longer than one year and (ii) each scheduled payment of interest or
principal on the Debt Security occurs on either the final or first day of an
accrual period. The amount of OID allocable to an accrual period equals the
excess of (a) the product of the Discount Debt Security's adjusted issue price
at the beginning of the accrual period and such Debt Security's yield to
maturity (determined on the basis of compounding at the close of each accrual
period and properly adjusted for the length of the accrual period) over (b) the
sum of the payments of qualified stated interest on the Debt Security allocable
to the accrual period. The "adjusted issue price" of a Discount Debt Security at
the beginning of any accrual period is the issue price of the Debt Security
increased by (x) the amount of accrued OID for each prior accrual period and
decreased by (y) the amount of any payments previously made on the Debt Security
that were not qualified stated interest payments. For purposes of determining
the amount of OID allocable to an accrual period, if an interval between
payments of
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qualified stated interest on the Debt Security contains more than one accrual
period, the amount of qualified stated interest payable at the end of the
interval (including any qualified stated interest that is payable on the first
day of the accrual period immediately following the interval) is allocated pro
rata on the basis of relative lengths of each accrual period in the interval,
and the adjusted issue price at the beginning of each accrual period in the
interval must be increased by the amount of any qualified stated interest that
has accrued prior to the first day of the accrual period but that is not payable
until the end of the interval. The amount of OID allocable to an initial short
accrual period may be computed using any reasonable method if all other accrual
periods other than a final short accrual period are of equal length. The amount
of OID allocable to the final accrual period is the difference between (x) the
amount payable at the maturity of the Debt Security (other than any payment of
qualified stated interest) and (y) the Debt Security's adjusted issue price as
of the beginning of the final accrual period.
Acquisition Premium. A United States Holder that purchases a Debt Security
for an amount less than or equal to the sum of all amounts payable on the Debt
Security after the purchase date (other than payments of qualified stated
interest) but in excess of its adjusted issue price (any such excess being
"acquisition premium") and that does not make the election described below under
"Election to Treat All Interest as Original Issue Discount" is permitted to
reduce the daily portions of OID by a fraction, the numerator of which is the
excess of the United States Holder's adjusted basis in the Debt Security
immediately after its purchase over the adjusted issue price of the Debt
Security, and the denominator of which is the excess of the sum of all amounts
payable on the Debt Security after the purchase date, other than payments of
qualified stated interest, over the Debt Security's adjusted issue price.
Pre-Issuance Accrued Interest. If (i) a portion of the initial purchase
price of a Debt Security is attributable to pre-issuance accrued interest, (ii)
the first stated interest payment on the Debt Security is to be made within one
year of the Debt Security's issue date and (iii) the payment will equal or
exceed the amount of pre-issuance accrued interest, then the United States
Holder may elect to decrease the issue price of the Debt Security by the amount
of pre-issuance accrued interest. In that event, a portion of the first stated
interest payment will be treated as a return of the excluded pre-issuance
accrued interest and not as an amount payable on the Debt Security.
Debt Securities Subject to Contingencies Including Optional Redemption. In
general, if a Debt Security provides for an alternative payment schedule or
schedules applicable upon the occurrence of a contingency or contingencies
(other than a remote or incidental contingency) and the timing and amounts of
the payments that comprise each payment schedule are known as of the issue date,
special rules apply for purposes of determining the yield and maturity of the
Debt Security. If, based on all the facts and circumstances as of the issue
date, a single payment schedule, including the stated payment schedule, is
significantly more likely than not to occur, then, in general, the yield and
maturity of the Debt Security are computed based on that payment schedule.
If there is no single payment schedule that is significantly more likely
than not to occur (other than because of a mandatory sinking fund), the amount
of interest taken into account for each accrual period would be determined by
constructing a projected payment schedule for the Debt Security and applying
rules similar to those for accruing OID on a noncontingent debt instrument. This
method is applied by first determining the yield at which MacSaver would issue a
fixed rate debt instrument with terms and conditions similar to the contingent
payment Debt Security (the comparable yield) and then determining a payment
schedule as of the issue date that would produce the comparable yield.
Notwithstanding the general rules for determining yield and maturity in the
case of Debt Securities subject to contingencies, if MacSaver or the Holder has
an unconditional option or options that, if exercised, would require payments to
be made on the Debt Security under an alternative payment schedule or schedules,
then (i) in the case of an option or options of MacSaver, MacSaver will be
deemed to exercise or not exercise an option or combination of options in the
manner that minimizes the yield on the Debt Security and (ii) in the case of an
option or options of the Holder, the Holder will be deemed to exercise or not
exercise an option or combination of options in the manner that maximizes the
yield on the Debt Security. If both MacSaver and the Holder have options
described in the preceding
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sentence, those rules apply to such options in the order in which they may be
exercised. For purposes of those calculations, the yield on the Debt Security is
determined by using any date on which the Debt Security may be redeemed or
repurchased as the maturity date and the amount payable on such date in
accordance with the terms of the Debt Security as the principal amount payable
at maturity.
If a contingency (including the exercise of an option) fails to occur, or
actually occurs but in a manner inconsistent with the assumption made according
to the above rules (a "change in circumstances") then, except to the extent that
a portion of the Debt Security is repaid as a result of the change in
circumstances and solely for purposes of the accrual of OID, the yield and
maturity of the Debt Security are redetermined by treating the Debt Security as
having been retired and reissued on the date of the change in circumstances for
an amount equal to the Debt Security's adjusted issue price on that date.
The federal income tax treatment of Debt Securities providing for
alternative payment schedules applicable upon the occurrence of one or more
contingencies will be described in greater detail in the applicable Prospectus
Supplement.
Election to Treat All Interest as Original Issue Discount. A United States
Holder may elect to include in gross income all interest that accrues on a Debt
Security using the constant-yield method described above under the heading
"Original Issue Discount--General", with the modifications described below. For
purposes of this election, interest includes stated interest, OID, de minimis
original issue discount, market discount, de minimis market discount and
unstated interest, as adjusted by any amortizable bond premium (described below
under "Debt Securities Purchased at a Premium") or acquisition premium.
In applying the constant-yield method to a Debt Security with respect to
which this election has been made, the issue price of the Debt Security will
equal the electing United States Holder's adjusted basis in the Debt Security
immediately after its acquisition, the issue date of the Debt Security will be
the date of its acquisition by the electing United States Holder, and no
payments on the Debt Security will be treated as payments of qualified stated
interest. This election will generally apply only to the Debt Security with
respect to which it is made and may not be revoked without the consent of the
Service. If this election is made with respect to a Debt Security with
amortizable bond premium, then the electing United States Holder will be deemed
to have elected to apply amortizable bond premium against interest with respect
to all debt instruments with amortizable bond premium (other than debt
instruments the interest on which is excludible from gross income) held by the
electing United States Holder as of the beginning of the taxable year in which
the Debt Security with respect to which the election is made is acquired or
thereafter acquired. The deemed election with respect to amortizable bond
premium may not be revoked without the consent of the Service.
Variable Rate Debt Securities. A "Variable Rate Debt Security" is a Debt
Security that: (i) has an issue price that does not exceed the total
noncontingent principal payments by more than the lesser of (1) .015 multiplied
by the product of (x) the total noncontingent principal payments and (y) the
number of complete years to maturity from the issue date, or (2) 15 percent of
the total noncontingent principal payments; (ii) does not provide for any stated
interest other than stated interest compounded or paid at least annually at (1)
one or more "qualified floating rates", (2) a single fixed rate and one or more
qualified floating rates, (3) a single "objective rate" or (4) a single fixed
rate and a single objective rate that is a "qualified inverse floating rate";
(iii) provides that a qualified floating rate or objective rate in effect at any
time during the term of the instrument must be set at a "current value" of that
rate (i.e., the value of the rate on any day that is no earlier than 3 months
prior to the first day on which that value is in effect and no later than 1 year
following that first day); and (iv) does not provide for any contingent
principal payments other than as provided in clause (i) of this sentence.
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A variable rate is a "qualified floating rate" if (i) variations in the
value of the rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the Debt
Security is denominated or (ii) it is equal to the product of a qualified
floating rate described in clause (i) and either (a) a fixed multiple that is
greater than .65 but not more than 1.35, or (b) a fixed multiple greater than
.65 but not more than 1.35, increased or decreased by a fixed rate. If a Debt
Security provides for two or more qualified floating rates that (i) are within
0.25 percentage points of each other on the issue date or (ii) can reasonably be
expected to have approximately the same values throughout the term of the Debt
Security, the qualified floating rates together constitute a single qualified
floating rate. A rate is not a qualified floating rate, however, if the rate is
subject to certain restrictions (including caps, floors, governors or other
similar restrictions) unless such restrictions are fixed throughout the term of
the Debt Security or are not reasonably expected to significantly affect the
yield on the Debt Security.
An "objective rate" is a rate, other than a qualified floating rate, that
is determined using a single, fixed formula and that is based on objective
financial or economic information, including one or more qualified floating
rates or the yield or changes in the price of one or more actively traded items
of personal property other than stock or debt of the issuer or a related party.
A variable rate is not an objective rate, however, if it is based on information
within the control of the issuer or a related party or is unique to the
circumstances of the issuer or a related party, or if it is reasonably expected
that the average value of the rate during the first half of the Debt Security's
term will be either significantly less than or significantly greater than the
average value of the rate during the final half of the Debt Security's term. An
objective rate is a "qualified inverse floating rate" if (i) the rate is equal
to a fixed rate minus a qualified floating rate, and (ii) the variations in the
rate can reasonably be expected to inversely reflect contemporaneous variations
in the cost of the qualified floating rate.
If interest on a Debt Security is stated at a fixed rate for an initial
period of one year or less followed by either a qualified floating rate or an
objective rate for a subsequent period and (i) the fixed rate and the qualified
floating rate or objective rate have values on the issue date of the Debt
Security that do not differ by more than 0.25 percentage points or (ii) the
value of the qualified floating rate or objective rate is intended to
approximate the fixed rate, the fixed rate and the qualified floating rate or
the objective rate constitute a single qualified floating rate or objective
rate. Under these rules, Commercial Paper Rate Debt Securities, Prime Rate Debt
Securities, LIBOR Debt Securities, Treasury Rate Debt Securities, CD Rate Debt
Securities and Federal Funds Rate Debt Securities will generally be treated as
Variable Rate Debt Securities.
In general, if a Variable Rate Debt Security provides for stated interest
at a single qualified floating rate or objective rate, all stated interest on
the Debt Security is qualified stated interest and the amount of OID, if any, is
determined by using, in the case of a qualified floating rate or qualified
inverse floating rate, a fixed rate equal to the value as of the issue date of
the qualified floating rate or qualified inverse floating rate, or, in the case
of any other objective rate, a fixed rate that reflects the yield reasonably
expected for the Debt Security.
If a Variable Rate Debt Security does not provide for stated interest at a
single qualified floating rate or objective rate or at a fixed rate (other than
at a single fixed rate for an initial period), the amount of interest and OID
accruals on the Debt Security are generally determined by (i) determining a
fixed rate substitute for each variable rate provided under the Variable Rate
Debt Security (generally, the value of each variable rate as of the issue date
or, in the case of an objective rate that is not a qualified inverse floating
rate, a rate that reflects the reasonably expected yield on the note), (ii)
constructing the equivalent fixed rate debt instrument (using the fixed rate
substitute described above), (iii) determining the amount of qualified stated
interest and OID with respect to the equivalent fixed rate debt instrument, and
(iv) making the appropriate adjustments for actual variable rates during the
applicable accrual period.
If a Variable Rate Debt Security provides for stated interest either at one
or more qualified floating rates or at a qualified inverse floating rate, and in
addition provides for stated interest at a single fixed rate (other than at a
single fixed rate for an initial period), the amount of interest and OID
accruals are determined as in the immediately
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preceding paragraph with the modification that the Variable Rate Debt Security
is treated, for purposes of the first three steps of the determination, as if it
provided for a qualified floating rate (or a qualified inverse floating rate, as
the case may be) rather than the fixed rate. The qualified floating rate (or
qualified inverse floating rate) replacing the fixed rate must be such that the
fair market value of the Variable Rate Debt Security as of the issue date would
be approximately the same as the fair market value of an otherwise identical
debt instrument that provides for the qualified floating rate (or qualified
inverse floating rate) rather than the fixed rate.
The federal income tax treatment of any Debt Security that provides for
payments of stated interest at a variable rate, but does not meet the foregoing
requirements of a Variable Rate Debt Security, will be described in the
applicable Prospectus Supplement.
Short-Term Debt Securities. In general, an individual or other cash basis
United States Holder of a Debt Security with a term of one year or less (a
"short-term Debt Security") is not required to accrue OID (as specially defined
below for the purposes of this paragraph) for United States federal income tax
purposes unless it elects to do so (but may be required to include any stated
interest in income as the interest is received). Accrual basis United States
Holders and certain other United States Holders, including banks, regulated
investment companies, dealers in securities, common trust funds, United States
Holders who hold Debt Securities as part of certain identified hedging
transactions, certain pass-through entities and cash basis United States Holders
who so elect, are required to accrue OID on short-term Debt Securities on either
a straight-line basis or under the constant-yield method (based on daily
compounding), at the election of the United States Holder.
In the case of a United States Holder not required and not electing to
include OID in income currently, any gain realized on the sale or retirement of
the short-term Debt Security will be ordinary income to the extent of the OID
accrued on a straight-line basis (unless an election is made to accrue the OID
under the constant-yield method) through the date of sale or retirement. United
States Holders who are not required and do not elect to accrue OID on short-term
Debt Securities will be required to defer deductions for interest on borrowings
allocable to short-term Debt Securities in an amount not exceeding the deferred
income until the deferred income is realized.
For purposes of determining the amount of OID subject to these rules, all
interest payments on a short-term Debt Security, including stated interest, are
included in the short- term Debt Security's stated redemption price at maturity.
Foreign Currency Discount Debt Securities. OID for any accrual period on a
Discount Debt Security that is denominated in, or determined by reference to, a
foreign currency will be determined in the foreign currency and then translated
into U.S. dollars in the same manner as stated interest accrued by an accrual
basis United States Holder, as described under "Payments of Interest". Upon
receipt of an amount attributable to OID (whether in connection with a payment
of interest or the sale or retirement of a Debt Security), a United States
Holder may recognize ordinary income or loss.
Debt Securities Purchased at a Premium
A United States Holder that purchases a Debt Security for an amount in
excess of its principal amount may elect to treat such excess as "amortizable
bond premium", in which case the amount required to be included in the United
States Holder's income each year with respect to interest on the Debt Security
will be reduced by the amount of amortizable bond premium allocable (based on
the Debt Security's yield to maturity) to such year. In the case of a Debt
Security that is denominated in, or determined by reference to, a foreign
currency, bond premium will be computed in units of foreign currency, and
amortizable bond premium will reduce interest income in units of the foreign
currency. At the time amortized bond premium offsets interest income, exchange
gain or loss (taxable as ordinary income or loss) is realized measured by the
difference between exchange rates at that time and at the time of the
acquisition of the Debt Securities. Any election to amortize bond premium shall
apply to all bonds (other than bonds the interest on which is excludible from
gross income) held by the United States Holder at the beginning of the
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first taxable year to which the election applies or thereafter acquired by the
United States Holder, and is irrevocable without the consent of the Service. See
also "Original Issue Discount--Election to Treat All Interest as Original Issue
Discount."
Purchase, Sale and Retirement of the Debt Securities
A United States Holder's tax basis in a Debt Security will generally be its
U.S. dollar cost (as defined below), increased by the amount of any OID or
market discount included in the United States Holder's income with respect to
the Debt Security and the amount, if any, of income attributable to de minimis
original issue discount and de minimis market discount included in the United
States Holder's income with respect to the Debt Security, and reduced by (i) the
amount of any payments that are not qualified stated interest payments, and (ii)
the amount of any amortizable bond premium applied to reduce interest on the
Debt Security. The U.S. dollar cost of a Debt Security purchased with a foreign
currency will generally be the U.S. dollar value of the purchase price on the
date of purchase or, in the case of Debt Securities traded on an established
securities market, as defined in the applicable Treasury Regulations, that are
purchased by a cash basis United States Holder (or an accrual basis United
States Holder that so elects), on the settlement date for the purchase.
A United States Holder will generally recognize gain or loss on the sale or
retirement of a Debt Security equal to the difference between the amount
realized on the sale or retirement and its tax basis in the Debt Security. The
amount realized on a sale or retirement for an amount in foreign currency will
be the U.S. dollar value of such amount on (i) the date payment is received in
the case of a cash basis United States Holder, (ii) the date of disposition in
the case of an accrual basis United States Holder or (iii) in the case of Debt
Securities traded on an established securities market, as defined in the
applicable Treasury Regulations, sold by a cash basis United States Holder (or
an accrual basis United States Holder that so elects), on the settlement date
for the sale. Except to the extent described above under "Original Issue
Discount--Short-Term Debt Securities" or described in the next succeeding
paragraph or attributable to accrued but unpaid interest, gain or loss
recognized on the sale or retirement of a Debt Security will be capital gain or
loss and will be long-term capital gain or loss if the Debt Security was held
for more than one year.
Gain or loss recognized by a United States Holder on the sale or retirement
of a Debt Security that is attributable to changes in exchange rates will be
treated as ordinary income or loss. However, exchange gain or loss is taken into
account only to the extent of total gain or loss realized on the transaction.
Exchange of Amounts in Other Than U.S. Dollars
Foreign currency received as interest on a Debt Security or on the sale or
retirement of a Debt Security will have a tax basis equal to its U.S. dollar
value at the time such interest is received or at the time of such sale or
retirement. Foreign currency that is purchased will generally have a tax basis
equal to the U.S. dollar value of the foreign currency on the date of purchase.
Any gain or loss recognized on a sale or other disposition of a foreign currency
(including its use to purchase Debt Securities or upon exchange for U.S.
dollars) will be ordinary income or loss.
Indexed Debt Securities
The applicable Prospectus Supplement will contain a discussion of any
special United States federal income tax rules with respect to Indexed
Securities (other than Debt Securities subject to the rules governing Variable
Rate Debt Securities).
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United States Alien Holders
For purposes of this discussion, a "United States Alien Holder" is any
holder of a Debt Security who is (i) a nonresident alien individual or (ii) a
foreign corporation, partnership or estate or trust, in each case not subject to
United States federal income tax on a net income basis in respect of income or
gain from a Debt Security. This discussion assumes that the Debt Security or
coupon is not subject to the rules of Section 871(h) (4) (A) of the Code
(relating to interest payments that are determined by reference to the income,
profits, changes in the value of property or other attributes of the debtor or a
related party). In addition, solely with respect to United States federal estate
tax, the discussion assumes that the Debt Security had a maturity date, when
issued, that was not less than 184 days from the date of issuance.
Under present United States federal income and estate tax law, and subject
to the discussion of backup withholding below:
(1) payments of principal, premium (if any) and interest, including OID, by
MacSaver or any of its paying agents to any holder of a Debt Security or coupon
that is a United States Alien Holder will not be subject to United States
federal withholding tax if, in the case of interest or OID, (i) the beneficial
owner of the Debt Security or coupon does not actually or constructively own 10%
or more of the total combined voting power of all classes of stock of MacSaver
entitled to vote, (ii) the beneficial owner of the Debt Security is not a
controlled foreign corporation that is related to MacSaver through stock
ownership, (iii) if the Debt Security is a Registered Security, either (a) the
beneficial owner of the Debt Security certifies to MacSaver or its agent, under
penalties of perjury, that it is not a United States Holder and provides its
name and address or (b) a securities clearing organization, bank or other
financial institution that holds customers' securities in the ordinary course of
its trade or business (a "financial institution") and holds the Debt Security on
behalf of a beneficial owner certifies to MacSaver or its agent, under penalties
of perjury, that such statement has been received from the beneficial owner by
it or by a financial institution between it and the beneficial owner and
furnishes the payor with a copy thereof and (iv) in the case of a Debt Security
which is not a Registered Security, the Debt Security is offered, sold and
delivered in compliance with applicable restrictions relating to issuance of
debt obligations which are not in registered form and payments on the Debt
Securities are made in accordance with the applicable procedures relating to the
issuance of debt obligations which are not in registered form (both of which
restrictions and procedures will be described in the applicable Prospectus
Supplement);
(2) a United States Alien Holder of a Debt Security or coupon will not be
subject to United States federal withholding tax on any gain realized on the
sale or exchange of a Debt Security or coupon; and
(3) a Debt Security or coupon held by an individual who at death is not a
citizen or resident of the United States will not be includible in the
individual's gross estate for purposes of the United States federal estate tax
as a result of the individual's death if (a) the individual did not actually or
constructively own 10% or more of the total combined voting power of all classes
of stock of MacSaver entitled to vote and (b) the income on the Debt Security
would not have been effectively connected with a United States trade or business
of the individual at the individual's death.
Recently proposed Internal Revenue Service Treasury regulations (the
"Proposed Regulations") would provide alternative methods for satisfying the
certification requirement described in clause (1)(iii) above. The Proposed
Regulations also would require in the case of Debt Securities held by a foreign
partnership, that (x) the certification described in clause (1)(iii) above be
provided by the partners rather than by the foreign partnership and (y) the
partnership provide certain information, including a United States taxpayer
identification number. A look-through rule would apply in the case of tiered
partnerships. The Proposed Regulations are proposed to be effective for payments
made after December 31, 1997. There can be no assurance that the Proposed
Regulations will be adopted or as to the provisions that they will include if
and when adopted in temporary or final form.
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Backup Withholding and Information Reporting
United States Holders
In general, information reporting requirements will apply to payments of
principal, any premium and interest on a Debt Security and the proceeds of the
sale of a Debt Security before maturity within the United States to, and to the
accrual of OID on a Discount Debt Security with respect to, non-corporate United
States Holders, and "backup withholding" at a rate of 31% will apply to such
payments and to payments of OID if the United States Holder fails to provide an
accurate taxpayer identification number or to report all interest and dividends
required to be shown on its federal income tax returns.
United States Alien Holders
Under current law, information reporting and backup withholding will not
apply to payments of principal, premium (if any) and interest (including OID)
made by the Company or a paying agent to a United States Alien Holder on a Debt
Security if, in the case of Debt Securities which are Registered Securities,
either of the certifications described in clause (1) (iii) under 'United States
Alien Holders' above is received, provided that the payor does not have actual
knowledge that the holder is a United States person. The Company or a paying
agent, however, may report (on Internal Revenue Service Form 1042S) payments of
interest (including OID) on Debt Securities that are Registered Securities. See
the discussion above under "United States Alien Holders" with respect to the
Proposed Regulations.
Payments of the proceeds from the sale by a United States Alien Holder of a
Debt Security made to or through a foreign office of a broker will not be
subject to information reporting or backup withholding, except that if the
broker is a United States person, a controlled foreign corporation for United
States tax purposes or a foreign person 50% or more of whose gross income is
effectively connected with a United States trade or business for a specified
three-year period, information reporting may apply to such payments. Payments of
the proceeds from the sale of a Debt Security to or through the United States
office of a broker is subject to information reporting and backup withholding
unless the holder or beneficial owner certifies as to its non-United States
status or otherwise establishes an exemption from information reporting and
backup withholding.
PLAN OF DISTRIBUTION
The Company or MacSaver may sell Securities to or through underwriters, and
also may sell Securities directly to other purchasers or through agents.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Sales of Common Stock offered hereby may be effected from time to time in
one or more transactions on the NYSE or in negotiated transactions or a
combination of such methods of sale, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at other negotiated
prices. In connection with distributions of Common Stock or otherwise, the
Company may enter into hedging transactions with broker-dealers in connection
with which such broker-dealers may sell Common Stock registered hereunder in the
course of hedging through short sales the positions they assume with the
Company.
In connection with the sale of Securities, underwriters or agents may
receive compensation from the Company or MacSaver or from purchasers of
Securities for whom they may act as agents in the form of discounts, concessions
or commissions. Underwriters may sell Securities to or through dealers, and such
dealers may receive compensation in
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the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agents. Underwriters,
dealers and agents that participate in the distribution of Securities may be
deemed to be underwriters, and any discounts or commissions received by them
from the Company or MacSaver and any profit on the resale of Securities by them
may be deemed to be underwriting discounts and commissions, under the Securities
Act of 1933 (the "Act"). Any such underwriter or agent will be identified, and
any such compensation received from the Company or MacSaver will be described,
in the Prospectus Supplement.
Under agreements which may be entered into by the Company and, in the case
of Debt Securities, MacSaver, underwriters and agents who participate in the
distribution of Securities may be entitled to indemnification by the Company
and, in the case of Debt Securities, MacSaver against certain liabilities,
including liabilities under the Act.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for the Company or MacSaver
in the ordinary course of business.
VALIDITY OF SECURITIES
The validity of the Securities to which this Prospectus relates will be
passed upon for the Company and, in the case of Debt Securities, MacSaver by
McGuire, Woods, Battle & Boothe, L.L.P., Richmond, Virginia, which serves as
general counsel to the Company. As of July 15, 1997, partners and associates of
McGuire, Woods, Battle & Boothe, L.L.P., who performed services in connection
with the offering made by this Prospectus, owned of record and beneficially
2,574 shares of Common Stock. Robert L. Burrus, Jr., a director of the Company,
is a partner of that firm. The validity of the Securities offered hereby will be
passed upon for any relevant Underwriters by Sullivan & Cromwell, New York, New
York, who will rely upon the opinion of McGuire, Woods, Battle & Boothe, L.L.P.
with respect to matters of Virginia law.
EXPERTS
The consolidated financial statements and the related financial statement
schedule incorporated in this Prospectus by reference from Heilig-Meyers
Company's Annual Report on Form 10-K have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given their authority as experts in accounting and auditing.
-34-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
<TABLE>
<S> <C>
SEC registration fee................................................................ $125,393
Accountants' fees and expenses...................................................... 40,000
Attorneys' fees and expenses........................................................ 75,000
Printing and engraving expenses..................................................... 24,000
Fees and expenses of trustee........................................................ 10,000
State qualification fees and expenses............................................... 20,000
Rating agencies' fees............................................................... 315,000
Miscellaneous....................................................................... 5,607
---------
Total.......................................................................... $615,000
=======
</TABLE>
- --------------
All fees and expenses other than the SEC registration fee are estimated.
Item 15. Indemnification of Directors and Officers
Article V of the Restated Articles of Incorporation of the Company provides:
1. Definitions. For purposes of this Article the following definitions
shall apply:
(a) "Corporation" means this Corporation only and no predecessor
entity or other legal entity;
(b) "expenses" include counsel fees, expert witness fees, and costs of
investigation, litigation and appeal, as well as any amounts expended in
asserting a claim for indemnification;
(c) "liability" means the obligation to pay a judgment, settlement,
penalty, fine, or other such obligation, including, without limitation, any
excise tax assessed with respect to an employee benefit plan;
(d) "legal entity" means a corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise;
(e) "predecessor entity" means a legal entity the existence of which
ceased upon its acquisition by the Corporation in a merger or otherwise; and
(f) "proceeding" means any threatened, pending, or completed action,
suit, proceeding or appeal whether civil, criminal, administrative or
investigative and whether formal or informal.
2. Limit On Liability. In every instance permitted by the Virginia Stock
Corporation Act, as it exists on the date hereof or may hereafter be amended,
the liability of a director or officer of the Corporation to the Corporation or
its shareholders arising out of a single transaction, occurrence or course of
conduct shall be eliminated.
3. Indemnification of Directors and Officers. The Corporation shall
indemnify any individual who is, was or is threatened to be made a party to a
proceeding (including a proceeding by or in the right of the Corporation)
because such individual is or was a director or officer of the Corporation or
because such individual is or was serving the Corporation or any other legal
entity in any capacity at the request of the Corporation while a director or
II-1
<PAGE>
officer of the Corporation against all liabilities and reasonable expenses
incurred in the proceeding, except such liabilities and expenses as are incurred
because of such individual's willful misconduct or knowing violation of the
criminal law. Service as a director or officer of a legal entity controlled by
the Corporation shall be deemed service at the request of the Corporation. The
determination that indemnification under this Section 3 is permissible and the
evaluation as to the reasonableness of expenses in a specific case shall be
made, in the case of a director, as provided by law, and in the case of an
officer, as provided in Section 4 of this Article; provided, however, that if a
majority of the directors of the Corporation has changed after the date of the
alleged conduct giving rise to a claim for indemnification, such determination
and evaluation shall, at the option of the person claiming indemnification, be
made by special legal counsel agreed upon by the Board of Directors and such
person. Unless a determination has been made that indemnification is not
permissible, the Corporation shall make advances and reimbursements for expenses
incurred by a director or officer in a proceeding upon receipt of an undertaking
from such director or officer to repay the same if it is ultimately determined
that such director or officer is not entitled to indemnification. Such
undertaking shall be an unlimited, unsecured general obligation of the director
or officer and shall be accepted without reference to such director's or
officer's ability to make repayment. The termination of a proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent shall not of itself create a presumption that a director or
officer acted in such a manner as to make such director or officer ineligible
for indemnification. The Corporation is authorized to contract in advance to
indemnify and make advances and reimbursements for expenses to any of its
directors or officers to the same extent provided in this Section.
4. Indemnification of Others. The Corporation may, to a lesser extent or to
the same extent that it is required to provide indemnification and make advances
and reimbursements for expenses to its directors and officers pursuant to
Section 3, provide indemnification and make advances and reimbursements for
expenses to its employees and agents, the directors, officers, employees and
agents of its subsidiaries and predecessor entities, and any person serving any
other legal entity in any capacity at the request of the Corporation, and may
contract in advance to do so. The determination that indemnification under this
Section 4 is permissible, the authorization of such indemnification and the
evaluation as to the reasonableness of expenses in a specific case shall be made
as authorized from time to time by general or specific action of the Board of
Directors, which action may be taken before or after a claim for indemnification
is made, or as otherwise provided by law. No person's rights under Section 3 of
this Article shall be limited by the provisions of this Section 4.
5. Miscellaneous. The rights of each person entitled to indemnification
under this Article shall inure to the benefit of such person's heirs, executors
and administrators. Special legal counsel selected to make determinations under
this Article may be counsel for the Corporation. Indemnification pursuant to
this Article shall not be exclusive of any other right of indemnification to
which any person may be entitled, including indemnification pursuant to a valid
contract, indemnification by legal entities other than the Corporation and
indemnification under policies of insurance purchased and maintained by the
Corporation or others. However, no person shall be entitled to indemnification
by the Corporation to the extent such person is indemnified by another,
including an insurer. The Corporation is authorized to purchase and maintain
insurance against any liability it may have under this Article or to protect any
of the persons named above against any liability arising from their service to
the Corporation or any other legal entity at the request of the Corporation
regardless of the Corporation's power to indemnify against such liability. The
provisions of this Article shall not be deemed to preclude the Corporation from
entering into contracts otherwise permitted by law with any individuals or legal
entities, including those named above. If any provision of this Article or its
application to any person or circumstance is held invalid by a court of
competent jurisdiction, the invalidity shall not affect other provisions or
applications of this Article, and to this end the provisions of this Article are
severable.
6. Application; Amendments. The provisions of this Article shall be
applicable from and after its adoption even though some or all of the underlying
conduct or events relating to a proceeding may have occurred before its
adoption. No amendment, modification or repeal of this Article shall diminish
the right provided hereunder to any person arising from conduct or events
occurring before the adoption of such amendment, modification or repeal.
II-2
<PAGE>
The Ninth Article of the Certificate of Incorporation of MacSaver provides:
NINTH: This Corporation shall, to the maximum extent permitted from
time to time under the law of the State of Delaware, indemnify and upon
request shall advance expenses to any person who is or was a party or is
threatened to be made a party to any threatened, pending or completed
action, suit, proceeding or claim, whether civil, criminal, administrative
or investigative, by reason of the fact that such person is or was or has
agreed to be a director or officer of this corporation or while a director
or officer is or was serving at the request of this corporation as a
director, officer, partner, trustee, employee or agent of any corporation,
partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, against expenses (including
attorney's fees and expenses), judgment, fines, penalties and amounts paid
in settlement incurred in connection with the investigation, preparation to
defend or defense of such action, suit, proceeding or claim; provided,
however, that the foregoing shall not require this corporation to indemnify
or advance expenses to any person in connection with any action, suit,
proceeding, claim or counterclaims initiated by or on behalf of such
person. Such indemnification shall not be exclusive of other
indemnification rights arising under any by-law, agreement, vote of
directors or stockholders or otherwise and shall inure to the benefit of
the heirs and legal representatives of such person. Any person seeking
indemnification under this Ninth Paragraph shall be deemed to have met the
standard of conduct required for such indemnification unless the contrary
shall be established. Any repeal or modification of the foregoing
provisions of this Ninth Paragraph shall not adversely effect any right or
protection of a director or officer of this corporation with respect to any
acts or omissions of such director or officer occurring prior to such
repeal or modification.
The Company and MacSaver maintain liability insurance which may provide
indemnification, including indemnification against liabilities under the
Securities Act of 1933, to the officers and directors of the Company and
MacSaver in certain circumstances.
In the Underwriting Agreements, forms of which are filed as Exhibit 1.1 and
1.2 hereto, the Underwriters will agree to indemnify, under certain conditions,
the Company and MacSaver, their directors, certain of their officers and persons
who control the Company and MacSaver within the meaning of the Securities Act of
1933, as amended (the "Securities Act") against certain liabilities.
Item 16. Exhibits
1.1 Proposed form of Underwriting Agreement for Common Stock, filed with
the Commission as Exhibit 1.1 to the Company's Registration Statement
on Form S-3 (No. 333-07753), is incorporated herein by this reference.
1.2 Proposed form of Underwriting Agreement for Debt Securities, previously
filed.
4.1 Indenture dated as of August 1, 1996 among the Company, MacSaver and
First Union National Bank of Virginia, as Trustee, including proposed
form of Debt Securities and Guarantees, filed with the Commission as
Exhibit 4(a) to the Company's Current Report on Form 8-K dated
September 11, 1996 (No. 1-8484), is incorporated herein by this
reference.
4.2 Company's Restated Articles of Incorporation, filed with the Commission
as Exhibit 3(a) to Company's Annual Report on Form 10-K for the fiscal
year ended February 28, 1990 (No. 1-8484), are incorporated herein by
this reference.
4.3 Articles of Amendment to Company's Restated Articles of Incorporation,
filed with the Commission as Exhibit 4 to Company's Form 8 (Amendment
No. 5 to Form 8-A filed April 26, 1983) filed August 6, 1992 (No.
1-8484), are incorporated herein by this reference.
II-3
<PAGE>
4.4 Articles of Amendment to Company's Restated Articles of Incorporation,
filed with the Commission as Exhibit 3(c) to Company's Annual Report on
Form 10-K for the fiscal year ended February 28, 1993 (No.
1-8484), are incorporated herein by this reference.
4.5 Articles of Amendment to Company's Restated Articles of Incorporation,
filed with the Commission as Exhibit 3(d) to Company's Annual Report on
Form 10-K for the fiscal year ended February 28, 1995 (No.
1-8484), are incorporated herein by this reference.
4.6 Company's By-laws, as amended, filed with the Commission as Exhibit
3(e) to Company's Annual Report on Form 10-K for the fiscal year ended
February 28, 1997 (No. 1-8484), are incorporated herein by this
reference.
4.7 Certificate of Incorporation of MacSaver as in effect since December
21, 1989, filed with the Commission as Exhibit 4.7 to Company's
Registration Statement on Form S-3 (No. 333-07753), is incorporated
herein by this reference.
4.8 By-laws of MacSaver as in effect since February 27, 1990, filed with
the Commission as Exhibit 4.8 to Company's Registration Statement on
Form S-3 (No. 333-07753), are incorporated herein by this reference.
4.9 Rights Agreement dated as of February 17, 1988 (the "Rights Agreement")
between the Company and Crestar Bank, filed with the Commission as
Exhibit (2) to Company's Registration Statement on Form 8-A dated
February 19, 1988 (No. 1-8484), is incorporated herein by this
reference.
4.10 Supplements Nos. 1-4 dated September 15, 1989 to Rights Agreement filed
with the Commission as Exhibits 2(a)-(d) to Form 8 (No. 1-8484) filed
with the Commission on September 20, 1989, are incorporated herein by
this reference.
5.1 Opinion and consent of McGuire, Woods, Battle & Boothe, L.L.P. as to
the validity of the Securities, previously filed.
8.1 Opinion and consent of McGuire, Woods, Battle & Boothe, L.L.P. as to
certain tax matters, previously filed.
12.1 Computation of ratio of earnings to fixed charges, filed herewith.
23.1 Consent of Deloitte & Touche LLP, filed herewith.
23.2 Consents of McGuire, Woods, Battle & Boothe, L.L.P. (included as part
of Exhibits 5.1 and 8.1).
23.3 Consent of Arthur Andersen LLP, filed herewith.
23.4 Consent of Deloitte & Touche LLP, filed herewith.
24.1 Power of Attorney for Heilig-Meyers Company, previously
filed.
24.2 Power of Attorney for MacSaver, previously filed.
25.1 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of First Union National Bank of
Virginia, previously filed.
II-4
<PAGE>
Item 17. Undertakings
1. The undersigned registrants hereby undertake:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities Act of
1933 if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Exchange Act that are incorporated by reference in
the registration statement.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
2. The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the
registrants' annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
3. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Company certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this Amendment to Registration
Statement No. 333-29929 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Richmond and Commonwealth of Virginia, on July
22, 1997.
HEILIG-MEYERS COMPANY
By: s/William C. DeRusha
---------------------------------
William C. DeRusha
Chairman of the Board
Principal Executive Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed below by the following persons in the capacities and
on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C>
s/William C. DeRusha Chairman of the Board; July 22, 1997
- -----------------------------
William C. DeRusha Principal Executive
Officer; Director
* President; Director July 22, 1997
- ------------------------------
Troy A. Peery, Jr.
s/Roy B. Goodman
- ------------------------------ July 22, 1997
Roy B. Goodman Senior Vice President,
Finance; Principal
Financial Officer
<PAGE>
* Senior Vice President, July 22, 1997
- ----------------------------------- Accounting; Principal
Accounting Officer
William J. Dieter
* Director July 22, 1997
- ------------------------------------
Hyman Meyers
* Director July 22, 1997
- ------------------------------------
S. Sidney Meyers
* Director July 22, 1997
- ------------------------------------
Nathaniel Krumbein
* Director July 22, 1997
- -------------------------------------
Alexander Alexander
* Director July 22, 1997
- -------------------------------------
Robert L. Burrus, Jr.
* Director July 22, 1997
- ---------------------------------------
Benjamin F. Edwards, III
* Director July 22, 1997
- -------------------------------------
Alan G. Fleischer
* Director July 22, 1997
- -------------------------------------
Lawrence N. Smith
<PAGE>
* Director July 22, 1997
- -------------------------------------
Charles A. Davis
* Director July 22, 1997
- -------------------------------------
Beverley E. Dalton
* Director July 22, 1997
- -------------------------------------
Eugene P. Trani
* By:s/ William C. DeRusha
-----------------------------
William C. DeRusha
Attorney-in-Fact
<PAGE>
Pursuant to the requirements of the Securities Act, MacSaver certifies that
it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Amendment to Registration Statement
No. 333-29929 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City/County of Cook and State of Illinois on July 15, 1997.
MACSAVER FINANCIAL SERVICES, INC.
By: s/Joseph R. Jenkins
---------------------------
Joseph R. Jenkins
President
Pursuant to the requirements of the Securities Act, this registration
statement has been signed below by the following persons in the capacities and
on the date indicated.
Signature Title Date
s/Joseph R. Jenkins President and Principal July 15, 1997
- ------------------------------------ Executive Officer; Director
Joseph R. Jenkins
* Vice President and Principal July 15, 1997
- ----------------------------------- Financial Officer; Director
Roy B. Goodman
* Director July 15, 1997
- -----------------------------------
William J. Dieter
* Director July 15, 1997
- -----------------------------------
William E. Helms
* By: s/Joseph R. Jenkins
- -----------------------------------
Joseph R. Jenkins
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
- --- -----------
12.1 Computation of ratio of earnings to fixed charges.
23.1 Consent of Deloitte & Touche LLP.
23.3 Consent of Arthur Andersen LLP.
23.4 Consent of Deloitte & Touche LLP.
</TABLE>
Heilig-Meyers Company
Computation of Ratio of Earnings to Fixed Charges
(dollar amounts in thousands)
<TABLE>
<CAPTION>
Fiscal Year Ended February 28(29)
-----------------------------------------------------------------------------------
1997 1996 1995 1994 1993
--------------- --------------- --------------- --------------- ---------------
<S> <C>
Net Income Before Taxes 61,900 64,527 105,901 87,154 59,394
Interest 47,800 40,767 32,889 23,834 23,084
Property Rentals 48,740 41,216 33,631 22,345 17,143
Equipment Rentals 24,793 21,858 16,050 11,964 6,805
--------------- --------------- --------------- --------------- ---------------
Total Earnings Available 183,233 168,368 188,471 145,297 106,426
Fixed Charges:
Interest 47,800 40,767 32,889 23,834 23,084
Property Rentals 48,740 41,216 33,631 22,345 17,143
Equipment Rentals 24,793 21,858 16,050 11,964 6,805
--------------- --------------- --------------- --------------- ---------------
Total Fixed Charges 121,333 103,841 82,570 58,143 47,032
Ratio of Earnings to Fixed Charges 1.51 1.62 2.28 2.50 2.26
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended May 31
---------------------------------
1997 1996
--------------- ---------------
<S> <C>
Net Income Before Taxes 22,000 19,208
Interest 15,428 10,591
Property Rentals 14,105 11,240
Equipment Rentals 6,484 5,824
--------------- ---------------
Total Earnings Available 58,017 46,863
Fixed Charges:
Interest 15,428 10,591
Property Rentals 14,105 11,240
Equipment Rentals 6,484 5,824
--------------- ---------------
Total Fixed Charges 36,017 27,655
Ratio of Earnings to Fixed Charges 1.61 1.69
</TABLE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-29929 of Heilig-Meyers Company on Form S-3
of our report dated March 25, 1997, appearing in the Annual Report on
Form 10-K of Heilig-Meyers Company and subsidiaries for the year ended
February 28, 1997, and to the reference to us under the heading "Experts"
in the Prospectus, which is part of such Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Richmond, Virginia
July 23, 1997
Exhibit 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement File No. 333-29929 of our reports dated
April 25, 1996 incorporated by reference in Heilig-Meyers Company Form 8-K/A and
to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Atlanta, Georgia
July 21, 1997
Exhibit 23.4
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 33-29929 of Heilig-Meyers Company on Form S-3 of our
report dated January 5, 1996 on the financial statements of Weberg Division (a
division of Weberg Enterprises, Inc.) as of and for the year ended December 31,
1994 which is incorporated by reference in Amendment No. 1 to Form 8-K dated
February 19, 1997 of Heilig-Meyers Company.
/s/ Deloitte & Touche LLP
- ---------------------------------
DELOITTE & TOUCHE LLP
Denver, Colorado
July 23, 1997
