<PAGE>
Filed Pursuant to Rule 424(b)(2)
Registration Number 33-62479
PROSPECTUS SUPPLEMENT
(To Prospectus dated October 6, 1995)
$250,000,000
HELLER FINANCIAL, INC.
6.44% NOTES DUE OCTOBER 6, 2002
INTEREST PAYABLE APRIL 6 AND OCTOBER 6
---------------
Interest on the 6.44% Notes due October 6, 2002 (the "Notes") will be
payable on April 6 and October 6 of each year beginning on April 6, 1998. The
Notes will mature on October 6, 2002. The Notes will not be redeemable prior
to maturity and will not be entitled to any sinking fund. See "Description of
the Notes."
The Notes will be issued in fully registered form and will be represented by
one or more global certificates (the "Global Securities") registered in the
name of a nominee of The Depository Trust Company ("DTC") or other successor
depository appointed by the Company (DTC or such other depository is herein
referred to as the "Depository"). Beneficial interests in Notes will be shown
on, and transfers thereof will be effected only through, records maintained by
the Depository (with respect to participants' interests) and its participants.
See "Description of Debt Securities--Book Entry, Delivery and Form." The Notes
will be issued only in denominations of $1,000 and integral multiples thereof.
See "Description of the Notes." Settlement for the Notes will be made in
immediately available funds. The Notes will trade in the Depository's Same-Day
Funds Settlement System until maturity, and secondary market trading activity
in the Notes will therefore settle in immediately available funds. See
"Description of Debt Securities--Same-Day Settlement."
---------------
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 SUPPLEMENT OR THE
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC (1) DISCOUNT (2) COMPANY (1) (3)
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note................................ 100% .45% 99.55%
- -----------------------------------------------------------------------------------
Total................................... $250,000,000 $1,125,000 $248,875,000
- -----------------------------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from October 6, 1997.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deduction of expenses payable by the Company estimated at $175,000.
---------------
The Notes are offered, subject to prior sale, when, as and if accepted by
the Underwriters and subject to approval of certain legal matters by Katten
Muchin & Zavis, counsel for the Underwriters. It is expected that delivery of
the Global Securities will be made on or about October 6, 1997, through the
facilities of the Depository in New York, New York against payment therefor in
same-day funds.
---------------
MERRILL LYNCH & CO.
CHASE SECURITIES INC.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
J.P. MORGAN & CO.
---------------
The date of this Prospectus Supplement is October 1, 1997.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES, INCLUDING
OVERALLOTMENT, STABILIZING TRANSACTIONS AND SYNDICATE SHORT COVERING
TRANSACTIONS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN
THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUPPLEMENT OR ANY OFFER TO SELL OR
THE SOLICITATION OF ANY OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN
WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE
IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Use of Proceeds............................................................ S-3
Ratio of Earnings to Fixed Charges......................................... S-3
Fuji Bank Recent Developments.............................................. S-3
Description of the Notes................................................... S-4
Underwriting............................................................... S-4
Legal Opinions............................................................. S-5
PROSPECTUS
Available Information...................................................... 2
Documents Incorporated by Reference........................................ 2
The Company................................................................ 3
Selected Financial Data.................................................... 8
Use of Proceeds............................................................ 9
Description of Debt Securities............................................. 9
Description of Warrants.................................................... 18
Plan of Distribution....................................................... 19
Legal Opinions............................................................. 20
Experts.................................................................... 20
</TABLE>
S-2
<PAGE>
USE OF PROCEEDS
The Company will utilize the net proceeds from the Notes for working capital
purposes, including to repay certain indebtedness incurred for working capital
purposes. Such indebtedness is of varying maturities of less than nine months
and bears interest at rates within the range of 5.0% to 6.0% per annum.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the Company for the periods
indicated below was as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
----------------- ---------------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
1.53 1.41 1.40 1.38 1.51 1.49 1.15
</TABLE>
For purposes of computing the ratio of earnings to combined fixed charges,
"earnings" includes income before income taxes, the minority interest in
Heller International Group, Inc. income and fixed charges. "Combined fixed
charges" includes interest on all indebtedness and one third of annual rentals
(approximate portion representing interest).
FUJI BANK RECENT DEVELOPMENTS
The following table summarizes selected financial data obtained from Fuji
Bank's most recent financial statements, as prepared in accordance with
accounting principles generally accepted in Japan, which differ from generally
accepted accounting principles in the United States.
THE FUJI BANK, LIMITED
(CONSOLIDATED FINANCIAL
STATEMENTS)
<TABLE>
<CAPTION>
------------------------------------------------------------
YEAR ENDED YEAR ENDED
MARCH 31, 1997 MARCH 31, 1996
--------------------- ---------------------
YEN DOLLARS YEN DOLLARS
(Billions) (Millions) (Billions) (Millions)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Total Assets............ 56,211.2 452,950.5 54,401.4 511,531.8
Total Deposits.......... 38,649.5 311,438.2 37,280.4 350,544.2
Total Liabilities....... 54,276.8 437,363.5 52,764.8 496,142.9
Total Stockholders'
Equity................. 1,934.3 15,587.0 1,636.1 15,388.9
Net Income.............. 109.0 878.7 (325.4) (3,059.9)
</TABLE>
- --------
*Rates of Exchange: 3/31/97 (Yen)124.10 = U.S. $1.00
3/31/96 (Yen)106.35 = U.S. $1.00
If the financial statements from which the numbers in the foregoing table
were taken had been prepared in accordance with accounting principles
generally accepted in the United States, some of the amounts shown might have
been materially different. The Company currently understands that accounting
principles generally accepted in Japan differ from generally accepted
accounting principles in the United States in various areas including the
following: valuation of securities, accounting treatment of guarantees,
commitments, unearned income, deferred taxes, leases, depreciation, foreign
currency transactions and investments in subsidiaries, and creation and
maintenance of optional and required reserves.
S-3
<PAGE>
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Notes offered
hereby supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the Debt Securities set
forth in the accompanying Prospectus, to which description reference is hereby
made. The statements herein concerning the Notes and the Indenture do not
purport to be complete. All such statements are qualified in their entirety by
reference to the accompanying Prospectus and the provisions of the Indenture,
the form of which has been filed with the Securities and Exchange Commission.
The Company's 6.44% Notes due October 6, 2002 (the "Notes") offered hereby
constitute a single series of Senior Securities to be issued under an
Indenture dated as of September 1, 1995, as amended by the First Supplemental
Indenture dated as of October 13, 1995, between the Company and State Street
Bank and Trust Company, as successor to Shawmut Bank Connecticut, National
Association, as Trustee, and will be limited to $250,000,000 aggregate
principal amount. State Street Bank and Trust Company will initially be the
Securities Registrar and Paying Agent (the "Paying Agent"). The Notes will be
issued only in registered form without coupons in denominations of $1,000 and
integral multiples thereof.
The Notes will mature on October 6, 2002. Interest on the Notes will be
payable semi-annually on each April 6 and October 6 (each an "Interest Payment
Date"), commencing April 6, 1998. Interest payable on each Interest Payment
Date will include interest accrued from October 6, 1997 or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for. Interest payable on any Interest Payment Date will be payable to the
person in whose name a Note (or any predecessor Note) is registered at the
close of business on March 15 or September 15, as the case may be, next
preceding such Interest Payment Date. Principal of and interest on the Notes
will be payable at the office or agency of the Company maintained for such
purpose in the Borough of Manhattan, The City of New York, which initially
will be the office of an affiliate of the Paying Agent, provided that payment
of interest may be made, at the option of the Company, by check mailed to the
person entitled thereto. Interest shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
The Notes are not redeemable or repayable prior to maturity and do not
provide for any sinking fund.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated the date hereof, the Company has agreed to sell to each of the
Underwriters named below, severally, and each of the Underwriters has
severally agreed to purchase, the principal amount of the Notes set forth
opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF NOTES
----------- ----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................ $ 50,000,000
Chase Securities Inc..................................... 50,000,000
Goldman, Sachs & Co...................................... 50,000,000
Lehman Brothers Inc...................................... 50,000,000
J.P. Morgan Securities Inc............................... 50,000,000
------------
Total............................................... $250,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are obligated to take and pay for all of the Notes if any are
taken.
The Underwriters propose initially to offer the Notes directly to the public
at the public offering price set forth on the cover page of this Prospectus
Supplement and to certain dealers at such price less a concession not in
excess of .3% of the principal amount of the Notes. The Underwriters may
allow, and such dealers may reallow, a discount not in excess of .25% of the
principal amount of the Notes to certain other dealers. After the initial
public offering, the public offering price, concession and discount may be
changed.
S-4
<PAGE>
The Company does not intend to apply for listing of the Notes on a national
securities exchange, but has been advised by the Underwriters that they intend
to make a market in the Notes. The Underwriters are not obligated, however, to
make a market in the Notes and may discontinue market making at any time
without notice. No assurance can be given as to the liquidity of, or trading
market for, the Notes.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended, or contribute to payments the Underwriters may be required to make in
respect thereof.
In the ordinary course of their respective businesses, the Underwriters or
their affiliates have engaged and may in the future engage in investment
banking, financial advisory and/or commercial banking transactions with the
Company and its subsidiaries.
In connection with the offering of the Notes, Merrill Lynch, Pierce, Fenner
& Smith Incorporated, on behalf of the Underwriters, may engage in
overallotment, stabilizing transactions and syndicate covering transactions in
accordance with Regulation M under the Securities Exchange Act of 1934, as
amended. Overallotment involves sales in excess of the offering size, which
creates a short position for the Underwriters. Stabilizing transactions
involve bids to purchase the Notes in the open market for the purpose of
pegging, fixing or maintaining the price of the Notes. Syndicate covering
transactions involve purchases of the Notes in the open market after the
distribution has been completed in order to cover short positions. Such
stabilizing transactions and syndicate covering transactions may cause the
price of the Notes to be higher than it would otherwise be in the absence of
such transactions. Such activities, if commenced, may be discontinued at any
time.
LEGAL OPINIONS
The legality of the Notes offered hereby will be passed upon for the Company
by Mark J. Ohringer, Associate General Counsel of the Company, and for the
Underwriters by Katten Muchin & Zavis, 525 W. Monroe Street, Chicago, Illinois
60661. Katten Muchin & Zavis from time to time acts as counsel in certain
matters for the Company and certain of its subsidiaries and affiliates.
S-5
<PAGE>
PROSPECTUS
HELLER FINANCIAL, INC.
DEBT SECURITIES
WARRANTS TO PURCHASE DEBT SECURITIES
----------------
Heller Financial, Inc. (the "Company") from time to time may issue in one or
more series its unsecured debt securities (the "Debt Securities"), which may
be senior (the "Senior Securities"), subordinated (the "Subordinated
Securities") or junior subordinated (the "Junior Subordinated Securities"),
and warrants (the "Warrants") to purchase Debt Securities (the Debt Securities
and the Warrants being herein collectively called the "Securities") for
proceeds up to $2,500,000,000, or the equivalent thereof if any of the
Securities are denominated in a foreign currency or a foreign currency unit.
The Debt Securities of each series will be offered on terms determined at the
time of sale. The Debt Securities and Warrants may be sold for U.S. dollars,
foreign currencies or foreign currency units, and the principal of and any
interest on the Debt Securities may be payable in U.S. dollars, foreign
currencies or foreign currency units. The specific designation, priority,
aggregate principal amount, the currency or currency unit for which the
Securities may be purchased, the currency or currency unit in which the
principal and any interest is payable, the rate (or method of calculation) and
time of payment of any interest, authorized denominations, maturity, offering
price, any redemption terms or other specific terms of the Securities in
respect of which this Prospectus is being delivered (the "Offered Securities")
are set forth in the accompanying Prospectus Supplement (the "Prospectus
Supplement"). With regard to the Warrants, if any, in respect of which this
Prospectus is being delivered, the Prospectus Supplement sets forth a
description of the Debt Securities for which each Warrant is exercisable and
the offering price, if any, exercise price, duration, detachability and other
terms of the Warrants.
The Securities may be offered directly to purchasers or to or through
underwriters, dealers or agents designated from time to time. If any
underwriters or agents are involved in the offering of the Offered Securities,
then the names of such underwriters or agents and any applicable fee,
commission or discount arrangements with them will be set forth in the
Prospectus Supplement. See "Plan of Distribution." The net proceeds to the
Company from such offering will also be set forth in the Prospectus
Supplement.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------
THE DATE OF THIS PROSPECTUS IS OCTOBER 6, 1995.
1
<PAGE>
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. NEITHER THIS PROSPECTUS NOR ANY
PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT
RELATES OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 ("Registration Statement")
under the Securities Act of 1933, as amended (the "Securities Act"), covering
the Securities. As permitted by the rules and regulations of the Commission,
this Prospectus omits certain information, exhibits and undertakings contained
in the Registration Statement. Such additional information can be inspected at
the principal office of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and copies of the Registration Statement can be obtained from the
Commission at prescribed rates by writing to the Commission at such address.
For further information, reference is made to the Registration Statement and
to the exhibits thereto. Statements contained herein concerning any document
are not necessarily complete and, in each instance, reference is made to the
copy of such document filed as an exhibit to the Registration Statement. Each
such statement is qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports and other information with the Commission. Such reports and
other information can be inspected and copied at the public reference
facilities of the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the Commission's regional offices at Seven World Trade
Center, New York, New York 10048 and 500 West Madison Street, Chicago,
Illinois 60661. Copies of such material can be obtained at prescribed rates
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such reports and other information concerning the
Company can also be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005. The Company has securities
listed on such exchange.
The Company files with the Commission an Annual Report on Form 10-K, which
contains financial information that has been examined and reported upon, with
an opinion expressed, by the Company's independent public accountants. This
Report will not be distributed to the holders of any series of Securities, but
will be available to them upon request. See "Documents Incorporated by
Reference."
DOCUMENTS INCORPORATED BY REFERENCE
The following documents heretofore filed by the Company under the 1934 Act
with the Commission are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994.
(2) The Company's Quarterly Reports on Form 10-Q for the periods ended
March 31, 1995 and June 30, 1995.
(3) The Company's Current Reports on Form 8-K (File No. 1-6157, dated
January 27, 1995, April 24, 1995, May 24, 1995 and July 31, 1995).
All documents filed by the Company pursuant to sections 13(a), 13(c), 14 or
15(d) of the 1934 Act after the date of this Prospectus and prior to the
termination of any offering of the Securities shall be deemed to be
incorporated in this Prospectus by reference and to be a part hereof from the
date of filing of each such
2
<PAGE>
document. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF
THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF SUCH
PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE
BEEN OR MAY BE INCORPORATED IN THIS PROSPECTUS BY REFERENCE, OTHER THAN
EXHIBITS TO SUCH DOCUMENTS. REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO:
TREASURER, HELLER FINANCIAL, INC., 500 WEST MONROE STREET, CHICAGO, ILLINOIS
60661 (TELEPHONE (312) 441-7000).
THE COMPANY
GENERAL
Heller Financial, Inc. (the "Company") was incorporated in 1919 under the
laws of the State of Delaware and is engaged in various aspects of the
commercial finance business. The Company and its consolidated subsidiaries
employ approximately 1,400 people. The executive offices are located at 500
West Monroe Street, Chicago, Illinois 60661 (telephone: (312) 441-7000).
Unless the context indicates otherwise, references to the Company include
Heller Financial, Inc. and its consolidated subsidiaries.
The Company operates in the middle market segment of the commercial finance
industry, which generally includes entities in the manufacturing and service
sectors with annual sales in the range of $15 million to $200 million and in
the real estate sector with property values generally in the range of $5
million to $40 million. The Company currently provides services in six product
categories: (1) corporate finance, (2) real estate finance, (3) asset based
finance, (4) current asset management, (5) specialized commercial finance and
investments and (6) international factoring and asset based finance.
The Company is continuing the program begun in 1990 to diversify its
portfolio and earnings sources, strengthen earnings quality, improve asset
quality and maintain its capital strength. The Company is diversifying its
portfolio and earnings sources by reducing reliance on the corporate finance
business and growing the asset based and international businesses. Earnings
quality is being strengthened by developing more stable earning streams and
reducing the level and volatility of credit quality costs. Asset quality is
improving through resolution of problem accounts and more conservative
underwriting practices. The Company is pursuing these goals in the framework
of continued moderate leverage, strong reserves and conservative liquidity.
OWNERSHIP
All of the outstanding Common Stock of the Company is owned by Heller
International Corporation (the "Parent"), a wholly-owned subsidiary of The
Fuji Bank, Limited ("Fuji Bank"), headquartered in Tokyo, Japan. Fuji Bank
also directly owns 21% of the outstanding shares of Heller International
Group, Inc., a consolidated subsidiary of the Company engaged in international
factoring and asset based financing activities. Fuji Bank is one of the
largest banks in the world, with total deposits of approximately $412 billion
at March 31, 1995. For a discussion of the "Keep Well Agreement" between Fuji
Bank and the Company, see "Keep Well Agreement with Fuji Bank."
3
<PAGE>
The following table summarizes selected financial data obtained from Fuji
Bank's most recent financial statements, as prepared in accordance with
accounting principles generally accepted in Japan, which differ from generally
accepted accounting principles in the United States.
THE FUJI BANK, LIMITED
(NON-CONSOLIDATED FINANCIAL STATEMENTS)
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
MARCH 31, 1995 MARCH 31, 1994
--------------------- ---------------------
YEN $ YEN $
(BILLIONS) (MILLIONS) (BILLIONS) (MILLIONS)
<S> <C> <C> <C> <C>
Total Assets........................ 50,730.1 567,769 52,448.6 508,469
Total Deposits...................... 36,799.6 411,859 38,556.7 373,792
Total Liabilities................... 48,849.3 546,719 50,578.1 490,335
Total Stockholders' Equity.......... 1,880.8 21,050 1,870.5 18,134
Net Income.......................... 34.3 384 26.7 259
</TABLE>
- --------
* Rates of Exchange:
3/31/95 (Yen) 89.35 = U.S. $1.00
3/31/94 (Yen)103.15 = U.S. $1.00
If the financial statements from which the numbers in the foregoing table
were taken had been prepared in accordance with accounting principles
generally accepted in the United States, some of the amounts shown might have
been materially different. The Company currently understands that accounting
principles generally accepted in Japan differ from generally accepted
accounting principles in the United States in various areas including the
following: valuation of securities, accounting treatment of guarantees,
commitments, unearned income, deferred taxes, leases, depreciation, foreign
currency transactions and investments in subsidiaries, and creation and
maintenance of optional and required reserves.
The "Keep Well Agreement" between Fuji Bank and the Company provides that,
if necessary, Fuji Bank will maintain the Company's net worth at $500 million
through the purchase of sufficient shares of a new series of preferred stock
of the Company and will provide loans of up to $500 million to maintain the
Company's liquidity. No purchases of preferred stock or loans have been made
by Fuji Bank under this Agreement. For further discussion of the "Keep Well
Agreement," see "Keep Well Agreement With Fuji Bank" below.
CORPORATE FINANCE
The Corporate Finance group offers a broad spectrum of services based on the
cash flows underlying a client's business. These services are often provided
through coordination with private equity sponsors and include the financing of
corporate recapitalizations, refinancings, acquisitions and buy-outs of
publicly and privately held entities in a wide variety of industries. Loans
are provided on both a term and revolving basis for periods of up to ten years
and are typically collateralized by senior liens on the borrower's stock or
assets or both. Corporate finance transactions may also include some
unsecured, subordinated or non-voting equity financing. From time to time the
Company buys and sells assignments and participations in loans as a method of
managing hold sizes and industry concentrations.
REAL ESTATE FINANCE
The Real Estate Financial Services group provides interim financing to
owners, investors and developers primarily for the acquisition, refinancing
and renovation of commercial income producing properties in a wide range of
property types and geographic areas. These loans generally have terms ranging
from one to five years and are principally collateralized by first mortgages.
The Company also offers financing for discounted loan portfolio acquisitions,
participating junior debt financing to developers of single and multi-family
housing, credit sale-leaseback financing for single tenant properties, as well
as standby commitments for periods of one to two years.
4
<PAGE>
ASSET BASED FINANCE
Asset based financing is offered by Vendor Finance, Commercial Equipment
Finance, Heller Business Credit ("Business Credit") and Heller First Capital
("First Capital"). Vendor Finance provides leasing and financing of equipment
through approximately 75 manufacturer and vendor programs, financing of
independent leasing companies and direct relationships with end users.
Individual transactions are generally under $500,000. This division finances
the machining, graphics, healthcare, communication, plastics and production
equipment markets. Commercial Equipment Finance provides financing of general
equipment transactions with an average size of $3 million to a diverse group
of businesses for expansion, replacement and modernization or refinancing of
existing equipment obligations.
Business Credit provides working capital and term financing to middle market
companies in a variety of industries for refinancings, recapitalizations and
acquisitions. The group also serves as co-lender on or participates in
transactions agented by other asset based lenders. The average commitment and
loan sizes are $17 million and $8 million, respectively, and are usually for
periods of 3 to 5 years. These loans consist of revolving credit facilities
secured by accounts receivable and inventory and to a lesser extent, term
loans secured by property, plant and equipment. The revolving credit
facilities and term loans are generally cross-collateralized.
First Capital is a provider of long-term financial products for small
businesses under U.S. Small Business Administration loan programs, which
guarantee from 60% to 90% of such financings. These loans generally have an
average size of approximately $350,000 and are made to small businesses in a
wide variety of industries for working capital, equipment and owner-occupied
facilities. From time to time, guaranteed portions of these loans may be sold
in the secondary market with servicing rights retained by First Capital.
CURRENT ASSET MANAGEMENT
The Current Asset Management group primarily offers factoring services to
the apparel, textile and home furnishings industries. In return for a
commission, the group purchases the client's accounts receivable and provides
collection and management information services. Working capital is provided by
advancing on a formula basis a percentage of the purchase price of the
client's factored accounts receivable. The Company is one of the largest
factors in the highly competitive United States factoring industry, with 1994
annual volume of $6.6 billion.
SPECIALIZED FINANCE AND INVESTMENTS
Specialized financing and investments are generally originated in four
areas: aircraft finance, project investment and advisory, direct equity
investments and portfolio investments. Aircraft Finance offers financing for
commercial aircraft and equipment through leases or junior secured loans to an
operating lessor, with terms ranging from 2 to 10 years. Project Investment
and Advisory offers financing to independent power producers and industrial
projects in the form of senior and junior secured loans, equity investments
and development loans. Heller Investments makes investments in middle market
companies requiring an operational or financial turnaround. The Company also
makes equity investments in established middle market companies through
participation with equity sponsors and investments in equity funds.
INTERNATIONAL FACTORING AND ASSET BASED FINANCE
The Company provides factoring and asset based financing outside the United
States through investments in commercial finance companies located in 19
countries in Europe, Asia, Australia and Latin America. These companies, which
may be wholly-owned or joint ventures, offer factoring, asset based finance,
acquisition finance, leasing, vendor finance and/or trade finance programs to
the mid-sized corporate sector. During
1994, the Company continued to pursue new international opportunities as it
invested in a factoring
5
<PAGE>
joint venture in Argentina. In addition to these joint venture activities, the
Company has expanded support of the international needs of existing domestic
customers.
KEEP WELL AGREEMENT WITH FUJI BANK
The Company entered into a Keep Well Agreement (the "Agreement") with Fuji
Bank on April 23, 1983 in order to assist the Company in maintaining its
credit rating. The Agreement was amended and supplemented on January 26, 1984,
in connection with the consummation of the purchase of the Company by Fuji
Bank and has been amended since that date from time to time.
On May 3, 1995, the Company and Fuji Bank agreed to extend the term of the
Keep Well Agreement for an additional two years from December 31, 2000 to
December 31, 2002.
The Agreement provides that Fuji Bank will maintain the Company's net worth
in an amount equal to $500 million. Accordingly, if the Company should
determine, at the close of any month, that its net worth is less than $500
million, then Fuji Bank will purchase, or cause one of its subsidiaries to
purchase, shares of the Company's NW Preferred Stock, Class B (No Par Value)
("NW Preferred Stock") in an amount necessary to increase the Company's net
worth to $500 million. If and when issued, dividends will be paid quarterly on
the NW Preferred Stock at a rate per annum equal to 1% over the three-month
London Inter-bank Offered Rate. Such dividends will not be paid during a
default in the payment of principal or interest on any of the outstanding
indebtedness for money borrowed by the Company. Subject to certain conditions,
the NW Preferred Stock will be redeemable at the option of the holder, within
a specified period of time after the end of a calendar quarter in an aggregate
amount not greater than the excess of net worth of the Company as of the end
of such calendar quarter over $500 million.
The Agreement further provides that if the Company should lack sufficient
cash, other liquid assets or credit facilities to meet its payment obligations
on its commercial paper, then Fuji Bank will lend the Company up to $500
million (the "Liquidity Commitment"), payable on demand, which the Company may
use only for the purpose of meeting such payment obligations. Any such loan by
Fuji Bank to the Company (a "Liquidity Advance") will bear interest at a
fluctuating interest rate per annum equal to the announced prime commercial
lending rate of Morgan Guaranty Trust Company of New York plus .25% per annum.
Each Liquidity Advance will be repayable on demand at any time after the
business day following the 29th day after such Liquidity Advance was made. No
repayment of the Liquidity Advance will be made during a period of default in
the payment of the Company's senior indebtedness for borrowed money.
No Liquidity Advances or purchases of NW Preferred Stock have been made by
Fuji Bank under the Agreement. The Parent has previously made other infusions
of capital in the Company.
Under the Agreement, the Company has covenanted to maintain, and Fuji Bank
has undertaken to assure that the Company will maintain, unused short-term
lines of credit and committed credit facilities in an amount approximately
equal to 75% of the amount of its commercial paper obligations from time to
time outstanding. In addition, under the Agreement, neither Fuji Bank nor any
of its subsidiaries can sell, pledge or otherwise dispose of any shares of the
Company's Common Stock or permit the Company to issue shares of its Common
Stock except to Fuji Bank or a Fuji Bank affiliate.
Neither Fuji Bank nor the Company may terminate the Agreement for any reason
prior to December 31, 2002. After December 31, 2002, either Fuji Bank or the
Company may terminate the Agreement upon 30 business days' prior written
notice. So long as the 8 1/8% Cumulative Perpetual Preferred Stock, Series A
("Perpetual Preferred Stock") is outstanding and held by third parties other
than Fuji Bank, the Agreement may not be terminated by either party unless the
Company has received written certifications from Moody's Investors Services,
Inc. and Standard and Poor's Corporation that upon termination the Perpetual
Preferred Stock will be rated by them no lower than "a3" and "A-",
respectively. For these purposes the Perpetual Preferred
Stock will no longer be deemed outstanding at such time as an effective notice
of redemption of all
6
<PAGE>
of the Perpetual Preferred Stock shall have been given by the Company and
funds sufficient to effectuate such redemption shall have been deposited with
the party designated for such purpose in the notice. In addition, any
termination of the Keep Well Agreement by the Company must be consented to by
Fuji Bank. Any such termination will not relieve the Company of its
obligations in respect of any NW Preferred Stock outstanding on the date of
termination or the dividends thereon, any amounts owed in respect of Liquidity
Advances on the date of termination or the unpaid principal or interest on
those Liquidity Advances or Fuji Bank's fee relating to the Liquidity
Commitment. Any such termination will not adversely affect the Company's
commercial paper obligations outstanding on the date of termination. The
Agreement can be modified or amended by a written agreement of Fuji Bank and
the Company. However, no such modification or amendment may change the
prohibition against termination before December 31, 2002. Further, no such
modification or amendment may adversely affect the Company's then-outstanding
commercial paper obligations.
Under the Agreement, the Company's commercial paper obligations and any
other debt instruments are solely the obligations of the Company. The
Agreement is not a guarantee by Fuji Bank of the payment of the Company's
commercial paper obligations, indebtedness, liabilities or obligations of any
kind.
7
<PAGE>
SELECTED FINANCIAL DATA
The following selected financial data of the Company and its consolidated
subsidiaries have been derived from information contained in, and should be
read in conjunction with, the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 and the Company's Quarterly Report on Form
10-Q for the six month period ended June 30, 1995.
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
JUNE 30, FOR THE YEAR ENDED DECEMBER 31,
-------------- --------------------------------------
1995 1994 1994 1993 1992 1991 1990
------ ------ ------ ------ ------ ------ ------
(UNAUDITED)
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Interest income........ $ 420 $ 321 $ 702 $ 620 $ 634 $ 730 $ 813
Interest expense....... 231 149 336 264 295 406 488
------ ------ ------ ------ ------ ------ ------
Net interest income... 189 172 366 356 339 324 325
Fees and other income.. 72 83 170 138 101 95 84
Income of international
joint ventures........ 17 10 21 23 26 19 20
------ ------ ------ ------ ------ ------ ------
Operating revenues.... 278 265 557 517 466 438 429
Operating expenses..... 102 90 195 174 169 167 181
Provision for losses... 78 90 188 210 252 201 144
------ ------ ------ ------ ------ ------ ------
Income before income
taxes, minority
interest and tax ac-
counting credit...... 98 85 174 133 45 70 104
Income tax
provision/(benefit)... 31 20 51 11 (5) 3 18
Minority interest in
international
income................ 3 2 5 5 3 3 2
------ ------ ------ ------ ------ ------ ------
Income before tax ac-
counting credit...... 64 63 118 117 47 64 84
Cumulative effect of a
change in accounting
principle for income
taxes................. -- -- -- -- 41 -- --
------ ------ ------ ------ ------ ------ ------
Net income............. $ 64 $ 63 $ 118 $ 117 $ 88 $ 64 $ 84
====== ====== ====== ====== ====== ====== ======
Ratio of earnings to
fixed charges (See
exhibit 12)........... 1.42x 1.56x 1.51x 1.49x 1.15x 1.17x 1.21x
====== ====== ====== ====== ====== ====== ======
<CAPTION>
JUNE 30, DECEMBER 31,
-------------- --------------------------------------
1995 1994 1994 1993 1992 1991 1990
------ ------ ------ ------ ------ ------ ------
(UNAUDITED)
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Receivables............ $8,137 $7,644 $7,616 $7,062 $7,465 $7,171 $7,343
Allowance for losses of
receivables........... 241 235 231 221 224 170 180
Investments............ 653 506 634 370 280 184 174
Investment in interna-
tional joint ventures. 221 163 174 144 140 129 123
Total assets........... $9,077 $8,350 $8,476 $7,913 $7,952 $7,529 $7,772
====== ====== ====== ====== ====== ====== ======
Senior debt:
Commercial paper and
short-term
borrowings........... $2,726 $2,244 $2,451 $1,981 $2,422 $2,797 $3,268
Notes and debentures.. 4,247 4,053 3,930 3,893 3,521 2,809 2,252
Subordinated debt...... -- -- -- -- -- 88 196
Junior subordinated
debt.................. -- -- -- 75 225 230 234
------ ------ ------ ------ ------ ------ ------
Total debt............ $6,973 $6,297 $6,381 $5,949 $6,168 $5,924 $5,950
====== ====== ====== ====== ====== ====== ======
Preferred stock........ $ 150 $ 150 $ 150 $ 150 $ 150 $ 25 $ 300
Common equity.......... 1,222 1,151 1,180 1,103 994 943 891
------ ------ ------ ------ ------ ------ ------
Total stockholders'
equity............... $1,372 $1,301 $1,330 $1,253 $1,144 $ 968 $1,191
====== ====== ====== ====== ====== ====== ======
Ratio of commercial pa-
per and short-term
borrowings to total
debt.................. 39% 36% 38% 33% 39% 47% 55%
====== ====== ====== ====== ====== ====== ======
Ratio of debt to total
stockholders' equity.. 5.1x 4.9x 4.8x 4.7x 5.4x 6.1x 5.0x
====== ====== ====== ====== ====== ====== ======
</TABLE>
8
<PAGE>
USE OF PROCEEDS
Except as otherwise provided in the Prospectus Supplement, the net proceeds
from the sale of the Securities will be added to the general funds of the
Company and will be available for the repayment of short-term borrowings and
for other corporate purposes.
From time to time, the Company may engage in additional public or private
financings of a character and amount that the Company may deem appropriate.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the indentures under which the Securities are to be issued. The particular
terms of each issue of Offered Securities, as well as any modifications or
additions to such general terms that may apply in the case of such Offered
Securities, will be described in the Prospectus Supplement relating to such
Offered Securities and will be set forth in a filing with the Commission.
Accordingly, for a description of the terms of a particular issue of Offered
Securities, reference must be made to both the Prospectus Supplement relating
thereto and to the following description.
The Senior Securities are to be issued under an indenture dated as of
September 1, 1995 between the Company and Shawmut Bank Connecticut, National
Association ("Shawmut"), as Trustee, or pursuant to an indenture described
below (such indentures, as at any time amended, being referred to herein
individually as a "Senior Indenture" or collectively as the "Senior
Indentures"); the Subordinated Securities are to be issued under an indenture
dated as of September 1, 1995 between the Company and Shawmut, as Trustee, or
pursuant to an indenture described below (such indentures, as at any time
amended, being referred to herein individually as a "Subordinated Indenture"
or collectively as the "Subordinated Indentures"); and the Junior Subordinated
Securities are to be issued under an indenture dated as of September 1, 1995
between the Company and Shawmut, as Trustee, or pursuant to an indenture
described below (such indentures being referred to herein individually as a
"Junior Subordinated Indenture" or collectively as the "Junior Subordinated
Indentures"). Each of the Senior Securities, the Subordinated Securities and
the Junior Subordinated Securities, respectively, may also be issued under an
indenture in the form of such indenture for each such class of Debt
Securities, respectively, filed as an exhibit to the Registration Statement,
for which the related Trustee will be qualified in accordance with the rules
and regulations of the Commission on or about the time of their respective
issuance. The forms of the Senior Indentures, the Subordinated Indentures and
the Junior Subordinated Indentures are filed as exhibits to the Registration
Statement and are sometimes referred to herein individually as an "Indenture"
and collectively as the "Indentures". The following description of the
Indentures and summaries of certain provisions thereof do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all provisions of the respective Indentures. All section references
appearing herein are to sections of the applicable Indenture or Indentures,
and capitalized terms defined in the Indentures are used herein as therein
defined.
There is no requirement that future issues of debt securities of the Company
be issued under any of the Indentures, and the Company will be free to employ
other indentures or documentation containing provisions different from those
included in the Indentures or applicable to one or more issues of Offered
Securities, in connection with future issues of such other debt securities.
GENERAL
Each Indenture provides that the Debt Securities issued thereunder may be
issued without limit as to aggregate principal amount, in one or more series,
and may be denominated in any currency or currency unit, in each case as
established from time to time in or pursuant to authority granted by a
resolution of the Board of Directors of the Company or as established in one
or more indentures supplemental to such Indenture. (Section
9
<PAGE>
3.01). Each Indenture also provides that there may be more than one Trustee
under such Indenture, each with respect to one or more series of Debt
Securities. The Trustee under any Indenture may resign or be removed with
respect to one or more series of Debt Securities issued under such Indenture,
and a successor Trustee may be appointed to act with respect to such series.
(Section 8.10). If two or more persons are acting as Trustee with respect to
different series of Debt Securities issued under the same Indenture, each such
Trustee shall be a Trustee of a trust under such Indenture separate and apart
from the trust administered by any other such Trustee (Section 8.11), and any
action described herein to be taken by the "Trustee" may then be taken by each
such Trustee with respect to, and only with respect to, the one or more series
of Debt Securities for which it is Trustee under such Indenture.
Reference is made to the Prospectus Supplement for the following terms of
the Debt Securities in respect of which this Prospectus is being delivered:
(1) the title of the Debt Securities and whether such Debt Securities will be
Senior Debt, Subordinated Debt or Junior Subordinated Debt of the Company; (2)
any limit on the aggregate principal amount of the Debt Securities; (3) the
percentage of their principal amount for which the Debt Securities will be
issued; (4) the date or dates on which the principal of (and premium, if any,
on) the Debt Securities will be payable; (5) the rate or rates (which may be
fixed or variable), or the method by which such rate or rates shall be
determined, at which the Debt Securities will bear interest, if any; (6) the
currency, currencies or currency units for which the Debt Securities may be
purchased and the currency, currencies or currency units in which the
principal of (and premium, if any) and interest, if any, on such Debt
Securities may be payable; (7) the date or dates from which any such interest
will accrue, the date or dates on which any such interest will be payable and
the regular record dates for such interest payment dates; (8) the place or
places where the principal of (and premium, if any) and interest, if any, on
the Debt Securities will be payable; (9) the period or periods within which,
the price or prices at which and the terms and conditions upon which the Debt
Securities may be redeemed, in whole or in part, at the option of the Company,
pursuant to any sinking fund or otherwise, if the Company is to have such an
option, and whether any special terms and conditions of redemption shall apply
if the Debt Securities are Registered Securities (as hereinafter defined) or
Unregistered Securities (as hereinafter defined); (10) the obligation, if any,
of the Company to redeem, repay or purchase the Debt Securities pursuant to
any sinking fund or analogous provision or at the option of a Holder thereof,
and the period or periods within which, the price or prices at which and the
terms and conditions upon which the Debt Securities will be redeemed, repaid
or purchased, in whole or in part, pursuant to such obligation; (11) any
Events of Default with respect to the Debt Securities in addition to those set
forth in the respective Indenture; and (12) any other terms of the Debt
Securities not inconsistent with the provisions of the respective Indenture.
The Company will comply with Rule 14e-1 promulgated under the 1934 Act, and
any other tender offer rules under the 1934 Act which may then be applicable
in connection with any obligation of the Company to purchase Debt Securities
at the option of the Holders thereof. Any such obligation applicable to an
issue of Offered Securities will be described in the Prospectus Supplement
relating thereto.
The Debt Securities may be issued in fully registered form without coupons
("Fully Registered Securities"), or in a form registered as to principal only
with coupons ("Registered Securities") or in bearer form with or without
coupons ("Unregistered Securities"). The Debt Securities of a series may be
issued in whole or in part in the form of one or more global securities that
will be deposited with, or on behalf of, a depositary identified in the
applicable Prospectus Supplement. The specific depositary arrangement with
respect to a series of Debt Securities or any part thereof will be described
in the applicable Prospectus Supplement. Unless otherwise specified in the
Prospectus Supplement, the Debt Securities will be issued only as Fully
Registered Securities in denominations of $1,000 and any integral multiple
thereof and will be payable in United States Dollars. (Section 3.02).
An investment in Debt Securities indexed, as to principal or interest or
both, to one or more values of currencies (including exchange rates between
currencies), commodities or interest rate indices entails significant risks
that are not associated with similar investments in a conventional fixed-rate
debt security. If the interest
10
<PAGE>
rate of such a Debt Security is so indexed, it may result in an interest rate
that is less than that payable on a conventional fixed-rate debt security
issued at the same time, including the possibility that no interest will be
paid, and, if the principal amount of such a Debt Security is so indexed, the
principal amount payable at maturity may be less than the original purchase
price of such Debt Security if allowed pursuant to the terms of such Debt
Security, including the possibility that no principal will be paid. The
secondary market for such Debt Securities will be affected by a number of
factors, independent of the creditworthiness of the issuer and the value of
the applicable currency, commodity or interest rate index, including the
volatility of the applicable currency, commodity or interest rate index, the
time remaining to the maturity of such Debt Securities, the amount outstanding
of such Debt Securities and market interest rates. The value of the applicable
currency, commodity or interest rate index depends on a number of interrelated
factors, including economic, financial and political events, over which the
Company has no control. Additionally, if the formula used to determine the
principal amount or interest payable with respect to such Debt Securities
contains a multiple or leverage factor, the effect of any change in the
applicable currency, commodity or interest rate index will be increased. The
historical experience of the relevant currencies, commodities or interest rate
indices should not be taken as an indication of future performance of such
currencies, commodities or interest rate indices during the term of any Debt
Security. Accordingly, prospective investors should consult their own
financial and legal advisors as to the risks entailed by an investment in such
Debt Securities and the suitability of such Debt Securities in light of their
particular circumstances.
If any of the Debt Securities are sold for foreign currencies or foreign
currency units or if the principal of (and premium, if any) and interest, if
any, on any series of Debt Securities is payable in foreign currencies or
foreign currency units, the restrictions, elections, tax consequences,
specific terms and other information with respect to such issue of Debt
Securities and such currencies or currency units will be set forth in the
Prospectus Supplement relating thereto.
One or more series of Debt Securities may be sold at a substantial discount
below their stated principal amount, bearing no interest or interest at a rate
which at the time of issuance is below market rates ("Original Issue Discount
Securities"). Special Federal income tax, accounting and other considerations
applicable thereto will be described in the Prospectus Supplement relating to
any such Debt Securities.
The Debt Securities will be unsecured obligations of the Company. None of
the Company's outstanding debt securities are, and none of the Debt Securities
will be, guaranteed by Fuji Bank.
CERTAIN DEFINITIONS
The following terms are defined in each Indenture. (Sections 1.01 and
12.07).
The term "Consolidated Net Tangible Assets" is defined to mean the total of
all assets reflected on a consolidated balance sheet of the Company and its
consolidated Subsidiaries, prepared in accordance with generally accepted
accounting principles, at their net book values (after deducting related
depreciation, depletion, amortization and all other valuation reserves which,
in accordance with such principles, should be set aside in connection with the
business conducted), but excluding goodwill, unamortized debt discount and all
other like segregated intangible assets, and amounts on the asset side of such
balance sheet for capital stock of the Company, all as determined in
accordance with such principles, less the aggregate of the current liabilities
of the Company and its consolidated Subsidiaries reflected on such balance
sheet, all as determined in accordance with such principles. For purposes of
this definition, "current liabilities" include all indebtedness for money
borrowed, incurred, issued, assumed or guaranteed by the Company and its
consolidated Subsidiaries, credit balances of factoring clients and other
payables and accruals, in each case payable on demand or due within one year
of the date of determination of Consolidated Net Tangible Assets, all as
reflected on such consolidated balance sheet of the Company and its
consolidated Subsidiaries, prepared in accordance with generally accepted
accounting principles.
11
<PAGE>
The term "Debt" is defined to mean all liabilities, whether issued or
assumed (i) in respect of money borrowed or (ii) evidenced by note, debenture
or other like written obligation to pay money, and (iii) all guarantees (x) in
respect of money borrowed by third persons or (y) in respect of obligations of
third persons evidenced by note, debenture or other like written obligation of
such third persons to pay money.
The term "Finance Business" is defined to mean the business of making loans,
extending credit, or providing financial accommodations to any person and such
activities as may be incidental thereto; including, but not limited to: the
purchase of obligations growing out of the sale or lease of all types of
consumer, commercial and industrial property; the making of loans to
individuals and business enterprises, including the extension of wholesale or
floor plan accommodations to permit distributors and dealers to carry
inventories for resale; factoring; leasing of tangible personal property to
others; mortgage brokerage and servicing; and other business of a similar
character to the extent that other companies similarly situated, within the
limits of sound trade practice, may have heretofore engaged or may hereafter
engage in such other business.
The term "Junior Subordinated Debt" is defined to mean all Debt of the
Company which is by its terms made subordinate and junior to Senior Debt and
Subordinated Debt.
The term "Lien" is defined to mean any mortgage, pledge, security interest
or lien.
The term "Restricted Subsidiary" is defined to mean any Subsidiary of the
Company or of a Restricted Subsidiary (i) which is primarily engaged in the
Finance Business, (ii) which conducts such Finance Business primarily in the
United States and (iii) of which the Company and/or a Restricted Subsidiary
owns 51% or more of each class of its Voting Stock.
The term "Senior Debt" is defined to mean all Debt of the Company which is
not by its terms made subordinate or junior in right of payment with respect
to the general assets of the Company to any other Debt of the Company.
The term "Subordinated Debt" is defined to mean all Debt of the Company
which is by its terms made subordinate or junior in right of payment to any
other Debt of the Company, except Junior Subordinated Debt.
The term "Subsidiary" is defined to mean any corporation of which more than
50% of the Voting Stock other than directors' qualifying shares (if any) shall
at the time be owned by the Company and/or one or more Subsidiaries.
The term "Voting Stock" is defined to mean stock of the class or classes
having general voting power under ordinary circumstances to elect at least a
majority of the board of directors, managers or trustees of such corporation
(irrespective of whether or not at the time stock of any other class or
classes shall have or might have voting power by reason of the happening of
any contingency).
CERTAIN RESTRICTIONS
The Company agrees in each Indenture that it will not, and will not permit
any Restricted Subsidiary to, create, incur or assume any Lien on property of
any character of the Company or any Restricted Subsidiary to secure
indebtedness for money borrowed, incurred, issued, assumed or guaranteed by
the Company or any Restricted Subsidiary ("indebtedness") unless: (1) the Lien
equally and ratably secures the Securities and the indebtedness (subject, in
the case of Securities constituting either Subordinated Debt or Junior
Subordinated Debt, to subordination of respective rights of payment as
provided in the Subordinated Indenture or the Junior Subordinated Indenture,
as the case may be); or (2) the Lien is on property or shares of stock of a
corporation at the time the corporation becomes a Restricted Subsidiary or
merges into or consolidates with the Company or a Restricted Subsidiary; or
(3) the Lien is on property at the time the Company or a Restricted Subsidiary
acquires the property; or (4) the Lien secures indebtedness incurred to
finance all or part of the purchase price or cost of construction of property
of the Company or a Restricted Subsidiary; or (5) the Lien secures
indebtedness of a
12
<PAGE>
Restricted Subsidiary owing to the Company or another Restricted Subsidiary;
or (6) the Lien is on property of a person at the time the person transfers or
leases all or substantially all of its assets to the Company or a Restricted
Subsidiary; or (7) the Lien is in favor of a government or governmental entity
and is for taxes or assessments or secures payments pursuant to a contract or
statute; or (8) the Lien arises out of a judgment, decree or court order or
the Lien arises in connection with other proceedings or actions at law or in
equity; or (9) the Lien is on receivables of the Company, or cash, deposited
or otherwise subjected to a Lien as a basis for the issuance of bankers'
acceptances or letters of credit in connection with any financing of
customers' operations by the Company or any Restricted Subsidiary; or (10) the
Lien is on property (or any receivables arising in connection with the lease
thereof) acquired by the Company or a Restricted Subsidiary through
repossession, foreclosure or like proceeding and secures indebtedness incurred
at the time of such acquisition or at any time thereafter to finance all or
part of the cost of maintenance, improvement or construction relating thereto;
or (11) the Lien is created in favor of the Small Business Administration on
property owned by a Restricted Subsidiary which is organized as a small
business investment company under Title 15, 681, of the United States Code; or
(12) the Lien extends, renews or replaces in whole or in part a Lien
enumerated in clauses (1) through (11) above; or (13) the Lien secures
indebtedness of the Company or a Restricted Subsidiary and the sum of the
following does not exceed 10% of Consolidated Net Tangible Assets: (x) such
indebtedness plus (y) other indebtedness of the Company and its Restricted
Subsidiaries secured by Liens on property of the Company and its Restricted
Subsidiaries, excluding indebtedness secured by a Lien existing as of the date
of the Indenture and excluding indebtedness secured by a Lien permitted by one
of clauses (1) through (12) above. (Section 12.07).
Each Indenture provides that the Company may omit in any particular instance
to comply with any part or the entirety of the foregoing restriction on Liens
if the Holders of at least a majority in principal amount of the Debt
Securities at the time Outstanding of each series that is affected thereby
shall either waive such compliance in such instance or generally waive
compliance. (Section 12.08).
None of the Indentures limits the amount of Senior Debt, Subordinated Debt
or Junior Subordinated Debt that may be incurred by the Company. However,
under certain restrictive provisions of other indentures and agreements, the
Company has covenanted that it will not at any time permit the aggregate
principal amount of all Debt which is reflected on the consolidated balance
sheets of the Company to exceed 10 times consolidated stockholders' equity,
determined in accordance with generally accepted accounting principles. The
foregoing provisions are contained in certain indentures and agreements of
varying terms, the longest of which is currently scheduled to expire on May
15, 2002. None of the Indentures affects the Company's ability to terminate or
amend such provisions prior to such date.
MERGERS, CONSOLIDATIONS AND TRANSFERS OF ASSETS
Each Indenture provides that the Company will not consolidate with or merge
into any other corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any person, unless (a) the corporation
formed by such consolidation or into which the Company is merged or the person
which shall have acquired by conveyance or transfer, or which leases such
properties and assets shall be a corporation organized and existing under the
laws of the United States, or any State or the District of Columbia, and shall
assume payment of the principal of (and premium, if any) and interest, if any,
on the Debt Securities and the performance or observance of every covenant to
be performed or observed by the Company under the Indenture, (b) immediately
thereafter, no Event of Default (or event which, with notice or lapse of time,
or both, would be such) shall have happened and be continuing and (c) certain
other conditions have been met. (Section 10.01). If any such transaction were
to occur, then, provided that all such conditions were satisfied, the Company
would be discharged from all of its obligations and covenants under the
Indenture and the Debt Securities. (Section 10.02).
PAYMENT AND TRANSFER
Principal of, premium, if any, and interest, if any, on Fully Registered
Securities is to be payable at the Corporate Trust Office of the Trustee under
the applicable Indenture or any other office maintained by the
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Company for such purposes, provided that payment of interest, if any, on Fully
Registered Securities may be made at the option of the Company by check mailed
to the persons in whose names such Securities are registered at the close of
business on the day or days specified in the applicable Prospectus Supplement.
(Sections 3.08, 3.12). The principal of, premium, if any, and interest, if
any, on Debt Securities in other forms will be payable in such manner and at
such place or places as may be designated by the Company and specified in the
applicable Prospectus Supplement. (Section 3.12).
Fully Registered Securities may be transferred or exchanged at the Corporate
Trust Office of the Trustee under the applicable Indenture or at any other
office or agency maintained by the Company for such purposes, subject to the
limitations in the applicable Indenture, without the payment of any service
charge except for any tax or governmental charge incidental thereto.
Provisions with respect to the transfer and exchange of Debt Securities in
other forms will be set forth in the applicable Prospectus Supplement.
(Section 3.05).
BOOK ENTRY, DELIVERY AND FORM
If the accompanying Prospectus Supplement so indicates, the Debt Securities
will be represented by one or more certificates (the "Global Securities"). The
Global Security representing Debt Securities will be deposited with, or on
behalf of, The Depository Trust Company ("DTC") or other successor depository
appointed by the Company (DTC or such other depository is herein referred to
as the "Depository") and registered in the name of the Depository or its
nominee.
DTC currently limits the maximum denomination of any single Global Security
to $200,000,000. Therefore, for purposes hereof, "Global Security" refers to
the Global Security or Global Securities representing the entire issue of Debt
Securities.
DTC has advised the Company and any underwriters, dealers or agents named in
the accompanying Prospectus Supplement as follows: DTC is a limited-purpose
trust company organized under the laws of the State of New York, a member of
the Federal Reserve System, a "clearing corporation" within the meaning of the
New York Uniform Commercial Code and a "clearing agency" registered pursuant
to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC
was created to hold securities of its participants and to facilitate the
clearance and settlement of securities transactions among its participants in
such securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC's participants include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations,
some of which (and/or their representatives) own DTC. Access to DTC's book-
entry system is also available to others, such as banks, brokers, dealers and
trust companies, that clear through or maintain a custodial relationship with
a participant, either directly or indirectly.
Upon the issuance by the Company of Debt Securities represented by a Global
Security, DTC will credit, on its book-entry registration and transfer system,
the respective principal amounts of the Debt Securities represented by such
Global Security to the accounts of participants. The accounts to be credited
shall be designated by the underwriters, dealers or agents. Ownership of
beneficial interests in the Global Security will be limited to participants or
persons that hold interests through participants. Ownership of beneficial
interests in Debt Securities represented by the Global Security will be shown
on, and the transfer of that ownership will be effected only through, records
maintained by DTC (with respect to interests of participants in DTC), or by
participants in DTC or persons that may hold interests through such
participants (with respect to persons other than participants in DTC). The
laws of some states require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and such
laws may impair the ability to transfer beneficial interests in the Global
Security.
So long as the Depository for the Global Security, or its nominee, is the
registered owner of the Global Security, the Depository or its nominee, as the
case may be, will be considered the sole owner or holder of the
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Debt Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as provided below, owners of beneficial interests
in Debt Securities represented by the Global Security will not be entitled to
have Debt Securities represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of Debt
Securities in definitive form and will not be considered the owners or holders
thereof under the applicable Indenture.
Payments of principal of and interest, if any, on the Debt Securities
represented by the Global Security registered in the name of DTC or its
nominee will be made by the Company through the Trustee under the applicable
Indenture or a paying agent (the "Paying Agent"), which may also be the
Trustee under the applicable Indenture to DTC or its nominee, as the case may
be, as the registered owner of the Global Security. Neither the Company, the
Trustee, nor the Paying Agent will have any responsibility or liability for
any aspect of the records relating to or payments made on account of
beneficial ownership interests of the Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company has been advised that DTC, upon receipt of any payment of
principal or interest in respect of a Global Security, will credit immediately
the accounts of the related participants with payment in amounts proportionate
to their respective holdings in principal amount of beneficial interest in
such Global Security as shown on the records of DTC. The Company expects that
payments by participants to owners of beneficial interests in a Global
Security will be governed by standing customer instructions and customary
practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name" and will be the
responsibility of such participants.
If the Depository with respect to a Global Security is at any time unwilling
or unable to continue as Depository and a successor Depository is not
appointed by the Company within 90 days, the Company will issue certificated
notes in exchange for the Debt Securities represented by such Global Security.
SAME-DAY SETTLEMENT
If the accompanying Prospectus Supplement so indicates, settlement for the
Debt Securities will be made by the underwriters, dealers or agents in
immediately available funds and all applicable payments of principal and
interest on the Debt Securities will be made by the Company in immediately
available funds. Secondary trading in long-term notes and debentures of
corporate issuers is generally settled in clearinghouse or next-day funds. In
contrast, the Debt Securities subject to settlement in immediately available
funds will trade in the Depository's Same-Day Funds Settlement System until
maturity, and secondary market trading activity in the Debt Securities will
therefore be required by the Depository to settle in immediately available
funds. No assurance can be given as to the effect, if any, of settlement in
immediately available funds on trading activity in the Debt Securities.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Except as may otherwise be set forth in the applicable Prospectus
Supplement, each Indenture provides that the following events are Events of
Default with respect to any series of Debt Securities issued thereunder: (a)
default in the payment of the principal of (or premium, if any, on) any Debt
Security of such series at its maturity, upon redemption (if applicable) or
otherwise; (b) default for 30 days in the payment of any installment of
interest on any Debt Security of such series; (c) default for 60 days after
written notice in the performance of any other covenant in respect of the Debt
Securities of such series contained in such Indenture or in such Debt
Securities; (d) (i) an Event of Default with respect to any other series of
Debt Securities issued pursuant to such Indenture, or (ii) a default under any
bond, debenture, note or other evidence of indebtedness for money borrowed,
issued, assumed or guaranteed by the Company having unpaid principal in excess
of $2,000,000 or under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any such
indebtedness for money borrowed, whether such indebtedness now exists or shall
hereafter be created, which Event of Default or default, as the case may be,
in either such case, shall have resulted in such other
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series of Debt Securities or such indebtedness becoming or being declared due
and payable prior to the date on which it would otherwise have become due and
payable, without such other series of Debt Securities or such indebtedness
having been discharged or such declaration of acceleration having been
rescinded or annulled within a period of 60 days after there shall have been
given, by registered or certified mail, to the Company by the Trustee, or to
the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the outstanding Securities of such series, a written
notice specifying such Event of Default or default, as the case may be, and
requiring the Company to cause such indebtedness to be discharged or cause
such acceleration to be rescinded or annulled and stating that such notice is
a "Notice of Default" under the Indenture, unless at the end of such 60-day
period and thereafter the Event of Default or default is being contested in
good faith by the Company; (e) certain events of bankruptcy, insolvency or
reorganization, or court appointment of a receiver, liquidator or trustee of
the Company or its property; and (f) any other Event of Default provided in or
pursuant to the applicable resolution of the Board of Directors, or
established in the supplemental indenture under which such series of Debt
Securities is issued. (Section 7.01). No Event of Default with respect to a
particular series of Debt Securities necessarily constitutes an Event of
Default with respect to any other series of Securities issued under the same
or another Indenture.
Within 90 days after the occurrence of any default with respect to any
series of Debt Securities, the Trustee for such series must give the Holders
of such Debt Securities notice of all defaults of which it has knowledge and
that have not been cured or waived. Nevertheless, the Trustee may withhold
notice to the Holders of any series of Debt Securities of any default with
respect to such series (except a default in the payment of principal, premium
or interest) if and so long as it determines that the withholding of such
notice is in the interest of such Holders. (Section 8.02).
If an Event of Default with respect to any series of Debt Securities shall
have occurred and be continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the outstanding Securities of such series may
declare the principal thereof (or, in the case of a series of Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the Prospectus Supplement respecting the offer and sale of such Debt
Securities) to be due and payable immediately. (Section 7.02).
Each Indenture contains a provision entitling the Trustee to be indemnified
by the Holders of Debt Securities issued thereunder before proceeding to
exercise any right or power under such Indenture at the request of any
Holders. (Section 8.03). Each Indenture provides that the Holders of a
majority in principal amount of the outstanding Securities of any series
issued thereunder may, with certain exceptions, direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, with respect to the
Debt Securities of such series. (Section 7.12). The right of a Holder to
institute a proceeding with respect to the applicable Indenture is subject to
certain conditions precedent, including notice and indemnity to the applicable
Trustee, but each Holder has an absolute right to the receipt of principal,
premium, if any, and interest, if any, at the respective Stated Maturities of
the Debt Securities (or, in the case of a redemption, on the Redemption Date)
or to institute suit for the enforcement thereof. (Sections 7.07 and 7.08).
The Holders of at least a majority in principal amount of the outstanding
Securities of any series may, on behalf of the Holders of all such Securities,
waive any past default, except (a) a default in the payment of the principal
of (or premium, if any) or interest, if any, on any Security of such series at
maturity, upon redemption or otherwise, and (b) a default in respect of any
covenant or provision of the applicable Indenture that cannot be amended or
modified without the consent of the Holder of each of the outstanding
Securities affected. (Section 7.13).
Each Indenture requires the Company to furnish to the applicable Trustee
annual statements as to the fulfillment by the Company of its obligations
under such Indenture. (Section 12.05).
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MODIFICATION OF THE INDENTURES
Modifications and amendments of any Indenture may be made by the Company and
the applicable Trustee with the consent of the Holders of a majority in
principal amount of each series of the Debt Securities at the time outstanding
that is affected thereby, provided that no such modification or amendment may,
without the consent of the Holder of each of the outstanding Securities
affected thereby: (i) modify the terms of payment of principal or interest;
(ii) reduce the above-stated percentage of Holders of outstanding Securities
necessary to modify or amend such Indenture or to waive compliance by the
Company with any restrictive covenant; or (iii) subordinate the indebtedness
evidenced by the Debt Securities to any indebtedness of the Company other than
to subordinate Subordinated Debt to Senior Debt or to subordinate Junior
Subordinated Debt to Senior Debt and Subordinated Debt. (Section 11.02).
SATISFACTION AND DISCHARGE
Each Indenture provides that the Company shall be discharged from its
obligations under the Debt Securities of a series at any time prior to the
Stated Maturity or redemption thereof when (a) the Company has irrevocably
deposited with the Trustee, in trust, (i) sufficient funds in the currency or
currency unit in which the Debt Securities are denominated to pay the
principal of (and premium, if any), and interest to Stated Maturity (or
redemption) on, the Debt Securities of such series, or (ii) such amount of
direct obligations of, or obligations the principal of and interest on which
are fully guaranteed by, the government which issued the currency in which the
Debt Securities are denominated, and which are not subject to prepayment,
redemption or call, as will, together with the predetermined and certain
income to accrue thereon without consideration of any reinvestment thereof, be
sufficient to pay when due the principal of (and premium, if any), and
interest to Stated Maturity (or redemption) on, the Debt Securities of such
series, (b) the Company has paid all other sums payable with respect to the
Debt Securities of such series, (c) if the deposit occurs more than one year
prior to the Stated Maturity or redemption of the Debt Securities of such
series, the Company has delivered to the Trustee an opinion of recognized tax
counsel to the effect that such deposit and discharge will not result in
recognition by the Holders of the Debt Securities of such series of income,
gain or loss for Federal income tax purposes (other than income, gain or loss
which would have been recognized in like amount and at a like time absent such
deposit and discharge) and (d) the Company has delivered to the Trustee an
Opinion of Counsel as to certain other matters. Upon such discharge, the
Holders of the Debt Securities of such series shall no longer be entitled to
the benefits of the Indenture, except for the purposes of registration of
transfer and exchange of the Debt Securities of such series, and replacement
of lost, stolen or mutilated Debt Securities and shall look only to such
deposited funds or obligations for payment. (Sections 6.01 and 6.03). However,
each Indenture provides that, if the Trustee is unable to apply any money or
obligations deposited with the Trustee by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, or by reason
of the Trustee's inability to convert any such money or Government Obligations
into the currency or currency unit required to be paid with respect to the
Debt Securities of such series, the Company's obligations under the Indenture
will be reinstated until such time as the Trustee is permitted to apply all
such money and obligations in accordance with the provisions of such
Indenture. (Section 6.04).
THE SENIOR SECURITIES
The Senior Securities are to be issued under one of the Senior Indentures.
Each series of Senior Securities will constitute Senior Debt and will rank
equally with each other series of Senior Securities. All Subordinated Debt
(including, but not limited to, all Subordinated Securities) and all Junior
Subordinated Debt (including, but not limited to, all Junior Subordinated
Securities) will be subordinated to the Senior Securities.
THE SUBORDINATED SECURITIES
The Subordinated Securities are to be issued under one of the Subordinated
Indentures. Each series of Subordinated Securities will constitute
Subordinated Debt and will rank equally with each other series of Subordinated
Securities. All Junior Subordinated Debt (including, but not limited to, all
Junior Subordinated
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Securities) will be subordinated to the Subordinated Securities, and the
Subordinated Securities will be subordinated to all Senior Debt (including,
but not limited to, all Senior Securities).
In the event of any insolvency or bankruptcy proceedings, and any
receivership, liquidation, reorganization or other similar proceedings in
connection therewith, relative to the Company or to its property, or if any
Subordinated Security is declared due and payable because of the occurrence of
an Event of Default, then, in either event, all principal of, premium, if any,
and interest, if any, on all Senior Debt will be paid in full before any
payment is made on such Subordinated Security. (Section 14.01 of the
Subordinated Indenture).
THE JUNIOR SUBORDINATED SECURITIES
The Junior Subordinated Securities are to be issued under one of the Junior
Subordinated Indentures. Each series of Junior Subordinated Securities will
rank equally with each other series of Junior Subordinated Securities. The
Junior Subordinated Securities will be subordinated to all Senior Debt
(including, but not limited to, all Senior Securities) and all Subordinated
Debt (including, but not limited to, all Subordinated Securities).
In the event of any insolvency or bankruptcy proceedings, and any
receivership, liquidation, reorganization or other similar proceedings in
connection therewith, relative to the Company or to its property, or if any
Junior Subordinated Security is declared due and payable because of the
occurrence of an Event of Default, then, in either event, all principal of,
premium, if any, and interest, if any, on all Senior Debt and all Subordinated
Debt will be paid in full before any payment is made on such Junior
Subordinated Security. (Section 14.01 of the Junior Subordinated Indenture).
As of June 30, 1995, the aggregate principal amount of Senior Debt
outstanding was $6.97 billion and there was no outstanding Subordinated Debt
or Junior Subordinated Debt.
CONCERNING SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION
Shawmut Bank Connecticut, National Association will serve as Trustee under a
Senior Indenture, a Subordinated Indenture and a Junior Subordinated
Indenture. It is anticipated that Shawmut will be appointed as Successor
Trustee for the Company under a senior indenture, dated as of February 24,
1993 between the Company and The First National Bank of Boston, as Trustee,
pursuant to which there have been six series of senior debt securities issued,
and under a junior subordinated indenture dated, as of February 24, 1993
between the Company and The First National Bank of Boston, as Trustee,
pursuant to which there have been no issuances. Shawmut is a depository of the
Company, has extended formal lines of credit to the Company and has performed
certain other services for the Company in the ordinary course of business.
DESCRIPTION OF WARRANTS
The following statements with respect to the Warrants are summaries of, and
subject to, the detailed provisions of a Warrant Agreement (the "Warrant
Agreement") to be entered into by the Company and a warrant agent to be
selected at the time of issue (the "Warrant Agent"), a form of which is filed
as an exhibit to the Registration Statement.
GENERAL
The Warrants, evidenced by Warrant certificates (the "Warrant
Certificates"), may be issued under the Warrant Agreement independently or
together with any Debt Securities offered by any Prospectus Supplement and may
be attached to or separate from such Debt Securities. If Warrants are offered,
the Prospectus Supplement will describe the terms of the Warrants, including
the following: (i) the offering price, if any; (ii) the designation, aggregate
principal amount, and terms of the Debt Securities purchasable upon exercise
of the Warrants; (iii) if applicable, the designation and terms of the Debt
Securities with which the Warrants are issued and the number
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of Warrants issued with each such Debt Security; (iv) if applicable, the date
on and after which the Warrants and the related Debt Securities will be
separately transferable; (v) the principal amount of Debt Securities
purchasable upon exercise of one Warrant and the price at which such principal
amount of Debt Securities may be purchased upon such exercise; (vi) the date
on which the right to exercise the Warrants shall commence and the date on
which such right shall expire; (vii) federal income tax consequences; (viii)
whether the Warrants represented by the Warrant Certificates will be issued in
registered or bearer form; and (ix) any other material terms of the Warrants.
Warrant Certificates may be exchanged for new Warrant Certificates of
different denominations and may (if in registered form) be presented for
registration of transfer at the corporate trust office of the Warrant Agent or
any Co-Warrant Agent, which will be listed in the Prospectus Supplement, or at
such other office as may be set forth therein. Warrantholders do not as such
have any of the rights of Holders of Debt Securities and are not entitled to
payments of principal of and interest, if any, on such Debt Securities.
EXERCISE OF WARRANTS
Warrants may be exercised by surrendering the Warrant Certificate at the
corporate trust office of the Warrant Agent or at the corporate trust office
of the Co-Warrant Agent, if any, with the form of election to purchase on the
reverse side of the Warrant Certificate properly completed and executed, and
by payment in full of the exercise price, as set forth in the Prospectus
Supplement. Upon the exercise of Warrants, the Warrant Agent or Co-Warrant
Agent, if any, will, as soon as practicable, deliver the Debt Securities in
authorized denominations in accordance with the instructions of the exercising
Warrantholder and at the sole cost and risk of such holder. If less than all
of the Warrants evidenced by the Warrant Certificate are exercised, a new
Warrant Certificate will be issued for the remaining amount of Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Securities in any of three ways: (i) through
underwriters or dealers; (ii) directly to a limited number of purchasers; or
(iii) through agents. The Prospectus Supplement with respect to the Offered
Securities will set forth the terms of the offering of the Offered Securities,
including the name or names of any underwriters, the purchase price of the
Offered Securities and the proceeds to the Company from such sale, any
underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers.
If underwriters are used in a sale of any Securities, such Securities will
be acquired by the underwriters for their own account and may be resold from
time to time in one or more transactions, either (i) at a fixed price or
prices, which may be changed; (ii) at market prices prevailing at the time of
sale; (iii) at prices relating to such prevailing market prices; or (iv) at
negotiated prices. The Securities may either be offered to the public through
underwriting syndicates represented by managing underwriters or may be offered
to the public directly by one or more underwriters. Unless otherwise set forth
in the Prospectus Supplement, the obligations of the underwriters to purchase
all of the Offered Securities will be subject to certain conditions precedent,
and the underwriters will be obligated to purchase all of the Offered
Securities if any are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
The Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any such agent involved in the
offer or sale of the Offered Securities will be named, and any commission
payable by the Company to such agent will be set forth, in the Prospectus
Supplement. Unless otherwise indicated in the Prospectus Supplement, any such
agent will be acting on a best efforts basis for the period of its
appointment.
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If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase Offered Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in
the future. Such contracts will be subject only to those conditions set forth
in the Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Agents, underwriters, dealers and other persons may be entitled, under
agreements entered into with the Company, to indemnification by the Company
against certain civil liabilities, including liabilities under the Securities
Act of 1933, or to contribution with respect to, certain payments that such
persons may be required to make in respect thereof. Agents, underwriters,
dealers, or such other persons may be customers of, engage in transactions
with, or perform services for, the Company in the ordinary course of business.
LEGAL OPINIONS
Certain legal matters in connection with the Securities have been passed
upon for the Company by Sylvia L. Bateman, Esq., Associate General Counsel,
Group General Counsel and Assistant Secretary of the Company, and for the
underwriters or agents, if any, by McDermott, Will & Emery, 227 W. Monroe
Street, Chicago, Illinois 60606. McDermott, Will & Emery from time to time
acts as counsel in certain matters for the Company and certain of its
subsidiaries.
EXPERTS
The financial statements and schedules incorporated in this Prospectus and
elsewhere in the Registration Statement by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1994 and the financial
statements for the five years ended December 31, 1994 from which the five-year
selected financial data included in this Prospectus have been derived, have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto. These financial statements,
schedules and five-year selected financial data forming a part of this
Prospectus and Registration Statement have been included or incorporated by
reference, as the case may be, herein in reliance upon the authority of said
firm as experts in giving such reports. The interim financial statements for
the six month periods ended June 30, 1994 and June 30, 1995 have not been
audited.
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LOGO HELLER FINANCIAL, INC.
