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As filed with the Securities and Exchange Commission on April 27, 1999
Registration No. 333-42325
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
AMENDMENT NO. 3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MALLINCKRODT INC.
(formerly Mallinckrodt Group Inc.)
(Exact name of registrant as specified in its charter)
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<TABLE>
<S> <C> <C>
New York 675 McDonnell Boulevard 36-1263901
(State or other jurisdiction of P.O. Box 5840 (I.R.S. Employer
incorporation or organization) St. Louis, MO 63134 Identification No.)
(314) 654-2000
</TABLE>
(Address, including zip code, and telephone number,
including area code, of registrant's Principal Executive Offices)
Roger A. Keller
Mallinckrodt Inc.
675 McDonnell Boulevard
P.O. Box 5840
St. Louis, MO 63134
(314) 654-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
John M. Reiss Michael A. Campbell
White & Case Mayer, Brown & Platt
1155 Avenue of the Americas 190 South LaSalle Street
New York, New York 10036 Chicago, Illinois 60603
(212) 819-8200 (312) 782-0600
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this registration statement as the
registrant shall determine.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
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If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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[LOGO]
$500,000,000
Mallinckrodt Inc.
Debt Securities
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Mallinckrodt Inc. (the "Company") may from time to time offer up to
$500,000,000 aggregate initial offering price of its debt securities (the "Debt
Securities"), on terms to be determined at the time of sale, and as more fully
described under "Description of the Securities." The accompanying Prospectus
Supplement (the "Prospectus Supplement") sets forth the specific designation,
the aggregate principal amount offered, authorized denominations, maturity,
purchase price, rate (which may be fixed or variable) and time of payment of
interest, any terms of redemption (including any sinking fund) and any other
specific terms of the Debt Securities in respect of which this Prospectus and
the Prospectus Supplement are being delivered (the "Securities"), together with
the terms of the offering and sale of the Securities.
The Company may sell Debt Securities to or through underwriters or dealers,
directly to one or more purchasers, through agents or through a combination of
the foregoing. See "Plan of Distribution." The accompanying Prospectus
Supplement sets forth the names of such underwriters or agents, the principal
amounts, if any, to be purchased by underwriters and the compensation, if any,
of such underwriters or agents.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
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.
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The date of this Prospectus is , 1999.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements, information statements and other information filed by the Company
can be inspected and copied at the public reference facilities maintained by
the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549, and at the following Regional Offices of the
Commission: New York Regional Office, Seven World Trade Center, New York, New
York 10048; and Chicago Regional Office, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can be obtained from the
Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Electronic filings filed through
the Commission's Electronic Data Gathering, Analysis and Retrieval system
("EDGAR") are publicly available through the Commission's home page on the
Internet at http://www.sec.gov. Such reports, proxy statements, information
statements and other information filed by 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 Chicago Stock Exchange, Inc., 440 South LaSalle Street,
Chicago, Illinois 60605; and the Pacific Stock Exchange, Incorporated, 233
South Beaudry Avenue, Los Angeles, California 90012 and 301 Pine Street, San
Francisco, California 94104.
The Company's Common Stock, $1 par value, is listed on the three
aforementioned stock exchanges.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus omits certain of the information contained
in the Registration Statement, and reference is hereby made to the
Registration Statement and to the exhibits thereto for further information
with respect to the Company and the Debt Securities. Any statements contained
herein concerning the provisions of 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 or otherwise filed with the
Commission. Each such statement is qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in this Prospectus by reference:
(1) The Company's Annual Report on Form 10-K for the year ended June 30,
1998 (as amended by Form 10-K/A No. 1 filed February 16, 1999).
(2) The Company's Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1998 (as amended by Form 10-Q/A No. 1 filed February 16,
1999), and December 31, 1998.
(3) The Company's current reports on Form 8-K filed on July 6, 1998 and
February 17, 1999.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date hereof and prior to the termination
of the offering of the Debt Securities shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing such
documents. Any statement contained in a document incorporated or deemed to be
incorporated
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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 hereby undertakes to provide without charge to each person to
whom a Prospectus is delivered a copy of any or all of the information that
has been incorporated by reference herein (other than exhibits to such
documents) upon written or oral request. Requests for such copies should be
directed to the Corporate Secretary, Mallinckrodt Inc., 675 McDonnell
Boulevard, St. Louis, MO 63134, telephone number (314) 654-2000.
FORWARD-LOOKING STATEMENTS
CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: The disclosures and analysis in this Prospectus and in the Prospectus
Supplement contain some "forward-looking" statements. Forward-looking
statements do not relate strictly to historical or current facts, but rather
give the Company's current expectations or forecasts of future events.
Forward-looking statements may be identified by their use of words such as
"plans," "expects," "will," "anticipates," "believes," and other words of
similar meaning. Such statements may address, among other things, the
Company's strategy for growth, product development, regulatory approvals, the
outcome of contingencies such as legal proceedings, market position,
expenditures, and financial results.
Forward-looking statements are based on current expectations of future
events. Such statements involve risks and uncertainties and actual results
could differ materially from those discussed. Among the factors that could
cause actual results to differ materially from those projected in any such
forward-looking statements are as follows: the effect of business and economic
conditions; the impact of competitive products and continued pressure on
prices realized by the Company for its products; constraints on supplies of
raw materials used in manufacturing certain of the Company's products;
capacity constraints limiting the production of certain products; difficulties
or delays in the development, production, testing, and marketing of products;
difficulties or delays in receiving required governmental or regulatory
approvals; market acceptance issues, including the failure of products to
generate anticipated sales levels; difficulties in rationalizing acquired
businesses and in realizing related cost savings and other benefits; the
effects of and changes in trade, monetary, and fiscal policies, laws, and
regulations; foreign exchange rates and fluctuations in those rates; the costs
and effects of legal and administrative proceedings, including environmental
proceedings and patent disputes involving the Company; difficulties or delays
in addressing "Year 2000" problems in the Company's operations or the
inability of major suppliers or customers to continue operations due to such
problems; and the risk factors reported from time to time in the Company's
filings with the Securities and Exchange Commission. The Company undertakes no
obligation to update any forward-looking statements as a result of future
events or developments.
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THE COMPANY
Mallinckrodt Inc. (the "Company" or "Mallinckrodt"), which was incorporated
in New York in 1909, is a global company serving selected healthcare markets.
The Company's products are instrumental in the delivery of healthcare
services and are sold primarily to hospitals and alternate care sites,
clinical laboratories and pharmaceutical manufacturers on a worldwide basis.
Healthcare products are influenced by a high degree of innovation and
technology, by regulation from agencies such as the U.S. Food and Drug
Administration, by industry standards and by markets served. They are
significantly affected by conditions within the healthcare industry, including
continuing legislative initiatives and public and private healthcare insurance
and reimbursement programs. The healthcare markets served by the Company are
respiratory, imaging and pharmaceuticals.
Respiratory. The respiratory products which help diagnose, monitor and treat
respiratory disorders are anesthesia and respiratory devices; pulse oximetry,
including monitors and sensors; critical care and portable ventilators;
medical gas, oxygen therapy and spirometry; sleep diagnostic and therapy; and
blood analysis products. Anesthesia and respiratory devices include continuous
core temperature monitoring systems, fluid warming and convective warm air
temperature management systems, and airway management products. Continuous
core temperature monitoring systems and temperature management systems are
utilized both in surgical procedures and post-operatively. The airway
management product line consists of tracheal tubes, a full range of
disposables used in hospitals to connect the airway management products to
anesthesia and ventilation machines, and tracheostomy tubes which are used in
hospitals and alternate site facilities for maintaining airways during
respiratory care. Pulse oximetry products, including monitors and sensors,
allow clinicians to monitor both oxygen saturation levels in the bloodstream
and pulse rates of patients in a variety of clinical settings and the home.
Ventilators assist or automatically perform a breathing function for patients
requiring respiratory support. The medical gas, oxygen therapy and spirometry
products cover the entire range of oxygen therapy functions, from oxygen
concentrators to portable liquid oxygen. Sleep diagnostic and therapy products
are used to diagnose sleep problems and to monitor and treat sleep disorders.
Blood analysis products include blood hemoglobin and glucose analysis systems
for use in hospitals and alternate site facilities. The respiratory products
are purchased for use throughout the hospital, including intermediate care and
step-down units, labor and delivery rooms, emergency rooms and general care
floors, and are marketed and sold into the alternate site care market,
including surgicenters, subacute care and skilled nursing facilities,
physicians' offices, clinics, ambulatory care settings, and the growing
alternate care setting in the home. These products are sold in the major
markets of the world, principally through a direct sales force, assisted by
clinical consultants and specialists, corporate account managers, and
distributors in the United States and internationally. The Company also
provides maintenance service programs that support customers during all stages
of product ownership.
Imaging. The imaging products are used in radiology, cardiology and nuclear
medicine. Radiology and cardiology products include x-ray contrast media
(ionic and nonionic), ultrasound contrast agents, magnetic resonance imaging
agents, and catheters for use in studies of the cardiovascular system, brain,
abdominal organs, renal system, and other areas of the body to aid in
diagnosis and therapy. These products are marketed throughout the world
through a direct sales force and distributors. Nuclear medicine products
consist of radiopharmaceuticals used to provide images of numerous body
organs, anatomy and function, and to diagnose and treat diseases. Nuclear
medicine products are sold to hospitals and clinics in the United States by
both a direct sales force and through a nationwide network of nuclear
pharmacies. Internationally, nuclear medicine products are marketed through a
direct sales force and distributors.
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Pharmaceuticals. The pharmaceuticals products include analgesics such as
acetaminophen used to control pain and fever; codeine salts, morphine and
other opium-based narcotics used to treat pain and coughs; and peptides which
are used in many new pharmaceuticals. Other pharmaceuticals products include
laboratory chemicals used in analysis and microelectronic chemicals used in
the semiconductor industry; Toleron brand of ferrous fumarate which stimulates
the formation of red blood cells; magnesium stearate for use as a tableting
aid in pharmaceuticals; potassium chloride for use as a potassium supplement
in pharmaceuticals and nutritionals; and other salts, chemicals and reagents
used in the production of pharmaceutical and food products. The
pharmaceuticals products are sold primarily through distributors and by a
direct sales force to the pharmaceutical industry for use in the manufacture
of dosage form drugs. Narcotic prescription chemicals are sold directly to
pharmaceutical manufacturers, pharmaceutical dosage products are sold directly
to drug wholesalers and chain pharmacies, and opiate addiction products are
sold primarily to clinics. Laboratory chemical products, which include
thousands of high-purity reagent chemicals used in research and development
and analytical laboratories, are sold primarily through distributors to
medical, industrial, educational and governmental laboratories. A direct sales
force is used to offer microelectronic chemicals and photoresist strippers to
worldwide semi-conductor chip producers.
The Company's corporate headquarters is located at 675 McDonnell Boulevard,
St. Louis, Missouri 63134, and the telephone number is (314) 654-2000.
USE OF PROCEEDS
Except as otherwise noted in any Prospectus Supplement, the net proceeds
from the sale of the Debt Securities will be used primarily for debt
refinancing in the manner described in any Prospectus Supplement. In addition,
a portion of such proceeds may be added to the general funds of the Company
and may be used for general corporate purposes. Pending such a use, some
portion of such funds may be invested in short-term marketable securities.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Six months ended Year ended June 30,
December 31, ------------------------
1998 1998 1997 1996 1995 1994
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Ratio of earnings to fixed charges.... 3.0 (1) 5.9 4.7 4.7 3.5
</TABLE>
(1) Earnings were inadequate to cover fixed charges for the year ended June
30, 1998 because of noncash charges directly related to the August 28,
1997 acquisition of Nellcor Puritan Bennett Incorporated ("Nellcor"). The
earnings deficiency was approximately $250 million. The acquisition was
accounted for as a purchase. Intangible assets directly related to the
Nellcor acquisition included purchased research and development of $308.3
million. The purchased research and development represents the value of
numerous new medical devices and other products/technologies in all major
product lines that were in various stages of development and had not
reached technological feasibility at the date of acquisition. This
intangible asset, which had no tax benefit, was charged to results from
continuing operations during the first quarter of fiscal 1998. In
addition, the sale of Nellcor inventories stepped up to fair value at
acquisition resulted in charges of $75.4 million, $46.7 million net of
taxes, in fiscal 1998. The pretax charges for purchased research and
development and inventory stepped up to fair value associated with Aero
Systems, a division of Nellcor which was sold and reclassified to
discontinued operations in the fourth quarter of fiscal 1998, were $2.0
million and $1.0 million, respectively. Excluding these noncash
acquisition-related charges, the ratio of earnings to fixed charges would
have been 2.1.
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The ratio of earnings to fixed charges is based on earnings from continuing
operations and has been computed on a total enterprise basis. Earnings
represent income from continuing operations before income taxes and fixed
charges, net of capitalized interest. Fixed charges consist of interest
expense before reduction for capitalized interest, the portions of rental
expense which are representative of the interest factors in the leases, and
amortization of debt discount and expenses.
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DESCRIPTION OF THE SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Securities to which any Prospectus Supplement may
relate. The Debt Securities are to be issued under an Indenture dated as of
March 15, 1985, as amended and restated as of February 15, 1995 and as may be
further amended and supplemented (the "Indenture"), between the Company and
First Trust of New York, National Association, as trustee (the "Trustee"), a
copy of which is filed as an exhibit to the Registration Statement. The
particular terms of the Securities and the extent, if any, to which such
general provisions may apply to the Securities will be described in the
Prospectus Supplement relating to such Securities.
The following summary of the material provisions of the Indenture does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, all the provisions of the Indenture, including the definition
therein of certain terms. Wherever particular articles, sections or defined
terms of the Indenture are referred to, it is intended that such articles,
sections or defined terms shall be incorporated herein by reference.
General
The Indenture does not limit the aggregate principal amount of debentures,
notes or other evidences of indebtedness which may be issued thereunder (such
debentures, notes or other evidences of indebtedness issued under the
Indenture being herein referred to as the "Securities"). The Indenture
provides that Securities may be issued from time to time in one or more
series. The Securities will be unsecured obligations ranking equally with each
other and with other unsecured and unsubordinated indebtedness of the Company.
The Prospectus Supplement relating to the particular Securities offered
thereby will describe the following terms of the Securities: (1) the title of
the Securities; (2) any limit on the aggregate principal amount of the
Securities; (3) the record date for determining the persons to whom any
interest on any Securities of the series will be payable; (4) the date or
dates on which the principal of the Securities will be payable; (5) the rate
or rates (or formula for determining such rates) at which the Securities of
the series will bear interest, if any, the date or dates from which such
interest will accrue, the interest payment dates on which such interest will
be payable and the record dates for the determination of Holders to whom
interest is payable; (6) whether the interest rate or interest rate formula
for Securities of the series may be reset at the option of the Company or
otherwise, and the date or dates on which such interest rate or interest rate
formula may be reset; (7) the place or places where the principal and interest
on the Securities of the series will be payable and the place or places where
the Securities may be surrendered for registration of transfer or exchange;
(8) the date, if any, after which the Securities may, pursuant to any optional
or mandatory redemption provisions, be redeemed, in whole or in part, and the
other detailed terms and provisions of any such optional or mandatory
redemption provisions; (9) any mandatory or optional sinking fund or analogous
provisions; (10) the currency or the composite currency in which the
Securities are denominated (the "Specified Currency"); (11) the currency or
currencies of payment of principal of and any premium and interest on the
Securities if other than the Specified Currency; (12) any index used to
determine the amount of payments of principal of and any premium and interest
on the Securities; (13) any additional covenants applicable to the Securities;
and (14) any other terms of the Securities (which terms will not be
inconsistent with the provisions of the Indenture). Unless otherwise indicated
in the Prospectus Supplement, principal of (and premium, if any) and interest,
if any, on the Securities will be payable, and transfers of the Securities
will be registrable, at the Corporate Trust Office of the Trustee (currently
located at 100 Wall Street, Suite 1600, New York, New York 10005), provided
that at the option of the Company payment of interest may be made by check
mailed to the address of the person entitled thereto as it appears in the
Security Register. (Sections 3.01, 3.03, 3.06 and 5.02)
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Unless otherwise indicated in the Prospectus Supplement, the Securities will
be issued only in fully registered form without coupons in denominations of
1,000 units of the Specified Currency or any integral multiple thereof.
(Section 3.02) No service charge will be made for any registration of transfer
or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. (Section 3.06) If any of the Securities are denominated in a
Specified Currency other than U.S. Dollars or if the principal, premium and/or
interest with respect to any series of Securities is payable in a Specified
Currency other than U.S. Dollars, the restrictions, elections, general tax
considerations, specific terms and other information with respect to such
issue of Securities related to such Specified Currency will be set forth in
the applicable Prospectus Supplement. The Company shall not be required to (i)
issue, register the transfer of, or exchange Securities of any series during
the period from 15 days prior to the mailing of notice of redemption of
Securities of that series to the date of such mailing or (ii) register the
transfer of or exchange any Security so selected for redemption, except the
unredeemed portion of any Security being redeemed in part. (Section 3.06)
Securities may be issued under the Indenture as Original Issue Discount Debt
Securities to be sold at a substantial discount below their principal amount.
Federal income tax and other considerations applicable to any Security that is
issued with "original issue discount" for Federal income tax purposes (which
may include an Original Issue Discount Debt Security) will be described in the
Prospectus Supplement relating thereto. The Prospectus Supplement may indicate
terms for redemption at the option of a Holder. Unless otherwise indicated in
the Prospectus Supplement, the covenants contained in the Indenture and the
Securities would not provide for redemption at the option of a Holder nor
afford Holders protection in the event of a highly leveraged or other
transaction that may adversely affect Holders.
Certain Definitions
The following terms are defined substantially as follows in Section 1.01 of
the Indenture and are used herein as so defined.
Consolidated Net Tangible Assets. (a) The total amount of assets (less
applicable reserves and other properly deductible items) after deducting
therefrom (i) all liabilities and liability items, except for indebtedness
payable by its terms more than one year from the date of incurrence thereof
(or renewable or extendible at the option of the obligor for a period ending
more than one year after such date of incurrence), capitalized rent, capital
stock and surplus, surplus reserves and deferred income taxes and credits and
other non-current liabilities, and (ii) all goodwill, trade names, trademarks,
patents, unamortized debt discount, unamortized expense incurred in the
issuance of debt, and other like intangibles (except prepaid royalties),
which, in each case, under generally accepted accounting principles would be
included on a consolidated balance sheet of the Company and its Restricted
Subsidiaries, less (b) loans, advances, equity investments and contingent
liabilities of every nature (other than accounts receivable arising from the
sale of merchandise in the ordinary course of business) at the time
outstanding which were made or incurred by the Company and its Restricted
Subsidiaries to, in or for Unrestricted Subsidiaries or to, in or for
corporations while they were Unrestricted Subsidiaries and which at the time
of computation are not Subsidiaries.
Principal Facility. Any manufacturing plant, warehouse, office building or
parcel of real property (including fixtures but excluding leases and other
contract rights which might otherwise be deemed real property) owned by the
Company or any Restricted Subsidiary, provided each such plant, warehouse,
office building or parcel of real property has a gross book value (without
deduction for any depreciation reserves) of in excess of two percent of the
Consolidated Net Tangible Assets of the Company and the Restricted
Subsidiaries, other than any such plant, warehouse, office building or parcel
of real property or portion thereof which, in the opinion of the Board of
Directors of the Company, is not of material importance to the business
conducted by the Company and its Subsidiaries taken as a whole.
Restricted Subsidiary. Any corporation in which the Company directly or
indirectly owns voting securities entitling it to elect a majority of the
directors and (a) which (i) existed as such on the date of
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the Indenture or is the successor, directly or indirectly, to, or owns,
directly or indirectly, any equity interest in, a corporation which so
existed, (ii) has its principal place of business and the principal location
of its assets in the United States (including its territories and possessions)
or Canada or both, (iii) has as its principal business a business other than
the financing of the acquisition or disposition of machinery, equipment,
inventory, accounts receivable and other real, personal and intangible
property or the owning, leasing, dealing in or developing of real property for
residential or office building purposes and (iv) substantially all of the
assets of which do not consist of the securities of a Subsidiary which is an
Unrestricted Subsidiary (as defined in the Indenture), or (b) which, pursuant
to the terms of the Indenture, is designated a Restricted Subsidiary by the
Company after the date of the Indenture; provided, however, the Company may
not designate a Subsidiary to be a Restricted Subsidiary if the Company would
thereby breach any covenant or agreement contained in the Indenture (on the
assumption that any transaction to which such Subsidiary was a party at the
time of such designation and which would have given rise to Secured Debt or
constituted a Sale and Leaseback Transaction at the time it was entered into
had such Subsidiary then been a Restricted Subsidiary was entered into at the
time of such designation). None of the existing principal operating
subsidiaries of the Company are Restricted Subsidiaries under the Indenture.
Sale and Leaseback Transaction. Any sale or transfer made by the Company or
one or more Restricted Subsidiaries (except a sale or transfer made to the
Company or one or more Restricted Subsidiaries) of any Principal Facility
which (in the case of a Principal Facility which is a manufacturing plant,
warehouse, office building or developed mining property) has been in
operation, use or commercial production (exclusive of test and start-up
periods) by the Company or any Restricted Subsidiary for more than 120 days
prior to such sale or transfer, or which (in the case of a Principal Facility
which is a parcel of real property other than a manufacturing plant,
warehouse, office building or developed mining property) has been owned by the
Company or any Restricted Subsidiary for more than 120 days prior to such sale
or transfer, if such sale or transfer is made with the intention of leasing,
or as part of an arrangement involving the lease, of such Principal Facility
to the Company or a Restricted Subsidiary (except a lease for a period not
exceeding 36 months, made with the intention that the use of the leased
Principal Facility by the Company or such Restricted Subsidiary will be
discontinued on or before the expiration of such period). The following shall
not be deemed to create or be defined to be a Sale and Leaseback Transaction:
(a) (i) the sale or other transfer of minerals in place for a period of time
until, or in an amount such that, the purchaser will realize therefrom a
specified amount of money (however determined) or a specified amount of such
minerals, or (ii) any nonrecourse royalty or lease arrangement or any interest
in property of the character commonly referred to as a "production payment" or
(b) Secured Debt otherwise permitted pursuant to the Indenture.
Secured Debt. Any indebtedness for money borrowed by, or evidenced by a note
or other similar instrument of, the Company or a Restricted Subsidiary, and
any other indebtedness of the Company or a Restricted Subsidiary on which by
the terms of such indebtedness interest is paid or payable, including
obligations evidenced or secured by leases, installment sales agreements or
other instruments in connection with industrial development bonds as defined
in Section 103(c)(2) of the Internal Revenue Code of 1954 (other than
indebtedness owed by a Restricted Subsidiary to the Company, by a Restricted
Subsidiary to another Restricted Subsidiary or by the Company to a Restricted
Subsidiary), which in any such case is secured by (a) a Security Interest in
any Principal Facility, or (b) a Security Interest in any shares of stock
owned directly or indirectly by the Company in a Restricted Subsidiary or in
indebtedness for money borrowed by a Restricted Subsidiary from the Company or
another Restricted Subsidiary. The securing in the foregoing manner of any
previously unsecured debt shall be deemed to be the creation of Secured Debt
at the time such security is given. The amount of Secured Debt at any time
outstanding shall be the maximum aggregate amount then owing thereon by the
Company and its Restricted Subsidiaries.
Security Interest. Any mortgage, pledge, lien, encumbrance or other security
interest which secures payment or performance of an obligation.
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Senior Funded Debt. Any obligation of the Company or any Restricted
Subsidiary which, as of the date of its creation, was payable by its terms
more than one year from the date of incurrence thereof (or renewable or
extendible at the option of the obligor for a period ending more than one year
after such date of incurrence), which under generally accepted accounting
principles should be shown as a liability on a consolidated balance sheet of
the Company and its Restricted Subsidiaries, and which, in the case of such an
obligation of the Company, is not subordinate and junior in right of payment
to the prior payment of the Debt Securities.
Certain Covenants of the Company
Restriction on Creation of Secured Debt. The Indenture provides that so long
as the Securities of any series remain outstanding, the Company will not, and
will not cause or permit a Restricted Subsidiary to, create, incur, assume or
guarantee any Secured Debt or create any Security Interest securing any
indebtedness existing on the date of the Indenture which would constitute
Secured Debt if it were secured by a Security Interest in a Principal Facility
unless such Securities and any other indebtedness of or guaranteed by the
Company or a Restricted Subsidiary which is so entitled will be secured
equally and ratably (subject to applicable priorities of payment) by the
Security Interest securing such Secured Debt or indebtedness, except that the
Company and its Restricted Subsidiaries may incur certain Secured Debt without
so securing the Securities. Among such permitted Secured Debt is indebtedness
secured by (i) certain Security Interests to secure payment of the cost of
acquisition, construction, development or improvement of certain types of
property, (ii) Security Interests on property at the time of acquisition
assumed by the Company or a Restricted Subsidiary, or on the property or on
the outstanding shares or indebtedness of a corporation or firm at the time it
becomes a Restricted Subsidiary or is merged into or consolidated with the
Company or a Restricted Subsidiary or the Company or a Restricted Subsidiary
acquires the properties of such corporation or firm as an entirety or
substantially as an entirety, (iii) Security Interests arising from
conditional sales agreements or title retention agreements with respect to
property acquired by the Company or any Restricted Subsidiary, (iv) Security
Interests securing indebtedness of a Restricted Subsidiary owing to the
Company or to another Restricted Subsidiary, (v) mechanics' and other
statutory liens arising in the ordinary course of business (including
construction of facilities) in respect of obligations which are not due or
which are being contested in good faith, (vi) liens for taxes, assessments or
governmental charges not yet due or for taxes, assessments or governmental
charges which are being contested in good faith, (vii) Security Interests
(including judgment liens) arising in connection with legal proceedings so
long as such proceedings are being contested in good faith and, in case of
judgment liens, execution thereon is stayed, (viii) certain landlords' liens
on fixtures, (ix) Security Interests to secure partial, progress, advance or
other payments or indebtedness incurred for the purpose of financing
construction on or improvement of property subject to such Security Interests
and (x) certain Security Interests in favor, or made at the request, of
governmental bodies. Additionally, such permitted Secured Debt includes (with
certain limitations) any extension, renewal or refunding, in whole or in part,
of any Secured Debt permitted at the time of the original incurrence thereof.
In addition to the foregoing, the Company and its Restricted Subsidiaries may
have Secured Debt, without equally and ratably securing the Securities, if the
sum of (a) the amount of Secured Debt entered into after the date of the
Indenture and otherwise prohibited by the Indenture plus (b) the aggregate
value of Sale and Leaseback Transactions entered into after the date of the
Indenture and otherwise prohibited by the Indenture does not exceed ten
percent of Consolidated Net Tangible Assets. (Section 5.05)
Restriction on Sale and Leaseback Transactions. The Indenture provides that
so long as the Securities of any series remain outstanding, the Company will
not, and will not permit any Restricted Subsidiary to, enter into any Sale and
Leaseback Transaction unless (a) the Company or such Restricted Subsidiary
would be entitled to incur Secured Debt permitted by the Indenture only by
reason of the provision described in the last sentence of the preceding
paragraph equal in amount to the net proceeds of the property sold or
transferred or to be sold or transferred pursuant to such Sale and Leaseback
Transaction and secured by a Security Interest on the property to be leased
without
9
<PAGE>
equally and ratably securing the Securities, or (b) the Company or a
Restricted Subsidiary shall apply within one year after the effective date of
such Sale and Leaseback Transaction, or shall have committed within one year
after the effective date of such Sale and Leaseback Transaction to apply, an
amount equal to such net proceeds (x) to the acquisition, construction,
development or improvement of properties, facilities, or equipment used for
operating purposes which are, or upon such acquisition, construction,
development, or improvement will be, a Principal Facility or Facilities or a
part thereof or (y) to the redemption of Securities or (z) to the repayment of
Senior Funded Debt of the Company or of any Restricted Subsidiary (other than
Senior Funded Debt owed to any Restricted Subsidiary), or in part to such
acquisition, construction, development or improvement and in part to such
redemption and/or repayment; provided that, in lieu of applying an amount
equal to such net proceeds to such redemption the Company may, within one year
after such sale or transfer, deliver to the Trustee Securities (other than
Securities made the basis of a reduction in a mandatory sinking fund payment)
for cancellation and thereby reduce the amount to be applied to the redemption
of Securities by an amount equivalent to the aggregate principal amount of the
Securities so delivered. (Section 5.06)
Restrictions on Transfer of Principal Facility to Certain Subsidiaries. The
Indenture provides that, so long as the Securities of any series are
outstanding, the Company will not, and will not cause or permit any Restricted
Subsidiary to, transfer any Principal Facility to any Subsidiary which was not
a Restricted Subsidiary at the time of such transfer unless it shall apply
within one year of the effective date of such transaction, or shall have
committed within one year of such effective date to apply, an amount equal to
the fair value of such Principal Facility at the time of such transfer (i) to
the acquisition, construction, development or improvement of properties,
facilities or equipment which are, or upon such acquisition, construction,
development or improvement will be, a Principal Facility or Facilities or a
part thereof or (ii) to the redemption of Securities or (iii) to the repayment
of Senior Funded Debt of the Company or any Restricted Subsidiary (other than
Senior Funded Debt owed to any Restricted Subsidiary), or in part to such
acquisition, construction, development or improvement and in part to such
redemption and/or repayment. In lieu of applying all or any part of such
amount to such redemption the Company may, within one year of such transfer,
deliver to the Trustee Securities of any series (other than Securities made
the basis of a reduction in a mandatory sinking fund payment) for cancellation
and thereby reduce the amount to be applied to the redemption of Securities by
an amount equivalent to the aggregate principal amount of the Securities so
delivered. (Section 5.07)
Merger
The Indenture provides that the Company may consolidate with, or sell or
convey all or substantially all of its assets to, or merge into any other
corporation, provided that in any such case, (i) the successor corporation
shall be a corporation organized and existing under the laws of the United
States of America or a State thereof and such corporation shall expressly
assume the due and punctual payment of the principal of (and premium, if any)
and interest on all the Securities, according to their tenor, and the due and
punctual performance and observance of all the covenants and conditions of the
Indenture to be performed by the Company by supplemental indenture
satisfactory to the Trustee, executed and delivered to the Trustee by such
corporation; and (ii) immediately after giving effect to such transaction, no
default shall have occurred and be continuing. Notwithstanding the foregoing,
if, upon any such consolidation or merger of the Company with or into any
other corporation, or upon any sale or conveyance of the property of the
Company as an entirety or substantially as an entirety to any other
corporation, or upon any acquisition by the Company by purchase or otherwise
of all or any part of the properties of another corporation, any Principal
Facility would thereupon become subject to any Security Interest securing
indebtedness not permitted by the Indenture to be Secured Debt, the Company,
prior to such consolidation, merger, sale, conveyance or acquisition, will
secure the Securities outstanding, equally and ratably (subject to applicable
priorities of payment) with the debt secured by such Security Interest.
(Article Twelve)
10
<PAGE>
Modification of the Indenture
With the consent of the Holders of more than 50% in aggregate principal
amount of any series of Securities then outstanding, waivers, modifications
and alterations of the terms of the Indenture may be made which affect the
rights of the Holders of such series of Securities, except that no such
modification or alteration may be made which will (a) extend the time of
payment of the principal at maturity of, or the interest on, any such series
of Securities, or reduce principal or premium or the rate of interest, without
the consent of the Holder thereof, or (b) without the consent of all of the
Holders of any series of Securities then outstanding, reduce the percentage of
Securities of any such series, the Holders of which are required to consent
(i) to any such supplemental Indenture, (ii) to rescind and annul a
declaration that the Securities of any series are due and payable as a result
of the occurrence of an Event of Default, (iii) to waive any past default
under the Indenture and its consequences and (iv) to waive compliance with
certain other provisions contained in the Indenture. (Sections 5.09 and 11.02)
In addition, as indicated under "Events of Default" below, Holders of a
majority in aggregate principal amount of the Securities of any series then
outstanding may waive past defaults in certain circumstances and may direct
the Trustee in enforcement of remedies. The Company and the Trustee may,
without the consent of any Holders, modify and supplement the Indenture (i) to
evidence the succession of another corporation to the Company under the
Indenture, (ii) to evidence and provide for the replacement of the Trustee,
(iii) with the Company's concurrence, to add to the covenants of the Company
for the benefit of the Holders, (iv) to modify the Indenture to permit the
qualification of any supplemental indenture under the Trust Indenture Act of
1939 (the "Trust Indenture Act"), and for certain other purposes. (Section
11.01)
Defeasance, Satisfaction and Discharge Prior to Maturity or Redemption
Defeasance of any Series. If the Company shall deposit with the Trustee, in
trust, at or before maturity or redemption, lawful money or direct obligations
of the United States of America or obligations the principal of and interest
on which are guaranteed by the United States of America in such amounts and
maturing at such times that the proceeds of such obligations to be received
upon the respective maturities and interest payment dates of such obligations
will provide funds sufficient, in the opinion of a nationally recognized firm
of independent public accountants, to pay when due the principal (and premium,
if any) and interest to maturity or to the redemption date, as the case may
be, with respect to any series of Outstanding Securities, then the Company may
cease to comply with the terms of the Indenture, including the restrictive
covenants described above and the Events of Default described in clauses (d)
and (e) under "Events of Default" below, except for (1) the Company's
obligation to duly and punctually pay the principal of (and premium, if any)
and interest on such series of Securities if the Securities are not paid from
the money or securities held by the Trustee, (2) the Events of Default
described in clauses (a), (b), (c), (f) and (g) under "Events of Default"
below, and (3) certain other provisions of the Indenture including, among
others, those relating to registration, transfer and exchange, lost or stolen
securities, maintenance of place of payment and, to the extent applicable to
such series, the redemption and sinking fund provisions of the Indenture.
Defeasance of Securities of any series is subject to the satisfaction of
certain specified conditions, including, among others, (i) the absence of an
Event of Default at the date of the deposit, (ii) the perfection of the
Holders' security interest in such deposit, and (iii) the absence of any
conflicting interest of the Trustee under the Trust Indenture Act. (Section
13.02)
Satisfaction and Discharge of any Series. Upon the deposit of money or
securities contemplated above and the satisfaction of certain conditions, the
Company may also cease to comply with its obligation duly and punctually to
pay the principal of (and premium, if any) and interest on a particular series
of Securities, or with any Events of Default with respect thereto, and
thereafter the Holders of such series of Securities shall be entitled only to
payment out of the money or securities deposited with the Trustee. Such
conditions include, among others, except in certain limited circumstances
involving a deposit made within one year of maturity or redemption, (i) the
absence of an Event of
11
<PAGE>
Default at the date of deposit or on the 91st day thereafter, (ii) the
delivery to the Trustee by the Company of an opinion of nationally recognized
tax counsel, or receipt by the Company from, or publication of a ruling by,
the United States Internal Revenue Service, to the effect that Holders of the
Securities of such series will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit and discharge and will be
subject to Federal income tax on the same amounts and in the same manner and
at the same times as would have been the case if such deposit and discharge
had not occurred, and (iii) that such satisfaction and discharge will not
result in the delisting of the Securities of that series from any nationally
recognized exchange on which they are listed. (Section 13.01)
Federal Income Tax Consequences. Under current Federal income tax law, the
deposit and defeasance described above under "Defeasance of any Series" will
not result in a taxable event to any Holder of Securities or otherwise affect
the Federal income tax consequences of an investment in the Securities of any
series.
A deposit and discharge described above under "Satisfaction and Discharge of
any Series" may be treated as a taxable exchange of such Securities for
beneficial interests in the trust consisting of the deposited money or
securities. In that event, a Holder of Securities may be required to recognize
gain or loss equal to the difference between the Holder's adjusted basis for
the Securities and the amount realized by such Holder with respect to such
exchange (which generally will be the fair market value of the beneficial
interest in such trust). Thereafter, such Holder may be required to include in
income a share of the income, gain and loss of the trust. As described above,
it is generally a condition to such a deposit and discharge to obtain an
opinion of tax counsel, or receipt by the Company from, or publication of a
ruling by the United States Internal Revenue Service, to the effect that such
deposit and discharge will not alter the Holders' tax consequences that would
have been applicable in the absence of the deposit and discharge. Purchasers
of the Securities should consult their own advisors with respect to the tax
consequences to them of such deposit and discharge, including the
applicability and effect of tax laws other than Federal income tax law.
Events of Default
As to any series of Securities, an Event of Default is defined in the
Indenture as being: (a) default for 30 days in payment of any interest on the
Securities of such series; (b) failure to pay principal or premium with
respect to the Securities of such series, if any, when due; (c) failure in the
deposit of any sinking fund installment with respect to any series of
Securities when due; (d) failure to observe or perform any other covenant in
the Indenture or Securities of any series (other than a covenant or warranty,
a default in whose performance or whose breach is specifically dealt with in
the section of the Indenture governing Events of Default), if such failure
continues for 60 days after written notice by the Trustee or the Holders of at
least 25% in aggregate principal amount of the Outstanding Securities of such
series; (e) uncured or unwaived failure to pay principal of or interest on any
other obligation for borrowed money of the Company (including default under
any other series of Securities and including default by the Company on any
guaranty of an obligation for borrowed money of a Restricted Subsidiary)
beyond any period of grace with respect thereto if (i) the aggregate principal
amount of any such obligation is in excess of $10,000,000 and (ii) the default
in such payment is not being contested by the Company in good faith and by
appropriate proceedings; (f) certain events of bankruptcy, insolvency,
receivership or reorganization; or (g) any other Event of Default provided
with respect to Securities of that series. (Section 7.01) The Trustee or the
Holders of 25% in aggregate principal amount of the outstanding Securities of
any series may declare the Securities of such series immediately due and
payable upon the occurrence of any Event of Default (after expiration of any
applicable grace period); in certain cases, the Holders of a majority in
principal amount of the Outstanding Securities of any series may waive any
past default and its consequences, except a default in the payment of
principal, premium, if any, or interest (including sinking fund payments).
(Sections 7.01 and 7.07)
12
<PAGE>
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of a default with respect to any such series for which there are
Securities outstanding which is continuing, give to the Holders of such
Securities notice of all uncured defaults known to it (the term default to
include the events specified above without grace periods); provided that,
except in the case of default in the payment of principal (or premium, if any)
or interest on any of the Securities of any series or the payment of any
sinking fund installment on the Securities of any series, the Trustee shall be
protected in withholding such notice if it in good faith determines that the
withholding of notice is in the interest of the Securityholders. (Section
7.08)
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default with respect to any series of such
Securities shall occur and be continuing, the Indenture provides that the
Trustee shall be under no obligation to exercise any of its rights or powers
under the Indenture at the request, order or direction of any of the Holders
of Securities outstanding of any series unless such Holders shall have offered
to the Trustee reasonable indemnity. (Sections 8.01 and 8.02) The right of a
Holder to institute a proceeding with respect to the Indenture is subject to
certain conditions precedent including notice and indemnity to the Trustee,
but the Holder has a right to receipt of principal, premium, if any, and
interest (subject to certain limitations with respect to defaulted interest)
on their due dates or to institute suit for the enforcement thereof. (Section
7.04)
So long as the Securities of any series remain outstanding, the Company will
be required to furnish annually to the Trustee an Officers' Certificate
stating whether, to the best of the knowledge of the signers, the Company is
in default under any of the provisions of the Indenture, and specifying all
such defaults, and the nature thereof, of which they have knowledge. (Section
5.08) The Company will also be required to furnish to the Trustee copies of
certain reports filed by the Company with the Commission. (Section 6.03)
The Holders of a majority in principal amount of the Securities outstanding
of such series will have the right to direct the time, method and place for
conducting any proceeding for any remedy available to the Trustee, or
exercising any power or trust conferred on the Trustee, provided that such
direction shall be in accordance with law and the provisions of the Indenture.
(Section 7.07) The Trustee will be under no obligation to act in accordance
with such direction unless such Holders shall have offered the Trustee
reasonable security or indemnity against costs, expenses and liabilities which
may be incurred thereby. (Section 8.02)
Information Concerning the Trustee
First Trust of New York, National Association, Trustee under the Indenture,
is also the trustee for the Company's 9.875% Sinking Fund Debentures due March
15, 2011, the Company's 6% Notes due October 15, 2003, the Company's 7%
Debentures due December 15, 2013, the Company's 6.75% Notes due September 15,
2005, the Company's 6.5% Notes due November 15, 2007, the Company's 5.99%
Series 1998-A Bond Backed Asset Trust Certificates due 2000, and the Company's
6.3% Puttable Reset Securities PURS SM * due 2011 all of which have been
issued under the Indenture and are unsecured obligations of the Company
ranking equally with the Debt Securities.
- --------
* PURS is a service mark of Goldman, Sachs & Co.
13
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through underwriters or dealers,
directly to one or more purchasers, through agents or through a combination of
the foregoing. Unless otherwise set forth in the Prospectus Supplement, such
underwriters will include Goldman, Sachs & Co. acting alone or as a
representative of a group of underwriters. Goldman, Sachs & Co. may also act
as agent.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. In connection with the sale
of Debt Securities, underwriters may receive compensation from the Company or
from purchasers of Debt Securities for whom they may act as agents in the form
of discounts, concessions or commissions. Underwriters may sell Debt
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agents. Underwriters,
dealers and agents that participate in the distribution of Debt Securities may
be deemed to be underwriters, and any discounts or commissions received by
them from the Company and any profit on the resale of Debt Securities by them
may be deemed to be underwriting discounts and commissions, under the
Securities Act. Any such underwriter or agent will be identified, and any such
compensation received from the Company will be described in the Prospectus
Supplement.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Debt Securities may be entitled
to indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions
with which such contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such institutions must be
approved by the Company. The obligations of any purchaser under any such
contract will be subject to the condition that the purchase of the Debt
Securities shall not at the time of delivery be prohibited under the laws of
any jurisdiction to which such purchaser is subject. The underwriters and such
other agents will not have any responsibility in respect of the validity or
performance of such contracts.
Unless otherwise indicated in the Prospectus Supplement, the Company does
not intend to list any of the Debt Securities on a national securities
exchange. In the event the Debt Securities are not listed on a national
securities exchange, certain broker-dealers may make a market in the Debt
Securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given that any broker-
dealer will make a market in the Debt Securities or as to the liquidity of the
trading market for the Debt Securities, whether or not the Debt Securities are
listed on a national securities exchange. The Prospectus Supplement with
respect to any Securities will state, if known, whether or not any broker-
dealer intends to make a market in such Securities. If no such determination
has been made, the Prospectus Supplement will so state.
14
<PAGE>
LEGAL MATTERS
The legality of the Debt Securities will be passed upon by White & Case,
1155 Avenue of the Americas, New York, New York 10036, as counsel for the
Company, and by Mayer, Brown & Platt, 190 South LaSalle Street, Chicago,
Illinois 60603, as counsel for any underwriters or agents.
EXPERTS
The consolidated financial statements of the Company appearing in its Annual
Report on Form 10-K for the year ended June 30, 1998 (as amended by Form 10-
K/A No. 1 filed February 16, 1999) have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such consolidated financial statements
are incorporated herein by reference in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
15
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following statement sets forth the estimated amounts of expenses, other
than underwriting discounts and commissions, to be borne by Registrant in
connection with the distribution of the Securities.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee............ $147,500
Trustee's Fees................................................. 16,000*
Printing Expenses.............................................. 100,000*
Rating Agency Fees............................................. 100,000*
Accounting Fees and Expenses................................... 40,000*
Legal Fees and Expenses........................................ 75,000*
Blue Sky Fees and Expenses..................................... 5,000*
Miscellaneous.................................................. 15,000*
--------
Total Expenses............................................... $498,500*
========
</TABLE>
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*(Estimated)
Item 15. Indemnification of Directors and Officers.
The Corporation's Bylaws provide for indemnification, to the fullest extent
permitted by applicable law, of any of its directors and officers who are, or
have been, or are threatened to be, made a party to an action or proceeding,
whether civil or criminal, by reason of the fact that such director or officer
is a director or officer of the Corporation, against any judgments, fines,
amounts paid in settlement and expenses, including attorneys' fees, or any
appeal therein. The Bylaws also provide that additional indemnification may be
provided by the Corporation to other persons to the extent permitted by
applicable law.
The Corporation's Certificate of Incorporation provides that a current or
former director shall not be liable to the Corporation or its shareholders for
damages for any breach of duty except where liability is imposed by New York
State law.
The Corporation has insurance to indemnify its directors and officers,
within the limits of the Corporation's insurance policies, for those
liabilities in respect of which such indemnification insurance is permitted
under the laws of the State of New York. In addition, indemnity agreements are
in effect with each officer of the Corporation who serves on its Employee
Benefits Committee.
Reference is made to Sections 721-726 of the New York Business Corporation
Law ("B.C.L."), which are summarized below.
Section 721 of the B.C.L. provides that indemnification pursuant to the
B.C.L. shall not be deemed exclusive, provided that no indemnification may be
made if a judgment or other final adjudication adverse to the director or
officer established that (i) his acts were committed in bad faith or were the
result of active and deliberate dishonesty, and, in either case, were material
to the cause of action so adjudicated, or (ii) he personally gained in fact a
financial profit or other advantage to which he was not legally entitled.
Section 722 of the B.C.L. provides that a corporation may indemnify a
director or officer made, or threatened to be made, a party to any action,
whether derivative or nonderivative, or whether civil or
criminal, against judgments, fines, amounts paid in settlement and reasonable
expenses actually and
II-1
<PAGE>
necessarily incurred as a result of such action, if such director or officer
acted in good faith, for a purpose which he reasonably believed to be in the
best interests of the corporation and, in criminal actions or proceedings, in
addition, had no reasonable cause to believe that his conduct was unlawful. In
derivative actions, the statute provides that no indemnification shall be made
in respect of (1) a threatened action, or a pending action which is settled or
otherwise disposed of, or (2) any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation unless and to
the extent an appropriate court determines that the person is fairly and
reasonably entitled to indemnification.
Section 723 of the B.C.L. specifies the manner in which payment of such
indemnification may be authorized by the corporation. It provides that
indemnification by a corporation is mandatory in any case in which the
director or officer has been successful, whether on the merits or otherwise,
in defending an action. In the event that the director or officer has not been
successful or the action is settled, indemnification may be made by the
corporation (unless ordered by a court under Section 724 of the B.C.L.) only
if authorized by the appropriate corporate action as set forth in such Section
723. Section 724 of the B.C.L. provides that upon proper application by a
director or officer, indemnification shall be awarded by a court to the extent
authorized under Sections 722 and 723 of the B.C.L. Section 725 of the B.C.L.
contains certain other miscellaneous provisions affecting the indemnification
of directors and officers, including provision for the return of amounts paid
as indemnification if any such person is ultimately found not to be entitled
thereto.
Section 726 of the B.C.L. authorizes the purchase and maintenance of
insurance to indemnify (1) a corporation for any obligations which it incurs
as a result of the indemnification of directors and officers under the above
sections, (2) directors and officers in instances in which they may be
indemnified by a corporation under such sections, and (3) directors and
officers in instances in which they may not otherwise be indemnified by a
corporation under such sections, provided the contract of insurance covering
such directors and officers provides, in a manner acceptable to the New York
State Superintendent of insurance, for a retention amount and for co-
insurance. Such insurance may not provide for the indemnification, other than
defense costs, of any director or officer whose deliberate and active
dishonesty is held to be material to an adjudicated cause of action in a
judgment adverse to the insured nor of any director or officer who personally
gained in fact a financial profit or other advantage to which he was not
legally entitled.
Item 16. Exhibits.
NO.
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement**
1.2 Form of Distribution Agreement**
4.1 Form of Indenture dated as of March 15, 1985, as amended and
restated as of February 15, 1995, between the Company and First
Trust Company of New York, National Association, as Trustee,
including Form of Securities (incorporated by reference to the
Company's Registration Statement on Form S-3 (No. 33-52821))
5.1 Opinion of White & Case**
12.1 Computation of Ratio of Earnings to Fixed Charges**
23.1 Consent of Ernst & Young LLP*
23.2 Intentionally Omitted
23.3 Intentionally Omitted
23.4 Intentionally Omitted
23.5 Consent of White & Case (included in Exhibit 5.1)**
25.1 Form T-1, Statement of Eligibility under Trust Indenture Act of
1939**
</TABLE>
- --------
*Filed herewith
**Previously filed
II-2
<PAGE>
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i)to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii)to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii)to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (1) (i) and (1) (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement;
(2) that, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial
bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for the liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in such Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused Amendment No. 3 to
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in St. Louis, Missouri, on the 27th day of
April, 1999.
Mallinckrodt Inc.
/s/ C. Ray Holman
By: _________________________________
C. Ray Holman
Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, Amendment No. 3
to this Registration Statement has been signed below by the following Persons,
in the capacities indicated, on April 27, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ C. Ray Holman Chairman of the Board and
____________________________________ Chief Executive Officer
C. Ray Holman (Principal Executive
Officer)
/s/ Michael A. Rocca Senior Vice President and
____________________________________ Chief Financial Officer
Michael A. Rocca (Principal Financial
Officer)
/s/ Douglas A. McKinney Vice President and
____________________________________ Controller (Principal
Douglas A. McKinney Accounting Officer)
/s/ Raymond F. Bentele Director
____________________________________
Raymond F. Bentele
/s/ Gareth C.C. Chang Director
____________________________________
Gareth C.C. Chang
/s/ William L. Davis, III Director
____________________________________
William L. Davis, III
Director
____________________________________
Ronald G. Evens
/s/ Roberta S. Karmel Director
____________________________________
Roberta S. Karmel
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Claudine B. Malone Director
____________________________________
Claudine B. Malone
/s/ Anthony Viscusi Director
____________________________________
Anthony Viscusi
/s/ Brian M. Rushton Director
____________________________________
Brian M. Rushton
/s/ Daniel R. Toll Director
____________________________________
Daniel R. Toll
</TABLE>
II-5
<PAGE>
INDEX TO EXHIBITS
Exhibit Sequential Page No.
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement**
1.2 Form of Distribution Agreement**
4.1 Form of Indenture dated as of March 15, 1985, as amended and
restated as of February 15, 1995, between the Company and First
Trust Company of New York, National Association, as Trustee,
including Form of Securities (incorporated by reference to the
Company's Registration Statement on Form S-3 (No. 33-52821))
5.1 Opinion of White & Case**
12.1 Computation of Ratio of Earnings to Fixed Charges**
23.1 Consent of Ernst & Young LLP*
23.2 Intentionally Omitted
23.3 Intentionally Omitted
23.4 Intentionally Omitted
23.5 Consent of White & Case (included in Exhibit 5.1)**
25.1 Form T-1, Statement of Eligibility under Trust Indenture Act of
1939**
</TABLE>
- --------
* Filed herewith
** Previously filed
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 2 to the Registration Statement (Form S-3) and related
Prospectus of Mallinckrodt Inc. for the registration of debt securities and to
the incorporation by reference therein of our report dated August 12, 1998
(except for the restatement related to purchased research and development
referred to in Note 2, as to which the date is January 26, 1999), with respect
to the consolidated financial statements and schedules of Mallinckrodt Inc.
included in its Annual Report on Form 10-K for the year ended June 30, 1998,
as amended by Form 10-K/A filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
St. Louis, Missouri
April 23, 1999
