As filed with the Securities and Exchange Commission on February 16, 1999.
Registration No. 333-67943
333-67943-01
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------
AMERICAN STANDARD INC.
(Exact name of registrant as specified in its charter)
Delaware 25-0900465
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
One Centennial Avenue
Piscataway, NJ 08855-6820
(732) 980-6000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
AMERICAN STANDARD COMPANIES INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3465896
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
One Centennial Avenue
Piscataway, NJ 08855-6820
(732) 980-6000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
------------------------
Richard A. Kalaher, Esq.
Vice President, General Counsel & Secretary
American Standard Inc.
One Centennial Avenue
P.O. Box 6820
Piscataway, NJ 08855-6820
(732) 980-6000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
Copies to:
Michael A. Becker, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
(212) 701-3000
------------------------
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If any of the securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
<PAGE>
<TABLE>
<CAPTION>
------------------------
CALCULATION OF REGISTRATION FEE
=============================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to Aggregate Price Aggregate Amount of
Securities to be Registered be Registered Per Share (1) Offering Price (1) Registration Fee
- ------------------------------------ ------------------ ------------------------ ------------------------ -------------------
<S> <C> <C> <C> <C>
Debt Securities $750,000,000 100% $750,000,000 $208,500(2)
- -----------------------------------------------------------------------------------------------------------------------------
Debt Guarantees $750,000,000 (3) (3) none (4)
=============================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee.
(2) $139,000 was paid with the initial filing of this Registration Statement.
An additional $69,500 has been paid in connection herewith.
(3) The additional registrant will not be paid any portion of the proceeds in
respect of the Guarantees.
(4) Pursuant to Rule 457(n) under the Securities Act of 1933, no registration
fee is required with respect to the Guarantees.
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 Section 8(a), may
determine.
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registraiton statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED FEBRUARY 16, 1999
PROSPECTUS
$750,000,000
Debt Securities
American Standard Inc., as issuer
American Standard Companies Inc., as guarantor
One Centennial Avenue
Piscataway, New Jersey 08855
(732) 980-6000
This prospectus describes the general terms that will apply to all of the
debt securities we intend to offer at one or more times under this registration
statement. We will describe the specific terms of each series of debt securities
that we offer in a supplement to this prospectus. Supplements will be made
available at the time of each offering of debt securities. You should read this
prospectus and the related supplement carefully before you invest.
An investment in these debt securities involves a high degree of risk.
Consider carefully the risk factors beginning on page 4 in this prospectus.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
---------------
The date of this Prospectus is .
<PAGE>
TABLE OF CONTENTS
Page
THE COMPANY....................................................................3
RISK FACTORS...................................................................4
WHERE YOU CAN FIND MORE INFORMATION............................................7
USE OF PROCEEDS................................................................9
RATIO OF EARNINGS TO FIXED CHARGES.............................................9
DESCRIPTION OF DEBT SECURITIES................................................10
PLAN OF DISTRIBUTION..........................................................22
LEGAL MATTERS.................................................................24
EXPERTS ......................................................................24
<PAGE>
FOR CALIFORNIA RESIDENTS
With respect to sales of the debt securities being offered hereby to
California residents, such debt securities may be sold only to: (1) "Accredited
Investors" within the meaning of Regulation D under the Securities Act of 1933,
(2) banks, savings and loan associations, trust companies, insurance companies,
investment companies registered under the Investment Company Act of 1940,
pension and profit-sharing trusts, corporations or other entities which,
together with the corporation's or other entity's affiliates, have a net worth
on a consolidated basis according to their most recent regularly prepared
financial statements (which shall have been reviewed, but not necessarily
audited, by outside accountants) of not less than $14,000,000 and subsidiaries
of the foregoing, or (3) any person (other than a person formed for the sole
purpose of purchasing the debt securities being offered hereby) who purchases at
least $1,000,000 aggregate amount of the debt securities being offered hereby or
(4) any person who (A) had a minimum annual gross income of $65,000 during the
last tax year and an expected gross income of $65,000 during the current tax
year and a minimum net worth of $250,000 or (B) has a net worth of $500,000 (in
each case, excluding home, home furnishings and personal automobiles).
----------------
Our registered trademarks include: AMERICAN STANDARD(R), IDEAL STANDARD(R),
STANDARD(R), TRANE(R), WABCO(R), LARA(R), Copalis(R), DiaSorin(TM), AMRITAGE
SHANKS(R), DOLOMITE(R) and PORCHER(R).
-2-
<PAGE>
THE COMPANY
We are a global, diversified manufacturer of high quality, brand-name
products. In 1998, we had sales of $6.7 billion. We have four operating
segments:
o air conditioning products - 59% of 1998 sales;
o plumbing products - 23% of 1998 sales;
o automotive products- 17% of 1998 sales; and
o medical systems - 1% of 1998 sales.
Three of our four business segments have a leading market share position in
the principal geographic areas in which they compete. The medical systems
segment, formed in 1997, is developing new medical diagnostic technologies.
Our brand name products include:
o TRANE(R) and AMERICAN STANDARD(R) air conditioning equipment for use
in central air condition systems for commercial, institutional and
residential buildings;
o AMERICAN STANDARD(R), IDEAL STANDARD(R), STANDARD(R) ,PORCHER(R),
ARMITAGE SHANKS(R) and DOLOMITE(R) for bathroom and kitchen fixtures
and fittings;
o WABCO(R) braking and control systems for medium-sized and heavy
trucks, buses, trailers and utility vehicles; and
o LARA(R) and Copalis(R) medical diagnostic systems and DiaSorin(TM)
medical diagnostic products.
One way in which we make our products more competitive is by emphasizing
technological advancements such as:
o air conditioning systems that utilize energy-efficient compressors and
refrigerants meeting current environmental standards;
o water-saving plumbing products;
-3-
<PAGE>
o commercial vehicle antilock braking systems and electronic controls
systems; and
o innovative medical diagnostic testing using laser technology.
We conduct significant operations outside the United States which generate
approximately one-half of our sales. We have 108 manufacturing facilities in 35
countries and employ approximately 54,000 people.
RISK FACTORS
Before you invest in the debt securities, you should consider carefully the
following risk factors, in addition to the other information contained in this
prospectus.
SUBSTANTIAL LEVERAGE -- The significant amount of our indebtedness could
adversely affect our financial health and could prevent us from fulfilling our
obligations under the debt securities.
We now have, and when debt securities are issued will continue to have, a
significant amount of indebtedness. Our level of indebtedness could adversely
affect our ability to:
o generate sufficient cash to service our debt;
o obtain additional financing in the future.
If our available cash were no longer sufficient to fund our expenditures and
debt service obligations, we might need to raise additional funds by:
o selling equity securities;
o selling a significant amount of our assets; or
o refinancing all or a part of our indebtedness.
We cannot assure you that any of these alternatives will be available, if
needed, to permit us to meet our obligations. Moreover, even if we could meet
our obligations, we might otherwise be limited in our ability to:
o finance capital expenditures;
o compete effectively;
-4-
<PAGE>
o expand our business; or
o operate successfully under adverse economic conditions.
As of December 31, 1998, our total consolidated indebtedness was $2.43
billion. At December 31, 1998, we had scheduled principal payments of $169
million for 1999, $30 million for 2000 and $12 million for 2001.
In January 1997, we entered into a $1.75 billion amended and restated
credit agreement, consisting of a $1.375 billion revolving credit facility and a
$375 million periodic access facility. At December 31, 1998, we had unused
borrowing capacity under the credit agreement of approximately $622 million.
On February 2, 1999, American Standard acquired the Bathrooms Division of
Blue Circle Industries PLC, a manufacturer of ceramic sanitaryware, brassware
and integrated plumbing systems, for approximately $417 million using the
proceeds of a borrowing under the credit agreement. On February 8, 1999,
American Standard refinanced $60 million of such indebtedness with the proceeds
of a borrowing under a short term loan facility provided by Goldman Sachs Credit
Partners L.P. American Standard intends to refinance the total purchase price of
the acquisition with proceeds from sales of debt securities registered
hereunder. Pending such refinancing, American Standard believes its existing
sources of liquidity and cash flow from operations are sufficient to satisfy its
capital requirements.
SUBORDINATION -- Although the debt securities are referred to as senior debt
securities, they will be effectively subordinated to our secured debt and all of
the debt and other obligations of our subsidiaries.
Subordination to Secured Creditors in Bankruptcy
The guarantor, the issuer and certain subsidiaries of the issuer have
guaranteed the repayment of the borrowings under the credit agreement, and the
stock of the issuer and its foreign and domestic subsidiaries has been pledged
as collateral to secure the guarantees. Your debt securities will not be
secured. Therefore, in the event of a bankruptcy or similar proceeding, the
guarantees granted and collateral pledged under the credit agreement will be
available to satisfy our obligations to the lenders under the credit agreement
before any payments are made on your securities.
Subordination to Secured Creditors in Disposition of Issuer's Equity
As secured creditors, the lenders under the credit agreement would control
the disposition and sale of the equity of the issuer and its subsidiaries after
an event of default un-
-5-
<PAGE>
der the credit agreement. As secured creditors, they are not legally required to
take into account your interests as holders of the debt securities.
Subordination to Creditors of our Subsidiaries
The debt securities you receive will be effectively subordinated to
creditors (including possibly the lenders under the credit agreement and other
lenders, tax authorities and trade creditors) and preferred stockholders (if
any) of the issuer's subsidiaries.
TAX MATTERS--Disputed German Tax Assessments and Pending German Tax Audits
We may be requested to deposit with and ultimately owe German tax
authorities a significant amount due to disputed German tax assessments and
pending German tax audits for the period 1984 through 1994. All dollar amounts
set forth below are at December 31, 1998 foreign exchange rates.
As a result of audits of our German subsidiaries by The State Finance
Administration for the State of North Rhine Westfalia, Germany (the "German Tax
Authority") for the periods 1984 through 1990 and 1991 through 1994, we have
previously received two assessments for the 1984-1990 audit period which we have
been contesting. The first assessment was for approximately $18 million and
claimed a disallowance of a deduction of interest expense upon the repayment of
an intercompany finance instrument. A deposit in the amount of the assessment
was paid in 1992 and a suit to recover the disputed tax is currently pending
before the German Tax Court in Cologne, Germany (the "German Tax Court"). The
second assessment, received in March 1996, was for approximately $65 million,
plus interest, and claimed primarily that investment earnings received by a
Dutch subsidiary should have been recognized as income taxable in Germany. In
early 1997 we made a partial deposit of $18 million in respect of the second
assessment and commenced an administrative appeal of the assessment with the
German Tax Authority. In 1998 we made an offer to settle the primary issue under
dispute with respect to the second assessment. On January 22, 1999, our
settlement offer and appeal of the second assessment were rejected. As a result,
we intend to file notice of appeal with the German Tax Court and to join our
appeal of the first assessment with our appeal of the second assessment. In
addition, we intend to request an order from the German Tax Authority, and if
denied from the German Tax Court, staying our obligation to pay the amount of
the second assessment during the pendency of our appeal. As a result of making
the settlement offer, American Standard has recorded a loss contingency as of
December 31, 1998 in the amount of the deposits related to the first and second
assessments, related trade taxes and interest.
-6-
<PAGE>
With respect to the 1991-1994 audit period, we engaged in significant
transactions similar to those that gave rise to the two earlier assessments and,
with respect to one such matter, the auditors have proposed an adjustment of
approximately $47 million. Because the German Tax Authorities assessed
additional taxes for the 1984-1990 audit period they might, after completing
their audit of the later period, propose adjustments for the 1991-1994 audit
period that might be as much as fifty percent higher.
If all matters currently under review by the German Tax Authorities were
made the subject of assessments and no orders staying the payment of taxes were
granted either by the German Tax Authorities or German Tax Court to relieve the
Company of the obligation to pay all assessed taxes during the pendency of our
appeals, we could be required to pay all assessed amounts plus accrued interest.
Interest on assessed and unpaid taxes accrues at the rate of six percent per
annum commencing fifteen months after the end of the tax year for which the tax
is assessed. We believe, based on the opinion of our external German legal
counsel, that our German tax returns are substantially correct as filed and that
any adjustments would be inappropriate. Unless we are otherwise able to reach a
satisfactory resolution of these matters with the German Tax Authorities, we
intend to contest vigorously the pending assessments and any adjustments that
may be assessed.
WHERE YOU CAN FIND MORE INFORMATION
American Standard Companies Inc. and its wholly-owned subsidiary, American
Standard Inc., file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference facilities maintained at 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information about its public reference rooms. Our SEC filings are also available
to the public over the Internet at the SEC's website at http://www.sec.gov.
American Standard Companies Inc.'s SEC filings are also available at the New
York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
We "incorporate by reference" into this prospectus the information we file
with the SEC. That means that, rather than reprinting here all of the
information contained in our other documents filed with the SEC, we can disclose
important information to you by referring you to those documents that are
already filed. The information incorporated by reference is an important part of
this prospectus and information that we file with the SEC in the future will
automatically update and supersede what is printed in this prospectus. We
incorporate by reference the following documents that we have filed with the SEC
and all of our future filings with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 until we have sold all the
securities offered by this prospectus:
-7-
<PAGE>
o The guarantor's Annual Report on Form 10-K for the year ended December
31, 1997, including portions incorporated therein of the guarantor's
definitive Proxy Statement dated March 26, 1998.
o The guarantor's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998, June 30, 1998 and September 30, 1998.
o The guarantor's Current Reports on Form 8-K filed January 13, 1998,
February 6, 1998, February 19, 1998 and February 12, 1999.
o The issuer's Annual Report on Form 10-K for the year ended December
31, 1997.
o The issuer's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998, June 30, 1998 and September 30, 1998.
o The issuer's Current Reports on Form 8-K filed January 13, 1998 ,
February 6, 1998 and February 12, 1999.
You may request a copy of these filings, at no cost, by writing or calling
us at the following address:
American Standard Companies Inc.
One Centennial Avenue
P.O. Box 6820
Piscataway, NJ 08855-6820
Attention: Office of the Secretary
Telephone: (732) 980-6000
You should rely only on the information incorporated by reference or set
forth in this prospectus and that is set forth in the applicable prospectus
supplement. We have not authorized anyone else to provide you with different
information. We may only use this prospectus to sell securities if it is
accompanied by a prospectus supplement. We are only offering our debt securities
in states where the offer is permitted. You should not assume that the
information in this prospectus or the applicable prospectus supplement is
accurate as of any date other than the dates on the front of those documents.
The registration statement that contains this prospectus, including
exhibits to the registration statement, contains additional information about us
and the securities offered under this prospectus. That registration statement
can be read at the SEC's website or at the SEC office mentioned above.
-8-
<PAGE>
Disclosure Regarding Forward Looking Statements
We provide information and make statements in this prospectus that are
considered forward-looking information or statements. Many of these statements
contain words such as "believes," "expects," "intends" and other similar words.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking information or statements. Many factors could cause actual
results to differ materially from those we believe, expect or intend will occur,
including:
(i) changes in future conditions in one or more of the various
geographic and/or product markets in which one or more of our businesses
competes, including, without limitation, as to governmental regulation
(including attitudes as to competition by non-locally owned businesses);
general economic conditions; weather or climate; local or non-local
competitive factors; interest rate or currency fluctuations; and/or other
conditions or factors;
(ii) the ability to carry out successfully strategic corporate,
marketing, tax and/or sales plans; and
(iii) accuracy of assessments as to the effects of contingent
liabilities, including, without limitations, taxes.
We cannot predict the actual effect these factors will have on our results and
many of the factors and their effects are beyond our control. Given these
uncertainties, you should not place undue reliance on these forward-looking
statements.
USE OF PROCEEDS
Unless otherwise described in the applicable prospectus supplement, we
intend to use the net proceeds from the sale of debt securities for general
corporate purposes, which may include the repayment of outstanding debt, stock
repurchases, certain investments, acquisitions, additions to working capital or
capital expenditures.
RATIO OF EARNINGS TO FIXED CHARGES
Set forth below is the ratio of earnings to fixed charges of American
Standard Companies Inc. for the periods indicated. For the purpose of computing
the above ratios, fixed charges consist of interest on debt (including
capitalized interest), amortization of debt discount and expense, and a portion
of rentals determined to be representative of interest. Earnings consist of
consolidated net income before income taxes, plus fixed charges other
-9-
<PAGE>
than capitalized interest but including the amortization thereof, adjusted by
the excess or deficiency of dividends over income of entities accounted for by
the equity method.
Year Ended December 31,
-----------------------
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
Ratio of Earnings to Fixed Charges...... -- 2.0 1.3 2.0 1.7
Earnings were insufficient to cover fixed charges for the year ended
December 31, 1994 by $16.0 million. The year ended December 31, 1996 included a
non-cash asset impairment charge of $235.2 million resulting from the adoption
of Statement of Financial Accounting Standards No. 121. Excluding that charge,
the ratio of earnings to fixed charges in that period would have been 2.3.
DESCRIPTION OF DEBT SECURITIES
This section describes the general terms and provisions of the debt
securities. The prospectus supplement will describe the particular terms of the
debt securities offered by that prospectus supplement and will note the extent,
if any, to which the general provisions described below do not apply to the debt
securities so offered. The prospectus supplement relating to each
individual/separate offering of debt securities will also describe any
applicable federal income tax considerations. You should read both this
prospectus and the applicable prospectus supplement for a description of the
terms of each particular series of debt securities.
The debt securities will be issued under an indenture among the issuer, the
guarantor and The Bank of New York, as trustee. The indenture is subject to and
qualified by the Trust Indenture Act of 1939, as amended (the "TIA"). The
indenture has been filed as an exhibit to the registration statement and you
should read the indenture for provisions that may be important to you. The
following summaries of certain provisions of the debt securities and the
indenture are not meant to be a complete description of the debt securities;
however, this prospectus contains the material terms and conditions of the debt
securities.
General
American Standard Companies Inc., the guarantor, has as its only
significant asset all the outstanding common stock of American Standard Inc.,
the issuer. The debt securi-
-10-
<PAGE>
ties will be direct unsecured obligations of the issuer and will be fully and
unconditionally guaranteed as to payment of principal, premium, if any, and
interest by the guarantor. The debt securities will rank pari passu with other
unsecured unsubordinated obligations of the issuer. The guarantees will rank
pari passu with other unsecured unsubordinated obligations of the guarantor.
The indenture does not limit the amount of indebtedness we may issue
thereunder and provides that the debt securities may be issued from time to time
in one or more series pursuant to the terms of one or more securities
resolutions or supplemental indentures.
The issuer may designate more than one trustee under the indenture, with
each trustee acting with respect to one or more series of debt securities. Any
trustee under the indenture may resign or be removed with respect to one or more
series of debt securities, and a successor trustee may be appointed to act with
respect to such series. In the event that two or more persons are acting as
trustee with respect to different series of debt securities, each such trustee
shall be a trustee of a trust under the indenture separate and apart from any
trust administered by any other trustee under the indenture. Except as otherwise
indicated herein, any action described to be taken may be taken with respect to,
and only with respect to, the one or more series of debt securities for which it
is trustee under the indenture.
The prospectus supplement relating to any series of debt securities being
offered will contain specific terms of such series of debt securities. The
specific terms of each series of debt securities that we offer will be stated in
the prospectus supplement related to that offering of debt securities. Those
specific terms will include some or all of the following:
o designation, aggregate principal o terms of any redemption at the
amount, currency or composite option of Holders
currency and denominations
o price and, if an index formula o if the debt securities provide
or other method is used, the that payments of principal or
method for determining amounts interest may be made in a
of principal or interest currency other than that in
which debt securities are
denominated, the manner for
determining such payments
-11-
<PAGE>
o maturity date and other dates, if o provisions, if any, granting
any, on which principal will be special rights upon the
payable occurrence of specified events
o interest rate (which may be o whether and upon what terms
fixed or variable), if any debt securities may be
defeased
o date or dates from which interest o any events of default or
will accrue and on which interest restrictive covenants in
will be payable, and the record addition to or in lieu of
dates for the payment of interest those set forth in the
indenture
o manner of paying principal and o provisions for electronic
interest issuance of debt securities
or for debt securities in
o the place or places where principal uncertificated form
and interest will be payable
o terms of any mandatory or optional o any additional provisions or
redemption by us including any other special terms not in-
sinking fund consistent with the provisions
of the indenture, including
o terms of any conversion or exchange any terms that may be required
right or advisable under United
States or other applicable
o tax indemnity provisions laws or regulations, or ad-
visable in connection with the
debt securities.
The debt securities may be issued at a discount below their principal
amount and provide for less than their entire principal amount to be payable
upon any declaration of acceleration of their maturity thereof. In such cases,
all material U.S. federal income tax and other considerations applicable to
these original issue discount securities will be described in the applicable
prospectus supplement.
The indenture does not contain any provisions that would limit our ability
to incur indebtedness or that would afford holders of debt securities protection
in the event of a highly leveraged or similar transaction involving the issuer
or its subsidiaries or in the event of a change of control. Please see the
applicable prospectus supplement for information with respect to any deletions
from, modifications of, or additions to, the events of default or covenants that
are described below.
-12-
<PAGE>
Global Securities
The debt securities of a series may be issued in whole or in part in
book-entry form consisting of one or more global securities. The global
securities will be deposited with a depositary identified in the applicable
prospectus supplement relating to such series. Global securities will be issued
in registered form. We will describe the specific terms of the depositary
arrangement with respect to a series of debt securities in the applicable
prospectus supplement.
Denomination and Interest
The debt securities will be issuable in denominations of $1,000 and
integral multiples thereof.
The principal of, premium, if any, and interest on any series of debt
securities will be payable at the corporate trust office of the applicable
trustee, the address of which will be stated in the applicable prospectus
supplement. Even though we will designate the trustee's corporate office as an
official place of payment, we may elect to pay interest by having the trustee
either mail a check to the person listed in the applicable register for such
debt securities as the owner of the debt securities or by delivering funds to
such person, in accordance with their instructions, by wire transfer at an
account maintained within the United States. The issuer may at any time
designate additional paying agents.
If we do not pay any interest when due on a debt security (defaulted
interest), the interest will not be payable to the holder on the applicable
regular record date. We may pay the defaulted interest either to the person in
whose name such debt security is registered at the close of business on a
special record date for the payment of such defaulted interest to be fixed by
the trustee, in which case notice thereof shall be given to the holder of such
debt security not less than 10 days prior to such special record date, or at any
time in any other lawful manner.
Registration and Transfer
Subject to certain limitations imposed upon debt securities issued in
book-entry form, the debt securities of any series may be exchanged or
transferred, pursuant to procedures in the indenture. No service charge, other
than tax or other governmental charges, will be made for any registration of
transfer or exchange of any debt securities.
Neither the issuer nor any trustee shall be required to:
-13-
<PAGE>
(1) issue, register the transfer of or exchange debt securities of any
series during a period beginning at the opening of business 15 days
before the selection of any debt securities for redemption and ending
at the close of business on the day of mailing of the relevant notice
of redemption ;
(2) register the transfer of or exchange any debt security, or portion
thereof, so selected for redemption, in whole or in part, except the
unredeemed portion of any debt security being redeemed in part; or
(3) issue, register the transfer of or exchange any debt security that has
been surrendered for repayment at the option of the holder, except the
portion, if any, of such debt security not to be so repaid.
Merger, Consolidation or Sale of Assets
We have agreed not to consolidate with or sell, lease or convey all or
substantially all of our assets to, or merge with or into, any other entity in
any transaction in which the issuer or the guarantor, as applicable, is not the
surviving entity unless:
(1) the successor entity is organized under the laws of the United States
or any state or the District of Columbia and expressly assumes the
guarantor's or the issuer's obligations under the debt securities and
the indenture;
(2) immediately after giving effect to such transaction, no default or
event of default under the indenture shall have occurred and be
continuing; and
(3) we deliver to the trustee an officers' certificate and legal opinion
covering certain of such conditions .
The successor entity shall be substituted for the issuer or the guarantor,
as applicable, and thereafter the issuer or guarantor would no longer have any
obligations under the indenture or the debt securities.
Certain Covenants
The applicable prospectus supplement will describe any material covenants
in respect of a series of debt securities that are not described in this
prospectus. Unless otherwise indicated in the applicable prospectus supplement,
the debt securities will include the following covenants of the issuer and the
guarantor:
-14-
<PAGE>
Existence. Except as permitted under "--Merger, Consolidation or Sale of
Assets," each of us is required to do all things necessary to preserve and keep
in full force and effect our existence, rights and franchises, unless we
determine that the preservation thereof is no longer desirable in the conduct of
our business.
Maintenance of Properties. We are required to maintain all of our material
properties used or useful in the conduct of our business in good condition,
repair and working order ; provided, however, that we shall not be prevented
from selling or otherwise disposing of our properties for value in the ordinary
course of business.
Insurance. We are required to cause each of our subsidiaries to maintain
reasonably adequate insurance.
Payment of Taxes and Other Claims. We are required to pay or discharge ,
before the same shall become delinquent,
(i) all taxes, assessments and governmental charges imposed upon us or any
subsidiary or upon our income profits or property and
(ii) all lawful claims for labor, materials and supplies which, if unpaid,
might by law become a lien upon our property;
provided, however, that we shall not be required to pay or discharge any such
tax, assessment, charge or claim if the amount, applicability or validity of it
is being contested in good faith.
Events of Default, Notice and Waiver
Unless otherwise provided in the applicable prospectus supplement, the
following events are "events of default" with respect to any series of debt
securities:
(a) failure to pay interest on any debt security for 30 days;
(b) failure to pay the principal of, or premium, if any, on, any debt
security when due;
(c) failure to make any sinking fund payment as may be required for any
debt security;
-15-
<PAGE>
(d) failure to perform any other covenant in the indenture and continuance
of such default for a period of 60 days after written notice as
provided in the indenture;
(e) default under any agreement or instrument under which there may be
issued or by which there may be secured or evidenced any indebtedness
for money borrowed by the guarantor or the issuer, or by any
subsidiary if the issuer has guaranteed such indebtedness or if the
issuer is directly responsible or liable as obligor or guarantor,
having an aggregate principal amount outstanding of at least
$20,000,000, whether such indebtedness now exists or shall hereafter
be created, which default results in the acceleration of such
indebtedness, without such indebtedness having been discharged, or
such acceleration having been rescinded or annulled, within a period
of 30 days after written notice to the issuer as provided in the
indenture;
(f) certain events of bankruptcy, insolvency or reorganization, or court
appointment of a receiver, liquidator or trustee of the guarantor, the
issuer or any significant subsidiary of the issuer; and
(g) any other event of default provided with respect to a particular
series of debt securities.
In clause (f) above, the term "significant subsidiary" has the meaning
ascribed to such term in Regulation S-X promulgated under the Securities Act.
A default under one series of debt securities will not necessarily be a
default under another series. If an event of default for any series of debt
securities occurs and is continuing, then the applicable trustee or the holders
of at least 25% in principal amount of the debt securities of that series may
declare the principal amount of (or, if the debt securities of that series are
original issue discount securities or indexed securities, such portion of the
principal amount as may be specified in the terms thereof) , and premium, if
any, on, all the debt securities of that series to be due and payable
immediately. In the case of an event of default described in clause (f) above
with respect to the issuer, acceleration is automatic.
If payment on the debt securities has been accelerated, subject to certain
conditions, the holders of at least a majority in principal amount of
outstanding debt securities of such series may rescind and annul such
declaration and its consequences . The holders of at least a majority in
principal amount of the outstanding debt securities of any series may also waive
any past default with respect to such series and its consequences, except :
-16-
<PAGE>
(i) a payment default or
(ii) a default relating to a covenant in the indenture that cannot be
modified or amended without the consent of the holder of each
outstanding debt security affected thereby.
The trustee may require indemnity satisfactory to it before it enforces the
indenture or the debt securities of the series. Subject to certain limitations,
holders of a majority in principal amount of the debt securities of the series
may direct the trustee in its exercise of any trust or power with respect to
such series. Except in the case of default in payment on a series, the trustee
may withhold from securityholders of such series notice of any continuing
default if it determines that withholding notice is in their interest. We are
required to furnish the trustee annually a brief certificate as to our
compliance with all conditions and covenants under the indenture.
The trustee may withhold notice to the holders of any series of debt
securities of any default with respect to such series, except a payment default,
if it considers such withholding to be in the interest of such holders.
Modification of the Indenture
We may modify and amend the indenture only with the consent of the holders
of at least a majority in principal amount of all outstanding debt securities
issued under the indenture, affected by such modification or amendment. No such
modification or amendment may, without the consent of the holder of each such
debt security affected thereby:
(1) change the stated maturity of any payment on any debt security;
(2) reduce the principal amount of, or the rate of interest on, any debt
security, or reduce the amount of principal of an original issue
discount security that would be due and payable upon declaration of
acceleration of the maturity thereof or would be provable in
bankruptcy;
(3) change the place of payment, or the coin or currency in which, any
payment is to be made on any debt security;
(4) impair a holder's right to sue to enforce any payment on any debt
security;
(5) modify or affect in any manner adverse to the interest of holders of
debt securities the obligation of the guarantor under the guarantees;
-17-
<PAGE>
(6) reduce the above-stated percentage of outstanding debt securities of
any series necessary to modify or amend the indenture, to waive
compliance with certain provisions thereof or certain defaults and
consequences thereunder or to reduce the quorum or voting requirements
set forth in the indenture; or
(7) modify any of the foregoing amendment or waiver provisions, except to
increase the required percentage to effect such action or to provide
that certain other provisions may not be modified or waived without
the consent of the holder of such debt security.
The holders of a majority in aggregate principal amount of the outstanding
debt securities of each series, on behalf of all holders of debt securities of
that series, insofar as that series is concerned, may waive compliance by the
issuer and the guarantor with certain restrictive covenants of the indenture.
Without the consent of any holder of debt securities, we may modify and
amend the indenture with the agreement of the trustee thereunder for any of the
following purposes:
(1) to evidence the succession of another person to the obligations of the
issuer and the guarantor under the indenture;
(2) to add to the covenants for the benefit of the holders of all or any
series of debt securities or to surrender any right or power conferred
upon the issuer and guarantor in the indenture;
(3) to add events of default for the benefit of the holders;
(4) to add or change any provisions of the indenture to permit or
facilitate the issuance of debt securities in uncertificated form,
provided that such action shall not adversely affect the interests of
the holders of the debt securities of any series in any material
respect;
(5) to change or eliminate any provisions of the indenture, provided that
any such change or elimination shall become effective only when there
are no debt securities outstanding of any series created prior thereto
which are entitled to the benefit of such provision;
(6) to secure the debt securities;
(7) to establish the form or terms of debt securities of any series;
-18-
<PAGE>
(8) to provide for the acceptance of appointment by a successor trustee or
facilitate the administration of the trusts under the indenture by
more than one trustee;
(9) to cure any ambiguity, defect or inconsistency in the indenture,
provided that such action shall not adversely affect the interests of
holders of debt securities of any series issued under the indenture in
any material respect; or
(10) to supplement any of the provisions of the indenture to the extent
necessary to permit or facilitate defeasance and discharge of any
series of such debt securities, provided that such action shall not
adversely affect the interests of the holders of the outstanding debt
securities of any series in any material respect.
Discharge, Defeasance and Covenant Defeasance
We are permitted to discharge certain obligations to holders of any series
of debt securities issued under the indenture that have not already been
delivered to the trustee for cancellation and that either have become due and
payable or will become due and payable within one year or scheduled for
redemption within one year. This discharge will occur when we irrevocably
deposit with the trustee, in trust, funds in such currency or currencies,
currency unit or units or composite currency or currencies in which such debt
securities are payable and/or government obligations in an amount sufficient to
pay the entire indebtedness on such debt securities in respect of principal,
premium, if any, and interest to the date of such deposit, if such debt
securities have become due and payable, or to the stated maturity or redemption
date, as the case may be.
The issuer may elect either:
(a) to defease and be discharged from any and all obligations with respect
to such debt securities, except for certain obligations, including
obligations to register the transfer or exchange of such debt
securities, to replace temporary or mutilated, destroyed, lost or
stolen debt securities, to maintain an office or agency in respect of
such debt securities, and to hold moneys for payment in trust
("indenture defeasance") or
(b) to be released from certain obligations under the indenture with
respect to such debt securities, including the restrictions described
under "--Certain Covenants", or, if provided in the applicable
prospectus supplement, its obligations with respect to any other
covenant, and any omis-
-19-
<PAGE>
sion to comply with such obligation shall not constitute an event of
default with respect to such debt securities ("covenant defeasance");
We may exercise our indenture defeasance option notwithstanding our prior
exercise of our covenant defeasance option. If we exercise our indenture
defeasance option, a series may not be accelerated because of an event of
default. If we exercise our covenant defeasance option, a series may not be
accelerated by reference to any restrictive covenants which may be applicable to
such series. Any discharge of the issuer's obligations shall result in a
discharge of the same obligations of the guarantor.
To exercise either defeasance option, the issuer must:
(1) irrevocably deposit with the trustee, in trust, an amount, in such
currency or currencies, currency unit or units or composite currency
or currencies in which such debt securities are payable at stated
maturity, or governmental obligations, or both, applicable to such
debt securities, which through the scheduled payment of principal and
interest in accordance with their terms will provide money in an
amount sufficient to pay the principal of, premium, if any, and
interest on such debt securities, and any mandatory sinking fund or
analogous payments thereon, on the scheduled due dates therefor, and
(2) comply with certain other conditions.
In particular, such a trust will only be permitted to be established if the
issuer or the guarantor has delivered to the trustee an opinion of counsel, as
specified in the indenture, to the effect that the holders of such debt
securities will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such indenture defeasance or covenant defeasance and
will be subject to U.S. federal income tax on the same amounts, in the same
manner and at the same time as would have been the case if such indenture
defeasance or covenant defeasance had not occurred. Such opinion of counsel, in
the case of indenture defeasance, will be required to refer to and be based upon
either a ruling received from the Internal Revenue Service or a change in
applicable United States federal income tax law occurring after the date of the
indenture. In the event of such indenture defeasance, the holders of such debt
securities would thereafter be able to look only to the trust fund, established
in accordance with clause (1) above, for payment of principal (and premium, if
any) and interest.
"Government Obligations" means securities that are (a) direct obligations
of the United States of America or the government which issued the foreign
currency in which the debt securities of a particular series are payable, for
the payment of which its full faith and
-20-
<PAGE>
credit is pledged or (b) obligations of a person controlled or supervised by and
acting as an agency or instrumentality of the United States of America or such
government which issued the foreign currency in which the debt securities of
such series are payable, the payment of which is unconditionally guaranteed as a
full faith and credit obligation by the United States of America or such other
government, which, in either case, are not callable or redeemable at the option
of the issuer thereof, and shall also include a depository receipt issued by a
bank or trust company as custodian with respect to any such Government
Obligation or a specific payment of interest on or principal of any such
Government Obligation held by such custodian for the account of the holder of a
depository receipt, provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the Government Obligation or the specific payment of interest on or principal of
the Government Obligation evidenced by such depository receipt.
If after the issuer has deposited funds and/or government obligations to
effect indenture defeasance or covenant defeasance with respect to debt
securities of any series,
(a) the holder of a debt security of such series is entitled to, and does,
elect pursuant to the indenture or the terms of such debt security to
receive payment in a currency, currency unit or composite currency
other than that in which such deposit has been made in respect of such
debt security, or
(b) a Conversion Event, as defined in the next paragraph, occurs in
respect of the currency, currency unit or composite currency in which
such deposit has been made,
then the indebtedness represented by such debt security will be deemed to have
been, and will be, fully discharged and satisfied through the payment of the
principal of, premium, if any, and interest on such debt security as the same
becomes due out of the proceeds yielded by converting the amount so deposited in
respect of such debt security into the currency, currency unit or composite
currency in which such debt security becomes payable as a result of such
election or such cessation of usage based on the applicable market exchange
rate.
"Conversion Event" means the cessation of use of (i) a currency, currency
unit or composite currency both by the government of the country which issued
such currency and for the settlement of transactions by a central bank or other
public institutions of or within the international banking community, (ii) the
European Currency Unit ("ECU") both within the European Monetary System and for
the settlement of transactions by public institutions
-21-
<PAGE>
of or within the European Communities or (iii) any currency unit or composite
currency other than the ECU for the purposes for which it was established. All
payments of principal of, premium, if any, and interest on any debt security
that is payable in a foreign currency that ceases to be used by its government
of issuance shall be made in U.S. dollars.
In the event the issuer effects covenant defeasance with respect to any
debt securities and such debt securities are accelerated because of the
occurrence of any event of default other than the event of default relating to
restrictive covenants, the amount on deposit with the applicable trustee will be
sufficient to pay amounts due on such debt securities at the time of their
stated maturity but may not be sufficient to pay amounts due on such debt
securities at the time of the acceleration resulting from such event of default.
However, the issuer would remain liable to make payment of such amounts due at
the time of acceleration.
The applicable prospectus supplement may further describe the provisions,
if any, permitting indenture defeasance or covenant defeasance, including any
modification to the provisions described above, with respect to the debt
securities of or within a particular series.
PLAN OF DISTRIBUTION
We may sell debt securities through underwriters or dealers, directly to
one or more purchasers or through agents.
The applicable prospectus supplement will set forth the terms of the
offering of any debt securities, including:
o the names of any underwriters or agents o the purchase price of such debt
securities
o the proceeds to the issuer from such sale o any underwriting discounts
o any other items constituting underwrit- o any initial public offering
ers' compensation price
o any discounts or concessions allowed or o any securities exchanges on
reallowed or paid to dealers which such debt securities may
be listed
If underwriters are used in the sale, debt securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. Such debt
securities may be offered to the public either
-22-
<PAGE>
through underwriting syndicates represented by managing underwriters or by
underwriters without a syndicate. Unless otherwise set forth in the applicable
prospectus supplement, the obligations of the underwriters to purchase such debt
securities will be subject to certain conditions precedent, and the underwriters
will be obligated to purchase all of such debt securities if any of such debt
securities 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. Only underwriters named in a prospectus supplement are deemed to be
underwriters in connection with the debt securities offered thereby.
We may sell debt securities directly or through agents designated by us
from time to time. Any agent involved in the offer or sale of debt securities
will be named, and any commissions payable by us to such agent will be set forth
in the applicable prospectus supplement. Unless otherwise indicated in the
applicable prospectus supplement, any such agent will act on a best efforts
basis for the period of its appointment.
If so indicated in a prospectus supplement, we will authorize agents,
underwriters or dealers to solicit offers by certain institutions to purchase
such debt securities from us at the public offering price set forth in the
prospectus supplement pursuant to delayed delivery contracts providing for
payment and delivery on the date or dates stated in the prospectus supplement.
Each contract will be for an amount not less than, and the aggregate principal
amount of the debt securities sold pursuant to the contracts shall be not less
nor more than, the respective amounts stated in the prospectus supplement.
Institutions with whom the contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions, and other institutions, but
will in all cases be subject to our approval. The contracts will not be subject
to any conditions except:
(1) the purchase by an institution of the debt securities covered by its
contract shall not at the time of delivery be prohibited under the
laws of any jurisdiction in the United States to which such
institution is subject, and
(2) if the debt securities are being sold to underwriters, we shall have
sold to such underwriters the total principal amount of the debt
securities less the principal amount thereof covered by the contracts.
The underwriters will not have any responsibility in respect of the
validity or performance of the contracts.
If dealers are utilized in the sale of any debt securities, we will sell
such debt securities to the dealers, as principal. Any dealer may then resell
such debt securities to the
-23-
<PAGE>
public at varying prices to be determined by such dealer at the time of resale.
The name of any dealer and the terms of the transaction will be set forth in the
prospectus supplement with respect to such debt securities being offered
thereby.
It has not been determined whether any series of debt securities will be
listed on a securities exchange. Underwriters will not be obligated to make a
market in any series of debt securities. We cannot predict the level of trading
activity in, or the liquidity of, any series of debt securities. In order to
comply with the securities laws of certain states, if applicable, the debt
securities will be sold in such jurisdictions only through registered or
licensed brokers or dealers.
Any underwriters, dealers or agents participating in the distribution of
debt securities may be deemed to be underwriters, and any discounts or
commissions received by them on the sale or resale of debt securities may be
deemed to be underwriting discounts and commissions under the Securities Act of
1933. Agents and underwriters may be entitled under agreements entered into with
us to indemnification by us against certain liabilities, including liabilities
under the Securities Act of 1933, or to contribution with respect to payments
that the agents or underwriters may be required to make in respect thereof.
Agents and underwriters may be customers of, engaged in transactions with, or
perform services for, us or our affiliates in the ordinary course of business.
LEGAL MATTERS
Certain legal matters, including the legality of the debt securities and
the guarantees covered by this prospectus will be passed upon for the issuer and
the guarantor by Richard A. Kalaher, Esq., Vice President, General Counsel &
Secretary of the issuer and guarantor, and for any underwriters, dealers or
agents by Cahill Gordon & Reindel (a partnership including a professional
corporation), New York, New York.
EXPERTS
The consolidated financial statements and schedules of American Standard
Inc. and American Standard Companies Inc. as of December 31, 1996 and 1997, and
for each of the three years in the period ended December 31, 1997, incorporated
by reference in American Standard Inc.'s, and American Standard Companies Inc.'s
Annual Reports on Form 10-K for the year ended December 31, 1997, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their
reports thereon incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such reports
given upon the authority of such firm as experts in accounting and auditing.
-24-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the registrant's expenses in connection with the
issuance of the debt securities being registered. Except for the registration
fee, the listed amounts are estimates.
Registration fee ...................................... $208,500
Blue Sky fees and expenses ............................ 25,000
Trustee's fees ........................................ 25,000
Printing and duplicating expenses ..................... 250,000
Legal fees and expenses ............................... 100,000
Accounting fees and expenses .......................... 100,000
Miscellaneous ......................................... 6,500
--------
========
Total ........................................ $715,000
--------
=========
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Law") empowers a Delaware corporation to indemnify any persons who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person was an officer or director
of such corporation, or is or was serving at the request of such corporation as
a director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided that such officer or
director acted in good faith and in a manner he reasonably believed to be in, or
not opposed to, the corporation's best interests, and, for criminal proceedings,
had no reasonable cause to believe his conduct was illegal. A Delaware
corporation may indemnify officers and directors in an action by or in the right
of the corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation in the
II-1
<PAGE>
performance of his duty. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director actually and reasonably incurred.
In accordance with the Delaware Law, the Restated Certificates of
Incorporation of each of the issuer and guarantor contains a provision to limit
the personal liability of the directors for violations of their fiduciary duty.
This provision eliminates each director's liability to either the issuer or
guarantor or their respective stockholders for monetary damages except (i) for
any breach of the director's duty of loyalty to either the issuer or guarantor
or their stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware Law providing for liability of directors for
unlawful payment of dividends or unlawful stock purchases or redemptions, or
(iv) for any transaction from which a director derived an improper personal
benefit. The effect of this provision is to eliminate the personal liability of
directors for monetary damages for actions involving a breach of their fiduciary
duty of care, including any such actions involving gross negligence.
Subsection (b) of Article EIGHTH of the guarantor's Restated Certificate of
Incorporation and subsection (b) of Article SEVENTH of the issuer's Restated
Certificate of Incorporation provides for indemnification of directors and
officers as follows:
(a) The Corporation shall indemnify, to the fullest extent now or
hereafter permitted by the General Corporation Law of the State of
Delaware, any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the
fact that he or she is or was or has agreed to become a Director or officer
of the Corporation, or is or was serving or has agreed to serve at the
request of the Corporation as a Director or officer of another corporation,
partnership, joint venture, trust or other enterprise, or by reason of any
action alleged to be taken or omitted in such capacity, and may to the same
extent indemnify any person who was or is a party or is threatened to be
made a party to such an action, suit or proceeding by reason of the fact
that he or she is or was or has agreed to become an employee or agent of
the Corporation, or is or was serving or has agreed to serve at the request
of the Corporation as an employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement in connection with such action, suit or proceeding or any appeal
therefrom.
Article VI of the Amended By-Laws of each of the issuer and the guarantor
provides for indemnification of directors and officers as follows:
II-2
<PAGE>
Section 6.1. Nature of Indemnity. The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was or has agreed to become a Director or officer of the Corporation, or is or
was serving or has agreed to serve at the request of the Corporation as a
director of another corporation, partnership, joint venture, trust or other
enterprise, or by reason of any action alleged to have been taken or omitted in
such capacity, and may indemnify any person who was or is a party or is
threatened to be made a party to such an action, suit or proceeding by reason of
the fact that he is or was or has agreed to become an employee or agent of the
Corporation, or is or was serving or has agreed to serve at the request of the
Corporation as an employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or on his behalf in connection with such action, suit or
proceeding and any appeal therefrom, if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding had no
reasonable cause to believe his conduct was unlawful; except that in the case of
an action or suit by or in the right of the Corporation to procure a judgment in
its favor (1) such indemnification shall be limited to expenses (including
attorneys' fees) actually and reasonably incurred by such person in the defense
or settlement of such action or suit, and (2) no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Corporation unless and only to the extent that the
Delaware Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Delaware Court of
Chancery or such other court shall deem proper.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was unlawful.
Section 6.2. Successful Defense. To the extent that a Director, officer,
employee or agent of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Section
6.1 hereof or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
II-3
<PAGE>
Section 6.3. Determination That Indemnification Is Proper. Any
Indemnification of a Director or officer of the Corporation under Section 6.1
hereof (unless ordered by a court) shall be made by the Corporation unless a
determination is made that indemnification of the Director or officer is not
proper in the circumstances because he has not met the applicable standard of
conduct set forth in Section 6.1 hereof. Any indemnification of an employee or
agent of the Corporation under Section 6.1 hereof (unless ordered by a court)
may be made by the Corporation upon a determination that indemnification of the
employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in Section 6.1 hereof. Any such
determination shall be made (1) by a majority vote of the Directors who are not
parties to such action, suit or proceeding, even though less than a quorum, or
(2) if there are no such Directors, or if such Directors so direct, by
independent legal counsel in a written opinion, or (3) by the stockholders.
Section 6.4. Advance Payment of Expenses. Expenses (including attorneys'
fees) incurred by a Director or officer in defending any civil, criminal,
administrative or investigative action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the Director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation as authorized in this Article.
Such expenses (including attorneys' fees) incurred by other employees and agents
may be so paid upon such terms and conditions, if any, as the Board of Directors
deems appropriate. The Board of Directors may authorize the Corporation's
counsel to represent such Director, officer, employee or agent in any action,
suit or proceeding, whether or not the Corporation is a party to such action,
suit or proceeding.
Section 6.5. Procedure for Indemnification of Directors and Officers. Any
indemnification of a Director or officer of the Corporation under Sections 6.1
and 6.2, or advance of costs, charges and expenses to a Director or officer
under Section 6.4 of this Article, shall be made promptly, and in any event
within 30 days, upon the written request of the Director or officer. If a
determination by the Corporation that the Director or officer is entitled to
indemnification pursuant to this Article is required, and the Corporation fails
to respond within sixty days to a written request for indemnity, the Corporation
shall be deemed to have approved such request. If the Corporation denies a
written request for indemnity or advancement of expenses, in whole or in part,
or if payment in full pursuant to such request is not made within 30 days, the
right to indemnification or advances as granted by this Article shall be
enforceable by the Director or officer in any court or competent jurisdiction.
Such person's costs and expenses incurred in connection with successfully
establishing his right to indemnification, in whole or in part, in any such
action shall also be indemnified by the Corporation. It shall be a defense to
any such action (other than an action brought to enforce a claim for the advance
of costs, charges and expenses under Sec-
II-4
<PAGE>
tion 6.4 of this Article where the required undertaking, if any, has been
received by the Corporation) that the claimant has not met the standard of
conduct set forth in Section 6.1 of this Article, but the burden of proving such
defense shall be on the Corporation. Neither the failure of the Corporation
(including its Board of Directors, its independent legal counsel, and its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in Section 6.1
of this Article, nor the fact that there has been an actual determination by the
Corporation (including its Board of Directors, its independent legal counsel,
and its stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
Section 6.6. Survival; Preservation of Other Rights. The foregoing
indemnification provisions shall be deemed to be a contract between the
Corporation and each Director, officer, employee and agent who serves in any
such capacity at any time while these provisions as well as the relevant
provisions of the General Corporation Law of the State of Delaware are in
effect. Any repeal or modification of these indemnification provisions shall not
affect any right or obligation then existing with respect to any state of facts
then or previously existing or any action, suit or proceeding previously or
thereafter brought or threatened based in whole or in part upon any such state
of facts. Such a "contract right" may not be modified retroactively without the
consent of such director, officer, employee or agent.
The indemnification provided by this Article VI shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any by-law, agreement, vote of stockholders or disinterested Directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a Director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
Section 6.7. Insurance. The Corporation shall purchase and maintain
insurance on behalf of any person who is or was or has agreed to become a
Director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director or officer of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him and incurred by him or on his behalf in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article,
provided that such insurance is available on acceptable terms, which
determination shall be made by a vote of a majority of the entire Board of
Directors.
II-5
<PAGE>
Section 6.8. Severability. If this Article VI or any portion hereof shall
be invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Director or officer and may
indemnify each employee or agent of the Corporation as to costs, charges and
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the
right of the Corporation, to the fullest extent permitted by any applicable
portion of this Article that shall not have been invalidated and to the fullest
extent permitted by applicable law.
Item 16. Exhibits.
Exhibit No. Description
(1) Form of Underwriting Agreement (incorporated by reference to Exhibit 1 to
the issuer's Registration Statement on Form S-3 (File No. 333-32627)).
(4) Indenture for the Senior Debt Securities (incorporated by reference to
Exhibit 4.1 to the issuer's Quarterly Report on Form 10-Q for the Quarter
Ended September 30, 1998).
(5) Opinion of Richard A. Kalaher, Esq., regarding the legality of the
securities being registered.*
(12) Computation of ratios of earnings to fixed charges of the issuer.
(23) (i) Consent of Ernst & Young LLP.
(ii) Consent of Richard A. Kalaher, Esq., included in Exhibit (5).*
(iii) Consent of Meilicke Hoffmann & Partner.*
(24) Powers of Attorney.*
(25) Statement of Eligibility on Form T-1 of The Bank of New York.*
(27) Financial Data Schedule (incorporated by reference to Exhibit 27 to the
issuer's Form 10-Q for the quarter ended September 30, 1998). -
- -----------------------
* Previously filed.
II-6
<PAGE>
Item 17. Undertakings.
(a) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the securities
Act of 1933 if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) herein do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the undersigned
registrants 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 that time shall be deemed to be the initial bona fide offering
thereof; and
II-7
<PAGE>
(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.
(b) The undersigned registrants hereby undertake that, for purposes of
determining any liability under the securities Act of 1933, each filing of
either registrant's annual report pursuant to section 13(a) or section 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.
(c) Insofar as indemnification for liabilities arising under the securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions or otherwise, the
registrants have been advised that in the opinion of the securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by either registrant of
expenses incurred or paid by a director, officer or controlling person of such
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 registrants will, unless in the opinion of
their 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.
(d) The undersigned registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430(A) and
contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of
prospectus 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.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Township of Piscataway, State of New Jersey on February
16, 1999.
AMERICAN STANDARD INC.
By: /s/ EMMANUEL A. KAMPOURIS
------------------------------
(Emmanuel A. Kampouris)
Chairman, President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities indicated on February 16, 1999.
<TABLE>
<CAPTION>
<S> <C>
/s/ EMMANUEL A. KAMPOURIS Chairman, President and Chief Executive Officer;
- ------------------------------------- Director (Principal Executive Officer)
(Emmanuel A. Kampouris)
/s/ GEORGE H. KERCKHOVE Vice President and Chief Financial Officer;
- ------------------------------------- Director (Principal Financial Officer)
(George H. Kerchkhove)
/s/ G. RONALD SIMON Vice President and Controller
- ------------------------------------- (Principal Accounting Officer)
(G. Ronald Simon)
* Director
- -------------------------------------
(Steven E. Anderson)
* Director
- -------------------------------------
(Horst Hinrichs)
II-9
<PAGE>
* Director
- -------------------------------------
(Shigeru Mizushima)
* Director
- -------------------------------------
(Roger W. Parsons)
* Director
- -------------------------------------
(J. Danforth Quayle)
* Director
- -------------------------------------
(David M. Roderick)
* Director
- -------------------------------------
(Joseph S. Schuchert)
*By: /s/ FREDERICK C. PAINE
-------------------------------
(Frederick C. Paine,
as attorney-in-fact)
</TABLE>
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Township of Piscataway, State of New Jersey on February
16, 1999.
AMERICAN STANDARD COMPANIES INC.
By:/s/ EMMANUEL A. KAMPOURIS
-------------------------------------
(Emmanuel A. Kampouris)
Chairman, President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities indicated on February 16, 1999.
<TABLE>
<CAPTION>
<S> <C>
/s/ EMMANUEL A. KAMPOURIS Chairman, President and Chief Executive Officer;
- ------------------------------------- Director (Principal Executive Officer)
(Emmanuel A. Kampouris)
/s/ GEORGE H. KERCKHOVE Vice President and Chief Financial Officer;
- ------------------------------------- Director (Principal Financial Officer)
(George H. Kerckhove)
/s/ G. RONALD SIMON Vice President and Controller
- ------------------------------------- (Principal Accounting Officer)
(G. Ronald Simon)
* Director
- -------------------------------------
(Steven E. Anderson)
* Director
- --------------------------------------
(Horst Hinrichs)
II-11
<PAGE>
* Director
- ---------------------------------------
(Shigeru Mizushima)
* Director
- ---------------------------------------
(Roger W. Parsons)
* Director
- ---------------------------------------
(J. Danforth Quayle)
* Director
- ---------------------------------------
(David M. Roderick)
* Director
- ---------------------------------------
(Joseph S. Schuchert)
*By: /s/ FREDERICK C. PAINE
- ---------------------------------------
(Frederick C. Paine,
as attorney-in-fact)
</TABLE>
II-12
AMERICAN STANDARD INC.
COMPUTATION OF THE RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Millions)
<TABLE>
<CAPTION>
For the Years ended December 31,
---------------------------------------------------
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Income (loss) from continuing
operations before taxes $(15.2) $226.9 $57.6 $236.8 $165.4
Equity in net (income) loss of
associated companies net of dividends
received 1.1 11.0 11.8 (2.9) (3.6)
Amortization of capitalized interest 1.0 1.1 1.3 1.4 1.6
Interest expense 259.4 213.3 198.2 192.2 188.4
Rental expense factor 17.6 23.0 27.3 25.0 26.5
------ ------ ------ ------ ------
Earnings available for fixed charges $263.9 $475.3 $296.2 $452.5 $378.3
====== ====== ====== ====== ======
Interest expense $259.4 $213.3 $198.2 $192.2 $188.4
Capitalized interest 2.9 4.0 3.9 3.8 4.5
Rental expense factor 17.6 23.0 27.3 25.0 26.5
------ ------ ------ ------ ------
Fixed charges $279.9 $240.3 $229.4 $221.0 $219.4
====== ====== ====== ====== ======
Ratio of earnings to fixed charges (a) (b) 2.0 1.3 2.0 1.7
</TABLE>
(a) For the purpose of computing the ratio of earnings to fixed charges, fixed
charges consist of interest on debt (including capitalized interest),
amortization of debt discount and expense, and a portion of rentals
determined to be representative of interest. Earnings consist of
consolidated net income before income taxes, plus fixed charges other than
capitalized interest but including the amortization thereof, adjusted by
the excess or deficiency of dividends over income of entities accounted for
by the equity method.
(b) Earnings were insufficient to cover fixed charges for the year ended
December 31, 1994 by $16.0 million.
EXHIBIT 23.i
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration Statement (Form S-3 No. 333-67943) and related
Prospectus of American Standard Inc. and American Standard Companies Inc. for
the registration of $750,000,000 of debt securities and to the incorporation by
reference therein of our reports dated February 16, 1998 with respect to the
consolidated financial statements and schedules of American Standard Inc. and
American Standard Companies Inc. incorporated by reference in their Annual
Reports (Form 10-K) for the year ended December 31, 1997, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young L.L.P.
New York, New York
February 16, 1999
