As filed with the Securities and Exchange Commission on November 7, 1997
REGISTRATION STATEMENT NO. 333-36013
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MARK IV INDUSTRIES, INC.
(Exact name of registrant is specified in its charter)
DELAWARE
(State or other 3052 23-1733979
jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification Number)
organization) Code No.)
--------------------
501 JOHN JAMES AUDUBON PARKWAY
P.O. BOX 810
AMHERST, NEW YORK 14226-0810
(716) 689-4972
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
WILLIAM P. MONTAGUE
PRESIDENT
MARK IV INDUSTRIES, INC.
501 JOHN JAMES AUDUBON PARKWAY
P.O. BOX 810
AMHERST, NEW YORK 14226-0810
(716) 689-4972
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------
COPIES TO:
DAVID L. FINKELMAN, ESQ. GERALD S. LIPPES, ESQ.
STROOCK & STROOCK & LAVAN LLP LIPPES, SILVERSTEIN, MATHIAS &
180 Maiden Lane WEXLER LLP
New York, New York 100384982 700 Guaranty Building
28 Church Street
Buffalo, New York 14202-3950
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Approximate date of commencement of proposed sale to public:
As soon as practicable after this Registration Statement becomes
effective.
--------------------
If the only securities being registered on this form are being in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. |_|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==================================================================================================================================
TITLE OF EACH CLASS OF PROPOSED PROPOSED AMOUNT OF
SECURITIES TO BE AMOUNT TO MAXIMUM MAXIMUM REGISTRATION
REGISTERED BE AGGREGATE AGGREGATE FEE
REGISTERED PRICE PER OFFERING
UNIT (1) PRICE (1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7 1/2% Senior Subordinated $250,000,000 100% $250,000,000 $75,757.78
Notes due 2007
===================================================================================================================================
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f).
</TABLE>
--------------------
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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
SUBJECT TO COMPLETION, DATED NOVEMBER __, 1997
PRELIMINARY PROSPECTUS
This Prospectus and the information contained herein are subject to change,
completion or amendment without notice. These securities may not be sold nor may
an offer to buy be accepted prior to the time the Prospectus is delivered in
final form. Under no circumstances shall this Prospectus constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of these
securities in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
any such jurisdiction.
MARK IV INDUSTRIES, INC.
OFFER TO EXCHANGE
7 1/2% SENIOR SUBORDINATED NOTES DUE 2007
FOR ANY AND ALL OUTSTANDING 7 1/2% SENIOR SUBORDINATED NOTES DUE 2007
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
DECEMBER , 1997 UNLESS EXTENDED BY MARK IV INDUSTRIES, INC. As more fully
described herein under "The Exchange Offer--Expiration Date; Extensions;
Amendment," the time the Exchange Offer expires (including extensions, if any,
by the Company) is referred to as the "Expiration Date."
Mark IV Industries, Inc., a Delaware corporation ("Mark IV" or the
"Company"), is hereby offering (the "Exchange Offer"), upon the terms and
subject to the conditions set forth in this prospectus (the "Prospectus") and
the accompanying letter of transmittal (the "Letter of Transmittal"), to
exchange $250,000,000 aggregate principal amount of its 7 1/2% Senior
Subordinated Notes due 2007 (the "Exchange Notes"), which exchange has been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to a registration statement of which this Prospectus is a part (the
"Registration Statement"), for $250,000,000 aggregate principal amount of its 7
1/2% Senior Subordinated Notes due 2007 (the "Private Notes" and, collectively
with the Exchange Notes, the "Notes") which were sold on August 11, 1997 in a
transaction exempt from registration under the Securities Act and are
outstanding on the date hereof.
The form and terms of the Exchange Notes are substantially identical in
all respects (including principal amount, interest rate, maturity and ranking)
to the form and terms of the Private Notes, except that (i) the Exchange Notes
will have been registered under the Securities Act and, therefore, will not bear
legends restricting the transfer thereof and (ii) holders of the Exchange Notes
will not be entitled to certain rights of holders of the Private Notes under the
Registration Rights Agreement (as defined), which rights will terminate upon
consummation of the Exchange Offer. The Exchange Notes will evidence the same
obligations as the Private Notes and will be issued pursuant to, and entitled to
the benefits of, the Indenture (as defined) governing the Private Notes. The
Exchange Offer is being made to satisfy the obligations of the Company under the
Registration Rights Agreement relating to the Private Notes. See "The Exchange
Offer" and "Description of the Exchange Notes."
The Exchange Notes will bear interest at a rate equal to 7 1/2% per
annum. Interest on the Exchange Notes will be payable semi-annually in arrears
on each March 1 and September 1, commencing March 1, 1998. Holders of Exchange
Notes will receive interest on March 1, 1998 from the date of initial issuance
of the Exchange Notes, plus an amount equal to the accrued interest on the
Private Notes from August 11, 1997, the date of initial issuance of the Private
Notes, to the date of exchange thereof for Exchange Notes. Holders of Private
Notes that are accepted for exchange will be deemed to have waived the right to
receive any interest accrued on the Private Notes.
The Exchange Notes will be general unsecured obligations of the
Company, will be subordinated in right of payment to the prior payment in full
of all existing and future Senior Indebtedness (as defined) of the Company, will
be senior in right of payment to, or PARI PASSU in right of payment with, any
existing and future Senior Subordinated Indebtedness (as defined) of the
Company, and will be effectively subordinated to the indebtedness of the
Company's subsidiaries. At August 31, 1997, Senior Indebtedness of the Company
and its subsidiaries was approximately $79,700,000 and Senior Subordinated
Indebtedness of the Company (including the Private Notes) was approximately
$755,300,000. The Indenture pursuant to which the Notes will be issued will not
restrict the Company or its subsidiaries from incurring additional indebtedness.
See "Description of the Exchange Notes --Subordination."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------------
THE DATE OF THIS PROSPECTUS IS __________, 1997
<PAGE>
The Private Notes were originally issued and sold in reliance upon the
exemption provided in Section 4(2) of the Securities Act and Rule 144A of the
Securities Act. Accordingly, the Private Notes may not be reoffered, resold or
otherwise pledged, hypothecated or transferred in the United States or to a U.S.
person unless registered under the Securities Act or unless an applicable
exemption from the registration requirements of the Securities Act is available.
Based on an interpretation by the staff of the Commission set forth in no-action
letters issued to third parties, the Company believes that the Exchange Notes
issued pursuant to the Exchange Offer in exchange for Private Notes may be
offered for resale, resold and otherwise transferred by a holder thereof (other
than (i) an "affiliate" of the Company within the meaning of Rule 405 under the
Securities Act, (ii) a broker-dealer who acquired Private Notes directly from
the Company to resell pursuant to Rule 144A or any other available exemption
under the Securities Act or (iii) a broker-dealer who acquired Private Notes as
a result of market making or other trading activities), without compliance with
the registration and prospectus delivery requirements of the Securities Act;
PROVIDED that the holder is acquiring Exchange Notes in the ordinary course of
its business and is not participating, and has no arrangement or understanding
with any person to participate, in the distribution of the Exchange Notes.
Holders of Private Notes wishing to accept the Exchange Offer must represent to
the Company, as required by the Registration Rights Agreement, that such
conditions have been met. The Company believes that none of the registered
holders of the Private Notes is an affiliate (as such term is defined in Rule
405 under the Securities Act) of the Company.
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Private Notes must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of
Exchange Notes received in exchange for Private Notes, where such Private Notes
were acquired by such broker-dealer as a result of market-making or other
trading activities. The Company has agreed to make this Prospectus (as it may be
amended or supplemented) available to any broker-dealer, upon request, for use
in connection with any such resale, for a period of one year after the
Registration Statement is declared effective by the Commission or until such
earlier date on which all the Exchange Notes are freely tradeable. However, any
broker-dealer who acquired the Private Notes directly from the Company may not
fulfill its prospectus delivery requirements with this Prospectus, but must
comply with the registration and prospectus delivery requirements of the
Securities Act. See "The Exchange Offer--Resale of the Exchange Notes" and "Plan
of Distribution."
The Company will not receive any proceeds from, and will bear the
expenses of, the Exchange Offer. No underwriter is being used in connection with
the Exchange Offer. See "The Exchange Offer--Resale of the Exchange Notes."
Prior to the Exchange Offer, there has been no public market for the
Notes. The Company has not determined whether the Exchange Notes will be listed
on any securities exchange, but the Private Notes are eligible for trading in
the Private Offerings, Resales and Trading through Automated Linkages ("PORTAL")
Market of the National Association of Securities Dealers, Inc. There can be no
assurance that an active market for the Exchange Notes will develop. To the
extent that a market for the Exchange Notes does develop the market value of the
Exchange Notes will depend on market conditions (such as yields on alternative
investments), general economic conditions, the Company's financial condition and
certain other factors. Such conditions might cause the Exchange Notes, to the
extent they are traded, to trade at a significant discount from face value. In
addition, any Private Notes not tendered and accepted in the Exchange Offer will
remain outstanding. To the extent that the Private Notes are tendered and
accepted in the Exchange Offer, a holder's ability to sell untendered, and
tendered but unaccepted, Private Notes could be adversely affected. Following
consummation of the Exchange Offer, the holders of Private Notes will continue
to be subject to the existing restrictions on transfer thereof. The Company,
except under certain limited circumstances, will not have any further obligation
to such holders to provide for the registration of the Private Notes under the
Securities Act. See "The Exchange Offer--Termination of Certain Rights."
AS USED HEREIN, THE "INDENTURE" MEANS THE INDENTURE, DATED AS OF AUGUST
11, 1997, AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME, BETWEEN THE COMPANY AND
MARINE MIDLAND BANK, AS TRUSTEE (THE "DEBENTURE TRUSTEE"), RELATING TO THE
PRIVATE NOTES AND THE EXCHANGE NOTES.
The Company will accept for exchange any and all validly tendered
Private Notes not withdrawn prior to 5:00 p.m., New York City time, on the
Expiration Date. Tenders of Private Notes may be withdrawn at any time prior to
5:00 p.m. on the Expiration Date. The Exchange Offer is not conditioned on any
minimum aggregate principal amount of Private Notes being tendered or accepted
for exchange; PROVIDED, HOWEVER, Private Notes may be tendered only in integral
multiples of $1,000. The Exchange Offer is subject to certain customary
conditions. See "The Exchange Offer--Conditions."
<PAGE>
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF PRIVATE NOTES IN ANY JURISDICTION IN
WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
NO PERSON IS AUTHORIZED IN CONNECTION WITH THE EXCHANGE OFFER TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
OR THE ACCOMPANYING LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, SUCH OTHER
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THE INFORMATION CONTAINED HEREIN IS AS OF THE DATE HEREOF AND
SUBJECT TO CHANGE, COMPLETION OR AMENDMENT WITHOUT NOTICE. NEITHER THE DELIVERY
OF THIS PROSPECTUS OR THE ACCOMPANYING LETTER OF TRANSMITTAL AT ANY TIME NOR ANY
EXCHANGE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE HEREOF.
IN MAKING AN INVESTMENT DECISION REGARDING THE SECURITIES OFFERED
HEREBY, PROSPECTIVE INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY
AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE
OFFERING IS BEING MADE ON THE BASIS OF THIS PROSPECTUS. ANY DECISION TO EXCHANGE
SECURITIES IN THE EXCHANGE OFFER MUST BE BASED ON THE INFORMATION CONTAINED
HEREIN.
The Exchange Notes will be available initially to qualified
institutional buyers only in book-entry form. Except as described herein, the
Exchange Notes will be represented by a Global Note (as defined) in fully
registered form, deposited with a custodian for and registered in the name of a
nominee of The Depository Trust Company ("DTC"). Beneficial interests in the
Global Note representing such Exchange Notes will be shown on, and transfers
thereof will be effected through, records maintained by DTC and its
participants. Beneficial interests in such Exchange Notes will trade in DTC's
Same-Day Funds Settlement System and secondary market trading activity in such
interests will therefore settle in immediately available funds.
TABLE OF CONTENTS
PAGE
AVAILABLE INFORMATION.........................................................4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...............................4
FORWARD LOOKING STATEMENTS....................................................5
PROSPECTUS SUMMARY............................................................6
CAPITALIZATION...............................................................12
SELECTED FINANCIAL DATA......................................................13
BUSINESS.....................................................................15
USE OF PROCEEDS..............................................................16
THE EXCHANGE OFFER...........................................................17
DESCRIPTION OF THE EXCHANGE NOTES............................................25
DESCRIPTION OF PRIVATE NOTES.................................................32
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS....................................32
PLAN OF DISTRIBUTION.........................................................34
LEGAL MATTERS................................................................35
EXPERTS .....................................................................35
<PAGE>
AVAILABLE INFORMATION
Mark IV Industries, Inc. ("Mark IV" or 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"). Reports, proxy statements and other information filed by the
Company with the Commission can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's regional offices located at Seven
World Trade Center, New York, New York 10048, and Suite 1400, Northwestern
Atrium Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
materials can be obtained from the Public Reference Section of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
Such materials can also be inspected at the New York Stock Exchange, 20 Broad
Street, New York, New York 10005. The Commission maintains an Internet web site
that contains reports, proxy and information statements and other information
regarding Issuers who file electronically with the Commission. The address of
that site is http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on
Form S-4 (together with all amendments, exhibits, annexes and schedules thereto,
the "Registration Statement") pursuant to the Securities Act, and the rules and
regulations promulgated thereunder, with respect to the securities being offered
hereby. This Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information with
respect to the Company and the securities offered hereby, reference is made to
the Registration Statement, including the exhibits filed as a part thereof and
otherwise incorporated therein. Statements made in this Prospectus as to the
contents of any contract, agreement or other document referred to are
necessarily summaries of the material elements of such contract, agreement or
document, and with respect to each contract, agreement or other document filed
as an exhibit to the Registration Statement, reference is made to such exhibit
for a more complete description of the matter involved. Each such statement
shall be deemed qualified in its entirety by such reference. Copies of the
Registration Statement and the exhibits may be inspected, without charge, at the
offices of the Commission, or obtained at prescribed rates from the Public
Reference Section of the Commission at the address set forth above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission by the
Company pursuant to the Exchange Act are incorporated by reference in this
Prospectus and made a part hereof:
(a) the Company's Annual Report on Form 10-K for the fiscal
year ended February 28, 1997 as amended by Amendment No. 1
on Form 10-K/A dated June 27, 1997;
(b) the Company's Quarterly Reports on Form 10-Q for the
quarters ended May 31, 1997 and August 31, 1997;
(c)the Company's Current Report on Form 8K dated August 11,
1997; and
(d)the Company's Current Report on Form 8K dated November 7,
1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date hereof and prior to the
termination of the Offering shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which is also incorporated or deemed to be
incorporated by reference herein modifies, supersedes or replaces such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to any person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the documents which have been incorporated by reference in this
Prospectus, other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into the documents so incorporated. Any
such request should be directed to Investor Relations, Mark IV Industries, Inc.,
501 John James Audubon Parkway, P.O. Box 810, Amherst, New York 14226-0810.
Telephone requests may be directed to (716) 689-4972.
FORWARD LOOKING STATEMENTS
This Prospectus, including certain information incorporated by
reference herein, may include "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Any statements with regard
to the Company's expectations as to industry conditions and its financial
results, demand for or pricing of its products and other aspects of its business
may constitute forward-looking statements. Although the Company makes such
statements based on assumptions which it believes to be reasonable, there can be
no assurance that actual results will not differ materially from the Company's
expectations. Accordingly, the Company hereby identifies the following important
factors, among others, which could cause its results to differ from any results
which might be projected, forecasted or estimated in any such forward-looking
statements: (i) general economic and competitive conditions in the markets and
countries in which the Company operates, and the risks inherent in international
operations and joint ventures; (ii) the Company's ability to continue to control
and reduce its costs of production; (iii) the level of consumer demand for new
vehicles equipped with the Company's products; (iv) the level of consumer demand
for the Company's aftermarket products, which varies based on such factors as
the severity of winter weather, the age of automobiles in the Company's markets
and the impact of improvements or changes in original equipment products; (v)
the effect of changes in the distribution channels for the Company's aftermarket
and industrial products; and (vi) the strength of the U.S. dollar against
currencies of other countries where the Company operates, as well as
cross-currencies between the Company's operations outside of the United States
and other countries with whom they transact business. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described in the
forward-looking statements. The Company does not intend to update
forward-looking statements.
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, APPEARING
ELSEWHERE OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. UNLESS THE CONTEXT
OTHERWISE REQUIRES, ALL REFERENCES HEREIN TO THE "COMPANY" OR "MARK IV" INCLUDE
MARK IV INDUSTRIES, INC. AND ITS SUBSIDIARIES.
THE COMPANY
Mark IV is a diversified manufacturer of a broad range of proprietary
and other power and fluid transfer products and systems which serve primarily
automotive and industrial markets. Many of Mark IV's product groups have a
significant, and in certain instances the leading, share of their respective
markets. Products manufactured by Mark IV principally serve specialized needs in
markets in which relatively few manufacturers compete. These products are sold
primarily directly, but also through independent distributors, to other
manufacturers, commercial users and resellers in the United States and Europe
and, to a lesser extent, in Canada, Latin America and the Far East. Mark IV
operates 68 manufacturing facilities and 45 distribution and sales locations and
employs approximately 16,200 people in 19 countries.
Mark IV's business strategy is focused on building its worldwide
Automotive and Industrial business segments through internal growth and
selective strategic acquisitions, and the continuation of cost control and
quality improvement programs. The Company's operating strategy emphasizes
establishing cooperative programs with customers to engineer, design and develop
higher value-added systems in addition to individual products, the introduction
of new, more cost effective and durable products, and management for continuous
improvement.
In furtherance of these strategies, over its last five fiscal years,
Mark IV has: (i) enhanced its ability to provide a broader range of products to
its existing customers through its acquisition of Purolator Products Company, a
leading manufacturer of automotive and industrial filtration products and
systems in late-fiscal 1995; (ii) established a joint venture in Brazil and is
in the process of establishing manufacturing facilities in Argentina and Brazil;
(iii) established distribution centers to serve markets in Latin America and the
Pacific Rim, and acquired manufacturing and distribution facilities in Mexico;
(iv) increased its industrial hose and couplings production capacity and
strengthened its position in the hose and couplings products market through its
acquisition of Imperial Eastman at the beginning of fiscal 1997; (v) emphasized
continuous product development, with a significant amount of its current sales
arising from the introduction of new products or products which have been
redesigned; (vi) initiated during fiscal 1997 a restructuring of the Company's
manufacturing and distribution facilities to make them more focused and cost
effective; and (vii) expanded its Automotive segment with the October 1997
acquisition of LPI Systemes Moteurs SA, a manufacturer of air handling systems
in France.
The Company's principal executive office is located at 501 John James
Audubon Parkway, P.O. Box 810, Amherst, New York 14226-0810 and its telephone
number is (716) 689-4972.
THE NOTES OFFERING
The Notes................. The Private Notes were sold by the
Company on August 11, 1997 to Bear, Stearns & Co.
Inc. (the "Initial Purchaser") pursuant to a
Purchase Agreement dated August 6, 1997 (the
"Purchase Agreement"). The Initial Purchaser
subsequently resold the Private Notes (i) to
qualified institutional buyers in reliance on Rule
144A under the Securities Act, (ii) to a limited
number of institutional accredited investors
pursuant to Regulation D under the Securities Act
and (iii) to Non-U.S. persons in offshore
transactions pursuant to Regulation S under the
Securities Act.
Registration Rights
Agreement................. Pursuant to the Purchase Agreement,
the Company and the Initial Purchaser entered into
a Registration Rights Agreement dated August 11,
1997 (the "Registration Rights Agreement"), which
grants the holder of the Private Notes certain
exchange and registration rights. The Exchange
Offer is intended to satisfy such exchange rights
which will terminate upon consummation of the
Exchange Offer except under certain limited
circumstances. See "The Exchange
Offer--Termination of Certain Rights."
THE EXCHANGE OFFER
The Exchange Offer........ The Company is hereby offering to
exchange $1,000 of Exchange Notes for each $1,000
of Private Notes that are properly tendered and
accepted. The Company will issue Exchange Notes on
or promptly after the Expiration Date. As of the
date hereof, $250,000,000 aggregate principal
amount of Private Notes are outstanding. See "The
Exchange Offer--Purpose of the Exchange Offer."
Based on an interpretation by the
staff of the Commission set forth in no-action
letters issued to third parties, the Company
believes that the Exchange Notes issued pursuant
to the Exchange Offer in exchange for Private
Notes may be offered for resale, resold and
otherwise transferred by a holder thereof (other
than (i) an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act, (ii)
a broker-dealer who acquired Private Notes
directly from the Company to resell pursuant to
Rule 144A or any other available exemption under
the Securities Act or (iii) a broker-dealer who
acquired Private Notes as a result of market
making or other trading activities), without
compliance with the registration and prospectus
delivery requirements of the Securities Act;
PROVIDED that the holder is acquiring Exchange
Notes in the ordinary course of its business and
is not participating, and has no arrangement or
understanding with any person to participate, in
the distribution of the Exchange Notes. Holders of
Private Notes wishing to accept the Exchange Offer
must represent to the Company, as required by the
Registration Rights Agreement, that such
conditions have been met. The Company believes
that none of the registered holders of the Private
Notes is an affiliate (as such term is defined in
Rule 405 under the Securities Act) of the Company.
Any broker-dealer that resells Exchange Notes that
were received by it for its own account pursuant
to the Exchange Offer and any broker or dealer
that participates in the distribution of such
Exchange Notes may be deemed to be an
"underwriter" within the meaning of the Securities
Act and any profit on any such resale of Exchange
Notes and any commissions or concessions received
by any such persons may be deemed to be
underwriting compensation under the Securities
Act.
Each broker-dealer that receives
Exchange Notes for its own account in exchange for
Private Notes must acknowledge that it will
deliver a prospectus in connection with any resale
of such Exchange Notes. The Letter of Transmittal
states that by so acknowledging and by delivering
a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to
time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in
exchange for Private Notes, where such Private
Notes were acquired by such broker-dealer as a
result of market-making or other trading
activities. The Company has agreed to make this
Prospectus (as it may be amended or supplemented)
available to any broker-dealer, upon request, for
use in connection with any such resale, for a
period of one year after the Registration
Statement is declared effective by the Commission
or until such earlier date on which all the
Exchange Notes are freely tradeable. However, any
broker-dealer who acquired the Private Notes
directly from the Company other than as a result
of market-making activities or ordinary trading
activities may not fulfill its prospectus delivery
requirements with this Prospectus, but must comply
with the registration and prospectus delivery
requirements of the Securities Act. See "The
Exchange Offer--Resale of the Exchange Notes."
Consequences of Failure
to Exchange........... Holders of Private Notes who do not
tender their Private Notes in the Exchange Offer
will continue to hold such Private Notes and will
be entitled to all the rights and limitations
applicable thereto under the Indenture. All
untendered, and tendered but not unaccepted,
Private Notes will continue to be subject to the
restrictions on transfer provided for in the
Private Notes and the Indenture. To the extent
that Private Notes are tendered and accepted in
the Exchange Offer, the trading market, if any,
for the Private Notes could be adversely affected.
See "The Exchange Offer-- Consequences of Failure
to Exchange."
Expiration Date......... The Exchange Offer will expire at
5:00 p.m., New York City time, on December , 1997,
unless the Exchange Offer is extended by the
Company, in its sole discretion, in which case the
term "Expiration Date" shall mean the latest date
and time to which the Exchange Offer is extended.
See "The Exchange Offer--Expiration Date;
Extensions; Amendments."
Accrued Interest
on the Exchange Notes and
the Private Notes........ The Exchange Notes will bear interest from and
including the date of issuance of the Private
Notes (August 11, 1997). Holders whose Private
Notes are accepted for exchange will be deemed to
have waived the right to receive any interest
accrued on the Private Notes. See "The Exchange
Offer--Interest on the Exchange Notes."
Conditions to the Exchange
Offer...................... The Exchange Offer is subject to
certain customary conditions that may be waived by
the Company. The Exchange Offer is not conditioned
upon any minimum aggregate amount of Private Notes
being tendered for exchange. See "The Exchange
Offer-- Conditions."
Procedures for
Tendering Private Notes.... Each Holder of Private Notes wishing to accept the
Exchange Offer must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, in
accordance with the instructions contained herein
and therein, and mail or otherwise deliver such
Letter of Transmittal, or such facsimile, together
with such Private Notes and any other required
documentation to Marine Midland Bank, as exchange
agent (the "Exchange Agent"), at its address set
forth herein. By executing the Letter of
Transmittal, the holder will represent to and
agree with the Company that, among other things,
(i) the Exchange Notes to be acquired by such
holder of Private Notes in connection with the
Exchange Offer are being acquired by such holder
in the ordinary course of its business, (ii) such
holder is not currently participating and has no
arrangement or understanding with any person to
participate in a distribution of the Exchange
Notes, (iii) if such holder is a broker-dealer
registered under the Exchange Act or is
participating in the Exchange Offer for the
purposes of distributing the Exchange Notes, such
holder will comply with the registration and
prospectus delivery requirements of the Securities
Act in connection with a secondary resale
transaction of the Exchange Notes acquired by such
person and cannot rely on the position of the
staff of the Commission set forth in no-action
letters (see "The Exchange Offer-- Resale of
Exchange Notes"), (iv) such holder understands
that a secondary resale transaction described in
clause (iii) above and any resales of Exchange
Notes obtained by such holder in exchange for
Private Notes acquired by such holder directly
from the Company should be covered by an effective
registration statement containing the selling
security holder information required by Item 507
of Regulation S-K of the Commission and (v) such
holder is not an "affiliate," as defined in Rule
405 under the Securities Act, of the Company. If
the holder is a broker-dealer that will receive
Exchange Notes for its own account in exchange for
Private Notes that were acquired as a result of
market-making activities or other trading
activities, such holder will be required to
acknowledge in the Letter of Transmittal that such
holder will deliver a prospectus in connection
with any resale of such Exchange Notes; however,
by so acknowledging and by delivering a
prospectus, such holder will not be deemed to
admit that it is an "underwriter" within the
meaning of the Securities Act. See "The Exchange
Offer--Procedures for Tendering."
Special Procedures for
Beneficial Owners......... Any beneficial owner whose Private
Notes are registered in the name of a broker,
commercial bank, trust company or other nominee
and who wishes to tender such Private Notes in the
Exchange Offer should contact such registered
holder promptly and instruct such registered
holder to tender on such beneficial owner's
behalf. If such beneficial owner wishes to tender
on such owner's own behalf, such owner must, prior
to completing and executing the Letter of
Transmittal and delivering such owner's Private
Notes, either make appropriate arrangements to
register ownership of the Private Notes in such
owner's name or obtain a properly completed bond
power from the registered holder. The transfer of
registered ownership may take considerable time
and may not be able to be completed prior to the
Expiration Date. See "The Exchange
Offer--Procedures for Tendering."
Guaranteed Delivery
Procedures.............. Holders of Private Notes who wish
to tender their Private Notes and whose Private
Notes are not immediately available or who cannot
deliver their Private Notes, the Letter of
Transmittal or any other documentation required by
the Letter of Transmittal to the Exchange Agent
prior to the Expiration Date must tender their
Private Notes according to the guaranteed delivery
procedures set forth under "The Exchange
Offer--Guaranteed Delivery Procedures."
Acceptance of
the Private Notes and
Delivery of the
Exchange Notes............. Subject to the satisfaction or
waiver of the conditions to the Exchange Offer,
the Company will accept for exchange any and all
Private Notes that are properly tendered in the
Exchange Offer prior to the Expiration Date. The
Exchange Notes issued pursuant to the Exchange
Offer will be delivered on the earliest
practicable date following the Expiration Date.
See "The Exchange Offer--Terms of the Exchange
Offer."
Withdrawal Rights.......... Tenders of Private Notes may be
withdrawn at any time prior to the Expiration
Date. See "The Exchange Offer--Withdrawal of
Tenders."
Certain Federal
Income Tax
Considerations............. For a discussion of certain material
federal income tax considerations relating
to the exchange of the Exchange Notes for
the Private Notes, see "Certain Federal Income Tax
Considerations."
Exchange Agent............. Marine Midland Bank is serving as the
Exchange Agent in connection with the Exchange
Offer.
Use of Proceeds............ The Company will not receive any
cash proceeds from the issuance of the Exchange
Notes offered hereby. See "Use of Proceeds."
<PAGE>
TERMS OF THE EXCHANGE NOTES
The Exchange Offer applies to $250,000,000 aggregate principal amount
of the Private Notes. The form and terms of the Exchange Notes are substantially
identical in all respects (including principal amount, interest rate, maturity
and ranking) to the form and terms of the Private Notes, except that (i) the
Exchange Notes will have been registered under the Securities Act and,
therefore, will not bear legends restricting the transfer thereof; and (ii)
holders of the Exchange Notes will not be entitled to certain rights of holders
of the Private Notes under the Registration Rights Agreement, which rights will
terminate upon consummation of the Exchange Offer. The Exchange Notes will
evidence the same obligations as the Private Notes and will be issued pursuant
to, and entitled to the benefits of, the Indenture governing the Private Notes.
The Exchange Offer is being made to satisfy the obligations of the Company under
the Registration Rights Agreement relating to the Private Notes. For further
information and for definitions of certain capitalized terms used below, see
"The Exchange Offer" and "Description of the Exchange Notes."
Issuer.................. Mark IV Industries, Inc.
Securities Offered...... Exchange Notes
Maturity Date........... September 1, 2007.
Interest Rate........... The Exchange Notes will bear interest at a
rate of 7 1/2% per annum.
Interest Payment
Dates................. Interest will accrue on the
Exchange Notes from the date of the initial
issuance of the Private Notes (August 11, 1997)
and will be payable semi-annually on each March 1
and September 1 of each year, commencing March 1,
1998.
Record Dates........... February 15 and August 15.
Subordination.......... The Exchange Notes will be
unsecured obligations of the Company, will be
subordinated in right of payment to the prior
payment in full of all Senior Indebtedness of the
Company, will be senior in right of payment to, or
rank PARI PASSU in right of payment with, any
existing and future Senior Subordinated
Indebtedness of the Company. At August 31, 1997,
Senior Indebtedness of the Company and its
subsidiaries was approximately $79,700,000 and
Senior Subordinated Indebtedness of the Company
(including the Private Notes) was approximately
$755,300,000. In addition, because the Company's
operations are conducted primarily through its
operating subsidiaries, claims of creditors and
holders of indebtedness of such subsidiaries will
have priority with respect to the assets and
earnings of such subsidiaries over the claims of
creditors of the Company, including holders of the
Notes. As of August 31, 1997, the aggregate
liabilities of such subsidiaries were
approximately $625,000,000. On October 29, 1997,
the Company sold in a transaction exempt from
registration under the Securities Act $275,000,000
principal amount of 4 3/4% Convertible
Subordinated Notes due 2004 (the "Convertible
Notes") which are subordinated in right of payment
to the Notes. The Company intends to use the net
proceeds from the sale of the Convertible Notes to
repurchase or redeem or defease or otherwise
retire all of the Company's outstanding
$258,000,000 principal amount of 8 3/4% Senior
Subordinated Notes due 2003 (the "8 3/4% Notes")
which rank PARI PASSU with the Notes. See
"Business-- Recent Developments." The Indenture
pursuant to which the Notes will be issued does
not restrict the Company and its subsidiaries from
incurring additional indebtedness. See
"Description of the Exchange
Notes--Subordination."
Absence of Market for the
Exchange Notes....... There is currently no market for
the Exchange Notes. Although the Initial Purchaser
has informed the Company that it currently intends
to make a market in the Exchange Notes, the
Initial Purchaser is not obligated to do so, and
any such market making may be discontinued at any
time without notice. Accordingly, there can be no
assurance as to the development or liquidity of
any market for the Exchange Notes. See "Plan of
Distribution."
<PAGE>
CAPITALIZATION
The following table sets forth the unaudited consolidated
capitalization of the Company as of August 31, 1997, which reflects the sale of
the Private Notes on August 11, 1997 and the application of a portion of the net
proceeds thereof to repay amounts outstanding under the Company's Credit
Agreement and domestic notes payable and as adjusted to give effect to the sale
of $275,000 principal amount of Convertible Note on October 29, 1997 and the
application of the net proceeds thereof to fund the retirement of the Company's
outstanding $258,000,000 principal amount of 8 3/4% Notes. See "Use of
Proceeds."
<TABLE>
<CAPTION>
AUGUST 31, 1997
(DOLLARS IN THOUSANDS)
----------------------------------------------
ACTUAL AS ADJUSTED
--------- -------------
<S> <C> <C>
Short-term debt:
Notes payable (1)........................................................ $ 58,600 $ 58,600
Current maturities of long-term debt..................................... 8,500 8,500
-------- --------
Total short-term debt............................................... $ 67,100 $ 67,100
=========== =========
Long-term debt, excluding current maturities:
Senior debt:
Credit Agreement (2).......................................... $ -- $ --
Other......................................................... 12,600 12,600
Total senior debt............................................. 12,600 12,600
------ ------
Subordinated debt:
8 3/4% Senior Subordinated Notes due April 1, 2003............ 258,000 --
7 3/4% Senior Subordinated Notes due April 1, 2006............ 248,600 248,600
7 1/2% Senior Subordinated Notes due September 1, 2007........ 248,700 248,700
4 3/4% Convertible Subordinated Notes due November 1, 2004.... --- 275,000
----------- ---------
Total subordinated debt....................................... 755,300 772,300
----------- ---------
Total long-term debt.......................................... 767,900 784,900
----------- ---------
Stockholders' equity....................................................
Preferred stock, $.01 par value: -- --
authorized 10 million shares: no issued shares
Common stock, $.01 par value: authorized 200 million shares:
63.7 million issued shares...................................... 600 600
Additional paid in capital...................................... 633,600 633,600
Retained Earnings............................................... 131,900 131,900 (3)
Foreign currently translation adjustment (24,900) (24,900)
-------- ---------
Total stockholders' equity.................................. 741,200 741,200
-------- ---------
Total Capitalization.......................................... $1,509,100 $1,526,100
========== ==========
- -----------------
(1) Consists primarily of notes payable of foreign subsidiaries of
the Company.
(2) The Company's Credit Agreement, which expires on March 8, 2001,
provides for a revolving credit facility with borrowing
availability of $400,000,000 under a domestic facility and
$100,000,000 under a multi-currency facility. If any amounts
were outstanding under the Credit Agreement, the interest rate on
such borrowings currently would be in a range of 6.0% to 6.25%
per annum.
(3) Excluding any redemption premium (net of tax benefit) related to the
retirement of the 8 3/4% Notes.
</TABLE>
<PAGE>
SELECTED FINANCIAL DATA
The following tables set forth selected consolidated financial
information of the Company for each of the five fiscal years in the period ended
February 28, 1997 and for the six-month periods ended August 31, 1996 and 1997.
Information for the six-month periods ended August 31, 1996 and 1997 is
unaudited but, in the opinion of management, includes all adjustments,
consisting only of normal recurring accruals, necessary for a fair presentation.
The results of operations for the six-month period ended August 31, 1997 are not
necessarily indicative of the results to be expected for the full year. These
tables should be read in conjunction with the Company's Consolidated Financial
Statements incorporated by reference herein.
<TABLE>
<CAPTION>
Six-Months
YEAR ENDED LAST DAY OF FEBRUARY, Ended
August 31,
------------------------------------------------------------ ------------------------
1993(1) 1994(1) 1995(1) 1996(1) 1997 1996(1) 1997
------- ------- ------- ------ ---- ------ -----
(Dollars in Thousands)
---------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Net sales from
continuing operations.............. $ 806,700 $ 958,900 $ 1,306,400 $ 1,779,200 $ 2,076,000 $ 1,035,200 $1,091,200
======= ======= ========= ========== ========== ========= =========
Operating income(2).................. $ 86,700 $ 104,100 $ 135,500 $ 188,300 $ 223,200 $ 114,800 $ 124,100
Restructuring charge................ -- -- -- -- 112,500 --- ---
Interest expense.................... 44,400 43,100 46,300 52,600 59,000 30,300 29,900
------ ------ ------ ------ ------ ------ ------
Income from continuing operations $42,300 $61,000 $89,200 $135,700 $ 51,700 $ 84,500 $94,200
before provision for taxes.......... ======== ======= ======= ======== ======== ========== ========
Income from continuing
operations(3):
Before restructuring charge......... $26,700 $38,200 $55,000 $ 82,800 $100,200 $ 51,500 $57,600
Restructuring charge:............... -- -- -- -- (67,500) -- --
------- ------- ------- -------- --------- --------- -------
Total continuing............... 26,700 38,200 55,000 82,800 32,700 51,500 57,600
------ ------- ------- -------- -------- --------- -------
Income from discontinued operations(3):
From operations..................... 16,000 12,900 12,900 9,600 5,900 3,800 --
Gain on divestitures................ -- -- -- -- 17,500 -- --
------- ------- ------- ------- ------- -------- -------
Total discontinued................. 16,000 12,900 12,900 9,600 23,400 3,800 --
------- ------- ------- ------ ------- -------- -------
Extraordinary loss from early
extinguishment of debt (3)......... (3,700) (21,700) (1,100) -- -- -- --
Cumulative effect of
accounting change (3).............. -- (26,000) -- -- -- -- --
------- -------- ------- ------ -------- -------- -------
Net income............................. $ 39,000 $ 3,400 $ 66,800 $ 92,400 $ 56,100 $ 55,300 $ 57,600
======= ======= ======= ======= ======== ======= =======
OTHER FINANCIAL DATA (UNAUDITED):
EBITDA(4)(5)......................... $112,000 $139,000 $179,800 $247,500 $292,200 $148,700 $161,100
Ratio of EBITDA to
interest expense.................... 2.52x 3.23x 3.88x 4.71x 4.95x 4.91x 5.39x
Ratio of earnings to
fixed charges(6)................... 1.86x 2.30x 2.75x 3.34x 3.48x 3.55x 3.82x
</TABLE>
<TABLE>
<CAPTION>
AS OF THE LAST DAY OF FEBRUARY, August 31,
1993 1994 1995 1996 1997 1997
---- ---- ---- ---- ---- ------
(DOLLARS IN THOUSANDS)
BALANCE SHEET DATA:
<S> <C> <C> <C> <C> <C> <C>
Working capital......................... $ 275,400 $ 312,800 $ 379,700 $ 404,900 $ 364,600 $ 556,800
Total assets............................ $1,124,800 $1,282,300 $1,846,400 $2,013,100 $1,974,600 $2,174,600
Long-term debt,
excluding current maturities............ $ 497,100 $ 567,200 $ 610,700 $ 642,500 $ 528,500 $ 767,900
Stockholders' equity.................... $ 345,600 $ 345,400 $ 635,500 $ 725,500 $ 758,400 $ 741,200
- ----------------------
(1) Income Statement amounts have been restated to reflect discontinued
operations.
(2) Represents income from continuing operations before the restructuring
charge, interest expense and taxes.
(3) Net of related tax effects.
(4) "EBITDA" is defined as income from continuing operations before interest
expense, taxes and depreciation and amortization. EBITDA is presented
because it is a widely accepted indicator of funds available to service
debt, although it is not a U.S. generally accepted accounting principles
("GAAP") based measure of liquidity or financial performance. The Company
believes that EBITDA, while providing useful information, should not be
considered in isolation or as an alternative to net income and cash flows
as determined under GAAP.
(5) Excluding the restructuring charge in fiscal 1997.
(6) For the purpose of calculating the ratio of earnings to fixed charges, (i)
earnings consist of income from continuing operations before income taxes
and the restructuring charge, plus fixed charges and (ii) fixed charges
consist of interest expense incurred, capitalized interest, amortization of
debt expense and 15% of the rental payments under operating leases (an
amount estimated by management to be the interest component of such
rentals). If the restructuring charge were included in the ratio
determination for fiscal 1997, the actual ratio would be 1.76x.
</TABLE>
<PAGE>
BUSINESS
Mark IV is a diversified manufacturer of a broad range of proprietary
and other power and fluid transfer products and systems which serve primarily
automotive and industrial markets. Many of Mark IV's product groups have a
significant, and in certain instances the leading, share of their respective
markets. Products manufactured by Mark IV principally serve specialized needs in
markets in which relatively few manufacturers compete. These products are sold
primarily directly, but also through independent distributors, to other
manufacturers, commercial users and resellers in the United States and Europe
and, to a lesser extent, in Canada, Latin America and the Far East. Mark IV
operates 68 manufacturing facilities and 45 distribution and sales locations and
employs approximately 16,200 people in 19 countries.
The Company classifies its operations into the following two business
segments: (i) Mark IV Automotive, which includes the design, manufacture and
distribution of (a) fuel, power transmission, and fluid handling systems and
components, and (b) filters and filtration systems, for the global automotive
aftermarket and OEM (original equipment manufacturers) market; and (ii) Mark IV
Industrial, which includes the design, manufacture and distribution of power and
fluid management systems and components for industrial OEM and distribution
markets worldwide.
Mark IV's business strategy is focused on building its worldwide
Automotive and Industrial business segments through internal growth and
selective strategic acquisitions, and the continuation of cost control and
quality improvement programs. The Company's operating strategy emphasizes
establishing cooperative programs with customers to engineer, design and develop
higher value-added systems in addition to individual products, the introduction
of new, more cost effective and durable products, and management for continuous
improvement.
In furtherance of these strategies, over its last five fiscal years,
Mark IV has: (i) enhanced its ability to provide a broader range of products to
its existing customers through its $286.3 million acquisition of Purolator
Products Company, a leading manufacturer of automotive and industrial filtration
products and systems in late-fiscal 1995; (ii) established a joint venture in
Brazil and is in the process of establishing manufacturing facilities in
Argentina and Brazil; (iii) established distribution centers to serve markets in
Latin America and the Pacific Rim, and acquired manufacturing and distribution
facilities in Mexico; (iv) increased its industrial hose and couplings
production capacity and strengthened its position in the hose and couplings
products market through its $78.0 million acquisition of Imperial Eastman at the
beginning of fiscal 1997; (v) emphasized continuous product development, with a
significant amount of its current sales arising from the introduction of new
products or products which have been redesigned; and (vi) initiated during
fiscal 1997 a restructuring of the Company's manufacturing and distribution
facilities to make them more focused and cost effective.
RECENT DEVELOPMENTS
As part of the Company's strategy to become more focused within its
Industrial business segment, the Company sold its Professional Audio, Vapor
Corporation, Interstate Highway Sign, and Eagle Signal businesses and certain
other non-operating assets during fiscal 1997. Shortly after the end of the
fiscal year, the Company also sold its Gulton Data Systems and LFE Industrial
Systems businesses. The total of all of these divestitures generated gross
proceeds of approximately $313 million.
During fiscal 1997, the Company also initiated a restructuring of its
manufacturing and distribution facilities, which is expected to improve customer
service, reduce costs and dedicate its facilities to either the Automotive or
Industrial business segments. The restructuring resulted in a pre-tax charge
against earnings of $112.5 million, with $51.8 million related to cash
expenditures required to be made primarily over a two-year period. The remaining
$60.7 million non-cash portion of the charge represents primarily asset
write-offs and pension benefits to be paid out of the Company's pension fund.
The Company believes that the restructuring will result in an annual pre-tax
cost savings of between $40.0 million and $45.0 million, with some benefit
beginning in the second half of the current fiscal year.
In October 1997, as a part of its strategy to pursue selective
strategic acquisitions and expand its international presence, the Company
acquired LPI Systemes Moteurs, SA ("LPI") for a cash purchase price of
approximately $60 million. LPI operates three manufacturing facilities in
France, and supplies plastic air admission systems, which include air intake
manifolds and cooling modules produced by injection, welding and blow molding
technologies, for the automotive OEM markets. The LPI acquisition enables the
Company's Automotive segment to expand its systems capabilities to include air
handling systems in addition to the segment's existing fuel and fluid handling
capabilities.
On October 29, 1997, the Company sold to Bear, Stearns & Co. Inc., as
Initial Purchaser, $275,000,000 principal amount of the Convertible Notes in a
transaction exempt from registration under the Securities Act. The Initial
Purchaser subsequently resold the Convertible Notes (i) to qualified
institutional buyers in reliance on Rule 144A under the Securities Act, (ii) to
a limited number of institutional accredited investors pursuant to Regulation D
under the Securities Act and (iii) to non-U.S. persons in offshore transactions
pursuant to Regulation S under the Securities Act. The Company intends to use
the net proceeds from the sale of the Convertible Notes, which are subordinated
in right of payment to the Notes, to repurchase or redeem or defease or
otherwise retire all of the Company's outstanding $258,000,000 principal amount
of 8 3/4% Notes which rank PARI PASSU with the Notes and are redeemable
beginning on April 2, 1998 at 104.375% of their aggregate principal amount.
USE OF PROCEEDS
The Exchange Offer is intended to satisfy certain of the Company's
obligations under the Registration Rights Agreement. The Company will not
receive any cash proceeds from the issuance of the Exchange Notes in the
Exchange Offer.
The net proceeds to the Company from the offering of the Private Notes
(after payment of the Initial Purchaser's discount and estimated expenses of the
offering) was $245,977,500. A portion of the net proceeds from the sale of the
Private Notes was used to repay amounts outstanding of Senior Indebtedness under
the Company's Credit Agreement and domestic notes payable. The balance of the
net proceeds from sale of the Private Notes was added to working capital and
will be used for general corporate purposes.
<PAGE>
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
The Private Notes were sold by the Company on August 11, 1997 (the
"Issue Date") to the Initial Purchaser pursuant to the Purchase Agreement. The
Initial Purchaser subsequently sold the Private Notes to (i) "qualified
institutional buyers" ("QIBs"), as defined in Rule 144A under the Securities Act
("Rule 144A"), in reliance on Rule 144A, (ii) to institutional "accredited
investors" within the meaning of subparagraph (a)(1), (2) (3) or (7) of Rule 501
under the Securities Act and (iii) to non-U.S persons in offshore transactions
pursuant to Regulation S under the Securities Act. As a condition to the sale of
the Private Notes, the Company and the Initial Purchaser entered into the
Registration Rights Agreement on August 11, 1997. Pursuant to the Registration
Rights Agreement, the Company agreed that, unless the Exchange Offer is not
permitted by applicable law or Commission policy, it would (i) file with the
Commission a Registration Statement under the Securities Act with respect to the
Exchange Notes within 45 days after the Issue Date, (ii) use its best efforts to
cause such Registration Statement to become effective under the Securities Act
within 120 days after the Issue Date and (iii) use its best efforts to
consummate the Exchange Offer within 150 days after the Issue Date. A copy of
the Registration Rights Agreement has been filed as an exhibit to the
Registration Statement. The Registration Statement is intended to satisfy
certain of the Company's obligations under the Registration Rights Agreement and
the Purchase Agreement.
RESALE OF THE EXCHANGE NOTES
With respect to the Exchange Notes, based upon an interpretation by the
staff of the Commission set forth in certain no-action letters issued to third
parties, the Company believes that a holder (other than (i) a broker-dealer who
purchased such Exchange Notes directly from the Company to resell pursuant to
Rule 144A or any other available exemption under the Securities Act, (ii) any
such holder that is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act or (iii) a broker-dealer who acquired Private Notes as
a result of market making or other trading activities) who exchanges Private
Notes for Exchange Notes in the ordinary course of business and who is not
participating, does not intend to participate, and has no arrangement with any
person to participate, in a distribution of the Exchange Notes, will be allowed
to resell Exchange Notes to the public without further registration under the
Securities Act and without delivering to the purchasers of the Exchange Notes a
prospectus that satisfies the requirements of Section 10 of the Securities Act.
However, if any holder acquires Exchange Notes in the Exchange Offer for the
purpose of distributing or participating in the distribution of the Exchange
Notes or is a broker-dealer, such holder cannot rely on the position of the
staff of the Commission enumerated in certain no-action letters issued to third
parties and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction,
unless an exemption from registration is otherwise available. Each broker-dealer
that receives Exchange Notes for its own account in exchange for Private Notes,
where such Private Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange Notes.
The Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Notes received in exchange for Private
Notes where such Private Notes were acquired by such broker-dealer as a result
of market-making or other trading activities. Pursuant to the Registration
Rights Agreement, the Company has agreed to make this Prospectus, as it may be
amended or supplemented from time to time, available to broker-dealers for use
in connection with any resale for a period of one year after the Registration
Statement is declared effective or until such earlier date on which the Exchange
Notes are freely tradable. See "Plan of Distribution."
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this
Prospectus and in the Letter of Transmittal, the Company will accept any and all
Private Notes validly tendered and not withdrawn prior to the Expiration Date.
The Company will issue $1,000 principal amount of Exchange Notes in exchange for
each $1,000 principal amount of outstanding Private Notes surrendered pursuant
to the Exchange Offer. Private Notes may be tendered in integral multiples of
$1,000.
The form and terms of the Exchange Notes are the same as the form and
terms of the Private Notes except that (i) the exchange will be registered under
the Securities Act and, therefore, the Exchange Notes will not bear legends
restricting the transfer thereof, (ii) holders of the Exchange Notes will not be
entitled to any of the rights of holders of Private Notes under the Registration
Rights Agreement, which rights will terminate upon the consummation of the
Exchange Offer except under certain limited circumstances. See "--Termination of
Certain Rights." The Exchange Notes will evidence the same obligations as the
Private Notes (which they replace) and will be issued under, and be entitled to
the benefits of, the Indenture, which also authorized the issuance of the
Private Notes, such that both series of Notes will be treated as a single class
of securities under the Indenture.
As of the date of this Prospectus, $250,000,000 in aggregate principal
amount of the Private Notes are outstanding and registered in the name of Cede &
Co., as nominee for DTC. Only a registered holder of the Private Notes (or such
holder's legal representative or attorney-in-fact) as reflected on the records
of the Trustee under the Indenture may participate in the Exchange Offer. There
will be no fixed record date for determining registered holders of the Private
Notes entitled to participate in the Exchange Offer.
Holders of the Private Notes do not have any appraisal or dissenters'
rights under the Indenture in connection with the Exchange Offer. The Company
intends to conduct the Exchange Offer in accordance with the provisions of the
Registration Rights Agreement and the applicable requirements of the Securities
Act, the Exchange Act and the rules and regulations of the Commission
thereunder.
The Company shall be deemed to have accepted validly tendered Private
Notes when, as and if the Company has given oral or written notice thereof to
the Exchange Agent. The Exchange Agent will act as agent for the tendering
holders of Private Notes for the purposes of receiving the Exchange Notes from
the Company.
Holders who tender Private Notes in the Exchange Offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the Letter of Transmittal, transfer taxes with respect to the exchange of
Private Notes pursuant to the Exchange Offer. The Company will pay all charges
and expenses, other than certain applicable taxes described below, in connection
with the Exchange Offer. See "--Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time on
December , 1997 unless the Company, in its sole discretion, extends the Exchange
Offer, in which case the term "Expiration Date" shall mean the latest date and
time to which the Exchange Offer is extended.
In order to extend the Exchange Offer, the Company will (i) notify the
Exchange Agent of any extension by oral or written notice, (ii) mail to the
registered holders an announcement thereof and (iii) issue a press release or
other public announcement, which shall include disclosure of the approximate
number of Private Notes deposited to date, each prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date. Without limiting the manner in which the Company may choose to make a
public announcement of any delay, extension, amendment or termination of the
Exchange Offer, the Company shall have no obligation to publish, advertise, or
otherwise communicate any such public announcement, other than by making a
timely press release to an appropriate news agency.
The Company reserves the right, in its reasonable discretion, (i) to
delay accepting any Private Notes, (ii) to extend the Exchange Offer or (iii) if
any conditions set forth below under "--Conditions" shall not have been
satisfied, to terminate the Exchange Offer by giving oral or written notice of
such delay, extension or termination to the Exchange Agent. Any such delay in
acceptance, extension, termination or amendment will be followed as promptly as
practicable by oral or written notice thereof to the registered holders. If the
Exchange Offer is amended in a manner determined by the Company to constitute a
material change, the Company will promptly disclose such amendment by means of a
prospectus supplement that will be distributed to the registered holders, and
the Company will extend the Exchange Offer for a period of five to ten business
days, depending upon the significance of the amendment and the manner of
disclosure to the registered holders, if the Exchange Offer would otherwise
expire during such five to ten business day period.
INTEREST ON THE EXCHANGE NOTES
The Exchange Notes will bear interest at a rate equal to 7 1/2% per
annum. Interest on the Exchange Notes will be payable semi-annually in arrears
on each March 1 and September 1, commencing March 1, 1998. Holders of Exchange
Notes will receive interest on March 1, 1998 from the date of initial issuance
of the Exchange Notes, plus an amount equal to the accrued interest on the
Private Notes from August 11, 1997, the date of initial issuance of the Private
Notes, to the date of exchange thereof for Exchange Notes. Holders of Private
Notes that are accepted for exchange will be deemed to have waived the right to
receive any interest accrued on the Private Notes.
PROCEDURES FOR TENDERING
Only a registered holder of Private Notes may tender such Private Notes
in the Exchange Offer. To tender in the Exchange Offer, a holder of Private
Notes must either, (i) complete, sign and date the Letter of Transmittal, or a
facsimile thereof, have the signatures thereon guaranteed if required by the
Letter of Transmittal, and mail or otherwise deliver such Letter of Transmittal
or such facsimile to the Exchange Agent at the address set forth below under
"--Exchange Agent, or (ii) if such Private Notes are tendered pursuant to the
procedures for book-entry transfer set forth below, a holder tendering Private
Notes may transmit an Agent's Message (defined herein) to the Exchange Agent in
lieu of the Letter of Transmittal, in either case prior to the Expiration Date.
In addition, either (i) certificates for such Private Notes must be received by
the Exchange Agent along with the Letter of Transmittal, (ii) a timely
confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such
Private Notes, if such procedure is available, into the Exchange Agent's account
at the Depositary pursuant to the procedure for book-entry transfer described
below, must be received by the Exchange Agent prior to the Expiration Date or
(iii) the holder must comply with the guaranteed delivery procedures described
below. The term "Agent's Message" means a message, transmitted to the Book-Entry
Transfer Facility and received by the Exchange Agent and forming a part of the
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the tendering participant in the
Book-Entry Transfer Facility that such participant has received and agrees to be
bound by the Letter of Transmittal and that the Company may enforce the Letter
of Transmittal against such participant.
The tender by a holder that is not withdrawn prior to the Expiration
Date will constitute an agreement between such holder and the Company in
accordance with the terms and subject to the conditions set forth herein and in
the Letter of Transmittal.
THE METHOD OF DELIVERY OF PRIVATE NOTES AND THE LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND
RISK OF THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS
USE AN OVERNIGHT OR HAND DELIVERY SERVICE, PROPERLY INSURED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT
BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR PRIVATE NOTES SHOULD BE
SENT TO THE COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS,
COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS
FOR SUCH HOLDERS.
Any beneficial owner(s) of the Private Notes whose Private Notes are
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee and who wishes to tender should contact the registered holder
promptly and instruct such registered holder to tender on such beneficial
owner's behalf. If such beneficial owner wishes to tender on such owner's own
behalf, such owner must, prior to completing and executing the Letter of
Transmittal and delivering such owner's Private Notes, either make appropriate
arrangements to register ownership of the Private Notes in such owner's name or
obtain a properly completed bond power from the registered holder. The transfer
of registered ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal
described below (see "--Withdrawal of Tenders"), as the case may be, must be
guaranteed by an Eligible Institution (as defined) unless the Private Notes
tendered pursuant thereto are tendered (i) by a registered holder who has not
completed the box titled "Special Delivery Instructions" on the Letter of
Transmittal or (ii) for the account of an Eligible Institution. In the event
that signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, are required to be guaranteed, such guarantee must be made by a
member firm of a registered national securities exchange or of the National
Association of Securities Dealers, Inc., a commercial bank or company having an
office or correspondent in the United States or an "eligible guarantor
institution" within the meaning of Rule 17Ad-15 under the Exchange Act which is
a member of one of the recognized signature guarantee programs identified in the
Letter of Transmittal (an "Eligible Institution").
If the Letter of Transmittal is signed by a person other than the
registered holder of any Private Notes listed therein, such Private Notes must
be endorsed or accompanied by a properly completed bond power, signed by such
registered holder as such registered holder's name appears on such Private
Notes.
If the Letter of Transmittal or any Private Notes or bond powers are
signed by Trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and unless waived by the
Company, evidence satisfactory to the Company of their authority to so act must
be submitted with the Letter of Transmittal.
The Exchange Agent and the Depositary have confirmed that any financial
institution that is a participant in the Depositary's system may utilize the
Depositary's Automated Tender Offer Program to tender Private Notes.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Private Notes will be determined
by the Company in its reasonable discretion, which determination will be final
and binding. The Company reserves the absolute right to reject any and all
Private Notes not properly tendered or any Private Notes the Company's
acceptance of which would, in the opinion of counsel for the Company, be
unlawful. The Company also reserves the right to waive any defects,
irregularities or conditions of tender as to particular Private Notes. The
Company's interpretation of the terms and conditions of the Exchange Offer
(including the instructions in the Letter of Transmittal) will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Private Notes must be cured within such time as the
Company shall determine. Although the Company intends to notify holders of
defects or irregularities with respect to tenders of Private Notes, neither the
Company, the Exchange Agent nor any other person shall incur any liability for
failure to give such notification. Tenders of Private Notes will not be deemed
to have been made until such defects or irregularities have been cured or
waived.
While the Company has no present plan to acquire any Private Notes that
are not tendered in the Exchange Offer or to file a registration statement to
permit resales of any Private Notes that are not tendered pursuant to the
Exchange Offer, the Company reserves the right in its sole discretion to
purchase or make offers for any Private Notes that remain outstanding subsequent
to the Expiration Date or, as set forth below under "--Conditions," to terminate
the Exchange Offer and, to the extent permitted by applicable law, purchase
Private Notes in the open market, in privately negotiated transactions or
otherwise. The terms of any such purchases or offers could differ from the terms
of the Exchange Offer.
By tendering, each holder of Private Notes will represent to the
Company that, among other things, (i) Exchange Notes to be acquired by such
holder of Private Notes in connection with the Exchange Offer are being acquired
by such holder in the ordinary course of business of such holder, (ii) such
holder has no arrangement or understanding with any person to participate in the
distribution of the Exchange Notes, (iii) such holder acknowledges and agrees
that any person who is a broker-dealer registered under the Exchange Act or is
participating in the Exchange Offer for the purposes of distributing the
Exchange Notes must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a secondary resale
transaction of the Exchange Notes, acquired by such person and cannot rely on
the position of the staff of the Commission set forth in certain no-action
letters, (iv) such holder understands that a secondary resale transaction
described in clause (iii) above and any resales of Exchange Notes obtained by
such holder in exchange for Private Notes acquired by such holder directly from
the Company should be covered by an effective registration statement containing
the selling security holder information required by Item 507, as applicable, of
Regulation S-K of the Commission and (v) such holder is not an "affiliate," as
defined in Rule 405 under the Securities Act, of the Company. If the holder is a
broker-dealer that will receive Exchange Notes for such holder's own account in
exchange for Private Notes that were acquired as a result of market-making
activities or other trading activities, such holder will be required to
acknowledge in the Letter of Transmittal that such holder will deliver a copy of
this Prospectus (as it may be supplemented or amended) in connection with any
resale of such Exchange Notes; however, by so acknowledging and by delivering a
prospectus, such holder will not be deemed to admit that it is an "underwriter"
within the meaning of the Securities Act.
RETURN OF PRIVATE NOTES
If any tendered Private Notes are not accepted for any reason set forth
in the terms and conditions of the Exchange Offer or if Private Notes are
withdrawn or are submitted for a greater principal amount than the holders
desire to exchange, such unaccepted, withdrawn or non-exchanged Private Notes
will be returned without expense to the tendering holder thereof (or, in the
case of Private Notes tendered by book-entry transfer into the Exchange Agent's
account at the Depositary pursuant to the book-entry transfer procedures
described below, such Private Notes will be credited to an account maintained
with the Depositary) as promptly as practicable.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with
respect to the Private Notes at DTC for purposes of the Exchange Offer within
two business days after the date of this Prospectus, and any financial
institution that is a participant in the Depositary's systems may make
book-entry delivery of Private Notes by causing DTC to transfer such Private
Notes into the Exchange Agent's account at DTC in accordance with DTC's
procedures for transfer. However, although delivery of Private Notes may be
effected through book-entry transfer at DTC, the Letter of Transmittal or
facsimile thereof, with any required signature guarantees, or an Agent's Message
in lieu of a Letter of Transmittal, and any other required documents, must, in
any case, be transmitted to and received by the Exchange Agent at the address
set forth below under "--Exchange Agent" on or prior to the Expiration Date or
pursuant to the guaranteed delivery procedures described below.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Private Notes and (i) whose Private
Notes are not immediately available or (ii) who cannot deliver their Private
Notes, the Letter of Transmittal or any other required documents to the Exchange
Agent prior to the Expiration Date, may effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) Prior to the Expiration Date, the Exchange Agent receives
from such Eligible Institution a properly completed and duly executed
Notice of Guaranteed Delivery substantially in the form provided by the
Company (by facsimile transmission, mail or hand delivery) setting
forth the name and address of the holder, the certificate number(s) of
such Private Notes and the principal amount of Private Notes tendered,
stating that the tender is being made thereby and guaranteeing that,
within five New York Stock Exchange trading days after the Expiration
Date, the Letter of Transmittal (or a facsimile thereof), together with
the certificate(s) representing the Private Notes in proper form for
transfer or a Book-Entry Confirmation, as the case may be, and any
other documents required by the Letter of Transmittal, will be
deposited by the Eligible Institution with the Exchange Agent; and
(c) Such properly executed Letter of Transmittal (or facsimile
thereof), as well as the certificate(s) representing all tendered
Private Notes in proper form for transfer and all other documents
required by the Letter of Transmittal are received by the Exchange
Agent within five New York Stock Exchange trading days after the
Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery
will be sent to holders who wish to tender their Private Notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Private Notes may be
withdrawn at any time prior to the Expiration Date.
To withdraw a tender of Private Notes in the Exchange Offer, a written
or facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to the Expiration Date. Any such
notice of withdrawal must (i) specify the name of the person having deposited
the Private Notes to be withdrawn (the "Depositor"), (ii) identify the Private
Notes to be withdrawn (including the certificate number or numbers and principal
amount of such Private Notes) and (iii) be signed by the holder in the same
manner as the original signature on the Letter of Transmittal by which such
Private Notes were tendered (including any required signature guarantees). All
questions as to the validity, form and eligibility (including time of receipt)
of such notices will be determined by the Company, in its sole discretion, whose
determination shall be final and binding on all parties. Any Private Notes so
withdrawn will be deemed not to have been validly tendered for purposes of the
Exchange Offer and no Exchange Notes will be issued with respect thereto unless
the Private Notes so withdrawn are validly retendered. Properly withdrawn
Private Notes may be retendered by following one of the procedures described
above under "The Exchange Offer--Procedures for Tendering" at any time prior to
the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company shall
not be required to accept for exchange, or exchange the Exchange Notes for, any
Private Notes, and may terminate the Exchange Offer as provided herein before
the acceptance of such Private Notes, if the Exchange Offer violates applicable
law, rules or regulations or an applicable interpretation of the staff of the
Commission.
If the Company determines in its reasonable discretion that any of
these conditions are not satisfied, the Company may (i) refuse to accept any
Private Notes and return all tendered Private Notes to the tendering holders,
(ii) extend the Exchange Offer and retain all Private Notes tendered prior to
the expiration of the Exchange Offer, subject, however, to the rights of holders
to withdraw such Private Notes (see "--Withdrawal of Tenders") or (iii) waive
such unsatisfied conditions with respect to the Exchange Offer and accept all
properly tendered Private Notes that have not been withdrawn. If such waiver
constitutes a material change to the Exchange Offer, the Company will promptly
disclose such waiver by means of a prospectus supplement that will be
distributed to the registered holders of the Private Notes, and the Company will
extend the Exchange Offer for a period of five to ten business days, depending
upon the significance of the waiver and the manner of disclosure to the
registered holders, if the Exchange Offer would otherwise expire during such
five to ten business day period.
TERMINATION OF CERTAIN RIGHTS
All rights under the Registration Rights Agreement (including
registration rights) of holders of the Private Notes eligible to participate in
the Exchange Offer will terminate upon consummation of the Exchange Offer except
with respect to the Company's continuing obligations (i) to indemnify such
holders (including any broker-dealers) and certain parties related to such
holders against certain liabilities (including liabilities under the Securities
Act), (ii) to provide, upon the request of any holder of a transfer-restricted
Private Note, the information required by Rule 144A(d)(4) under the Securities
Act in order to permit resales of such Private Notes pursuant to Rule 144A,
(iii) to use its best efforts to keep the Registration Statement effective to
the extent necessary to ensure that it is available for resales of Exchange
Notes by broker-dealers for a period of up to one year from the date the
Registration Statement is declared effective or until such earlier date on which
the Exchange Notes are freely tradeable and to provide copies of the latest
version of the Prospectus to such broker-dealers upon their request during such
period and (iv) to file a shelf registration statement as required by the
Registration Rights Agreement if any holder of transfer-restricted Notes
notifies the Company within 20 business days of the consummation of the Exchange
Offer that (A) such holder is prohibited by applicable law or Commission policy
from participating in the Exchange Offer, or (B) such holder may not resell the
Exchange Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and that this Prospectus is not appropriate or available
for such resales by such holder, or (C) that such holder is a broker-dealer and
holds Private Notes acquired directly from the Company or one of its affiliate
(see "--Additional Interest").
ADDITIONAL INTEREST
The Registration Rights Agreement provides that (i) the Company will
use its best efforts file the Registration Statement with the Commission on or
prior to 45 days after the Closing Date, (ii) the Company will use its best
efforts to have the Registration Statement declared effective by the Commission
on or prior to 120 days after the Issue Date, (iii) unless the Exchange Offer
would not be permitted by applicable law or Commission policy, the Company will
use its best efforts to consummate the exchange offer within 150 days after the
Issue Date and (iv) if obligated to file a shelf registration statement pursuant
to the terms of the Registration Rights Agreement (the "Shelf Registration
Statement" and, collectively with the Registration Statement, the "Registration
Statements"), the Company will use its best efforts to file such Shelf
Registration Statement with the Commission on or prior to 45 days after such
filing obligation arises and to cause the Shelf Registration to be declared
effective by the Commission on or prior to 120 days after such obligation
arises. If (a) the Company fails to file the Exchange Offer Registration
Statement or the Shelf Registration Statement on or prior to the 45th Calendar
day after the Issue Date then commencing on the day following such required
filing date, additional interest shall accrue on the principal amount of the
Private Notes at a rate of 0.50% per annum, (b) neither the Exchange Offer
Registration Statement nor a Shelf Registration Statement is declared effective
by the Commission on or prior to the 75th calendar day after the applicable
required filing date or, notwithstanding that the Company has consummated or
will consummate an Exchange Offer, the Company is required to file a Shelf
Registration Statement and such Shelf Registration Statement is not declared
effective by the Commission on or prior to the 75th Calendar day after the date
such Shelf Registration Statement was required to be filed, then, commencing on
the 76th Calendar day after the applicable required filing date, additional
interest shall accrue on the principal amount of the Private Notes at a rate of
0.50% per annum or (c) the Company fails to exchange Exchange Notes for all
Private Notes on or prior to the 150th Calendar day after the Issue Date or, if
applicable, the Shelf Registration Statement has been declared effective and
such Shelf Registration Statement ceases to be effective at any time prior to
the second anniversary of its effective date, then commencing the 151st Calendar
day after such issue date or such date that the Shelf Registration ceases to be
effective additional interest shall accrue on the principal amount of the
Private Notes at a rate of 0.50% per annum. The additional interest rate on the
Private Notes may not exceed in the aggregate 0.50% per annum. Any amounts of
additional interest due pursuant to clause (a), (b) or (c) above will be payable
in cash on March 1 and September 1 of each year to the holders of record on the
preceding February 15 or August 15, respectively. Following the cure of all
Registration Defaults, the accrual of additional interest will cease.
Holders of Notes will be required to make certain representations to
the Company (as described in the Registration Rights Agreement) in order to
participate in the Exchange Offer and will be required to deliver information to
be used in connection with the Shelf Registration Statement and to provide
comments on the Shelf Registration Statement within the time periods set forth
in the Registration Rights Agreement in order to have their Private Notes
included in the Shelf Registration Statement and benefit from the provisions
regarding Additional Interest set forth above.
FEES AND EXPENSES
The expenses incident to the Company's compliance with its obligations
under the Registration Rights Agreement will be borne by the Company. The
expenses of soliciting tenders will be borne by the Company. The principal
solicitation is being made by mail; however, additional solicitation may be made
by telegraph, telephone or in person by officers and regular employees of the
Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptances of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith.
The cash expenses to be incurred in connection with the Exchange Offer
will be paid by the Company and are estimated in the aggregate to be $200,000.
Such expenses include registration fees, fees and expenses of the Exchange Agent
and the Trustee, accounting and legal fees and printing costs, among others.
The Company will pay all transfer taxes, if any, applicable to the
exchange of Private Notes pursuant to the Exchange Offer. If, however, a
transfer tax is imposed for any reason other than the exchange of the Private
Notes pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered holder or any other persons) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such tendering holder.
CONSEQUENCE OF FAILURE TO EXCHANGE
Participation in the Exchange Offer is voluntary. Holders of the
Private Notes are urged to consult their financial and tax advisors in making
their own decisions on what action to take.
The Private Notes that are not exchanged for the Exchange Notes
pursuant to the Exchange Offer will remain restricted securities. Accordingly,
such Private Notes may be resold only (i) to a person whom the seller reasonably
believes is a QIB in a transaction meeting the requirements of Rule 144A, (ii)
in a transaction meeting the requirements of Rule 144 under the Securities Act,
(iii) outside the United States to a foreign person in a transaction meeting the
requirements of Rule 904 under the Securities Act, (iv) in accordance with
another exemption from the registration requirements of the Securities Act (and
based upon an opinion of counsel if the Company so requests), (v) to the Company
or (vi) pursuant to an effective registration statement and, in each case, in
accordance with any applicable securities laws of any state of the United States
or any other applicable jurisdiction.
ACCOUNTING TREATMENT
For accounting purposes, the Company will recognize no gain or loss as
a result of the Exchange Offer. The expenses of the Exchange Offer will be
amortized over the term of the Exchange Notes.
EXCHANGE AGENT
Marine Midland Bank has been appointed Exchange Agent for the Exchange
Offer. Delivery of the Letters of Transmittal and any other required documents,
questions, requests for assistance and requests for additional copies of this
Prospectus or of the Letter of Transmittal should be directed to the Exchange
Agent as follows:
BY REGISTERED OR CERTIFIED MAIL:
Marine Midland Bank
140 Broadway, Level A
New York, New York 10005-1180
Attn: Corporate Trust Operations
CONFIRM BY TELEPHONE: (212) 658-5931
CONFIRM BY FAX: (212) 658-2292
Delivery to other than the above addresses or facsimile number will not
constitute a valid delivery.
<PAGE>
DESCRIPTION OF THE EXCHANGE NOTES
GENERAL
The Exchange Notes will be issued pursuant to an indenture (the
"Indenture") dated as of August 11, 1997 between the Company and Marine Midland
Bank, as trustee (the "Trustee"). The terms of the Exchange Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (the "Trust Indenture Act") as in effect on the date
of the Indenture. The Exchange Notes are subject to all such terms and holders
of the Exchange Notes are referred to the Indenture and the Trust Indenture Act
for a statement thereof. The following summary of certain provisions of the
Indenture does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, the provisions of the Indenture, including the
definitions therein of certain terms used below. A copy of the form of Indenture
and Registration Rights Agreement is available as set forth under "--Additional
Information." The definitions of certain terms used in the following summary are
set forth below under "--Certain Definitions." For purposes of this section,
references to the "Company" include only the Company and not its subsidiaries
and references to the "Notes" include the Private Notes and Exchange Notes.
The Exchange Notes will be general unsecured obligations of the
Company, will be subordinated in right of payment to the prior payment in full
of all existing and future Senior Indebtedness of the Company, will be senior in
right of payment to, or PARI PASSU in right of payment with, any existing and
future Senior Subordinated Indebtedness of the Company, and will be effectively
subordinated to the indebtedness of the Company's subsidiaries. See
"--Subordination."
PRINCIPAL, MATURITY AND INTEREST
The Exchange Notes are limited in aggregate principal amount to
$250,000,000 and will mature on September 1, 2007. Interest on the Notes will
accrue at the rate of 7 1/2% per annum and will be payable semi-annually on each
March 1 and September 1 commencing on March 1, 1998, to holders of record of the
Notes ("Holders") on the immediately preceding February 15 and August 15,
whether or not a business day. Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the Issue Date. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
Principal of, and interest on, the Notes will be payable at the office
or agency of the Company maintained for such purpose within or without the City
and State of New York or, at the option of the Company, payment of interest and
principal may be made by check mailed to the Holders at their respective
addresses set forth in the register of the Holders; PROVIDED that all payments
with respect to Global Notes and Certificated Securities held by Holders who
have given wire transfer instructions to the Company will be required to be made
by wire transfer of same day funds to the accounts specified by the Holders
thereof. Unless otherwise designated by the Company, the Company's office or
agency in New York will be the office of the Trustee maintained for such
purpose. The Notes will be issued only in registered form, without coupons, in
denominations of $1,000 and integral multiples thereof.
CERTAIN COVENANTS
MERGER, CONSOLIDATION OR SALE OF ASSETS
The Company, without the consent of the Holders of Notes then
outstanding, may consolidate or merge with or into, or convey, transfer or lease
its properties and assets substantially as an entirety to any Person which is a
corporation, partnership or trust organized and validly existing under the laws
of any domestic jurisdiction, provided that (1) any successor Person assumes by
supplemental indenture the Company's obligations on the Notes and under the
Indenture, (2) after giving effect to the transaction, no Event of Default, and
no event which, after notice or lapse of time, would become an Event of Default,
shall have occurred and be continuing under the Indenture and (3) the Company
shall have delivered an officer's certificate and an opinion of counsel, each
stating that such transaction or supplemental indenture, complies with the
Indenture.
ANTI-LAYERING
The Indenture provides that the Company will not incur, create, issue,
assume, guarantee or otherwise become liable for any Indebtedness that is
subordinate or junior in right of payment to any Senior Indebtedness and senior
in any respect in right of payment to the Notes, including having a stated
maturity earlier than the Notes.
EVENTS OF DEFAULT AND REMEDIES
The following events are defined in the Indenture as "Events of
Default" with respect to the Notes: (1) failure to pay any interest on any Note
when due and payable, continued for 30 days; (2) failure to pay principal of any
Note at its maturity; (3) failure to perform any other covenant of the Company
in the Indenture, continued for 60 days after written notice as provided in the
Indenture; (4) default under any indenture or instrument (other than the
Indenture or any Note) under which the Company shall have outstanding or shall
have guaranteed the payment of at least $25.0 million aggregate principal amount
of indebtedness for money borrowed which default (a) is caused by failure to pay
the principal of, or interest on, such indebtedness prior to the expiration of
the grace period provided in such indebtedness on the date of such default or
(b) results in acceleration of such indebtedness prior to its express maturity
and such acceleration has not been annulled within ten days after written notice
as provided in the Indenture; and (5) certain events in bankruptcy, insolvency
or reorganization involving the Company.
If an Event of Default occurs and is continuing, then either the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding by notice as provided in the Indenture may declare the
principal amount of all of the Notes to be due and payable immediately. Subject
to the subordination provisions described below, at any time after a declaration
of acceleration with respect to Notes has been made, but before a judgment or
decree for payment of money has been obtained by the Trustee, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may, under
certain circumstances, rescind and annul such acceleration.
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity. Subject to such provisions for the
indemnification of the Trustee, the Holders of a majority in aggregate principal
amount of the Notes then outstanding will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Notes.
The Company is required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance.
DEFEASANCE AND DISCHARGE OF THE INDENTURE AND THE NOTES
If the Company irrevocably deposits, or causes to be deposited with the
Trustee or the Paying Agent, at any time prior to the stated maturity of the
Notes, as trust funds in trust, money or direct noncallable obligations of or
guaranteed by the United States of America in amounts (including interest, but
without consideration of any reinvestment of such interest) and maturities
sufficient to pay timely and discharge the entire principal of the then
outstanding Notes and all interest then due in cash, the Indenture shall cease
to be of further effect as to all outstanding Notes (except, among other things,
as to (i) remaining rights of registration of transfer and substitution and
exchange of the Notes, (ii) rights of holders to receive payment of principal of
and interest on the Notes, and (iii) the rights, obligations and immunities of
the Trustee).
SUBORDINATION
The Notes will be general unsecured obligations of the Company, will be
subordinated in right of payment to the prior payment in full of all existing
and future Senior Indebtedness of the Company, will be senior in right of
payment to, or PARI PASSU in right of payment with, any existing and future
Senior Subordinated Indebtedness of the Company. At August 31, 1997, Senior
Indebtedness of the Company and its subsidiaries was approximately $79,700,000
and Senior Subordinated Indebtedness of the Company (including the Private
Notes) was approximately $755,300,000. In addition, because the Company's
operations are conducted primarily through its operating subsidiaries, claims of
creditors and holders of indebtedness of such subsidiaries will have priority
with respect to the assets and earnings of such subsidiaries over the claims of
creditors of the Company, including holders of the Notes. As of August 31, 1997,
the aggregate liabilities of such subsidiaries were approximately $625,000,000.
On October 29, 1997, the Company sold in a transaction exempt from registration
under the Securities Act $275,000,000 principal amount of its Convertible Notes
which are subordinated in right of payment to the Notes. The Company intends to
use the net proceeds from the sale of the Convertible Notes to repurchase or
redeem or defease or otherwise retire all of the Company's outstanding
$258,000,000 principal amount of 8 3/4% Notes which rank PARI PASSU with the
Notes. See "Business- -Recent Developments."
Upon any bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or its properties, or any assignment
for the benefit of creditors or marshalling of the assets and liabilities or the
Company or any distribution to creditors or a liquidation or dissolution of the
Company, the holders of Senior Indebtedness will be entitled to receive payment
in full in cash or, at the option of such holders, cash equivalents of all
obligations with respect to Senior Indebtedness, before the Holders receive any
payment of principal or interest on the Notes or receive any distributions to
which the Holders would otherwise be entitled.
Upon the maturity of any Senior Indebtedness by lapse of time,
acceleration (unless waived, rescinded or annulled) or otherwise, all principal
thereof and interest thereon shall first be paid in full in cash, or such
payment duly provided for in cash or in a manner satisfactory to the holders of
such Senior Indebtedness, before any payment is made on account of principal,
interest, fees or expenses on the Notes.
The Company may not, directly or indirectly, pay principal or interest
on the Notes and may not acquire any Notes for cash or property or make any
other distribution with respect to the Notes if (i) a default in the payment of
principal or interest on any Senior Indebtedness occurs and is continuing (a
"Payment Default") unless and until such default has been cured or waived; or
(ii) a default, other than a Payment Default, on any Senior Indebtedness occurs
and is continuing that permits the holders (or the agent) of such Senior
Indebtedness to accelerate its maturity (a "Non-Payment Default"), and such
default is either the subject of judicial proceedings or the Trustee or the
Paying Agent receives a notice of the default from a person who may give it
pursuant to the terms of the Indenture at least two business days prior to the
relevant payment date; PROVIDED, HOWEVER, that only one such notice relating to
the same event of default or any other default existing at the time of such
notice under the Senior Indebtedness may be given during any 365-consecutive-day
period.
The Company shall resume payments on the Notes and may acquire them
upon the earlier of when (a) the default is cured or waived, or (b) in the case
of a default referred to in clause (ii) in the immediately preceding paragraph,
the 179th day after receipt of the notice referred to therein if the default is
not the subject of judicial proceedings.
A Payment Default or Non-Payment Default with respect to the Senior
Indebtedness does not suspend the rights of the Trustee or the Holders to take
any action to accelerate the maturity of the Notes; PROVIDED, HOWEVER, that all
Senior Indebtedness then or thereafter due shall be paid first. In addition, any
acceleration of the maturity of the Notes as a result of the failure by the
Company to make any payment of principal or interest on the Notes as a result of
the foregoing subordination provisions shall be automatically rescinded if (i)
all defaults on Senior Indebtedness are permanently cured or waived and (ii) the
payment or payments, the omission of which gave rise to the Event of Default, is
or are made within 179 days after the Trustee received notice of the default or
defaults on Senior Indebtedness and at the time of such recision no other
Default or Event of Default shall have occurred and be continuing. See "Events
of Default and Remedies."
As a result of the subordination provisions described above, in the
event of insolvency of the Company, funds that would otherwise be payable to
Holders will be paid or turned over to the holders of Senior Indebtedness to the
extent necessary to pay the Senior Indebtedness in full, and the Company may be
unable to make all payments due under the Notes. Additionally, in such event,
Holders may recover less ratably than general creditors of the Company or the
general creditors of the Company's subsidiaries to whom the Notes are
structurally subordinated.
TRANSFER AND EXCHANGE
A holder may transfer or exchange Notes in accordance with the
Indenture. The Registrar may require a holder, among other things, to furnish
appropriate endorsements and transfer documents, and to pay any taxes and fees
required by law or permitted by the Indenture. The registered holder of a Note
will be treated as the owner of it for all purposes.
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the
Company and the Trustee with the consent of the Holders of not less than a
majority in aggregate principal amount of the outstanding Notes; PROVIDED,
HOWEVER, that no such modification or amendment may, without the consent of the
Holder of each Note affected thereby, change the fixed maturity of the principal
of, or any installment of principal of or interest on any Note, reduce the
principal amount of, or interest on, any Note, change the place of payment where
or coin or currency in which the principal of, or interest on, any Notes is
payable, impair the right to institute suit for the enforcement of any payment
on or with respect to any Note, make any change in the subordination provisions
of the Indenture that adversely affects the rights of any holders of the Notes
or any change to any other section of the Indenture that adversely affects the
rights of any holder of the Notes under the subordination provisions of the
Indenture, reduce the percentage in principal amount of outstanding Notes, the
consent of the Holders of which is required for modification or amendment of the
Indenture or for waiver of compliance with certain provisions of the Indenture
or for waiver of certain defaults or modify any of the above provisions.
The Holders of not less than a majority in aggregate principal amount
of the outstanding Notes may, on behalf of the Holders of all Notes, waive
compliance by the Company with certain restrictive provisions of the Indenture.
The Holders of not less than a majority in aggregate principal amount of the
outstanding Notes may, on behalf of the Holders of all Notes, waive any past
default under the Indenture, except a default (1) in the payment of principal
of, or interest on, any Note, or (2) in respect of a covenant or provision of
the Indenture which cannot be modified or amended without the consent of the
Holder of each Note.
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the
Trustee, should it become a creditor of the Company, to obtain payment of claims
in certain cases, or to realize on certain property received in respect of any
such claim as security or otherwise. The Trustee will be permitted to engage in
other transactions; however, if it acquires any conflicting interest it must
eliminate such conflict within 90 days, or apply to the Commission for
permission to continue or resign.
The holders of a majority in principal amount of the then outstanding
Notes will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
shall occur (which shall not be cured), the Trustee will be required, in the
exercise of its power, to use the degree of care of a prudent man in the conduct
of his own affairs. Subject to such provisions, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request of any of the holders of the Notes, unless they shall have offered to
the Trustee security or indemnity satisfactory to it against any loss, liability
or expense.
BOOK-ENTRY; DELIVERY AND FORM
The certificates representing the Notes will be issued in fully
registered form, without coupons. Except as described below, the Notes will be
deposited with, or on behalf of, The Depository Trust Company ("DTC"), New York,
New York, as depositary (the "Depositary"), and registered in the name of Cede &
Co., as DTC's nominee, in the form of one or more global Note certificates (the
"Global Note").
GLOBAL NOTES. Ownership of beneficial interests in a Global Note will
be limited to persons who have accounts with DTC ("participants") or persons who
hold interests through participants. Ownership of beneficial interests in the
Global Notes will be shown on, and the transfer of these ownership interests
will be effected only through, records maintained by DTC or its nominee (with
respect to interests of participants) and the records of participants (with
respect to interests of persons other than participants).
So long as DTC, or its nominee, is the registered owner or holder of a
Global Note, DTC or such nominee, as the case may be, will be considered the
sole owner or holders of the Notes represented by such Global Note for all
purposes under the Indenture and the Notes. In addition, no beneficial owner of
an interest in a Global Note will be able to transfer that interest except in
accordance with DTC's applicable procedures (in addition to those under the
Indenture referred to herein).
Payments on Global Notes will be made to DTC, or its nominee, as the
registered owner thereof. Neither the Company, the Trustee nor any paying agent
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in the Global
Notes or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Company expects that DTC, or its nominee, upon receipt of any
payment in respect of a Global Note representing any Notes held by it or its
nominee, will immediately credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Note for such Notes as shown on the records of DTC or its
nominee. The Company also expects that payments by participants to owners of
beneficial interests in such Global Note held through such participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers registered in the names of
nominees for such customers. Such payments will be the responsibility of such
participants.
Transfers between participants in DTC will be effected in the ordinary
way in accordance with DTC rules. The laws of some states require that certain
persons take physical delivery of securities in definitive form. Consequently,
the ability to transfer beneficial interests in a Global Note to such persons
may be limited. Because DTC can only act on behalf of participants, who in turn
act on behalf of indirect participants (defined below) and certain banks, the
ability of a person having a beneficial interest in a Global Note to pledge such
interest to persons or entities that do not participate in the DTC system or
otherwise take actions in respect of such interest, may be affected by the lack
of a physical certificate of such interest.
The Company believes that it is the policy of DTC that it will take any
action permitted to be taken by a holder of Notes (including the presentation of
Notes for exchange) only at the direction of one or more participants to whose
account interests in the Global Notes are credited and only in respect of such
portion of the aggregate principal amount of the Notes as to which such
participant or participants has or have given such direction.
DTC has advised the Company as follows: DTC is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered pursuant to the provisions of
section 17A of the Exchange Act. DTC holds securities that its participants
deposit with DTC and facilitates the settlement among participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. Access to the DTC system
is also available to others such as securities brokers and dealers, banks and
trust companies that clear through or maintain a custodial relationship with a
direct participant, either directly or indirectly ("indirect participants"). The
rules applicable to DTC and its participants are on file with the Commission.
Although DTC has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Notes among participants of DTC,
it is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. Neither the Company nor the
Trustee will have any responsibility for the performance by DTC or its
participants or indirect participants of their respective obligations under the
rules and procedures governing their operations.
CERTIFICATED SECURITIES
Subject to certain conditions, any person having a beneficial interest
in the Global Note may, upon request to the Trustee, exchange such beneficial
interest for Notes in the form of Certificated Securities. Upon any such
issuance, the Trustee is required to register such Certificated Securities in
the name of, and cause the same to be delivered to, such person or persons (or
the nominee of any thereof). In addition, if (i) the Company notifies the
Trustee in writing that the Depositary is no longer willing or able to act as a
depositary and the Company is unable to locate a qualified successor within 90
days or (ii) the Company, at its option, notifies the Trustee in writing that it
elects to cause the issuance of Notes in the form of Certificated Securities
under the Indenture, then, upon surrender by the Global Note Holder of its
Global Note, Notes in such form will be issued to each person that the Global
Note Holder and the Depositary identify as being the beneficial owner of the
related Notes.
Neither the Company nor the Trustee will be liable for any delay by the
Global Note Holder or the Depositary in identifying the beneficial owners of
Notes and the Company and the Trustee may conclusively rely on, and will be
protected in relying on, instructions from the Global Note Holder or the
Depositary for all purposes.
In case any Note shall become mutilated, defaced, destroyed, lost or
stolen, the Company will execute and, upon the Company's request, the Trustee
will authenticate and deliver a new Note, of like tenor and equal principal
amount in exchange and substitution for such Note (upon surrender and
cancellation thereof) or in lieu of a substitution for such Note. In case such
Note is destroyed, lost or stolen, the applicant for a substituted Note shall
furnish to the Company and the Trustee such security or indemnity as may be
required by them to hold each of them harmless, and, in every case of
destruction, loss or theft of such Note, the applicant shall also furnish to the
Company or the Trustee satisfactory evidence of the destruction, loss or theft
of such Note and of the ownership thereof. Upon the issuance of any substituted
Note, the Company may require the payment by the registered holder thereof of a
sum sufficient to cover fees and expenses connected therewith.
SAME-DAY SETTLEMENT AND PAYMENT
The Indenture will require that payments in respect of the Notes
represented by the Global Note (including principal and interest) be made in
immediately available same day funds. With respect to Certificated Securities,
however, the Company will make all payments of principal and interest by mailing
a check to each Holder's registered address. Secondary trading in long-term
notes and debentures of corporate issuers is generally settled by clearing-house
or next-day funds. In contrast, the Notes represented by the Global Note are
expected to be eligible to trade in the PORTAL Market and to trade in the
Depositary's Same-Day Funds Settlement System, and any permitted secondary
market trading activity in such Notes will, therefore, be required by the
Depositary to be settled in immediately available funds. The Company expects
that secondary trading in the Certificated Securities will also be settled in
immediately available funds.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture.
Reference is made to the Indenture for a full disclosure of all such terms, as
well as any other capitalized terms used herein for which no definition is
provided.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease which
would at such time be so required to be capitalized on the balance sheet in
accordance with GAAP.
"Credit Agreement" means the Amended and Restated Credit and Guarantee
Agreement, dated as of March 8, 1996, as amended from time to time, by and among
the Company and Dayco PTI S.p.A., as Borrowers, and certain other subsidiaries
of the Company, as Guarantors, The Chase Manhattan Bank, as Administrator and
Bid Agent, Bank of America National Trust and Savings Association, as
Documentation Agent, and the banks and other financial institutions that are
signatories thereto, and any refinancings or replacements thereof providing for
Indebtedness in principal amount of up to $500,000,000, less, in the case of any
such refinancings or replacements, the amount of all permanent reductions
thereunder.
"8 3/4% Notes" means the Company's 8 3/4% Senior Subordinated Notes due
April 1, 2003 issued pursuant to the Indenture, dated as of March 15, 1993,
between the Company and Citibank, N.A., as trustee.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession,
from time to time.
"Indebtedness" of any person means any indebtedness, contingent or
otherwise, in respect of borrowed money (whether or not the recourse of the
lender is to the whole of the assets of such Person or only to a portion
thereof), or evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement obligations with respect thereto) or
representing the balance deferred and unpaid of the purchase price of any
property (including pursuant to Capital Lease Obligations), if and to the extent
any of the foregoing indebtedness would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP (except that any such
balance that constitutes a trade payable and/or an accrued liability arising in
the ordinary course of business shall not be considered Indebtedness), and shall
also include, to the extent not otherwise included, any Capital Lease
Obligations, the maximum fixed repurchase price of any Redeemable Stock,
indebtedness secured by a Lien to which the property or assets owned or held by
such Person is subject, whether or not the obligations secured thereby shall
have been assumed, guarantees of items that would be included within this
definition to the extent of such guarantees (exclusive of whether such items
would appear upon such balance sheet), and net liabilities in respect of
Interest Rate Protection Obligations. For purposes of the preceding sentence,
the maximum fixed repurchase price of any Redeemable Stock which does not have a
fixed repurchase price shall be calculated in accordance with the terms of such
Redeemable Stock as if such Redeemable Stock were repurchased on any date on
which Indebtedness shall be required to be determined pursuant to the Indenture,
provided that if such Redeemable Stock is not then permitted to be repurchased,
the repurchase price shall be the book value of such Redeemable Stock. The
amount of Indebtedness of any person at any date shall be, without duplication,
(i) the outstanding balance at such date of all unconditional obligations as
described above and the maximum liability of any such contingent obligations at
such date and (ii) in the case of Indebtedness of others secured by a Lien to
which the property or assets owned or held by such Person is subject, the lesser
of the fair market value at such date of any asset subject to a Lien securing
the Indebtedness of others and the amount of the Indebtedness secured.
"Interest Rate Protection Obligations" means the obligations of any
Person pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include without limitation, interest rate swaps, caps,
floors, collars and similar agreements.
"Lien" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, whether or not filed, recorded or otherwise perfected
under applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give any security interest in and any filing or other agreement to give
any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction).
"Person" means any individual, corporation, partnership, joint venture,
incorporated or unincorporated association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"Redeemable Stock" means any capital stock or other equity interest
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable before the stated maturity of the
Notes), or upon the happening of any event, matures or is mandatorily
redeemable, in whole or in part, prior to the stated maturity of the Notes.
"Senior Indebtedness" means the principal of, premium, if any, and
interest on any Indebtedness of the Company, whether outstanding on the date of
the Indenture or thereafter created, incurred, assumed or guaranteed, unless, in
the case of any particular Indebtedness, the instrument under which such
Indebtedness is created, incurred, assumed or guaranteed expressly provides that
such Indebtedness shall not be senior or superior in right of payment to the
Notes. Without limiting the generality of the foregoing, "Senior Indebtedness"
shall include the principal of, premium, if any, and interest on all obligations
of every nature of the Company from time to time owed to the lenders under the
Credit Agreement, including, without limitation, principal of and interest on,
and all fees and expenses payable under the Credit Agreement. Notwithstanding
anything to the contrary contained in this Indenture or the Notes, "Senior
Indebtedness" shall not include any Indebtedness represented by the 8 3/4% Notes
or the 7 3/4% Notes.
"7 3/4% Notes" means the Company's 7 3/4% Senior Subordinated Notes due
April 1, 2006 issued pursuant to the Indenture, dated as of March 11, 1996,
between the Company and Fleet National Bank, as trustee.
"Senior Subordinated Indebtedness" means Indebtedness (i) represented
by the 8 3/4% Notes and the 7 3/4% Notes and (ii) any other Indebtedness which
is PARI PASSU with the Notes and expressly provides that it is subordinated to
Senior Indebtedness.
DESCRIPTION OF PRIVATE NOTES
The terms of the Private Notes are identical in all material respects
to the Exchange Notes, except that (i) the Private Notes have not been
registered under the Securities Act, are subject to certain restrictions on
transfer and are entitled to certain rights under the applicable Registration
Rights Agreement (which rights will terminate upon consummation of the Exchange
Offer, except under limited circumstances) and (ii) the Exchange Notes will not
provide for payment of Additional Interest thereon. The Private Notes provide
that, in the event that the Exchange Offer is not consummated within 150 days
after August 11, 1997 or, in certain limited circumstances, in the event of a
shelf registration statement (the "Shelf Registration Statement") with respect
to the resale of the Private Notes is not declared effective on or prior to the
75th calendar day after the date such Shelf Registration Statement was required
to be filed, then Additional Interest will accrue (in addition to the stated
interest rate on the Private Notes) at the rate of 0.50% per annum on the
principal amount of the Private Notes. See "The Exchange Offer--Additional
Interest."
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a brief summary of certain U.S. federal income tax
consequences associated with the acquisition, ownership and disposition of the
Notes applicable to initial purchasers of Notes. The summary is based upon the
Internal Revenue Code of 1986, as amended (the "Code"), regulations, rulings and
judicial decisions, all as of the date hereof and all of which are subject to
change, possibly with retroactive effect. The discussion below does not address
all aspects of U.S. federal income taxation that may be relevant to particular
holders in the context of their specific investment circumstances (for example,
persons holding Notes as a hedge against currency risks or as part of a straddle
or conversion transaction) or to certain types of holders subject to special
treatment under such laws (for example, financial institutions, tax-exempt
organizations and insurance companies). In addition, the discussion does not
address any aspect of state, local or foreign taxation and assumes that such
purchasers of the Notes will hold them as "capital assets" within the meaning of
Section 1221 of the Code.
For purposes of this discussion, a "U.S. holder" is an individual who
is a citizen or resident of the United States, a corporation (or other entity
taxable as a corporation) or partnership created under the laws of the United
States or any political subdivision thereof, (except, in the case of a
partnership, to the extent Treasury Department regulations provide otherwise),
an estate that is subject to U.S. federal income taxation on its worldwide
income regardless of its source, or a trust other than a trust described in
Section 7701(a)(31) of the Code.
PROSPECTIVE PURCHASERS OF THE NOTES ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS CONCERNING THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF
ACQUIRING, OWNING AND DISPOSING OF THE NOTES AS WELL AS THE APPLICATION OF
STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX LAWS.
U.S. HOLDERS
Interest payable on the Notes will be includable as ordinary income in
the income of a U.S. holder as received or accrued, in accordance with such
holder's regular method of accounting. If a Note is sold or otherwise disposed
of, a U.S. holder generally will recognize gain or loss equal to the difference
between the amount realized on the disposition (except to the extent
attributable to accrued but unpaid interest) and such holder's tax basis in the
Note. Such gain or loss will generally be capital gain or loss. Under recently
enacted legislation, the net capital gain of an individual derived in respect of
the Notes generally will be taxable at a maximum rate of 28% if the holding
period for the Notes was greater than one year but not more than 18 months, or
20% if the holding period was greater than 18 months.
A U.S. holder of a Note may be subject to information reporting and
possibly backup withholding. If applicable, backup withholding would apply at a
rate of 31% with respect to interest on, or the proceeds of a sale, exchange,
redemption, retirement, or other disposition of, such Note unless (i) such U.S.
holder is a corporation or comes within certain other exempt categories and,
when required, demonstrates this fact, or (ii) provides a taxpayer
identification number, certifies as to no loss of exemption from backup
withholding, and otherwise complies with applicable backup withholding rules.
Amounts withheld under the backup withholding rules from payment to a U.S.
holder will be allowed as a credit against such holder's U.S. federal income tax
and may entitle the holder to a refund, provided that the required information
is provided to the Internal Revenue Service.
Recently issued Treasury Department regulations (the "Final Withholding
Regulations"), which are generally effective with respect to payments made after
December 31, 1998, modify the currently effective information reporting and
backup withholding procedures and requirements, and provide certain presumptions
regarding the status of holders when payments to the holders cannot be reliably
associated with appropriate documentation provided to the payor. To avoid backup
withholding with respect to payments made after December 31, 1998, initial U.S.
holders will be required to provide certification, if applicable, that conforms
to the requirements of the Final Withholding Regulations, subject to certain
transitional rules which may apply to extend until December 31, 1999 a
certification given in accordance with prior Treasury Department regulations.
Because the application of the Final Withholding Regulations will vary depending
on the U.S. holder's particular circumstances, U.S. holders are urged to consult
their own tax advisors regarding the application of the Final Withholding
Regulations to them.
NON-U.S. HOLDERS
Payments of interest to a person other than a U.S. holder with respect to a
Note generally will not be subject to U.S. federal income tax and a withholding
tax if (a) the interest is not effectively connected with the conduct by such
holder of a trade or business in the United States, (b) either (i) the
beneficial owner of the Note certifies to the Company or its agent, under
penalties of perjury, that it is not a U.S. person and provides its name and
address on an Internal Revenue Service Form W-8 (or a suitable substitute form)
or (ii) a securities clearing organization, bank or other financial organization
that holds customers' securities in the ordinary course of business (a
"financial institution") and holds the Note certifies under penalties of perjury
that such a Form W-8 (or suitable substitute form) has been received from the
beneficial owner by it or by a financial institution between it and the
beneficial owner and furnishes the payor with a copy thereof, and (c) the person
does not actually or constructively own 10% or more of the voting power of all
voting stock of the Company and is not a controlled foreign corporation for U.S.
tax purposes that is related to the Company through stock ownership. The Final
Withholding Regulations consolidate and modify the current certification
requirements and means by which a non-U.S. holder may claim exemption from U.S.
federal income tax withholding. A non-U.S. holder must provide certification
that complies with the procedures in the Final Withholding Regulations, where
required, by the first payment date after the effective date of those
regulations, subject to certain transitional rules which may extend
certifications previously provided by such non-U.S. holder in accordance with
the currently effective Treasury Department regulations until December 31, 1999.
Non-U.S. holders claiming benefits under an income tax treaty may be required to
obtain a taxpayer identification number ("TIN") and to certify their eligibility
under the applicable treaty's limitations on benefits under the applicable
treaty's limitations on benefits article in order to comply with the Final
Withholding Regulations' certification requirements. All non-U.S. holders should
consult their tax advisors regarding the application of the Final Withholding
Regulations, which are generally effective with respect to payments made after
December 31, 1998.
Any capital gain realized on the sale, redemption, retirement or other
taxable disposition of a Note by a person other than a U.S. holder generally
will not be subject to U.S. federal income tax provided (i) such gain is not
effectively connected with the conduct by such holder of a trade or business in
the United States, and (ii) in the case of gains derived by an individual, such
individual is not in the United States for 183 days or more in the taxable year
of the disposition.
Payments on the Notes made by the Company or any paying agent of the
Company to non-U.S. holders generally should not be subject to information
reporting and backup withholding at the rate of 31% if the holder certifies as
to its non-U.S. holder status or otherwise establishes an exemption from
information reporting and backup withholding and the payor does not have actual
knowledge that the holder is a U.S. holder. Payment of proceeds from a sale of a
Note to or through the U.S. office of a broker is subject to information
reporting backup withholding unless the non-U.S. holder certifies as to its
non-U.S. holder status or otherwise establishes an exemption from information
reporting and backup withholding. Payment outside the U.S. of the proceeds of
the sale of a Note to or through a foreign office of a "broker" (as defined in
applicable U.S. Treasury Department regulations) should not be subject to
information reporting or backup withholding, except that if the broker is a U.S.
person, a controlled foreign corporation for U.S. federal income tax purposes or
a foreign person 50% or more of whose gross income is from a U.S. trade or
business, information reporting should apply to such payment unless the broker
has documentary evidence in its records that the beneficial owner is not a U.S.
holder and certain other conditions are not met or the beneficial owner
otherwise establishes an exemption. All non-U.S. holders are urged to consult
their own tax advisors regarding the possible application of information
reporting and backup withholding in light of their particular circumstances
under the Final Withholding Regulations.
EXCHANGE OFFER
A holder should not recognize any taxable gain or loss on the exchange
of the Private Notes for Exchange Notes pursuant to the Exchange Offer. The
Exchange Notes should have the same issue price as the Private Notes, and a
holder should have the same adjusted tax basis and holding period in the
Exchange Notes as the holder had in the Private Notes immediately before the
exchange.
PLAN OF DISTRIBUTION
Based on an interpretation by the staff of the Commission set forth in
no-action letters issued to third parties, the Company believes that the
Exchange Notes issued pursuant to the Exchange Offer in exchange for Private
Notes may be offered for resale, resold and otherwise transferred by a holder
thereof (other than (i) an "affiliate" of the Company within the meaning of Rule
405 under the Securities Act, (ii) a broker-dealer who acquired Private Notes
directly from the Company to resell pursuant to Rule 144A or any other available
exemption under the Securities Act or (iii) a broker-dealer who acquired Private
Notes as a result of market making or other trading activities), without
compliance with the registration and prospectus delivery requirements of the
Securities Act; PROVIDED that the holder is acquiring Exchange Notes in the
ordinary course of its business and is not participating, and has no arrangement
or understanding with any person to participate, in the distribution of the
Exchange Notes. Holders of Private Notes wishing to accept the Exchange Offer
must represent to the Company, as required by the Registration Rights Agreement,
that such conditions have been met. The Company believes that none of the
registered holders of the Private Notes is an affiliate (as such term is defined
in Rule 405 under the Securities Act) of the Company.
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Private Notes must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of
Exchange Notes received in exchange for Private Notes, where such Private Notes
were acquired by such broker-dealer as a result of market-making activities or
other trading activities. The Company has agreed to make this Prospectus (as it
may be amended or supplemented) available to any broker-dealer, upon request,
for use in connection with any such resale, for a period of one year after the
Registration Statement is declared effective by the Commission or until such
earlier date on which all the Exchange Notes are freely tradeable. However, any
broker-dealer who acquired the Notes directly from the Company may not fulfill
its prospectus delivery requirements with this Prospectus, but must comply with
the registration and prospectus delivery requirements of the Securities Act.
The Company will not receive any proceeds from any sale of the Exchange
Notes by broker-dealers or any other persons. Exchange Notes received by
broker-dealers for their own accounts pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange Notes or
a combination of such methods of resale, at market prices prevailing at the time
of such resale, at prices related to such prevailing market prices or at
negotiated prices. Any such resale may be made directly to purchasers or to or
through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer and/or purchasers of any
such Exchange Notes. Any broker-dealer that resells Exchange Notes that were
received by it for its own account pursuant to the Exchange Offer and any broker
or dealer that participates in the distribution of such Exchange Notes may be
deemed to be an "underwriter" within the meaning of the Securities Act and any
profit on any such resale of Exchange Notes and any commissions or concessions
received by any such persons may be deemed to be underwriting compensation under
the Securities Act. The Letter of Transmittal states that by acknowledging that
it will deliver and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
By acceptance of this Exchange Offer, each broker-dealer that receives
Exchange Notes pursuant to the Exchange Offer agrees that, upon receipt of
notice from the Company of the happening of any event which makes any statement
in the Prospectus untrue in any material respect or which requires the making of
any changes in the Prospectus in order to make the statements therein not
misleading (which notice the Company agrees to deliver promptly to such
broker-dealer), such broker-dealer will suspend use of the Prospectus until the
Company has amended or supplemented the Prospectus to correct such misstatement
or omission and has furnished copies of the amended or supplemented Prospectus
to such broker-dealer. If the Company shall give any such notice to suspend the
use of the Prospectus, it shall extend the one-year period referred to above by
the number of days during the period from and including the date of the giving
of such notice to and including the date when the broker-dealers shall have
received copies of the supplemented or amended Prospectus necessary to permit
resales of the Exchange Notes.
The Company has agreed to pay all expenses incident to the Company's
performance of, or compliance with, the Registration Rights Agreement and will
indemnify the holders (including any broker-dealers) and certain parties related
to the holders against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Exchange
Notes will be passed upon on behalf of the Company by Stroock & Stroock & Lavan
LLP, New York, New York, special counsel to the Company.
EXPERTS
The consolidated balance sheets as of February 28, 1997 and February
29, 1996 and the related consolidated statements of income, stockholders' equity
and cash flows for each of the three years in the period ended February 28, 1997
incorporated by reference into this Prospectus, have been incorporated herein in
reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of that firm as experts in accounting and auditing.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") provides, in summary, that directors and officers of Delaware
corporations are entitled, under certain circumstances, to be indemnified
against all expenses and liabilities (including attorneys' fees) incurred by
them as a result of suits brought against them in their capacity as a director
or officer, if they acted in good faith and in a manner they 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
their conduct was unlawful; provided, that no indemnification may be made
against expenses in respect of any claim, issue or matter as to which they shall
have been adjudged to be liable to the corporation, unless and only to the
extent that 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, they are fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper. Any such
indemnification may be made by the corporation only as authorized in each
specific case upon a determination by the stockholders or disinterested
directors that indemnification is proper because the indemnitee has met the
applicable standard of conduct. Article Ninth of the Company's Certificate of
Incorporation entitles officers, directors and controlling persons of the
Company to indemnification to the full extent permitted by Section 145 of the
DGCL, as the same may be supplemented or amended from time to time.
Article Ninth of the Company's Certificate of Incorporation provides
that no director shall have any personal liability to the Company or its
stockholders for any monetary damages for breach of fiduciary duty as a
director, provided that such provision does not limit or eliminate the liability
of any director (i) for breach of such director's duty or loyalty to the Company
or its 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 DGCL (involving certain unlawful dividends or stock
repurchases) or (iv) for any transaction from which such director derived an
improper personal benefit. The provisions of such article do not limit or
eliminate the liability of any director for any act or omission occurring prior
to the effective time of such amendment.
Reference is made to Section 8 of the Registration Rights Agreement
included in Exhibit 4.3 hereto which provides certain indemnification rights to
the directors and officers of the Company.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBIT
NO. DESCRIPTION
4.1 Indenture between Mark IV and Marine Midland Bank, as
trustee, relating to the 7 1/2% Senior Subordinated NoteS,
dated August 11, 1997 (incorporated by reference to Exhibit
4.1 to the Company's Current Report on Form 8K dated
August 11, 1997).
4.2 Form of Exchange Note for Mark IV (incorporated by
reference to Exhibit 4.1 to the Company's Current Report
on Form 8K dated August 11, 1997).
4.3* Registration Rights Agreement between Mark IV Industries,
Inc. and Bear, Stearns & Co. Inc., as initial purchasers,
dated August 11, 1997.
5.1* Opinion of Stroock & Stroock & Lavan LLP as to the legality
of the Exchange Notes to be issued by Mark IV Industries,
Inc.
12.1** Statement Regarding Computation of Ratios of Earnings
to Fixed Charges.
23.1** Consent of Coopers & Lybrand L.L.P.
23.2* Consent of Stroock & Stroock & Lavan LLP (included in
Exhibit 5.1).
25.1* Form T-1 Statement of Eligibility of Marine Midland
Bank to act as Trustee under the Indenture.
99.1* Form of Letter of Transmittal.
99.2* Form of Notice of Guaranteed Delivery.
99.3* Form of Letter to Nominees.
99.4* Form of Letter to Clients.
99.5* Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
- -----------------
* Filed previously
** Filed herewith
ITEM 22. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each
filing of the Registrant's annual report pursuant to Section 13(a) or
15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating
to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(b) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under
the Securities Act, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A 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, 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.
(c) The undersigned registrant hereby undertakes that insofar
as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, 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 the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
(d) The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the
prospectus pursuant to Item 4, 10(b), 11 or 13 of this form, within one
business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This
includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of
responding to the request.
(e) The undersigned registrant hereby undertakes to supply by
means of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein, that was
not the subject of and included in the registration statement when it
became effective.
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THE REGISTRANT HAS
DULY CAUSED THIS AMENDMENT TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE TOWN OF AMHERST,
STATE OF NEW YORK, ON NOVEMBER , 1997.
MARK IV INDUSTRIES, INC.
BY /S/ WILLIAM P. MONTAGUE
WILLIAM P. MONTAGUE
PRESIDENT
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITY AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
/S/ SAL H. ALFIERO Chairman of the Board November 7, 1997
SAL H. ALFIERO and Chief Executive
Officer
/S/ WILLIAM P. MONTAGUE President and Chief November 7, 1997
WILLIAM P. MONTAGUE Operating Officer and
Director
/S/ GERALD S. LIPPES Secretary and Director November 7, 1997
GERALD S. LIPPES
/S/ JOHN J. BYRNE Vice President and Chief November 7, 1997
JOHN J. BYRNE Financial Officer
/S/ RICHARD L. GRENOLDS Vice President and Chief November 7, 1997
RICHARD L. GRENOLDS Accounting Officer
/S/ CLEMENT R. ARRISON Director November 7, 1997
CLEMENT R. ARRISON
JOSEPH G. DONOHOO Director November __, 1997
HERBERT ROTH, JR. Director November __, 1997
<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
4.1 Indenture between Mark IV and Marine Midland Bank, as trustee,
relating to the 7 1/2% Senior Subordinated Notes, dated August 11, 1997
(incorporated by reference to Exhibit 4.1 to the Company's Current
Report on Form 8K dated August 11, 1997)
4.2 Form of Exchange Note for Mark IV (incorporated by reference to
Exhibit 4.1 to the Company's Current Report on Form 8K dated August 11,
1997)
4.3* Registration Rights Agreement between Mark IV Industries, Inc. and
Bear, Stearns & Co. Inc., as initial purchasers, dated August 11, 1997
5.1* Opinion of Stroock & Stroock & Lavan LLP as to the legality of the
Exchange Notes to be issued by Mark IV Industries, Inc.
12.1** Statement Regarding Computation of Ratios of Earnings to Fixed Charges
23.1** Consent of Coopers & Lybrand L.L.P.
23.2* Consent of Stroock & Stroock & Lavan LLP (included in Exhibit 5.1)
25.1* Form T-1 Statement of Eligibility of Marine Midland Bank to act as
Trustee under the Indenture
99.1* Form of Letter of Transmittal
99.2* Form of Notice of Guaranteed Delivery
99.3* Form of Letter to Nominees
99.4* Form of Letter to Clients
99.5* Form of Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9
- -----------------
* Filed previously
** Filed herewith
EXHIBIT 12.1
<TABLE>
<CAPTION>
MARK IV INDUSTRIES, INC.
STATEMENT REGARDING COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES(1)
(DOLLARS IN THOUSANDS)
(UNAUDITED)
YEAR ENDED LAST DAY OF SIX-MONTHS ENDED
FEBRUARY AUGUST 31,
1993 1994 1995 1996 1997 1996 1997
---- ---- ---- ---- ---- ---- ----
Earnings:
<S> <C> <C> <C> <C> <C> <C> <C>
Income before provision for income taxes $42,300 $61,000 $89,200 $135,700 $164,200 $ 84,500 $94,200
Fixed charges, before capitalized interest 48,033 46,874 50,448 57,197 63,809 32,744 32,167
Amortization of capitalized interest 133 210 247 265 335 168 263
--------- -------- -------- -------- --------- --------- --------
Earnings as adjusted $90,466 $108,084 $139,895 $193,162 $228,344 $117,412 $126,630
========= ========= ========= ======== ========= ========= =========
Fixed Charges:
Interest expense, net $44,400 $43,100 $46,300 $52,600 $59,000 $ 30,300 $ 29,900
Investment income earned (2) 300 400 284 396 418 209 219
--------- -------- -------- -------- --------- --------- ----------
Total interest 44,700 43,500 46,584 52,996 59,418 30,509 30,119
Amortization of debt expense 1,383 1,424 1,659 1,726 1,871 975 1,028
Interest portion of rent expense 1,950 1,950 2,205 2,475 2,520 1,260 1,020
-------- -------- ------- ------- --------- --------- --------
Fixed Charges, before
capitalized interest 48,033 46,874 50,448 57,197 63,809 32,744 32,167
Capitalized interest 632 195 335 703 1,901 352 951
------- ------- -------- -------- ------- --------- --------
Fixed Charges $48,665 $47,069 $50,783 $57,900 $65,710 $ 33,096 $ 33,118
======== ======== ========== ========= ======== ========== ==========
Ratio of Earnings to Fixed Charges 1.86x 2.30x 2.75x 3.34x 3.48x 3.55x 3.82x
- ---------------
(1) For the purpose of calculating the ratio of earnings to
fixed charges, (i) earnings consist of income from
continuing operations before income taxes and the
restructuring charge, plus fixed charges and (ii) fixed
charges consist of interest expense incurred, capitalized
interest, amortization of debt expense and 15% of rental
payments under operating leases (an amount estimated by
management to be the interest component of such rentals).
If the restructuring charge were included in the ratio
determination for fiscal 1997, the actual ratio would be 1.76x.
(2) Represents investment income presented with interest expense, which
must be eliminated for purposes of calculating the ratios.
</TABLE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Amendment No. 1 to the
registration statement on Form S-4 (File No. 333-36013) of our reports dated
March 18, 1998, on our audits of the consolidated financial statements and
financial statement schedule of Mark IV Industries, Inc. and subsidiaries, which
reports dated March 18, 1997, are included in the Company's Annual Report on
Form 10-K, as amended on Form 10-K/A. We also consent to the reference to
our firm under the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
Rochester, New York
November 7, 1997
