<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 25, 1998
REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
MATTEL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-1567322
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
333 CONTINENTAL BOULEVARD, EL SEGUNDO, CALIFORNIA 90245-5012 (310) 252-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
ROBERT NORMILE, ESQ.
VICE PRESIDENT, ASSOCIATE GENERAL COUNSEL AND SECRETARY
MATTEL, INC.
333 CONTINENTAL BOULEVARD, EL SEGUNDO, CALIFORNIA 90245-5012 (310) 252-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
RONALD M. LOEB, ESQ. RICHARD A. BOEHMER, ESQ.
IRELL & MANELLA LLP O'MELVENY & MYERS LLP
333 SOUTH HOPE STREET, SUITE 3300 400 SOUTH HOPE STREET, SUITE 1060
LOS ANGELES, CA 90071 LOS ANGELES, CA 90071
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act") other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. [_]
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
<CAPTION>
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF PROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED(1) REGISTERED(1) PER SECURITY(2) PRICE(2)(3)(4) FEE(5)
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock (6)(7).... -- (10) -- --
- ------------------------------------------------------------------------------------------
Preference Share Pur-
chase Rights(7)....... -- (10) -- --
- ------------------------------------------------------------------------------------------
Preferred Stock (8).... -- (10) -- --
- ------------------------------------------------------------------------------------------
Depositary Shares(8)... -- (10) -- --
- ------------------------------------------------------------------------------------------
Debt Securities(9)..... -- (10) -- --
- ------------------------------------------------------------------------------------------
Warrants............... -- (10) -- --
- ------------------------------------------------------------------------------------------
Units.................. -- (10) -- --
- ------------------------------------------------------------------------------------------
Total.................. $400,000,000 (10) $400,000,000 $111,200
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
</TABLE>
(1) Subject to Footnote (3), there are being registered hereunder (i) an
indeterminate amount of Common Stock, Preferred Stock, Depositary Shares,
Debt Securities, Warrants, and Units issuable in primary offerings, (ii)
an indeterminate amount of Common Stock, Preferred Stock and Depositary
Shares issuable upon conversion or exchange of Debt Securities, Preferred
Stock, Preference Share Purchase Rights or Depositary Shares, as the case
may be, registered hereunder, (iii) an indeterminate amount of Common
Stock, Preferred Stock, Depositary Shares and Debt Securities issuable
upon exercise of Warrants registered hereunder, and (iv) an indeterminate
amount of Preference Share Purchase Rights, which are evidenced by
certificates for, and are transferred along with and only with, the
Common Stock until the occurrence of certain prescribed events (see
Footnote (7) below).
(2) In U.S. dollars or the equivalent thereof in one or more foreign
currencies or composite currencies. The proposed maximum offering price
per unit will be determined from time to time by the Registrant in
connection with the issuance of the securities registered hereunder.
(3) Estimated solely for the purpose of calculating the registration fee. In
no event will the aggregate maximum offering price of all securities
issued under this Registration Statement exceed $400,000,000 or the
equivalent thereof in one or more foreign currencies or composite
currencies or, if any Debt Securities are issued with original issue
discount, such greater amount as shall result in proceeds of $400,000,000
to the Registrant.
(4) With respect to Debt Securities, excluding accrued interest and accrued
amortization of discount, if any, to the date of delivery.
(5) The registration fee has been calculated in accordance with Rule 457(o)
under the Securities Act.
(6) Shares of Common Stock may be issued in primary offerings, upon
conversion of Debt Securities and/or Preferred Stock registered hereby,
and/or upon exercise of Warrants registered hereby. The aggregate amount
of Common Stock registered hereby is limited to that which is permissible
under Rule 415(a)(4) under the Securities Act.
(7) The Preference Share Purchase Rights accompany shares of the Common Stock
and, until the occurrence of any of certain prescribed events, are not
exercisable, are evidenced by the certificates for the Common Stock and
are transferred along with and only with the Common Stock.
(8) Shares of Preferred Stock and/or Depositary Shares may be issued in
primary offerings, upon conversion of Debt Securities registered hereby,
and/or upon exercise of Warrants registered hereby.
(9) Debt Securities may be issued in primary offerings and/or upon exercise
of Warrants registered hereby.
(10) Omitted pursuant to General Instruction II(D) of Form S-3 under the
Securities Act.
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 OR ON SUCH DATE AS THE SECURITIES AND
EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY +
+NOT OFFER OR SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED +
+WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS +
+NOT AN OFFER TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY +
+THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS (SUBJECT TO COMPLETION)
DATED NOVEMBER 25, 1998
[LOGO OF MATTEL, INC.]
By this prospectus, we may offer:
COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
DEBT SECURITIES
WARRANTS
UNITS CONSISTING OF TWO OR MORE OF THE FOREGOING SECURITIES
These securities will have an aggregate initial offering price of up to
$400,000,000 or an equivalent amount in U.S. Dollars if any securities are
denominated in a currency other than U.S. Dollars. We may offer these
securities separately or together in any combination and as separate series.
We will provide the specific terms of these securities in supplements to this
prospectus. You should read this prospectus and the prospectus supplement
carefully before you invest.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
, 1998
(R)
<PAGE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS OR THE
PROSPECTUS SUPPLEMENT THAT WE HAVE REFERRED YOU TO. WE HAVE AUTHORIZED NO ONE
TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF THESE
SECURITIES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME
THAT THE INFORMATION IN THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT IS
ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THE DOCUMENT.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary.................................................................. 3
Where You Can Find More Information...................................... 6
The Company.............................................................. 7
Use of Proceeds.......................................................... 7
Prospectus Supplement.................................................... 7
Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed
Charges and Preferred Stock Dividends................................... 8
Description of Capital Stock............................................. 8
Description of Depositary Shares......................................... 13
Description of Debt Securities........................................... 17
Description of Warrants.................................................. 28
Description of Units..................................................... 31
Plan of Distribution..................................................... 32
Legal Matters............................................................ 33
Experts.................................................................. 33
</TABLE>
2
<PAGE>
SUMMARY
This summary highlights selected information from this prospectus and may not
contain all of the information that is important to you. To understand the
terms of our securities, you should carefully read this prospectus and the
prospectus supplement that gives the specific terms of the securities we are
offering. You should also read the documents we have referred you to in "Where
You Can Find More Information" on page 6 for information on our Company and our
financial statements.
MATTEL, INC.
Our Company designs, manufactures, markets and distributes a broad variety of
toy products on a worldwide basis. Our core brands can be grouped in the
following five categories: Fashion Dolls (BARBIE fashion dolls and accessories,
collector dolls, and FASHION MAGIC); Infant and Preschool (FISHER-PRICE, Disney
Preschool and Plush, POWER WHEELS, SESAME STREET, SEE 'N SAY, MAGNA DOODLE and
VIEW-MASTER); Entertainment (Disney, Nickelodeon, games and puzzles); Wheels
(HOT WHEELS, MATCHBOX, Tyco Electric Racing and Tyco Radio Control); and Large
and Small Dolls (AMERICAN GIRL, CABBAGE PATCH KIDS, POLLY POCKET and Tyco large
dolls and Plush).
THE SECURITIES WE MAY OFFER
We may offer up to $400,000,000 of any of the following securities: common
stock, preferred stock, depositary shares, debt securities, warrants and units
consisting of two or more of the foregoing securities. The prospectus
supplement and the pricing supplement, if one is used, will describe the
specific amounts, prices, and terms of these securities.
COMMON STOCK
We may offer from time to time shares of common stock. Holders of common stock
are entitled to receive dividends, if any, declared by our Board of Directors
(subject to rights of preferred stock holders). Each holder of common stock is
entitled to one vote per share. The holders of common stock have no preemptive
rights. Holders of common stock have cumulative voting rights.
On February 7, 1992, we established a preference share purchase rights plan and
declared a dividend of one right for each share of common stock outstanding.
During the term of the preference share purchase rights plan, any shares of
common stock we issue will be accompanied by preference share purchase rights.
The rights will only be exercisable when we learn that a person has acquired or
has the right to acquire more than 20% of our outstanding common stock. The
preference share purchase rights plan makes it more difficult to acquire large
amounts of common stock or to cause a change of control of the Company.
PREFERRED STOCK
We may offer from time to time shares of preferred stock in one or more series
and will determine the dividend, voting, and conversion rights, and other
provisions at the time of sale. We may also issue fractional shares of
preferred stock that will be represented by depositary shares and depositary
receipts.
3
<PAGE>
DEPOSITARY SHARES
We may offer from time to time depositary receipts for the depositary shares,
which represent fractional shares of a series of preferred stock. Holders of
depositary receipts relating to the depositary shares will receive any cash
dividends or other cash distributions, if any, payable on the preferred stock
and will vote according to the rights designated on the preferred stock.
DEBT SECURITIES
We may offer from time to time unsecured general obligations of our Company in
the form of either senior or subordinated debt securities. Senior debt includes
our notes, debt, and guarantees that are for money borrowed and are not
subordinated. Subordinated debt, designated at the time it is issued, is
entitled to interest and principal payments only after the senior debt
payments.
We have summarized the general features of the debt. We encourage you to read
the indenture which governs the debt. A copy of the indenture can be found as
Exhibit 4.1 to our Current Report on Form 8-K dated April 11, 1996.
The following are general indenture provisions that apply to senior and
subordinated debt.
. The indenture does not limit the amount of debt that we may issue or
provide a holder with any protection from the consequences of a highly
leveraged transaction involving our Company.
. If we redeem any debt that is convertible into our capital stock, your
right to convert that debt into our capital stock will expire on the
redemption date.
. The indenture allows us to merge or to consolidate with another company,
or sell all or substantially all of our assets to another company. If
these events occur, the other company will be required to assume our
responsibilities on the debt and, in a merger or consolidation, we will
be released from all liabilities and obligations.
. Upon our request to change an obligation created by the indenture, the
indenture provides that the holders of a majority of the total principal
amount of the debt outstanding in any series may vote to change our
obligations or your rights concerning the debt in that series. But to
change the payment of principal or interest, every holder in that series
must consent.
. Under certain conditions, we may discharge the indenture at any time by
depositing sufficient funds with the trustee to pay the obligations when
due. All amounts due to you on the debt would be paid by the trustee
from the deposited funds.
4
<PAGE>
The following are events of default under the indenture:
. Failure to pay principal when due.
. Failure to make sinking fund payment when due.
. Failure to pay interest for 30 days.
. Failure to perform covenants for 60 days after receipt of notice to
cure.
. Acceleration of, or failure to pay, at least $25,000,000 in principal
amount of our other debt not cancelled or paid within 30 days after
notice.
. Any other event of default relating to a specific offering of debt
securities and set forth in the prospectus supplement for those debt
securities.
If there is an event of default, the trustee or holders of at least 25% of the
principal amount outstanding of a series may declare the principal immediately
payable for that series. However, holders of a majority in principal amount of
that series may cancel this action.
WARRANTS
We may offer from time to time warrants for the purchase of common stock,
preferred stock, debt securities, or depositary shares. We may offer warrants
independently or together with common stock, preferred stock, debt securities,
or depositary shares.
UNITS
We may offer from time to time units consisting of two or more of the foregoing
securities. The title of any series of units, the constituent securities, and
the price of the units will be described in a prospectus supplement.
5
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission (the "SEC"). You may
read and copy any document we file at the SEC's public reference rooms in
Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-732-0330 for further information on the public reference rooms. Our
SEC filings are also available to the public from the SEC's web site at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information that we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus and supplements to this prospectus.
The information filed by us with the SEC in the future will update and
supersede this information. We incorporate by reference the documents listed
below and any future filings made by us with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") until our offering is completed.
(i) Our Annual Report on Form 10-K for the year ended December 31, 1997;
(ii) Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
1998, June 30, 1998 and September 30, 1998;
(iii) Our Current Reports on Form 8-K filed January 23, 1998, February 5,
1998, April 17, 1998, June 16, 1998, July 16, 1998, July 24, 1998,
August 21, 1998, September 30, 1998 and October 29, 1998;
(iv) The description of our Series C Mandatorily Convertible Redeemable
Preferred Stock and Series C Depositary Shares set forth in our and
Tyco Toys, Inc.'s joint proxy statement and prospectus filed with the
SEC on Form S-4 dated February 14, 1997; and
(v) The description of our Common Stock contained in our Current Report on
Form 8-K filed with the SEC on November 17, 1998.
You may request a copy of these filings, at no cost, by writing or calling us
at the following address or telephone number:
Corporate Secretary
Mattel, Inc.
333 Continental Boulevard
El Segundo, California 90245-5012
(310) 252-2000
6
<PAGE>
THE COMPANY
Our Company designs, manufactures, markets and distributes a broad variety of
toy products on a worldwide basis. Our business is dependent in great part on
our ability each year to redesign, restyle and extend existing core products
and product lines and to design and develop innovative new toys and product
lines. New products have limited lives, ranging from one to three years, and
generally must be updated and refreshed each year.
We plan to continue to focus on core brands that have fundamental play patterns
and worldwide appeal, are sustainable, and have delivered consistent
profitability and stable growth. Our core brands can be grouped in the
following five categories: Fashion Dolls (BARBIE fashion dolls and accessories,
collector dolls, and FASHION MAGIC); Infant and Preschool (FISHER-PRICE, Disney
Preschool and Plush, POWER WHEELS, SESAME STREET, SEE 'N SAY, MAGNA DOODLE, and
VIEW-MASTER); Entertainment (Disney, Nickelodeon, games and puzzles); Wheels
(HOT WHEELS, MATCHBOX, Tyco Electric Racing and Tyco Radio Control); and Large
and Small Dolls (AMERICAN GIRL, CABBAGE PATCH KIDS, POLLY POCKET and Tyco large
dolls and Plush).
We were incorporated in California in 1948 and reincorporated in Delaware in
1968. Our executive offices are located at 333 Continental Boulevard, El
Segundo, California 90245-5012, telephone number (310) 252-2000.
USE OF PROCEEDS
We will use the net proceeds from the sale of the securities for general
corporate purposes. General corporate purposes may include repayment of debt,
repurchases of common stock, acquisitions, additions to working capital and
capital expenditures. We may invest the net proceeds not required immediately
in short-term marketable securities.
PROSPECTUS SUPPLEMENT
The prospectus supplement for each offering of securities will contain the
specific information and terms for that offering. The prospectus supplement may
also add, update or change information contained in this prospectus. It is
important for you to read both the prospectus and the prospectus supplement
before you invest.
7
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
Our unaudited ratios of earnings to fixed charges and earnings to combined
fixed charges and preferred stock dividends for the periods indicated are set
forth below.
<TABLE>
<CAPTION>
FOR THE NINE MONTHS FOR THE YEARS
ENDED SEPTEMBER 30, ENDED DECEMBER 31,(A)
------------------- ---------------------------
1998 1997(A) 1997 1996 1995 1994 1993(B)
--------- ----------- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges(c).................. 5.59 3.02 4.90 5.40 5.09 4.49 2.50
Ratio of earnings to combined
fixed charges and preferred
stock dividends(c).......... 5.22 2.72 4.47 5.09 4.84 4.21 2.39
</TABLE>
- --------
(a) The consolidated ratios of earnings to fixed charges and earnings to
combined fixed charges and preferred stock dividends for 1993 through 1997
have been restated for the effects of the March 1997 merger of Tyco Toys,
Inc. into our Company, accounted for as a pooling of interests.
(b) The consolidated ratios of earnings to fixed charges and earnings to
combined fixed charges and preferred stock dividends for 1993 have been
restated for the effects of the November 1993 merger of Fisher-Price, Inc.
into a wholly-owned subsidiary of our Company, accounted for as a pooling
of interests.
(c) The ratio of earnings to fixed charges is computed by dividing earnings,
which consist of income before taxes, extraordinary items, cumulative
effect of changes in accounting principles, fixed charges, minority
interest and undistributed income of less-than-majority-owned affiliates,
by fixed charges. Fixed charges consist of the sum of interest costs
(whether expensed or capitalized) and the portion of aggregate rental
expense (one-third) that is estimated to represent the interest factor in
such rentals. The ratio of earnings to combined fixed charges and preferred
stock dividends is computed by dividing earnings by the sum of fixed
charges plus dividends on our Company's outstanding shares of preferred
stock during the indicated period.
DESCRIPTION OF CAPITAL STOCK
The following is a summary of certain matters with respect to our capital
stock. Because it is only a summary, it does not contain all information that
may be important to you. Therefore, you should read the more detailed
provisions of the Company's Restated Certificate of Incorporation (as amended,
the "Certificate of Incorporation") and Bylaws, as amended (the "Bylaws"), the
Rights Agreement (as defined below) and the Deposit Agreement (as defined
below) carefully.
GENERAL
We may offer Common Stock, Preferred Stock and Preference Stock. As of the date
of this prospectus, we have authorized 1,000,000,000 shares of Common Stock,
3,000,000 shares of Preferred Stock and 20,000,000 shares of Preference Stock.
No other classes of capital stock are authorized under our Certificate of
Incorporation. The issued and outstanding shares of Common Stock and Preferred
Stock are duly authorized, validly issued, fully paid and nonassessable. No
Preference Stock is currently outstanding.
COMMON STOCK
Holders of Common Stock have no preemptive, redemption or conversion rights.
The holders of Common Stock are entitled to receive dividends when and as
declared by our Board of Directors (the
8
<PAGE>
"Board of Directors") out of funds legally available therefor. Upon our
liquidation, dissolution or winding up, the holders of Common Stock may share
ratably in our net assets after payment of liquidating distributions to holders
of Preferred Stock or Preference Stock, if any. Each holder of Common Stock is
entitled to one vote per share of Common Stock held of record by such holder
and may cumulate its votes in the election of directors. Each outstanding share
of Common Stock is accompanied by a right to purchase one one-hundredth (
128/37,500ths as adjusted to reflect a series of stock splits) of a share of
our Series E Junior Participating Preference Stock (the "Series E Preference
Shares"). There are 2,000,000 shares of Series E Preference Shares authorized
for issuance and our Board of Directors has reserved 1,500,000 shares for
issuance. There are currently no Series E Preference Shares outstanding. See
"--Description of Preference Share Purchase Rights."
The registrar and transfer agent for the Common Stock is Boston EquiServe, L.P.
DESCRIPTION OF PREFERENCE SHARE PURCHASE RIGHTS
On February 7, 1992, the Board of Directors declared a dividend of one
preference share purchase right (a "Right") for each outstanding share of
Common Stock. The dividend was paid on February 17, 1992 (the "Record Date") to
the stockholders of record on that date. At the date the dividend was declared
and paid, each Right entitled the registered holder to purchase from the
Company one one-hundredth of a Series E Preference Share at a price per share
of $150 (the "Purchase Price"), subject to adjustment. Subsequent to the Record
Date, and pursuant to the terms of the Rights, the number of shares of Series E
Preference Shares purchasable from the Company upon exercise of a Right was
adjusted from one one-hundredth to 128/37,500ths of a share of Series E
Preference Shares, reflecting a series of stock splits in the underlying Common
Stock. The description and terms of the Rights are set forth in a Rights
Agreement dated as of February 7, 1992 (the "Rights Agreement") between us and
The First National Bank of Boston, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public announcement that
a person or group of affiliated or associated persons (an "Acquiring Person")
have acquired beneficial ownership of 20% or more of the outstanding Common
Stock or (ii) 10 business days (or such later date as may be determined by
action of the Board of Directors prior to such time as any person or group of
affiliated persons becomes an Acquiring Person) following the commencement of,
or announcement of an intention to make, a tender offer or exchange offer, the
consummation of which would result in the beneficial ownership by a person or
group of 20% or more of the outstanding Common Stock (the earlier of such dates
being called the "Distribution Date"), the Rights are evidenced, with respect
to any Common Stock certificate outstanding as of the Record Date, by such
Common Stock certificate with a copy of the Summary of Rights pertaining to
such Rights (the "Summary of Rights") attached thereto.
The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with
and only with the Common Stock. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Stock certificates issued
after the Record Date upon transfer or new issuance of Common Stock will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption
9
<PAGE>
or expiration of the Rights), the surrender for transfer of any certificates
for Common Stock outstanding as of the Record Date, even without such notation
or a copy of the Summary of Rights being attached thereto, will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, we will
mail separate certificates evidencing the Rights ("Right Certificates") to
holders of record of the Common Stock as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on February 17, 2002 (the "Final Expiration Date"), unless we extend the
Final Expiration Date or we redeem or exchange the Rights before the Final
Expiration Date, in each case as described below.
The Purchase Price payable, and the number of Series E Preference Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Series E
Preference Shares, (ii) upon the grant to holders of the Series E Preference
Shares of certain rights or warrants to subscribe for or purchase Series E
Preference Shares at a price, or securities convertible into Series E
Preference Shares with a conversion price, less than the then-current market
price of the Series E Preference Shares or (iii) upon the distribution to
holders of the Series E Preference Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Series E Preference Shares) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of Series E Preference Shares
issuable upon exercise of each Right are also subject to adjustment in the
event of a stock split of the Common Stock or a stock dividend on the Common
Stock payable in Common Stock or subdivision, consolidation or combinations of
the Common Stock occurring, in any such case, prior to the Distribution Date.
Series E Preference Shares purchasable upon exercise of the Rights will not be
redeemable. Each Series E Preference Share will be entitled to a minimum
preferential quarterly dividend payment of the greater of (i) $1 per share and
(ii) an aggregate dividend of 292.969 (as adjusted) times the dividend declared
per share of Common Stock. In the event of liquidation, the holders of the
Series E Preference Shares will be entitled to a preferential liquidation
payment of the greater of (i) $100 per share and (ii) an aggregate payment of
292.969 (as adjusted) times the payment made per share of Common Stock. Each
Series E Preference Share will have 292.969 (as adjusted) votes, voting
together with the Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which shares of Common Stock are
exchanged, each Series E Preference Share will be entitled to receive 292.969
(as adjusted) times the amount received per share of Common Stock. These rights
are protected by customary antidilution provisions.
Because of the nature of the Series E Preference Shares' dividend, liquidation
and voting rights, the value of the fractional interest ( 128/37,500ths, as
adjusted) in a Series E Preference Share purchasable upon exercise of each
Right should approximate the value of one share of Common Stock.
In the event that, after a person or group has become an Acquiring Person, we
are acquired in a merger or other business combination transaction or 50% or
more of our consolidated assets or
10
<PAGE>
earning power are sold, proper provision will be made so that each holder of a
Right will thereafter have the right to receive, upon the exercise thereof at
the then current exercise price of the Right, that number of shares of common
stock of the acquiring company which at the time of such transaction will have
a market value of two times the exercise price of the Right. In the event that
any person or group of affiliated or associated persons becomes an Acquiring
Person, proper provisions shall be made so that each holder of a Right, other
than Rights beneficially owned by the Acquiring Person (which will thereafter
be void), will thereafter have the right to receive upon exercise that number
of shares of Common Stock having a market value of two times the exercise price
of the Right.
At any time after any person or group becomes an Acquiring Person and prior to
the acquisition by such person or group of 50% or more of the outstanding
shares of Common Stock, the Board of Directors may exchange the Rights (other
than Rights owned by such person or group which will have become void), in
whole or in part, at an exchange ratio of one share of Common Stock, or
one one-hundredth ( 128/37,500ths, as adjusted) of a Series E Preference Share
(or of a share of a class or series of the Company's preference stock having
equivalent rights, preferences and privileges), per Right (subject to
adjustment).
With certain exceptions, no adjustment in the Purchase Price will be required
until cumulative adjustments require an adjustment of at least 1% in such
Purchase Price. No fractional Series E Preference Shares will be issued (other
than fractions which are integral multiples of one one-hundredth of a Series E
Preference Share, which may, at the election of the Company, be evidenced by
depositary receipts) and in lieu thereof, an adjustment in cash will be made
based on the market price of the Series E Preference Shares on the last trading
date prior to the date of exercise.
At any time prior to the time an Acquiring Person becomes such, the Board of
Directors may redeem the Rights in whole, but not in part, at a price of
$.0034133 per Right (as adjusted) (the "Redemption Price"). The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
The Board of Directors may amend the terms of the Rights without the consent of
the holders of the Rights, including an amendment to lower certain thresholds
described above to not less than the greater of (i) the sum of .001% and the
largest percentage of the outstanding shares of Common Stock then known to us
to be beneficially owned by any person or group of affiliated or associated
persons (other than (a) the Company, (b) any subsidiary of the Company, (c) any
employee benefit plan of the Company or any subsidiary of the Company, (d) any
entity holding Common Stock for or pursuant to the terms of any such plan or
(e) E.M. Warburg, Pincus & Co., Inc., a Delaware corporation, and its
affiliates and associates) and (ii) 10%, except that from and after such time
as any person or group of affiliated or associated persons becomes an Acquiring
Person, no such amendment may adversely affect the interests of the holders of
the Rights.
For the purpose of calculating the various percentage ownership thresholds
contained in the Rights Agreement, shares issued in connection with the capital
investment approved by our shareholders at the 1984 Annual Meeting and still
owned by the original owner, or owned by certain qualified
11
<PAGE>
transferees, are excluded from the amount deemed to be beneficially owned by
such persons. However, if such original owner or qualified transferee becomes a
member of a group with certain other persons, such shares will be included in
the amount attributable to, and will be deemed to be beneficially owned by,
such other persons.
Until a Right is exercised, the holder thereof, as such, will have no rights as
a stockholder of the Company, including, without limitation, the right to vote
or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire us without
the approval of our Board of Directors, except pursuant to an offer conditioned
on a substantial number of Rights being acquired. The Rights should not
interfere with any merger or other business combination approved by our Board
of Directors since the Rights may be redeemed by us at the Redemption Price
prior to the time that a person or group has acquired beneficial ownership of
20% or more of the Common Stock.
PREFERRED STOCK
Our Board of Directors has the power, without further vote of shareholders, to
authorize the issuance of up to 3,000,000 shares of Preferred Stock and
20,000,000 shares of Preference Stock and to fix and determine the terms,
limitations and relative rights and preferences of any shares of Preferred
Stock or Preference Stock. This power includes the authority to establish
voting, dividend, redemption, conversion, liquidation and other rights of any
such shares. Other than as set forth herein, there are no shares of Preferred
Stock or Preference Stock currently outstanding.
SERIES C MANDATORILY CONVERTIBLE REDEEMABLE PREFERRED STOCK; SERIES C
DEPOSITARY SHARES
We have issued and outstanding 771,920 shares of Series C Preferred Stock. In
addition, there are 19,298,000 Series C Depositary Shares outstanding. The
shares of Series C Preferred Stock are represented by Series C Depositary
Shares, each such share representing one twenty-fifth of a share of Series C
Preferred Stock. Subject to the terms of a deposit agreement, each owner of a
Series C Depositary Share is entitled to all the rights and preferences of the
Series C Preferred Stock represented thereby, and subject, proportionately, to
all of the limitations of the Series C Preferred Stock represented thereby,
contained in the Certificate of Designation related to the Series C Preferred
Stock summarized below.
Holders of Series C Preferred Stock are entitled to receive, when and as
declared by the Board of Directors out of funds legally available therefor,
cash dividends from the issue date, accruing at the rate per share of 8.25% per
annum. The Series C Preferred Stock has a liquidation preference of $125 per
share. On July 1, 2000 (the "Mandatory Conversion Date"), each outstanding
share of Series C Preferred Stock will automatically convert into (i) 13.5753
shares of Common Stock (the "Mandatory Conversion Rate"), and (ii) the right to
receive cash in an amount equal to all accrued and unpaid dividends on such
Series C Preferred Stock (other than previously declared dividends payable to a
holder of record as of a prior date) to the Mandatory Conversion Date, whether
or not declared, out of funds legally available for the payment of dividends,
subject to (1) the right of the Company to redeem the Series C Preferred Stock
on or after July 1, 1999 (the "First Call Date") and before the Mandatory
Conversion Date and (2) the conversion of the Series C Preferred Stock to
12
<PAGE>
Common Stock at the option of the holder at any time before the Mandatory
Conversion Date. The Mandatory Conversion Rate is subject to adjustment in
certain circumstances. The shares of Series C Preferred Stock are not
redeemable prior to the First Call Date. At any time and from time to time on
or after that date until immediately before the Mandatory Conversion Date, the
Company may redeem, in whole or in part, the outstanding Series C Preferred
Stock. Shares of Series C Preferred Stock are convertible in whole or in part,
at the option of the holder thereof at any time before the Mandatory Conversion
Date, unless previously redeemed, into shares of Common Stock at the rate of
the greater of (i) the number of shares of Common Stock equal to the quotient
of the Call Price (as defined in the Certificate of Incorporation) in effect on
the applicable redemption date, divided by the Current Market Price (as defined
in the Certificate of Incorporation) of the Common Stock and (ii) 10.0159
(which rate is subject to adjustment). The holders of Series C Preferred Stock
have the right with the holders of Common Stock to vote in the election of
directors and upon each other matter coming before any meeting of the holders
of Common Stock. Each share of Series C Preferred Stock is entitled to 12.219
votes. The holders of Series C Preferred Stock and Common Stock vote together
as one class on such matters except as otherwise provided by law or by the
Certificate of Incorporation of the Company.
DESCRIPTION OF DEPOSITARY SHARES
The following is a description of certain provisions of the Deposit Agreement
(as defined below), the Depositary Shares and the Depositary Receipts. Because
the following is only a summary, it does not contain all the information that
may be important to you. You should review the Deposit Agreement and Depositary
Receipts relating to each series of the Preferred Stock, which will be filed
with the SEC and incorporated by reference as an exhibit to the Registration
Statement of which this prospectus is a part at or prior to the time of the
issuance of such series of the Preferred Stock.
GENERAL
We may, at our option, elect to offer fractional shares of Preferred Stock
rather than full shares of Preferred Stock. In the event we exercise such
option we will issue to the public receipts for Depositary Shares, each of
which will represent a fraction (to be set forth in the prospectus supplement)
of a share of a particular series of the Preferred Stock as described below.
Currently, there are 19,298,000 Series C Depositary Shares outstanding. See
"Description of Capital Stock--Series C Mandatorily Convertible Redeemable
Preferred Stock; Series C Depositary Shares."
We will deposit the shares of any series of the Preferred Stock represented by
Depositary Shares under a separate deposit agreement (the "Deposit Agreement")
among the Company, a bank or trust company we select (the "Depositary") and the
holders from time to time of the Depositary Receipts. Subject to the terms of
the Deposit Agreement, each owner of a Depositary Share will in general be
entitled, in proportion to the applicable fraction of a share of Preferred
Stock represented by such Depositary Share, to all the rights and preferences
of the Preferred Stock represented thereby (including dividend, voting,
redemption and liquidation rights).
The Depositary Shares relating to any series of the Preferred Stock will be
evidenced by Depositary Receipts issued pursuant to the related Deposit
Agreement. We will distribute Depositary Receipts to
13
<PAGE>
those persons purchasing such Depositary Shares in accordance with the terms of
the offering made by the related prospectus supplement.
Upon surrender of Depositary Receipts at the office of the Depositary and upon
payment of the charges provided in the Deposit Agreement and subject to the
terms thereof, a holder of Depositary Receipts is entitled to have the
Depositary deliver to such holder the whole shares of Preferred Stock
underlying the Depositary Shares evidenced by the surrendered Depositary
Receipts. However, there may be no market for the underlying Preferred Stock
and once the underlying Preferred Stock is withdrawn from the Depositary, it
may not be redeposited.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash distributions
received in respect of the Preferred Stock to the record holders of Depositary
Receipts relating to such Preferred Stock in proportion, insofar as
practicable, to the respective numbers of Depositary Shares evidenced by such
Depositary Receipts held by such holders on the relevant record date. The
Depositary will distribute only such amount, however, as can be distributed
without attributing to any holder of Depositary Receipts a fraction of one
cent, and any balance not so distributed will be added to and treated as part
of the next sum received by the Depositary for distribution to record holders
of Depositary Receipts then outstanding.
In the event of a distribution other than in cash, the Depositary will
distribute such amounts of the securities or property received by it as are, as
nearly as practicable, in proportion to the respective numbers of Depositary
Shares evidenced by the Depositary Receipts held by such holders on the
relevant record date, unless the Depositary determines that it is not feasible
to make such distribution, in which case the Depositary may, with our approval,
adopt such method as it deems equitable and practicable for the purpose of
effecting such distribution, including the sale of such securities or property.
The Deposit Agreement will also contain provisions relating to the manner in
which any subscription or similar rights offered by us to holders of the
Preferred Stock will be made available to holders of Depositary Receipts.
The amount distributed in all of the foregoing cases will be reduced by any
amounts required to be withheld by us or the Depositary on account of taxes and
governmental charges.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock represented by Depositary Shares is subject
to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the Preferred Stock held by the Depositary. The Depositary
will mail notice of redemption at least 30 and no more than 60 days prior to
the date fixed for redemption to the record holders of the Depositary Receipts
evidencing the Depositary Shares to be so redeemed at their respective
addresses appearing in the Depositary's books. The redemption price per
Depositary Share will be equal to the applicable fraction of the redemption
price per share payable with respect to such series of the Preferred Stock plus
all money and other
14
<PAGE>
property, if any, payable with respect to such Depositary Share, including all
amounts payable by us in respect of any accumulated but unpaid dividends.
Whenever we redeem shares of Preferred Stock held by the Depositary, the
Depositary will redeem as of the same redemption date the number of Depositary
Shares representing shares of Preferred Stock so redeemed. If less than all the
Depositary Shares are to be redeemed, the Depositary Shares to be redeemed will
be selected by lot or pro rata (subject to rounding to avoid fractions of
Depositary Shares) as may be determined by the Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be considered outstanding and all rights of the
holders of Depositary Receipts evidencing such Depositary Shares will cease,
except the right to receive the moneys payable upon such redemption and any
moneys or other property to which such holders were entitled upon such
redemption upon surrender to the Depositary of the Depositary Receipts
evidencing such Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting or action to be taken by written consent
at or as to which the holders of the Preferred Stock are entitled to vote or
consent, the Depositary will mail the information contained in such notice of
meeting or action to the record holders of the Depositary Receipts evidencing
the Depositary Shares relating to such Preferred Stock. Each record holder of
such Depositary Receipts on the record date (which will be the same date as the
record date for the Preferred Stock) will be entitled to instruct the
Depositary as to the exercise of the voting rights or the giving or refusal of
consent, as the case may be, pertaining to the number of shares of the
Preferred Stock represented by the Depositary Shares evidenced by such holder's
Depositary Receipts. The Depositary will endeavor, insofar as practicable, to
vote, or give or withhold consent with respect to, the maximum number of whole
shares of the Preferred Stock represented by all Depositary Shares as to which
any particular voting or consent instructions are received, and we will agree
to take all action which may be deemed necessary by the Depositary in order to
enable the Depositary to do so. The Depositary will abstain from voting, or
giving consents with respect to, shares of the Preferred Stock to the extent it
does not receive specific instructions from the holders of Depositary Receipts
evidencing Depositary Shares representing such Preferred Stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares relating to any
series of Preferred Stock and any provision of the related Deposit Agreement
may be amended by agreement between us and the Depositary in any respect which
we and the Depositary may deem necessary or desirable. However, any amendment
which imposes or increases any fees, taxes or charges upon holders of
Depositary Shares or Depositary Receipts relating to any series of Preferred
Stock or which materially and adversely alters the existing rights of such
holders will not be effective unless such amendment has been approved by the
record holders of Depositary Receipts evidencing at least a majority of such
Depositary Shares then outstanding. Notwithstanding the foregoing, no such
amendment may impair the right of any holder of Depositary Shares or Depositary
Receipts to receive any moneys or other property to which such holder may be
entitled under the terms of such Depositary Receipts or the Deposit Agreement
at the times and in the manner and amount provided for therein. A Deposit
Agreement may be terminated only after (a) all outstanding Depositary Shares
15
<PAGE>
relating thereto have been redeemed and the accumulated and unpaid dividends,
together with all other moneys and property, if any, have been paid or
distributed or provision therefor has been duly made, (b) there has been a
final distribution following any liquidation, dissolution or winding up of the
Company, or (c) all outstanding Depositary Shares have been converted (if
convertible) into shares of Common Stock or another series of Preferred Stock.
MISCELLANEOUS
The Depositary will forward to record holders of Depositary Receipts, at their
respective addresses appearing in the Depositary's books, all reports and
communications from us which are delivered to the Depositary and which we are
required to furnish to the holders of the Preferred Stock or Depositary
Receipts.
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. We will also pay
charges of the Depositary in connection with the initial deposit of the
Preferred Stock and the initial issuance of the Depositary Receipts evidencing
the Depositary Shares, any redemption of the Preferred Stock and any
withdrawals of Preferred Stock by the holders of Depositary Shares. Holders of
Depositary Shares will pay other transfer and other taxes and governmental
charges and such other charges as are expressly provided in the Deposit
Agreement to be for their accounts.
The Deposit Agreement will contain provisions relating to adjustments in the
fraction of a share of Preferred Stock represented by a Depositary Share in the
event of a change in par value, split-up, combination or other reclassification
of the Preferred Stock or upon any recapitalization, merger or sale of
substantially all of our assets.
Neither the Depositary nor any of its agents nor any registrar nor we will be
(a) liable if any of them or we are prevented or delayed by law or any
circumstance beyond their or our control in performing their or our obligations
under the Deposit Agreement, (b) subject to any liability under the Deposit
Agreement to holders of Depositary Receipts other than for the relevant party's
gross negligence or willful misconduct, or (c) obligated to prosecute or defend
any legal proceeding in respect of any Depositary Receipts, Depositary Shares
or the Preferred Stock unless satisfactory indemnity is furnished. They and we
may rely upon written advice of counsel or accountants, or information provided
by holders of Depositary Receipts or other persons in good faith believed to be
competent and on documents reasonably believed to be genuine.
RESIGNATION OR REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to us notice of its
election to do so, and we may at any time remove the Depositary, any such
resignation or removal to take effect upon the appointment of a successor
Depositary and its acceptance of such appointment. Such successor Depositary
must be appointed within 60 days after delivery of the notice of resignation
or removal.
16
<PAGE>
DESCRIPTION OF DEBT SECURITIES
We may offer debt securities (the "Debt Securities") that will be issued
pursuant to an indenture, dated as of February 15, 1996 (the "Indenture"),
between the Company and Chase Manhattan Bank and Trust Company, National
Association (formerly Chemical Trust Company of California), as Trustee (the
"Trustee"). The Indenture may be supplemented by supplemental indentures in
order to issue new Debt Securities, change the provisions of the Indenture or
alter previously issued Debt Securities. The following is a summary of certain
provisions of the Indenture and does not contain all the information that may
be important to you. You should read all provisions of the Indenture carefully,
including the definitions of certain terms, before you decide to invest in the
Debt Securities. If we refer to particular sections or defined terms of the
Indenture, we mean to incorporate by reference those sections or defined terms
of the Indenture. A copy of the Indenture was filed as Exhibit 4.1 to our
Current Report on Form 8-K dated April 11, 1996. See "Where You Can Find More
Information."
GENERAL
The Debt Securities will either rank equally with all of our other unsecured
and unsubordinated indebtedness or be subordinated to our other debt
obligations. The prospectus supplement will provide whether the Debt Securities
will rank equally with other unsecured indebtedness or are subordinated to our
other debt obligations.
The Indenture does not limit the amount of Debt Securities that we may issue.
We may issue the Debt Securities in one or more series with the same or various
maturities, at par, at a premium, or with an original issue discount. The
prospectus supplement will set forth the initial offering price, the aggregate
principal amount and the following terms of the Debt Securities:
(1) the title;
(2) any limit on the aggregate principal amount of a particular series;
(3) the date or dates that principal is payable;
(4) the rate or rates of interest and, if applicable, the method used to
determine the rate or rates of interest, if any, the date or dates from
which interest will accrue, the dates that interest shall be payable and
the record date for the payment of interest;
(5) the place or places where principal and interest will be payable, or
the method of such payment;
(6) the period or periods within which, the price or prices at which and
the terms and conditions upon which the Debt Securities may be redeemed, in
whole or in part, at our option;
(7) our obligation, if any, to redeem or repurchase the Debt Securities
pursuant to any sinking fund or similar provisions or at the option of a
holder thereof and the period, price and terms and conditions for
redemption or repurchase;
(8) the denominations, if other than denominations of $1,000 and any
integral multiple thereof;
(9) the amount of principal that shall be payable upon acceleration, if
other than the entire principal amount;
17
<PAGE>
(10) the currency of denomination;
(11) the designation of the currency or currencies in which payment of
principal and interest will be made;
(12) if payments of principal or interest are to be made in a currency
other than the denominated currency, how the exchange rate will be
determined;
(13) how the payments of principal or interest will be determined if by
reference to an index based on a currency or currencies other than
originally denominated or by reference to a commodity, commodity index,
stock exchange index or financial index;
(14) any subordination provisions;
(15) any provision for conversion or exchange;
(16) if such Debt Securities are to be issued upon the exercise of
warrants, the authentication and delivery provisions;
(17) the provisions, if any, relating to any security provided for such
Debt Securities;
(18) any addition to or change in the Events of Default and any change in
the acceleration provisions;
(19) any addition to or change in the covenants;
(20) any other terms that will not be inconsistent with the provisions of
the Indenture;
(21) whether the Debt Securities will be in bearer or registered form; and
(22) any depositaries, interest rate calculation agents, exchange rate
agents or other agents other than those originally appointed. (Indenture
(S) 2.1 and (S) 2.2).
PAYMENT OF INTEREST AND EXCHANGE
Each Debt Security will be represented by either a global security (a "Global
Debt Security") registered in the name of The Depository Trust Company, as
Depository ("DTC" or the "Depository") or a nominee of the Depository (each
such Debt Security represented by a Global Debt Security being herein referred
to as a "Book-Entry Debt Security") or a certificate issued in definitive
registered form (a "Certificated Debt Security"), as set forth in the
applicable prospectus supplement. Except as set forth under "Global Debt
Securities and Book-Entry System" below, Book-Entry Debt Securities will not
be issuable in certificated form.
Certificated Debt Securities. A holder may transfer or exchange Certificated
Debt Securities at the Trustee's office or paying agencies in accordance with
the terms of the Indenture. There will not be a service charge for any
transfer or exchange of Certificated Debt Securities, but we may require a
holder to pay any tax or other governmental charge payable in connection with
the transfer or exchange. A holder will not be able to exchange Certificated
Debt Securities for Book-Entry Debt Securities, except under the circumstances
described below under "Global Debt Securities and Book-Entry System."
(Indenture (S)(S) 2.4 and 2.7)
18
<PAGE>
The transfer of Certificated Debt Securities and the right to the principal and
interest on such Certificated Debt Securities will occur only after the
surrender of the old certificate representing such Certificated Debt Securities
and either we or the Trustee (i) reissue the old certificate to the new holder
or (ii) issue a new certificate to the new holder.
Global Debt Securities and Book-Entry System. We will register each Global Debt
Security representing Book-Entry Debt Securities in the name of the Depository
or a nominee of the Depository. Except as set forth below, Book-Entry Debt
Securities will not be exchangeable for Certificated Debt Securities and will
not otherwise be issuable as Certificated Debt Securities.
The procedures that the Depository has indicated it intends to follow with
respect to Book-Entry Debt Securities are set forth below.
Ownership of beneficial interests in Book-Entry Debt Securities will be limited
to persons that have accounts with the Depository for the related Global Debt
Security ("Participants") or persons that may hold interests through
Participants. Upon the issuance of a Global Debt Security, the Depository will
credit, on its book-entry registration and transfer system, the Participants'
accounts with the respective principal amounts of the Book-Entry Debt
Securities represented by such Global Debt Security beneficially owned by such
Participants. The accounts to be credited shall be designated by any dealers,
underwriters or agents participating in the distribution of such Book-Entry
Debt Securities. Ownership of Book-Entry Debt Securities will be shown on, and
the transfer of such ownership interests will be effected only through, records
maintained by the Depository for the related Global Debt Security (with respect
to interests of Participants) and on the records of Participants (with respect
to interests of persons holding through Participants). The laws of some states
may require that certain purchasers of securities take physical delivery of
such securities in definitive form. Such limits and such laws may impair the
ability to own, transfer or pledge beneficial interests in Book-Entry Debt
Securities.
So long as the Depository for a Global Debt Security, or its nominee, is the
registered owner of such Global Debt Security, such Depository or such nominee,
as the case may be, will be considered the sole owner or holder of the Book-
Entry Debt Securities represented by such Global Debt Security for all purposes
under the Indenture. Except as set forth below, owners of Book-Entry Debt
Securities will not be entitled to have such securities registered in their
names, will not receive or be entitled to receive physical delivery of a
certificate in definitive form representing such securities and will not be
considered the owners or holders thereof under the Indenture. Accordingly, each
person owning Book-Entry Debt Securities must rely on the procedures of the
Depository for the related Global Debt Security and, if such person is not a
Participant, on the procedures of the Participant through which such person
owns its interest, to exercise any rights of a holder under the Indenture.
We understand, however, that under existing industry practice, the Depository
will authorize the persons on whose behalf it holds a Global Debt Security to
exercise certain rights of holders of Debt Securities, and the Indenture
provides that we, the Trustee and our respective agents will treat as the
holder of a Debt Security the persons specified in a written statement of the
Depository with respect to such Global Debt Security for purposes of obtaining
any consents, declarations or directions required to be given by holders of the
Debt Securities pursuant to the Indenture. (Indenture (S) 2.14.6)
19
<PAGE>
We will make payments of principal and interest on Book-Entry Debt Securities
to the Depository or its nominee, as the case may be, as the registered holder
of the Global Debt Security. (Indenture (S) 2.14.5) Neither we, the Trustee or
any of our respective agents will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in such Global Debt Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
We expect that the Depository, upon receipt of any payment of principal or
interest on a Global Debt Security, will immediately credit Participants'
accounts with payments in amounts proportionate to the respective amounts of
Book-Entry Debt Securities held by each such Participant as shown on the
records of such Depository. We also expect that payments by Participants to
owners of beneficial interests in Book-Entry Debt Securities held through such
Participants will be governed by standing customer instructions and customary
practices, as is now the case with the securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participants.
If (i) the Depository is unwilling or unable to continue as Depository or
ceases to be a clearing agency registered under the Exchange Act, and a
successor Depository registered as a clearing agency under the Exchange Act is
not appointed by us within 90 days, (ii) we determine not to have any of the
Book-Entry Debt Securities represented by one or more Global Debt Securities or
(iii) an event shall have happened and be continuing which is or after notice
or lapse of time or both, would be an Event of Default, we will issue
Certificated Debt Securities in exchange for such Global Debt Security or
Securities. Any Certificated Debt Securities issued in exchange for a Global
Debt Security will be registered in such name or names as the Depository shall
instruct the Trustee. It is expected that such instructions will be based upon
directions received by the Depository from Participants with respect to
ownership of Book-Entry Debt Securities relating to such Global Debt Security.
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 United States Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered under the provisions of Section 17A of the Exchange Act. DTC
holds securities that its Participants ("Direct Participants") deposit with
DTC. DTC also facilitates the settlement among Direct Participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in such Direct Participant's
accounts, 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.
DTC is owned by a number of its Direct Participants and by the New York Stock
Exchange, The American Stock Exchange, Inc. and The National Association of
Securities Dealers, Inc. Access to DTC's Book-Entry 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 Direct and Indirect Participants are on file with the SEC.
20
<PAGE>
The foregoing information in this section concerning DTC and DTC's Book-Entry
System has been obtained from sources we believe to be reliable, but we take no
responsibility for the accuracy thereof.
NO PROTECTION IN THE EVENT OF A CHANGE OF CONTROL
Unless otherwise set forth in the prospectus supplement, the Debt Securities
will not contain any provisions that protect the holders of the Debt Securities
in the event of a change in control of the Company or in the event of a highly
leveraged transaction (whether or not such transaction results in a change in
control of the Company).
CERTAIN COVENANTS OF THE COMPANY
Limitation on Liens. We shall not and shall not permit any Subsidiary to
create, assume or suffer to exist any Lien (as defined in "Certain Definitions"
below) upon any of the their respective property or assets, except for:
(1) Liens existing on the date of the Indenture or arising under the
Indenture;
(2) any extension, renewal or replacement (or successive extensions,
renewals or replacements) of any Lien existing on the date of the Indenture
if limited to the same property subject to, and securing not more than the
amount secured by, the Lien extended, renewed or replaced;
(3) Liens on Current Assets (as defined in "Certain Definitions" below) (or
on any promissory notes received in satisfaction of any of our or our
Subsidiaries' accounts receivable, which immediately prior to such
satisfaction, was subject to such Lien) securing Indebtedness (as defined
in "Certain Definitions" below) incurred to finance working capital
requirements, provided, however, that the Indebtedness secured by such Lien
does not mature later than 36 months from the date incurred;
(4) certain Liens incurred in the ordinary course of business;
(5) Liens on property that are in existence at the time we or our
Subsidiaries acquire such property (including by reason of a merger or
consolidation), provided that such Liens (A) are not incurred in connection
with, or in contemplation of, the acquisition of the property acquired and
(B) do not extend to or cover any of our or our Subsidiaries' property or
assets other than the property so acquired;
(6) purchase money Liens upon or in any real or personal property
(including fixtures and other equipment) acquired or held by us or our
Subsidiary in the ordinary course of business to secure the purchase price
of such property or to secure Indebtedness incurred solely for the purpose
of financing or refinancing the acquisition or improvement of or
construction costs related to such property, provided that no such Lien
shall extend to or cover any property other than the property being
acquired or improved;
(7) any interest or title of a lessor in the property subject to any
Capitalized Lease or Sale/Leaseback Transaction that is permitted under the
restrictions described below under "--Limitation on Sale/Leaseback
Transactions"; or
(8) other Liens securing Indebtedness in an aggregate principal amount
which, together with the aggregate outstanding principal amount of all our
and our Subsidiaries other Indebtedness
21
<PAGE>
secured by Liens permitted by this subsection (8), and the aggregate amount
(before deducting expenses) of the Sale/Leaseback Transactions which would
otherwise be permitted under the restrictions described below in clause
(i) under the caption "--Limitation on Sale/Leaseback Transactions," does
not at the time any such Lien is incurred exceed ten percent of the
Consolidated Net Tangible Assets (as defined) as shown in our latest
audited consolidated balance sheet.
Limitation on Sale/Leaseback Transactions. We shall not, and shall not permit
any Subsidiary, to enter into any Sale/Leaseback Transaction, unless either (i)
we or such Subsidiary would be permitted to incur Indebtedness in a principal
amount equal to or exceeding the amount (before deducting expenses) of such
Sale/Leaseback Transaction secured by a Lien on the property subject to such
Sale/Leaseback Transaction and remain in compliance with subsection (8) under
"--Limitation on Liens" above; or (ii) we or such Subsidiary, within 90 days
after the effective date of such Sale/Leaseback Transaction, apply or
unconditionally agree to apply to the retirement of Indebtedness an amount
equal to the greater of the net proceeds of the Sale/Leaseback Transaction or
the fair value, in the opinion of our Board of Directors, of such property at
the time of such Sale/Leaseback Transaction (in either case adjusted to reflect
the remaining term of the lease subject to such Sale/Leaseback Transaction).
Merger, Consolidation, or Sale of Assets. We may not consolidate or merge with
or into, or sell, lease, convey or otherwise dispose of all or substantially
all of our assets to, another corporation, person or entity unless (i) we are
the surviving person or the successor or transferee is a corporation organized
under the laws of the United States, any state thereof or the District of
Columbia, (ii) the successor assumes all of our obligations under the Debt
Securities and the Indenture, and (iii) immediately after such transaction no
Event of Default exists.
CERTAIN DEFINITIONS
Set forth below are certain significant terms which are defined in Section 1.1
of the Indenture:
"Capitalized Lease" means any lease of property where the obligations of the
lease are required to be classified and accounted for as a capitalized lease on
a balance sheet of such lessee under generally accepted accounting principles.
"Consolidated Net Tangible Assets" means the total amount of our and our
Subsidiaries' assets on a consolidated basis (less applicable depreciation,
amortization and other valuation reserves), except to the extent resulting from
write-ups occurring after January 1, 1988 of capital assets (excluding in any
case write-ups in connection with accounting for acquisitions in conformity
with generally accepted accounting principles), after deducting therefrom (i)
all our and our Subsidiaries' current liabilities, (ii) all investments in
unconsolidated Subsidiaries and in persons which are not our Subsidiaries
(except, in each case, investments in marketable securities) and (iii) all
goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other intangible items, all as set forth on our and our
Subsidiaries' most recently available consolidated balance sheet, prepared in
conformity with generally accepted accounting principles.
"Current Assets" means any of our or any of our Subsidiaries' assets that would
be classified as a current asset on our audited consolidated balance sheet
prepared, in accordance with generally accepted accounting principles, on the
date any Lien on such asset is incurred.
22
<PAGE>
"Discount Security" means any Debt Security that provides for an amount less
than the stated principal amount thereof to be due and payable upon declaration
of acceleration of the maturity thereof pursuant to the terms of the Indenture.
"Indebtedness" means, with respect to any person, and without duplication:
(1) any liability of such person (A) for borrowed money, or (B) for any
letter of credit for the account of such person supporting obligations of
such person or other persons, or (C) evidenced by a bond, note, debenture
or similar instrument (including a purchase money obligation) given in
connection with the acquisition of any businesses, properties or assets of
any kind (other than a trade payable or a current liability arising in the
ordinary course of business), or (D) for the payment of money relating to a
Capitalized Lease;
(2) any liability of others described in the preceding clause (1) that the
person has guaranteed or that is otherwise its legal liability; and
(3) any amendment, supplement, modification, deferral, renewal, extension
or refunding of any liability of the types referred to in clauses (1) and
(2) above.
"Lien" means any lien, security interest, charge, mortgage, pledge or other
encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest).
"Sale/Leaseback Transaction" means any arrangement with any person (other than
us or any of our Subsidiaries) providing for our or any of our Subsidiaries
leasing of any property which has been or is to be sold or transferred by us or
such Subsidiary to such person or to any person (other than us or any of our
Subsidiaries) to which funds have been or are to be advanced by such person on
the security of the leased property.
"Subsidiary" of any specified person means (i) a corporation a majority of
whose capital stock with voting power, under ordinary circumstances, to elect
directors is at the time, directly or indirectly, owned by such person or by
such person and a subsidiary or subsidiaries of such person or by a subsidiary
or subsidiaries of such person or (ii) any other person (other than a
corporation) in which such person or such person and a subsidiary or
subsidiaries of such person or a subsidiary or subsidiaries of such person
directly or indirectly, at the date of determination thereof has at least
majority ownership interest.
EVENTS OF DEFAULT
The following will be Events of Default under the Indenture with respect to
Debt Securities of any series:
(a) default in the payment of any interest when it becomes due and payable,
and continuance of such default for a period of 30 days;
(b) default in the payment of principal when due;
(c) default in the deposit of any sinking fund payment, when and as due;
(d) default in the performance or breach of any of our other covenants or
warranties in the Indenture (other than a covenant or warranty that has
been included in the Indenture solely for
23
<PAGE>
the benefit of a series of Debt Securities other than that series), which
default continues uncured for a period of 60 days after written notice to
us by the Trustee or to us and the Trustee by the holders of at least 25%
in principal amount of the outstanding Debt Securities of that series as
provided in the Indenture;
(e) unless the terms of such series otherwise provide, an event of default
under any Indebtedness for money borrowed by us (including a default with
respect to Debt Securities of any series other than that series) or any
Subsidiary (or the payment of which is guaranteed by us or a Subsidiary),
whether such Indebtedness or guarantee now exists or shall hereafter be
created, if (A) such default either (1) results from the failure to pay any
such Indebtedness at its stated final maturity or (2) relates to an
obligation other than the obligation to pay such Indebtedness at its stated
final maturity and results in the holder or holders of such Indebtedness
causing such Indebtedness to become due prior to its stated maturity and
(B) the principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness in default for failure to pay
principal at stated final maturity or the maturity of which has been so
accelerated, aggregates $25 million or more at any one time outstanding;
(f) certain events of bankruptcy, insolvency or reorganization; and
(g) any other Event of Default that is described in the prospectus
supplement accompanying this prospectus. (Indenture (S) 6.1).
The occurrence of an Event of Default would constitute an event of default
under certain of our existing bank lines. In addition, the occurrence of
certain Events of Default or an acceleration under the Indenture would
constitute an event of default under certain of our other indebtedness.
If an Event of Default with respect to Debt Securities of any series at the
time outstanding occurs and is continuing, then in every such case the Trustee
or the holders of not less than 25% in principal amount of the outstanding Debt
Securities of that series may declare to be due and payable immediately the
principal (or, if the Debt Securities of that series are Discount Securities,
such portion of the principal amount as may be specified in the terms of that
series) by a notice in writing to us (and to the Trustee if given by the
holders), and upon such declaration such principal shall be immediately due and
payable. In the case of an Event of Default resulting from certain events of
bankruptcy, insolvency or reorganization, the principal (or such specified
amount) of all outstanding Debt Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any holder of outstanding Debt Securities. At any time after a
declaration of acceleration with respect to Debt Securities of any series has
been made, but before a judgment or decree for payment of the money due has
been obtained by the Trustee, the holders of a majority in principal amount of
the outstanding Debt Securities of that series may, subject to us having paid
or deposited with the Trustee a sum sufficient to pay overdue interest and
principal which has become due other than by acceleration and certain other
conditions, rescind and annul such acceleration if all Events of Default, other
than the non-payment of accelerated principal with respect to Debt Securities
of that series, have been cured or waived as provided in the Indenture.
(Indenture (S) 6.2) For information as to waiver of defaults see the discussion
set forth below under "--Modification and Waiver." Reference is made to the
prospectus supplement relating to any series of Debt Securities that are
Discount Securities for the particular provisions relating to acceleration of a
portion of the principal amount of such Discount Securities upon the occurrence
of an Event of Default and the continuation thereof.
24
<PAGE>
The Indenture provides that the Trustee will be under no obligation to exercise
any of its rights or powers under the Indenture at the request of any holder of
outstanding Debt Securities, unless the Trustee receives indemnity satisfactory
to it against any loss, liability or expense. (Indenture (S) 7.1(e)) Subject to
certain rights of the Trustee, the holders of a majority in principal amount of
the outstanding Debt Securities of any series shall 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 Debt Securities of that series; provided that (a)
such direction will not conflict with any law or the Indenture, (b) the Trustee
may take any other action that is not inconsistent with such direction; and (c)
the Trustee will have the right to decline any such direction if the Trustee in
good faith determines that the proceeding would involve the Trustee in personal
liability. (Indenture (S) 6.12)
No holder of any Debt Security of any series will have any right to institute
any proceeding, judicial or otherwise, with respect to the Indenture or for the
appointment of a receiver or trustee, or for any other remedy under the
Indenture, unless such holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to Debt Securities
of that series and the holders of at least 25% in principal amount of the
outstanding Debt Securities of that series shall have made written request, and
offered reasonable indemnity, to the Trustee to institute such proceeding, and
the Trustee shall not have received from the holders of a majority in principal
amount of the outstanding Debt Securities of that series a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days. (Indenture (S) 6.7) Notwithstanding the foregoing,
the holder of any Debt Security will have an absolute and unconditional right
to receive payment of the principal and any interest on such Debt Security on
or after the due dates expressed in such Debt Security and to institute suit
for the enforcement of any such payment, and such right shall not be impaired
without the consent of such holder. (Indenture (S) 6.8)
The Indenture requires that within 90 days after the end of each of its fiscal
years we furnish to the Trustee a statement as to compliance with the
Indenture. (Indenture (S) 4.3) If a Default or Event of Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
holder of Debt Securities or publish in an authorized newspaper (if bearer
securities are outstanding) notice of a Default or Event of Default within 90
days after it occurs or when the Trustee learns of such Default or Event of
Default. The Indenture provides that the Trustee may withhold notice to the
holders of Debt Securities of any series of any Default or Event of Default
(except in payment on any Debt Securities of such series) with respect to Debt
Securities of such series if it in good faith determines that withholding such
notice is in the interest of the holders of Debt Securities.
(Indenture (S) 7.5)
MODIFICATION AND WAIVER
Modifications to, and amendments of, the Indenture may be made by us and the
Trustee with the consent of the holders of at least a majority in principal
amount of the outstanding Debt Securities of each series affected by such
modifications or amendments, provided, however, that no such modification or
amendment may, without the consent of the holder of each outstanding Debt
Security affected thereby:
(a) change the amount of Debt Securities whose holders must consent to an
amendment, supplement or waiver;
25
<PAGE>
(b) reduce the rate of or extend the time for payment of interest
(including default interest) on any Debt Security;
(c) reduce the principal or change the maturity of any Debt Security or
reduce the amount of, or postpone the date fixed for, the payment of any
sinking fund or analogous obligation;
(d) waive a Default or Event of Default in the payment of the principal or
interest on any Debt Security (except a rescission of acceleration of the
Debt Securities of any series by the holders of at least a majority in
aggregate principal amount of the then outstanding Debt Securities of such
series and a waiver of the payment default that resulted from such
acceleration);
(e) make the Debt Security payable in currency other than that stated in
the Debt Security;
(f) make any change to certain provisions of the Indenture relating to,
among other things, the right of holders of Debt Securities to receive
payment of the principal and interest on such Debt Securities, waivers of
past defaults and to institute suit for the enforcement of any such payment
and to waivers or amendments; or
(g) waive a redemption payment with respect to any Debt Security or change
any of the provisions with respect to the redemption of any Debt
Securities. (Indenture (S) 9.3)
The holders of at least a majority in principal amount of the outstanding Debt
Securities of any series may on behalf of the holders of all Debt Securities of
that series waive, insofar as that series is concerned, compliance by the
Company with provisions of the Indenture other than certain specified
provisions. (Indenture (S) 9.2) The holders of a majority in principal amount
of the outstanding Debt Securities of any series may on behalf of the holders
of all the Debt Securities of such series waive any past default under the
Indenture with respect to such series and its consequences, except a default in
the payment of the principal or any interest on any Debt Security of that
series or in respect of a provision which under the Indenture cannot be
modified or amended without the consent of the holder of each outstanding Debt
Security of that series affected. (Indenture (S) 6.13)
DEFEASANCE OF DEBT SECURITIES OR CERTAIN COVENANTS IN CERTAIN CIRCUMSTANCES
Defeasance and Discharge. The Indenture provides that we may be discharged from
any and all obligations in respect of the Debt Securities of any series (except
for certain obligations to register the transfer or exchange of Debt Securities
of such series, to replace stolen, lost or mutilated Debt Securities of such
series, to maintain paying agencies and the treatment of funds held by paying
agents) upon our deposit with the Trustee, in trust, of money and/or government
obligations in the same currency as such series that, through the payment of
interest and principal in respect thereof in accordance with their terms, will
provide money in an amount sufficient in the opinion of a nationally recognized
firm of independent public accountants to pay and discharge each installment of
principal and interest on and any mandatory sinking fund payments in respect of
the Debt Securities of such series on the stated maturity of such payments in
accordance with the terms of the Indenture and such Debt Securities. Such
discharge may occur only if, among other things, (a) we have received from, or
there has been published by, the United States Internal Revenue Service a
ruling, or, since the date of execution of the Indenture, there has been a
change in the applicable United States federal income tax law, in either case
to the effect that holders of the Debt Securities of such series will not
recognize income, gain or loss for United States federal income tax purposes as
a
26
<PAGE>
result of such deposit, defeasance and discharge and will be subject to United
States federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such deposit, defeasance and
discharge had not occurred; and (b) such discharge will not be applicable to
any Debt Securities of such series then listed on the New York Stock Exchange
or any other securities exchange if such discharge would cause said Debt
Securities to be de-listed as a result thereof. (Indenture (S) 8.3)
Defeasance of Certain Covenants. The Indenture provides that unless otherwise
provided by the terms of the applicable series of Debt Securities, upon
compliance with certain conditions, (i) we may omit to comply with certain
covenants, including the restrictive covenants described above under the
caption "Certain Covenants of the Company"; and (ii) the Events of Default
described in clause (e) of the first paragraph under "Events of Default" shall
be inapplicable to such series. The conditions include: the deposit with the
Trustee of money and/or government obligations in the same currency as such
series that, through the payment of interest and principal in respect thereof
in accordance with their terms, will provide money in an amount sufficient in
the opinion of a nationally recognized firm of independent public accountants
to pay principal and interest on and any mandatory sinking fund payments in
respect of the Debt Securities of such series on the stated maturity of such
payments in accordance with the terms of the Indenture and such Debt
Securities; and the delivery to the Trustee of an opinion of counsel to the
effect that the holders of the Debt Securities of such series will not
recognize income, gain or loss for United States federal income tax purposes as
a result of such deposit and related covenant defeasance and will be subject to
United States federal income tax in the same amount and in the same manner and
at the same times as would have been the case if such deposit and related
covenant defeasance had not occurred. (Indenture (S) 8.4)
Defeasance and Events of Default. In the event we exercise our option to omit
compliance with certain covenants of the Indenture with respect to any series
of Debt Securities and the Debt Securities of such series are declared due and
payable because of the occurrence of any Event of Default, the amount of money
and government obligations on deposit with the Trustee will be sufficient to
pay amounts due on the Debt Securities of such series at the time of their
stated maturity but need not be sufficient to pay amounts due on the Debt
Securities of such series at the time of the acceleration resulting from such
Event of Default. However, the Company shall remain liable for such payments.
CONVERSION INTO CAPITAL STOCK OF THE COMPANY
If and to the extent set forth in the Indenture and described in the applicable
prospectus supplement, any portion of the principal amount of any Debt
Securities of any series that is $1,000 or an integral multiple thereof may be
converted into shares of our Common Stock and/or Preferred Stock at any time
prior to redemption (if applicable) or maturity, following the date set forth
in the applicable prospectus supplement. The specific class of our capital
stock into which Debt Securities are convertible and the other terms pertaining
to such conversion right will be set forth in the applicable prospectus
supplement.
27
<PAGE>
CONCERNING THE TRUSTEE
We maintain banking relationships in the ordinary course of business with one
or more affiliates of the Trustee.
DESCRIPTION OF WARRANTS
We may offer Warrants for the purchase of Debt Securities ("Debt Warrants"),
Preferred Stock ("Preferred Stock Warrants"), Depositary Shares ("Depositary
Share Warrants"), or Common Stock ("Common Stock Warrants"). Each series of
Warrants will be issued under a separate warrant agreement (a "Warrant
Agreement") to be entered into between us and a bank or trust company, as
Warrant Agent, all as set forth in the applicable prospectus supplement
relating to the particular issue of Warrants. The Warrant Agent will act solely
as our agent in connection with the Warrant Agreement or any certificates
evidencing the Warrants ("Warrant Certificates") and will not assume any
obligation or relationship of agency or trust for or with any holders of
Warrant Certificates or beneficial owners of Warrants. Copies of the forms of
Warrant Agreements and the forms of Warrant Certificates representing the
Warrants will be filed by a post-effective amendment to the Registration
Statement or incorporated by reference in connection with the offering of any
Warrants. Because the following is a summary of certain provisions of the forms
of Warrant Agreements and Warrant Certificates, it does not contain all
information that may be important to you. You should read all the provisions of
the Warrant Agreements and the Warrant Certificates.
GENERAL
If Warrants are offered, the applicable prospectus supplement will describe the
terms of such Warrants, including, in the case of Warrants for the purchase of
Debt Securities (the "Underlying Debt Securities"), the following, where
applicable: (i) the title and aggregate number of such Debt Warrants; (ii) the
title, rank, aggregate principal amount, denominations, and terms of the
Underlying Debt Securities; (iii) the currencies in which such Debt Warrants
are being offered; (iv) the principal amount of the series of Debt Securities
purchasable upon exercise of each such Debt Warrant and the exercise price, or
the manner of determining such price, at which and currencies in which such
Debt Securities may be purchased; (v) the time or times, or period or periods,
in which such Debt Warrants may be exercised and the date (the "Expiration
Date") on which such exercise right shall expire; (vi) United States federal
income tax consequences; (vii) the terms of any right to redeem or accelerate
the exercisability of such Debt Warrants; (viii) the offering price of such
Debt Warrants; and (ix) any other terms of such Debt Warrants.
In the case of Warrants for the purchase of Preferred Stock (the "Underlying
Preferred Stock") or Depositary Shares (the "Underlying Depositary Shares"),
the prospectus supplement will describe the terms of such Warrants, including
where applicable: (i) the title and aggregate number of such Preferred Stock
Warrants or Depositary Share Warrants; (ii) the specific designation and stated
value per share and any dividend (including the method of calculating payment
of dividends), liquidation, redemption, voting and other rights of the
Underlying Preferred Stock or Underlying Depositary Shares; (iii) the number of
shares of Preferred Stock or Depositary Shares that may be purchased on
exercise of each Preferred Stock Warrant or Depositary Share Warrant; (iv) the
exercise price or
28
<PAGE>
manner of determining such price and, if other than cash, the property and
manner in which the exercise price may be paid and any minimum number of
Preferred Stock Warrants or Depositary Share Warrants exercisable at one time;
(v) our rights to redeem or accelerate the exercisability of such Preferred
Stock Warrants or Depositary Share Warrants; (vi) the time or times, or period
or periods, in which the Preferred Stock Warrants or Depositary Share Warrants
may be exercised and the Expiration Date; (vii) United States federal income
tax consequences; and (viii) any other terms of such Preferred Stock Warrants
or Depositary Share Warrants.
In the case of Common Stock Warrants, the prospectus supplement will describe
the terms of such Warrants, including the following, where applicable: (i) the
title and aggregate number of such Common Stock Warrants; (ii) the number of
shares of Common Stock that may be purchased on exercise of each Common Stock
Warrant; (iii) the exercise price or manner of determining such price and, if
other than cash, the property and manner in which the exercise price may be
paid and any minimum number of Common Stock Warrants exercisable at one time;
(iv) our rights to redeem or accelerate the exercisability of such Common Stock
Warrants; (v) the time or times, or period or periods, in which the Common
Stock Warrants may be exercised and the Expiration Date; (vi) United States
federal income tax consequences; and (vii) any other terms of such Common Stock
Warrants.
Warrants may be exchanged for new Warrants of different denominations, may (if
in registered form) be presented for registration of transfer and may be
exercised at the corporate trust office of the Warrant Agent or any other
office indicated in the applicable prospectus supplement. No service charge
will be made for any permitted transfer or exchange of Warrant Certificates,
but we may require payment of any tax or other governmental charge payable in
connection therewith. Prior to the exercise of any Debt Warrants, Preferred
Stock Warrants, Depositary Share Warrants or Common Stock Warrants, holders of
such Warrants, as such, will not have any of the rights of holders of the Debt
Securities, Preferred Stock, Depositary Shares or Common Stock, respectively,
purchasable upon such exercise, including (i) in the case of Debt Warrants, the
right to receive payments of principal of or interest, if any, on the Debt
Securities purchasable upon such exercise or to enforce covenants in the
applicable indenture, or (ii) in the case of Preferred Stock, Depositary Shares
and Common Stock Warrants, the right to receive payments of dividends, if any,
on the Preferred Stock, Depositary Shares or Common Stock, as the case may be,
purchasable upon such exercise or to exercise any applicable right to vote.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder thereof to purchase such principal amount
of Debt Securities or number of shares of Preferred Stock, Depositary Shares or
Common Stock, as the case may be, at such exercise price as shall in each case
be set forth in, or calculable from, the prospectus supplement relating to the
offered Warrants. After the close of business on the Expiration Date (or such
later date to which such Expiration Date may be extended by the Company),
unexercised Warrants will become void.
Warrants may be exercised by delivering to the Warrant Agent payment as
provided in the applicable prospectus supplement of the amount required to
purchase the underlying Debt Securities, Preferred Stock, Depositary Shares or
Common Stock, as the case may be, together with certain information
29
<PAGE>
set forth on the reverse side of the Warrant. Warrants will be deemed to have
been exercised upon receipt of payment of the exercise price, subject to the
receipt, within five business days, of the Warrant Certificate evidencing such
Warrants. Upon receipt of such payment and such Warrant Certificate properly
completed and duly executed at the corporate trust office of the Warrant Agent
or any other office indicated in the applicable prospectus supplement, we will,
as soon as practicable, issue and deliver the underlying Debt Securities,
Preferred Stock, Depositary Shares or Common Stock, as the case may be. If
fewer than all of the Warrants represented by such Warrant Certificate are
exercised, a new Warrant Certificate will be issued for the remaining amount of
Warrants. The holder of a Warrant will be required to pay any tax or other
governmental charge that may be imposed in connection with any transfer
involved in the issuance of the underlying Debt Securities, Preferred Stock,
Depositary Shares or Common Stock, as the case may be.
MODIFICATIONS
The Warrant Agreements and the terms of the Warrants may be modified or amended
by us and the Warrant Agent, without the consent of any holder, for the purpose
of curing any ambiguity, or of curing, correcting or supplementing any
defective or inconsistent provision contained therein, or in any other manner
that we deem necessary or desirable and that will not materially adversely
affect the interests of the holders of the Warrants.
We and the Warrant Agent may also modify or amend the Warrant Agreement and the
terms of the Warrants with the consent of the holders of not less than a
majority in number of the then outstanding unexercised Warrants affected
thereby; provided that no such modification or amendment that accelerates the
Expiration Date, increases the exercise price, reduces the number of
outstanding Warrants held by holders required to consent to any such
modification or amendment, or otherwise materially adversely affects the rights
of the holders of the Warrants, may be made without the consent of each holder
affected thereby.
PREFERRED STOCK, DEPOSITARY SHARES AND COMMON STOCK WARRANT ADJUSTMENT
The terms and conditions on which the exercise price of and/or the number of
shares of Preferred Stock, Depositary Shares or Common Stock covered by a
Preferred Stock Warrant, Depositary Share Warrant or Common Stock Warrant,
respectively, are subject to adjustment and will be set forth in the Preferred
Stock Warrant Certificate, Depositary Share Warrant Certificate or Common Stock
Warrant Certificate, as the case may be, and the applicable prospectus
supplement. Such terms will include (i) provisions for adjusting the exercise
price of and/or the number of shares of Preferred Stock, Depositary Shares or
Common Stock covered by such Preferred Stock Warrant, Depositary Share Warrant
or Common Stock Warrant, as the case may be; (ii) the events requiring such
adjustment; (iii) the events upon which we may, in lieu of making such
adjustment, make proper provisions so that the holder of such Preferred Stock
Warrant, Depositary Share Warrant or Common Stock Warrant, as the case may be,
upon exercise thereof, would be treated as if such holder had exercised such
Preferred Stock Warrant, Depositary Share Warrant or Common Stock Warrant, as
the case may be, prior to the occurrence of such events; and (iv) provisions
affecting exercise if certain events affecting the Preferred Stock, Depositary
Shares or Common Stock.
30
<PAGE>
DESCRIPTION OF UNITS
We may offer Units consisting of two or more other constituent Securities,
which Units may be issuable as, and for the period of time specified therein
may be transferable as, a single Security only, as distinguished from the
separate constituent Securities comprising such Units. Any such Units will be
offered pursuant to a prospectus supplement which will (i) identify and
designate the title of any series of Units; (ii) identify and describe the
separate constituent Securities comprising such Units; (iii) set forth the
price or prices at which such Units will be issued; (iv) describe, if
applicable, the date on and after which the constituent Securities comprising
the Units will become separately transferable; (v) provide information with
respect to book-entry procedures, if any; (vi) discuss applicable United States
federal income tax considerations relating to the Units; and (vii) set forth
any other terms of the Units and their constituent Securities.
31
<PAGE>
PLAN OF DISTRIBUTION
We may sell the Securities (i) through underwriters or dealers; (ii) directly
to one or more purchasers; or (iii) through agents.
If underwriters are used in the sale, the underwriters will acquire the
Securities for their own account and the Securities may be resold in one or
more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase such Securities will be subject to
certain conditions. The underwriters will be obligated to purchase all the
Securities of the series offered by a prospectus supplement if any of such
Securities are purchased. Any initial public offering price and any discounts
or concessions allowed or reallowed or paid to dealers may be changed from time
to time.
We may also sell Securities directly or through agents designated by us. Unless
indicated in the prospectus supplement, any such agent is acting on a best
efforts basis for the period of its appointment.
We may authorize agents, underwriters or dealers to solicit offers by certain
institutional investors to purchase Securities providing for payment and
delivery on a future date specified in the prospectus supplement. Institutional
investors to which such offers may be made, when authorized, include commercial
and savings banks, insurance companies, pension funds, investment companies,
education and charitable institutions and such other institutions as may be
approved by us. The obligations of any such purchasers under such delayed
delivery and payment arrangements will not be subject to any conditions except
that the purchase by an institution of the particular Securities shall not at
delivery be prohibited under the laws of any jurisdiction in the United States
to which such institution is subject. Underwriters will not have any
responsibility for the validity of such arrangements or the performance by us
or such institutional investors.
Underwriters, dealers and agents that participate in the distribution of the
Securities may be underwriters, and any discounts or commissions received by
them from us and any profit on the resale of the Securities by them may be
treated as underwriting discounts and commissions, under the Securities Act.
Under agreements which may be entered into by us, underwriters, dealers and
agents who participate in the distribution of the offered Securities may be
entitled to indemnification by us against certain civil liabilities, including
liabilities under the Securities Act, or to contribution with respect to
payments which the underwriters, dealers or agents may be required to make.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, us or our subsidiaries in the ordinary course of their
businesses.
32
<PAGE>
LEGAL MATTERS
The validity of the securities we are offering will be passed upon for us by
the law firm of Irell & Manella LLP, Los Angeles, California. Ronald M. Loeb,
of counsel to such firm, is a Director of the Company and is the beneficial
owner of 103,795 shares of Common Stock, including 20,000 shares of Common
Stock which may be acquired immediately upon the exercise of options. Certain
legal matters will be passed upon for any underwriters or agents by the law
firm of O'Melveny & Myers LLP, Los Angeles, California.
EXPERTS
Our financial statements as of December 31, 1997 and for each of the three
years in the period ended December 31, 1997 incorporated by reference in this
prospectus from our Annual Report on Form 10-K have been so incorporated in
reliance on the reports of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting and,
with respect to the historical financial statements of Tyco for the years ended
December 31, 1996 and 1995, in reliance on the report of Deloitte & Touche LLP,
independent auditors, given upon their authority as experts in accounting and
auditing.
33
<PAGE>
[LOGO OF MATTEL, INC.(R)]
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Registration fee................................................ $111,200
Rating agency fees.............................................. 90,000
Printing and engraving expenses................................. 30,000
Accounting fees and expenses.................................... 50,000
Legal fees and expenses......................................... 50,000
Blue sky fees and expenses...................................... 15,000
Fees and expenses of Trustee.................................... 10,000
Miscellaneous................................................... 8,800
--------
Total.......................................................... $365,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Mattel, Inc. (the "Company" or the "Registrant") has adopted provisions in
its Restated Certificate of Incorporation (the "Certificate") which require
the Company to indemnify any and all persons whom it has the power to
indemnify pursuant to the Delaware General Corporation Law (the "DGCL")
against any and all expenses, judgments, fines, amounts paid in settlement,
and any other liabilities to the fullest extent permitted by the DGCL.
The Certificate also empowers the Registrant by action of its Board of
Directors to purchase and maintain insurance, at its expense, to protect
itself and such persons against any such expense, judgment, fine, amount paid
in settlement or other liability, whether or not the Registrant would have the
power to so indemnify such person under the DGCL.
In addition, the Registrant's Bylaws require that each person who was or is
made a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or she, or person of whom he or
she is the legal representative, is or was a director, officer, employee or
agent of the Registrant or is or was serving at the request of the Registrant,
as a director, officer, employee or agent of the Registrant as a director,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged action in an
official capacity as a director, officer, employee or agent, or in any other
capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Registrant to the fullest extent
authorized by the DGCL, as the same exists or may hereafter be amended (but,
in the case of any such amendment, only to the extent that such amendment
permits the Registrant to provide broader indemnification rights than said law
permitted the Registrant to provide prior to such amendment) against all
expense, liability and loss (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith and
such indemnification shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of his or
her heirs, executors and administrators; provided, however, that except for
claims by such persons for non-payment of entitled indemnification claims
against the Registrant, the Registrant shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person only if such proceeding (or part thereof) was authorized by the
Registrant's Board of Directors. The Bylaws specify that the right to
indemnification so provided is a contract right, set forth certain procedural
and evidentiary standards applicable to the enforcement of a claim under the
Bylaws, entitle the persons to be indemnified to be reimbursed for the
expenses of prosecuting any such claim against the Registrant and entitle them
to have all expenses incurred in advance of the final disposition of a
proceeding paid by the Registrant. Such provisions, however, are intended to
be in furtherance and not in limitation of the general right to
indemnification provided in the Certificate.
II-1
<PAGE>
The Company has entered into indemnity agreements (the "Indemnity
Agreements") with each director of the Company, including directors who are
also officers and employees of the Company, and certain senior officers of the
Company. The Indemnity Agreements provide that the Company will pay any costs
which an indemnitee actually and reasonably incurs because of claims made
against him or her by reason of the fact that he or she is or was a director
or officer of the Company. The payments to be made under the Indemnity
Agreements include, but are not limited to, expenses of investigation,
judicial or administrative proceedings or appeals, damages, judgments, fines,
amounts paid in settlement, and attorneys' fees and disbursements, except the
Company is not obligated to make any payment under the Indemnity Agreements
which the Company is prohibited by law from paying as indemnity, or where (a)
indemnification is provided to an indemnitee under an insurance policy, except
for amounts in excess of insurance coverage, (b) the claim is one for which an
indemnitee is otherwise indemnified by the Company, (c) final determination is
rendered in a claim based upon the indemnitee obtaining a personal profit or
advantage to which he or she is not legally entitled, (d) final determination
is rendered on a claim for an accounting of profits made in connection with a
violation of Section 16(b) of the Securities Exchange Act of 1934, or similar
state or common law provisions, (e) the indemnitee was adjudged to be
deliberately dishonest, or (f) (with respect to a director) liability arises
out of a breach of certain of his or her fiduciary duties.
The directors and officers of the Company and its subsidiaries are insured
under certain insurance policies against claims made during the period of the
policies against liabilities arising out of claims for certain acts in their
capacities as directors and officers of the Company and its subsidiaries.
ITEM 16.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
*1.1 Form of Underwriting Agreement for Debt Securities
*1.2 Form of Underwriting Agreement for Equity Securities
*1.3 Form of Underwriting Agreement for Warrants
4.1 Indenture dated as of February 15, 1996 between the Registrant and
Chase Trust Company of California, as Trustee, relating to the Debt
Securities (incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K filed April 11, 1996)
*4.2 Form of Floating Rate Note
*4.3 Form of Fixed Rate Note
4.4 Restated Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3.0 to the Company's Annual Report on Form
10-K for the year ended December 31, 1993)
4.5 Certificate of Amendment of Restated Certificate of Incorporation
(incorporated by reference to Exhibit B to the Company's Proxy
Statement dated March 23, 1996)
4.6 Bylaws of the Company, as amended to date (incorporated by reference
to Exhibit 4.3 to the Company's Registration Statement on Form
S-3 filed with the Securities and Exchange Commission on September
26, 1997)
4.7 Rights Agreement, dated as of February 7, 1992, between the
Company and The First National Bank of Boston, as Rights Agent
(incorporated by reference to Exhibit 1 to the Company's
Registration Statement on Form 8-A, dated February 12, 1992)
4.8 Specimen Stock Certificate with respect to Common Stock
(incorporated by reference to the Company's Current Report on
Form 8-K filed on July 22, 1996)
*4.9 Certificate of Designation of Preferred Stock
*4.10 Specimen Stock Certificate with respect to Preferred Stock
*4.11 Form of Warrant Agreement pertaining to Common Stock (including
the form of Certificate representing a Warrant for Common Stock)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
*4.12 Form of Warrant Agreement pertaining to Preferred Stock (including
the form of Certificate representing a Warrant for Preferred
Stock)
*4.13 Form of Warrant Agreement pertaining to Debt Securities (including
the form of Certificate representing a Warrant for Debt Securities)
*4.14 Form of Deposit Agreement pertaining to Depositary Shares
(including the form of Depositary Receipts relating to Preferred
Stock)
4.15 Certificate of Designation of Series C Preferred Stock dated
March 26, 1997 (incorporated by reference to Exhibit 4.7 to the
Company's Registration Statement on Form S-3 filed with the
Securities and Exchange Commission on August 21, 1997)
4.16 Deposit Agreement dated June 24, 1996 among Tyco, Midlantic Bank,
N.A., as Depositary, and all holders from time to time of
depositary receipts issued thereunder (incorporated by reference
to Exhibit 4.2 to Tyco Toys, Inc.'s Registration Statement on
Form S-3, dated June 20, 1996)
4.17 Amendment to Deposit Agreement dated as March 27, 1997 between the
Company, as successor to Tyco and The First National Bank of Boston
(incorporated by reference to Exhibit 4.9 to the Company's
Registration on Form S-3 filed with the Securities and Exchange
Commission on September 26, 1997)
4.18 Certificate of Designation of Series B Preferred Stock dated
March 26, 1997 (incorporated by reference to Exhibit 4.6 to the
Company's Registration Statement on Form S-3 filed with the
Securities and Exchange Commission on August 21, 1997)
4.19 Certificate of Amendment of Restated Certificate of Incorporation
(incorporated by reference to Exhibit B to the Company's Proxy
Statement dated March 30, 1998)
+5 Opinion of Irell & Manella LLP as to the validity of the Securities
+12 Computation of Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred Stock Dividends
+23.1 Consent of PricewaterhouseCoopers LLP
+23.2 Consent of Deloitte and Touche LLP
23.3 Consent of Irell & Manella LLP (included in their Exhibit 5 opinion)
24 Power of Attorney with respect to the Company (contained in signature
page)
+25 Form T-1 Statement of Eligibility and Qualification of the Trustee
Under the Trust Indenture Act of 1939
</TABLE>
- --------
* To be filed by a post-effective amendment to the Registration Statement or
incorporated by reference in the event of an offering of the specified
Securities.
+ Filed herewith.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
II-3
<PAGE>
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) of this section do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to section 13 or section 15(d) of
the Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(4) 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 Section 15(d) of the Exchange Act that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities 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.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of El Segundo, State of California, on
November 25, 1998.
MATTEL, INC.
By: /s/ Harry J. Pearce
___________________________________
Name: Harry J. Pearce
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below on this Registration Statement hereby constitutes and appoints Jill E.
Barad, Ned Mansour, Robert Normile, Lee B. Essner and John L. Vogelstein,
their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for them and in their name, place and stead,
in any and all capacities (unless revoked in writing) to sign any and all
amendments to this Registration Statement to which this power of attorney is
attached, including any post-effective amendments as well as any related
registration statement (or amendment thereto) filed in reliance upon Rule
462(b) under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting to such attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in connection therewith,
as fully to all intents and purposes as they might and could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or
any of them, or their substitute or substitutes, may lawfully do or cause to
be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Jill E. Barad Chairman of the Board, November 25, 1998
____________________________________ President and Chief
Jill E. Barad Executive Officer
/s/ Harry J. Pearce Chief Financial Officer November 25, 1998
____________________________________ (Principal Financial
Harry J. Pearce Officer)
/s/ Kevin M. Farr Senior Vice President and November 25, 1998
____________________________________ Controller (Chief Accounting
Kevin M. Farr Officer)
/s/ Dr. Harold Brown Director November 25, 1998
____________________________________
Dr. Harold Brown
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Tully M. Friedman Director November 25, 1998
____________________________________
Tully M. Friedman
/s/ Joseph C. Gandolfo Director and President, November 25, 1998
____________________________________ Worldwide Manufacturing
Joseph C. Gandolfo Operations
/s/ Ronald M. Loeb Director November 25, 1998
____________________________________
Ronald M. Loeb
/s/ Ned Mansour Director and President, November 25, 1998
____________________________________ Corporate Operations
Ned Mansour
/s/ Dr. Andrea L. Rich Director November 25, 1998
____________________________________
Dr. Andrea L. Rich
/s/ William D. Rollnick Director November 25, 1998
____________________________________
William D. Rollnick
/s/ Pleasant T. Rowland Vice Chairman of the Board November 25, 1998
____________________________________ and President, The Pleasant
Pleasant T. Rowland Company
/s/ Christopher A. Sinclair Director November 25, 1998
____________________________________
Christopher A. Sinclair
/s/ Bruce L. Stein Director, President, November 25, 1998
____________________________________ Mattel Worldwide
Bruce L. Stein and Chief Operating Officer
/s/ John L. Vogelstein Director November 25, 1998
____________________________________
John L. Vogelstein
</TABLE>
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
*1.1 Form of Underwriting Agreement for Debt Securities
*1.2 Form of Underwriting Agreement for Equity Securities
*1.3 Form of Underwriting Agreement for Warrants
4.1 Indenture dated as of February 15, 1996 between the Registrant and
Chase Trust Company of California, as Trustee, relating to the Debt
Securities (incorporated by reference to Exhibit 4.1 to the Company's
Current Report on Form 8-K filed April 11, 1996)
*4.2 Form of Floating Rate Note
*4.3 Form of Fixed Rate Note
4.4 Restated Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3.0 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1993)
4.5 Certificate of Amendment of Restated Certificate of Incorporation
(incorporated by reference to Exhibit B to the Company's Proxy
Statement dated March 23, 1996)
4.6 By-laws of the Company, as amended to date (incorporated by reference
to Exhibit 4.3 to the Company's Registration Statement on Form S-3
filed with the Securities and Exchange Commission on September 26,
1997)
4.7 Rights Agreement, dated as of February 7, 1992, between the Company
and The First National Bank of Boston, as Rights Agent (incorporated
by reference to Exhibit 1 to the Company's Registration Statement on
Form 8-A, dated February 12, 1992)
4.8 Specimen Stock Certificate with respect to Common Stock (incorporated
by reference to the Company's Current Report on Form 8-K filed on
July 22, 1996)
*4.9 Certificate of Designation of Preferred Stock
*4.10 Specimen Stock Certificate with respect to Preferred Stock
*4.11 Form of Warrant Agreement pertaining to Common Stock (including the
form of Certificate representing a Warrant for Common Stock)
*4.12 Form of Warrant Agreement pertaining to Preferred Stock (including the
form of Certificate representing a Warrant for Preferred Stock)
*4.13 Form of Warrant Agreement pertaining to Debt Securities (including the
form of Certificate representing a Warrant for Debt Securities)
*4.14 Form of Deposit Agreement pertaining to Depositary Shares (including
the form of Depositary Receipts relating to Preferred Stock)
4.15 Certificate of Designation of Series C Preferred Stock dated March 26,
1997 (incorporated by reference to Exhibit 4.7 to the Company's
Registration Statement on Form S-3 filed with the Securities and
Exchange Commission on August 21, 1997)
4.16 Deposit Agreement dated June 24, 1996 among Tyco, Midlantic Bank,
N.A., as Depositary, and all holders from time to time of depositary
receipts issued thereunder (incorporated by reference to Exhibit 4.2
to Tyco Toys, Inc.'s Registration Statement on Form S-3, dated June
20, 1996)
4.17 Amendment to Deposit Agreement dated as March 27, 1997 between the
Company, as successor to Tyco and The First National Bank of Boston
(incorporated by reference to Exhibit 4.9 to the Company's
Registration on Form S-3 filed with the Securities and Exchange
Commission on September 26, 1997)
4.18 Certificate of Designation of Series B Preferred Stock dated March 26,
1997 (incorporated by reference to Exhibit 4.6 to the Company's
Registration Statement on Form S-3 filed with the Securities and
Exchange Commission on August 21, 1997)
</TABLE>
<PAGE>
INDEX TO EXHIBITS--(CONTINUED)
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
4.19 Certificate of Amendment of Restated Certificate of Incorporation
(incorporated by reference to Exhibit B to the Company's Proxy
Statement dated March 30, 1998)
+5 Opinion of Irell & Manella LLP as to the validity of the Securities
+12 Computation of Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred Stock Dividends
+23.1 Consent of PricewaterhouseCoopers LLP
+23.2 Consent of Deloitte and Touche LLP
23.3 Consent of Irell & Manella LLP (included in their Exhibit 5 opinion)
24 Power of Attorney with respect to the Company (contained in signature
page)
+25 Form T-1 Statement of Eligibility and Qualification of the Trustee
Under the Trust Indenture Act of 1939
</TABLE>
- --------
* To be filed by a post-effective amendment to the Registration Statement or
incorporated by reference in the event of an offering of the specified
Securities.
+ Filed herewith.
<PAGE>
EXHIBIT 5
[LETTERHEAD OF IRELL & MANELLA LLP]
November 25, 1998
Mattel, Inc.
333 Continental Boulevard
El Segundo, California 90245-5012
Ladies and Gentlemen:
We have acted as counsel to Mattel, Inc., a Delaware corporation (the
"Company"), in connection with the Company's Registration Statement on Form S-
3 (the "Registration Statement") to be filed with the Securities and Exchange
Commission with respect to the registration under the Securities Act of 1933,
as amended (the "Act"), of up to $400,000,000 aggregate initial offering price
of an indeterminate amount of the following: (i) shares of the Company's
common stock, $1.00 par value per share, which shares of common stock are
accompanied by preference share purchase rights ("Common Stock"), (ii) shares
of the Company's preferred stock, $1.00 par value per share ("Preferred
Stock"), which may be convertible into shares of Common Stock, (iii)
depositary shares of the Company ("Depositary Shares"), representing a
fractional interest in a share of Preferred Stock, which Depositary Shares are
to be represented by depositary receipts (the "Depositary Receipts") to be
issued pursuant to one or more deposit agreements (each a "Deposit Agreement")
between the Company and a bank or trust company to be selected by the Company
(the "Depositary"), (iv) the Company's debt securities (the "Debt
Securities"), which may be convertible into shares of Common Stock, Preferred
Stock and/or Depositary Shares, and which are to be issued pursuant to an
Indenture (the "Indenture") between the Company and Chase Manhattan Bank and
Trust Company, National Association (formerly Chemical Trust Company of
California), as trustee (the "Trustee"), (v) warrants ("Warrants") to be
issued pursuant to one or more warrant agreements (each a "Warrant
Agreement"), between the Company and a bank or trust company as warrant agent
to be selected by the Company (the "Warrant Agent"), to acquire Common Stock,
Preferred Stock, Depositary Shares and/or Debt Securities, and (vi) units
("Units") consisting of two or more of the foregoing securities. The Common
Stock, Preferred Stock, Depositary Shares, Debt Securities, Warrants and Units
(collectively, the "Securities") may be issued from time to time pursuant to
Rule 415 under the Act and will be subject to specific terms pertaining to
each respective class or series of Securities as determined at the time of
sale and as set forth in one or more supplements to the Prospectus
constituting part of the Registration Statement.
As such counsel, we have examined the Registration Statement, the Indenture
and such records of the Company's corporate proceedings and such other
documents, and we have made such other factual and legal investigations, as we
deemed necessary or appropriate in order to render this opinion.
Based upon such examinations and investigations and subject to (i) the
occurrence of such additional corporate procedures as are now contemplated
prior to the issuance of any Securities or which we, as the Company's counsel,
advise the Company to undertake in connection with any such issuance, (ii) the
effectiveness of the Registration Statement under the Act, (iii) the
establishment of the terms of each series of Securities in accordance with the
terms of (a) the Company's Restated Certificate of Incorporation and Bylaws,
(b) any judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company, (c) any agreement, indenture, mortgage,
deed of trust, undertaking or other instrument that is binding upon the
Company, and (d) applicable law, and (iv) if applicable, the due
authorization, execution, authentication and delivery of and payment for the
Securities, it is our opinion that:
1. The Common Stock (including any Common Stock that may be issuable
pursuant to the conversion of any Preferred Stock or Debt Securities or the
exercise of any Warrants or as part of any Units) will, upon the issuance
and sale thereof in the manner contemplated by the Registration Statement,
be validly issued, fully paid and nonassessable.
<PAGE>
2. The Preferred Stock (including any Preferred Stock that may be
issuable pursuant to the conversion or exchange of any Depositary Shares or
Debt Securities or the exercise of any Warrants or as part of any Units)
will, upon the issuance and sale thereof in the manner contemplated by the
Registration Statement, be validly issued, fully paid and nonassessable.
3. Assuming the due authorization, execution and delivery of the
applicable Deposit Agreement by the Depositary and the Company, each
Depositary Share (including any Depositary Shares that may be issuable
pursuant to the conversion of any Debt Securities or the exercise of any
Warrants or as part of any Units), when issued in accordance with such
Deposit Agreement against deposit of the shares of Preferred Stock, will
represent a beneficial interest in the applicable fraction of a validly
issued, fully paid and nonassessable share of Preferred Stock, and assuming
the due execution and delivery of the Depositary Receipts by the Depositary
pursuant to such Deposit Agreement and upon payment for and delivery of the
Depositary Shares as contemplated by the Registration Statement, the
Depositary Receipts will entitle the holders thereof to the benefits
provided therein and in such Deposit Agreement.
4. The Debt Securities (including any Debt Securities that may be
issuable pursuant to the exercise of any Warrants or as part of any Units)
will, upon the issuance and sale thereof in the manner contemplated by the
Registration Statement, constitute valid and legally binding obligations of
the Company, enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally, and subject, as to the binding and enforceable nature of such
obligations, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity).
5. Assuming the due authorization, execution and delivery of the
applicable Warrant Agreement by the Warrant Agent and the Company, the
Warrants (including any Warrants that may be issuable as part of any Units)
will, upon the issuance and sale thereof in the manner contemplated by the
Registration Statement, constitute valid and legally binding obligations of
the Company, enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally, and subject, as to the binding and enforceable nature of such
obligations, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity).
This opinion is rendered solely for your benefit in connection with the
transactions described above. We hereby consent to the use of this opinion as
an exhibit to the Registration Statement and to the use of our name under the
heading "Legal Matters" in the Prospectus constituting part of the
Registration Statement. In giving such consent, we do not thereby admit that
we are in the category of persons whose consent is required under Section 7 of
the Act.
Sincerely,
/s/ Irell & Manella LLP
<PAGE>
EXHIBIT 12
MATTEL, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(AMOUNTS IN THOUSANDS, EXCEPT RATIOS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE
MONTHS ENDED FOR THE YEARS ENDED DECEMBER 31,(a)
------------------ ------------------------------------------------
SEPT 30, SEPT 30,
1998 1997(a) 1997 1996 1995 1994 1993(b)
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS AVAILABLE FOR
FIXED CHARGES:
Income (loss) before
income taxes, cumula-
tive effect of
changes in accounting
principles and ex-
traordinary item..... $381,859 $158,080 $425,082 $536,756 $504,668 $362,157 $153,306
Less (plus) minority
interest and undis-
tributed income
(loss) of less-than-
majority-owned affil-
iates, net........... 161 (369) (144) 303 (36) (649) 124
Add:
Interest expense..... 69,675 62,782 90,130 100,226 102,983 87,071 86,101
Appropriate portion
of rents(c)......... 12,748 13,708 17,665 19,527 19,450 16,224 16,221
-------- -------- -------- -------- -------- -------- --------
Earnings available for
fixed charges........ $464,443 $234,201 $532,733 $656,812 $627,065 $464,803 $255,752
======== ======== ======== ======== ======== ======== ========
FIXED CHARGES:
Interest expense...... $ 69,675 $ 62,782 $ 90,130 $100,226 $102,983 $ 87,071 $ 86,101
Capitalized interest.. 650 991 991 1,789 693 285 --
Appropriate portion of
rents(c)............. 12,748 13,708 17,665 19,527 19,450 16,224 16,221
-------- -------- -------- -------- -------- -------- --------
Fixed charges......... $ 83,073 $ 77,481 $108,786 $121,542 $123,126 $103,580 $102,322
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to
fixed charges.......... 5.59x 3.02x 4.90x 5.40x 5.09x 4.49x 2.50x
======== ======== ======== ======== ======== ======== ========
</TABLE>
- --------
(a) Consolidated financial information for 1993 through 1997 has been restated
for the effects of the March 1997 merger of Tyco Toys, Inc. into the
Company, accounted for as a pooling of interests.
(b) Consolidated financial information for 1993 has been restated for the
effects of the November 1993 merger of Fisher-Price, Inc. into a wholly-
owned subsidiary of the Company, accounted for as a pooling of interests.
(c) Portion of rental expenses which is deemed representative of an interest
factor, not to exceed one-third of total rental expense.
<PAGE>
MATTEL, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(AMOUNTS IN THOUSANDS, EXCEPT RATIOS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE
MONTHS ENDED FOR THE YEARS ENDED DECEMBER 31,(a)
------------------ ------------------------------------------------
SEPT 30, SEPT 30,
1998 1997(a) 1997 1996 1995 1994 1993(b)
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS AVAILABLE FOR
FIXED CHARGES:
Income (loss) before
income taxes,
cumulative effect of
changes in accounting
principles and
extraordinary item... $381,859 $158,080 $425,082 $536,756 $504,668 $362,157 $153,306
Less (plus) minority
interest and
undistributed income
(loss) of less-than-
majority-owned
affiliates, net...... 161 (369) (144) 303 (36) (649) 124
Add:
Interest expense.... 69,675 62,782 90,130 100,226 102,983 87,071 86,101
Appropriate portion
of rents(c)........ 12,748 13,708 17,665 19,527 19,450 16,224 16,221
-------- -------- -------- -------- -------- -------- --------
Earnings available for
fixed charges........ $464,443 $234,201 $532,733 $656,812 $627,065 $464,803 $255,752
======== ======== ======== ======== ======== ======== ========
FIXED CHARGES:
Interest expense...... $ 69,675 $ 62,782 $ 90,130 $100,226 $102,983 $ 87,071 $ 86,101
Capitalized interest.. 650 991 991 1,789 693 285 --
Dividends--Series B
preferred stock...... -- 2,537 2,537 3,406 3,200 2,157 --
Dividends--Series C
preferred stock...... 5,970 5,978 7,968 3,985 -- -- --
Dividends--Series F
preference stock..... -- -- -- -- 3,342 4,689 4,894
Appropriate portion of
rents(c)............. 12,748 13,708 17,665 19,527 19,450 16,224 16,221
-------- -------- -------- -------- -------- -------- --------
Fixed charges......... $ 89,043 $ 85,996 $119,291 $128,933 $129,668 $110,426 $107,216
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to
fixed charges.......... 5.22x 2.72x 4.47x 5.09x 4.84x 4.21x 2.39x
======== ======== ======== ======== ======== ======== ========
</TABLE>
- --------
(a) Consolidated financial information for 1993 through 1997 has been restated
for the effects of the March 1997 merger of Tyco Toys, Inc. into the
Company, accounted for as a pooling of interests.
(b) Consolidated financial information for 1993 has been restated for the
effects of the November 1993 merger of Fisher-Price, Inc. into a wholly-
owned subsidiary of the Company, accounted for as a pooling of interests.
(c) Portion of rental expenses which is deemed representative of an interest
factor, not to exceed one-third of total rental expense.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated February 2, 1998, which appears on page 55 of the 1997 Annual Report to
Shareholders of Mattel, Inc., which is incorporated by reference in Mattel,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997. We also
consent to the incorporation by reference of our report on the Financial
Statement Schedule, which appears on page 30 of such Annual Report on Form 10-
K. We also consent to the reference to us under the heading "Experts" in such
Prospectus.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Los Angeles, California
November 20, 1998
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of Mattel, Inc. of our reports dated February 4, 1997
(except for note 15, as to which the date is March 27, 1997) relating to the
consolidated financial statements of Tyco Toys, Inc. and subsidiaries, not
presented separately herein, appearing in Mattel, Inc.'s Current Reports on
Form 8-K dated July 30, 1997 and April 17, 1997.
/s/ Deloitte & Touche LLP
Philadelphia, Pennsylvania
November 20, 1998
<PAGE>
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER THE
TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
----------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2)
----------------
CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
95-4655078
(I.R.S. EMPLOYER IDENTIFICATION NO.)
101 CALIFORNIA STREET, SAN FRANCISCO, CALIFORNIA
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
94111
(ZIP CODE)
----------------
MATTEL, INC..
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
95-1567322
(I.R.S. EMPLOYER IDENTIFICATION NO.)
333 CONTINENTAL BOULEVARD
EL SEGUNDO, CALIFORNIA
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
90245-5012
(ZIP CODE)
----------------
DEBT SECURITIES
(TITLE OF INDENTURE SECURITIES)
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of the Currency, Washington, D.C.
Board of Governors of the Federal Reserve System, Washington, D.C. .
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the Obligor is an affiliate of the trustee, describe each such
affiliation.
None.
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES
(a) Title of the securities outstanding under each such other indenture:
$210,500,000 Series A Medium Term Notes issued under Indenture dated as
of 8/1/94
$290,000,000 Series B Medium Term Notes issued under Indenture dated as
of 2/15/96
$70,000,000 Series C Medium Term Notes issued under Indenture dated as of
2/15/96
$150,000,000 6% Notes due 7/15/2003 and $150,000,000 6 1/8% Notes due
7/15/2005 issued under Indenture dated as of 2/15/96
$100,000,000 6 3/4% Notes due 5/15/2000 issued under Indenture dated as
of 1993
(b) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310 (b) (1)
of the Act arises as a result of the trusteeship under any such other
indenture, including a statement as to how the indenture securities will
rank as compared with the securities issued under such other indenture.
The Trustee is not deemed to have a conflicting interest within the meaning
of Section 310 (b) (1) of the Act because (i) the indenture securities
referenced in (a) above (the "Prior Securities") are not in default and (ii)
proviso (i) under 310 (b) (1) is applicable and excludes the operations of 310
(b) (1) as the indenture to be qualified and the indenture entered into in
connection with the Prior Securities (the "Prior Indenture") are wholly
unsecured and rank equally and the Prior Indenture is specifically described
in the indenture to be qualified.
<PAGE>
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as part of this statement of eligibility.
Exhibit 1. Articles of Association of the Trustee as Now in Effect (see
Exhibit 1 to Form T-1 filed in connection with Registration
Statement No. 333-41329, which is incorporated by reference).
Exhibit 2. Certificate of Authority of the Trustee to Commence Business
(see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 333-41329, which is incorporated by reference).
Exhibit 3. Authorization of the Trustee to Exercise Corporate Trust powers
(contained in Exhibit 2).
Exhibit 4. Existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed
in connection with Registration Statement No. 333-41329, which is
incorporated by reference).
Exhibit 5. Not Applicable
Exhibit 6. The consent of the Trustee required by Section 321 (b) of the
Act (see Exhibit 6 to Form T-1 filed in connection with
Registration Statement No. 333-41329, which is incorporated by
reference).
Exhibit 7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising
or examining authority.
Exhibit 8. Not Applicable
Exhibit 9. Not Applicable
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Chase Manhattan Bank and Trust Company, National Association, has
duly caused this statement of eligibility and qualification to be signed on
its behalf by the undersigned, thereunto duly authorized, all in the City of
San Francisco, and State of California, on the 23d day of November, 1998.
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION
By /s/ PAULA OSWALD
----------------------------------
Paula Oswald
Assistant Vice President
<PAGE>
EXHIBIT 7
REPORT OF CONDITION OF THE TRUSTEE
CONSOLIDATED REPORT OF CONDITION OF CHASE MANHATTAN BANK
AND TRUST COMPANY, N.A.
LOCATED AT 1800 CENTURY PARK EAST, STE. 400 LOS ANGELES, CA 94111
AS OF CLOSE OF BUSINESS ON SEPTEMBER 30, 1998
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30,
1998
ASSETS -------------
------
<C> <S> <C>
1. Cash and balances due from
a. Noninterest-bearing balances and currency and coin (1,
2)...................................................... 911
b. Interest bearing balances (3)......................... 0
2. Securities
a. Held-to-maturity securities (from Schedule RC-B,
column A)............................................... 0
b. Available-for-sale securities (from Schedule RC-B,
column D)............................................... 1,080
3. Federal Funds sold (4) and securities purchased agree-
ments to resell......................................... 47,620
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from
Schedule RC-C)........................................ 11
b. LESS: Allowance for loan and lease losses............. 0
c. LESS: Allocated transfer risk reserve................. 0
d. Loans and leases, net of unearned income, allowance,
and reserve (item 4.a minus 4.b and 4.c).............. 11
5. Trading assets........................................... 0
6. Premises and fixed assets (including capitalized
leases)................................................. 350
7. Other real estate owned (from Schedule RC-M)............. 0
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M).......................... 0
9. Customers liability to this bank on acceptances outstand-
ing..................................................... 0
10. Intangible assets (from Schedule RC-M)................... 1,470
11. Other assets (from Schedule RC-F)........................ 3,288
12.a TOTAL ASSETS............................................. 54,730
b. Losses deferred pursuant to 12 U.S.C. 1823(j)......... 0
c. Total assets and losses deferred pursuant to 12 U.S.C.
1823(j) (sum of items 12.a and 12.b).................. 54,730
</TABLE>
- --------
(1) includes cash items in process of collection and unposted debits.
(2) The amount reported in this item must be greater than or equal to the sum
of Schedule RC-M, items 3.a and 3.b
(3) includes time certificates of deposit not held for trading.
(4) Report "term federal funds sold" in Schedule RC, item 4.a "Loans and
leases, net of unearned income" and in Schedule RC-C, part 1.
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
-----------
<C> <S> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from
Schedule RC-E)................................................ 24,839
(1) Noninterest-bearing.......................................... 6,558
(2) Interest-bearing............................................. 18,281
b. In foreign offices, Edge and Agreement subsidiaries, and IBF'
(1) Noninterest-bearing..........................................
(2) Interest-bearing.............................................
14. Federal funds purchased (2) and securities sold under agreements
to repurchase................................................... 0
15. a. Demand notes issued to the U.S. Treasury...................... 0
b. Trading liabilities........................................... 0
16. Other borrowed money (includes mortgage indebtedness and
obligations under capitalized leases):
a. With a remaining maturity of one year or less................. 0
b. With a remaining maturity of more than one year through three
years......................................................... 0
c. With a remaining maturity of more than three years............ 0
17. Not applicable...................................................
18. Bank's liability on acceptances executed and outstanding......... 0
19. Subordinated notes and Debentures(3)............................. 0
20. Other liabilities (from Schedule RC-G)........................... 5,033
21. Total liabilities (sum of items 13 through 20)................... 29,872
22. Not applicable...................................................
EQUITY CAPITAL
--------------
23. Perpetual preferred stock and related surplus.................... 0
24. Common stock--................................................... 600
25. Surplus (exclude all surplus related to preferred stock)......... 12,590
26. a. Undivided profits and capital reserves........................ 11,667
b. Net unrealized holding gains (losses) on available-for-sale
securities.................................................... 1
27. Cumulative foreign currency translation adjustments
28. a. Total equity capital (sum of items 23 through 27)............. 24,858
b. Losses deferred pursuant to 12 U.S.C. 1823(j)................. 0
c. Total equity capital and losses deferred pursuant to 12 U.S.C.
1823(j) (sum of items 28.a and 28.b)......................... 24,858
29. Total liabilities, equity capital, and losses deferred pursuant
to 12 U.S.C. 1823(j) (sum of items 21 and 28.c)................. 54,730
</TABLE>
