<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 22, 1999
REGISTRATION NO. 333-47493
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
PRE-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________
<TABLE>
<CAPTION>
APPLIED POWER INC. APPLIED POWER CAPITAL TRUST I
<S> <C>
(Exact name of Registrant as APPLIED POWER CAPITAL TRUST II
specified in its charter)
(Exact name of each Registrant as
specified in its Trust Agreement)
WISCONSIN DELAWARE
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
39-1068610 39-6703302; 39-6703303
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
13000 WEST SILVER SPRING DRIVE c/o APPLIED POWER INC.
BUTLER, WISCONSIN 53007-1093 13000 WEST SILVER SPRING DRIVE
(414) 783-9279 BUTLER, WISCONSIN 53007-1093
(Address, including zip code, and (414) 783-9279
telephone (Address, including zip code, and telephone
number, including area code, of number, including area code, of Registrants'
Registrant's principal executive offices)
principal executive offices)
</TABLE>
ROBERT C. ARZBAECHER
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
APPLIED POWER INC.
13000 WEST SILVER SPRING DRIVE
BUTLER, WISCONSIN 53007-1093
(414) 783-9279
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
________________
COPIES TO:
BRUCE C. DAVIDSON GARY W. WOLF
QUARLES & BRADY LLP CAHILL GORDON & REINDEL
411 EAST WISCONSIN AVENUE 80 PINE STREET
MILWAUKEE, WISCONSIN 53202 NEW YORK, NEW YORK 10005
(414) 277-5000 (212) 701-3600
________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: At such time or from time to time after the effective date of this
Registration Statement as the Registrants shall determine in light of market
conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, 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, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] _______________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
============================================================================================================
PROPOSED
AMOUNT PROPOSED MAXIMUM AMOUNT
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT PRICE FEE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Securities of Applied Power Inc.: (1) (2) (3) $600,000,000 (3) $ 171,900 (4)
Debt Securities
Cumulative Preferred Stock, par
value $1.00 per share
Depositary Shares
Class A Common Stock, par value
$.20 per share
Warrants
Stock Purchase Contracts
Stock Purchase Units
Preferred Securities of Applied
Power Capital Trust I
Preferred Securities of Applied
Power Capital Trust II
Guarantees of Preferred Securities
of Applied Power Capital Trust I
and Applied Power Capital Trust II
by Applied Power Inc. (5)
============================================================================================================
</TABLE>
(1) Such indeterminate number or amount of Debt Securities, Cumulative
Preferred Stock, Depositary Shares, Class A Common Stock, Warrants, Stock
Purchase Contracts and Stock Purchase Units of Applied Power Inc. and
Preferred Securities of Applied Power Capital Trust I and Applied Power
Capital Trust II as may from time to time be issued at indeterminate
prices. Junior Subordinated Debt Securities may be issued and sold to
Applied Power Capital Trust I and Applied Power Capital Trust II, in which
event such Junior Subordinated Debt Securities may later be distributed to
the holders of Preferred Securities upon a dissolution of Applied Power
Capital Trust I and Applied Power Capital Trust II and the distribution of
the assets thereof. Securities registered hereunder (the "Securities") may
be sold separately, together or as units with other Securities registered
hereunder.
(2) Such amount in U.S. dollars or the equivalent thereof in foreign currencies
or foreign currency units as shall result in an aggregate initial offering
price for all Securities not to exceed $600,000,000. If any Debt Securities
are issued at an original issue discount, such greater amount as may result
in the initial offering price for Securities aggregating $600,000,000. In
addition, this Registration Statement includes such presently indeterminate
number of Securities as may be issuable from time to time upon conversion
or exchange of the Securities being registered hereunder.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933, as amended (the
"Securities Act"). Accordingly, the table does not specify by each class
information as to the amount to be registered or the proposed maximum
offering price per unit.
(4) Consists of $88,500 calculated pursuant to Rule 457(o) (at the statutory
rate of .000295 of the maximum aggregate offering price in effect at the
time) and paid with the filing of the Registration Statement on March 6,
1998, covering $300,000,000 of Securities, and $83,400 so calculated (at
the current statutory rate of .000278) and paid with the filing of this
Pre-Effective Amendment No. 2 to the Registration Statement, which
increases the maximum aggregate offering price to $600,000,000.
(5) Applied Power Inc. is also registering under this Registration Statement
all other obligations that it may have with respect to Preferred Securities
issued by Applied Power Capital Trust I and Applied Power Capital Trust II.
No separate consideration will be received for any Guarantee or any other
such obligations.
______________________
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
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 UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
==========================================================
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
PROSPECTUS
SUBJECT TO COMPLETION, DATED JANUARY 22, 1999
$600,000,000
APPLIED POWER INC.
DEBT SECURITIES, CUMULATIVE PREFERRED STOCK,
CLASS A COMMON STOCK, WARRANTS,
STOCK PURCHASE CONTRACTS AND
STOCK PURCHASE UNITS
________________
APPLIED POWER CAPITAL TRUST I
APPLIED POWER CAPITAL TRUST II
PREFERRED SECURITIES FULLY AND UNCONDITIONALLY GUARANTEED,
AS DESCRIBED HEREIN, BY
APPLIED POWER INC.
Applied Power Inc., a Wisconsin corporation (the "Company"), may offer and
sell from time to time, together or separately, (i) its unsecured debt
securities ("Debt Securities"), which may be senior (the "Senior Debt
Securities"), subordinated (the "Subordinated Debt Securities"), or junior
subordinated (the "Junior Subordinated Debt Securities") in priority of payment,
(ii) shares of its Cumulative Preferred Stock, par value $1.00 per share, which
may be represented by depositary shares as described herein (the "Preferred
Stock"), (iii) shares of its Class A Common Stock, par value $.20 per share (the
"Class A Common Stock"), (iv) warrants (the "Warrants") to purchase any of the
foregoing Debt Securities, Preferred Stock or Class A Common Stock, (v) stock
purchase contracts ("Stock Purchase Contracts") to purchase shares of Class A
Common Stock or (vi) stock purchase units ("Stock Purchase Units"), each
representing ownership of a Stock Purchase Contract and any of (x) Debt
Securities, (y) debt obligations of third parties, including U.S. Treasury
Securities, or (z) Preferred Securities (as defined below) of an Applied Power
Trust (as defined below), securing the holder's obligation to purchase Class A
Common Stock under the Stock Purchase Contract. The Debt Securities, the
Preferred Stock, the Class A Common Stock, the Warrants, the Stock Purchase
Contracts and the Stock Purchase Units, together with the Preferred Securities
and the related Guarantees (as defined below), are collectively referred to
herein as the "Securities." The Securities may be offered in one or more
separate classes or series, in amounts, at prices and on terms to be determined
at the time of the offering thereof and to be set forth in a supplement or
supplements to this Prospectus (each, a "Prospectus Supplement"). The
Securities may be sold for U.S. dollars, foreign currencies or foreign currency
units, and the Securities may be payable in U.S. dollars, foreign currencies or
foreign currency units.
Applied Power Capital Trust I and Applied Power Capital Trust II, each a
statutory business trust created under the laws of the State of Delaware (each,
an "Applied Power Trust," and collectively, the "Applied Power Trusts"), may
severally offer preferred securities (the "Preferred Securities") representing
undivided beneficial ownership interests in the assets of such Applied Power
Trust. The Company will be the owner of the common securities (the "Common
Securities," and, together with the Preferred Securities, the "Trust
Securities") of each Applied Power Trust. The payment of periodic cash
distributions ("Distributions") with respect to Preferred Securities of each of
the Applied
<PAGE>
Power Trusts out of monies held by the Property Trustee (as defined herein) of
such Applied Power Trust, and payments on liquidation of such Applied Power
Trust and on redemption of Preferred Securities of such Applied Power Trust,
will be guaranteed by the Company as and to the extent described herein (each, a
"Guarantee"). See "Description of Guarantees." The Company's obligation under
each Guarantee is an unsecured obligation of the Company and will rank
subordinate and junior in right of payment to all senior indebtedness and
subordinated indebtedness of the Company. Except as otherwise provided in the
applicable Prospectus Supplement, (i) concurrently with the issuance by an
Applied Power Trust of its Preferred Securities, such Applied Power Trust will
invest the proceeds thereof and any contributions made in respect of the Common
Securities in a corresponding series of the Company's Junior Subordinated Debt
Securities (the "Corresponding Junior Subordinated Debt Securities") with terms
directly corresponding to the terms of that Applied Power Trust's Preferred
Securities, (ii) the Corresponding Junior Subordinated Debt Securities will be
the sole assets of that Applied Power Trust and (iii) payments under the
Corresponding Junior Subordinated Debt Securities will be the only revenue of
each Applied Power Trust. Unless otherwise specified in an applicable Prospectus
Supplement, the Company may redeem the Corresponding Junior Subordinated Debt
Securities (and cause the redemption of Trust Securities) or may dissolve each
Applied Power Trust and, after satisfaction of creditors of such Applied Power
Trusts as provided by applicable law, cause the Corresponding Junior
Subordinated Debt Securities to be distributed to the holders of Preferred
Securities in liquidation of their interests in the applicable Applied Power
Trust. See "Description of Preferred Securities -- Liquidation Distribution upon
Dissolution."
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
________________
The date of this Prospectus is January __, 1999.
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<PAGE>
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the accompanying Prospectus Supplement or
Supplements, together with the terms of the offering of any such Securities, the
initial price thereof, the net proceeds from the sale thereof and the intended
use or uses of such proceeds. The Prospectus Supplement will also set forth with
respect to the particular Securities offered, certain terms thereof, including,
where applicable, (i) in the case of Debt Securities, the designation, aggregate
principal amount, authorized denominations and priority thereof, the currency,
currencies or currency units for which the Debt Securities may be purchased and
the currency, currencies or currency units in which the principal of and any
interest on such Debt Securities may be payable, the date on which such Debt
Securities will mature, the rate per annum at which such Debt Securities will
bear interest, if any, or the method of determination of such rate, the dates on
which such interest, if any, will be payable, the deferral of payment of any
interest, any conversion or exchange provisions, any redemption or sinking fund
provisions and any additional or other rights, preferences, privileges,
limitations and restrictions relating to such Debt Securities, (ii) in the case
of Preferred Stock, the specific designation, number of shares or fractional
interests therein and any dividend, liquidation, redemption, exchange, voting,
conversion and other rights, preferences and privileges, (iii) in the case of
Class A Common Stock, the aggregate number of shares offered and market price
and dividend information, (iv) in the case of the Warrants, the Debt Securities,
the Preferred Stock or Class A Common Stock, respectively, for which each such
Warrant is exercisable and the exercise price, duration, detachability and other
terms of the Warrants, (v) in the case of Stock Purchase Contracts, the
designation and number of shares of Class A Common Stock issuable thereunder,
the purchase price of the Class A Common Stock, the date or dates on which the
Class A Common Stock is required to be purchased by the holders of the Stock
Purchase Contracts and any periodic payments required to be made by the Company
to the holders of the Stock Purchase Contracts or vice versa, (vi) in the case
of Stock Purchase Units, the specific terms of the Stock Purchase Contracts and
any Debt Securities or debt obligations of third parties or Preferred Securities
of an Applied Power Trust securing the holders' obligation to purchase the Class
A Common Stock under the Stock Purchase Contracts, the ability of a holder of
such Stock Purchase Units to settle early the underlying Stock Purchase Contract
by delivering cash in exchange for the underlying collateral and, if applicable,
whether the Company will issue to such holder a Prepaid Security (as defined
herein) as a result of such early settlement and the specific terms of the
Prepaid Security and (vii) in the case of Preferred Securities of an Applied
Power Trust, the specific designation, number of securities, liquidation amount
per security, any listing on a securities exchange, distribution rate (or method
of calculation thereof), dates on which distributions shall be payable and dates
from which distributions shall accrue, voting rights, if any, terms for any
conversion or exchange into other securities, any redemption or sinking fund
provisions, any other rights, preferences, privileges, limitations or
restrictions relating to the Preferred Securities and the terms upon which the
proceeds of the sale of the Preferred Securities shall be used to purchase a
specific series of Corresponding Junior Subordinated Debt Securities of the
Company. The Prospectus Supplement will also contain information, where
applicable, about certain United States Federal income tax considerations
relating to the Securities described in the Prospectus Supplement. All or a
portion of the Securities may be issued in permanent or temporary global form
(each a "Global Security").
The aggregate initial offering price of all Securities shall not exceed
$600,000,000 (or, if any Securities are issued (i) with any initial offering
price denominated in a foreign currency or currency unit, such amount as shall
result in aggregate gross proceeds equivalent to $600,000,000 at the time of
initial offering or (ii) at an original issue discount, such greater amount as
shall result in aggregate gross proceeds of $600,000,000).
The Securities may be sold through underwriters or dealers or may be sold
by the Company and/or each Applied Power Trust directly or through agents
designated from time to time. The names of any underwriters or agents involved
in the sale of the Securities in respect to which this Prospectus is being
delivered and their compensation will be set forth in the Prospectus Supplement.
________________
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR
THE ACCOMPANYING PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY UNDERWRITER, DEALER OR AGENT. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER
OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN OR IN THE ACCOMPANYING PROSPECTUS SUPPLEMENT IS
CORRECT AS OF ANY DATE
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<PAGE>
SUBSEQUENT TO THE DATE HEREOF OR THEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF. NEITHER THIS PROSPECTUS
NOR THE ACCOMPANYING PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY SECURITIES IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy or information statements and other information
with the Securities and Exchange Commission (the "Commission"), all of which may
be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549, and at the following Regional Offices of the Commission: Chicago
Regional Office, Suite 1400, Northwestern Atrium Center, 500 West Madison
Street, Chicago, Illinois 60661; and New York Regional Office, 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material can be
obtained at the prescribed rates from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549,
and accessed electronically at the web site maintained by the Commission
(http://www.sec.gov). Such material can also be inspected at the offices of the
New York Stock Exchange (the "NYSE"), 20 Broad Street, New York, New York 10005,
where the Class A Common Stock is listed (symbol "APW").
This Prospectus constitutes part of a Registration Statement on Form S-3
filed by the Company and the Applied Power Trusts with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Securities offered hereby. This Prospectus omits certain of the information
contained in the Registration Statement in accordance with the rules and
regulations of the Commission. Reference is hereby made to the Registration
Statement and related exhibits for further information with respect to the
Company and the Securities. Statements contained herein concerning the
provisions of any document are not necessarily complete and, in each instance,
where a copy of such document has been filed as an exhibit to the Registration
Statement or otherwise has been filed with the Commission, reference is made to
the copy of the applicable document so filed. Each such statement is qualified
in its entirety by such reference.
No separate financial statements of the Applied Power Trusts have been
included herein. The Company and the Applied Power Trusts do not consider that
such financial statements would be material to holders of the Preferred
Securities because (i) all of the voting securities of the Applied Power Trusts
will be owned, directly or indirectly, by the Company, a reporting company under
the Exchange Act, (ii) each Applied Power Trust is a newly formed special
purpose entity, has no operating history or independent operations and is not
engaged in and does not propose to engage in any activity other than holding as
trust assets the Corresponding Junior Subordinated Debt Securities of the
Company and issuing the Trust Securities and (iii) the Company's obligations
described herein and in any accompanying Prospectus Supplement, through the
applicable Guarantee Agreement (as defined herein), the applicable Trust
Agreement (as defined herein), the Corresponding Junior Subordinated Debt
Securities and the applicable Securities Resolution under the Indenture (as
defined herein), taken together, constitute a full, irrevocable and
unconditional guarantee by the Company of payments due on the Preferred
Securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It is only
the combined operation of these documents that has the effect of providing a
full, irrevocable and unconditional guarantee of the Applied Power Trust's
obligations under the Preferred Securities. See "The Applied Power Trusts,"
"Description of Preferred Securities," "Description of Debt Securities --
Certain Provisions Relating to Corresponding Junior Subordinated Debt
Securities" and "Description of Guarantees."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company (Commission File
No. 1-11288) with the Commission pursuant to the Exchange Act are incorporated
herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
August 31, 1998;
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
November 30, 1998;
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<PAGE>
(c) The Company's Current Report on Form 8-K dated September 29, 1998 and
Amendment No. 1 thereto on Form 8-K/A filed December 11, 1998; and
(d) The description of the Class A Common Stock contained in the Company's
Current Report on Form 8-K dated August 12, 1998 filed for the purpose
of updating and superseding the description of the Class A Common
Stock contained in the Company's Registration Statement on Form 8-A
filed on August 11, 1987, as previously updated by the Company's
Current Report on Form 8-K dated January 28, 1991.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the Securities made hereby shall
be deemed to be incorporated by reference into this Prospectus from the date of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, including any beneficial owner of Securities, upon
the written or oral request of any such person, a copy of any and all of the
documents that have been or may be incorporated by reference herein, other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into such documents). Such requests should be directed to Investor
Relations, Applied Power Inc., 13000 West Silver Spring Drive, Butler, Wisconsin
53007 (telephone: (414) 783-9279).
________________
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$", "dollars" or
"U.S.$").
FORWARD-LOOKING STATEMENTS AND CAUTIONARY FACTORS
This Prospectus and any Prospectus Supplement (including the documents
incorporated herein or therein by reference) may contain statements that
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Prospective investors are cautioned
that any such forward-looking statements are not guarantees of future
performance and involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements to differ
materially from the future results, performance or achievements expressed or
implied in such forward-looking statements. The words "anticipate," "believe,"
"estimate," "expect," "project," "objective" and similar expressions are
intended to identify forward-looking statements. In addition to the assumptions
and other factors referred to specifically in connection with such statements,
factors that could cause the Company's actual results to differ materially from
those contemplated in the forward-looking statements include factors described
under the caption "Risk Factors That May Affect Future Results" or similar
cautionary captions in the documents incorporated herein by reference.
THE COMPANY
The Company, a Wisconsin corporation incorporated in 1910, is a diversified
global company engaged in the business of providing tools, equipment, systems
and supply items to a variety of end-users and original equipment manufacturers
("OEMs") in the manufacturing, computer, semiconductor, telecommunication,
datacom, construction, electrical, transportation, recreational vehicle, natural
resources, aerospace, defense, and other industries.
The Company's operations are divided into three business segments:
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<PAGE>
. Enclosure Products and Systems
------------------------------
Electronic enclosure products, systems and technical environment
solutions sold into the telecommunications, computer networking,
semiconductor equipment, medical, electronic and manufacturing
environments.
. Engineered Solutions
--------------------
Motion, vibration control and magnetic applications and systems
primarily for OEM customers.
. Tools and Supplies
------------------
Industrial and electrical tools and supplies sold primarily through
distributors and mass merchandisers.
ENCLOSURE PRODUCTS AND SYSTEMS
Enclosure Products and Systems ("EPS"), formerly known as Technical
Environments and Enclosures, provides users and manufacturers of electronic
equipment with technical furniture and electronic enclosure products and
systems. Technical furniture, sold primarily under the Wright Line brand name,
is used to configure the environment in which computers reside, including
computer room, manufacturing or technical office environments. Electronic
enclosure products are cabinets, racks and subracks that are sold under the
Stantron and VERO brand names. Other products include backplanes, power
supplies and cases sold under the VERO, Danica and ZERO Halliburton (R) brand
names, respectively. In addition to providing standard products, EPS sells
customized electronic enclosure systems allowing the Company to provide
completely integrated and tested products to a wide array of customers including
the telecommunication, computer networking, semiconductor manufacturing
equipment and automated teller machines markets. The systems business is driven
by the desire of many producers of electronic components to outsource
manufacturing and it relies heavily on EPS' skills in new product development,
supply chain management, assembly and testing. EPS also has a global drop ship
capability. EPS products are primarily sold direct, with specific standard
products going through distribution in selected markets. EPS sales and
manufacturing locations are mainly in Europe and North America.
ENGINEERED SOLUTIONS
Engineered Solutions ("ES") is a technology based business providing
customized solutions to OEM customers in the truck, aerospace, automotive,
recreational vehicle, electrical/electronic enclosures and other general
industrial markets. ES possesses particular competence in hydraulic,
electromechanical, rubber/elastomer molding, magnetic, thermal systems and
electronic control techniques. Principal brand names that ES trades under
include McLean, Barry Controls, Power Gear, Power Packer, Vlier, Mox-Med and
Eder. The segment's sales, engineering and manufacturing activities are
primarily in Europe and North America. As an OEM supplier, ES operates as a
just-in-time supplier and maintains numerous quality certifications including
ISO 9001 and ISO 9000. Most ES sales are diversified by customer and end user
industry and are primarily sold through direct sales persons, with sales
representatives and distributors used in certain situations.
TOOLS AND SUPPLIES
Tools and Supplies ("TS") provides a wide array of electrical and
industrial tools and supplies to wholesale distributors, catalogs and various
retail channels of distribution. TS provides over 10,000 stock keeping units
("SKUs"), most of which are designed and manufactured by the Company in North
America. TS has particular expertise in hydraulic design and plastic injection
molding. The Company maintains a sophisticated sourcing operation to supply
additional products to supplement its own products and meet its customers'
needs. Principal brand names used by the Company include Enerpac, GB Gardner
Bender, Ancor, Calterm and Del City. End user markets include general
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<PAGE>
industrial, construction, retail marine, retail automotive, do-it-yourself and
production automation. To provide its customers with the service levels
required, TS maintains a sophisticated warehouse and physical distribution
capability in North America, Europe and Asia. Certain products are sold on an
OEM basis.
* * * * *
The Company has had an active acquisition program and regularly reviews
acquisition opportunities in the ordinary course of its business, some of which
may be material. Such opportunities may be under investigation, discussion, or
negotiation at any particular time or from time to time.
The Company's principal executive offices are located at 13000 West Silver
Spring Drive, Butler, Wisconsin 53007, and its telephone number is (414) 783-
9279.
USE OF PROCEEDS
Except as otherwise described in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Securities (other
than the Trust Securities) to refinance, in part, existing indebtedness and/or
for general corporate purposes. Funds not required immediately for such
purposes may be invested temporarily in short-term marketable securities. The
Company expects from time to time to continue to incur short-term and long-term
debt and to effect other financings, the amounts of which cannot now be
determined. Each Applied Power Trust will use all proceeds received from the
sale of its Trust Securities to purchase the applicable Corresponding Junior
Subordinated Debt Securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges for the Company for the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NOVEMBER 30, YEARS ENDED AUGUST 31,
------------------------------- -------------------------------
1998(1)(2) 1998(3) 1997 1996 1995 1994
--------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges (4) (5) 2.6 2.6 5.3 7.4 5.5 4.0
</TABLE>
___________________
(1) The Company's business has historically experienced the effects of
seasonality where the second half of the fiscal year generally produces
better results than the first half. The results for the first quarter ended
November 30, 1998, are not necessarily indicative of full year results.
(2) Net earnings for the three month period ended November 30, 1998, include a
one-time pre-tax contract termination charge of $7,824,000. Excluding this
charge and the related tax benefit, the ratio of earnings to fixed charges
would have been 3.1.
(3) 1998 net earnings include a non-recurring restructuring charge of
$52,637,000 which related to merger costs, various plant consolidations,
and other cost reductions and product rationalization efforts of the
Company. Excluding this charge and the related tax benefit, the ratio of
earnings to fixed charges would have been 4.6.
(4) The ratios reflect the combined results of operations and financial
position of the Company and ZERO Corporation, acquired by merger on July
31, 1998, restated for all periods presented pursuant to the pooling-of-
interests method of accounting, and reflect the results of other acquired
companies from their respective effective dates of acquisition in
accordance with the purchase method of accounting.
(5) For purposes of computing the ratio of earnings to fixed charges,
"earnings" consist of income before income taxes, cumulative effect of
change in accounting methods, discontinued operations, extraordinary items
and fixed charges. "Fixed charges" consist of interest on indebtedness,
amortization of debt expenses and one-third of rent expense which is deemed
representative of an interest factor.
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THE APPLIED POWER TRUSTS
Each Applied Power Trust is a statutory business trust created under
Delaware law pursuant to (i) a trust agreement executed by the Company, as
depositor of such Applied Power Trust, and the Issuer Trustees (as defined
herein) of such Applied Power Trust and (ii) a certificate of trust filed with
the Delaware Secretary of State. Each trust agreement will be amended and
restated in its entirety (each as so amended and restated, a "Trust Agreement")
substantially in the form filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. Each Trust Agreement will be qualified as
an indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). Each Applied Power Trust exists for the exclusive purposes of
(i) issuing and selling its Trust Securities, (ii) using the proceeds from the
sale of such Trust Securities to acquire a series of Corresponding Junior
Subordinated Debt Securities issued by the Company and (iii) engaging in only
those other activities necessary, convenient or incidental thereto. Each of the
Applied Power Trusts is a separate legal entity, and the assets of one will not
be available to satisfy the obligations of any other similar trust which may be
created.
All of the Common Securities of each Applied Power Trust will be owned by
the Company. The Common Securities of an Applied Power Trust will rank pari
passu, and payments will be made thereon pro rata, with the Preferred Securities
of such Applied Power Trust, except that upon the occurrence and continuance of
a Trust Event of Default (as defined herein) resulting from an Event of Default
with respect to Corresponding Junior Subordinated Debt Securities, the rights of
the Company as holder of the Common Securities to payment in respect of
Distributions and payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Preferred Securities of such
Applied Power Trust. See "Description of Preferred Securities -- Subordination
of Common Securities." The Company will acquire Common Securities in an
aggregate liquidation amount equal to not less than 3% of the total capital of
each Applied Power Trust.
Unless otherwise specified in the applicable Prospectus Supplement, each
Applied Power Trust has a term of approximately 50 years, but may dissolve
earlier as provided in the applicable Trust Agreement. Each Applied Power
Trust's business and affairs are conducted by its trustees, each appointed by
the Company as holder of the Common Securities. Unless otherwise specified in
the applicable Prospectus Supplement, the trustees for each Applied Power Trust
will be The First National Bank of Chicago, as the Property Trustee (the
"Property Trustee"), First Chicago Delaware Inc., as the Delaware Trustee (the
"Delaware Trustee"), and two individual trustees (the "Administrative Trustees")
who are employees or officers of or affiliated with the Company (collectively,
the "Issuer Trustees"). The First National Bank of Chicago, as Property
Trustee, will act as sole indenture trustee under each Trust Agreement for
purposes of compliance with the Trust Indenture Act. Unless otherwise specified
in the applicable Prospectus Supplement, The First National Bank of Chicago will
act as trustee under the Guarantee Agreement (as defined herein). See
"Description of Guarantees" and "Description of Debt Securities -- Certain
Provisions Relating to Corresponding Junior Subordinated Debt Securities." The
holder of the Common Securities of an Applied Power Trust, or the holders of a
majority in liquidation amount of the outstanding related Preferred Securities
if a Trust Event of Default resulting from an Event of Default with respect to
Corresponding Junior Subordinated Debt Securities for such Applied Power Trust
has occurred and is continuing, will be entitled to appoint, remove or replace
the Property Trustee and/or the Delaware Trustee for such Applied Power Trust.
In no event will the holders of the Preferred Securities have the right to vote
to appoint, remove or replace the Administrative Trustees; such voting rights
are vested exclusively in the holder of the Common Securities. The duties and
obligations of each Issuer Trustee are governed by the applicable Trust
Agreement. Pursuant to the Indenture, the Company, as borrower, will pay all
fees and expenses related to each Applied Power Trust and the offering of the
Preferred Securities and will pay, directly or indirectly, all ongoing costs,
expenses and liabilities of each Applied Power Trust.
The principal executive office of each Applied Power Trust is c/o Applied
Power Inc., 13000 West Silver Spring Drive, Butler, Wisconsin 53007, and its
telephone number is (414) 783-9279.
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DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued in one or more series under an Indenture
(the "Indenture") between the Company and The First National Bank of Chicago, as
trustee (the "Trustee"), the form of which is filed as an exhibit to the
Registration Statement. The Indenture will be subject to, and governed by, the
Trust Indenture Act. The following summary of certain provisions of the
Indenture does not purport to be complete and is qualified in its entirety by
express reference to the Indenture and the Securities Resolution (which may be
in the form of a resolution or a supplemental indenture) authorizing a series
(copies of which have been or will be filed with the Commission). All article
and section references herein are to the articles and sections of the Indenture,
and all capitalized terms used in this section without definition have the
meanings given such terms in the Indenture.
The Debt Securities will constitute senior, subordinated or junior
subordinated debt of the Company. The Debt Securities will be issued under one
or more separate Securities Resolutions for Senior Debt Securities, Subordinated
Debt Securities or Junior Subordinated Debt Securities. The particular terms of
the Debt Securities offered by a Prospectus Supplement will be described in such
Prospectus Supplement, along with any applicable modifications of or additions
to the general terms of the Debt Securities as described herein and in the
Indenture. Accordingly, for a description of the terms of any series of Debt
Securities, reference must be made to both the Prospectus Supplement relating
thereto and the description of the Debt Securities set forth in this Prospectus.
GENERAL
The Indenture does not limit the amount of Debt Securities that can be
issued thereunder and provides that the Debt Securities may be issued from time
to time in one or more series pursuant to the terms of one or more Securities
Resolutions creating such series. The Indenture does not restrict the amount of
debt that may be incurred by the Company or any subsidiary. The Indenture does
not contain any covenant or other provision that is specifically intended to
afford any Holder special protection in the event of highly leveraged
transactions or any other transactions resulting in a decline in the ratings or
credit quality of the Company. As of the date of this Prospectus, there were no
Debt Securities outstanding under the Indenture. The ranking of a series of
Debt Securities with respect to all indebtedness of the Company will be
established by the Securities Resolution creating such series. As of November
30, 1998, approximately $872 million of existing indebtedness of the Company
would have ranked pari passu with the Senior Debt Securities and senior to the
Subordinated Debt Securities and the Junior Subordinated Debt Securities and
there was no existing indebtedness of the Company that would have ranked pari
passu with the Subordinated Debt Securities and senior to the Junior
Subordinated Debt Securities. Although the Indenture provides for the possible
issuance of Debt Securities in other forms or currencies, the only Debt
Securities covered by this Prospectus will be Debt Securities denominated in
U.S. dollars in registered form without coupons unless otherwise indicated in
the applicable Prospectus Supplement.
TERMS
Reference is made to the Prospectus Supplement for the following terms, if
applicable, of the Debt Securities offered thereby: (1) the designation,
aggregate principal amount, currency or composite currency and denominations;
(2) the price at which such Debt Securities will be issued and, if an index,
formula or other method is used, the method for determining amounts of principal
or interest; (3) the maturity date and other dates, if any, on which principal
will be payable; (4) the interest rate or rates, if any, or method of
calculating the interest rate or rates; (5) the date or dates from which
interest will accrue and on which interest will be payable, and the record dates
for the payment of interest; (6) the manner of paying principal and interest;
(7) the place or places where principal and interest will be payable; (8) the
terms of any mandatory or optional redemption by the Company including any
sinking fund; (9) the terms of any conversion or exchange right; (10) the terms
of any redemption at the option of Holders; (11) any tax indemnity provisions;
(12) if the Debt Securities provide that payments of principal or interest may
be made in a currency other than that in which Debt Securities are denominated,
the manner for determining such payments; (13) the portion of principal payable
upon acceleration of a Discounted Debt Security (as defined below); (14) whether
and upon what terms Debt Securities may be defeased; (15) whether any events of
default or covenants in addition to or in lieu of those set forth in the
Indenture apply; (16) provisions for electronic issuance of Debt Securities or
for Debt Securities in uncertificated form; (17) the ranking of the Debt
Securities, including the relative degree, if any, to which the Debt
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<PAGE>
Securities of such series shall be subordinated to one or more other series of
Debt Securities in right of payment, whether outstanding or not; (18) any
provisions relating to extending or shortening the date on which the principal
and premium, if any, of the Debt Securities of such series is payable; (19) any
provisions relating to the deferral of payment of any interest; (20) if such
Debt Securities are to be issued to an Applied Power Trust, the forms of the
related trust agreement and guarantee agreement relating thereto; (21) the
additions or changes, if any, to the Indenture with respect to the Debt
Securities of such series as shall be necessary to permit or facilitate the
issuance of such Debt Securities to an Applied Power Trust; and (22) any other
terms not inconsistent with the provisions of the Indenture, including any
covenants or other terms that may be required or advisable under United States
or other applicable laws or regulations, or advisable in connection with the
marketing of the Debt Securities. (Section 2.01)
Debt Securities of any series may be issued as registered Debt Securities,
bearer Debt Securities or uncertificated Debt Securities, and in such
denominations as specified in the terms of the series. (Section 2.01)
In connection with its original issuance, no bearer Debt Security will be
offered, sold or delivered to any location in the United States, and a bearer
Debt Security in definitive form may be delivered in connection with its
original issuance only upon presentation of a certificate in a form prescribed
by the Company to comply with United States laws and regulations. (Section
2.04)
Registration of transfer of registered Debt Securities may be requested
upon surrender thereof at any agency of the Company maintained for that purpose
and upon fulfillment of all other requirements of the agent. (Sections 2.03 and
2.07)
Debt Securities may be issued under the Indenture as Discounted Debt
Securities to be offered and sold at a substantial discount from the principal
amount thereof. Special United States federal income tax and other
considerations applicable thereto will be described in the Prospectus Supplement
relating to such Discounted Debt Securities. "Discounted Debt Security" means a
Debt Security where the amount of principal due upon acceleration is less than
the stated principal amount. (Sections 1.01 and 2.10)
CONVERSION AND EXCHANGE
The terms, if any, on which Debt Securities of any series will be
convertible into or exchangeable for Class A Common Stock, Preferred Stock,
Preferred Securities or other securities, property, cash or obligations or a
combination of any of the foregoing, will be summarized in the Prospectus
Supplement relating to such series. Such terms may include provisions for
conversion or exchange, either on a mandatory basis, at the option of the Holder
or at the option of the Company.
CERTAIN COVENANTS
Any restrictive covenants which may apply to a particular series of Debt
Securities will be described in the Prospectus Supplement relating thereto.
RANKING OF DEBT SECURITIES
Unless stated otherwise in a Prospectus Supplement, the Debt Securities
will be unsecured and will rank equally and ratably with other unsecured and
unsubordinated debt of the Company. The Debt Securities will not be secured by
any properties or assets and will represent unsecured debt of the Company. The
Indenture does not limit the ability of any of the Company's subsidiaries to
issue debt, and the Debt Securities will be effectively subordinated to all
existing and future indebtedness and other liabilities and commitments of the
Company's subsidiaries.
SUCCESSOR OBLIGOR
The Indenture provides that, unless otherwise specified in the Securities
Resolution establishing a series of Debt Securities, the Company shall not
consolidate with or merge into, or transfer all or substantially all of its
assets to, any person in any transaction in which the Company is not the
survivor, unless: (1) the person is organized under the laws
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<PAGE>
of the United States or a State thereof; (2) the person assumes by supplemental
indenture all the obligations of the Company under the Indenture, the Debt
Securities and any coupons; (3) all required approvals of any regulatory body
having jurisdiction over the transaction shall have been obtained; and (4)
immediately after the transaction no Default (as defined below) exists. The
successor shall be substituted for the Company, and thereafter all obligations
of the Company under the Indenture, the Debt Securities and any coupons shall
terminate. (Section 5.01)
EXCHANGE OF DEBT SECURITIES
Registered Debt Securities may be exchanged for an equal aggregate
principal amount of registered Debt Securities of the same series and date of
maturity in such authorized denominations as may be requested upon surrender of
the registered Debt Securities at an agency of the Company maintained for such
purpose and upon fulfillment of all other requirements of such agent. (Section
2.07)
DEFAULTS AND REMEDIES
Unless the Securities Resolution establishing the series otherwise provides
(in which event the Prospectus Supplement will so state), an "Event of Default"
with respect to a series of Debt Securities will occur if:
(1) the Company defaults in any payment of interest on any Debt Securities
of such series when the same becomes due and payable and the Default continues
for a period of 30 days;
(2) the Company defaults in the payment of the principal and premium, if
any, of any Debt Securities of the series when the same becomes due and payable
at maturity or upon redemption, acceleration or otherwise;
(3) the Company defaults in the payment or satisfaction of any sinking
fund obligation with respect to any Debt Securities of the series as required by
the Securities Resolution establishing such series;
(4) the Company defaults in the performance of any of its other agreements
applicable to the series and the Default continues for 60 days after the notice
specified below;
(5) the Company pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian for it or for all
or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(6) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case,
(B) appoints a Custodian for the Company or for all or
substantially all of its property, or
(C) orders the liquidation of the Company,
and the order or decree remains unstayed and in effect for 60 days; or
(7) there occurs any other Event of Default provided for in such series.
(Section 6.01)
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<PAGE>
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar federal
or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or a similar official under any
Bankruptcy Law. (Section 6.01)
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default. A Default under subparagraph (4) above is not an
Event of Default until the Trustee or the Holders of at least 25% in principal
amount of the series notify the Company of the Default and the Company does not
cure the Default within the time specified after receipt of the notice.
(Section 6.01) If an Event of Default occurs and is continuing on a series, the
Trustee by notice to the Company, or the Holders of at least 25% in principal
amount of the series (or, in the case of a series issued to an Applied Power
Trust, so long as any of the related Preferred Securities of such Applied Power
Trust remain outstanding, if, upon such Event of Default, the Trustee or the
Holders of not less than 25% in aggregate principal amount of such series fail
to declare the principal of all the Debt Securities of such series to be so
immediately due and payable, the holders of 25% in aggregate liquidation amount
of such Preferred Securities then outstanding shall have such right) by notice
to the Company and the Trustee, may declare the principal of and accrued
interest on all the Debt Securities of the series to be due and payable
immediately. Discounted Debt Securities may provide that the amount of
principal due upon acceleration is less than the stated principal amount. The
Holders of a majority in principal amount of the series, by notice to the
Trustee, may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default on the series have been cured or waived except nonpayment of principal
or interest that has become due solely because of the acceleration; provided,
that in the case of a series issued to an Applied Power Trust, so long as any of
the related Preferred Securities of such Applied Power Trust remain outstanding,
the holders of a majority in aggregate liquidation amount of such Preferred
Securities then outstanding shall also have such right to rescission of
acceleration and its consequences with respect to such series, subject to
the same conditions set forth above. (Section 6.02) If an Event of Default
occurs and is continuing on a series, the Trustee may pursue any available
remedy to collect principal or interest then due on the series, to enforce the
performance of any provision applicable to the series, or otherwise to protect
the rights of the Trustee and Holders of the series. (Section 6.03)
In the case of a series issued to an Applied Power Trust, any holder of the
related Preferred Securities of such Applied Power Trust shall have the right,
upon the occurrence and continuance of an Event of Default described in clauses
(1) and (2) of the first paragraph of this subsection with respect to such
series, to institute a suit directly against the Company to enforce payment to
such holder of the principal of, and premium, if any, and interest on, the Debt
Securities having a principal amount equal to the aggregate liquidation amount
of such Preferred Securities held by such holder. (Section 6.06)
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Debt Securities of the series. (Section 7.01) Subject to
certain limitations, Holders of a majority in principal amount of the Debt
Securities of the series may direct the Trustee in its exercise of any trust or
power with respect to such series. (Section 6.05) Except in the case of Default
in payment on a series, the Trustee may withhold from Holders of such series
notice of any continuing Default if it determines that withholding the notice is
in the interest of Holders of the series. (Section 7.04) The Company is
required to furnish the Trustee annually a brief certificate as to the Company's
compliance with all conditions and covenants under the Indenture. (Section
4.04)
The Indenture does not have a cross-default provision. Thus, a default by
the Company on any other debt, including any other series of Debt Securities,
would not constitute an Event of Default. A Securities Resolution may provide
for a cross-default provision, in which case the Prospectus Supplement will
describe the terms thereof.
AMENDMENTS AND WAIVERS
The Indenture and the Debt Securities or any coupons of the series may be
amended, and any default may be waived as follows: Unless the Securities
Resolution otherwise provides (in which event the Prospectus Supplement will so
state), the Company and the Trustee may amend the Debt Securities, the Indenture
and any coupons with the written consent of the Holders of a majority in
principal amount of the Debt Securities of all series affected voting as one
class; provided that, in the case of a series issued to an Applied Power Trust,
so long as any of the related Preferred Securities of such Applied Power Trust
remain outstanding, no such amendment shall be made that adversely affects the
holders
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<PAGE>
of such Preferred Securities in any material respect, and no termination of the
Indenture shall occur, without the prior consent of the holders of not less than
a majority in aggregate liquidation amount of such Preferred Securities then
outstanding unless and until the principal (and premium, if any) of the Debt
Securities of such series and all accrued and unpaid interest thereon have been
paid in full; and provided further that, in the case of a series issued to an
Applied Power Trust, so long as any of the related Preferred Securities of such
Applied Power Trust remain outstanding, no amendment shall be made to the
provisions of the Indenture described in the fourth paragraph under "Defaults
and Remedies" above without the prior consent of the holders of each such
Preferred Security then outstanding unless and until the principal (and premium,
if any) of the Debt Securities of such series and all accrued and unpaid
interest thereon have been paid in full. (Section 10.02) Unless the Securities
Resolution otherwise provides (in which event the Prospectus Supplement will so
state), a Default on a particular series may be waived with the consent of the
Holders of a majority in principal amount of the Debt Securities of the series
(or, in the case of a series issued to an Applied Power Trust, so long as any of
the related Preferred Securities of such Applied Power Trust remain outstanding,
the holders of a majority in aggregate liquidation amount of such Preferred
Securities then outstanding). (Section 6.04) However, without the consent of
each Debt Security holder affected, no amendment or waiver may (1) reduce the
amount of Debt Securities whose Holders must consent to an amendment or waiver,
(2) reduce the interest on or change the time for payment of interest on any
Debt Security, (3) change the fixed maturity of any Debt Security, (4) reduce
the principal of any non-Discounted Debt Security or reduce the amount of the
principal of any Discounted Debt Security that would be due on acceleration
thereof, (5) change the currency in which the principal or interest on a Debt
Security is payable, (6) make any change that materially adversely affects the
right to convert or exchange any Debt Security, or (7) waive any Default in
payment of interest on or principal of a Debt Security. (Sections 6.04 and
10.02) Without the consent of any Debt Security holder, the Company and the
Trustee may amend the Indenture, the Debt Securities or any coupons to cure any
ambiguity, omission, defect, or inconsistency; to provide for assumption of
Company obligations to Debt Securityholders in the event of a merger or
consolidation requiring such assumption; to provide that specific provisions of
the Indenture shall not apply to a series of Debt Securities not previously
issued; to create a series and establish its terms; to provide for a separate
Trustee for one or more series; or to make any change that does not materially
adversely affect the rights of any Debt Security holder. (Section 10.01)
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Debt Securities of a series may be defeased in accordance with their terms
and, unless the Securities Resolution establishing the terms of the series
otherwise provides, as set forth in the Indenture and described briefly below.
The Company at any time may terminate as to a series all of its obligations
(except for certain obligations, including obligations with respect to the
defeasance trust and obligations to register the transfer or exchange of a Debt
Security, to replace destroyed, lost or stolen Debt Securities and coupons, and
to maintain paying agencies in respect of the Debt Securities) with respect to
the Debt Securities of the series and any related coupons and the Indenture
("legal defeasance"). The Company at any time may terminate as to a series its
obligations, if any, with respect to the Debt Securities and coupons of the
series under any restrictive covenants which may be applicable to a particular
series ("covenant defeasance").
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option, a series may not be accelerated because of an Event of
Default. If the Company exercises its covenant defeasance option, a series may
not be accelerated by reference to any restrictive covenants which may be
applicable to a particular series. (Section 8.01)
To exercise either defeasance option as to a series, the Company must (i)
irrevocably deposit in trust (the "defeasance trust") with the Trustee or
another trustee money or U.S. Government Obligations, (ii) deliver a certificate
from a nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due on the deposited
U.S. Government Obligations, without reinvestment, plus any deposited money
without investment will provide cash at such times and in such amounts as will
be sufficient to pay the principal and interest when due on all Debt Securities
of such series to maturity or redemption, as the case may be, and (iii) comply
with certain other conditions. In particular, the Company must obtain an
opinion of tax counsel that the defeasance will not result in recognition of any
gain or loss to Holders for federal income tax purposes. "U.S. Government
Obligations" means direct obligations of the United States or an agency or
instrumentality of the United States, the payment of which is unconditionally
guaranteed by the United States, which, in either case, have the full faith and
credit of the United
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States of America pledged for payment and which are not callable at the issuer's
option, or certificates representing an ownership interest in such obligations.
(Section 8.02)
CERTAIN PROVISIONS RELATING TO CORRESPONDING JUNIOR SUBORDINATED DEBT SECURITIES
General. The Corresponding Junior Subordinated Debt Securities may be
issued in one or more series of Junior Subordinated Debt Securities under the
Indenture with terms corresponding to the terms of a series of related Preferred
Securities. Concurrently with the issuance of each Applied Power Trust's
Preferred Securities, such Applied Power Trust will invest the proceeds thereof
and the consideration paid by the Company for the Common Securities in a series
of Corresponding Junior Subordinated Debt Securities issued by the Company to
such Applied Power Trust. Each series of Corresponding Junior Subordinated Debt
Securities will be in the principal amount equal to the aggregate stated
Liquidation Amount of the related Preferred Securities and the Common Securities
of such Applied Power Trust and will rank pari passu with all other series of
Junior Subordinated Debt Securities. Holders of the related Preferred
Securities for a series of Corresponding Junior Subordinated Debt Securities
will have the rights in connection with modifications to the Indenture or upon
occurrence of a Trust Event of Default (as defined under "Description of
Preferred Securities -- Events of Default; Notice") relating to Corresponding
Junior Subordinated Debt Securities described under "-- Amendments and Waivers,"
"-- Defaults and Remedies," and "-- -- Enforcement of Certain Rights by Holders
of Preferred Securities," unless provided otherwise in the Prospectus Supplement
for such related Preferred Securities.
Unless otherwise specified in the applicable Prospectus Supplement, the
Company will covenant, as to each series of Corresponding Junior Subordinated
Debt Securities, (i) to maintain, directly or indirectly, 100% ownership of the
Common Securities of the Applied Power Trust to which Corresponding Junior
Subordinated Debt Securities have been issued, provided that certain successors
which are permitted pursuant to the Indenture may succeed to the Company's
ownership of the Common Securities, (ii) not to voluntarily dissolve, wind-up or
liquidate any Applied Power Trust, except (a) in connection with a distribution
of Corresponding Junior Subordinated Debt Securities to the holders of the
Preferred Securities in liquidation of such Applied Power Trust or (b) in
connection with certain mergers, consolidations or amalgamations permitted by
the related Trust Agreement and (iii) to use its reasonable efforts, consistent
with the terms and provisions of the related Trust Agreement, to cause such
Applied Power Trust to remain classified as a grantor trust and not as an
association taxable as a corporation for United States Federal income tax
purposes. For additional covenants relating to payment of certain expenses of
the Applied Power Trusts, see "Description of Preferred Securities -- Payment of
Expenses."
Option to Extend Interest Payment Date. If provided in the applicable
Prospectus Supplement, the Company shall have the right at any time and from
time to time during the term of any series of Corresponding Junior Subordinated
Debt Securities to defer payment of interest for such number of consecutive
interest payment periods as may be specified in the applicable Prospectus
Supplement (each, an "Extension Period"), subject to the terms, conditions and
covenants, if any, specified in such Prospectus Supplement, provided that such
Extension Period may not extend beyond the maturity date of such series of
Corresponding Junior Subordinated Debt Securities. Certain United States
Federal income tax consequences and special considerations applicable to any
such Corresponding Junior Subordinated Debt Securities will be described in the
applicable Prospectus Supplement.
Redemption. Unless otherwise indicated in the applicable Prospectus
Supplement, the Company may, at its option, redeem the Corresponding Junior
Subordinated Debt Securities of any series in whole at any time or in part from
time to time. Corresponding Junior Subordinated Debt Securities may be redeemed
in the denominations as set forth in the applicable Prospectus Supplement.
Except as otherwise specified in the applicable Prospectus Supplement, the
redemption price for any Corresponding Junior Subordinated Debt Security so
redeemed shall equal any accrued and unpaid interest thereon to the redemption
date, plus the principal amount thereof. Unless otherwise specified in the
applicable Prospectus Supplement, the Company may not redeem a series of
Corresponding Junior Subordinated Debt Securities in part unless all accrued and
unpaid interest has been paid in full on all outstanding Corresponding Junior
Subordinated Debt Securities of such series for all interest periods terminating
on or prior to the redemption date.
Except as otherwise specified in the applicable Prospectus Supplement, if a
Junior Subordinated Debt Security Tax Event (as defined below) or an Investment
Company Event (as defined below) in respect of an Applied Power Trust
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shall occur and be continuing, the Company may, at its option, redeem the
Corresponding Junior Subordinated Debt Securities held by such Applied Power
Trust at any time within 90 days of the occurrence of such Junior Subordinated
Debt Security Tax Event or Investment Company Event, in whole but not in part,
subject to the provisions of the applicable Securities Resolution. The
redemption price for any such Corresponding Junior Subordinated Debt Securities
shall be equal to 100% of the principal amount of such Corresponding Junior
Subordinated Debt Securities then outstanding plus accrued and unpaid interest
to the date fixed for redemption. For so long as the applicable Applied Power
Trust is the holder of all such outstanding Corresponding Junior Subordinated
Debt Securities, the proceeds of any such redemption will be used by the Applied
Power Trust to redeem the corresponding Trust Securities in accordance with
their terms.
"Junior Subordinated Debt Security Tax Event" means the receipt by the
applicable Applied Power Trust of an opinion of counsel experienced in such
matters to the effect that, as a result of any amendment to, or change
(including any announced proposed change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or as a result of any official administrative
written decision, pronouncement or action or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which proposed change, pronouncement, action or decision is announced on or
after the date of issuance of the applicable series of Corresponding Junior
Subordinated Debt Securities pursuant to the applicable Securities Resolution,
there is more than an insubstantial risk that (i) the applicable Applied Power
Trust is, or will be within 90 days of the date of such opinion, subject to
United States Federal income tax with respect to income received or accrued on
the corresponding series of Corresponding Junior Subordinated Debt Securities,
(ii) interest payable by the Company on such series of Corresponding Junior
Subordinated Debt Securities is not, or within 90 days of the date of such
opinion, will not be, deductible by the Company, in whole or in part, for United
States Federal income tax purposes or (iii) the applicable Applied Power Trust
is, or will be within 90 days of the date of such opinion, subject to more than
a de minimis amount of other taxes, duties or other governmental charges.
"Investment Company Event" means the receipt by the applicable Applied
Power Trust of an opinion of counsel experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation or a change
in interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in the Investment
Company Act"), the applicable Applied Power Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), which Change in
the Investment Company Act becomes effective on or after the date of original
issuance of the series of Preferred Securities issued by the Applied Power
Trust.
Restrictions on Certain Payments. The Company will, unless otherwise
provided in the applicable Prospectus Supplement, covenant, as to each series of
Corresponding Junior Subordinated Debt Securities, that it will not, and will
not permit any subsidiary of the Company to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock or (ii) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Company (including other Corresponding Junior
Subordinated Debt Securities) that rank pari passu with or junior in interest to
the Corresponding Junior Subordinated Debt Securities or make any guarantee
payments with respect to any guarantee by the Company of the debt securities of
any subsidiary of the Company if such guarantee ranks pari passu or junior in
interest to the Corresponding Junior Subordinated Debt Securities (other than
(a) dividends or distributions in common stock of the Company, (b) redemptions
or purchases of any rights pursuant to the Company's shareholder rights plan
("Rights Agreement"), if any, or any successor to such Rights Agreement, and the
declaration of a dividend of such rights or the issuance of stock under a Rights
Agreement in the future, (c) payments under any Guarantee and (d) purchases of
common stock related to the issuance of common stock under any of the Company's
benefit plans for its directors, officers or employees) if at such time (A)
there shall have occurred any event of which the Company has actual knowledge
(a) that with the giving of notice or the lapse of time, or both, would
constitute an Event of Default under the Indenture with respect to the
Corresponding Junior Subordinated Debt Securities of such series and (b) in
respect of which the Company shall not have taken reasonable steps to cure, (B)
if such Corresponding Junior Subordinated Debt Securities are held by an Applied
Power Trust which is the issuer of a series of related Preferred Securities, the
Company shall be in default with respect to its payment of any obligations under
the Guarantee relating to such related Preferred Securities or (C) the Company
shall have given notice of its selection of an Extension Period as provided
pursuant to the Securities Resolution with respect to the Corresponding Junior
Subordinated Debt Securities
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of such series and shall not have rescinded such notice, or such Extension
Period, or any extension thereof, shall be continuing.
Enforcement of Certain Rights by Holders of Preferred Securities. If an
Event of Default with respect to a series of Corresponding Junior Subordinated
Debt Securities has occurred and is continuing and such event is attributable to
the failure of the Company to pay principal of or premium, if any, or interest,
if any, on such series of Corresponding Junior Subordinated Debt Securities on
the date such interest, premium or principal is otherwise payable, a holder of
related Preferred Securities may institute a legal proceeding directly against
the Company for enforcement of payment to such holder of the principal of or
premium, if any, or interest, if any, on such Corresponding Junior Subordinated
Debt Securities having a principal amount equal to the aggregate Liquidation
Amount of the related Preferred Securities of such holder (a "Direct Action").
The Company may not amend the Indenture to remove the foregoing right to bring a
Direct Action without the prior written consent of the holders of all of the
Preferred Securities. If the right to bring a Direct Action is removed, the
applicable Applied Power Trust may become subject to the reporting obligations
under the Exchange Act. The Company shall have the right pursuant to the
Indenture to set-off any payment made to such holder of Preferred Securities by
the Company in connection with a Direct Action. Unless otherwise specified in
the applicable Prospectus Supplement, the holders of the related Preferred
Securities will not be able to exercise directly any remedies other than those
set forth in this paragraph available to the holders of the Corresponding Junior
Subordinated Debt Securities.
REGARDING THE TRUSTEE
The First National Bank of Chicago will act as Trustee and Registrar for
Debt Securities issued under the Indenture and, unless otherwise indicated in a
Prospectus Supplement, the Trustee will also act as Transfer Agent and Paying
Agent with respect to the Debt Securities. (Section 2.03) The Company may
remove the Trustee with or without cause if the Company so notifies the Trustee
three months in advance and if no Default occurs during the three-month period.
(Section 7.07) The Trustee, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
affiliates, and may otherwise deal with the Company or its affiliates, as if it
were not Trustee.
DESCRIPTION OF WARRANTS TO PURCHASE DEBT SECURITIES
The following statements with respect to Warrants to purchase Debt
Securities (the "Debt Warrants") are summaries of, and subject to, the detailed
provisions of a Debt Warrant Agreement (the "Debt Warrant Agreement") to be
entered into by the Company and a warrant agent to be selected at the time of
issue (the "Debt Warrant Agent"), a form of which will be filed with the
Commission.
GENERAL
The Debt Warrants, evidenced by Debt Warrant certificates (the "Debt
Warrant Certificates"), may be issued under the Debt Warrant Agreement
independently or together with any Securities offered by any Prospectus
Supplement and may be attached to or separate from such Securities. If Debt
Warrants are offered, the Prospectus Supplement will describe the terms of the
Debt Warrants, including the following: (i) the offering price, if any; (ii) the
designation, aggregate principal amount, and terms of the Debt Securities
purchasable upon exercise of the Debt Warrants; (iii) if applicable, the
designation and terms of the Securities with which the Debt Warrants are issued
and the number of Debt Warrants issued with each such Security; (iv) if
applicable, the date on and after which the Debt Warrants and the related
Securities will be separately transferable; (v) the principal amount of Debt
Securities purchasable upon exercise of one Debt Warrant and the price at which
such principal amount of Debt Securities may be purchased upon such exercise;
(vi) the date on which the right to exercise the Debt Warrants shall commence
and the date on which such right shall expire; (vii) Federal income tax
consequences; (viii) whether the Debt Warrants represented by the Debt Warrant
Certificates will be issued in registered or bearer form; and (ix) any other
terms of the Debt Warrants.
Debt Warrant Certificates may be exchanged for new Debt Warrant
Certificates of different denominations and may (if in registered form) be
presented for registration of transfer at the corporate trust office of the Debt
Warrant Agent or any Co-Debt Warrant Agent, which will be identified in the
Prospectus Supplement, or at such other office
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as may be set forth therein. Holders of Debt Warrants do not have any of the
rights of Holders of Debt Securities (except to the extent that the consent of
holders of Debt Warrants may be required for certain modifications of the terms
of the Indenture and the series of Debt Securities issuable upon exercise of the
Debt Warrants) and are not entitled to payments of principal of and interest, if
any, on such Debt Securities.
EXERCISE OF WARRANTS TO PURCHASE DEBT SECURITIES
Debt Warrants may be exercised by surrendering the Debt Warrant Certificate
at the corporate trust office of the Debt Warrant Agent or at the corporate
trust office of the Co-Debt Warrant Agent, if any, with the form of election to
purchase on the reverse side of the Debt Warrant Certificate properly completed
and executed, and by payment in full of the exercise price, as set forth in the
Prospectus Supplement. Upon the exercise of Debt Warrants, the Debt Warrant
Agent or Co-Debt Warrant Agent, if any, will, as soon as practicable, deliver
the Debt Securities in authorized denominations in accordance with the
instructions of the holder exercising the Debt Warrant and at the sole cost and
risk of such holder. If less than all of the Debt Warrants evidenced by the
Debt Warrant Certificate are exercised, a new Debt Warrant Certificate will be
issued for the remaining amount of Debt Warrants.
DESCRIPTION OF PREFERRED STOCK AND COMMON STOCK
The following summary does not purport to be a complete description of the
applicable provisions of the Company's Restated Articles of Incorporation (the
"Articles") and Amended and Restated Bylaws (the "Bylaws"), as amended from time
to time, copies of which have been or will be filed with the Commission, or of
applicable statutory or other law, and is qualified in its entirety by reference
thereto.
The authorized capital stock of the Company as of November 30, 1998,
consisted of 80,000,000 shares of Class A Common Stock, $.20 par value ("Class A
Common Stock"), of which 38,674,551 shares were issued and outstanding;
7,500,000 shares of Class B Common Stock, $.20 par value ("Class B Common
Stock"), none of which were issued and outstanding; and 800,000 shares of
Cumulative Preferred Stock, $1.00 par value ("Preferred Stock"), none of which
have been issued. Class A Common Stock and Class B Common Stock are
collectively referred to herein as "Common Stock."
PREFERRED STOCK
The Preferred Stock may be issued in one or more series providing for such
dividend rates, voting, liquidation, redemption, and conversion rights, and such
other terms and conditions as the Board of Directors of the Company may
determine, without further approval by holders of Common Stock. If any shares
of Class B Common Stock were outstanding, any voting rights conferred on holders
of Preferred Stock would be limited, with respect to the election of directors,
to the power to vote together with holders of Class A Common Stock in electing a
"maximum minority" of the Board of Directors, as described under "Common Stock"
below.
If the Company issues any shares of Preferred Stock, the Company would be
permitted to pay dividends or make other distributions upon the Common Stock
(except for distributions payable in shares of Common Stock) only after paying
or setting apart funds for payment of current dividends and any accrued but
unpaid dividends upon the outstanding Preferred Stock, at the rate or rates
designated for each series of outstanding Preferred Stock, and making provision
for any mandatory sinking fund payments. In the event of voluntary or
involuntary liquidation of the Company, the holders of any outstanding Preferred
Stock would be entitled to receive all accrued dividends on the Preferred Stock
and the liquidation amount specified for each series of Preferred Stock before
any amount may be distributed to holders of the Common Stock.
Each series of Preferred Stock will have such designation, preferences,
limitations and relative rights as shall be stated in the resolution or
resolutions providing for the designation and issue of such series adopted by
the Board of Directors (or any duly authorized committee thereof). The
amendment to the Articles setting forth the terms of each series will be filed
with the Commission in connection with the offering of such series of Preferred
Stock. The Prospectus Supplement relating to an offering of Preferred Stock (or
securities convertible into Preferred Stock) will
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describe terms relevant thereto including the number of shares offered, the
initial offering price and the relative rights and preferences of the shares of
such series.
Under the Articles, all shares of Preferred Stock shall be identical except
as to the following relative rights and preferences, as to which the Board of
Directors may establish variations between different series not inconsistent
with other provisions in the Articles: (a) the dividend rate; (b) the price at
and terms and conditions on which shares may be redeemed; (c) the amount payable
upon shares in the event of voluntary or involuntary liquidation; (d) sinking
fund provisions for the redemption or purchase of shares; (e) the terms and
conditions on which shares may be converted into Common Stock, if the shares of
any series are issued with the privilege of conversion; and (f) voting rights,
if any, subject to the provisions regarding voting rights described herein.
As described under "Description of Depositary Shares," the Company may, at
its option, elect to offer depositary shares ("Depositary Shares") evidenced by
depositary receipts ("Depositary Receipts"), each representing an interest (to
be specified in the Prospectus Supplement relating to the particular series of
the Preferred Stock) in a share of the particular series of the Preferred Stock
issued and deposited with a Preferred Stock Depositary (as defined below).
The holders of Preferred Stock will have no preemptive rights. Under the
Articles, each series of Preferred Stock will, with respect to dividend rights
and rights on liquidation, dissolution and winding up of the Company, rank prior
to the Common Stock and on a parity with each other series of Preferred Stock.
COMMON STOCK
The rights and preferences of shares of Class A Common Stock and Class B
Common Stock are identical, except as to voting power with respect to the
election of directors and conversion rights.
On all matters other than the election of directors, the holders of Class A
Common Stock and Class B Common Stock possess equal voting power of one vote per
share, voting as a single class of stock (unless otherwise required by the
Wisconsin Business Corporation Law--the "WBCL"). In the election of the Board
of Directors, the holders of Class A Common Stock, voting together as a single
class with the holders of any Preferred Stock which has voting power, are
entitled to elect a "maximum minority" of the number of directors to be elected.
As a result of the "maximum minority" provision, the holders of the Class B
Common Stock, voting as a separate class, are entitled to elect the balance of
the directors, constituting a "minimum majority" of the number of directors to
be elected. If an even number of directors is to be elected, the holders of
Class B Common Stock will be entitled to elect two more directors than the
holders of Class A Common Stock and any Preferred Stock having voting power; if
the number of directors to be elected is an odd number, the holders of Class B
Common Stock will be entitled to elect one more director than the holders of
Class A Common Stock and any Preferred Stock having voting power. In the event
there are no shares of Class B Common Stock outstanding, holders of Class A
Common Stock, together with holders of any Preferred Stock having voting power,
shall elect all of the directors to be elected. A director, once elected and
duly qualified, may be removed only by the requisite affirmative vote of the
holders of that class of stock by which such director was elected.
Holders of both classes of Common Stock are equally entitled to such
dividends as the Company's Board of Directors may declare out of funds legally
available therefor. If the Company were to issue any of its authorized
Preferred Stock, no dividends could be paid or set apart for payment on shares
of Common Stock, unless paid in Common Stock, until dividends on all of the
issued and outstanding shares of Preferred Stock had been paid or set apart for
payment and provision had been made for any mandatory sinking fund payments.
Certain covenants contained in the Company's debt agreements, or in the
provisions of the Articles for the benefit of any Preferred Stock that may be
issued, from time to time could have the direct or indirect effect of limiting
the payment of dividends or other distributions on (including redemptions and
purchases of) the Company's capital stock. Stock dividends on Class A Common
Stock may be paid only in shares of Class A Common Stock and stock dividends on
Class B Common Stock may be paid only in shares of Class B Common Stock.
The Articles contain provisions which provided for the conversion of Class
B Common Stock into shares of Class A Common Stock on a share-for-share basis at
the option of the holder, and for the automatic conversion of all
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outstanding shares of Class B Common Stock to Class A Common Stock on a share-
for-share basis when the number of outstanding shares of Class B Common Stock
was reduced below a certain threshold. All of the shares of Class B Common Stock
that had been outstanding were converted into Class A Common Stock pursuant to
these conversion provisions. Holders of Class A Common Stock do not have any
conversion rights.
In the event of dissolution or liquidation of the Company, the holders of
both classes of Common Stock are entitled to share ratably all assets of the
Company remaining after payment of the Company's liabilities and satisfaction of
the rights of any series of Preferred Stock which may be outstanding. There are
no redemption or sinking fund provisions with respect to the Common Stock.
The Class A Common Stock is listed on the NYSE. Firstar Bank Milwaukee,
N.A., Milwaukee, Wisconsin, serves as the transfer agent for the Class A Common
Stock.
GENERAL
The Articles provide that the affirmative vote of two-thirds of all shares
entitled to vote thereon is required in order to constitute shareholder approval
of a merger, consolidation, or liquidation of the Company, sale or other
disposition of all or substantially all of its assets, amendment of the Articles
or the Bylaws, or removal of a director.
Directors of the Company are currently elected to serve one-year terms.
The Articles provide that the Bylaws (which may be amended by the Board of
Directors or by the shareholders) may provide for the division of the Board of
Directors into two or three classes, serving staggered two or three-year terms.
When the Company has received the consideration for which the Board of
Directors authorized the issuance of shares, the shares issued for that
consideration are fully paid and nonassessable. Shareholders are subject to
personal liability under Section 180.0622(2)(b) of the WBCL, as judicially
interpreted, for debts owing to employees of the Company for services performed
for the Company, but not exceeding six months' service in any one case.
Holders of capital stock of the Company do not have preemptive or other
subscription rights to purchase or subscribe for unissued stock or other
securities of the Company.
CERTAIN STATUTORY PROVISIONS
Under Section 180.1150(2) of the WBCL, the voting power of shares of a
"resident domestic corporation," such as the Company (as long as it continues to
meet the statutory definition), which are held by any person (including two or
more persons acting in concert) in excess of 20% of the voting power in the
election of directors shall be limited (in voting on any matter) to 10% of the
full voting power of the shares in excess of 20%, unless full voting rights have
been restored at a special meeting of the shareholders called for that purpose.
Shares held or acquired under certain circumstances are excluded from the
application of Section 180.1150(2), including (among others) shares acquired
directly from the Company, shares acquired before April 22, 1986, and shares
acquired in a merger or share exchange to which the Company is a party.
Sections 180.1130 to 180.1134 of the WBCL provide generally that, in
addition to the vote otherwise required by law or the articles of incorporation
of a "resident domestic corporation," such as the Company (as long as it
continues to meet the statutory definition), certain business combinations not
meeting certain fair price standards specified in the statute must be approved
by the affirmative vote of at least (a) 80% of the votes entitled to be cast by
the outstanding voting shares of the corporation and (b) two-thirds of the votes
entitled to be cast by the holders of voting shares other than voting shares
beneficially owned by a "significant shareholder" or an affiliate or associate
thereof who is a party to the transaction. The term "business combination" is
defined to include, subject to certain exceptions, a merger or share exchange of
the resident domestic corporation (or any subsidiary thereof) with, or the sale
or other disposition of all or substantially all of the property and assets of
the resident domestic corporation to, any significant shareholder or affiliate
thereof. "Significant shareholder" is defined generally to mean a person that
is the beneficial owner of 10% or more of the voting power of the outstanding
voting shares of the resident domestic corporation. The statute also
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restricts the repurchase of shares and the sale of corporate assets by a
resident domestic corporation in response to a take-over offer.
Sections 180.1140 to 180.1144 of the WBCL prohibit certain "business
combinations" between a "resident domestic corporation," such as the Company (as
long as it continues to meet the statutory definition), and a person
beneficially owning 10% or more of the voting power of the outstanding voting
stock of such corporation (an "interested stockholder") within three years after
the date such person became a 10% beneficial owner, unless the business
combination or the acquisition of such stock has been approved before the stock
acquisition date by the corporation's board of directors. Business combinations
after the three-year period following the stock acquisition date are permitted
only if (i) the board of directors approved the acquisition of the stock prior
to the acquisition date, (ii) the business combination is approved by a majority
of the outstanding voting stock not beneficially owned by the interested
stockholder, or (iii) the consideration to be received by shareholders meets
certain fair price requirements of the statute with respect to form and amount.
Under the WBCL, as amended in 1997, a "resident domestic corporation" is
defined to mean a Wisconsin corporation that has a class of voting stock that is
registered or traded on a national securities exchange or that is registered
under Section 12(g) of the Exchange Act and that, as of the relevant date,
satisfies any of the following: (i) its principal offices are located in
Wisconsin; (ii) it has significant business operations located in Wisconsin;
(iii) more than 10% of the holders of record of its shares are residents of
Wisconsin; or (iv) more than 10% of its shares are held of record by residents
of Wisconsin. The Company is a "resident domestic corporation" for purposes of
the above described provisions. A Wisconsin corporation that is otherwise
subject to certain of such statutes may preclude their applicability by an
election to that effect in its articles of incorporation. The Company's
Articles do not contain any such election.
These provisions of the WBCL, the ability to issue additional shares of
Common Stock and Preferred Stock without further shareholder approval (except as
required under NYSE corporate governance standards), and certain other
provisions of the Company's Articles (discussed above) could have the effect,
among others, of discouraging take-over proposals for the Company, delaying or
preventing a change in control of the Company, or impeding a business
combination between the Company and a major shareholder of the Company.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts summarizes the material terms of the Deposit
Agreement and of the Depositary Shares and Depositary Receipts, and is qualified
in its entirety by reference to the form of Deposit Agreement and form of
Depositary Receipts relating to each series of the Preferred Stock.
GENERAL
The Company may, at its option, elect to have shares of Preferred Stock
represented by Depositary Shares. The shares of any series of the Preferred
Stock underlying the Depositary Shares will be deposited under a separate
deposit agreement (the "Deposit Agreement") between the Company and a bank or
trust company selected by the Company (the "Preferred Stock Depositary"). The
Prospectus Supplement relating to a series of Depositary Shares will set forth
the name and address of the Preferred Stock Depositary. Subject to the terms of
the Deposit Agreement, each owner of a Depositary Share will be entitled,
proportionately, to all the rights, preferences and privileges of the Preferred
Stock represented thereby (including dividend, voting, redemption, conversion,
exchange and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement, each of which will represent the applicable
interest in a number of shares of a particular series of the Preferred Stock
described in the applicable Prospectus Supplement.
A holder of Depositary Shares will be entitled to receive the shares of
Preferred Stock (but only in whole shares of Preferred Stock) underlying such
Depositary Shares. If the Depositary Receipts delivered by the holder evidence
a
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number of Depositary Shares in excess of the whole number of shares of Preferred
Stock to be withdrawn, the Depositary will deliver to such holder at the same
time a new Depositary Receipt evidencing such excess number of Depositary
Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions in respect to the Preferred Stock to the record holders of
Depositary Receipts in proportion, insofar as possible, to the number of
Depositary Shares owned by such holders.
In the event of a distribution other than in cash in respect to the
Preferred Stock, the Preferred Stock Depositary will distribute property
received by it to the record holders of Depositary Receipts in proportion,
insofar as possible, to the number of Depositary Shares owned by such holders,
unless the Preferred Stock Depositary determines that it is not feasible to make
such distribution, in which case the Preferred Stock Depositary may, with the
approval of the Company, adopt such method as it deems equitable and practicable
for the purpose of effecting such distribution, including sale of such property
and distribution of the net proceeds from such sale to such holders.
The amount so distributed in any of the foregoing cases will be reduced by
any amount required to be withheld by the Company or the Preferred Stock
Depositary on account of taxes.
CONVERSION AND EXCHANGE
If any Preferred Stock underlying the Depositary Shares is subject to
provisions relating to its conversion or exchange as set forth in the Prospectus
Supplement relating thereto, each record holder of Depositary Shares will have
the right or obligation to convert or exchange such Depositary Shares pursuant
to the terms thereof.
REDEMPTION OF DEPOSITARY SHARES
If Preferred Stock underlying the Depositary Shares is subject to
redemption, the Depositary Shares will be redeemed from the proceeds received by
the Preferred Stock Depositary resulting from the redemption, in whole or in
part, of the Preferred Stock held by the Preferred Stock Depositary. The
redemption price per Depositary Share will be equal to the aggregate redemption
price payable with respect to the number of shares of Preferred Stock underlying
the Depositary Shares. Whenever the Company redeems Preferred Stock from the
Preferred Stock Depositary, the Preferred Stock Depositary will redeem as of the
same redemption date a proportionate number of Depositary Shares representing
the shares of Preferred Stock that were 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 as may be determined by the Company.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
redemption price upon such redemption. Any funds deposited by the Company with
the Preferred Stock Depositary for any Depositary Shares which the holders
thereof fail to redeem shall be returned to the Company after a period of two
years from the date such funds are so deposited.
VOTING
Upon receipt of notice of any meeting at which the holders of any shares of
Preferred Stock underlying the Depositary Shares are entitled to vote, the
Preferred Stock Depositary will mail the information contained in such notice to
the record holders of the Depositary Receipts. 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 Preferred
Stock Depositary as to the exercise of the voting rights pertaining to the
number of shares of Preferred Stock underlying such holder's Depositary Shares.
The Preferred Stock Depositary will endeavor, insofar as practicable, to vote
the number of shares of Preferred Stock underlying such Depositary Shares in
accordance with such instructions, and the Company will agree to take all
reasonable action which may be deemed necessary by the Preferred Stock
Depositary in order to enable the Preferred Stock Depositary to do so. The
Preferred Stock Depositary will abstain from voting the Preferred
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Stock to the extent it does not receive specific written instructions from
holders of Depositary Receipts representing such Preferred Stock.
RECORD DATE
Whenever (i) any cash dividend or other cash distribution shall become
payable, any distribution other than cash shall be made, or any rights,
preferences or privileges shall be offered with respect to the Preferred Stock,
or (ii) the Preferred Stock Depositary shall receive notice of any meeting at
which holders of Preferred Stock are entitled to vote or of which holders of
Preferred Stock are entitled to notice, or of the mandatory conversion of or any
election on the part of the Company to call for the redemption of any Preferred
Stock, the Preferred Stock Depositary shall in each such instance fix a record
date (which shall be the same as the record date for the Preferred Stock) for
the determination of the holders of Depositary Receipts (x) who shall be
entitled to receive such dividend, distribution, rights, preferences or
privileges or the net proceeds of the sale thereof or (y) who shall be entitled
to give instructions for the exercise of voting rights at any such meeting or to
receive notice of such meeting or of such redemption or conversion, subject to
the provisions of the Deposit Agreement.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt and any provision of the Deposit Agreement
may at any time be amended by agreement between the Company and the Preferred
Stock Depositary. However, any amendment which imposes or increases any fees,
taxes or other charges payable by the holders of Depositary Receipts (other than
taxes and other governmental charges, fees and other expenses payable by such
holders as stated under "Charges of Preferred Stock Depositary"), or which
otherwise prejudices any substantial existing right of holders of Depositary
Receipts, will not take effect as to outstanding Depositary Receipts until the
expiration of 90 days after notice of such amendment has been mailed to the
record holders of outstanding Depositary Receipts.
Whenever so directed by the Company, the Preferred Stock Depositary will
terminate the Deposit Agreement by mailing notice of such termination to the
record holders of all Depositary Receipts then outstanding at least 30 days
prior to the date fixed in such notice for such termination. The Preferred
Stock Depositary may likewise terminate the Deposit Agreement if at any time 45
days shall have expired after the Preferred Stock Depositary shall have
delivered to the Company a written notice of its election to resign and a
successor depositary shall not have been appointed and accepted its appointment.
If any Depositary Receipts remain outstanding after the date of termination, the
Preferred Stock Depositary thereafter will discontinue the transfer of
Depositary Receipts, will suspend the distribution of dividends to the holders
thereof, and will not give any further notices (other than notice of such
termination) or perform any further acts under the Deposit Agreement except as
provided below and except that the Preferred Stock Depositary will continue (i)
to collect dividends on the Preferred Stock and any other distributions with
respect thereto and (ii) to deliver the Preferred Stock together with such
dividends and distributions and the net proceeds of any sales of rights,
preferences, privileges or other property, without liability for interest
thereon, in exchange for Depositary Receipts surrendered. At any time after the
expiration of two years from the date of termination, the Preferred Stock
Depositary may sell the Preferred Stock then held by it at public or private
sales, at such place or places and upon such terms as it deems proper and may
thereafter hold the net proceeds of any such sale, together with any money and
other property then held by it, without liability for interest thereon, for the
pro rata benefit of the holders of Depositary Receipts which have not been
surrendered.
CHARGES OF PREFERRED STOCK DEPOSITARY
The Company will pay all charges of the Preferred Stock Depositary
including charges in connection with the initial deposit of the Preferred Stock,
the initial issuance of the Depositary Receipts, the distribution of information
to the holders of Depositary Receipts with respect to matters on which Preferred
Stock is entitled to vote, withdrawals of the Preferred Stock by the holders of
Depositary Receipts or redemption or conversion of the Preferred Stock, except
for taxes (including transfer taxes, if any) and other governmental charges and
such other charges as are expressly provided in the Deposit Agreement to be at
the expense of holders of Depositary Receipts or persons depositing Preferred
Stock.
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MISCELLANEOUS
The Preferred Stock Depositary will make available for inspection by
holders of Depositary Receipts at its corporate office and its New York office,
all reports and communications from the Company which are delivered to the
Preferred Stock Depositary as the holder of Preferred Stock.
Neither the Preferred Stock Depositary nor the Company will be liable if it
is prevented or delayed by law or any circumstance beyond its control in
performing its obligations under the Deposit Agreement. The obligations of the
Preferred Stock Depositary under the Deposit Agreement are limited to performing
its duties thereunder without negligence or bad faith. The obligations of the
Company under the Deposit Agreement are limited to performing its duties
thereunder in good faith. Neither the Company nor the Preferred Stock Depositary
is obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares or Preferred Stock unless satisfactory indemnity is furnished.
The Company and the Preferred Stock Depositary are entitled to rely upon advice
of or information from counsel, accountants or other persons believed to be
competent and on documents believed to be genuine.
The Preferred Stock Depositary may resign at any time or be removed by the
Company, effective upon the acceptance by its successor of its appointment;
provided, that if a successor Preferred Stock Depositary has not been appointed
or accepted such appointment within 45 days after the Preferred Stock Depositary
has delivered a notice of election to resign to the Company, the Preferred Stock
Depositary may terminate the Deposit Agreement. See "--Amendment and
Termination of the Deposit Agreement" above.
DESCRIPTION OF WARRANTS TO PURCHASE CLASS A
COMMON STOCK OR PREFERRED STOCK
The following statements with respect to the Warrants to purchase Class A
Common Stock or Preferred Stock (the "Stock Warrants") are summaries of, and
subject to, the detailed provisions of a Stock Warrant Agreement (the "Stock
Warrant Agreement") to be entered into by the Company and a warrant agent to be
selected at the time of issue (the "Stock Warrant Agent"), a form of which will
be filed with the Commission.
GENERAL
The Stock Warrants, evidenced by Stock Warrant certificates (the "Stock
Warrant Certificates"), may be issued under the Stock Warrant Agreement
independently or together with any Securities offered by any Prospectus
Supplement and may be attached to or separate from such Securities. If Stock
Warrants are offered, the Prospectus Supplement will describe the terms of the
Stock Warrants, including the following: (i) the offering price, if any; (ii)
the number of shares of Preferred Stock or Class A Common Stock purchasable upon
exercise of each Stock Warrant and the initial price at which such shares may be
purchased upon exercise; (iii) if applicable, the designation and terms of the
Securities with which the Stock Warrants are issued and the number of Stock
Warrants issued with each such Security; (iv) if applicable, the date on and
after which the Stock Warrants and the related Preferred Stock or Class A Common
Stock will be separately transferable; (v) the date on which the right to
exercise the Stock Warrants shall commence and the date on which such right
shall expire; (vi) federal income tax consequences;(vii) call provisions of such
Stock Warrants, if any; (viii) whether the Stock Warrants represented by the
Stock Warrant Certificates will be issued in registered or bearer form; and (ix)
any additional or other rights, preferences, privileges, limitations and
restrictions relating to the Stock Warrants. The shares of Preferred Stock or
Class A Common Stock issuable upon the exercise of the Stock Warrants will, when
issued in accordance with the Stock Warrant Agreement, be fully paid and
nonassessable.
Stock Warrant Certificates may be exchanged for new Stock Warrant
Certificates of different denominations and may (if in registered form) be
presented for registration of transfer at the corporate trust office of the
Stock Warrant Agent or any Co-Stock Warrant Agent, which will be identified in
the Prospectus Supplement, or at such other office as may be set forth therein.
Holders of Stock Warrants do not have any of the rights of holders of Class A
Common Stock or Preferred Stock (except to the extent that the consent of
holders of Stock Warrant may be required for certain modifications of the terms
of the Class A Common Stock or Preferred Stock issuable upon exercise of the
Stock
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Warrants) and are not entitled to dividend payments on the Class A Common Stock
or Preferred Stock purchasable upon such exercise.
EXERCISE OF STOCK WARRANTS
Stock Warrants may be exercised by surrendering the Stock Warrant
Certificate at the corporate trust office of the Stock Warrant Agent or at the
corporate trust office of the Co-Stock Warrant Agent, if any, with the form of
election to purchase on the reverse side of the Stock Warrant Certificate
properly completed and executed, and by payment in full of the exercise price,
as set forth in the Prospectus Supplement. Upon the exercise of Stock Warrants,
the Stock Warrant Agent or Co-Stock Warrant Agent, if any, will, as soon as
practicable, forward a certificate representing the number of shares of
Preferred Stock or Class A Common Stock purchasable upon such exercise in
accordance with the instructions of the holder exercising the Stock Warrant and
at the sole cost and risk of such holder. If less than all of the Stock Warrants
evidenced by the Stock Warrant Certificate are exercised, a new Stock Warrant
Certificate will be issued for the remaining amount of Stock Warrants.
ANTI-DILUTION PROVISIONS
Unless otherwise specified in the applicable Prospectus Supplement, the
exercise price payable and the number of shares purchasable upon the exercise of
each Stock Warrant will be subject to adjustment in certain events, including
(i) the issuance of a stock dividend to holders of Preferred Stock or Class A
Common Stock or a combination, subdivision or reclassification of the Preferred
Stock or Class A Common Stock; (ii) the issuance of rights, warrants or options
to all holders of Preferred Stock or Class A Common Stock entitling the holders
thereof to subscribe for or purchase Preferred Stock or Class A Common Stock for
an aggregate consideration per share less than the current market price per
share of the Preferred Stock or Class A Common Stock; or (iii) any distribution
by the Company to the holders of its Preferred Stock or Class A Common Stock of
evidences of indebtedness of the Company or of assets (excluding cash dividends
or distributions payable out of capital surplus and dividends and distributions
referred to in (i) above). No fractional shares will be issued upon exercise of
Stock Warrants, but the Company will pay the cash value of any fractional shares
otherwise issuable.
DESCRIPTION OF PREFERRED SECURITIES
The following description sets forth certain general terms and provisions
of the Preferred Securities to which any Prospectus Supplement may relate. The
particular terms of the Preferred Securities offered by any Prospectus
Supplement and the extent, if any, to which such general provisions may apply to
the Preferred Securities so offered will be described in the Prospectus
Supplement relating to such Preferred Securities.
Pursuant to the terms of the Trust Agreement for each Applied Power Trust,
the Administrative Trustees, on behalf of such Applied Power Trust, are
authorized to issue the Preferred Securities and the Common Securities. The
Preferred Securities of a particular issue will represent beneficial ownership
interests in the assets of such Applied Power Trust, and the holders thereof
will be entitled to a preference in certain circumstances with respect to
Distributions and amounts payable on redemption or liquidation over the Common
Securities of such Applied Power Trust, as well as other benefits as described
in the corresponding Trust Agreement. This summary of certain provisions of the
Preferred Securities and each Trust Agreement does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, all the
provisions of each Trust Agreement, including the definitions therein of certain
terms, and the Trust Indenture Act. Wherever particular defined terms of a
Trust Agreement (as amended or supplemented from time to time) are referred to
herein or in a Prospectus Supplement, such defined terms are incorporated herein
or therein by reference. The form of the Trust Agreement has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
Each of the Applied Power Trusts is a legally separate entity, and the assets of
one are not available to satisfy the obligations of the other.
GENERAL
The Preferred Securities of an Applied Power Trust will rank pari passu,
and payments will be made thereon pro rata, with the Common Securities of that
Applied Power Trust except as described under "-- Subordination of
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Common Securities." Legal title to the Corresponding Junior Subordinated Debt
Securities will be held by the Property Trustee in trust for the benefit of the
holders of the related Preferred Securities and Common Securities. Each
Guarantee Agreement executed by the Company for the benefit of the holders of an
Applied Power Trust's Preferred Securities (each, a "Guarantee Agreement") will
be a guarantee on a junior subordinated basis with respect to the related
Preferred Securities but will not guarantee payment of Distributions or amounts
payable on redemption or liquidation of such Preferred Securities when the
related Applied Power Trust does not have funds on hand available to make such
payments. See "Description of Guarantees."
DISTRIBUTIONS
Distributions on the Preferred Securities will be cumulative, will
accumulate from the date of original issuance and will be payable on such dates
as specified in the applicable Prospectus Supplement. Except as specified in
the applicable Prospectus Supplement, in the event that any date on which
Distributions are payable on the Preferred Securities is not a Business Day (as
defined below), payment of the Distribution payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect to any such delay), with the same force and effect as
if made on such date (each date on which Distributions are payable in accordance
with the foregoing, a "Distribution Date"). Except as specified in the
applicable Prospectus Supplement, a "Business Day" shall mean any day other than
a Saturday or a Sunday, or a day on which banking institutions in The City of
New York are authorized or required by law to remain closed or a day on which
the corporate trust office of the Property Trustee or the Trustee under the
Indenture is closed for business.
An Applied Power Trust's Preferred Securities represent beneficial
ownership interests in the assets of such Applied Power Trust, and the
Distributions on each Preferred Security will be payable at a rate specified in
the Prospectus Supplement for such Preferred Securities. The amount of
Distributions payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months unless otherwise specified in the applicable
Prospectus Supplement. Distributions to which holders of Preferred Securities
are entitled will accumulate additional Distributions at the rate per annum if
and as specified in the applicable Prospectus Supplement. The term
"Distributions" as used herein includes any such additional Distributions unless
otherwise stated.
If provided in the applicable Prospectus Supplement, the Company shall have
the right at any time and from time to time during the term of any series of
Corresponding Junior Subordinated Debt Securities to defer payment of interest
for such number of consecutive interest payment periods as may be specified in
the applicable Prospectus Supplement (each, an "Extension Period"), subject to
the terms, conditions and covenants, if any, specified in such Prospectus
Supplement, provided that such Extension Period may not extend beyond the
maturity date of such series of Corresponding Junior Subordinated Debt
Securities. Certain United States Federal income tax consequences and special
considerations applicable to any such Corresponding Junior Subordinated Debt
Securities will be described in the applicable Prospectus Supplement. As a
consequence of any such extension, Distributions on the related Preferred
Securities would be deferred (but would continue to accumulate additional
Distributions thereon at the rate per annum set forth in the Prospectus
Supplement for such Preferred Securities) by the Applied Power Trust which
issued such Preferred Securities during any such Extension Period.
If the Company shall have given notice of its selection of an Extension
Period as provided pursuant to the Indenture with respect to the Corresponding
Junior Subordinated Debt Securities of a series and shall not have rescinded
such notice, or such Extension Period, or any extension thereof, shall be
continuing, the Company may not, and may not permit any subsidiary of the
Company to, (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Company's capital stock or (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Company (including other Corresponding Junior Subordinated Debt Securities) that
rank pari passu with or junior in interest to the Corresponding Junior
Subordinated Debt Securities of such series or make any guarantee payments with
respect to any guarantee by the Company of debt securities of any subsidiary of
the Company if such guarantee ranks pari passu or junior in interest to the
Corresponding Junior Subordinated Debt Securities of such series (other than (a)
dividends or distributions in common stock of the Company, (b) redemptions or
purchases of any rights pursuant to the Company's Rights Agreement, if any, or
any successor to such Rights Agreement, and the declaration of a dividend of
such rights or the issuance of stock under such plans in the future, (c)
payments under any Guarantee and (d) purchases of common
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stock related to the issuance of common stock under any of the Company's benefit
plans for its directors, officers or employees). For additional circumstances in
which the Company is restricted in making such payments, see "Description of
Debt Securities -- Certain Provisions Relating to Corresponding Junior
Subordinated Debt Securities -- Restrictions on Certain Payments."
The revenue of each Applied Power Trust available for distribution to
holders of its Preferred Securities will be limited to payments under the
Corresponding Junior Subordinated Debt Securities in which the Applied Power
Trust will invest the proceeds from the issuance and sale of its Trust
Securities. See "Description of Debt Securities -- Certain Provisions Relating
to Corresponding Junior Subordinated Debt Securities." If the Company does not
make interest payments on such Corresponding Junior Subordinated Debt
Securities, the Property Trustee will not have funds available to pay
Distributions of the related Preferred Securities. The payment of Distributions
(if and to the extent the Applied Power Trust has funds legally available for
the payment of such Distributions and cash sufficient to make such payments) is
guaranteed by the Company on a limited basis as set forth herein under
"Description of Guarantees."
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the register of such Applied Power Trust on the
relevant record dates, which, as long as the Preferred Securities remain in
book-entry form, will be one Business Day prior to the relevant Distribution
Date. Subject to any applicable laws and regulations and the provisions of the
applicable Trust Agreement, each such payment will be made as described under
"Book Entry Issuance." In the event any Preferred Securities are not in book-
entry form, the relevant record date for such Preferred Securities shall be the
date at least 15 days prior to the relevant Distribution Date, as specified in
the applicable Prospectus Supplement.
PAYMENT OF EXPENSES
Pursuant to the Indenture, the Company, as borrower, has agreed to pay all
debts and obligations (other than with respect to the Trust Securities) and all
costs and expenses of the Applied Power Trusts (including, but not limited to,
all costs and expenses relating to the organization of the Applied Power Trusts,
the fees and expenses of the Property Trustee, the Delaware Trustee and the
Administrative Trustees and all costs and expenses relating to the operation of
the Applied Power Trusts (other than with respect to the Trust Securities)) and
to pay any and all taxes, duties, assessments or other governmental charges of
whatever nature (other than United States withholding taxes) imposed by the
United States or any other taxing authority, so that the net amounts received
and retained by the applicable Applied Power Trust after paying such fees,
expenses, debts and obligations will be equal to the amounts the applicable
Applied Power Trust would have received and retained had no such fees, expenses,
debts and obligations been incurred by or imposed on the applicable Applied
Power Trust. The foregoing obligations of the Company are for the benefit of,
and shall be enforceable by, any person to whom such fees, expenses, debts and
obligations are owed (each, a "Creditor"), whether or not such Creditor has
received notice thereof. Any such Creditor may enforce such obligations of the
Company directly against the Company, and the Company has agreed to irrevocably
waive any right or remedy to require that any such Creditor take any action
against the applicable Applied Power Trust or any other person before proceeding
against the Company. The Company shall execute such additional agreements as
may be necessary to give full effect to the foregoing.
REDEMPTION OR EXCHANGE
Upon the repayment or redemption, in whole or in part, of any Corresponding
Junior Subordinated Debt Securities, whether at maturity or upon earlier
redemption as provided in the Indenture, the proceeds from such repayment or
redemption shall be applied by the Property Trustee to redeem a Like Amount (as
defined below) of the Trust Securities, upon not less than 30 nor more than 60
days notice, at a redemption price (the "Redemption Price") equal to the
aggregate Liquidation Amount of such Trust Securities plus accumulated but
unpaid Distributions thereon to the date of redemption (the "Redemption Date")
and the related amount of the premium, if any, paid by the Company upon the
concurrent redemption of such Corresponding Junior Subordinated Debt Securities.
See "Description of Debt Securities -- Certain Provisions Relating to
Corresponding Junior Subordinated Debt Securities -- Redemption." If less than
all of any series of Corresponding Junior Subordinated Debt Securities are to be
repaid or redeemed on a Redemption Date, then the proceeds from such repayment
or redemption shall be allocated to the redemption pro rata of the related Trust
Securities. The amount of premium, if any, paid by the Company upon the
redemption of all or any
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part of any series of any Corresponding Junior Subordinated Debt Securities to
be repaid or redeemed on a Redemption Date shall be allocated to the redemption
pro rata of the related Trust Securities.
The Company will have the right to redeem any series of Corresponding
Junior Subordinated Debt Securities (i) subject to the conditions described
under "Description of Debt Securities -- Certain Provisions Relating to
Corresponding Junior Subordinated Debt Securities -- Redemption" or (ii) as may
be otherwise specified in the applicable Prospectus Supplement.
"Like Amount" means (i) with respect to a redemption of any series of Trust
Securities, Trust Securities of such series having a Liquidation Amount (as
defined below) equal to that portion of the principal amount of Corresponding
Junior Subordinated Debt Securities to be contemporaneously redeemed in
accordance with the Indenture, allocated to the Common Securities and to the
Preferred Securities based upon the relative Liquidation Amounts of such classes
and the proceeds of which will be used to pay the Redemption Price of such Trust
Securities, and (ii) with respect to a distribution of Corresponding Junior
Subordinated Debt Securities to holders of any series of Trust Securities in
connection with a dissolution or liquidation of the related Applied Power Trust,
Corresponding Junior Subordinated Debt Securities having a principal amount
equal to the Liquidation Amount of the Trust Securities of the holder to whom
such Corresponding Junior Subordinated Debt Securities are distributed. Unless
otherwise specified in the applicable Prospectus Supplement, "Liquidation
Amount" means the stated amount per Trust Security specified in the applicable
Prospectus Supplement.
At any time, the Company has the right to dissolve an Applied Power Trust
and, after satisfaction of the liabilities of creditors of such Applied Power
Trust as provided by applicable law, cause the Corresponding Junior Subordinated
Debt Securities owned by such Applied Power Trust to be distributed to the
holders of the related Preferred Securities and Common Securities in liquidation
of the Applied Power Trust.
If provided in the applicable Prospectus Supplement, the Company shall have
the right to extend or shorten the maturity of any series of Corresponding
Junior Subordinated Debt Securities at the time that the Company exercises its
right to elect to dissolve the related Applied Power Trust and cause such
Corresponding Junior Subordinated Debt Securities to be distributed to the
holders of such related Preferred Securities and Common Securities in
liquidation of the Applied Power Trust, provided that it can extend the maturity
only if certain conditions specified in the applicable Prospectus Supplement are
met at the time such election is made and at the time of such extension.
After the liquidation date fixed for any distribution of Corresponding
Junior Subordinated Debt Securities for any series of Preferred Securities (i)
such series of Preferred Securities will no longer be deemed to be outstanding,
(ii) The Depository Trust Company ("DTC") or its nominee, as the record holder
of such series of Preferred Securities, will receive a registered global
certificate or certificates representing the Corresponding Junior Subordinated
Debt Securities to be delivered upon such distribution and (iii) any
certificates representing such series of Preferred Securities not held by DTC or
its nominee will be deemed to represent the Corresponding Junior Subordinated
Debt Securities having a principal amount equal to the stated Liquidation Amount
of such series of Preferred Securities, and bearing accrued and unpaid interest
in an amount equal to the accrued and unpaid Distributions on such series of
Preferred Securities until such certificates are presented to the Administrative
Trustees or their agent for transfer or reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Corresponding Junior Subordinated Debt Securities that may be
distributed in exchange for Preferred Securities if a dissolution and
liquidation of an Applied Power Trust were to occur. Accordingly, the Preferred
Securities that an investor may purchase, or the Corresponding Junior
Subordinated Debt Securities that an investor may receive on dissolution and
liquidation of an Applied Power Trust, may trade at a discount to the price that
the investor paid to purchase the Preferred Securities.
REDEMPTION AND EXCHANGE PROCEDURES
Preferred Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Corresponding Junior Subordinated Debt Securities. Redemptions
of the Preferred Securities shall be made and the Redemption Price shall be
payable on each Redemption
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Date only to the extent that the related Applied Power Trust has funds on hand
available for the payment of such Redemption Price. See "-- Subordination of
Common Securities."
If an Applied Power Trust gives a notice of redemption in respect of its
Preferred Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, to the extent funds are available, the Property Trustee will deposit
irrevocably with DTC funds sufficient to pay the applicable Redemption Price and
will give DTC irrevocable instructions and authority to pay the Redemption Price
to the holders of such Preferred Securities. See "Book-Entry Issuance." If such
Preferred Securities are no longer in book-entry form, the Property Trustee, to
the extent funds are available, will irrevocably deposit with the paying agent
for such Preferred Securities funds sufficient to pay the applicable Redemption
Price and will give such paying agent irrevocable instructions and authority to
pay the Redemption Price to the holders thereof upon surrender of their
certificates evidencing such Preferred Securities. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Preferred Securities called for redemption shall be payable to the holders of
such Preferred Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of the
holders of such Preferred Securities so called for redemption will cease, except
the right of the holders of such Preferred Securities to receive the Redemption
Price, but without interest on such Redemption Price, and such Preferred
Securities will cease to be outstanding. Except as specified in the applicable
Prospectus Supplement, in the event that any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of any such delay).
In the event that payment of the Redemption Price in respect of Preferred
Securities called for redemption is improperly withheld or refused and not paid
either by the Applied Power Trust or by the Company pursuant to the Guarantee as
described under "Description of Guarantees," Distributions on such Preferred
Securities will continue to accrue at the then applicable rate, from the
Redemption Date originally established by the Applied Power Trust for such
Preferred Securities to the date such Redemption Price is actually paid, in
which case the actual payment date will be the date fixed for redemption for
purposes of calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
Federal securities law), the Company or its subsidiaries may at any time and
from time to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Corresponding Junior Subordinated Debt Securities to holders of
Preferred Securities shall be made to the applicable record holders thereof as
they appear on the register for such Preferred Securities on the relevant record
date, which shall be one Business Day prior to the relevant Redemption Date or
liquidation date, as applicable; provided, however, that in the event that any
Preferred Securities are not in book-entry form, the relevant record date for
such Preferred Securities shall be a date at least 15 days prior to the
Redemption Date or liquidation date, as applicable, as specified in the
applicable Prospectus Supplement.
If less than all of the Preferred Securities and Common Securities issued
by an Applied Power Trust are to be redeemed on a Redemption Date, then the
aggregate Liquidation Amount of such Preferred Securities and Common Securities
to be redeemed shall be allocated pro rata to the Preferred Securities and the
Common Securities based upon the relative Liquidation Amounts of such classes.
The particular Preferred Securities to be redeemed shall be selected on a pro
rata basis not more than 60 days prior to the Redemption Date by the Property
Trustee from the outstanding Preferred Securities not previously called for
redemption. The Property Trustee shall promptly notify the trust registrar in
writing of the Preferred Securities selected for redemption and, in the case of
any Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of each Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the aggregate
Liquidation Amount of Preferred Securities which has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of Trust Securities to be
redeemed at its registered address. Unless the Company defaults in payment of
the Redemption Price on the Corresponding Junior Subordinated Debt Securities,
on and after the Redemption Date
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interest ceases to accrue on such Junior Subordinated Debt Securities or
portions thereof (and distributions cease to accrue on the related Preferred
Securities or portions thereof) called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, each Applied
Power Trust's Preferred Securities and Common Securities, as applicable, shall
be made pro rata based on the Liquidation Amount of such Preferred Securities
and Common Securities; provided, however, that if on any Distribution Date or
Redemption Date an Event of Default with respect to any Junior Subordinated Debt
Security shall have occurred and be continuing, no payment of any Distribution
on, or Redemption Price of, any of the Applied Power Trust's Common Securities,
and no other payment on account of the redemption, liquidation or other
acquisition of such Common Securities, shall be made unless payment in full in
cash of all accumulated and unpaid Distributions on all of the Applied Power
Trust's outstanding Preferred Securities for all Distribution periods
terminating on or prior thereto, or in the case of payment of the Redemption
Price the full amount of such Redemption Price on all of the Applied Power
Trust's outstanding Preferred Securities then called for redemption, shall have
been made or provided for, and all funds available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions on, or
Redemption Price of, the Applied Power Trust's Preferred Securities then due and
payable.
In the case of any Event of Default with respect to any Junior Subordinated
Debt Security, the Company as holder of such Applied Power Trust's Common
Securities will be deemed to have waived any right to act with respect to any
such Event of Default under the applicable Trust Agreement until the effect of
all such Events of Default with respect to such Preferred Securities has been
cured, waived or otherwise eliminated. Until any such Events of Default under
the applicable Trust Agreement with respect to the Preferred Securities have
been so cured, waived or otherwise eliminated, the Property Trustee shall act
solely on behalf of the holders of such Preferred Securities and not on behalf
of the Company as holder of the Applied Power Trust's Common Securities, and
only the holders of such Preferred Securities will have the right to direct the
Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Pursuant to each Trust Agreement, each Applied Power Trust shall
automatically dissolve upon expiration of its term and shall dissolve on the
first to occur of: (i) certain events of bankruptcy, dissolution or liquidation
of the Company; (ii) the written direction to the Property Trustee from the
Company, as Depositor, to dissolve such Applied Power Trust and distribute the
Corresponding Junior Subordinated Debt Securities to the holders of the
Preferred Securities in exchange for the Preferred Securities (which direction
is optional and wholly within the discretion of the Company, as Depositor);
(iii) the redemption of all of the Applied Power Trust's Trust Securities; and
(iv) the entry of an order for the dissolution of such Applied Power Trust by a
court of competent jurisdiction.
If an early dissolution occurs as described in clause (i), (ii) or (iv)
above, the Applied Power Trust shall be liquidated by the Issuer Trustees as
expeditiously as the Issuer Trustees determine to be possible by distributing,
after satisfaction of liabilities to creditors of such Applied Power Trust as
provided by applicable law, to the holders of such Trust Securities a Like
Amount of the Corresponding Junior Subordinated Debt Securities, unless such
distribution is determined by the Property Trustee not to be practical, in which
event such holders will be entitled to receive out of the assets of the Applied
Power Trust available for distribution to holders, after satisfaction of
liabilities to creditors of such Applied Power Trust as provided by applicable
law, an amount equal to, in the case of holders of Preferred Securities, the
aggregate of the Liquidation Amount plus accrued and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because such Applied Power Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by such Applied Power Trust on its Preferred Securities shall be paid on a pro
rata basis. The holder(s) of such Applied Power Trust's Common Securities will
be entitled to receive distributions upon any such liquidation pro rata with the
holders of its Preferred Securities, except that if a Junior Subordinated Debt
Security Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities.
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EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under
each Trust Agreement (a "Trust Event of Default") with respect to the Preferred
Securities issued thereunder (whatever the reason for such Trust Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) the occurrence of an Event of Default with respect to a
Corresponding Junior Subordinated Debt Security under the Indenture
(see "Description of Debt Securities -- Defaults and Remedies"); or
(ii) default by the Property Trustee in the payment of any Distribution
when it becomes due and payable, and continuation of such default
for a period of 30 days; or
(iii) default by the Property Trustee in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Issuer Trustees in such Trust
Agreement (other than a covenant or warranty a default in the
performance of which or the breach of which is dealt with in clause
(ii) or (iii) above), and continuation of such default or breach for
a period of 60 days after there has been given, by registered or
certified mail, to the defaulting Issuer Trustee or Trustees by the
holders of at least 25% in aggregate liquidation preference of the
outstanding Preferred Securities of the applicable Applied Power
Trust, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a
"Notice of Default" under such Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Company to
appoint a successor Property Trustee within 60 days thereof.
Within 90 days after the occurrence of any Trust Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Trust Event of Default to the holders of such Applied Power
Trust's Preferred Securities, the Administrative Trustees and the Company, as
Depositor, unless such Trust Event of Default shall have been cured or waived.
The Company, as Depositor, and the Administrative Trustees are required to file
annually with the Property Trustee a certificate as to whether or not they are
in compliance with all the conditions and covenants applicable to them under
each Trust Agreement.
If an Event of Default with respect to a Corresponding Junior Subordinated
Debt Security has occurred and is continuing, the Preferred Securities shall
have a preference over the Common Securities upon termination of each Applied
Power Trust as described above. See "-- Liquidation Distribution upon
Dissolution." The existence of a Trust Event of Default does not entitle the
holders of Preferred Securities to cause the redemption of the Preferred
Securities.
REMOVAL OF ISSUER TRUSTEES
Unless an Event of Default with respect to a Corresponding Junior
Subordinated Debt Security shall have occurred and be continuing, any Issuer
Trustee may be removed at any time by the holder of the Common Securities. If a
Trust Event of Default resulting from an Event of Default with respect to a
Corresponding Junior Subordinated Debt Security has occurred and is continuing,
the Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in Liquidation Amount of the outstanding Preferred
Securities. In no event will the holders of the Preferred Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Company as the holder of the Common
Securities. No resignation or removal of an Issuer Trustee and no appointment
of a successor trustee shall be effective until the acceptance of appointment by
the successor trustee in accordance with the provisions of the applicable Trust
Agreement.
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CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless a Trust Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Company, as the holder of the Common
Securities, and the Administrative Trustees shall have power to appoint one or
more persons either to act as a co-trustee, jointly with the Property Trustee,
of all or any part of such Trust Property, or to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the applicable Trust Agreement. In case an Event
of Default with respect to a Corresponding Junior Subordinated Debt Security has
occurred and is continuing, the Property Trustee alone shall have power to make
such appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any corporation into which the Property Trustee, the Delaware Trustee or
any Administrative Trustee that is not a natural person may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of such Trustee, shall be the successor of such Trustee under
each Trust Agreement, provided such corporation shall be otherwise qualified and
eligible.
MERGERS, CONSOLIDATIONS, CONVERSIONS, AMALGAMATIONS OR REPLACEMENTS OF THE
APPLIED POWER TRUSTS
An Applied Power Trust may not merge with or into, consolidate, convert
into, amalgamate, or be replaced by, or convey, transfer or lease its properties
and assets substantially as an entirety to any corporation or other Person,
except as described below, as described in "-- Liquidation Distribution upon
Dissolution" or as described in the Prospectus Supplement with respect to the
Preferred Securities. An Applied Power Trust may, at the request of the
Company, with the consent of the Administrative Trustees and without the consent
of the holders of the Preferred Securities, merge with or into, consolidate,
convert into, amalgamate, or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as such
under the laws of any State; provided, that (i) such successor entity either (a)
expressly assumes all of the obligations of such Applied Power Trust with
respect to the Preferred Securities or (b) substitutes for the Preferred
Securities other securities having substantially the same terms as the Preferred
Securities (the "Successor Securities") so long as the Successor Securities rank
the same as the Preferred Securities rank in priority with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii) the
Company expressly appoints a trustee of such successor entity possessing the
same powers and duties as the Property Trustee as the holder of the
Corresponding Junior Subordinated Debt Securities, (iii) the Successor
Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed, if any, (iv)
such merger, consolidation, conversion, amalgamation, replacement, conveyance,
transfer or lease does not cause the Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized statistical
rating organization, (v) such merger, consolidation, conversion, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities (including
any Successor Securities) in any material respect, (vi) such successor entity
has a purpose substantially similar to that of the Applied Power Trust, (vii)
prior to such merger, consolidation, conversion, amalgamation, replacement,
conveyance, transfer or lease, the Company has received an opinion from
independent counsel to the Applied Power Trust experienced in such matters to
the effect that (a) such merger, consolidation, conversion, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities (including
any Successor Securities) in any material respect, and (b) following such
merger, consolidation, conversion, amalgamation, replacement, conveyance,
transfer or lease, neither the Applied Power Trust nor such successor entity
will be required to register as an investment company under the Investment
Company Act and (viii) the Company or any permitted successor or assignee owns
all of the common securities of such successor entity and guarantees the
obligations of such successor entity under the Successor Securities at least to
the extent provided by the Guarantee. Notwithstanding the foregoing, an Applied
Power Trust shall not, except with the consent of holders of 100% in Liquidation
Amount of the Preferred Securities, merge with or into, consolidate, convert
into, amalgamate, or be replaced by or convey, transfer or lease its properties
and assets substantially as an entirety to any other entity or permit any other
entity to consolidate,
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amalgamate, merge with or into, or replace it if such merger, consolidation,
conversion, amalgamation, replacement, conveyance, transfer or lease would cause
the Applied Power Trust or the successor entity to be classified as other than a
grantor trust for United States Federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF EACH TRUST AGREEMENT
Except as provided below and under "Description of Guarantees -- Amendments
and Assignment" and as otherwise required by law and the applicable Trust
Agreement, the holders of the Preferred Securities will have no voting rights.
Each Trust Agreement may be amended from time to time by the Company, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Preferred Securities (i) to cure any ambiguity, correct or
supplement any provisions in such Trust Agreement that may be inconsistent with
any other provision, or to make any other provisions with respect to matters or
questions arising under such Trust Agreement, which shall not be inconsistent
with the other provisions of such Trust Agreement or (ii) to modify, eliminate
or add to any provisions of such Trust Agreement to such extent as shall be
necessary to ensure that the Applied Power Trust will be classified for United
States Federal income tax purposes as a grantor trust at all times that any
Trust Securities are outstanding or to ensure that the Applied Power Trust will
not be required to register as an "investment company" under the Investment
Company Act; provided, however, that in the case of clause (i), such action
shall not adversely affect in any material respect the interests of any holder
of Trust Securities, and any such amendments of such Trust Agreement shall
become effective when notice thereof is given to the holders of Trust
Securities. Each Trust Agreement may be amended by the Issuer Trustees and the
Company with (i) the consent of holders representing not less than a majority
(based upon Liquidation Amounts) of the outstanding Trust Securities and (ii)
receipt by the Issuer Trustees of an opinion of counsel experienced in such
matters to the effect that such amendment or the exercise of any power granted
to the Issuer Trustees in accordance with such amendment will not affect the
Applied Power Trust's status as a grantor trust for United States Federal income
tax purposes or the Applied Power Trust's exemption from status as an
"investment company" under the Investment Company Act, provided that without the
consent of each holder of Trust Securities, such Trust Agreement may not be
amended to (i) change the amount or timing of any Distribution on the Trust
Securities or otherwise adversely affect the amount of any Distribution required
to be made in respect of the Trust Securities as of a specified date or (ii)
restrict the right of a holder of Trust Securities to institute suit for the
enforcement of any such payment on or after such date.
So long as any Corresponding Junior Subordinated Debt Securities are held
by the Property Trustee, the Issuer Trustees shall not (i) direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee under the Indenture, or executing any trust or power conferred on the
Property Trustee with respect to such Corresponding Junior Subordinated Debt
Securities, (ii) waive any past default that is waivable under Section 6.04 of
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the principal of all the Corresponding Junior Subordinated Debt Securities shall
be due and payable or (iv) consent to any amendment, modification or termination
of the Indenture, the applicable Securities Resolution or such Corresponding
Junior Subordinated Debt Securities, where such consent shall be required,
without, in each case, obtaining the prior approval of the holders of a majority
in aggregate Liquidation Amount of all outstanding Preferred Securities;
provided, however, that where a consent under the Indenture would require the
consent of each holder of Corresponding Junior Subordinated Debt Securities
affected thereby, no such consent shall be given by the Property Trustee without
the prior consent of each holder of the related Preferred Securities. The
Issuer Trustees shall not revoke any action previously authorized or approved by
a vote of the holders of the Preferred Securities except by subsequent vote of
the holders of the Preferred Securities. The Property Trustee shall notify each
holder of Preferred Securities of any notice of default with respect to the
Corresponding Junior Subordinated Debt Securities. In addition to obtaining the
foregoing approvals of the holders of the Preferred Securities, prior to taking
any of the foregoing actions, the Issuer Trustees shall obtain an opinion of
counsel to the effect that the Applied Power Trust will not be classified as a
corporation for United States Federal income tax purposes on account of such
action.
Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or pursuant
to written consent. The Property Trustee will cause a notice of any
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meeting at which holders of Preferred Securities are entitled to vote to be
given to each holder of record of Preferred Securities in the manner set forth
in each Trust Agreement.
No vote or consent of the holders of Preferred Securities will be required
for an Applied Power Trust to redeem and cancel its Preferred Securities in
accordance with the applicable Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Company, the Issuer Trustees or any affiliate
of the Company or any Issuer Trustees, shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to the
Depositary, which shall credit the relevant accounts at the Depositary on the
applicable Distribution Dates or, if any Applied Power Trust's Preferred
Securities are not held by the Depositary, such payments shall be made by check
mailed to the address of the holder entitled thereto as such address shall
appear on the Register. Unless otherwise specified in the applicable Prospectus
Supplement, the paying agent (the "Paying Agent") shall initially be the
Property Trustee and any co-paying agent chosen by the Property Trustee and
acceptable to the Administrative Trustees and the Company. The Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Property Trustee and the Company. In the event that the Property Trustee shall
no longer be the Paying Agent, the Administrative Trustees shall appoint a
successor (which shall be a bank or trust company acceptable to the
Administrative Trustees and the Company) to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Property Trustee will act as registrar and transfer agent for the Preferred
Securities.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of each Applied Power Trust, but upon payment of any tax
or other governmental charges that may be imposed in connection with any
transfer or exchange. The Applied Power Trusts will not be required to register
or cause to be registered the transfer of their Preferred Securities after such
Preferred Securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of a
Trust Event of Default, undertakes to perform only such duties as are
specifically set forth in each Trust Agreement and, after such Trust Event of
Default, must exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the applicable Trust Agreement at the request of any
holder of Preferred Securities unless it is offered reasonable indemnity against
the costs, expenses and liabilities that might be incurred thereby. If no Trust
Event of Default has occurred and is continuing and the Property Trustee is
required to decide between alternative causes of action, construe ambiguous
provisions in the applicable Trust Agreement or is unsure of the application of
any provision of the applicable Trust Agreement, and the matter is not one on
which holders of Preferred Securities are entitled under such Trust Agreement to
vote, then the Property Trustee shall take such action as is directed by the
Company and if not so directed, shall take such action as it deems advisable and
in the best interests of the holders of the Trust Securities and will have no
liability except for its own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Applied Power Trusts in such a way that no Applied
Power Trust will be deemed to be an "investment company" required to be
registered under the Investment Company Act or classified as an association
taxable as a corporation for United States Federal income tax purposes and so
that the Corresponding Junior Subordinated Debt Securities will be treated as
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indebtedness of the Company for United States Federal income tax purposes. In
this connection, the Company and the Administrative Trustees are authorized to
take any action, not inconsistent with applicable law, the certificate of trust
of each Applied Power Trust or each Trust Agreement, that the Company and the
Administrative Trustees determine in their discretion to be necessary or
desirable for such purposes, as long as such action does not materially
adversely affect the interests of the holders of the related Preferred
Securities.
Holders of the Preferred Securities have no preemptive or similar rights.
No Applied Power Trust may borrow money or issue debt or mortgage or pledge
any of its assets.
DESCRIPTION OF GUARANTEES
A Guarantee Agreement will be executed and delivered by the Company
concurrently with the issuance by each Applied Power Trust of its Preferred
Securities for the benefit of the holders from time to time of such Preferred
Securities. The First National Bank of Chicago will act as indenture trustee
("Guarantee Trustee") under each Guarantee for the purposes of compliance with
the Trust Indenture Act, and each Guarantee will be qualified as an indenture
under the Trust Indenture Act. This summary of certain provisions of the
Guarantees does not purport to be complete and is subject to, and qualified in
its entirety by reference to, all of the provisions of each Guarantee Agreement,
including the definitions therein of certain terms, and the Trust Indenture Act.
The form of the Guarantee has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. Reference in this summary to
Preferred Securities means that Applied Power Trust's Preferred Securities to
which a Guarantee relates. The Guarantee Trustee will hold each Guarantee for
the benefit of the holders of the related Applied Power Trust's Preferred
Securities.
GENERAL
The Company will irrevocably agree to pay in full on a junior subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined below)
to the holders of the Preferred Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that such Applied Power Trust may have
or assert other than the defense of payment. The following payments with
respect to the Preferred Securities, to the extent not paid by or on behalf of
the related Applied Power Trust (the "Guarantee Payments"), will be subject to
the Guarantee: (i) any accumulated and unpaid Distributions required to be paid
on such Preferred Securities, to the extent that such Applied Power Trust has
funds on hand available therefor at such time, (ii) the Redemption Price with
respect to any Preferred Securities called for redemption to the extent that
such Applied Power Trust has funds on hand available therefor at such time or
(iii) upon a voluntary or involuntary dissolution, winding up or liquidation of
such Applied Power Trust (unless the Corresponding Junior Subordinated Debt
Securities are distributed to holders of such Preferred Securities), the lesser
of (a) the Liquidation Distribution and (b) the amount of assets of such Applied
Power Trust remaining available for distribution to holders of Preferred
Securities. The Company's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Company to the
holders of the applicable Preferred Securities or by causing the Applied Power
Trust to pay such amounts to such holders.
Each Guarantee will be an irrevocable guarantee on a junior subordinated
basis of the related Applied Power Trust's obligations under the Preferred
Securities, but will apply only to the extent that such related Applied Power
Trust has funds sufficient to make such payments, and is not a guarantee of
collection.
If the Company does not make interest payments on the Corresponding Junior
Subordinated Debt Securities held by the Applied Power Trust, the Applied Power
Trust will not be able to pay Distributions on the Preferred Securities and will
not have funds legally available therefor. Each Guarantee will rank subordinate
and junior in right of payment to all senior indebtedness and subordinated
indebtedness of the Company. See "-- Status of the Guarantees." The majority of
the operating assets of the Company and its consolidated subsidiaries are owned
by such subsidiaries. The Company relies primarily on funds obtained from such
subsidiaries to meet its obligations for payment of principal and interest on
its outstanding debt obligations and corporate expenses. Accordingly, the
Company's obligations under the Guarantees will be effectively subordinated to
all existing and future liabilities of the Company's subsidiaries, and claimants
should look only to the assets of the Company for payments thereunder. See
"Description of Debt Securities -- General" and --"Ranking of Debt Securities."
Except as otherwise provided in the applicable Prospectus Supplement,
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the Guarantees do not limit the incurrence or issuance of other secured or
unsecured debt of the Company, whether under the Indenture, any other indenture
that the Company may enter into in the future or otherwise. See the Prospectus
Supplement relating to any offering of Preferred Securities.
The Company has also agreed to irrevocably and unconditionally guarantee
the obligations of the Applied Power Trusts with respect to the Common
Securities to the same extent as the Preferred Securities Guarantee, except that
upon an Event of Default with respect to a Corresponding Junior Subordinated
Debt Security, holders of Preferred Securities shall have priority over holders
of Common Securities with respect to distributions and payments on liquidation,
redemption or otherwise.
The Company's obligations described herein and in any accompanying
Prospectus Supplement, through the applicable Guarantee Agreement, the
applicable Trust Agreement, the Corresponding Junior Subordinated Debt
Securities, and the applicable Securities Resolution under the Indenture, taken
together, constitute a full, irrevocable and unconditional guarantee by the
Company of payments due on the Preferred Securities. No single document
standing alone or operating in conjunction with fewer than all of the other
documents constitutes such guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Applied Power Trust's obligations under the
Preferred Securities. See "The Applied Power Trusts," "Description of Preferred
Securities," and "Description of Debt Securities -- Certain Provisions Relating
to Corresponding Junior Subordinated Debt Securities."
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of the Company and
will rank subordinate and junior in right of payment to all senior indebtedness
and subordinated indebtedness.
Each Guarantee will rank pari passu with all other Guarantees issued by the
Company relating to Preferred Securities. Each Guarantee will constitute a
guarantee of payment and not of collection (i.e., the guaranteed party may
institute a legal proceeding directly against the Guarantor to enforce its
rights under the Guarantee without first instituting a legal proceeding against
any other person or entity). Each Guarantee will be held for the benefit of the
holders of the related Preferred Securities. Each Guarantee will not be
discharged except by payment of the Guarantee Payments in full to the extent not
paid by the Applied Power Trust or upon distribution to the holders of the
Preferred Securities of the Corresponding Junior Subordinated Debt Securities.
None of the Guarantees places a limitation on the amount of additional senior
indebtedness or subordinated indebtedness that may be incurred by the Company.
The Company expects from time to time to incur additional indebtedness
constituting senior indebtedness or subordinated indebtedness.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of the related Preferred Securities in any material respect (in which
case no vote will be required), no Guarantee may be amended without the prior
approval of the holders of not less than a majority of the aggregate Liquidation
Amount of the related outstanding Preferred Securities. The manner of obtaining
any such approval will be as set forth under "Description of Preferred
Securities -- Voting Rights; Amendment of Each Trust Agreement." All guarantees
and agreements contained in each Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Company and shall inure
to the benefit of the holders of the related Preferred Securities then
outstanding.
EVENTS OF DEFAULT
An event of default under each Guarantee Agreement will occur upon the
failure of the Company to perform any of its payment or other obligations
thereunder. The holders of not less than a majority in aggregate Liquidation
Amount of the related Preferred Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of such Guarantee Agreement or to direct the
exercise of any trust or power conferred upon the Guarantee Trustee under such
Guarantee Agreement.
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Any holder of the Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under such Guarantee
Agreement without first instituting a legal proceeding against the Applied Power
Trust, the Guarantee Trustee or any other person or entity.
The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with all
the conditions and covenants applicable to it under the Guarantee Agreement.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Company in performance of any Guarantee, undertakes to perform
only such duties as are specifically set forth in each Guarantee Agreement and,
after default with respect to any Guarantee, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the Guarantee Trustee is under
no obligation to exercise any of the powers vested in it by any Guarantee
Agreement at the request of any holder of any Preferred Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the related Preferred Securities, upon
full payment of the amounts payable upon liquidation of the related Applied
Power Trust or upon distribution of Corresponding Junior Subordinated Debt
Securities to the holders of the related Preferred Securities. Each will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of the related Preferred Securities must restore payment of any
sums paid under such Preferred Securities or such Guarantee.
GOVERNING LAW
Each Guarantee Agreement will be governed by and construed in accordance
with the laws of the State of New York.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE CORRESPONDING JUNIOR SUBORDINATED DEBT SECURITIES
AND THE GUARANTEES
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Preferred Securities
(to the extent the applicable Applied Power Trust has funds available for the
payment of such Distributions) are irrevocably guaranteed by the Company as and
to the extent set forth under "Description of Guarantees." Taken together, the
Company's obligations under each series of Corresponding Junior Subordinated
Debt Securities, the related Securities Resolution, the Indenture, the related
Trust Agreement and the related Guarantee provide, in the aggregate, a full,
irrevocable and unconditional guarantee of payments of distributions and other
amounts due on the related series of Preferred Securities. No single document
standing alone or operating in conjunction with fewer than all of the other
documents constitutes such guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Applied Power Trust's obligations under the
Preferred Securities. If and to the extent that the Company does not make
payments on any series of Corresponding Junior Subordinated Debt Securities,
such Applied Power Trust will not pay Distributions or other amounts due on its
Preferred Securities. The Guarantees do not cover payment of Distributions when
the related Applied Power Trust does not have sufficient funds to pay such
Distributions. In such event, the remedy of a holder of a series of Preferred
Securities is to institute a legal proceeding directly against the Company for
enforcement of payment of such Distributions to such holder. The obligations of
the Company under each Guarantee are subordinate and junior in right of payment
to all senior indebtedness and subordinated indebtedness of the Company.
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SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on
each series of Corresponding Junior Subordinated Debt Securities, such payments
will be sufficient to cover Distributions and other payments due on the related
Preferred Securities, primarily because (i) the aggregate principal amount of
each series of Corresponding Junior Subordinated Debt Securities will be equal
to the sum of the aggregate stated Liquidation Amount of the related Preferred
Securities and related Common Securities; (ii) the interest rate and interest
and other payment dates on each series of Corresponding Junior Subordinated Debt
Securities will match the Distribution rate and Distribution and other payment
dates for the related Preferred Securities; (iii) the Company, as borrower,
shall pay for all and any costs, expenses and liabilities of such Applied Power
Trust except the Applied Power Trust's obligations to holders of its Preferred
Securities under such Preferred Securities; and (iv) each Trust Agreement
further provides that the Applied Power Trust will not engage in any activity
that is not consistent with the limited purposes of such Applied Power Trust.
Notwithstanding anything to the contrary in the Indenture, the Company has
the right to set-off any payment it is otherwise required to make thereunder if
and to the extent the Company has theretofore made, or is concurrently on the
date of such payment making, a payment under the related Guarantee Agreement.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any Preferred Security may institute a legal proceeding
directly against the Company to enforce its rights under the related Guarantee
Agreement without first instituting a legal proceeding against the Guarantee
Trustee, the related Applied Power Trust or any other person or entity.
A default or event of default under any senior or subordinated indebtedness
of the Company would not necessarily constitute a Trust Event of Default.
However, in the event of payment defaults under, or acceleration of, senior or
subordinated indebtedness of the Company, the subordination provisions of the
applicable Securities Resolution will, unless the applicable Securities
Resolution states otherwise, provide that no payments may be made in respect of
the Corresponding Junior Subordinated Debt Securities until such senior or
subordinated indebtedness has been paid in full or any payment default
thereunder has been cured or waived. Failure to make required payments on any
series of Corresponding Junior Subordinated Debt Securities would constitute a
Trust Event of Default.
LIMITED PURPOSE OF APPLIED POWER TRUSTS
Each Applied Power Trust's Preferred Securities evidence undivided
beneficial ownership interests in the assets of such Applied Power Trust, and
each Applied Power Trust exists for the sole purposes of issuing its Preferred
Securities and Common Securities, investing the proceeds thereof in
Corresponding Junior Subordinated Debt Securities and engaging in only those
other activities necessary, convenient or incidental thereto. A principal
difference between the rights of a holder of a Preferred Security and a holder
of a Corresponding Junior Subordinated Debt Security is that a holder of a
Corresponding Junior Subordinated Debt Security is entitled to receive from the
Company the principal amount of and interest accrued on Corresponding Junior
Subordinated Debt Securities held, while a holder of Preferred Securities is
entitled to receive Distributions from such Applied Power Trust (or from the
Company under the applicable Guarantee Agreement) if and to the extent such
Applied Power Trust has funds available for the payment of such Distributions.
RIGHTS UPON DISSOLUTION
Upon any voluntary or involuntary dissolution of any Applied Power Trust
involving the liquidation of the Corresponding Junior Subordinated Debt
Securities, the holders of the related Preferred Securities will be entitled to
receive, out of assets held by such Applied Power Trust and, after satisfaction
of creditors of such Applied Power Trust as provided by applicable law, the
Liquidation Distribution in cash. See "Description of Preferred Securities --
Liquidation Distribution upon Dissolution." Upon any voluntary or involuntary
liquidation or bankruptcy of the Company, the Property Trustee, as holder of the
Corresponding Junior Subordinated Debt Securities, would be a junior
subordinated creditor of the Company, subordinated in right of payment to all
senior indebtedness and subordinated
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<PAGE>
indebtedness, but entitled to receive payment in full of principal and interest,
before any stockholders of the Company receive payments or distributions. Since
the Company is the guarantor under each Guarantee Agreement and pursuant to the
Indenture, as borrower, has agreed to pay for all costs, expenses and
liabilities of each Applied Power Trust (other than the Applied Power Trust's
obligations to the holders of its Preferred Securities), the positions of a
holder of such Preferred Securities and a holder of such Corresponding Junior
Subordinated Debt Securities relative to other creditors and to stockholders of
the Company in the event of liquidation or bankruptcy of the Company are
expected to be substantially the same.
DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, representing contracts
obligating holders to purchase from the Company, and the Company to sell to the
holders, a specified number of shares of Class A Common Stock at a future date
or dates. The price per share of Class A Common Stock may be fixed at the time
the Stock Purchase Contracts are issued or may be determined by reference to a
specific formula set forth in the Stock Purchase Contracts. Stock Purchase
Contracts may be issued separately or as a part of units ("Stock Purchase
Units") consisting of a Stock Purchase Contract and either (x) Senior Debt
Securities, Subordinated Debt Securities or Junior Subordinated Debt Securities,
(y) debt obligations of third parties, including U.S. Treasury securities, or
(z) Preferred Securities of an Applied Power Trust, securing the holder's
obligations to purchase the Class A Common Stock under the Stock Purchase
Contracts. The Stock Purchase Contracts may require the Company to make
periodic payments to the holders of the Stock Purchase Units or vice versa, and
such payments may be unsecured or prefunded on some basis. The Stock Purchase
Contracts may require holders to secure their obligations thereunder in a
specified manner and in certain circumstances the Company may deliver newly
issued prepaid stock purchase contracts ("Prepaid Securities") upon release to a
holder of any collateral securing such holder's obligations under the original
Stock Purchase Contract.
The applicable Prospectus Supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units and, if applicable, Prepaid
Securities. The description in the Prospectus Supplement will not purport to
be complete and will be qualified in its entirety by reference to the Stock
Purchase Contracts, the collateral arrangements and depositary arrangements, if
applicable, relating to such Stock Purchase Contracts or Stock Purchase Units
and, if applicable, the Prepaid Securities and the document pursuant to which
such Prepaid Securities will be issued. Certain material United States Federal
income tax considerations applicable to the Stock Purchase Units and Stock
Purchase Contracts will be set forth in the Prospectus Supplement relating
thereto.
BOOK-ENTRY ISSUANCE
The Debt Securities, Preferred Securities and Corresponding Junior
Subordinated Debt Securities of a series may be issued in whole or in part in
the form of one or more Global Securities that will be deposited with, or on
behalf of, the Depositary identified in the Prospectus Supplement relating to
such series ("Book-Entry Securities"). Unless otherwise indicated in the
applicable Prospectus Supplement for such series, the Depositary will be DTC.
Book-Entry Securities may be issued only in fully registered form and in either
temporary or permanent form. Unless and until it is exchanged in whole or in
part for the individual Book-Entry Securities represented thereby, a Book-Entry
Security may not be transferred except as a whole by the Depositary for such
Book-Entry Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any nominee to a successor Depositary or any nominee of such
successor.
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. DTC holds securities that its Participants
deposit with DTC. DTC also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in Participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
Direct Participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations ("Direct
Participants"). DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange,
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<PAGE>
Inc., the American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available to others
such as securities brokers and dealers, banks and trust companies that clear
through or maintain custodial relationships with Direct Participants, either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and its Participants are on file with the Commission.
Purchases of Book-Entry Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Book-Entry
Securities on DTC's records. The ownership interest of each actual purchaser of
each Book-Entry Security ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Book-Entry
Securities. Transfers of ownership interests in the Book-Entry Securities are
to be accomplished by entries made on the books of Participants acting on behalf
of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Book-Entry Securities, except in the
event that use of the book-entry system is discontinued. The laws of some
states require that certain purchasers of securities take physical delivery of
such securities in definitive form. Such limits and such laws may impair the
ability to transfer beneficial interests in a Global Security.
To facilitate subsequent transfers, all Book-Entry Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Book-Entry Securities with DTC and their
registration in the name of Cede & Co. effect no change in beneficial ownership.
DTC has no knowledge of the actual Beneficial Owners of the Book-Entry
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Book-Entry Securities are credited, which may or may not
be the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
The Company and the Applied Power Trusts expect that conveyance of notices
and other communications by DTC to Direct Participants, by Direct Participants
to Indirect Participants, and by Direct Participants and Indirect Participants
to Beneficial Owners and the voting rights of Direct Participants, Indirect
Participants and Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Redemption notices shall be sent to Cede & Co. as the registered holder of
the Book-Entry Securities.
Although voting with respect to the Book-Entry Securities is limited to the
holders of record of the Book-Entry Securities, in those instances in which a
vote is required, neither DTC nor Cede & Co. will itself consent or vote with
respect to Book-Entry Securities. Under its usual procedures, DTC would mail an
omnibus proxy ( "Omnibus Proxy") to the relevant Trustee as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts such Book-Entry
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
As long as the Book-Entry Securities are held by DTC or its nominee and DTC
continues to make its same-day funds settlement system available to the Company,
all payments on the Book-Entry Securities (other than Preferred Securities or
Corresponding Junior Subordinated Debt Securities) will be made by the Company
in immediately available funds to DTC. Distribution payments on the Preferred
Securities or the Junior Subordinated Debt Securities will be made by the
relevant Trustee to DTC. The Company and the Applied Power Trusts have been
advised that DTC's practice is to credit Direct Participants' accounts on the
relevant payment date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive payments
on such payment date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices and will be the
responsibility of such Participant and not of DTC, the relevant Trustee, the
Applied Power Trust (as applicable) or the Company, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment on Book-
Entry Securities to DTC is the responsibility of the Company or the relevant
Trustee (as applicable), disbursement of such payments to Direct Participants is
the responsibility of DTC and disbursements of such payments to the Beneficial
Owners is the responsibility of Direct and Indirect Participants
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<PAGE>
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Preferred Securities is at any time unwilling, unable
or ineligible to continue as depositary and a successor depositary is not
appointed by the Company within 90 days, the Company will issue individual
Preferred Securities of such series in exchange for the Global Security
representing such series of Preferred Securities. In addition, the Company may
at any time and in its sole discretion, subject to any limitations described in
the Prospectus Supplement relating to such Preferred Securities, determine not
to have any Preferred Securities of such series represented by one or more
Global Securities and, in such event, will issue individual Preferred Securities
of such series in exchange for the Global Security or the Securities
representing such series of Preferred Securities. Further, if the Company so
specifies with respect to Preferred Securities of a series, an owner of a
beneficial interest in a Global Security representing Preferred Securities of
such series may, on terms acceptable to the Company, the Property Trustee and
the Depositary for such Global Security, receive individual Preferred Securities
of such series in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Preferred
Securities. In any such instance, a Beneficial Owner in such Global Security
will be entitled to physical delivery of individual Preferred Securities of the
series represented by such Global Security equal in principal amount to such
beneficial interest and to have such Preferred Securities registered in its
name. Individual Preferred Securities of such series so issued will be issued
in such denominations as set forth in the accompanying Prospectus Supplement.
DTC may discontinue providing its services as securities depositary with
respect to Debt Securities at any time by giving reasonable notice to the
Company or the Indenture Trustee. Under such circumstances, if a successor
depositary is not appointed by the Company within 90 days, the Company will
issue individual definitive Debt Securities in exchange for all the Global
Securities representing such Debt Securities. In addition, the Company may at
any time and in its sole discretion determine not to have the Debt Securities
represented by Global Securities and, in such event, will issue individual
definitive Debt Securities in exchange for all the Global Securities
representing the Debt Securities. Individual definitive Debt Securities so
issued will be issued in denominations of $1,000 and any larger amount that is
an integral multiple of $1,000 and registered in such names as DTC shall direct.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Applied Power Trusts and the Company
believe to be accurate, but the Applied Power Trusts and the Company assume no
responsibility for the accuracy thereof. Neither the Applied Power Trusts nor
the Company has any responsibility for the performance by DTC or its
Participants of their respective obligations as described herein or under the
rules and procedures governing their respective operations.
PLAN OF DISTRIBUTION
The Company and/or any Applied Power Trust may sell the Securities in any
one or more of the following ways from time to time: (i) to or through
underwriters or dealers; (ii) directly to one or more purchasers; or (iii)
through agents. Prospectus Supplement with respect to the Securities being
offered thereby sets forth the terms of the offering of such Securities,
including the name or names of any underwriters, the purchase price of such
Securities and the proceeds to the Company and/or an Applied Power Trust from
such sale, any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price, any discounts or concessions
allowed or reallowed or paid to dealers, and any securities exchange on which
such Securities may be listed. Only underwriters so named in the Prospectus
Supplement are deemed to be underwriters in connection with the Securities
offered thereby.
If underwriters are used in the sale, the Securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase such Securities will be subject to
certain conditions precedent, and the underwriters will be obligated to purchase
all the Securities of the series offered by the Company's and/or the applicable
Applied Power Trust's 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.
Securities may also be offered and sold, if so indicated in the Prospectus
Supplement, in connection with a remarketing upon their purchase, in accordance
with a redemption or repayment pursuant to their terms, by one or more firms
("remarketing firms") acting as principals for their own accounts or as agents
for the Company and/or an
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<PAGE>
applicable Applied Power Trust. Any remarketing firm will be identified and the
terms of its agreement, if any, with the Company and its compensation will be
described in the Prospectus Supplement. Remarketing firms may be deemed to be
underwriters in connection with the Securities remarketed thereby.
Securities may also be sold directly by the Company and/or an Applied Power
Trust or through agents designated by the Company from time to time. Any agent
involved in the offering and sale of the Securities in respect of which this
Prospectus is delivered is named, and any commissions payable by the Company
and/or an Applied Power Trust to such agent are set forth, in the Prospectus
Supplement. Unless otherwise indicated in the Prospectus Supplement, any such
agent is acting on a best efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company and/or an Applied
Power Trust will 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. There may be
limitations on the minimum amount which may be purchased by any such
institutional investor or on the portion of the aggregate principal amount of
the particular Securities which may be sold pursuant to such arrangements.
Institutional investors to which such offers may be made, when authorized,
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and such other
institutions as may be approved by the Company and/or an Applied Power Trust.
The obligations of any such purchasers pursuant to such delayed delivery and
payment arrangements will not be subject to any conditions except (i) the
purchase by an institution of the particular Securities shall not at the time of
delivery be prohibited under the laws of any jurisdiction in the United States
to which such institution is subject, and (ii) if the particular Securities are
being sold to underwriters, the Company and/or an Applied Power Trust shall have
sold to such underwriters all of such Securities other than the Securities
covered by such arrangements. Underwriters will not have any responsibility in
respect of the validity of such arrangements or the performance of the Company
or such institutional investors thereunder.
If any underwriter or any selling group member intends to engage in
stabilizing, syndicate short covering transactions, penalty bids or any other
transaction in connection with the offering of Securities that may stabilize,
maintain, or otherwise affect the price of such Securities, such intention and a
description of such transactions will be described in the Prospectus Supplement.
Agents and underwriters may be entitled under agreements entered into with
the Company and/or the applicable Applied Power Trust to indemnification by the
Company against certain civil liabilities, including liabilities under the
Securities Act of 1933, or to contribution with respect to payments which the
agents or underwriters may be required to make in respect thereof. Agents and
underwriters may engage in transactions with, or perform services for, the
Company and its subsidiaries in the ordinary course of business.
CERTAIN LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplements,
certain legal matters in connection with the Securities will be passed upon (i)
for the Company by Quarles & Brady LLP, Milwaukee, Wisconsin, counsel to the
Company, (ii) for the Applied Power Trusts (with respect to the validity of the
Preferred Securities under Delaware law) by Morris, Nichols, Arsht & Tunnell,
Wilmington, Delaware, special Delaware counsel to the Applied Power Trusts and
the Company, and (iii) for any underwriters by Cahill Gordon & Reindel (a
partnership including a professional corporation), New York, New York. Anthony
W. Asmuth III, the Corporate Secretary of the Company, is a partner in Quarles &
Brady LLP. As of December 31, 1998, Mr. Asmuth owned 38,420 shares of the
Company's Class A Common Stock and served as trustee or co-trustee with sole or
shared voting and dispositive powers over trusts that held an aggregate of
270,402 shares of Class A Common Stock.
EXPERTS
The consolidated financial statements of the Company as of and for the year
ended August 31, 1998, and the combination of the consolidated balance sheet as
of August 31, 1997, and the related consolidated statements of earnings,
shareholders' equity and cash flows for each of the two years in the period then
ended, after restatement for the 1998 pooling of interests, incorporated by
reference in this Prospectus, have been incorporated herein in reliance
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on the report of PricewaterhouseCoopers LLP, independent accountants, given on
the authority of that firm as experts in accounting and auditing.
The consolidated financial statements of the Company for the years ended
August 31, 1997 and 1996, prior to restatement for pooling of interests, and the
separate financial statements of ZERO Corporation included in the 1997 and 1996
restated consolidated financial statements, for the years ended March 31, 1997
and 1996, incorporated in this Prospectus by reference from the Company's Annual
Report on Form 10-K for the year ended August 31, 1998, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports, which
are incorporated herein by reference, and have been so incorporated in reliance
upon the reports of such firm given upon their authority as experts in
accounting and auditing.
The financial statements of Rubicon Group plc for the year ended May 31,
1998, incorporated by reference in this Prospectus, have been incorporated
herein in reliance on the report of PricewaterhouseCoopers, chartered
accountants and registered auditors, given on the authority of that firm as
experts in accounting and auditing.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and distribution of
the Securities covered by this Registration Statement are as follows:
<TABLE>
<S> <C>
SEC registration fee (actual)...................... $ 171,900
Trustee's fee and expenses......................... 15,000
Printing and engraving expenses.................... 90,000
Legal fees and expenses............................ 200,000
Accounting fees and expenses....................... 50,000
Rating agency fees................................. 200,000
Miscellaneous...................................... 23,100
---------
Total............................................ $ 750,000
=========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is incorporated under the Wisconsin Business Corporation Law
("WBCL"). Under Section 180.0851(1) of the WBCL, the Company is required to
indemnify a director or officer, to the extent such person is successful on the
merits or otherwise in the defense of a proceeding, for all reasonable expenses
incurred in proceeding if such person was a party because he or she was a
director or officer of the Company. In all other cases, the Company is required
by Section 180.0851(2) of the WBCL to indemnify a director or officer against
liability incurred in a proceeding to which such person was a party because he
or she was an officer or director of the Company, unless it is determined that
he or she breached or failed to perform a duty owed to the Company and the
breach or failure to perform constitutes: (i) a willful failure to deal fairly
with the Company or its shareholders in connection with a matter in which the
director or officer has a material conflict of interest; (ii) a violation of
criminal law, unless the director or officer had reasonable cause to believe his
or her conduct was lawful or no reasonable cause to believe his or her conduct
was unlawful; (iii) a transaction from which the director or officer derived an
improper personal profit; or (iv) willful mis conduct. Section 180.0858(1) of
the WBCL provides that, subject to certain limitations, the mandatory
indemnification provisions do not preclude any additional right to
indemnification or allowance of expenses that a director or officer may have
under the Company's articles of incorporation, bylaws, a written agreement or a
resolution of the Board of Directors or shareholders.
Section 180.0859 of the WBCL provides that it is the public policy of the
State of Wisconsin to require or permit indemnification, allowance of expenses
and insurance to the extent required or permitted under Sections 180.0850 to
180.0858 of the WBCL for any liability incurred in connection with a proceeding
involving a federal or state statute, rule or regulation regulating the offer,
sale or purchase of securities.
Section 180.0828 of the WBCL provides that, with certain exceptions, a
director is not liable to a corporation, its shareholders, or any person
asserting rights on behalf of the corporation or its shareholders, for damages,
settlements, fees, fines, penalties or other monetary liabilities arising from a
breach of, or failure to perform, any duty resulting solely from his or her
status as a director, unless the person asserting liability proves that the
breach or failure to perform constitutes any of the four exceptions to mandatory
indemnification under Section 180.0851(2) referred to above.
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<PAGE>
Under Section 180.0833 of the WBCL, directors of the Company against whom
claims are asserted with respect to the declaration of an improper dividend or
other distribution to shareholders to which they assented are entitled to
contribution from other directors who assented to such distribution and from
shareholders who knowingly accepted the improper distribution, as provided
therein.
Article VIII of the Company's Bylaws contains provisions that generally
parallel the indemnification provisions of the WBCL and cover certain procedural
matters not dealt with in the WBCL. Directors and officers of the Company are
also covered by directors' and officers' liability insurance under which they
are insured (subject to certain exceptions and limitations specified in the
policy) against expenses and liabilities arising out of proceedings to which
they are parties by reason of being or having been directors or officers.
Under each Trust Agreement, the Company will agree to indemnify each of the
Issuer Trustees of the Applied Power Trusts or any predecessor Issuer Trustee
for the Applied Power Trusts, and to hold the Issuer Trustees harmless against,
any loss, damage, claims, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the acceptance or
administration of the Trust Agreements, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties under the Trust Agreements.
ITEM 16. EXHIBITS.
See Exhibit Index following the Signatures page in this Registration
Statement, which Exhibit Index is incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
The undersigned Registrants hereby undertake (in accordance with the
corresponding lettered undertakings in Item 512 of Regulation S-K):
(a) (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end
of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this
section do not apply if the Registration Statement is on Form S-3 or Form S-8,
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant with
the Commission pursuant
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<PAGE>
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) Reference is made to the indemnification provisions described in Item
15 of this Registration Statement.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(i) (1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment to this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Butler, State of Wisconsin, on January 22,
1999.
APPLIED POWER INC.
(Registrant)
By: /s/ ROBERT C. ARZBAECHER
----------------------------
Robert C. Arzbaecher
Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE
/s/ RICHARD G. SIM Chairman of the Board, President and
- -----------------------
Richard G. Sim Chief Executive Officer; Director
/s/ ROBERT C. ARZBAECHER Senior Vice President and Chief Financial
- ------------------------ Officer
Robert C. Arzbaecher (Principal Financial Officer)
/s/ RICHARD D. CARROLL Controller and
- ----------------------
Richard D. Carroll Principal Accounting Officer
/s/ H. RICHARD CROWTHER* Director
- ------------------------
H. Richard Crowther
/s/ JACK L. HECKEL* Director
- -------------------
Jack L. Heckel
/s/ RICHARD A. KASHNOW* Director
- -----------------------
Richard A. Kashnow
/s/ L. DENNIS KOZLOWSKI* Director
- ------------------------
L. Dennis Kozlowski
/s/ JOHN J. McDONOUGH* Director
- ----------------------
John J. McDonough
* By signing his name hereto, Robert C. Arzbaecher signs this document on behalf
of each person indicated above pursuant to the power of attorney duly executed
by such persons.
By /s/ ROBERT C. ARZBAECHER
-------------------------
Robert C. Arzbaecher
Attorney-in-Fact
Each of the above signatures is affixed as of January 22, 1999.
S-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Applied Power
Capital Trust I and Applied Power Capital Trust II each certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing
on Form S-3 and has duly caused this Amendment to this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Butler, State of Wisconsin, on January 22, 1999.
APPLIED POWER CAPITAL TRUST I
By: Applied Power Inc., as Depositor
By: /s/ ROBERT C. ARZBAECHER
------------------------
Robert C. Arzbaecher
Senior Vice President and
Chief Financial Officer
APPLIED POWER CAPITAL TRUST II
By: Applied Power Inc., as Depositor
By: /s/ ROBERT C. ARZBAECHER
------------------------
Robert C. Arzbaecher
Senior Vice President and
Chief Financial Officer
S-2
<PAGE>
APPLIED POWER INC
(THE "COMPANY")
(COMMISSION FILE NO. 1-11288)
EXHIBIT INDEX
TO
FORM S-3 REGISTRATION STATEMENT
(File No. 333-47493)
The following exhibits are filed with or incorporated by reference in this
Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION INCORPORATED HEREIN FILED
BY REFERENCE TO HEREWITH
<S> <C> <C> <C>
1.1* Form of Purchase Agreement for Debt
Securities and Debt Warrants
1.2* Form of Purchase Agreement for Equity
Securities
1.3* Form of Purchase Agreement for Preferred
Securities, Stock Purchase Contracts or
Stock Purchase Units
3.1 Restated Articles of Incorporation of the Exhibit 4.1 to the
Company Company's Registration
Statement on Form S-8
(File No. 333-46469)
3.2 Amended and Restated By-Laws Exhibit 3.2 to the
of the Company Company's Form 10-K
for fiscal year ended
August 31, 1997
4.1 Articles III, IV and V of the Company's See Exhibit 3.1 above
Restated Articles of Incorporation
4.2 Agreement for Purchase and Sale, dated Exhibit 19.2(a)-(g) to
August 29, 1990, between Minnesota the Company's Form
Mining and Manufacturing Company and 10-Q for quarter ended
Applied Power Inc., and seven related May 31, 1991
Leases, each dated April 29, 1991, between
Bernard Garland and Sheldon Garland, d/b/a
Garland Enterprises, as Landlord, and
Applied Power Inc., as Tenant
</TABLE>
EI-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION INCORPORATED HEREIN FILED
BY REFERENCE TO HEREWITH
<S> <C> <C> <C>
4.3 Multicurrency Credit Agreement, dated as of Exhibit 4.4 to the
October 14, 1998, among Applied Power Company's Form 10-K
Inc. and Enerpac B.V., as Borrowers, for fiscal year ended
various financial institutions from time to August 31, 1998 ("1998
time party thereto, as Lenders, the First 10-K")
National Bank of Chicago, as Syndication
Agent, Societe Generale, as Documentation
Agent, and Bank of America National Trust
and Savings Association, as Administrative
Agent, arranged by NationsBanc
Montgomery Securities LLC
4.4 (a) Receivables Purchase Agreement dated Exhibit 4.1 to the
as of November 20, 1997 among Applied Company's Form 10-Q
Power Credit Corporation as Seller, Applied for quarter ended
Power Inc. individually and as Servicer, and November 30, 1997
Barton Capital Corporation as Purchaser and
Societe Generale as Agent
(b) First Amendment to Receivables Exhibit 4.5(b) to 1998
Purchase Agreement dated as of August 28, 10-K
1998
(c) Second Amendment to Receivables Purchase Exhibit 4.2(c) to the
Agreeement dated as of December 18, 1998 Company's Form 10-Q
for quarter ended
November 30, 1998
("11/30/98 10-Q")
4.5 Form of Indenture for Debt Securities+ X**
4.6 Certificate of Trust of Applied Power Exhibit 99.1 to 11/30/98
Capital Trust I+ 10-Q
4.7 Trust Agreement of Applied Power Capital Exhibit 99.2 to 11/30/98
Trust II+ 10-Q
4.8 Certificate of Trust of Applied Power Exhibit 99.3 to 11/30/98
Capital Trust II+ 10-Q
4.9 Trust Agreement of Applied Power Capital Exhibit 99.4 to 11/30/98
Trust II+ 10-Q
4.10 Form of Amended and Restated Trust X**
Agreement for Applied Power Capital Trusts
I and II
4.11 Form of Preferred Security Certificate for x**
Applied Power Capital Trusts I and II
(incorporated by reference to Exhibit D of
Exhibit 4.10)
4.12 Form of Guarantee Agreement for Applied x**
Power Capital Trusts I and II
5.1 Opinion of Quarles & Brady LLP+ x***
</TABLE>
EI-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION INCORPORATED HEREIN FILED
BY REFERENCE TO HEREWITH
<S> <C> <C> <C>
5.2 Opinion of Morris, Nichols, Arsht & Tunnell X**
as to the legality of the Preferred Securities
to be issued by Applied Power Capital Trust
I and Applied Power Capital Trust II
12 Statement of Computation of Ratio of X***
Earnings to Fixed Charges+
23.1 Consent of Deloitte & Touche LLP X***
Milwaukee, Wisconsin+
23.2 Consent of Deloitte & Touche LLP X***
Los Angeles, California+
23.3 Consent of PricewaterhouseCoopers LLP X***
Milwaukee, Wisconsin+
23.4 Consent of PricewaterhouseCoopers X***
Birmingham, England+
23.5 Consent of Quarles & Brady LLP Contained in Exhibit 5.1
23.6 Consent of Morris, Nichols, Arsht & Tunnell Contained in Exhibit 5.2
24 Power of Attorney Signature page of
original Registration
Statement
25.1 Form T-1, Statement of Eligibility under the X**
Trust Indenture Act of 1939 of The First
National Bank of Chicago with respect to the
Indenture for Debt Securities and the
Guarantees for the benefit of the holders of
Preferred Securities of Applied Power
Capital Trust I and Applied Power Capital
Trust II+
25.2 Form T-1, Statement of Eligibility under the X**
Trust Indenture Act of 1939 of The First
National Bank of Chicago with respect to the
Amended and Restated Trust Agreement of
Applied Power Capital Trust I
25.3 Form T-1, Statement of Eligibility under the X**
Trust Indenture Act of 1939 of The First
National Bank of Chicago with respect to the
Amended and Restated Trust Agreement of
Applied Power Capital Trust II
</TABLE>
_______________
* To be filed by amendment or under cover of Form 8-K and incorporated herein
by reference.
** Filed with Pre-Effective Amendment No.1 to this Registration Statement.
*** Filed with Pre-Effective Amendment No.2 to this Registration Statement.
+ Replaces the form of this Exhibit previously filed with this Registration
Statement.
EI-3
<PAGE>
EXHIBIT 5.1
QUARLES & BRADY LLP
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
January 22, 1999
Applied Power Inc.
13000 West Silver Spring Drive
Butler, WI 53007-1093
Ladies and Gentlemen:
We are providing this opinion in connection with the Registration Statement
of Applied Power Inc. (the "Company") on Form S-3 (File No. 333-47493), as
amended (the "Registration Statement"), filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"), with respect to the proposed offering on a delayed basis pursuant to
Rule 415 under the Act from time to time, together or separately, of up to
$600,000,000 of the Company's (i) unsecured debt securities ("Debt Securities"),
(ii) Cumulative Preferred Stock, par value $1.00 per share, which may be
represented by depositary shares (the "Preferred Stock"), (iii) Class A Common
Stock, par value $.20 per share (the "Class A Common Stock"), (iv) warrants to
purchase Debt Securities, Preferred Stock or Class A Common Stock (the
"Warrants"), (v) stock purchase contracts to purchase Class A Common Stock (the
"Stock Purchase Contracts") and/or (vi) stock purchase units ("Stock Purchase
Units"), each representing ownership of a Stock Purchase Contract and any of (x)
Debt Securities, (y) debt obligations of third parties, including U.S. Treasury
Securities, or (z) Preferred Securities of Applied Power Capital Trust I or
Applied Power Capital Trust II (each, an "Applied Power Trust"), and/or (vii)
the guarantee by the Company of any Preferred Securities issued by each Applied
Power Trust pursuant to a Guarantee Agreement to be executed by the Company (the
"Guarantees"). The Debt Securities, the Preferred Stock, the Class A Common
Stock, the Warrants, the Stock Purchase Contracts, the Stock Purchase Units and
the Guarantees shall be collectively referred to herein as the "Offered
Securities."
We have examined (i) the Registration Statement; (ii) the Company's
Restated Articles of Incorporation and Amended and Restated Bylaws, as amended
to date; (iii) the proposed form of Indenture for Debt Securities (including, as
exhibits, proposed forms of Registered Security and Bearer Security thereunder)
from the Company to The First National Bank of Chicago, as Trustee (the
"Indenture"), providing for the issuance of the Debt Securities from time to
time in one or more series pursuant to the terms of one or more Securities
Resolutions (as defined in the Indenture) creating such series; (iv) other
exhibits to the Registration Statement relating to the Offered Securities; (v)
corporate proceedings of the Company relating to the Registration Statement, the
<PAGE>
Applied Power Inc.
Page 2
January 22, 1999
Indenture and the transactions contemplated thereby; and (vi) such other
documents, and such matters of law, as we have deemed necessary in order to
render this opinion.
On the basis of and subject to the foregoing, we advise you that, in our
opinion:
1. The Company is a corporation validly existing under the laws of the
State of Wisconsin.
2. When (i) the Registration Statement has become effective under the
Act, (ii) the terms of any class or series of Offered Securities have
been authorized by appropriate action of the Company in a manner that
would not violate any applicable law or result in a default under or
breach of any agreement or instrument binding upon the Company and so
as to comply with any requirement or restriction imposed by a court or
a governmental or regulatory body having jurisdiction over the
Company, (iii) any such class or series of Offered Securities has been
duly issued and sold, and payment has been received for such Offered
Securities in the manner contemplated in the Registration Statement
and any prospectus supplement relating thereto, then (a) the Preferred
Stock and Class A Common Stock will be validly issued, fully paid and
nonassessable, subject to the personal liability which may be imposed
on shareholders by statute for debts owing to employees as described
below; and (b) the Debt Securities, the Warrants, the Stock Purchase
Units and the Guarantees will be duly authorized and legally issued
and will constitute valid and binding obligations of the Company
enforceable in accordance with their respective terms subject to (x)
bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium and other similar laws now or hereafter in effect relating
to or affecting creditors' rights generally, (y) general principles of
equity (regardless of whether considered in a proceeding at law or in
equity) and (z) the qualification that the remedy of specific
performance and injunctive or other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court
before which any proceeding may be brought.
Our opinion with respect to the nonassessability of the Preferred Stock and
the Class A Common Stock is subject to the personal liability which may be
imposed on shareholders by Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law, as judicially interpreted, for debts owing to employees for
services performed, but not exceeding six months service in any one case.
Although Section 180.0622(2)(b) provides that such personal liability of
shareholders shall be "to
<PAGE>
Applied Power Inc.
Page 3
January 22, 1999
an amount equal to the par value of shares owned by them respectively, and to
the consideration for which their shares without par value was issued," the
Wisconsin Supreme Court, by a split decision without a written opinion, has
affirmed a judgment holding shareholders of a corporation liable under the
substantially identical predecessor statute in effect prior to January 1, 1991
(Section 180.40(6)) for unpaid employee wages to an amount equal to the
consideration for which their par value shares were issued rather than the
shares' lower stated par value. Local 257 of Hotel and Restaurant Employees and
Bartenders International Union v. Wilson Street East Dinner Playhouse, Inc., 126
Wis. 2d 284, 375 N.W.2d 664 (1985) (affirming the 1983 decision of the Circuit
Court for Dane County, Wisconsin, in Case No. 82-CV-0023).
As to the legality of the Preferred Securities to be issued by the Applied
Power Trusts, you have received the opinion of Morris, Nichols, Arsht & Tunnell,
special Delaware counsel to the Applied Power Trusts and the Company.
Anthony W. Asmuth III, a partner in our firm, is Corporate Secretary of the
Company.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to our firm under the caption "Certain Legal
Matters" in the Prospectus constituting a part thereof. In giving our consent,
we do not admit that we are "experts" within the meaning of Section 11 of the
Act, or that we come within the category of persons whose consent is required by
Section 7 of the Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ Quarles & Brady LLP
QUARLES & BRADY LLP
<PAGE>
EXHIBIT 12
APPLIED POWER INC.
COMPUTATION OF RATIO OF
EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT RATIO DATA)
YEAR ENDED AUGUST 31,
-----------------------------------------------------------------------------------
Three Months Ended
November 30, 1998(1)(2) 1998(3) 1997 1996 1995 1994
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Earnings from continuing operations $16,401 $26,687 $ 57,925 $50,679 $39,830 $29,747
Add Income Tax Expense 9,802 30,698 31,299 26,735 21,269 16,514
Add Interest Expense (4) 13,899 28,531 16,158 7,892 9,250 10,859
Portion of Rent deemed interest factor (5) 2,020 6,639 4,747 4,223 4,331 4,462
-----------------------------------------------------------------------------------
Total Earnings Available
for Fixed Charges $42,122 $92,555 $110,129 $89,529 $74,680 $61,582
===================================================================================
Fixed Charges:
Interest Expense (4) $13,899 $28,531 $ 16,158 $ 7,892 $ 9,250 $10,859
Portion of Rent deemed interest factor (5) 2,020 6,639 4,747 4,223 4,331 4,462
-----------------------------------------------------------------------------------
Total Fixed Charges $15,919 $35,170 $ 20,905 $12,115 $13,581 $15,321
===================================================================================
Ratio of Earnings to Fixed Charges 2.6 2.6 5.3 7.4 5.5 4.0
===================================================================================
</TABLE>
_______________
The ratios reflect the combined results of operations and financial
position of the Company and ZERO Corporation, acquired by merger on July
31, 1998, restated for all periods presented pursuant to the pooling-of-
interests method of accounting, and reflect the results of other acquired
companies from their respective effective dates of acquisition in
accordance with the purchase method of accounting.
(1) The Company's business has historically experienced the effects of
seasonality where the second half of the fiscal year generally produces
better results than the first half. The results for the first quarter ended
November 30, 1998, are not necessarily indicative of full year results.
(2) Net earnings for the three month period ended November 30, 1998, include a
one-time pre-tax contract termination charge of $7,824. Excluding this
charge and the related tax benefit, the ratio of earnings to fixed charges
would have been 3.1.
(3) 1998 net earnings include a non-recurring restructuring charge of $52,637
which related to merger costs, various plant consolidations, and other cost
reductions and product rationalization efforts of the Company. Excluding
this charge and the related tax benefit, the ratio of earnings to fixed
charges would have been 4.6.
(4) Interest Expense consists of interest on indebtedness and amortization of
debt expense.
(5) 33% of rental expense is deemed representative of the interest factor.
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Pre-Effective
Amendment No. 2 to Registration Statement No. 333-47493 of Applied Power Inc. on
Form S-3 of our report dated September 25, 1997 (October 16, 1997 as to Note O),
appearing in the Annual Report on Form 10-K of Applied Power Inc. for the year
ended August 31, 1998, and to the reference to us under the heading "Experts" in
the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
January 21, 1999
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Pre-Effective
Amendment No. 2 to Registration Statement No. 333-47493 of Applied Power Inc. on
Form S-3 of our report dated May 11, 1998 (related to the consolidated financial
statements of ZERO Corporation and subsidiaries not presented separately
therein), appearing in the Annual Report on Form 10-K of Applied Power Inc. for
the year ended August 31, 1998, and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Los Angeles, California
January 21, 1999
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment to this
Registration Statement of Applied Power Inc. on Form S-3 of our report dated
September 30, 1998, appearing in the Annual Report on Form 10-K of Applied Power
Inc. for the year ended August 31, 1998, and to the reference to our firm under
the caption "Experts" in the Prospectus which is part of this Registration
Statement.
PRICEWATERHOUSECOOPERS LLP
Milwaukee, Wisconsin
January 21, 1999
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment to this
Registration Statement of Applied Power Inc. on Form S-3 of our report dated
August 26, 1998 on the consolidated financial statements of Rubicon Group plc as
at May 31, 1998 and for the year then ended, which report is included in the
Current Report on Form 8-K/A of Applied Power Inc. dated December 11, 1998,
filed with the Securities and Exchange Commission, and to the reference to our
firm under the caption "Experts" in the Prospectus which is part of this
Registration Statement.
PRICEWATERHOUSECOOPERS
Chartered Accountants and Registered Auditors
Birmingham, England
January 21, 1999
