<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 18, 1997
REGISTRATION NO. 333-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
QUANTUM CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 94-2665054
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
500 McCARTHY BOULEVARD
MILPITAS, CALIFORNIA 95035
(408) 894-4000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
MICHAEL A. BROWN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
QUANTUM CORPORATION
500 McCARTHY BOULEVARD
MILPITAS, CALIFORNIA 95035
(408) 894-4000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
STEVEN E. BOCHNER
JOHN A. FORE
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304
(415) 493-9300
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. //
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /__________
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. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED OFFERING PRICE(1)(2) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Debt Securities .................................................. $ -- $ --
Common Stock, par value $0.01 per share........................... -- --
Series A Junior Participating Preferred Stock (the "Rights")(3)... -- --
Total............................................................. $450,000,000 $136,364
</TABLE>
(1) Or (i) if any Debt Securities are issued at an original issue discount,
such greater principal amount as shall result in an aggregate initial
offering price equal to the amount to be registered or (ii) if any Debt
Securities are issued with a principal amount denominated in a foreign
currency or composite currency, such principal amount as shall result in an
aggregate initial offering price equivalent thereto in United States
dollars at the time of initial offering.
(2) These figures are estimates made solely for the purpose of calculating the
registration fee pursuant to Rule 457(o). Exclusive of accrued interest,
if any, on the Debt Securities.
(3) Each share of Common Stock registered hereby shall include the associated
Rights under the Company's Preferred Shares Rights Agreement, dated as of
August 3, 1988, between the registrant and Bank of America, N.T. & S.A.,
Rights Agent.
<PAGE> 2
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 THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
STATE.
SUBJECT TO COMPLETION, DATED JUNE 18, 1997
PROSPECTUS
$450,000,000
[LOGO] QUANTUM CORPORATION
Debt Securities and Common Stock
____________________________
Quantum Corporation ("Quantum" or the "Company") may from time to
time offer, together or separately, (1) its debt securities (the "Debt
Securities"), which may be either senior debt securities (the "Senior Debt
Securities") or subordinated debt securities (the "Subordinated Debt
Securities") and (2) shares of its common stock, par value $0.01 per share
(the "Common Stock"). The Debt Securities and the Common Stock are
collectively referred to herein as the "Securities".
The Securities offered pursuant to this Prospectus may be issued in
one or more series or issuances and will be limited to $450,000,000 aggregate
public offering price (or its equivalent (based on the applicable exchange rate
at the time of the sale) in one or more foreign currencies, currency units or
composite currencies as shall be designated by the Company). Certain specific
terms of the particular Securities in respect of which this Prospectus is being
delivered will be set forth in an accompanying Prospectus Supplement (the
"Prospectus Supplement"), including, where applicable, (i) in the case of Debt
Securities, the specific title, aggregate principal amount, the denomination,
whether such Debt Securities are secured or unsecured obligations, whether such
Debt Securities are senior or subordinated, maturity, premium, if any, the
interest rate (which may be fixed, floating or adjustable), the time and method
of calculating payment of interest, if any, the place or places where principal
of (and premium, if any) and interest, if any, on such Debt Securities will be
payable, the currency in which principal of (and premium, if any) and interest,
if any, on such Debt Securities will be payable, any terms of redemption at the
option of the Company or the Holder, any sinking fund provisions, terms for any
conversion into other Securities, the initial public offering price and other
special terms and (ii) in the case of Common Stock, the number of shares
offered for sale by the Company and the initial public offering price or method
of determining the initial public offering price. If so specified in the
applicable Prospectus Supplement, Debt Securities of a series may be issued in
whole or in part in the form of one or more temporary or permanent global
securities. The Company's Common Stock is listed on the Nasdaq National Market
under the symbol "QNTM". Any Common Stock sold pursuant to a Prospectus
Supplement will be quoted on such market.
Unless otherwise specified in a Prospectus Supplement, the Senior Debt
Securities, when issued, will be unsecured and will rank equally with all other
unsecured and unsubordinated indebtedness of the Company. The Subordinated Debt
Securities, when issued, will be subordinated in right of payment to all Senior
Indebtedness (as defined) of the Company, including any outstanding Senior Debt
Securities. See "Description of Debt Securities -- Subordination of
Subordinated Debt Securities".
The Prospectus Supplement may contain information concerning U.S.
federal income tax considerations, if applicable to the Securities offered.
The Securities may be sold directly, through agents, underwriters or
dealers as designated from time to time, or through a combination of such
methods. See "Plan of Distribution". If agents of the Company or any dealers
or underwriters are involved in the sale of the Securities in respect of which
the Prospectus is being delivered, the names of such agents, dealers or
underwriters and any applicable commissions or discounts, if any, are set forth
in or may be calculated from the Prospectus Supplement with respect to such
Securities.
This Prospectus may not be used to consummate sales of Securities
unless accompanied by a Prospectus Supplement.
SEE "RISK FACTORS" ON PAGE 3 OF THIS PROSPECTUS FOR A DESCRIPTION OF
CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN
THE SECURITIES.
_______________________________________________
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 COM-
MISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PRO-
SPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is June 18, 1997.
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy and information statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy and information statements and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, NW, Washington,
D.C. 20549, and at the Commission's Regional Offices located at Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission, 450 Fifth Street,
NW, Washington, D.C. 20549, at prescribed rates. The Commission maintains a
World Wide Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. The address of the World Wide Web site is http://www.sec.gov. The
Common Stock is quoted on the Nasdaq National Market. Reports, proxy and
information statements and other information concerning the Company may be
inspected at the offices of the Nasdaq Stock Market at 1735 K Street, NW,
Washington, D.C. 2001.
The Company has filed with the Commission a registration statement on
Form S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Securities. This Prospectus which
constitutes part of the Registration Statement does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information with respect to the Company and the Securities offered
hereby, reference is made to the Registration Statement and the exhibits and the
financial statements, notes and schedules filed as a part thereof or
incorporated by reference therein, which may be inspected at the public
reference facilities of the Commission at the addresses set forth above or
through the Commission's World Wide Web site.
Statements contained in this Prospectus as to the contents of any
contract or other document are not necessarily complete, and in each instance
are qualified in all respects by reference to the copy of such contract or
document filed as an exhibit to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission and are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1997;
(b) The Company's Registration Statement on Form 8-A filed with the
Commission on August 1, 1983, relating to the Company's Common Stock; and
(c) The Company's Registration Statement on Form 8-A filed with the
Commission on August 5, 1988, relating to the Company's Preferred Share purchase
rights.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Registration Statement of
which this Prospectus forms a part and prior to the termination of the offering
of the Securities offered hereby shall be deemed to be incorporated by reference
into this Prospectus and be a part hereof from the date of filing 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 the Registration Statement or this Prospectus to the extent that
a statement contained herein, in a Prospectus Supplement or in any other
document subsequently filed with the Commission which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of the Registration Statement or this
Prospectus.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of such person, a copy of any or all of the documents incorporated by
reference, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Requests should be
directed to Investor Relations, Quantum Corporation, 500 McCarthy Boulevard,
Milpitas, California 95035, telephone (408) 894-4000.
-2-
<PAGE> 4
THE COMPANY
Quantum Corporation ("Quantum" or the "Company") designs, develops and
markets mass storage products, including high-performance, high quality hard
disk drives, recording heads and tape drives. The Company was incorporated as a
California corporation in February 1980, and reincorporated as a Delaware
corporation in April 1987. The Company's principal executive offices are located
at 500 McCarthy Boulevard, Milpitas, California 95035, and its telephone number
is (408) 894-4000.
RISK FACTORS
Prior to making an investment decision with respect to the Securities
offered hereby, prospective investors should carefully consider the specific
factors set forth under the caption "Risk Factors" in the applicable Prospectus
Supplement pertaining thereto, together with all of the other information
appearing herein or therein or incorporated by reference herein, in light of
their particular investment objectives and financial circumstances.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying Prospectus Supplement,
the net proceeds to be received by the Company from the sale of the Securities
will be used for general corporate purposes, including capital expenditures and
to meet working capital needs. Pending such uses, the Company will invest the
net proceeds in interest-bearing securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges
for the Company and its consolidated subsidiaries for the periods indicated.
For purposes of calculating the ratio of earnings to fixed charges, earnings
consist of income before income taxes, plus fixed charges and fixed charges
consist of interest expense incurred and the estimated portion of rental
expense deemed by the Company to be representative of the interest factor of
rental payments under operating leases.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MARCH 31,
---------------------------------------------------------
1997 1996 1995 1994 1993
---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges(1).... 4.5x -- 6.0x 1.2x 9.6x
</TABLE>
- ----------
(1) Earnings for fiscal 1996 were insufficient to cover fixed charges by
$141.3 million.
-3-
<PAGE> 5
DESCRIPTION OF DEBT SECURITIES
The Senior Debt Securities are to be issued under an Indenture (the
"Senior Indenture"), between the Company, as issuer, and LaSalle National Bank,
as Trustee (the "Trustee"). The Subordinated Debt Securities are to be issued
under a separate Indenture (the "Subordinated Indenture"), also between the
Company, as issuer, and LaSalle National Bank, as Trustee. The Senior Indenture
and Subordinated Indenture are sometimes referred to collectively as the
"Indentures". A copy of the form of each Indenture is filed as an exhibit to
the Registration Statement of which this Prospectus is a part. The Debt
Securities may be issued from time to time in one or more series. The
particular terms of each series, or of Debt Securities forming a part of a
series, which are offered by a Prospectus Supplement will be described in such
Prospectus Supplement.
The following summaries of certain provisions of the Indentures do not
purport to be complete and are subject, and are qualified in their entirety by
reference, to all the provisions of the Indentures, including the definitions
therein of certain terms, and, with respect to any particular Debt Securities,
to the description of the terms thereof included in the Prospectus Supplement
relating thereto. Wherever particular Sections or defined terms of the
Indentures are referred to herein or in a Prospectus Supplement, such Sections
or defined terms are incorporated by reference herein or therein, as the case
may be.
GENERAL
The Indentures will provide that Debt Securities in separate series
may be issued thereunder from time to time without limitation as to aggregate
principal amount. The Company may specify a maximum aggregate principal amount
for the Debt Securities of any series. (Section 301) The Debt Securities are to
have such terms and provisions which are not inconsistent with the Indentures,
including as to maturity, principal and interest, as the Company may determine.
Unless otherwise specified in the applicable Prospectus Supplement, the Senior
Debt Securities when issued will be unsecured and unsubordinated obligations of
the Company and will rank on a parity with all other unsecured and
unsubordinated indebtedness of the Company. The Subordinated Debt Securities
when issued will be subordinated in right of payment to the prior payment in
full of all Senior Indebtedness of the Company, including any outstanding Senior
Debt Securities, as described under "Subordination of Subordinated Debt
Securities" and in the applicable Prospectus Supplement.
The applicable Prospectus Supplement will set forth whether the Debt
Securities offered shall be Senior Debt Securities or Subordinated Debt
Securities, the price or prices at which the Debt Securities to be offered will
be issued and will describe the following terms of such Debt Securities:
(1) the title of such Debt Securities; (2) any limit on the aggregate principal
amount of such Debt Securities or the series of which they are a part; (3) the
Person to whom any interest on a Debt Security of the series shall be payable,
if other than the Person in whose name that Debt Security (or one or more
predecessor Debt Securities) is registered at the close of business on the
Regular Record Date for such interest; (4) the date or dates on which the
principal of any of such Debt Securities will be payable; (5) the rate or rates
at which any of such Debt Securities will bear interest, if any, the date or
dates from which any such interest will accrue, the Interest Payment Dates on
which any such interest will be payable and the Regular Record Date for any
such interest payable on any Interest Payment Date; (6) the place or places
where the principal of and any premium and interest on any of such Debt
Securities will be payable; (7) the period or periods within which, the price
or prices at which, and the terms and conditions on which any
4
<PAGE> 6
of such Debt Securities may be redeemed, in whole or in part, at the option of
the Company; (8) the obligation, if any, of the Company to redeem or purchase
any of such Debt Securities pursuant to any sinking fund or analogous provision
or at the option of the Holder thereof, and the period or periods within which,
the price or prices at which, and the terms and conditions on which any of such
Debt Securities will be redeemed or purchased, in whole or in part, pursuant to
any such obligation; (9) the denominations in which any of such Debt Securities
will be issuable, if other than denominations of $1,000 and any integral
multiple thereof; (10) if the amount of principal of or any premium or interest
on any of such Debt Securities may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts will be determined;
(11) if other than the currency of the United States of America, the currency,
currencies or currency units in which the principal of or any premium or
interest on any of such Debt Securities will be payable (and the manner in
which the equivalent of the principal amount thereof in the currency of the
United States of America is to be determined for any purpose, including for the
purpose of determining the principal amount deemed to be Outstanding at any
time); (12) if the principal of or any premium or interest on any of such Debt
Securities is to be payable, at the election of the Company or the Holder
thereof, in one or more currencies or currency units other than those in which
such Debt Securities are stated to be payable, the currency, currencies or
currency units in which payment of any such amount as to which such election is
made will be payable, the periods within which and the terms and conditions
upon which such election is to be made and the amount so payable (or the manner
in which such amount is to be determined); (13) if other than the entire
principal amount thereof, the portion of the principal amount of any of such
Debt Securities which will be payable upon declaration of acceleration of the
Maturity thereof; (14) if the principal amount payable at the Stated Maturity
of any of such Debt Securities will not be determinable as of any one or more
dates prior to the Stated Maturity, the amount which will be deemed to be such
principal amount as of any such date for any purpose, including the principal
amount thereof which will be due and payable upon any Maturity other than the
Stated Maturity or which will be deemed to be Outstanding as of any such date
(or, in any such case, the manner in which such deemed principal amount is to
be determined); (15) if applicable, that such Debt Securities, in whole or any
specified part, are defeasible pursuant to the provisions of the Indentures
described under "Defeasance and Covenant Defeasance-Defeasance and Discharge"
or "Defeasance and Covenant Defeasance-Defeasance of Certain Covenants," or
under both such captions; (16) if applicable, the terms of any right to convert
Debt Securities into shares of Common Stock of the Company or other securities
or property; (17) whether any of such Debt Securities will be issuable in whole
or in part in the form of one or more Global Securities and, if so, the
respective Depositaries for such Global Securities, the form of any legend or
legends to be borne by any such Global Security in addition to or in lieu of
the legends referred to under "Form, Exchange and Transfer" or "Global
Securities" and, if different from those described under such captions, any
circumstances under which any such Global Security may be exchanged in whole or
in part for Securities registered, and any transfer of such Global Security in
whole or in part may be registered, in the names of Persons other than the
Depositary for such Global Security or its nominee; (18) any addition to or
change in the Events of Default applicable to any of such Debt Securities and
any change in the right of the Trustee or the Holders to declare the principal
amount of any of such Debt Securities due and payable; (19) any addition to or
change in the covenants in the Indentures described under "Restrictive
Covenants" applicable to any of such Debt Securities; and (20) any other terms
of such Debt Securities not inconsistent with the provisions of the relevant
Indenture. (Section 301)
5
<PAGE> 7
Debt Securities, including Original Issue Discount Securities, may be
sold at a substantial discount below their principal amount. Certain special
United States federal income tax considerations (if any) applicable to Debt
Securities sold at an original issue discount will be described in the
applicable Prospectus Supplement under "United States Taxation". In addition,
certain special United States federal income tax or other considerations (if
any) applicable to any Debt Securities which are denominated in a currency or
currency unit other than United States dollars will be described in the
applicable Prospectus Supplement.
CONVERSION RIGHTS
The terms on which Debt Securities of any series are convertible into
Common Stock or other securities or property will be set forth in the Prospectus
Supplement relating thereto. Such terms shall include provisions as to whether
conversion is mandatory or at the option of the Holder and may include
provisions pursuant to which the number of shares of Common Stock or other
securities or property to be received by the Holders of Debt Securities upon
conversion would be calculated according to the market price of Common Stock or
other securities or property as of a time stated in the applicable Prospectus
Supplement. (Article Fourteen)
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Unless otherwise indicated in the Prospectus Supplement, the following
provisions will apply to the Subordinated Debt Securities.
The indebtedness evidenced by the Subordinated Debt Securities is
subordinated to the extent provided in the Subordinated Indenture to the prior
payment in full of all Senior Indebtedness (as defined), including any
outstanding Senior Debt Securities. Upon any distribution of assets of the
Company upon any dissolution, winding up, liquidation or reorganization, the
payment of the principal of, or premium, if any, and interest on the
Subordinated Debt Securities is to be subordinated to the extent provided in the
Subordinated Indenture in right of payment to the prior payment in full in cash
of all Senior Indebtedness. In the event of any acceleration of the Subordinated
Debt Securities because of an Event of Default, the holders of any Senior
Indebtedness then outstanding would be entitled to payment in full in cash of
all obligations in respect of such Senior Indebtedness before the Holders of the
Subordinated Debt Securities are entitled to receive any payment or distribution
in respect thereof. The Subordinated Indenture will require that the Company
promptly notify holders of Senior Indebtedness if payment of the Subordinated
Debt Securities is accelerated because of an Event of Default.
The Company also may not make any payment upon or in respect of the
Subordinated Debt Securities if (i) a default in the payment of the principal
of, premium, if any, interest, rent or other obligations in respect of Senior
Indebtedness occurs and is continuing beyond any applicable period of grace or
(ii) any other default occurs and is continuing with respect to Designated
Senior Indebtedness (as defined) that permits holders of the Designated Senior
Indebtedness as to which such default relates to accelerate its maturity and the
Trustee receives a notice of such default (a "Payment Blockage Notice") from the
Company or other person permitted to give such notice under the Subordinated
Indenture. Payments on the Subordinated Debt Securities may and shall be resumed
(a) in case of a payment default, upon the date on which such default is cured
or waived or ceases to exist and (b) in case of a nonpayment default, the
earlier of the date on which such nonpayment default is cured or waived or
ceases to exist or 179 days after the date on which the applicable Payment
Blockage Notice is received. No new period of payment blockage may be commenced
pursuant to a Payment Blockage Notice unless and until (i) 365 days have elapsed
since the initial effectiveness of the immediately prior Payment Blockage Notice
and (ii) all scheduled payments of principal, premium, if any, and interest on
the Subordinated Debt Securities that have become due have been paid in full in
cash. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice.
By reason of the subordination provisions described above, in the event
of the Company's bankruptcy, dissolution or reorganization, holders of Senior
Indebtedness may receive more, ratably, and Holders of the Subordinated Debt
Securities may receive less, ratably, than the other creditors of the Company.
Such subordination will not prevent the occurrence of any Event of Default under
the Subordinated Indenture.
The term "Senior Indebtedness" means the principal of, premium, if any,
interest (including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and rent payable on or
in connection with, and all fees, costs, expenses and other amounts accrued or
due on or in connection with, Indebtedness (as defined) of the Company, whether
outstanding on the date of the Subordinated Indenture or thereafter created,
incurred, assumed, guaranteed or in effect guaranteed by the Company (including
all deferrals, renewals, extensions or refundings of, or amendments,
modifications or supplements to, the foregoing), unless in the case of any
particular Indebtedness the instrument creating or evidencing the same or the
assumption or guarantee thereof expressly provides that such Indebtedness shall
not be senior in right of payment to the Subordinated Debt Securities or
expressly provides that such Indebtedness is "pari passu" or "junior" to the
Subordinated Debt Securities. Notwithstanding the foregoing, the term Senior
Indebtedness shall not include any Indebtedness of the Company to any subsidiary
of the Company, a majority of the voting stock of which is owned, directly or
indirectly, by the Company or the Company's 5% Convertible Subordinated
Notes due April 1, 2003.
6
<PAGE> 8
The term "Indebtedness" means, with respect to any Person (as defined
in the Subordinated Indenture), and without duplication, (a) all indebtedness,
obligations and other liabilities (contingent or otherwise) of such Person for
borrowed money (including obligations of the Company in respect of overdrafts,
foreign exchange contracts, currency exchange agreements, interest rate
protection agreements, and any loans or advances from banks, whether or not
evidenced by notes or similar instruments) or evidenced by bonds, debentures,
notes or similar instruments (whether or not the recourse of the lender is to
the whole of the assets of such Person or to only a portion thereof) (other
than any account payable or other accrued current liability or obligation
incurred in the ordinary course of business in connection with the obtaining of
materials or services), (b) all reimbursement obligations and other liabilities
(contingent or otherwise) of such Person with respect to letters of credit,
bank guarantees or bankers' acceptances, (c) all obligations and liabilities
(contingent or otherwise) in respect of leases of such Person required, in
conformity with generally accepted accounting principles, to be accounted for
as capitalized lease obligations on the balance sheet of such Person and all
obligations and other liabilities (contingent or otherwise) under any lease or
related document (including a purchase agreement) in connection with the lease
of real property which provides that such Person is contractually obligated to
purchase or cause a third party to purchase the leased property and thereby
guarantee a minimum residual value of leased property to the lessor and the
obligations of such Person under such lease or related document to purchase or
to cause a third party to purchase such leased property, (d) all obligations of
such Person (contingent or otherwise) with respect to an interest rate or other
swap, cap or collar agreement or other similar instrument or agreement or
foreign currency hedge, exchange, purchase or similar instrument or agreement,
(e) all direct or indirect guaranties or similar agreements by such Person in
respect of, and obligations or liabilities (contingent or otherwise) of such
Person to purchase or otherwise acquire or otherwise assure a creditor against
loss in respect of, indebtedness, obligations or liabilities of another Person
of the kind described in clauses (a) through (d), (f) any indebtedness or other
obligations described in clauses (a) through (d) secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held
by such Person, regardless of whether the indebtedness or other obligation
secured thereby shall have been assumed by such Person and (g) any and all
deferrals, renewals, extensions and refundings of, or amendments, modifications
or supplements to, any indebtedness, obligation or liability of the kind
described in clauses (a) through (f).
The term "Designated Senior Indebtedness" means the Credit Agreement
(as defined in the Subordinated Indenture), the Sumitomo Credit Agreement (as
defined in the Subordinated Indenture) and any particular Senior Indebtedness
in which the instrument creating or evidencing the same or the assumption or
guarantee thereof (or related agreements or documents to which the Company is a
party) expressly provides that such Senior Indebtedness shall be "Designated
Senior Indebtedness" for purposes of the Subordinated Debenture (provided that
such instrument, agreement or other document may place limitations and
conditions on the right of such Senior Indebtedness to exercise the rights of
Designated Senior Indebtedness).
The Subordinated Debt Securities will be obligations exclusively of
the Company. Since the operations of the Company are partially conducted
through its subsidiaries, the cash flow and the consequent ability to service
debt, including the Subordinated Debt Securities, of the Company will be
partially dependent upon the earnings of any such subsidiaries and the
distribution of those earnings, or upon loans or other payments of funds by
those subsidiaries, to the Company. Such subsidiaries are separate and distinct
legal entities and have no obligation, contingent or otherwise, to pay any
amounts due pursuant to the Subordinated Debt Securities or to make any funds
available therefor, whether by dividends, distributions, loans or other
payments. In addition, the payment of dividends or distributions and the making
of loans and advances to the Company by any such subsidiaries could be subject
to statutory or contractual restrictions, could be contingent upon the earnings
of those subsidiaries and are subject to various business considerations.
Any right of the Company to receive any assets of any of its
subsidiaries upon their liquidation or reorganization (and the consequent right
of the Holders of the Subordinated Debt Securities to participate in those
assets) will be effectively subordinated to the claims of the subsidiary's
creditors (including trade creditors), except to the extent that the Company is
itself recognized as a creditor of such subsidiary, in which case the claims of
the Company would still be subordinate to any security interest in the assets
of such subsidiary and any indebtedness of such subsidiary senior to that held
by the Company.
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The Subordinated Indenture does not limit or prohibit the incurrence
of additional Senior Indebtedness, which may include indebtedness that is senior
to the Subordinated Debt Securities, but subordinate to other obligations of the
Company. The Senior Debt Securities, when issued, will constitute Senior
Indebtedness.
The Prospectus Supplement may further describe the provisions, if any,
applicable to the subordination of the Subordinated Debt Securities of a
particular series.
FORM, EXCHANGE AND TRANSFER
The Debt Securities of each series will be issuable only in fully
registered form, without coupons, and, unless otherwise specified in the
applicable Prospectus Supplement, only in denominations of $1,000 and integral
multiples thereof. (Section 302)
At the option of the Holder, subject to the terms of the Indentures
and the limitations applicable to Global Securities, Debt Securities of each
series will be exchangeable for other Debt Securities of the same series of any
authorized denomination and of a like tenor and aggregate principal amount.
(Section 305)
Subject to the terms of the Indentures and the limitations applicable
to Global Securities, Debt Securities may be presented for exchange as provided
above or for registration of transfer (duly endorsed or with the form of
transfer endorsed thereon duly executed) at the office of the Security
Registrar or at the office of any transfer agent designated by the Company for
such purpose. No service charge will be made for any registration of transfer
or exchange of Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. Such transfer or exchange will be effected upon the Security
Registrar or such transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request. The Company
has appointed the Trustee as Security Registrar. Any transfer agent (in
addition to the Security Registrar) initially designated by the Company for any
Debt Securities will be named in the applicable Prospectus Supplement. (Section
305) The Company may at any time designate additional transfer agents or
rescind the designation of any transfer agent or approve a change in the office
through which any transfer agent acts, except that the Company will be required
to maintain a transfer agent in each Place of Payment for the Debt Securities
of each series. (Section 1002)
If the Debt Securities of any series (or of any series and specified
tenor) are to be redeemed in part, the Company will not be required to
(i) issue, register the transfer of or exchange any Debt Security of that series
(or of that series and specified tenor, as the case may be) during a period
beginning at the opening of business 15 days before the day of mailing of a
notice of redemption of any such Debt Security
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that may be selected for redemption and ending at the close of business on the
day of such mailing or (ii) register the transfer of or exchange any Debt
Security so selected for redemption, in whole or in part, except the unredeemed
portion of any such Debt Security being redeemed in part. (Section 305)
GLOBAL SECURITIES
Some or all of the Debt Securities of any series may be represented,
in whole or in part, by one or more global securities which will have an
aggregate principal amount equal to that of the Debt Securities represented
thereby (a "Global Security"). Each Global Security will be registered in the
name of a depositary (the "Depositary") or a nominee thereof identified in the
applicable Prospectus Supplement, will be deposited with such Depositary or
nominee or a custodian therefor and will bear a legend regarding the
restrictions on exchanges and registration of transfer thereof referred to
below and any such other matters as may be provided for pursuant to the
Indentures.
Notwithstanding any provision of the Indentures or any Debt Security
described herein, no Global Security may be exchanged in whole or in part for
Debt Securities registered, and no transfer of a Global Security in whole or in
part may be registered, in the name of any Person other than the Depositary for
such Global Security or any nominee of such Depositary unless (i) the
Depositary has notified the Company that it is unwilling or unable to continue
as Depositary for such Global Security or has ceased to be qualified to act as
such as required by the Indentures, (ii) there shall have occurred and be
continuing an Event of Default with respect to the Debt Securities represented
by such Global Security or (iii) there shall exist such circumstances, if any,
in addition to or in lieu of those described above as may be described in the
applicable Prospectus Supplement. All securities issued in exchange for a
Global Security or any portion thereof will be registered in such names as the
Depositary may direct. (Sections 204 and 305)
As long as the Depositary, or its nominee, is the registered Holder of
a Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner and Holder of such Global Security and the Debt
Securities represented thereby for all purposes under the Debt Securities and
the Indentures. Except in the limited circumstances referred to above, owners
of beneficial interests in a Global Security will not be entitled to have such
Global Security or any Debt Securities represented thereby registered in their
names, will not receive or be entitled to receive physical delivery of
certificated Debt Securities in exchange therefor and will not be considered to
be the owners or Holders of such Global Security or any Debt Securities
represented thereby for any purpose under the Debt Securities or the
Indentures. All payments of principal of and any premium and interest on a
Global Security will be made to the Depositary or its nominee, as the case may
be, as the Holder thereof. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of such securities in
definitive form. These laws may impair the ability to transfer beneficial
interests in a Global Security.
Ownership of beneficial interests in a Global Security will be limited
to institutions that have accounts with the Depositary or its nominee
("participants") and to persons that may hold beneficial interests through
participants. In connection with the issuance of any Global Security, the
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of Debt Securities represented by the Global
Security to the accounts of its participants. Ownership of beneficial
interests in a Global Security will be shown only on, and the transfer of those
ownership interests will be effected only through, records maintained by the
Depositary (with respect to participants' interests) or any such participant
(with respect to interests of persons held by such participants on their
behalf).
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Payments, transfers, exchanges and others matters relating to beneficial
interests in a Global Security may be subject to various policies and
procedures adopted by the Depositary from time to time. None of the Company,
the Trustee or any agent of the Company or the Trustee will have any
responsibility or liability for any aspect of the Depositary's or any
participant's records relating to, or for payments made on account of,
beneficial interests in a Global Security, or for maintaining, supervising or
reviewing any records relating to such beneficial interests.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of interest on a Debt Security on any Interest Payment Date will be
made to the Person in whose name such Debt Security (or one or more Predecessor
Debt Securities) is registered at the close of business on the Regular Record
Date for such interest. (Section 307)
Unless otherwise indicated in the applicable Prospectus Supplement,
principal of and any premium and interest on the Debt Securities of a particular
series will be payable at the office of such Paying Agent or Paying Agents as
the Company may designate for such purpose from time to time, except that at the
option of the Company payment of any interest may be made by check mailed to the
address of the Person entitled thereto as such address appears in the Security
Register. Unless otherwise indicated in the applicable Prospectus Supplement,
the Corporate Trust Office of the Trustee will be designated as the Company's
sole Paying Agent for payments with respect to Debt Securities of each series.
Any other Paying Agents initially designated by the Company for the Debt
Securities of a particular series will be named in the applicable Prospectus
Supplement. The Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agent or approve a change in the office
through which any Paying Agent acts, except that the Company will be required to
maintain a Paying Agent in each Place of Payment for the Debt Securities of a
particular series. (Section 1002)
All moneys paid by the Company to a Paying Agent for the payment of the
principal of or any premium or interest on any Debt Security which remain
unclaimed for a period ending the earlier of 10 business days prior to the date
such money would escheat to the State or at the end of two years after such
principal, premium or interest has become due and payable will be repaid to the
Company, and the Holder of such Debt Security thereafter may look only to the
Company for payment thereof. (Section 1003)
RESTRICTIVE COVENANTS
Unless otherwise indicated in the applicable Prospectus Supplement,
the following provisions will apply to the Senior Debt Securities.
Limitations on Liens
The Senior Indenture will provide that the Company will not issue,
incur, create, assume or guarantee, and will not permit any Restricted
Subsidiary (as defined) to issue, incur, create, assume or guarantee, any
debt for borrowed money secured by a mortgage, security interest, pledge, lien,
charge or other encumbrance ("mortgages") upon any Principal Property (as
defined) of the Company or any Restricted Subsidiary or upon any shares
of stock or indebtedness of any Restricted Subsidiary (whether such Principal
Property, shares or indebtedness are now existing or owned or hereafter created
or acquired) without in any such case effectively providing concurrently with
the issuance, incurrence, creation, assumption or guarantee of any such secured
debt, or the grant of a mortgage with respect to
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any such indebtedness, that the Senior Debt Securities (together with, if the
Company shall so determine, any other indebtedness of or guarantee by the
Company or such Restricted Subsidiary ranking equally with the Senior Debt
Securities) shall be secured equally and ratably with (or, at the option of the
Company, prior to) such secured debt. The foregoing restriction, however, will
not apply to: (a) mortgages on property existing at the time of acquisition
thereof by the Company or any Subsidiary, provided that such mortgages were in
existence prior to the contemplation of such acquisition; (b) mortgages on
property, shares of stock or indebtedness or other assets of any corporation
existing at the time such corporation becomes a Restricted Subsidiary, provided
that such mortgages are not incurred in anticipation of such corporation
becoming a Restricted Subsidiary; (c) mortgages on property, shares of stock or
indebtedness existing at the time of acquisition thereof by the Company or a
Restricted Subsidiary or mortgages thereon to secure the payment of all or any
part of the purchase price thereof, or mortgages on property, shares of stock
or indebtedness to secure any indebtedness for borrowed money incurred prior
to, at the time of, or within 270 days after, the latest of the acquisition
thereof, or, in the case of property, the completion of construction, the
completion of improvements, or the commencement of substantial commercial
operation of such property for the purpose of financing all or any part of the
purchase price thereof, such construction, or the making of such improvements;
(d) mortgages to secure indebtedness owing to the Company or to a Restricted
Subsidiary; (e) mortgages existing at the date of the Senior Indenture; (f)
mortgages on property of a corporation existing at the time such corporation is
merged into or consolidated with the Company or a Restricted Subsidiary or at
the time of a sale, lease or other disposition of the properties of a
corporation as an entirety or substantially as an entirety to the Company or a
Restricted Subsidiary, provided that such mortgage was not incurred in
anticipation of such merger or consolidation or sale, lease or other
disposition; (g) mortgages in favor of the United States or any State,
territory or possession thereof (or the District of Columbia), or any
department, agency, instrumentality or political subdivision of the United
States or any State, territory or possession thereof (or the District of
Columbia), to secure partial, progress, advance or other payments pursuant to
any contract or statute or to secure any indebtedness incurred for the purpose
of financing all or any part of the purchase price or the cost of constructing
or improving the property subject to such mortgages; (h) mortgages created in
connection with the acquisition of assets or a project financed with, and
created to secure, a Nonrecourse Obligation (as defined); and (i)
extensions, renewals, refinancings or replacements of any mortgage referred to
in the foregoing clauses (a), (b), (c), (d), (e), (f), (g), and (h) provided,
however, that any mortgages permitted by any of the foregoing clauses (a), (b),
(c), (d), (e), (f), (g), and (h) shall not extend to or cover any property of
the Company or such Restricted Subsidiary, as the case may be, other than the
property, if any, specified in such clauses and improvements thereto, and
provided further that any refinancing or replacement of any mortgages permitted
by the foregoing clauses (g) and (h) shall be of the type referred to in such
clauses (g) or (h), as the case may be.
Notwithstanding the restrictions described in the preceding paragraph,
the Company or any Restricted Subsidiary will be permitted to issue, incur,
create, assume or guarantee debt secured by a mortgage which would otherwise be
subject to such restrictions, without equally and ratably securing the Senior
Debt Securities, provided that after giving effect thereto, the aggregate
amount of all debt so secured by mortgages (not including mortgages permitted
under clauses (a) through (i) above) does not exceed 15% of the Consolidated
Net Tangible Assets (as defined below) of the Company as most recently
determined on or prior to such date.
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Limitations on Sale and Lease-Back Transactions
The Senior Indenture will provide that the Company will not, nor will
it permit any Restricted Subsidiary to, enter into any Sale and Lease-Back
Transaction (as defined) with respect to any Principal Property, other
than any such transaction involving a lease for a term of not more than three
years or any such transaction between the Company and a Restricted Subsidiary
or between Restricted Subsidiaries, unless (a) the Company or such Restricted
Subsidiary would be entitled to incur indebtedness secured by a mortgage on the
Principal Property involved in such transaction at least equal in amount to the
Attributable Debt (as defined) with respect to such Sale and Lease-Back
Transaction, without equally and ratably securing the Senior Debt Securities,
pursuant to the limitation on liens in the Senior Indenture; or (b) the Company
shall apply an amount equal to the greater of the net proceeds of such sale or
the Attributable Debt with respect to such Sale and Lease-Back Transaction
within 180 days of such sale to either (or a combination of) the retirement
(other than any mandatory retirement, mandatory prepayment or sinking fund
payment or by payment at maturity) of debt for borrowed money of the Company or
a Restricted Subsidiary that matures more than 12 months after the creation of
such indebtedness or the purchase, construction or development of other
comparable property.
Certain Definitions Applicable to Covenants
The term "Attributable Debt" when used in connection with a Sale and
Lease-Back Transaction involving a Principal Property shall mean, at the time
of determination, the lesser of: (a) the fair value of such property (as
determined in good faith by the Board of Directors of the Company); or (b) the
present value of the total net amount of rent required to be paid under such
lease during the remaining term thereof (including any renewal term or period
for which such lease has been extended), discounted at the rate of interest set
forth or implicit in the terms of such lease or if not practicable to determine
such rate, the weighted average interest rate per annum (in the case of
Original Issue Discount Securities, the imputed interest rate) borne by the
Senior Debt Securities of each series outstanding pursuant to the Indenture
compounded semi-annually. For purposes of the foregoing definition, rent shall
not include amounts required to be paid by the lessee, whether or not
designated as rent or additional rent, on account of or contingent upon
maintenance and repairs, insurance, taxes, assessments, water rates and similar
charges. In the case of any lease which is terminable by the lessee upon the
payment of a penalty, such net amount shall be the lesser of the net amount
determined assuming termination upon the first date such lease may be
terminated (in which case the net amount shall also include the amount of the
penalty, but no rent shall be considered as required to be paid under such
lease subsequent to the first date upon which it may be so terminated) and the
net amount determined assuming no such termination.
The term "Consolidated Net Tangible Assets" shall mean, as of any
particular time, total assets (excluding applicable reserves and other properly
deductible items) less: (a) total current liabilities, except for (1) notes and
loans payable; (2) current maturities of long-term debt and (3) current
maturities of obligations under capital leases; and (b) goodwill, patents and
trademarks, to the extent included in total assets; all as set forth on the
most recent consolidated balance sheet of the Company and its Restricted
Subsidiaries and computed in accordance with generally accepted accounting
principles.
The term "Nonrecourse Obligation" means indebtedness or other
obligations substantially related to (i) the acquisition of assets not
previously owned by the Company or any Restricted Subsidiary or (ii) the
financing of a project involving the development or expansion of properties of
the Company or
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any Restricted Subsidiary, as to which the obligee with respect to such
indebtedness or obligation has no recourse to the Company or any Restricted
Subsidiary or any assets of the Company or any Restricted Subsidiary other than
the assets which were acquired with the proceeds of such transaction or the
project financed with the proceeds of such transaction (and the proceeds
thereof).
The term "Principal Property" shall mean the land, land improvements,
buildings and fixtures (to the extent they constitute real property interests,
including any leasehold interest therein) constituting the principal corporate
office, any manufacturing facility or any distribution center (whether now
owned or hereafter acquired) which: (a) is owned by the Company or any
Subsidiary; (b) is located within any of the present 50 states of the United
States (or the District of Columbia); (c) has not been determined in good faith
by the Board of Directors of the Company not to be materially important to the
total business conducted by the Company and its Subsidiaries taken as a whole;
and (d) has a market value on the date as of which the determination is being
made in excess of 2.0% of Consolidated Net Tangible Assets of the Company as
most recently determined on or prior to such date.
The term "Restricted Subsidiary" shall mean any Subsidiary that owns
any Principal Property; provided, however, that the term "Restricted
Subsidiary" shall not include (a) any Subsidiary which is principally engaged
in financing receivables, or which is principally engaged in financing the
Company's operations outside the United States of America or (b) any
Subsidiary less than 80% of the voting stock of which is owned, directly or
indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries if the common stock of such
Subsidiary is traded on any national securities exchange or quoted on the
Nasdaq National Market or in the over-the-counter market.
The term "Sale and Lease-Back Transaction" shall mean any arrangement
with any person providing for the leasing by the Company or any Restricted
Subsidiary of any Principal Property which property has been or is to be sold
or transferred by the Company or such Restricted Subsidiary to such person.
The term "Subsidiary" shall mean any corporation of which at least a
majority of the outstanding voting stock having the power to elect a majority of
the board of directors of such corporation is at the time owned, directly or
indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries, and the accounts of which are
consolidated with those of the Company in the most recent consolidated
financial statements in accordance with generally accepted accounting
principles. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indentures will provide that the Company may not consolidate with
or merge into any other Person (in a transaction in which the Company is not
the surviving corporation), or convey, transfer or lease its properties and
assets substantially as an entirety to, any Person (a "Successor Person"),
unless (i) the Successor Person (if any) is a corporation, limited liability
company, partnership, trust or other entity organized and existing under the
laws of any domestic jurisdiction and assumes the Company's obligations on the
Debt Securities and under the Indentures, (ii) immediately after giving effect
to the transaction, and treating any indebtedness which becomes an obligation
of the Company or any Subsidiary as a result of the transaction as having been
incurred by it at the time of the transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing,
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and (iii) certain other conditions are met. (Section 801)
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the
Indentures with respect to Debt Securities of any series: (a) failure to pay
principal of or any premium on any Debt Security of that series when due,
whether or not such payment is prohibited by the subordination provisions of the
Subordinated Indenture; (b) failure to pay any interest on any Debt Securities
of that series when due, continued for 30 days, whether or not such payment is
prohibited by the subordination provisions of the Subordinated Indenture; (c)
failure to deposit any sinking fund payment, when due, in respect of any Debt
Security of that series, whether or not such deposit is prohibited by the
subordination provisions of the Subordinated Indenture; (d) failure to perform
any other covenant of the Company in the Indentures (other than a covenant
included in the Indentures solely for the benefit of a series other than that
series), continued for 60 days after written notice has been given by the
Trustee, or the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series, as provided in the Indentures; (e)
certain events in bankruptcy, insolvency or reorganization with respect to the
Company; and (f) any other Event of Default specified in the applicable
Prospectus Supplement. (Section 501)
The Indentures will provide that, if an Event of Default (other than an
Event of Default described in clause (e) above) with respect to the Debt
Securities of any series at the time Outstanding shall occur and be continuing,
either the Trustee or the Holders of at least 25% in aggregate principal amount
of the Outstanding Securities of that series by notice as provided in the
Indentures may declare the principal amount of the Debt Securities of that
series (or, in the case of any Debt Security that is an Original Issue Discount
Security or the principal amount of which is not then determinable, such
portion of the principal amount of such Debt Security, or such other amount in
lieu of such principal amount, as may be specified in the terms of such Debt
Security) to be due and payable immediately. If an Event of Default described
in clause (e) above with respect to the Debt Securities of any series at the
time Outstanding shall occur, the principal amount of all the Debt Securities
of that series (or, in the case of any such Original Issue Discount Security or
other Debt Security, such specified amount) will automatically, and without any
action by the Trustee or any Holder, become immediately due and payable. After
any such acceleration, but before a judgment or decree based on acceleration,
the Holders of a majority in aggregate principal amount of the Outstanding
Securities of that series may, under certain circumstances, rescind and annul
such acceleration if all Events of Default, other than the non-payment of
accelerated principal (or other specified amount), have been cured or waived as
provided in the Indentures. (Section 502) For information as to waiver of
defaults, see "Modification and Waiver".
Subject to the provisions of the Indentures relating to the duties of
the Trustee in case an Event of Default shall occur and be continuing, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indentures at the request or direction of any of the Holders, unless
such Holders shall have offered to the Trustee reasonable indemnity. (Section
603) Subject to such provisions for the indemnification of the Trustee, the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of any series will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the Debt
Securities of that series. (Section 512)
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No Holder of a Debt Security of any series will have any right to
institute any proceeding with respect to the Indentures, or for the appointment
of a receiver or a trustee, or for any other remedy thereunder, unless (i) such
Holder has previously given to the Trustee written notice of a continuing Event
of Default with respect to the Debt Securities of that series, (ii) the Holders
of at least 25% in aggregate principal amount of the Outstanding Securities of
that series have made a written request, and such Holder or Holders have
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee and (iii) the Trustee has failed to institute such proceeding, and has
not received from the Holders of a majority in aggregate principal amount of
the Outstanding Securities of that series a direction inconsistent with such
request, within 60 days after such notice, request and offer. (Section 507)
However, such limitations do not apply to a suit instituted by a Holder of a
Debt Security for the enforcement of payment of the principal of or any premium
or interest on such Debt Security on or after the applicable due date specified
in such Debt Security. (Section 508)
The Indentures will include a covenant requiring the Company to
furnish to the Trustee annually a statement by certain of its officers as to
whether or not the Company, to their knowledge, is in default in the
performance or observance of any of the terms, provisions and conditions of the
Indentures and, if so, specifying all such known defaults. (Section 1004)
MODIFICATION AND WAIVER
Modifications and amendments of the Indentures may be made by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Outstanding Securities of each series
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the Holder of each
Outstanding Security affected thereby, (a) change the Stated Maturity of the
principal of, or any installment of principal of or interest on, any Debt
Security, (b) reduce the principal amount of, or any premium or interest on,
any Debt Security, (c) reduce the amount of principal of an Original Issue
Discount Security or any other Debt Security payable upon acceleration of the
Maturity thereof, (d) change the place or currency of payment of principal of,
or any premium or interest on, any Debt Security, (e) impair the right to
institute suit for the enforcement of any payment on or with respect to any
Debt Security, (f) in the case of Subordinated Debt Securities, modify the
subordination provisions in a manner adverse to the Holders of the Subordinated
Debt Securities, (g) reduce the percentage in principal amount of Outstanding
Securities of any series, the consent of whose Holders is required for
modification or amendment of the Indentures, (h) reduce the percentage in
principal amount of Outstanding Securities of any series necessary for waiver
of compliance with certain provisions of the Indentures or for waiver of
certain defaults or (i) modify such provisions with respect to modification and
waiver. (Section 902)
The Indentures will provide that the Holders of a majority in
aggregate principal amount of the Outstanding Securities of any series may
waive, on behalf of the Holders of all Debt Securities of such series,
compliance by the Company with certain restrictive provisions of the
Indentures. (Sections 1010 and 1008 of the Senior Indenture and the
Subordinated Indenture, respectively) The Holders of a majority in principal
amount of the Outstanding Securities of any series may waive any past default
under the Indentures, except a default in the payment of principal, premium or
interest and certain covenants and provisions of the Indentures which cannot be
amended without the consent of the Holder of each Outstanding Security of such
series affected. (Section 513)
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The Indentures will provide that in determining whether the Holders of
the requisite principal amount of the Outstanding Securities have given or
taken any direction, notice, consent, waiver or other action under the
Indentures as of any date, (i) the principal amount of an Original Issue
Discount Security that will be deemed to be Outstanding will be the amount of
the principal thereof that would be due and payable as of such date upon
acceleration of the Maturity thereof to such date, (ii) if, as of such date,
the principal amount payable at the Stated Maturity of a Debt Security is not
determinable (for example, because it is based on an index), the principal
amount of such Debt Security deemed to be Outstanding as of such date will be
an amount determined in the manner prescribed for such Debt Security and (iii)
the principal amount of a Debt Security denominated in one or more foreign
currencies or currency units that will be deemed to be Outstanding will be the
U.S. dollar equivalent, determined as of such date in the manner prescribed for
such Debt Security, of the principal amount of such Debt Security (or, in the
case of a Debt Security described in clause (i) or (ii) above, of the amount
described in such clause). Certain Debt Securities, including those for whose
payment or redemption money has been deposited or set aside in trust for the
Holders and those that have been fully defeased pursuant to Section 1302, will
not be deemed to be Outstanding. (Section 101)
Except in certain limited circumstances, the Company will be entitled
to set any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to give or take any direction,
notice, consent, waiver or other action under the Indentures, in the manner and
subject to the limitations provided in the Indentures. In certain limited
circumstances, the Trustee will be entitled to set a record date for action by
Holders. If a record date is set for any action to be taken by Holders of a
particular series, such action may be taken only by persons who are Holders of
Outstanding Securities of that series on the record date. To be effective,
such action must be taken by Holders of the requisite principal amount of such
Debt Securities within a specified period following the record date. For any
particular record date, this period will be 180 days or such other shorter
period as may be specified by the Company (or the Trustee, if it set the record
date), and may be shortened or lengthened (but not beyond 180 days) from time
to time. (Section 104)
DEFEASANCE AND COVENANT DEFEASANCE
If and to the extent indicated in the applicable Prospectus
Supplement, the Company may elect, at its option at any time, to have the
provisions of Section 1302, relating to defeasance and discharge of
indebtedness, or Section 1303, relating to defeasance of certain restrictive
covenants in the Indentures, applied to the Debt Securities of any series, or
to any specified part of a series. (Section 1301)
Defeasance and Discharge. The Indentures will provide that, upon the
Company's exercise of its option (if any) to have Section 1302 applied to any
Subordinated Debt Securities, the provisions of Article Fifteen of the
Subordinated Indenture relating to subordination will cease to be effective and,
with respect to any Debt Securities, the Company will be discharged from all its
obligations with respect thereto (except for certain obligations to exchange or
register the transfer of Debt Securities, to replace stolen, lost or mutilated
Debt Securities, to maintain paying agencies, to hold moneys for payment in
trust and, if applicable, to effect conversion of Debt Securities) upon the
deposit in trust for the benefit of the Holders of such Debt Securities of money
or U.S. Government Obligations, or both, which, through the payment of principal
and interest in respect thereof in accordance with their terms, will provide
money in an amount sufficient to pay the principal of and any premium and
interest on such Debt Securities on the respective Stated Maturities in
accordance with the terms of the Indentures and such Debt Securities. Such
defeasance or discharge may occur only if, among other things, the Company has
delivered to the Trustee an Opinion of Counsel to the effect that
16
<PAGE> 18
the Company has received from, or there has been published by, the United
States Internal Revenue Service a ruling, or there has been a change in tax
law, in either case to the effect that Holders of such Debt Securities will not
recognize gain or loss for federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to federal income tax on
the same amount, in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge were not to occur. (Sections
1302 and 1304)
Defeasance of Certain Covenants. The Indentures will provide that,
upon the Company's exercise of its option (if any) to have Section 1303 applied
to any Debt Securities, the Company may omit to comply with certain restrictive
covenants, including those described under "Restrictive Covenants" and any that
may be described in the applicable Prospectus Supplement, and the occurrence of
certain Events of Default, which are described above in clause (d) (with respect
to such restrictive covenants) under "Events of Default" and any that may be
described in the applicable Prospectus Supplement, will be deemed not to be or
result in an Event of Default, in each case with respect to such Debt
Securities, and, in the case of the Subordinated Indenture, the provisions of
Article Fifteen relating to subordination will cease to be effective with
respect to any Subordinated Debt Securities. The Company, in order to exercise
such option, will be required to deposit, in trust for the benefit of the
Holders of such Debt Securities, money or U.S. Government Obligations, or both,
which, through the payment of principal and interest in respect thereof in
accordance with their terms, will provide money in an amount sufficient to pay
the principal of and any premium and interest on such Debt Securities on the
respective Stated Maturities in accordance with the terms of the Indentures and
such Debt Securities. The Company will also be required, among other things, to
deliver to the Trustee an Opinion of Counsel to the effect that Holders of such
Debt Securities will not recognize gain or loss for federal income tax purposes
as a result of such deposit and defeasance of certain obligations and will be
subject to federal income tax on the same amount, in the same manner and at the
same times as would have been the case if such deposit and defeasance were not
to occur. In the event the Company exercised this option with respect to any
Debt Securities and such Debt Securities were declared due and payable because
of the occurrence of any Event of Default, the amount of money and U.S.
Government Obligations so deposited in trust would be sufficient to pay amounts
due on such Debt Securities at the time of their respective Stated Maturities
but may not be sufficient to pay amounts due on such Debt Securities upon any
acceleration resulting from such Event of Default. In such case, the Company
would remain liable for such payments. (Sections 1303 and 1304)
The Company may, at its option, satisfy and discharge each of the
Indentures (except for certain obligations of the Company and the Trustee,
including, among others the obligations to apply money held in trust) when (i)
either (a) all Debt Securities under such Indenture previously authenticated and
delivered (other than (1) Debt Securities that were destroyed, lost or stolen
and that have been replaced or paid and (2) Debt Securities for the payment of
which money has been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust) have
been delivered to the Trustee for cancellation or discharge from such trust)
have been delivered to the Trustee for cancellation or (b) all such Debt
Securities under such Indenture not theretofore delivered to the Trustee for
cancellation (1) have become due and payable, (2) will become due and payable at
their Stated Maturity within one year, or (3) are to be called for redemption
within one year under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name and at the expense of the
Company, and the Company has deposited or caused to be deposited with the
Trustee as trust funds in trust for such purpose an amount sufficient to pay and
discharge the entire indebtedness on such Debt Securities under such Indenture
not previously delivered to the Trustee for cancellation, for principal and any
premium and interest to the date of such deposit (in the case of Debt Securities
under such Indenture which have become due and payable) or to the Stated
Maturity or redemption date as the case may be, (ii) the Company has paid or
caused to be paid all other sums payable under such Indenture by the Company,
and (iii) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each to the effect that all conditions precedent relating
to the satisfaction and discharge of such Indenture have been satisfied.
NOTICES
Notices to Holders of Debt Securities will be given by mail to the
addresses of such Holders as they may appear in the Security Register.
(Sections 101 and 106)
TITLE
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name a Debt Security is registered as the
absolute owner thereof (whether or not such Debt Security may be overdue) for
the purpose of making payment and for all other purposes. (Section 308)
17
<PAGE> 19
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and
construed in accordance with, the law of the State of New York. (Section 112)
REGARDING THE TRUSTEE
The Indentures contain certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases or to realize for its own account on certain property received in
respect of any such claim as security or otherwise. (Section 613) The Trustee
is permitted to engage in certain other transactions; however, if it acquires
any conflicting interest and there is a default under the Securities of any
series for which the Trustee serves as trustee, the Trustee must eliminate such
conflict or resign. (Section 608)
18
<PAGE> 20
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 500,000,000
shares of Common Stock, $.01 par value, and 4,000,000 shares of Preferred Stock,
$.01 par value.
COMMON STOCK
As of May 1, 1997, there were 65,509,049 shares of Common Stock
outstanding held of record by approximately 1890 stockholders. (Such
outstanding share amounts have not been restated to reflect the 2-for-1 split
of the Company's Common Stock that was effected during June 1997 in the form of
a stock dividend of one share for each outstanding share.) The holders of
Common Stock are entitled to one vote per share on all matters to be voted on
by the stockholders, other than the election of directors. Subject to
preferences that may be applicable to outstanding shares of Preferred Stock, if
any, the holders of Common Stock are entitled to receive ratably such dividends
as may be declared from time to time by the Board of Directors out of funds
legally available therefor. In the event of the liquidation, dissolution or
winding up of the Company, the holders of Common Stock are entitled to share
ratably in all assets remaining after payment of liabilities, subject to prior
liquidation rights of Preferred Stock, if any, then outstanding. The Common
Stock has no preemptive, conversion rights or other subscription rights. There
are no redemption or sinking funds provisions applicable to the Common Stock.
All outstanding shares of Common Stock are fully paid and non-assessable.
PREFERRED STOCK
The Company's Certificate of Incorporation authorizes 4,000,000 shares
of Preferred Stock. The Board of Directors has the authority to issue the
Preferred Stock in one or more series and to fix the rights, preferences,
privileges and restrictions thereof, including dividend rights, dividend rates,
conversion rights, voting rights, terms of redemption, redemption prices,
liquidation preferences and the number of shares constituting any series or the
designation of such series, without further vote or action by the stockholders.
The issuance of Preferred Stock may have the effect of delaying, deferring or
preventing a change in control of the Company without further action by the
stockholders and may adversely affect the voting and other rights of the
holders of Common Stock, including the loss of voting control to others.
In February 1997, the Company issued 90,000 shares of Redeemable
Convertible Participating Series B Preferred Stock ("Series B Preferred") in
conjunction with the acquisition of a 19% minority ownership interest in
Quantum Peripherals Colorado, Inc., a consolidated subsidiary involved
in the development and manufacture of recording heads. The shares of Series B
Preferred are mandatorily redeemable for $111.11 per share, plus declared but
unpaid dividends, in the event of a voluntary or involuntary liquidation,
dissolution, change in control, or sale of all or substantially all of the
assets of the Company. Holders of the shares of Series B Preferred have a
liquidation preference senior to that of holders of the Company's Common Stock.
Each share of Series B Preferred will convert into two shares of the Company's
Common Stock upon the earlier of (i) the Company's Common Stock closing at
$35.00 per share (as adjusted upon the occurrence of certain specified events),
(ii) April 1, 1999, or (iii) written notice to the Company of the holders of a
majority of outstanding shares of Series B Preferred. The holders of shares of
Series B Preferred ratably participate on an as-if-converted basis with holders
of Common Stock, in declared cash and in-kind dividends.
STOCKHOLDER RIGHTS PLAN
On July 21, 1988, the Board of Directors of the Company declared a
dividend of one Preferred Share purchase right (a "Right") for each outstanding
share of Common Stock to the holders of record on August 19, 1988 and
authorized and directed the issuance of one Right with respect to each share of
Common Stock that shall become outstanding prior to the occurrence of certain
terminating events. Currently the Rights trade with the shares of Common Stock.
Upon the occurrence of certain events generally associated with an unsolicited
takeover attempt of the Company or certain transactions involving a change of
control, the Rights (except for Rights held by an Acquiring Person (as defined
in the Preferred Shares Rights Agreement) (the "Rights Agreement")) will become
exercisable and will cease to automatically trade with the Common Stock. Upon
the acquisition of 20% or more of the Company's outstanding Common Stock or the
commencement of, or announcement of an intention to make a tender offer or
exchange offer, the consummation of which would result in the beneficial
ownership by a person or group of 30% or more of the Company's outstanding
Common Stock, each Right (except for Rights held by an Acquiring Person) will
be converted into a right to purchase at the then-current exercise price of the
Right that number of shares of Preferred Shares (as defined in the Rights
Agreement) having a market value of two times the exercise price of the Right
or, in the event of merger of the Company into an Acquiring Person, securities
of the Acquiring Person having a market value of two times the exercise price
of the Right.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
in a manner which causes the Rights to become exercisable. The Company believes,
however, that the Rights should neither affect any prospective offeror willing
to negotiate
19
<PAGE> 21
with the Board of Directors of the Company nor interfere with any merger of
other business combination approved by the Board of Directors of the Company.
The Rights may be redeemed pursuant to the terms of the Rights Agreement. The
terms of the Rights may be amended by the Board of Directors of the Company
without the consent of the holders of the Rights.
CHANGE OF CONTROL PROVISIONS
Certain provisions of the Company's Certificate of Incorporation and
Bylaws may have the effect of preventing, discouraging or delaying any change in
the control of the Company and may maintain the incumbency of the Board of
Directors and management. The authorization of undesignated Preferred Stock
makes it possible for the Board of Directors to issue Preferred Stock with
voting or other rights or preferences that could impede the success of any
attempt to change control of the Company.
The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law (the "Antitakeover Law") regulating corporate takeovers.
The Antitakeover Law prevents certain Delaware corporations, including those
whose securities are listed on the Nasdaq National Market, from engaging, under
certain circumstances, in a "business combination" (which includes a merger or
sale of more than 10% of the corporation's assets) with any "interested
stockholder" (a stockholder who acquired 15% or more of the corporation's
outstanding voting stock without the prior approval of the corporation's Board
of Directors) for three years following the date that such stockholder became an
"interested stockholder." A Delaware corporation may "opt out" of the
Antitakeover Law with an express provision in its original certificate of
incorporation or an express provision in its certificate of incorporation or
bylaws resulting from a stockholders' amendment approved by at least a majority
of the outstanding voting shares. The Company has not "opted out" of the
provisions of the Antitakeover Law.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is Harris Trust
Company of California.
20
<PAGE> 22
PLAN OF DISTRIBUTION
The Company may sell the Securities separately or together, (i) to one
or more underwriters or dealers for public offering and sale by them and (ii) to
investors directly or through agents. The distribution of the Securities may be
effected from time to time in one or more transactions at a fixed price or
prices (which may be changed from time to time), at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at
negotiated prices. Each Prospectus Supplement will describe the method of
distribution of the Securities offered thereby.
In connection with the sale of the Securities, underwriters, dealers or
agents may receive compensation from the Company or from purchasers of the
Securities for whom they may act as agents, in the form of discounts,
concessions or commissions. The underwriters, dealers or agents which
participate in the distribution of the Securities may be deemed to be
underwriters under the Securities Act and any discounts or commissions received
by them and any profit on the resale of the Securities received by them may be
deemed to be underwriting discounts and commissions thereunder. Any such
underwriter, dealer or agent will be identified and any such compensation
received from the Company will be described in the Prospectus Supplement. Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
Under agreements that may be entered into with the Company,
underwriters, dealers and agents may be entitled to indemnification by the
Company against certain civil liabilities, including liabilities under the
Securities Act, or to contribution with respect to payments which the
underwriters, dealers or agents may be required to make in respect thereof.
The Company may grant underwriters who participate in the distribution
of Securities an option to purchase additional Securities to cover
over-allotments, if any.
Certain of the underwriters or agents and their associates may be
customers of, engage in transactions with or perform services for the Company in
the ordinary course of business.
LEGAL OPINIONS
The validity of the Securities is being passed upon for the Company by
Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto,
California.
EXPERTS
The consolidated financial statements of Quantum Corporation appearing
in Quantum Corporation's Annual Report (Form 10-K) for the year ended March 31,
1997, have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon included therein and incorporated herein by reference.
Such consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
21
<PAGE> 23
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses, other than any
underwriting discount and commissions, in connection with the issuance and
distribution of the Securities being registered. All of the amounts are
estimates, except the registration fee.
<TABLE>
<CAPTION>
AMOUNT TO BE PAID
-----------------
<S> <C>
Registration fee.................................................. $ --
Trustee's fees and expenses....................................... 25,000
Accounting fees and expenses...................................... *
Printing and engraving............................................ 100,000
Transfer agent and registrar fees and expenses.................... 15,000
Blue Sky and legal investment fees and expenses................... 15,000
Rating agencies' fees............................................. 100,000
Legal fees and expenses of the registrant......................... *
Miscellaneous..................................................... *
-------------
Total.................................................... $ *
=============
</TABLE>
- -----------
* To be provided by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law ("Delaware Law")
authorizes a court to award or a corporation's Board of Directors to grant
indemnification to directors and officers in terms sufficiently broad to permit
such indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended. The registrant's Certificate of Incorporation and Bylaws
provide for indemnification of its directors, officers, employees and other
agents to the maximum extent permitted by Delaware Law. The registrant has
entered into indemnification agreements with its directors and certain of its
officers. The indemnification agreements provide the registrant's directors and
elected officers with further indemnification to the maximum extent permitted by
Delaware Law.
Reference is made to the form of Underwriting Agreement filed as
Exhibit 1.1 to this registration statement for certain provisions regarding
indemnification of officers and directors of the registrant by the several
Underwriters.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
-------------- ----------------------
<S> <C>
1.1 Form of Underwriting Agreement*.
4.1 Form of Senior Indenture.*
4.2 Form of Subordinated Indenture.*
4.3 Form of Senior Debt Security (included in Exhibit 4.1).*
4.4 Form of Subordinated Debt Security (included in
Exhibit 4.2).*
4.5+ Preferred Shares Rights Agreement, dated as of August
3, 1988, between the registrant and Bank of America,
N.T. & S.A., Rights Agent, including the Certificate of
Designation, the form of Rights Certificate and the
Summary of Rights attached thereto as Exhibits A, B and
C, respectively+.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati,
Professional Corporation*.
12.1 Computation of Ratios of Earnings to Fixed Charges.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of Wilson Sonsini Goodrich & Rosati,
Professional Corporation (included in Exhibit 5.1)*.
24.1 Power of Attorney of certain directors and officers of
the registrant (contained on Page II-4).
25.1 Form T-1 Statement of Eligibility and Qualification of
Trustee for Senior Indenture under the Trust
Indenture Act of 1939*.
25.2 Form T-1 Statement of Eligibility and Qualification of
Trustee for Subordinated Indenture under the Trust
Indenture Act of 1939*.
- ---------------------------
</TABLE>
* To be filed by amendment.
+ Incorporated by reference to the registrant's Registration Statement on
Form 8-A filed with the Securities and Exchange Commission on August 5,
1988.
II-1
<PAGE> 24
ITEM 17. UNDERTAKINGS
1. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933 (the "Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, 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; and
(iii)To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that the undertakings set forth in clauses (i) and (ii)
above shall not apply if the information required to be included in a
post-effective amendment by these clauses is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") that are incorporated
by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in 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.
3. Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the provisions described under Item 15 above, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in 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.
4. The undersigned registrant hereby undertakes that:
(a) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
II-2
<PAGE> 25
(b) For the purpose of determining any liability under the Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 26
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 this Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Milpitas, State of California, on June 18, 1997.
QUANTUM CORPORATION
By: /s/ MICHAEL A. BROWN
--------------------------------------
Michael A. Brown
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each such person whose
signature appears below constitutes and appoints Michael
A. Brown and Richard L. Clemmer, and each of them individually, as his true and
lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities to sign the Registration Statement filed herewith and any or all
amendments to said Registration Statement (including post-effective amendments
and registration statements filed pursuant to Rule 462(b) under the Securities
Act of 1933, as amended and otherwise), and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission granting unto said attorneys-in-fact and agents the full
power and authority to do and perform each and every act and thing requisite
and necessary to be done in and about the foregoing, as full to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or his or her
substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
on June 18, 1997, this Registration Statement has been signed by the following
persons in the capacities indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE TITLE
---------------- -----
<S> <C>
/s/ MICHAEL A. BROWN President, Chief Executive Officer (Principal
- ----------------------------------- Executive Officer) and Director
Michael A. Brown
/s/ RICHARD L. CLEMMER Executive Vice President, Finance and Chief Financial Officer
- ----------------------------------- (Principal Financial and Accounting Officer)
Richard L. Clemmer
/s/ STEPHEN M. BERKLEY Chairman
- -----------------------------------
Stephen M. Berkley
/s/ DAVID A. BROWN Director
- -----------------------------------
David A. Brown
/s/ EDWARD M. ESBER, JR. Director
- ----------------------------------
Edward M. Esber, Jr.
/s/ STEVEN C. WHEELWRIGHT Director
- -----------------------------------
Steven C. Wheelwright
</TABLE>
II-4
<PAGE> 27
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
-------------- ----------------------
<S> <C>
1.1 Form of Underwriting Agreement*.
4.1 Form of Senior Indenture.*
4.2 Form of Subordinated Indenture.*
4.3 Form of Senior Debt Security (included in Exhibit 4.1).*
4.4 Form of Subordinated Debt Security (included in
Exhibit 4.2).*
4.5+ Preferred Shares Rights Agreement, dated as of August
3, 1988, between the registrant and Bank of America,
N.T. & S.A., Rights Agent, including the Certificate of
Designation, the form of Rights Certificate and the
Summary of Rights attached thereto as Exhibits A, B and
C, respectively+.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati,
Professional Corporation*.
12.1 Computation of Ratios of Earnings to Fixed Charges.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of Wilson Sonsini Goodrich & Rosati,
Professional Corporation (included in Exhibit 5.1)*.
24.1 Power of Attorney of certain directors and officers of
the registrant (contained on Page II-4).
25.1 Form T-1 Statement of Eligibility and Qualification of
Trustee for Senior Indenture under the Trust
Indenture Act of 1939*.
25.2 Form T-1 Statement of Eligibility and Qualification of
Trustee for Subordinated Indenture under the Trust
Indenture Act of 1939*.
- ---------------------------
</TABLE>
* To be filed by amendment.
+ Incorporated by reference to the registrant's Registration Statement on
Form 8-A filed with the Securities and Exchange Commission on August 5,
1988.
II-5
<PAGE> 1
EXHIBIT 12.1
COMPUTATION OF RATIOS
OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Years Ended March 31,
------------------------------------------------------------------------
(In thousands) 1997 1996 1995 1994 1993
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Income (loss) before income
taxes $200,696 $(141,338) $145,305 $ 3,663 $146,579
Add fixed charges 56,669 48,226 29,277 18,906 17,125
-------- --------- -------- ------- --------
Earnings (as defined) $257,365 $ (93,112) $174,582 $22,569 $163,704
======== ========= ======== ======= ========
Fixed charges
Interest expense $ 47,882 $ 35,904 $ 21,557 $ 14,305 $ 13,777
Amortization of debt
issuance costs (ii) 2,427 1,458 577 586
Estimated interest component
of rent expenses 8,787 9,895 6,262 4,024 2,762
-------- --------- -------- -------- --------
Total fixed charges $ 56,669 $ 48,226 $ 29,277 $ 18,906 $ 17,125
======== ========= ======== ======== ========
Ratio of earnings to
fixed charges 4.5 (i) 6.0 1.2 9.6
=== === === ===
</TABLE>
(i) Earnings (as defined) for fiscal 1996 were insufficient to cover fixed
charges by $141.3 million.
(ii) In 1997 the amortization of debt issuance costs is included in interest
expense.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Quantum Corporation
for the registration of debt securities, common stock and rights and to the
incorporation by reference therein of our report dated April 28, 1997 with
respect to the consolidated financial statements and schedule of Quantum
Corporation included in its Annual Report (Form 10-K) for the year ended March
31, 1997, filed with the Securities and Exchange Commission.
Ernst & Young LLP
Palo Alto, California
June 13, 1997
