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As filed with the Securities and Exchange Commission on May 1, 1995
Registration No. 33-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
under
The Securities Act of 1933
_______________
McDonnell Douglas Finance Corporation
(Exact name of registrant as specified in its charter)
DELAWARE 95-2564584
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
4060 Lakewood Boulevard, Sixth Floor
Long Beach, California 90808
(310) 627-3000
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
_______________
Michael C. Draffin, Esq.
Vice President - Taxes & Associate General Counsel and Secretary
McDonnell Douglas Finance Corporation
4060 Lakewood Boulevard, Sixth Floor
Long Beach, California 90808
(310) 627-3085
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copies to:
H. David Heumann, Esq. Norman D. Slonaker, Esq.
Senior Counsel Brown & Wood
McDonnell Douglas Finance Corporation One World Trade Center
4060 Lakewood Boulevard, Sixth Floor New York, New York 10048-0557
Long Beach, California 90808-1700
_______________
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement
as determined in light of market conditions.
_______________
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. ____
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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__
_______________
CALCULATION OF REGISTRATION FEE
Proposed
Maximum Proposed
Title of Each Offering Maximum
Class of Amount Price Aggregate Amount of
Securities to be to be Per Offering Registration
Registered Registered Unit(1) Price(1) Fee
Debt
Securities........... $750,000,000(2) 100% $750,000,000 $258,623
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Or, if any Debt Securities are (i) denominated other than in U.S.
dollars, such principal amount as shall result in an aggregate offering
price equivalent to $750,000,000 at the time of initial offering, or (ii)
issued at an original issue discount, such greater principal amount as
shall result in aggregate gross proceeds to the Registrant of
$750,000,000.
_______________
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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SUBJECT TO COMPLETION, DATED May 1, 1995
P R O S P E C T U S
$750,000,000
(MDFC LOGO APPEARS HERE)
McDONNELL DOUGLAS FINANCE CORPORATION
Senior/Subordinated Debt Securities
_______________
McDonnell Douglas Finance Corporation (the "Company" or "MDFC") from time
to time may offer and sell up to $750,000,000 aggregate principal amount, or
its equivalent, based on the applicable exchange rate at the time of the
offering, in such foreign currencies, units or composites of two or more
thereof as shall be designated by the Company at the time of offering, of its
senior debt securities (the "Senior Securities") and/or subordinated debt
securities (the "Subordinated Securities"). The Senior Securities and the
Subordinated Securities will be referred to collectively as the "Securities."
The Securities may be offered in one or more separate series in amounts, at
prices and on terms to be determined at the time of sale and set forth in a
supplement to this Prospectus (a "Prospectus Supplement").
The Securities will be unsecured obligations of the Company. The Senior
Securities will rank equally with all other unsecured and unsubordinated
indebtedness of the Company. The Subordinated Securities will be subordinated
to all existing and future Senior Indebtedness (as defined below) of the
Company. See "Description of the Securities." The Securities may be issued in
registered form ("Registered Securities") without coupons or in bearer form
("Bearer Securities") with coupons attached or both. Bearer Securities will
be offered only to non-United States persons and to offices located outside
the United States of certain United States financial institutions.
The specific terms of the Securities in respect of which this Prospectus
is being delivered, including, where applicable, the specific designation,
aggregate principal amount, authorized denominations, currency, maturity,
interest rate (which may be fixed or variable) and time of payment of
interest, if any, terms for any redemption or repayment at the option of the
Company or the holder, terms for sinking fund payment, if any, whether the
Securities are Senior Securities or Subordinated Securities, the initial
public offering price or purchase price, any stock exchange listings, any
special provisions related to Securities denominated in a foreign or composite
currency or issued as medium-term notes, original issue discount securities or
other special terms will be set forth in the accompanying Prospectus
Supplement. As used herein, Securities shall include securities denominated
in United States dollars or, at the option of the Company if so specified in
the applicable Prospectus Supplement, in any other currency or in composite
currencies.
The Securities may be sold to underwriters for public offering pursuant
to terms of offering established at the time of sale. In addition, the
Securities may be sold by the Company directly or through dealers or agents
designated from time to time. The Prospectus Supplement will also set forth
with respect to the sale of the Securities in respect of which this Prospectus
is being delivered the names of the underwriters, dealers or agents, if any,
any applicable commissions or discounts, the net proceeds to the Company from
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such sale and any other terms of the offering. Any underwriters, dealers or
agents participating in the offering may be deemed "underwriters" within the
meaning of the Securities Act of 1933, as amended (the "Securities Act").
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
_______________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
_______________
The date of this Prospectus is __________, 1995.
LEGEND FOR COVER PAGE OF PROSPECTUS:
[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 date the registration statement becomes
effective. This preliminary prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.]
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities
and Exchange Commission (the "Commission"). Such reports and other
information can be inspected and copied at the public reference facilities of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following Regional Offices of the Commission: Chicago Regional Office,
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
and New York Regional Office, 13th Floor, Seven World Trade Center, New York,
New York 10048. Copies of such material can also be obtained at prescribed
rates from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. Copies of such material also may be inspected
at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005, on which exchange certain of the Company's securities
are listed.
This Prospectus constitutes a part of a Registration Statement on Form S-
3 (together with all exhibits thereto, the "Registration Statement") filed
with the Commission under the Securities Act, with respect to $750,000,000
aggregate principal amount of Senior Securities and Subordinated Securities of
the Company. This Prospectus does not contain all of the information
contained in the Registration Statement. Reference is made to the
Registration Statement for further information with respect to the Company and
the Securities offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1994, as filed with the Commission, is hereby incorporated by reference into
this Prospectus and made a part hereof.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering of the
Securities shall be deemed to be incorporated by reference into this
Prospectus and made a part hereof from the respective dates of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein, or contained in this Prospectus, shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
This Prospectus contains brief summaries of certain more detailed
information contained in documents incorporated herein by reference. Such
summaries are qualified in their entirety by the more detailed information
contained in the incorporated documents.
The Company will provide without charge to each person (including any
beneficial owner) to whom this Prospectus is delivered, upon the written or
oral request of any such person (identified to the Company's satisfaction), a
copy of any or all documents incorporated by reference into this Prospectus
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(without exhibits unless such exhibits are specifically incorporated by
reference herein). Requests should be directed to:
McDonnell Douglas Finance Corporation
4060 Lakewood Boulevard, 6th Floor
Long Beach, California 90808-1700
Attention: Treasury Department
Telephone: (310) 627-3100
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THE COMPANY
The Company is a commercial finance company primarily engaged in
commercial aircraft financing and commercial equipment leasing. The Company
is a wholly-owned subsidiary of McDonnell Douglas Financial Services
Corporation, a wholly-owned subsidiary of McDonnell Douglas Corporation
("MDC"). The Company was incorporated in Delaware in 1968.
In 1990, the Company commenced a program to focus its new business
efforts within its two core business units, commercial aircraft financing and
commercial equipment leasing. The Company now operates in three business
segments: commercial aircraft financing, commercial equipment leasing and
non-core businesses.
The Company's commercial aircraft financing group, located in Long Beach,
California, primarily finances the acquisition of MDC aircraft by purchasing
such aircraft subject to lease to airlines and by providing secured and
unsecured notes receivable financing in connection with the acquisition of
such aircraft. Although since 1986 the Company has provided financing to
airlines (primarily regional airlines) for aircraft manufactured by
manufacturers other than MDC, aircraft manufactured by MDC continue to
comprise a substantial majority of the Company's commercial aircraft
portfolio. At December 31, 1994, the carrying amount of the Company's
commercial aircraft portfolio was $1,333.0 million, with 33 customers (20
domestic and 13 foreign).
The commercial equipment leasing business segment provides single-
investor, tax-oriented lease financing as its primary product. This segment,
which maintains its principal operations in Long Beach, California and has
marketing offices in Chicago, Illinois and Detroit, Michigan, obtains its
business primarily through direct solicitation by its marketing personnel.
The commercial equipment leasing business segment specializes in leasing
equipment such as over-the-road transportation equipment, executive aircraft,
machine tools, printing equipment, shipping containers, textile manufacturing
equipment and other types of equipment which it believes will maintain strong
collateral and residual values. At December 31, 1994, the carrying amount of
the Company's commercial equipment leasing portfolio was $369.4 million.
The non-core businesses consist primarily of the remaining assets of two
business units: receivable inventory financing and real estate financing. At
December 31, 1994, the non-core business portfolio was $113.9 million. The
Company does not intend to seek new contractual commitments in its non-core
businesses. Since 1991, the Company has been liquidating or selling the
assets of its non-core businesses. The Company is actively managing the non-
core business portfolios with a view toward liquidating these portfolios over
time.
The principal executive office of the Company is located at 4060 Lakewood
Boulevard, 6th Floor, Long Beach, California 90808-1700, telephone number
(310) 627-3000.
USE OF PROCEEDS
Net proceeds from the sale of the Securities will be used to fund the
acquisition of receivables (possibly including, without limitation, the
acquisition of portfolios of receivables), to purchase equipment for lease,
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for other corporate purposes, and to reduce, from time to time, other
indebtedness, including indebtedness to MDC.
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SELECTED CONSOLIDATED FINANCIAL DATA
The following is a summary of certain consolidated financial information
of the Company and its subsidiaries at the dates or for each of the periods
indicated. The selected consolidated financial data at December 31, 1994 and
1993 and for each of the years ended December 31, 1994, 1993 and 1992 has been
derived from, should be read in conjunction with, and is qualified in its
entirety by reference to, the audited consolidated financial statements and
notes thereto of the Company included in its Annual Report on Form 10-K for
the year ended December 31, 1994, incorporated by reference in this
Prospectus. See "Incorporation of Certain Documents by Reference."
As of and for the Year Ended December 31,
1994 1993 1992 1991 1990
(Dollars in millions)
Selected earnings data:
Operating income . . $ 187.6 $ 198.5 $ 254.7 $ 342.3 $ 430.8
Interest expense 108.3 116.4 145.9 198.5 216.4
Net income . . . 28.3 16.8 27.7 36.7 65.5
Ratio of earnings
to fixed charges(1). . 1.37x 1.34x 1.32x 1.28x 1.45x
Selected balance sheet data:
Total assets. . $1,929.6 $2,055.5 $1,999.0 $2,582.3 $3,443.7
Total debt . . . 1,215.1 1,361.2 1,330.4 1,730.7 2,443.2
Shareholder's equity . . 271.9 269.4 256.4 340.5 364.9
Cash dividends paid(2) . . 29.9 3.6 105.8 59.0 23.5
_____________
(1) For the purpose of computing the ratio of earnings to fixed charges,
earnings consists of earnings from continuing operations before income
taxes, cumulative effect of accounting changes and fixed charges, and
fixed charges consists of interest expense and preferred stock dividends.
(2) The provisions of various credit and debt agreements require the Company
to maintain a minimum net worth, restrict indebtedness, and limit cash
dividends and other distributions. At December 31, 1994, at least $51.9
million of earnings retained for growth was available for dividends.
DESCRIPTION OF THE SECURITIES
The Senior Securities are to be issued under an indenture dated as of
April 15, 1987, as supplemented by a supplemental indenture, dated as of
______, 1995 (as so supplemented, the "Senior Indenture"), between the Company
and Bankers Trust Company, as trustee ("Bankers Trust"). The Subordinated
Securities are to be issued pursuant to an indenture dated as of June 15,
1988, as supplemented by a supplemental indenture, dated as of ______, 1995
(as so supplemented, the "Subordinated Indenture") between the Company and
Bankers Trust, as trustee (successor to First Trust of California). The
Senior Indenture and the Subordinated Indenture are referred to collectively
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herein as the "Indentures" and Bankers Trust is referred to herein as the
"Trustee." A copy of each of the Indentures is an exhibit to the Registration
Statement. The Indentures provide that there may be more than one trustee,
each with respect to one or more series of Securities.
The following information concerning the Securities and certain provisions
of the Indentures is intended to provide a summary thereof and does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, all of the provisions of the Indentures, including the
definitions therein of certain terms. Wherever reference is made to defined
terms (which are capitalized herein) of either of the Indentures, such defined
terms are incorporated herein by reference.
General
Reference is made to the Prospectus Supplement relating to the particular
series of Securities offered thereby for the following terms of such
Securities: (a) the title of such Securities; (b) any limit on the aggregate
principal amount of such series of Securities; (c) whether such Securities are
to be Senior Securities or Subordinated Securities; (d) whether such
Securities are to be issuable as Registered Securities or Bearer Securities or
both and whether such Securities are to be issuable initially in temporary
global form or permanent global form; (e) the price or prices (expressed as a
percentage of the aggregate principal amount thereof) at which such Securities
will be issued; (f) the date or dates on which, and the method of determining
Holders to which, the principal of such Securities will be payable; (g) the
rate or rates per annum (which may be fixed or variable), or the formula by
which such rate or rates will be determined, at which such Securities will
bear interest, if any, and the date from which such interest, if any, will
accrue; (h) each Interest Payment Date on which such interest, if any, on such
Securities will be payable and the Regular Record Date for the interest
payable on such Securities which are Registered Securities on any Interest
Payment date; (i) any mandatory or optional sinking fund or analogous
provisions; (j) each office or agency where, subject to the terms of the
appropriate Indenture as described below under "Payment and Paying Agents",
the principal of, and premium, if any, and interest on such Securities will be
payable and each office or agency where such Securities may be presented for
registration of transfer or exchange; (k) the date, if any, after which and
the price or prices at which such Securities may, pursuant to any optional or
mandatory redemption provisions, be redeemed, in whole or in part, and the
other detailed terms and provisions of any such optional or mandatory
redemption provisions; (l) the denominations in which such Securities which
are Registered Securities will be issuable if other than denominations of
$1,000 and any integral multiple thereof, and the denominations or
denominations in which such Securities which are Bearer Securities will be
issuable; (m) the currency or currencies (including composite currencies) of
payment of principal of and premium, if any, and interest on such Securities;
(n) any index used to determine the amount of payments of principal of and
premium, if any, and interest on such Securities; (o) whether and under what
circumstances the Company will pay additional amounts ("Additional Amounts")
in respect of the Securities held by persons who are non-United States persons
(as defined in the Prospectus Supplement if applicable) in respect of
specified taxes, assessments or other governmental charges and whether the
Company has the option to redeem the affected Securities rather than pay
Additional Amounts; and (p) any other terms of such Securities not
inconsistent with the provisions of the appropriate Indenture. Any such
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Prospectus Supplement will also describe any special provisions for the
payment of Additional Amounts with respect to such Securities.
The Securities may be issued as Original Issue Discount Securities to be
sold at a substantial discount below their principal amount and may be
denominated in currencies other than United States dollars. Special United
States federal income tax considerations applicable to any such Securities
will be set forth in a Prospectus Supplement relating thereto.
The Securities will be unsecured obligations of the Company. The Senior
Securities will rank on a parity with all other unsecured and unsubordinated
indebtedness of the Company. The indebtedness represented by the Subordinated
Securities will be subordinated in right of payment to the prior payment in
full of the Senior Indebtedness of the Company as described below under
"Subordination."
The Indentures do not limit the aggregate principal amount of Securities
that may be issued thereunder or of any particular series of such Securities.
Under the Indentures, the Company will have the ability, in addition to
the ability to issue Securities with terms the same as or different from those
of Securities previously issued, to "reopen" a previous issue of a series of
Securities and issue additional Securities of such series or establish
additional terms of such Series of Securities.
Form, Exchange, Registration and Transfer
The Securities of a series may be issued solely as Registered Securities,
solely as Bearer Securities (with coupons attached) or as both Registered
Securities and Bearer Securities. Securities of a series may be issuable in
whole or part in the form of one or more global Securities, as described below
under "Global Securities."
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor. In addition, if Securities of
any series are issuable as both Registered Securities and Bearer Securities,
at the option of the Holder, subject to the terms of the appropriate
Indenture, Bearer Securities (accompanied by all unmatured coupons, except as
provided below, and all matured coupons in default) of such series will be
exchangeable for Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor. Unless
otherwise indicated in the Prospectus Supplement relating thereto, any Bearer
Security surrendered in exchange for a Registered Security between a Regular
Record Date or a Special Record Date and the relevant date for payment of
interest will be surrendered without the coupon relating to such date for
payment of interest and interest will not be payable in respect of the
Registered Security issued in exchange for such Bearer Security, but will be
payable only to the Holder of such coupon when due in accordance with the
terms of the appropriate Indenture. Bearer Securities will not be issued in
exchange for Registered Securities.
Securities may be presented for exchange as provided above, and unless
otherwise indicated in an applicable Prospectus Supplement, Registered
Securities may be presented for registration of transfer (duly endorsed, or
accompanied by a duly executed written instrument of transfer), at the office
of Bankers Trust, Four Albany Street, New York, New York 10006, Attention:
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Corporate Trust and Agency Group (the "Security Registrar") or at the office
of any transfer agent designated by the Company for such purpose with respect
to any series of Securities and referred to in the Prospectus Supplement
relating thereto, without service charge and upon payment of any taxes and
other governmental charges as described in the appropriate Indenture. 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. If a Prospectus
Supplement refers to any transfer agents (in addition to the Security
Registrar) designated by the Company with respect to any series of Securities,
the Company may at any time rescind the designation of any such transfer agent
or approve a change in the location through which any such transfer agent
acts, except that, if Securities of a series are issuable only as Registered
Securities, the Company will be required to maintain a transfer agent in each
Place of Payment for such series and, if Securities of a series are issuable
as Bearer Securities, the Company will be required to maintain (in addition to
the Security Registrar) a transfer agent in a Place of Payment for such series
located outside the United States. The Company may at any time designate
additional transfer agents with respect to any series of Securities.
In the event of any partial redemption of Securities of any series, the
Company will not be required to (i) register the transfer of or exchange
Securities of that series during a period beginning at the opening of business
15 days before any selection of Securities of that series to be redeemed and
ending at the close of business on (a) if Securities of the series are
issuable only as Registered Securities, the day of mailing of the relevant
notice of redemption and (b) if Securities of the series are issuable only as
Bearer Securities, the day of the first publication of the relevant notice of
redemption or, if Securities of the series are issuable as Bearer Securities
and Registered Securities and there is no publication, the mailing of the
relevant notice of redemption; (ii) register the transfer of or exchange any
Registered Security, or portion thereof, called for redemption, except the
unredeemed portion of any Registered Security being redeemed in part; or
(iii) exchange any Bearer Security called for redemption, except to exchange
such Bearer Security for a Registered Security of that series and of like
tenor and principal amount that is immediately surrendered for redemption.
Payment and Paying Agents
Unless otherwise indicated in the Prospectus Supplement relating thereto,
payment of principal of, premium, if any, and interest, on Registered
Securities will be made at the office of such Paying Agent or Paying Agents as
the Company may designate from time to time, except that at the option of the
Company, payment of any interest may be made (i) by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register or (ii) by wire transfer to an account maintained by the
Person entitled thereto as specified in the Security Register. Unless
otherwise indicated in the Prospectus Supplement relating thereto, payment of
any installment of interest on Registered Securities will be made to the
Person in whose name such Registered Security is registered at the close of
business on the Regular Record Date for such interest.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
payment of principal of, premium, if any, and interest, on Bearer Securities
will be payable, subject to any applicable laws and regulations, at the office
of such Paying Agents outside the United States as the Company may designate
from time to time, or by check or by transfer to an account maintained by the
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payee outside the United States. Unless otherwise indicated in the Prospectus
Supplement relating thereto, any payment of interest on Bearer Securities will
be made only against surrender of the coupon relating to such interest
installment.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the principal office of Bankers Trust will be designated as the Company's sole
Paying Agent for payments with respect to Securities which are issuable solely
as Registered Securities and as the Company's Paying Agent in the Borough of
Manhattan, The City of New York for payments with respect to Securities
(subject to any limitations described in any related Prospectus Supplement)
which are issuable as Bearer Securities. Any Paying Agents outside the United
States and any other Paying Agents in the United States initially designated
by the Company for the Securities will be named in an 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, if Securities of a series
are issuable only as Registered Securities, the Company will be required to
maintain a Paying Agent in each Place of Payment for such series and, if
Securities of a series are issuable as Bearer Securities, the Company will be
required to maintain (i) a Paying Agent in the Borough of Manhattan, The City
of New York, for payments with respect to any Registered Securities of the
series (and for payments with respect to Bearer Securities of the series in
the circumstances described in the appropriate Indenture, but not otherwise),
and (ii) a Paying Agent in a Place of Payment located outside the United
States where Securities of such series and any related coupons may be
presented and surrendered for payment; provided, however, that if the
Securities of such series are listed on The International Stock Exchange of
the United Kingdom and the Republic of Ireland Limited (the "London Stock
Exchange") or the Luxembourg Stock Exchange or any other stock exchange
located outside the United States and such stock exchange shall so require,
the Company will maintain a Paying Agent in London or Luxembourg or any other
required city located outside the United States, as the case may be, for the
Securities of such series.
All moneys paid by the Company to a Paying Agent for the payment of
principal of, premium, if any, or interest on any Security which remain
unclaimed at the end of one year after such principal, premium, if any, or
interest shall have become due and payable will be repaid to the Company for
payment thereof.
Global Securities
The Securities of a series may be issued in whole or in part in global
form. A Security in global form (a "Global Security") will be deposited with,
or on behalf of, a Depositary, which will be identified in the Prospectus
Supplement relating thereto. A Global Security may be issued in either
registered or bearer form and in either temporary or permanent form. A Global
Security may not be transferred except as a whole by the Depositary for such
Security to a nominee of such Depositary or by such Depositary or any such
nominee to a successor of such Depositary or a nominee of such successor. If
any Securities of a series are issuable in global form, the related Prospectus
Supplement will describe the circumstances, if any, under which beneficial
owners of interests in any such Global Security may exchange such interests
for definitive Securities of such series and of like tenor and principal
amount in any authorized form and denomination, the manner of payment of
principal of, premium, if any, and interest, if any, on any such Global
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Security and the specific terms of the depositary arrangement with respect to
any such Global Security.
Certain Defined Terms
Unless otherwise noted herein all defined terms are applicable to both the
Indentures.
"Consolidated Assets" is defined as the amount of all assets which under
generally accepted accounting principles as in effect on the date of such
balance sheet would appear on a consolidated balance sheet of the Company and
its Subsidiaries (after deducting related depreciation, amortization, unearned
finance charges, allowance for credit losses, and other valuation reserves),
but shall not include goodwill, unamortized debt discount and expenses,
corporate organization expense, patents and trademarks.
"Consolidated Liabilities" is defined as the amount of all liabilities
which under generally accepted accounting principles (as in effect as of the
date of such balance sheet) would appear on the consolidated balance sheet of
the Company and its Subsidiaries including, without limitation, the par value
or involuntary liquidation value, whichever is greater, of minority interests,
if any, in preference stock of all Subsidiaries, but not including any of the
following: redeemable preferred or preference stock, minority interests, if
any, in common stock of Subsidiaries, valuation reserves (including unearned
finance charges and allowances for credit losses deducted from assets),
Capital Stock and surplus and surplus reserves of the Company, deferred taxes,
deferred investment tax credit and any Subordinated Indebtedness of the
Company.
"Debt" is defined as, with respect to any Person, all obligations for
borrowed money of such Person which in accordance with generally accepted
accounting principles shall be classified upon a balance sheet of such Person
as liabilities of such Person, including all (a) direct Debt and other similar
monetary obligations of such Person, (b) obligations secured by any lien upon
Property owned by such Person or obligations created or arising under any
conditional sale, capital lease, or other title retention agreement with
respect to Property acquired by such Person; provided, however, that Debt does
not include any indebtedness, including purchase money indebtedness, with
respect to which a creditor has no recourse against the obligor except
recourse to specific Property the acquisition of which was financed by or
otherwise secures such indebtedness, or to the proceeds of any sale or lease
of such Property or both, (c) obligations under agreements to pay installments
of purchase price or other like payments with respect to fixed assets not
utilized by such Person or its subsidiaries in the ordinary course of its
business, including obligations ostensibly to pay rent under which an equity
interest is to be acquired in the rented Property. In addition, Debt includes
all Guarantees of such Person to the extent the amount of such Guarantees is
in excess of 50% of the Shareholder's Equity of such Person.
"Lien" is defined as any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract (but excluding a
landlord's statutory lien for rent not yet due), and including, but not
limited to, the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" includes reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
<PAGE>
<PAGE>15
leases and other title exceptions and encumbrances affecting Property. Under
the Indentures, the Company or a Subsidiary will be deemed to be the owner of
any Property which it has acquired or holds subject to a conditional sales
agreement, capital lease or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for security
purposes.
"Original Issue Discount Security" is defined as any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof, as
provided in the applicable Indenture.
"Property" is defined as any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Senior Indebtedness" as defined in the Subordinated Indenture shall mean
all of the indebtedness of, or guaranteed by, the Company for borrowed money
(including the principal of, premium, if any, or interest on any such borrowed
money and any commitment fees for unborrowed amounts which, if borrowed, would
constitute Senior Indebtedness), whether currently outstanding or hereafter
incurred, unless, under the instrument evidencing the same or under which the
same is outstanding, it is expressly provided that such indebtedness is
subordinate to other indebtedness and obligations of the Company.
"Shareholder's Equity" of any Person shall mean the shareholder's equity
appearing on the balance sheet of such Person as determined under generally
accepted accounting principles.
"Subordinated Indebtedness" as defined in the Subordinated Indenture shall
mean the Subordinated Securities and all other indebtedness of, or guaranteed
by, the Company whether or not outstanding on the date of the Subordinated
Indenture, which is by the terms thereof made subordinate and junior in right
of payment to all Senior Indebtedness.
Certain Covenants
Limitation on Dividends. The Indentures provide that no dividend shall be
paid or declared or other distribution made on any Capital Stock of the
Company (except in shares of Capital Stock of the Company), and neither the
Company nor any Subsidiary of the Company shall acquire any shares of such
stock unless, after giving effect thereto, Consolidated Assets would be at
least equal to 115% of Consolidated Liabilities. For purposes of this
limitation, the definition of Capital Stock shall not include any preferred
stock issued by the Company or its Subsidiaries. The foregoing restrictions,
however, shall not prevent any acquisition of shares of Capital Stock of the
Company solely in exchange for other shares of Capital Stock of the Company,
any acquisition of such shares of Capital Stock of the Company through the
application of the net proceeds of a substantially concurrent sale for cash
(other than to a Subsidiary of the Company) of other shares of such Capital
Stock of the Company, or the payment of any dividend within 60 days after the
date of declaration thereof, if at such date such declaration complied with
the restrictions of such limitation.
Limitation upon Liens. The Indentures provide that the Company will not,
and will not permit any Subsidiary to, create or permit to continue in
existence any Lien or charge of any kind upon any Property or assets of the
Company or of any Subsidiary unless the Securities then outstanding shall be
<PAGE>
<PAGE>16
equally and ratably secured (subject, in the case of the Subordinated
Securities, to subordination as to rights of payment as provided in the
Subordinated Indenture), with any other obligation or indebtedness so secured,
subject to certain exceptions including (a) leases or subleases of Property in
the ordinary course of business of the Company or any Subsidiary, or if such
Property is not needed in the operation of the business; (b) Liens created
within 12 months after the acquisition or construction of Property to secure
or to provide for the Payment of the purchase or construction price of such
Property and Liens existing on any Property at the time of acquisition or
certain pre-existing Liens and conditional sales agreements and/or title
retention agreements with respect to any subsequently acquired Property,
provided that the aggregate principal amount of the indebtedness secured by
all such Liens on any particular Property may not exceed the cost (including
improvements thereon) of such Property to the Company or any Subsidiary, and
that such Lien(s) do not extend to other Property owned prior to such
acquisition or construction or to Property thereafter acquired or constructed;
(c) Liens securing indebtedness incurred to finance or refinance the
acquisition of the Property subject to the Lien and in respect of which the
creditor has no recourse against the Company or any Subsidiary except recourse
to such Property, or to the proceeds of any sale or lease of such Property or
both; (d) Liens on Property of the Company or a Subsidiary in favor of the
United States or any State thereof, or any department, governmental body,
agency or instrumentality or political subdivision of any such jurisdiction,
to secure partial, progress, advance or other payments pursuant to any
contract or statute relating thereto; (e) deposits with or security interest
given to a governmental agency as a condition to the transaction of business
or the exercise of a privilege, or made to enable the Company or such
Subsidiary to maintain self-insurance or participate in any fund, or in
connection with workmen's compensation, unemployment insurance, old age
pensions, or other social security, or to share in any privileges or other
benefits available to corporations participating in any such arrangements, or
for any other purpose required by law or regulation promulgated by said
governmental agency as a condition to the transaction of any business or the
exercise of any privilege or license, or deposit assets of the Company or such
Subsidiary with any surety company or clerk of any court or in escrow, as
collateral in connection with, or in lieu of, any bond on appeal by the
Company or such Subsidiary from any judgment or in connection with any other
judicial proceedings by or against the Company or such Subsidiary;
(f)(i) Liens for taxes, assessments or other governmental charges or levies
which are not yet due or are payable without penalty or are being contested in
good faith and against which reserves deemed adequate by the Company or such
Subsidiary have been established, provided that foreclosure or similar
proceedings have not been commenced (unless cured by payment), (ii) Liens of
any judgment and other similar Liens arising in connection with court
proceedings, providing such Lien is discharged or the execution or other
enforcement of such Lien is effectively stayed within six months of the
creation of such Lien, (iii) undetermined Liens or charges incident to
construction, (iv) mechanics' or other like Liens arising in the ordinary
course of business in respect of obligations which are not overdue or which
are being contested by the Company or such Subsidiary in good faith, or
deposits to obtain the release of such Liens, or (v) immaterial encumbrances
consisting of zoning restrictions, licenses, easements and restrictions on the
use of real property and minor defects and irregularities in the title
thereto; (g) banker's liens and rights of off-set in the holders of
indebtedness such as commercial paper or monies of the Company or a Subsidiary
deposited with such Lender in the ordinary course of business; (h) Liens
related solely to the purchase of, or the investment in or with respect to, a
<PAGE>
<PAGE>17
specific item or items of tangible personal property and securing indebtedness
evidenced by participation certificates, trust certificates, indentures or the
like, however denominated, provided that no such Lien shall constitute a
general lien or mortgage on substantially all the tangible assets of the
Company; (i) refundings, replacements or extensions of any permitted Liens not
exceeding the principal amount of indebtedness so refunded or extended at the
time of such refunding or extension and covering the same Property theretofore
securing the same; (j) deposits or pledges as security for the performance of
any contract or undertaking in the ordinary course of business but unrelated
to the borrowing of money or to the securing of indebtedness; (k) Liens
existing on April 15, 1987 on its Property (with respect to the Senior
Indenture) and Liens existing on June 15, 1988 on its Property (with respect
to the Subordinated Indenture); (l) liens on aircraft or equipment held by the
Company or a Subsidiary or leased to third parties, if such obligation is
without recourse to the Company or such Subsidiary; and (m) in addition to
Liens permitted under clauses (a) through (l) above, Liens with respect to an
aggregate amount of indebtedness of the Company (including its Subsidiaries)
not in excess of an amount equal to 15% of Consolidated Assets.
Reference is made to the Prospectus Supplement relating to the Securities
offered thereby for information with respect to any additional covenants that
may be included in the terms of such Securities.
Mergers and Sales of Assets by the Company
The Company may consolidate or merge with or into any other corporation,
and the Company may convey, transfer or lease all or substantially all of its
Properties or assets to another Person provided that (a) the corporation (if
other than the Company) formed by or resulting from any such consolidation or
merger or which shall have received the transfer of such assets shall be a
corporation organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall expressly
assume payment of the principal of (and premium, if any) and interest
(including all Additional Amounts) on the Securities and the performance and
observance of the respective Indenture, and (b) the Company or such successor
corporation shall not immediately thereafter be in default under the
respective Indenture and certain other conditions are met.
Events of Default, Notice and Waiver
If an Event of Default with respect to the Securities of any series then
outstanding shall have occurred and be continuing, the Trustee or the Holders
of at least 25% in principal amount of the Securities of such series then
outstanding may declare the principal (or, if the Securities of that series
are Original Issue Discount Securities, such portion of the principal amount
as may be specified in the terms of that series) and accrued interest of all
the Securities of such series to be due and payable immediately; provided,
that, in certain cases, if all Events of Default with respect to such series
shall have been remedied, the Holders of a majority in aggregate principal
amount of the Securities of such series then outstanding may rescind and annul
such declaration and its consequences. Reference is made to the Pricing
Supplement relating to any series of Securities which is issued at a
substantial discount from the principal amount thereof for the particular
provisions relating to acceleration of the maturity of a portion of the
principal amount of such Securities upon the occurrence of an Event of Default
and the continuation thereof.
<PAGE>
<PAGE>18
An Event of Default with respect to the Securities of any series then
outstanding is defined in the Indenture as being: default for a period of 30
days or more in the payment of any interest on the Securities of such series
whether or not, in the case of the Subordinated Securities, such payment is
prohibited by the subordination provisions referred to below under
"Subordination"; default in payment of any principal of (or premium, if any,
on) the Securities of such series whether or not, in the case of the
Subordinated Securities, such payment is prohibited by the subordination
provisions referred to below under "Subordination"; default in the deposit of
any sinking fund payment, when and as due by the terms of a Security of that
series whether or not, in the case of the Subordinated Securities, such
payment is prohibited by the subordination provisions referred to below under
"Subordination"; default for a period of 60 days after notice by the Holders
of at least 25% in principal amount of the Outstanding Securities of that
series or by the Trustee in the performance of any other covenant or warranty
of the Company in the respective Indenture with respect to a series of the
Securities; an event of default, as defined in any mortgage, indenture or
instrument evidencing any indebtedness of the Company for money borrowed
(including other series of the Securities) in excess of $10,000,000 aggregate
principal amount then outstanding (except that such dollar amount shall not
apply with respect to a default with respect to Securities of any series
outstanding), as a result of which such indebtedness of the Company shall have
been accelerated and such acceleration shall not have been annulled or
rescinded within a period of 20 days after written notice thereof; or certain
events of bankruptcy, insolvency or reorganization.
The Trustee is required, within 90 days after the occurrence of any
default which is known to the Trustee and is continuing, to give to the
Holders of the applicable series of Securities with respect to which such
default has occurred notice of such default; provided that, except in the case
of default in the payment of principal, premium, if any (including any sinking
fund payment) or interest on a series of Securities with respect to which such
default has occurred, the Trustee shall be protected in withholding such
notice if it determines in good faith that the withholding of such notice is
in the interest of the Holders of the Securities of such series.
The Trustee, subject to its duties during default to act with the required
standard of care, may require indemnification by the Holders of a series of
Securities with respect to which a default has occurred before proceeding to
exercise any right or power under the applicable Indenture at the request of
the Holders of Securities of such series. The Holders of a majority in
principal amount of the Outstanding Securities of this series may 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.
In certain cases, the Holders of a majority in principal amount of an
outstanding series of Securities may, on behalf of the Holders of all
Securities of such series, and any coupons appertaining thereto, waive any
past default with respect to such series except a default in the payment of
the principal, premium, if any or interest (except to the extent that such
interest has been paid) on such series of Securities with respect to which
such default has occurred.
The Company is required to file annually with the Trustee a certificate as
to the absence of defaults under each Indenture.
<PAGE>
<PAGE>19
Notices
Except as otherwise provided in the Indentures, notices to Holders of
Bearer Securities will be given by publication at least twice in a daily
newspaper in The City of New York and in such other city or cities as may be
specified in such Securities. Notices to Holders of Registered Securities
will be given by mail to the addresses of such Holders as they appear in the
Security Registers.
Modification of the Indentures
Modification and amendment of the Indentures may be made by the Company
and the Trustee with the consent of the Holders of not less than 66- % in
aggregate principal amount of the Outstanding Securities of an affected
series, provided 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, or any installment of principal or interest
(or any Additional Amount) on, any Outstanding Security, or reduce the
principal amount or rate of interest thereon, or change the Redemption Price;
(b) change the place or currency of payment of principal of or premium, if
any, or interest on any Security; (c) impair the right to institute suit for
the enforcement of any such payment on or after the Stated Maturity thereof;
(d) reduce the above-stated percentage of Outstanding Securities necessary to
modify or amend the respective Indentures; (e) modify the foregoing
requirements or reduce the percentage of Outstanding Securities necessary to
waive any past default or compliance with certain restrictive provisions to
less than a majority; (f) with respect to the Senior Securities, reduce the
amount of principal of an Original Issue Discount Security payable upon
acceleration of the Maturity thereof; or (g) with respect to the Subordinated
Securities, reduce the amount of principal of or the rate of interest on a
Security payable upon acceleration of the Maturity thereof. The Holders of at
least a majority in aggregate principal amount of the Outstanding Securities
may waive past defaults and compliance by the Company with certain restrictive
provisions.
Modification and amendment of the Indentures may be made by the Company
and the Trustee without the consent of any Holder, for any of these purposes:
(a) to evidence the succession of another corporation to the Company; (b) to
add to the covenants of the Company for the benefit of the Holders of all or
any series of Securities; (c) to add additional Events of Default; (d) to
change any provision of the Indentures or either of them to facilitate the
issuance of Bearer Securities; (e) to change or eliminate any provision of any
Indenture, provided no Security Outstanding of any series is entitled to the
benefit of such provision; (f) to secure the Securities; (g) to establish the
form or terms of Securities; (h) to provide for the acceptance of appointment
by a successor Trustee; or (i) to cure any ambiguity, defect or inconsistency
in either Indenture or both of them provided such action does not adversely
affect the interests of Holders of Securities.
Subordination
The indebtedness evidenced by the Subordinated Securities and the payment
of the principal of (and premium, if any) and interest on each and all of the
Subordinated Securities are subordinated in right of payment to the prior
payment in full of Senior Indebtedness and, unless specifically designated as
ranking junior to other subordinated debt securities of the Company, are pari
passu with all other subordinated debt securities of the Company which have
<PAGE>
<PAGE>20
not been specifically designated as ranking junior to other subordinated debt
securities of the Company. The Company has not issued any subordinated debt
ranking junior to the Subordinated Securities but the Company may issue such
junior subordinated debt.
If the Company defaults in the payment of any Senior Indebtedness, unless
and until such default shall have been cured or waived, no direct or indirect
payment shall be made on account of the principal of, premium, if any or
interest or any Additional Amounts on the Subordinated Securities, or in
respect of any sinking fund for, or redemption, retirement or purchase or
other acquisition of any of the Subordinated Securities.
If any other event of default occurs with respect to any Senior
Indebtedness, permitting the holders thereof to accelerate the maturity
thereof, then, unless and until such event of default shall have been cured or
waived, no direct or indirect payment shall be made on account of the
principal of, or premium, if, any, or interest (including Additional Amounts)
on any Subordinated Securities or in respect of any sinking fund for, or
redemption, retirement, purchase or other acquisition of the Subordinated
Securities, during any period of 90 days after written notice of such default
shall have been given to the Company by any holder of Senior Indebtedness or
during any period in which any judicial proceeding is pending in respect of
such default and a notice of acceleration of the maturity of such Senior
Indebtedness has been transmitted to the Company in respect of such default.
In the event of: (i) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment or other similar proceeding relating
to the Company, its creditors or its property; (ii) any proceeding for the
liquidation, dissolution or other winding up of the Company, whether voluntary
or involuntary, whether or not involving bankruptcy proceedings; (iii) any
assignment by the Company for the benefit of creditors; or (iv) any other
marshalling of the assets of the Company, all Senior Indebtedness shall first
be paid in full before any payment or distribution shall be made to any Holder
of Subordinated Securities.
If any such payment or distribution to be paid to the holders of Senior
Indebtedness shall be made to any Holder of Subordinated Securities in
contravention of the foregoing and before all the Senior Indebtedness shall
have been paid in full, such payment or distribution shall be received in
trust for the benefit of, and shall be paid over or delivered and transferred
to, the holders of Senior Indebtedness at the time outstanding in accordance
with the priorities then existing among such holders for applications to the
payment of all Senior Indebtedness remaining unpaid.
Senior Indebtedness shall not be deemed to have been paid in full unless
the holders thereof shall have received cash equal to the amount of Senior
Indebtedness then outstanding. Upon payment in full of all Senior
Indebtedness, the Holders of Subordinated Securities shall be subrogated to
all rights of any holders of Senior Indebtedness to receive any further
payments or distributions applicable to the Senior Indebtedness until all
amounts owing on the Subordinated Securities shall have been paid in full, and
such payments or distributions which otherwise would be paid or distributed to
the holders of Senior Indebtedness, shall, as between the Company and its
creditors (other than the holders of Senior Indebtedness), on the one hand,
and the Holders of the Subordinated Securities, on the other hand, be deemed
to be a payment by the Company on account of Senior Indebtedness and on
account of the Subordinated Securities.
<PAGE>
<PAGE>21
As of December 31, 1994, the Company had issued $1,918.8 million of its
Senior Securities pursuant to the Senior Indenture and $82.9 million of its
Subordinated Securities pursuant to the Subordinated Indenture. As of
December 31, 1994, there was $1,127.6 million of Senior Indebtedness of the
Company outstanding and $87.5 million of Subordinated Indebtedness of the
Company outstanding. Pursuant to certain indebtedness of the Company not
covered by the Indentures, the Company's most restrictive covenants regarding
the incurrence of Senior Indebtedness allow the Company to incur Senior
Indebtedness to the extent of 450% of the sum of Net Worth plus Subordinated
Indebtedness, less certain adjustments. For the purposes of such covenants,
Subordinated Indebtedness in excess of 50% of Net Worth constitutes Senior
Indebtedness. The maximum amount of additional Senior Indebtedness which
could have been incurred as of December 31, 1994 was $351.8 million. In
addition, certain of the Company's other indebtedness not covered by the
Indentures contains covenants restricting the incurrence of Senior
Indebtedness. However, such covenants are not as restrictive as the covenants
described in this paragraph.
The holders of the Securities should not rely on the continued existence
of the covenants described above because they will expire (i) as the
indebtedness related thereto matures and is paid (the Company currently has no
indebtedness outstanding under the facility described above), (ii) if the
Company prepays such related indebtedness, (iii) if the Company amends or
deletes such restrictions through the process of negotiation or (iv) with
respect to the most restrictive covenants, if the Company terminates such
facility.
The Trustee Under the Indentures
Bankers Trust is the Trustee under the Senior Indenture and the
Subordinated Indenture. Bankers Trust is also the Trustee for certain other
series of the Company's medium term notes. The Company maintains banking and
borrowing relations with Bankers Trust.
PLAN OF DISTRIBUTION
The Company may sell Securities to one or more underwriters for public
offering and sale by them or may sell Securities to investors directly or
through agents that solicit or receive offers on behalf of the Company or
through dealers or through a combination of any such method of sale. Any such
underwriter, dealer or agent involved in the offer and sale of the Securities
will be named in a supplement to this Prospectus.
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. The Company
may authorize agents of the Company acting on a best efforts or other basis to
solicit and receive offers by certain institutions to purchase the Securities
from the Company upon the terms and conditions as are set forth the Prospectus
Supplement. Each Prospectus Supplement will describe the method of
distribution of the Securities offered thereby.
In connection with the sale of the Securities, underwriters may receive
compensation from the Company or from purchasers of Securities for whom they
may act as agents, in the form of discounts, concessions or commissions. The
<PAGE>
<PAGE>22
underwriters, dealers and agents which participate in the distribution of
Securities (including agents only soliciting or receiving offers to purchase
Securities on behalf of the Company) 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 Securities by them may be deemed to be underwriting
discounts and commissions under the Securities Act. Any such dealer will be
identified and any such compensation will be set forth in the Prospectus
Supplement.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents which participate in the distribution of Securities may be
entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act.
Each underwriter, dealer and agent participating in the distribution of
any Securities which are issuable as Bearer Securities will agree that it will
not offer, sell or deliver, directly or indirectly, Bearer Securities in the
United States or to United States persons (other than qualifying financial
institutions), in connection with the original issuance of the Securities.
Each underwriter, dealer and agent has represented and agreed that:
(a) it has not offered or sold and, for so long as Part III of the
Companies Act 1985 remains in force in relation to the Securities,
will not offer or sell in the United Kingdom, by means of any
document, any Securities:
(i) (in the case of Securities which are to be listed on the London
Stock Exchange) prior to application for listing of the
Securities being made in accordance with Part IV of the
Financial Services Act 1986 ("FSA"), other than in
circumstances which do not constitute an offer to the public
within the meaning of the Companies Act 1985; and
(ii) (in the case of Securities which are not to be listed on the
London Stock Exchange) other than to persons whose ordinary
business it is to buy or sell shares or debentures, whether as
principal or agent or in circumstances which do not constitute
an offer to the public within the meaning of the Companies Act
1985;
(b) it has complied and will comply with all applicable provisions of
the FSA with respect to anything done by it in relation to the
Securities in, from or otherwise involving the United Kingdom;
(c) it has only issued or passed on and it will only issue or pass on in
the United Kingdom any document received by it in connection with
the issue of the Securities, other than any document which, in
relation to those Securities, consists of or any part of the listing
particulars, supplementary listing particulars or any other document
requird or permitted to be published by the listing rules under Part
IV of the FSA, to a person who is of a kind described in
Article 9(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1988 as amended or is a person to
whom the document may otherwise be lawfully issued or passed on; and
<PAGE>
<PAGE>23
(d) once the provisions of law which shall replace Part III of the
Companies Act in relation to offers of securities have come into
force, it will not make any offer to the public (with the meaning of
those provisions) of the Securities in circumstances which would
require ()for the avoidance of any contravention of those
provisions) a prospectus to have been delivered to the Registrar of
Companies in England and Wales.
Certain of the underwriters and their associates may be customers of,
engage in transactions with and perform services for the Corporation in the
ordinary couse of business.
LEGAL MATTERS
The validity of the Securities will be passed upon for the Company by
Michael C. Draffin, Vice President - Taxes & Associate General Counsel and
Secretary of the Company or by H. David Heumann, Senior Counsel of the
Company, and for the underwriters or agents by Brown & Wood, New York, New
York. Mr. Draffin and Mr. Heumann may rely, as to all matters governed by New
York law, on the opinion of Brown & Wood.
EXPERTS
The consolidated financial statements and schedules of McDonnell Douglas
Finance Corporation and subsidiaries appearing in its Annual Report (Form 10-
K) for the year ended December 31, 1994 have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. The information under the
caption "Selected Consolidated Financial Data" for each of the five years in
the period ended December 31, 1994, included elsewhere herein has been derived
from consolidated financial statements audited by Ernst & Young LLP as set
forth in their report, included in the Annual Report on Form 10-K for the year
ended December 31, 1994, and incorporated herein by reference. Such
consolidated financial statements and selected consolidated financial data
have been incorporated herein by reference and included herein, respectively,
in reliance upon such report, given upon the authority of such firm as experts
in accounting and auditing.
<PAGE>
<PAGE>24
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth all expenses in connection with the
issuance and distribution of the securities being registered. All the amounts
shown are estimates, except the registration fee.
Registration fee . . . . . . . . . . . . . . . . . . . . . . . . $258,623
Fees and expenses of accountants . . . . . . . . . . . . . . . . 50,000
Fees and expenses of counsel . . . . . . . . . . . . . . . . . . . 75,000
Blue Sky fees and expenses . . . . . . . . . . . . . . . . . . . . 15,000
Fees and expenses of Trustee . . . . . . . . . . . . . . . . . . 45,000
Printing expenses . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Rating agency fees . . . . . . . . . . . . . . . . . . . . . . . 175,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,377
________
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . $650,000
========
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law permits
indemnification of officers and directors of domestic or foreign corporations
under certain circumstances and subject to certain limitations. Article XXIII
of the Company's By-Laws and resolutions adopted by the Company's Board of
Directors contain provisions for indemnification of its directors and officers
consistent with the provisions of said Section 145.
Section 2-418 of the Maryland General Corporation Law permits
indemnification of officers and directors of domestic or foreign corporations
under certain circumstances and subject to certain limitations. Article IX of
MDC's By-Laws and Resolution 736 adopted by MDC's Board of Directors provide
indemnification of the Company's directors and officers consistent with the
provisions of said Section 2-418.
MDC maintains policies of insurance under which the directors and officers
of the Company are insured, within the limits and subject to the limitations
of the policies, against certain expenses in connection with the defense of
actions, suits or proceedings, and certain liabilities which might be imposed
as a result of such actions, suits or proceedings, to which they are parties
by reason of being or having been such directors or officers of the Company.
II-1<PAGE>
<PAGE>25
Item 16. List of Exhibits.
1 -- Distribution Agreement, dated as of _______________, 1995.(2)
4(a) -- Indenture, dated as of April 15, 1987, between McDonnell
Douglas Finance Corporation and Bankers Trust Company providing
for the issuance of Debt Securities.(1)
4(b) -- Supplemental Indenture, dated as of _______________, 1995,
between McDonnell Douglas Finance Corporation and Bankers Trust
Company.(2)
4(c) -- Indenture dated June 15, 1988, between McDonnell Douglas
Finance Corporation and Bankers Trust Company of California,
N.A. providing for the issuance of Subordinated Debt
Securities.(1)
4(d) -- Supplemental Indenture, dated as of _______________, 1995,
between McDonnell Douglas Finance Corporation and Bankers Trust
Company.(2)
4(e) -- Form of Fixed Rate Senior Medium-Term Note.(2)
4(f) -- Form of Subordinated Fixed Rate Medium-Term Note.(2)
4(g) -- Form of Subordinated Floating Rate Medium-Term Note.(2)
4(h) -- Form of Senior Floating Rate Medium-Term Note.(2)
5 -- Opinion of H. David Heumann, Esq., Senior Counsel of the
Company.(2)
12 -- Computation of Ratio of Earnings to Fixed Charges, for the year
ended December 31, 1994.
23(a) -- Consent of H. David Heumann, Esq., Senior Counsel of the
Company (included in Exhibit 5).
23(b) -- Consent of Ernst & Young LLP.
24 -- Power of Attorney (included on page II-4).
25(a) -- Statement of Eligibility under the Trust Indenture Act of 1939
on Form T-1 of Bankers Trust Company with respect to Senior
Debt Securities.
25(b) -- Statement of Eligibility under the Trust Indenture Act of 1939
on Form T-1 of Bankers Trust Company with respect to Senior
Subordinated Debt Secutities.
__________
(1) Previously filed with the Commission as an exhibit to the Company's
Form S-3 Registration Statement (File No. 33-26674) and incorporated by
reference herein.
(2) To be filed by amendment.
II-2
<PAGE>
<PAGE>26
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement;
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 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.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions referred to in Item 15 of this
Registration Statement, or otherwise, the registrant has been advised that in
the opinion of the 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
<PAGE>
<PAGE>27
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.
II-3
<PAGE>
<PAGE>28
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3, based on Registrant's reasonable belief
that the security rating requirement will be met by the time of effectiveness,
and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Long Beach, and
State of California, on the 1st day of May, 1995.
McDONNELL DOUGLAS FINANCE CORPORATION
By: /s/ THOMAS J. MOTHERWAY
Thomas J. Motherway
(President)
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Thomas J. Lawlor, Jr. and Thomas J. Motherway, and
each of them, 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 any and all amendments (including
post-effective amendments) to this Registration Statement, 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, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about
the premises, as fully 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 their or his substitute or substitutes, may lawfully
do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
Principal Executive Officer:
/s/ THOMAS J. MOTHERWAY President and Director May 1, 1995
(Thomas J. Motherway)
Principal Financial and Accounting Officer:
/s/ THOMAS J. LAWLOR, JR. Senior Vice President May 1, 1995
(Thomas J. Lawlor, Jr.) & Chief Financial Officer
and Director
Other Directors:
___________________________ Chairman and Director May _, 1995
(Herbert J. Lanese)
<PAGE>
<PAGE>29
/s/ ROBERT H. HOOD, JR. Director May 1, 1995
(Robert H. Hood, Jr.)
____________________________ Director May __, 1995
(F. Mark Kuhlmann)
II-4
<PAGE>1
EXHIBIT 12
McDonnell Douglas Finance Corporation and Subsidiaries
Computation of Ratio of Income to Fixed Charges
Years Ending December 31,
(Dollars in millions) 1994 1993 1992 1991 1990
Income from continuing operations
before income taxes and
cumulative effect of
accounting change $ 41.9 $ 40.8 $48.0 $57.2 $98.9
Fixed charges(1) 111.8 120.0 149.4 202.0 219.9
Income from continuing operations
before income taxes, cumulative
effect of accounting change and
fixed charges $153.7 $160.8 $197.4 $259.2 $318.8
Ratio of income to fixed charges 1.37 1.34 1.32 1.28 1.45
(1) Includes interest expense, amortization of discount and preferred
stock dividends.
<PAGE>1
EXHIBIT 23(b)
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 as filed with the Securities and Exchange
Commission on May 1, 1995 and related Prospectus of McDonnell Douglas Finance
Corporation and to the incorporation by reference therein of our report dated
January 17, 1995, with respect to the consolidated financial statements,
schedules, and selected financial data of McDonnell Douglas Finance
Corporation included in its Annual Report (Form 10-K for the year ended
December 31, 1994, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Orange County, California
May 1, 1995
<PAGE>1
EXHIBIT 25(a)
______________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2) ___________
______________________________
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of Incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
_________________________________
MC DONNELL DOUGLAS FINANCE CORPORATION
(Exact name of obligor as specified in the charter)
DELAWARE 95-2564585
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
4060 LAKEWOOD BLVD.
LONG BEACH, CALIFORNIA 90808
(Address of principal executive offices) (Zip Code)
______________________________
SENIOR INDENTURE
Providing for the Issuance of Senior Debt Securities
(Title of the indenture securities)
______________________________________________________________________________
<PAGE>
<PAGE>2
Item 1. General Information.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising
authority to which it is subject.
Name Address
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate
trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the Trustee, describe each
such affiliation.
None.
Item 3. -15. Not Applicable
Item 16. List of Exhibits.
Exhibit 1 - Restated Organization Certificate of Bankers
Trust Company dated August 7, 1990 and Certificate
of Amendment of the Organization Certificate of
Bankers Trust Company dated March 28, 1994 -
Incorporated herein by reference to Exhibit 1
filed with Form 1 Statement, Registration No. 33-
79862.
Exhibit 2 - Certificate of Authority to commence business -
Incorporated herein by reference to Exhibit 2
filed with Form T-1 Statement, Registration No.
33-21047.
Exhibit 3 - Authorization of the Trustee to exercise corporate
trust powers - Incorporated herein by reference
to Exhibit 2 filed with Form T-1 Statement,
Registration No. 33-21047.
Exhibit 4 - Existing By-Laws of Bankers Trust Company, dated as
amended on September 21, 1993. - Incorporated
herein by reference to Exhibit 4 filed with Form
T-1 Statement, Registration No. 33-52359.
<PAGE>
<PAGE>3
Exhibit 5 - Not applicable.
Exhibit 6 - Consent of Bankers Trust Company required by
Section 321(b) of the Act. - Incorporated
herein by reference to Exhibit 4 filed with
Form T-1 Statement, Registration No. 22-18864.
Exhibit 7 - A copy of the latest report of condition of
Bankers Trust Company dated as of
December 31, 1994, incorporated herein by
reference to Exhibit 7 filed with Form T-1
Statement, Registration No. 33-57835.
Exhibit 8 - Not Applicable
Exhibit 9 - Not Applicable
<PAGE>
<PAGE>4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the trustee,
Bankers Trust Company, a corporation organized and existing under the laws
of the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
The City of New York, and State of New York, on the 28th day of April, 1995.
BANKERS TRUST COMPANY
/s/ Jenna Kaufman
By: _______________________________
Jenna Kaufman
Assistant Vice President
<PAGE>
<PAGE>5
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the trustee,
Bankers Trust Company, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
The City of New York, and State of New York, on the 28th day of April, 1995.
BANKERS TRUST COMPANY
/s/ Jenna Kaufman
By: ____________________
Jenna Kaufman
Assistant Vice President
<PAGE>1
EXHIBIT 25(b)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2) ___________
______________________________
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of Incorporation (I.R.S.
Employer if not a U.S. national bank) Identification No.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
_________________________________
MC DONNELL DOUGLAS FINANCE CORPORATION
(Exact name of obligor as specified in the charter)
DELAWARE 95-2564585
(State or other jurisdiction of (I.R.S.
employer Incorporation or organization) Identification No.)
4060 LAKEWOOD BLVD.
LONG BEACH, CALIFORNIA 90808
(Address of principal (Zip Code)
executive offices)
______________________________
SUBORDINATED INDENTURE
Providing for the Issuance of Senior Subordinated Debt Securities
(Title of the indenture securities)
_____________________________________________________________________________
<PAGE>2
Item 1. General Information.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising authority
to which it is subject.
Name Address
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
Item 3. -15 Not Applicable
Item 16. List of Exhibits.
Exhibit 1 - Restated Organization Certificate of Bankers Trust
Company dated August 7, 1990 and Certificate of
Amendment of the Organization Certificate of Bankers
Trust Company dated March 28, 1994 - Incorporated
herein by reference to Exhibit 1 filed with Form 1
Statement, Registration No. 33-79862..
Exhibit 2 - Certificate of Authority to commence business -
Incorporated herein by reference to Exhibit 2 filed
with Form T-1 Statement, Registration No. 33-21047.
Exhibit 3 - Authorization of the Trustee to exercise corporate
trust powers - Incorporated herein by reference to
Exhibit 2 filed with Form T-1 Statement, Registration
No. 33-21047.
Exhibit 4 - Existing By-Laws of Bankers Trust Company, dated as
amended on September 21, 1993. - Incorporated herein by
reference to Exhibit 4 filed with Form T-1 Statement,
Registration No. 33-52359.
<PAGE>
<PAGE>3
Exhibit 5 - Not applicable.
Exhibit 6 - Consent of Bankers Trust Company required by Section
321(b) of the Act. - Incorporated herein by reference
to Exhibit 4 filed with Form T-1 Statement,
Registration No. 22-18864.
Exhibit 7 - A copy of the latest report of condition of Bankers
Trust Company dated as of December 31, 1994,
incorporated herein by reference to Exhibit 7 filed
with Form T-1 Statement, Registration No. 33-57835.
Exhibit 8 - Not Applicable
Exhibit 9 - Not Applicable
<PAGE>
<PAGE>4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
trustee, Bankers Trust Company, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all
in The City of New York, and State of New York, on the 28th day of April,
1995.
BANKERS TRUST COMPANY
/s/ Jenna Kaufman
By: _____________________
Jenna Kaufman
Assistant Vice President
<PAGE>
<PAGE>5
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
trustee, Bankers Trust Company, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all
in The City of New York, and State of New York, on the 28th day of April,
1995.
BANKERS TRUST COMPANY
/s/ Jenna Kaufman
By: ________________________
Jenna Kaufman
Assistant Vice President
