<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 23, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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COMDISCO, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-2687938
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
6111 NORTH RIVER ROAD PHILIP A. HEWES, ESQ.
ROSEMONT, ILLINOIS 60018 SENIOR VICE PRESIDENT/LEGAL AND
(847) 698-3000 SECRETARY
(ADDRESS, INCLUDING ZIP CODE, AND COMDISCO, INC.
TELEPHONE NUMBER, INCLUDING AREA 6111 NORTH RIVER ROAD
CODE, OF REGISTRANT'S PRINCIPAL ROSEMONT, ILLINOIS 60018
EXECUTIVE OFFICES) (847) 698-3000
(NAME, ADDRESS, INCLUDING ZIP CODE,
AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF AGENT FOR SERVICE)
COPIES TO:
LOLA M. HALE, ESQ. ROBERT J. DONATUCCI, ESQ.
MCBRIDE BAKER & COLES BROWN & WOOD LLP
500 WEST MADISON STREET, 40TH FLOOR ONE WORLD TRADE CENTER
CHICAGO, ILLINOIS 60661 NEW YORK, NEW YORK 10048-0557
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of the 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. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
MAXIMUM PROPOSED
TITLE OF EACH CLASS OF AMOUNT AGGREGATE MAXIMUM AMOUNT OF
SECURITIES TO BE PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(2) FEE
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<S> <C> <C> <C> <C>
Debt Securities (3)..... $1,200,000,000(4) 100% $1,200,000,000(4) $363,636.36
Common Stock, par value
$0.10 per share (5)....
</TABLE>
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(1) To be determined from time to time by the Registrant in connection with
the issuance by the Registrant of the securities registered hereunder.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933.
(3) Subject to note (4) below, there is being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold, from
time to time, or as may be issuable upon exercise or conversion of Debt
Securities registered hereunder. For Debt Securities issued with an
original issue discount, the amount to be registered is calculated as the
original accreted value of such Debt Securities.
(4) In no event will the aggregate offering price of all securities issued
from time to time pursuant to this Registration Statement exceed
$1,200,000,000 (exclusive of accrued interest, if any) or the equivalent
thereof in one or more foreign currencies, foreign currency units or
composite currencies. No separate consideration will be received for Debt
Securities or Common Stock issued upon conversion or exchange of Debt
Securities registered hereunder.
(5) Subject to note (4) above, there is being registered an indeterminate
number of shares of Common Stock as may from time to time be issuable upon
the conversion or exchange of Debt Securities registered hereunder.
Includes the common stock purchase rights associated with the Common Stock
which will be issued for no additional consideration.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED JUNE 23, 1997
PROSPECTUS
$1,200,000,000
LOGO
DEBT SECURITIES
Comdisco, Inc. (the "Company") may issue from time to time, together or
separately its debt securities (the "Debt Securities"), which may be either
senior ("Senior Debt Securities") or subordinated in priority of payment
("Subordinated Debt Securities"). The Company may also issue Debt Securities
which may be convertible into or exchangeable for shares of common stock, par
value $0.10, of the Company (the "Common Stock"). The Company may also issue
Subordinated Debt Securities at a substantial discount from their principal
amount at maturity, with no periodic payments of interest, which will be
convertible into or exchangeable for shares of Common Stock, in amounts, at
prices and on terms to be determined by market conditions at the time of
offering ("Zero-Coupon Subordinated Convertible Securities").
The Debt Securities may be issued in one or more series or issuances and
will be limited to $1,200,000,000 in aggregate public offering price (or its
equivalent, based on the applicable exchange rate, to the extent Debt
Securities are issued for one or more foreign currencies or currency units).
The Debt Securities may be sold for U.S. dollars, or any foreign currency or
currencies or currency units, and the principal of, any premium on, and any
interest on, the Debt Securities may be payable in U.S. dollars, or any
foreign currency or currencies or currency units.
The specific terms of the Debt Securities in respect of which this
Prospectus is being delivered are set forth in the accompanying Prospectus
Supplement, including, where applicable, the specific designation, ranking,
priority, aggregate principal amount, currency or currencies, denominations,
maturity, which may be fixed or extendible, premium or discount, if any,
interest rate (or method of calculation), which may be fixed or floating, and
time of payment of interest, form (which may be bearer, registered or global),
terms for redemption at the option of the Company or repayment at the option
of the holder, terms for sinking fund payments, terms for conversion into or
exchange for shares of Common Stock and any other terms in connection with the
offers and sale of Debt Securities. Additionally, the Prospectus Supplement
relating to an issuance of Subordinated Debt Securities or Zero-Coupon
Subordinated Convertible Securities will identify the indenture pursuant to
which such Debt Securities will be offered and the trustee under such
indenture, and will provide a summary of the provisions of such indenture
which are materially different than the descriptions contained in this
Prospectus. The applicable Prospectus Supplement will also contain
information, where applicable, about certain United States federal income tax
considerations relating to the Debt Securities and any listing on a securities
exchange of the Debt Securities covered by such Prospectus Supplement and
about relationships between the Company and the applicable trustee.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURI-
TIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR ANY PROSPECTUS SUP-
PLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Debt Securities may be offered directly, through agents designated from
time to time, through underwriting syndicates led by one or more managing
underwriters, through or to one or more dealers or underwriters acting alone,
or through a combination of the foregoing. If any agents, dealers or
underwriters are involved in the sale of any of the Debt Securities, their
names, and any applicable fee, commission, purchase price or discount
arrangements with them, will be set forth, or will be calculable from the
information set forth, in the applicable Prospectus Supplement. See "Plan of
Distribution."
The date of this Prospectus is June , 1997.
<PAGE>
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 and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, and at the Commission's Regional Offices
located at 7 World Trade Center, New York, New York 10048 and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can be
obtained by mail from the Public Reference Branch of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition,
reports, proxy statements and other information concerning the Company may be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, 7th
floor, New York, New York 10005 and the Chicago Stock Exchange, 440 South
LaSalle Street, Chicago, Illinois 60605. The Commission maintains a Web site,
which contains reports, proxy and information statements and other information
regarding registrants that, like the Company, file electronically with the
Commission, at the following address: http://www.sec.gov.
Additional information regarding the Company and the Debt Securities is
contained in the registration statements on Form S-3 (together with all
exhibits and amendments, collectively, the "Registration Statement") filed
with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the Commission's rules. For further information pertaining to
the Company and the Debt Securities offered hereby reference is made to the
Registration Statement which may be inspected without charge at the office of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and copies
thereof may be obtained from the Commission at prescribed rates.
Statements made in this Prospectus concerning the provisions of any
contract, agreement or other document referred to herein are not necessarily
complete. With respect to each such statement concerning a contract, agreement
or other document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission, reference is made to such exhibit or
other filing for a more complete description of the matter involved, and each
such statement is qualified in its entirety by such reference.
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Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$", "dollars,"
"U.S. dollars," or "U.S.$").
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 1-7725) are
incorporated herein by reference.
1. The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1996.
2. The Company's Current Report on Form 8-K dated January 24, 1997 and
filed with the Commission on January 27, 1997.
3. The Company's Quarterly Report on Form 10-Q dated December 31, 1996
and filed with the Commission on February 15, 1997.
4. The Company's Current Report on Form 8-K dated May 1, 1997 and filed
with the Commission on May 1, 1997.
5. The Company's Current Report on Form 8-K dated May 6, 1997 and filed
with the Commission on May 7, 1997.
6. The Company's Quarterly Report on Form 10-Q dated March 31, 1997 and
filed with the Commission on May 15, 1997.
2
<PAGE>
7. The description of the Common Stock included in the registration
statement filed under the Exchange Act under File No. 1-7725, including all
amendments or reports filed for the purpose of updating such description.
8. The description of the Company's Common Stock Purchase Rights included
in the Registration Statement on Form 8-A filed November 20, 1987, as
amended by Form 8-A/A filed December 6, 1994.
All documents filed by the Company pursuant to Section 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 Debt Securities shall be deemed to
be incorporated by reference into this Prospectus and to be a part hereof from
the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed document
which 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
this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person,
including any beneficial owner, a copy of any or all of the documents
incorporated herein by reference (other than exhibits, unless such exhibits
are specifically incorporated by reference in such documents). Written
requests for such copies should be directed to Edward A. Pacewicz, Vice
President and Treasurer, Comdisco, Inc., 6111 North River Road, Rosemont,
Illinois 60018; telephone (847) 698-3000.
THE COMPANY
Comdisco, Inc. (with its subsidiaries, the "Company" or "Comdisco") is a
technology services company, providing solutions that help organizations
reduce technology cost and risk. The Company operates in one industry segment,
high technology equipment, and provides information technology services,
business continuity services and diversified technology services to its
customers. These services are designed to provide integrated, long-term, cost
effective asset and technological planning as well as data recovery and voice
availability/recovery to users of high technology equipment.
As an independent organization, the Company provides customers with
available technical, financial and recovery alternatives, regardless of
hardware platform or manufacturer. In addition to working with its customers
to develop strategies governing when to acquire equipment and how to track it,
when to upgrade existing equipment and when to order new equipment to take
advantage of current technology, Comdisco also provides business continuity
services for customers' data, voice and network systems. The Company also has
the ability to act as an outlet for the equipment being displaced.
Comdisco's business is diversified by customer, customer type, equipment
segments, geographic location of its customers and maturity of its lease
receivables. The Company's customers include "Fortune 1000" corporations or
companies of a similar size as well as smaller corporations. A substantial
portion of the Company's transactions are with repeat customers. The Company's
businesses are not dependent on any single customer or on any single source
for the purchasing, selling or leasing of equipment.
The Company was founded in 1969 and incorporated in Delaware in 1971. The
executive offices of the Company are located in the Chicago area at 6111 North
River Road, Rosemont, Illinois 60018, and its telephone number is (847) 698-
3000. At March 31, 1997 the Company had 2,376 full-time employees.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for the periods indicated.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED MARCH
31, FISCAL YEAR ENDED SEPTEMBER 30,
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1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
1.65 1.62 1.64 1.55 1.29 1.43 1.09
</TABLE>
3
<PAGE>
For purposes of calculating the ratio of earnings to fixed charges, earnings
have been calculated by adding fixed charges and income taxes to net earnings
available to common stockholders without taking into account earnings and
losses attributed to discontinued operations and extraordinary items. Fixed
charges consist of interest expense on all indebtedness, amortization of debt
issuance costs, and one-third of rental expense, which is assumed to be the
representative interest portion of rental expense.
USE OF PROCEEDS
Unless otherwise stated in the accompanying Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Debt Securities
for general corporate purposes, including equipment purchases, repayment of
short-term debt and redemption or repurchase of senior debt. Pending such
applications, the net proceeds may be temporarily invested in cash
equivalents. Management of the Company expects that it will, on a recurrent
basis, engage in additional financings as the need arises to finance the
growth of the Company or to lengthen the average maturity of its borrowings.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to such Debt Securities will be described in such
Prospectus Supplement.
The Senior Debt Securities are to be issued under an Indenture, as amended
from time to time (the "Senior Indenture") dated as of December 1, 1995,
between the Company and Yasuda Bank and Trust Company (U.S.A.) as trustee, or
the trustee named in the applicable Prospectus Supplement as trustee (the
"Senior Trustee"). The Senior Indenture is an exhibit to the Registration
Statement. Subordinated Debt Securities (other than Zero-Coupon Convertible
Subordinated Securities) will be issued under an indenture or indentures, as
amended from time to time (collectively, the "Subordinated Indenture") between
the Company and the trustee or trustees named in the applicable Prospectus
Supplement (collectively, the "Subordinated Trustee"). Zero-Coupon Convertible
Subordinated Securities will be issued under an indenture or indentures, as
amended from time to time (collectively, the "Zero-Coupon Convertibles
Indenture") between the Company and the trustee named in the applicable
Prospectus Supplement as trustee (collectively, the "Zero-Coupon Convertibles
Trustee"). Prior to the issuance of any Subordinated Debt Securities or Zero-
Coupon Convertible Subordinated Securities thereunder, the forms of
Subordinated Indenture and Zero-Coupon Convertibles Indenture, as applicable,
will be qualified under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and filed by amendment as exhibits to the Registration
Statement. The Senior Indenture, Subordinated Indenture and Zero-Coupon
Convertibles Indenture are collectively referred to as the "Indentures."
The terms of the Debt Securities include those stated, and to be stated, in
the Indentures and those made a part of the Indentures by reference to the
Trust Indenture Act, and the holders of Debt Securities are referred to the
Indentures and the Trust Indenture Act for a statement thereof. The following
summary of certain provisions of the Debt Securities and the Indentures does
not purport to be complete and is subject to, and is qualified in its entirety
by reference to, the Indentures and the Trust Indenture Act. The term "Debt
Securities," as used under this caption, refers to all Securities issued or
issuable from time to time under the Indentures. The particular terms of the
Debt Securities offered by a Prospectus Supplement and the extent, if any, to
which such general provisions may apply to Debt Securities, will be described
in the Prospectus Supplement relating to such Debt Securities.
4
<PAGE>
Wherever particular defined terms of the Indentures are referred to, it is
intended that such defined terms shall be incorporated herein by reference.
Unless otherwise indicated herein, capitalized terms used herein that are
defined in the Indentures shall have the meanings ascribed to them in the
Indentures.
Unless otherwise provided in the applicable Prospectus Supplement, none of
the Indentures limits the amount of Debt Securities which may be issued
thereunder, and each Indenture provides that Debt Securities of any series may
be issued thereunder up to the aggregate principal amount which may be
authorized from time to time by the Company and may be denominated in any
currency or currency unit designated by the Company. Unless otherwise provided
in the applicable Prospectus Supplement, neither the Indentures nor the Debt
Securities will limit or otherwise restrict the amount of other indebtedness
which may be incurred or the other securities which may be issued by the
Company or any of its subsidiaries.
Debt Securities of a series may be issuable in registered form without
coupons ("Registered Securities"), in bearer form with or without coupons
attached ("Bearer Securities") or in the form of one or more global securities
in registered or bearer form (each a "Global Security").
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for the following terms, when
applicable, of the Debt Securities: (i) the title of the Debt Securities; (ii)
any limit on the aggregate principal amount of the Debt Securities; (iii) the
date or dates, or the method by which such date or dates will be determined or
extended, on which the principal (and premium, if any) of the Debt Securities
will be payable; (iv) the rate or rates per annum at which the Debt Securities
will bear interest, if any, or the method by which such rate or rates will be
determined and the date or dates from which such interest will accrue; (v) the
dates on which such interest, if any, will be payable and the Regular Record
Dates for any interest payable on any Registered Security on any such Interest
Payment Dates, any circumstances in which the Company may defer interest
payments or any manner of computing interest if other than a 360-day year of
twelve 30-day months; (vi) the place or places where principal and interest
(and premium, if any) on the Debt Securities may be payable, where any
Registered Securities may be surrendered for transfer and where Debt
Securities may be exchanged and notices and demands may be served or
published, (vii) the price at which, the periods within which or the date or
dates on which, and the terms and conditions upon which the Debt Securities
may, pursuant to any optional or mandatory redemption provisions, be redeemed
at the option of the Company; (viii) the obligation, if any, of the Company to
redeem, repay or purchase Debt Securities pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the period or
periods, price or prices and terms and conditions upon which such repurchase,
redemption or purchase shall occur; (ix) whether Debt Securities are to be
Registered Securities, Bearer Securities or both, are to be issuable with or
without coupons and the terms upon which Bearer Securities may be exchanged
for Registered Securities and in the case of Bearer Securities, the date as of
which such Bearer Securities shall be dated (if not the date of original
issuance of the first security of like tenor and term); (x) whether Debt
Securities are to be issued in the form of a Global Security, the Depositary
and Global Exchange Agent, whether such global form is temporary or permanent,
the circumstances under which any temporary Global Security will be exchanged
for definitive Global Securities and any applicable Exchange Date; (xi)
whether any additional amounts ("Additional Amounts") will be payable to
Holders of the Debt Securities; (xii) the denomination of any Registered
Security (if other than $1,000 or any integral multiple thereof) and of any
Bearer Security (if other than $5,000 or any integral multiple thereof);
(xiii) if other than Dollars, the currency or currencies of denomination,
including any composite currency or index; (xiv) the application, if any, of
the defeasance or covenant defeasance provisions of the applicable Indenture
to the Debt Securities; (xv) if other than Dollars, the currency, currencies
or currency units in which payments shall be made on the Debt Securities and
the time and manner of determining any exchange rate between the currency or
Currencies of denomination and that or those in which they are to be paid;
(xvi) the manner in which any payments on an offered Security may be
determined with respect to an index; (xvii) the designation of any initial
Exchange Rate Agent; (xviii) the terms and conditions, if any, upon which the
Debt Securities are to be convertible into or exchangeable for any securities
of any Person (including the Company); (xix) the portion of the principal
amount of the Debt Securities, if other than the principal amount thereof,
payable upon acceleration of maturity thereof; (xx) the Person to whom any
interest on any Registered Security shall be payable, if other
5
<PAGE>
than the Person in whose name such Registered Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date, the manner in which, or Person to whom, any interest on any
Bearer Security will be payable, if other than upon presentation and surrender
of the coupons appertaining thereto as they mature, and the extent to which
any interest payable on an Interest Payment Date on any temporary Security
issued in Global form will be paid if other than the manner in the applicable
Indenture; (xxi) the terms of any pledge of property made to secure the
obligations of the Company under such Debt Securities and the circumstances
under which such pledge may be released, and the limitations, if any, on
recourse against the Company under such Debt Securities; (xxii) if other than
the Trustee, the identity of the Security Registrar and/or Paying Agent;
(xxiii) if other than the principal amount thereof, the portion of the
principal amount of the Debt Securities which will be payable upon declaration
of acceleration of the maturity thereof pursuant to an Event of Default;
(xxiv) if other than as defined in the Indenture, the meaning of "Business
Day" when used with respect to the Debt Securities; and (xxv) any other terms
of the Debt Securities not inconsistent with the provisions of the applicable
Indenture. The variable terms of the Debt Securities are subject to change
from time to time, but no such change will affect any Debt Security already
issued or as to which an offer to purchase has been accepted by the Company.
For purposes of this Prospectus, any reference to the payment of principal (or
premium, if any) or interest, if any, on any Debt Securities will be deemed to
include mention of the payment of any Additional Amounts required by the terms
of such Debt Securities.
Special United States Federal income tax considerations or other
restrictions or terms applicable to any Debt Securities which are (i) Bearer
Securities, (ii) offered exclusively to United States Aliens (as defined in
the Indenture) or (iii) denominated in a currency other than United States
dollars will be set forth in a Prospectus Supplement relating thereto.
Under the Indentures, the Company will have the ability to issue Debt
Securities with terms different from those of Debt Securities previously
issued thereunder and, without the consent of the holders thereof, to issue
additional amounts of a series of Debt Securities (with different dates for
payments, different rates of interest and in different currencies or
currency), in an aggregate principal amount determined by the Company.
Unless otherwise specified in the applicable Prospectus Supplement, the
Indentures do not, and will not, include covenants of the Company restricting
its ability to incur additional debt.
Principal and interest, premium and additional amounts, if any, will be
payable in the manner, at the places and subject to the restriction set forth
in the Indentures, the Debt Securities and the Prospectus Supplement relating
thereto, provided that payment of any interest and any additional amounts may
be made at the option of the Company by check mailed to the holders of
registered Debt Securities at their registered addresses.
Debt Securities may be presented for exchange, and registered Debt
Securities may be presented for transfer in the manner, at the places and
subject to the restrictions set forth in the applicable Indentures, the Debt
Securities and the Prospectus Supplement relating thereto. Bearer Securities
and the coupons, if any, pertaining thereto will be transferable by delivery.
Unless otherwise specified in the applicable Prospectus Supplement, no service
charge will be made for any 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.
DENOMINATIONS, FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt Securities of a series may be issuable solely as Registered Securities,
solely as Bearer Securities or as both Registered Securities and Bearer
Securities. Unless otherwise provided in the applicable Prospectus Supplement,
Registered Securities denominated in U.S. dollars (other than Global
Securities, which may be of any denomination) are issuable in denominations of
$1,000 and any integral multiple thereof and Bearer Securities denominated in
U.S. dollars are issuable in denominations of $5,000 and any integral
multiples thereof. The Indentures will also provide that Debt Securities of a
series may be issuable in global form. See "Description
6
<PAGE>
of Debt Securities--Global Securities" below. Unless otherwise indicated in
the applicable Prospectus Supplement, Bearer Securities (except Global
Securities) will have interest coupons attached.
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of authorized denominations and of a
like aggregate principal amount, tenor and terms. In addition, if Debt
Securities of any series are issuable as both Registered Securities and Bearer
Securities, at the option of the Holder, but subject to applicable laws, upon
request confirmed in writing, and subject to the terms of the applicable
Indenture, Bearer Securities (with all unmatured coupons, except as provided
below, and all matured coupons in default) of such series will be exchangeable
into Registered Securities of the same series of any authorized denominations
and of a like aggregate principal amount, tenor and terms. Bearer Securities
surrendered in exchange for Registered Securities of the same series between
the close of business on a Regular Record Date or a Special Record Date and
the relevant date for payment of interest shall 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 applicable Indenture. Unless otherwise
specified in the applicable Prospectus Supplement, Bearer Securities will not
otherwise be issued in exchange for Registered Securities.
Debt Securities may be presented for exchange as provided above, and
Registered Securities may be presented for registration of transfer (duly
endorsed or accompanied by a satisfactory written instrument of transfer), at
the office of the Security Registrar or at the office of any transfer agent
designated by the Company for such purpose with respect to such series of Debt
Securities, without service charge and upon payment of any taxes and other
governmental charges. If the Prospectus Supplement refers to any transfer
agent (in addition to the Security Registrar) initially designated by the
Company with respect to any series of Debt 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 (or Security Registrar)
acts, except that, if Debt Securities of a series are issuable solely as
Registered Securities, the Company will be required to maintain a transfer
agent in each Place of Payment for such series and, if Debt 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
Debt Securities.
The Company shall not be required (i) to issue, register the transfer of or
exchange Debt Securities of any particular series to be redeemed or exchanged
for a period of 15 days preceding the first publication of the relevant notice
of redemption or, if Registered Securities are outstanding and there is no
publication, the mailing of the relevant notice of redemption or exchange,
(ii) to register the transfer of or exchange any Registered Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Registered Security being redeemed or exchanged in part, or (iii) to
exchange any Bearer Security so selected for redemption except that such a
Bearer Security may be exchanged for a Registered Security of like tenor and
terms of that series, provided that such Registered Security shall be
surrendered for redemption.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on
behalf of, a depository (the "Depository") identified in the Prospectus
Supplement relating to such series. Global Securities may be issued in fully
registered or bearer form and may be issued in either temporary or permanent
form. Unless and until it is exchanged in whole or in part for the individual
Debt Securities represented thereby, a Global Security may not be transferred
except as a whole by the Depository for such Global Security to a nominee of
such Depository or by a nominee of such Depository to such Depository or
another nominee of such Depository or by the Depository or any nominee of such
Depository to a successor Depository or any nominee of such successor.
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The specific terms of the depository arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series. The Company anticipates that the following provisions
will generally apply to depository arrangements.
Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit on its book-entry registration and
transfer system the respective principal amounts of the individual Debt
Securities represented by such Global Security to the accounts of persons that
have accounts with such Depository ("Participants"). Such accounts shall be
designated by the underwriters, dealers or agents with respect to such Debt
Securities or by the Company if such Debt Securities are offered and sold
directly by the Company. Ownership of beneficial interests in a Global
Security will be limited to Participants or persons that may hold interests
through Participants. Ownership of beneficial interests in such Global
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the applicable Depository or its nominee
(with respect to interests of Participants) and records of Participants (with
respect to interests of persons who hold through Participants). The laws of
some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to own, pledge or transfer a beneficial interest in a
Global Security.
So long as the Depository for a Global Security or its nominee is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as provided below, owners of beneficial interests
in a Global Security will not be entitled to have any of the individual Debt
Securities of the series represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
any such Debt Securities of such series in definitive form and will not be
considered the owners or holders thereof under the applicable Indenture.
Payments of principal of and any interest (and premium, if any) on
individual Debt Securities represented by a Global Security registered in the
name of a Depository or its nominee will be made to the Depository or its
nominee, as the case may be, as the registered owner of the Global Security
representing such Debt Securities. None of the Company, the Trustee, any
Paying Agent or the Security Registrar for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global
Security for such Debt Securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interest.
The Company expects that the Depository for a series of Debt Securities or
its nominee, upon receipt of any payment of principal or interest (or premium,
if any) in respect of a permanent Global Security representing any of such
Debt Securities, immediately will credit Participants' accounts with payments
in amounts proportionate to their respective beneficial interest in the
principal amount of such Global Security representing such Debt Securities as
shown on the records of such Depository or its nominee. The Company also
expects that payments by Participants to owners of beneficial interests in
such Global Security held through such Participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name." Such payments will be the responsibility of such Participants.
If a Depository for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depository and a successor depository is
not appointed by the Company within 90 days, the Company will issue definitive
Debt Securities of such series to Participants in exchange for the Global
Security representing such series of Debt Securities. In addition, the Company
may, at any time and in its sole discretion, subject to any limitations
described in the applicable Prospectus Supplement relating to such Debt
Securities, determine not to have any Debt Securities of such series
represented by one or more Global Securities and, in such event, will issue
individual Debt Securities of such series to Participants in exchange for the
Global Security or Securities representing such series of Debt Securities.
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ORIGINAL ISSUE DISCOUNT SECURITIES
The Debt Securities may be issued under the Indentures as Original Issue
Discount Securities to be offered and sold at a substantial discount below
their principal amount. Special United States federal income tax, accounting
and other considerations applicable to any such Original Issue Discount
Securities will be described in any Prospectus Supplement relating thereto.
"Original Issue Discount Security" means any security that 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 a result of the
occurrence of an Event of Default and the continuation thereof. In addition,
the Subordinated Debt Securities may, for United States federal income tax
purposes, be deemed to have been issued with "Original Issue Discount" ("OID")
even if such securities are offered and sold at an amount equal to their
stated principal amount. The United States federal income tax consequences of
Subordinated Debt Securities deemed to be issued with OID will be described in
any Prospectus Supplement relating thereto.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Securities may not be offered, sold, resold or delivered in connection with
their original issuance in the United States or to United States persons (each
as defined below) other than to a Qualifying Branch of a United States
Financial Institution (as defined below) or a United States person acquiring
Bearer Securities through a Qualifying Branch of a United States Financial
Institution and any underwriters, agents and dealers participating in the
offering of Debt Securities must agree that they will not offer any Bearer
Securities for sale or resale in the United States or to United States persons
(other than a Qualifying Branch of a United States Financial Institution or a
United States person acquiring Bearer Securities through a Qualifying Branch
of a United States Financial Institution) nor deliver Bearer Securities within
the United States. In addition, any such underwriters, agents and dealers must
agree to send confirmations to each purchaser of a Bearer Security confirming
that such purchaser represents that it is not a United States person or is a
Qualifying Branch of a United States Financial Institution and, if such person
is a dealer, that it will send similar confirmations to purchasers form it.
The term "Qualifying Branch of a United States Financial Institution" means a
branch located outside the United States of a United States securities
clearing organization, bank or other financial institution listed under
Treasury Regulation Section 1.165(c)(1)(v) that agrees to comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Code and the
regulations thereunder.
Bearer Securities and any coupons appertaining thereto will bear a legend
substantially to the following effect: "Any United States person who holds
this obligation will be subject to limitations under the United States income
tax laws, including the limitations provided in Sections 165(j) and 1287(a) of
the Internal Revenue Code." Under Sections 165(j) and 1287(a) of the Code,
holders that are United States persons, with certain exceptions, will not be
entitled to deduct any loss on Bearer Securities and must treat as ordinary
income any gain realized on the sale or other disposition (including the
receipt of principal) of Bearer Securities.
The term "United States person" means a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in or
under the laws of the United States or of any political subdivision thereof,
and an estate or trust the income of which is subject to United States federal
income taxation regardless of its source, and the term "United States" means
the United States of America (including the states and the District of
Columbia), its territories, its possessions and other areas subject to its
jurisdiction (including the Commonwealth of Puerto Rico).
PAYMENT AND PAYING AGENTS
Unless otherwise provided in the applicable Prospectus Supplement, the Place
of Payment for a series issuable solely as Registered Securities will be New
York, New York, U.S.A., and the Company will initially designate the corporate
trust office of the applicable Trustee for this purpose. Notwithstanding the
foregoing, at
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the option of the Company, interest, if any, may be paid on Registered
Securities (i) by check mailed to the address of the Person entitled thereto
as such Person's address appears in the Security Register or (ii) by wire
transfer to an account located in the United States maintained by the Person
entitled thereto as specified in the Security Register. Unless otherwise
provided in the applicable Prospectus Supplement, 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 of such interest.
If Debt Securities of a series are issuable solely as Bearer Securities or
as both Registered Securities and Bearer Securities, information relating to
the place and manner of payment, and the identity of the Company's Paying
Agents, will be specified in the applicable Prospectus Supplement.
The Company may from time to time designate additional offices or agencies
for payment with respect to any Debt Securities, approve a change in the
location of any such office or agency and, except as provided above, rescind
the designation of any such office or agency.
CONSOLIDATION, MERGER OR SALE OF ASSETS BY THE COMPANY
Except as is otherwise specified in the applicable Prospectus Supplement,
each Indenture provides, or will provide, that the Company may, without the
consent of the Holders of Outstanding Debt Securities, consolidate with or
merge into any other person or convey, transfer or lease its properties and
assets substantially as an entirety to another person, provided that, (i) the
resulting, surviving or transferee person (if other than the Company) is
organized and existing under the laws of the United States, any state thereof
or the District of Columbia and such person assumes all obligations of the
Company under any Debt Securities and related Indenture, (ii) the Company or
such successor person shall not immediately thereafter be in default under the
Indenture relating to any Debt Securities and (iii) certain other conditions
under the applicable Indenture are met. Upon the assumption of the Company's
obligations by such a person in such circumstances, subject to certain
exceptions, the Company shall be discharged from all obligations under any
Debt Securities and the Indenture relating to any Debt Securities.
MODIFICATION OF THE INDENTURE; WAIVER OF COVENANTS
Each Indenture provides, or will provide, that, with the consent of the
holders of not less than a majority in aggregate principal amount of the
outstanding Debt Securities of each affected series, modifications and
alterations of such Indenture may be made which affect the rights of the
holders of such Debt Securities and that at least a majority in principal
amount of Debt Securities of each affected series may, with respect to such
Debt Securities, waive past defaults under such Indenture or compliance by the
Company with certain provisions of such Indenture; provided however, that no
such modification or alteration may be made without the consent of the holder
of each Debt Security so affected which would, among other things, (i) change
the maturity of the principal of, or of any installment of interest (or
premium, if any) on, or any redemption price, with respect to any Debt
Security issued pursuant to such Indenture, or reduce the principal amount
thereof or any premium thereon, or change the place of payment, method of
calculation of interest or the currency of payment of principal or interest
(or premium, if any) on, or reduce the minimum rate of interest thereon, or
impair the right to institute suit for the enforcement of any such payment on
or with respect to any such Debt Security, or reduce the amount of principal
of an Original Issue Discount Security that would be due and payable upon an
acceleration of the maturity thereof; or (ii) reduce the percentage in
principal amount of outstanding Debt Securities required to modify or alter
such Indenture or required to waive compliance with certain provisions of, or
past defaults under, such Indenture, or reduce the requirements for quorum or
voting provided by such Indenture.
ADDITIONAL PROVISIONS
Each Indenture provides, or will provide, that, subject to the duty of the
applicable Trustee during default to act with the required standard of care,
the applicable Trustee will be under no obligation to exercise any of its
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rights or powers under such Indenture at the request or direction of any of
the holders, unless such holders shall have offered to the applicable Trustee
reasonable indemnity. Subject to such provisions for the indemnification of
the applicable Trustee and certain other conditions, the holders of a majority
in aggregate principal amount of the Outstanding Debt 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 applicable Trustee, or exercising
any trust or power conferred on the applicable Trustee with respect to the
Debt Securities of that series.
No holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the applicable Indenture or for any
remedy thereunder, unless: (i) such holder shall have previously given to the
applicable Trustee written notice of a continuing Event of Default with
respect to Debt Securities of that series; (ii) the holders of not less than
25% in aggregate principal amount of the Outstanding Debt Securities of that
series shall have made written request, and offered reasonable indemnity, to
the applicable Trustee to institute such proceeding as trustee; (iii) the
applicable Trustee shall have failed to institute such proceeding within 60
days after receipt of such written request; and (iv) the applicable Trustee
shall not have received during such 60 day period from the holders of a
majority in principal amount of the Outstanding Debt Securities of that series
a direction inconsistent with such request. However, the holder of any Debt
Security will have an absolute right to receive payment of the principal of
(and premium, if any) and interest on such Debt Security on the due dates
expressed in such Debt Security and to institute suit for the enforcement of
any such payment.
PARTICULAR TERMS OF THE SENIOR DEBT SECURITIES
GENERAL
The following description of the Senior Debt Securities sets forth certain
general terms and provisions of the Senior Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Senior Debt
Securities offered by any Prospectus Supplement, and the extent, if any, to
which such general provisions may apply to the Senior Debt Securities so
offered, will be described in the Prospectus Supplement relating to such
Senior Debt Securities. The Senior Debt Securities will be direct, unsecured
obligations of the Company and will rank equally with each other and with all
outstanding unsecured senior indebtedness of the Company.
EVENTS OF DEFAULT; WAIVERS, ETC.
Unless otherwise described in the applicable Prospectus Supplement, under
the Senior Indenture, the following will be Events of Default with respect to
Senior Debt Securities of any series under the Senior Indenture: (a) default
in the payment of any interest or Additional Amounts upon any of the Senior
Debt Securities of that series when due, continued for 30 days; (b) default in
the payment of any principal or premium, if any, on any of the Senior Debt
Securities of that series when due, whether at maturity, upon declaration of
acceleration, notice of redemption, request for repayment, or otherwise; (c)
default in the deposit of any sinking fund payment, when due, in respect of
any of the Senior Debt Securities of that series; (d) default in the
performance of any covenant of the Company, contained in the Senior Indenture
(other than a covenant expressly included in the Senior Indenture for the
benefit of a series of Senior Debt Securities other than such series or
otherwise expressly dealt with in the Senior Indenture or the Senior Debt
Securities) continued for 60 days after written notice as provided in the
Senior Indenture; (e) default in the payment when due (subject to any
applicable grace period), whether at stated maturity or otherwise, of any
principal of or interest on (however designated) any indebtedness for borrowed
money of, or guaranteed by, the Company (other than the Senior Debt Securities
of any series and other than non-recourse indebtedness) in an aggregate
principal amount exceeding 5% of the consolidated net worth of the Company and
its subsidiaries (determined as of the most recent fiscal quarter for which a
balance sheet is available), whether such indebtedness now exists or shall
hereafter be created, which default shall result in such indebtedness becoming
or being declared due and payable prior to the date on which it would
otherwise become due and payable and the Senior Trustee receives written
notice from a Holder or the Company of such declaration; provided however,
that if any such acceleration shall subsequently be rescinded or
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annulled (including through the discharge of the accelerated indebtedness)
prior to the obtaining of any judgment or decree for the payment of any money
due on such indebtedness or the actual payment of money on such indebtedness,
any acceleration with respect to Senior Debt Securities of any series
consequent solely on such other acceleration shall likewise be deemed
rescinded or annulled without further action on the part of any Holders;
provided, further, that for a default other than a default in payment, so long
as the Company is contesting in good faith such event of default and the
Company delivers to the Senior Trustee a certificate that the Company is
contesting in good faith the existence of such event of default, then no Event
of Default shall be deemed to exist under this clause; (f) certain events in
bankruptcy, insolvency or reorganization; and (g) any other Event of Default
established with respect to Senior Debt Securities of that series. The Senior
Trustee may withhold notice to the Holders of any series of Debt Securities
issued under the Senior Indenture of any default (except in the payment of
principal, premium, if any, or interest, if any, on any of the Debt Securities
of such series or in the making of any sinking fund installment) if it
considers it in the interest of such Holders to do so. No Event of Default
with respect to a particular series of Senior Debt Securities necessarily
constitutes an Event of Default with respect to any other series of Senior
Debt Securities issued under the Senior Indenture.
If an Event of Default with respect to outstanding Senior Debt Securities of
any series occurs and is continuing, the Senior Trustee or the Holders of not
less than 25% in principal amount of the outstanding Senior Debt Securities of
that series may declare the principal amount of all outstanding Senior Debt
Securities of that series (or such lesser amount as may be provided for in the
Senior Debt Securities of that series or the Prospectus Supplement relating to
that series) and the interest accrued thereon and Additional Amounts payable
in respect thereof, if any, to be due and payable immediately. At any time
after a declaration of acceleration has been made with respect to Senior Debt
Securities of any series, but before a judgment or decree for payment of money
due has been obtained by the Senior Trustee, the Holders of a majority in
principal amount of the outstanding Senior Debt Securities of that series may
rescind any declaration of acceleration and its consequences, if all payments
due (other than those due as a result of acceleration) have been made and all
Events of Default have been remedied or waived.
Any default with respect to Senior Debt Securities of any series may be
waived by the Holders of a majority in principal amount of all outstanding
Senior Debt Securities of that series, except a default in the payment of
principal or premium, if any, or interest or Additional Amounts, if any, on
any of the Senior Debt Securities of that series or a default in respect of a
covenant or provisions which cannot be modified or amended without the consent
of the Holder of each of the outstanding Senior Debt Securities of such series
affected. Upon any such waiver, such default shall cease to exist and any
Event of Default arising from it shall be deemed to be cured.
The Holders of a majority in principal amount of the outstanding Senior Debt
Securities of any series may direct the time, method and place of conducting
any proceeding for any remedy available to the Senior Trustee or exercising
any trust or power conferred on the Senior Trustee with respect to Senior Debt
Securities of such series, provided that such direction shall not be in
conflict with any rule of law or the Senior Indenture and the Senior Trustee
determines that the action so directed is not unduly prejudicial to the rights
of other Holders of such series. Before proceeding to exercise any right or
power under the Indenture at the direction of such Holders, the Senior Trustee
shall be entitled to receive from such Holders reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred
by it in complying with any such direction.
The Company is required to file with the Senior Trustee annually a written
statement as to the presence or absence of certain defaults under the Senior
Indenture and compliance by the Company with all conditions and covenants
under the Senior Indenture.
CONCERNING THE SENIOR TRUSTEE
The Senior Trustee has its principal office at 666 Fifth Avenue, 8th Floor,
New York, New York 10103. The Senior Trustee's offices for the purpose of
presenting Securities for payment or registration of transfer or exchange are
located at the same address. The Company has leased equipment to the Senior
Trustee and provides
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it with business continuity services through its subsidiaries. The Senior
Trustee is one of several core relationship banks which provide credit and
banking services to the Company and its subsidiaries, both domestically and
internationally.
PARTICULAR TERMS OF THE SUBORDINATED DEBT SECURITIES
GENERAL
The particular terms of the Subordinated Debt Securities, including Zero-
Coupon Convertible Subordinated Securities, offered by any Prospectus
Supplement and the extent, if any, to which such general provisions may apply
will be described in the Prospectus Supplement relating to such Subordinated
Debt Securities.
The Subordinated Debt Securities will be direct, unsecured obligations of
the Company. Except to the extent otherwise set forth in the applicable
Prospectus Supplement or applicable Subordinated Debt Indenture or Zero-Coupon
Convertibles Indenture, the obligations of the Company pursuant to the
Subordinated Debt Securities will be subordinated in right of payment to all
Senior Indebtedness of the Company. See "Subordination," below.
The default provisions, covenants and amendment provisions, relating to
Subordinated Debt Securities, including, as applicable, Zero-Coupon
Convertible Subordinated Securities, will be set forth in the applicable
Indenture and the Prospectus Supplement relating to such Debt Securities.
To the extent that Subordinated Debt Securities, including, as applicable,
Zero-Coupon Convertible Subordinated Securities, are issued as Original Issue
Discount Securities, or deemed to be issued with OID, the United States
federal income tax considerations applicable to such Subordinated Debt
Securities will be described in any applicable Prospectus Supplement.
Prior to the issuance of any Subordinated Debt Securities, including without
limitation, Zero-Coupon Convertible Subordinated Securities, the Company will
qualify the applicable Zero-Coupon Convertibles Indenture or Subordinated
Indenture under the Trust Indenture Act and amend the Registration Statement
to file the applicable Indenture as an exhibit. The applicable Prospectus
Supplement will also identify the Trustee under the applicable Indenture and
the Trustee's relationships with the Company.
SUBORDINATION
Indebtedness evidenced by the Subordinated Debt Securities, including Zero-
Coupon Convertible Subordinated Securities, will be subordinated in right of
payment, as set forth in the applicable Subordinated Indenture or Zero-Coupon
Convertibles Indenture, to the prior payment in full, in cash or cash
equivalents, of all existing and future Senior Indebtedness (as defined
below), in each case as more fully provided in the Prospectus Supplement
applicable to such Subordinated Debt Securities.
By reason of such subordination, unless and to the extent otherwise provided
in the applicable Prospectus Supplement, in the event of dissolution,
insolvency, bankruptcy or similar proceedings, upon any distribution of the
assets of the Company, the holders of Senior Indebtedness will first be
entitled to receive payment in full in cash or cash equivalents of all amounts
due or to become due thereon, before the Holders of the Subordinated Debt
Securities, including Zero-Coupon Convertible Subordinated Securities, will be
entitled to receive any payment or distribution from the Company with respect
to any Subordinated Debt Securities, including Zero-Coupon Convertible
Subordinated Securities.
Unless otherwise indicated in the applicable Prospectus Supplement, no
payment of the principal amount at maturity, interest, if any, or any other
amount with respect to the Subordinated Debt Securities, including Zero-Coupon
Convertible Subordinated Securities, may be made (nor may the Company acquire
any Zero-Coupon
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Convertible Subordinated Securities for cash or property) if (i) any payment
default on any Senior Indebtedness occurs and is continuing that permits the
acceleration of the maturity thereof or (ii) any other default on any Senior
Indebtedness occurs and is continuing that permits the acceleration of the
maturity thereof and either such default is the subject of judicial
proceedings or the Company receives notice of the default, unless (a) in the
case of defaults on Senior Indebtedness other than payment defaults, 180 days
pass after notice of default is given and such default is not then the subject
of judicial proceedings or (b) the default with respect to Senior Indebtedness
is cured or waived and, in each case, the terms of the applicable Subordinated
Indenture or Zero-Coupon Convertibles Indenture otherwise permit the payment
(or acquisition of the Zero-Coupon Convertible Subordinated Securities) at
that time.
Unless otherwise defined in the definitive form of applicable Subordinated
Indenture or Zero-Coupon Convertibles Indenture filed under the Registration
Statement, or is otherwise provided in an applicable Prospectus Supplement,
"Senior Indebtedness" means the principal of, premium, if any, and interest on
(including interest accruing after the filing of a petition initiating any
proceeding pursuant to any bankruptcy law, whether or not allowable as a claim
in such proceeding) and other amounts due on or in connection with, any
Indebtedness of the Company, either outstanding on the date of the applicable
Subordinated Indenture or Zero-Coupon Convertibles Indenture or created,
incurred or assumed subsequent to such date, unless, in the case of any
particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Subordinated Debt
Securities, including Zero-Coupon Convertible Subordinated Securities. Without
limiting the generality of the foregoing, and except as otherwise provided in
the applicable Subordinated Indenture or Zero-Coupon Convertibles Indenture,
or in the applicable Prospectus Supplement, "Senior Indebtedness" shall
include the principal of, premium, if any, and interest on (including interest
accruing after the filing of a petition initiating any proceeding pursuant to
any bankruptcy law, whether or not allowable as a claim in such proceeding)
all obligations of every nature of the Company from time to time owed to the
holders of the Senior Debt Securities under the Senior Indenture including,
without limitation, all fees, expenses (including fees and expenses of
counsel), claims, charges and indemnity obligations.
Unless otherwise defined in the definitive form of applicable Subordinated
Indenture or Zero-Coupon Convertibles Indenture filed under the Registration
Statement, or otherwise provided in the applicable Prospectus Supplement,
"Indebtedness" means (i) any liability of any Person (A) for borrowed money,
or under any reimbursement obligation relating to a letter of credit, or (B)
evidenced by a bond, note, debenture or similar instrument (including a
purchase money obligation) given in connection with the acquisition of any
businesses, properties or assets of any kind (other than a trade payable or a
current liability arising in the ordinary course of business), or (C) under
interest rate contracts and exchange rate contracts, or (D) for the payment of
money as lessee under leases required to be capitalized on the balance sheet
of the lessee under generally accepted accounting principles; (ii) any
liability of others described in the preceding clause (i) that such Person has
guaranteed or that is otherwise its legal liability; (iii) all Indebtedness
referred to in (but not excluded from ) clauses (i) and (ii) above of other
Persons and all dividends of other Persons, the payment of which is secured by
(or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any lien upon or in property
(including, without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness; and (iv) any amendment, supplement,
modification, deferral, renewal, extension or refunding of any liability of
the types referred to in clauses (i), (ii) and (iii) above.
If Subordinated Debt Securities are issued under a Subordinated Indenture,
or Zero-Coupon Subordinated Convertible Securities are issued under a Zero-
Coupon Convertibles Indenture, the amount of Senior Indebtedness outstanding
as of a then recent date will be set forth in the applicable Prospectus
Supplement. Except to the extent otherwise set forth in a Prospectus
Supplement, no Subordinated Indenture or Zero-Coupon Convertibles Indenture
will contain any restriction on the amount of Senior Indebtedness which the
Company may incur.
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DESCRIPTION OF THE COMPANY'S COMMON STOCK
The following statements with respect to the Company's common stock and
common stock purchase rights are subject to the detailed provisions of the
Company's restated certificate of incorporation, as amended (the "Certificate
of Incorporation"), and bylaws, as amended (the "Bylaws"), and to the Rights
Agreement (as defined below). These statements do not purport to be complete
and are qualified in their entirety by reference to the terms of the
Certificate of Incorporation, the Bylaws and the Rights Agreement, which are
incorporated by reference as exhibits to the Registration Statement. All
references to outstanding Common Stock and related rights reflect the three-
for-two stock split of the Company's Common Stock which was effected with
respect to holders of record on May 23, 1997.
GENERAL
The Company is authorized to issue 200,000,000 shares of Common Stock, par
value $0.10 per share, of which 73,447,760 shares were issued and outstanding
as of March 31, 1997, and 100,000,000 shares of preferred stock, par value
$.10 per share ("Preferred Stock"), of which an aggregate of 3,562,600 shares
of 8.75% Cumulative Preferred Stock, Series A and B were issued and
outstanding as of March 31, 1997.
Holders of Common Stock are entitled to one vote for each share held on all
matters requiring stockholder action. Subject to the rights of the holders of
Preferred Stock, the holders of Common Stock are entitled to receive dividends
out of any funds of the Company lawfully available therefore (if, when and as
declared by the Board of Directors in its discretion). Certain restrictions
set forth in the Company's financing agreements limit the Company's ability to
declare and pay dividends.
Stockholders are entitled upon liquidation, dissolution or winding-up of the
affairs of the Company to share ratably in the assets of the Company legally
available for distribution to holders of Common Stock. Holders of Common Stock
have no preemptive rights. The shares of Common Stock do not have cumulative
voting rights.
The Certificate of Incorporation of the Company provides for a Board of
Directors of not less than four and no more than fifteen directors, with the
number to be set by or in accordance with the Bylaws. The affirmative votes of
the holders of at least 66 2/3% of the stock then entitled to vote in an
election of directors is required for the approval of any proposal that any
director of the Company be removed from office, or that the provisions
relating to the number in classification of directors or the Bylaw provision
setting the number or procedure for determining the number of directors be
altered, amended or repealed.
Article 12 of the Certificate of Incorporation of the Company requires the
affirmative vote of the holders of at least 66 2/3% of the stock and entitled
to vote in an election of directors, not owned by a Substantial Stockholder
(as defined below) for the approval of certain business combinations and
certain other transactions with a Substantial Stockholder unless certain
minimum price and procedural requirements are met and for the amendment or
repeal of these provisions. A Substantial Stockholder is defined as any person
or entity that acquires at least 10% or more of the Common Stock of the
Company, excluding any member of the Board of Directors of the Company as of
September 30, 1985, or any employee benefit plan of the Company or its
subsidiaries. Such super-majority approval would not be required if (1) the
business combination is solely between the Company and another corporation 50%
or more stock which is owned, directly or indirectly, by the Company and none
of which is owned by a Substantial Stockholder or (2) all following conditions
are satisfied: (a) the cash or fair market value of the consideration to be
received per share by holders of the common stock is not less than the higher
of (i) the highest per share price paid by such Substantial Stockholder in
acquiring any Common Stock of the Company of (ii) the highest per share market
price of the Company's Common Stock during the three-month period immediately
preceding the date of the proxy statement described in (c) below or, if none,
the six-month period prior to the consummation of the business combination;
(b) after becoming a Substantial Stockholder and prior to consummation of such
business combination (i) such Substantial Stockholder shall not have acquired
any newly issued shares of capital stock, directly or indirectly, from the
Company except proportionately as a stockholder or upon compliance with the
provisions of Article 12 and (ii)
15
<PAGE>
such Substantial Stockholder shall not have received the benefit, directly or
indirectly (except proportionately as a stockholder), of any loans or other
financial assistance provided by the Company, or made any major change in the
Company's equity capital structure; and (c) if such proposal otherwise
requires stockholder approval, a proxy statement responsive to the
requirements of the Securities Exchange Act of 1934, whether or not the
Company is subject to such requirements, shall be mailed to the stockholders
of the Company for the purpose of soliciting stockholder approval of such
business combination.
The outstanding shares of the Company's Common Stock are duly and validly
issued, fully paid and nonassessable, and any shares of Common Stock issuable
upon the conversion or exchange of Debt Securities which are convertible into
or exchangeable for Common Stock, unless the applicable Prospectus Supplement
specifies otherwise, upon the purchase of such Debt Securities at the option
of the Holder thereof will be, duly and validly issued, fully paid and
nonassessable.
COMMON STOCK PURCHASE RIGHTS
Each outstanding share of Common Stock of the Company is accompanied by a
common stock purchase right (a "Right"). Each Right entitles the registered
holder to purchase from the Company one share of Common Stock of the Company
at a price of $42.33 per share, subject to adjustment. The description and
terms of the Rights are set forth in the Rights Agreement, dated as of
November 18, 1987, as amended and restated as of November 7, 1994 (the "Rights
Agreement"), between the Company and ChaseMellon Shareholder Services, L.L.C.
(the successor of Manufacturers Hanover Trust Company), as Rights Agent.
The following summary of certain provisions of the Rights and the Rights
Agreement does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, all of the provisions of the Rights and the
Rights Agreement, including particular provisions or defined terms of the
Rights Agreement. A copy of the Rights Agreement has been filed with the
Commission as an exhibit to a Registration Statement on Form 8-A, which, as
amended by Form 8-A/A, is incorporated herein by reference. See "Incorporation
of Certain Documents by Reference."
Presently, the Rights are attached to all Common Stock certificates
representing shares outstanding, and no separate Right Certificates have been
distributed. The Rights will separate from the Common Stock and a Distribution
Date will occur upon the earlier of (i) 10 days following a public
announcement that a person or group has become an Acquiring Person (as defined
below) or (ii) the close of business on the 10th business day (or such later
date as the Board of Directors determine) after the date a person or group
makes a tender or exchange offer which if completed would result in such
person or group being the beneficial owner of 15% or more of the outstanding
Common Stock or (iii) the close of business on the 10th business day after the
Board of Directors declares a person to be an Adverse Person (as defined
below). An "Acquiring Person" is a person or group of affiliated or associated
persons has acquired, or obtained the right to acquire, beneficial ownership
of 15% or more of the outstanding Common Stock (the date of such announcement
being the "Stock Acquisition Date"); provided, however, that an Acquiring
Person shall not include, and a Distribution Date shall not occur as a result
of the ownership of Common Stock by, any person who, at the Record Date,
together with all affiliates and associates of such person, is the beneficial
owner of 20% or more of the shares of Common Stock then outstanding (an
"Existing Holder") until such time as such Existing Holder or any affiliate or
associate of such Existing Holder shall become the beneficial owner of any
additional shares of Common Stock or any other person who is the beneficial
owner of any shares of Common Stock shall become an affiliate or associate of
such Existing Holder, if after giving effect to such additional shares or the
shares beneficially owned by such other person, such Existing Holder, together
with all affiliates and associates of such Existing Holder, shall be the
beneficial owner of 30% or more of the shares of Common Stock then
outstanding; and provided further that each of the Existing Holder's
successors in interest (as defined in the Rights Agreement) that would
beneficially own, as a result of the transfer to such successor of any shares
of Common Stock beneficially owned by an Existing Holder, 15% or more of the
shares of Common Stock then outstanding shall be treated as an Existing
Holder. An "Adverse Person" is a person or group, other than an Existing
Holder, which beneficially owns 10%
16
<PAGE>
or more of the outstanding Common Stock and as to which the Board of Directors
has made a determination that such person or group has interests adverse to
those of the Company (based on requirements set out in the Rights Agreement).
Until the Distribution Date, (i) the Rights will be evidenced by the Common
Stock certificates and will be transferred with and only with such Common
Stock certificates, (ii) Common Stock certificates issued after the Record
Date will contain a notation incorporating the Rights Agreement by reference
and (iii) the surrender for transfer of any certificates for shares of Common
Stock outstanding will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on November 17, 1997, unless earlier redeemed by the
Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates will
be mailed to holders of record of the Common Stock as of the close of business
on the Distribution Date and, thereafter, the separate Rights Certificates
alone will represent the Rights. All shares of Common Stock issued prior to
the Distribution Date will be issued with Rights. Shares of Common Stock
issued after the Distribution Date will be issued with Rights if such shares
are issued pursuant to the exercise of stock options or under an employee
benefit plan, granted or awarded as of the Distribution Date, or upon the
conversion of securities issued after adoption of the Rights Agreement. Except
as otherwise determined by the Board of Directors, no other shares of Common
Stock issued after the Distribution Date will be issued with Rights.
In the event that (i) a person becomes an Acquiring Person (except pursuant
to an offer for all outstanding shares of Common Stock which the independent
directors of the Company determine to be fair to and otherwise in the best
interests of the Company and its stockholders) or (ii) the Board of Directors
declares a person to be an Adverse Person, following the Distribution Date,
each holder of a Right will thereafter have the right to receive, upon
exercise, the number of shares of Common Stock for which such Right was
exercisable immediately prior to the first occurrence of such event
(currently, one) at an adjusted per share Purchase Price of 20% of the market
price per share of Common Stock. Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in this paragraph, all
Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person or Adverse Person
will be null and void. However, Rights are not exercisable following the
occurrence of any of the events set forth above until such time as the Rights
are no longer redeemable by the Company as set forth below.
In the event that, at any time following the Stock Acquisition Date, (i) the
Company is acquired in a merger or other business combination transaction
(other than a merger which follows an offer described in the preceding
paragraph) or (ii) 50% or more of the Company's assets or earning power is
sold or transferred, each holder of a Right (except Rights which have
previously been voided as set forth above) shall thereafter have the right to
receive, upon exercise, common stock of the acquiring company having a value
equal to two times the Exercise Price of the Right. The Exercise Price is the
Purchase Price multiplied by the number of shares of Common Stock issuable
upon exercise of a Right prior to the events described in this paragraph
(currently, one). The events set forth in this paragraph and in the preceding
paragraph are referred to as the "Triggering Events".
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or reclassification of, the
Common Stock, (ii) if holders of the Common Stock are granted certain rights
or warrants to subscribe for shares of Common Stock or convertible securities
at less than the current market price of the Common Stock or (iii) upon the
distribution to holders of the Common Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights
or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares of Common Stock will be issued upon exercise
17
<PAGE>
of the Rights and, in lieu thereof, an adjustment in cash will be made based
on the market price of the Common Stock on the last trading date prior to the
date of exercise.
At any time until fifteen days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.021
per Right (payable, at the election of the Company, in cash, Common Stock or
such other consideration as the Board of Directors may determine). Immediately
upon the action of the Board of Directors ordering redemption of the Rights,
the Rights will terminate and the only right of the holders of Rights will be
to receive the $.021 redemption price.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends. While the distribution of the Rights will not be
taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights
become exercisable for Common Stock (or other consideration) of the Company or
for common stock of the acquiring company as set forth.
Other than those provisions relating to the principal economic terms of the
Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by
the Board in order to cure any ambiguity, defect or inconsistency, to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of an Acquiring Person or Adverse Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption
shall be made at such time as the Rights are not redeemable.
Each share of outstanding Common Stock has one Right attached thereto. Until
the Distribution Date, the Company will issue one Right with each share of
Common Stock that shall become outstanding so that all such shares will have
attached Rights.
The Rights have certain antitakeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being
acquired. Accordingly, the existence of the Rights may deter certain acquirors
from making takeover proposals or tender offers. However, the Rights are not
intended to prevent a takeover but rather are designed to enhance the ability
of the Board of Directors to negotiate with an acquiror on behalf of all of
the stockholders. In addition, the Rights should not interfere with a proxy
contest.
PLAN OF DISTRIBUTION
The Company may sell any of the Debt Securities directly to purchasers, or
through agents, dealers, or underwriters.
The Prospectus Supplement and Pricing Supplement, if any, set forth the
terms of the offering of the particular series of Debt Securities to which
such Prospectus Supplement and any such Pricing Supplement relate, including
(i) the name or names of any underwriters or agents with whom the Company has
entered into arrangements with respect to the sale of such series of Debt
Securities, (ii) the initial public offering or purchase price of such series
of Debt Securities, (iii) any underwriting discounts, commissions and other
items constituting underwriters' compensation from the Company and any other
discounts, concessions or commissions allowed or reallowed or paid by any
underwriters to other dealers, (iv) any commissions paid to any agents, (v)
the net proceeds to the Company, and (vi) the securities exchanges, if any, on
which such series of Debt Securities will be listed.
If underwriters are used in the sale, the Debt Securities will be acquired
by the underwriters for their own account and may be resold from time to time
in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase such Debt Securities will be
subject to certain conditions precedent, and the underwriters will be
18
<PAGE>
obligated to purchase all the Debt Securities offered by the Prospectus
Supplement relating to such series if any are purchased. Any initial public
offering price and any discounts or concessions allowed or reallowed or paid
to dealers may be changed from time to time.
Offers to purchase the Debt Securities may be solicited directly by the
Company or by agents designated by the Company from time to time. Any agent
involved in the offering and sale thereof in respect of which this Prospectus
is delivered is named and any commissions payable by the Company to such agent
are set forth in the Prospectus Supplement relating to such series. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be
acting on a best efforts basis for the period of its appointment.
If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, the Company will sell such Debt Securities
to the dealer, as principal. The dealer may then resell such Debt Securities
to the public at varying prices to be determined by such dealer at the time of
resale. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
If the sale is accomplished through an underwriter or underwriters, the
Company will enter into an underwriting agreement with such underwriters at
the time of sale to them, and the names of the underwriters (including
identification of any managing underwriter or underwriters) and the terms of
the transaction will be set forth in the Prospectus Supplement, which,
together with this Prospectus, will be used by the underwriters to make
resales of the Debt Securities in respect of which the Prospectus Supplement
and this Prospectus is delivered to the public.
If so indicated in an applicable Prospectus Supplement, the Company will
authorize underwriters, agents or dealers to solicit offers by certain
institutions to purchase Debt Securities to which such Prospectus Supplement
relates pursuant to Delayed Delivery Contracts ("Contracts") providing for
payment and delivery on the date or dates stated in the Prospectus Supplement.
Each of the Contracts will be for an amount not less than, and, unless the
Company otherwise agrees, the aggregate principal amount of Debt Securities
sold pursuant to such Contracts shall not be less or more than, the respective
amounts stated in the Prospectus Supplement. Institutions with whom Contracts,
when authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions, and other institutions, but will in all cases be subject to the
approval of the Company. Contracts will not be subject to any conditions
except that (i) the purchase by an institution of Debt Securities covered
thereby shall not at the time of delivery be prohibited under the applicable
laws of any jurisdiction in the United States to which such institution is
subject, and (ii) if the particular Debt Securities are being sold to
underwriters, the Company shall have sold to such underwriters the total
amount of such Debt Securities less the amount thereof covered by such
Contracts. Underwriters, agents or dealers will not have any responsibility in
respect of the validity of such arrangements or the performance of the Company
or such institutional investors thereunder.
Underwriters, agents and dealers may be entitled under agreements entered
into with the Company 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 or agents may be
required to make in respect thereof.
All Debt Securities will be new issues of securities with no established
trading market. Any underwriters to whom Debt Securities are sold by the
Company for public offering and sale may make a market in such Debt
Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given concerning the liquidity of the trading market for any Debt Securities.
Underwriters, agents and dealers, and their respective affiliates, may
engage in transactions with, or perform services for, the Company, including
investment and commercial banking transactions and services, in the ordinary
course of business.
19
<PAGE>
Underwriters, agents and dealers participating in the distribution of the
Debt Securities may be deemed to be underwriters under the Securities Act, and
any discounts and commissions received by them and any profit realized by them
on resale of Debt Securities may be deemed to be underwriting discounts and
commissions under the Securities Act.
LEGAL MATTERS
Certain legal matters with respect to the legality of the Debt Securities
will be passed upon for the Company by Jeremiah M. Fitzgerald, Esq., Vice
President and General Counsel of the Company and for the underwriters, agents
and dealers by Brown & Wood LLP, New York, New York. Mr. Fitzgerald
beneficially owns 23,029 shares of the Company's Common Stock and holds
options, granted under the Company's stock option plans, to purchase an
additional 35,884 shares of Common Stock.
EXPERTS
The consolidated financial statements and schedule of Comdisco, Inc. and
subsidiaries as of September 30, 1996 and 1995 and for each of the years in
the three-year period ended September 30, 1996 incorporated herein by
reference to the Annual Report on Form 10-K of the Company for the year ended
September 30, 1996 have been audited by KPMG Peat Marwick LLP, independent
certified public accountants, as indicated in their reports with respect
thereto, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in auditing and accounting.
20
<PAGE>
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- --------------------------------------------------------------------------------
NO DEALER, SALESMAN OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR INCORPORATED
BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT, THE APPLICABLE PRICING SUPPLEMENT
OR THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLE-
MENT, THE APPLICABLE PRICING SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY ANY AGENT. NEITHER THE DELIVERY OF THIS PRO-
SPECTUS SUPPLEMENT, THE APPLICABLE PRICING SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IM-
PLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE
DATE HEREOF. THIS PROSPECTUS SUPPLEMENT, THE APPLICABLE PRICING SUPPLEMENT AND
THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY
STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
---------------
TABLE OF CONTENTS
PROSPECTUS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 3
Ratio of Earnings to Fixed Charges......................................... 3
Use of Proceeds............................................................ 4
Description of Debt Securities............................................. 4
Particular Terms of the Senior Debt Securities............................. 11
Particular Terms of the Subordinated Debt
Securities................................................................ 13
Description of the Company's Common Stock.................................. 15
Plan of Distribution....................................................... 18
Legal Matters.............................................................. 20
Experts.................................................................... 20
</TABLE>
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$1,200,000,000
LOGO
---------------
PROSPECTUS
---------------
JUNE , 1997
- --------------------------------------------------------------------------------
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14.OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
All dollar amounts in the following tables are estimated other than
the amounts of the registration fee under the Securities Act of 1933.
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee............... $363,636.00
Printing fees and expenses.................................. 80,000.00
Auditors' fees and expenses................................. 50,000.00
Legal fees and expenses..................................... 100,000.00
Blue sky qualification and legal investment survey fees and
expenses (including counsel fees).......................... 15,000.00
Trustee fees and expenses................................... 30,000.00
Rating Agency fees and expenses............................. 150,000.00
Miscellaneous............................................... 1,364.00
-----------
Total................................................... $790,000.00
===========
</TABLE>
ITEM 15.INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the General Corporation Law of the
State of Delaware (the "DGCL") empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that he is
or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action,
suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful.
Subsection (b) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action, or suit by or
in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person acted in any of the capacities set
forth above, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement
of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of
the corporation, except that no indemnification may be made in respect
of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent
that the Court of Chancery or the court in which such action or suit
was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for
such expenses which the Court of Chancery or such other court shall
deem proper.
Section 145 of the DGCL further provides that to the extent a
director or officer of a corporation has been successful on the merits
or otherwise in the defense of any action, suit or proceeding referred
to in subsections (a) and (b) of Section 145, or in defense of any
claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred
by
II-1
<PAGE>
him in connection therewith; that indemnification provided for by
Section 145 shall not be deemed exclusive of any other rights to which
the indemnified party may be entitled; that indemnification provided
for by Section 145 shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of such
person's heirs, executors and administrators; and empowers the
corporation to purchase and maintain insurance on behalf of a director
or officer of the corporation against any liability asserted against
him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him against such liabilities under Section 145. Article VIII
of the by-laws of the Registrant provides, in substance, that the
Registrant will indemnify its directors and officers to the full extent
permitted by Section 145 of the DGCL. Also, as permitted by the DGCL,
Article 13 of the Registrant's Restated Certificate of Incorporation
eliminates the personal liability of each director of the Registrant to
the Registrant or its stockholders for monetary damages arising out of
or resulting from any breach of his fiduciary duty as a director,
except where such director (i) breached his duty of loyalty to the
Registrant or its stockholders, (ii) failed to act in good faith or
engaged in intentional misconduct or a knowing violation of the law,
(iii) violated Section 174 of the DGCL or (iv) obtained an improper
personal benefit.
The Registrant maintains policies insuring its and its subsidiaries'
officers and directors against certain liabilities for actions taken in
such capacities, including, subject to certain exemptions, liabilities
under the Securities Act of 1933.
Reference is made to the form of Underwriting Agreement filed as
Exhibit 1.1 hereto and to the form of Distribution Agreement filed as
Exhibit 1.2 hereto for a description of the indemnification
arrangements in connection with any offering through underwriters or
agents of the Securities registered hereby. Similar indemnification
provisions were contained in the underwriting agreements, distribution
agreements and other agreements executed in connection with prior
offerings and sales of securities by the Registrant.
ITEM 16.LIST OF EXHIBITS.
<TABLE>
<CAPTION>
PAGE
NUMBERS
OF EXHIBITS
EXHIBIT FILED
NUMBER EXHIBIT HEREWITH
------- ------- -----------
<C> <S> <C>
1.1 --Form of Underwriting Agreement for Senior Debt Se-
curities (incorporated by reference to Exhibit 1.1
to the Registrant's Registration Statement on Form
S-3 (Registration No. 33-63823))
1.2 --Form of Distribution Agreement for Senior Debt Se-
curities (incorporated by reference to Exhibit 1.2
to the Registrant's Registration Statement on Form
S-3 (Registration No. 33-63823))
4.1 --Senior Debt Indenture dated as of December 1, 1995
between the Registrant and Yasuda Bank & Trust Co.
(U.S.A.) as Trustee. (incorporated by reference to
Exhibit 4.1 to the Registrant's Current Report on
Form 8-K dated January 12, 1996 and filed with the
Commission on January 17, 1996 (File No. 1-7725)).
The form or forms of Senior Debt Securities with
respect to each particular offering will be filed
as an exhibit to a Current Report on Form 8-K and
incorporated herein by reference.
5 --Opinion of Jeremiah M. Fitzgerald, Esq., Vice
President and General Counsel of the Registrant
12 --Statement Regarding Computation of Ratios (incor-
porated by reference to Exhibit 12 to the Regis-
trant's Quarterly Report on Form 10-Q for the quar-
ter ended March 31, 1997)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
PAGE
NUMBERS
OF EXHIBITS
EXHIBIT FILED
NUMBER EXHIBIT HEREWITH
------- ------- -----------
<C> <S> <C>
23.1 --Consent of KPMG Peat Marwick LLP
23.2 --Consent of Jeremiah M. Fitzgerald (contained in
the opinion filed as Exhibit 5 to this Registration
Statement)
24 --Powers of Attorney of Directors and Officers of
the Registrant (included on signature page)
25 --Statement of Eligibility on Form T-1 of Yasuda
Bank & Trust Co. (U.S.A.)
</TABLE>
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:
(a) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933 (the "Securities Act");
(b) 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 Securities and Exchange Commission
pursuant to Rule 424(b) promulgated under the Securities Act 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
Registration Statement.
(c) 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)(a) and (1)(b) do not apply if
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
Securities Exchange Act of 1934, as amended (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; and
(4) that, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act that
is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
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 described above in
Item 15, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person
of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE VILLAGE OF ROSEMONT, STATE OF ILLINOIS, ON JUNE 19, 1997.
COMDISCO, INC.
/s/ Jack Slevin
By___________________________________
Jack Slevin, President
POWER OF ATTORNEY AND SIGNATURES
EACH PERSON WHOSE SIGNATURE APPEARS BELOW CONSTITUTES AND APPOINTS JACK
SLEVIN, JOHN J. VOSICKY AND WILLIAM N. PONTIKES, OR ANY ONE OF THEM, EACH WITH
FULL POWER OF SUBSTITUTION AND RESUBSTITUTION, SUCH PERSON'S TRUE AND LAWFUL
ATTORNEY-IN-FACT AND AGENT, IN SUCH PERSON'S NAME AND ON SUCH PERSON'S BEHALF,
IN ANY AND ALL CAPACITIES, TO SIGN ANY AND ALL AMENDMENTS TO THIS REGISTRATION
STATEMENT, INCLUDING ANY POST-EFFECTIVE AMENDMENTS, AND TO SIGN ANY RELATED
REGISTRATION STATEMENT, AND ANY AND ALL AMENDMENTS TO SUCH REGISTRATION
STATEMENT, FILED PURSUANT TO RULE 462(B) OF THE SECURITIES ACT OF 1933, AND TO
FILE THE SAME, WITH ALL EXHIBITS THERETO AND OTHER DOCUMENTS IN CONNECTION
THEREWITH, WITH THE SECURITIES AND EXCHANGE COMMISSION.
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Jack Slevin
- ------------------------------------
(Jack Slevin) President, Chief Executive
Officer, Chairman of the
Board and Director
(Principal Executive
Officer) June 19, 1997
/s/ John J. Vosicky
- ------------------------------------
(John J. Vosicky) Executive Vice
President/Chief Financial
Officer and Director
(Principal Financial
Officer)
/s/ David J. Keenan June 23, 1997
- ------------------------------------
(David J. Keenan) Senior Vice President and
Controller (Principal
Accounting Officer)
/s/ Robert A. Bardagy
- ------------------------------------
(Robert A. Bardagy) Director
/s/ C. Keith Hartley
- ------------------------------------
(C. Keith Hartley) Director
/s/ Harry M. Jansen Kraemer, Jr.
- ------------------------------------
(Harry M. Jansen Kraemer, Jr.) Director
/s/ Carolyn L. Murphy
- ------------------------------------
(Carolyn L. Murphy) Director
/s/ Thomas H. Patrick
- ------------------------------------
(Thomas H. Patrick) Director
/s/ William N. Pontikes June 19, 1997
- ------------------------------------
(William N. Pontikes) Director
/s/ Nicholas K. Pontikes
- ------------------------------------
(Nicholas K. Pontikes) Director
/s/ Rick Kash
- ------------------------------------
(Rick Kash) Director
/s/ Alan J. Andreini
- ------------------------------------
(Alan J. Andreini) Director
/s/ Philip A. Hewes
- ------------------------------------
(Philip A. Hewes) Director
</TABLE>
<PAGE>
Exhibit 5
[Comdisco Letterhead]
June 18, 1997
The Board of Directors of
Comdisco, Inc.
6111 North River Road
Rosemont, Illinois 60018
Re: Registration of $1.2 Billion in Debt Securities of Comdisco, Inc.
-----------------------------------------------------------------
Gentlemen:
Reference is made to the form of the Registration Statement on Form S-3 to
be filed with the Securities and Exchange Commission (the "Commission") on or
about June 19, 1997 (the "Registration Statement") by Comdisco, Inc., a Delaware
corporation (the "Company"), under the Securities Act of 1933, as amended (the
"Act"), relating to $1,200,000,000 in aggregate principal amount of Debt
Securities of the Company (the "Debt Securities") and Common Stock as may be
issuable from time to time upon conversion or exchange or Debt Securities to the
extent such Debt Securities are, by their terms, convertible or exchangeable for
Debt Securities pursuant to Rule 415 under the Act for issuance from time to
time. At your request, this opinion is being furnished to you for filing as
Exhibit 5 to the Registration Statement.
I am familiar with the proceedings taken and proposed to be taken by the
Company in connection with the proposed authorization, issue and sale of the
Debt Securities and related Common Stock, and I have examined the originals, or
copies, certified or otherwise identified, of corporate records of the Company,
certifies of public officials and the representatives of the Company, statutes
and other documents and instruments, as the basis for the opinions hereinafter
expressed.
Based upon the foregoing examination, and in reliance thereon, I am of the
opinion that when the Registration Statement has become effective, and subject
to the terms of the Debt Securities and related Common Stock being otherwise in
compliance with applicable law:
1. The Debt Securities, when duly authorized, executed, authenticated and
delivered in accordance with the terms of the applicable resolutions of the
Board of Directors of the Company, and applicable indenture and any legally
required consents, approvals, authorizations and other orders of the Commission
or any other judicial or regulatory authorities required to be obtained, against
payment therefor as described in the Registration Statement, will be legally
issued and will be binding obligations of the Company, entitled to the benefits
of any applicable indenture.
<PAGE>
Comdisco, Inc.
June 18, 1997
Page 2
2. All shares of Common Stock issuable on conversion or exchange of Debt
Securities, which by their terms are convertible or exchangeable for Common
Stock, will be legally issued, fully paid and non-assessable shares of the
Company.
The foregoing opinions are subject to (i) any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and (ii) with respect to the enforceability of any agreement to
general principles of equity (regardless of whether such enforceability is
considered in an action at law or in equity).
I am qualified to practice law in the State of Illinois and do not purport
to be an expert on, or to express any opinion herein concerning any law other
than the laws of the State of Illinois, the corporation laws of the State of
Delaware, and the federal laws of the United States. Without limiting the
generality of the foregoing, I express no opinion as to the effect of the law of
any jurisdiction other than the State of Illinois or the corporate law of
Delaware.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and I further consent to the use of my name under the
caption "LEGAL MATTERS" in the Prospectus forming a part of the Registration
Statement.
Very truly yours,
/s/ Jeremiah M. Fitzgerald
--------------------------
Jeremiah M. Fitzgerald
Vice President and
General Counsel
<PAGE>
Exhibit 23.1
------------
[KPMG Peat Marwick LLP Letterhead]
Consent of KPMG Peat Marwick LLP
--------------------------------
The Board of Directors
Comdisco, Inc.
We consent to the incorporation by reference in the Registration Statement on
Form S-3 of Comdisco, Inc. of our reports dated November 5, 1996, relating to
the consolidated balance sheets of Comdisco, Inc. and subsidiaries as of
September 30, 1996 and 1995, and the related consolidated statements of
earnings, stockholders' equity, and cash flows for each of the years in the
three-year period ended September 30, 1996 and the related financial statement
schedule which reports appear in or are incorporated by reference in the
September 30, 1996 annual report on Form 10-K of Comdisco, Inc. and to the
reference to our firm under the heading "Experts" included herein.
/s/ KPMG Peat Marwick LLP
June 18, 1997
Chicago, Illinois
<PAGE>
Exhibit 25
---------------------------------------
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)___
----------------------------
YASUDA BANK AND TRUST COMPANY (U.S.A)
(Exact name of trustee as specified in its charter)
New York 13-3410433
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
666 Fifth Avenue, Suite 802 10103
New York, New York (Zip code)
(Address of principal executive offices)
----------------------------
COMDISCO, INC.
(Exact name of obligor as specified in its charter)
Delaware 36-2687938
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6111 North River Road 60018
Rosemont, Illinois (Zip code)
(Address of principal executive offices)
----------------------------
Debt Securities
(Title of the indenture securities)
<PAGE>
Item 1. General Information
-------------------
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Reserve Bank of New York (2nd District)
New York, New York
Federal Deposit Insurance Corporation,
Washington, D.C.
New York Banking Department, Albany, New York.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
-----------------------------
If the obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits.
----------------
Exhibit 1 - Copy of an Organization Certificate of the trustee as
now in effect. Incorporated herein by reference to
Exhibit 1 filed with Form T-1 Statement, Registration
# 33-43683.
Exhibit 2 - Copy of a certificate of authority of the trustee to
commence business. Incorporated herein by reference to
Exhibit 2 filed with Form T-1 Statement, Registration
# 33-43683.
Exhibit 3 - The authorization of the trustee to exercise corporate
trust powers is included in Exhibit 2 incorporated
herein by reference to Exhibit 2 filed with Form T-1
Statement, Registration # 33-43683.
Exhibit 4 - Copy of existing by-laws of the trustee. Incorporated
herein by reference to Exhibit 4 filed with Form T-1
Statement, Registration # 33-43683.
Exhibit 5 - Not Applicable.
Exhibit 6 - The consent of the trustee required by Section 321(b)
of the Trustee Indenture Act of 1939, as amended by the
Trust Indenture Reform Act of 1990. Incorporated herein
by reference to Exhibit 6 filed with Form T-1
Statement, Registration # 33-43683.
Exhibit 7 - A copy of the Consolidated Financial Statements of
Yasuda Bank and Trust Company (U.S.A.)
Exhibit 8 - Not Applicable.
Exhibit 9 - Not Applicable.
<PAGE>
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
Yasuda Bank and Trust Company (U.S.A.), a New York trust company has duly caused
this statement of eligibility and qualifications 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 9th day of June 1997.
YASUDA BANK AND TRUST COMPANY (U.S.A.)
Anthony A. Bocchino
By: _______________________
Anthony A. Bocchino
Vice President
