<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 1, 2000
REGISTRATION NO. 333-[________]
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ARROW ELECTRONICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
<TABLE>
<S> <C> <C>
NEW YORK 5065 11-1806155
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
25 HUB DRIVE
MELVILLE, NEW YORK 11747
(516) 391-1300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ROBERT E. KLATELL
EXECUTIVE VICE PRESIDENT
ARROW ELECTRONICS, INC.
25 HUB DRIVE
MELVILLE, NEW YORK 11747
(516) 391-1300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
WITH A COPY TO:
HOWARD S. KELBERG
DONALD B. BRANT
MILBANK, TWEED, HADLEY & MCCLOY LLP
ONE CHASE MANHATTAN PLAZA
NEW YORK, NEW YORK 10005
(212) 530-5000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED EXCHANGE OFFER: As soon as
possible following the effective date of this Registration Statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] ____________
If this form is a post-effective amendment filed pursuant to Rule 462(d)
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. [ ] ____________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
AMOUNT PROPOSED MAXIMUM PROPOSED
TITLE OF EACH CLASS OF TO BE OFFERING PRICE MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER NOTE (1) OFFERING PRICE (1) REGISTRATION
FEE
<S> <C> <C> <C> <C>
Floating Rate Exchange Notes due October 5, 2001 $200,000,000 100% $200,000,000 $ 52,800
8.20% Senior Exchange Notes due October 1, 2003 $425,000,000 100% $425,000,000 $ 112,200
8.70% Senior Exchange Notes due October 1, 2005 $250,000,000 100% $250,000,000 $ 66,000
9.15% Senior Exchange Notes due October 1, 2010 $200,000,000 100% $200,000,000 $ 52,800
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee.
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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SECTION 8(a), MAY DETERMINE.
<PAGE> 2
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
SUBJECT TO COMPLETION, DATED [ ], 2000
PRELIMINARY PROSPECTUS
[ARROW LOGO]
OFFER TO EXCHANGE UP TO $1,075,000,000 OF
$200,000,000 FLOATING RATE EXCHANGE NOTES DUE OCTOBER 5, 2001,
$425,000,000 8.20% SENIOR EXCHANGE NOTES DUE OCTOBER 1, 2003,
$250,000,000 8.70% SENIOR EXCHANGE NOTES DUE OCTOBER 1, 2005, AND
$200,000,000 9.15% SENIOR EXCHANGE NOTES DUE OCTOBER 1, 2010
FOR ANY AND ALL OUTSTANDING
$200,000,000 FLOATING RATE NOTES DUE OCTOBER 5, 2001,
$425,000,000 8.20% SENIOR NOTES DUE OCTOBER 1, 2003,
$250,000,000 8.70% SENIOR NOTES DUE OCTOBER 1, 2005, AND
$200,000,000 9.15% SENIOR NOTES DUE OCTOBER 1, 2010
OF
ARROW ELECTRONICS, INC.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON [ ], 2000, UNLESS EXTENDED
We are offering to exchange up to $1,075,000,000 aggregate principal
amount of our exchange notes for any and all outstanding notes of the same class
that we issued in a private offering on October 6, 2000. The terms of the
exchange notes are identical in all material respects to the terms of the
original notes, except that the exchange notes have been registered under the
Securities Act, and that transfer restrictions, registration rights and
provisions regarding additional interest relating to the original notes do not
apply to the exchange notes. We will not receive any proceeds from the exchange
offer.
To exchange your original notes for exchange notes:
- you must make the representations described on page 20 to us,
- you must complete and send the letter of transmittal that accompanies
this prospectus to the exchange agent, The Bank of New York, by 5:00
p.m., New York time, on [ ], 2000 and
- you should read the section called "The Exchange Offer" that begins on
page 19 for further information on how to exchange your original notes
for exchange notes.
If you tender original notes, you may withdraw your tender at any time
prior to the expiration of the exchange offer. We will exchange all notes
that you validly tender and do not validly withdraw before such expiration.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS [ ], 2000.
2
<PAGE> 3
AVAILABLE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the U.S. Securities and Exchange Commission. Our SEC
filings are available on the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file with the SEC
at its public reference facilities:
<TABLE>
<S> <C> <C>
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661-2511
</TABLE>
You may also obtain copies of the documents at prescribed rates by
writing to the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549. Please call 1-800-SEC-0330 for further
information on the operations of the public reference facilities. Our SEC
filings are also available at the offices of the New York Stock Exchange, 20
Broad Street, New York, New York 10005.
This prospectus is part of a registration statement filed by us with
the SEC under the Securities Act. As allowed by SEC rules, this prospectus does
not contain all of the information that you can find in the registration
statement or the exhibits to the registration statement.
The SEC allows us to "incorporate by reference" the information we file
with them, which means:
- incorporated documents are considered part of this prospectus;
- we can disclose important information to you by referring you
to those documents; and
- information that we file with the SEC will automatically
update and supersede the information in this prospectus and
any information that was previously incorporated in this
prospectus.
We incorporate by reference the documents listed below, which were
filed with the SEC under the Securities Exchange Act of 1934, as amended:
(1) our Annual Report on Form 10-K for the year ended December 31,
1999;
(2) our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000; and
(3) our Current Reports on Form 8-K dated September 1, 2000 and
September 19, 2000.
We also incorporate by reference each of the following documents that
we file with the SEC after the date of this prospectus and prior to the
termination of the exchange offer:
- reports filed under Section 13(a) and (c) of the Exchange Act;
- definitive proxy or information statements filed under Section
14 of the Exchange Act in connection with any subsequent
shareholders' meeting; and
- reports filed under Section 15(d) of the Exchange Act.
3
<PAGE> 4
You can obtain any of the filings incorporated by reference in this
prospectus from us or from the SEC on the SEC's web site or at the addresses
listed above. Documents incorporated by reference are available from us without
charge, including any exhibits to those documents that are not specifically
incorporated by reference in those documents. You may request a copy of the
documents incorporated by reference in this prospectus and a copy of the
indenture, exchange and registration rights agreement and other documents
referred to in this prospectus by writing or telephoning us at the following
address:
Arrow Electronics, Inc.
25 Hub Drive
Melville, New York 11747
(516) 391-1300
Attention: Secretary
IF YOU WOULD LIKE TO REQUEST DOCUMENTS, PLEASE DO SO BY [ ], 2000
IN ORDER TO RECEIVE THEM BEFORE THE EXCHANGE OFFER EXPIRES ON [ ], 2000.
The exchange offer is not being made to, nor will we accept surrenders
for exchange from, holders of original notes in any jurisdiction in which the
exchange offer or the acceptance of the exchange offer would not be in
compliance with the securities or blue sky laws of that jurisdiction.
INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements that are subject to
certain risks and uncertainties which could cause actual results or facts to
differ materially from such statements for a variety of reasons, including, but
not limited to: industry conditions, changes in product supply, pricing, and
customer demand, competition, other vagaries in the electronic components and
commercial computer products markets, and changes in relationships with key
suppliers. Forward-looking statements are those statements which are not
statements of historical fact. You can identify these forward-looking statements
by forward-looking words such as "expects," "anticipates," "intends," "plans,"
"may," "will," "believes," "seeks," "estimates," and similar expressions. You
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date on which they are made. We undertake no
obligation to update publicly or revise any of the forward-looking statements.
References in this prospectus to "Arrow," "we," "us," "our," or "ours" are
references to Arrow Electronics, Inc., unless the context of the statement
indicates otherwise. References to the "floating rate notes" are references to
the Floating Rate Notes due October 5, 2001 or the Floating Rate Exchange Notes
due October 5, 2001, as the context may require. References to the "fixed rate
notes" are references to the 8.20% Senior Notes due October 1, 2003, the 8.70%
Senior Notes due October 1, 2005 and the 9.15% Senior Notes due October 1, 2010
or the 8.20% Senior Exchange Notes due October 1, 2003, the 8.70% Senior
Exchange Notes due October 1, 2005 and the 9.15% Senior Exchange Notes due
October 1, 2010, as the context may require. References to the "original notes"
are references to the floating rate notes and the fixed rate notes currently
outstanding; references to the "exchange notes" are references to the floating
rate notes and the fixed rate notes offered by this prospectus; and references
to the "notes" are references to the original notes or the exchange notes as the
context requires.
4
<PAGE> 5
PROSPECTUS SUMMARY
ARROW ELECTRONICS, INC.
We are the world's largest distributor of electronic components and
computer products to industrial and commercial customers. We believe we are one
of the global electronics distribution industry's leaders in state-of-the-art
operating systems, employee productivity, value-added programs, and total
quality assurance. We are a leading distributor for over 600 suppliers.
Our distribution network spans the world's three dominant electronics
markets: North America, Europe, and the Asia/Pacific region. Through our
business units in these vital industrialized regions, we serve a diversified
base of original equipment manufacturers and commercial customers worldwide.
Original equipment manufacturers, or OEMs, include manufacturers of computer and
office products, industrial equipment (including machine tools, factory
automation, and robotic equipment), telecommunications products, aircraft and
aerospace equipment, and scientific and medical devices. Commercial customers
are mainly value-added resellers of computer systems. Through a network of more
than 225 sales facilities and 19 distribution centers in 38 countries, we
deliver to more than 175,000 OEMs and commercial customers the products,
inventory solutions, materials management services, and design and technical
support they need when, where and how they need them.
THE WYLE ACQUISITION
On August 7, 2000, a consortium consisting of ourselves, an affiliate of
Schroder Ventures, and another distributor entered into a share purchase
agreement to purchase the VEBA Electronics Group from the Germany-based energy
company E.ON AG, for an aggregate purchase price of approximately $2.35 billion
in cash, including the assumption of debt. Under the terms of the share purchase
agreement, on October 16, 2000 we acquired Wyle Components, Wyle Systems, and
ATLAS Services North America (collectively, the "Wyle Companies" or the "Wyle
Electronics Group") for a purchase price of $944,969,000 (including the
assumption of debt), subject to adjustments.
SUMMARY OF THE TERMS OF THE EXCHANGE OFFER
The Exchange Offer .................. We are offering to exchange up to $1,075
million aggregate principal amount of
exchange notes for an equal aggregate
principal amount of outstanding notes of
the same class. The form and terms of
each class of exchange notes are
substantially the same as the form and
terms of the outstanding notes of the
same class, except that the exchange
notes have been or will be registered
under the Securities Act and will not
bear legends restricting their transfer.
Exchange and Registration Rights
Agreement .......................... You have rights to exchange your
floating rate notes, 8.20% senior notes
8.70% senior notes or 9.15% senior note
for exchange notes of the same class,
and we intend the exchange offer to
satisfy those rights. After we complete
the exchange offer, you will no longer
have any exchange or registration rights
regarding your notes unless you tender
your notes in the exchange offer and do
not receive freely tradable exchange
notes or you are ineligible to
participate in the exchange offer.
5
<PAGE> 6
Resales of the Exchange Notes ...... We believe that you may resell the
exchange notes without complying with
the registration and prospectus delivery
provisions of the Securities Act if:
(1) you are acquiring the exchange
notes in the ordinary course of
your business;
(2) you are not participating, do not
intend to participate and have no
arrangement or understanding with
any person to participate, in a
distribution of the exchange notes;
(3) you are not an affiliate of our
company; and
(4) you are not an initial purchaser
who acquired notes directly from us
in the initial offering.
If you do not meet these conditions, you
may be liable under the Securities Act
if you transfer any exchange note
without compliance with the registration
and prospectus delivery requirements of
the Securities Act. We do not assume or
indemnify you against that liability.
Each broker-dealer that receives
exchange notes for its own account in
exchange for original notes, where such
original notes were acquired by that
broker-dealer as a result of
market-making activities or other
trading activities, must acknowledge
that it will deliver a prospectus in
connection with any resale of exchange
notes. A broker-dealer may use this
prospectus for an offer to resell or to
otherwise transfer the exchange notes.
Expiration Date ..................... The exchange offer will expire at 5:00
p.m., New York City time, on [ ], 2000,
unless we decide to extend it.
Conditions to the Exchange Offer .... The only conditions to completing the
exchange offer are that:
(1) it does not violate applicable law
or any applicable interpretation of
the SEC staff;
(2) no action or proceeding is
instituted with respect to the
exchange offer;
(3) no law, rule or regulation is
adopted that we expect would impair
our ability to proceed with the
exchange offer; and
(4) we obtain all necessary
governmental approvals for the
exchange offer.
Procedures for Tendering Notes ...... We issued the outstanding floating rate
notes, 8.20% senior notes, 8.70% senior
notes and 9.15% senior notes as global
securities in fully registered form,
which we will refer to as the "original
notes". Beneficial interests in the
original notes held by direct or
indirect participants in The Depository
Trust Company through depositary
interests are shown on records
maintained in book-entry form by DTC
with respect to its participants.
Transfers can be made only on those
records. If you are a holder of an
original note held in the form of a
book-entry interest and you wish to
tender your note under the exchange
offer, you must transmit through a
financial institution that is a
participant in DTC's book-entry transfer
facility system, on or prior to the
expiration of the exchange offer, a
computer-generated message transmitted
by means of DTC's Automated Offer
Program system to the exchange agent
forming a part of a confirmation of
book-entry transfer in which you
acknowledge and agree to be bound by the
terms of the letter of transmittal.
6
<PAGE> 7
Special Procedures for Beneficial
Owners .............................. If you are the beneficial owner of
original notes that are registered in
the name of a broker, dealer, commercial
bank, trust company or other nominee and
you wish to tender your notes, you
should promptly contact the person in
whose name your notes are registered and
instruct that person to tender on your
behalf.
Guaranteed Delivery Procedures ...... If you wish to tender your original
notes and cannot complete the procedure
for book-entry transfer on a timely
basis, you may still tender your notes
in accordance with the guaranteed
delivery procedures set forth in "The
Exchange Offer -- Guaranteed Delivery
Procedures".
Acceptance of Notes and Delivery of
Exchange Notes ...................... Unless the conditions to the exchange
offer are not met or tendered notes are
properly withdrawn, we will accept any
and all outstanding floating rate notes,
8.20% senior notes, 8.70% senior notes
and 9.15% senior notes that are properly
tendered in the exchange offer prior to
5:00 p.m., New York City time, on the
expiration date.
Withdrawal ......................... You may withdraw the tender of your
original notes at any time prior to 5:00
p.m., New York City time, on the
expiration date. We will return to you
any notes not accepted for exchange for
any reason without expense to you as
soon as practicable after withdrawal.
Exchange Agent ..................... The Bank of New York is serving as the
exchange agent for the exchange offer.
Federal Income Tax Consequences .... The exchange of your original notes in
the exchange offer will not be a taxable
event for federal income tax purposes.
SUMMARY OF THE TERMS OF THE EXCHANGE NOTES
The terms of the exchange notes are identical in all material respects
to the terms of the original notes, except that the registration rights and
related additional interest provisions and the transfer restrictions applicable
to the original notes are not applicable to the exchange notes. The exchange
notes will evidence the same debt as the original notes. The same indenture will
govern the exchange notes and the original notes.
Issuer ............................. Arrow Electronics, Inc.
Securities Offered ................. - $200,000,000 of Floating Rate
Exchange Notes due October 5, 2001.
- $425,000,000 of 8.20% Senior
Exchange Notes due October 1, 2003.
- $250,000,000 of 8.70% Senior
Exchange Notes due October 1, 2005.
- $200,000,000 of 9.15% Senior
Exchange Notes due October 1, 2010.
Maturity ............................ - The floating rate notes will bear
interest at LIBOR plus 1.00%,
payable quarterly in arrears on
January 5, 2001, April 5, 2001,
July 5, 2001 and the maturity date.
- The three classes of fixed rate
notes will bear interest at 8.20%,
8.70% and 9.15%, respectively,
payable semiannually on April 1 and
October 1 of each year, commencing
on April 1, 2001.
7
<PAGE> 8
Ranking ............................. The exchange notes will be general
unsecured obligations of Arrow. As such,
the exchange notes will rank equally in
right of payment with all other
unsecured and unsubordinated debt of
Arrow. See "Description of Notes --
General."
Redemption .......................... We may not redeem the floating rate
notes before they mature. We may redeem
the fixed rate notes as described under
"Description of Notes -- Optional
Redemption."
Covenants ........................... The indenture pursuant to which we will
issue the exchange notes contains
covenants that, among other things,
limit the ability of Arrow and its
restricted subsidiaries to secure
indebtedness with security interests on
certain property or stock or engage in
certain sale and leaseback transactions
with respect to certain properties. See
"Description of Notes -- Restrictive
Covenants."
Exchange Offer, Registration
Rights ............................. Pursuant to an exchange and registration
rights agreement among the initial
purchasers and Arrow, we agreed (1) to
file a registration statement, within 60
days after the original issue date of
the original notes with respect to an
offer to exchange the original notes for
exchange notes that are registered under
the Securities Act and (2) to use our
reasonable best efforts to cause such
registration statement to be declared
effective by the SEC within 180 days
after the original issue date of the
original notes. In addition, under
certain circumstances we may be required
to file a shelf registration statement
to cover resales of the original notes
by the holders thereof. We intend that
the exchange offer will satisfy most of
our obligations under the exchange and
registration rights agreement.
Use of Proceeds ..................... We will not receive any proceeds from
the exchange offer. Our net proceeds
from the sale of the original notes,
after deducting the initial purchasers'
discount and offering expenses, were
approximately $1,069,000,000, and we
used those proceeds (i) to finance the
cost of acquiring the Wyle Companies and
(ii) to provide a $50,000,000 bridge
loan to an affiliate of Schroder
Ventures, with the balance being used
for general corporate purposes. See "Use
of Proceeds."
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<PAGE> 9
SUMMARY HISTORICAL FINANCIAL DATA
The following table contains our summary historical financial data as of the
dates and for the periods indicated. We have derived the historical financial
data as of and for each of the years in the five-year period ended December 31,
1999 from our audited consolidated financial statements. We have derived the
historical financial data as of September 30, 2000 and for the nine-month
periods ended September 30, 2000 and September 30, 1999 from our unaudited
consolidated financial statements which, in the opinion of management, include
all adjustments necessary for a fair presentation. Nine-month results, however,
are not necessarily indicative of the results that may be expected for any other
interim period or for a full year.
You should read the following data together with our other historical
financial information and statements (including related notes) incorporated by
reference in this prospectus. Please also read "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Capitalization"
included or incorporated by reference in this prospectus.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
-------------------- ----------------------------------------------------
2000 1999(a) 1999(b) 1998 1997(c) 1996 1995
------ ------- ------- ------ -------- ------ ------
(In millions except per share data)
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INCOME STATEMENT DATA
Sales ........................... $9,268 $6,827 $9,313 $8,345 $7,764 $6,535 $5,919
Operating income ................ 537 230 339 353 375 401 423
EBITDA(d) ....................... 598 308 433 405 440 438 459
Interest expense ................ 107 78 106 81 67 38 46
Net income ...................... 249 80 124 146 164 203 203
Diluted earnings per share(e).... $ 2.53 $ 0.83 $ 1.29 $ 1.50 $ 1.64 $ 1.98 $ 2.03
</TABLE>
<TABLE>
<CAPTION>
AT AT DECEMBER 31,
SEPTEMBER ----------------------------------------------------
30, 2000 1999 1998 1997 1996 1995
--------- -------- -------- -------- -------- -------
(In millions)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Accounts receivable and $ 4,209 $ 3,084 $ 2,676 $ 2,475 $ 1,948 $ 1,979
inventory ...................
Total assets ................... 5,707 4,483 3,840 3,538 2,710 2,701
Total long-term debt and
capital lease obligations ... 859 1,533 1,047 830 353 461
Shareholders' equity ........... 1,766 1,551 1,487 1,361 1,358 1,196
</TABLE>
----------
(a) Operating and net income include a special charge of $25 million and $16
million after taxes, respectively, associated with the acquisition and
integration of Richey Electronics, Inc. ("Richey") and the electronics
distribution group of Bell Industries, Inc. ("EDG"). Excluding this charge,
operating income, net income, and earnings per share on a diluted basis
would have been $255 million, $97 million, and $1.01, respectively.
(b) Operating and net income include a special charge of $25 million and $16
million after taxes, respectively, associated with the acquisition and
integration of Richey and EDG. Excluding this charge, operating income, net
income, and earnings per share on a diluted basis would have been $363
million, $141 million, and $1.46, respectively.
(c) Operating and net income include special charges totaling $59 million and
$40 million after taxes, respectively, associated with the realignment of
our North American Components Operations and the acquisition and integration
of the volume electronic component distribution businesses of Premier
Farnell plc. Excluding these charges, operating income, net income, and
earnings per share on a diluted basis were $434 million, $204 million, and
$2.05, respectively.
(d) EBITDA consists of the sum of net income, interest expense, income taxes,
minority interest, and depreciation and amortization, exclusive of the
special charges related to acquisitions. We present EBITDA because investors
use EBITDA to determine our ability to meet our debt service obligations,
fund capital expenditures, and expand our business. You should not consider
this information to be an alternative to net income, operating income, cash
flow from operations or any other operating or liquidity performance measure
prescribed by generally accepted accounting principles (GAAP). Our
presentation of EBITDA may not be comparable to EBITDA defined and presented
by other companies.
(e) Per share amounts in 1996 and 1995 have been restated to reflect a
two-for-one stock split effective October 15, 1997.
9
<PAGE> 10
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth our historical consolidated ratios of
earnings to fixed charges for the periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, --------------------------------------------
2000 1999 1998 1997 1996 1995
----- ------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges 4.6 2.9(a) 4.0 5.0(b) 8.6 7.7
</TABLE>
----------
(a) Excluding the special pre-tax charge of $25 million associated with the
acquisition and integration of Richey and EDG, the ratio of earnings to
fixed charges would have been 3.1.
(b) Excluding special pre-tax charges totaling $59 million associated with the
realignment of our North American components operations and the acquisition
and integration of the volume electronic component distribution businesses
of Premier Farnell plc, the ratio of earnings to fixed charges would have
been 5.7.
10
<PAGE> 11
ARROW ELECTRONICS, INC.
BUSINESS OVERVIEW
We are the world's largest distributor of electronic components and computer
products to industrial and commercial customers. Spanning the world's three
major electronics markets -- the Americas, Europe, and the Asia/Pacific region
-- we offer an extensive global distribution network.
We have one of the industry's broadest product offerings, or line cards,
providing real-time access to a $1.9 billion inventory from more than 600
leading manufacturers. Through a network of more than 225 sales facilities and
19 distribution centers in 38 countries we deliver to more than 175,000 original
equipment manufacturers and commercial customers the products, inventory
solutions, materials management services, design, and technical support they
need when, where and how they need them. We are the largest distributor for many
of the world's leading semiconductor suppliers and one of the leading passive,
electromechanical, and interconnect ("PEMCO") distribution resources in the
industry.
In 1999, revenues exceeded $9.3 billion with EBITDA and net income of $433.2
million and $140.7 million, respectively, excluding the special charge of $24.6
million ($16.5 million after taxes) associated with the integration of
acquisitions. For the first nine months of 2000, revenues totaled more than $9.3
billion with EBITDA and net income of $597.7 million and $249 million,
respectively. In each of the first three quarters of 2000, sales, EBITDA, and
net income were at record levels.
Because we have a diverse mix of products and customers and a broad
geographic reach, we do not rely upon any one supplier or type of product, and
have limited exposure to technological change in the products we offer as well
as limited risks related to our customers' business cycles and regional economic
cycles.
We have transitioned our business from its historical role of simple order
fulfillment to an integral part of the supply chain. Suppliers rely on us to
possess significant "demand creation" skills, on a global basis, and to serve as
an integral resource to their own selling efforts.
We also serve as a critical link in the management of our customers' own
supply chain. Through our wide range of value-added services, we help our
customers select the right technology and design and the most appropriate
components, reduce time-to-market, lower costs, and enhance overall
competitiveness. As manufacturing has moved to a just-in-time (JIT) basis, our
expertise in supply-chain management enables us to deliver parts to our
customers as needed. Contributing to this important role is our ability to
profile our customers' product requirements -- taking into consideration
changing demand patterns and market fluctuations. Because of the breadth of our
line card we can offer customers one-stop shopping, helping them to minimize
their own costs. Over 64% of our North American revenues are derived from
customers to whom we provide value-added services, reflecting our key role in
the supply chain for suppliers and customers alike.
The value-added services we offer are:
<TABLE>
<CAPTION>
MANUFACTURING SERVICES MATERIALS MANAGEMENT PRODUCT ENHANCEMENT
SERVICES
<S> <C> <C>
Box Building Bill of Materials (BOM) Grading Bar Coding
Component Programming Bonded Inventory Management Packaging
Connector and Cable Assembly CARES (Auto Replenishment) Serialization
Flat Panel Assembly Hardware E-compass (Forecast and Order Special Handling
Configuration Management) Procedures
Kitting Systems In-plant Stores Special Marking Tape and
Integration Inventory Man Reel Testing
JIT Inventory Software Integration
Primary and Proximity Warehousing
Product Life Cycle Management
Product Traceability
Schedule Sharing
</TABLE>
<TABLE>
<CAPTION>
TECHNICAL SUPPORT ELECTRONIC COMMERCE FINANCIAL SERVICES
<S> <C> <C>
Design-in Engineering Support EDI Consolidating
Field Application Engineers Internet Ordering Invoicing
Marketing Support PRO-Series Specialized Financing
Product Education and In-plant Terminals
Certification
Technical Seminars
Technical Support
Technical Training
</TABLE>
11
<PAGE> 12
INDUSTRY OVERVIEW
Our industry has undergone a significant transformation. Leading
distributors must be more than stocking and marketing intermediaries. Their
ability to fill a range of roles is paramount. Technical proficiency and demand
creation, broad product offerings, innovative value-added programs, and a global
presence contribute to the success of our suppliers and customers alike.
Our industry has had strong long-term growth, yet is still subject to
business cycles. Over the past 30 years our industry has grown at a 12% compound
annual growth rate. Despite this growth, there are, periodically, industry-wide
troughs driven principally by product supply and availability.
Our financial performance through these cycles has changed significantly.
During the down cycle of the mid 1980s, we suffered losses, while during the
recessionary period of the early 1990s, we were marginally profitable. During
the period from mid 1996 through 1999, the industry's longest and most severe
recessionary cycle in the past three decades, our annual net income was never
below $140 million, excluding non-recurring charges. Today, not only are we well
positioned to reap the benefits from our industry's growth, but we are also
better prepared to remain profitable during the recessionary cycles, principally
due to our ability to leverage our operating structure and cost efficiencies.
Our industry requires modest capital investments in "bricks and mortar."
Instead, our cash requirements are most often tied to highly-liquid assets like
receivables and inventory.
Our industry's exposure to inventory risks is limited. It is the policy of
most manufacturers to protect authorized distributors, like ourselves, against
the potential write-down of semiconductor inventories due to technological
change or manufacturers' price reductions. Under the terms of the related
distributor agreements, and assuming the distributor complies with certain
conditions, those suppliers are required to credit the distributor for inventory
losses incurred through reductions in manufacturers' list prices. In addition,
under the terms of many distributor agreements, the distributor has the right to
return to the manufacturer for credit a defined portion of those inventory items
purchased within a designated period of time. Approximately 65 percent of the
dollar value of our inventory consists of semiconductors.
A manufacturer who elects to terminate a distributor agreement is generally
required to purchase from the distributor the total amount of its products
carried in inventory. While these industry practices do not entirely protect us
from inventory losses, we believe that they currently provide substantial
protection from those losses.
OVERVIEW BY REGION
Our business has a significant presence in each of the world's three major
markets. Our 1999 sales of $9.3 billion were generated as follows: 66% from the
Americas, 26% from Europe, and 8% from the Asia/Pacific region.
NORTH AMERICA
In North America, we are a leader in electronics distribution. Our
operations are organized around two distinct operating groups, the North
American Components ("NACO") and North American Computer Products ("NACP")
groups:
NACO offers a wide range of electronic components -- principally
semiconductors and PEMCO products (i.e., capacitors, resistors, potentiometers,
power supplies, relays, switches, and connectors) -- representing the industry's
broadest line card. Sales totaled $3.6 billion and $3.9 billion in 1999 and for
the first nine months of 2000, respectively, for this group.
NACO, prior to the acquisition of Wyle Components, consisted of seven
segmented marketing groups specifically positioned to provide business solutions
tailored to match customer needs.
Arrow Contract Manufacturing Services Distribution Group focuses exclusively
on providing industry expertise, extensive technical resources, and value-added
services to contract manufacturers.
Arrow/Richey Electronics is one of the world's largest distributors of PEMCO
products, and provides customers with comprehensive, innovative value-added
services.
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<PAGE> 13
Arrow/Bell Components specializes in servicing the needs of small, medium,
and emerging industrial OEMs in North America offering a complete line of
semiconductor, PEMCO, and industrial computer products, as well as cable,
mechanical, and assembly value-added services. Arrow/Bell's field application
engineers provide dedicated semiconductor engineering support, design tools, and
a broad technology base to assist customers throughout the product development
and design cycle.
Arrow Semiconductor Group specializes in serving the semiconductor needs of
the larger OEMs, interfacing with customers' engineers and product development
teams to help select the right components that will minimize a product's
time-to-market.
Arrow/Zeus Electronics maintains support from design through production to
the military, aerospace and other electronics industries offering
high-reliability semiconductors and space products, commercial semiconductors,
and industrial computer products, with military and aerospace inventories geared
to meet crucial deadlines.
Arrow Alliance Group provides a full line card and a wide range of
value-added services to large customers with complex needs.
Arrow Supplier Services Group manages all semiconductor supplier
relationships, including the line card strategy, marketing programs and
purchasing.
NACP is a full-line technical distributor of computer systems, peripherals,
and software to value-added resellers ("VARs") and industrial computer products,
with an emphasis on being a leading distributor of mid-range work stations.
Sales of this group totaled $2.6 billion and $1.8 billion in 1999 and for the
first nine months of 2000, respectively.
NACP, prior to the acquisition of Wyle Systems and Merisel's Open Computing
Alliance ("MOCA"), consisted of five segmented marketing groups as follows:
SBM is a leading distributor of Hewlett-Packard mid-range work stations
operating on UNIX and NT platforms, offering sales, marketing, and technical
support to its VARs.
Support Net Inc. is a leading distributor of IBM mid-range work stations
offering sales, marketing, and technical support to its VARs.
Arrow Industrial Computer Products Group focuses exclusively on selling
computer components and flat panel display products to North American OEMs and
system integrators as well as providing end users with systems integration
services, consignment programs, and product life cycle management.
Arrow Microtronica provides component and board level computer products to
PC, server and storage subsystem builders and integrators representing the
world's preeminent suppliers of CPUs, mass storage, memory, motherboards, and
all other components and peripherals required to build a computer system.
Gates/Arrow is a full-line technical distributor of computer systems,
peripherals, and software to VARs, offering a full range of computing platforms,
from desktop systems to enterprise computing environments and technical
assistance for most operating systems including UNIX, Netware, DOS, Windows,
Windows NT, as well as Intel and RISC-based platforms.
Arrow also serves the rapidly-developing markets in Argentina, Brazil, and
Mexico through its recent majority investments in Elko, Panamericana, and
Dicopel, respectively, leading electronic components distributors in each of
these countries.
EUROPE
Our position in Europe has grown dramatically since our initial entry into
this market in 1985 with 1999 revenues representing 26% of our worldwide total.
We are a recognized leader of pan- European components distribution. We have
secured this position by recognizing that Europe is made up of unique sectors
requiring different products and services; in effect cultivating a base of local
knowledge supported by a global presence. Our product offering in Europe is more
heavily weighted toward semiconductors, PEMCO products, and industrial computer
products. We are organized into the following geographic regions to service the
unique needs of our customers:
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<PAGE> 14
Northern Europe serves the U.K., Denmark, Finland, Ireland, Norway, and
Sweden. Our joint venture in South Africa, Arrow-Altech, is also a part of this
group.
Central Europe serves Germany, Austria, Belgium, the Netherlands,
Switzerland, Poland, and the Czech Republic.
Southern Europe services Italy, France, Spain, Portugal, Israel, Greece,
Hungary, Turkey, and Slovenia.
Sales in Europe totaled $2.4 billion in 1999 and $2.6 billion for the first
nine months of 2000.
ASIA/PACIFIC
We are one of the largest distributors in this rapidly-growing region. Since
our initial investment in this region in 1993, revenues have grown to more than
$750 million in 1999 and we expect to exceed $1.3 billion in revenues in 2000.
Our product offerings in Asia/Pacific largely consist of semiconductors, PEMCO,
and industrial computer products. Headquartered in Hong Kong, we have offices in
Australia, China, India, Malaysia, New Zealand, Singapore, South Korea, Taiwan,
and Thailand. These areas are serviced by our regional distribution centers in
Hong Kong, Malaysia, Taiwan, and Singapore.
Our presence in the region has been strengthened by our joint venture with
the Marubun Corporation, a leading independent components distributor in Japan.
The joint venture sells electronic components to Japanese-owned customers in the
Asia/Pacific region and the Americas.
STRATEGY
Our strategy is to be the premier supply-chain partner for our customers and
suppliers, assisting them throughout the supply chain -- from concept through
production. Set forth below are the key elements of our strategy.
- We seek to ensure that our sales force and engineers stay abreast of the
latest technological developments. Our field application engineers are
trained to understand the needs of our customers and to translate that
information back to our suppliers. By understanding the state-of-the-art
products of our suppliers, and the full potential of their application,
our team will be able to provide maximum benefit to both our customers
and our suppliers.
- We strive to provide our customers with the broadest array of the
value-added services they want in order to service their needs
throughout the supply chain. These value-added services, including both
physical and materials management, position us as a true partner to our
customers. From kitting, to programming of parts, to procurement and
materials management programs, to credit extension, we seek to
strengthen the reliance our customers place in us.
- We continuously invest in the technology, the systems, and the logistics
network needed to make our distribution operations more efficient. Then,
we rely on this efficient network to generate economies of scale from
increased business activity, which results in decreased operating costs
as a percentage of our revenues.
- Our opportunistic acquisitions over the past 20 years have enabled us to
become the largest electronic components distributor in the world and to
become a truly global distributor. They have also helped us to improve
our operating efficiencies by giving us the additional business activity
from which economies of scale are derived. We will continue to expand
our reach, striving for a presence that serves the needs of our
customers and suppliers around the globe.
- Our investments in the Internet, both directly through our internal
efforts and externally through the joint ventures in which we
participate, will enable our customers, suppliers, and shareholders to
participate in the benefits to be derived from this emerging technology.
INTERNET
Because of our critical position in the supply chain and the increasing
demand for value-added services, we believe that the Internet provides us with a
valuable tool to better serve our suppliers' and customers' needs.
We have utilized a two-prong approach to the Internet. Internally, we have a
formalized organization, the Internet Business Group, that focuses on our
corporate e-commerce activities and brings us to the Internet with a set of
tools and services that makes it as easy for customers to do business with us
over the Internet as by traditional means. In 1999, we
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<PAGE> 15
launched an extensive suite of on-line, supply-chain management tools, arrow.com
PRO-Series. The result of extensive research and testing, PRO-Series gives
customers Internet-based, 24-hour access to our inventory, plus the ability to
place, modify, monitor, and manage every order on-line. We believe PRO-Series is
the only on-line, supply-chain management tool that provides:
- Real-time multi-line quotes;
- Customer-specific pricing;
- Spot and scheduled ordering on account;
- Ability to change quantity, change data, cancel orders;
- Return authorization; and
- Real-time integration with our sales team.
The second prong in our approach to the Internet has been to make strategic
investments in select Internet start-up companies to access certain market
segments that we do not currently reach. To date, we have made six such
investments, including investments in companies targeted at Internet buyers and
sellers of excess components, companies providing technical design resources for
engineers for utilization in prototype development, and companies providing
supply-chain management tools.
ACQUISITIONS
The electronics distribution market has undergone a period of consolidation.
In 1970, we were ranked number eleven in our industry based upon annual
revenues. Today, to a large extent resulting from our acquisition strategy, we
are ranked number one. Since 1985, we have made more than 50 acquisitions and
strategic investments. We believe we were the first distributor to develop and
execute a strategy to build a pan-European distribution network and the first
North American distributor to enter the Asia/Pacific region, building one of the
largest regional distribution networks. Our approach is to acquire companies
that are recognized leaders in their respective markets, share our operating
philosophies and values, and possess strong, accomplished managers.
Our acquisitions over the past 15 years have provided us with access to
experienced sales and marketing teams, new supplier relationships, strong
entrepreneurial managers, facilities and value-added centers, technical
expertise, new customer markets, geographic reach, and the ability to gain
greater operating leverage.
One of the key attributes of our organization is our ability to integrate
all of our North American acquisitions, and many of our international
acquisitions, into our operating systems with a minimal amount of disruption to
either business. These integrations create significant synergies, which lower
our fixed costs as a percentage of revenues. The synergies are principally from
areas such as systems, facilities, logistics centers, and related personnel, as
well as personnel in finance, human resources, and operations. For example, in
January 1999, we acquired both Richey Electronics, Inc. and the electronics
distribution business of Bell Industries, Inc. and by late 1999 we had
identified and eliminated significant duplicative annual costs. The sales and
marketing forces, however, are generally not rationalized. Instead, we utilize
these larger teams to gain greater penetration in the market.
THE WYLE ACQUISITION
In early August 2000, a consortium consisting of ourselves, an affiliate of
Schroder Ventures, and another distributor, agreed to purchase the VEBA
Electronics Group from Germany-based E.ON AG (formerly VEBA AG) for
approximately $2.35 billion in cash, including the assumption of debt. The VEBA
Electronics Group reported 1999 sales of $5.5 billion. On October 16, 2000, we
completed the acquisition of E.ON's U.S.-based operations: Wyle Components, Wyle
Systems, and the U.S.-based portion of E.ON's logistics unit, ATLAS. Together,
these entities reported combined 1999 sales in North America of about $2
billion.
The Wyle businesses complement our existing distribution businesses in North
America. Wyle brings a focused group of technical specialists to the market who
will now be better positioned to deliver to its customers our broader and richer
array
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<PAGE> 16
of value-added services. We are fully committed to the integration of the best
practices and people of the Wyle operations. Additionally, several new suppliers
will be added to our line card. As has been the case with prior acquisitions, we
expect the acquisition of the Wyle Companies to produce sizable synergies.
Wyle Components is a franchised distributor for both broadline and
proprietary semiconductor suppliers in North America. Wyle Components serves
customers in various markets, including networking and communications,
computing, contract manufacturing, instrumentation, transportation, and
industrial controls. The merger of Wyle Components with our North American
Components Operations effectively combines our superior supply-chain management
tools and broad line card with Wyle's strong demand creation capabilities. Wyle
Components had revenues of almost $1.3 billion in 1999 and $1.4 billion for the
first nine months of 2000.
Wyle Systems is a distributor of computer products with a strong market
presence in the western United States. Our merger with Wyle Systems nearly
doubles our OEM systems sales and systems configuration business, expands our
line card, and strengthens our relationships with suppliers. Wyle Systems had
revenues of $642 million in 1999 and $513 million for the first nine months of
2000.
Wyle Systems has three business units: the OEM Systems Division, the
Technical Solutions Division, and the Commercial Systems Division.
The OEM Systems Division (OSD) provides three types of outsourcing services
to OEMs: (1) manufacturing services, such as systems integration -- integrating
a combination of off-the-shelf products, such as boards, memory and
microprocessors, and unique or custom products into end products for OEM
customers, (2) engineering support, and (3) logistic and supply chain
management, including drop-ship management, on- and off-site consignment
management, export control and compliance management, and traffic management.
The Technical Solutions Division (TSD) provides services similar to those of
the OEM Systems Division. However, while the OSD serves OEMs, the TSD's
customers are application VARs, systems integrators, and end users, with greater
concentration on engineering support and less on manufacturing services.
TSD also provides three types of outsourcing services to VARs and end users:
integration services, systems engineering support, and just-in-time delivery.
The Commercial Systems Division (CSD) services systems and PC integrators by
acting as a volume distributor of commodity products, such as Quantum low-end
storage products. The Commercial Systems Division targets the top 100 PC and
systems integrators in the United States with an outside sales force and also
concentrates on Intel product dealers with an internal group.
THE MOCA ACQUISITION
In September 2000, we signed an agreement with Merisel, Inc. under which we
will acquire the Merisel Open Computing Alliance (MOCA(R)) for an initial
purchase price of $115 million in cash plus the assumption or repayment of
approximately $57 million of off-balance sheet financing. The agreement provides
that the purchase price may be increased by up to an additional $37.5 million
based upon future developments with respect to MOCA's business. MOCA is a
distributor of Sun Microsystems products, selling enterprise software, storage
area networks, and Solaris operating systems which run on Sun Microsystems
hardware and related professional services.
USE OF PROCEEDS
The exchange offer is intended to satisfy a number of Arrow's obligations to
the initial purchasers of the original notes. Arrow will not receive any
proceeds from the issuance of the exchange notes offered under this prospectus.
In consideration for issuing the exchange notes, we will receive in
exchange, original notes in like principal amount. The form and terms of the
exchange notes are identical in all material respects to the form and terms of
the original notes, except as otherwise described under "The Exchange Offer -
Terms of the Exchange Offer." The original notes surrendered in exchange for the
exchange notes will be retired and cancelled and cannot be reissued.
Accordingly, the issuance of the exchange notes will not result in any increase
in our outstanding debt.
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<PAGE> 17
Our net proceeds from the sale of the original notes, after deducting
offering expenses and the initial purchasers' discount, were approximately
$1,069 million. We used the net proceeds (i) to finance the cost of acquiring
the Wyle Companies and (ii) to provide a $50 million bridge loan to an affiliate
of Schroder Ventures, with the balance being used for general corporate
purposes.
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<PAGE> 18
CAPITALIZATION
The following table sets forth our capitalization at September 30, 2000 and
as adjusted on a pro forma basis to give effect to the issuance of the original
notes, the application of the net proceeds thereof in accordance with "Use of
Proceeds", and the Exchange Offer.
<TABLE>
<CAPTION>
SEPTEMBER 30, 2000
ACTUAL AS ADJUSTED
(In millions, except
share data)
<S> <C> <C>
Short-term debt:
Various borrowings, including current
maturities of long-term debt ....... $ 374 $ 374
Floating rate exchange notes due 2001 . -- 200
Credit facilities ..................... 389 389
Commercial paper program .............. 405 405
Bid facilities ........................ 297 297
------- -------
1,465 1,665
------- -------
Long-term debt:
6.45% senior notes due 2003 ........... 250 250
7% senior notes due 2007 .............. 198 198
6 7/8% senior debentures due 2018 ..... 196 196
7 1/2% senior debentures due 2027 ..... 196 196
8.20% senior exchange notes due 2003 .. -- 425
8.70% senior exchange notes due 2005 .. -- 250
9.15% senior exchange notes due 2010 .. -- 200
Other obligations with various interest
rates and due dates ................ 19 19
------- -------
Total long-term debt ............... 859 1,734
------- -------
Total debt ......................... 2,324 3,399
------- -------
Shareholders' equity:
Common stock, par value $1:
Authorized -- 120,000,000 shares
Issued -- 103,741,595 shares ....... 104 104
Capital in excess of par value ........ 528 528
Retained earnings ..................... 1,488 1,488
Foreign currency translation adjustment (196) (196)
------- -------
1,924 1,924
Less:
Treasury shares (5,552,692), at cost .. 149 149
Unamortized employee stock awards ..... 9 9
------- -------
Total shareholders' equity ......... 1,766 1,766
------- -------
Total capitalization ............... $ 4,090 $ 5,165
======= =======
</TABLE>
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THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
We initially sold the original notes in a private offering on October
6, 2000 to Goldman, Sachs & Co., Chase Securities Inc. and Morgan Stanley & Co.
Incorporated, referred to as the initial purchasers in this prospectus, pursuant
to a Purchase Agreement dated September 29, 2000 between ourselves and the
initial purchasers. The initial purchasers subsequently resold the original
notes to qualified institutional buyers in the United States in reliance on, and
subject to the restrictions of, Rule 144A under the Securities Act and outside
the United States in accordance with Regulation S under the Securities Act.
In connection with the private offering of the original notes, we and
the initial purchasers entered into an exchange and registration rights
agreement dated September 29, 2000, in which we agreed, among other things:
(1) to file with the SEC within 60 days after the issuance of the
original notes, a registration statement relating to an exchange offer for the
original notes;
(2) to use all commercially reasonable efforts to cause that
registration statement to be declared effective under the Securities Act within
180 days after the issuance of the original notes;
(3) upon the effectiveness of that registration statement, to offer the
holders of the original notes the opportunity to exchange their original notes
in the exchange offer for a like principal amount of exchange notes; and
(4) to keep the exchange offer open for not less than 30 days.
We also agreed that where applicable law or SEC policy makes the
exchange offer itself, or the participation in the exchange offer by one or more
holders of the original notes, impermissible or impossible, the exchange offer
has not been completed within 225 days following the issuance of the original
notes or the exchange offer is not available to any of the holders, we would:
(1) file a shelf registration statement relating to the offer and sale
of the original notes by the holders of the original notes within 30 days after
the time each obligation arises;
(2) use all commercially reasonable efforts to cause the shelf
registration statement to become or be declared effective within 120 days after
the shelf registration statement is filed; and
(3) use all commercially reasonable efforts to keep the shelf
registration statement effective for at least until the earlier of the second
anniversary of the effective date of the registration statement, or until such
time as there are no original notes outstanding.
The exchange offer made by this prospectus is intended to satisfy your
registration rights under the exchange and registration rights agreement. If we
fail to fulfill our registration and exchange obligations, you, as a holder of
outstanding original notes, are entitled to receive additional interest at a per
annum rate of 0.25% per annum for the first 90 days of the default period, at a
per annum rate of 0.75% for the third 90 days of the default period and at a per
annum rate of 1.00% thereafter for the remaining portion of the default period.
Original notes that are not tendered for exchange in the exchange offer
will remain outstanding and continue to accrue interest and will be entitled to
the rights and benefits that holders of original notes have under the indenture
governing the notes and the exchange and registration rights agreement. No
holder of original notes will be entitled to receive any additional interest as
noted in the prior paragraph on its original notes, if that holder was, at any
time while the exchange offer is pending, eligible to exchange, and did not
validly tender, its original notes for exchange notes in the exchange offer.
The foregoing is a summary of the material terms of the exchange and
registration rights agreement. For a comprehensive understanding of your
registration rights, you should refer to the exchange and registration rights
agreement, which is included as Exhibit 4.6 to the Registration Statement that
relates to this prospectus.
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RESALE OF EXCHANGE NOTES
Based on no-action letters issued by the staff of the SEC in unrelated
transactions, we believe that you may offer for resale, resell or otherwise
transfer any exchange notes issued to you in the exchange offer in exchange for
original notes without compliance with the registration and prospectus delivery
requirements of the Securities Act, if
(1) you are acquiring the exchange notes issued in the exchange offer
in the ordinary course of your business;
(2) you are not participating, do not intend to participate and have no
arrangement or understanding with any person to participate, in a distribution
of the exchange notes;
(3) you are not an "affiliate" of ours, as that term is defined in Rule
405 under the Securities Act; and
(4) you are not an initial purchaser who is holding exchange notes you
received in exchange for original notes acquired directly from us in the initial
offering.
If you are an "affiliate" of ours or an initial purchaser described
above or if you have any arrangement or understanding with any person to
participate in a distribution of the exchange notes
(1) you will not be able to rely on the interpretations of the staff of
the SEC in connection with any offer for resale, resale or other transfer of
exchange notes; and
(2) you must comply with the registration and prospectus delivery
requirements of the Securities Act, or have an exemption available to you, in
connection with any offer for resale, resale or other transfer of the exchange
notes. This prospectus may be used for an offer for sale, resale or other
transfer of the exchange notes only as specifically set forth in this
prospectus.
In addition, we are not making the exchange offer to, nor will we
accept surrenders of original notes from, holders of original notes in any state
in which the exchange offer would not comply with the applicable securities laws
or "blue sky" laws of that state.
Each broker-dealer that receives exchange notes for its own account in
exchange for original notes, where original notes were acquired by the
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of exchange notes. See "Plan of Distribution."
TERMS OF THE EXCHANGE OFFER
On the terms and conditions set forth in this prospectus and in the
accompanying letter of transmittal, we will accept all outstanding original
notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time,
on the Expiration Date, which is defined below in " -- Expiration Date;
Extensions; Amendments". After authentication of the exchange notes by the
trustee or an authenticating agent, we will issue and deliver $1,000 principal
amount of exchange notes in exchange for each $1,000 principal amount of
outstanding original notes accepted in the exchange offer. You may tender some
or all of your original notes pursuant to the exchange offer, but only in
integral multiples of $1,000.
By tendering original notes in exchange for exchange notes and by
executing the letter of transmittal, you will be representing to us that, among
other things
(1) any exchange notes to be received by you will be acquired in the
ordinary course of your business;
(2) you are not engaging in a distribution nor do you have an
arrangement or understanding with any person to participate in the distribution
of the exchange notes; and
(3) you are not an "affiliate" of ours, as defined in Rule 405 under
the Securities Act, or, if you are an affiliate, that you will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable.
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<PAGE> 21
IN THE CASE OF A BROKER-DEALER THAT RECEIVES EXCHANGE NOTES FOR ITS OWN
ACCOUNT IN EXCHANGE FOR ORIGINAL NOTES THAT WERE ACQUIRED BY IT AS A RESULT OF
MARKET-MAKING OR OTHER TRADING ACTIVITIES, THE LETTER OF TRANSMITTAL WILL ALSO
INCLUDE AN ACKNOWLEDGMENT THAT THE BROKER-DEALER WILL DELIVER A COPY OF THIS
PROSPECTUS IN CONNECTION WITH THE RESALE BY IT OF EXCHANGE NOTES RECEIVED
PURSUANT TO THE EXCHANGE OFFER; HOWEVER, BY SO ACKNOWLEDGING AND BY DELIVERING A
PROSPECTUS, THE BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN
"UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT. SEE "PLAN OF
DISTRIBUTION".
The exchange notes will be issued under and entitled to the benefits of
the indenture that governs the original notes. The form and terms of the
exchange notes are identical in all material respects to the form and terms of
the outstanding original notes, except that
(1) the offering of the exchange notes has been registered under
the Securities Act;
(2) the exchange notes will not be subject to transfer
restrictions; and
(3) the exchange notes will be issued without registration rights.
As of the date of this prospectus, $1,075,000,000 aggregate principal
amount of the original notes is outstanding. In connection with the issuance of
the original notes, we arranged for the original notes to be issued and
transferable in book-entry form through the facilities of The Depository Trust
Company, acting as a depositary. The exchange notes will also be available and
transferable in book-entry form through DTC.
This prospectus and the accompanying letter of transmittal are
initially being sent to all registered holders of original notes as of the close
of business on [ ], 2000. There will be no fixed record date for determining
registered holders of original notes entitled to participate in the exchange
offer. The exchange offer is not conditioned upon the tender of any minimum
aggregate principal amount of original notes. The exchange offer is, however,
subject to customary conditions, which may be waived by us, and to the terms and
provisions of the exchange and registration rights agreement. See " --
Conditions of the Exchange Offer."
We will be deemed to have accepted validly tendered original notes when
and if we have given oral or written notice to the exchange agent. See " --
Exchange Agent." The exchange agent will act as agent for the tendering holders
of original notes for the purpose of receiving exchange notes from Arrow and
delivering exchange notes to those holders.
If any tendered original notes are not accepted for exchange because of
an invalid tender or the occurrence of other events set forth in this section,
certificates for any of the unaccepted original notes will be returned, at our
expense, to the tendering holder as promptly as practicable after the Expiration
Date.
Holders who tender original notes in the exchange offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the letter of transmittal, transfer taxes with respect to the exchange of
original notes pursuant to the exchange offer. We will pay all charges and
expenses, other than specified applicable taxes, in connection with the exchange
offer. See " -- Solicitation of Tenders, Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City time, on [ ],
2000, or the latest date to which we extend the exchange offer. We may extend
the exchange offer at any time and from time to time, in our sole discretion, by
giving oral or written notice to the exchange agent and by timely public
announcement.
If any of the conditions set forth under " -- Conditions of the
Exchange Offer" has occurred and has not been waived by us, we expressly reserve
the right, in our sole discretion, by giving oral or written notice to the
exchange agent, to
(1) extend the exchange offer or delay accepting any original
notes;
(2) amend the terms of the exchange offer; or
(3) terminate the exchange offer and return any tendered notes.
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Any delay in accepting any original note and any extension, amendment
or termination of the exchange offer will be followed as promptly as practicable
by oral or written notice to the registered holders of the original notes. If we
amend the exchange offer in a manner that we determine to constitute a material
change, we will promptly disclose the amendment in a manner reasonably
calculated to inform the holders of the amendment, and we will extend the
exchange offer to the extent required by law.
Without limiting the manner in which we may choose to make public
announcements of any delay in acceptance, extension, termination or amendment of
the exchange offer, we are not obligated to publish, advise, or otherwise
communicate any public announcement, other than by making a timely press
release.
INTEREST ON THE EXCHANGE NOTES
Interest on the exchange notes will accrue from the last interest
payment date on which interest was paid on the original notes that are
surrendered in exchange or, if no interest has been paid on the original notes,
from October 6, 2000. The rate of and payment date for interest on the exchange
notes will be the same as that of the related original note.
PROCEDURES FOR TENDERING
BOOK-ENTRY INTERESTS. The original notes were issued as global
securities in fully registered form without interest coupons. Beneficial
interests in the global securities held by direct or indirect participants in
DTC are shown on, and transfers of these interests are effected only through,
records maintained in book-entry form by DTC with respect to its participants.
If you hold your original notes in the form of book-entry interests and
you wish to tender your original notes for exchange in the exchange offer, you
must transmit to the exchange agent on or prior to the Expiration Date either:
(1) a written or facsimile copy of a properly completed and duly
executed letter of transmittal, including all other documents required by such
letter of transmittal, to the exchange agent at the address set forth on the
cover page of the letter of transmittal; or
(2) a computer-generated message, or Agent's Message, transmitted by
means of DTC's Automated Tender Offer Program, or ATOP, system and received by
the exchange agent and forming a part of a confirmation of book-entry transfer,
in which you acknowledge and agree to be bound by the terms of the letter of
transmittal.
In addition, in order to deliver original notes held in the form of
book-entry interests (1) a timely confirmation of book-entry transfer of those
notes into the exchange agent's account at DTC pursuant to the procedure for
book-entry transfers described below under " -- Book-Entry Transfer" must be
received by the exchange agent prior to the Expiration Date; or (2) you must
comply with the guaranteed delivery procedures described below.
THE METHOD OF DELIVERY OF ORIGINAL NOTES AND THE LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR ELECTION AND
RISK. INSTEAD OF DELIVERY BY MAIL, WE RECOMMEND THAT YOU USE AN OVERNIGHT OR
HAND DELIVERY SERVICE. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ASSURE
DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. YOU SHOULD NOT SEND
THE LETTER OF TRANSMITTAL OR ORIGINAL NOTES TO US OR DTC. YOU MAY REQUEST YOUR
BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY, OR NOMINEE TO EFFECT THE ABOVE
TRANSACTIONS FOR YOU.
CERTIFICATED ORIGINAL NOTES. Only registered holders of certificated
original notes may tender those notes in the exchange offer. Certificated notes
are notes held in physical, as opposed to book-entry, form. If your original
notes are certificated notes and you wish to tender those notes for exchange in
the exchange offer, you must transmit to the exchange agent on or prior to the
Expiration Date, a written or facsimile copy of a properly completed and duly
executed letter of transmittal, including all other required documents, to the
address set forth below under " -- Exchange Agent." In addition, in order to
validly tender your certificated original notes:
(1) the certificates representing your original notes must be received
by the exchange agent prior to the Expiration Date or
(2) you must comply with the guaranteed delivery procedures described
below.
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PROCEDURES APPLICABLE TO ALL HOLDERS. If you tender an original note
and you do not withdraw the tender prior to the Expiration Date, you will have
made an agreement with us in accordance with the terms and subject to the
conditions set forth in this prospectus and in the letter of transmittal.
If your original notes are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee and you wish to tender your
notes, you should contact the registered holder promptly and instruct the
registered holder to tender on your behalf. If you wish to tender on your own
behalf, you must, prior to completing and executing the letter of transmittal
and delivering your original notes, either make appropriate arrangements to
register ownership of the original notes in your name or obtain a properly
completed bond power from the registered holder. The transfer of registered
ownership may take considerable time.
Signatures on a letter of transmittal or a notice of withdrawal must be
guaranteed by an eligible institution unless:
(1) original notes tendered in the exchange offer are tendered
either
(a) by a registered holder who has not completed the box
entitled "Special Registration Instructions" or
"Special Delivery Instructions" on the letter of
transmittal or
(b) for the account of an eligible institution; and
(2) the box entitled "Special Registration Instructions" on the
letter of transmittal has not been completed.
If signatures on a letter of transmittal or a notice of withdrawal are
required to be guaranteed, the guarantee must be by a financial institution,
which includes most banks, savings and loan associations and brokerage houses,
that is a participant in the Securities Transfer Agents Medallion Program, the
New York Stock Exchange Medallion Program or the Stock Exchanges Medallion
Program.
If the letter of transmittal is signed by a person other than you, your
original notes must be endorsed or accompanied by a properly completed bond
power and signed by you as your name appears on those original notes.
If the letter of transmittal or any original notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations, or others acting in a fiduciary or representative
capacity, those persons should so indicate when signing. Unless we waive this
requirement, in this instance you must submit with the letter of transmittal
proper evidence satisfactory to us of their authority to act on your behalf.
In addition, we reserve the right in our sole discretion to:
(1) purchase or make offers for, or offer registered notes for, any
original notes that remain outstanding subsequent to the expiration of the
exchange offer; or
(2) to the extent permitted by applicable law, purchase notes in the
open market, in privately negotiated transactions or otherwise.
The terms of any of these purchases or offers could differ from the
terms of the exchange offer.
In all cases, we will issue registered notes for original notes that
are accepted for exchange in the exchange offer after timely receipt by the
exchange agent of certificates for your original notes or a timely book-entry
confirmation of your original notes into the exchange agent's account at DTC, a
properly completed and duly executed letter of transmittal, or a
computer-generated message instead of the letter of transmittal, and all other
required documents. If any tendered original notes are not accepted for any
reason set forth in the terms and conditions of the exchange offer or if
original notes are submitted for a greater principal amount than you desire to
exchange and you withdraw tender of such original notes you do not desire to
exchange, those or substitute original notes will be returned without expense to
you. In addition, in the case of original notes tendered by book-entry transfer
into the exchange agent's account at DTC pursuant to the book-entry transfer
procedures described below, the unexchanged original notes will be credited to
your account maintained with DTC, as promptly as practicable after the
expiration or termination of the exchange offer.
We will determine, in our sole discretion, all questions regarding the
validity, form, eligibility, time of receipt, acceptance of tendered original
notes and withdrawal of tendered original notes, and that determination will be
final and
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binding on all parties. We reserve the absolute right to reject any and all
original notes not properly tendered or to refuse to accept any original notes
that would, in the opinion of our counsel, be unlawful. We also reserve the
right to waive, in our sole discretion, to waive any defects, irregularities or
conditions of tender as to any particular original note. Our interpretation of
the terms and conditions of the exchange offer and the instructions in the
letter of transmittal will be final and binding on all parties. Unless waived,
any defects or irregularities in connection with tenders of original notes must
be cured within such time as we may determine. Although we intend to notify any
affected holder of defects or irregularities in the tender of original notes,
none of us, the exchange agent, the trustee or any other person undertakes any
liability for any failure to give that notice. Tenders of original notes will
not be deemed to have been properly made until these defects or irregularities
have been cured or waived.
Any original notes received by the exchange agent that we determine are
not properly tendered or the tender of which is otherwise rejected by us and as
to which the defects or irregularities have not been cured or waived by us will
be returned by the exchange agent to the tendering holder unless otherwise
provided in the letter of transmittal, as soon as practicable following the
Expiration Date.
We will execute, and the trustee will authenticate and deliver to the
surrendering holder of original notes, exchange notes in the same aggregate
principal amount as the original notes so surrendered and then outstanding as
promptly as practicable following the Expiration Date whenever any original
notes are validly tendered for exchange and accepted by us. If any original
notes tendered are paid down prior to the consummation of the exchange offer,
the principal amount of original notes exchanged will be the amount of those
notes tendered that are then outstanding.
GUARANTEED DELIVERY PROCEDURES. If you desire to tender your original
notes and your original notes are not immediately available or one of the
situations described in " -- Book-Entry Transfer" occurs, you may tender if:
(1) you tender through an eligible financial institution;
(2) on or prior to 5:00 p.m., New York City time, on the Expiration
Date, the exchange agent receives from an eligible institution, a written or
facsimile copy of a properly completed and duly executed notice of guaranteed
delivery, substantially in the form provided by us; and
(3) the certificates for all certificated original notes, in proper
form for transfer, or a book-entry confirmation, and all other documents
required by the letter of transmittal, are received by the exchange agent within
three New York Stock Exchange trading days after the date of execution of the
notice of guaranteed delivery.
The notice of guaranteed delivery may be sent by facsimile
transmission, mail or hand delivery. The notice of guaranteed delivery must set
forth:
(1) your name and address;
(2) the amount of original notes you are tendering; and
(3) a statement that your tender is being made by the notice of
guaranteed delivery and that you guarantee that within three New York Stock
Exchange trading days after the execution of the notice of guaranteed delivery,
the eligible institution will deliver the following documents to the exchange
agent:
(a) the certificates for all certificated original notes being
tendered, in proper form for transfer or a book-entry confirmation of
tender,
(b) a written or facsimile copy of the letter of transmittal,
or a book-entry confirmation instead of the letter of transmittal; and
(c) any other documents required by the letter of transmittal.
BOOK-ENTRY TRANSFER. The exchange agent will establish an account with
respect to the book-entry interests at DTC for purposes of the exchange offer
promptly after the date of this prospectus. You must deliver your book-entry
interest by book-entry transfer to the account maintained by the exchange agent
at DTC. Any financial institution that is a participant in DTC's systems may
make book-entry delivery of book-entry interests by causing DTC to transfer the
book-entry interests into the exchange agent's account at DTC in accordance with
DTC's procedures for transfer.
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If you cannot deliver a book-entry confirmation of book-entry delivery
of your book-entry interests into the exchange agent's account at DTC, or you
cannot deliver all other documents required by the letter of transmittal to the
exchange agent prior to the Expiration Date, then you must tender your
book-entry interests according to the guaranteed delivery procedures discussed
above.
WITHDRAWAL OF TENDERS
Except as otherwise provided in this prospectus, you may withdraw
tenders of original notes at any time prior to 5:00 p.m., New York City time, on
the Expiration Date.
For a withdrawal to be effective, the exchange agent must receive a
written or facsimile transmission notice of withdrawal at its address set forth
below under " -- Exchange Agent" at any time prior to 5:00 p.m., New York City
time, on the Expiration Date.
In any notice of withdrawal, you must
(1) specify your name in the same manner as when you deposited the
original notes to be withdrawn;
(2) identify the original notes to be withdrawn, including the
principal amount of the original notes of each series, as applicable, and the
name and number of the account at DTC to be credited;
(3) sign electronically in the same manner as your original signature
on the letter of transmittal by which your original notes were tendered or be
accompanied by documents of transfer sufficient to permit the registrar to
register the transfer of the original notes into your name; and
(4) specify the name in which you want any original notes to be
registered, if not your own.
All questions as to the validity, form, eligibility and time of receipt
of any withdrawal notices will be determined by us in our sole discretion and
our determination will be final and binding on all parties. Any original notes
so withdrawn will be deemed not to have been validly tendered for purposes of
the exchange offer, and no exchange notes will be issued in exchange for them
unless the original notes so withdrawn are validly retendered. Any original
notes that have been tendered but are validly withdrawn will be returned to the
relevant holder without cost to that holder as soon as practicable after
withdrawal. Properly withdrawn original notes may be retendered by following one
of the procedures described above under " -- Procedures for Tendering" at any
time prior to the Expiration Date.
CONDITIONS OF THE EXCHANGE OFFER
We are not required to accept for exchange, or to exchange notes for,
any original notes, and may terminate or amend the exchange offer before the
acceptance of any original notes, if, in our judgement, any of the following
conditions has occurred or has not been satisfied:
(1) the exchange offer, or the making of any exchange by a holder of
original notes, violates applicable interpretations of the SEC staff;
(2) any action or proceeding is instituted or threatened in any court
or by or before any governmental body with respect to the exchange offer;
(3) there is adopted or enacted any law, rule or regulation that we
expect to impair our ability to proceed with the exchange offer; or
(4) any governmental approval that we, in our sole discretion, deem
necessary for the exchange offer is not obtained.
If we determine to terminate the exchange offer for any of the reasons
set forth above, we will refuse to accept any original notes and return any
original notes that have been tendered; alternatively, if we determine not to
terminate the exchange offer despite the existence of any of the reasons set
forth above, we may extend or otherwise amend the exchange offer, delay
accepting any tendered original note and retain all original notes tendered
prior to the Expiration Date
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of the exchange offer, subject to the rights of the holders of the tendered
original notes to withdraw the original notes. We may, in our discretion, waive
any rule or condition and proceed with the exchange offer. If we determine that
a waiver constitutes a material change in the exchange offer, we will promptly
disclose that change.
In addition, we will not accept for exchange any original notes
tendered, and no exchange notes will be issued in exchange for the original
notes, if at that time any stop order is threatened or in effect with respect to
either the Registration Statement of which this prospectus is a part or the
qualification of the indenture governing the Note under the Trust Indenture Act
of 1939.
The specified conditions are for our sole benefit, and we may assert
any of the conditions regardless of the circumstances giving rise to any
condition or may waive the condition in whole or in part at any time and from
time to time in our sole discretion. Our failure at any time to exercise any of
these rights is not to be deemed a waiver of any right, and each right is an
ongoing right that may be asserted at any time and from time to time.
EXCHANGE AGENT
The Bank of New York, the trustee under the indenture governing the
notes, has been appointed as the exchange agent for the exchange offer. In its
capacity as the exchange agent, The Bank of New York has no fiduciary duties and
will be acting solely on directions from us. Requests for assistance and
requests for additional copies of this prospectus or of the letter of
transmittal should be directed to the exchange agent addressed as follows:
By Registered or Certified Mail: The Bank of New York
101 Barclay Street, 7E
New York, New York 10286
Attention: Michael Daly
By Hand or Overnight Delivery: The Bank of New York
101 Barclay Street
Corporate Trust Services Window
Ground Level
New York, New York 10286
Attention: Michael Daly
Facsimile Transmissions: (212) 815-5915
Information or Confirmation by
Telephone: (212) 815-2588
Delivery to an address or facsimile number other than those listed
above will not constitute a valid delivery.
SOLICITATION OF TENDERS; FEES AND EXPENSES
We will bear all expenses of soliciting tenders pursuant to the
exchange offer. The principal solicitation pursuant to the exchange offer is
being made by mail. Additional solicitations may be made by us or an agent
designated by us in person, by telegraph, telephone or facsimile transmission.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to brokers, dealers or other persons
soliciting acceptances of the exchange offer. We will, however, pay the exchange
agent reasonable and customary fees for its services and will reimburse the
exchange agent for its reasonable out-of-pocket costs and expenses and will
indemnify the exchange agent for all losses and claims incurred by it as a
result of the exchange offer. We will also pay the administrative agent its
ongoing fees and expenses. We may also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this prospectus, letters of transmittal
and related documents to the beneficial owners of the original notes and in
handling or forwarding tenders for exchange.
We will also pay all other expenses incurred by it in connection with
the exchange offer, including accounting and legal fees and printing costs.
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ACCOUNTING TREATMENT
The exchange notes will be recorded at the same carrying value as the
original notes, as reflected in our accounting records on the date of the
exchange. Accordingly, we will not recognize any gain or loss for accounting
purposes as a result of the consummation of the exchange offer. We will amortize
the expense of the exchange offer over the term of the exchange notes.
TRANSFER TAXES
We will pay any transfer taxes imposed in the United States that are
applicable to the exchange of original notes pursuant to the exchange offer. If,
however, a transfer tax is imposed for any reason other than the mere exchange
of original notes pursuant to the exchange offer, the amount of any transfer
taxes -- whether imposed on a registered holder or any other person -- will be
payable by the tendering holder. For example, you will be responsible for
transfer taxes, if certificates representing exchange notes are to be delivered
to, or are to be registered or issued in the name of, any person other than the
registered holder of the original notes tendered. If satisfactory evidence of
payment of those taxes or exemption from them is not submitted with the letter
of transmittal, we will bill the amount of the applicable transfer taxes
directly to the tendering holder. Any holder who is subject to taxes outside the
United States and who is considering tendering original notes for exchange
should consult its tax advisors as to the particular tax consequences to it of
exchanging original notes for exchange notes.
CONTINUING RESTRICTIONS ON THE TRANSFER OF ORIGINAL NOTES
All original notes that are not tendered will continue to be subject to
the restrictions on transfer set forth in the indenture governing the notes.
After completion of the exchange offer, we will no longer have any obligation to
file any further registration statement for any original notes. Accordingly,
after the completion of the exchange offer, you will be able to offer for sale,
sell or otherwise transfer untendered original notes only as follows:
(1) to us;
(2) pursuant to a registration statement that has been declared
effective under the Securities Act;
(3) for so long as the original notes are eligible for resale
pursuant to Rule 144A under the Securities Act, to a person you reasonably
believe is a qualified institutional buyer within the meaning of Rule 144A, that
purchases for its own account or for the account of a qualified institutional
buyer to whom notice is given that the transfer is being made in reliance on the
exemption from the registration requirements of the Securities Act provided by
Rule 144A;
(4) pursuant to offers and sales that occur outside the United
States to foreign persons in transactions complying with the provisions of
Regulation S under the Securities Act;
(5) to an "accredited investor" within the meaning of Rule 501 (a)
(1), (2), (3) or (7) under the Securities Act that is an institutional investor
purchasing for its own account or for the account of this type of accredited
investor, in each case in a minimum principal amount of the original notes of
$250,000; or
(6) pursuant to any other available exemption from the
registration requirements of the Securities Act.
DESCRIPTION OF NOTES
The original notes were and the new notes will be issued under an indenture,
dated as of January 15, 1997, between us and The Bank of New York (as successor
to Bank of Montreal Trust Company), as Trustee (the "Indenture"). The following
summary of important provisions of the notes and the indenture does not purport
to be complete, and this summary is subject to the detailed provisions of the
Indenture, including the definition of certain terms used in this prospectus and
those terms made a part of the indenture by reference to the Trust Indenture
Act, the notes and the exchange and registration rights agreement. Copies of
these documents are available from us upon request. Wherever particular sections
or defined terms of the Indenture are referred to, such sections or defined
terms are incorporated in this prospectus by reference as part of the statement
made, and the statement is qualified in its entirety by such reference.
Numerical references in parentheses below are to sections in the Indenture.
Capitalized terms that are used and not otherwise defined in this
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prospectus shall have the meanings assigned to them in the Indenture or the
exchange and registration rights agreement, as the case may be.
GENERAL
The Indenture provides for the issuance from time to time of debentures,
notes (including the notes) or other evidences of indebtedness by us (the
"Securities") in an unlimited amount pursuant to an indenture supplemental to
the Indenture or a Board Resolution, or Officers' Certificates pursuant to such
supplemental indenture or Board Resolution (Section 2.3). Additional Securities
may be issued in series.
The notes will be unsubordinated and unsecured obligations of ours ranking
pari passu with all of our existing and future unsubordinated and unsecured
obligations. Claims of Holders of the notes will be effectively subordinated to
the claims of holders of the debt of our subsidiaries with respect to the assets
of such subsidiaries. In addition, claims of Holders of the notes will be
effectively subordinated to the claims of holders of our secured debt and the
secured debt of our subsidiaries with respect to the collateral securing such
claims. Our claims as the holder of general unsecured intercompany debt will be
similarly effectively subordinated to claims of holders of secured debt of our
subsidiaries.
THE FIXED RATE NOTES
The Senior Notes due 2003. The notes due 2003 will pay interest from October
6, 2000, at 8.20% per annum, semiannually on April 1 and on October 1 of each
year, commencing April 1, 2001, to the person in whose name the note is
registered at the close of business on March 15 or September 15, as the case may
be, immediately preceding such April 1 or October 1.
The Senior Notes due 2005. The notes due 2005 will pay interest from October
6, 2000, at 8.70% per annum, semiannually on April 1 and on October 1 of each
year, commencing April 1, 2001, to the person in whose name the note is
registered at the close of business on March 15 or September 15, as the case may
be, immediately preceding such April 1 or October 1.
The Senior Notes due 2010. The notes due 2010 will pay interest from October
6, 2000, at 9.15% per annum, semiannually on April 1 and on October 1 of each
year, commencing April 1, 2001, to the person in whose name the note is
registered at the close of business on March 15 or September 15, as the case may
be, immediately preceding such April 1 or October 1.
THE FLOATING RATE NOTES
We will pay interest on the floating rate notes quarterly in arrears on
January 5, 2001, April 5, 2001, July 5, 2001, each an interest payment date, and
on the maturity date. If any of the quarterly interest payment dates listed
above falls on a day that is not a business day, we will postpone the interest
payment date to the next succeeding business day, unless that business day is in
the next succeeding calendar month, in which case the interest payment date will
be the business day immediately preceding that quarterly interest payment date.
Interest on the notes will be computed on the basis of a 360 day year for the
actual number of days elapsed.
Interest on the notes will accrue from, and including, October 6, 2000, to,
but excluding, the first interest payment date and then from, and including, the
immediately preceding interest payment date to which interest has been paid or
duly provided for to, but excluding, the next interest payment date or the
maturity date, as the case may be. We refer to each of these periods as an
"interest period." The amount of accrued interest that we will pay for an
interest period can be calculated by multiplying the face amount of the floating
rate notes by an accrued interest factor. This accrued interest factor is
computed by adding the interest factor calculated for each day from October 6,
2000, or from the last date we paid interest to you, to the date for which
accrued interest is being calculated. The interest factor for each day is
computed by dividing the interest rate applicable to that day by 360.
If the maturity date of the floating rate notes falls on a day that is not a
business day, we will pay principal and interest on the next succeeding business
day, but we will consider that payment as being made on the date that the
payment was due to you. Accordingly, no interest will accrue on the payment for
the period from and after the maturity date to the date we make the payment to
you on the next succeeding business day.
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The interest payment by us on the floating rate notes on any interest
payment date, subject to certain exceptions, will be paid to the persons in
whose names the floating rate notes are registered at the close of business on
the fifteenth calendar day, whether or not a business day, immediately preceding
the interest payment date. However, interest that we pay on the maturity date
will be payable to the person to whom the principal will be payable.
The interest rate on the notes, other than the initial interest rate, will
be calculated by The Bank of New York as calculation agent. The calculation
agent will reset the interest rate on each interest payment date, each of which
we will refer to as an "interest reset date." The second London business day
preceding an interest reset date will be the "interest determination date" for
that interest reset date. The interest rate in effect on each day that is not an
interest reset date will be the interest rate determined as of the interest
determination date pertaining to the immediately preceding interest reset date,
except that the interest rate in effect for the period from and including
October 6, 2000 to the initial interest reset date will be the initial interest
rate. The interest rate in effect on any day that is an interest reset date will
be the interest rate determined as of the interest determination date pertaining
to that interest reset date.
When we use the term "business day" in this section we mean any day except a
Saturday, a Sunday or a legal holiday in the City of New York on which banking
institutions are authorized or required by law, regulation or executive order to
close; provided that the day is also a "London business day." "London business
day" means any day on which dealings in United States dollars are transacted in
the London interbank market.
"LIBOR" will be determined by the calculation agent in accordance with the
following provisions:
(i) With respect to any interest determination date, LIBOR will be the
rate for deposits in United States dollars for a three-month period
commencing on the first day of the applicable interest period that appears
on Telerate Page 3750 as of 11:00 A.M., London time, on that interest
determination date. If Telerate page 3750 does not include such a rate or is
unavailable on an interest determination date, LIBOR with respect to that
interest determination date will be determined in accordance with the
provisions described in (ii) below.
(ii) With respect to an interest determination date on which no rate
appears on Telerate page 3750, as specified in (i) above, or is unavailable,
the calculation agent will request the principal London offices of each of
four major reference banks in the London interbank market, as selected by
the calculation agent, to provide the calculation agent with its offered
quotation for deposits in United States dollars for a three-month period
commencing on the first day of the applicable interest period, to prime
banks in the London interbank market at approximately 11:00 A.M., London
time, on that interest determination date and in a principal amount that is
representative for a single transaction, in that market at that time. If at
least two quotations are provided, then LIBOR on that interest determination
date will be the arithmetic mean of those quotations. If fewer than two
quotations are provided, then LIBOR on the interest determination date will
be the arithmetic mean of the rates quoted at approximately 11:00 A.M., in
the City of New York, on the interest determination date by three major
banks in the City of New York selected by the calculation agent for loans in
United States dollars to leading European banks, having a three-month
maturity and in a principal amount that is representative for a single
transaction in that market at that time; provided, however, that if the
banks selected by the calculation agent are not providing quotations in the
manner described in this sentence, LIBOR determined as of that interest
determination date will be LIBOR in effect on the immediately preceding
interest determination date.
"Telerate Page 3750" means the display designated as "Page 3750" on Bridge
Telerate, Inc., or any successor service, for the purpose of displaying the
London interbank rates of major banks for United States dollars.
REGISTERED GLOBAL SECURITIES
Each of the exchange notes will be issued in the form of one or more
registered notes in global form (the "Global Notes"). Global Notes will be
deposited on the date of the closing of the exchange with, or on behalf of, The
Depository Trust Company (the "Depositary") and registered in the name of a
nominee of the Depositary. Exchange notes exchanged for original notes held
pursuant to Regulation S will be deposited upon issuance with, or on behalf of,
a custodian for the Depositary in the manner described in the preceding sentence
for credit to the respective accounts of the purchasers (or to such other
accounts as they may direct) at Morgan Guaranty Trust Company of New York,
Brussels Office, as operator of the Euroclear System, or Clearstream S.A.
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THE DEPOSITARY
We understand that the Depositary is a limited-purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934.
The Depositary holds securities that its participants (the "Direct
Participants") deposit with the Depositary. The Depositary also facilitates the
settlement among Direct Participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic computerized
book-entry changes in Direct Participants' accounts, thereby eliminating the
need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. Access to the Depositary's system
is also available to others such as securities brokers and dealers, banks and
trust companies that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly (the "Indirect Participants",
and together with the Direct Participants, the "Participants").
Purchases of Securities within the Depositary's system must be made by or
through Direct Participants, which will receive a credit for the Securities on
the Depositary's records. The ownership interest of each actual purchaser of
each Security (a "Beneficial Owner") is in turn to be recorded on the Direct and
Indirect Participants' respective records. Beneficial Owners will not receive
written confirmation from the Depositary of their purchase, but Beneficial
Owners are expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the Direct
or Indirect Participant through which the Beneficial Owner entered into the
transaction. Transfers of ownership interest in the Securities are to be
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interest in Securities except in the event that use of the
book-entry system for the Securities is discontinued.
To facilitate subsequent transfers, all Securities deposited by Direct
Participants with the Depositary are registered in the name of a nominee of the
Depositary. The deposit of the Securities with the Depositary and their
registration in the name of the nominee affect no change in beneficial
ownership. The Depositary has no knowledge of the actual Beneficial Owners of
the Securities; the Depositary's records reflect only the identity of the Direct
Participants to whose accounts such Securities are credited, which may or may
not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices will be sent to the nominee of the Depositary. If less
than all of the Securities of an issue are being redeemed, the Depositary's
practice is to determine by lot the amount of the interest of each Direct
Participant in the particular series to be redeemed.
Neither the Depositary nor its nominee will consent or vote with respect to
the Securities. Under its usual procedures, the Depositary mails an omnibus
proxy (an "Omnibus Proxy") to the Participants as soon as possible after the
record date. The Omnibus Proxy assigns the nominee's consenting or voting rights
to those Direct Participants to whose accounts the Securities are credited on
the record date (identified in a listing attached to the Omnibus Proxy).
Principal, premium, if any, and interest payments on the Securities will be
made to the Depositary. We expect that the Depositary will credit Direct
Participants' accounts on the relevant payment date in accordance with their
respective holdings shown on the Depositary's records unless the Depositary has
reason to believe that it will not receive payment on such payment date. We also
expect that payments by participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with Securities
for the accounts of customers in bearer form or registered in "street-name".
These payments will be the responsibility of such participant and not of the
Depositary, the initial purchasers, or us, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
principal, redemption premium, if any, and interest to the Depositary is our
responsibility or that of the respective trustees. Disbursement of such payments
to Direct Participants is the responsibility of the Depositary, and disbursement
of such payments to the Beneficial Owners is the responsibility of Direct and
Indirect Participants. Registered Global Securities will settle in immediately
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available funds in the secondary trading market. No assurance can be given as to
the effect, if any, of settlement in immediately available funds on trading
activity in the Securities.
The Depositary may discontinue providing its services as securities
depository with respect to the Securities at any time by giving reasonable
notice. Under such circumstances and in the event that a successor securities
depository is not obtained, Securities certificates are required to be printed
and delivered. In addition, we may decide to discontinue use of the system of
book-entry transfers through the Depositary (or a successor securities
depository). In that event, Securities certificates which may have the legend
affixed to under "Notice to Investors" will be printed and delivered.
We will not have any responsibility or obligation to Participants or the
persons for whom they act as nominees with respect to the accuracy of the
records of the Depositary, its nominee or any Direct or Indirect Participant
with respect to any ownership interest in the Securities, or with respect to
payments to or providing of notice for the Direct Participants, the Indirect
Participants or the Beneficial Owners.
So long as a nominee of the Depositary is the registered owner of the
Securities, references herein to Holders of the Securities shall mean such
nominee or the Depositary and shall not mean the Beneficial Owners of the
Securities.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from the Depositary. Neither
we, the Trustee nor the initial purchasers, dealers or agents take
responsibility for the accuracy or completeness thereof.
PAYMENT OF ADDITIONAL AMOUNTS
We will, subject to the exceptions and limitations described below, pay as
additional interest, on each series of notes, any additional amounts that are
necessary in order that the net payment by our paying agents of the principal of
and interest on the notes to a holder who is a non-United States person (as
defined below), after deduction for any present or future tax, assessment or
governmental charge of the United States or a political subdivision or taxing
authority thereof or therein, imposed by withholding with respect to the
payment, will not be less than the amount provided in the notes to be then due
and payable; provided, however, that the foregoing obligation to pay additional
amounts shall not apply:
(1) to a tax, assessment or governmental charge that is imposed or
withheld solely by reason of the holder, or a fiduciary, settlor,
beneficiary, member or shareholder of the holder if the holder is an estate,
trust, partnership or corporation, or a person holding a power over an
estate or trust administered by a fiduciary holder, being considered as:
(a) being or having been present or engaged in trade or business in the
United States or having or having had a permanent establishment in the
United States;
(b) having a current or former relationship with the United States,
including a relationship as a citizen or resident thereof;
(c) being or having been a foreign or domestic personal holding company,
a passive foreign investment company or a controlled foreign corporation
with respect to the United States or a corporation that has accumulated
earnings to avoid United States federal income tax; or
(d) being or having been a "10-percent shareholder" of us as defined in
section 871(h)(3) of the United States Internal Revenue Code or any
successor provision;
(2) to any holder that is not the sole beneficial owner of such note, or
a portion thereof, or that is a fiduciary or partnership, but only to the
extent that a beneficiary or settlor with respect to the fiduciary, a
beneficial owner or member of the partnership would not have been entitled
to the payment of an additional amount had the beneficiary, settlor,
beneficial owner or member received directly its beneficial or distributive
share of the payment;
(3) to a tax, assessment or governmental charge that is imposed or
withheld solely by reason of the failure of the holder or any other person
to comply with certification, identification or information reporting
requirements concerning the nationality, residence, identity or connection
with the United States of the holder or beneficial owner of such note, if
compliance is required by statute, by regulation of the United States
Treasury Department or by an applicable income tax treaty to which the
United States is a party as a precondition to exemption from such tax,
assessment or other governmental charge;
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(4) to a tax, assessment or governmental charge that is imposed
otherwise than by withholding by us or a paying agent from the payment;
(5) to a tax, assessment or governmental charge that is imposed or
withheld solely by reason of a change in law, regulation, or administrative
or judicial interpretation that becomes effective more than 15 days after
the payment becomes due or is duly provided for, whichever occurs later;
(6) to an estate, inheritance, gift, sales, excise, transfer, wealth or
personal property tax or a similar tax, assessment or governmental charge;
(7) to any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal of or interest on
any note, if such payment can be made without such withholding by any other
paying agent; or
(8) in the case of any combination of items (1), (2), (3), (4), (5), (6)
and (7).
The notes are subject in all cases to any tax, fiscal or other law or regulation
or administrative or judicial interpretation applicable thereto. Except as
specifically provided under this heading "-- Payment of Additional Amounts" and
under the heading "-- Redemption for Tax Reasons" below, we shall not be
required to make any payment with respect to any tax, assessment or governmental
charge imposed by any government or a political subdivision or taxing authority
thereof or therein.
As used under this heading "-- Payment of Additional Amounts", under the
heading "-- Redemption for Tax Reasons," and under the heading "-- Material
Federal Income Tax Consequences to Non-United States Holders" below, the term
"United States" means the United States of America (including the States and the
District of Columbia) and its territories, its possessions and other areas
subject to its jurisdiction, "United States person" means any individual who is
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 any
estate or trust the income of which is subject to United States federal income
taxation regardless of its source and "non-United States person" means a person
who is not a United States person.
OPTIONAL REDEMPTION
We may not redeem the floating rate notes before they mature. The fixed rate
notes may be redeemed in whole at any time or in part from time to time, at our
option, at a redemption price equal to the greater of (1) 100% of the principal
amount of the applicable series of notes to be redeemed, and (2) the sum of the
present values of the remaining scheduled payments of principal and interest on
the applicable series of notes to be redeemed discounted to the date of
redemption on a semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at the applicable Treasury Rate plus 25 basis points for the
8.20% notes, the applicable Treasury Rate plus 37.5 basis points for the 8.70%
notes, or the applicable Treasury Rate plus 50 basis points for the 9.15% notes,
in each case plus accrued and unpaid interest on the principal amount being
redeemed to the redemption date.
"Treasury Rate" means, with respect to any redemption date, (1) the yield,
under the heading which represents the average for the immediately preceding
week, appearing in the most recently published statistical release designated
"H.15(519)" or any successor publication which is published weekly by the Board
of Governors of the Federal Reserve System and which establishes yields on
actively traded United States Treasury securities adjusted to constant maturity
under the caption "Treasury Constant Maturities," for the maturity corresponding
to the Comparable Treasury Issue (if no maturity is within three months before
or after the Remaining Life, yields for the two published maturities most
closely corresponding to the Comparable Treasury Issue will be determined and
the Treasury Rate will be interpolated or extrapolated from such yields on a
straight line basis, rounding to the nearest month) or (2) if such release (or
any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield-to-maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price of
such redemption date. The Treasury Rate will be calculated on the third Business
Day preceding the redemption date.
"Business Day" means any calendar day that is not a Saturday, Sunday or
legal holiday in New York, New York and on which commercial banks are open for
business in New York, New York.
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"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term ("Remaining Life") of the notes to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such notes.
"Independent Investment Banker" means Goldman, Sachs & Co. and its successor
or, if such firm is unwilling or unable to select the Comparable Treasury Issue,
an independent investment banking institution of national standing appointed by
the Trustee after consultation with us.
"Comparable Treasury Price" means (1) the average of five Reference Treasury
Dealer Quotations for such redemption date, after excluding the highest and
lowest Reference Treasury Dealer Quotations, or, (2) if the Independent
Investment Banker obtains fewer than five such Reference Treasury Dealer
Quotations, the average of all such quotations.
"Reference Treasury Dealer" means (1) each of Goldman, Sachs & Co., Chase
Securities Inc. and Morgan Stanley & Co. Incorporated, and their respective
successors, provided, however, that if any of the foregoing shall cease to be a
primary U.S. government securities dealer in New York City (a "Primary Treasury
Dealer"), we will substitute for such firm another Primary Treasury Dealer, and
(2) any other Primary Treasury Dealer selected by the Independent Investment
Banker after consultation with us.
"The Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Independent Investment Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Independent Investment Banker at 5:00
p.m., New York City time, on the third Business Day preceding such redemption
date.
Holders of notes to be redeemed as provided above will receive notice
thereof by first-class mail at least 30 and not more than 60 days before the
date fixed for redemption. If fewer than all of the notes of the series are to
be redeemed, the Trustee will select, not more than 60 days before the
redemption date, the particular notes or portions thereof for redemption from
the outstanding notes not previously called by such method as the Trustee deems
fair and appropriate.
REDEMPTION FOR TAX REASONS
If (a) as a result of any change in, or amendment to, the laws (or any
regulations or rulings promulgated thereunder) of the United States (or any
political subdivision or taxing authority thereof or therein), or any change in,
or amendments to, official positions regarding the application or interpretation
of such laws, regulations or rulings, which change or amendment is announced or
becomes effective on or after the date of this prospectus, we become or will
become obligated to pay additional amounts with respect to any series of notes
as described above under the heading "-- Payment of Additional Amounts" or (b)
any act is taken by a taxing authority of the United States on or after the date
of this prospectus, whether or not such act is taken with respect to us or any
affiliate, that results in a substantial probability that we will or may be
required to pay such additional amounts, then we may, at our option, redeem, as
a whole, but not in part, such series of notes on not less than 30 nor more than
60 days' prior notice, at a redemption price equal to 100% of their principal
amount, together with interest accrued thereon to the date fixed for redemption;
provided that we determine, in our business judgment, that the obligation to pay
such additional amounts cannot be avoided by the use of reasonable measures
available to us, not including substitution of the obligor under such series of
notes. No redemption pursuant to (b) above may be made unless we shall have
received an opinion of independent counsel to the effect that an act taken by a
taxing authority of the United States results in a substantial probability that
we will or may be required to pay the additional amounts described above under
the heading "-- Payment of Additional Amounts" and we shall have delivered to
the Trustee a certificate, signed by a duly authorized officer, stating that,
based on such opinion, we are entitled to redeem such notes pursuant to their
terms.
CERTAIN COVENANTS
Except as specified below, the following covenants apply to all series of
Securities, including the notes.
Restrictions on Liens. The Indenture provides that we will not, and will not
permit any Restricted Subsidiary to, create or incur any Lien on any shares of
stock, indebtedness or other obligations of a Restricted Subsidiary or any
Principal Property of ours or of a Restricted Subsidiary, whether those shares
of stock, indebtedness or other obligations of a Restricted Subsidiary or
Principal Property are owned at the date of the Indenture or acquired
afterwards, unless we secure or cause
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such Restricted Subsidiary to secure the outstanding Securities equally and
ratably with (or, at our option, prior to) all indebtedness secured by the
particular Lien, so long as the indebtedness shall be so secured. This covenant
does not apply in the case of:
- the creation of any Lien on any shares of stock, indebtedness or other
obligations of a Subsidiary or any Principal Property Acquired after the
date of the Indenture (including acquisitions by way of merger or
consolidation) by us or a Restricted Subsidiary, contemporaneously with
such acquisition, or within 180 days thereafter, to secure or provide
for the payment or financing of any part of the purchase price, or the
assumption of any Lien upon any shares of stock, indebtedness or other
obligations of a Subsidiary or any Principal Property acquired after the
date of the Indenture existing at the time of the acquisition, or the
acquisition of any shares of stock, indebtedness or other obligations of
a Subsidiary or any Principal Property subject to any Lien without the
assumption thereof, provided that every such Lien referred to in this
clause shall attach only to the shares of stock, indebtedness or other
obligations of a Subsidiary or any Principal Property so acquired and
fixed improvements thereon;
- any Lien on any shares of stock, indebtedness or other obligations of a
Subsidiary or any Principal Property existing at the date of the
Indenture;
- any Lien on any shares of stock, indebtedness or other obligations of a
Subsidiary or any Principal Property in favor of us or any Restricted
Subsidiary;
- any Lien on any Principal Property being constructed or improved
securing loans to finance the construction or improvements;
- any Lien on shares of stock, indebtedness or other obligations of a
Subsidiary or any Principal Property incurred in connection with the
issuance of tax-exempt governmental obligations (including, without
limitation, industrial revenue bonds and similar financings);
- any mechanics', materialmen's, carriers' or other similar Liens arising
in the ordinary course of business with respect to obligations that are
not yet due or that are being contested in good faith;
- any Lien on any shares of stock, indebtedness or other obligations of a
Subsidiary or any Principal Property for taxes, assessments or
governmental charges or levies not yet delinquent, or already delinquent
but the validity of which is being contested in good faith;
- any Lien on any shares of stock, indebtedness or other obligations of a
Subsidiary or any Principal Property arising in connection with legal
proceedings being contested in good faith, including any judgment Lien
so long as execution on the Lien is stayed;
- any landlord's Lien on fixtures located on premises leased by us or a
Restricted Subsidiary in the ordinary course of business, and tenants'
rights under leases, easements and similar Liens not materially
impairing the use or value of the property involved;
- any Lien arising by reason of deposits necessary to qualify us or any
Restricted Subsidiary to conduct business, maintain self-insurance, or
obtain the benefit of, or comply with, any law;
- Liens on our current assets to secure loans to us that mature within
twelve months from their creation and that are made in the ordinary
course of business; and
- any renewal of or substitution for any Lien permitted by any of the
preceding bullet points, provided, in the case of a Lien permitted under
the first, second or fourth bullet points, the indebtedness secured is
not increased nor the Lien extended to any additional assets. (Section
4.3(a)) Notwithstanding the foregoing, we or any Restricted Subsidiary
may create or assume Liens in addition to those permitted by the
preceding sentence of this paragraph, and renew, extend or replace those
Liens, provided that at the time of the creation, assumption, renewal,
extension or replacement, and after giving effect thereto, Exempted Debt
does not exceed 15 percent of Consolidated Net Tangible Assets. (Section
4.3(b))
Restrictions on Sale and Lease-Back Transactions. The Indenture provides
that we will not, and will not permit any Restricted Subsidiary to, sell or
transfer, directly or indirectly, except to us or to a Restricted Subsidiary,
any Principal
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Property as an entirety, or any substantial portion thereof, with the intention
of taking back a lease of such property, except a lease for a period of three
years or less at the end of which it is intended that the use of that property
by the lessee will be discontinued; provided that, notwithstanding the
foregoing, we or any Restricted Subsidiary may sell any such Principal Property
and lease it back for a longer period:
(i) if we or such Restricted Subsidiary would be entitled, pursuant to
the provisions of Section 4.3(a) of the Indenture, to create a Lien on the
property to be leased securing Funded Debt in an amount equal to the
Attributable Debt with respect to the sale and lease-back transaction
without equally and ratably securing the outstanding Securities, or
(ii) if (A) we promptly inform the Trustee of such transaction, and (B)
we cause an amount equal to the fair value (as determined by resolution of
our Board of Directors) of the property to be applied (1) to the purchase of
other property that will constitute Principal Property having a fair value
at least equal to the fair value of the property sold, or (2) to the
retirement within 120 days after receipt of the proceeds of Funded Debt
incurred or assumed by us or a Restricted Subsidiary (including the
Securities);
provided further that, in lieu of applying all of or any part of such net
proceeds to such retirement, we may, within 75 days after the sale, deliver or
cause to be delivered to the applicable trustee for cancellation either
debentures or notes evidencing Funded Debt of ours (which may include the
Securities) or of a Restricted Subsidiary previously authenticated and delivered
by the applicable trustee, and not yet tendered for sinking fund purposes or
called for a sinking fund or otherwise applied as a credit against an obligation
to redeem or retire such notes or debentures, and Officers' Certificates (which
shall be delivered to the Trustee) stating that we elect to deliver or cause to
be delivered such debentures or notes in lieu of retiring Funded Debt as
provided in the Indenture.
If we deliver debentures or notes to the applicable trustee and we duly
deliver the Officers' Certificates, the amount of cash that we will be required
to apply to the retirement of Funded Debt under this provision of the Indenture
will be reduced by an amount equal to the aggregate of the then applicable
optional redemption prices (not including any optional sinking fund redemption
prices) of the applicable debentures or notes, or, if there are no such
redemption prices, the principal amount of those debentures or notes; provided
that in the case of debentures or notes that provide for an amount less than the
principal amount to be due and payable upon a declaration of the maturity, then
the amount of cash will be reduced by the amount of principal of those
debentures or notes that would be due and payable as of the date of the
application upon a declaration of acceleration of the maturity pursuant to the
terms of the indenture pursuant to which such debentures or notes were issued.
(Section 4.4(a))
Notwithstanding the foregoing, we or any Restricted Subsidiary may enter
into sale and lease-back transactions in addition to those permitted by this
paragraph, without any obligation to retire any outstanding Securities or other
Funded Debt, provided that at the time of entering into such sale and lease-back
transactions and after giving effect thereto, Exempted Debt does not exceed 15
percent of Consolidated Net Tangible Assets.
(Section 4.4(b))
CERTAIN DEFINITIONS
The term "Attributable Debt" as defined in the Indenture means when used in
connection with a sale and leaseback transaction referred to above under "--
Certain Covenants -- Restrictions on Sale and Lease-Back Transactions", on any
date as of which the amount thereof is to be determined, the product of (i) the
net proceeds from the sale and lease-back transaction multiplied by (ii) a
fraction, the numerator of which is the number of full years of the term of the
lease relating to the property involved in the sale and lease-back transaction
(without regard to any options to renew or extend such term) remaining on the
date of the making of the computation and the denominator of which is the number
of full years of the term of the lease measured from the first day of the term.
The term "Consolidated Net Tangible Assets" as defined in the Indenture
means total assets after deducting therefrom all current liabilities and
intangible assets as set forth in our most recent balance sheet and our
consolidated Subsidiaries and computed in accordance with GAAP.
The term "Exempted Debt" as defined in the Indenture means the sum, without
duplication, of the following items outstanding as of the date Exempted Debt is
being determined:
(i) indebtedness of ours and our restricted subsidiaries incurred after
the date of the Indenture and secured by liens created or assumed or
permitted to exist pursuant to Section 4.3(b) of the Indenture described
above under "-- Certain Covenants -- Restrictions on Liens"; and
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(ii) Attributable Debt of ours and our restricted subsidiaries in
respect of all sale and lease-back transactions with regard to any Principal
Property entered into pursuant to Section 4.4(b) of the Indenture described
above under "-- Certain Covenants -- Restrictions on Sales and Lease-Back
Transactions".
The term "Funded Debt" as defined in the Indenture means all indebtedness
for money borrowed, including purchase money indebtedness, having a maturity of
more than one year from the date of its creation or having a maturity of less
than one year but by its terms being renewable or extendible at the option of
the obligor, beyond one year from the date of its creation.
The terms "Holder" or "Securityholder" as defined in the Indenture mean the
registered holder of any Security with respect to Registered Securities and the
bearer of any Unregistered Security or any coupon appertaining to it, as the
case may be.
The term "Lien" as defined in the Indenture means, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or encumbrance of
any kind, or any other type of preferential arrangement that has the practical
effect of creating a security interest in respect of such asset. For the
purposes of the Indenture, we or any Subsidiary shall be deemed to own subject
to a Lien any asset that it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
The term "Original Issue Discount Security" as defined in the Indenture
means any Security that provides for an amount less than the principal amount of
a particular security to be due and payable upon a declaration of acceleration
of the maturity of that security pursuant to Section 6.2 of the Indenture.
The term "Person" means an individual, partnership, corporation, business,
trust, joint stock company, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
The term "Principal Property" as defined in the Indenture means any
manufacturing or processing plant or warehouse owned at the date of the
Indenture or acquired after that date by us or any of our restricted
subsidiaries which is located within the United States and the gross book value
of which (including related land and improvements and all machinery and
equipment without deduction of any depreciation reserves) on the date as of
which the determination is being made exceeds 2 percent of Consolidated Net
Tangible Assets, other than:
(i) any manufacturing or processing plant or warehouse or any portion of
the same (together with the land on which it is erected and fixtures that
are a part of that land) which is financed by industrial development bonds
which are tax exempt pursuant to Section 103 of the Internal Revenue Code
(or which receive similar tax treatment under any subsequent amendments or
any successor laws or under any other similar statute of the United States),
(ii) any property which in the opinion of our Board of Directors is not
of material importance to the total business conducted by us as an entirety,
or
(iii) any portion of a particular property which is similarly found not
to be of material importance to the use or operation of such property.
The term "Restricted Subsidiary" as defined in the Indenture means a
Subsidiary of ours (i) of which substantially all the property is located, or
substantially all the business is carried on, within the United States, and (ii)
which owns Principal Property; provided, however, that any Subsidiary may be
declared a Restricted Subsidiary by Board Resolution, effective as of the date
such Board Resolution is adopted; provided further, that any such declaration
may be rescinded by further Board Resolution, effective as of the date that
further Board Resolution is adopted.
The term "Subsidiary" as defined in the Indenture means, with respect to any
Person, any corporation, association or other business entity of which more than
50% of the outstanding Voting Stock is owned, directly or indirectly, by that
Person and one or more other Subsidiaries of that Person.
RESTRICTIONS ON MERGERS AND SALES OF ASSETS
Under the Indenture, we may not consolidate with, merge with or into, or
sell, convey, transfer, lease or otherwise dispose of all or substantially all
of our property and assets (in one transaction or a series of related
transactions) to, any
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Person (other than a consolidation with or merger with or into a Subsidiary or a
sale, conveyance, transfer, lease or other disposition to a Subsidiary) or
permit any Person to merge with or into us unless (i) either (A) we will be the
continuing Person or (B) the Person (if other than ourselves) formed by the
consolidation or into which we are merged or that acquired or leased such
property and assets of ours will be a corporation organized and validly existing
under the laws of the United States of America or any of its jurisdictions and
will expressly assume, by a supplemental indenture, executed and delivered to
the Trustee, all of our obligations on all of the Securities under the
Indenture, and we will have delivered to the Trustee an Opinion of Counsel
stating that the consolidation, merger or transfer and the supplemental
indenture complies with the Indenture and that all conditions precedent provided
for in the Indenture relating to such transaction have been complied with and
that the supplemental indenture constitutes a legal, valid and binding
obligation of ours or such successor enforceable against such entity in
accordance with its terms, subject to customary exceptions; and (ii) Officers'
Certificates to the effect that immediately after giving effect to such
transaction, no Default shall have occurred and be continuing and an Opinion of
Counsel as to the matters set forth in clause (i) shall have been delivered to
the Trustee. (Section 5.1)
EVENTS OF DEFAULT
Events of Default defined in the Indenture with respect to the Securities of
any series are:
- we default in the payment of the Principal of any Securities of a series
when the same becomes due and payable at maturity, upon acceleration,
redemption or mandatory repurchase, including as a sinking fund
installment, or otherwise;
- we default in the payment of interest on any Securities of a series when
the same becomes due and payable, and that default continues for a
period of 30 days;
- we default in the performance of or breach any other covenant or
agreement of ours in the Indenture with respect to the Securities of a
series and that default or breach continues for a period of 30
consecutive days after written notice to us by the Trustee or to us and
the Trustee by the Holders of 25 percent or more in aggregate principal
amount of the Securities of all series affected thereby;
- an involuntary case or other proceeding shall be commenced against us or
any Restricted Subsidiary with respect to our or the Restricted
Subsidiary's debts, as the case may be, under any bankruptcy, insolvency
or other similar law now or in the future in effect seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of ours or it or any substantial part of our or its
property, as the case may be, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60
days; or an order for relief shall be entered against us or any
Restricted Subsidiary under the federal bankruptcy laws as now or
hereafter in effect;
- we or any Restricted Subsidiary (A) commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or in the
future in effect, or consents to the entry of an order for relief in an
involuntary case under any such law, (B) consent to the appointment of
or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of us or any Restricted
Subsidiary or for all or substantially all of the property and assets of
ours or any Restricted Subsidiary or (C) effect any general assignment
for the benefit of creditors; and
- any other Event of Default established with respect to any series of
Securities issued pursuant to the Indenture occurs. (Section 6.1)
The Indenture provides that if an Event of Default described in the first
two bullet points above, with respect to the Securities of any series then
outstanding, occurs and is continuing, then, and in each and every such case,
except for any series of Securities the Principal of which shall have already
become due and payable, either the Trustee or the Holders of not less than 25
percent in aggregate principal amount of the Securities of any such affected
series then outstanding under the Indenture (each series being treated as a
separate class) by notice in writing to us (and to the Trustee if given by
Securityholders), may declare the entire Principal (or, if the Securities of any
such series are Original Issue Discount Securities, the applicable portion of
the Principal amount as may be specified in the terms of the particular series
established pursuant to the Indenture) of all Securities of the affected series,
and the interest accrued on that Series, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable.
If an Event of Default described in the third or fourth bullet points above,
with respect to the Securities of one or more but not all series then
outstanding, or with respect to the Securities of all series then outstanding,
occurs and is continuing, then, and in each and every such case, except for any
series of Securities the Principal of which shall have already become due and
payable, either the Trustee or the Holders of not less than 25 percent in
aggregate principal amount (or, if the Securities
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of any such series are Original Issue Discount Securities, the amount of which
is accelerable as described in this paragraph) of the Securities of all the
affected series then outstanding under the Indenture (treated as a single class)
by notice in writing to us (and to the Trustee if given by Securityholders) may
declare the entire Principal (or, if the Securities of any such series are
Original Issue Discount Securities, such portion of the Principal amount as may
be specified in the terms of such series established pursuant to the Indenture)
of all Securities of all the affected series, and the interest accrued on those
series, if any, to be due and payable immediately, and upon any such declaration
the same shall become immediately due and payable.
If an Event of Default described in the fourth or fifth bullet points above
occurs and is continuing, then the principal amount (or, if any Securities are
Original Issue Discount Securities, such portion of the Principal as may be
specified in the terms of such series established pursuant to the Indenture) of
all the Securities then outstanding and interest accrued thereon, if any, shall
be and become immediately due and payable without any notice or other action by
any Holder or the Trustee to the full extent permitted by applicable law. Upon
certain conditions such declarations may be rescinded and annulled and past
defaults may be waived by the Holders of a majority in Principal of the then
outstanding Securities of all such series that have been accelerated (voting as
a single class). (Section 6.2)
TRUSTEE'S RIGHTS
The Indenture contains a provision under which, subject to the duty of the
Trustee during a default to act with the required standard of care:
- the Trustee may rely and shall be protected in acting or refraining from
acting upon any resolution, certificate, Officers' Certificates, Opinion
of Counsel (or both), statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence or indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper person or
persons, and the Trustee need not investigate any fact or matter stated
in the document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may
see fit;
- before the Trustee acts or refrains from acting, it may require
Officers' Certificates and/or an Opinion of Counsel, which shall conform
to the requirements of the Indenture, and the Trustee shall not be
liable for any action it takes or omits to take in good faith in
reliance on such certificate or opinion; subject to the terms of the
Indenture, whenever in the administration of the trusts of the Indenture
the Trustee shall deem it necessary or desirable that a matter be proved
or established prior to taking or suffering or omitting any action under
the Indenture, such matter (unless other evidence in respect thereof be
specifically prescribed in the Indenture) may, in the absence of
negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by Officers' Certificates delivered
to the Trustee, and such certificate, in the absence of negligence or
bad faith on the part of the Trustee, shall be full warrant to the
Trustee for any action taken, suffered or omitted by it under the
provisions of the Indenture upon the faith of the Officers'
Certificates;
- the Trustee may act through its attorneys and agents not regularly in
its employ and shall not be responsible for the misconduct or negligence
of any agent or attorney appointed with due care by it under the
Indenture;
- any request, direction, order or demand of us mentioned in the Indenture
shall be sufficiently evidenced by Officers' Certificates (unless other
evidence in respect thereof be specifically prescribed in the
Indenture); and any Board Resolution may be evidenced to the Trustee by
a copy thereof certified by our Secretary or an Assistant Secretary;
- the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by the Indenture at the request, order or
direction of any of the Holders, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that might be incurred by it in compliance with
such request or direction;
- the Trustee shall not be liable for any action it takes or omits to take
in good faith that it believes to be authorized or within its rights or
powers or for any action it takes or omits to take in accordance with
the direction of the Holders in accordance with the Indenture relating
to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under the Indenture;
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- the Trustee may consult with counsel, and the written advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it under the Indenture in good faith and in reliance thereon;
and
- prior to the occurrence of an Event of Default under the Indenture and
after the curing or waiving of all Events of Default, the Trustee shall
not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, Officers' Certificates, Opinion of
Counsel, Board Resolution, statement, instrument, opinion, report,
notice, request, consent, order, approval, appraisal, bond, debenture,
note, coupon, security, or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit and, if the Trustee shall determine
to make such further inquiry or investigation, it shall be entitled to
examine, during normal business hours and upon prior written notice, our
books, records and premises, personally or by agent or attorney.
(Section 7.2)
Subject to various provisions in the Indenture, the Holders of at least a
majority in principal amount (or, if the Securities are Original Issue Discount
Securities, such portion of the Principal as is then accelerable under the
Indenture) of the outstanding Securities of all series affected (voting as a
single class) by notice to the Trustee, may waive, on behalf of the Holders of
all the Securities of such series, an existing Default or Event of Default with
respect to the Securities of such series and its consequences, except a Default
in the payment of Principal of or interest on any Security as specified in the
first and second bullet points of the "Events of Default" section above or in
respect of a covenant or provision of the Indenture which cannot be modified or
amended without the consent of the Holder of each outstanding Security affected.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default with respect to the Securities of such series arising therefrom shall be
deemed to have been cured, for every purpose of the Indenture; but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereto. (Section 6.4)
Subject to such provisions in the Indenture for the indemnification of the
Trustee and certain other limitations, the Holders of at least a majority in
aggregate principal amount (or, if any Securities are Original Issue Discount
Securities, such portion of the Principal as is then accelerable under the
Indenture) of the outstanding Securities of all series affected (voting as a
single class), may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Securities of such series by
the Indenture, provided that the Trustee may refuse to follow any direction that
conflicts with law or the Indenture that may involve the Trustee in personal
liability, or that the Trustee determines in good faith may be unduly
prejudicial to the rights of Holders not joining in the giving of such
direction; and provided further that the Trustee may take any other action it
deems proper that is not inconsistent with any directions received from Holders
of Securities pursuant to the Indenture. (Section 6.5)
The Indenture provides that no Holder of any Securities of any series may
institute any proceeding, judicial or otherwise, with respect to the Indenture
or the Securities of that series, or for the appointment of a receiver or
trustee, or for any other remedy under the Indenture, unless:
- the Holder has previously given to the Trustee written notice of a
continuing Event of Default with respect to the Securities of that
series;
- the Holders of at least 25 percent in aggregate principal amount of
outstanding Securities of all those series affected shall have made
written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee under the Indenture;
- the Holder or Holders have offered to the Trustee indemnity reasonably
satisfactory to the Trustee against any costs, liabilities or expenses
to be incurred in compliance with the request;
- the Trustee for 60 days after its receipt of the notice, request and
offer of indemnity has failed to institute any such proceeding; and
- during the 60-day period, the Holders of a majority in aggregate
principal amount of the outstanding Securities of all those affected
series have not given the Trustee a direction that is inconsistent with
such written request. A Holder may not use the Indenture to prejudice
the rights of another Holder or to obtain a preference or priority over
such other Holder. (Section 6.6)
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The Indenture contains a covenant that we will file with the Trustee, within
15 days after we are required to file the same with the SEC, copies of the
annual reports and of the information, documents and other reports that we may
be required to file with the SEC pursuant to Section 13 or Section 15(d) of the
Exchange Act. (Section 4.6)
DISCHARGE, LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides with respect to each series of Securities that,
except as otherwise provided in this paragraph, we may terminate our obligations
under the Securities of a series and the Indenture with respect to Securities of
such series if:
(i) all Securities of such series previously authenticated and
delivered, with certain exceptions, have been delivered to the Trustee for
cancellation, and we have paid all sums payable by us under the Indenture;
or
(ii) (A) the Securities of such series mature within one year or all of
them are to be called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption,
(B) we irrevocably deposit in trust with the Trustee, as trust funds
solely for the benefit of the Holders of such Securities, for that purpose,
money or U.S. Government Obligations or a combination thereof sufficient
(unless such funds consist solely of money, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee), without consideration of
any reinvestment, to pay Principal of and interest on the Securities of such
series to maturity or redemption, as the case may be, and to pay all other
sums payable by us under the Indenture, and
(C) we deliver to the Trustee Officers' Certificates and an Opinion of
Counsel, in each case stating that all conditions precedent provided for in
the Indenture relating to the satisfaction and discharge of the Indenture
with respect to the Securities of such series have been complied with.
With respect to the foregoing clause (i), only our obligations to compensate
and indemnify the Trustee shall survive. With respect to the foregoing clause
(ii), only our obligations to execute and deliver Securities of such series for
authentication, to set the terms of the Securities of such series, to maintain
an office or agency in respect of the Securities of such series, to have moneys
held for payment in trust, to register the transfer or exchange of Securities of
such series, to deliver Securities of such series for replacement or to be
canceled, to compensate and indemnify the Trustee and to appoint a successor
trustee, and our right to recover excess money held by the Trustee shall survive
until such Securities are no longer outstanding. Thereafter, only our
obligations to compensate and indemnify the Trustee and its right to recover
excess money held by the Trustee shall survive. (Section 8.1)
The Indenture provides that, except as otherwise provided in this paragraph,
we:
(i) will be deemed to have paid and will be discharged from any and all
obligation, in respect of the Securities of any series, and the provisions
of the Indenture will no longer be in effect with respect to the Securities
of such series (a "legal defeasance") and
(ii) may omit to comply with any term, provision or condition of the
Indenture described above under "Certain Covenants" (or any other specific
covenant relating to such series provided for in a Board Resolution or
supplemental indenture or Officers' Certificates pursuant to such Board
Resolution or such supplemental indenture, that may by its terms be defeased
pursuant to the Indentures) and such omission shall be deemed not to be an
Event of Default under the third and fourth bullet points under "Events of
Default" above with respect to the outstanding Securities of a series (a
"covenant defeasance");
provided that the following conditions shall have been satisfied:
(i) we have irrevocably deposited in trust with the Trustee as trust
funds solely for the benefit of the Holders of the Securities of such
series, for payment of the Principal of and interest on the Securities of
such series, money or U.S. Government obligations or a combination of the
foregoing sufficient (unless such funds consist solely of money, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee)
without consideration of any reinvestment and after payment of all federal,
state and local taxes or other charges and assessments in respect thereof
payable by the Trustee, to pay and discharge the Principal of and accrued
interest on the outstanding Securities of such series to maturity or earlier
redemption (irrevocably provided for under arrangements satisfactory to the
Trustee), as the case may be;
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(ii) such deposit will not result in a breach or violation of, or
constitute a default under, the Indenture or any other material agreement or
instrument to which we are a party or by which we are bound;
(iii) no Default with respect to such Securities of such series shall
have occurred and be continuing on the date of such deposit;
(iv) we shall have delivered to the Trustee an Opinion of Counsel that
the Holders of the Securities of such series have a valid security interest
in the trust funds subject to no prior liens under the Uniform Commercial
Code; and
(v) we shall have delivered to the Trustee Officers' Certificates and an
Opinion of counsel, in each case stating that all conditions precedent
provided for in the Indenture relating to the defeasance contemplated have
been complied with.
In the case of a legal defeasance, we shall have delivered to the Trustee an
Opinion of Counsel (based on a change in law) or a ruling directed to the
Trustee from the United States Internal Revenue Service that the Holders of the
Securities of such series will not recognize income, gain or loss for federal
income tax purposes as a result of our exercise of our option under this
provision of the Indenture and will be subject to federal income tax on the same
amount and in the same manner and at the same times as could have been the case
if such deposit and defeasance had not occurred, or an instrument, in form
reasonably satisfactory to the Trustee, wherein we, notwithstanding a legal
defeasance of our indebtedness in respect of Securities of any series, or any
portion of the principal amount thereof, shall assume the obligation which shall
be absolute and unconditional) to irrevocably deposit with the Trustee such
additional sums of money, if any, or additional U.S. Government Obligations, if
any, or any combination thereof, at such time or times, as shall be necessary,
together with the money and/or U.S. Government Obligations theretofore so
deposited, to pay when due the Principal of and premium, if any, and interest
due and to become due on such Securities or portions thereof; provided, however,
that such instrument may state that our obligation to make additional deposits
as aforesaid shall be subject to the delivery to us by the Trustee of a notice
asserting the deficiency accompanied by an opinion of an independent public
accountant of nationally recognized standing selected by the Trustee, showing
the calculation thereof.
Subsequent to a legal defeasance, our obligations to execute and deliver
Securities of such series for authentication, to set the terms of the Securities
of such series, to maintain an office or agency in respect of the Securities of
such series, to have moneys held for payment in trust, to register the transfer
or exchange of Securities of such series, to deliver Securities of such series
for replacement or to be canceled, to compensate and indemnify the Trustee and
to appoint a successor trustee, and its right to recover excess money held by
the Trustee shall survive until such Securities are no longer outstanding. After
such Securities are no longer outstanding, in the case of a legal defeasance,
only our obligations to compensate and indemnify the Trustee and our right to
recover excess money held by the Trustee shall survive. (Section 8.2 and 8.3)
MODIFICATION OF THE INDENTURE
The Indenture provides that we and the Trustee may amend or supplement the
Indenture or the Securities of any series without notice to or the consent of
any Holder:
- to cure any ambiguity, defect or inconsistency in the Indenture,
provided that such amendments or supplements do not materially and
adversely affect the interests of the Holders;
- to comply with Article 5 (which relates to the covenant discussed under
" -- Restrictions on Mergers and Sales of Assets") of the Indenture;
- to comply with any requirements of the SEC in connection with the
qualification of the Indenture under the Trust Indenture Act;
- to evidence and provide for the acceptance of appointment under the
Indenture with respect to the Securities of any or all series by a
successor Trustee;
- to establish the form or forms or terms of Securities of any series or
of the coupons appertaining to such Securities as permitted under the
Indenture;
- to provide for uncertificated or unregistered Securities and to make all
appropriate changes for such purpose;
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- to change or eliminate any provisions of the Indenture with respect to
all or any series of the Securities not then outstanding (and, if the
change is applicable to fewer than all those series of the Securities,
specifying the series to which the change is applicable), and to specify
the rights and remedies of the Trustee and the Holders of such
Securities; and
- to make any change that does not materially and adversely affect the
rights of any Holder. (Section 9.1)
The Indenture also contains provisions that allow us and the Trustee,
subject to certain conditions, without prior notice to any Holders, to amend the
Indenture and the outstanding Securities of any series with the written consent
of the Holders of a majority in aggregate principal amount of the Securities
then outstanding of all series affected by such supplemental indenture (all such
series voting as one class), and the Holders of a majority in aggregate
principal amount of the outstanding Securities of all series affected (all such
series voting as one class) by written notice to the Trustee may waive future
compliance by us with any provision of the Indenture or the Securities of such
series. Notwithstanding the foregoing provisions, without the consent of each
Holder affected thereby, an amendment or waiver, including a waiver pursuant to
Section 6.4 of the Indenture, may not:
- extend the stated maturity of the Principal of, or any sinking fund
obligation or any installment of interest on, the Holder's Security or
reduce the principal amount or the rate of interest of that Security
(including any amount in respect of original issue discount), or any
premium payable with respect to that Security, or adversely affect the
rights of such Holder under any mandatory redemption or repurchase
provision or any right of redemption or repurchase at the option of such
Holder, or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon the acceleration of
the maturity of that Security or any amount provable in bankruptcy, or
change any place of payment where, or the currency in which, any
Security or any premium or the interest on such Security is payable, or
impair the right to institute suit for the enforcement of any such
payment on or after the due date of such payment;
- reduce the percentage in principal amount of outstanding Securities of
the relevant series the consent of whose Holders is required for any
such supplemental indenture or for any waiver of compliance with certain
provisions of the Indenture or certain Defaults and their consequences
provided for in the Indenture; and
- waive a Default in the payment of Principal of or interest on any
Security of such Holder; or modify any of the provisions of the
Indenture governing supplemental indentures with the consent of
Securityholders, except to increase any such percentage or to provide
that certain other provisions of the Indenture cannot be modified or
waived without the consent of the Holder of each outstanding Security
affected by the modification.
A supplemental indenture which changes or eliminates any covenant or other
provision of the Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of Holders of Securities of such series with respect to such covenant or
provision, shall be deemed not to affect the rights under the Indenture of the
Holders of Securities of any other series or of the coupons appertaining to such
Securities. It shall not be necessary for the consent of any Holder under this
section of the Indenture to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof. After an amendment, supplement or waiver under
this section of the Indenture becomes effective, we or, at our request, the
Trustee shall give to the Holders affected thereby a notice briefly describing
the amendment, supplement or waiver. We or, at our request, the Trustee will
mail supplemental indentures to Holders upon request. Any failure of us to mail
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture or waiver. (Section 9.2)
INFORMATION CONCERNING THE TRUSTEE
An affiliate of The Bank of New York participates as a lender under certain
of our credit agreements.
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MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The following is a discussion of the material U.S. federal income tax
consequences of the ownership and disposition of the notes to an original
purchaser of the notes who is a Non-U.S. Holder (as defined below) and of the
exchange of original notes for exchange notes by a U.S. Holder (as defined
below). This discussion is based on the Internal Revenue Code of 1986, as
amended to the date hereof (the "Code"), on administrative pronouncements,
judicial decisions and existing and proposed Treasury Regulations, and
interpretations of the foregoing, changes to any of which subsequent to the date
of this offering circular may affect the tax consequences described herein,
possibly with retroactive effect.
The following does not discuss all of the tax consequences that may be
relevant to a holder in light of such holder's particular circumstances or to
holders subject to special rules, such as persons engaged in a trade or business
in the United States, persons who own, actually or constructively, 10% or more
of the total combined voting power of all of our classes of stock entitled to
vote or persons who have ceased to be United States citizens or to be taxed as
resident aliens. Prospective investors should consult their tax advisors with
regard to the application of U.S. federal tax laws to their particular
situations, as well as any tax consequences arising under the laws of any state,
local or foreign taxing jurisdiction.
As used herein, the term "Non-U.S. Holder" means a beneficial owner of a
note that is, for U.S. federal income tax purposes,
- A nonresident alien individual;
- A foreign corporation;
- A foreign estate or trust that in either case has a nonresident alien
fiduciary; or
- A foreign partnership.
PAYMENT OF INTEREST
Subject to the discussion below concerning backup withholding, payments of
interest on the notes by us or any paying agent of ours to any Non-U.S. Holder
will not be subject to U.S. federal withholding tax provided that (i) the
Non-U.S. Holder does not actually or constructively own 10% or more of our
voting stock, (ii) the Non-U.S. Holder is not a controlled foreign corporation
related to us for United States federal income tax purposes, (iii) the Non-U.S.
Holder is not a bank which acquired the notes in consideration for an extension
of credit made pursuant to a loan agreement entered into in the ordinary course
of business, and (iv) the certification requirement, as described below, has
been fulfilled with respect to the beneficial owner.
The certification requirement referred to above will be fulfilled if the
beneficial owner of a note certifies on Internal Revenue Service Form W-8 (or
W-8BEN) under penalties of perjury, that it is not a U.S. person and provides
its name and address, and (1) such beneficial owner files such Form W-8 (or
W-8BEN) with the withholding agent or, (2) in the case of a note held by a
securities clearing organization, bank or other financial institution holding
customers' securities in the ordinary course of its trade or business holding
the note on behalf of the beneficial owner, such financial institution files
with the withholding agent a statement that it has received the Form W-8 (or
W-8BEN) from the Non-U.S. Holder and furnishes the withholding agent with a copy
thereof. With respect to notes held by a foreign partnership, under current law,
the Form W-8 (or W-8BEN) may be provided by the foreign partnership. However,
unless a foreign partnership has entered into a withholding agreement with the
Internal Revenue Service, for interest and disposition proceeds paid with
respect to a note after December 31, 2000, the foreign partnership will be
required, in addition to providing an intermediary Form W-8 (or W-8IMY) to
attach an appropriate certification by each partner. Prospective investors,
including foreign partnerships and their partners, should consult their tax
advisors regarding possible additional reporting requirements.
The gross amount of payments of interest that do not qualify for the
exception from withholding described above will be subject to U.S. withholding
tax at a rate of 30% unless a treaty applies to reduce or eliminate withholding
and the Non-U.S. Holder properly certifies to its entitlement to such treaty
benefits.
43
<PAGE> 44
THE EXCHANGE
The exchange of original notes for exchange notes will not be a taxable
event for U.S. federal income tax purposes. A U.S. Holder will have the same
adjusted tax basis and holding period in an exchange note as it had in the
original note exchanged for such exchange note. The term "U.S. Holder" means a
beneficial owner of a note that is not a Non-U.S. Holder.
SALE, EXCHANGE OR DISPOSITION OF THE NOTES
Subject to the discussion below concerning backup withholding, a Non-U.S.
Holder of a note will not be subject to U.S. federal income tax on the gain
realized on the sale, exchange or other disposition of such note, unless such
holder is an individual who is present in the United States for 183 days or more
in the taxable year of disposition, and certain other conditions are met.
FEDERAL ESTATE TAXES
If a Non-U.S. Holder is an individual who at the time of death is not a
citizen or resident of the United States, the note held by such Non-U.S. Holder
at the time of such holder's death will not be subject to United States federal
estate tax, provided that (1) such holder does not actually or constructively
own 10% or more of the total combined voting power of all classes of our stock
entitled to vote and (2) the interest accrued on the note was not effectively
connected with such holder's conduct of a United States trade or business.
BACKUP WITHHOLDING AND INFORMATION REPORTING
We are required to report annually to the Internal Revenue Service and to
each Non-U.S. Holder any interest paid to the Non-U.S. Holder. Copies of these
information returns may also be made available under the provisions of a
specific treaty or other agreement to the tax authorities of the country in
which the Non-U.S. Holder resides.
Under current U.S. federal income tax, backup withholding tax of 31% will
not apply to payments of interest by us or any paying agent of ours on a note if
the certifications described above under "Payment of Interest" are received,
provided that we or such paying agent, as the case may be, do not have actual
knowledge that the payee is a U.S. person.
Under current Treasury Regulations, payments on the sale, exchange or other
disposition of a note made to or through a foreign office of a foreign broker
generally will not be subject to backup withholding or information reporting.
However, if such broker is for U.S. federal income tax purposes a U.S. person, a
controlled foreign corporation, a foreign person 50% or more of whose gross
income is effectively connected with a U.S. trade or business for a specified
three-year period or (generally in the case of payments made after December 31,
2000) a foreign partnership with certain connections to the United States, then
information reporting will be required unless the broker has in its records
documentary evidence that the beneficial owner is not a U.S. person and certain
other conditions are met or the beneficial owner otherwise establishes an
exemption. Backup withholding may apply to any payment that such broker is
required to report if the broker has actual knowledge that the payee is a U.S.
person. Payments to or through the U.S. office of a broker will be subject to
backup withholding and information reporting unless the holder certifies, under
penalties of perjury, that it is not a U.S. person or otherwise establishes an
exemption.
Recently promulgated Treasury Regulations, generally effective for payments
after December 31, 2000, provide certain presumptions under which a Non-U.S.
Holder will be subject to backup withholding and information reporting unless
such holder certifies as to its non-U.S. status or otherwise establishes an
exemption. In addition, the new Treasury Regulations change certain procedural
requirements relating to establishing a holder's non-U.S. status.
Non-U.S. Holders of notes should consult their tax advisors regarding the
application of information reporting and backup withholding in their particular
situations, the availability of an exemption therefrom, and the procedure for
obtaining such an exemption, if available. Any amounts withheld from a payment
to a Non-U.S. Holder under the backup withholding rules will be allowed as a
credit against such holder's U.S. federal income tax liability and may entitle
such holder to a refund, provided that the required information is furnished to
the Internal Revenue Service.
44
<PAGE> 45
PLAN OF DISTRIBUTION
We are not using any underwriters for this exchange offer. We are
bearing the expenses of the exchange.
Each broker-dealer that receives exchange notes for its own account in
the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of exchange notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of exchange notes received in exchange for original
notes where original notes were acquired as a result of market-making activities
or other trading activities. We have agreed that, for a period of 180 days after
the expiration date, we will make this prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any resale of exchange
notes received by it in exchange for original notes.
We will not receive any proceeds from any sale of exchange notes by
broker-dealers.
New notes received by broker-dealers for their own account in the
exchange offer may be sold from time to time in one or more transactions
- in the over-the-counter market,
- in negotiated transactions,
- through the writing of options on the exchange notes or
- a combination of those methods of resale,
at market prices prevailing at the time of resale, at prices related to
prevailing market prices or negotiated prices.
Any resale may be made
- directly to purchasers or
- to or through brokers or dealers who may receive compensation
in the form of commissions or concessions from any
broker-dealer or the purchasers of any exchange notes.
Any broker-dealer that resells exchange notes that were received by it
for its own account in the exchange offer and any broker or dealer that
participates in a distribution of those exchange notes may be considered to be
an "underwriter" within the meaning of the Securities Act. Any profit on any
resale of those exchange notes and any commission or concessions received by any
of those persons may be considered to be underwriting compensation under the
Securities Act. The letter of transmittal states that, by acknowledging that it
will deliver and by delivering a prospectus, a broker-dealer will not be
considered to admit that it is an "underwriter" within the meaning of the
Securities Act.
For a period of 180 days after the expiration date, we will promptly
send additional copies of this prospectus and any amendment or supplement to
this prospectus to any broker-dealer that requests those documents in the letter
of transmittal. We have agreed to pay all expenses incident to the exchange
offer, including the expenses of one counsel for the holders of the notes, other
than commissions or concessions of any brokers or dealers, and will indemnify
the holders of the notes, including any broker-dealers, against some
liabilities, including liabilities under the Securities Act.
LEGAL OPINIONS
The validity of the exchange notes will be passed upon for us by Milbank,
Tweed, Hadley & McCloy LLP.
45
<PAGE> 46
EXPERTS
The consolidated financial statements of Arrow Electronics, Inc. at December
31, 1999 and 1998, and for each of the three years in the period ended December
31, 1999, appearing in our Annual Report on Form 10-K for the fiscal year ended
December 31, 1999 and incorporated by reference herein, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report dated
February 16, 2000 incorporated in this prospectus by reference and are included
in reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
The combined financial statements of the Wyle Electronics Group as of
December 31, 1999 and for the year then ended incorporated in this prospectus by
reference and included in Arrow's Current Report on Form 8-K dated September 1,
2000 have been audited by PricewaterhouseCoopers LLP, independent accountants,
as stated in their report dated March 21, 2000, except for the second paragraph
of Note 1 which the date is August 7, 2000 and except for the fourth paragraph
of Note 8 which the date is August 4, 2000, and are included in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
46
<PAGE> 47
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION
OR TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST NOT RELY ON
ANY UNAUTHORIZED INFORMATION OR REPRESENTATIONS. THIS PROSPECTUS IS AN OFFER TO
SELL ONLY THE NOTES OFFERED HEREBY, BUT ONLY UNDER CIRCUMSTANCES AND IN
JURISDICTIONS WHERE IT IS LAWFUL TO DO SO. THE INFORMATION CONTAINED IN THIS
PROSPECTUS IS CURRENT ONLY AS OF ITS DATE.
TABLE OF CONTENTS
Page
----
Available Information ................................................ 3
Information Relating to Forward-Looking Statements ................... 4
Prospectus Summary ................................................... 5
Consolidated Ratios of Earnings to Fixed Charge ...................... 10
Arrow Electronics, Inc................................................ 11
Use of Proceeds ...................................................... 16
Capitalization ....................................................... 18
The Exchange Offer ................................................... 19
Description of Notes ................................................. 27
Material Federal Income Tax Consequences ............................. 43
Plan of Distribution ................................................. 45
Legal Opinions ....................................................... 45
Experts .............................................................. 46
UNTIL [ ], 2000 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
BROKER-DEALERS EFFECTING TRANSACTIONS IN THE EXCHANGE NOTES, WHETHER OR NOT
PARTICIPATING IN THE EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO A BROKER-DEALER'S OBLIGATION TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITER AND WITH RESPECT TO ANY UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
$1,075,000,000
ARROW ELECTRONICS, INC.
[ARROW LOGO]
OFFER TO EXCHANGE
$200,000,000 FLOATING EXCHANGE RATE NOTES
DUE OCTOBER 5, 2001,
$425,000,000 8.20% SENIOR EXCHANGE NOTES
DUE OCTOBER 1, 2003,
$250,000,000 8.70% SENIOR EXCHANGE NOTES
DUE OCTOBER 1, 2005
AND
$200,000,000 9.15% SENIOR EXCHANGE NOTES
DUE OCTOBER 1, 2010
PRELIMINARY PROSPECTUS
[ ], 2000
II-1
<PAGE> 48
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 9 of the Company's Certificate of Incorporation permits the
indemnification of officers and directors under certain circumstances to the
full extent that such indemnification may be permitted by law.
Such rights of indemnification are in addition to, and not in
limitation of, any rights to indemnification to which any officer or director of
the Registrant is entitled under the Business Corporation Law of the State of
New York (Sections 721 through 726), which provides for indemnification by a
corporation of its officers and directors under certain circumstances as stated
in the Business Corporation Law and subject to specified limitations set forth
in the Business Corporation Law.
The Company also maintains directors' and officers' liability insurance
coverage which insures directors and officers of the Company against certain
losses arising from claims made, and for which the Company has not provided
reimbursement, by reason of their being directors and officers of the Company or
its subsidiaries.
ITEM 21. EXHIBITS
See Exhibit Index.
ITEM 22. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing,
any increase or decrease in the volume of securities
offered (if the total dollar value of securities offered
would not exceed that which was registered) and any
deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which have not
been exchanged at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
II-2
<PAGE> 49
(c) Insofar as the indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of the issue.
(d) The undersigned Registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the
prospectus pursuant to Item 4, 10(b) or 11 of this Form, within one
business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt
means. This includes information contained in documents filed
subsequent to the effective date of the registration statement
through the date of responding to the request.
(e) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction,
and the company being acquired involved therein, that was not the
subject of and included in the registration statement when it became
effective.
II-3
<PAGE> 50
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-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Melville, New York, on November 30, 2000.
ARROW ELECTRONICS, INC.
By: /s/ Robert E. Klatell
------------------------------
Robert E. Klatell
Executive Vice President
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933 this
registration statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose name appears below
hereby constitutes and appoints each of Francis M. Scricco, Stephen P. Kaufman
and Robert E. Klatell, or any of them, each acting alone, such person's true and
lawful attorney-in-fact, with full power of substitution to sign for such person
and in such person's name and capacity indicated below, in connection with this
Registrant's registration statement on Form S-4, including to sign this
registration statement and any and all amendments to this registration
statement, including post-effective amendments, and any registration statement
filed pursuant to Rule 462(b) under the Securities Act, and to file the same
with the Securities and Exchange Commission, hereby ratifying and confirming
such person's signature as it may be signed by said attorneys-in-fact to any and
all amendments.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Stephen P. Kaufman Chairman of the Board November 30, 2000
___________________________
Stephen P. Kaufman
/s/ Francis M. Scricco President and Chief Executive Officer November 30, 2000
___________________________ (Principal Executive Officer)
Francis M. Scricco
/s/ Robert E. Klatell Executive Vice President, Secretary, and November 30, 2000
___________________________ Director
Robert E. Klatell
/s/ Sam R. Leno Senior Vice President November 30, 2000
___________________________ (Principal Financial Officer)
Sam R. Leno
/s/ Paul J. Reilly Vice President - Finance November 30, 2000
___________________________ (Principal Accounting Officer)
Paul J. Reilly
/s/ Daniel W. Duval Director November 30, 2000
___________________________
Daniel W. Duval
___________________________ Director
Carlo Giersch
/s/ John N. Hanson Director November 30, 2000
___________________________
John N. Hanson
</TABLE>
II-4
<PAGE> 51
<TABLE>
<S> <C> <C>
/s/ Roger King Director November 30, 2000
___________________________
Roger King
/s/ Karen Gordon Mills Director November 30, 2000
___________________________
Karen Gordon Mills
/s/ Barry W. Perry Director November 30, 2000
___________________________
Barry W. Perry
/s/ Richard S. Rosenbloom Director November 30, 2000
___________________________
Richard S. Rosenbloom
/s/ John C. Waddell Director November 30, 2000
___________________________
John C. Waddell
</TABLE>
II-5
<PAGE> 52
EXHIBIT INDEX
Exhibit
Number Exhibit Description
------ -------------------
4.1 Indenture between Arrow Electronics and The Bank of New York (formerly,
Bank of Montreal Trust Company), as trustee, dated as of January 15,
1997 (filed as Exhibit 4.1 to our registration statement on Form S-3,
No. 333-19431).**
4.2 Form of 8.20% Senior Exchange Note due October 1, 2003.*
4.3 Form of 8.70% Senior Exchange Note due October 1, 2005.*
4.4 Form of 9.15% Senior Exchange Note due October 1, 2010.*
4.5 Form of Floating Rate Exchange Note due October 5, 2001.*
4.6 Exchange and Registration Rights Agreement.*
4.7 Form of Exchange Agent Agreement.*
5.1 Opinion of Milbank, Tweed, Hadley & McCloy LLP with respect to the
validity of securities being offered by Arrow Electronics.*
8.1 Tax opinion of Milbank, Tweed, Hadley & McCloy LLP.*
12.1 Statement regarding computation of consolidated ratios of earnings to
fixed charges.*
23.1 Consent of Milbank, Tweed, Hadley & McCloy LLP (included in Exhibit
5.1).*
23.2 Consent of Ernst & Young LLP, independent accountants.*
23.3 Consent of PricewaterhouseCoopers LLP, independent auditors.*
24 Power of Attorney (included on the signature page of this registration
statement).*
25 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee under the Indenture
between the Company and The Bank of New York (as successor to Bank of
Montreal Trust Company) on Form T-1.*
--------------------
* Filed herewith
** Incorporated by Reference
