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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 8, 1997
REGISTRATION NO. 333-31087
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
FRUIT OF THE LOOM, INC.
(Exact name of registrant as specified in its charter)
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<S> <C>
DELAWARE 36-3361804
(State of Incorporation) (I.R.S. Employer Identification No.)
</TABLE>
5000 SEARS TOWER, 233 SOUTH WACKER DRIVE, CHICAGO, ILLINOIS 60606, (312)
876-1724
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
LARRY K. SWITZER
SENIOR EXECUTIVE VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
5000 SEARS TOWER, 233 SOUTH WACKER DRIVE, CHICAGO, ILLINOIS 60606, (312)
876-1724
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
With a copy to:
HOWARD S. LANZNAR
MARK D. WOOD
KATTEN MUCHIN & ZAVIS
525 WEST MONROE STREET, SUITE 1600, CHICAGO, ILLINOIS 60661, (312) 902-5200
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box: [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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PROSPECTUS
[FRUIT OF THE LOOM LOGO]
DEBT SECURITIES
PREFERRED STOCK
CLASS A COMMON STOCK
Fruit of the Loom, Inc. (the "Company") may from time to time offer (i)
debt securities ("Debt Securities") consisting of debentures, notes and/or other
evidences of indebtedness, in one or more series, (ii) shares of preferred
stock, par value $.01 per share ("Preferred Stock"), in one or more series, or
(iii) shares of Class A common stock, par value $.01 per share (including
preferred stock purchase rights) ("Class A Common Stock" and, collectively with
the Debt Securities and Preferred Stock, being hereinafter referred to as
"Securities"), or any combination of the foregoing, at an aggregate initial
offering price not to exceed $850,000,000, at prices and on terms to be
determined at or prior to the time of the sale.
Specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in an accompanying Prospectus Supplement (the
"Prospectus Supplement"), together with the terms of the offering of such
Securities and the initial price and the net proceeds to the Company from their
sale. Without limiting the foregoing, the Prospectus Supplement will set forth
the following: (i) in the case of Debt Securities, the specific designation,
aggregate principal amount, ranking as senior debt or subordinated debt,
authorized denomination, maturity, rate or method of calculation of interest and
dates for payment thereof, nature and terms of any security, any
exchangeability, conversion, redemption, prepayment or sinking fund provisions,
the trustee, additional covenants or events of default, tax consequences, and
the currency or currencies or currency unit or currency units in which
principal, premium, if any, or interest, if any, is payable; (ii) in the case of
Preferred Stock, the designation, number of shares, liquidation preference per
share, dividend rate (or method of calculation thereof), dates on which
dividends, if any, shall be payable and from which dividends shall accrue,
voting rights, if any, any redemption or sinking fund provisions, and any
conversion or exchange rights; and (iii) in the case of Class A Common Stock,
the number of shares.
The Class A Common Stock is listed on the New York Stock Exchange under the
symbol "FTL." Any Class A Common Stock sold pursuant to a Prospectus Supplement
will be listed on the New York Stock Exchange, subject to official notice of
issuance. The Company has not yet determined whether any of the Debt Securities
or Preferred Stock offered hereby will be listed on any exchange or
over-the-counter market. If the Company decides to seek listing of any such
Securities, the Prospectus Supplement relating thereto will disclose such
exchange or market.
The Company may sell the Securities directly, through agents, underwriters
or dealers, as designated from time to time, or through a combination of any
such methods. See "Plan of Distribution." If any agents of the Company or any
underwriters or dealers are involved in the sale of the Securities, the names of
such agents, underwriters or dealers and any applicable commissions and
discounts will be set forth in the Prospectus Supplement.
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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.
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THE DATE OF THIS PROSPECTUS IS AUGUST 8, 1997.
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (herein, together with all
amendments and exhibits, referred to as the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"). This Prospectus,
which constitutes a part of the Registration Statement, does not contain all of
the information set forth in the Registration Statement, certain parts of which
are omitted as permitted by the rules and regulations of the Commission. For
further information, reference is hereby made to the Registration Statement.
Statements made in this Prospectus as to the contents of any contract, agreement
or other document are not necessarily complete. With respect to each such
contract, agreement or other document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission, reference is made to the copy
so filed, and each such statement shall be deemed qualified in its entirety by
such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy and information statements, and other information
with the Commission. The Registration Statement, as well as such reports, proxy
and information statements, and other information filed by the Company with the
Commission, can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the regional offices of the Commission at 7 World Trade Center, Suite
1300, New York, New York 10048 and Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661. Copies of such material also can be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. The Class A Common Stock is listed
on the New York Stock Exchange, and reports and other information concerning the
Company may be inspected at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005. Certain other securities of the Company are
listed on the American Stock Exchange, and reports and other information
concerning the Company may also be inspected at the offices of the American
Stock Exchange, 86 Trinity Place, New York, New York 10006. Copies of reports,
proxy and information statements and other information regarding registrants
that file electronically (including the Company) are available on the
Commission's Web Site at http://www.sec.gov.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the year ended December
31, 1996;
(2) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997 and June 30, 1997;
(3) The description of the Class A Common Stock contained in the Company's
Registration Statement on Form 8-A filed on September 19, 1986 pursuant
to Section 12 of the Exchange Act and all amendments thereto and
reports filed for the purposes of updating such description; and
(4) The description of the preferred stock purchase rights contained in the
Company's Registration Statement on Form 8-A filed on March 11, 1996
pursuant to Section 12 of the Exchange Act and all amendments thereto
and reports filed for the purposes of updating such description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities shall be deemed incorporated
by reference in this Prospectus and a part hereof from the respective date of
filing of each such document. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
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The Company will provide, without charge, to each person to whom a copy of
this Prospectus has been delivered, upon the written or oral request of any such
person, a copy of any or all of the documents referred to above that have been
incorporated in this Prospectus by reference (other than exhibits thereto,
unless such exhibits are specifically incorporated by reference into the
information that this Prospectus incorporates). Requests for such copies should
be directed to Fruit of the Loom, Inc., 5000 Sears Tower, 233 South Wacker
Drive, Chicago, Illinois 60606, Attention: Secretary (telephone (312) 876-1724).
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
This Prospectus contains, any Prospectus Supplement will contain, and the
documents incorporated by reference herein contain or will contain certain
statements which describe the Company's beliefs concerning future business
conditions and the outlook for the Company, based on currently available
information. Wherever possible, the Company has identified these
"forward-looking" statements (as defined in Section 27A of the Securities Act)
by words such as "anticipates," "believes," "estimates," "expects" and similar
expressions. These forward-looking statements are subject to risks and
uncertainties which could cause the Company's actual results, performance or
achievements to differ materially from those expressed in, or implied by, these
statements. These risks and uncertainties include, but are not limited to, the
following: financial strength of the retail industry (particularly the mass
merchant channel), the level of consumer spending for apparel, the amount of
sales of the Company's activewear screenprint products, the competitive pricing
environment within the basic apparel segment of the apparel industry, the
Company's ability to develop new products, the Company's effective income tax
rate, the Company's ability to successfully move labor-intensive segments of the
manufacturing process offshore, the success of planned advertising, marketing
and promotional campaigns and international activities, and the resolution of
legal proceedings and other contingent liabilities. The Company assumes no
obligation to update publicly any forward-looking statements, whether as a
result of new information, future events or otherwise.
THE COMPANY
The Company is a marketing oriented, vertically integrated international
basic apparel company, emphasizing branded products for consumers ranging from
infants to senior citizens. The Company is one of the largest domestic producers
of men's, boys', women's and girls' underwear and of activewear for the
imprinted market, selling products principally under the FRUIT OF THE LOOM(R),
BVD(R), SCREEN STARS(R), BEST(TM), MUNSINGWEAR(R), WILSON(R), BOTANY 500(R) AND
JOHN HENRY(R) brand names. The Company also manufacturers and markets sports
licensed apparel bearing the names, tradenames and logos of the National
Football League, the National Basketball Association, Major League Baseball and
the National Hockey League, professional sports teams and many colleges and
universities in the United States, as well as the likenesses of certain popular
professional athletes, under the PRO PLAYER(R) and FANS GEAR(R) brands.
Additionally, the Company manufactures and markets casualwear, jeanswear under
the GITANO(R) brand name, and infants' and toddlers' apparel.
The Company is a fully integrated manufacturer, performing most of its own
spinning, knitting, cloth finishing, cutting, sewing and packaging. The Company
has established manufacturing operations in Honduras, El Salvador and Jamaica,
in addition to contracting with various third parties in Mexico and the
Caribbean, to assemble fabrics which have been manufactured and cut either in
the Company's U.S. operations or by external sources into finished goods for
sale principally in the United States. Management believes that the Company is
one of the lowest cost producers in each of the principal markets it serves.
Management considers the Company's primary strengths to be its excellent brand
recognition, cost-effective production, strong relationships with mass
merchandisers and discount chains and its ability to effectively service its
customer base. Management also believes that consumer awareness of the value and
excellent quality at competitive prices of FRUIT OF THE LOOM products will
benefit the Company in the current retail environment in which consumers are
more value conscious.
The Company extensively markets its activewear and, to a lesser extent,
other products outside the United States, principally in Europe, Canada, Japan
and Mexico. To serve these markets, the Company has
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manufacturing plants in Canada, the Republic of Ireland and Northern Ireland
(United Kingdom), as well as manufacturing operations in Morocco where cut
fabrics from the Republic of Ireland are sewn and returned to Europe for sale.
The Company was incorporated in 1985 under the laws of the State of
Delaware. Its principal executive offices are located at 5000 Sears Tower, 233
South Wacker Drive, Chicago, Illinois, 60606, and its telephone number is (312)
876-1724. Unless the context indicated otherwise, references to the Company mean
Fruit of the Loom, Inc. and its subsidiaries.
USE OF PROCEEDS
The Company does not currently have specific plans for the use of the net
proceeds from the sale of the Securities and currently anticipates that any such
net proceeds would be used for general corporate purposes, including, but not
limited to, working capital, capital expenditures, expansion of existing
properties, development of new projects, prepayment of outstanding indebtedness,
investments and acquisitions. When Securities are offered, the Prospectus
Supplement related thereto will set forth the Company's intended use for the net
proceeds received from the sale of such Securities. Pending the application of
the net proceeds, the Company expects to invest such proceeds in short-term,
interest-bearing instruments or other investment-grade securities.
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratios of earnings to fixed charges and
earnings to combined fixed charges and preferred stock dividends for the Company
and its consolidated subsidiaries for the periods indicated.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------
1997 1996 1995 1994 1993 1992
---------- ---- ---- ---- ---- ----
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Ratio of earnings to fixed charges(1).......... 2.2x 2.5x * 2.2x 5.3x 4.4x
Ratio of earnings to combined fixed charges and
preferred stock dividends(2)................. 2.2x 2.5x * 2.2x 5.3x 4.4x
</TABLE>
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* Earnings were insufficient to cover fixed charges for the year ended
December 31, 1995 by $247.2 million.
(1) The ratio of earnings to fixed charges is calculated by dividing (i) fixed
charges plus pretax earnings from continuing operations by (ii) fixed
charges. Fixed charges consist of interest expense, the interest component
of rent expense, amortization of deferred financing costs and guarantor debt
charges. Guarantor debt charges are the estimated interest related to the
Company's evaluation of its exposure under its guarantee of debt incurred by
Acme Boot Company, Inc., an affiliate of the Company. Approximately $0.6
million and $1.2 million of guarantor debt charges are included in fixed
charges for the year ended December 31, 1996 and the six months ended June
30, 1997, respectively.
(2) The ratio of earnings to combined fixed charges and preferred stock
dividends is calculated by dividing (i) fixed charges plus pretax earnings
from continuing operations by (ii) fixed charges plus preferred stock
dividends. The Company had no shares of preferred stock outstanding, and no
dividends were declared or paid, during any of the periods indicated.
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DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate ("Offered Debt Securities"). The particular terms of the Offered Debt
Securities and the extent to which such general provisions may apply will be
described in the Prospectus Supplement relating to such Offered Debt Securities.
The Debt Securities will be general obligations of the Company, and each
series of Offered Debt Securities will constitute either senior debt securities
or subordinated debt securities. In the case of senior debt securities ("Senior
Debt Securities"), the Debt Securities will be issued under an Indenture (the
"Senior Indenture") to be executed by the Company and a trustee under the Senior
Indenture to be named in the applicable Prospectus Supplement. In the case of
subordinated debt securities ("Subordinated Debt Securities"), the Debt
Securities will be issued under an Indenture (the "Subordinated Indenture") to
be executed by the Company and a trustee under the Subordinated Indenture to be
named in the applicable Prospectus Supplement. The Senior Indenture and the
Subordinated Indenture are sometimes hereinafter referred to herein individually
as an "Indenture" and collectively as the "Indentures." The trustee under each
Indenture (and any successor thereto under each Indenture) is referred to herein
as the "Trustee." The statements under this caption relating to the Debt
Securities and the Indentures are summaries only and do not purport to be
complete. Such summaries make use of terms defined in the Indentures. Wherever
such terms are used herein or particular provisions of the Indentures are
referred to, such terms or provisions, as the case may be, are incorporated by
reference as part of the statements made herein, and such statements are
qualified in their entirety by such reference. Copies of the proposed forms of
the Senior Indenture and the Subordinated Indenture have been filed as exhibits
to the Registration Statement, of which this Prospectus is a part.
PROVISIONS APPLICABLE TO BOTH SENIOR AND SUBORDINATED DEBT SECURITIES
General. The Indentures do not limit the aggregate principal amount of Debt
Securities which can be issued thereunder and provide that Debt Securities may
be issued thereunder from time to time in one or more series, each in an
aggregate principal amount authorized by the Company prior to issuance. The
applicable Prospectus Supplement will set forth any limitations on the amount of
other indebtedness or securities which may be issued by the Company.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for the following terms of the Offered
Debt Securities: (i) the title and aggregate principal amount; (ii) the maturity
date or dates; (iii) the interest rate or rates (which may be fixed or variable)
per annum, if any, or the method of determining such rate or rates; (iv) the
date or dates from which such interest, if any, will accrue and the date or
dates on which such interest, if any, will be payable, the date on which payment
of such interest, if any, will commence and the record dates for determining
interest payments, if any; (v) the terms for redemption or early payment, if
any, including any mandatory or optional sinking fund or analogous provision;
(vi) whether such Offered Debt Securities will be secured or unsecured and, if
secured, the nature and terms of the security, (vii) the terms for conversion or
exchange, if any; (viii) the classification as Senior Debt Securities or
Subordinated Debt Securities; (ix) in the case of Offered Debt Securities
offered to foreign investors, whether such Offered Debt Securities will be
issued in fully registered form or in bearer form or any combination thereof;
(x) whether such Offered Debt Securities will be issued in the form of one or
more global securities and whether such global securities are to be issuable in
temporary global form or permanent global form; (xi) if other than U.S. dollars,
the currency or currencies or currency unit or units in which such Offered Debt
Securities will be denominated and in which the principal of, and premium, if
any, and interest, if any, thereon will be payable; (xii) whether, and the terms
and conditions on which, the Company or a holder may elect that, or the other
circumstances under which, payment of principal of, or premium, if any, or
interest, if any, is to be made in a currency or currencies or currency unit or
units other than that in which such Offered Debt Securities are denominated;
(xiii) any Events of Default (as defined below) with respect to the Offered Debt
Securities if not otherwise set forth under "Events of Default" below; (xiv) any
additions to, or changes in, the covenants which apply to the Offered Debt
Securities; (xv) a summary of the tax consequences to holders under United
States laws of owning the Offered
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Debt Securities, including the possible imposition of withholding taxes; (xvi)
the securities exchange or market, if any, on which the Offered Debt Securities
will be listed; and (xvii) any other specific terms of the Offered Debt
Securities.
Offered Debt Securities may be sold at a discount (which may be
substantial) below their stated principal amount or bear no interest or interest
at a rate which at the time of issuance is below market rates, or both.
No service charge will be made to any holder for any registration of
transfer or exchange of the Offered Debt Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
If any of the Offered Debt Securities are sold for any foreign currency or
currency unit or if the principal of, or premium, if any, or interest, if any,
on, any of the Offered Debt Securities is payable in any foreign currency or
currency unit, the restrictions, elections, tax consequences, specific terms and
other information with respect to such Offered Debt Securities and such foreign
currency or currency unit will be set forth in the Prospectus Supplement
relating thereto.
Events of Default. Unless otherwise provided in the Prospectus Supplement
with respect to any series of Offered Debt Securities, the following are "Events
of Default" under each Indenture with respect to each series of Debt Securities
issued under such Indenture: (a) failure for 30 days to pay any interest on any
Debt Security of such series when due; (b) failure to pay principal of (or
premium, if any, on) any Debt Security of such series when due; (c) failure for
60 days to deposit any mandatory sinking fund payment, when due, in respect of
the Debt Securities of such series; (d) failure for 90 days after written notice
as provided in the Indenture to perform any other covenant of the Company in the
Indenture (other than a covenant included in the Indenture for the benefit of a
series of Debt Securities other than such series); (e) certain events of
bankruptcy, insolvency or reorganization; and (f) any other Event of Default as
may be specified in the Prospectus Supplement with respect to the Offered Debt
Securities. If an Event of Default with respect to any outstanding series of
Debt Securities occurs and is continuing, either the Trustee or the holders of
at least 25% in principal amount of the outstanding Debt Securities of such
series (in the case of an Event of Default described in clause (a), (b), (c) or
(f) above) or at least 25% in principal amount of all outstanding Debt
Securities under the applicable Indenture (in the case of other Events of
Default) may declare the principal amount and all accrued but unpaid interest of
all the Debt Securities of the applicable series (or of all outstanding Debt
Securities under the applicable Indenture, as the case may be) to be due and
payable immediately. At any time after a declaration of acceleration with
respect to Debt Securities of any series (or of all outstanding Debt Securities
under the applicable Indenture, as the case may be) has been made, but before a
judgment or decree for payment of money has been obtained, the holders of a
majority in principal amount of the outstanding Debt Securities of such series
(or of all outstanding Debt Securities under the applicable Indenture, as the
case may be) may, under certain circumstances, rescind and annul such
acceleration. Depending on the terms of other indebtedness of the Company
outstanding from time to time, an Event of Default under an Indenture may give
rise to cross defaults on such other indebtedness of the Company.
Each Indenture provides that the Trustee will, within 90 days after the
occurrence of a default in respect of any series of Debt Securities, give to the
holders of the Debt Securities of such series notice of all uncured and unwaived
defaults known to it; provided, however, that except in the case of a default in
the payment of the principal of, or premium, if any, or interest, if any, on, or
any sinking fund installment with respect to, any Debt Securities of such
series, the Trustee will be protected in withholding such notice if it in good
faith determines that the withholding of such notice is in the best interest of
the holders of the Debt Securities of such series. For the purpose of this
provision, "default" with respect to Debt Securities of any series means any
event which is, or after notice or lapse of time or both would become, an Event
of Default with respect to the Debt Securities of such series.
The holders of a majority in principal amount of the outstanding Debt
Securities of any series (or, in certain cases, all outstanding Debt Securities
under the applicable Indenture) have the right, subject to certain limitations,
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee with respect to the Debt Securities of such
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series (or of all outstanding Debt Securities under the applicable Indenture).
Each Indenture provides that in case an Event of Default shall occur and be
continuing, the Trustee shall exercise such of its rights and powers under the
applicable Indenture and use the same degree of care and skill in its exercise
as a prudent person would exercise or use under the circumstances in the conduct
of his own affairs. Subject to such provisions, the Trustee will be under no
obligation to exercise any of its rights or powers under either Indenture at the
request of any of the holders of the Debt Securities unless they shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request.
The holders of a majority in principal amount of the outstanding Debt
Securities of any series (or, in certain cases, all outstanding Debt Securities
under the applicable Indenture) may, on behalf of the holders of all Debt
Securities of such series (or of all outstanding Debt Securities under the
applicable Indenture), waive any past default under the applicable Indenture,
except a default in the payment of the principal of, or premium, if any, or
interest, if any, on, any Debt Security of such series (or of all outstanding
Debt Securities under the applicable Indenture) or in respect of a provision
which under the applicable Indenture cannot be modified or amended without the
consent of the holder of each outstanding Debt Security affected. The holders of
a majority in principal amount of the outstanding Debt Securities affected
thereby may, on behalf of the holders of all such Debt Securities, waive
compliance by the Company with certain restrictive provisions of the Indentures.
The Company is required to furnish to the Trustee annually a statement as
to the performance by the Company of certain of its obligations under each
Indenture and as to any default in such performance.
Modification of Indentures. The Company and the Trustee may, with the
consent of the holders of a majority in principal amount of all series of
outstanding Debt Securities under the Indenture affected thereby, enter into
supplemental indentures for the purpose of amending or modifying, in any manner,
provisions of such Indenture or any supplemental indenture modifying the rights
of holders of such series of Debt Securities; provided, however, that no such
supplemental indenture, without the consent of the holder of each outstanding
Debt Security affected thereby, shall, among other things, (a) change the stated
maturity date of the principal of, or any installment of interest on, any Debt
Security, (b) reduce the principal amount of, or the premium, if any, or
interest, if any, on, any Debt Security, (c) change the place or currency or
currencies or currency unit or units of payments of principal of, or premium, if
any, or interest, if any, on, any Debt Security, (d) impair the right to
institute suit for the enforcement of any payment on or with respect to any Debt
Security, or (e) reduce the percentage in principal amount of outstanding Debt
Securities the consent of whose holders is required for execution of any such
supplemental indenture or for waiver of compliance with certain provisions of
such Indenture or for waiver of certain defaults.
Each Indenture provides that the Company and the Trustee may, without the
consent of any holders of Debt Securities, enter into supplemental indentures
for the purposes, among other things, of(a) adding to the Company's covenants,
(b) adding additional Events of Default, (c) establishing the form or terms of
Debt Securities or (d) curing ambiguities or inconsistencies in the applicable
Indenture, any supplemental indenture or in the Debt Securities of any series,
provided such action to cure ambiguities or inconsistencies shall not adversely
affect the interests of the holders of the Debt Securities in any material
respect.
Consolidation, Merger and Sale of Assets. The Company may not consolidate
with or merge into, or convey, transfer or lease its assets substantially as an
entirety to, any person, unless (a) the person formed by such consolidation or
into which the Company is merged or which acquires or leases the assets of the
Company substantially as an entirety is a corporation, partnership, limited
liability company or trust organized under the laws of any United States
jurisdiction, (b) the person formed by such consolidation or into which the
Company is merged or which acquires or leases the assets of the Company
substantially as an entirety assumes by supplemental indenture the Company's
obligations in respect of the Debt Securities and under the Indentures, (c)
after giving effect to the transaction, no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default, shall
have occurred and be continuing, and (d) certain other conditions are met. Upon
compliance with these provisions by a successor person, the
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Company will (except in the case of a lease) be relieved of its obligations
under the Indentures and the Debt Securities.
Other Covenants. The Prospectus Supplement relating to the Offered Debt
Securities will describe other specific affirmative and negative covenants from
which the Offered Debt Securities will benefit. The Company may covenant, among
other things, to deliver to holders of the Offered Debt Securities reports filed
by the Company pursuant to the Exchange Act and to execute additional
instruments necessary to fulfill its obligations under the Indenture and the
Offered Debt Securities. Each Indenture or indenture supplemental thereto may
also impose restrictions on indebtedness, guarantees, issuance of preferred
stock, liens, investments, acquisitions, dividend payments and/or transactions
with affiliates. Unless otherwise indicated in a Prospectus Supplement, the Debt
Securities will not benefit from any covenant or other provision that would
afford holders of such Debt Securities special protection in the event of a
highly leveraged transaction or change of control involving the Company.
Discharge and Defeasance. The Company may satisfy and discharge its
obligations under each Indenture, other than its obligation to pay the principal
of, and premium, if any, and interest, if any, on, the Debt Securities of any
series and certain other obligations, if it (i) irrevocably deposits or causes
to be irrevocably deposited with the Trustee as trust funds an amount, in money
or U.S. government obligations maturing as to principal and interest, sufficient
to pay the principal of, and premium, if any, and interest, if any, on, and any
mandatory sinking funds in respect of, all outstanding Debt Securities of such
series on the stated maturity date of such payments or on any redemption date
and (ii) complies with any additional conditions specified to be applicable with
respect to the covenant defeasance of Debt Securities of such series.
The terms of any series of Debt Securities may also provide for legal
defeasance pursuant to each Indenture. In such case, if the Company (i)
irrevocably deposits or causes to be irrevocably deposited money or U.S.
government obligations as described above, (ii) makes a request to the Trustee
to be discharged from its obligations on the Debt Securities of such series and
(iii) complies with any additional conditions specified to be applicable with
respect to legal defeasance of Debt Securities of such series, then the Company
shall be deemed to have paid and discharged the entire indebtedness on all the
outstanding Debt Securities of such series, and the obligations of the Company
under the applicable Indenture and the Debt Securities of such series to pay the
principal of, and premium, if any, and interest, if any, on, the Debt Securities
of such series shall cease, terminate and be completely discharged, and the
holders thereof shall thereafter be entitled only to payment out of the money or
U.S. government obligations so deposited with the Trustee, unless the Company's
obligations are revived and reinstated because the Trustee is unable to apply
such trust fund by reason of any legal proceeding, order or judgment.
Form, Exchange, Registration and Transfer. Each Debt Security will be
represented by either a global security (a "Global Debt Security") registered in
the name of The Depository Trust Company (the "Depositary") or a nominee of the
Depositary (each such Debt Security represented by a Global Debt Security being
herein referred to as a "Book-Entry Debt Security") or a certificate issued in
definitive registered form (a "Certificated Debt Security"), as set forth in the
applicable Prospectus Supplement. Except as set forth below, Book-Entry Debt
Securities will not be issuable in certificated form.
Certificated Debt Securities may be transferred or exchanged at the
Trustee's office or paying agencies in accordance with the terms of the
Indenture. No service charge will be made to any holder for any transfer or
exchange of Certificated Debt Securities, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. Certificated Debt Securities will not be exchangeable for
Book-Entry Debt Securities.
The transfer of Certificated Debt Securities and the right to the principal
of, and premium, if any, and interest, if any, on, such Certificated Debt
Securities may be effected only by surrender of the old certificate representing
such Certificated Debt Securities and either reissuance by the Company or the
Trustee of the old certificate to the new holder or the issuance by the Company
or the Trustee of a new certificate to the new holder.
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Each Global Debt Security representing Book-Entry Debt Securities will be
deposited with, or on behalf of, the Depositary and registered in the name of
the Depositary or a nominee of the Depositary. Except as set forth below,
Book-Entry Debt Securities will not be exchangeable for Certificated Debt
Securities and will not otherwise be issuable as Certificated Debt Securities.
Ownership of beneficial interests in Book-Entry Debt Securities will be
limited to persons that have accounts with the Depositary for the related Global
Debt Security ("Participants") or persons that may hold interests through
Participants. Upon deposit of a Global Debt Security, the Depositary will
credit, on its book-entry registration and transfer system, the Participants'
accounts with the respective principal amounts of the Book-Entry Debt Securities
represented by such Global Debt Security beneficially owned by such
Participants. The accounts to be credited shall be designated by any dealers,
underwriters or agents participating in the distribution of such Book-Entry Debt
Securities. Ownership of Book-Entry Debt Securities will be shown on, and the
transfer of such ownership interests will be effected only through, records
maintained by the Depositary for the related Global Debt Security (with respect
to interests of Participants) and on the records of Participants (with respect
to interests of persons holding through Participants). The laws of some states
may require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the ability
to own, transfer or pledge beneficial interests in Book-Entry Debt Securities.
So long as the Depositary for a Global Debt Security, or its nominee, is
the registered owner of such Global Debt Security, the Depositary or such
nominee, as the case may be, will be considered the sole owner or holder of the
Book-Entry Debt Securities represented by such Global Debt Security for all
purposes under the Indenture. Except as set forth below, owners of beneficial
interests in Book-Entry Debt Securities will not be entitled to have such
securities registered in their names, will not receive or be entitled to receive
physical delivery of a certificate in definitive form representing such
securities and will not be considered the owners or holders thereof under the
Indenture for any purpose, including with respect to the giving of any
directions, approvals or instructions to the Trustee thereunder. As a result,
the ability of a person having a beneficial interest in Book-Entry Securities
represented by a Global Debt Security to pledge such interest to persons or
entities that do not participate in the Depositary's system, or to otherwise
take actions with respect to such interest, may be affected by the lack of a
physical certificate evidencing such interest. Accordingly, each person owning
Book-Entry Debt Securities must rely on the procedures of the Depositary for the
related Global Debt Security and, if such person is not a Participant, on the
procedures of the Participant through which such person owns its interest, to
exercise any rights of a holder under the Indenture.
The Company understands that, under existing industry practice, if the
Company requests any action of holders, or an owner of a beneficial interest in
a Global Debt Security desires to give any notice or take any action a holder is
entitled to give or take under the Indenture, the Depositary will authorize the
Participants on whose behalf it holds a Global Debt Security to give such notice
or take such action, and Participants will authorize beneficial owners owning
through such Participant to give such notice or take such action or will
otherwise act upon the instructions of beneficial owners owning through them.
The Indentures provide that the Company, the Trustee and their respective agents
will treat as the holder of a Debt Security the persons specified in a written
statement of the Depositary with respect to such Global Debt Security for
purposes of obtaining any consents or directions required to be given by holders
of the Debt Securities pursuant to the Indentures.
Payments of principal of, and premium, if any, and interest, if any, on,
Book-Entry Debt Securities will be made by the Trustee to the Depositary or its
nominee, as the case may be, as the registered holder of the related Global Debt
Security. Under the terms of the Indentures, the Company and the Trustee may
treat the persons in whose names the Offered Debt Securities, including the
Global Debt Security, are registered as the owners thereof for the purpose of
receiving such payments and for any and all other purposes whatsoever.
Consequently, none of the Company, the Trustee or any other agent of the Company
or any agent of the Trustee will have any responsibility or liability for any
aspect of the records relating to, or payments made on account of beneficial
ownership interest in, such Global Debt Security or for maintaining, supervising
or reviewing any records relating to such beneficial ownership interests.
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The Company expects that the Depositary, upon receipt of any payment of
principal of, or premium, if any, or interest, if any, on, a Global Debt
Security, will immediately credit Participants' accounts with payments in
amounts proportionate to the respective amounts of Book-Entry Debt Securities
held by each such Participant as shown on the records of such Depositary. The
Company also expects that payments by Participants to owners of beneficial
interests in Book-Entry Debt Securities held through such Participants will be
governed by standing customer instructions and customary practices, as is now
the case with the securities held for the accounts of customers in bearer form
or registered in "street name," and will be the responsibility of the
Participants.
If (i) the Depositary is at any time unwilling or unable to continue as
Depositary or ceases to be a clearing agency registered under the Exchange Act,
and a successor depositary registered as a clearing agency under the Exchange
Act is not appointed by the Company within 90 days, (ii) the Company, at its
option, notifies the Trustee that it elects to cause the issuance of
Certificated Debt Securities under an Indenture or (iii) there shall be an Event
of Default with respect to the Debt Securities represented by the Global Debt
Security, then, upon surrender by the Depositary of the Global Debt Security,
Certificated Debt Securities will be issued to each person that the Depositary
identifies as the beneficial owner of the Book-Entry Debt Securities represented
by the Global Debt Security.
Neither the Company nor the Trustee shall be liable for any delay by the
Depositary or any Participant or any person that may hold interests through a
Participant in identifying the beneficial owners of the Book-Entry Debt
Securities, and the Company and the Trustee may conclusively rely on, and shall
be protected in relying on, instructions from the Depositary for all purposes
(including with respect to the registration and delivery, and the respective
principal amounts, of the Book-Entry Debt Securities to be issued).
The foregoing information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the Company
believes to be reliable. The Company takes no responsibility for the accuracy of
such information or the performance by the Depositary or its Participants of
their respective obligations as described hereunder or under the rules and
procedures governing their respective operations.
Each Indenture requires that payments in respect to the Book-Entry Debt
Securities represented by a Global Debt Security (including principal, premium,
if any, and interest, if any) be made by wire transfer of immediately available
funds to the accounts specified by the Depositary. With respect to Offered Debt
Securities represented by Certificated Debt Securities, the Company will make
all payments of principal, premium, if any, and interest, if any, by mailing a
check to each such holder's registered address.
Meetings. The Indentures contain provisions for convening meetings of the
holders of Debt Securities of a series. A meeting may be called at any time by
the Trustee and also, upon request, by the Company or the holders of at least
10% in principal amount of the outstanding Debt Securities of any series, in any
such case upon proper notice. Except for any consent that must be given by the
holder of each of the outstanding Debt Securities affected thereby, as described
under "Modification of Indentures" above, any resolution presented at a meeting
or adjourned meeting at which a quorum is present may be adopted by the
affirmative vote of the holders of a majority in principal amount of the
outstanding Debt Securities of that series; provided, however, that except for
any consent that must be given by the holder of each outstanding Debt Security
affected thereby, as described under "Modification of Indentures" above, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by the
holders of a specified percentage which is less than a majority in principal
amount of the outstanding Debt Securities of a series may be adopted at a
meeting or adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the holders of such specified percentage in principal amount
of the outstanding Debt Securities of that series. Subject to the proviso set
forth above, any resolution passed or decision taken at any meeting of holders
of Debt Securities of any series duly held in accordance with the Indenture will
be binding on all holders of Debt Securities of that series. The quorum at any
meeting called to adopt a resolution, and at any reconvened meeting, will be
persons holding or representing a majority in principal amount of the
outstanding Debt Securities of a series.
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The Trustee. Each Indenture contains certain limitations on the right of
the Trustee, as a creditor of the Company, to obtain payment of claims in
certain cases and to realize on certain property received with respect to any
such claims, as security or otherwise. The Trustee is permitted to engage in
other transactions, except that, if it acquires any conflicting interest (as
defined), it must eliminate such conflict or resign. The Trustee may also be a
trustee under other indentures of the Company under which outstanding senior or
subordinated debt securities of the Company have been issued.
PROVISIONS APPLICABLE SOLELY TO SENIOR DEBT SECURITIES
Senior Debt Securities will be issued under the Senior Indenture and will
rank pari passu with all other unsubordinated debt of the Company.
PROVISIONS APPLICABLE SOLELY TO SUBORDINATED DEBT SECURITIES
General. Subordinated Debt Securities will be issued under the Subordinated
Indenture and will rank pari passu with certain other subordinated debt of the
Company that may be outstanding from time to time and junior to all Senior
Indebtedness (as defined below) of the Company (including any Senior Debt
Securities) that may be outstanding from time to time.
Subordination. The payment of the principal of, and premium, if any, and
interest, if any, on, the Subordinated Debt Securities is expressly
subordinated, to the extent and in the manner set forth in the Subordinated
Indenture, in right of payment to the prior payment in full of all Senior
Indebtedness of the Company.
In the event of any dissolution or winding up or total or partial
liquidation or reorganization of the Company, whether in bankruptcy,
reorganization, insolvency, receivership or similar proceeding, the holders of
Senior Indebtedness will be entitled to receive payment in full of all amounts
due or to become due on or in respect of all Senior Indebtedness before the
holders of the Subordinated Debt Securities are entitled to receive any payment
on account of principal of, or premium, if any, or interest, if any, on, the
Subordinated Debt Securities.
Unless otherwise indicated in the applicable Prospectus Supplement, no
payment in respect of the Subordinated Debt Securities shall be made if, at the
time of such payment, there exists a default in payment of all or any portion of
any Senior Indebtedness and such default shall not have been cured or waived in
writing or the benefits of such subordination in the Subordinated Indenture
shall not have been waived in writing by or on behalf of the holders of such
Senior Indebtedness. In addition, during the continuation of any event of
default (other than a default referred to in the immediately preceding sentence)
with respect to any Senior Indebtedness permitting the holders to accelerate the
maturity thereof and upon written notice thereof given to the Trustee, with a
copy to the Company (the delivery of which shall not affect the validity of the
notice to the Trustee), by any holder of Senior Indebtedness or its
representative, then, unless and until such Event of Default shall have been
cured or waived or shall have ceased to exist, no payment shall be made by the
Company with respect to the principal of, or interest on, the Subordinated Debt
Securities or to acquire any of the Subordinated Debt Securities or on account
of the redemption provisions for the Subordinated Debt Securities; provided,
however, that if the holders of the Senior Indebtedness to which the default
relates have not declared such Senior Indebtedness to be immediately due and
payable within 180 days after the occurrence of such default (or shall have
declared such Senior Indebtedness to be immediately due and payable and within
such period have rescinded such declaration of acceleration), then the Company
shall resume making any and all required payments in respect of the Subordinated
Debt Securities (including any missed payments). Only one such payment blockage
period may be commenced within any consecutive 365-day period with respect to
the Subordinated Debt Securities. No event of default which existed or was
continuing on the date of the commencement of any 180-day payment blockage
period with respect to the Senior Indebtedness initiating such payment blockage
period shall be, or be made, the basis for the commencement of a second payment
blockage period by a holder or representative of such Senior Indebtedness,
whether or not within a period of 365 consecutive days, unless such event of
default shall have been cured or waived for a period of not less than 90
consecutive days.
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The term "Senior Indebtedness" is defined in the Subordinated Indenture as
Indebtedness, either outstanding as of the date of the Subordinated Indenture or
issued subsequent to the date of the Subordinated Indenture, which is not
subordinated by its terms in right of payment to any other Indebtedness of the
Company or otherwise is senior in right of payment to the Subordinated Debt
Securities, provided that the term "Senior Indebtedness" shall not include (i)
Indebtedness of the Company to any Subsidiary for money borrowed or advanced
from such Subsidiary or (ii) amounts owed (except to banks and other financial
institutions) for goods, materials or services purchased in the ordinary course
of business.
The term "Indebtedness," as applied to any person, is defined in the
Subordinated Indenture as all indebtedness, whether or not represented by bonds,
debentures, notes or other securities, created or assumed by such person for the
repayment of money borrowed, and obligations, computed in accordance with
generally accepted accounting principles, as lessee under leases that should, in
accordance with generally accepted accounting principles, be treated as capital
leases. All Indebtedness secured by a lien upon property owned by the Company or
any Subsidiary and upon which Indebtedness such person customarily pays
interest, although such person has not assumed or become liable for the payment
of such Indebtedness, shall be deemed to be Indebtedness of such person. All
Indebtedness of others guaranteed as to payment of principal by such person or
in effect guaranteed by such person through a contingent agreement to purchase
such Indebtedness shall also be deemed to be Indebtedness of such person.
Indebtedness (i) shall not include accounts payable to trade creditors or other
indebtedness for goods or services created or assumed in the ordinary course of
business and (ii) shall include only the principal component of any obligation
described in this definition.
If Subordinated Debt Securities are issued under the Subordinated
Indenture, the aggregate principal amount of Senior Indebtedness outstanding as
of a recent date will be set forth in the applicable Prospectus Supplement. The
applicable Prospectus Supplement will also set forth any limitation on the
issuance by the Company of any additional Senior Indebtedness.
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DESCRIPTION OF CAPITAL STOCK
GENERAL
The following description of the capital stock of the Company is qualified
in its entirety by reference to the Company's Restated Certificate of
Incorporation, as amended (the "Restated Certificate"), which has been filed
with, and is available from the offices of, the Commission as referred to under
"Available Information."
The Restated Certificate authorizes the issuance of 265,000,000 shares of
capital stock, of which 35,000,000 shares are designated preferred stock, par
value $.01 per share ("Preferred Stock"), 200,000,000 shares are designated
Class A Common Stock, par value $.01 per share ("Class A Common Stock") and
30,000,000 shares are designated Class B Common Stock, $.01 par value per share
("Class B Common Stock" and, collectively with Class A Common Stock, "Common
Stock"). As of July 25, 1997, 67,490,795 shares of Class A Common Stock and
5,790,576 shares of Class B Common Stock were issued and outstanding. As of July
25, 1997, there were 1,500,000 shares of Series A Junior Participating Preferred
Stock authorized, none of which were issued and outstanding, nor were any shares
of any other class or series of Preferred Stock issued and outstanding. All
outstanding shares of Common Stock are fully paid and nonassessable. Class A
Common Stock and Preferred Stock offered hereby will, upon full payment of the
purchase price therefor, likewise be fully paid and nonassessable.
PREFERRED STOCK
Under the Restated Certificate, the Board of Directors of the Company may
provide for the issuance of Preferred Stock from time to time in one or more
series, and the rights, preferences, privileges and restrictions, including
dividend rights, voting rights, conversion rights, terms of redemption and
liquidation preferences, of the Preferred Stock of each series will be fixed or
designated by the Board of Directors pursuant to a certificate of designation,
preferences and rights without any further vote or action by the Company's
stockholders.
The description of Preferred Stock set forth below and the description of
the terms of a particular series of Preferred Stock that will be set forth in a
Prospectus Supplement do not purport to be complete and are qualified in their
entirety by reference to the Restated Certificate and the certificate of
designation, preferences and rights relating to such series. The specific terms
of a particular series of Preferred Stock offered hereby will be described in a
Prospectus Supplement relating to such series and will include the following:
(i) the maximum number of shares to constitute the series and the
distinctive designation thereof;
(ii) the annual dividend rate, if any, on shares of the series,
whether such rate is fixed or variable or both, the date or dates from
which dividends will begin to accrue or accumulate and whether dividends
will be cumulative;
(iii) whether the shares of the series will be redeemable and, if so,
the price at, and the terms and conditions on which, the shares of the
series may be redeemed, including the time during which shares of the
series may be redeemed and any accumulated dividends thereon that the
holders of shares of the series shall be entitled to receive upon the
redemption thereof;
(iv) the liquidation preference, if any, applicable to shares of the
series;
(v) whether the shares of the series will be subject to operation of a
retirement or sinking fund and, if so, the extent and manner in which any
such fund shall be applied to the purchase or redemption of the shares of
the series for retirement or for other corporate purposes, and the terms
and provisions relating to the operation of such fund;
(vi) the terms and conditions, if any, on which the shares of the
series shall be convertible into, or exchangeable for, shares of any other
class or classes of capital stock of the Company or another corporation or
any series of any other class or classes, or of any other series of the
same class, including
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the price or prices or the rate or rates of conversion or exchange and the
method, if any, of adjusting the same;
(vii) the voting rights, if any, of the shares of the series; and
(viii) any other preferences and relative, participating, optional or
other special rights or qualifications, limitations or restrictions
thereof.
DESCRIPTION OF PREFERRED STOCK PURCHASE RIGHTS
In February 1996 the Board of Directors of the Company adopted a
stockholder rights plan (the "Rights Plan") by which preferred stock purchase
rights (the "Series A Rights") were distributed for each outstanding share of
Common Stock. The record date for distribution of such Series A Rights was March
22, 1996 and, for so long as the Series A Rights are associated with the Common
Stock, each new share of Common Stock issued by the Company (including any
shares of Class A Common Stock which may be offered pursuant to this
Registration Statement) will include one Series A Right.
Each Series A Right entitles holders of the Common Stock to purchase one
one-hundredth of a share of Series A Junior Participating Preferred Stock of the
Company at an exercise price of $90, subject to adjustment. The Series A Rights
are not exercisable until the earlier of (i) ten days after the first public
announcement that a person or group has acquired beneficial ownership of 15% or
more of the outstanding Common Stock (an "Acquiring Person") or (ii) ten days
(unless extended by the Company's Board of Directors) after the commencement of,
or announcement of intention to make, a tender offer or exchange offer that
would result in a person or group beneficially owning 15% or more of the
outstanding Common Stock.
If any person or group becomes an Acquiring Person, each holder of a Series
A Right (except the acquiring party) will have the right to receive, upon
exercise, (i) shares of Class A Common Stock having a value of two times the
exercise price of the Series A Right and (ii) one Series B Right (with the
Series A Rights, the "Rights"). The Company's Board of Directors has the option,
after a person or group becomes an Acquiring Person but before there has been an
acquisition of 50% or more of the outstanding Common Stock, to exchange each
Series A Right (other than Series A Rights held by an acquiring party) for both
(i) one share of Class A Common Stock (or of a share of preferred stock having
equivalent rights, preferences and privileges) and (ii) one Series B Right. If,
after the first date of public announcement that a person or group has become an
Acquiring Person (the "Shares Acquisition Date"), the Company is involved in a
merger or other business combination, or if the Company sells or transfers more
than 50% of its consolidated assets or earning power, each Series A Right and
Series B Right then outstanding (other than Rights held by an acquiring party)
will be exercisable for common stock of the other party to such transaction
having a market value of two times the exercise price of the Right. The Company
has the right to redeem the Series A Rights for $.01 per Series A Right (the
"Redemption Price") prior to the Shares Acquisition Date. Under certain
circumstances, the decision to redeem the Series A Rights will require the
concurrence of a majority of the directors (other than an acquiring party) who
(i) were directors prior to the date of the Rights Plan or (ii) are recommended
or approved by a majority of such directors. The Series B Rights, once issued,
are not redeemable. The Rights expire on March 21, 2006, unless such date is
extended or the Rights are redeemed earlier.
The Rights have certain anti-takeover effects. The Rights should not
interfere with any merger or business combination approved by the Board of
Directors because the Series A Rights may be redeemed by the Company at the
Redemption Price prior to the time that a person or group has become an
Acquiring Person. However, by causing substantial dilution to a person or group
that attempts to acquire the Company on terms not approved by the Company's
Board of Directors, the Rights may interfere with certain acquisitions,
including acquisitions that may offer a premium over market price to some or all
of the Company's stockholders. The Rights are not intended to prevent an
acquisition of the Company on terms that are favorable and fair to all
stockholders. The foregoing description of the Rights Plan does not purport to
be complete and is qualified in its entirety by reference to the Rights Plan.
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COMMON STOCK
Voting. The holders of Class A Common Stock are entitled to one vote per
share. The holders of Class B Common Stock are entitled to five votes per share.
All actions submitted to a vote of stockholders are voted on by the holders of
Class A and Class B Common Stock, voting together as a single class, except as
otherwise set forth below or as provided by law. With respect to the election of
directors, holders of Class A Common Stock, voting as a separate class, are
entitled to elect 25% of the total number of directors constituting the entire
Board of Directors of the Company (the "Class A Directors") and, if not a whole
number, then the holders of the Class A Common Stock are entitled to elect the
nearest higher whole number of directors that is a least 25% of the total number
of directors, so long as the number of outstanding shares of Class A Common
Stock is at least 10% of the total number of outstanding shares of both classes
of Common Stock. The holders of the Class A Common Stock and the holders of the
Class B Common Stock, voting together as a single class, are entitled to elect
the remaining directors. The holders of the Class B Common Stock vote separately
as a class on the issuance of additional shares of Class B Common Stock and on
any amendment to the Restated Certificate which would adversely affect such
holders.
If, however, on the record date for any stockholders meeting at which
directors are to be elected, the number of outstanding shares of Class A Common
Stock is less than 10% of the total number of outstanding shares of both classes
of Common Stock, then the holders of the Class A Common Stock would not have the
right to elect 25% of the number of the directors, but would have one vote per
share for all directors and the holders of the Class B Common Stock would have
five votes per share for all directors.
If, on the record date for any stockholders meeting at which directors are
to be elected, the number of outstanding shares of Class B Common Stock is equal
to or greater than 12.5% of the total number of outstanding shares of both
classes of Common Stock, then the holders of Class A Common Stock, voting as a
separate class, would continue to elect a number of Class A Directors equal to
25% of the total number of directors constituting the entire Board of Directors
of the Company, and the holders of Class B Common Stock, voting as a separate
class, would be entitled to elect the remaining directors to be elected at such
meeting.
Conversion. Class A Common Stock has no conversion rights. Class B Common
Stock is convertible into Class A Common Stock, in whole or in part, at any time
and from time to time on the basis of one share of Class A Common Stock for each
share of Class B Common Stock. If at any time any shares of Class B Common Stock
are beneficially owned by any person other than William Farley, Chairman of the
Board, Chief Executive Officer and a director of the Company, or any entity
controlled by Mr. Farley, such shares automatically convert into an equal number
of shares of Class A Common Stock.
Dividends. Holders of Class A Common Stock are entitled to receive, on a
cumulative basis, the first dollar per share of cash dividends if and when
declared by the Company's Board of Directors from funds legally available
therefor. Thereafter, holders of Class A Common Stock and Class B Common Stock
are entitled to receive cash dividends equally on a per share basis if and when
such dividends are declared by the Board of Directors of the Company from funds
legally available therefor. In the case of any dividend paid in stock, holders
of Class A Common Stock are entitled to receive the same percentage dividend
(payable in shares of Class A Common Stock) as the holders of Class B Common
Stock receive (payable in shares of Class B Common Stock).
Liquidation. Holders of Class A Common Stock and Class B Common Stock share
with each other on a ratable basis as a single class in the net assets of the
Company available for distribution in respect of Common Stock in the event of
liquidation.
Other Terms. Neither the Class A Common Stock nor the Class B Common Stock
may be subdivided, consolidated, reclassified or otherwise changed unless
contemporaneously therewith the other class of shares is subdivided,
consolidated, reclassified or otherwise changed in the same proportion and in
the same manner.
In any merger, consolidation or business combination, the consideration to
be received per share by holders of either Class A Common Stock or Class B
Common Stock must be identical to that received by holders of the other class of
Common Stock, except that in any such transaction in which shares of capital
15
<PAGE> 17
stock are distributed, the dividend preference of the Class A Common Stock must
be retained and such shares may differ as to voting rights only to the extent
that voting rights now differ between Class A Common Stock and Class B Common
Stock.
Anti-Takeover Provisions. In addition to the Rights Plan, the Company's
corporate documents include certain provisions which may be deemed to have a
potential "anti-takeover" effect in that such provisions may delay, defer or
prevent a change of control of the Company. The Company's Restated Certificate
and Bylaws contain provisions that include (i) the authority of the Company's
Board of Directors to issue series of Preferred Stock with such voting rights
and other powers as the Company's Board of Directors may determine; and (ii)
notice requirements in the Bylaws relating to nominations to the Company's Board
of Directors and to the raising of business matters at stockholders meetings.
Delaware General Corporation Law. The Company is subject to the provisions
of Section 203 of the Delaware General Corporation Law ("Section 203"). Pursuant
to Section 203, with certain exceptions, a Delaware corporation may not engage
in any of a broad range of business combinations, such as mergers,
consolidations and sales of assets, with an "interested stockholder" for a
period of three years from the date that such person became an interested
stockholder unless (i) the transaction that results in the person becoming an
interested stockholder, or the business combination, is approved by the board of
directors of the corporation before the person becomes an interested
stockholder, (ii) upon consummation of the transaction which results in the
stockholder becoming an interested stockholder, the interested stockholder owns
85% or more of the voting stock of the corporation outstanding at the time the
transaction commenced (other than certain excluded shares), or (iii) on or after
the date the person becomes an interested stockholder, the business combination
is approved by the corporation's board of directors and by holders of at least
two-thirds of the corporation's outstanding voting stock, excluding shares owned
by the interested stockholder, at a meeting of stockholders. Under Section 203,
an "interested stockholder" is defined as any person, other than the corporation
and any direct or indirect majority-owned subsidiaries of the corporation, that
is (x) the owner of 15% or more of the outstanding voting stock of the
corporation or (y) an affiliate or associate of the corporation and was the
owner of 15% or more of the outstanding voting stock of the corporation at any
time within the three-year period immediately prior to the date on which it is
sought to be determined whether such person is an interested stockholder.
Under certain circumstances, Section 203 makes it more difficult for a
person who would be an "interested stockholder" to effect various business
combinations with a corporation for a three-year period. The provisions of
Section 203 may encourage persons interested in acquiring the Company to
negotiate in advance with the Company's Board of Directors because the
stockholder approval requirement would be avoided if directors then in office
approve either the business combination or the transaction which results in the
person becoming an interested stockholder. Such provisions also may have the
effect of preventing changes in management of the Company. It is possible that
such provisions could make it more difficult to accomplish transactions that
stockholders may otherwise deem to be in their best interests.
Transfer Agent. The Company's Transfer Agent and Registrar for the Class A
Common Stock is ChaseMellon Shareholder Services, L.L.C.
PLAN OF DISTRIBUTION
The Company may offer the Securities directly to purchasers, to or through
underwriters, through dealers or agents or through a combination of any such
methods. Any such underwriter(s), dealer(s) or agent(s) involved in the offer
and sale of the Securities in respect of which this Prospectus is delivered will
be named in a Prospectus Supplement. The Prospectus Supplement with respect to
such Securities also will set forth the terms of the offering of such
Securities, including the purchase price of such Securities and the proceeds to
the Company from such sale, any underwriting discounts and other items
constituting underwriters' compensation, any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges or markets on which such Securities may be listed.
16
<PAGE> 18
If underwriters are used in an offering of Securities, the Company will
execute an underwriting agreement with such underwriters, and the name of each
underwriter and the terms of the transaction, including any underwriting
discounts and other items constituting compensation of the underwriters and
dealers, if any, will be set forth in the Prospectus Supplement relating to such
offering, and, if an underwriting syndicate is used, the managing underwriter or
underwriters will be set forth on the cover of such Prospectus Supplement. Such
Securities will be acquired by the underwriters for their own accounts and may
be resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
If a dealer is used in an offering of Securities, the Company will sell
such Securities to the dealer, as principal. The dealer then may resell such
Securities to the public at varying prices to be determined by such dealer at
the time of resale. The name of the dealer and the terms of the transaction will
be set forth in the Prospectus Supplement relating thereto.
If an agent is used in an offering of Securities, the agent will be named,
and the terms of the agency will be set forth, in the Prospectus Supplement
relating thereto. Unless otherwise indicated in such Prospectus Supplement, an
agent will act on a best efforts basis for the period of its appointment.
Dealers and agents named in a Prospectus Supplement may be deemed to be
underwriters (within the meaning of the Securities Act) of the Securities
described therein. Underwriters, dealers and agents, under underwriting
agreements and other agreements which may be entered into with the Company, may
be entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act.
Offers to purchase Securities may be solicited, and sales thereof may be
made, by the Company directly to institutional investors or others, who may be
deemed to be underwriters within the meaning of the Securities Act with respect
to any resales thereof. The terms of any such offer will be set forth in the
Prospectus Supplement relating thereto.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters, dealers or other agents of the Company to solicit offers by
certain institutional investors to purchase Securities from the Company pursuant
to contracts providing for payment and delivery at a future date. Institutional
investors with which such contracts may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such purchasers must be
approved by the Company. The obligations of any purchaser under any such
contract will not be subject to any conditions except that (i) the purchase of
the Securities shall not at the time of delivery be prohibited under the laws of
any jurisdiction to which such purchaser is subject and (ii) if the Securities
also are being sold to underwriters, the Company shall have sold to such
underwriters the Securities not subject to delayed delivery. Underwriters and
other agents will not have any responsibility in respect of the validity or
performance of such contracts.
The anticipated date of delivery of Securities will be set forth in the
Prospectus Supplement relating to each applicable offering.
There can be no assurance that a secondary market will be created for the
Debt Securities or Preferred Stock or, if it is created, that it will continue.
Certain underwriters, dealers or agents and their associates may engage in
transactions with, and perform services for, the Company in the ordinary course
of business, including refinancing of the Company's indebtedness.
To facilitate an offering of a series of Securities, certain persons
participating in the offering may engage in transactions that stabilize,
maintain or otherwise affect the price of the Securities. This may include over-
allotments or short sales of the Securities, which involves the sale by persons
participating in the offering of more Securities than have been sold to them by
the Company. In such circumstances, such persons would cover such
over-allotments or short positions by purchasing in the open market or by
exercising the over-allotment option granted to such persons. In addition, such
persons may stabilize or maintain the price of the
17
<PAGE> 19
Securities by bidding for or purchasing Securities in the open market or by
imposing penalty bids, whereby selling concessions allowed to dealers
participating in any such offering may be reclaimed if Securities sold by them
are repurchased in connection with stabilization transactions. The effect of
these transactions may be to stabilize or maintain the market price of the
Securities at a level above that which might otherwise prevail in the open
market. Such transactions, if commenced, may be discontinued at any time.
LEGAL MATTERS
Certain legal matters with respect to the Securities offered hereby will be
passed upon for the Company by Katten Muchin & Zavis, Chicago, Illinois. Certain
legal matters will be passed upon for any agents or underwriters by counsel for
such agents or underwriters identified in the applicable Prospectus Supplement.
EXPERTS
The consolidated financial statements and schedule of the Company appearing
in the Company's Annual Report on Form 10-K for the year ended December 31, 1996
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon (which contains an explanatory paragraph with respect to an
accounting change in 1995 mentioned in the notes to consolidated financial
statements) included therein and incorporated herein by reference. Such
consolidated financial statements and schedule are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
18
<PAGE> 20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following expenses will be paid by the Company:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee......... $257,576
Accounting Fees and Expenses................................ 50,000
Legal Fees and Expenses..................................... 100,000
Trustees' Fees and Expenses................................. 5,000
Blue Sky Fees and Expenses.................................. 5,000
Printing and Engraving Expenses............................. 50,000
Miscellaneous Expenses...................................... 32,424
--------
Total.................................................. $500,000
========
</TABLE>
All expenses other than the Securities and Exchange Commission registration
fee are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides that a
Delaware corporation may indemnify any persons who are, or are threatened to be
made, parties to any threatened, pending or completed legal action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of such corporation), by reason of the fact that
such person is or was an officer or director of such corporation, or is or was
serving at the request of such corporation as a director, officer, employee or
agent of another corporation or enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided that such officer or director acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
corporation's best interests and, for criminal proceedings, had no reasonable
cause to believe his conduct was unlawful. A Delaware corporation may indemnify
officers and directors in an action by or in the right of the corporation under
the same conditions against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense or settlement
of such action, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation
in the performance of his duty. Where an officer or director is successful on
the merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which he actually and
reasonably incurred.
The Company's Bylaws provide for indemnification of its directors and
officers to the extent permitted by Section 145.
Articles XII and XIII of the Company's Restated Certificate of
Incorporation, as amended, provide that the Company shall indemnify certain of
its former and present directors and officers against certain liabilities and
expenses incurred as a result of their duties as such.
The Company has purchased directors' and officers' liability insurance
covering certain liabilities incurred by its officers and directors and those of
its subsidiaries and affiliates in connection with the performance of their
duties.
II-1
<PAGE> 21
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
<S> <C>
1.1* Form of Underwriting Agreement (Debt Securities).
1.2* Form of Underwriting Agreement (Preferred Stock).
1.3* Form of Underwriting Agreement (Class A Common Stock).
3.1 Restated Certificate of Incorporation and Certificate of
Amendment of the Restated Certificate of Incorporation of
the Company (incorporated herein by reference to Exhibit 3
to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1993).
3.2 Bylaws of the Company (incorporated herein by reference to
Exhibit 4(b) to the Company's Registration Statement on Form
S-2, Reg. No. 33-8303).
4.1** Form of Indenture between the Company and the Trustee,
governing the Senior Debt Securities.
4.2** Form of Indenture between the Company and the Trustee,
governing the Subordinated Debt Securities.
4.3* Form of Senior Debt Securities.
4.4* Form of Subordinated Debt Securities.
4.5* Form of Certificate of Designation, Preferences and Rights
for Preferred Stock.
4.6 Rights Agreement, dated as of March 8, 1996 between the
Company and Chase Mellon Shareholder Services, L.L.C.,
Rights Agent (incorporated herein by reference to Exhibit
4(c) to the Company's Annual Report on Form 10-K for the
year ended December 31, 1995).
5** Opinion of Katten Muchin & Zavis as to the legality of the
Securities being registered.
12 Statement of Computation of Ratio of Earnings to Fixed
Charges and Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2** Consent of Katten Muchin & Zavis (contained in their opinion
filed as Exhibit 5 hereto).
24** Powers of Attorney (previously included on the signature
page to this Registration Statement).
25.1* Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of the Trustee for the Senior Debt Securities.
25.2* Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of the Trustee for the Subordinated Debt
Securities.
</TABLE>
- -------------------------
* To be filed as an exhibit to Form 8-K in reference to the specific offering
of Securities, if any, to which it relates.
** Previously filed as an exhibit to this Registration Statement.
ITEM 17. 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 this 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 this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate
II-2
<PAGE> 22
offering price set forth in the "Calculation of Registration Fee" table
in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in this Registration Statement.
(2) That, for the purposes 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 post-effective amendment
any of the Securities being registered which remain unsold 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.
C. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
D. The undersigned Registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
II-3
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Chicago, State of Illinois on the 8th day of
August, 1997.
FRUIT OF THE LOOM, INC.
By: /s/ LARRY K. SWITZER
------------------------------------
Larry K. Switzer, Senior Executive
Vice
President and Chief Financial
Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed by the following persons in the
capacities indicated on August 8, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
* Chairman of the Board and Chief Executive Officer
- --------------------------------------------- (principal executive officer) and Director
William Farley
/s/ LARRY K. SWITZER Senior Executive Vice President and Chief Financial
- --------------------------------------------- Officer
Larry K. Switzer (principal financial and accounting officer) and
Director
* Director
- ---------------------------------------------
Omar Z. Al Askari
* Director
- ---------------------------------------------
Dennis S. Bookshester
* Director
- ---------------------------------------------
Lee W. Jennings
* Director
- ---------------------------------------------
Henry A. Johnson
* Director
- ---------------------------------------------
Richard C. Lappin
* Director
- ---------------------------------------------
A. Lorne Weil
* Director
- ---------------------------------------------
Sir Brian Wolfson
*By: /s/ LARRY K. SWITZER
- ---------------------------------------------
Larry K. Switzer
Attorney-in-fact
</TABLE>
II-4
<PAGE> 24
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
12 Statement of Computation of Ratio of Earnings to Fixed
Charges and Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends.
23.1 Consent of Ernst & Young LLP, independent auditors.
</TABLE>
<PAGE> 1
EXHIBIT 12
FRUIT OF THE LOOM, INC. AND SUBSIDIARIES
STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1997 Year Ended December 31,
----------------- ----------------------------------------------------------
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
FIXED CHARGES:
Interest Expense $ 40.0 $ 103.6 $ 116.9 $ 95.4 $ 72.7 $ 82.1
Amortization of debt issuance
costs 0.6 2.1 2.5 3.0 5.8 7.2
Portion of rents representative of
interest factor 7.5 14.8 12.2 6.7 3.8 3.0
Guarantor Debt Charges(1) 1.2 0.6 -- -- -- --
Capitalized interest expense -- 0.6 1.7 1.9 2.1 1.1
Total fixed charges $ 49.3 $ 121.7 $ 133.3 $ 107.0 $ 84.4 $ 93.4
Preferred Stock Dividends(2) $ -- $ -- $ -- $ -- -- $ --
EARNINGS:
Earnings before income tax
expense, extraordinary items and
cumulative effect of change in
accounting principle $ 61.5 $ 185.3 $ (246.7) $ 133.5 $ 367.1 $ 319.9
Interest Expense 40.0 103.6 116.9 95.4 72.7 82.1
Amortization of debt issuance costs 0.6 2.1 2.5 3.0 5.8 7.2
Portion of rents representative of
interest factor 7.5 14.8 12.2 6.7 3.8 3.0
Amortization of capitalized
interest 0.6 1.2 1.2 1.1 0.9 0.8
Total earnings $ 110.2 $ 307.0 $ (113.9) $ 239.7 $ 450.3 $ 413.0
Ratio of earnings to combined fixed
charges and perferred stock dividends 2.2 x 2.5 x * x 2.2 x 5.3 x 4.4 x
</TABLE>
* The deficiency in earnings to cover fixed charges for the year ended
December 31, 1995 was $247.2.
(1) Guarantor debt charges are the estimated interest related to the Company's
evaluation of its exposure under its guarantee of debt incurred by Acme
Boot Company, Inc., an affiliate of the Company.
(2) The Company had no shares of preferred stock outstanding, and no dividends
were declared or paid, during any of the periods indicated.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3) and related Prospectus
of Fruit of the Loom, Inc. for the registration of Debt Securities, Preferred
Stock and Class A Common Stock at an aggregate initial offering price not to
exceed $850,000,000 and to the incorporation by reference therein of our
report dated February 12, 1997, with respect to the consolidated financial
statements and schedule of Fruit of the Loom, Inc, included in its Annual
Report (Form 10-K) for the year ended December 31, 1996, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
Chicago, Illinois
August 6, 1997
