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RULE NO. 424(b)(3)
REGISTRATION NOS. 33-50832,
33-42397,
33-23039 and
33-3985
PROSPECTUS
FORTUNE
BRANDS
DEBT SECURITIES,
WARRANTS TO PURCHASE DEBT SECURITIES
AND
FOREIGN CURRENCY WARRANTS
----------------
Fortune Brands, Inc., a Delaware corporation (the "Company"), intends to
offer from time to time its debt securities of one or more series (the "Debt
Securities") in an aggregate principal amount (or net proceeds, in the case of
Debt Securities issued at an original issue discount) of up to $850,000,000,
or the equivalent thereof in one or more foreign or composite currencies,
warrants to purchase Debt Securities (the "Debt Warrants") and up to
$100,000,000 of options, warrants or other rights relating to foreign currency
exchange rates (the "Foreign Currency Warrants"). The Debt Securities, the
Debt Warrants and the Foreign Currency Warrants may be issued in one or more
series with the same or various maturities or expiration dates, in amounts, at
prices (which, in the case of Debt Securities, may be at par, at a premium or
at an original issue discount), in currencies or composite currencies and on
terms to be determined at the time of sale. The Debt Securities may be issued
as convertible Debt Securities which, unless previously redeemed, repaid or
otherwise purchased or acquired, will be convertible, at any time during a
specified conversion period, into shares of Common Stock, par value $3.125 per
share (the "Common Stock"), of the Company. The Debt Warrants may be offered
with the Debt Securities or separately. The Foreign Currency Warrants may be
offered in conjunction with an offering of Debt Securities or Debt Warrants or
of Debt Securities and Debt Warrants, or separately. See "Plan of
Distribution".
The terms of the Debt Securities, including, where applicable, the specific
designation, aggregate principal amount, authorized denominations, purchase
price, maturity, rate (or manner of calculation thereof) and time of payment
of any interest, any redemption terms, any conversion terms, the currency or
composite currency in which the Debt Securities or any interest thereon shall
be payable and other specific terms and any listing on a securities exchange
of the Debt Securities, the terms of the Debt Warrants, including the exercise
price, detachability, expiration date and other specific terms and any listing
on a securities exchange of the Debt Warrants, and the terms of the Foreign
Currency Warrants, including the procedures and conditions relating to
exercise, expiration date and other specific terms and the listing on a
national securities exchange of the Foreign Currency Warrants, and any initial
public offering price, the net proceeds to the Company and other special terms
in connection with the offering and sale of the series of Debt Securities,
Debt Warrants or Foreign Currency Warrants, as the case may be, in respect of
which this Prospectus is being delivered (respectively, the "Offered Debt
Securities", the "Offered Debt Warrants" and the "Offered Foreign Currency
Warrants") are set forth in the accompanying Prospectus Supplement or
Supplements (the "Prospectus Supplement", which term, as used herein, includes
any accompanying Pricing Supplement).
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The Debt Securities, Debt Warrants and Foreign Currency Warrants will be
sold directly, through agents designated from time to time or through
underwriters or dealers. If any agents of the Company or any dealers or
underwriters are involved in the sale of the Debt Securities, Debt Warrants or
Foreign Currency Warrants in respect of which this Prospectus is being
delivered, the names of, and the principal amount of Debt Securities or number
of Debt Warrants or Foreign Currency Warrants to be purchased through or by,
such agents, dealers or underwriters and any applicable commissions or
discounts are set forth in the Prospectus Supplement. See "Plan of
Distribution" for possible indemnification arrangements for the agents,
dealers and underwriters.
----------------
The date of this Prospectus is March 5, 1998
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities of the Commission located at 450
Fifth Street, N.W., Washington, D.C. 20549 and at the following Regional
Offices of the Commission: New York Regional Office, 7 World Trade Center,
Suite 1300, New York, New York 10048 and Chicago Regional Office, Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
Copies of such material can be obtained from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Commission also maintains a World Wide Web site that contains
reports, proxy and information statements and other information regarding
registrants (including the Company) that file electronically with the
Commission (http://www.sec.gov).
The Company's Common Stock and certain other of its securities are listed on
the New York Stock Exchange and reports, proxy statements and other
information concerning the Company can be inspected and copied at the offices
of the New York Stock Exchange, Inc. at 20 Broad Street, New York, New York
10005.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed with the Commission by the Company (File No.
1-9076) are incorporated herein by reference and made a part hereof:
(i) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, which incorporates by reference certain information,
including the Company's 1996 consolidated financial statements contained in
its 1996 Annual Report to Stockholders;
(ii) the Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, June 30 and September 30, 1997;
(iii) the Company's Current Reports on Form 8-K dated January 24, April
23, May 9, June 9, July 23, October 1, October 21 and December 2, 1997 and
January 12, January 23, February 10, February 20, March 2 and March 4,
1998;
(iv) the description of the Common Stock which is contained in the
Company's Application for Registration on Form 8-B dated January 27, 1986
by incorporation by reference to pages 17-20 of the Proxy Statement and
Prospectus constituting a part of the Company's Registration Statement on
Form S-4 (Registration No. 33-635), including the amendments to such
description set forth in the Company's Current Reports on Form 8-K dated
June 19, 1986 and September 4, 1986, its Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 1990 and its Current Report on Form 8-
K dated September 25, 1990; and
(v) the description of the Company's Preferred Share Purchase Rights
which is contained in the Company's Application for Registration on Form 8-
A dated December 22, 1997.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Debt
Securities, Debt Warrants and Foreign Currency Warrants shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus and the
Registration Statements of which it is a part to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement modified or superseded shall not be deemed, except as
so modified or superseded, to constitute part of this Prospectus or such
Registration Statements.
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THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO EACH PERSON, INCLUDING ANY
BENEFICIAL OWNER, TO WHOM THIS PROSPECTUS IS DELIVERED, UPON SUCH PERSON'S
WRITTEN OR ORAL REQUEST, A COPY OF ANY AND ALL OF THE INFORMATION THAT HAS
BEEN INCORPORATED BY REFERENCE IN THIS PROSPECTUS (NOT INCLUDING EXHIBITS TO
SUCH INFORMATION UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE INTO SUCH INFORMATION). ANY SUCH REQUEST SHOULD BE DIRECTED TO THE
SECRETARY OF FORTUNE BRANDS, INC., 1700 EAST PUTNAM AVENUE, OLD GREENWICH,
CONNECTICUT 06870-0811 (TELEPHONE NUMBER (203) 698-5000).
THE COMPANY
The Company is a holding company with subsidiaries engaged in various
businesses. Subsidiaries of the Company are engaged in the manufacture and
sale of home and office products, golf products and distilled spirits.
As a holding company, the Company is a legal entity separate and distinct
from its subsidiaries. Accordingly, the right of the Company, and thus the
right of the Company's creditors (including holders of Debt Securities, Debt
Warrants and Foreign Currency Warrants) and stockholders, to participate in
any distribution of the assets or earnings of any subsidiary is subject to the
claims of creditors of the subsidiary, except to the extent that claims of the
Company itself as a creditor of such subsidiary may be recognized, in which
event the Company's claims may in certain circumstances be subordinate to
certain claims of others. In addition, as a holding company, a principal
source of the Company's unconsolidated revenues and funds is dividends and
other payments from its subsidiaries. The Company's principal subsidiaries
currently are not limited by long-term debt or other agreements in their
abilities to pay cash dividends or to make other distributions with respect to
their capital stock or other payments to the Company.
The Company's principal executive offices are located at 1700 East Putnam
Avenue, Old Greenwich, Connecticut 06870-0811 and its telephone number is
(203) 698-5000.
USE OF PROCEEDS
Except as may otherwise be set forth in the Prospectus Supplement, the
Company will apply the net proceeds from the sale of the Offered Debt
Securities, the Offered Debt Warrants and the Offered Foreign Currency
Warrants, after payment of costs, if any, incurred by the Company in hedging
its currency risk with respect to the Offered Foreign Currency Warrants, to
its general funds to be used by its management for general corporate purposes,
including the repayment of existing indebtedness, additions to working capital
or acquisitions. See "Recent Developments" set forth in the Prospectus
Supplement if this section is referenced therein.
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RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges..................... 2.17 1.22 3.23 2.81 2.06
</TABLE>
For the purpose of computing the ratio of earnings to fixed charges,
earnings consist of income from continuing operations before income taxes and
minority interest, plus fixed charges, less capitalized interest, less excess
of earnings over dividends of less-than-fifty-percent-owned companies. Fixed
charges consist of interest (including capitalized interest) on all
indebtedness, amortization of debt discount and expense and that portion of
rental expense which the Company believes to be representative of an interest
factor.
DESCRIPTION OF DEBT SECURITIES
The Offered Debt Securities and the Debt Securities issuable upon exercise
of Offered Debt Warrants are to be issued under an Indenture dated as of July
15, 1988, as supplemented, between the Company and The Chase Manhattan Bank
(formerly known as Chemical Bank, as successor by merger to Manufacturers
Hanover Trust Company), as trustee, or such other Indenture as may be entered
into between the Company and a bank or trust company, as trustee, all as shall
be set forth in the Prospectus Supplement relating thereto. The Indenture
under which the Offered Debt Securities and the Debt Securities issuable upon
exercise of the Offered Debt Warrants are to be issued, as modified by the
Trust Indenture Reform Act of 1990, and the trustee thereunder are herein
referred to as the "Indenture" and the "Trustee", respectively. The statements
under this caption, as modified or superseded by the applicable Prospectus
Supplement, are brief summaries of certain provisions of the Indenture and are
subject to the detailed provisions thereof, a form of which is on file as an
exhibit to the Registration Statements of which this Prospectus is a part.
References under this caption in italics are to sections of the Indenture.
Wherever particular provisions of the Indenture are referred to, such
provisions are incorporated by reference as a part of the statements made, and
the statements are qualified in their entirety by such reference.
GENERAL
The Indenture does not limit the amount of securities which can be issued
thereunder and provides that Debt Securities may be issued thereunder up to
the aggregate principal amount which may be authorized from time to time by
the Company. (Section 3.01). Reference is made to the Prospectus Supplement
for the following terms of the Offered Debt Securities and the Debt Securities
issuable upon exercise of the Offered Debt Warrants: (i) the designation and
aggregate principal amount of such Debt Securities; (ii) the percentage of
their principal amount at which such Debt Securities will be issued; (iii) the
date or dates (or the manner of determining the same) on which such Debt
Securities will mature; (iv) the rate or rates per annum (or the method of
determining the same) at which such Debt Securities will bear interest, if
any, and the date or dates from which any such interest shall accrue; (v) the
times (or the manner of determining the same) at which any such interest will
be payable; (vi) the place or places where principal, premium, if any, and
interest, if any, will be payable and each office or agency as described below
under "Form, Denominations, Exchange and Transfer" where such Debt Securities
may be surrendered for exchange or, if applicable, registration of transfer;
(vii) the period or periods within which, the prices at which and the terms
and conditions upon which such Debt Securities may be redeemed, in whole or in
part, at the option of the Company; (viii) the obligation, if any, of the
Company to redeem, repay or purchase such Debt Securities pursuant to any
sinking fund or analogous provisions or at the option of a holder thereof and
the period or periods within which, the price or prices at which and the terms
and conditions upon which such Debt Securities will be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation; (ix) whether such
Debt Securities are convertible into Common Stock and, if so, the initial
conversion price or rate, the conversion period and the other terms and
conditions relating to the conversion thereof, including whether any Preferred
Share Purchase Rights (the "Rights") of the Company will be delivered with
shares of Common Stock issued upon conversion; (x) if such Debt Securities are
not denominated in United
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States dollars, the foreign currency or currencies or composite currency or
currencies in which such Debt Securities are denominated and, if any payment
of principal of or premium or interest on or any other amount in respect of
such Debt Securities is not payable in United States dollars, the foreign
currency or currencies or composite currency or currencies in which such
payment shall be payable and the particular provisions applicable thereto;
(xi) if the amount of payments of principal of or premium, if any, or
interest, if any, on such Debt Securities may be determined with reference to
an index, the manner in which such amount shall be determined; (xii) whether
such Debt Securities are issuable in registered form ("Registered Securities")
or bearer form ("Bearer Securities"), or both, whether any Bearer Securities
will not have interest coupons attached and any conditions related to the
issuance, delivery or exchange of Bearer Securities; (xiii) whether such Debt
Securities will be represented by a single permanent global Debt Security or a
temporary global Debt Security and the common depositary or other depositary
in respect thereof; (xiv) any events of default or covenants with respect to
such Debt Securities in addition to those described in this Prospectus; (xv)
whether and under what circumstances the Company will pay additional amounts
on such Debt Securities and whether the Company will have the option to redeem
rather than pay such additional amounts or in the event of the imposition of
any reporting requirement; (xvi) the proposed listing, if any, of such Debt
Securities on any securities exchange; and (xvii) any other terms of such Debt
Securities. (Section 3.01).
The Debt Securities will be direct, unsecured and unsubordinated obligations
of the Company and will rank equally with any other unsecured and
unsubordinated obligations of the Company for borrowed money. See "The
Company". The Indenture does not limit other indebtedness or securities which
may be incurred or issued by the Company or contain financial or similar
restrictions on the Company, except as described under "Certain Covenants of
the Company". Other than the protections which may otherwise be afforded
holders of Debt Securities as a result of the operation of the covenants
described thereunder, there are no covenants or other provisions which may
afford holders of Debt Securities protection in the event of a leveraged
buyout or other highly leveraged transaction involving the Company or any
similar occurrence.
If the purchase price of any Debt Securities is denominated in a foreign
currency or composite currency or if the principal of or premium, if any, or
interest, if any, on or any other amount in respect of any Debt Securities is
payable in a foreign currency or composite currency, the restrictions,
elections, tax consequences, specific terms and other information with respect
to such Debt Securities and such foreign currency or composite currency will
be as set forth in the Prospectus Supplement.
If any Debt Securities are being issued as original issue discount
securities (bearing no interest or interest at a rate which at the time of
issuance is below market rates) to be sold at a substantial discount below the
stated principal amount, the federal income tax consequences and other special
considerations applicable to such original issue discount securities will be
as described in the Prospectus Supplement.
FORM, DENOMINATIONS, EXCHANGE AND TRANSFER
Unless otherwise provided in an applicable Prospectus Supplement with
respect to a series of Debt Securities, the Debt Securities will be issuable
in definitive form solely as Registered Securities, solely as Bearer
Securities or as both Registered Securities and Bearer Securities. Unless
otherwise provided in an applicable Prospectus Supplement, Bearer Securities
will have interest coupons attached. (Section 2.01). The Indenture also
provides that Debt Securities of a series may be issuable in temporary or
permanent global form. (Section 3.01). See "Global Debt Securities".
Unless otherwise specified in the Prospectus Supplement, Registered
Securities will be issuable in denominations of $1,000 and any multiple
thereof and Bearer Securities will be issuable in denominations of $1,000 or
$10,000. (Section 3.02). Debt Securities denominated in a foreign currency or
in a composite currency will be issuable in such denominations as are set
forth in the Prospectus Supplement relating thereto. Debt Securities may be
surrendered for exchange and Registered Securities may be surrendered for
registration of transfer in the manner, at the places and subject to the
restrictions set forth in the Prospectus Supplement relating thereto. No
service charge will be made for any transfer or exchange of any Debt
Securities, but the Company
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may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. (Section 3.05). Bearer Securities and
the coupons, if any, appertaining thereto will be transferable by delivery.
In connection with their sale during the "restricted period" as defined in
Section 1.163-5(c)(2)(i)(D)(7) of the United States Treasury Regulations
(generally, the first 40 days after the closing date (or, in the case of Debt
Securities issuable on exercise of a Debt Warrant, the first 40 days after the
date of exercise of such Debt Warrant) and, with respect to unsold allotments,
until sold), Bearer Securities may not be delivered within the United States
or its possessions and may be delivered only upon certification as to the
beneficial ownership thereof. See "Limitations on Issuance of Bearer Debt
Securities and Bearer Debt Warrants".
In the event of any redemption in part, the Company shall not be required to
(i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before (A) if
Debt Securities of such series are issuable only as Registered Securities, the
day of the mailing of a notice of redemption of Debt Securities of such series
selected to be redeemed and ending at the close of business on the day of such
mailing, and (B) if Debt Securities of such series are issuable as Bearer
Securities, the day of the first publication of the relevant notice of
redemption or, if earlier, and if Debt Securities of such series are also
issuable as Registered Securities and there is no publication, the day of the
mailing of the relevant notice of redemption and in either case ending at the
close of business on the day of such publication or mailing; (ii) register the
transfer of or exchange any Registered Security, or portion thereof, called
for redemption, except the unredeemed portion of any Registered Security being
redeemed in part; or (iii) exchange any Bearer Security called for redemption,
except to exchange such Bearer Security for a Registered Security of such
series and like tenor that is immediately surrendered for redemption. (Section
3.05).
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and premium, if any, and interest, if any, on Registered
Securities will be made at the office of such paying agent or paying agents as
the Company may designate from time to time, except that at the option of the
Company payment of any instalment of interest on Registered Securities will be
made by check mailed to the person in whose name such Registered Security is
registered at such person's registered address at the close of business on the
record date for such interest or by transfer to an account maintained by the
payee with a bank located in the United States. (Sections 3.07 and 10.02).
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and premium, if any, and interest, if any, on Bearer
Securities will be payable, subject to any applicable laws and regulations, at
the offices of such paying agents outside the United States as the Company may
designate from time to time, except that, at the option of the Company,
payment of any interest may be made by check or by transfer to an account
maintained by the payee with a bank located outside the United States.
(Sections 3.07 and 10.02). Unless otherwise indicated in an applicable
Prospectus Supplement, payment of interest, if any, on Bearer Securities on
any interest payment date will be made only upon presentation and surrender of
the coupon relating to such interest payment date. (Section 10.01). No payment
of principal, premium, if any, or interest, if any, with respect to any Bearer
Security will be made at any paying agency maintained by the Company in the
United States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States
except as may be permitted under United States tax laws and regulations in
effect at the time of such payment without detriment to the Company.
Notwithstanding the foregoing, (i) any payment in respect of Bearer Securities
to be made in United States dollars may be made at the office of a paying
agent in the United States if payment at all paying agencies outside the
United States is illegal or effectively precluded by exchange controls or
other similar restrictions and (ii) any payment in respect of Bearer
Securities to be made in a foreign currency or composite currency may be made
at the office of a paying agent in the United States in United States dollars
in an amount equal to the sum otherwise due in such foreign currency or
composite currency as converted into United States dollars at the rate of
exchange as set forth in the Indenture if payment
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at all paying agencies outside the United States in such foreign currency or
composite currency and in United States dollars in such amount is illegal or
effectively precluded by exchange controls or other similar restrictions.
(Section 10.02).
The paying agents outside the United States initially appointed by the
Company for a series of Debt Securities will be named in the applicable
Prospectus Supplement. The Company may terminate the appointment of any of the
paying agents from time to time, except that the Company will maintain in the
Borough of Manhattan, The City of New York, at least one paying agency where
the Registered Securities of each series may be presented for payment. The
Company will maintain one or more paying agencies in a city or cities located
outside the United States (including any city in which a paying agency is
required to be maintained under the rules of any stock exchange on which the
Debt Securities of such series are listed) where the Bearer Securities may be
presented for payment. (Section 10.02).
All monies paid by the Company to a paying agent for the payment of
principal of or premium, if any, or interest, if any, on any Debt Security
that remains unclaimed at the end of two years after such principal, premium
or interest shall have become due and payable will be repaid to the Company
and the holder of such Debt Security or any coupon appertaining thereto will
thereafter look only to the Company for payment thereof. (Section 10.03).
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more fully registered global Debt Securities (each, a
"Registered Global Security") that will be deposited with a depositary (the
"Depositary") or with a nominee for the Depositary identified in the
applicable Prospectus Supplement. In such a case, one or more Registered
Global Securities will be issued in a denomination or aggregate denominations
equal to the portion of the aggregate principal amount of outstanding Debt
Securities of the series to be represented by such Registered Global Security
or Securities. Unless and until it is exchanged in whole or in part for Debt
Securities in definitive form, a Registered Global Security may not be
registered for transfer or exchange except as a whole by the Depositary for
such Registered Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor Depositary
for such series or a nominee of such successor Depositary and except in the
circumstances described in the applicable Prospectus Supplement. (Section
3.05).
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Registered Global
Security will be described in the applicable Prospectus Supplement. The
Company expects that the provisions set forth below will apply to such a
depositary arrangement.
Ownership of beneficial interests in a Registered Global Security will be
limited to institutions that have accounts with the Depositary or its nominee
("participants") and to persons that may hold interests through participants.
Ownership of beneficial interests by participants in a Registered Global
Security will be shown on and will be evidenced only by, and the transfer of
that ownership will be effected only through, records maintained by the
Depositary for such Registered Global Security. Ownership of beneficial
interests in such Registered Global Security by persons that hold through
participants will be shown on and will be evidenced only by, and the transfer
of that ownership interest within such participant will be effected only
through, records maintained by such participant.
The Company expects that upon the issuance of a Registered Global Security
representing Debt Securities, and the deposit of such Registered Global
Security with or on behalf of the Depositary, the Depositary will immediately
credit, on its book-entry registration and transfer system, the respective
principal amounts of the Debt Securities represented by such Registered Global
Security to the accounts of participants. The accounts to be credited shall be
designated by the underwriters or agents engaging in the distribution of such
Debt Securities or, to the extent that the Debt Securities are offered and
sold directly by the Company, by the Company.
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Unless otherwise specified in the applicable Prospectus Supplement, payment
of principal of and premium, if any, and interest, if any, on Debt Securities
represented by any such Registered Global Security will be made to the
Depositary or its nominee, as the case may be, as the sole registered owner
and the sole holder of the Debt Securities represented thereby for all
purposes under the Indenture. None of the Company, the Trustee and any agent
of the Company or the Trustee will have any responsibility or liability for
any aspect of the Depositary's records or any participant's records relating
to or payments made on account of beneficial ownership interests in a
Registered Global Security representing any Debt Securities or for
maintaining, supervising or reviewing any of the Depositary's records or any
participant's records relating to such beneficial ownership interests.
The Company expects that the Depositary, upon receipt of any payment of
principal of or premium, if any, or interest, if any, on any such Registered
Global Security, will immediately credit, on its book-entry registration and
transfer system, the accounts of participants with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Registered Global Security as shown on the records of the Depositary.
Payments by participants to owners of beneficial interests in a Registered
Global Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for customer accounts registered in "street name", and will be the sole
responsibility of such participants.
Except as otherwise set forth in the applicable Prospectus Supplement, a
Registered Global Security is exchangeable for definitive Debt Securities in
registered form, of like tenor and of an equal aggregate principal amount,
only if (x) the Depositary notifies the Company that it is unwilling or unable
to continue as Depositary for such Registered Global Security or if at any
time the Depositary ceases to be a clearing agency registered under the
Exchange Act, and a successor of the Depositary is not appointed by the
Company within 90 calendar days, (y) the Company in its sole discretion
determines that such Registered Global Security shall be exchangeable for
definitive Debt Securities in registered form or (z) an Event of Default (as
defined below under "Defaults and Certain Rights on Default") with respect to
the Debt Securities represented by such Registered Global Security has
occurred and is continuing. Any Registered Global Security that is
exchangeable pursuant to the preceding sentence shall be exchangeable in whole
for definitive Debt Securities in registered form, of like tenor and of an
equal aggregate principal amount, in denominations of $100,000 and any larger
amount that is an integral multiple of $1,000. Such definitive Debt Securities
will be registered in the name or names of the owners of such person or
persons as the Depositary shall instruct the Trustee. It is expected that such
instructions may be based upon directions received by the Depositary from its
participants with respect to ownership of beneficial interests in such
Registered Global Security.
Unless otherwise specified in the applicable Prospectus Supplement and
except as provided above, owners of beneficial interests in such a Registered
Global Security will not be entitled to receive physical delivery of Debt
Securities in definitive form and will not be considered the holders thereof
for any purpose under the Indenture, and no Registered Global Security
representing Debt Securities will be exchangeable except for another permanent
Registered Global Security of like denomination and tenor to be registered in
the name of the Depositary or its nominee. Accordingly, each person owning a
beneficial interest in such a Registered Global Security must rely on the
procedures of the Depositary 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 laws of some
jurisdictions 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 transfer beneficial interests in a Registered Global
Security.
The Indenture permits the Depositary, as a holder, to authorize participants
as its agents to make, give or take any request, demand, authorization,
direction, notice, consent, waiver or other action which a holder is entitled
to make, give or take under the Indenture. The Company understands that under
existing industry practices, in the event that the Company requests any action
of holders or an owner of a beneficial interest in such a Registered Global
Security desires to make, give or take any request, demand, authorization,
direction, notice, consent, waiver or other action which a holder is entitled
to make, give or take under the Indenture, the
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Depositary would authorize the participants holding the relevant beneficial
interests to make, give or take such action, and such participants would
authorize beneficial owners owning through such participants to make, give or
take such action or would otherwise act upon the instructions of beneficial
owners owning through them.
The Debt Securities of a series may also be issued in whole or in part in
the form of one or more bearer global securities (a "Bearer Global Security")
that will be deposited with a common depositary for Morgan Guaranty Trust
Company of New York, Brussels office, as operator of the Euro-clear System
("Euro-clear"), and for Centrale de Livraison de Valeurs Mobilieres S.A.
("Cedel"), or with a nominee for such common depositary, identified in the
applicable Prospectus Supplement. Any such Bearer Global Securities may be
issued in temporary or permanent form. The specific terms and procedures,
including the specific terms of the depositary arrangement, with respect to
any portion of a series of Debt Securities to be represented by one or more
Bearer Global Securities, will be described in the applicable Prospectus
Supplement. See "Limitations on Issuance of Bearer Debt Securities and Bearer
Debt Warrants".
CONVERTIBLE DEBT SECURITIES
The terms and conditions upon which any convertible Debt Securities of a
series may be converted into shares of Common Stock, including the initial
conversion price or rate and the conversion period, and other provisions
applicable thereto, will be set forth in the Prospectus Supplement relating
thereto. See "Description of Capital Stock".
CERTAIN COVENANTS OF THE COMPANY
Definitions. In the Indenture, "Subsidiary" is defined as any corporation of
which the Company or any one or more Subsidiaries directly or indirectly own
outstanding stock having voting power sufficient to elect, under ordinary
circumstances, a majority of the directors. "Restricted Subsidiary" is defined
to exclude a Subsidiary organized under foreign laws or operating outside the
United States, a Subsidiary involved primarily in the business of finance,
banking, credit, leasing, insurance, financial services, real estate,
petroleum or gas, transportation or overseas financing, and Subsidiaries of
the foregoing. A Subsidiary required to be disposed of by court order and
determined by the Company's Board of Directors not to be a Restricted
Subsidiary is also excluded from the definition of Restricted Subsidiary.
"Funded Debt" is defined to include, in addition to indebtedness for borrowed
money maturing more than one year from the date of creation or extension
thereof, guarantees of funded debt or of dividends (except guarantees arising
in connection with the sale or pledge of customers' paper or otherwise arising
in the ordinary course of business) and any funded debt secured by a mortgage
on property of the Company or any Restricted Subsidiary whether or not
assumed. "Secured Debt" is defined to include indebtedness for money borrowed
secured by a mortgage upon any assets of the Company or a Restricted
Subsidiary; "mortgage" includes any mortgage, pledge or security interest.
"Consolidated Net Tangible Assets" is defined to mean the excess over current
liabilities of all assets as set forth in a consolidated balance sheet of the
Company and its consolidated Subsidiaries after deducting goodwill,
trademarks, patents, other like intangibles and minority interests of others.
(Section 1.01).
Restrictions on Secured Debt. The Indenture provides that, except as
described below, neither the Company nor any Restricted Subsidiary may incur
any Secured Debt without securing the Debt Securities (and, if the Company so
elects, any indebtedness ranking equally with the Debt Securities) equally and
ratably with, or prior to, such Secured Debt. This restriction does not apply
to indebtedness secured by (a) mortgages existing at the time a corporation
becomes a Restricted Subsidiary, (b) mortgages assumed in connection with a
merger with, or an acquisition of substantially all of the properties of, a
corporation, if any such mortgage existed prior to such merger or acquisition
and did not apply to any property owned by the Company or a Restricted
Subsidiary immediately prior to such merger or acquisition, (c) mortgages on
property existing at the time of acquisition thereof or mortgages on certain
property to finance the cost of acquisition, construction or improvement
thereof, (d) mortgages securing indebtedness owing to the Company or a
Restricted Subsidiary, (e) mortgages in favor of the United States or any
State or any instrumentality of either to secure partial, progress, advance or
other payments pursuant to any contract or statute, (f) mortgages incurred
under industrial revenue
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bond or similar financings, or (g) extensions, renewals or refundings of any
of the foregoing. Notwithstanding these provisions, the Company and its
Restricted Subsidiaries may incur Secured Debt without equally and ratably
securing the Debt Securities if after giving effect thereto the sum of (i) the
aggregate of all Secured Debt of the Company and its Restricted Subsidiaries
(except Secured Debt of the types described in (a) through (g) above), (ii)
the value of all sale and lease back transactions (as defined) and (iii) the
aggregate of all unsecured Funded Debt of Restricted Subsidiaries of the type
described in clause (iv) of the following paragraph, does not exceed 10% of
Consolidated Net Tangible Assets. (Section 10.06).
Restrictions on Borrowing by Restricted Subsidiaries. The Indenture provides
that Restricted Subsidiaries may not incur any Funded Debt, except (i) Funded
Debt owed to the Company or a Restricted Subsidiary, (ii) Funded Debt which is
Secured Debt that could under the preceding "Restrictions on Secured Debt"
paragraph be incurred without ratably securing the Debt Securities, (iii)
unsecured Funded Debt which represents an extension, renewal or refunding of
Secured Debt described in the second sentence of the "Restrictions on Secured
Debt" paragraph, (iv) unsecured Funded Debt, which, if it were Secured Debt,
would be permitted by the last sentence of the "Restrictions on Secured Debt"
paragraph, (v) existing unsecured Funded Debt assumed by a Restricted
Subsidiary in connection with its merger with, or acquisition of all or a
substantial part of the assets of any corporation, (vi) unsecured Funded Debt
of any corporation existing when it becomes a Restricted Subsidiary, (vii)
Funded Debt incurred in connection with industrial revenue bond or similar
financings, or (viii) extensions, renewals or refundings of any of the
foregoing. (Section 10.05).
Restrictions on Sale and Lease Back Transactions. The Indenture provides
that neither the Company nor any Restricted Subsidiary may sell and lease back
for periods exceeding five years any major facility owned as of the date of
the Indenture unless (a) fair value is received for the facility sold and (b)
an amount equal to the net proceeds of such sale is applied to the retirement
of Funded Debt which is not subordinated in right of payment to the Debt
Securities, provided that the amount of such required retirement shall be
reduced by (i) the amount of any Secured Debt which the Company or such
Restricted Subsidiary could then incur under the last sentence of the
preceding "Restrictions on Secured Debt" paragraph and (ii) the principal
amount of any instruments evidencing Funded Debt (which may include the Debt
Securities) delivered within 120 days after such sale to the applicable
trustee for retirement and cancellation, other than instruments retired by
payment at maturity or pursuant to mandatory sinking fund or prepayment
provisions. (Section 10.07).
Restrictions on Transfers of Property. Neither the Company nor any
Restricted Subsidiary may transfer or lease any major facility to any
Subsidiary excluded from the definition of "Restricted Subsidiary" in the
Indenture for any of the reasons described in the second sentence of the
preceding "Definitions" paragraph. (Section 10.08).
LIMITATIONS ON MERGER BY THE COMPANY
The Indenture provides that if, upon any merger or consolidation of the
Company with or into any other corporation or upon any transfer of
substantially all of its assets to any other corporation, any of the property
of the Company or a Restricted Subsidiary would thereupon become subject to
any mortgage, the Company will simultaneously with or prior to such
transaction secure the Debt Securities by a prior lien on such property.
(Section 8.03). In the event of any merger of the Company into or
consolidation of the Company with any other corporation or upon any transfer
of substantially all of its assets to any other corporation, the successor
corporation shall be substituted as obligor under the Indenture. (Sections
8.01 and 8.02).
MODIFICATION OF INDENTURE
The Indenture provides that with the consent of the holders of not less than
a majority in principal amount of the Debt Securities of each series affected
thereby at the time outstanding (or such greater percentage in such principal
amount as may be specified in the Prospectus Supplement), the Trustee and the
Company may execute a supplemental indenture to change the Indenture or modify
the rights of the holders of the Debt Securities of such series, but, without
the consent of the holder of each outstanding Debt Security of such series so
affected, a
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supplemental indenture may not, among other things, (i) change the maturity of
principal of or interest on any Debt Security of such series, reduce the
principal amount thereof or the interest thereon or impair the right to
convert any convertible Debt Securities, or (ii) reduce the aforesaid
percentage of holders of Debt Securities of such series whose consent shall be
required to authorize any such supplemental indenture. (Section 9.02).
DEFAULTS AND CERTAIN RIGHTS ON DEFAULT
An "Event of Default" is defined under the Indenture as any of the
following: default for 30 days in payment of any interest; default in payment
of principal; default for 60 days after notice in performance of any other
covenant in the Indenture; and certain events of bankruptcy, insolvency,
receivership or reorganization. The Indenture requires the Company to file
with the Trustee annually a written statement as to the fulfillment of its
obligations under the Indenture and provides that in case an Event of Default
with respect to Debt Securities of any series affected thereby should occur
and be continuing, the Trustee or the holders of at least 25% in principal
amount of the Debt Securities of such series then outstanding may declare the
principal of all the Debt Securities of such series to be due and payable. The
Indenture permits such declaration, under certain circumstances, to be
rescinded by the holders of a majority in principal amount of the Debt
Securities of such series at the time outstanding. (Sections 5.01, 5.02 and
10.04).
Subject to the provisions thereof relating to the duties of the Trustee in
case an Event of Default shall occur and be continuing, the Indenture provides
that the Trustee shall be under no obligation to exercise any of the rights or
powers under the Indenture at the request or direction of any of the holders
of Debt Securities, unless such holders shall have offered to the Trustee
reasonable security or indemnity. Subject to such provisions for
indemnification and certain limitations contained in the Indenture, the
holders of a majority in principal amount of the Debt Securities of any series
at the time outstanding and so affected shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee with
respect to the Debt Securities of such series. Such holders may, in certain
cases, waive any default except a default in payment of principal of or
premium, if any, or interest, if any, on the Debt Securities of such series.
(Sections 5.12, 5.13 and 6.03).
DEFEASANCE
The Prospectus Supplement will state if any defeasance provision will apply
to the Offered Debt Securities.
Defeasance and Discharge. The Indenture provides that, if applicable, the
Company will be discharged from any and all obligations in respect of the Debt
Securities of any series (except for certain obligations to register the
transfer or exchange of Debt Securities of such series, to replace stolen,
lost or mutilated Debt Securities of such series, to maintain paying agencies
and conversion agencies, if any, and to hold monies for payment in trust and
in respect of the conversion of Debt Securities of such series, if
convertible) upon the deposit with the Trustee, in trust, of money and/or
Government Obligations (as defined) which through the payment of interest and
principal in respect thereof in accordance with their terms will provide money
in an amount sufficient to pay any instalment of principal of and premium, if
any, and interest, if any, on the Debt Securities of such series on the stated
maturity of such payments in accordance with the terms of the Indenture and
the Debt Securities of such series. If specified in the Prospectus Supplement
to be applicable to the Debt Securities of such series, such a trust may be
established only if, among other things, the Company has delivered to the
Trustee (i) an opinion of counsel (who may be an employee of or counsel for
the Company) to the effect that the Company has received from, or there has
been published by, the Internal Revenue Service a ruling to the effect set
forth in clause (ii) of this sentence, or (ii) in lieu thereof, but only if
specified in the Prospectus Supplement, an opinion of such counsel to the
effect that the holders of the Debt Securities of such series will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit, defeasance and discharge and will be subject to federal income
tax on the same amount and in the same manner and at the same times, as would
have been the case if such deposit, defeasance and discharge had not occurred.
(Section 4.03).
Defeasance of Certain Covenants and Certain Events of Default. The Indenture
provides that, if applicable, the Company may omit to comply with certain
restrictive covenants described in Sections 10.05
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(Restrictions on Borrowing by Restricted Subsidiaries), 10.06 (Restrictions on
Secured Debt), 10.07 (Restrictions on Sale and Lease Back Transactions) and
10.08 (Restrictions on Transfers of Property), and that Section 5.01(c)
(describing a default in performance of certain covenants or agreements) shall
not, with respect to Sections 10.05, 10.06, 10.07 and 10.08, be deemed to be
an Event of Default under the Indenture and the Debt Securities of any series,
upon the deposit with the Trustee, in trust, of money and/or Government
Obligations (as defined) which through the payment of interest and principal
in respect thereof in accordance with their terms will provide money in an
amount sufficient to pay any instalment of principal of and premium, if any,
and interest, if any, on the Debt Securities of such series on the stated
maturity of such payments in accordance with the terms of the Indenture and
the Debt Securities of such series. The obligations of the Company under the
Indenture and the Debt Securities of such series other than with respect to
the covenants referred to above and the Events of Default other than the Event
of Default referred to above shall remain in full force and effect. If
specified in the Prospectus Supplement to be applicable to the Debt Securities
of such series, such a trust may be established only if, among other things,
the Company has delivered to the Trustee an opinion of counsel (who may be an
employee of or counsel for the Company) to the effect that the holders of the
Debt Securities of such series will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance of
certain covenants and Events of Default and will be subject to federal income
tax on the same amount and in the same manner and at the same times, as would
have been the case if such deposit and defeasance had not occurred. (Section
10.10).
Defeasance and Certain Other Events of Default. In the event the Company
exercises its option to omit compliance with certain covenants of the
Indenture with respect to the Debt Securities of any series as described above
and the Debt Securities of such series are declared due and payable because of
the occurrence of any Event of Default still possible after such defeasance,
the amount of money and Government Obligations on deposit with the Trustee
will be sufficient to pay amounts due on the Debt Securities of such series at
the time of their stated maturity but may not be sufficient to pay amounts due
on the Debt Securities of such series at the time of the acceleration
resulting from such Event of Default. The Company, however, shall remain
liable for such payments.
GOVERNING LAW
The Indenture, the Debt Securities and the coupons, if any, appertaining
thereto will be governed by, and construed in accordance with, the laws of the
State of New York. (Section 1.12).
CONCERNING THE TRUSTEE
The Prospectus Supplement will set forth whether The Chase Manhattan Bank or
another bank or trust company identified therein will be the Trustee with
respect to the Offered Debt Securities and the Debt Securities issuable upon
exercise of Offered Debt Warrants. The Chase Manhattan Bank is one of a number
of banks with which the Company maintains ordinary banking relationships and
with which the Company maintains credit facilities. As of the date of this
Prospectus, The Chase Manhattan Bank is trustee with respect to six series of
Debt Securities, the 9% Notes Due 1999, the 8 5/8% Debentures Due 2021, the 8
1/2% Notes Due 2003, the 7 7/8% Debentures Due 2023, the 7 1/2% Notes Due 1999
and the Medium-Term Notes, Series A of the Company.
DESCRIPTION OF CAPITAL STOCK
The following description of the capital stock of the Company, as amended or
superseded by the applicable Prospectus Supplement, includes a summary of
certain provisions of the Company's Certificate of Incorporation, as amended
(the "Certificate of Incorporation"), and its By-laws, as amended (the "By-
laws"). Such description does not purport to be complete and is subject to the
detailed provisions of, and is qualified in its entirety by reference to, the
Certificate of Incorporation and the By-laws, copies of which are on file as
exhibits to the Registration Statements of which this Prospectus is a part.
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CAPITAL STOCK GENERALLY
The Company has authorized 810 million shares, of which 750 million are
Common Stock, par value $3.125 per share, and 60 million are Preferred Stock,
without par value.
Apart from the $2.67 Convertible Preferred Stock (the "$2.67 Preferred")
described below under "Outstanding Preferred Stock", the rights, preferences
and limitations of which are set forth in the Certificate of Incorporation,
the Board of Directors of the Company is empowered to provide for any series
of Preferred Stock and, in general, to determine the relative rights,
preferences and limitations of such series. The Certificate of Incorporation
provides that no holder of Common Stock or Preferred Stock shall have any
preemptive rights.
The outstanding shares of Common Stock and $2.67 Preferred are, and any
shares of Common Stock issued upon conversion of any convertible Debt
Securities will be, validly issued, fully paid and nonassessable.
COMMON STOCK
Holders of Common Stock are entitled to receive such dividends as are
declared by the Board of Directors and are entitled to cast one vote for each
share on all matters voted upon by stockholders, except where holders of
Preferred Stock are entitled to vote separately in certain cases. Upon
liquidation of the Company, holders of Common Stock are entitled to share
equally and ratably in any assets available for distribution to them.
No dividend may be paid or declared on the Common Stock or any other junior
stock, other than a dividend payable in Common Stock or other junior stock,
nor may any shares of Common Stock or any junior stock be acquired for a
consideration by the Company or any subsidiary, unless all dividends on the
$2.67 Preferred accrued for all past quarterly dividend periods have been paid
and unless, in the case of dividends on the Common Stock or any other junior
stock, the full dividends on the $2.67 Preferred for the then current
quarterly dividend period have been then paid or declared. Subject to the
foregoing, the Certificate of Incorporation does not restrict the Company from
purchasing shares of Common Stock.
The co-transfer agent and registrar for shares of the Common Stock is
Continental Stock Transfer & Trust Company. The Company also serves as the co-
transfer agent for shares of the Common Stock.
OUTSTANDING PREFERRED STOCK
Holders of $2.67 Preferred are entitled to cumulative dividends at an annual
rate of $2.67 per share, payable quarterly on the 10th day of March, June,
September and December, as and when declared by the Board of Directors, to
preference in liquidation of $30.50 per share plus accrued dividends then
unpaid and to three-tenths of a vote per share on all matters voted upon by
stockholders (but are not, except in certain cases, entitled to vote as a
class) and effective June 2, 1997 have the right to convert each share of
$2.67 Preferred into 6.205 ( 6205/1000) shares of Common Stock (subject to
adjustment to prevent dilution of the conversion right in certain events). The
Company may redeem all or any part of the $2.67 Preferred at a price of $30.50
per share, plus accrued dividends then unpaid.
PREFERRED SHARE PURCHASE RIGHTS
Each outstanding share of Common Stock also evidences one preferred share
purchase right (the "Rights"). Unless otherwise specified in the Prospectus
Supplement applicable to any convertible Debt Securities, as long as the
Rights are attached to the Common Stock, the Company presently intends to
deliver one Right with each new share of Common Stock issued, including shares
issued upon conversion of such Debt Securities, prior to the expiration or
earlier redemption or exchange of the Rights, so that all such shares will
have attached Rights. The description and terms of the Rights are set forth in
a Rights Agreement dated as of November 19, 1997, as amended, between the
Company and First Chicago Trust Company of New York, as Rights Agent, and the
following is subject to the detailed provisions of, and is qualified in its
entirety by reference to, such Rights Agreement, a copy of which is on file as
an exhibit to the Registration Statements of which this Prospectus is a part.
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Each Right entitles the registered holder thereof until December 24, 2007
(or, if earlier, the redemption or exchange of the Rights) to purchase from
the Company one one-hundredth ( 1/100) of a share of Series A Junior
Participating Preferred Stock, without par value (the "Preferred Shares"), of
the Company at an exercise price of $150 per one one-hundredth of a Preferred
Share (the "Purchase Price"), subject to certain adjustments.
The Rights will not be exercisable or transferable apart from the Common
Stock, until the earlier of (i) the tenth day after the public announcement
that a person or group has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the Common Stock (other than a person
or group that becomes such a 15% beneficial owner by means of share
acquisitions by the Company or a person or group that the Board of Directors
determines in good faith has become such a 15% beneficial owner inadvertently,
so long as such person or group as promptly as possible divests enough Common
Stock so as no longer to be such a 15% beneficial owner) or (ii) the tenth
business day (or such later date as may be determined by the Board of
Directors prior to a person or group becoming such a 15% beneficial owner)
after the commencement of, or the announcement of an intention to commence, a
tender or exchange offer the consummation of which would result in beneficial
ownership by a person or group of 15% or more of the Common Stock. The Rights
will not have any voting rights or be entitled to dividends.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of the assets or earning power of the
Company and its subsidiaries (taken as a whole) are sold, each Right will
entitle its holder to purchase, at the Purchase Price, that number of shares
of common stock of the acquiring company which at the time of such transaction
would have a market value of two times the Purchase Price. Alternatively, if a
person or group has become a 15% beneficial owner as described in clause (i)
of the first sentence of the preceding paragraph, each Right, other than
Rights beneficially owned by the 15% holder (which will thereafter be void),
will become exercisable for the number of shares of Common Stock which, at
that time, would have a market value of two times the Purchase Price or, if
such beneficial ownership is less than 50% of the outstanding Common Stock,
may be exchanged by the Board of Directors, at its option, in whole or in
part, for shares of Common Stock at an exchange ratio of one share of Common
Stock for each Right, subject to adjustment.
The Rights are redeemable at $.01 per Right (the "Redemption Price"),
subject to adjustment, at any time prior to the time that a person or group
has acquired, or obtained the right to acquire, beneficial ownership of 15% or
more of the Common Stock. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders
of Rights will be to receive the Redemption Price. The rights will expire on
December 24, 2007 (unless earlier redeemed or exchanged).
In the event that the Company is not able to authorize a sufficient number
of additional shares of Common Stock to satisfy the exercise or exchange of a
Right pursuant to its terms, the Company will be required to substitute
Preferred Shares (or a fraction thereof) for the shares of Common Stock that
would otherwise be issuable upon exercise or exchange of such Right at a rate
such that the Preferred Shares substituted would have the same market value as
the shares of Common Stock that would otherwise have been issued upon such
exercise or exchange.
ELECTION OF DIRECTORS, OTHER VOTING PROVISIONS AND RELATED MATTERS
Pursuant to the Certificate of Incorporation, the Company's Board of
Directors is divided into three classes of directors serving staggered three-
year terms, with the exact number of directors to be determined from time to
time by or pursuant to the By-laws, provided that their number shall not
exceed 20. The Board of Directors is currently comprised of 12 directors. The
Certificate of Incorporation also provides a procedure requiring that advance
written notice be given to the Company of stockholder nominations of
directors.
The Certificate of Incorporation requires, in addition to any affirmative
vote required by law, the Certificate of Incorporation or the By-laws, the
affirmative vote of two-thirds of the votes cast by the Company's stockholders
entitled to vote thereon in order to obtain stockholder approval of amendments
to the Certificate of
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Incorporation, mergers, consolidations and sales or leases of substantially
all of the Company's assets. Currently, Delaware law generally requires the
affirmative vote of the holders of a majority of the outstanding shares of the
Company's capital stock entitled to vote thereon. Notwithstanding the
foregoing, the Certificate of Incorporation further provides that the
affirmative vote of at least 80 percent of the votes entitled to be cast by
the holders of all the then outstanding shares of stock of the Company
entitled to be voted generally in the election of directors, voting together
as a single class, shall be required for the amendment or repeal of, or the
adoption of provisions inconsistent with, the above-described provisions of
the Certificate of Incorporation relating to classification and stockholder
nomination of directors unless such amendment, repeal or adoption has been
approved by three-fourths of the directors then in office.
The By-laws require that the Annual Meeting of the Company's stockholders
for the election of directors and other proper business be held at such place
as may from time to time be designated by the directors on the first Wednesday
of May or on such other day as the directors may designate (or, if the day
fixed for the meeting is a legal holiday, on the next business day which is
not a legal holiday.) The By-laws further provide that special meetings of the
stockholders may be called only by the Chairman of the Board, the President or
the directors, by resolution adopted by a majority of the entire Board of
Directors. In addition, the Certificate of Incorporation provides that any
action to be taken by the stockholders must be effected at a duly called
annual or special meeting and may not be effected by written consent. The By-
laws require that, except as otherwise provided by law, at least ten days'
prior notice of each annual or special meeting shall be given by written
notice signed by the Secretary or an Assistant Secretary and mailed to each
stockholder of record entitled to vote. The By-laws also provide a procedure
requiring that advance written notice be given to the Company of the proposal
by stockholders of business other than the nomination of directors and then
only such business as is stated in a notice of a special meeting shall be
transacted at such meeting.
Certain of the provisions described under this section entitled "Description
of Capital Stock", including the right to issue additional shares of Preferred
Stock, could have the effect of discouraging transactions that might lead to a
change in control of the Company.
DESCRIPTION OF DEBT WARRANTS
The Company may issue, together with Debt Securities or separately, Debt
Warrants for the purchase of Debt Securities. If the Debt Warrants are issued
together with any Debt Securities, they may be attached to or separate from
such Debt Securities. The Offered Debt Warrants are to be issued under a Debt
Warrant Agreement (the "Debt Warrant Agreement") to be entered into between
the Company and a bank or trust company, as Warrant Agent (the "Debt Warrant
Agent"), all as shall be set forth in the Prospectus Supplement relating
thereto. The statements under this caption, as modified or superseded by the
applicable Prospectus Supplement, are brief summaries of certain provisions of
the Debt Warrant Agreement and are subject to the detailed provisions thereof,
the forms of which are on file as an exhibit to the Registration Statements of
which this Prospectus is a part. References under this caption in italics are
to the Debt Warrant Agreement. Wherever particular provisions of the Debt
Warrant Agreement are referred to, such provisions are incorporated by
reference as a part of the statements made, and the statements are qualified
in their entirety by such reference.
GENERAL
Reference is made to the Prospectus Supplement for the following terms of
the Offered Debt Warrants: (i) the price at which the Offered Debt Warrants
will be issued; (ii) the currency or composite currency for which the Offered
Debt Warrants may be purchased; (iii) the designation, aggregate principal
amount, currency or composite currency and terms of the Debt Securities which
may be purchased upon exercise of the Offered Debt Warrants; (iv) if
applicable, the designation and terms of the Debt Securities with which the
Offered Debt Warrants are issued and the number of Offered Debt Warrants
issued with each of such Debt Securities; (v) if applicable, the date on and
after which the Offered Debt Warrants and the related Debt Securities will be
separately transferable; (vi) the principal amount of Debt Securities
purchasable upon exercise of each Offered
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Debt Warrant and the price at which and the currency or composite currency in
which such principal amount of Debt Securities may be purchased upon such
exercise; (vii) the date on which the right to exercise the Offered Debt
Warrants shall commence and the date on which such right shall expire (the
"Debt Warrant Expiration Date") or, if the Offered Debt Warrants are not
continuously exercisable throughout such period, the specific date or dates on
which they will be exercisable (each, a "Debt Warrant Exercise Date", which
term shall also mean, with respect to Offered Debt Warrants continuously
exercisable for a period of time, every date during such period); (viii)
whether the Debt Warrant certificates representing the Offered Debt Warrants
(the "Debt Warrant Certificates") will be in registered form ("Registered
Warrants") or bearer form ("Bearer Warrants"), or both; (ix) any applicable
federal income tax consequences; (x) the identity of the Debt Warrant Agent in
respect of the Offered Debt Warrants; (xi) the proposed listing, if any, of
the Offered Debt Warrants or the Debt Securities purchasable upon exercise
thereof on any securities exchange; and (xii) any other terms of the Offered
Debt Warrants.
Registered Warrants of each series will be evidenced by Debt Warrant
Certificates in registered form and Bearer Warrants of each series will be
evidenced by a permanent global Debt Warrant Certificate in bearer form (the
"Global Debt Warrant Certificate"). The Global Debt Warrant Certificate will
be deposited with a common depositary for Euro-clear and Cedel, for credit to
the accounts of the subscribers for the Bearer Warrants on the related date of
issue. Bearer Warrants will not be issued in definitive form. At the option of
the holder upon request confirmed in writing, and subject to the terms of the
relevant Debt Warrant Agreement, Registered Warrants of any series will be
exchangeable for Registered Warrants of the same series representing in the
aggregate the number of Debt Warrants surrendered for exchange. Registered
Warrants may be presented for exchange and for registration of transfer (with
the form of transfer endorsed thereon duly executed), at the corporate trust
office of the Debt Warrant Agent for such series of Debt Warrants (or any
other office indicated in the Prospectus Supplement relating to such series of
Debt Warrants) without service charge and upon payment of any taxes and other
governmental charges as described in the relevant Debt Warrant Agreement. Such
transfer or exchange will be effected upon the Debt Warrant Agent for such
series of Debt Warrants being satisfied with the documents of title and
identity of the person making the request. (Section 4.01).
Bearer Warrants will not be offered, sold or delivered, at any time, to
persons within the United States or to United States persons, except to the
extent permitted under United States Treasury Regulations. See "Limitations on
Issuance of Bearer Debt Securities and Bearer Debt Warrants".
EXERCISE OF DEBT WARRANTS
Each Debt Warrant will entitle the holder to purchase for cash such
principal amount of Debt Securities at such exercise price as shall in each
case be set forth in, or be determinable as set forth in, the Prospectus
Supplement. Debt Warrants may be exercised at any time up to the close of
business on the Debt Warrant Expiration Date set forth in the Prospectus
Supplement. After the close of business on the Debt Warrant Expiration Date
(or such later date to which the Debt Warrant Expiration Date may be extended
by the Company), unexercised Debt Warrants will become void. (Section 2.02).
Subject to any restrictions and additional requirements that may be set
forth in the Prospectus Supplement, Registered Warrants may be exercised by
delivery to the Debt Warrant Agent of the Debt Warrant Certificate evidencing
such Registered Warrants properly completed and duly executed and of payment
as provided in the Prospectus Supplement of the amount required to purchase
the Debt Securities purchasable upon such exercise. (Section 2.03). Subject to
any such restrictions and additional requirements, Bearer Warrants may be
exercised by the beneficial owner thereof delivering to Euro-clear or Cedel a
duly completed exercise letter or tested telex, in the form obtainable from
Euro-clear or Cedel or the Debt Warrant Agent, setting forth, among other
things, instructions for payment as provided in the Prospectus Supplement on
the date of exercise of the amount required to purchase the Debt Securities
purchasable upon exercise of Bearer Warrants. Purchasers of Bearer Securities
to be delivered upon exercise of the Bearer Warrants will be subject to
certification requirements as to beneficial ownership thereof. See
"Limitations on Issuance of Bearer Debt Securities and Bearer Debt Warrants".
The
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procedures to be followed in connection with the delivery of the exercise
letter will be set forth in the Prospectus Supplement. The exercise price of
Debt Warrants will be that price applicable on the date of receipt of payment
in full of the requisite amount of funds, determined as set forth in the
Prospectus Supplement. Upon receipt of such payment (plus payment of any
accrued interest on the Debt Securities being purchased, from and including
the immediately preceding interest payment date for such Debt Securities to
and including the Debt Warrant Exercise Date (unless the Debt Warrant Exercise
Date is after the record date, if any, but on or before the immediately
succeeding interest payment date, if any, for the Debt Securities being
purchased, in which case no accrued interest is payable in respect of Debt
Securities to be issued as Registered Securities)) and upon either (i)
surrender of such Debt Warrant Certificate at the corporate trust office of
the Debt Warrant Agent or any other office indicated in the Prospectus
Supplement, in the case of Registered Warrants, or (ii) satisfaction of the
certification requirements referred to above, in the case of Bearer Warrants,
the Company will, as soon as practicable, forward the Debt Securities
purchasable upon such exercise. Only Registered Securities will be deliverable
upon exercise of Registered Warrants. Registered Securities or, subject to the
certification procedures referred to above, Bearer Securities will be
delivered upon exercise of Bearer Warrants, as may be specified in the
exercise letter. If fewer than all of the Registered Warrants represented by a
Debt Warrant Certificate are exercised, a new Debt Warrant Certificate will be
issued representing the remaining number of Registered Warrants. (Section
2.03).
MODIFICATIONS
The Debt Warrant Agreement and the terms of the Debt Warrants and the Debt
Warrant Certificates may be amended by the Company and the Debt Warrant Agent,
without the consent of the holders, for the purpose of curing any ambiguity,
or of curing, correcting or supplementing any defective or inconsistent
provision therein or in any other manner which the Company may deem necessary
or desirable and which will not adversely affect the interests of the holders
in any material respect. (Section 6.01).
MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITION
If at any time there shall be a merger or consolidation of the Company or
transfer of substantially all of its assets as permitted under the Indenture,
the successor corporation thereunder shall succeed to and assume all
obligations of the Company under the Debt Warrant Agreement and the Debt
Warrant Certificates. (Section 3.04). See "Description of Debt Securities --
Limitations on Merger by the Company".
ENFORCEABILITY OF RIGHTS OF DEBT WARRANTHOLDERS; GOVERNING LAW
The Debt Warrant Agent will act solely as an agent of the Company in
connection with the Debt Warrant Certificates and will not assume any
obligation or relationship of agency or trust for or with any holders of Debt
Warrant Certificates or beneficial owners of Debt Warrants. (Section 5.02).
Any holder of Debt Warrant Certificates evidencing Registered Warrants and any
beneficial owner of Bearer Warrants may, without the consent of the Debt
Warrant Agent, any other holder, the Trustee, the holder of any Debt
Securities issued upon exercise of Debt Warrants or, if applicable, the common
depositary for Euro-clear and Cedel, enforce by appropriate legal action, on
its own behalf, its right to exercise the Debt Warrants evidenced by such Debt
Warrant Certificates or the Global Debt Warrant Certificates evidencing such
Bearer Warrants, as the case may be, in the manner provided therein and in the
Debt Warrant Agreement. (Section 3.03). No holder of any Debt Warrant
Certificate or beneficial owner of any Debt Warrants evidenced thereby shall
be entitled to any of the rights of a holder of the Debt Securities
purchasable upon exercise of such Debt Warrants, including, without
limitation, the right to receive the payment of principal of or premium, if
any, or interest, if any, on such Debt Securities or to enforce any of the
covenants in the Indenture. (Section 3.01). The Debt Warrants and each Debt
Warrant Agreement will be governed by, and construed in accordance with, the
laws of the State of New York. (Section 6.04).
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LIMITATIONS ON ISSUANCE OF BEARER DEBT SECURITIES AND BEARER DEBT WARRANTS
Except as may otherwise be provided in the Prospectus Supplement applicable
thereto, in compliance with United States federal tax laws and regulations,
(i) Debt Securities that are Bearer Securities (including Debt Securities in
global form) may not be offered or sold during the restricted period (as
defined under "Description of Debt Securities--Form, Denominations, Exchange
and Transfer") to persons within the United States or its possessions ("United
States") or to United States persons, (ii) Bearer Securities sold during the
restricted period may not be delivered within the United States, and (iii)
Debt Warrants that are Bearer Warrants may not be offered, sold or delivered
to persons within the United States or to United States persons at any time,
except to the extent permitted under Section 1.163-5(c)(2)(i)(D) of the United
States Treasury Regulations (the "D Rules"). Any underwriters, agents and
dealers participating in the offering of Bearer Securities or Bearer Warrants
must agree that, except to the extent permitted under the D Rules, they will
not offer or sell Bearer Securities to persons within the United States or to
United States persons during the restricted period, will not deliver within
the United States Bearer Securities sold during the restricted period, and
will not offer, sell or deliver Bearer Warrants to persons within the United
States or to United States persons at any time. In addition, any such
underwriters, agents and dealers must have in effect procedures reasonably
designed to ensure that their employees or agents who are directly engaged in
selling Bearer Securities or Bearer Warrants are aware that such Bearer
Securities and Bearer Warrants cannot be offered or sold, during the
applicable period, to persons within the United States or to United States
persons.
Bearer Securities (other than temporary global Debt Securities) will be
delivered in definitive form only upon certification, as provided in the D
Rules, that the beneficial owners thereof are not United States persons, or
other certification as to ownership permissible under the D Rules.
Bearer Securities (other than temporary global Debt Securities) and any
coupons appertaining thereto will bear a legend substantially to the following
effect: "Any United States person who holds this obligation will be subject to
limitations under the United States income tax laws, including the limitations
provided in Sections 165(j) and 1287(a) of the United States Internal Revenue
Code". The sections referred to in such legend provide that a United States
person (other than a United States financial institution described above or
United States person holding through such a financial institution) who holds a
Bearer Security or coupon will not be allowed to deduct any loss realized on
the sale, exchange or redemption of such Bearer Security and any gain (which
might otherwise be characterized as capital gain) recognized on such sale,
exchange or redemption will be treated as ordinary income.
As used herein, "United States person" means a citizen, national or resident
of the United States, a corporation, partnership or other entity created or
organized in or under the laws of the United States or any political
subdivision thereof, or an estate or trust the income of which is subject to
United States federal income taxation regardless of its source.
DESCRIPTION OF FOREIGN CURRENCY WARRANTS
The Offered Foreign Currency Warrants will be issued under a Currency
Warrant Agreement (the "Currency Warrant Agreement") to be entered into
between the Company and a bank or trust company, as Currency Warrant Agent
(the "Currency Warrant Agent"), all as shall be set forth in the Prospectus
Supplement related thereto. The statements under this caption, as modified or
superseded by the applicable Prospectus Supplement, are brief summaries of
certain provisions of the Currency Warrant Agreement, including the form of
certificate representing Foreign Currency Warrants, and are subject to the
detailed provisions thereof. A form of Currency Warrant Agreement is on file
as an exhibit to the Registration Statements of which this Prospectus is a
part. References under this caption in italics are to the Currency Warrant
Agreement. Wherever particular provisions of the Currency Warrant Agreement
are referred to, such provisions are incorporated by reference as a part of
the statements made, and the statements are qualified in their entirety, by
such reference.
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GENERAL
The Company may offer and sell Foreign Currency Warrants separately or in
conjunction with the offer and sale of Debt Securities, Debt Warrants or Debt
Securities and Debt Warrants. The Foreign Currency Warrants may be issued (a)
in the form of Foreign Currency Put Warrants, which entitle the owners thereof
to receive from the Company the Cash Settlement Value (as hereinafter defined)
in United States dollars of the right to sell a designated amount of a
specified foreign currency (a "Base Currency") for a designated amount of
United States dollars, (b) in the form of Foreign Currency Call Warrants,
which entitle the owners thereof to receive from the Company the Cash
Settlement Value in United States dollars of the right to purchase a
designated amount of a Base Currency for a designated amount of United States
dollars, or (c) in such other form as shall be specified in the Prospectus
Supplement.
If Foreign Currency Warrants are to be offered either in the form of Foreign
Currency Put Warrants or Foreign Currency Call Warrants, an owner will receive
a cash payment upon exercise only if the Foreign Currency Warrants have a Cash
Settlement Value in excess of zero at the time of exercise. The spot exchange
rate of the applicable Base Currency, as compared to the United States dollar
upon exercise, will determine whether the Foreign Currency Warrants have a
Cash Settlement Value on any given day prior to their expiration. Such spot
exchange rate on any day (the "Spot Rate") will be the offered spot rate of
the applicable Base Currency for United States dollars as quoted by a bank
named for such purpose in the Prospectus Supplement or, if such bank is not
quoting such rate, the rate quoted by such other leading bank in the foreign
exchange markets as may be selected by the Company in good faith. (Section
2.02). The Foreign Currency Warrants are expected to be "out-of-the-money"
(i.e., their Cash Settlement Value will be zero) when initially sold and will
be "in-the-money" (i.e., their Cash Settlement Value will exceed zero) if, in
the case of Foreign Currency Put Warrants, the Base Currency depreciates
against the United States dollar to the extent that one United States dollar
is worth more than the price determined for the Base Currency in the
Prospectus Supplement (the "Strike Price") or, in the case of Foreign Currency
Call Warrants, the Base Currency appreciates against the United States dollar
to the extent that one United States dollar is worth less than the Strike
Price. The "Cash Settlement Value" on an Exercise Date (as such term is
defined in the Prospectus Supplement) is an amount which is the greater of (i)
zero, (ii) the amount computed, in the case of Foreign Currency Put Warrants,
by subtracting from a constant (e.g., 50), or, in the case of Foreign Currency
Call Warrants, by subtracting such constant from, an amount equal to such
constant multiplied by a fraction, the numerator of which is the Strike Price
and the denominator of which is the Spot Rate on such day, and (iii) the
expiration value, if any, specified in the Prospectus Supplement.
Reference is made to the Prospectus Supplement for the following terms of
the Offered Foreign Currency Warrants: (i) the number of Offered Foreign
Currency Warrants and the price at which the Offered Foreign Currency Warrants
will be issued; (ii) whether the Offered Foreign Currency Warrants are Foreign
Currency Put Warrants or Foreign Currency Call Warrants or otherwise; (iii)
the date on which the right to exercise the Offered Foreign Currency Warrants
shall commence and the date on which such right shall expire (the "Foreign
Currency Warrant Expiration Date"); (iv) the formula or method for determining
the Cash Settlement Value and the Strike Price of each Foreign Currency
Warrant, if applicable; (v) any procedures and conditions relating to the
exercise of the Offered Foreign Currency Warrants in addition to those
described in this Prospectus; (vi) any circumstances that will cause the
Offered Foreign Currency Warrants to be deemed automatically exercised in
addition to those described in this Prospectus; (vii) the minimum number, if
any, of Offered Foreign Currency Warrants that may be exercised at any one
time (other than upon automatic exercise); (viii) the identity of the Currency
Warrant Agent in respect of the Offered Foreign Currency Warrants; (ix) the
identity of the national securities exchange on which the Offered Foreign
Currency Warrants will initially be listed; and (x) any other terms of the
Offered Foreign Currency Warrants.
BOOK-ENTRY PROCEDURES AND SETTLEMENT
Except as may be otherwise provided in an applicable Prospectus Supplement
with respect to a series of Foreign Currency Warrants, the Foreign Currency
Warrants of such series will be issued in book-entry form and
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will be represented by a single Global Foreign Currency Warrant Certificate,
registered in the name of a depositary of the Foreign Currency Warrants of
such series, or its nominee, as specified in the applicable Prospectus
Supplement. Owners of Foreign Currency Warrants of a series issued in book-
entry form will have beneficial interests in the Global Foreign Currency
Warrant Certificate in respect thereof but will generally not be entitled to
receive physical delivery of definitive certificates representing such Foreign
Currency Warrants. An owner's ownership of a Foreign Currency Warrant will be
recorded on or through the records of the brokerage firm or other entity that
maintains such owner's account. In turn, the total number of Foreign Currency
Warrants held by an individual brokerage firm for its clients will be
maintained on the records of the depositary in respect thereof in the name of
such brokerage firm or its agent. (Section 1.04). Transfer of ownership of any
Foreign Currency Warrant will be effected only through the selling owner's
brokerage firm. Neither the Company nor the Currency Warrant Agent will have
any responsibility or liability for any aspect of the records relating to
beneficial interests in the Global Foreign Currency Warrant Certificate or for
maintaining, supervising or reviewing records relating to such beneficial
interests.
EXERCISE OF FOREIGN CURRENCY WARRANTS
Except as may otherwise be provided in the Prospectus Supplement relating
thereto, each Foreign Currency Warrant will entitle the owner thereof on the
Settlement Date (as such term is defined in the Prospectus Supplement) to the
Cash Settlement Value of such Foreign Currency Warrant on the applicable
Exercise Date, in each case as described in the Prospectus Supplement relating
thereto. (Section 2.02). If not exercised prior to 3:00 p.m., New York City
time, on the fifth business day preceding the Foreign Currency Warrant
Expiration Date, Foreign Currency Warrants will be deemed automatically
exercised on the Foreign Currency Warrant Expiration Date. (Section 2.03).
Foreign Currency Warrants will also be deemed automatically exercised as
described below under "Delisting of Foreign Currency Warrants".
LISTING
Each series of Foreign Currency Warrants will be listed on a national
securities exchange, subject only to official notice of issuance, as a pre-
condition to the sale of any Foreign Currency Warrants of such series. The
Foreign Currency Warrants will cease trading as of the close of business on
the Foreign Currency Warrant Expiration Date.
DELISTING OF FOREIGN CURRENCY WARRANTS
In the event that the Foreign Currency Warrants of any series are delisted
from, or permanently suspended from trading on, each national securities
exchange on which the Foreign Currency Warrants of such series are listed and,
at or prior to such delisting or permanent suspension, the Foreign Currency
Warrants of such series shall not have been accepted for listing on another
national securities exchange, the Foreign Currency Warrants of such series
will be deemed automatically exercised on the date on which such delisting or
permanent suspension becomes effective. The Company will notify owners, or
will cause owners to be notified, as soon as practicable of any expected
delisting or permanent suspension of trading of the Foreign Currency Warrants.
(Section 2.03). The Company will covenant in the applicable Currency Warrant
Agreement not to seek delisting of the Foreign Currency Warrants or suspension
of their trading on any national securities exchange upon which the Foreign
Currency Warrants are listed unless prior to such delisting or suspension the
Foreign Currency Warrants shall have been accepted for listing on another
national securities exchange. (Section 2.04).
MODIFICATION
The Currency Warrant Agreement and the terms of the Foreign Currency
Warrants and the Global Foreign Currency Warrant Certificate may be amended by
the Company and the Currency Warrant Agent, without the consent of any owners
of the Foreign Currency Warrants or the registered holder of the Global
Foreign Currency Warrant Certificate, for the purpose of curing any ambiguity,
or of curing, correcting or supplementing any
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defective or inconsistent provision contained therein, permitting the issuance
of separate Foreign Currency Warrant certificates in definitive form to
owners, or in any other manner which the Company may deem necessary or
desirable and which will not adversely affect the interest of the owners.
(Section 6.01).
The Company and the Currency Warrant Agent may also modify or amend the
Currency Warrant Agreement and the terms of the Foreign Currency Warrants and
the Global Foreign Currency Warrant Certificate, with the consent of the
owners of not less than a majority in number of the then outstanding
unexercised Foreign Currency Warrants affected thereby, provided that no such
modification or amendment may be made without the consent of each owner of
Foreign Currency Warrants affected thereby that (i) increases the Strike
Price, in the case of a Foreign Currency Put Warrant, or decreases the Strike
Price, in the case of a Foreign Currency Call Warrant, (ii) shortens the
period of time during which the Foreign Currency Warrants may be exercised,
(iii) otherwise materially and adversely affects the exercise rights of the
owners of such Foreign Currency Warrants or (iv) reduces the percentage of the
number of outstanding Foreign Currency Warrants the consent of whose owners is
required for modification or amendment of the Currency Warrant Agreement or
the terms of the Foreign Currency Warrants or the Global Foreign Currency
Warrant Certificate. (Section 6.01).
MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITION
If at any time there shall be a merger, consolidation, sale, transfer,
conveyance or other disposition of substantially all of the assets of the
Company, then in any such event the successor or assuming corporation shall
succeed to and be substituted for the Company, with the same effect as if it
had been named in the Currency Warrant Agreement and in the Foreign Currency
Warrants as the Company. The Company shall thereupon be relieved of any
further obligation under the Currency Warrant Agreement or under the Foreign
Currency Warrants, and, in the event of any such sale, transfer, conveyance
(other than by way of lease) or other disposition, the Company as the
predecessor corporation may thereupon or at any time thereafter be dissolved,
wound up or liquidated. (Section 3.02).
ENFORCEABILITY OF RIGHTS BY OWNERS OF FOREIGN CURRENCY WARRANTS; GOVERNING LAW
The Currency Warrant Agent will act solely as an agent of the Company under
the Currency Warrant Agreement and in connection with the Global Foreign
Currency Warrant Certificate and with the issuance and exercise of Foreign
Currency Warrants and will not assume any obligation or relationship of agency
or trust for or with any owner of a beneficial interest in Foreign Currency
Warrants or with the registered holder thereof. (Section 5.02). Any owner may,
without the consent of the Currency Warrant Agent or any other owner, enforce
by appropriate legal action, on its own behalf, its right to exercise, and to
receive payment upon the exercise of, its Foreign Currency Warrants. (Section
3.01). The Foreign Currency Warrants and each Currency Warrant Agreement will
be governed by, and construed in accordance with, the laws of the State of New
York. (Section 6.05).
FEDERAL INCOME TAX CONSIDERATIONS
A summary of certain anticipated United States federal income tax
consequences to United States persons of investing in the Foreign Currency
Warrants will be set forth in the applicable Prospectus Supplement.
RISK FACTORS RELATING TO THE FOREIGN CURRENCY WARRANTS
THE FOREIGN CURRENCY WARRANTS MAY ENTAIL RISKS PRIMARILY RELATED TO
FLUCTUATIONS IN THE FOREIGN CURRENCY MARKETS AND POSSIBLE ILLIQUIDITY IN THE
SECONDARY MARKET. THESE RISKS WILL VARY DEPENDING ON THE PARTICULAR TERMS OF
THE OFFERED FOREIGN CURRENCY WARRANTS AND WILL BE MORE FULLY DESCRIBED IN THE
PROSPECTUS SUPPLEMENT.
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PLAN OF DISTRIBUTION
The Company may sell the Debt Securities, the Debt Warrants and the Foreign
Currency Warrants in any of three ways (or in any combination thereof): (i)
through underwriters or dealers; (ii) directly to a limited number of
purchasers or to a single purchaser; or (iii) through agents. The Prospectus
Supplement with respect to the Offered Debt Securities, the Offered Debt
Warrants and the Offered Foreign Currency Warrants will set forth the terms of
the offering thereof, including the name or names of any underwriters and the
respective amounts of the Offered Debt Securities, the Offered Debt Warrants
and the Offered Foreign Currency Warrants underwritten or purchased by each of
them, the purchase price of the Offered Debt Securities, the Offered Debt
Warrants and the Offered Foreign Currency Warrants and the proceeds to the
Company from such sale, any discounts, commissions or other items constituting
compensation from the Company, any initial public offering price and any
discounts, commissions or concessions allowed or reallowed or paid to dealers,
any restrictions or limitations on persons to whom, jurisdictions in which or
the manner in which the Offered Debt Securities, Offered Debt Warrants and the
Offered Foreign Currency Warrants may be offered, sold, resold or delivered,
any securities exchanges on which the Offered Debt Securities and the Offered
Debt Warrants may initially be listed and the national securities exchange on
which the Offered Foreign Currency Warrants will initially be listed. Only
underwriters so named in the Prospectus Supplement are deemed to be
underwriters in connection with the Offered Debt Securities, the Offered Debt
Warrants and the Offered Foreign Currency Warrants.
If underwriters or dealers are used in the sale, the Debt Securities, the
Debt Warrants and the Foreign Currency Warrants will be acquired by the
underwriters or dealers for their own account and may be resold from time to
time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of
sale. The Debt Securities, the Debt Warrants and the Foreign Currency Warrants
may be offered to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by such a
managing underwriter or underwriters. Unless otherwise set forth in the
Prospectus Supplement, the obligations of the underwriters to purchase the
Offered Debt Securities, the Offered Debt Warrants and the Offered Foreign
Currency Warrants will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all the Offered Debt Securities,
the Offered Debt Warrants and the Offered Foreign Currency Warrants if any are
purchased. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
Debt Securities, Debt Warrants and Foreign Currency Warrants may also be
sold directly by the Company or through agents designated by the Company from
time to time. The Prospectus Supplement will name any agent involved in the
offer or sale thereof in respect of which this Prospectus is delivered and
will set forth any commissions payable by the Company to such agent. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be
acting on a best efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain purchasers to
purchase Offered Debt Securities, Offered Debt Warrants and Offered Foreign
Currency Warrants from the Company at the public offering price set forth in
the Prospectus Supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future. Such contracts will be
subject to only those conditions set forth in the Prospectus Supplement, and
the Prospectus Supplement will set forth the commission payable for
solicitation of such contracts.
Agents, dealers and underwriters may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act of 1933, as
amended, or to contribution with respect to payments which the agents or
underwriters may be required to make in respect thereof. Agents and
underwriters may be customers of, engage in transactions with or perform
services for the Company in the ordinary course of business.
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LEGAL OPINION
The legality of the Debt Securities, Debt Warrants and Foreign Currency
Warrants offered hereby will be passed upon for the Company by Chadbourne &
Parke LLP, 30 Rockefeller Plaza, New York, New York 10112, and, if Debt
Securities, Debt Warrants and Foreign Currency Warrants are being distributed
in an underwritten offering, the legality of such Debt Securities, Debt
Warrants and Foreign Currency Warrants will be passed upon for the
underwriters by Davis Polk & Wardwell, 450 Lexington Avenue, New York, New
York 10017.
EXPERTS
The consolidated financial statements and financial statement schedules
included or incorporated by reference in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1996, incorporated herein by
reference, have been incorporated herein by reference in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants, given upon the
authority of that firm as experts in accounting and auditing.
With respect to the unaudited interim financial information for the periods
ended March 31, June 30 and September 30, 1997 and 1996, incorporated herein
by reference, the independent accountants have reported that they have applied
limited procedures in accordance with professional standards for a review of
such information. However, their separate reports included in the Company's
Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, June
30 and September 30, 1997, and incorporated herein by reference, state that
they did not audit and they do not express an opinion on that interim
financial information. Accordingly, the degree of reliance on their reports on
such information should be restricted in light of the limited nature of the
review procedures applied. The accountants are not subject to the liability
provisions of Section 11 of the Securities Act of 1933 for their reports on
the unaudited interim financial information because each such report is not a
"report" or a "part" of the registration statement prepared or certified by
the accountants within the meaning of Sections 7 and 11 of that Act.
ADDITIONAL INFORMATION
This Prospectus does not contain all the information set forth in the
Registration Statements, or amendments thereto, certain portions of which have
been omitted pursuant to the Commission's rules and regulations. The
information so omitted may be obtained from the Commission's principal office
in Washington, D.C. upon payment of the fees prescribed by the Commission.
23
