<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 14, 2000
Post-Effective Amendment No. 2 to Registration Statement No. 333-67647
Registration Statement No. 333-96051
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
PRE-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
AND
POST-EFFECTIVE AMENDMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
POLAROID CORPORATION
(Exact name of Registrant as specified in its charter)
------------------------------
<TABLE>
<S> <C>
DELAWARE 04-1734655
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
784 MEMORIAL DRIVE
CAMBRIDGE, MASSACHUSETTS 02139
(781) 386-2000
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
------------------------------
NEAL D. GOLDMAN, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
POLAROID CORPORATION
784 MEMORIAL DRIVE
CAMBRIDGE, MASSACHUSETTS 02139
(781) 386-3228
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------
COPY TO:
RAYMOND W. WAGNER, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017-3954
(212) 455-2000
--------------------------
Approximate date of commencement of proposed sale to the public: From time
to time after the Registration Statement becomes effective as determined by
market conditions and other factors.
------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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- --------------------------------------------------------------------------------
<PAGE>
Subject to Completion, dated February 14, 2000
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO
SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
PROSPECTUS
[LOGO]
POLAROID CORPORATION
784 MEMORIAL DRIVE
CAMBRIDGE, MASSACHUSETTS 02139
(781) 386-2000
$500,000,000
DEBT SECURITIES
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
WARRANTS
WARRANT UNITS
-------------
WE WILL PROVIDE SPECIFIC TERMS OF THESE SECURITIES IN SUPPLEMENTS TO THIS
PROSPECTUS.
YOU SHOULD READ THIS PROSPECTUS AND ANY SUPPLEMENT CAREFULLY BEFORE YOU INVEST.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THIS PROSPECTUS IS DATED , 2000.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Summary............................... 1
Where You Can Find More Information
about Polaroid...................... 2
The Company........................... 3
Ratios of Earnings to Fixed Charges... 3
Use of Proceeds....................... 3
Description of Debt Securities........ 4
Limitations on Issuance of Bearer Debt
Securities.......................... 18
</TABLE>
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Description of Capital Stock.......... 19
Description of Offered Preferred
Stock............................... 26
Description of Stock Purchase
Contracts and Stock Purchase
Units............................... 30
Description of Warrants and Warrant
Units............................... 30
Plan of Distribution.................. 32
Experts............................... 33
Legal Opinions........................ 33
</TABLE>
i
<PAGE>
SUMMARY
This summary highlights selected information from this prospectus and does
not contain all of the information that is important to you. To understand the
terms of our securities, you should carefully read this document with the
applicable prospectus supplement. Together, these documents will give the
specific terms of the securities we are offering. You should also read the
documents we have incorporated by reference in this prospectus described below
under "Where You Can Find More Information About Polaroid".
THE SECURITIES WE MAY OFFER
This prospectus is part of a registration statement that we filed with the
SEC utilizing a "shelf" registration process. Under this shelf registration, we
may offer from time to time up to $500,000,000 of any of the following
securities, either separately or in units with other securities:
- debt securities;
- preferred stock;
- depositary shares;
- common stock;
- stock purchase contracts relating to the common stock; and
- warrants.
This prospectus provides you with a general description of the securities we may
offer. Each time we offer securities, we will provide you with a prospectus
supplement that will describe the specific amounts, prices and other terms of
the securities being offered. The prospectus supplement may also add, update or
change information contained in this prospectus.
DEBT SECURITIES
We may offer unsecured general obligations of Polaroid, which may be either
senior or subordinate and may be convertible into shares of our common stock. In
this prospectus, we refer to the senior debt securities and the subordinated
debt securities together as the "debt securities". The senior debt securities
will have the same rank as all of our other unsecured and unsubordinated debt.
The subordinated debt securities will be entitled to payment only after payment
on our senior debt.
The debt securities will be issued under an indenture between us and State
Street Bank and Trust Company, as the trustee. We have summarized general
features of the debt securities from the indenture. We encourage you to read the
indenture which is an exhibit to the registration statement.
PREFERRED STOCK AND DEPOSITARY SHARES
We may issue our preferred stock, $1.00 par value per share, in one or more
series. Our board of directors will determine the dividend, voting, conversion
and other rights of the series of preferred stock being offered. We may also
issue fractional shares of the preferred stock that will be represented by
depositary shares and depositary receipts.
COMMON STOCK
We may issue our common stock, par value $1.00 per share. Holders of common
stock are entitled to receive dividends when declared by the board of directors,
subject to the rights of holders of preferred stock, and include rights to
purchase shares of our Series A Preferred Stock as described below. Each holder
of common stock is entitled to one vote per share. The holders of common stock
have no preemptive rights or cumulative voting rights.
STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue stock purchase contracts for the purchase of our common stock.
We also may issue stock purchase units, each of which will consist of:
- a stock purchase contract and
- a debt security of Polaroid, a share of preferred stock of Polaroid or a
depositary share relating to preferred stock of Polaroid or a debt
obligation of a third party, including a U.S. Treasury security.
Our debt security, share of preferred stock or depositary share relating to
preferred stock or the debt obligation of a third party may be
1
<PAGE>
pledged by the holder as collateral to secure the holder's obligation to
purchase common stock under the stock purchase contract. Our board of directors
will determine the terms of the offering, including the terms of the stock
purchase contracts and information about the security or obligation that will
secure the holder's obligation to purchase common stock.
WARRANTS AND WARRANT UNITS
We may issue warrants for the purchase ofdebt securities, preferred stock,
depositary shares or common stock. We may issue warrants independently or
together with other securities.
We also may issue warrant units. Each warrant unit will consist of (1) a
warrant under which the holder, upon exercise, will purchase a specified number
of shares of common stock and (2) any of a debt security, share of preferred
stock or depositary share relating to preferred stock.
WHERE YOU CAN FIND MORE INFORMATION ABOUT POLAROID
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may also read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are available to the public over
the Internet at the SEC's web site at http://www.sec.gov and at our web site at
http://www.polaroid.com.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be a part of this prospectus, and information that we file later with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until we sell all of the securities:
- Annual Report on Form 10-K for the year ended December 31, 1998;
- Quarterly Reports on Form 10-Q for the quarterly periods ended March 28,
1999, June 27, 1999 and September 26, 1999;
- Current Reports on Form 8-K filed on January 28, 1999, on February 17,
1999, on January 5, 2000 and on January 27, 2000; and
- the description of rights to purchase our Series A Participating
Cumulative Preferred Stock contained in our registration statement on
Form 8-A dated September 14, 1986, as amended by amendments contained in
exhibits to our registration statements on Form 8-A dated August 18, 1988,
September 15, 1988, January 30, 1989, February 21, 1989, October 21, 1991,
March 24, 1993, July 2, 1993, and to our registration statement on
Form 8-A/A dated July 13, 1998.
You may request a copy of these filings at no cost, by writing or
telephoning our agent at the following address:
Boston EquiServe, L.P.
150 Royal Street
Canton, Massachusetts 02021
Telephone: 800-730-4001
Because we list our common stock on the New York Stock Exchange, you may
also inspect the filings described above, as well other information, at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. WE HAVE NOT AUTHORIZED
ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT MAKING AN
OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU
SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THOSE
DOCUMENTS.
2
<PAGE>
THE COMPANY
Polaroid, with annual sales of approximately $2 billion, is the worldwide
leader in instant imaging. We supply instant photographic cameras and films;
digital imaging hardware, software and media; secure identification systems;
sunglasses and polarizers to markets worldwide.
Our principal executive offices are located at 784 Memorial Drive,
Cambridge, Massachusetts 02139. Our telephone number is (781) 386-2000. When we
refer to "Polaroid", "we" or "our" in this prospectus, we mean Polaroid
Corporation and its subsidiaries on a consolidated basis, unless the context
requires otherwise.
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows the consolidated ratio of earnings to fixed
charges of Polaroid for each of the five most recent fiscal years. Fixed charges
consist of interest expense (including amortization of deferred financing
costs), the portion of rental expense that is representative of the interest
factor (deemed by us to be one-third) and capitalized interest.
<TABLE>
<CAPTION>
FOR THE NINE
MONTHS ENDED
FISCAL YEAR ENDED DECEMBER 31, SEPT. 26,
---------------------------------------------------- ------------
1994 1995 1996 1997 1998 1999
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<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges................ 3.3 (a) 1.4(b) (c) (d) (e)
</TABLE>
- ------------------------
(a) Earnings were insufficient to cover fixed charges by $206.2 million after
giving effect to the pre-tax expense for restructuring and other charges of
$247.0 million. Excluding the pre-tax restructuring and other charges, the
ratio of earnings to fixed charges was 1.6x.
(b) In 1996, we recorded a pre-tax expense for restructuring and other special
charges of $150.0 million ($7.0 million of which was recorded in cost of
goods sold). Excluding the pre-tax restructuring and other special charges,
the ratio of earnings to fixed charges was 3.8x.
(c) Earnings were insufficient to cover fixed charges by $194.5 million after
giving effect to the pre-tax expense for restructuring and other charges of
$340.0 million ($16.5 million of which was recorded in cost of goods sold).
Excluding the pre-tax restructuring and other charges, the ratio of earnings
to fixed charges was 3.4x.
(d) Earnings were insufficient to cover fixed charges by $41.1 million after
giving effect to the pre-tax expense for restructuring of $50.0 million.
Excluding the pre-tax restructuring, the ratio of earnings to fixed charges
was 1.1x.
(e) Earnings were insufficient to cover fixed charges by $32.5 million. Earnings
include the impact of non-cash charges of $35 million related to the sale of
the Helios medical diagnostic imaging equipment line and $33 million related
to the graphics arts business.
USE OF PROCEEDS
We will use the net proceeds that we receive from the sale of the securities
offered by this prospectus and the accompanying prospectus supplement for
general corporate purposes. General corporate purposes may include repayment of
other debt, capital expenditures, possible acquisitions, repurchase of
Polaroid's stock and any other purposes that may be stated in any prospectus
supplement. The net proceeds may be invested temporarily or applied to repay
short-term debt until they are used for their stated purpose.
3
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the debt securities summarizes
some general terms that will apply to the debt securities. The description is
not complete, and we refer you to the indenture, a copy of which we filed with
the SEC as an exhibit to the registration statement of which this prospectus is
a part.
The debt securities will be either senior debt securities or subordinated
debt securities of Polaroid. We will issue debt securities under an indenture,
dated as of January 9, 1997, between Polaroid and State Street Bank and Trust
Company, as trustee, as supplemented by a supplemental indenture, that Polaroid
will enter into with the trustee. We refer to the indenture and supplemental
indenture collectively as the "indenture" throughout the remainder of this
prospectus unless the context indicates otherwise. The indenture provides for
the issuance from time to time of debt securities in an unlimited dollar amount
and an unlimited number of series.
For your reference, in several cases below we have noted the section in the
indenture that the paragraph summarizes. Capitalized terms have the meanings
assigned to them in the indenture. The referenced sections of the indenture and
the definitions of capitalized terms are incorporated by reference in the
following summary.
SPECIFIC TERMS OF EACH SERIES
Each time that we issue a new series of debt securities, the prospectus
supplement relating to that new series will specify the particular amount, price
and other terms of these debt securities. These terms may include:
- the title of the debt securities;
- whether the debt securities will be senior unsecured obligations of
Polaroid, or its subordinated unsecured obligations;
- any limit on the total principal amount of the debt securities;
- the date or dates on which the principal of and premium on the debt
securities will be payable or their method of determination;
- the interest rate or rates of the debt securities or their method of
determination; the date from which interest will accrue; the interest
payment dates for the debt securities; and the regular record dates;
- the place or places where the principal of and premium and interest on the
debt securities will be paid;
- the period or periods within which, the price or prices at which and the
terms on which any of the debt securities may be redeemed, in whole or in
part at our option;
- the terms on which Polaroid would be required to redeem debt securities
pursuant to any sinking fund or analogous provisions, on the occurrence of
some event or at the option of a holder of debt securities; and the period
or periods within which, the price or prices at which and the terms and
conditions on which the debt securities will be so redeemed, repaid or
purchased in whole or in part;
- whether the debt securities will be convertible into our common stock or
other securities of Polaroid or exchangeable for securities of any other
person;
- the terms for the attachment to debt securities of warrants, options or
other rights to purchase or sell stock or other securities of Polaroid;
- the portion of the principal amount of the debt securities that is payable
on the declaration of acceleration of the maturity other than their
principal amount (these debt securities are referred to as "OID debt
securities" and are described below);
- whether and to what extent any other means of satisfaction and discharge,
or "defeasance", will be applicable to the debt securities other than as
described
4
<PAGE>
below under "Satisfaction and Discharge; Defeasance";
- any modifications to the events of default, described below under "Events
of Default, Notice and Waiver";
- any modification to the covenants described below under "Certain
Covenants";
- the currency or currencies or currency unit or currency units in which the
debt securities will be denominated or in which payment of the principal
of and premium and interest on any of the debt securities will be issued,
if other than U.S. dollars;
- if the principal of and premium or interest on any of the debt securities
is to be payable at our election or at the election of a holder of the
debt securities or in a currency or currencies or currency unit or
currency units other than that in which the debt securities are
denominated, the period or periods within which and the terms and
conditions on which these elections may be made, or the other
circumstances under which the debt securities are to be payable; these
provisions may also require the holder of the debt securities to bear
currency exchange costs by deduction from these payments;
- if the amount of principal of and premium or interest on any of the debt
securities may be determined by reference to an index based on either a
currency or currencies or a currency unit or currency units other than
that in which the debt securities are payable or any other method
specifying the manner in which these amounts will be determined;
- if the debt securities and coupons are to be issued on the exercise of
warrants, the time, manner and place for these debt securities and coupons
to be authenticated and delivered;
- whether and under what circumstances we will pay additional amounts on any
of the debt securities and coupons to any holder of debt securities who is
not a U.S. person (including a definition of this term) for any tax,
assessment or governmental charge withheld or deducted and whether we will
have the option to redeem these debt securities rather than pay additional
amounts;
- the person to whom interest on debt securities in registered form will be
payable, if other than the person in whose name those debt securities are
registered at the close of business on the regular record dates; the
manner in which, or the person to whom, any interest on any Bearer
Security of the series will be payable, if other than on presentation and
surrender of the coupons attached to that security as they mature; and the
extent to which, or the manner in which, any interest payable on a
temporary global debt security on an interest payment date will be paid;
and
- any other specific terms of the debt securities that are not inconsistent
with the indenture.
(Section 2.2)
We may issue debt securities as OID debt securities. OID debt securities
bear no interest or bear interest at below-market rates and are sold at a
discount below their stated principal amount. The prospectus supplement will
contain any special tax, accounting or other information relating to OID debt
securities or to various other kinds of debt securities that may be offered,
including debt securities linked to an index or payable in a currency or
currencies other than U.S. dollars.
RANKING
SENIOR DEBT SECURITIES
The senior debt securities will be the senior, unsecured obligations of
Polaroid and will rank equally in right of payment with all of Polaroid's
present and future senior unsecured and unsubordinated debt.
5
<PAGE>
SUBORDINATED DEBT SECURITIES
The subordinated debt securities will be the unsecured and subordinated
obligations of Polaroid and will rank junior in right of payment with present
and future senior debt of Polaroid.
For purposes of the above definitions of senior debt securities and
subordinated debt securities, "senior debt" means the principal, premium, if
any, and interest on:
- all debt of Polaroid, whether outstanding on or after the date of the
issuance of any debt securities which is for money borrowed, or evidenced
by a note or similar instrument given in connection with the acquisition
of any business, properties or assets, including securities;
- any debt of others of the kinds described in the preceding clause for the
payment of which Polaroid is responsible or liable, directly or
indirectly, contingently or otherwise, or as guarantor or otherwise; and
- amendments, renewals, extensions and refundings of any debt described
above,
unless it is expressly provided that the debt is not superior in right of
payment to the debt securities of any series.
CONVERSION OR EXCHANGE RIGHTS
The debt securities may be convertible into shares of our common stock or
exchangeable for common stock of another person. If the debt securities are
convertible, the terms and conditions of conversion will be stated in the
applicable prospectus supplement. The terms will include:
- the conversion price or the factors that will be relevant in determining
the conversion price;
- the period during which the debt securities are convertible;
- provisions regarding our ability or the ability of a holder of debt
securities to convert the debt securities into shares of our common stock;
- events requiring adjustments to the conversion price; and
- provisions affecting the ability to convert debt securities in the event
of our redemption of debt securities.
If the debt securities are exchangeable, the terms of the exchange similar
to those applicable to convertible debt securities will be stated in the
applicable prospectus supplement.
FORM AND DENOMINATION
We may issue debt securities of a series in fully registered form without
coupons, in bearer form either with or without coupons or any combination of
those forms. (Section 2.2) The prospectus supplement will state whether the
bearer debt securities may be exchanged for registered debt securities. The
prospectus supplement will also state whether the debt securities will initially
be issued in temporary global form or in definitive form. (Sections 4.3, 4.4,
4.11 and 4.12)
We will issue debt securities in the form of registered debt securities in
denominations of $1,000 or multiples thereof and debt securities in the form of
bearer debt securities in denominations of $5,000, unless the prospectus
supplement states otherwise. (Section 4.1)
CERTAIN COVENANTS
The indenture includes the following covenants. These covenants use terms
that are defined below following the summary of these covenants.
RESTRICTIONS ON SECURED DEBT
If Polaroid or any Restricted Subsidiary incurs or guarantees any debt for
money borrowed ("Debt") that is secured by a mortgage, pledge or lien
("Mortgage") on any Principal Property or on any shares of stock or Debt of any
Restricted Subsidiary, then Polaroid will secure, or cause that Restricted
Subsidiary to secure, the debt securities to the same extent and in the same
proportion with, or, at Polaroid's option, prior to, that secured Debt. This
restriction does not apply, however, if the total amount of this secured Debt,
together with
6
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all Attributable Debt of Polaroid and its Restricted Subsidiaries that is
incurred by sale/ leaseback transactions involving Principal Properties (with
the exception of the transactions which are excluded as described below under
"Restrictions on Sale/ Leaseback Transactions") is less than or equal to 10% of
Consolidated Net Tangible Assets. (Section 11.4)
The above restrictions do not apply to, and the calculation of secured Debt
under these restrictions does not include, Debt secured by any of the following:
- Mortgages on property of, or on any shares of stock of or Debt of, any
corporation existing at the time that that corporation becomes a
Restricted Subsidiary;
- Mortgages in favor of Polaroid or a Restricted Subsidiary;
- Mortgages in favor of governmental bodies to secure progress or advance
payments;
- Mortgages on property, shares of stock or Debt existing at the time of the
acquisition of these items, including acquisition through merger or
consolidation, and purchase money and construction Mortgages which are
entered into prior to, at the time of or within 180 days after the later
of acquisition or completion of construction;
- any extension, renewal or refunding of any Mortgage referred to in the
preceding six exceptions, provided that any extended, renewed or replaced
Mortgage shall be limited to the same property, stock or Debt that secured
the original Mortgage; and
- Mortgages securing industrial revenue or pollution control bonds.
(Section 11.4)
RESTRICTIONS ON SALE/LEASEBACK TRANSACTIONS
Neither Polaroid nor any Restricted Subsidiary may enter into any
sale/leaseback transaction involving any Principal Property, unless the total
amount of all Attributable Debt from these transactions plus all Debt secured by
Mortgages on Principal Properties (with the exception of secured Debt which is
excluded from Debt as described above under "Restrictions on Secured Debt") is
less than or equal to 10% of Consolidated Net Tangible Assets. (Section 11.5)
The above restrictions do not apply to, and the calculation of Attributable
Debt under these restrictions does not include, any sale/leaseback transaction
if:
- the lease is for a period, including renewal rights, of not more than
three years;
- the sale or transfer of the Principal Property is made prior to, at the
time of or within 180 days after its acquisition or construction thereon;
- the lease secures or relates to industrial revenue or pollution control
bonds;
- the transaction is between Polaroid and a Restricted Subsidiary or between
Restricted Subsidiaries; or
- within 180 days after the sale or transfer is completed, Polaroid or the
Restricted Subsidiary applies an amount at least equal to the greater of:
-- the net proceeds of the sale of the Principal Property leased back
in the sale/leaseback transaction; and
-- the fair market value of the Principal Property leased back in the
sale/leaseback transaction,
to any of (1) the retirement of debt securities or other Funded Debt of
Polaroid ranking equally with or senior to all the debt securities,
(2) the retirement of Funded Debt of a Restricted Subsidiary or (3) the
purchase of other property that constitutes a Principal Property having a
fair market value at least equal to the value of the Principal Property
leased back. The amount to be applied to the retirement of Funded Debt of
Polaroid or a Restricted Subsidiary is to be reduced
7
<PAGE>
by (1) the principal amount of any debt securities and other debt
constituting Funded Debt of Polaroid or a Restricted Subsidiary delivered
to the applicable trustee for retirement and cancellation within this
180-day period and (2) the principal amount of Funded Debt voluntarily
retired within this 180-day period, other than those items listed in
clause (1) of this sentence. This exception does not apply to debt that is
paid at maturity or pursuant to any mandatory sinking fund payment or any
mandatory prepayment provision.
(Section 11.5)
CERTAIN DEFINITIONS
The covenants which we have summarized above use the following terms:
"Restricted Subsidiary" means a Subsidiary, substantially all of whose
property is located or substantially all of whose business is carried on within
the United States and which owns a "Principal Property" but does not include a
Subsidiary which is primarily engaged in (a) the development and sale or
financing of real property or (b) financing, or assisting in financing, the
acquisition or disposition of products of Polaroid or a Subsidiary by dealers,
distributors or customers. (Section 1.1)
"Subsidiary" means a corporation, at least a majority of whose outstanding
voting stock is, at the time, owned, directly or indirectly, by Polaroid and/or
one or more Subsidiaries. (Section 1.1)
"Principal Property" means any real estate or any manufacturing or
processing plant or warehouse owned or leased by Polaroid or by any Restricted
Subsidiary that is located within the United States and the gross book value of
which (without deduction of any depreciation reserves) on the date on which the
determination is being made exceeds 2% of Consolidated Net Tangible Assets. It
does not include either (a) properties which in the opinion of our board of
directors are not of material importance to our business as an entirety or
(b) any portion of any particular property which our board of directors
determines is not of material importance to the use or operation of this
property. (Section 1.1)
"Attributable Debt" means the total net amount of rent required to be paid
during the remaining term of certain leases, discounted at the rate per annum
borne by the relevant debt securities. (Section 1.1)
"Consolidated Net Tangible Assets" means the total assets, less applicable
reserves and other properly deductible items, on Polaroid's balance sheet less
(a) all current liabilities and (b) goodwill, trade names, trademarks, patents,
organization expenses and other similar intangibles of Polaroid and its
consolidated Subsidiaries. (Section 1.1)
"Funded Debt" means (a) debt for money borrowed having a maturity of more
than 12 months, or renewable or extendible beyond 12 months and (b) rental
obligations payable more than 12 months from that date under leases which are
capitalized in accordance with generally accepted accounting principles. These
rental obligations are to be included as Funded Debt at the amount capitalized
and are to be included for the purposes of the definition of Consolidated Net
Tangible Assets both as an asset and Funded Debt at the amount capitalized.
(Section 1.1)
NO EVENT RISK COVENANT
The indenture does not contain any covenants or other provisions that give
holders of the debt securities protection in the event of a highly leveraged
transaction involving Polaroid, except for the "Restrictions on Secured
Indebtedness" and "Restrictions on Sale/ Leaseback Transactions" described
above.
LIMITATION ON MERGER, CONSOLIDATION AND CERTAIN SALES OF ASSETS
We may not merge into or consolidate with any other corporation, or convey
or transfer our properties and assets substantially as an entirety to any person
unless:
- the successor is a U.S. corporation;
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- the successor assumes on the same terms and conditions all the obligations
under the debt securities and the indenture; and
- immediately after giving effect to the transaction, there is no default
under the indenture.
(Section 9.1) Upon any merger, consolidation, conveyance or transfer, the
successor will succeed to, and will be substituted in lieu of, Polaroid.
(Section 9.2)
POSSIBLE WAIVER OF CERTAIN COVENANTS
We will not be required to comply with the restrictive covenants described
above under "Restrictions on Secured Debt" and "Restrictions on Sale/Leaseback
Transactions", if the holders of at least a majority in principal amount of all
series of outstanding debt securities affected by that covenant, acting as one
class, waive compliance with it. (Section 11.7)
COMPUTATION OF INTEREST
We will calculate the interest that is due on the debt securities based on a
360-day year of twelve 30-day months, unless the prospectus supplement states
otherwise.
PAYMENT AND PAYING AGENTS
PAYMENTS ON REGISTERED DEBT SECURITIES
We will pay principal of and premium and interest on registered debt
securities in the designated currency or currency unit at the office of a paying
agent or paying agents as we designate from time to time. At our option, we may
pay interest on registered debt securities by check mailed to the address of the
person that appears in the security register. We will pay installments of
interest on any registered debt security to the person in whose name the
registered debt security is registered at the close of business on the regular
record date for such payments. (Sections 4.6 and 4.1)
PAYMENTS ON BEARER DEBT SECURITIES
We will pay principal of and premium and interest on bearer debt securities
in the designated currency unit at the offices of those paying agents outside
the United States as we may designate from time to time. We will pay principal
and premium on bearer debt securities only against surrender of these debt
securities, and we will pay interest on bearer debt securities with coupons only
against surrender of the coupon relating to the particular interest payment
date. (Sections 4.1 and 11.2). We will not make a payment on any bearer debt
security at our office or agency in the United States or by check mailed to any
address in the United States or by transfer to any account maintained with a
bank located in the United States. Notwithstanding the above, we will make
payments on bearer debt securities denominated and payable in U.S. dollars at
the office of Polaroid's paying agent in New York City, if payment of the full
amount thereof in U.S. dollars at all offices or agencies outside the United
States is not lawful or effectively precluded by exchange controls or other
similar restrictions. (Section 11.2)
PAYMENTS OF UNCLAIMED MONEYS
All moneys that we have deposited with the trustee or a paying agent or then
held by us (in trust for the payment of principal of or premium and interest on
any debt security or coupon) which remain unclaimed two years after that payment
becomes due and payable will be repaid to Polaroid or, if then held by Polaroid,
discharged from that trust. In that event, the holder of that debt security or
coupon will be able to look only to Polaroid for payment of these moneys.
(Section 11.3)
PAYING AGENT
State Street Bank and Trust Company will be designated as Polaroid's paying
agent unless the prospectus supplement states otherwise. The office of State
Street Bank and Trust Company, N.A., an affiliate of State Street Bank and Trust
Company, will be the office or agency of Polaroid in New York City where
(1) debt securities that are issuable solely as registered debt securities and
(2) debt securities (subject to the limitations described above in the case of
bearer debt securities) that are issuable solely as bearer debt securities or as
both registered debt
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securities and bearer debt securities may be presented or surrendered for
payment. We will name any paying agents outside the United States and any other
paying agents in the United States in the prospectus supplement. (Section 11.2)
At any time, we may designate additional paying agents or rescind the
designation of any paying agent or approve a change in the office through which
any paying agent acts, subject to the limitations described in the indenture.
(Section 11.2)
EXCHANGE, REGISTRATION AND TRANSFER
EXCHANGE
Holders of debt securities may present their securities for exchange under
the following conditions:
- Holders of registered debt securities of any series may exchange their
securities for an equal principal amount of other registered debt
securities of different authorized denominations of the same series and
with the same terms.
- Holders of debt securities of a series that are issuable as both
registered debt securities and bearer debt securities may exchange the
bearer debt securities of that series for an equal principal amount of
registered debt securities of the same series of any authorized
denominations and with the same terms. These debt securities must be
exchanged with all unmatured coupons, except as provided below, and all
matured coupons in default.
- If a holder of a bearer debt security with coupons attached surrenders
that security in exchange for a registered debt security after a record
date but before the relevant interest payment date, then interest will not
be payable on that interest payment date on the registered debt security
issued in exchange for the bearer debt security. Instead, interest will be
payable only to the holder of the coupon issued with the bearer debt
security on that interest payment date.
- Holders of bearer debt securities may not exchange them for registered
debt securities, unless the applicable prospectus supplement describes
that they may do so and applicable rules and regulations permit that
exchange.
Holders of debt securities will not be charged a service charge for any
transfer or exchange, but we may require payment of a sum sufficient to cover
any tax or other governmental charge in connection with that transfer or
exchange. (Section 4.4)
REGISTRATION AND TRANSFER
Holders of registered debt securities (other than book-entry debt securities
which are discussed below) may present their securities for registration of
transfer at the office of the security registrar or at the office of any
additional transfer agent designated by us. The form of transfer endorsed
thereon must be duly executed. (Sections 4.4 and 11.2) State Street Bank and
Trust Company will be the initial security registrar under the indenture. State
Street Bank and Trust Company, N.A., an affiliate of State Street Bank and Trust
Company will initially be designated as the office or agency of Polaroid in New
York City where holders of debt securities may present their debt securities for
registration of transfer or exchange. State Street Bank and Trust Company, N.A.
currently has offices at 61 Broadway, 15(th) Floor, New York, New York 10006.
(Section 4.4)
At any time, we may designate, or rescind the designation of, the security
registrar or any additional transfer agent or approve a change in the location
through which the security registrar or any transfer agent acts. However, if
debt securities of a series are issuable solely as registered debt securities,
then we will be required to maintain a transfer agent in each place of payment
for that series. Similarly, if debt securities are issuable as both registered
debt securities and bearer debt securities or solely as bearer debt securities,
then we will be also required to maintain a transfer agent in a place of payment
for that series located outside of the United States. At any time, we may
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designate additional transfer agents for any series of debt securities.
(Section 11.2)
If we redeem in part any series of debt securities, we will not be required
to issue, register the transfer of and/or exchange debt securities under the
following conditions.
- If debt securities of a series are issuable only as registered debt
securities, we will not be required to issue, register the transfer of or
exchange debt securities of any series during a period beginning at the
opening of business 15 business days before any selection of debt
securities of that series to be redeemed and ending at the close of
business on the day of mailing of the relevant notice of redemption.
- If debt securities of the series are issuable as bearer debt securities,
we will not be required to issue, register the transfer of or exchange
debt securities of any series during a period beginning at the opening of
business 15 business days before any selection of debt securities of that
series to be redeemed and ending at the close of business on the day of
the first publication of the relevant notice of redemption.
- If debt securities of a series are issuable as both bearer debt securities
and as registered debt securities and there is no publication, we will not
be required to issue, register the transfer of or exchange debt securities
of any series during a period beginning at the opening of business 15
business days before any selection of debt securities of that series to be
redeemed and ending at the close of business on the day of mailing of the
relevant notice of redemption.
- We will not be required to register the transfer of, or exchange any
registered debt securities selected for redemption, in whole or in part,
except the unredeemed portion of any registered debt securities being
redeemed in part.
- We will not be required to exchange any bearer debt securities selected
for redemption, except to exchange bearer debt securities for registered
debt securities of that series and of like terms that are simultaneously
surrendered for redemption.
(Section 4.4) For a description of restrictions on the exchange, registration
and transfer of global debt securities, see "Global Securities".
GLOBAL SECURITIES
We may issue debt securities of a series in whole or in part as one or more
global debt securities in the following two kinds of forms:
- in either registered or bearer form; and
- in either temporary or definitive form.
We summarize each of these forms below as well as the depositary
arrangements that we anticipate will apply to them.
DEPOSITARY ARRANGEMENTS
The trustee will deposit the global debt securities of a series with, or on
behalf of, a depositary located in the United States (a "U.S. Depositary") or a
common depositary located outside the United States (a "Common Depositary") for
the benefit of the Euro-clear System ("Euro-clear") or Cedelbank for credit to
the respective accounts of the beneficial owners of interests in these debt
securities. All temporary or definitive global debt securities in bearer form
will be deposited with a Common Depositary. (Section 4.3)
The prospectus supplement will describe the specific terms of the depositary
arrangement for debt securities of a series that are issued in global form. None
of Polaroid, the Trustee, any paying agent or the security registrar will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a global debt
security or for maintaining, supervising or reviewing any records relating to
these beneficial ownership interests. (Section 4.11) We anticipate that the
following provisions will apply to all depositary arrangements with a U.S.
Depositary or a Common Depositary.
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TEMPORARY GLOBAL SECURITIES
If the prospectus supplement specifies, all or any portion of the debt
securities of a series that are issuable as bearer debt securities initially
will be represented by one or more temporary global debt securities, without
interest coupons. These bearer debt securities in temporary form will be
deposited with a Common Depositary in London for Morgan Guaranty Trust Company
of New York, Brussels Office, as operator of Euro-clear, and Cedelbank for
credit to the respective accounts of the beneficial owners of these debt
securities or to other accounts as they may direct. On and after the date set
for the exchange of these temporary securities, each temporary global debt
security will be exchangeable for definitive debt securities in any of the
following three forms or any combination:
- in bearer form;
- in registered form; or
- in definitive global bearer form.
Bearer debt securities, including debt securities in definitive global
bearer form, which are to be delivered in exchange for a portion of temporary
global debt securities, will not be mailed or otherwise delivered to any
location in the United States in connection with that exchange. (Sections 4.2
and 4.3)
Unless the prospectus states otherwise, we will pay interest on that portion
of temporary global debt securities that is due before the issuance of
definitive debt securities to Euro-clear or Cedelbank for that portion of the
temporary global debt securities held for its account. As a condition of making
that payment, we will require that Euro-clear or Cedelbank deliver to the
trustee a certificate signed by Euro-clear or Cedelbank dated no earlier than
that interest payment date. The certificate must be based on statements provided
to it by its account holders who are beneficial owners of interests in those
temporary global debt securities. The certificate must state either of the
following:
- that that portion of temporary global debt securities that is due before
the issuance of definitive debt securities (1) is not beneficially owned
by a "U.S. person" and (2) has not been acquired by or on behalf of a U.S.
person or for offer to resell or for resale to a U.S. person or any person
inside the United States; or
- if a beneficial interest in that portion has been acquired by a U.S.
person, (1) that person is a financial institution (as defined in the U.S.
Treasury Regulations promulgated under the Internal Revenue Code of 1986),
purchasing for its own account or has acquired the debt security through a
financial institution and (2) that these debt securities are held by a
financial institution that has agreed in writing to comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Code and the U.S.
Treasury Regulations and that it did not purchase for offer to resell or
for resale inside the United States.
For the purposes of the certificate referred to above, a "U.S. person" means
a citizen or resident of the United States, a corporation or partnership created
or organized in or under the laws of the United States or an estate or trust the
income of which is subject to U.S. federal income taxation regardless of its
source.
Euro-clear or Cedelbank will credit the interest received by it regarding
these temporary global debt securities to the accounts of their beneficial
owners or to other accounts as these beneficial owners may direct.
(Section 4.3)
DEFINITIVE GLOBAL SECURITIES
BEARER DEBT SECURITIES. If any debt securities of a series are issuable in
definitive global bearer form, the prospectus supplement will describe the
circumstances under which beneficial owners of interests in any of these
definitive global bearer debt securities may exchange these interests for debt
securities of that series and of like term and principal amount in any
authorized form and denomination. Bearer debt securities delivered in exchange
for a portion of definitive global debt securities will not be mailed or
otherwise delivered to any location in the United States in connection with that
exchange. (Section 4.4) We will pay
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principal of and premium and interest on definitive global bearer debt
securities in the manner described in the prospectus supplement.
BOOK-ENTRY DEBT SECURITIES. If debt securities of a series are to be
represented by one or more definitive global registered debt securities to be
deposited with or on behalf of a U.S. Depositary, then these definitive global
debt securities will be registered in the name of the U.S. Depositary or its
nominee. Book-entry debt securities are subject to the following procedures and
rules:
- Following the issuance of definitive global debt securities registered in
the name of the U.S. Depositary, the U.S. Depositary will credit, on its
book-entry registration and transfer system, the principal amounts of the
book-entry debt securities represented by those global debt securities to
the accounts of institutions that have accounts with that depositary or
its nominee ("participants"). The accounts to be credited will be
designated by the underwriters or agents for the sale of these book-entry
debt securities or by us, if we sell debt securities directly.
- Ownership of book-entry debt securities will be limited to participants or
persons that may hold interests through participants. Ownership of
book-entry debt securities will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the U.S.
Depositary or its nominee for the applicable definitive global debt
securities or by participants or persons that hold through participants.
So long as the U.S. Depositary, or its nominee, is the registered owner of
those global debt securities, that depositary or its nominee will be
considered the sole owner or holder of the book-entry debt securities
represented by those global debt securities for all purposes under the
indenture.
- We will pay principal, premium and interest on book-entry debt securities
to the U.S. Depositary or its nominee as the registered owner or the
holder of the global debt securities representing those book-entry debt
securities.
- Owners of book-entry debt securities will not be entitled to have those
debt securities registered in their names in the security register, will
not receive or be entitled to receive physical delivery of those debt
securities in definitive form and will not be considered the owners or
holders thereof under the indenture.
We expect that the U.S. Depositary for a series of book-entry debt
securities, following the receipt of any payment of principal of or premium or
interest on the related definitive global debt securities, will immediately
credit participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of those global debt
securities as shown on the records of the U.S. Depositary. We also expect that
standing instructions and customary practices will govern the payments by
participants to owners of beneficial interests in any global debt securities
held through these participants and that these payments will be the
responsibility of these participants. These procedures are currently in practice
with securities held for the accounts of customers in bearer form or registered
in "street name".
Some jurisdictions require that some purchasers of securities take physical
delivery of these securities in definitive form. These limits and laws impair
the ability to purchase or transfer book-entry debt securities.
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SATISFACTION AND DISCHARGE; DEFEASANCE
SATISFACTION AND DISCHARGE
At our request, the indenture will terminate as to the debt securities of
any series when either:
- all of these debt securities and coupons have been delivered to the
trustee for cancellation; or
- all of these debt securities and coupons have become due and payable (or
will become due and payable at their stated maturity within one year or
are to be called for redemption within one year) and we have deposited
with the trustee in trust, money, in the currency or currencies or
currency unit or currency units in which these debt securities are
payable, in an amount sufficient to make all remaining payments on these
debt securities.
In these circumstances, however, we have obligations to register the
transfer or exchange of the debt securities and related coupons and hold moneys
for payment of these debt securities and coupons in trust. (Section 5.1)
DEFEASANCE
Unless the prospectus supplement states otherwise, if we deposit with the
trustee money, U.S. government obligations (in the case of debt securities
denominated in U.S. dollars) or foreign government obligations (in the case of
debt securities and coupons denominated in a foreign currency) that will be
sufficient to pay principal of and interest on these debt securities when due,
then we may elect one of the following two options:
- to be discharged after 91 days from all of our obligations regarding that
series of debt securities, except for obligations to register the transfer
of or exchange debt securities and related coupons, replace stolen, lost
or mutilated debt securities and coupons, maintain paying agencies and
hold moneys for payment in trust; or
- to be released from the restrictions of the covenants described under
"Certain Covenants".
To elect either option described above, we must deliver to the trustee an
opinion of counsel to the effect that the deposit and related defeasance
described above would not cause the holders of that series to recognize income,
gain or loss for U.S. federal income tax purposes and that the holders of that
series will be subject to U.S. federal income tax in the same amounts, in the
same manner and at the same times as would have been the case if that option had
not been exercised. (Section 5.3)
EVENTS OF DEFAULT, NOTICE AND WAIVER
EVENTS OF DEFAULT
An "event of default" regarding any series of debt securities is any one of
the following events:
- default for 30 days in the payment of any interest installment when due
and payable;
- default in the payment of principal or premium when due at its stated
maturity, by declaration, when called for redemption or otherwise;
- default in the making of any sinking fund payment when due;
- default in the performance of any covenant in the debt securities or in
the indenture for 90 days after notice to Polaroid by the trustee or by
holders of 25% in principal amount of the outstanding debt securities of
that series;
- certain events of bankruptcy, insolvency and reorganization of Polaroid;
and
- any other event of default of that series that is specified in the
prospectus supplement.
A default regarding a single series of debt securities will not necessarily
constitute a default regarding any other series. A default under other debt of
Polaroid will not be a default under the indenture.
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If an event for default for any series of debt securities occurs and is
continuing, either the trustee or the holders of 25% in principal amount of the
outstanding debt securities of that series (in the case of certain events of
bankruptcy, insolvency and reorganization, voting as one class with all other
outstanding debt securities) may declare the principal of all the debt
securities of that series, together with any accrued interest on the debt
securities, to be immediately due and payable by notice in writing to Polaroid.
If the holders of debt securities give notice of that declaration of
acceleration to Polaroid, then they must also give notice to the trustee.
The holders of a majority in principal amount of the outstanding debt
securities may rescind a declaration of acceleration if:
- Polaroid has paid a sum sufficient to pay principal, interest, including
overdue interest and interest thereon, any premium and the fee and
expenses of the trustee; and
- any other events of default (besides the failure to pay principal due
because of the declaration of acceleration) have been cured or waived.
(Section 6.2)
We are required to file every year with the trustee an officers' certificate
stating whether any default exists and specifying any default that exists.
(Section 11.6)
NOTICES
The trustee is required to give notice to holders of debt securities of a
default which remains uncured or has not been waived that is known to the
trustee within 90 days after the occurrence of the default. The trustee may
withhold this notice, however, if it determines in good faith that the
withholding of the notice is in the interest of the holders of the debt
securities. However, the trustee may not withhold the notice in the case of
default in the payment of principal of and premium or interest on, or a sinking
fund installment on, any of the debt securities. In addition, the trustee is
only required to give notice of the failure by Polaroid to perform any covenant
other than for payment until at least 30 days after that failure has become a
default. The term "default" for this purpose means any event which is, or after
notice or lapse of time or both would become, an event of default.
(Section 7.2)
CERTAIN RIGHTS OF THE TRUSTEE
The holders of a majority in principal amount of outstanding debt securities
of any series may direct the time, method and place of conducting any proceeding
for any remedy available to the trustee or exercising any trust or other power
conferred on the trustee. The trustee may decline to follow that direction,
however, if it either would involve the trustee in personal liability or would
be unduly prejudicial to holders of the debt securities of that series that do
not join in that direction. (Section 6.12) During a default, the trustee is
required to exercise the standard of care that a prudent man would exercise or
use under the circumstances in the conduct of his own affairs. Otherwise, the
trustee is not obligated, however, to exercise any of its rights or powers under
the indenture at the request or direction of any of the holders of debt
securities unless those holders have offered to the trustee reasonable security
or indemnity. (Section 7.3)
WAIVER
In some cases, the holders of a majority in principal amount of the
outstanding series of debt securities may, on behalf of the holders of all debt
securities of that series, waive any past default or event of default regarding
that series or compliance with some provisions of the indenture. The following
defaults may not, however, be waived:
- default in the payment of the principal of and premium or interest on any
of that series which has not been cured until that time; or
- a default regarding a covenant or provision of the indenture which cannot
be modified or amended without the consent of the holder of each
outstanding debt security of the series affected.
(Section 6.13)
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MODIFICATION OF THE INDENTURE
MODIFICATION NOT REQUIRING CONSENT OF HOLDERS
Without the consent of any holders of debt securities, we and the trustee
may modify the indenture, among other things, to:
- add to the covenants of Polaroid for the benefit of any series of debt
securities;
- add any additional events of default for any series of debt securities;
- cure any ambiguity or inconsistencies in the indenture; or
- add any other provision provided that these other provisions are not
adverse to holders of debt securities of any series in any material
respect.
(Section 10.1)
MODIFICATION REQUIRING CONSENT OF HOLDERS
With the consent of the holders of at least a majority in principal amount
of the outstanding series of the debt securities that would be affected by a
modification of the indenture, the indenture permits us and the trustee to
modify the indenture or the rights of the holders of the debt securities.
However, without the consent of each holder of all of the outstanding debt
securities affected by that modification, we may not:
- change the stated maturity date of the principal of, or any installment of
principal of or interest on, any debt security;
- reduce the principal amount of, the rate of interest on, or any premium
payable upon the redemption of, any debt security;
- reduce the principal amount of an OID debt security that would be due and
payable upon acceleration of the maturity of that security;
- change any place of payment where, or the currency or currencies or
currency unit or currency units in which, any debt security or any premium
or interest thereon is payable;
- impair the right to sue for the enforcement of any payment on or after the
stated maturity date thereof or, in the case of redemption, on or after
the redemption date;
- adversely affect the terms of conversion of any debt security into stock
or other securities of Polaroid or of any other corporation;
- reduce the percentage in principal amount of the outstanding debt
securities of any series required to consent to modify the indenture or to
consent to any waiver of compliance with the indenture;
- change Polaroid's obligation to maintain an office or agency for the
payment of outstanding debt securities; or
- modify any of the provisions listed above, the provisions for the waiver
of some covenants and defaults (except to increase the percentage of the
total principal amount of outstanding debt securities required to modify
the indenture where consent is currently required) or to modify the
provisions for modification or waiver that require the consent of each
holder of the outstanding debt securities affected.
(Section 10.2)
MEETINGS
PURPOSE AND CALLING OF MEETINGS
The indenture contains provisions for convening meetings of the holders of
debt securities of any series for any action to be made, given or taken by
holders of debt securities. (Section 14.1) The trustee, Polaroid and the holders
of at least 10% in principal amount of the outstanding debt securities of a
series may call a meeting, in each case after notice to holders of that series
has been properly given according to the requirements stated under "Notices"
below. (Section 14.2)
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QUORUM AND ACTION
Persons entitled to vote a majority in principal amount of the outstanding
debt securities of a series will constitute a quorum at a meeting of holders of
debt securities of that series. If a meeting is called by holders of debt
securities and a quorum does not exist, then the chairman of the meeting is
required to dissolve the meeting. If a meeting is called by either Polaroid or
the trustee, then the chairman of the meeting may adjourn that meeting for a
period of not less than 10 days and may further adjourn it for a period of not
less than 10 days if a quorum does not exist. (Section 14.4)
Any resolution passed or decision taken at any meeting of holders of debt
securities of any series that has been properly held in accordance with the
indenture will bind all holders of debt securities of that series and the
related coupons. (Section 14.4)
NOTICES
Except as otherwise provided in the indenture, notices to holders of bearer
debt securities, will be given by:
- publication at least once in a daily newspaper in New York City and in
London and in another city or cities as may be specified in such bearer
debt securities; and
- mail to those persons whose names and addresses were previously filed with
the trustee, within the prescribed time period.
Notices to holders of registered debt securities will be given by mail or by
overnight courier to the addresses of those holders as they appear in the
security register. (Section 1.6)
TITLE
Title to any bearer debt securities and any related coupons will pass by
delivery. Polaroid, the trustee and any of their agents may treat the bearer of
any bearer debt security or related coupon and, prior to due presentment for
registration of transfer, the registered owner of any registered debt security,
including registered debt securities in global registered form, as the absolute
owner of that security for the purpose of making payment and for all other
purposes. This will be the case whether or not that debt security or coupon
shall be overdue and notwithstanding any notice to the contrary. (Section 4.7)
REPLACEMENT OF SECURITIES AND COUPONS
MUTILATED COUPONS
We will replace any mutilated debt security and any debt security with a
mutilated coupon relating to it at the expense of the holder and on surrender of
that mutilated debt security or debt security with a mutilated coupon to the
security registrar. (Section 4.5)
DESTROYED, STOLEN OR LOST COUPONS
We will replace debt securities or coupons that are destroyed, stolen or
lost at the expense of the holder and on delivery to the security registrar of
evidence of that destruction, loss or theft which is satisfactory to us and the
security registrar. In the case of a coupon that is destroyed, stolen or lost,
that coupon will be replaced (on surrender to the security registrar of the debt
security with all other coupons not destroyed, stolen or lost) by issuance of a
new debt security in exchange for the debt security to which that coupon
relates. Before we issue a replacement debt security or coupon, we and the
security registrar may require an indemnity from the party seeking the
replacement security. (Section 4.5)
BEARER SECURITIES
If the debt security that we replace is a bearer security, we will deliver
that new debt security only outside the United States. (Section 4.5)
RESERVATION OF COMMON STOCK
Polaroid will reserve the full number of shares of common stock issuable on
conversion of the debt securities free from preemptive rights out of the total
of its authorized but unissued shares of common stock or common stock held as
treasury shares to permit the conversion of the debt securities, or preferred
stock, into shares of common stock.
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GOVERNING LAW
The laws of the State of New York govern the indenture and will govern the
debt securities and the coupons, including any matters of interpretation under
them. (Section 1.12)
INFORMATION CONCERNING THE TRUSTEE
We may from time to time maintain lines of credit, and have other customary
banking relationships, with State Street Bank and Trust Company, State Street
Bank and Trust Company, N.A., an affiliate of State Street Bank and Trust
Company, or with either of their affiliates. State Street Bank and Trust
Company, as successor to The First National Bank of Boston, also serves as the
trustee under Polaroid's indenture dated as of December 15, 1991, providing for
an unlimited amount of debt securities.
Boston EquiServe, L.P., a joint venture, of which State Street Bank and
Trust Company is an affiliate, serves as transfer agent and registrar for our
common stock.
LIMITATIONS ON ISSUANCE OF BEARER DEBT SECURITIES
Bearer debt securities are subject to the following limitations:
- Bearer debt securities may not be offered or sold during the "restricted
period" (as defined in Section 1.163-5(c)(2)(i)(D)(7) of the U.S. Treasury
Regulations) within the United States or its possessions or to U.S.
persons other than to:
-- an office located outside the United States and its possessions of a
U.S. financial institution (as defined in Section 1.165-12(c) (1)(v)
of the U.S. Treasury Regulations), that purchases for its own account
or for resale or for the account of certain customers, and provides a
certificate stating that it agrees to comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Code and the U.S. Treasury
Regulations, or
-- certain other persons described in Section 1.163-5(c)(2)(i)(D)(1)
(iii)(B) of the U.S. Treasury Regulations.
- Bearer debt securities may not be delivered in connection with their sale
during the restricted period within the United States or its possessions.
- Any distributor (as defined in Section 1.163-5(c)(2)(i)(D)(4) of the U.S.
Treasury Regulations) participating in the offering or sale of bearer debt
securities must agree that:
-- it will not offer or sell during the restricted period any bearer debt
securities within the United States or its possessions or to United
States persons other than those described above,
-- it will not deliver in connection with the sale of bearer debt
securities during the restricted period any bearer debt securities
within the United States or its possessions; and
-- it has in effect procedures reasonably designed to ensure that its
employees and agents who are directly engaged in selling bearer debt
securities are aware of the restrictions on the offers and sales
described above.
- Bearer debt securities (other than a bearer debt security in temporary
global form) may not be delivered, nor may interest be paid on any bearer
debt securities until delivery to the trustee of the certificate signed by
either Euro-clear or Cedelbank, which is described above under "Global
Securities--Temporary Global Securities".
- Bearer debt securities will bear a legend 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 Section 165(j) and 1287(a) of the Internal Revenue
Code".
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DESCRIPTION OF CAPITAL STOCK
The following description summarizes our capital stock. The description is
not complete, and we refer you to our Restated Certificate of Incorporation, as
amended, which we have filed with the SEC as an exhibit to the registration
statement of which this prospectus is a part.
COMMON STOCK
We have authorized 150 million shares of common stock, par value $1.00 per
share. At November 3, 1999, we had 44,524,580 shares of common stock issued and
outstanding. Our common stock is listed on the New York Stock Exchange under the
symbol "PRD".
The holders of our common stock are entitled to one vote per share on all
matters voted on by stockholders, including the election of directors, and
exclusively possess all voting power, except as otherwise:
- required by law; or
- provided in any resolution adopted by the board of directors relating to
any series of preferred stock that establishes the powers, designations,
preferences and relative, participating, option or other special rights of
the preferred stock.
Our Restarted Certificate of Incorporation does not provide for cumulative
voting in the election of directors.
Subject to the preferential rights of any outstanding series of preferred
stock, the holders of our common stock are entitled to receive:
- dividends, if declared by the board of directors from funds legally
available for dividends; and
- upon liquidation, all assets of Polaroid available for distribution to
common stock holders on a proportionate basis.
All shares of common stock issued will be fully paid and non-assessable. The
holders of our common stock will not have preemptive rights.
The transfer agent and registrar of the common stock is First National Bank
of Boston, c/o Boston EquiServe.
PREFERRED STOCK
We have authorized 20 million shares of preferred stock, par value $1.00 per
share, including one million shares of Series A Participating Cumulative
Preferred Stock (the "Series A Preferred Stock"). At December 31, 1998, no
shares of our preferred stock were issued and outstanding. The board of
directors is authorized to:
- provide for the issuance of shares of preferred stock in one or more
series;
- to establish the number of shares in each series; and
- to fix the designations, powers, preferences and rights of each series and
the qualifications, limitations or restrictions of any series.
For more information about the Series A Preferred Stock, see "--Limitations on
Changes in Control--Rights Agreement--Series A Preferred Stock". For more
information about the preferred stock offered by this prospectus, see
"Description of Offered Preferred Stock".
LIMITATIONS ON CHANGES IN CONTROL
We summarize below several agreements and provisions of our Restated
Certificate of Incorporation and by-laws and the Delaware General Corporation
Law. These provisions which we summarize below could have the effect of
delaying, deferring or preventing a change in control of Polaroid or the removal
of existing management or deterring potential acquirors from making an offer to
our stockholders. This could be the case even though a majority of our
stockholders might benefit from such a change in control or offer. In addition,
these provisions may encourage companies interested in acquiring Polaroid to
negotiate in advance with the board of directors as discussed below. These
descriptions are not complete and we refer you to these documents, which we have
filed with the SEC as exhibits to the registration statement of which this
prospectus is a part, and the Delaware General Corporation Law.
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RIGHTS AGREEMENT
Each outstanding share of common stock includes one right to purchase
1/100th of a share of our Series A Preferred Stock for a purchase price of $200
when the rights become exercisable. Until the rights become exercisable they:
- do not represent any value separate from the common stock;
- are not represented by a separate certificate;
- each common stock certificate represents both one right and one share of
common stock; and
- trade with the common stock.
The terms and other provisions of the rights are defined in a rights
agreement, dated September 9, 1986, as amended, between Polaroid and BankBoston
N.A., as successor rights agent. The rights are scheduled to expire on July 1,
2000. We filed the rights agreement with the SEC as an exhibit to our
registration statement on Form 8-A, on September 15, 1986, and we filed
amendments to it in subsequent filings with the SEC which we refer to under
"Where You Can Find More Information About Polaroid".
As long as the rights agreement is in effect, the rights that we have issued
are, and new rights that we will issue will be, attached to shares of our common
stock. As a result, whenever we issue new shares of our common stock, we will
issue one right with each of these new shares. In addition, as long as the
rights agreement is in effect, we will issue one right with each new issue share
of common stock:
- issuable upon conversion of any convertible security, including
convertible debt securities, convertible preferred stock and convertible
depositary shares;
- issuable upon the exercise of warrants to purchase common stock; and
- upon the settlement of a share purchase contract or share purchase unit.
EXERCISE OF RIGHTS. The rights are exercisable upon the earlier of:
- any person, together with all affiliates and associates, acquiring
beneficial ownership of 20% or more of our outstanding common stock (an
"Acquiring Person"), except pursuant to permitted tender offers; or
- ten days after, or on a later date if the board of directors so
determines, any person or group announces an intention to commence, or
- commences, a tender offer for 30% or more of our outstanding common stock.
The board of directors may determine in good faith that a person who has
become an Acquiring Person but was unaware that it beneficially owned 20% or
more of our outstanding common stock or acquired this amount without the
intention of effecting a change in control or influencing control of Polaroid,
will not constitute an Acquiring Person.
After the rights become exercisable, we will issue separate certificates
representing the rights and the rights will trade separately from the common
stock. Rights beneficially owned by holders of 20% or more of our outstanding
common stock are not, however, exercisable.
After the rights become exercisable, they can become valuable under various
circumstances in which the payment of the exercise price will entitle the
holders to more than a fraction of a share of Series A Preferred Stock. The
fraction is designed to be the economic equivalent of one share of common stock
at an original exercise price of $200. The circumstances in which exercise
become valuable include:
- a merger or other business combination to which we are a party; or
- the sale, lease, exchange or other transfer of 50% or more of our assets
or assets representing 50% or more of our earning power.
If one of these transactions were to occur, each right would then entitle the
holder to purchase for the exercise price:
- our common stock with a market value of two times the exercise price, if
we are the
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surviving entity in that kind of a transaction; or
- the capital stock of the acquiring entity with a market value of two times
the exercise price.
Similarly, if any person, together with all affiliates and associates:
- acquires 20% or more of our outstanding common stock, unless pursuant to
an all cash tender offer for all outstanding shares of common stock at a
price and on other terms determined by the board of directors to be fair
and adequate; or
- engages in certain "self-dealing" transactions with us,
then each right will entitle the holder to purchase for the exercise price that
number of shares, or fractions of shares, of Series A Preferred Stock equal to
the number of shares of common stock which, at the time of the transaction, will
have a market value of two times the exercise price.
REDEMPTION. We may redeem the rights at a price of $.05 per right at any
time prior to the time any party becomes an Acquiring Person. The rights may
also be redeemed by the action of our stockholders if:
- we receive a written proposal to purchase all of our outstanding voting
stock, which includes our common stock and all other classes of stock that
are entitled to vote together with our common stock as one class for the
election of directors;
- 80% of the consideration is in cash;
- the offer is accompanied by a written fairness opinion from the acquiring
party and written financing commitments; and
- a majority of our voting stock, excluding votes cast by the party
proposing to acquire the stock, votes to accept the proposal at a special
meeting of stockholders, which the board of directors is required to call.
AMENDMENT AND EXPIRATION. Prior to the rights becoming exercisable, we may
amend any provision of the rights without the prior approval of the holders of
the rights.
After the rights become exercisable, the board of directors may amend the
rights without the prior approval of the holders of rights to:
- cure any ambiguity or correct any defective provision; or
- make any other necessary or desirable changes which will not adversely
affect the interests of the holders of the rights.
The rights expire on July 1, 2000 and may be extended by the board of
directors for up to seven years. Prior to authorizing any extension, the board
of directors is required to request a vote by our stockholders as to whether to
extend the expiration date, although the outcome of that vote does not bind the
board of directors.
CERTAIN EFFECTS OF THE RIGHTS AGREEMENT. The Rights Agreement is designed to
protect our stockholders in the event of unsolicited offers to acquire Polaroid
and other coercive takeover tactics, which, in the opinion of the board of
directors, could impair its ability to represent stockholders' interests. The
rights agreement may prevent a takeover of Polaroid more difficult or make it
less likely to occur. The rights agreement may have these effects even though
the potential acquirer might be willing to pay a premium above the then
prevailing market rate for our common stock and the acquisition might be favored
by a majority of our stockholders.
SERIES A PREFERRED STOCK. If the rights become exercisable, then each right
will entitle its holder to purchase a fraction of a share of Series A Preferred
Stock that is designed to be the economic equivalent of one share of our common
stock at an exercise price of $200. This purchase price is subject to adjustment
in the event we were to:
- declare or pay a dividend on our common stock payable in shares of common
stock;
- subdivide the number of our outstanding common stock by effecting a stock
split or similar transaction; or
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- combine the outstanding shares of our common stock by a reverse stock
split or similar transaction.
Holders of Series A Preferred Stock are entitled to:
- cumulative quarterly dividends of $20 per share, even if no dividends have
been declared or paid on common stock;
- the declaration of an additional dividend prior to or at the same time
that we declare a dividend on common stock equal to the amount of
dividends payable on each share of common stock multiplied by a "formula
number", as described in the next sentence.
Initially, the formula number is 100. If we were to:
- declare or pay a dividend on our common stock payable in shares of common
stock;
- subdivide the number of outstanding shares of common stock by effecting a
stock split or similar transaction;
- combine the outstanding shares of common stock by a reverse stock split or
similar transaction; or
- issue shares of capital stock in a reclassification or change of the
outstanding shares of common stock, including in connection with a merger
in which Polaroid is the survivor,
then the formula number would be multiplied by a fraction. The numerator of the
fraction would be the number of shares of common stock outstanding after one of
the events specified above. The denominator of the fraction would be the number
of shares of common stock outstanding immediately prior to that event.
Holders of the Series A Preferred Stock will have the following voting
rights:
- Each holder will be entitled to the number of votes equal to the formula
number then in effect on all matters on which holders of common stock are
entitled to vote.
- Holders of Series A Preferred Stock and common stock will vote together as
one class for the election of directors and on all other matters submitted
to a vote of our stockholders, except as described in the next sentence.
- If, at the time of any annual meeting of stockholders for the election of
directors, six quarterly dividends, whether or not consecutive, payable on
any share of Series A Preferred Stock are in default, then the holders of
Series A Preferred Stock will be entitled to elect two directors to be
added to the board of directors.
- If the default described in the preceding sentence ceases to exist, then
holders of the Series A Preferred Stock will be divested of these special
voting rights and the directors elected pursuant to them will be
terminated.
If quarterly or other dividends to holders of the Series A Preferred Stock
are in arrears, then we will not:
- pay dividends on or redeem, purchase or otherwise acquire any shares of
stock which rank junior to the Series A Preferred Stock as to dividends or
upon liquidation, dissolution or winding up;
- pay dividends on stock which ranks equally with the Series A Preferred
Stock as to dividends or upon liquidation, dissolution or winding up,
except dividends paid proportionately on the Series A Preferred Stock and
all other equally ranking stock;
- redeem or acquire shares of any stock which ranks equally with the
Series A Preferred Stock as to dividends or upon liquidation, dissolution
or winding up, provided that we may redeem or acquire these shares in
exchange for shares of our stock that rank junior to the Series A
Preferred Stock as to dividends or upon liquidation, dissolution or
winding up;
- purchase or acquire any shares of Series A Preferred Stock, or any shares
of stock which rank equally with them, except in accordance with a
purchase made in writing or by publication to all
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holders of these shares and upon terms that the board of directors
considers, in good faith, will result in a fair and equitable treatment
among the various series or classes of stock then outstanding; or
- permit any of our subsidiaries to purchase or acquire any shares of our
stock unless we could do so.
Upon the liquidation, dissolution or winding up of Polaroid, no distribution
can be made to:
- holders of stock which rank junior to Series A Preferred Stock as to
dividends or upon liquidation, dissolution or winding up, unless holders
of the Series A Preferred Stock have received:
-- accrued and unpaid dividends to the date of this payment; plus
-- the greater of (1) $100 for each share and (2) the amount to be
distributed to each share of common stock multiplied by the formula
number then in effect for each share of Series A Preferred Stock; or
- holders of stock ranking equally with the Series A Preferred Stock as to
dividends or upon liquidation, dissolution or winding up, except
distributions made on a proportionate basis on the Series A Preferred
Stock and all other equally ranking stock.
If we enter into any consolidation, merger, combination or other transaction
in which the shares of common stock are exchanged for cash, other securities or
property, then the Series A Preferred Stock will be exchanged, at the same time,
into an amount equal to the amount exchanged for the common stock multiplied by
the formula number then in effect.
The Series A Preferred Stock will rank junior to all other series of
preferred stock, unless the board of directors determines otherwise.
POSSIBLE ANTI-TAKEOVER EFFECT OF CERTAIN PROVISIONS OF THE RESTATED
CERTIFICATE OF INCORPORATION AND BY-LAWS
Provisions of the Restated Certificate of Incorporation and our by-laws may
be deemed to have the effect of discouraging a takeover of Polaroid and may
delay, defer or prevent a tender offer or takeover attempt that a stockholder
might consider to be in that stockholder's best interest, including those
attempts that might result in his or her receiving a premium over the market
price for our common stock. We summarize these provisions below.
NO STOCKHOLDER ACTION BY WRITTEN CONSENT; SPECIAL MEETINGS. The Restated
Certificate of Incorporation prohibits stockholder action by written consent and
provides that stockholder action may only be effected at a duly called meeting.
Stockholders may only take action at an annual or special meeting called in
accordance with our by-laws. Our by-laws, however, do not permit stockholders to
call special meetings. Special meetings of stockholders may only be called by
the Chairman of the Board, the President or the board of directors. In addition,
only those matters set forth in Polaroid's notice of a special meeting may be
considered or acted upon at a special meeting of stockholders.
These provisions could have the effect of delaying consideration of a
stockholder proposal until the following annual meeting. These provisions would
also prevent the holders of a majority of the voting power of our capital stock
entitled to vote from unilaterally using the written consent procedure to take
stockholder action.
ADVANCE NOTICE FOR DIRECTOR NOMINATIONS AND STOCKHOLDER PROPOSALS. Our
by-laws require stockholders to provide advance notice of business proposed to
be brought before, and of nominations of directors to be made at, annual
meetings of stockholders. The by-laws set a date by which a stockholder must
advise Polaroid of his or her intent to seek to take action at a meeting and fix
the contents of the notice, requiring information, such as beneficial stock
ownership and other information required by the proxy rules under the Securities
Exchange
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Act of 1934. If a stockholder fails to deliver proper notice 90 days prior to
the anniversary of the immediately preceding annual meeting or in the event that
the annual meeting is more than 20 days prior to that anniversary, not later
than the 20th day following the first date on which the date of the annual
meeting was first disclosed, the proposal will be excluded from stockholder
consideration at the meeting.
ISSUANCE OF PREFERRED STOCK WITHOUT STOCKHOLDER APPROVAL. As set forth
above under "Preferred Stock", the Restated Certificate of Incorporation
authorizes the board of directors to issue, without further stockholder
approval, from time to time, preferred stock with the designations, powers,
preferences and rights that the board of directors may determine, including the
issuance of preferred stock to persons designated by the board of directors and
preferred stock with voting rights. The issuance of preferred stock, while
providing flexibility in connection with possible acquisitions and other
corporate purposes, could have the effect of making it more difficult for a
third party to acquire a majority of our outstanding common stock. In addition,
our ability to issue this kind of preferred stock may adversely effect the
marketability and potential market price of our common stock.
DELAWARE ANTI-TAKEOVER STATUTE
Polaroid is subject to Section 203 of the Delaware General Corporation Law.
In general, Section 203 prevents a person who owns 15% or more of our
outstanding voting stock (an "interested stockholder") from engaging in some
business combinations, as described below, with Polaroid for three years
following the time that that person becomes an interested stockholder unless one
of the following occurs:
- the board of directors either approves the business combination or the
transaction in which the person became an interested stockholder before
that person became an interested stockholder;
- upon completion of the transaction which resulted in the person becoming
an interested stockholder, the interested stockholder owned at least 85%
of Polaroid's voting stock outstanding at the time the transaction
commenced, excluding stock held by:
-- directors who are also officers of Polaroid; and
-- employee stock plans that do not provide employees with the right to
determine confidentially whether shares held subject to the plan will
be tendered in a tender or exchange offer; or
- at or subsequent to the time that the transaction in which the person
became an interested stockholder, the business combination is:
-- approved by the board of directors; and
-- authorized at a meeting of stockholders by the affirmative vote of the
holders of at least 66 2/3% of our outstanding voting stock which is
not owned by the interested stockholder.
For purposes of Section 203, the term "business combinations" as used above
include mergers, consolidations, asset sales or other transactions that result
in a financial benefit to the interested stockholder and transactions that would
increase the interested stockholder's proportionate share ownership of Polaroid.
Under some circumstances, Section 203 makes it more difficult for an
interested stockholder to effect various business combinations with Polaroid for
a period of three years. Although our stockholders have the right to exclude
Polaroid from the restrictions imposed by Section 203, they have not done so.
Section 203 may encourage companies interested in acquiring Polaroid to
negotiate in advance with the board of directors, since the requirement stated
above regarding stockholder approval, would be avoided if a majority of the
directors approves, prior to the time the party became an interested
stockholder, either the business combination or the transaction which results in
the stockholder becoming an interested stockholder.
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LIMITATION OF DIRECTORS' LIABILITY
The Restated Certificate of Incorporation provides that a director will not
be personally liable for monetary damages to Polaroid or our stockholders for
breach of fiduciary duty as a director, except for:
- breach of the director's duty of loyalty to Polaroid or our stockholders;
- acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
- paying a dividend or approving a stock repurchase that is not lawful, in
violation of Section 174 of the Delaware General Corporation Law; or
- a transaction from which the director derived an improper personal
benefit.
While the Restated Certificate of Incorporation provides directors with
protection from awards for monetary damages for breaches of their duty of care,
it does not eliminate these duties. Accordingly, the Restated Certificate of
Incorporation will have no effect on the availability of equitable remedies such
as an injunction or rescission based on a director's breach of the duty of care.
The inclusion of these provisions in the Restated Certificate of
Incorporation may have the effect of reducing the likelihood of derivative
litigation against directors. In addition, these provisions may discourage or
deter stockholders or management from bringing a lawsuit against directors for
breach of their duty of care, even though that action, if successful, might have
benefitted Polaroid and our stockholders otherwise.
INDEMNIFICATION AGREEMENTS
We have entered into indemnification agreements with our officers and
directors. The indemnification agreements require, among other things, that we:
- indemnify our officers and directors to the fullest extent permitted by
law;
- advance to the officers and directors all related expenses, subject to
reimbursement if it is determined subsequently that indemnification is not
permitted;
- indemnify and advance all expenses incurred by officers and directors
seeking to enforce their rights under the indemnification agreements; and
- provide officers and directors liability insurance.
Although the form of the indemnification agreement offers substantially the
same scope of coverage afforded by the Restated Certificate of Incorporation and
our by-laws, it provides greater assurance to directors and officers that
indemnification will be available, because, as a contract, it cannot be modified
unilaterally in the future by the board of directors or by stockholders to
eliminate the rights it provides.
RESTRICTIONS ON DIVIDENDS
Two of the agreements pursuant to which we have issued debt, and can issue
more debt in the future, restrict our ability to pay dividends. Our
$350 million Amended and Restated Credit Agreement, dated as of December 11,
1998, among Polaroid Corporation and the lenders party thereto, Morgan Guaranty
Trust Company of New York, as Administrative and Collateral Agent and
BankBoston, N.A., as Co-Agent, provides that we may not declare or pay dividends
that exceed $7.5 million, on a cumulative basis, in any fiscal quarter. The
indenture, pursuant to which we issued $275 million aggregate principal amount
of 11 1/2% Notes due 2006 on February 17, 1999 (the "11 1/2% Notes indenture")
limits our ability to make specified restricted payments, including dividends on
our capital stock, unless:
- we are not, or would not as a result of such payment be, in default under
the 11 1/2% Notes;
- we are, and based on a pro forma calculation of a fixed charge coverage
ratio set forth in the 11 1/2% Notes indenture would be, able to incur an
additional $1 of indebtedness (as defined in the 11 1/2% Notes indenture);
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- the aggregate amount of all restricted payments is less than the total of:
-- 50% of our consolidated net income (as defined in the 11 1/2% Notes
indenture) after March 28, 1999 until our most recently ended fiscal
quarter, or, if our consolidated net income for our most recently
ended fiscal quarter was a deficit, less 100% of that deficit;
-- the net cash proceeds from the sale after February 17, 1999 of our
equity securities or debt securities that are convertible into equity
securities;
-- the sale of specified investments; and
-- the value of subsidiaries if they were to become subject to the
covenants contained in the 11 1/2% Notes Indenture.
Notwithstanding the test set forth above, the 11 1/2% Notes indenture
permits us to (1) pay cash dividends on our capital stock up to $7.5 million in
any fiscal quarter and (2) make restricted payments, including dividends on our
capital stock, that do not exceed $30.0 million after February 17, 1999. We
filed the 11 1/2% Notes indenture with the SEC on a Current Report on Form 8-K
on February 17, 1999.
DESCRIPTION OF OFFERED PREFERRED STOCK
The following description summarizes some general terms that will apply to
each series of preferred stock that we issue. It is not complete, and we refer
you to the Restated Certificate of Incorporation and the form of the Certificate
of Designations Powers, Preferences and Rights for Preferred Stock, which we
have filed with the SEC as an exhibit to the registration statement of which
this prospectus is a part.
SPECIFIC TERMS OF EACH SERIES
Each time that we issue a new series of preferred stock, we will file with
the SEC a definitive certificate of designations and the prospectus supplement
relating to that new series will specify the particular amount, price and other
terms of that preferred stock. These terms will include:
- the designation of the title of the series;
- dividend rates;
- redemption provisions, if any;
- special or relative rights in the event of liquidation, dissolution,
distribution or winding up of Polaroid;
- sinking fund provisions, if any;
- whether the preferred stock will be convertible into our common stock or
other securities of Polaroid or exchangeable for securities of any other
person;
- voting rights; and
- any other preferences, privileges, powers, rights, qualifications,
limitations and restrictions, not inconsistent with the Restated
Certificate of Incorporation and by-laws.
The shares of any series of preferred stock will be, when issued, fully paid
and non-assessable. The holders of the preferred stock will not have preemptive
rights.
The prospectus supplement relating to the new series will specify whether
the series of preferred stock will be issued separately, as part of stock
purchase units or warrant units or upon exercise of warrants.
RANKING
Each new series of preferred stock will rank equally with each other series
of preferred stock and prior to our common stock regarding the distribution of
dividends or disposition of other assets, unless otherwise specified in the
applicable prospectus supplement.
DIVIDENDS
Holders of each new series of preferred stock will be entitled to receive
cash dividends, if declared by the board of directors out of funds legally
available for cash dividends. For each series, we will specify in the applicable
prospectus supplement:
- the dividend rates;
- whether the rates will be fixed or variable or both;
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- the dates of distribution of the cash dividends; and
- whether the dividends on any series of preferred stock will be cumulative
or non-cumulative.
We will pay dividends to holders of record of preferred stock as they appear
on our records, or, if applicable, the records of the depositary referred to
below under "Depositary Shares", on the record dates fixed by the board of
directors.
We cannot declare or pay full dividends on funds set apart for the payment
of dividends on any series of preferred stock unless dividends have been paid or
set apart for payment on a proportionate basis with other equity securities
which rank equally with the preferred stock regarding the distribution of
dividends. If we do not pay full dividends on all equity securities which rank
equally, then each series of preferred stock will share dividends in proportion
with our other equity securities that rank equally with that series.
CONVERSION AND EXCHANGE
The prospectus supplement for any new series of preferred stock will state
the terms and other provisions, if any, on which shares of the new series of
preferred stock are convertible into shares of our common stock or exchangeable
for securities of a third party.
REDEMPTION
We will specify in the prospectus supplement applicable to each new series
of preferred stock:
- whether it will be redeemable at any time, in whole or in part, at the
option of Polaroid or the holder of the preferred stock;
- whether it will be subject to mandatory redemption pursuant to a sinking
fund or on other terms; and
- the redemption prices.
In the event that preferred stock is partially redeemed, the shares to be
redeemed will be determined by lot, on a proportionate basis or any other method
determined to be equitable by the board of directors.
Dividends will cease to accrue on shares of preferred stock called for
redemption, and all rights of holders of redeemed shares will terminate, on and
after a redemption date, except for the right to receive the redemption price,
unless Polaroid defaults in the payment of the redemption price.
LIQUIDATION PREFERENCE
Upon the voluntary or involuntary liquidation, dissolution or winding up of
Polaroid, holders of each series of preferred stock will be entitled to receive:
- distributions upon liquidation in the amount set forth in the applicable
prospectus supplement; plus
- any accrued and unpaid dividends.
These payments will be made to holders of preferred stock out of our assets
available for distribution to stockholders before any distribution is made on
any securities ranking junior to the preferred stock regarding liquidation
rights.
In the event that holders of preferred stock are not paid in full upon a
liquidation, dissolution or winding up of Polaroid, then these holders will
share, on a proportionate basis, any future distribution of our assets with
holders of our other securities that rank equally with them.
After payment of the full amount of the liquidation preference to which they
are entitled, the holders of each series of preferred stock will not be entitled
to any further participation in any distribution of assets of Polaroid.
VOTING RIGHTS
The holders of shares of preferred stock will have no voting rights except
as indicated in the certificate of designations relating to the series, the
applicable prospectus supplement or as required by applicable law.
TRANSFER AGENT AND REGISTRAR
We will specify each of the transfer agent, registrar, dividend disbursing
agent and redemption agent for shares of each new series of preferred stock in
the applicable prospectus supplement.
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<PAGE>
RESERVATION OF COMMON STOCK
Polaroid will reserve the full number of shares of common stock issuable on
conversion of the preferred stock from preemptive rights out of the total of its
authorized but unissued shares of common stock or common stock held as treasury
shares to permit the conversion of the debt securities, or preferred stock, into
shares of common stock.
DEPOSITARY SHARES
We may, at our option, elect to offer fractional, rather than whole, shares
of preferred stock. In that event, we will issue to the public receipts for
depositary shares, each of which will represent a fraction of a share of
preferred stock. If we issue depositary shares, we will specify the terms and
other provisions of that series in a prospectus supplement and whether the
series will be issued separately, as part of stock purchase units or warrant
units or upon exercise of warrants.
The depositary shares will be deposited with a depositary under a deposit
agreement to be entered between Polaroid and that depositary. The depositary
will be a bank or trust company selected by us and is required to have its
principal office in the United States and have a combined capital and surplus of
a least $50 million. The depositary shares will be evidenced by depositary
receipts issued pursuant to the deposit agreement. Depositary receipts will be
distributed to those persons purchasing the depositary shares.
The following description of the depositary shares is not complete, and we
refer you to the forms of deposit agreement and the depositary receipt which we
have filed with the SEC as exhibits to the registration statement of which this
prospectus is a part.
RIGHTS AND PREFERENCES
Each owner of a depositary share will be entitled to all the rights and
preferences of the preferred stock, in proportion to the applicable fraction of
the share of preferred stock represented by the depositary share, including:
- dividend rights;
- redemption rights, if any;
- voting rights;
- conversion or exchange rights, if any; and
- liquidation rights.
DIVIDENDS AND OTHER DISTRIBUTIONS
The depositary will distribute all cash dividends and other cash
distributions received on the preferred stock to the record holders of
depositary shares in proportion to the number of depositary shares that they
hold.
In the event of a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary shares
entitled to receive the property, unless the depositary determines that it is
not feasible to make the distribution. If the depositary determines that it is
not feasible to make the distribution, then the depositary may, with our
approval, sell the property and distribute the net proceeds of the sale to the
holders of the depositary shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of preferred stock represented by depositary shares is subject
to redemption, the depositary shares will be redeemed from the proceeds received
by the depositary resulting from the redemption, in whole or in part, of
preferred stock held by the depositary. The redemption price for each depositary
share will be equal to the applicable fraction of the redemption price for each
share payable on the series of the preferred stock.
If we redeem shares of preferred stock held by the depositary, the
depositary will redeem, as of the same redemption date, the number of depositary
shares representing the shares of preferred stock so redeemed. If fewer than all
the depositary shares are to be redeemed, the depositary will select by lot or
on a proportionate basis the depositary shares to be redeemed.
CONVERSION AND EXCHANGE
If a series of preferred stock represented by depository shares is
convertible into our common stock or exchangeable for securities of a third
party, each depository share will be convertible into or exchangeable for that
number of shares of our common stock or third party securities
28
<PAGE>
equal to the applicable fraction of the conversion or exchange ratio applicable
to one share of preferred stock.
VOTING THE PREFERRED STOCK
Each holder of depositary shares on the record date will be entitled to
instruct the depositary as to the exercise of the voting rights pertaining to
the amount of the preferred stock represented by that holder's depositary
shares. The record date will be the same date as the record date for the
preferred stock.
When the depositary receives notice of any meeting at which the holders of
any series of preferred stock are entitled to vote, the depositary will:
- mail the information contained in the notice of meeting to the record
holders of the depositary shares;
- endeavor, insofar as practicable, to vote the amount of the preferred
stock represented by the depositary shares in accordance with the voting
instructions of the record holders of the depositary shares; and
- abstain from voting shares of the preferred stock to the extent it does
not receive specific instructions from the holders of depositary shares.
Polaroid will agree to take all action which may be deemed necessary by the
depositary in order to enable the depositary to vote the depositary shares as
instructed.
TEMPORARY AND DEFINITIVE DEPOSITARY RECEIPTS
Pending the preparation of definitive depositary receipts, the depositary
may issue temporary depositary receipts substantially identical to the
definitive depositary receipts. Temporary depositary receipts will carry the
same rights as definitive depositary receipts.
If temporary depositary receipts are issued, we will prepare definitive
depositary receipts without unreasonable delay. Temporary depositary receipts
will be exchangeable for definitive depositary receipts at our expense. In
addition, subject to the terms of the deposit agreement, holders of depositary
shares will be entitled to withdraw and receive, upon surrender of depositary
receipts, certificates evidencing the fractional number of shares of preferred
stock represented by the depositary receipts.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The depositary receipts evidencing the depositary shares and any provision
of the deposit agreement may be amended by agreement between Polaroid and the
depositary at any time. However, any amendment that materially and adversely
alters the rights of the holders of depositary shares will not be effective,
unless the amendment has been approved by the holders of at least a majority of
the depositary shares then outstanding.
The deposit agreement may be terminated by Polaroid or the depositary only
if:
- all outstanding depositary shares have been redeemed; or
- there has been a final distribution in respect of the preferred stock in
connection with any liquidation, dissolution or winding up of Polaroid and
the distribution has been distributed to the holders of depositary
receipts.
TAXES AND COSTS
We will pay:
- all transfer and other taxes and governmental charges arising solely from
the existence of the depositary arrangements; and
- charges of the depositary in connection with the initial deposit of the
preferred stock and any redemption of preferred stock.
Holders of depositary receipts will pay:
- transfer and other taxes and governmental charges other than those
described in the preceding sentence; and
- other charges, including a fee for the withdrawal of shares of preferred
stock upon surrender of depositary receipts, as provided in the deposit
agreement to be for their accounts.
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<PAGE>
DELIVERY OBLIGATIONS
The depositary will forward to holders of depositary receipts all reports
and communications from Polaroid that are delivered to the depositary and which
we are required to furnish to the holders of the preferred stock.
LIMITATION OF LIABILITY
Neither we nor the depositary will be liable if we or it is prevented or
delayed by law or any circumstance beyond our or its control in performing our
or its obligations under the deposit agreement. Our and the depositary's
obligations under the deposit agreement will be limited to the performance, in
good faith, of our and its duties under it. We and the depositary will not be
obligated to prosecute or defend any legal proceeding regarding the depositary
shares or the preferred stock unless we or they are furnished a satisfactory
indemnity. We and the depositary may rely upon the written advice of counsel or
accountants and information provided by persons presenting preferred stock for
deposit and holders of depositary receipts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering to us notice of its
election to do so. In addition, at any time, we may remove the depositary
subject to the appointment of an acceptable successor. The resignation or effect
upon the appointment of a successor depositary and its acceptance of the
appointment. The successor depositary must be appointed within 60 days after
delivery of the notice of resignation or removal and must be a bank or trust
company having its principal office in the United States and having a combined
capital and surplus of at least $50 million.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue share purchase contracts, including contracts obliging holders
to purchase from Polaroid, and Polaroid to sell to the holders, a specified
number of shares of common stock at a future date or dates. The consideration
per share of common stock may be fixed at the time the stock purchase contracts
are issued or may be determined by reference to a specific formula described in
the stock purchase contracts. We may issue the stock purchase contracts
separately or as a part of stock purchase units consisting of:
- a stock purchase contract; and
- any of a debt security of Polaroid, a share of preferred stock of Polaroid
or a depositary share relating to preferred stock of Polaroid or a debt
obligation of a third party, including a U.S. Treasury security.
The debt security, share of preferred stock or depositary share relating to
preferred stock of Polaroid or debt obligation of a third party may serve as
collateral to secure the holders' obligations to purchase the common stock under
the stock purchase contracts. The stock purchase contracts may require us to
make periodic payments to the holders of stock purchase contracts. These
payments may be unsecured or prefunded on some basis to be specified. The stock
purchase contracts may require holders of Polaroid to secure their obligations
in a specified manner. The applicable prospectus supplement will describe the
specific terms and other provisions of any stock purchase contracts or stock
purchase units.
DESCRIPTION OF WARRANTS AND WARRANT UNITS
We may issue warrants, including debt warrants, which are warrants to
purchase debt securities, and equity warrants, which are warrants to purchase
common stock, preferred stock or depositary shares. We may issue warrants
independently of or together with any other securities, including as part of a
warrant unit, and warrants may be attached to or separate from those securities.
Each series of warrants will be issued under a separate warrant agreement to
be entered into between Polaroid and a warrant agent. The warrant agent will act
solely as our agent in connection with a series of warrants and will not
30
<PAGE>
assume any obligation or relationship of agency for or with holders or
beneficial owners of warrants. The following describes the general terms and
provisions of the warrants offered by this prospectus. The applicable prospectus
supplement will describe any other terms of the warrant and the applicable
warrant agreement.
Each warrant unit will consist of:
- a warrant under which the holder will, upon exercise, purchase a specified
number of shares of common stock; and
- any of a debt security of Polaroid, a share of preferred stock of Polaroid
or a depositary share relating to preferred stock of Polaroid.
DEBT WARRANTS
The applicable prospectus supplement will describe the terms of any debt
warrants, including the following:
- the title and aggregate number of the debt warrants;
- any offering price of the debt warrants;
- whether the debt warrants are to be issued with any debt securities, and,
if so, the title, total principal amount and terms;
- the number of debt warrants and debt securities that will be separately
transferable;
- any date on and after the debt warrants and debt securities will be
separately transferable;
- the title, total principal amount, ranking and terms, including
subordination and conversion provisions, of the underlying debt securities
that may be purchased upon exercise of the debt warrants;
- the time or period when the debt warrants are exercisable, the minimum or
maximum amount of debt warrants which may be exercised at any one time,
and the final date on which the debt warrants may be exercised;
- the principal amount of underlying debt securities that may be purchased
upon exercise of each debt warrant and the price, or the manner of
determining the price, at which the principal amount may be purchased upon
exercise;
- the terms of any right to redeem or call the debt warrants;
- any book-entry procedure information;
- any currency or currency units in which the offering price and the
exercise price are payable;
- any other terms of the debt warrants not inconsistent with the provisions
of the debt warrant agreement.
EQUITY WARRANTS
The applicable prospectus supplement will describe the terms of any equity
warrants, including the following:
- the title and aggregate number of the equity warrants;
- any offering price of the equity warrants;
- the designation and terms of any preferred shares that are purchasable
upon exercise of the equity warrants or that underlie depositary shares
purchasable upon this exercise;
- if applicable, the designation and terms of the securities with which the
equity warrants are issued and the number of the equity warrants issued
with each security;
- if applicable, the date from and after the equity warrants and any
securities issued with them will be separately transferrable;
- the number of shares of common stock, preferred stock or depositary shares
purchasable upon exercise of an equity warrant and the price;
- the time or period when the equity warrants are exercisable and the final
date on which the equity warrants may be exercised and terms regarding any
right of Polaroid to accelerate this final date;
- if applicable, the minimum or maximum amount of the equity warrants
exercisable at any one time;
- any currency or currency units in which the offering price and the
exercise price are payable;
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- any applicable anti-dilution provisions of the equity warrants;
- any applicable redemption or call provisions; and
- any additional terms of the equity warrants not inconsistent with the
provisions of the equity warrant agreement.
WARRANT UNITS
The applicable prospectus supplement will describe the specific terms and
other provisions of any warrant units.
PLAN OF DISTRIBUTION
We may sell the debt securities, the preferred stock and the depositary
shares in any of three ways:
- through underwriters;
- through agents; or
- directly to a limited number of institutional purchasers or to a single
purchaser.
The prospectus supplement for each series of securities we sell will
describe that offering, including:
- the name or names of any underwriters;
- the purchase price and the proceeds to us from that sale;
- any underwriting discounts and other items constituting underwriters'
compensation;
- any initial public offering price and any discounts or concessions allowed
or reallowed or paid to dealers; and
- any securities exchanges on which the securities may be listed.
UNDERWRITERS
If underwriters are used in the sale, we will execute an underwriting
agreement with those underwriters relating to the securities that we will offer.
Unless otherwise set forth in the prospectus supplement, the obligations of the
underwriters to purchase these securities will be subject to conditions. The
underwriters will be obligated to purchase all of these securities if any are
purchased.
The securities subject to the underwriting agreement will be acquired by the
underwriters for their own account and may be resold by them 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.
Underwriters may be deemed to have received compensation from us in the form of
underwriting discounts or commissions and may also receive commissions from the
purchasers of these securities for whom they may act as agent. Underwriters may
sell these securities to or through dealers. These dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions from the purchasers for whom they may act as
agent. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
We also may sell the securities in connection with a remarketing upon their
purchase, in connection with a redemption or repayment, by a remarketing firm
acting as principal for its own account or as our agent. Remarketing firms may
be deemed to be underwriters in connection with the securities that they
remarket.
We may authorize underwriters to solicit offers by institutions to purchase
the securities subject to the underwriting agreement from us at the public
offering price stated in the prospectus supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future.
If we sell securities pursuant to these delayed delivery contracts, the
prospectus supplement will state that as well as the conditions to which these
delayed delivery contracts will be subject and the commissions payable for that
solicitation.
AGENTS
We may also sell any of the securities through agents designated by us from
time to time. We will name any agent involved in the offer or sale of these
securities and will list commissions payable by us to these agents in the
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prospectus supplement. These agents will be acting on a best efforts basis to
solicit purchases for the period of its appointment, unless we state otherwise
in the prospectus supplement.
DIRECT SALES
We may sell any of the securities directly to purchasers. In this case, we
will not engage underwriters or agents in the offer and sale of these
securities.
INDEMNIFICATION
We may indemnify underwriters, dealers or agents who participate in the
distribution of securities against certain liabilities, including
liabilities under the Securities Act of 1933 and agree to contribute to payments
which these underwriters, dealers or agents may be required to make.
NO ASSURANCE OF LIQUIDITY
Each series of securities will be a new issue of securities with no
established trading market. Any underwriters that purchase securities from us
may make a market in these securities. The underwriters will not be obligated,
however, to make such a market and may discontinue market-making at any time
without notice to holders of the securities. We cannot assure you that there
will be liquidity in the trading market for any securities of any series.
EXPERTS
The consolidated financial statements and schedules of Polaroid and
subsidiary companies as of December 31, 1997 and 1998, and for each of the years
in the three-year period ended December 31, 1998, have been incorporated by
reference in this prospectus and in the registration statement of which this
prospectus is a part in reliance upon the report of KPMG LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of that firm as experts of accounting and auditing.
The report of KPMG LLP covering the December 31, 1997, consolidated
financial statements refers to a change in the method of accounting for
depreciation.
With respect to the unaudited interim financial information for the periods
ended March 28, 1999, June 27, 1999 and September 26, 1999, incorporated by
reference herein, the independent certified public accountants have reported
that they applied limited procedures in accordance with professional standards
for a review of such information. However, their separate reports included in
our quarterly reports on Form 10-Q for the quarters ended March 28,1999,
June 27, 1999 and September 26, 1999, and incorporated by reference herein,
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 report on the
unaudited financial information because their report is not a "report" or a
"part" of the registration statement prepared or certified by accountants within
the meaning of Sections 7 and 11 of such Act.
LEGAL OPINIONS
Simpson Thacher & Bartlett, New York, New York, has issued an opinion
regarding the legality of each of the Securities. Neal D. Goldman, Esq., who is
the Vice President, General Counsel and Secretary of Polaroid, may issue an
opinion regarding certain other matters for us. Any underwriters, dealers or
agents may be advised about other issues relating to any offering by their own
legal counsel.
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PART II INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemization of all fees and expenses incurred or
expected to be incurred by the Registrant in connection with the issuance and
distribution of the securities being registered hereby, other than underwriting
discounts and commissions. All but the Securities and Exchange Commission
registration fee are estimates and remain subject to future contingencies.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 72,600*
Legal fees and expenses..................................... 250,000
Accounting fees and expenses................................ 10,000
Trustee's fees and expenses................................. 15,000
Printing and engraving fees................................. 100,000
Rating Agency Fees.......................................... 350,000
Blue Sky fees and expenses.................................. 20,000
Miscellaneous expenses...................................... 32,400
--------
Total................................................... $850,000
========
</TABLE>
* In addition, the Registrant has previously paid a registration fee of
$62,550 in connection with the filing of an aggregate principal amount of
$225,000,000 of debt securities that remain eligible to be sold under the Prior
Registration Statement and that are being carried forward to the prospectus
included herein pursuant to Rule 429 under the Securities Act.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Section 102(b)(7) of the Delaware General Corporation Law,
the Registrant's Restated Certificate of Incorporation eliminates a director's
personal liability for monetary damages to the Registrant and its stockholders
arising from a breach of a director's fiduciary duty, except (1) for liability
with respect to an illegal dividend or stock repurchase or (2) liability for a
breach of the director's duty of loyalty to the Registrant or its stockholders,
(3) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (4) for any transaction in which the
director derived an improper personal benefit. The effect of this provision in
the Restated Certificate of Incorporation is to eliminate the rights of the
Registrant and its stockholders (through stockholders' derivative suits on
behalf of the Registrant) to recover monetary damages against a director for
breach of fiduciary duty as a director (including breaches resulting from
negligent or grossly negligent behavior) except in the situations described
above.
Section 145 of the Delaware General Corporation Law provides for
indemnification by the Registrant of its directors and officers and certain
other persons.
The Registrant's By-Laws provide that, to the extent not inconsistent with
Delaware or other applicable law in effect from time to time, the Registrant
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Registrant) by reason of the fact that he is or was a
director, officer, employee or agent of the Registrant or is or was serving at
the request of the Registrant as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Registrant, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
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<PAGE>
The Registrant's By-Laws also provide that, to the extent not inconsistent
with Delaware or other applicable law in effect from time to time, the
Registrant shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Registrant to procure a judgment in its favor by reason of the
fact that such person acted in any of the capacities set forth above, against
expenses (including attorney's fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interests of the Registrant, except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the Registrant unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine that despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper.
Generally, a director will be entitled to be indemnified against a claim if
a majority of a quorum of the directors who are not parties to the relevant
legal proceedings, independent legal counsel or the stockholders determine that
the director acted under the relevant standard of conduct set forth in the two
preceding paragraphs.
The Registrant's By-Laws further provide that to the extent that a director,
officer, employee or agent of the Registrant has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to above or
in defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith; that the indemnification provided for by the
By-Laws shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; and that the Registrant is empowered to
purchase and maintain insurance on behalf of a person who is or was acting in
any of the capacities set forth above against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Registrant would have the power to indemnify him against such
liabilities under the By-Laws.
The Registrant maintains policies of insurance under which directors,
officers and certain employees of the Registrant and its subsidiaries are
insured, subject to certain specific exclusions and deductible maximum amounts,
against loss arising from any civil claim which may be made against them, or any
of them, arising out of any misstatement, misleading statement, omission or
other act done or alleged to have been done, or wrongfully attempted, while
acting in their representative capacities.
Any agreement with underwriters or agents may contain provisions providing
for the indemnified of the Registrant and certain of its directors and officers
in certain circumstances.
ITEM 16. EXHIBITS
The following exhibits are filed as part of this registration statement:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
1.1*** Form of Underwriting Agreement for [Convertible]
[Senior][Subordinated] Debt Securities.
1.2*** Form of Underwriting Agreement for Common Stock.
1.3*** Form of Underwriting Agreement for [Convertible] Preferred
Stock.
1.4*** Form of Underwriting Agreement for Depositary Shares.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
3.1** Restated Certificate of Incorporation. (The Restated
Certificate of Incorporation, included as Exhibit 3.2(a) to
Polaroid Corporation's Annual Report Form 10-K for the year
ended December 31, 1988, is hereby incorporated herein by
reference.)
3.2** Amendment to the Restated Certificate of Incorporation as of
May 12, 1987. (The Amendment to the Restated Certificate of
Incorporation, included as Exhibit 3.1 to Polaroid
Corporation's Quarterly Report on Form 10-Q for the
quarterly period ended June 28, 1987, is hereby incorporated
herein by reference.)
3.3** Amendment to the Restated Certificate of Incorporation as of
June 2, 1989. (The Amendment to the Restated Certificate of
Incorporation, included as Exhibit 3.1 to Polaroid
Corporation's Quarterly Report on Form 10-Q for the
quarterly period ended July 2, 1989, is hereby incorporated
herein by reference.)
3.5** By-laws of Polaroid Corporation. (The By-laws, included as
Exhibit 3.1 to Polaroid Corporation's Annual Report on Form
10-K for the year ended December 31, 1993, are hereby
incorporated herein by reference.)
3.6** Amendment to the Restated Certificate of Incorporation as of
May 14, 1985 (the Amendment to the Restated Certificate of
Incorporation, included as Exhibit 3 to Polaroid
Corporation's Quarterly Report on Form 10-Q for the
quarterly period ended March 28, 1999, is hereby
incorporated herein by reference.)
4.1** Rights Agreement, dated as of September 9, 1986, between
Polaroid Corporation and Morgan Shareholder Services Trust
Company, as Rights Agent. (The Rights Agreement, included as
Exhibit 1 to Polaroid Corporation' Registration Statement on
Form 8-A as filed on September 15, 1986, is hereby
incorporated herein by reference.)
4.2** First Amendment, dated as of August 16, 1988, to Rights
Agreement, dated as of September 9, 1986, between Polaroid
Corporation and Morgan Shareholder Services Trust Company,
as Rights Agent. (The First Amendment, included as Exhibit 4
to Polaroid Corporation's Registration Statement on Form 8-A
(Amendment No. 1 to Polaroid Corporation's Registration
Statement on Form 8-A filed on September 15, 1986) as filed
on August 18, 1988, is hereby incorporated herein by
reference.)
4.3** Second Amendment, dated as of September 14, 1988, to Rights
Agreement, dated as of September 9, 1986, between Polaroid
Corporation and Morgan Shareholder Services Trust Company,
as Rights Agent. (The Second Amendment, included as Exhibit
5 to Polaroid Corporation's Registration Statement on Form
8-A (Amendment No. 2 to Polaroid Corporation's Registration
Statement on Form 8-A filed on September 15, 1988), filed on
September 15, 1986, is hereby incorporated herein by
reference.)
4.4** Supplemental Rights Agreement and Third Amendment, dated as
of January 30, 1989, to Rights Agreement, dated as of
September 9, 1986, between Polaroid Corporation and Morgan
Shareholder Services Trust Company, as Rights Agent. (The
Supplemental Rights Agreement and Third Amendment, included
as Exhibit 6 to Polaroid Corporation's Registration
Statement on Form 8-A (Amendment No. 3 to Polaroid
Corporation's Registration Statement on Form 8-A filed on
September 15, 1986) filed on January 30, 1989, is hereby
incorporated herein by reference.)
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
4.5** Fourth Amendment, dated as of February 21, 1989, to the
Rights Agreement, dated as of September 9, 1986, between
Polaroid Corporation and Morgan Shareholder Services Trust
Company, as Rights Agent. (The Fourth Amendment, included as
Exhibit 7 to Polaroid Corporation's Registration Statement
on Form 8-A (Amendment No. 4 to Polaroid Corporation's
Registration Statement on Form 8-A filed on September 15,
1986) filed on February 21, 1989, is hereby incorporated
herein by reference.)
4.6** Supplemental Rights Agreement and Fifth Amendment, dated as
of October 7, 1991, to the Rights Agreement, dated as of
September 9, 1986, between Polaroid Corporation and First
Chicago Trust Company (as successor to Morgan Shareholder
Services Trust Company), as Rights Agent. (The Supplemental
Rights Agreement and Fifth Amendment, included as Exhibit 8
to Polaroid Corporation's Registration Statement on Form 8-A
(Amendment No. 5 to Polaroid Corporation's Registration
Statement on Form 8-A filed on September 15, 1986) filed on
October 21, 1991, is hereby incorporated herein by
reference.)
4.7** Sixth Amendment (previously designated as the Fifth
Amendment), dated as of March 23, 1993, to the Rights
Agreement, dated as of September 9, 1986, between Polaroid
Corporation and First Chicago Trust Company, as Rights
Agent. (The Sixth Amendment (previously designated as the
Fifth Amendment), included as Exhibit 9 (previously
designated as Exhibit 8) to Polaroid Corporation's
Registration Statement on Form 8-A (Amendment No. 6
(previously designated as Amendment No. 5) to Polaroid
Corporation's Registration Statement on Form 8-A filed on
September 15, 1986) filed on July 2, 1993, is hereby
incorporated herein by reference.)
4.8** Amendment, dated as of June 30, 1993, to the Fifth
Amendment, dated as of March 23, 1993, to the Rights
Agreement, dated as of September 9, 1986, between Polaroid
Corporation and First Chicago Trust Company, as Rights
Agent. (The Amendment to the Sixth Amendment, included as
Exhibit 10 to Polaroid Corporation's Registration Statement
on Form 8-A (Supplement to Amendment No. 5 and redesignation
thereof as Amendment No. 6 to Polaroid Corporation's
Registration Statement on Form 8-A filed on September 15,
1986) filed on July 2, 1993, is hereby incorporated herein
by reference.)
4.9** Seventh Amendment, dated as of July 13, 1998, to the Rights
Agreement, dated as of September 9, 1986, between Polaroid
Corporation and BankBoston, N.A. (as successor to First
Chicago Trust Company), as Rights Agent. (The Seventh
Amendment, included as Exhibit 11 to Polaroid Corporation's
Registration Statement on Form 8-A/A (Amendment No.7 to the
Form 8-A filed on September 15, 1986) filed on July 13,
1998, is hereby incorporated herein by reference.)
4.10** Indenture, dated as of January 9, 1997, by and between
Polaroid Corporation and State Street Bank and Trust
Company, as Trustee. (The Indenture, included as Exhibit 4
to Polaroid Corporation's Quarterly Report on Form 10-Q for
the quarterly period ended March 30, 1997, is hereby
incorporated herein by reference.)
4.11** First Supplemental Indenture, dated as of February 17, 1999,
by and between Polaroid Corporation and State Street Bank
and Trust Company, as Trustee (The First Supplemental
indenture included as Exhibit 4.2 to Polaroid Corporation's
Current Report on Form 8-K filed on February 17, 1999, is
hereby incorporated herein by reference.)
4.12*** Form of Second Supplemental Indenture by and between
Polaroid Corporation and State Street Bank and Trust
Company, as Trustee.
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
4.13*** Form of Fixed Rate Security with or without Optional
Redemption Provision for Convertible or Non-Convertible
Senior or Subordinated Debt Security. (The Form of Debt
Security, included as Exhibit A in Exhibit 4.11 hereto, is
hereby incorporated herein by reference.)
4.14** Certificate of Designations, Powers Preferences and Rights
of Series A Participating Cumulative Preferred Stock. (The
Certificate of Designations, filed as Exhibit 4.1 to
Polaroid Corporation's Quarterly Report on Form 10-Q for the
quarterly period ended September 27, 1987, is hereby
incorporated herein by reference.)
4.15*** Form of Certificate of Designations Powers, Preferences and
Rights for Preferred Stock.
4.16*** Form of Deposit Agreement.
4.17*** Form of Depositary Receipt. (The Form of Depositary Receipt,
included as Exhibit A to Exhibit 4.16 hereto, is hereby
included herein by reference.)
4.18*** Form of Common Stock Certificate.
4.19** Form of Rights Certificate. (The Form of Rights Certificate,
included as Exhibit B to Exhibit 4.1, is hereby incorporated
herein by reference.)
4.20*** Form of Preferred Stock Certificate.
4.21*** Form of Stock Purchase Agreement.
4.22*** Form of [Senior] [Subordinated] Debt Warrant Agreement.
4.23*** Form of Stock Warrant Agreement.
5*** Opinion of Simpson Thacher & Bartlett as to the legality of
the Debt Securities, the Preferred Stock, the Depositary
Shares, the Common Stock, the Rights, the Stock Purchase
Contracts, the Stock Purchase Units, the Warrants and the
Warrant Units.
10.1** $350,000,000 Amended and Restated Credit Agreement dated as
of December 11, 1998 (the "Amended and Restated Credit
Agreement") among Polaroid Corporation, Morgan Guaranty
Trust Company of New York, as Agent, and the Banks listed
therein. (The Amended and Restated Credit Agreement,
included as Exhibit 10.1 to Polaroid Corporation's Current
Report on Form 8-K filed on January 21, 1999 is hereby
incorporated herein by reference.)
10.2** Amendment Number 1 dated as of March 31, 1999 to the Amended
and Restated Credit Agreement. (Amendment Number 1, included
as Exhibit 10 to Polaroid Corporation's Quarterly Report on
Form 10-Q for the quarterly period ended March 28, 1999, is
hereby incorporated herein by reference.)
10.3** Amendment Number 2 dated as of September 10, 1999 to the
Amended and Restated Credit Agreement. (Amendment Number 1,
included as Exhibit 10.1 to Polaroid Corporation's Quarterly
Report on Form 10-Q for the quarterly period ended
September 26, 1999, is hereby incorporated herein by
reference.)
12.1** Statement of Computation of Ratio of Earnings To Fixed
Charges. (The Statement, included as Exhibit 12 to Polaroid
Corporation's Quarterly Report on Form 10-Q for the
quarterly period ended September 26, 1999, is hereby
incorporated herein by reference.)
15.1*** Letter regarding unaudited interim financial information
regarding the Forms 10-Q for the Quarterly Periods Ended
March 28, 1999, June 27, 1999 and September 26, 1999.
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
23.1* Consent of KPMG LLP.
23.2*** Consent of Simpson Thacher & Bartlett. (The Consent is
included in Exhibit 5.)
24*** Powers of Attorney. (The Powers of Attorney are included on
page II-7 of this Registration Statement.)
</TABLE>
- ------------------------
* Filed herewith.
** Incorporated herein by reference as stated in the description of the
exhibit.
*** Filed previously.
In addition, the Registrant hereby agrees to furnish to the Commission, upon
request, copies of certain debt instruments defining the rights of holders of
long-term debt of the kind described in, and pursuant to, Item
601(b)(4)(iii) of Regulation S-K of the Commission
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more that
a 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act, (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section (d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein,
II-6
<PAGE>
and the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by a registrant of expenses incurred or paid
by a director, officer or controlling person of such registrant in the
successful defense of any action suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
[THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cambridge, the Commonwealth of Massachusetts, on
February 14, 2000.
<TABLE>
<S> <C> <C>
POLAROID CORPORATION
By: /s/ RALPH M. NORWOOD
-----------------------------------------
Name: Ralph M. Norwood
Title: Vice President and Treasurer
</TABLE>
POWERS OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Gary T. DiCamillo, Judith G. Boynton, Neal
D. Goldman and Ralph M. Norwood, severally, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, and in any and all
capacities, to sign this Registration Statement and any and all amendments to
this Registration Statement of the Registrant, together with all schedules and
exhibits thereto, and to file the same with all scheduled exhibits thereto and
other documents in connection therewith with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, severally, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as each such person might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof, all on
January 31, 2000.
[THE REST OF THIS PAGE IS LEFT INTENTIONALLY BLANK. THE SIGNATURE PAGE FOLLOWS.]
II-8
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
pre-effective amendment no. 1 to the registration statement has been signed
below by the following persons in the capacities indicated and on February 14,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S> <C>
* Chairman of the Board
------------------------------------------- and Chief Executive Officer
Gary T. DiCamillo (Chief Executive Officer)
* Executive Vice President
------------------------------------------- and Chief Financial Officer
Judith G. Boynton (Principal Financial Officer)
*
------------------------------------------- Vice President and Controller
Carl L. Lueders (Controller)
*
------------------------------------------- Director
Stephen A. Bemazzani
*
------------------------------------------- Director
Ralph E. Gomory
*
------------------------------------------- Director
Stephen P. Kaufman
*
------------------------------------------- Director
John W. Loose
*
------------------------------------------- Director
Albin F. Moschner
*
------------------------------------------- Director
Alfred Poe
*
------------------------------------------- Director
Ralph Z. Sorenson
*
------------------------------------------- Director
Carole F. St. Mark
*
------------------------------------------- Director
Bernee D. L. Strom
*
------------------------------------------- Director
Alfred M. Zeien
</TABLE>
<TABLE>
<S> <C>
/s/ RALPH M. NORWOOD
-------------------------------------------
*By: ATTORNEY-IN-FACT
</TABLE>
II-9
<PAGE>
Exhibit 23.1
The Board of Directors
Polaroid Corporation
We consent to the use in Pre-Effective Amendment No. 1 of the Registration
Statement on Form S-3 (No. 333-96051) of Polaroid Corporation, of our audit
reports dated January 20, 1999, except for Note 8 to which the date is
February 17, 1999, on the consolidated financial statements and schedules of
Polaroid Corporation and subsidiary companies as of December 31, 1998 and
1997, and for each of the years in the three-year period ended December 31,
1998 incorporated herein by reference and to the reference to our firm under
the heading "Experts" in the prospectus which forms a part of such
registration statement.
As discussed in Note 1 to the consolidated financial statements, in 1997,
Polaroid Corporation changed its method of accounting for depreciation.
/s/ KPMG LLP
Boston, Massachusetts
February 14, 2000
