As filed with the Securities and Exchange Commission on June 23, 1995
REGISTRATION NO. 33-59451
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
Amendment No. 1
to
FORM S-3
Registration Statement under the Securities Act of 1933
----------------------
DIAMOND SHAMROCK, INC.
(Exact Name of Registrant as specified in its charter)
Delaware 74-2456753
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
9830 Colonnade Boulevard
San Antonio, Texas 78230
(210) 641-6800
(Address, including zip code, and telephone number,
including area code, of Registrant's principal
executive offices)
---------------------
TIMOTHY J. FRETTHOLD, ESQ.
SENIOR VICE PRESIDENT/GROUP EXECUTIVE AND GENERAL COUNSEL
9830 COLONNADE BOULEVARD
San Antonio, Texas 78230
(210) 641-6800
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
-----------------------
Copies to:
ROBERT A. PROFUSEK, ESQ. JOHN B. TEHAN, ESQ.
JONES, DAY, REAVIS & POGUE SIMPSON THACHER & BARTLETT
599 LEXINGTON AVENUE 425 LEXINGTON AVENUE
30TH FLOOR NEW YORK, NEW YORK 10017
NEW YORK, NEW YORK 10022 (212) 455-2000
(212) 326-3800
-------------------- --------------------
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.
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, as amended (the "Securities Act") other than securities offered
only in connection with dividend or interest reinvestment plans, please 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 COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION, OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED June 23, 1995
PROSPECTUS
$150,000,000
DIAMOND SHAMROCK, INC.
Debt Securities Preferred Stock
Common Stock Warrants
Diamond Shamrock, Inc. (the "Company") may, from time to time, offer or
solicit offers to purchase its (i) unsecured senior debt securities, (the
"Debt Securities"); (ii) warrants to purchase the Debt Securities (the "Debt
Warrants"); (iii) shares of preferred stock, par value $0.01 per share (the
"Preferred Stock"); (iv) warrants to purchase shares of Preferred Stock
("Preferred Stock Warrants"); (v) shares of common stock, par value $0.01 per
share (the "Common Stock"); and (vi) warrants to purchase shares of Common
Stock ("Common Stock Warrants"), having an aggregate initial public offering
price not to exceed $150,000,000 or the equivalent thereof in one or more
foreign currencies or composite currencies, including European Currency
Units, on terms to be determined at the time of sale (the Debt Warrants,
Preferred Stock Warrants and Common Stock Warrants being referred to herein
collectively as the "Securities Warrants"). The Debt Securities, Preferred
Stock, Common Stock and Securities Warrants offered hereby (collectively,
the "Offered Securities") may be offered separately or as units with other
Offered Securities, in separate series, in amounts, at prices, and on terms,
to be determined at the time of sale and to be set forth in a supplement to
this Prospectus (a "Prospectus Supplement").
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered, including, where applicable, (i) in the case
of Debt Securities, the specific designation, aggregate principal amount,
denominations, maturity, interest rate (which may be fixed or variable) and time
of payment of interest, if any, coin or currency in which principal, premium,
if any, and interest, if any, will be payable, any terms for redemption,
exchange, or conversion, any terms for sinking fund payments; (ii) in the case
of Preferred Stock, the specific title and stated value, number of shares,
the dividend, liquidation, exchange, redemption, conversion, voting, and other
rights, and the initial public offering price; (iii) in the case of Common
Stock, the initial public offering price; (iv) in the case of Securities
Warrants, the duration, offering price, exercise price and detachability
thereof; and (v) in the case of all Offered Securities, whether such Offered
Securities will be offered separately or as a unit with other Offered
Securities, will be set forth in the accompanying Prospectus Supplement.
The Prospectus Supplement will also contain information, where
applicable, concerning certain United States federal income tax
considerations relating to, and any listing on a securities exchange of, the
Offered Securities covered by the Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Offered Securities may be sold directly to purchasers or through
underwriters, dealers, or agents. If any underwriters, dealers, or agents are
involved in the sale of any Offered Securities, their names and any
applicable fee, commission, or discount arrangements will be set forth in the
Prospectus Supplement. The principal amount or number of shares of Offered
Securities, the purchase price thereof, and the net proceeds to the Company
from sales of Offered Securities will be set forth in the Prospectus
Supplement. The net proceeds to the Company of the sale of Offered
Securities will be the purchase price of such Offered Securities less
attributable issuance expenses, including underwriters', dealers', or agents'
compensation arrangements. See "Plan of Distribution" for indemnification
arrangements for underwriters, dealers, and agents.
This Prospectus may not be used to consummate sales of Offered
Securities unless accompanied by a Prospectus Supplement.
The date of this Prospectus is June , 1995
<PAGE>
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT
DELIVERED HEREWITH AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY
UNDERWRITER, DEALER, OR AGENT. THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT DO
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
OFFERED SECURITIES BY ANYONE IN ANY JURISDICTION IN WHICH THE OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING THE OFFER OR
SOLICITATION IS NOT AUTHORIZED TO DO SO OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements, and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements, and other information filed by the Company can be inspected
and copied at the Public Reference Room of the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 and at the public reference
facilities maintained by the Commission at Seven World Trade Center, Suite
1300, New York, New York 10048 and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of such materials can be
obtained at prescribed rates from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Documents filed
by the Company can also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005, on which exchange
certain of the Company's securities are listed.
This Prospectus constitutes a part of a Registration Statement filed by
the Company with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"), relating to the securities offered hereby. This
Prospectus omits certain of the information contained in the Registration
Statement, and reference is hereby made to the Registration Statement and to the
exhibits relating thereto for further information with respect to the Company
and the securities offered hereby. Any statements contained herein concerning
the provisions of any document are not necessarily complete, and in each
instance reference is made to the copy of such document filed as an exhibit
to the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates into this Prospectus by reference the
Company's (i) Annual Report on Form 10-K for the year ended December 31, 1994
(the "1994 Form 10-K"), filed pursuant to the Exchange Act, which contains
the consolidated financial statements of the Company and the report thereon of
Price Waterhouse LLP, (ii) Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995, and (iii) Current Reports on Form 8-K, dated January
25, 1995, February 6, 1995, and June 1, 1995.
All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14, or 15(d) of the Exchange Act, prior to the termination of
the offering made hereby, shall be deemed incorporated by reference in this
Prospectus and to be a part of this Prospectus from the date of the filing of
such reports.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain, without
charge, upon written or oral request, a copy of any of the documents
incorporated by reference herein, except for the exhibits to such documents
(other than the exhibits expressly incorporated in such documents by reference).
Requests should be directed to: Investor Relations, Diamond Shamrock, Inc., P.O.
Box 696000, San Antonio, Texas 78269-6000 (telephone 210-641-6800).
THE COMPANY
Diamond Shamrock, Inc. is the leading independent refiner and marketer
of petroleum products in the southwestern United States. Its principal
activities consist of crude oil refining, wholesale marketing of petroleum
products, and retail marketing of petroleum products and other merchandise
through Company-operated retail outlets. In addition, the Company processes
petrochemicals and is engaged in the marketing, distribution, and storage of
natural gas liquids.
The Company's principal executive offices are located at 9830 Colonnade
Boulevard, San Antonio, Texas 78230 (in person); P.O. Box 696000, San
Antonio, Texas 78269-6000 (by mail). Its telephone number is 210-641-6800.
EARNINGS RATIOS
The following table sets forth the ratio of earnings to fixed charges
and the ratio of earnings to combined fixed charges and preferred stock
dividends for the three-month periods ended March 31, 1995 and 1994 and for
each of the years in the five-year period ended December 31, 1994. For purposes
of computing such ratios, earnings consist of income before income taxes and
fixed charges, and fixed charges consist of interest on outstanding debt,
amortization of debt issuance expense, and one-third of rental payments on
operating leases (such amount having been deemed by the Company to represent
the interest portion of such payments).
Three Months
Ended
March 31 Year Ended December 31,
1995 1994 1994 1993 1992 1991 1990
Ratio of Earnings to
Fixed Charges 1.5 2.4 3.2 2.0 1.7 2.1 3.5
Ratio of Earnings to
Combined Fixed Charges
and Preferred Stock
Dividends 1.4 2.2 2.9 1.8 1.7 2.1 3.3
USE OF PROCEEDS
The Offered Securities may be offered by the Company from time to time
when market conditions are determined by the Company to be favorable. Unless
otherwise indicated in the applicable Prospectus Supplement, the net proceeds
from the sale of the Offered Securities will be added to the Company's funds and
used for general corporate purposes.
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain
general terms and provisions of the Debt Securities to which any Prospectus
Supplement may relate. The particular terms of the Debt Securities offered by
any Prospectus Supplement (the "Offered Debt Securities") and the extent, if
any, to which such general provisions do not apply to the Offered Debt
Securities will be described in the Prospectus Supplement relating to such
Offered Debt Securities.
The Debt Securities to which this Prospectus relates will be issued
under an Indenture dated as of December 15, 1989 (the "Indenture"), between
the Company and The First National Bank of Chicago, as trustee (the "Trustee"),
which is filed as an exhibit to the Registration Statement. The following
summaries of certain provisions of the Indenture do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Indenture, including the definitions therein of
certain terms. Numerical references in parentheses below are to sections in
the Indenture. Whenever particular sections or defined terms of the Indenture
are referred to, such sections or defined terms are incorporated herein by
reference.
General
The Indenture does not limit the amount of Debt Securities which may be
issued thereunder and provides that Debt Securities may be issued thereunder
from time to time in one or more series up to the aggregate principal amount
which may be authorized from time to time by the Company. All Debt Securities
will be unsecured and will rank pari passu with all other unsecured
unsubordinated indebtedness of the Company. The Company is primarily a holding
company and the Debt Securities will not be guaranteed by any of the
Company's Subsidiaries. As a result, the right of creditors of the Company
upon its liquidation, reorganization, or otherwise is necessarily subject to
the claims of creditors of the Company's Subsidiaries, except to the extent
that claims of the Company itself as a creditor of any of its Subsidiaries
may be recognized. Except as described below, the Indenture does not limit the
amount of other indebtedness or securities which may be issued by the Company.
Reference is made to the Prospectus Supplement relating to the
particular series of Offered Debt Securities offered thereby for the
following terms of such series of Offered Debt Securities: (i) the
designation, aggregate principal amount, and authorized denominations of such
Offered Debt Securities; (ii) the purchase price of such Offered Debt
Securities (expressed as a percentage of the principal amount thereof); (iii)
the date or dates on which such Offered Debt Securities will mature; (iv) the
rate or rates per annum, if any (which may be fixed or variable), at which such
Offered Debt Securities will bear interest or the method by which such rate
or rates will be determined; (v) the dates on which such interest will be
payable and the record dates for payment of interest, if any; (vi) the coin
or currency in which payment of the principal of (and premium, if any) or
interest, if any, on such Offered Debt Securities will be payable; (vii) the
terms of any mandatory or optional redemption (including any sinking fund) or
any obligation of the Company to repurchase Offered Debt Securities; (viii)
whether such Offered Debt Securities are to be issued in whole or in part in
the form of one or more temporary or permanent global Debt Securities
("Global Securities") and, if so, the identity of the depositary, if any, for
such Global Security or Securities; and (ix) any other additional provisions or
specific terms which may be applicable to that series of Offered Debt
Securities.
Principal, premium, if any, and interest, if any, will be payable, and
the Debt Securities will be transferable or exchangeable, at the office or
agency of the Company maintained for such purposes in the Borough of
Manhattan, The City of New York, provided that payment of interest on any
Debt Securities may, at the option of the Company, be made by check mailed to
the registered holders. Interest, if any, will be payable on any Interest
Payment Date to the persons in whose names the Debt Securities are registered
at the close of business on the record date with respect to such Interest
Payment Date (Sections 305, 307 and 1202).
Unless otherwise indicated in the Prospectus Supplement relating
thereto, the Debt Securities will be issued only in fully registered form,
without coupons, in denominations of $1,000 or any integral multiple thereof.
No service charge will be made for any registration of transfer or exchange of
the Debt Securities, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith
(Sections 302 and 305).
Some or all of the Debt Securities may be issued as discounted Debt
Securities (bearing no interest or interest at a rate which at the time of
issuance is below market rates) to be sold at a substantial discount below
their stated principal amount. Federal income tax consequences and other
special considerations applicable to any such discounted Debt Securities will
be described in the Prospectus Supplement relating thereto.
The Indenture does not contain provisions permitting the holders of the
Debt Securities to require prepayment in the event of a change in the
management or control of the Company, or in the event the Company enters into
one or more highly leveraged transactions, nor are any such events deemed to
be events of default under the terms of the Indenture. Should the terms of any
note representing any Offered Debt Securities contain such provisions, such
provisions will be described in the applicable Prospectus Supplement.
Global Securities
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with or on
behalf of a depositary located in the United States (a "Depositary")
identified in the Prospectus Supplement relating to such series.
The specific terms of the depositary arrangements with respect to any
Debt Securities of a series will be described in the Prospectus Supplement
relating to such series. The Company anticipates that the following
provisions will apply to all depositary arrangements.
Unless otherwise specified in an applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited
with or on behalf of a Depositary will be represented by a Global Security
registered in the name of such depositary or its nominee. Upon the issuance
of a Global Security in registered form, the Depositary for such Global Security
will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such
Global Security to the accounts of institutions that have accounts with such
Depositary or its nominee ("participants"). The accounts to be credited
shall be designated by the underwriters or agents of such Debt Securities or
by the Company, if such Debt Securities are offered and sold directly by the
Company. Ownership of beneficial interests in such Global Securities will be
limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests by participants in such
Global Securities will be shown on, and the transfer of that ownership
interest will be effected only through, records maintained by the Depositary
or its nominee for such Global Security. Ownership of beneficial interests
in Global Securities by persons that hold through participants will be shown on,
and the transfer of that ownership interest within such participant will be
effected only through, records maintained by such participant. The laws of
some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and such
laws may impair the ability to transfer beneficial interests in a Global
Security.
So long as the Depositary for a Global Security in registered form, or
its nominee, is the registered owner of such Global Security, such Depositary
or such nominee, as the case may be, will be considered the sole owner or
holder of the Debt Securities represented by such Global Security for all
purposes under the Indenture governing such Debt Securities. Except as set
forth below, owners of beneficial interests in such Global Security will
not be entitled to have Debt Securities of the series represented by such
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of Debt Securities of such series in definitive
form, and will not be considered the owners or holders thereof under the
Indenture.
Payment of principal of, premium, if any, and any interest on Debt
Securities registered in the name of or held by a Depositary or its nominee
will be made to the Depositary or its nominee, as the case may be, as the
registered owner or the holder of the Global Security representing such Debt
Securities. None of the Company, the Trustee, any Paying Agent, or the
Security Registrar for such Debt Securities will have any responsibility or
liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in a Global Security for such Debt
Securities or for maintaining, supervising, or reviewing any records relating
to such beneficial ownership interests.
The Company expects that the Depositary for Debt Securities of a series,
upon receipt of any payment of principal, premium, or interest in respect of a
permanent Global Security, will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Security as shown on the records of the
Depositary. The Company also expects that payments by participants to owners of
beneficial interests in such Global Security held through such participants will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such
participants. However, the Company has no control over the practices of the
Depositary and/or the participants and there can be no assurance that these
practices will not be changed.
A Global Security may not be transferred except as a whole by the
Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor of such
Depositary or a nominee of such successor (Section 304). If a Depositary for
Debt Securities of a series is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by the Company within
90 days, the Company will issue Debt Securities in definitive registered form in
exchange for the Global Security or Securities representing such Debt
Securities. In addition, the Company may at any time and in its sole discretion
determine not to have any Debt Securities in registered form represented by one
or more Global Securities and, in such event, will issue Debt Securities in
definitive form in exchange for the Global Security or Securities
representing such Debt Securities. In any such instance, an owner of a
beneficial interest in a Global Security will be entitled to physical delivery
in definitive form of Debt Securities of the series represented by such Global
Security equal in principal amount to such beneficial interest and to have such
Debt Securities registered in its name.
Limitations on the Company and Certain Subsidiaries
Limitations on Mortgages. The Indenture provides that neither the
Company nor any Subsidiary of the Company will issue, assume, or guarantee any
notes, bonds, debentures, or other similar evidences of indebtedness for money
borrowed ("Debt") secured by any mortgages, liens, pledges, or other
encumbrances ("Mortgages") upon any asset or any interest it may have therein or
of or upon any stock or indebtedness of any Subsidiary, whether now owned or
hereafter acquired, without effectively providing that all Debt Securities
issued under the Indenture (together with, if the Company so determines, any
other indebtedness or obligation then existing or thereafter created ranking
equally with the Debt Securities) will be secured equally and ratably with (or
prior to) such Debt so long as such Debt will be so secured, except that this
restriction will not apply to: (i) Mortgages securing the purchase price or
cost of construction of property (or additions, substantial repairs,
alterations, or substantial improvements thereto if the amount of such Debt does
not exceed the cost thereof), provided such Debt and the Mortgages are incurred
within 18 months of the acquisition or completion of construction and full
operation, or the completion of such repairs, alterations, or improvements, as
the case may be; (ii) Mortgages existing on property at the time of its
acquisition by the Company or a Subsidiary or on the property of a corporation
at the time of the acquisition of such corporation by the Company or a
Subsidiary (including acquisitions through merger or consolidation); (iii)
Mortgages to secure Debt on which the interest payments are exempt from federal
income tax under Section 103 of the Internal Revenue Code of 1986, as amended
(the "Code"); (iv) in the case of a Subsidiary, Mortgages in favor of the
Company or a Subsidiary; (v) Mortgages existing on the date of the Indenture;
(vi) certain Mortgages incurred in the ordinary course of business and Mortgages
to governmental entities; (vii) Mortgages incurred in connection with the
borrowing of funds if within 120 days such funds are used to repay Debt in the
same principal amount secured by other Mortgages on assets or receivables having
a fair market value (as determined by the chief financial officer of the
Company) at least equal to the fair market value of the assets or receivables
which secure the new Mortgage; (viii) Mortgages incurred within 90 days
(or any longer period, not in excess of one year, as permitted by law) after
acquisition of the property or equipment subject to such Mortgage arising solely
in connection with the transfer of tax benefits in accordance with Section
168(f)(8) of the Code (or any similar provision adopted hereafter); (ix)
Mortgages on accounts receivable of the Company or its Subsidiaries which secure
obligations not exceeding at any time the lesser of 90% of Consolidated
Receivables (as defined below) or $100,000,000, provided that the dollar
limitation of $100,000,000 will increase at a compounded rate of 10% each April
1, with the first such increase effective on April 1, 1990 and subsequent
increases to be effective on and as of each succeeding April 1, provided
further, however, that in no event will such dollar limitation exceed
$300,000,000; and (x) any extension, renewal, or replacement of any Mortgage
referred to in the foregoing clauses (i) through (ix), provided the dollar
amount secured is not increased (Section 1205).
Limitations on Sale and Lease-Back Transactions. The Indenture provides
that neither the Company nor any Subsidiary will enter into any Sale and
Lease-Back Transaction with respect to any asset owned by it with any person
(other than the Company or a Subsidiary) unless either (i) the Company or such
Subsidiary would be entitled, pursuant to the provisions described in clauses
(i) through (x) under "Limitations on Mortgages" above, to incur Debt secured by
a Mortgage on the asset to be leased without equally and ratably securing the
Debt Securities, or (ii) the Company during or immediately after the expiration
of 120 days after the effective date of such transaction applies to the
voluntary retirement of its Funded Debt an amount equal to the greater of the
net proceeds of the sale of the property leased in such transaction or the fair
market value (as determined by the chief financial officer of the Company) of
the leased property at the time such transaction was entered into, in each case
net of the principal amount of all Debt Securities delivered under the Indenture
(Section 1206).
Exempted Transactions. Notwithstanding the foregoing, the Company and any
one or more Subsidiaries may, without securing the Debt Securities, issue,
assume, or guarantee Debt secured by Mortgages and enter into Sale and
Lease-Back Transactions which would otherwise be subject to the foregoing
restrictions in an aggregate principal amount which, together with all other
such Debt of the Company and its Subsidiaries secured by Mortgages (not
including Debt permitted to be secured pursuant to clauses (i) through (x) under
"Limitations on Mortgages" above) and the aggregate Attributable Debt (as
defined below) in respect of Sale and Lease-Back Transactions (not including
those permitted as described under "Limitations on Sale and Lease-Back
Transactions" above), does not exceed 15% of Consolidated Net Tangible Assets
(as defined below) of the Company and its consolidated Subsidiaries (Section
1207).
Certain Definitions. The term "Consolidated Net Tangible Assets" at any
date means the total assets shown on a consolidated balance sheet of the Company
and its Subsidiaries, prepared in accordance with generally accepted accounting
principles, less (i) all current liabilities, and (ii) goodwill and like
intangibles included on such balance sheet. The term "Attributable Debt" means
(a) as to any capitalized lease obligations, the Debt carried on the balance
sheet in accordance with generally accepted accounting principles, and (b) as to
any operating leases, the total net amount of rent required to be paid under
such leases during the remaining term thereof discounted at the rate of 1% per
annum over the weighted average yield to maturity of all Debt Securities issued
and outstanding under the Indenture, including any outstanding Debt Securities,
compounded semi-annually. The term "Consolidated Receivables" at any date means
the aggregate amount of all accounts receivable of the Company and its
Subsidiaries at the end of the most recent fiscal quarter, as shown on the
consolidated balance sheet of the Company and its Subsidiaries in respect of
such quarter, or in respect of the fiscal year in the case of the fourth quarter
(Section 101).
Events of Default
The following are "Events of Default" under the Indenture with respect to
Debt Securities of any series: (i) failure to pay principal of or any premium on
any Debt Security of that series when due; (ii) failure to pay any interest on
any Debt Security of that series when due, and the continuation of such failure
for 30 days; (iii) failure to deposit any sinking fund payment in respect of any
Debt Security of that series when due; (iv) failure to perform any other
covenant of the Company in the Indenture (other than a covenant included in the
Indenture solely for the benefit ofa series of Debt Securities other than the
series), continued for 60 days after written notice as provided in the
Indenture; (v) certain events in bankruptcy, insolvency, or reorganization;
(vi) indebtedness for borrowed money of the Company or any Subsidiary in excess
of $10,000,000 (whether such indebtedness now exists or is hereafter created) is
not paid at final maturity or becomes or is declared due and payable prior to
the date or dates on which such indebtedness would otherwise have become due and
payable as a result of the occurrence of one or more events of default as
defined in any mortgages, indentures, or instruments under which such
indebtedness may have been issued or by which such indebtedness may have been
secured, and such failure to pay shall not be cured or such acceleration or
accelerations, as the case may be, shall not be rescinded, annulled, or cured,
in any case prior to the expiration of 30 days after the date such failure to
pay or acceleration or accelerations occurred; and (vii) any other Event of
Default provided with respect to Debt Securities of that series (Section 501).
If any Event of Default with respect to Debt Securities of any series at any
time outstanding occurs and is continuing, either the Trustee or the Holders of
at least 25% in aggregate principal amount of the outstanding Debt Securities of
that series may declare the principal amount (or, if the Debt Securities of that
series are Discount Securities, such portion of the principal amount as may be
specified in the terms of that series) of all the Debt Securities of that series
to be due and payable immediately. At any time after a declaration of
acceleration with respect to Debt Securities of any series has been made, but
before a judgment or decree based on acceleration has been obtained, the Holders
of a majority in aggregate principal amount of outstanding Debt Securities of
that series may, under certain circumstances, rescind and annul such
acceleration (Section 502).
The Indenture provides that, subject to the duty of the Trustee during the
continuance of an Event of Default to act with the required standard of care,
the Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request or direction of any of the Holders, unless
such Holders have offered to the Trustee reasonable indemnity (Section 603).
Subject to such provisions for the indemnification of the Trustee, the Holders
of a majority in aggregate principal amount of the outstanding Debt Securities
of any series will have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the Debt
Securities of that series (Section 512).
The Company is required to furnish the Trustee annually with a statement as
to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance (Section 1208).
Modification and Waiver
Modifications of and amendments to the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than two-thirds in
aggregate principal amount of the outstanding Debt Securities of each series
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the Holder of each
outstanding Debt Security affected thereby, (i) change the Stated Maturity of
the principal of, or any installment of interest, if any, on, any Debt Security,
(ii) reduce the principal amount of, or any premium or interest on, any Debt
Security, (iii) reduce the amount of principal of Discount Securities payable
upon acceleration of the stated maturity thereof, (iv) change the currency of
payment of principal of, or any premium or interest on, any Debt Security, (v)
impair the right to institute suit for the enforcement of any payment on or with
respect to any Debt Security, or (vi) reduce the percentage in principal amount
of outstanding Debt Securities of any series, the consent of whose Holders is
required for modification or amendment of the Indenture or for waiver of
compliance with certain provisions of the Indenture or for waiver of certain
defaults (Section 1102).
The Holders of a majority in aggregate principal amount of the outstanding
Debt Securities of each series may, on behalf of all Holders of Debt Securities
of that series, waive any past default under the Indenture with respect to Debt
Securities of that series, except a default in the payment of principal or any
premium or interest or a covenant or provision that cannot be modified or
amended without the consent of the Holders of each outstanding Debt Security
affected thereby (Section 513).
Consolidation, Merger, Sale, or Lease of Assets
The Company, without the consent of the Holders of any of the outstanding
Debt Securities under the Indenture, may consolidate with or merge into, or
transfer or lease its assets substantially as an entirety to, any corporation
organized under laws of any domestic jurisdiction, provided that the successor
corporation assumes the Company's obligations on the Debt Securities and that
under the Indenture, after giving effect to the transactions, no Event of
Default, and no event which, after notice or lapse of time, would become an
Event of Default, shall have occurred and be continuing, and that certain other
conditions are met (Section 1001).
Defeasance
The Indenture provides that the Company, at its option, (i) will be
discharged from any and all obligations in respect of any series of Debt
Securities (except for certain obligations to register the transfer or exchange
of the Debt Securities; replace stolen, lost, or mutilated Debt Securities;
maintain paying agencies; and hold money for payment in trust), or (ii) will not
be subject to provisions of the Indenture concerning limitations upon
Mortgages; Sale and Lease-Back Transactions; and consolidation, merger, and sale
of assets, in each case if the Company deposits with the Trustee, in trust,
money or U.S. Government Obligations which through the payment of interest
thereon and principal thereof in accordance with their terms will provide money
in an amount sufficient to pay all principal, premium, if any, and interest on
the Debt Securities of such series on the dates such payments are due in
accordance with the terms of such Debt Securities. To exercise any such option,
the Company is required, among other things, to deliver an opinion of counsel to
the Trustee to the effect that (a) the Company has received from or there has
been published by the Internal Revenue Service a ruling to the effect that the
deposit and related defeasance would not cause the Holders of such series of
Debt Securities to recognize income, gain, or loss for United States federal
income tax purposes and (b) if such series of Debt Securities are then listed on
any national securities exchange, such Debt Securities would not be delisted
from such exchange as a result of the exercise of such option (Article
Fifteen).
Notices
Notices to Holders will be given by mail to the addresses of such Holders
as they appear in the Security Register (Sections 101, 105).
Governing Law
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York (Section 111).
Concerning the Trustee
The Trustee has normal banking relationships with the Company.
DESCRIPTION OF CAPITAL STOCK
The following description of the Company's capital stock is subject to the
detailed provisions of the Company's Certificate of Incorporation (the
"Certificate"). These statements do not purport to be complete and are
qualified in their entity by reference to the terms of the Certificate, a copy
of which has been filed as an exhibit to the Registration Statement of which
this Prospectus is a part.
Under the Certificate, the Company has the authority to issue 25,000,000
shares of Preferred Stock, $.01 par value, and 75,000,000 shares of Common
Stock, $.01 par value. As of May 31, 1995, 1,725,000 shares of the Company's 5%
Cumulative Convertible Preferred Stock and 29,028,534 shares of Common Stock
were issued, of which 8,472 shares of Common Stock were held in treasury. The
outstanding shares of Common Stock and Preferred Stock are fully paid and
nonassessable. As of such date, 1,887,102 shares of Common Stock were reserved
for issuance pursuant to the Company's 1987 and 1990 Long-Term Incentive Plans,
and 750,000 shares of the Company's Series A Junior Participating Preferred
Stock, $.01 par value, were reserved for issuance pursuant to the Rights
Agreement (the "Rights Agreement"), dated March 6, 1990, between the Company
and Society National Bank, as Rights Agent. See "-Preferred Stock -- Preferred
Stock Purchase Rights." An additional 3,254,716 shares of Common Stock are
reserved for issuance upon conversion of the Company's outstanding 5% Cumulative
Convertible Preferred Stock. See "5% Cumulative Convertible Preferred Stock."
Preferred Stock
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which a
Prospectus Supplement may relate. Specific terms of any series of Preferred
Stock offered by a Prospectus Supplement will be described in the Prospectus
Supplement relating to such series of Preferred Stock. The description set
forth below is subject to and qualified in its entirety by reference to the
Certificate and the form of Certificate of Designations (the "Designation")
establishing a particular series of Preferred Stock which will be filed with the
Commission in connection with the offering of such series of Preferred Stock.
General. Under the Certificate, the Board of Directors of the Company (the
"Board of Directors") is authorized, without further shareholder action, to
provide for the issuance of up to 25,000,000 shares of Preferred Stock, in one
or more series, and to fix the designations, terms, and relative rights and
preferences, including the dividend rate, voting rights, conversion rights,
redemption and sinking fund provisions and liquidation values of each such
series. The Company may amend the Certificate from time to time to increase
the number of authorized shares of Preferred Stock. Any such amendment would
require the approval of the holders of a majority of the outstanding shares of
all series of Preferred Stock voting together as a single class without regard
to series. As of the date of this Prospectus, the Company has one series of
Preferred Stock outstanding.
The Preferred Stock will have the dividend, liquidation, redemption,
conversion, and voting rights set forth below unless otherwise provided in the
Prospectus Supplement relating to a particular series of Preferred Stock.
Reference is made to the Prospectus Supplement relating to the particular series
of the Preferred Stock offered thereby for specific terms, including, (i)
the title and liquidation preference per share of such Preferred Stock and the
number of shares offered; (ii) the price at which such Preferred Stock will be
issued; (iii) the dividend rate (or method of calculation), the dates on which
dividends shall be payable and the dates from which dividends shall commence to
accumulate; (iv) any redemption or sinking fund provisions of such Preferred
Stock; (v) any conversion or exchange provisions of such Preferred Stock; (vi)
the voting rights, if any, of such Preferred Stock; and (vii) any additional
dividend, liquidation, redemption, sinking fund and other rights, preferences,
privileges, limitations, and restrictions of such Preferred Stock. The
Preferred Stock will, when issued, be fully paid and nonassessable.
Dividend Rights. The Preferred Stock will be preferred over the Common
Stock as to payment of dividends. Before any dividends or distributions on the
Common Stock shall be declared and set apart for payment or paid, the holders or
shares of each series of Preferred Stock shall be entitled to receive dividends
(either in cash, shares of Common Stock or Preferred Stock, or otherwise) when,
as, and if declared by the Board of Directors, at the rate and on the date or
dates as set forth in the Prospectus Supplement. With respect to each series of
Preferred Stock, the dividends on each share of such series with respect to
which dividends are cumulative shall be cumulative from the date of issue of
such share unless some other date is set forth in the Prospectus Supplement
relating to any such series. Accruals of dividends shall not bear interest.
Rights Upon Liquidation. The Preferred Stock shall be preferred over the
Common Stock as to assets so that the holders of each series of Preferred Stock
shall be entitled to be paid, upon the voluntary or involuntary liquidation,
dissolution, or winding up of the Company, and before any distribution is made
to the holders of Common Stock, the amount set forth in the Prospectus
Supplement relating to any such series, but in such case the holders of such
series of Preferred Stock shall not be entitled to any other or further payment.
If upon any such liquidation, dissolution, or winding up of the Company its net
assets shall be insufficient to permit the payment in full of the respective
amounts to which the holders of all outstanding Preferred Stock are entitled,
the entire remaining net assets of the Company shall be distributed among the
holders of each series of Preferred Stock in amounts proportionate to the full
amounts to which the holders of each such series are respectively so entitled.
Redemption and Conversion. All shares of any series of Preferred Stock
shall be redeemable to the extent set forth in the Prospectus Supplement
relating to any such series. All shares of any series of Preferred Stock shall
be convertible into shares of Common Stock or into shares of any other series of
Preferred Stock to the extent set forth in the Prospectus Supplement relating to
any such series.
Voting Rights. All shares of any series of Preferred Stock shall have the
voting rights set forth in the prospectus supplement relating to any such
series.
5% Cumulative Convertible Preferred Stock. In June 1993, the Company
issued 1,725,000 shares of 5% Cumulative Convertible Preferred Stock, $.01 par
value per share (the "5% Preferred Stock"). Each share of 5% Preferred Stock
has a liquidation preference of $50.00 per share, plus accrued and unpaid
dividends thereon. Cash dividends on the 5% Preferred Stock are cumulative
from the date of original issue at an annual rate of $2.50 per share and are
payable quarterly in arrears. Shares of 5% Preferred Stock are convertible at
any time commencing 90 days after the date of original issue at the option of
the holder into shares of Common Stock of the Company at a conversion price of
$26.50 per share of Common Stock, which is equivalent to a conversion rate of
approximately 1.8868 shares of Common Stock for each share of 5% Preferred
Stock, subject to adjustment in certain circumstances.
The shares of 5% Preferred Stock are not redeemable prior to June 15, 1996.
On and after such date and from time to time until June 14, 2000, the 5%
Preferred Stock will be redeemable, in whole or in part, at the option of the
Company, for such number of shares of Common Stock as are issuable at the
conversion price for each share of 5% Preferred Stock. The Company may exercise
this option only if, for 20 trading days within any period of 30 consecutive
trading days, including the last trading day of such 30 trading-day period, the
closing price of the Company's Common Stock on the New York Stock Exchange
exceeds $34.45, subject to adjustment in certain circumstances. On and after
June 15, 2000, the 5% Preferred Stock will be redeemable for cash at a
redemption price equivalent to $50 per share, plus accrued and unpaid dividends.
Shares of 5% Preferred Stock are not be entitled to the benefit of any sinking
fund.
Preferred Stock Purchase Rights. 750,000 shares of Series A Junior
Participating Preferred Stock, $.01 par value ("Junior Preferred Stock"), are
reserved for issuance pursuant to the Rights Agreement. Pursuant to the Rights
Agreement, one right (a "Right") to purchase 1/100th of a share of Junior
Preferred Stock (structured so as to be substantially the equivalent of Common
Stock) is attached to each issued and outstanding share of Common Stock. The
Rights are not exercisable and are attached to, and may not trade separately
from, the Common Stock unless certain change of control events occur.
Common Stock
The holders of the Company's Common Stock are entitled to one vote per
share on all matters voted on by the stockholders, including elections of
directors, and, except as otherwise required by law or provided in any
resolution adopted by the Board of Directors of the Company with respect to any
series of Preferred Stock, the holders of such shares will exclusively possess
all voting power. Subject to any preferential rights of any outstanding series
of Preferred Stock, the holders of Common Stock are entitled to such dividends
as may be declared from time to time by the Board of Directors from funds
available therefor, and upon liquidation are entitled to receive pro rata all
assets of the Company available for distribution to such holders. No holder of
Common Stock has any preemptive right to subscribe to any securities of the
Company of any kind or class. The Company's Common Stock is listed on the New
York Stock Exchange and prices are reported by the New York Stock Exchange
Composite Tape under the symbol DRM. The Transfer Agent and Registrar of the
Company's Common Stock is KeyCorp Shareholder Services, Inc., Cleveland, Ohio.
Certain Provisions of the Certificate and By-laws
The Certificate and By-laws of the Company contain certain provisions which
may have the effect of delaying, deferring, or preventing a change of control of
the Company. The Certificate provides that the Board shall be divided into
three classes, with directors serving three-year terms, and limits the ability
of stockholders to change the number of directors. Special meetings of the
Company's stockholders may only be called by the Board of Directors or the
Chairman of the Board, and any action required or permitted to be taken by the
stockholders of the Company must be effected at an annual or special meeting of
stockholders of the Company and may not be effected by any consent in writing of
such stockholders. In addition, the Board has generally the authority, without
further action by stockholders, to fix the relative powers, preferences, and
rights of the unissued shares of Preferred Stock. Provisions which could
discourage an unsolicited tender offer or takeover proposal, such as
extraordinary voting, dividend, redemption, or conversion rights, could be
included in such Preferred Stock. See "-Preferred Stock."
Under the Certificate, holders of Common Stock are entitled to cumulative
voting rights in certain limited circumstances in which the Company becomes
aware that a stockholder of the Company (other than the Company or a subsidiary
of the Company) has become the beneficial owner, directly or indirectly, of 30%
or more of the outstanding capital stock of the Company entitled to vote
generally in the election of Company directors. Holders of Common Stock are not
otherwise entitled to cumulative voting rights. Under cumulative voting, a
stockholder may multiply the number of shares owned by the number of directors
to be elected, and cast that total number of votes in any proportion among as
many nominees as the stockholder desires.
The By-laws of the Company contain certain requirements concerning advance
notice of (i) nominations by stockholders of persons for election to the Board,
and (ii) other matters introduced by stockholders at annual meetings.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Debt
Securities, Preferred Stock or Common Stock. Securities Warrants may be issued
independently or together with Debt Securities, Preferred Stock or Common Stock
offered by any Prospectus Supplement and may be attached to or separate from any
such Offered Securities. Each series of Securities Warrants will be issued
under a separate warrant agreement (a "Securities Warrant Agreement") to be
entered into between the Company and a bank or trust company, as warrant agent
(the "Securities Warrant Agent"), all as set forth in the Prospectus Supplement
relating to the particular issue of Securities Warrants. The Securities Warrant
Agent will act solely as an agent of the Company in connection with the
Securities Warrants and will not assume any obligation or relationship of agency
or trust for or with any holders of Securities Warrants or beneficial owners of
Securities Warrants. The following summary of certain provisions of the
Securities Warrants does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all provisions of the Securities
Warrant Agreements.
Reference is made to the Prospectus Supplement relating to the particular
issue of Securities Warrants offered thereby for the terms of such Securities
Warrants, including, where applicable: (i) the designation, aggregate principal
amount, currencies, denominations, and terms of the series of Debt Securities
purchasable upon exercise of Debt Warrants and the price at which such Debt
Securities may be purchased upon such exercise; (ii) the designation, number of
shares, stated value, and terms (including, without limitation, liquidation,
dividend, conversion, and voting rights) of the series of Preferred Stock
purchasable upon exercise of Preferred Stock Warrants and the price at which
such number of shares of Preferred Stock of such series may be purchased upon
such exercise; (iii) the number of shares of Common Stock purchasable upon the
exercise of Common Stock Warrants and the price at which such number of shares
of Common Stock may be purchased upon such exercise; (iv) the date on which the
right to exercise such Securities Warrants shall commence and the date on which
such right shall expire (the "Expiration Date"); (v) United States federal
income tax consequences applicable to such Securities Warrants; and (vi) any
other terms of such Securities Warrants. Preferred Stock Warrants and Common
Stock Warrants will be offered and exercisable for U.S. dollars only.
Securities Warrants will be issued in registered form only. The exercise price
for Securities Warrants will be subject to adjustment in accordance with the
applicable Prospectus Supplement.
Each Securities Warrant will entitle the holder thereof to purchase such
principal amount of Debt Securities or such number of shares of Preferred Stock
or Common Stock at such exercise price as shall in each case be set forth in, or
calculable from, the Prospectus Supplement relating to the Securities Warrants,
which exercise price may be subject to adjustment upon the occurrence of certain
events as set forth in such Prospectus Supplement. After the close of business
on the Expiration Date (or such later date to which such Expiration Date may be
extended by the Company), unexercised Securities Warrants will become void. The
place or places where, and the manner in which, Securities Warrants may be
exercised shall be specified in the Prospectus Supplement relating to such
Securities Warrants.
Prior to the exercise of any Securities Warrants to purchase Debt
Securities, Preferred Stock, or Common Stock, holders of such Securities
Warrants will not have any of the rights of holders of the Debt Securities,
Preferred Stock, or Common Stock, as the case may be, purchasable upon such
exercise, including the right to receive payments of principal of, premium, if
any, or interest, if any, on the Debt Securities purchasable upon such exercise
or to enforce covenants in the applicable Indenture, or to receive payments of
dividends, if any, on the Preferred Stock or Common Stock purchasable upon such
exercise, or to exercise any applicable right to vote.
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities to which this Prospectus
relates to or for resale to the public through one or more underwriters, acting
alone or in underwriting syndicates led by one or more managing underwriters,
and also may sell such Offered Securities directly to other purchasers or
dealers or through agents.
The distribution of Offered Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed from
time to time, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices, or at negotiated prices. Each Prospectus
Supplement will describe the method of distribution of the Offered Securities.
In connection with the sale of Offered Securities, such underwriters,
dealers, and agents may receive compensation from the Company, or from
purchasers of Offered Securities for whom they may act as agents, in the form of
discounts, concessions, or commissions. Underwriters, dealers, and agents that
participate in the distribution of Offered Securities and, in certain cases,
direct purchasers from the Company, may be deemed to be "underwriters" and any
discounts or commissions received by them and any profit on the resale of
Offered Securities by them may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such underwriters, dealers, or agents
will be identified and any such compensation will be described in the
applicable Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters,
dealers, and agents who participate in the distribution of Offered Securities
may be entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act. The place and time of delivery
for Offered Debt Securities in respect of which this Prospectus is delivered
will be set forth in the applicable Prospectus Supplement.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the Company
by Timothy J. Fretthold, Esq., Senior Vice President/Group Executive and General
Counsel of the Company, and for the underwriters, dealers, or other agents by
Simpson Thacher & Bartlett (a partnership which includes professional
corporations), New York, New York. As of June 1, 1995, Mr. Fretthold
beneficially owned 49,963 shares of Common Stock of the Company, including
23,180 shares which he had the right to acquire within 60 days through the
exercise of employee stock options.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the 1994 Form 10-K have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
With respect to the unaudited consolidated financial information of the
Company for the three-month periods ended March 31, 1995 and 1994, incorporated
by reference in this Prospectus, Price Waterhouse LLP reported that they have
applied limited procedures in accordance with professional standards for a
review of such information. However, their separate report dated May 11, 1995,
incorporated by reference herein, states that they do not express an opinion on
that unaudited consolidated financial information. Price Waterhouse LLP has not
carried out any significant or additional audit tests beyond those which would
have been necessary if their report had not been included. Accordingly, the
degree of reliance on their report on such information should be restricted in
light of the limited nature of the review procedures applied. Price Waterhouse
LLP is not subject to the liability provisions of Section 11 of the Securities
Act for their report on the unaudited consolidated financial information because
that report is not a "report" or a "part" of the Registration Statement prepared
or certified by Price Waterhouse LLP within the meaning of Sections 7 and 11 of
the Securities Act.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Estimated expenses in connection with the issuance and distribution of the
securities to be registered, other than underwriters' or agents' discounts and
commissions, are as follows:
Registration Fee $ 51,724
Blue Sky Fees and Expenses 10,000
Printing Expenses 15,000
Legal Fees and Expenses 20,000
Accounting Fees and Expenses 10,000
Indenture Trustee Fees and Expenses 1,500
Miscellaneous 1,776
Total $110,000
Item 15. Indemnification of Directors and Officers
Set forth below is a description of Article Tenth ("Article Tenth") of the
Certificate. This description is intended as a summary only and is qualified in
its entirety by reference to the Certificate.
Elimination of Liability in Certain Circumstances. Article Tenth protects
the Company's directors against monetary damages for breaches of their fiduciary
duty of care, except as set forth below. Under the Delaware General Corporation
Law (the "Delaware Law"), absent Article Tenth, directors could generally be
held liable for gross negligence for decisions made in the performance of their
duty of care but not for simple negligence. Article Tenth eliminates director
liability for negligence in the performance of their duties, including gross
negligence. Directors remain liable for breaches of their duty of loyalty to the
Company and its stockholders, as well as acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law and
transactions from which a director derives improper personal benefit.
Article Tenth does not limit a stockholder's ability to pursue injunctive
or other equitable relief and does not apply to claims arising under violations
of the federal securities laws.
Indemnification and Insurance. Under Delaware Law, directors and officers
as well as other employees and individuals may be indemnified against expenses
(including attorneys' fees), judgments, fines, and amounts paid in settlement in
connection with specified actions, suits, or proceedings, whether civil,
criminal, administrative, or investigative (other than an action by or in the
right of the corporation such as a derivative action) if they acted in good
faith and in a manner they reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful.
Article Tenth provides, in general, that each person who was or is made a
party to, or is involved in, any action, suit, or proceeding by reason of the
fact that he or she is or was a director, officer, employee, or agent of the
Company (or was serving at the request of the Company as a director, officer,
employee, or agent for another entity) will be indemnified and held harmless by
the Company, to the full extent authorized by Delaware Law, as currently in
effect (or, to the extent indemnification is broadened, as it may be amended)
against all expense, liability, or loss (including attorneys' fees, judgments,
fines, ERISA excise taxes, or penalties and amounts to be paid in settlement)
reasonably incurred by such person in connection therewith. Article Tenth
provides that persons indemnified thereunder may bring suit against the Company
to recover unpaid amounts claimed thereunder, and that if such suit is
successful, the expenses of bringing such a suit will be reimbursed by the
Company. Article Tenth further provides that while it is a defense to such a
suit that the person claiming indemnification has not met the applicable
standards of conduct making indemnification permissible under Delaware Law, the
burden of proving the defense will be on the Company and neither the failure of
the Company's Board to have made a determination that indemnification is proper,
nor an actual determination that the claimant has not met the applicable
standard of conduct will be a defense to the action or create a presumption
that the claimant has not met the applicable standard of conduct.
Article Tenth provides that the Company may maintain insurance, at its
expense, to protect itself and any of its directors, officers, employees, or
agents against any expense, liability, or loss, whether or not the Company would
have the power to indemnify such person against such expense, liability, or
loss under Delaware Law. Finally, Article Tenth provides that the rights to
indemnification and the payment of expenses incurred in defending a proceeding
in advance of its final disposition conferred therein will not be exclusive of
any other right which any person may have or acquire under any statute,
provision of the Certificate or the Company's By-laws, agreement, or vote of
stockholders or disinterested directors, or otherwise.
The Company and each of the Directors have entered into indemnification
agreements providing for indemnification that is broader than that provided by
Article Tenth. Each of the Directors of the Company is entitled to
indemnification pursuant to the indemnification agreements whether the
Director's acts, failures to act, neglect, or breach of duty giving rise to the
right to indemnity thereunder occurred prior or subsequent to the date of such
agreement. Such right, however, is not available with respect to acts, failures
to act, neglect, or breaches of duty of a Director occurring prior to the date
such person was elected as a Director of the Company and does not apply to acts,
failures to act, neglect, or breaches of duty of any Director of the Company
while acting in such Director's prior position, if any, with Maxus Energy
Corporation, the Company's former parent company.
Item 16. Exhibits
Exhibit No. Description
1.1 -- Agency Agreement, dated January 25, 1990 (filed as
Exhibit 1.1 to the Registration Statement, File No.
33-32024 ("Registration Statement No. 33-32024")
and incorporated herein by reference).
1.2 -- Amendment No. 1 to the Agency Agreement (filed as
Exhibit 1.2 to the Registration Statement, File No.
33-43502 and incorporated herein by reference).
1.3 -- Amendment No. 2 to the Agency Agreement (filed as
Exhibit 1.3 to the Registration Statement, File No.
33-58744 and incorporated herein by reference).
1.4 -- Form of Amendment No. 3 to the Agency Agreement
(filed as Exhibit 1.4 to the Registration
Statement, File No. 33-67556 (Registration
Statement No.33-67556) and incorporated herein by
reference).
*1.5 -- Underwriting Agreement Standard Provisions.
4.1 -- Indenture, dated as of December 15, 1989, between
the Company and The First National Bank of Chicago,
as trustee (filed as Exhibit 4.1 to Registration
Statement No. 33-32024 and incorporated herein by
reference).
4.2 -- Forms of Medium-Term Notes (filed as Exhibit 4.2 to
Registration Statement No. 33-67556 and
incorporated herein by reference).
4.3 -- Certificate of Incorporation of the Company (filed
as Exhibit 3.1 to the Company's Form 10
Registration No. 1-9409 (the "Form 10") and
incorporated herein by reference).
4.4 -- By-laws of the Company (filed as Exhibit 3.2 to the
Form 10 and incorporated herein by reference).
4.5 -- Form of Common Stock Certificate (filed as Exhibit
4.3 to the Form 10 and incorporated herein by
reference).
4.6 -- Form of Right Certificate (filed as Exhibit 1 to
the Company's Form 8-A Registration Statement,
dated March 6, 1990 (the "Form 8-A"), and
incorporated herein by reference).
4.7 -- Rights Agreement, dated as of March 6, 1990,
between the Company and Ameritrust Company National
Association (filed as Exhibit 2 to the Form 8-A and
incorporated herein by reference).
4.8 -- Form of Certificate of Designations of Series A
Junior Participating Preferred Stock (filed as
Exhibit 3 to the Form 8-A and incorporated herein
by reference).
**4.9 -- Form of Warrant Agreement for Debt Securities.
**4.10 -- Form of Warrant Certificate for Debt Securities.
**4.11 -- Form of Warrant Agreement for Preferred Stock.
**4.12 -- Form of Warrant Certificate for Preferred Stock.
**4.13 -- Form of Warrant Agreement for Common Stock.
**4.14 -- Form of Warrant Certificate for Common Stock.
*5.1 -- Opinion of Timothy J. Fretthold, Esq., Senior
Vice-President/Group Executive and General Counsel
regarding legality of Offered Securities
(previously filed as Exhibit 5.2 to the Registration
Statement).
*12.1 -- Computation of ratio of earnings to fixed charges
and earnings to fixed charges and preferred stock
dividends for the three-month periods ended
March 31, 1995 and 1994 and for each of the five
years ended December 31, 1994.
15.1 -- Independent Accountants Awareness Letter
23.1 -- Consent of Price Waterhouse LLP.
23.2 -- Consent of Timothy J. Fretthold, Esq. (included in
Exhibit 5.1).
*24.1 -- Powers of Attorney of directors and officers of the
Company relating to this Registration Statement.
(Previously filed as Exhibit 24.4 to the
Registration Statement).
*24.2 -- Power of Attorney of the Company relating to this
Registration Statement. (Previously filed as
Exhibit 24.5 to the Registration Statement).
*24.3 -- Certified copy of resolutions of the Board of
Directors of the Company relating to Offered
Securities registered under this Registration
Statement. (Previously filed as Exhibit 24.6
to the Registration Statement).
*25.1 -- Statement as to the eligibility of the Trustee
under the Indenture.
*27.1 -- Financial Data Schedule.
* Previously filed.
** To be filed as an Exhibit to Form 8-K in reference to the
specific offering of Securities Warrants to which it relates.
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, unless the
information required to be included in such
post-effective amendment is contained in periodic
reports filed by the registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act
of 1934 and incorporated herein by reference;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this
Registration Statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth in
this Registration Statement, unless the information
required to be included in such post-effective
amendment is contained in periodic reports filed by
the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 and
incorporated herein by reference;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed
in this Registration Statement or any material
change to such information in this Registration
Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering; and
(4) That for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in
this Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
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 the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement (No. 33-59451) to be signed on its behalf by the
undersigned, thereunto duly authorized pursuant to Powers of Attorney executed
on behalf of the Registrant and previously filed with the Securities and
Exchange Commission in the City of San Antonio, State of Texas on June 23, 1995.
DIAMOND SHAMROCK, INC.
By /S/ TODD WALKER
Todd Walker
Attorney-in-Fact
Pursuant to the requirements of the Securities Act, this Amendment No. 1 to
the Registration Statement (No. 33-59451) has been signed on June 23, 1995 by
the following persons in the capacities indicated below.
Signature Title
R. R. HEMMINGHAUS* Chairman, President, and
R. R. Hemminghaus Chief Executive Officer
(Principal Executive Officer)
and Director
ROBERT C. BECKER* Vice President and Treasurer
Robert C. Becker (Principal Financial Officer)
GARY E. JOHNSON* Vice President and Controller
Gary E. Johnson (Principal Accounting Officer)
B. CHARLES AMES* Director
B. Charles Ames
E. GLENN BIGGS* Director
E. Glenn Biggs
W. E. BRADFORD* Director
W. E. Bradford
LAURO F. CAVAZOS* Director
Lauro F. Cavazos
W. H. CLARK* Director
W. H. Clark
WILLIAM L. FISHER* Director
William L. Fisher
KATHERINE D. ORTEGA* Director
Katherine D. Ortega
BOB MARBUT* Director
Bob Marbut
* The undersigned, by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors and previously filed with the Securities and
Exchange Commission.
/S/ Todd Walker
Todd Walker
Attorney-in-Fact
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Exhibit Pages
1.1 -- Agency Agreement, dated January 25, 1990 (filed as
Exhibit 1.1 to the Registration Statement, File No.
33-32024 ("Registration Statement No. 33-32024")
and incorporated herein by reference).
1.2 -- Amendment No. 1 to the Agency Agreement (filed as
Exhibit 1.2 to the Registration Statement, File No.
33-43502 and incorporated herein by reference).
1.3 -- Amendment No. 2 to the Agency Agreement (filed as
Exhibit 1.3 to the Registration Statement, File No.
33-58744 and incorporated herein by reference).
1.4 -- Form of Amendment No. 3 to the Agency Agreement
(filed as Exhibit 1.4 to the Registration
Statement, File No. 33-67556 (Registration
Statement No.33-67556) and incorporated herein by
reference).
*1.5 -- Underwriting Agreement Standard Provisions.
4.1 -- Indenture, dated as of December 15, 1989, between
the Company and The First National Bank of Chicago,
as trustee (filed as Exhibit 4.1 to Registration
Statement No. 33-32024 and incorporated herein by
reference).
4.2 -- Forms of Medium-Term Notes (filed as Exhibit 4.2 to
Registration Statement No. 33-67556 and
incorporated herein by reference).
4.3 -- Certificate of Incorporation of the Company (filed
as Exhibit 3.1 to the Company's Form 10
Registration No. 1-9409 (the "Form 10") and
incorporated herein by reference).
4.4 -- By-laws of the Company (filed as Exhibit 3.2 to the
Form 10 and incorporated herein by reference).
4.5 -- Form of Common Stock Certificate (filed as Exhibit
4.3 to the Form 10 and incorporated herein by
reference).
4.6 -- Form of Right Certificate (filed as Exhibit 1 to
the Company's Form 8-A Registration Statement,
dated March 6, 1990 (the "Form 8-A"), and
incorporated herein by reference).
4.7 -- Rights Agreement, dated as of March 6, 1990,
between the Company and Ameritrust Company National
Association (filed as Exhibit 2 to the Form 8-A and
incorporated herein by reference).
4.8 -- Form of Certificate of Designations of Series A
Junior Participating Preferred Stock (filed as
Exhibit 3 to the Form 8-A and incorporated herein
by reference).
**4.9 -- Form of Warrant Agreement for Debt Securities.
**4.10 -- Form of Warrant Certificate for Debt Securities.
**4.11 -- Form of Warrant Agreement for Preferred Stock.
**4.12 -- Form of Warrant Certificate for Preferred Stock.
**4.13 -- Form of Warrant Agreement for Common Stock.
**4.14 -- Form of Warrant Certificate for Common Stock.
*5.1 -- Opinion of Timothy J. Fretthold, Esq., Senior
Vice-President/Group Executive and General Counsel
regarding legality of Offered Securities (previously
filed as Exhibit 5.2 to the Registration Statement).
*12.1 -- Computation of ratio of earnings to fixed charges
and earnings to fixed charges and preferred stock
dividends for the three-month periods ended
March 31, 1995 and 1994 and for each of the five
years ended December 31, 1994.
15.1 -- Independent Accountants Awareness Letter
23.1 -- Consent of Price Waterhouse LLP.
23.2 -- Consent of Timothy J. Fretthold, Esq. (included in
Exhibit 5.1).
*24.1 -- Powers of Attorney of directors and officers of the
Company relating to this Registration Statement.
(Previously filed as Exhibit 24.4 to the Registration
Statement).
*24.2 -- Power of Attorney of the Company relating to this
Registration Statement. (Previously filed as
Exhibit 24.5 to the Registration Statement).
24.3 -- Certified copy of resolutions of the Board of
Directors of the Company relating to Offered
Securities registered under this Registration
Statement. (Previously filed as Exhibit 24.6
to the Registration Statement).
*25.1 -- Statement as to the eligibility of the Trustee
under the Indenture.
*27.1 -- Financial Data Schedule.
* Previously filed.
** To be filed as an Exhibit to Form 8-K in reference to the
specific offering of Securities Warrants to which it relates.
W2961.TW
EXHIBIT 15.1
INDEPENDENT ACCOUNTANTS' AWARENESS LETTER
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
We are aware that Diamond Shamrock, Inc. has included our report dated May 11,
1995 (issued pursuant to the provisions of Statement on Auditing Standards No.
71) in the Prospectus constituting part of its Amendment No. 1 to the
Registration Statement on Form S-3 (No. 33-59451) to be filed on or about June
22, 1995. We are also aware of our responsibilities under the Securities Act of
1933.
Yours very truly,
/S/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
San Antonio, Texas
June 22, 1995
W2930.TW
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Amendment No. 1 to the Registration Statement on Form
S-3 (No. 33-59451) of our report dated February 24, 1995, which is attached as
Exhibit 13.3 to Diamond Shamrock, Inc.'s Annual Report on Form 10-K for the year
ended December 31, 1994. We also consent to the incorporation by reference of
our report on the Financial Statement Schedules, which is included in Item
14(a)(2) of such Annual Report on Form 10-K. We also consent to the references
to us under the heading "Experts" in such Prospectus.
/S/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
San Antonio, Texas
June 22, 1995
W2963.TW
