<PAGE> 1
Rule 424(b)(2)
Registration No. 33-59241
THIS PROSPECTUS SUPPLEMENT RELATES TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AND IS SUBJECT TO COMPLETION OR
AMENDMENT. 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 JULY 7, 1995.
------------------------------------------
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JULY 7, 1995
$750,000,000
[RAYTHEON LOGO]
$500,000,000 % Notes Due , 2005
$250,000,000 % Debentures Due , 2025
Interest payable and
------------------
The % Notes Due , 2005 and the % Debentures Due , 2025 are
herein referred to, respectively, as the "Notes" and the "Debentures" and
collectively as the "Offered Debt Securities". The Notes are not redeemable
prior to maturity. The Debentures may not be redeemed by Raytheon prior
to , 2005. On or after such date, the Debentures may be
redeemed at any time at the option of Raytheon, in whole or in
part, at prices set forth herein plus accrued interest. Neither
the Notes nor the Debentures are entitled to a sinking fund.
The Notes and Debentures each will be represented by one or more Global
Securities (as defined herein) registered in the name of the nominee of The
Depository Trust Company ("DTC"). Except as provided herein and in the
accompanying Prospectus, Offered Debt Securities in definitive form will
not be issued. Settlement for the Offered Debt Securities will be made
in immediately available funds. The Offered Debt Securities will trade
in DTC's Same-Day Funds Settlement System until maturity, and
secondary market trading activity for the Securities will therefore
settle in immediately available funds. See "Description of the
Securities" herein.
------------------
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 SUPPLEMENT OR THE PROSPECTUS. ANY REPRE-
SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public(1) Commissions Raytheon(1)(2)
------------- ------------- -------------
<S> <C> <C> <C>
Per Note..............................................
Per Debenture.........................................
Total.................................................
<FN>
(1) Plus accrued interest, if any, from , 1995.
(2) Before deducting expenses payable by Raytheon estimated at $ .
</TABLE>
------------------
The Offered Debt Securities are offered by the several Underwriters when,
as and if issued by Raytheon, delivered to and accepted by the Underwriters and
subject to their right to reject orders in whole or in part. It is expected that
delivery of the Global Securities in book-entry form will be made through the
facilities of The Depository Trust Company on or about , 1995 against
payment in immediately available funds.
CS First Boston
Bear, Stearns & Co. Inc.
Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
Merrill Lynch & Co.
Morgan Stanley & Co.
Incorporated
The date of this Prospectus Supplement is , 1995.
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
THE COMPANY
Raytheon Company is an international, high technology company that operates
in four businesses: commercial and defense electronics; engineering and
construction; aircraft; and major appliances. Raytheon's principal business is
in the design, manufacture and servicing of advanced electronic devices,
equipment and systems for government and commercial use. Through a
diversification program begun in 1964, Raytheon has expanded into aircraft
products, engineering and construction services, major appliances and textbook
publishing. In May 1995 Raytheon acquired E-Systems, Inc., a leading global
provider of defense electronic systems and services, in a transaction valued at
approximately $2.3 billion. In 1994 Raytheon had sales of $10 billion, or $12
billion on a pro forma basis after giving effect to the acquisition of
E-Systems.
Raytheon's four strategic goals are to:
- CONTINUE TO GROW AS A DIVERSIFIED COMMERCIAL COMPANY. In 1994 Raytheon's
commercial businesses achieved record sales and profits in each quarter
excluding the restructuring provision announced in the first quarter of
1994. The commercial businesses contributed 65 percent and 50 percent of
Raytheon's 1994 total sales and profits, respectively.
- REMAIN A TOP-TIER COMPETITOR IN THE DEFENSE INDUSTRY. Despite the
dramatic decline in global defense spending in recent years, Raytheon's
defense systems--and in particular Raytheon's Patriot program--are an
integral part of the defense systems of the U.S. and its allies around
the world. The E-Systems' acquisition provides Raytheon with additional
and complementary defense skills and markets.
- EXPAND CORE DEFENSE TECHNOLOGIES AND SKILLS INTO THE COMMERCIAL MARKET
PLACE. Raytheon is expanding its defense technologies into critical
commercial markets, including international air traffic control,
communication, transportation and environmental monitoring. In 1995
Raytheon signed a $1.3 billion contract after winning an international
competition to design, manufacture, install and integrate an
environmental system that will enable Brazil to monitor its Amazon region
utilizing surveillance and other technology developed in connection with
Raytheon's defense operations. Raytheon believes that many of E-Systems'
technologies can be transferred to commercial applications and used in
combination with Raytheon's existing technologies.
- EXPAND GLOBAL PRESENCE. Raytheon has opened marketing and business
development offices in 24 countries. Raytheon Engineers and Constructors
has projects in approximately 45 countries. Raytheon's air traffic
control systems have been installed in 39 countries. Raytheon intends to
tailor its products and services to specific markets and to team with
partners who bring special strengths to such markets.
ELECTRONICS. Raytheon's Electronics segment designs, manufactures and
services advanced electronic devices, equipment and systems for both government
and commercial customers. 1994 sales for the Electronics segment were
approximately $4.1 billion.
Raytheon's defense related electronics operations, which had 1994 sales of
approximately $3.6 billion, focus primarily on air defense systems, missile
programs, naval systems and countermeasures and communications.
- In air defense systems, the Patriot missile program remains Raytheon's
largest program, accounting for $1.1 billion of sales in 1994. The U.S.
and seven foreign nations have selected Patriot for their defense
systems. Since the Gulf War, Raytheon has received more than $3.1 billion
in foreign orders for Patriot equipment and support services.
S-2
<PAGE> 3
- In missile programs, Raytheon is a major producer of the U.S. Navy's
Standard Missile and is the design agent for the next generation Standard
Missile -2 Block IV (Aegis-ER). In 1995 Raytheon was awarded a $166
million contract to provide 57 percent of the U.S. government's current
year's buy of advanced medium range air-to-air missiles (AMRAAM), the
most advanced air-to-air missile in production. Raytheon also has been
selected as the prime contractor for the Army's Enhanced Fiber Optic
Guided Missile (EFOG-M) demonstration program, which is a key element of
the Army's Rapid Force Projection Initiative Advanced Concept Technology
Demonstration, designed to provide rapidly deployable, lethal and highly
survivable technologies to early entry forces. Raytheon also produces
Sidewinder and Sparrow missiles used by the U.S. and foreign air forces.
- In naval systems, Raytheon is a major supplier of defense electronics
systems for surface ships and submarines. Nearly every U.S. Navy ship
carries at least one Raytheon radar/fire control system, which includes
the Tartar, SPS-49 and Seasparrow systems. In addition, Raytheon develops
sonars, combat control systems and minehunting equipment for submarines
and ships in U.S. and allied fleets and unmanned underwater vehicles and
laser sensors.
- In countermeasures and communications, Raytheon designs and builds
advanced electronics countermeasures systems to protect U.S. and allied
ships and planes against enemy strikes. These systems include the
AN/ALQ-184 airborne countermeasure pod for the U.S. Air Force, which
equips its F-16s, F-15s and A-10s with such systems, and the AN/SLQ-32
shipboard jamming system for the U.S. Navy. In communications, Raytheon
is producing Milstar Terminals and TRC-170 communication sets for the
armed forces.
Raytheon continues to transition its defense business into commercial areas
focusing on transferring core defense technologies to business applications in
the fields of communications, air traffic control, transportation and
environmental monitoring. Key programs in its diversification efforts include
IRIDIUM[R], a cellular telecommunications system; the FAA's Advanced Automation
System; Terminal Doppler Weather Radars installed at airports to warn of wind
shear; vessel traffic control systems to monitor waterways; and development of a
personal rapid transit system, a state-of-the-art people mover under
development.
Raytheon's commercial electronics business, which had 1994 sales of
approximately $500 million, is benefiting from Raytheon's focus on transferring
core defense technologies to commercial applications in areas such as
communications, air traffic control, transportation and environmental
surveillance. Raytheon has strong positions in its targeted markets in marine
electronics, microelectronics, semi-conductor and audio components and
educational publishing.
ENGINEERING AND CONSTRUCTION. Raytheon Engineers and Constructors is
engaged in the design, construction and maintenance of facilities and plants
operated by a range of customers in the U.S. and throughout the world, including
independent power producers, major utility companies, petroleum companies,
industrial concerns and governments. Raytheon Engineers and Constructors has
emerged as one of the largest and most capable engineering, construction and
operation and maintenance firms in the world, supporting customers in 11
industries. More than one third of the segment's year-end backlog was based on
business outside of the U.S. 1994 sales for the Engineering and Construction
segment were approximately $2.8 billion.
- Raytheon Engineers and Constructors has been involved in a wide range of
large-scale domestic and international projects. For example, Raytheon
Engineers and Constructors is constructing a one million ton per year
steel finishing plant in Riverdale, Illinois and a 145,000 barrel-per-day
crude oil refinery in Rayong, Thailand. Raytheon Engineers and
Constructors provides operations and maintenance services to government
and industry, such as the U.S. Army's Kwajalein Missile Range and the
Johnston Atoll chemical weapons destruction facility.
- The Engineering and Construction segment also designs and manufactures a
wide range of equipment used for infrastructure building and repair,
including aggregate producing equipment, asphalt paving equipment, mixing
plants and soil remediation systems.
AIRCRAFT. Raytheon's Aircraft segment offers the broadest product line in
the general aviation market. Raytheon Aircraft, formed in 1994 by combining
Raytheon's Beech Aircraft and Raytheon Corporate Jets
S-3
<PAGE> 4
operations, manufactures, markets and supports piston-powered aircraft, jet
props and light and medium jets for the world's commercial, regional airline and
military markets. 1994 sales for the Aircraft segment were approximately $1.7
billion.
- Since the introduction of the King Air series in 1964, Raytheon has sold
more commercial jetprop aircraft than any other manufacturer.
- Raytheon is the market leader in deliveries of 19 passenger regional
aircraft through the popular Beech 1900D "stand-up cabin" aircraft. At
the end of 1994, 17 U.S. regional airlines and 14 foreign airlines were
flying a version of this aircraft.
- Raytheon manufactures the Hawker 800, the world's most popular mid-sized
business jet, which can fly further than any other full cabin mid-sized
jet and has 38 percent more cabin space than its nearest competitor.
MAJOR APPLIANCES. Raytheon's Appliance segment offers some of the
best-known names in appliances, including Amana, Caloric, Modern Maid, Sunray,
Menumaster, Speed Queen, Huebsch and UniMac. The Appliance segment manufactures
and sells household and commercial appliances including refrigerators, gas and
electric ranges, cooktops, wall and microwave ovens and home and commercial
laundry equipment. 1994 sales for the Appliances segment were approximately $1.4
billion.
- Raytheon's appliance strategy is to develop products that distinguish
themselves on the basis of quality and features. The Appliance segment's
product line offers several industry exclusive features, including
laundry equipment with stainless steel wash baskets and dryer drums;
quartz halogen cooktops with ten position, variable intensity control
systems for more even heating; the first U.S. built commercial microwave
ovens capable of reading bar code cooking instructions; and one of the
quietest lines of room air conditioners on the market.
- Raytheon's heating and air conditioning, refrigerator and microwave oven,
cooking appliance and laundry manufacturing facilities are ISO9001
certified, the first such facilities in the U.S. to be so certified. The
ISO9001 certification is the most stringent of the ISO9000 international
series of manufacturing quality measures and assures consumers that a
product was built within a facility maintaining strict criteria for
quality procedures and systems.
- In 1994 the Appliance segment derived nearly half of its sales from
products introduced within the prior 18 months.
RECENT ACQUISITION
In May 1995 Raytheon completed its acquisition of E-Systems, a leading
global provider of defense electronic systems and services. E-Systems had 1994
sales of approximately $2 billion and a record total backlog at year end of
approximately $2.6 billion. The acquisition was valued at approximately $2.3
billion and will be financed through a combination of short-term, medium-term
and long-term financing. See "Use of Proceeds."
E-Systems is a leading developer and producer of defense electronic systems
including:
- Reconnaissance and surveillance systems such as signal intelligence
systems, intrusion detection systems, electronic support measures and
automated, remote controlled reconnaissance systems.
- Command, control and communications systems that gather information
through advanced electronic and conventional means used to direct forces
and to monitor rapidly changing strategic and tactical events.
- Navigation and control systems such as aircraft and missile steering and
tracking systems and aircraft navigation aids.
S-4
<PAGE> 5
The E-Systems aircraft maintenance and modification segment recently was
awarded two significant programs for the P-3 aircraft: an award from the
government of Australia for an electronic suite upgrade for its maritime patrol
aircraft valued at over $400 million and an award from the U.S. Navy to extend
the service life of its P-3 aircraft with an initial option exercise value of
$50 million.
Raytheon's acquisition of E-Systems will result in a combination of
complementary defense skills and markets with little overlap. In addition, a
significant amount of E-Systems' technologies can be used to further Raytheon's
strategic goals to apply defense technologies to commercial markets and to
continue to grow as a diversified commercial company while remaining a top-tier
competitor in the defense industry.
Raytheon estimates that the pro forma ratio of earnings to fixed charges
for the three months ended April 2, 1995, determined as if Raytheon had acquired
E-Systems on January 1, 1995, is approximately 4.9. See "Ratio of Earnings to
Fixed Charges" in the accompanying Prospectus.
USE OF PROCEEDS
The net proceeds from the sale of the Offered Debt Securities, estimated to
be , will be used to repay commercial paper, with a weighted average
interest rate as of of percent, issued to finance Raytheon's
acquisition of E-Systems.
CAPITALIZATION
<TABLE>
The following table sets forth the consolidated capitalization of Raytheon
at April 2, 1995 and as adjusted to reflect (i) the acquisition of E-Systems and
the incurrence of indebtedness to finance the purchase price thereof; and (ii)
the issuance and sale of the Offered Debt Securities and the use of the proceeds
thereof (without deduction of expenses) as described under "Use of Proceeds."
<CAPTION>
APRIL 2, 1995
------------------------------------------
ACQUISITION OF
E-SYSTEMS AND
ISSUANCE OF ISSUANCE OF
COMMERCIAL OFFERED DEBT
ACTUAL PAPER SECURITIES
------ ------------- ------------
(IN MILLIONS)
<S> <C> <C> <C>
Notes Payable and Current Portion of Long-Term Debt..... $1,405 $ 3,611 $ 2,861
Long-Term Debt:
Notes Due 2005 Offered Hereby...................... 500
Debentures Due 2025 Offered Hereby................. 250
Other Long-Term Debt............................... 24 29 29
------ ------- -------
Total Long-Term Debt.......................... 24 29 779
Stockholders' Equity.................................... 4,055 4,055 4,055
------ ------- -------
Total Capitalization.......................... $5,484 $ 7,695 $ 7,695
</TABLE>
S-5
<PAGE> 6
SELECTED FINANCIAL DATA
<TABLE>
The following table presents selected financial data for Raytheon, which
has been derived from and is qualified by reference to Raytheon's consolidated
financial statements and should be read in conjunction with the financial
statements and notes thereto. The financial information for the years ended
December 31, 1994, 1993, 1992, 1991 and 1990 is derived from Raytheon's audited
consolidated financial statements. The data for the three month periods ended
April 3, 1994 and April 2, 1993 is unaudited but, in the opinion of management,
reflects all adjustments, which are of a normal recurring nature, necessary for
a fair presentation of the results for the interim periods.
<CAPTION>
FOR THE THREE
MONTHS ENDED
------------------- FOR FISCAL YEAR ENDED DECEMBER 31,
APRIL 2, APRIL 3, --------------------------------------------
1995 1994 1994 1993 1992 1991 1990
-------- -------- ------- ------ ------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Data:
Net sales.................... $ 2,387 $ 2,314 $10,013 $9,201 $9,058 $9,274 $9,268
Operating income............. 256 (7)(1) 829(1) 920 894 822 799
Interest expense............. 23 11 49 32 48 92 114
Net income................... 174 7(2) 597(2) 693 635 592 557
Balance Sheet Data:
Net working capital.......... $ 1,772 $ 1,644 $ 1,702 $1,809 $1,639 $1,032 $ 458
Total assets................. 7,674 7,264 7,395 7,258 6,015 6,087 6,119
Notes payable and current
portion of long-term debt.. 1,405 810 1,033 873 707 1,105 1,425
Long-term debt............... 24 23 25 24 25 39 46
Stockholders' equity......... 4,055 4,233 3,928 4,298 3,843 3,323 2,847
Other Data:
Depreciation................. $ 65 $ 69 $ 275 $ 278 $ 302 $ 306 $ 304
Capital expenditures......... 55 68 267 256 308 349 391
- ---------------
<FN>
(1) Includes first quarter 1994 restructuring provision of $249.8 million.
(2) Includes first quarter 1994 after-tax restructuring provision of $162.3 million.
</TABLE>
<TABLE>
SEGMENT SALES
<CAPTION>
FOR FISCAL YEAR ENDED DECEMBER 31,
----------------------------------------------
1994 1993 1992 1991 1990
------ ------ ------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Net Sales
Electronics................................. $4,068 $4,792 $4,976 $5,501 $5,682
Engineering and Construction................ 2,821 1,718 1,757 1,677 1,471
Aircraft.................................... 1,722 1,466 1,254 1,098 1,074
Major Appliances............................ 1,402 1,225 1,071 998 1,041
</TABLE>
S-6
<PAGE> 7
DESCRIPTION OF THE SECURITIES
General. The Offered Debt Securities will be limited to $750,000,000
aggregate principal amount, consisting of $500,000,000 principal amount of Notes
and $250,000,000 principal amount of Debentures. The Offered Debt Securities are
Senior Debt Securities as described in the accompanying Prospectus.
The Notes. Each Note will bear interest at the applicable rate per annum
stated on the cover page of this Prospectus Supplement, payable semiannually on
and of each year, commencing , 1996, to the person
in whose name the Note is registered, subject to certain exceptions as provided
in the Senior Indenture, at the close of business on or
(each a "Record Date"), as the case may be, immediately preceding such
or . The Notes will mature on , 2005. The Notes
are not redeemable prior to maturity. There is no provision for a sinking fund
for the Notes.
The Debentures. Each Debenture will bear interest at the applicable rate
per annum stated on the cover page of this Prospectus Supplement, payable
semiannually on and of each year, commencing ,
1996, to the person in whose name the Debenture is registered, subject to
certain exemptions as provided in the Senior Indenture, at the close of business
on or (each a "Record Date"), as the case may be,
immediately preceding such or . The Debentures will mature
on , 2025.
The Debentures are not redeemable prior to , 2005. On or after
such date, the Debentures may be redeemed at the option of Raytheon, at any time
as a whole, or from time to time in part, upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below if redeemed during the 12-month period commencing
of the years indicated:
<TABLE>
<CAPTION>
REDEMPTION REDEMPTION
YEAR PRICE YEAR PRICE
- ---- ---------- ---- ----------
<S> <C> <C> <C>
2005............................ 2010............................
2006............................ 2011............................
2007............................ 2012............................
2008............................ 2013............................
2009............................ 2014............................
</TABLE>
and thereafter at 100% of the principal amount thereof, in each case plus
accrued and unpaid interest (if any) to the date of redemption. Interest
installments on a Debenture due on or prior to such redemption date will be
payable to the holder of record on the relevant Record Date.
There is no provision for a sinking fund for the Debentures.
Defeasance. Under certain circumstances, Raytheon will be deemed to have
discharged the entire indebtedness on all of the outstanding Notes or Debentures
by defeasance, or to be discharged from certain covenants otherwise applicable
to the Notes or Debentures and described in the accompanying Prospectus under
the heading "Description of Debt Securities -- Certain Covenants of the
Corporation". See "Description of Debt Securities -- Defeasance and Covenant
Defeasance" in the accompanying Prospectus for a description of the terms of any
such defeasance. Raytheon has made these defeasance provisions applicable to the
Notes and to the Debentures.
Book Entry System. The Notes and Debentures will each initially be
represented by one or more global securities (each a "Global Security")
deposited with The Depository Trust Company ("DTC") and registered in the name
of a nominee of DTC, except as set forth below. The settlement of transactions
with respect to each Global Security will be facilitated through electronic
computerized book-entry changes in participants' accounts, thereby eliminating
the physical movement of certificates representing Offered Debt Securities. The
Offered Debt Securities will be available for purchase in denominations of
$1,000 and integral multiples thereof in book-entry form only. Unless and until
certificated securities are issued under the limited circumstances described
below, no beneficial owner of an Offered Debt Security shall be entitled to
receive a definitive certificate representing an Offered Debt Security. So long
as DTC or any successor depositary (the "Depositary") or its nominee is the
registered owner of a Global Security, the Depositary or such nominee, as the
case may be, will be considered to be the sole owner or holder of the Offered
Debt Securities represented thereby for all purposes of the Indenture.
S-7
<PAGE> 8
Unless and until it is exchanged in whole or in part for the Offered Debt
Securities represented thereby, a Global Security may not be transferred except
as a whole by the Depositary to a nominee of the Depositary or by a nominee to a
successor depositary or any nominee of such successor.
So long as Offered Debt Securities are represented by a Global Security,
all payments of principal and interest with respect thereto will be made to the
Depositary or its nominee (or a successor), as the case may be, as the sole
registered owner of the Global Security representing such Offered Debt
Securities.
Raytheon expects that the Depositary or its nominee, upon receipt of any
payment of principal or interest in respect of a Global Security representing
Offered Debt Securities, will credit 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 or such
nominee.
If DTC at anytime is unwilling, unable or ineligible to continue as
Depositary for a Global Security or in the event there shall have occurred and
be continuing an Event of Default, or an event which with notice or lapse of
time or both would become an Event of Default, with respect to the Offered Debt
Securities represented by such Global Debt Security, Raytheon will issue
certificated Offered Debt Securities in definitive form in exchange for such
Global Security. In addition, Raytheon may at any time determine not to have the
Notes or the Debentures represented by a Global Security, and, in such event,
will issue certificated Offered Debt Securities in definitive form in exchange
for such Global Security. In either instance, an owner of a beneficial interest
in a Global Security will be entitled to physical delivery of certificated
Offered Debt Securities in definitive form equal in principal amount to such
beneficial interest in such Global Security and to have such certificated
Offered Debt Securities registered in its name. Certificated Offered Debt
Securities so issued in definitive form will be issued in denominations of
$1,000 and integral multiples thereof and will be issued in registered form
only, without coupons.
See "Description of Debt Securities" in the accompanying Prospectus for
additional information concerning the Offered Debt Securities and the Senior
Indenture.
Same Day Settlement and Payment Settlement for the Offered Debt Securities
will be made by the Underwriters in immediately available funds.
Secondary trading in notes and debentures of corporate issuers is generally
settled in clearinghouse or next-day funds. In contrast, the Offered Debt
Securities will trade in DTC's Same-Day Funds Settlement System until maturity,
and secondary market trading activity in the Offered Debt Securities will
therefore settle in immediately available funds. No assurance can be given as to
the effect, if any, of settlements in immediately available funds on trading
activity in the Offered Debt Securities.
S-8
<PAGE> 9
UNDERWRITING
<TABLE>
The Underwriters named below have severally agreed, subject to the terms of
the Underwriting Agreement, to purchase from Raytheon the following respective
principal amounts of the Offered Debt Securities.
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
NOTES DEBENTURES
DUE 2005 DUE 2025
---------- ----------
<S> <C> <C>
CS First Boston Corporation..........................................
Bear, Stearns & Co. Inc..............................................
Goldman, Sachs & Co..................................................
J.P. Morgan Securities Inc...........................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated...................
Morgan Stanley & Co. Incorporated....................................
Total......................................................
========== ==========
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all of the Offered Debt Securities if
any are purchased.
Raytheon has been advised by CS First Boston Corporation; Bear, Stearns &
Co. Inc.; Goldman, Sachs & Co.; J.P. Morgan Securities Inc.; Merrill Lynch,
Pierce, Fenner & Smith Incorporated; and Morgan Stanley & Co. Incorporated, as
Representatives of the Underwriters, that the Underwriters propose to offer the
Offered Debt Securities to the public initially at the public offering prices
set forth on the cover page of this Prospectus Supplement and, through the
Representatives, to certain dealers at such prices less a concession of
of the principal amount per Note and of the principal amount
per Debenture; that the Underwriters and such dealers may allow a discount of
of the principal amount of the Offered Debt Securities on sales to certain
other dealers; and that after the initial public offering, the public offering
prices and concessions and discount to dealers may be changed by the
Representatives.
Raytheon has been advised by the Representatives that they intend to make a
market in the Offered Debt Securities, but they are not obligated to do so and
may discontinue such market making at any time without notice. No assurance can
be given as to the liquidity of the trading market for the Offered Debt
Securities. The Offered Debt Securities will not be listed on any national
securities exchange.
Raytheon has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act of 1933, as
amended, or to contribute to payments which the Underwriters may be required to
make in respect thereof.
Each of the Underwriters and certain of their affiliates engage in
transactions with and perform services, including in certain cases commercial
banking services, for Raytheon and certain of its subsidiaries in the ordinary
course of business.
S-9
<PAGE> 10
NOTICE TO CANADIAN RESIDENTS
Resale Restrictions The distribution of the Offered Debt Securities in
Canada is being made only on a private placement basis exempt from the
requirement that Raytheon prepare and file a prospectus with the securities
regulatory authorities in each province where trades of Offered Debt Securities
are effected. Accordingly, any resale of the Offered Debt Securities in Canada
must be made in accordance with applicable securities laws which will vary
depending on the relevant jurisdiction, and which may require resales to be made
in accordance with available statutory exemptions or pursuant to a discretionary
exemption granted by the applicable Canadian securities regulatory authority.
Purchasers who are Canadian residents are advised to seek legal advice prior to
any resale of the Offered Debt Securities.
Representations of Purchasers Each purchaser of Offered Securities in
Canada who receives a purchase confirmation will be deemed to represent to
Raytheon and the dealer from whom such purchase confirmation is received that
(i) such purchaser is entitled under applicable provincial securities laws to
purchase such Offered Debt Securities without the benefit of a prospectus
qualified under such securities laws; (ii) where required by law, that such
purchaser is purchasing as principal and not as agent; and (iii) such purchaser
has reviewed the text above under "Resale Restrictions."
Rights of Action and Enforcement The Offered Debt Securities are those of
a foreign issuer and Ontario purchasers will not receive the contractual right
of action prescribed by section 32 of the Regulation under the Securities Act
(Ontario). As a result, Ontario purchasers must rely on other remedies that may
be available, including common law rights of action for damages or rescission or
rights of action under the civil liability provisions of the U.S. federal
securities laws.
All of Raytheon's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Ontario purchasers to effect service of process within Canada upon Raytheon
or such persons. All or a substantial portion of the assets of Raytheon and such
persons may be located outside of Canada and, as a result, it may not be
possible to satisfy a judgment against Raytheon or such persons in Canada or to
enforce a judgment obtained in Canadian courts against Raytheon or persons
outside of Canada.
Notice to British Columbia Residents A purchaser of Offered Debt
Securities to whom the Securities Act (British Columbia) applies is advised that
such purchaser is required to file with the British Columbia Securities
Commission a report within ten days of the sale of any Offered Debt Securities
acquired by such purchaser pursuant to this offering. Such report must be in the
form attached to British Columbia Securities Commission Blanket Order BOR #88/5.
Only one such report must be filed in respect of Offered Debt Securities
acquired on the same date and under the same prospectus exemption.
- ---------------
IRIDIUM is a registered trademark and service mark of Iridium, Inc.
S-10
<PAGE> 11
PROSPECTUS
RAYTHEON COMPANY
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
------------------------
Raytheon Company (the "Company") may offer from time to time (i) in one or
more series, its unsecured debt securities consisting of notes, debentures or
other evidences of indebtedness (the "Debt Securities"), (ii) shares of serial
preferred stock, without par value, in one or more series ("Preferred Stock"),
or (iii) shares of common stock, $1.00 par value per share ("Common Stock"), all
having an aggregate initial public offering price not to exceed $2,000,000,000
or the equivalent thereof in one or more foreign currencies, foreign currency
units, or composite currencies, including European Currency Units. The Debt
Securities, Preferred Stock and Common Stock are referred to herein collectively
as the "Offered Securities." 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 in light of market conditions at the time of sale.
The specific terms of the Offered Securities with respect to which this
Prospectus is being delivered will be set forth in a supplement to this
Prospectus (a "Prospectus Supplement"), together with the terms of the offering
and sale of the Offered Securities and the initial offering price and the net
proceeds to the Company from the sale thereof. The Prospectus Supplement will
include, with regard to the particular Offered Securities, the following
information: (i) in the case of Debt Securities, the specific designation,
aggregate principal amount, ranking, authorized denomination, maturity, rate or
method of calculation of interest and dates for payment thereof, any terms for
optional or mandatory redemption or payment of additional amounts or any sinking
fund provisions, any index or formula for determining the amount of any
principal, premium, or interest fund provisions, the currency or currency unit
in which principal, premium, or interest is payable, whether the securities are
issuable in registered form or in the form of global securities and any
provisions for the conversion or exchange of such Debt Securities; (ii) in the
case of Preferred Stock, the designation, number of shares, liquidation
preference per share, dividend rate (or method of calculation thereof), dividend
payment dates and dates from which dividends shall accrue, any redemption or
sinking fund provisions, any conversion or exchange rights; (iii) in the case of
Common Stock, the number of shares; and (iv) in the case of all Offered
Securities, whether such Offered Securities will be offered separately or as a
unit with other Offered Securities. The Prospectus Supplement also will contain
information, where applicable, about material United States federal income tax
considerations relating to, and any listing on a securities exchange of, the
Offered Securities covered by such Prospectus Supplement.
The Company's Common Stock is listed on the New York Stock Exchange, the
Chicago Stock Exchange and the Pacific Stock Exchange. Any Common Stock offered
will be listed, subject to notice of issuance, on such exchanges.
The Debt Securities may be unsecured Senior Debt Securities or unsecured
Subordinated Debt Securities. The Senior Debt Securities, when issued, will rank
on a parity with all the unsecured and unsubordinated indebtedness of the
Company, and the Subordinated Debt Securities, when issued, will be subordinated
in right of payment to all obligations of the Company to its other creditors,
except obligations ranking on a parity with or junior to the Subordinated Debt
Securities. See "Description of Debt Securities -- Subordination of Subordinated
Debt Securities."
The Offered Securities may be sold directly by the Company, through agents
designated from time to time or to or through underwriters or dealers. See "Plan
of Distribution." If any agents of the Company, underwriters or dealers are
involved in the sale of any Offered Securities in respect of which this
Prospectus is being delivered, the names of such agents, underwriters or dealers
and any applicable commissions or discounts and the net proceeds to the Company
will be set forth in a 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 date of this Prospectus is July 7, 1995.
<PAGE> 12
No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained in this Prospectus or
any Prospectus Supplement, and, if given or made, such information or
representations must not be relied upon as having been authorized by the Company
or any underwriter, agent or dealer. Neither this Prospectus nor any Prospectus
Supplement constitutes an offer to sell or a solicitation of an offer to buy any
of the securities offered hereby in any jurisdiction to any person to whom it is
unlawful to make such an offer in such jurisdiction. Neither the delivery of
this Prospectus or any Prospectus Supplement nor any sale made hereunder or
thereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of the Company since the date hereunder or
thereof.
AVAILABLE INFORMATION
The Company is subject to the reporting requirement of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files periodic reports and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information concerning the Company may be inspected and copies may be obtained
(at prescribed rates) at the Commission's Public Reference Section, 450 5th
Street, N.W., Washington, D.C. 20549, as well as the following regional offices:
7 World Trade Center, New York, New York 10048 and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. The Company's Common Stock is listed on the
New York, Chicago and Pacific Stock Exchanges, where reports, proxy statements
and other information concerning the Company can also be inspected. The offices
of the New York Stock Exchange are located at 20 Broad Street, New York, New
York 10005.
The Company has filed two Registration Statements on Form S-3 (together,
the "Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with the Commission with respect to the Offered Securities.
As permitted by the rules and regulations of the Commission, this Prospectus
omits certain of the information contained in the Registration Statement. For
further information with respect to the Company and the Offered Securities,
reference is hereby made to such Registration Statement, including the exhibits
filed as part thereof. Statements contained in this Prospectus concerning the
provisions of certain documents filed with, or incorporated by reference in, the
Registration Statement are not necessarily complete, each such statement being
qualified in all respects by such reference. Copies of all or any part of the
Registration Statement, including the documents incorporated by reference
therein or exhibits thereto, may be obtained upon payment of the prescribed
rates at the offices of the Commission set forth above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company pursuant
to the Exchange Act are incorporated herein by reference: Annual Report on Form
10-K for the fiscal year ended December 31, 1994; Current Report on Form 8-K
dated May 9, 1995; and Quarterly Report on Form 10-Q for the fiscal quarter
ended April 2, 1995.
All documents filed by the Company pursuant to section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Offered Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing such documents. Any statement contained herein or in a document,
all or a portion of which is incorporated or deemed to be incorporated by
reference herein, shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document or portion thereof which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a Prospectus is delivered, on written or oral request
of such person, a copy of any or all of the documents incorporated by reference
herein (other than exhibits to such documents unless such exhibits are
incorporated by reference into such documents). Such written requests should be
addressed to: Secretary, Raytheon
2
<PAGE> 13
Company, 141 Spring Street, Lexington, Massachusetts 02173. Telephone requests
may be directed to the Secretary at (617) 862-6600.
THE COMPANY
Raytheon is an international, high technology company which operates in
four businesses: commercial and defense electronics, engineering and
construction, aircraft and major appliances. Its principal business is the
design, manufacture and servicing of advanced electronic devices, equipment and
systems for government and commercial use. Through a diversification program
begun in 1964, Raytheon has expanded into aircraft products, engineering and
construction services, major appliances and textbook publishing. In recent
years, the Company has strengthened its business through consolidation,
operational improvement and acquisitions and diversified core defense
technologies into commercial markets while remaining a strong defense company.
The address of the principal executive office of the Company is 141 Spring
Street, Lexington, Massachusetts 02173. The telephone number of the Company is
(617) 862-6600.
USE OF PROCEEDS
Unless otherwise provided in the applicable Prospectus Supplement, the net
proceeds from the sale of the Offered Securities will be used by the Company to
refinance commercial paper and/or bank borrowings, with various maturities and
bearing interest at various rates, that were incurred to finance acquisitions or
other capital expenditures and working capital requirements and for other
general corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
The following table sets forth the Company's consolidated ratios of
earnings to fixed charges for each of the Company's fiscal years 1994, 1993,
1992, 1991 and 1990 and its fiscal quarter ended April 2, 1995:
<CAPTION>
FISCAL QUARTER ENDED FISCAL YEAR ENDED DECEMBER 31
APRIL 2, 1995 1994 1993 1992 1991 1990
-------------------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
9.3 12.0 18.1 11.9 7.5 6.3
</TABLE>
For purposes of computing the ratio of earnings to fixed charges, earnings
consist of net earnings, taxes on income and fixed charges (less capitalized
interest) and fixed charges consist of interest expense, amortization of debt
discount and expense, the portion of rents representative of an interest factor
and capitalized interest.
DESCRIPTION OF DEBT SECURITIES
The Senior Debt Securities are to be issued under an Indenture, dated as of
July 3, 1995 (the "Senior Indenture"), between the Company and The Bank of New
York, as trustee. The Subordinated Debt Securities are to be issued under a
second Indenture, dated as of July 3, 1995 (the "Subordinated Indenture"), also
between the Company and The Bank of New York, as trustee. Copies of the Senior
Indenture and the Subordinated Indenture have been filed with the Commission as
exhibits to the Registration Statement. The Senior Indenture and the
Subordinated Indenture are sometimes referred to collectively as the
"Indentures." The Bank of New York is hereinafter referred to as the "Senior
Trustee" when referring to it in its capacity as trustee under the Senior
Indenture, as the "Subordinated Trustee" when referring to it in its capacity as
trustee under the Subordinated Indenture, and as the "Trustee" when referring to
it in its capacity as trustee under both of the Indentures. The following
summaries of certain provisions of the Senior Debt Securities, the Subordinated
Debt Securities and the Indentures 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 applicable to a particular series of Debt Securities (the "Applicable
Indenture"), including the definitions therein of certain terms. Wherever
particular Sections, Articles or defined terms of the Applicable Indenture are
referred to, it is intended that such Sections, Articles or defined terms shall
be incorporated
3
<PAGE> 14
herein by reference. Article and Section references used herein are references
to the Applicable Indenture. Capitalized terms not otherwise defined herein
shall have the meaning given in the Applicable Indenture.
The following sets forth certain general terms and provisions of the Debt
Securities offered hereby. The particular terms of the Debt Securities offered
by any Prospectus Supplement (the "Offered Debt Securities") will be described
in the Prospectus Supplement relating to such Offered Debt Securities (the
"Applicable Prospectus Supplement").
GENERAL
The Indentures do not limit the amount of Debt Securities that may be
issued thereunder and provide that Debt Securities may be issued thereunder from
time to time in one or more series. The Debt Securities will be unsecured
obligations of the Company.
Unless otherwise indicated in the Applicable Prospectus Supplement,
principal of, premium, if any, and interest on the Debt Securities will be
payable, and the transfer of Debt Securities will be registrable, at the office
or agency of the Company in each Place of Payment maintained by the Company and
at any other office or agency maintained by the Company for such purpose, except
that, at the option of the Company, interest may be paid by mailing a check to
the address of the Person entitled thereto as it appears on the register for the
Debt Securities (Sections 301, 305, 307 and 1002). The Debt Securities will be
issued only in fully registered form without coupons and, unless otherwise
indicated in the Applicable Prospectus Supplement, in denominations of $1,000 or
integral multiples thereof (Section 302). 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 imposed in connection therewith (Section 305).
The Applicable Prospectus Supplement will describe the following terms of
the Offered Debt Securities: (i) the title of the Offered Debt Securities; (ii)
whether the Offered Debt Securities are Senior Debt Securities or Subordinated
Debt Securities; (iii) any limit on the aggregate principal amount of the
Offered Debt Securities; (iv) the Person to whom any interest on the Offered
Debt Securities is payable if other than the Person in whose name any such
Offered Debt Securities are registered; (v) the date or dates on which the
principal of the Offered Debt Securities will mature; (vi) the rate or rates per
annum (which may be fixed or variable) at which the Offered Debt Securities will
bear interest, if any, and the date or dates from which such interest, if any,
will accrue; (vii) the dates on which such interest, if any, on the Offered Debt
Securities will be payable and the Regular Record Dates for such Interest
Payment Dates; (viii) the place or places where the principal of and any premium
and interest on the Offered Debt Securities shall be payable; (ix) any mandatory
or optional sinking funds or analogous provisions; (x) the date, if any, after
which and the price or prices at which the Offered Debt Securities may, pursuant
to any optional or mandatory redemption provisions, be redeemed and the other
detailed terms and provisions of any such optional or mandatory redemption
provision; (xi) the obligation of the Company, if any, to redeem or repurchase
the Offered Debt Securities at the option of the Holder; (xii) if other than
denominations of $1,000 and any integral multiple thereof, the denominations in
which the Offered Debt Securities shall be issuable; (xiii) if other than the
principal amount thereof, the portion of the principal amount of the Offered
Debt Securities that will be payable upon the declaration of acceleration of the
Maturity thereof; (xiv) the currency of payment of principal of and any premium
and interest on the Offered Debt Securities and, if other than United States
currency, the manner of determining the equivalent thereof in United States
currency for any purpose; (xv) any index used to determine the amount of payment
of principal of, and any premium and interest on, the Offered Debt Securities;
(xvi) if the Offered Debt Securities will be issuable only in the form of a
Global Security, the Depositary or its nominee with respect to the Offered Debt
Securities and the circumstances under which the Global Security may be
registered for transfer or exchange in the name of a Person other than the
Depositary or its nominee; (xvii) the applicability, if any, of the provisions
described under "Defeasance and Covenant Defeasance"; (xviii) whether the Debt
Securities are convertible into any other securities and the terms and
conditions of such convertibility; (xix) any additional Event of Default, and in
the case of any Offered Debt Securities that are Subordinated Debt Securities,
any additional Event of Default that would result in the acceleration of the
Maturity thereof; and (xx) any other terms of the Offered Debt Securities
(Section 301).
4
<PAGE> 15
Both Senior Debt Securities and Subordinated Debt Securities may be issued
as Original Issue Discount Debt Securities to be offered and sold at a
substantial discount below their stated principal amount. "Original Issue
Discount Debt Security" means any Debt Security which provides for an amount
less than the principal amount thereof to be due and payable upon the
declaration of acceleration of the Maturity thereof upon the occurrence of an
Event of Default and the continuation thereof (Section 101).
The Applicable Prospectus Supplement will also describe any material United
States federal income tax consequences or other special considerations
applicable to the series of Debt Securities to which such Prospectus Supplement
relates, including those applicable to (i) Debt Securities with respect to which
payments of principal, premium, or interest are determined with reference to an
index or formula (including changes in prices of particular securities,
currencies, or commodities), (ii) Debt Securities with respect to which
principal, premium, or interest is payable in a foreign or composite currency,
(iii) Original Issue Discount Debt Securities, and (iv) variable rate Debt
Securities that are exchangeable for fixed rate Debt Securities.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Unless otherwise indicated in the Applicable Prospectus Supplement, the
following provisions will apply to the Subordinated Debt Securities.
The payment of the principal of, premium, if any, and interest on the
Subordinated Debt Securities will be subordinated in right of payment to the
prior payment in full of all Senior Indebtedness (as defined below) (Section
1301). Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshalling of assets or any bankruptcy, insolvency or similar
proceedings of the Company, the holders of all Senior Indebtedness will be
entitled to receive payment in full of all amounts due or to become due thereon
before the Holders of the Subordinated Debt Securities will be entitled to
receive any payment in respect of the principal of, premium, if any, or interest
on the Subordinated Debt Securities (Section 1302). In the event of the
acceleration of the Maturity of any Subordinated Debt Securities of any series,
the holders of all Senior Indebtedness will be entitled to receive payment in
full of all amounts due or to become due thereon before the Holders of the
Subordinated Debt Securities will be entitled to receive any payment of the
principal of, premium, if any, or interest on the Subordinated Debt Securities
of such series or on account of the purchase or other acquisition of
Subordinated Debt Securities of such series (Section 1303). Accordingly, in case
of such an acceleration, all Senior Indebtedness would have to be repaid before
any payment could be made in respect of the Subordinated Debt Securities. No
payments on account of principal, premium, if any, or interest in respect of the
Subordinated Debt Securities or on account of the purchase or other acquisition
of Subordinated Debt Securities may be made if there shall have occurred and be
continuing a default in any payment with respect to any Senior Indebtedness, or
an Event of Default with respect to any Senior Indebtedness permitting the
holders thereof to accelerate the maturity thereof, or if any judicial
proceeding shall be pending with respect to any such default (Section 1304).
By reason of such subordination, in the event of the insolvency of the
Company, creditors of the Company who are not holders of Senior Indebtedness or
the Subordinated Debt Securities may recover less, ratably, than holders of
Senior Indebtedness and may recover more, ratably, than Holders of the
Subordinated Debt Securities.
"Senior Indebtedness" is defined in the Subordinated Indenture to mean the
principal of, and premium, if any, and interest on (i) all indebtedness of the
Company for money borrowed, other than the Subordinated Debt Securities, and any
other indebtedness of the Company represented by a note, bond, debenture or
other similar evidence of indebtedness (including indebtedness of others
guaranteed by the Company), in each case whether outstanding on the date of
execution of the Subordinated Indenture or thereafter created, incurred or
assumed and (ii) any amendments, renewals, extensions, modifications and
refundings of any such indebtedness, unless in any case in the instrument
creating or evidencing any such indebtedness or pursuant to which it is
outstanding it is provided that such indebtedness is not superior in right of
payment to the Subordinated Debt Securities. For the purposes of this
definition, "indebtedness for money borrowed" is defined as (A) any
5
<PAGE> 16
obligation of, or any obligation guaranteed by, the Company for the repayment of
borrowed money, whether or not evidenced by bonds, debentures, notes or other
written instruments, (B) any deferred payment obligation of, or any such
obligation guaranteed by, the Company for the payment of the purchase price of
property or assets evidenced by a note or similar instrument, and (C) any
obligation of, or any such obligation guaranteed by, the Company for the payment
of rent or other amounts under a lease of property or assets if such obligation
is required to be classified and accounted for as a capitalized lease on the
balance sheet of the Company under generally accepted accounting principles
(Section 101).
The Subordinated Indenture will not limit the amount of other indebtedness,
including Senior Indebtedness, that may be issued by the Company or any of its
Subsidiaries.
EVENTS OF DEFAULT
The Senior Indenture (with respect to any series of Senior Debt Securities
then Outstanding) and, unless otherwise provided in the Applicable Prospectus
Supplement, the Subordinated Indenture (with respect to any series of
Subordinated Debt Securities then Outstanding), define an Event of Default as
any one of the following events: (i) default in the payment of any interest on
any Debt Security of that series when it becomes due and payable, and
continuance of such default for a period of 30 days (in the case of the
Subordinated Indenture, whether or not payment is prohibited by the
subordination provisions); (ii) default in the payment of the principal of, or
premium, if any, on any Debt Security of that series at its Maturity (in the
case of the Subordinated Indenture, whether or not payment is prohibited by the
subordination provisions); (iii) failure to deposit any sinking fund payment
when and as due by the terms of a Debt Security of that series (in the case of
the Subordinated Indenture, whether or not payment is prohibited by the
subordination provisions); (iv) failure to perform any other covenants or
agreements of the Company in the Applicable Indenture (other than covenants or
agreements included in the Applicable Indenture solely for the benefit of a
series of Debt Securities thereunder other than that series) and continuance of
such default for a period of 60 days after either the Trustee or the Holders of
at least 25% of the principal amount of the Outstanding Debt Securities of that
series have given written notice specifying such failure as provided in the
Applicable Indenture; (v) certain events in bankruptcy, insolvency or
reorganization of the Company; and (vi) any other Event of Default provided with
respect to Debt Securities of that series (Section 501). If an Event of Default
occurs with respect to Debt Securities of any series, the Trustee shall give the
Holders of Debt Securities of such series notice of such default, provided,
however, that in the case of a default described in (iv) above, no such notice
to Holders shall be given until at least 30 days after the occurrence thereof
(Section 602).
If an Event of Default with respect to the Senior Debt Securities of any
series at the time Outstanding occurs and is continuing, either the Trustee or
the Holders of at least 25% of the 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 Original Issue Discount Debt Securities, such
portion of the principal amount as may be specified in the terms thereof) of all
the Senior Debt Securities of that series to be due and payable immediately.
Payment of the principal of the Subordinated Debt Securities may be accelerated
only in the case of certain events of bankruptcy, insolvency or reorganization
of the Company. The Trustee and the Holders will not be entitled to accelerate
the maturity of the Subordinated Debt Securities upon the occurrence of any of
the Events of Default described above except for those described in subparagraph
(v) (i.e., certain events in bankruptcy, insolvency or reorganization of the
Company). Accordingly, there is no right of acceleration in the case of a
default in the performance of any other covenant with respect to the
Subordinated Debt Securities, including the payment of interest or principal. 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 of the aggregate principal amount
of Outstanding Debt Securities of that series may, under certain circumstances,
rescind and annul such acceleration (Section 502).
The Indentures provide that, subject to the duty of the Trustee during
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 shall have
offered to the Trustee reasonable security or indemnity (Section 603). Subject
to such provisions for the indemnification of
6
<PAGE> 17
the Trustee and to certain other conditions, the Holders of a majority of the
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).
No Holder of any series of Debt Securities will have any right to institute
any proceeding with respect to the Applicable Indenture or for any remedy
thereunder, unless: (i) such Holder previously has given to the Trustee under
the Applicable Indenture written notice of a continuing Event of Default with
respect to Debt Securities of that series; (ii) the Holders of at least 25% of
the aggregate principal amount of the Outstanding Debt Securities of that series
have made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee; (iii) in the 60-day period following
receipt of a written notice from a Holder, the Trustee has not received from the
Holders of a majority of the aggregate principal amount of the Outstanding Debt
Securities of that series a direction inconsistent with such request; and
(iv) the Trustee shall have failed to institute such proceeding within such
60-day period (Section 507). However, such limitations do not apply to a suit
instituted by a Holder of a Debt Security for enforcement of payment of the
principal of and premium, if any, or interest on such Debt Security on or after
the respective due dates expressed in such Debt Security (Section 508).
The Company is required to furnish to the Trustee annually a statement as
to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance (Section 1007).
Any payment default on any Debt Security regardless of amount, where the
aggregate principal amount of the series of such Debt Security exceeds $25
million, or any other default that causes acceleration of any such Debt
Security, would give rise to a cross-default under the Company's $3 billion
Credit Agreement dated April 28, 1995.
DEFEASANCE AND COVENANT DEFEASANCE
The Indentures provide that, if such provision is made applicable to the
Debt Securities of any series pursuant to Section 301 of the Applicable
Indenture (which will be indicated in the Applicable Prospectus Supplement), the
Company may elect either (i) to defease and be discharged from any and all
obligations in respect of such Debt Securities then outstanding (including, in
the case of Subordinated Debt Securities, the provisions described under
"Subordination of Subordinated Debt Securities" and except for certain
obligations to register the transfer of or exchange of such Debt Securities,
replace stolen, lost or mutilated Debt Securities, maintain paying agencies and
hold monies for payment in trust) ("defeasance") or (ii) to be released from its
obligations with respect to such Debt Securities concerning the subordination
provisions described under "Subordination of Subordinated Debt Securities" and
any other covenants applicable to such Debt Securities which are determined
pursuant to Section 301 of the Applicable Indenture to be subject to covenant
defeasance ("covenant defeasance"), and the occurrence of an event described in
clause (iv) (insofar as with respect to covenants subject to covenant
defeasance) under "Events of Default" above shall no longer be an Event of
Default, in the case of either (i) or (ii) if the Company deposits, in trust,
with the Trustee 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, without reinvestment, to pay all the
principal of and premium, if any, and interest on such Debt Securities on the
dates such payments are due (which may include one or more redemption dates
designated by the Company) and any mandatory sinking fund or analogous payments
thereon in accordance with the terms of such Debt Securities. Such a trust may
only be established if, among other things (A) no Event of Default or event
which with the giving of notice or lapse of time, or both, would become an Event
of Default under the Applicable Indenture shall have occurred and be continuing
on the date of such deposit, (B) such deposit will not cause the Trustee to have
any conflicting interest with respect to other securities of the Company and (C)
the Company shall have delivered an Opinion of Counsel to the effect that the
Holders will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit or defeasance and will be subject to federal income
tax in the same manner as if such defeasance had not occurred.
7
<PAGE> 18
The Company may exercise its defeasance option with respect to such Debt
Securities notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its defeasance option, payment of such Debt Securities
may not be accelerated because of a subsequent Event of Default. If the Company
exercises its covenant defeasance option, payment of such Debt Securities may
not be accelerated by reference to a subsequent breach of any of the covenants
noted under clause (ii) in the preceding paragraph. In the event the Company
omits to comply with its remaining obligations with respect to such Debt
Securities under the Applicable Indenture after exercising its covenant
defeasance option and such Debt Securities are declared due and payable because
of the subsequent occurrence of any Event of Default, the amount of money and
U.S. Government Obligations on deposit with the Trustee may be insufficient to
pay amounts due on the Debt Securities of such series at the time of the
acceleration resulting from such Event of Default. However, the Company will
remain liable in respect of such payments (See Article Thirteen and Article
Fourteen of the Senior Indenture and the Subordinated Indenture, respectively).
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than a majority of
the aggregate principal amount of the Outstanding Debt Securities of all series
issued under the Indenture and affected by the modification or amendments
(voting as a single class); provided, however, that no such modification or
amendment may, without the consent of the Holders of all Debt Securities
affected thereby (i) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Debt Security; (ii) reduce the
principal amount of, or the premium, if any, or (except as otherwise provided in
the Applicable Prospectus Supplement) interest on, any Debt Security (including
in the case of an Original Issue Discount Debt Security the amount payable upon
acceleration of the Maturity thereof); (iii) change the place or currency of
payment of principal of, premium, if any, or interest on any Debt Security;
(iv) impair the right to institute suit for the enforcement of any payment on
any Debt Security on or after the Stated Maturity thereof (or in the case of
redemption, on or after the Redemption Date); (v) in the case of the
Subordinated Indenture, modify the subordination provisions in a manner adverse
to the Holders of the Subordinated Debt Securities; or (vi) reduce the
percentage of the 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 902).
The Holders of a majority of the aggregate principal amount of the Senior
Debt Securities or the Subordinated Debt Securities may, on behalf of all
Holders of the Senior Debt Securities or the Subordinated Debt Securities,
respectively, waive any past default under the Applicable Indenture, except a
default in the payment of principal, premium or interest or in the performance
of certain covenants (Section 513).
CERTAIN COVENANTS OF THE CORPORATION
Limitation on Liens. The Company may not, nor may it permit any
Significant Subsidiary (as defined below) to, create, incur, assume or permit to
exist any Lien (as defined below) on any property or asset (including any stock
or other securities of any Person, including any Significant Subsidiary), or on
any income or revenues or rights in respect of any thereof, unless the Debt
Securities of any series then or thereafter Outstanding shall be equally and
ratably secured. This restriction does not apply, however, to (i) Liens on
property or assets of the Company and its Subsidiaries existing on July 3, 1995,
provided that such Liens shall secure only those obligations which they secure
as of July 3, 1995; (ii) any Lien existing on any property or asset prior to the
acquisition thereof by the Company or any Subsidiary, provided that (x) such
Lien is not created in contemplation of or in connection with such acquisition
and (y) such Lien does not apply to any other property or assets of the Company
or any Subsidiary; (iii) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves, to the extent required by GAAP, have been set aside; (iv)
carriers', warehousemen's, mechanics', materialsmen's, repairmen's or other like
Liens arising in the ordinary course of business and securing obligations that
are not due and payable or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves, to the
extent required by GAAP, have been set aside; (v) pledges and deposits made
8
<PAGE> 19
in the ordinary course of business in compliance with workmen's compensation,
unemployment insurance and other social security laws or regulations; (vi)
deposits to secure the performance of bids, trade contracts (other than for
Indebtedness), leases (other than capital leases), statutory obligations, surety
and appeal bonds, advance payment bonds, performance bonds and other obligations
of a like nature incurred in the ordinary course of business; (vii) zoning
restrictions, easements, rights-of-way, restrictions on use of real property and
other similar encumbrances incurred in the ordinary course of business which, in
the aggregate, are not substantial in amount and do not materially detract from
the value of the property subject thereto or interfere with the ordinary conduct
of the business of the Company or any of its Subsidiaries; (viii) Liens upon any
property acquired, constructed or improved by the Company or any Subsidiary
which are created or incurred within 360 days of such acquisition, construction
or improvement to secure or provide for the payment of any part of the purchase
price of such property or the cost of such construction or improvement,
including carrying costs (but no other amounts), provided that any such Lien
shall not apply to any other property of the Company or any Subsidiary; (ix)
Liens on the property or assets of any Subsidiary in favor of the Company; (x)
extensions, renewals and replacements of Liens referred to in paragraphs (i)
through (ix) above, provided that any such extension, renewal or replacement
Lien shall be limited to the property or assets covered by the Lien extended,
renewed or replaced and that the obligations secured by any such extension,
renewal or replacement Lien shall be in an amount not greater than the amount of
the obligations secured by the Lien extended, renewed or replaced; (xi) any
Lien, of the type described in clause (iii) of the definition below of the term
"Lien", on securities imposed pursuant to an agreement entered into for the sale
or disposition of such securities pending the closing of such sale or
disposition; provided such sale or disposition is otherwise permitted hereunder;
(xii) Liens arising in connection with any Permitted Receivables Program (to the
extent the sale by the Company or the applicable Subsidiary of its accounts
receivable is deemed to give rise to a Lien in favor of the purchaser thereof in
such accounts receivable or the proceeds thereof); (xiii) Liens on the capital
stock or assets of any Subsidiary that is not a Significant Subsidiary; and
(xiv) Liens to secure Indebtedness if, immediately after the grant thereof, the
aggregate amount of all Indebtedness secured by Liens that would not be
permitted but for this clause (xiv) does not exceed 15% of the Stockholders'
Equity (as defined below) as shown on the most recent consolidated balance sheet
of the Company filed with the Commission pursuant to the Exchange Act.
Limitation on Sale/Leaseback Transactions. Transactions involving any sale
and leaseback by the Company or any Significant Subsidiary of any Principal
Property (as defined below) are prohibited, unless the Company or any such
Significant Subsidiary, within 120 days after the effective date of the lease,
applies to the retirement of any Funded Debt (as defined below) an amount equal
to the greater of (i) the net proceeds of the sale of the property leased or
(ii) the fair market value of the property leased within 90 days prior to the
effective date of the lease. The amount to be so applied in respect of any such
transaction will be reduced, however, by the principal amount of any Debt
Securities surrendered to the Trustee by the Company for cancellation and by the
principal amount of Funded Debt other than Debt Securities, voluntarily retired
by the Company, within 120 days after the effective date of the lease, provided
that no retirement may be effected by payment on the final maturity date or
pursuant to mandatory sinking fund or prepayment provisions. This restriction
does not apply, however, to the Company or any Significant Subsidiary: (i)
entering into any transaction not involving a lease with a term of more than
three (3) years; (ii) entering into any transaction to the extent the Lien on
any such property subject to such sale and leaseback would be permitted under
the covenant described above under "Limitation on Liens" or (iii) entering into
any transaction for the sale and leaseback of any property if such lease is
entered into within 180 days after the later of the acquisition, completion of
construction or commencement of operation of such property.
Leveraged Transactions. Except for the limitations on liens and
sale/leaseback transactions referred to above and on consolidations, mergers or
transfers of the Company's assets substantially as an entirety referred to
below, the Indentures and the terms of the Debt Securities do not contain any
covenants or other provisions designed to afford holders of any Debt Securities
protection in the event of a highly leveraged transaction involving the Company.
Applicability of Covenants. Any series of Securities may provide that
either or both of the covenants described above shall not be applicable to the
Securities of such series (Section 301).
9
<PAGE> 20
Certain Definitions. Certain terms are defined in the Indenture and are
used in this Prospectus as follows:
"Funded Debt" means all Indebtedness that will mature, pursuant to a
mandatory sinking fund or prepayment provision or otherwise, and all
installments of Indebtedness that will fall due, more than one year from the
date of determination. In calculating the maturity of any Indebtedness, there
shall be included the term of any unexercised right of the debtor to renew or
extend such Indebtedness existing at the time of determination.
"GAAP" means generally accepted accounting principles applied on a
consistent basis.
"Indebtedness" of any Person shall mean, as at any date of determination,
all indebtedness (including capitalized lease obligations) of such Person and
its consolidated subsidiaries at such date that would be required to be included
as a liability on a consolidated balance sheet (excluding the footnotes thereto)
of such Person prepared in accordance with GAAP.
"Lien" means, with respect to any asset of any Person, (i) any mortgage,
deed of trust, lien, pledge, encumbrance, charge or security interest in or on
such asset, (ii) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (iii) in the case of securities that constitute assets of such
Person, any purchase option, call or similar right of a third party with respect
to such securities.
"Permitted Receivables Program" means any receivables securitization
program pursuant to which the Company or any of the Subsidiaries sells accounts
receivable to any non-Affiliate in a "true sale" transaction; provided, however,
that any related indebtedness incurred to finance the purchase of such accounts
receivable is not includible on the balance sheet (excluding the footnotes
thereto) of the Company or any Subsidiary in accordance with GAAP and applicable
regulations of the Commission.
"Principal Property" means (i) the Company's principal office building and
(ii) any manufacturing plant or principal research facility of the Company or
any Significant Subsidiary which is located within the United States of America
or Canada, except any such principal office building, plant or facility which
the Board of Directors by resolution declares is not of material importance to
the total business conducted by the Company and its Subsidiaries as an entirety.
"Significant Subsidiary" means, at any time, any Subsidiary that would be a
"Significant Subsidiary" at such time, as such term is defined in Regulation S-X
promulgated by the Commission, as in effect on July 3, 1995.
"Stockholders' Equity" means, at any date of determination, the
stockholders' equity at such date of the Company and its Subsidiaries, as
determined in accordance with GAAP.
"Subsidiary" means any corporation, partnership, limited liability company,
joint venture, trust or unincorporated organization more than 50% of the
outstanding voting interest of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge into any other Person or
transfer or lease its assets substantially as an entirety to any Person unless
any successor or purchaser is a corporation organized under the laws of the
United States of America, any State or the District of Columbia, and any such
successor or purchaser expressly assumes the Company's obligations on the Debt
Securities under a supplemental indenture. The Trustee may receive an Opinion of
Counsel as conclusive evidence of compliance with these provisions (Article
Eight).
10
<PAGE> 21
CONVERSION RIGHTS
The terms, if any, on which Debt Securities of a series may be exchanged
for or converted into shares of Common Stock, Preferred Stock or any other
security, including the conversion price or exchange ratio (or the method of
calculating the same), the conversion or exchange period (or the method of
determining the same), whether conversion or exchange will be mandatory or at
the option of the holder or the Company, provisions for adjustment of the
conversion price or the exchange ratio and provisions affecting conversion or
exchange in the event of the redemption of such Debt Securities, will be set
forth in the Prospectus Supplement relating thereto.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in the form of one or more
Global Securities that will be deposited with a Depositary or its nominee
identified in the Applicable Prospectus Supplement. In such a case, one or more
Global Securities will be issued in a denomination or aggregate denominations
equal to the portion of the aggregate principal amount of Outstanding Debt
Securities of the series to be represented by such Global Security or
Securities. Unless and until it is exchanged in whole or in part for Debt
Securities in definitive registered form, a Global Security may not be
registered for transfer or exchange except as a whole by the Depositary for such
Global Security to a nominee for such Depositary and except in the circumstances
described in the Applicable Prospectus Supplement (Sections 204 and 305).
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Global Security
will be described in the Applicable Prospectus Supplement.
CONCERNING THE TRUSTEE
The Bank of New York is Trustee under the Indentures. The Trustee performs
services for the Company in the ordinary course of business.
DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
general terms and provisions of the Preferred Stock to which any Prospectus
Supplement may relate (the "Applicable Prospectus Supplement"). Certain other
terms of any series of the Preferred Stock offered by the Applicable Prospectus
Supplement will be described in the Applicable Prospectus Supplement. The
description of certain provisions of the Preferred Stock set forth below and in
any Prospectus Supplement does not purport to be complete and is subject to and
qualified in its entirety be reference to the Company's Restated Certificate of
Incorporation (the "Restated Certificate of Incorporation"), and the certificate
of designation (a "Certificate of Designation") relating to each series of the
Preferred Stock which will be filed with the Commission and incorporated by
reference in the Registration Statement of which this Prospectus is a part at or
prior to the time of the issuance of such series of the Preferred Stock.
GENERAL
The Company has authorized 3,000,000 shares of Serial Preferred Stock,
without par value, of which no shares are currently outstanding. The Board of
Directors has been authorized, subject to certain limitations set forth in the
Restated Certificate of Incorporation of the Company, to issue shares of Serial
Preferred Stock in one or more series, by resolution providing for the issuance
of such series, and to (i) fix the number of shares which will constitute such
series and the designation thereof, (ii) fix the stated value, if any, of such
series and the consideration for which shares of such series may be issued,
(iii) determine the voting rights of shares of such series, (iv) determine the
terms and conditions, if any, under which such series may be redeemable, (v)
determine whether shares of such series will be subject to the operation of a
retirement or sinking fund,
11
<PAGE> 22
(vi) determine the rate of any dividends payable with respect to shares of such
series and any preferences or relations to dividends payable with respect to
shares of other classes of the Company's capital stock, (vii) determine the
rights of shares of such series upon the dissolution of the Company, (viii)
determine if shares of such series are convertible into or exchangeable for
shares of another class or classes of capital stock of the Company and the rates
or prices at which shares of such series are convertible or exchangeable, and
(ix) determine such other preferences and relative, participating, optional or
other special rights and qualifications of shares of such series as are not
inconsistent with the terms of the Restated Certificate of Incorporation. To the
extent permitted by the resolutions of the Board of Directors authorizing any
such series of Preferred Stock, a duly authorized committee of the Board of
Directors may determine certain of the designations described above which are
made with respect to such series.
The Preferred Stock shall have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided in the Applicable
Prospectus Supplement relating to the particular series of the Preferred Stock
offered thereby for the specific terms of such series.
The Preferred Stock will, when issued, be fully paid and nonassessable and
will have no preemptive rights. The rights of the holders of each series of the
Preferred Stock will be subordinate to those of the Company's general creditors.
In the event that the Company issues any Preferred Stock pursuant to the
Applicable Prospectus Supplement, unless otherwise noted in the Applicable
Prospectus Supplement, State Street Bank and Trust Company of Boston,
Massachusetts will be the registrar and transfer agent for such Preferred Stock.
DIVIDEND RIGHTS
Holders of the Preferred Stock of each series will be entitled to receive,
when and as declared by the Board of Directors of the Company, out of funds of
the Company legally available therefor, cash dividends on such dates and at such
rates as are set forth in, or as are determined by the method described in, the
Applicable Prospectus Supplement. Each such dividend will be payable to the
holders of record as they appear on the stock books of the Company on such
record dates, fixed by the Board of Directors of the Company, as specified in
the Applicable Prospectus Supplement.
Such dividends may be cumulative or noncumulative, as provided in the
Applicable Prospectus Supplement. If the Board of Directors of the Company fails
to declare a dividend payable on a dividend payment date on any series of
Preferred Stock for which dividends are noncumulative, then the right to receive
a dividend in respect of the dividend period ending on such dividend payment
date will be lost, and the Company will have no obligation to pay any dividend
for such period, whether or not dividends on such series are declared payable on
any future dividend payment dates. Dividends on the shares of each series of
Preferred Stock for which dividends are cumulative will accrue from the date
fixed by the Board of Directors. Unless dividends on all outstanding shares of
series of Preferred Stock having cumulative dividend rights have been fully
paid, no dividend (other than stock dividends) may be paid on the Common Stock
or any other class of stock ranking junior to the Preferred Stock.
LIQUIDATION PREFERENCES
Unless otherwise specified in the Applicable Prospectus Supplement, in the
event of any liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, the holders of each series of the Preferred Stock will
be entitled to receive out of the assets of the Company available for
distribution to stockholders, before any distribution of assets is made to the
holders of Common Stock or any other shares of stock of the Company ranking
junior as to such distribution to such series of the Preferred Stock, the amount
(if any) set forth in the Applicable Prospectus Supplement, together with any
unpaid cumulative dividends. If, upon any voluntary or involuntary liquidation,
dissolution or winding up of the Company, the amounts payable with respect to
the Preferred Stock of any series are not paid in full, the holders of the
Preferred Stock of such series and of any other series of equal preference will
share ratably in any such distribution of assets of the Company in proportion to
the full respective preferential amounts to which they are entitled. After
payment to the holders of the Preferred Stock of each series that has a
liquidation preference of the full
12
<PAGE> 23
preferential amounts of the liquidating distribution to which they are entitled,
the holders of each such series of the Preferred Stock will be entitled to no
further participation in any distribution of assets by the Company. A
consolidation, merger or sale of all or substantially all of the assets of the
Company would not be considered a "liquidation" within the meaning of the
foregoing provisions.
REDEMPTION
A series of the Preferred Stock may be redeemable, in whole or from time to
time in part, at the option of the Company, and may be subject to mandatory
redemption pursuant to a sinking fund or otherwise, in each case upon terms, at
the time and at the redemption prices set forth in the Applicable Prospectus
Supplement. Shares of the Preferred Stock redeemed by the Company will be
restored to the status of authorized but unissued shares of Preferred Stock of
the Company.
CONVERSION AND EXCHANGE RIGHTS
The terms, if any, on which shares of Preferred Stock of any series may be
exchanged for or converted into shares of Common Stock, or another series of
Preferred Stock, or any other security will be set forth in the Applicable
Prospectus Supplement. Such terms may include provisions for conversion, either
mandatory, at the option of the holder, or at the option of the Company, in
which case the number of shares of Common Stock, the shares of another series of
Preferred Stock or the amount of any other securities to be received by the
holders of Preferred Stock would be calculated as of a time and in the manner
stated in the Applicable Prospectus Supplement.
VOTING
So long as there are any shares of Preferred Stock outstanding, the Company
would be prohibited, without the affirmative vote of at least two-thirds of the
outstanding Preferred Stock, from (i) authorizing a new class of stock which
ranks senior in the payment of dividends or in liquidation preference to the
Preferred Stock, or (ii) altering materially the rights of the Preferred Stock,
unless in either case provision is made for the redemption of all shares of
Preferred Stock at the time outstanding. So long as there are any shares of
Preferred Stock outstanding, without the affirmative vote of at least a majority
of the outstanding Preferred Stock, the Company would be prohibited from
authorizing any class of stock which ranks on a parity as to payment of
dividends or liquidation preference with the Preferred Stock, unless provision
is made for the redemption of all shares of Preferred Stock at the time
outstanding. If accrued dividends on any series of Preferred Stock have not been
paid or set aside in an amount equivalent to six quarterly dividends, the
holders of all outstanding shares of all series of Preferred Stock, voting
separately as a class, would be entitled to increase the number of directors of
the Company by two and elect the two additional directors. These directors would
serve until all accrued and unpaid dividends on all outstanding shares of
Preferred Stock had been paid or set aside in full. Except for the specific
voting rights summarized above in this paragraph, the holders of any series of
Preferred Stock would only have such voting rights as may be authorized by the
Board of Directors of the Company in establishing the terms of that series.
DESCRIPTION OF COMMON STOCK
COMMON STOCK
The Company's Restated Certificate of Incorporation authorizes the issuance
of 200,000,000 shares of Common Stock, par value $1.00 per share. As of May 28,
1995, there were 122,179,969 shares of Common Stock outstanding. Each
outstanding share of Common Stock includes a Right to purchase certain Preferred
Stock or other property, but these Rights will not be exercisable or evidenced
separately from the Common Stock prior to the occurrence of certain events, as
described below under "Description of the Common Stock -- Stockholder Rights
Plan."
Subject to the rights of the holders of any Preferred Stock, each holder of
Common Stock on the applicable record date is entitled to receive such dividends
as may be declared by the Board of Directors out of
13
<PAGE> 24
funds legally available therefor, and, in the event of liquidation, to share pro
rata in any distribution of the Company's assets after payment of liabilities.
Each holder of Common Stock is entitled to one vote for each share held of
record on the applicable record date on all matters presented to a vote of
stockholders. The outstanding Common Stock is fully paid and non-assessable.
State Street Bank and Trust Company of Boston, Massachusetts is the
registrar and transfer agent for the Common Stock.
CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND BYLAWS
The following summary of certain provisions of the Company's Restated
Certificate of Incorporation and Bylaws does not purport to be complete and is
subject to and qualified in its entirety by reference to the Restated
Certificate of Incorporation and the Bylaws which are incorporated by reference
as exhibits to the Registration Statement of which this Prospectus is a part.
Fair Price Provisions. The Company's Restated Certificate of Incorporation
requires approval by holders of at least 75% of the Company's outstanding voting
stock for mergers and certain other corporate transactions ("Business
Transactions") that involve a beneficial owner of (or person that has announced
an intention to acquire) 10% or more of the voting stock of the Company (a
"Related Person"), unless (i) the transaction has been approved by a majority of
certain directors ("Continuing Directors") who constitute a majority of the
entire Board of Directors of the Company at such time or (ii) certain fair price
criteria and procedural requirements are satisfied. These provisions of the
Restated Certificate of Incorporation may be amended or repealed only by the
vote of the holders of 75% or more of the voting stock of the Company, or by the
vote of holders of a simple majority of the voting stock of the Company if the
Board of Directors is composed entirely of Continuing Directors and unanimously
approves the amendment or repeal.
A "Continuing Director" is any member of the Board of Directors who is not
an affiliate or associate of the Related Person involved in a particular
Business Transaction and was or becomes a director prior to the time that the
Related Person became a Related Person, or is elected or recommended for
election by the stockholders by a majority of the then Continuing Directors.
The fair price criteria require that in the event of a Business Transaction
in which cash or other consideration would be paid to the Company's
stockholders, (i) the consideration to be received by the stockholders be either
cash or the same type of consideration used by the Related Person to acquire the
largest portion of such Related Person's shares, and (ii) the fair market value
of such consideration to be received per share of Common Stock be not less than
the highest per share price paid by the Related Person in acquiring any Common
Stock of the Company within two years before becoming and while a Related
Person, or if higher the per share price on the date of first public
announcement of the Business Transaction.
The fair price criteria also require that the aggregate amount of cash and
fair market value of other consideration to be received by holders of shares of
voting stock other than Common Stock shall be the higher of: (i) the highest per
share price paid by the Related Person in acquiring such voting stock within two
years before becoming and while a Related Person, or if higher the per share
price on the date of first public announcement of the Business Transaction and
(ii) the highest preferential liquidation amount per share to which such voting
shares are entitled.
The procedural requirements would not be satisfied if, (i) after a Related
Person became a 10% voting stockholder, the Related Person acquired additional
shares of voting stock of the Company, other than pursuant to a pro rata stock
split or dividend, (ii) before consummation of the Business Transaction, the
Related Person shall have received the benefit of any financial assistance or
tax advantage provided by the Company not shared proportionately with all other
stockholders, (iii) before consummation of the Business Transaction, the Related
Person causes a material change in the Company's business, capital structure or
dividend rates or policy, or (iv) the proposed Business Transaction shall not
have been described in a proxy statement mailed to the Company's stockholders no
later than 30 days prior to the consummation of such transaction, which proxy
statement must prominently set forth any statements any of the Continuing
Directors choose to make with respect to the advisability (or inadvisability) of
the proposed Business Transaction and, if
14
<PAGE> 25
deemed advisable by a majority of the Continuing Directors, the opinion of an
investment bank selected by a majority of the Continuing Directors as to the
fairness (or not) to the Company's stockholders of the proposed Business
Transaction.
Classification of Directors; Advance Notice of Nominations. The Company's
Restated Certificate of Incorporation and Bylaws provide that its Board of
Directors shall be divided into three classes, each class being as nearly equal
in number as possible, and that at each annual meeting of the Company's
stockholders, the successors to the Directors whose terms expire that year shall
be elected for a term of three years. Within the limit of not less than five nor
more than 15 Directors, the number of Directors is fixed by the Board of
Directors. Newly created Directorships and any vacancies on the Board of
Directors are filled by a majority vote of the remaining Directors then in
office, even if less than a quorum. Directors may be removed by the affirmative
vote of the holders of a majority of the outstanding voting shares of the
Company, but only for cause.
Any stockholder intending to nominate a person for election as Director at
a meeting of stockholders may do so only if written notice of the stockholder's
intent to make such nomination, including certain related information specified
in the Bylaws, is given to the Secretary of the Company not later than 90 days
or earlier than 120 days in advance of the annual meeting at which the
nomination is to be made (or in the case of a special meeting, not later than
the tenth day following the date on which notice of that meeting is first given
to stockholders).
STOCKHOLDER RIGHTS PLAN
On June 25, 1986 the Board of Directors of the Company adopted a
stockholder rights plan (which was amended with the approval of the Board of
Directors as of June 22, 1988) providing for a dividend of one Preferred Stock
Purchase Right for each outstanding share of Common Stock of the Company (the
"Rights"). The dividend was distributed on July 8, 1986 to stockholders of
record on that date. Holders of shares of Common Stock issued subsequent to that
date receive the Rights with their shares. The Rights trade automatically with
shares of Common Stock and become exercisable only under certain circumstances
as described below. The Rights are designed to protect the interests of the
Company and its stockholders against coercive takeover tactics. The purpose of
the Rights is to encourage potential acquirers to negotiate with the Company's
Board of Directors prior to attempting a takeover and to provide the Board with
leverage in negotiating on behalf of all stockholders the terms of any proposed
takeover. The Rights may have certain anti-takeover effects. The Rights should
not, however, interfere with any merger or other business combination approved
by the Board of Directors.
Until a Right is exercised, the holder of a Right, as such, will have no
rights as a stockholder of the Company including, without limitation, the right
to vote or receive dividends. Upon becoming exercisable, each Right will entitle
the holder thereof to purchase from the Company one one-hundredth of a share of
Series A Junior Participating Serial Preferred Stock at a purchase price of $180
per Right, subject to adjustment. In general, the Rights will become exercisable
upon the earlier of (i) ten days following a public announcement that a person
or group has acquired beneficial ownership of 20% or more of the Company's
outstanding Common Stock (the "Stock Acquisition Date") or (ii) ten business
days (or such later date as the Board of Directors may determine) after the
commencement of a tender offer or exchange offer that would result in a person
or group beneficially owning 25% or more of the Company's outstanding Common
Stock.
Generally, in the event that a person or group becomes the beneficial owner
of 25% or more of the Company's outstanding Common Stock (a "Flip-In Event"),
each Right, other than Rights owned by the acquirer, will thereafter entitle the
holder to receive, upon exercise of the Right, Common Stock having a value equal
to two times the exercise price of the Right. In the event that, at any time
after the Stock Acquisition Date, the Company is acquired in a merger or other
business combination transaction or more than 50% of the Company's assets or
earning power is sold or transferred (a "Flip-Over Event"), each Right, other
than Rights owned by the acquirer, will thereafter entitle the holder thereof to
receive, upon the exercise of the Right, common stock of the acquirer having a
value equal to two times the exercise price of the Right.
15
<PAGE> 26
The Rights are redeemable by the Corporation at $.05 per Right (payable in
cash, shares of Common Stock or any other form of consideration, as deemed
appropriate by the Board of Directors) at any time prior to ten days after the
Stock Acquisition Date (or after that time if no Flip-In Event or Flip-Over
Event has occurred, the person or group that caused the Stock Acquisition Date
has reduced its ownership of Common Stock, in transactions not directly or
indirectly involving the Company, to 10% or less of the outstanding Common Stock
and there is not then any other person or group beneficially owning 20% or more
of the outstanding Common Stock). The Rights will expire at the close of
business on July 8, 1996, unless earlier redeemed.
The foregoing description of the Rights does not purport to be complete and
is qualified in its entirety by the description of the Rights contained in the
Rights Agreement, dated as of June 25, 1986, and amended as of June 22, 1988,
between the Company and The First National Bank of Boston, as Rights Agent,
which is incorporated herein by reference to the Company's Registration
Statement on Form 8-A filed on July 3, 1986 and amended on June 28, 1988.
CERTAIN ANTI-TAKEOVER PROVISIONS OF DELAWARE LAW
The Company is a Delaware corporation and is subject to Section 203 of the
Delaware General Corporation Law. In general, Section 203 prevents an
"interested stockholder" (defined generally as a person owning 15% or more of
the Company's outstanding voting stock) from engaging in a "business
combination" (as defined in Section 203) with the Company (or its majority-owned
subsidiaries) for three years following the date such person became an
interested stockholder unless: (i) before such person became an interested
stockholder, the Company's Board of Directors approved the transaction in which
the interested stockholder became an interested stockholder or approved the
business combination; (ii) upon consummation of the transaction that resulted in
the interested stockholder becoming an interested stockholder, the interested
stockholder owns at least 85% of the Company's voting stock outstanding at the
time the transaction commenced (excluding stock held by directors who are also
officers of the Company and by employee stock plans that do not provide
employees with the rights to determine confidentially whether shares held
subject to the plan will be tendered in a tender or exchange offer); or (iii)
following the transaction in which such person became an interested stockholder,
the business combination is approved by the Company's Board of Directors and
approved at a meeting of stockholders by the affirmative vote of the holders of
at least two-thirds of the Company's outstanding voting stock not owned by the
interested stockholder. Under Section 203, the restrictions described above also
do not apply to certain business combinations proposed by an interested
stockholder following the earlier of the announcement or notification of one of
certain extraordinary transactions involving the Company and a Person who had
not been an interested stockholder during the previous three years or who became
an interested stockholder with the approval of a majority of the Company's
directors, if such extraordinary transaction is approved or not opposed by a
majority of the directors who were directors prior to any person becoming an
interested stockholder during the previous three years or were recommended for
election or elected to succeed such directors by a majority of such directors.
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities in or outside the United States
through underwriters or dealers, directly to one or more purchasers, or through
agents. The Prospectus Supplement with respect to the Offered Securities will
set forth the terms of the offering of the Offered Securities, including the
name or names of any underwriters, dealers, or agents, the purchase price of the
Offered Securities and the proceeds to the Company from such sale, any delayed
delivery arrangements, any underwriting discounts and other items constituting
underwriters' compensation, the initial public offering price, any discounts or
concessions allowed or re-allowed or paid to dealers, and any securities
exchanges on which the Offered Securities may be listed.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Offered Securities may be offered to the public either through underwriting
syndicates represented by one or more
16
<PAGE> 27
managing underwriters or directly by one or more firms acting as underwriters.
The underwriter or underwriters with respect to a particular underwritten
offering of Offered Securities will be named in the Prospectus Supplement
relating to such offering, and if an underwriting syndicate is used, the
managing underwriter or underwriters will be set forth on the cover of such
Prospectus Supplement. Unless otherwise set forth in the Prospectus Supplement
relating thereto, the obligations of the underwriters or agents to purchase the
Offered Securities will be subject to conditions precedent, and the underwriters
will be obligated to purchase all the Offered Securities if any are purchased.
The initial public offering price and any discounts or concessions allowed or
re-allowed or paid to dealers may be changed from time to time.
If dealers are used in the sale of Offered Securities with respect to which
this Prospectus is delivered, the Company will sell such Offered Securities to
the dealers as principals. The dealers may then resell such Offered Securities
to the public at varying prices to be determined by such dealers at the time of
resale. The names of the dealers and the terms of the transaction will be set
forth in the Prospectus Supplement relating thereto.
Offered Securities may be sold directly by the Company or through agents
designated by the Company from time to time at fixed prices, which may be
changed, or at varying prices determined at the time of sale. Any agent involved
in the offer or sale of the Offered Securities with respect to which this
Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement relating
thereto. Unless otherwise indicated in the Prospectus Supplement, any such agent
will be acting on a best efforts basis for the period of its appointment.
Offered Securities may be sold directly by the Company to institutional
investors or others, who may be deemed to be underwriters within the meaning of
the Securities Act with respect to any resale thereof. The terms of any such
sales will be described in the Applicable Prospectus Supplement.
In connection with the sale of the Offered Securities, underwriters or
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, agents and dealers participating in the
distribution of the Offered Securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Company and any profit on the
resale of the Offered Securities by them may be deemed to be underwriting
discounts or commissions under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers from certain types of
institutions to purchase Offered Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject only to those conditions set forth in the
Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Agents, dealers and underwriters may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments that such agents, dealers, or underwriters may be
required to make with respect thereto. Agents, dealers, and underwriters may be
customers of, engage in transactions with, or perform services for the Company
in the ordinary course of business.
Some or all of the Offered Securities may be new issues of securities with
no established trading market. Any underwriters to whom Offered Securities are
sold by the Company for public offering and sale may make a market in such
Offered Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of or the trading markets for any Offered Securities.
Certain of the underwriters, dealers or agents and their affiliates may be
customers of, engage in transactions with, and perform services for, the Company
in the ordinary course of business.
17
<PAGE> 28
VALIDITY OF OFFERED SECURITIES
The validity of the Offered Securities will be passed upon for the Company
by Sally F. Cloyd, Assistant General Counsel of the Company, and for any
underwriters by Cravath, Swaine & Moore of New York City. As of the date of this
Prospectus, Ms. Cloyd holds 100 shares and options to acquire 5,600 shares of
Common Stock of the Company.
EXPERTS
The consolidated balance sheets of Raytheon Company as of December 31, 1994
and 1993 and the related statements of income, stockholders' equity and cash
flows for each of the three years in the period ended December 31, 1994 and the
related financial statement schedules, incorporated by reference in this
Prospectus, have been incorporated herein in reliance on the reports of Coopers
& Lybrand L.L.P., independent accountants, given on the authority of that firm
as experts in accounting and auditing. The consolidated financial statements of
E-Systems, Inc. as of December 31, 1994 and 1993 and for the three years ended
December 31, 1994, incorporated by reference in this Prospectus, have been
incorporated herein in reliance on the reports of Ernst & Young LLP, independent
auditors, given on the authority of that firm as experts in accounting and
auditing.
18
<PAGE> 29
- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY RAYTHEON OR
ANY UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF RAYTHEON SINCE SUCH DATE.
------------------
<TABLE>
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<CAPTION>
PAGE
----
<S> <C>
The Company................................ S-2
Recent Acquisition......................... S-4
Use of Proceeds............................ S-5
Capitalization............................. S-5
Selected Financial Data.................... S-6
Description of the Securities.............. S-7
Underwriting............................... S-9
Notice to Canadian Residents............... S-10
PROSPECTUS
Available Information...................... 2
Incorporation of Certain Documents by
Reference................................ 2
The Company................................ 3
Use of Proceeds............................ 3
Ratio of Earnings to Fixed Charges......... 3
Description of Debt Securities............. 3
Description of Preferred Stock............. 11
Description of Common Stock................ 13
Plan of Distribution....................... 16
Validity of Offered Securities............. 18
Experts.................................... 18
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
$750,000,000
[RAYTHEON LOGO]
$500,000,000
% Notes Due , 2005
$250,000,000
% Debentures Due , 2025
PROSPECTUS SUPPLEMENT
CS First Boston
Bear, Stearns & Co. Inc
Goldman, Sachs & Co.
J.P. Morgan Securitiesies Inc.
Merrill Lynch & Co.
Morgan Stanley & Co.
Incorporated
- ------------------------------------------------------
[RECYCLED LOGO] Printed on Recycled Paper
