<PAGE>
FILED PURSUANT TO RULE 424(b)(2)
REGISTRATION NO.'S 333-70273
333-70273-01
333-50835 AND
333-50835-01
PROSPECTUS SUPPLEMENT
(To Prospectus dated May 1, 1998)
[LOGO]
TYCO INTERNATIONAL GROUP S.A.
$400,000,000 6 1/8% NOTES DUE 2009
ISSUE PRICE: 99.058%
$800,000,000 6 7/8% NOTES DUE 2029
ISSUE PRICE: 98.378%
INTEREST PAYABLE JANUARY 15 AND JULY 15
FULLY AND UNCONDITIONALLY GUARANTEED BY
TYCO INTERNATIONAL LTD.
The 6 1/8% Notes due 2009 will mature on January 15, 2009 and the 6 7/8% Notes
due 2029 will mature on January 15, 2029. Interest will accrue from January 12,
1999. Tyco International Group S.A. may redeem the Notes in whole or in part at
any time at the greater of their principal amount or the discounted present
value of the remaining scheduled payments of principal and interest plus accrued
and unpaid interest, as described on page S-12. In addition, if certain changes
to Luxembourg or Bermuda withholding taxes occur, Tyco International Group S.A.
may redeem all of the Notes. The Notes will be issued in minimum denominations
of $1,000 increased in multiples of $1,000.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this Prospectus Supplement or the Prospectus. Any
representation to the contrary is a criminal offense.
<TABLE>
<S> <C> <C> <C>
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS THE COMPANY
Per 2009 Note 99.058% .650% 98.408%
Total $396,232,000 $2,600,000 $393,632,000
Per 2029 Note 98.378% .875% 97.503%
Total $787,024,000 $7,000,000 $780,024,000
</TABLE>
The Notes will not be listed on any national securities exchange. Currently,
there is no public market for the Notes.
It is expected that delivery of the Notes will be made to investors on or about
January 12, 1999.
J.P. MORGAN & CO.
ABN AMRO
INCORPORATED
BT ALEX.BROWN
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON
FIRST UNION CAPITAL
MARKETS
HSBC MARKETS
NATIONSBANC MONTGOMERY SECURITIES
LLC
SALOMON SMITH BARNEY
<PAGE>
COMMERZBANK CAPITAL MARKETS
CORPORATION
CREDIT LYONNAIS SECURITIES
FIRST CHICAGO CAPITAL MARKETS,
INC.
MCDONALD INVESTMENTS
A KEYCORP COMPANY
SCOTIA CAPITAL MARKETS (USA) INC.
January 7, 1999
<PAGE>
No person is authorized to give any information or to make any representations
other than those contained or incorporated by reference in this Prospectus
Supplement or the Prospectus, and, if given or made, such information or
representations must not be relied upon as having been authorized. This
Prospectus Supplement and the Prospectus do not constitute an offer to sell or
the solicitation of an offer to buy any securities other than the securities
described in this Prospectus Supplement or an offer to sell or the solicitation
of an offer to buy such securities in any circumstances in which such offer or
solicitation is unlawful. Neither the delivery of this Prospectus Supplement or
the Prospectus, nor any sale made hereunder and thereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of Tyco International Group S.A. (the "Company") or Tyco International
Ltd. ("Tyco") since the date hereof or that information contained or
incorporated by reference herein or therein is correct as of any time subsequent
to the date of such information.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Forward Looking Information............................................... S-3
Where Can You Find More Information....................................... S-3
Tyco...................................................................... S-4
The Company............................................................... S-4
Current Developments...................................................... S-4
Use of Proceeds........................................................... S-6
Ratio of Earnings to Fixed Charges of Tyco................................ S-6
Capitalization of Tyco.................................................... S-8
Selected Supplemental Consolidated Financial Data of Tyco................. S-9
Description of the Notes.................................................. S-11
Certain Luxembourg, Bermuda and United States Federal Income Tax
Consequences............................................................ S-15
Underwriting.............................................................. S-17
Legal Matters............................................................. S-18
Experts................................................................... S-18
</TABLE>
PROSPECTUS
<TABLE>
<S> <C>
Available Information..................................................... 2
Incorporation of Certain Information by Reference......................... 2
Tyco International Ltd.................................................... 3
The Company............................................................... 3
Enforcement of Civil Liabilities.......................................... 4
Use of Proceeds........................................................... 4
Ratio of Earnings to Fixed Charges of Tyco................................ 4
Description of the Debt Securities and the Guarantees..................... 6
Plan of Distribution...................................................... 19
Legal Matters............................................................. 20
Experts................................................................... 20
</TABLE>
S-2
<PAGE>
FORWARD LOOKING INFORMATION
Certain statements contained or incorporated by reference in this Prospectus
Supplement or the Prospectus are "forward looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. All forward looking
statements involve risks and uncertainties. In particular, any statement
contained in this Prospectus Supplement, the Prospectus or any document
incorporated by reference in the Prospectus, regarding the consummation and
benefits of future acquisitions, as well as expectations with respect to future
sales, operating efficiencies and product expansion, are subject to known and
unknown risks, uncertainties and contingencies, many of which are beyond the
control of the Company and/or Tyco, which may cause actual results, performance
or achievements to differ materially from anticipated results, performances or
achievements. Factors that might affect such forward looking statements include,
among other things, overall economic and business conditions; the demand for the
goods and services of the Company and Tyco; competitive factors in the
industries in which the Company and Tyco compete; changes in government
regulation; changes in tax requirements (including tax rate changes, new tax
laws and revised tax law interpretations); interest rate fluctuations and other
capital market conditions, including foreign currency rate fluctuations;
economic and political conditions in international markets, including
governmental changes and restrictions on the ability to transfer capital across
borders; the ability to achieve anticipated synergies and other costs savings in
connection with acquisitions; the timing, impact and other uncertainties of
future acquisitions; and the ability of the Company and Tyco, and their
customers and suppliers, to replace, modify or upgrade computer programs in
order to adequately address the Year 2000 issue.
WHERE YOU CAN FIND MORE INFORMATION
Tyco files annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. These filings are
available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document filed by Tyco or the
Company with the SEC at the SEC's public reference rooms in Washington, D.C.,
New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330
for further information of the public reference rooms and their copy charges.
Tyco's common shares are listed on the New York Stock Exchange, as well as on
the London and Bermuda Stock Exchanges. You can obtain information about Tyco
from the New York Stock Exchange at 20 Broad Street, New York, New York 10005.
The Prospectus "incorporates by reference" information filed or to be filed by
Tyco with the SEC. The information incorporated by reference is an important
part of the Prospectus. The following documents that have been filed with the
SEC, as well as all other documents filed by Tyco with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended,
after the date of this Prospectus Supplement and prior to the closing of this
Offering, are incorporated by reference into the Prospectus:
1. Tyco's Annual Report on Form 10-K for the fiscal year ended September 30,
1998.
2. Tyco's Current Report on Form 8-K filed December 10, 1998.
3. Tyco's Current Report on Form 8-K/A filed December 11, 1998.
S-3
<PAGE>
TYCO
Tyco is a diversified manufacturing and service company that, through its
subsidiaries:
- - designs, manufactures and distributes electrical and electronic components and
designs, manufactures, installs and services undersea cable communication
systems;
- - designs, manufactures and distributes disposable medical supplies and other
specialty products, and conducts vehicle auctions and related services;
- - designs, manufactures, installs and services fire detection and suppression
systems and installs, monitors and maintains electronic security systems; and
- - designs, manufactures and distributes flow control products.
Tyco's strategy is to be the low-cost, high quality producer and provider in
each of its markets. It promotes its leadership position by investing in
existing businesses, developing new markets and acquiring complementary
businesses and products. Combining the strengths of its existing operations and
its business acquisitions, Tyco seeks to enhance shareholder value through
increased earnings per share and strong cash flows.
On July 2, 1997, a wholly-owned subsidiary of what was formerly called ADT
Limited merged with Tyco International Ltd., a Massachusetts corporation
("Former Tyco"). Upon consummation of the merger, ADT (the continuing public
company) changed its name to Tyco International Ltd.
Tyco's registered and principal executive offices are located at The Gibbons
Building, 10 Queen Street, Suite 301, Hamilton HM 11, Bermuda, and its telephone
number is (441) 292-8674. The executive offices of Tyco's principal United
States subsidiary, Tyco International (US) Inc., are located at One Tyco Park,
Exeter, New Hampshire 03833, and its telephone number is (603) 778-9700.
THE COMPANY
The Company, Tyco International Group S.A., is a Luxembourg company and a
wholly-owned subsidiary of Tyco. The registered and principal offices of the
Company are located at 6, avenue Emile Reuter, 2nd Floor, L-2420 Luxembourg, and
its telephone number is (352) 46 43 40-1. Through its subsidiaries, the Company
owns substantially all of the assets, and engages in substantially all of the
businesses, owned or engaged in by Tyco.
CURRENT DEVELOPMENTS
PENDING ACQUISITION OF AMP
On November 22, 1998, a subsidiary of Tyco entered into a definitive merger
agreement for the acquisition of AMP Incorporated. It is estimated that Tyco
will issue up to approximately 186.0 million common shares for delivery by its
subsidiary to the former shareholders of AMP in the merger. AMP designs,
manufactures and markets electronic, electrical and electro-optic connection
devices and associated application tools and machines. AMP had annual revenues
of approximately $5.7 billion in 1997. At September 30, 1998, AMP's total cash
and cash equivalents was approximately $236 million, its total debt was
approximately $630 million (including long-term debt of approximately $170
million) and its shareholders' equity was approximately $2.8 billion.
The acquisition of AMP, which will be accounted for as a pooling of interests,
has been structured so that AMP shareholders will receive for each of their
shares of AMP common stock a fraction of a Tyco common share valued between
$51.00 and $55.95. The fraction will be determined based on the average of the
daily weighted averages of the trading price of Tyco common shares on the New
York Stock Exchange over the 15 consecutive trading days ending four trading
days prior to the date of the special meeting of AMP shareholders to vote on the
merger. This average is referred to as the "Average Stock Price."
S-4
<PAGE>
- - If the Average Stock Price is equal to or greater than $67.00 but less than or
equal to $73.50, the exchange ratio will be 0.7612 Tyco common shares for each
share of AMP common stock, corresponding to a value of between $51.00 (0.7612
X $67.00) and $55.95 (0.7612 X $73.50).
- - If the Average Stock Price is greater than $73.50, the exchange ratio will be
reduced, so that the product of the exchange ratio and the Average Stock Price
is $55.95 (i.e., AMP shareholders will receive $55.95 in value (based upon the
Average Stock Price) of Tyco common shares for each share of AMP common
stock).
- - If the Average Stock Price is equal to or greater than $60.00 but less than
$67.00, the exchange ratio will be increased, so that the product of the
exchange ratio and the Average Stock Price is $51.00 (i.e., AMP shareholders
will receive $51.00 in value (based upon the Average Stock Price) of Tyco
common shares for each share of AMP common stock).
- - If the Average Stock Price is less than $60.00, the exchange ratio will be
increased, so that the product of the exchange ratio and the Average Stock
Price remains $51.00 (i.e., AMP shareholders will receive $51.00 in value
(based upon the Average Stock Price) of Tyco common shares for each share of
AMP stock). In this case, Tyco may call off the merger unless AMP agrees to an
exchange ratio equal to 0.8500. If AMP so agrees, AMP shareholders will
receive Tyco shares with a value (based on the Average Stock Price) of less
than $51.00.
Tyco has identified certain risks in connection with the AMP acquisition,
including:
- - Tyco believes that the AMP acquisition will be immediately accretive to
earnings per share based on the implementation by AMP of its profit
improvement plan, the achievement of additional cost savings and the
realization of other synergistic benefits. While Tyco believes that such
benefits are realizable, the timing for realization of these benefits, as well
as the amounts thereof, may be affected by factors beyond the control of Tyco
and AMP.
- - The anticipated benefits of the AMP acquisition to Tyco and its shareholders
include the realization of synergies and cost savings expected to be achieved
following the acquisition through the combination of the businesses of Tyco
and AMP. In this regard, Tyco expects to enhance and accelerate AMP's profit
improvement plan, based upon Tyco's experiences with prior acquisitions.
Tyco's ability to achieve these objectives and to realize the anticipated
benefits of the merger will depend in large measure on the ability of Tyco to
integrate AMP's business and operations with Tyco's Electric and Electronic
Components group following the AMP acquisition and to adapt AMP to Tyco's
management culture. Although Tyco has been successful in the past in
integrating its acquired businesses with its existing operations, AMP is
substantially larger than any of Tyco's prior acquisitions. Tyco could
encounter unexpected difficulties in integrating AMP's business, which would
reduce or eliminate anticipated benefits of the AMP acquisition.
- - AMP services segments of the electrical, electronic and electro-optical device
industries that have been adversely affected by the current economic downturn
in Asia and other parts of the world. The effects of this downturn on AMP have
been more pronounced than on the businesses of Tyco generally, in part because
of the lesser dependence of Tyco's Electrical and Electronic Components group
on Asian business and in part because of the diversified nature of Tyco's
other businesses. Tyco is unable to predict how long the economic disruptions
in Asia will persist. In addition, the effects of these disruptions on the
business of AMP following the AMP acquisition could be greater than
anticipated.
A restructuring charge to Tyco's operations is expected to be recognized in
connection with the AMP acquisition to reflect the combination of Tyco and AMP.
Such charge, which has yet to be estimated, may include amounts with respect to
the elimination of excess facilities, the write-off of certain goodwill and
fixed assets, severance costs and the satisfaction of certain liabilities. In
addition, AMP has indicated that, during the fourth quarter of 1998, it will
take a restructuring charge to complete the implementation of its profit
improvement plan.
The consummation of the AMP transaction is contingent upon customary regulatory
review, approval by the AMP shareholders of the merger, approval by the Tyco
shareholders of the issuance of the Tyco common shares to be
S-5
<PAGE>
delivered in connection with the merger and certain other conditions. There is
no assurance that the AMP acquisition will be consummated.
AMP is subject to the informational requirements of the Securities Exchange Act
of 1934, as amended, and in accordance with the Exchange Act, files reports,
proxy statements and other information with the SEC. Tyco has filed a
registration statement on Form S-4 with the SEC in respect of the AMP
acquisition, which has not yet been declared effective by the SEC.
ACQUISITION OF US SURGICAL
On October 1, 1998, Tyco acquired United States Surgical Corporation, which
manufactures and markets surgical wound closure products and other advanced
surgical products. Following the acquisition, Tyco's financial statements were
restated pursuant to the pooling of interests method of accounting which
combines the results of operations and financial condition of Tyco and US
Surgical for all relevant periods. The financial information for Tyco presented
in this Prospectus Supplement reflects this restatement.
USE OF PROCEEDS
The Company estimates that the net proceeds from the sale of the Notes, after
deducting the Underwriters' discount and offering expenses, will be
approximately $1,173.5 million. Such proceeds are expected to be used to repay
borrowings under the Company's $2.25 billion bank credit agreement. As of
January 5, 1999, there was $2.16 billion outstanding under the bank credit
agreement, bearing interest at a weighted average rate of 5.86% per annum and
having current maturities of beyond one year. The bank credit agreement permits
the Company to borrow up to $2.25 billion until February 12, 2000 and thereafter
up to $0.50 billion until February 12, 2003. The borrowings under this facility
were primarily incurred in connection with certain business acquisitions in
fiscal 1998, including, among others, the Wells Fargo Alarm business of
Borg-Warner Security Corporation, Sigma Circuits Inc., Rust Environmental and
Infrastructure, Inc. and CIPE S.A.; a final payment for the acquisition of Tyco
Submarine Systems Ltd.; repayment of US Surgical's committed credit facilities;
and the acquisition of Graphic Controls Corporation in November 1998. Affiliates
of certain of the Underwriters are lenders under the bank credit agreement and
will receive a significant portion of the net proceeds of the Offering. For more
information, see "Capitalization of Tyco" and "Underwriting."
RATIO OF EARNINGS TO FIXED CHARGES OF TYCO
The following table sets forth the ratio of earnings to fixed charges of Tyco
for the fiscal year ended September 30, 1998, the nine month transition period
ended September 30, 1997 and the years ended December 31, 1996, 1995 and 1994.
<TABLE>
<CAPTION>
NINE MONTHS YEAR ENDED
YEAR ENDED ENDED DECEMBER 31,
SEPTEMBER 30, SEPTEMBER 30, ------------------------
1998(3) 1997(3) 1996 1995
----------------- ------------------- ----------- -----------
<S> <C> <C> <C> <C>
Ratio of earnings to fixed charges(1)(2)................. 4.96 (4) 1.29(4) 3.08
<CAPTION>
1994
-----------
<S> <C>
Ratio of earnings to fixed charges(1)(2)................. 3.21
</TABLE>
- ------------------------
(1) For purposes of determining the ratio of earnings to fixed charges, earnings
consist of income (loss) before income taxes and extraordinary items, and
fixed charges. Fixed charges consist of interest on indebtedness,
amortization of debt expenses and one-third of rent expense which is deemed
representative of an interest factor.
(2) On July 2, 1997, a wholly-owned subsidiary of Tyco merged with Former Tyco.
On August 27, 1997, Tyco consummated a merger with INBRAND Corporation, on
August 29, 1997, Tyco consummated a merger with Keystone International, Inc.
and on October 1, 1998, Tyco consummated a merger with US Surgical. Each of
the four merger transactions qualifies for the pooling of interests method
of accounting. As such, the ratio of earnings to fixed charges for the year
ended September 30, 1998, the nine months ended September 30,
S-6
<PAGE>
1997 and the years ended December 31, 1996, 1995 and 1994 include the effect
of the mergers, except that the calculation presented above for periods
prior to January 1, 1997 does not include INBRAND due to immateriality.
Prior to their respective mergers, ADT, Keystone and US Surgical had calendar
year ends and Former Tyco had a June 30 fiscal year end. The historical
results upon which the ratios are based have been combined using a calendar
year end for ADT, Keystone, US Surgical and Former Tyco for the year ended
December 31, 1996. For 1995 and 1994, the ratio of earnings to fixed charges
reflects the combination of ADT, Keystone and US Surgical with a calendar
year end and Former Tyco with a June 30 fiscal year end.
(3) In September 1997, Tyco changed its fiscal year end from December 31 to
September 30. Accordingly, the nine-month transition period ended September
30, 1997 and the year ended September 30, 1998 are presented.
(4) Earnings were insufficient to cover fixed charges by $489.6 million in the
nine months ended September 30, 1997.
Earnings for the nine months ended September 30, 1997 and the year ended
December 31, 1996 include merger, restructuring and other non-recurring
charges of $947.9 million and $246.1 million, respectively. Earnings also
include a charge for the impairment of long-lived assets of $148.4 million
and $744.7 million, respectively, in the 1997 and 1996 periods. The 1997
period also includes a write-off of purchased in-process research and
development of $361.0 million.
On a pro forma basis, the ratio of earnings to fixed charges excluding
merger, restructuring and other non-recurring charges, charge for the
impairment of long-lived assets and write-off of purchased in-process
research and development would have been 5.71x and 4.82x for the nine months
ended September 30, 1997 and year ended December 31, 1996, respectively.
S-7
<PAGE>
CAPITALIZATION OF TYCO
The following table sets forth the consolidated capitalization of Tyco (i) on an
actual basis as of September 30, 1998, (ii) on a pro forma basis to give effect
to the October 1998 issuance of the Company's private placement notes due 2004
and 2008, the assumption of certain outstanding debt in connection with the
acquisition of Graphic Controls in November 1998 and increases in amounts
outstanding under the Company's bank credit agreement and uncommitted lines of
credit through January 5, 1999 in connection with certain business acquisitions,
including, among others, Graphic Controls and repayment of amounts outstanding
under the Company's bank credit facilities and (iii) as adjusted to give effect
to the issuance of the Notes and the application of the net proceeds thereof.
This table should be read in conjunction with the supplemental consolidated
financial statements of Tyco and the related notes included in Tyco's Current
Report on Form 8-K filed on December 10, 1998 incorporated by reference into the
Prospectus. See "Where You Can Find More Information" and "Use of Proceeds."
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
-----------------------------------
ACTUAL PRO FORMA AS ADJUSTED
---------- ---------- -----------
<S> <C> <C> <C>
(IN MILLIONS, EXCEPT SHARE DATA)
Current portion of long-term debt:.................................................. $ 355.9 $ 485.9 $ 485.9
---------- ---------- -----------
---------- ---------- -----------
Long-term debt:
Bank and acceptance facilities.................................................... $ 0.8 $ 0.8 $ 0.8
Bank credit agreement............................................................. 1,359.0 2,162.0 988.4
Bank credit facilities............................................................ 206.9 20.5 20.5
Uncommitted lines of credit....................................................... -- 130.0 130.0
8.125% public notes due 1999...................................................... 10.5 10.5 10.5
8.25% senior notes due 2000....................................................... 9.5 9.5 9.5
6.5% public notes due 2001........................................................ 299.0 299.0 299.0
6.125% public notes due 2001...................................................... 747.0 747.0 747.0
9.25% senior subordinated notes due 2003.......................................... 14.1 14.1 14.1
5.875% private placement notes due 2004........................................... -- 397.3 397.3
6.375% public notes due 2004...................................................... 104.6 104.6 104.6
6.375% public notes due 2005...................................................... 742.6 742.6 742.6
12.0% notes due 2005--Graphic Controls............................................ -- 75.0 75.0
6.125% private placement notes due 2008........................................... -- 394.4 394.4
7.25% senior notes due 2008....................................................... 300.0 300.0 300.0
Zero coupon Liquid Yield Option Notes due 2010.................................... 115.3 115.3 115.3
6.25% public Dealer remarketable securities(SM) ("Drs.(SM)") due 2013*............ 762.8 762.8 762.8
9.5% public debentures due 2022................................................... 49.0 49.0 49.0
8.0% public debentures due 2023................................................... 50.0 50.0 50.0
7.0% public notes due 2028........................................................ 492.1 492.1 492.1
Financing lease obligation........................................................ 76.5 76.5 76.5
6.125% Notes due 2009............................................................. -- -- 393.6
6.875% Notes due 2029............................................................. -- -- 780.0
Other............................................................................. 270.5 270.5 270.5
---------- ---------- -----------
Total debt...................................................................... 5,610.2 7,223.5 7,223.5
Less current portion............................................................ 355.9 485.9 485.9
---------- ---------- -----------
Total long-term debt............................................................ 5,254.3 6,737.6 6,737.6
---------- ---------- -----------
Shareholders' equity:
Common shares, $0.20 par value, 1,503,750,000 shares authorized; 645,883,118 shares
outstanding, net of 3,371,003 shares owned by subsidiaries........................ 129.2 129.2 129.2
Capital in excess:
Share premium..................................................................... 4,032.8 4,032.8 4,032.8
Contributed surplus, net of deferred compensation of $46.3........................ 2,850.5 2,850.5 2,850.5
Currency translation adjustment..................................................... (212.9) (212.9) (212.9)
Accumulated earnings................................................................ 400.0 400.0 400.0
---------- ---------- -----------
Total shareholders' equity...................................................... 7,199.6 7,199.6 7,199.6
---------- ---------- -----------
Total capitalization................................................................ $ 12,453.9 $ 13,937.2 $13,937.2
---------- ---------- -----------
---------- ---------- -----------
</TABLE>
- ------------------------------
* "Dealer remarketable securities(SM)" and "Drs.(SM)" are service marks of
J.P. Morgan Securities Inc.
S-8
<PAGE>
SELECTED SUPPLEMENTAL CONSOLIDATED FINANCIAL DATA OF TYCO
The following information is only a summary and has been derived from Tyco's
audited supplemental consolidated financial statements for the fiscal year ended
September 30, 1998, the nine months ended September 30, 1997 and the year ended
December 31, 1996. The information should be read in conjunction with the
financial statements and related notes contained in the annual, quarterly and
other reports filed by Tyco with the SEC. See "Where to Find More Information."
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED YEAR ENDED
SEPTEMBER SEPTEMBER DECEMBER
30, 30, 31,
1998(1) 1997(1) 1996(2)
----------- ------------ -----------
<S> <C> <C> <C>
(DOLLARS IN MILLIONS, EXCEPT PER SHARE
AMOUNTS)
CONSOLIDATED STATEMENTS OF OPERATIONS DATA:
Net sales................................................................. $13,537.2 $ 8,457.8 $ 9,216.4
Cost of sales............................................................. 8,621.1 5,455.2 5,935.8
Selling, general and administrative expenses.............................. 3,198.4 1,921.3 2,157.9
Merger, restructuring and other non-recurring charges..................... 92.5 947.9 246.1
Charge for the impairment of long-lived assets............................ -- 148.4 744.7
Write-off of purchased in-process research and
development............................................................. -- 361.0 --
----------- ------------ -----------
Operating income (loss)(3)(4)(5).......................................... 1,625.2 (376.0) 131.9
Interest income........................................................... 38.9 31.2 36.5
Interest expense.......................................................... (270.1) (144.8) (207.3)
Other income less expenses................................................ -- -- 119.4
----------- ------------ -----------
Income (loss) before income taxes and extraordinary items................. 1,394.0 (489.6) 80.5
Income taxes.............................................................. (428.9) (208.1) (268.1)
----------- ------------ -----------
Income (loss) before extraordinary items.................................. 965.1 (697.7) (187.6)
Extraordinary items, net of taxes......................................... (2.4) (58.3) (8.4)
----------- ------------ -----------
Net income (loss)......................................................... 962.7 (756.0) (196.0)
Dividends on preference shares............................................ -- (4.7) (19.8)
----------- ------------ -----------
Net income (loss) available to common shareholders........................ $ 962.7 $ (760.7) $ (215.8)
----------- ------------ -----------
----------- ------------ -----------
BASIC EARNINGS (LOSS) PER COMMON SHARE(6):
Income (loss) before extraordinary items.................................. $ 1.54 $ (1.23) $ (0.40)
Extraordinary items, net of taxes......................................... -- (0.10) (0.02)
Net income (loss) per common share........................................ 1.54 (1.33) (0.41)
DILUTED EARNINGS (LOSS) PER COMMON SHARE(6):
Income (loss) before extraordinary items.................................. $ 1.50 $ (1.23) $ (0.40)
Extraordinary items, net of taxes......................................... -- (0.10) (0.02)
Net income (loss) per common share........................................ 1.50 (1.33) (0.41)
CASH DIVIDENDS PER COMMON SHARE(6)(7)..................................... 0.10 see (8) below
CONSOLIDATED BALANCE SHEET DATA:
Working capital........................................................... $ 935.4 $ 476.2 $ 689.1
Total assets.............................................................. 18,722.6 12,141.6 9,986.1
Long-term debt............................................................ 5,254.3 2,613.2 2,020.8
Shareholders' equity...................................................... 7,199.6 4,659.3 4,342.4
</TABLE>
S-9
<PAGE>
(1) In September 1997, Tyco changed its fiscal year end from December 31 to
September 30. Accordingly, the nine-month transition period ended September
30, 1997 and the year ended September 30, 1998 are presented.
(2) On July 2, 1997, Tyco (formerly ADT) merged with Former Tyco. On August 27,
1997, August 29, 1997, and October 1, 1998, Tyco merged with INBRAND,
Keystone and US Surgical, respectively. These four combinations are more
fully described in Notes 1 and 2 to the Supplemental Consolidated Financial
Statements contained in Tyco's Current Report on Form 8-K filed on December
10, 1998, incorporated herein by reference. Prior to their respective
mergers, ADT, Keystone and US Surgical had a December 31 fiscal year end and
Former Tyco had a June 30 fiscal year end. The historical results have been
combined using a December 31 fiscal year end for ADT, Keystone, Former Tyco
and US Surgical for the year ended December 31, 1996.
(3) Operating income in the fiscal year ended September 30, 1998 includes
certain charges of $80.5 million, including $9.6 million of merger costs and
$70.9 million of costs to exit certain businesses in US Surgical's
operations, and restructuring charges of $12.0 million related to severance
costs, facility disposals and asset write-downs as part of US Surgical's
cost cutting objectives. See Note 15 to the Supplemental Consolidated
Financial Statements contained in Tyco's Form 8-K filed on December 10,
1998.
(4) Operating loss in the nine months ended September 30, 1997 includes charges
related to merger, restructuring and other non-recurring costs of $917.8
million and impairment of long-lived assets of $148.4 million primarily
related to the mergers and integration of ADT, Former Tyco, Keystone and
INBRAND, and charges of $24.3 million for litigation and other related costs
and $5.8 million for restructuring charges in US Surgical's operations. See
Notes 11 and 15 to the Supplemental Consolidated Financial Statements
contained in Tyco's Form 8-K filed on December 10, 1998. The results for the
nine months ended September 30, 1997 also include a charge of $361.0 million
for the write-off of purchased in-process research and development related
to the acquisition of the submarine systems business of AT&T Corp.
(5) Operating loss in 1996 includes non-recurring charges of $744.7 million
related to the adoption of Statement of Financial Accounting Standards No.
121, $237.3 million related principally to the restructuring of ADT's
electronic security services business in the United States and United
Kingdom and $8.8 million of fees and expenses related to ADT's acquisition
of Automated Security (Holdings) plc, a United Kingdom company. See Notes 11
and 15 to the Supplemental Consolidated Financial Statements contained in
Tyco's Form 8-K filed on December 10, 1998.
(6) Per share amounts for all periods presented have been restated to give
effect to the mergers with Former Tyco, Keystone, INBRAND and US Surgical, a
0.48133 reverse stock split effected on July 2, 1997, and a two-for-one
stock split distributed on October 22, 1997, effected in the form of a stock
dividend.
(7) Tyco has paid a quarterly dividend of $0.025 per common share since July 2,
1997, the date of the Former Tyco/ADT merger. ADT had not paid any dividends
on its common shares since 1992. Prior to the merger with ADT, Former Tyco
paid a quarterly cash dividend of $0.025 per share of common stock since
January 1992. Prior to its merger with Tyco, Keystone paid quarterly
dividends of $0.19 per share since January 1994. US Surgical paid quarterly
dividends of $0.04 per share in the year ended September 30, 1998 and the
nine months ended September 30, 1997 and aggregate dividends of $0.08 per
share in 1996. The payment of dividends by Tyco in the future will be
determined by Tyco's Board of Directors and will depend on business
conditions, Tyco's financial condition and earnings and other factors.
S-10
<PAGE>
DESCRIPTION OF THE NOTES
The 2009 Notes and the 2029 Notes offered by this Prospectus Supplement will be
issued as two separate series of Debt Securities (as defined in the accompanying
Prospectus) under an indenture dated as of June 9, 1998 (the "Indenture") among
the Company, Tyco and The Bank of New York, as trustee (the "Trustee").
Information about the Indenture and the general terms and provisions of the
Notes is contained in the Prospectus under "Description of the Debt Securities
and the Guarantees."
GENERAL
The interest rate, aggregate principal amounts and maturity dates of each series
of Notes are as follows:
<TABLE>
<CAPTION>
2009 NOTES 2029 NOTES
------------------ ------------------
<S> <C> <C>
Interest Rate Per Annum............................... 6 1/8% 6 7/8%
Aggregate Principal Amount............................ $400 million $800 million
Maturity Date......................................... January 15, 2009 January 15, 2029
</TABLE>
Interest is payable semiannually on January 15 and July 15 of each year,
commencing July 15, 1999, to the persons in whose names such Notes are
registered at the close of business on January 1 or July 1 (whether or not a
Business Day), as the case may be, immediately preceding such interest payment
date. Interest will begin to accrue on the Notes on January 12, 1999. "Business
Day" means any day other than a Saturday, a Sunday or a day on which banking
institutions in New York City are authorized or obligated by law, executive
order or governmental decree to be closed.
The Notes will be unsecured and unsubordinated obligations of the Company and
will be fully and unconditionally guaranteed on an unsubordinated basis by Tyco.
See "Description of the Debt Securities and the Guarantees--Guarantees" in the
accompanying Prospectus.
The Notes of each series will be issued in the form of one or more registered
global securities and will be deposited with, or on behalf of, The Depository
Trust Company, as depositary, and registered in the name of the depositary's
nominee. A description of the depositary's procedures with respect to the global
securities is set forth in the accompanying Prospectus under "Description of the
Debt Securities and the Guarantees--Book Entry System."
The Indenture does not limit the aggregate principal amount of debt securities
which may be issued thereunder. As of the date of this Prospectus Supplement,
$3.55 billion of debt securities in six series have been issued by the Company
and guaranteed by Tyco and are outstanding under the Indenture. The interest
rate, aggregate principal amounts and maturity dates of each of such series of
debt securities are as follows:
<TABLE>
<CAPTION>
DEALER
REMARKETABLE
SECURITIES(SM)
2001 NOTES 2004 NOTES 2005 NOTES 2008 NOTES 2028 NOTES ("DRS.(SM)")*
------------ --------------- ------------ --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Interest Rate Per Annum....... 6 1/8% 5 7/8% 6 3/8% 6 1/8% 7% 6 1/4%**
Aggregate Principal Amount.... $750 million $400 million $750 million $400 million $500 million 7$50 million
June 15, November 1, June 15, November 1, June 15, June 15,
Maturity Date................. 2001 2004 2005 2008 2028 2013
</TABLE>
- ------------------------
* "Dealer remarketable securities(SM)" and "Drs.(SM)" are service marks of
J.P. Morgan Securities Inc.
** The Dealer remarketable securities will bear interest at the rate of 6 1/4%
per annum to June 15, 2003. If
J.P. Morgan Securities Inc. elects to remarket the Drs., the interest rate
will be reset at a fixed rate until June 15, 2013 as determined by the
remarketing dealer. If J.P. Morgan Securities Inc. does not elect to
remarket the Drs., all Drs. must be repurchased by the Company on June 15,
2003.
S-11
<PAGE>
OPTIONAL REDEMPTION
The Notes will be redeemable, in whole or in part, at the option of the Company
at any time at a redemption price equal to the greater of (i) 100% of the
principal amount of such Notes, and (ii) as determined by the Quotation Agent
(defined below), the sum of the present values of the remaining scheduled
payments of principal and interest on the Notes to be redeemed (not including
any portion of such payments of interest accrued as of the date of redemption)
discounted to the date of redemption on a semiannual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Redemption Treasury
Rate (defined below) plus 25 basis points plus, in each case, accrued interest
thereon to the date of redemption.
Notice of any redemption will be mailed at least 30 days and not more than 60
days before the redemption date to each holder of the Notes to be redeemed.
Unless the Company defaults in the payment of the redemption price, on or after
the redemption date, interest will cease to accrue on the Notes or the portions
thereof called for redemption. See "Description of the Debt Securities and the
Guarantees--Redemption" in the accompanying Prospectus.
"ADJUSTED REDEMPTION TREASURY RATE" means, with respect to any redemption date,
the annual rate equal to the semiannual equivalent yield to maturity or
interpolated (on a 30/360 day count basis) yield to maturity of the Comparable
Redemption Treasury Issue, assuming a price for the Comparable Redemption
Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Redemption Treasury Price for such redemption date.
"COMPARABLE REDEMPTION TREASURY ISSUE" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the Notes to be redeemed that would be utilized at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of such
Notes.
"COMPARABLE REDEMPTION TREASURY PRICE" means, with respect to any redemption
date, (i) the average of the Redemption Reference Treasury Dealer Quotations for
such redemption date, after excluding the highest and lowest such Redemption
Reference Treasury Dealer Quotations (unless there is more than one highest or
lowest quotation, in which case only one such highest and/or lowest quotation
shall be excluded), or (ii) if the Quotation Agent obtains fewer than four such
Redemption Reference Treasury Dealer Quotations, the average of all such
Redemption Reference Treasury Dealer Quotations.
"QUOTATION AGENT" means a Redemption Reference Treasury Dealer appointed as such
agent by the Company.
"REDEMPTION REFERENCE TREASURY DEALER" means each of J.P. Morgan Securities Inc.
and four other primary U.S. Government securities dealers in The City of New
York selected by the Company.
"REDEMPTION REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
Redemption Reference Treasury Dealer and any redemption date, the offer price
for the Comparable Redemption Treasury Issue (expressed in each case as a
percentage of its principal amount) for settlement on the redemption date quoted
in writing to the Quotation Agent by such Redemption Reference Treasury Dealer
at 5:00 p.m., New York City time, on the third Business Day preceding such
redemption date.
REDEMPTION UPON CHANGES IN WITHHOLDING TAXES
Each series of Notes may be redeemed, as a whole but not in part, at the
election of the Company, upon not less than 30 nor more than 60 days notice
(which notice shall be irrevocable), at a redemption price equal to 100% of the
principal amount thereof, together with accrued interest, if any, to the
redemption date and Additional Amounts (defined below), if any, if as a result
of any amendment to, or change in, the laws or regulations of Luxembourg or
Bermuda or any political subdivision or taxing authority thereof or therein
having power to tax (a "Taxing Authority"), or any change in the application or
official interpretation of such laws or regulations which amendment or change is
announced and becomes effective after the date the series of Notes are issued,
the Company or Tyco has become or will become obligated to pay Additional
Amounts, on the next date on which any
S-12
<PAGE>
amount would be payable with respect to the Notes of such series, and such
obligation cannot be avoided by the use of reasonable measures available to the
Company or Tyco, as the case may be; PROVIDED, HOWEVER, that (a) no such notice
of redemption may be given earlier than 60 days prior to the earliest date on
which the Company or Tyco, as the case may be, would be obligated to pay such
Additional Amounts and (b) at the time such notice of redemption is given, such
obligation to pay such Additional Amounts remains in effect. Prior to the giving
of any notice of redemption described in this paragraph, the Company shall
deliver to the Trustee (i)(I) a certificate signed by two directors of the
Company stating that the obligation to pay Additional Amounts cannot be avoided
by the Company taking reasonable measures available to it or (II) a certificate
signed by two executive officers of Tyco stating that the obligation to pay
Additional Amounts cannot be avoided by Tyco taking reasonable measures
available to it, as the case may be, and (ii) a written opinion of independent
legal counsel to the Company or Tyco, as the case may be, of recognized standing
to the effect that the Company or Tyco, as the case may be, has or will become
obligated to pay Additional Amounts as a result of a change, amendment, official
interpretation or application described above and that the Company or Tyco, as
the case may be, cannot avoid the payment of such Additional Amounts by taking
reasonable measures available to it.
PAYMENT OF ADDITIONAL AMOUNTS
All payments made by the Company or Tyco under or with respect to the Notes and
the Guarantees (as defined in the Prospectus) will be made free and clear of and
without withholding or deduction for or on account of any present or future
taxes, duties, levies, imposts, assessments or governmental charges of whatever
nature imposed or levied by or on behalf of any Taxing Authority ("Taxes"),
unless the Company or Tyco, as the case may be, is required to withhold or
deduct Taxes by law or by the interpretation or administration thereof. In the
event that the Company or Tyco is required to so withhold or deduct any amount
for or on account of any Taxes from any payment made under or with respect to
the Notes or the Guarantees, as the case may be, the Company or Tyco, as the
case may be, will pay such additional amounts ("Additional Amounts") as may be
necessary so that the net amount received by each holder of Notes (including
Additional Amounts) after such withholding or deduction will equal the amount
that such holder would have received if such Taxes had not been required to be
withheld or deducted; PROVIDED that no Additional Amounts will be payable with
respect to a payment made to a holder of Notes to the extent:
(a) that any such Taxes would not have been so imposed but for the existence of
any present or former connection between such holder and the Taxing Authority
imposing such Taxes (other than the mere receipt of such payment, acquisition,
ownership or disposition of such Notes or the exercise or enforcement of rights
under such Notes, the Guarantees or the Indenture);
(b) of any estate, inheritance, gift, sales, transfer, or personal property
Taxes imposed with respect to such Notes, except as otherwise provided herein;
(c) that any such Taxes would not have been so imposed but for the presentation
of such Notes or Guarantees (where presentation is required) for payment on a
date more than 30 days after the date on which such payment became due and
payable or the date on which payment thereof is duly provided for, whichever is
later, except to the extent that the beneficiary or holder thereof would have
been entitled to Additional Amounts had the Notes or Guarantees been presented
for payment on any date during such 30-day period; or
(d) that such holder would not be liable or subject to such withholding or
deduction of Taxes but for the failure to make a valid declaration of
non-residence or other similar claim for exemption, if (x) the making of such
declaration or claim is required or imposed by statute, treaty, regulation,
ruling or administrative practice of the relevant Taxing Authority as a
precondition to an exemption from, or reduction in, the relevant Taxes and (y)
at least 60 days prior to the first payment date with respect to which the
Company or Tyco shall apply this clause (d), the Company or Tyco shall have
notified all holders of Notes in writing that they shall be required to provide
such declaration or claim.
The Company or Tyco, as the case may be, will also (i) make such withholding or
deduction of Taxes and (ii) remit the full amount of Taxes so deducted or
withheld to the relevant Taxing Authority in accordance with all
S-13
<PAGE>
applicable laws. The Company or Tyco, as the case may be, will use its
reasonable best efforts to obtain certified copies of tax receipts evidencing
the payment of any Taxes so deducted or withheld from each Taxing Authority
imposing such Taxes. The Company or Tyco, as the case may be, will, upon
request, make available to the holders of the Notes, within 60 days after the
date the payment of any Taxes so deducted or withheld is due pursuant to
applicable law, certified copies of tax receipts evidencing such payment by the
Company or Tyco or if, notwithstanding the Company's or Tyco's efforts to obtain
such receipts, the same are not obtainable, other evidence of such payments by
the Company or Tyco.
At least 30 days prior to each date on which any payment under or with respect
to the Notes or Guarantees is due and payable, if the Company or Tyco will be
obligated to pay Additional Amounts with respect to such payment, the Company or
Tyco will deliver to the Trustee an officer's certificate stating the fact that
such Additional Amounts will be payable, the amounts so payable and such other
information as is necessary to enable such Trustee to pay such Additional
Amounts to holders of Debt Securities on the payment date.
The foregoing provisions shall survive any termination of the discharge of the
Indenture and shall apply MUTATIS MUTANDIS to any jurisdiction in which any
successor Person (as defined in the Prospectus) to the Company or Tyco, as the
case may be, is organized or is engaged in business for tax purposes or any
political subdivisions or taxing authority or agency thereof or therein;
PROVIDED, HOWEVER, the date on which such Person becomes a successor Person to
the Company or Tyco, as the case may be, shall be substituted for the date on
which the Notes were issued.
In addition, the Company or Tyco, as the case may be, will pay any stamp, issue,
registration, documentary or other similar taxes and duties, including interest,
penalties and Additional Amounts with respect thereto, payable in Luxembourg,
Bermuda or the United States or any political subdivision or taxing authority of
or in the foregoing in respect of the creation, issue, offering, enforcement,
redemption or retirement of the Notes or the Guarantees.
Whenever in the Indenture, the Notes, the Guarantees, in this "Description of
the Notes" or in the "Description of the Debt Securities and the Guarantees" in
the Prospectus there is mentioned, in any context, the payment of principal (and
premium, if any), redemption price, interest or any other amount payable under
or with respect to any Notes or Guarantees, such mention shall be deemed to
include mention of the payment of Additional Amounts to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof.
S-14
<PAGE>
CERTAIN LUXEMBOURG, BERMUDA AND UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following discussion is intended to be a general summary of Luxembourg,
Bermuda and United States federal income tax consequences to holders of Notes.
Due to the complexity of the tax laws of these and other taxing jurisdictions,
the uncertainty, in some instances, as to the manner in which such laws apply to
holders and possible changes in law, it is particularly important that each
holder consult with its own tax adviser regarding the tax treatment of the
acquisition, ownership and disposition of Notes under the laws of any U.S.
federal, state, local or other taxing jurisdiction.
LUXEMBOURG
Under current law, no withholding or deduction is imposed in Luxembourg in
respect of any payment to be made by the Company in respect of the Notes.
Holders of Notes who are neither resident in Luxembourg nor engaged in a trade
or business through a permanent establishment or permanent representative in
Luxembourg will not be subject to taxes or duties in Luxembourg with respect to
interest payments on, or gains realized on the disposition of, the Notes. No
stamp, registration or similar taxes, duties or charges are payable in
Luxembourg in connection with the issuance of the Notes.
BERMUDA
Under current law, no withholding or deduction is imposed in Bermuda in respect
of any payment to be made by the Company or Tyco in respect of the Notes or Tyco
in respect of the Guarantees. Holders of Notes who are neither resident in
Bermuda nor engaged in a trade or business through a permanent establishment or
permanent representative in Bermuda will not be subject to taxes or duties in
Bermuda with respect to interest payments on, or gains realized on the
disposition of, the Notes. No stamp, registration or similar taxes, duties or
charges are payable in Bermuda in connection with the issue of the Notes or the
related Guarantees.
UNITED STATES
The following is a general discussion of certain anticipated U.S. federal income
tax consequences of the ownership and disposition of the Notes to initial
holders purchasing Notes at their respective "issue prices." The "issue price"
of the Notes will equal the first price at which a substantial amount of the
Notes is sold for cash to the public (not including the Underwriters or other
persons acting in the capacity of underwriters, placement agents or
wholesalers). This summary is based upon laws, regulations, rulings and
decisions currently in effect, all of which are subject to change at any time,
possibly with retroactive effect. Moreover, it deals only with purchasers who
hold Notes as "capital assets" within the meaning of Section 1221 of the
Internal Revenue Code of 1986, as amended, and does not purport to deal with
persons in special tax situations, such as financial institutions, insurance
companies, regulated investment companies, tax exempt investors, dealers in
securities or currencies, U.S. expatriates, persons holding Notes as a hedge
against currency risk or as a position in a "straddle," "hedge," "conversion" or
another integrated transaction for tax purposes, persons who own (directly or
indirectly) 10 percent or more of the voting power of the Company, or U.S.
Holders (defined below) whose functional currency is not the U.S. dollar.
Further, this discussion does not address the consequences under U.S. federal
estate or gift tax laws or the laws of any U.S. state or locality.
Prospective purchasers of the Notes are urged to consult their own tax advisors
concerning the consequences, in their particular circumstances, of ownership of
the Notes under the U.S. federal tax laws and the laws of any relevant state,
local or non-U.S. taxing jurisdiction.
S-15
<PAGE>
The term "U.S. Holder" means a beneficial owner of Notes that is, for U.S.
federal income tax purposes:
- - a citizen or resident of the United States;
- - a corporation, partnership or other entity (other than a trust) created or
organized in or under the laws of the United States or of any political
subdivision thereof (other than a partnership that is not treated as a U.S.
person under any applicable Treasury regulations);
- - an estate whose income is subject to U.S. federal income tax regardless of its
source; or
- - a trust if, in general, a court within the United States is able to exercise
primary jurisdiction over its administration and one or more U.S. persons have
authority to control all of its substantial decisions.
The term "non-U.S. Holder" means a beneficial owner of Notes that is not a U.S
Holder for U.S. federal income tax purposes.
U.S. HOLDERS
INTEREST. The gross amount of interest paid on the Notes (including any
Additional Amounts paid in respect of withholding taxes) will be taxable as
ordinary income for U.S. federal income tax purposes when received or accrued by
a U.S. Holder in accordance with such U.S. Holder's method of tax accounting.
Such interest will be income from sources outside the United States and, with
certain exceptions, will be treated as "passive" income for purposes of
computing the foreign tax credit allowable under U.S. federal income tax laws.
The rules relating to foreign tax credits and the timing thereof are extremely
complex, and U.S. Holders should consult their own tax advisers with regard to
the availability of foreign tax credits and the application of the foreign tax
credit limitations to their particular situations.
DISPOSITION. Upon the sale, redemption or other taxable disposition of a Note, a
U.S. Holder will recognize capital gain or loss equal to the difference between
the amount realized (excluding any amount attributable to accrued interest,
which will be taxable as ordinary interest income as described above) and the
U.S. Holder's tax basis in the Notes (generally the U.S. Holder's cost). Such
gain or loss will be long term capital gain or loss if the Notes are held for
more than one year. The deductibility of capital losses is subject to certain
limitations. For purposes of foreign tax credits under U.S. federal income tax
laws, capital gain recognized by a U.S. Holder generally will be treated as U.S.
source income, but any capital loss recognized by a U.S. Holder may be allocable
to foreign source income. U.S. Holders should consult their own tax advisors as
to the foreign tax credit implications of the disposition of Notes under U.S.
federal income tax laws.
INFORMATION REPORTING AND BACKUP WITHHOLDING. Non-exempt U.S. Holders may be
subject to information reporting with respect to payments of interest on, and
the proceeds of the disposition of, Notes. Non-exempt U.S. Holders who are
subject to information reporting and who do not provide appropriate information
when requested may be subject to backup withholding at a 31% rate. U.S. Holders
should consult their tax advisors.
NON-U.S. HOLDERS
INTEREST AND DISPOSITION. In general (and subject to the discussion below under
"Information Reporting and Backup Withholding"), a non-U.S. Holder will not be
subject to U.S. federal income or withholding tax with respect to payments of
interest on, or gain upon the disposition of, Notes, unless the income or gain
is effectively connected with the conduct by the non-U.S. Holder of a trade or
business in the United States. In that event, such income or gain will generally
be subject to regular U.S. income tax in the same manner as if it were realized
by a U.S. Holder. In addition, if such non-U.S. Holder is a non-U.S.
corporation, such income or gain may be subject to a branch profits tax at a
rate of 30% (or such lower rate provided by an applicable income tax treaty).
INFORMATION REPORTING AND BACKUP WITHHOLDING. If the Notes are held by a
non-U.S. Holder through a non-U.S. (and non-U.S. related) broker or financial
institution, information reporting and backup withholding generally would not be
required. Information reporting, and possibly backup withholding, may apply if
the Notes are held by a non-U.S. Holder through a U.S. (or U.S. related) broker
or financial institution and the non-U.S. Holder fails to provide appropriate
information. Holders should consult their tax advisors.
S-16
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreements
among the Company, Tyco and the Underwriters named below, dated the date hereof,
the Company has agreed to sell to each of the Underwriters, severally, and each
of the Underwriters has severally agreed to purchase, the principal amount of
the Notes set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT OF 2009 AMOUNT OF 2029
UNDERWRITERS NOTES NOTES
- ----------------------------------------------------------------------- -------------- --------------
<S> <C> <C>
J.P. Morgan Securities Inc. ........................................... $220,000,000 $440,000,000
ABN AMRO Incorporated.................................................. 20,000,000 40,000,000
BT Alex. Brown Incorporated............................................ 20,000,000 40,000,000
Chase Securities Inc. ................................................. 20,000,000 40,000,000
Credit Suisse First Boston Corporation................................. 20,000,000 40,000,000
First Union Capital Markets, a division of
Wheat First Securities, Inc. ........................................ 20,000,000 40,000,000
HSBC Securities, Inc. ................................................. 20,000,000 40,000,000
NationsBanc Montgomery Securities LLC.................................. 20,000,000 40,000,000
Salomon Smith Barney Inc. ............................................. 20,000,000 40,000,000
Commerzbank Capital Markets Corporation................................ 4,000,000 8,000,000
Credit Lyonnais Securities (USA) Inc. ................................. 4,000,000 8,000,000
First Chicago Capital Markets, Inc. ................................... 4,000,000 8,000,000
McDonald Investments Inc............................................... 4,000,000 8,000,000
Scotia Capital Markets (USA) Inc. ..................................... 4,000,000 8,000,000
-------------- --------------
Total.................................................................. $400,000,000 $800,000,000
-------------- --------------
-------------- --------------
</TABLE>
Under the terms and conditions of the Underwriting Agreements, if the
Underwriters take any of the Notes of a series, then the Underwriters are
obligated to take and pay for all of the Notes of that series.
The Notes are new issues of securities with no established trading market and
will not be listed on any national securities exchange. The Underwriters have
advised the Company that they intend to make a market for the Notes, but they
have no obligation to do so and may discontinue market making at any time
without providing any notice. No assurance can be given as to the liquidity of
any trading market for the Notes.
The Underwriters initially propose to offer part of the Notes directly to the
public at the offering prices described on the cover page and part to certain
dealers at a price that represents a concession not in excess of .40% of the
principal amount of the 2009 Notes and .50% of the principal amount of the 2029
Notes. Any Underwriter may allow, and any such dealer may reallow, a concession
not in excess of .25% of the principal amount of the 2009 Notes and the 2029
Notes to certain other dealers. After the initial offering of the Notes, the
Underwriters may from time to time vary the offering price and other selling
terms.
The Company has also agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute to payments which the Underwriters may be required to make in
respect of any such liabilities.
In connection with the offering of the Notes, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Notes. Specifically, the Underwriters may overallot in connection with the
offering of the Notes, creating a syndicate short position. In addition, the
Underwriters may bid for, and purchase, Notes in the open market to cover
syndicate short positions or to stabilize the price of the Notes. Finally, the
underwriting syndicate may reclaim selling concessions allowed for distributing
the Notes in the offering of the Notes, if the syndicate repurchases previously
distributed notes in syndicate covering transactions, stabilization
S-17
<PAGE>
transactions or otherwise. Any of these activities may stabilize or maintain the
market price of the Notes above independent market levels. The Underwriters are
not required to engage in any of these activities, and may end any of them at
any time.
Expenses associated with this offering, to be paid by the Company, are estimated
to be $150,000.
In the ordinary course of their respective businesses, certain of the
Underwriters and their affiliates have engaged, and may in the future engage, in
commercial banking and/or investment banking transactions with the Company and
its affiliates. Affiliates of each of J.P. Morgan Securities Inc., ABN AMRO
Incorporated, BT Alex. Brown Incorporated, Credit Suisse First Boston
Corporation, First Union Capital Markets, a division of Wheat First Securities,
Inc., HSBC Securities, Inc., NationsBanc Montgomery Securities LLC, Salomon
Smith Barney Inc., Commerzbank Capital Markets Corporation, Credit Lyonnais
Securities (USA) Inc., First Chicago Capital Markets, Inc., McDonald Investments
Inc. and Scotia Capital Markets (USA) Inc. are lenders under the Company's bank
credit agreement. The net proceeds from the sale of the Notes will be used to
repay borrowings under the bank credit agreement. Since the amount to be repaid
to affiliates of the Underwriters will exceed 10% of the net proceeds from the
sale of the Notes, this offering is being made pursuant to the provisions of
Rule 2710(c)(8) and 2720(c)(3) of the National Association of Securities
Dealers, Inc. See "Use of Proceeds." Credit Suisse First Boston Corporation is
acting as financial advisor to AMP in connection with the pending acquisition of
AMP by a subsidiary of Tyco.
LEGAL MATTERS
Certain U.S. legal matters regarding the Notes and the Guarantees will be passed
upon for Tyco and the Company by Kramer Levin Naftalis & Frankel LLP, New York,
New York, and for the Underwriters by Davis Polk & Wardwell, New York, New York.
Joshua M. Berman, a director and vice president of Tyco, is counsel to Kramer
Levin Naftalis & Frankel LLP. Mr. Berman beneficially owns 72,090 common shares
of Tyco. Certain matters under the laws of Bermuda related to the Guarantees of
Tyco will be passed upon for Tyco by Appleby, Spurling & Kempe, Hamilton,
Bermuda, Bermuda counsel to Tyco. Certain matters under the laws of Luxembourg
related to the Notes will be passed upon by Beghin Nothar Feider Loeff Claeys
Verbeke, Luxembourg counsel to the Company. Kramer Levin Naftalis & Frankel LLP
and Davis Polk & Wardwell will rely on Appleby, Spurling & Kempe with respect to
matters of Bermuda law and on Beghin Nothar Feider Loeff Claeys Verbeke with
respect to matters of Luxembourg law.
EXPERTS
The consolidated financial statements and financial statement schedule included
in Tyco's Annual Report on
Form 10-K for the fiscal year ended September 30, 1998 and incorporated by
reference in this Prospectus Supplement have been audited by
PricewaterhouseCoopers, independent accountants, as set forth in their report
included therein. In its report, that firm states that with respect to a certain
subsidiary its opinion is based upon the report of other independent
accountants, namely Arthur Andersen LLP. The consolidated financial statements
and financial statement schedule referred to above have been incorporated herein
in reliance upon said reports given upon the authority of such firms as experts
in accounting and auditing.
The supplemental consolidated financial statements and supplemental consolidated
financial statement schedule of Tyco as of September 30, 1998 and 1997 and for
the year ended September 30, 1998, the nine months ended September 30, 1997 and
the year ended December 31, 1996 included in Tyco's Current Report on Form 8-K
filed on December 10, 1998 and incorporated by reference in this Prospectus
Supplement give retroactive effect to the merger between Tyco International Ltd.
and United States Surgical Corporation and have been audited by
PricewaterhouseCoopers, independent accountants, as set forth in their report
included therein. In its report, that firm states that with respect to certain
subsidiaries its opinion is based upon the reports of other independent
accountants, namely Arthur Andersen LLP and Deloitte & Touche LLP. The
supplemental consolidated financial statements and supplemental consolidated
financial statement schedule referred to above have been incorporated herein in
reliance upon said reports given upon the authority of such firms as experts in
accounting and auditing.
S-18
<PAGE>
PROSPECTUS
$3,750,000,000
----------------
TYCO INTERNATIONAL GROUP S.A.
-------------
DEBT SECURITIES
----------------
FULLY AND UNCONDITIONALLY GUARANTEED BY
TYCO INTERNATIONAL LTD.
------------------
Tyco International Group S.A., a Luxembourg company (the "Company"), may
offer from time to time unsecured debt securities ("Debt Securities") consisting
of debentures, notes and/or other evidences of unsecured indebtedness in one or
more series, at an aggregate initial offering price not to exceed
U.S.$3,750,000,000, or its equivalent if some or all of the Debt Securities are
denominated in one or more foreign currencies, at prices and on terms to be
determined at or prior to the time of sale in light of market conditions at the
time of sale. Debt Securities may be issued in registered form without coupons
("Registered Securities"), bearer form with or without coupons attached ("Bearer
Securities") or in the form of one or more global securities (each a "Global
Security"). Unless otherwise specified in the Prospectus Supplement, all Debt
Securities will be fully and unconditionally guaranteed as to payment of
principal, premium, if any, and interest by Tyco International Ltd. ("Tyco"),
the sole shareholder of the Company. Guarantees of the Debt Securities (the
"Guarantees") by Tyco will constitute unsecured and unsubordinated obligations
of Tyco.
Specific terms of the particular Debt Securities in respect of which this
Prospectus is being delivered will be set forth in one or more accompanying
Prospectus Supplements (each a "Prospectus Supplement"), together with the terms
of the offering of the Debt Securities and the initial price and the net
proceeds to the Company from the sale thereof. The Prospectus Supplement will
set forth with regard to the particular Debt Securities, without limitation, the
following: the specific designation, aggregate principal amount, ranking as
senior debt or subordinated debt, authorized denomination, maturity, rate or
method of calculation of interest and dates for payment thereof, any
exchangeability, conversion, redemption, prepayment or sinking fund provisions,
the currency or currencies or currency unit or currency units in which
principal, premium, if any, or interest is payable, any modification of the
covenants and any other specific terms thereof. The amounts payable by the
Company in respect of Debt Securities may be calculated by reference to the
value, rate or price of one or more specified commodities, currencies or indices
as set forth in the Prospectus Supplement. The Prospectus Supplement will also
contain, where applicable, relevant tax considerations relating to the holders
of Debt Securities covered by the Prospectus Supplement.
The Company may sell Debt Securities offered hereby to or through
underwriters or dealers, and also may sell Debt Securities directly to other
purchasers or through agents. The Prospectus Supplement will also set forth the
names of the underwriters, dealers and agents involved in the sale of the Debt
Securities offered hereby, the principal amounts, if any, to be purchased by the
underwriters or agents and the compensation, if any, of such underwriters or
agents and any applicable commissions or discounts. The net proceeds to the
Company from the sale of the Debt Securities offered hereby will also be set
forth in the Prospectus Supplement.
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by 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 May 1, 1998.
<PAGE>
No person has been authorized to give any information or to make any
representation not contained or incorporated by reference in this Prospectus or
the accompanying Prospectus Supplement and, if given or made, such information
or representation must not be relied upon as having been authorized by the
Company, Tyco or any underwriter, dealer or agent. Neither the delivery of this
Prospectus or the accompanying Prospectus Supplement nor any sale made hereunder
or thereunder shall, under any circumstances, create an implication that the
information contained herein or in the accompanying Prospectus Supplement is
correct as of any date subsequent to the date hereof or thereof or that there
has been no change in the affairs of the Company or Tyco since the date hereof
or thereof. Neither this Prospectus nor the accompanying Prospectus Supplement
constitutes an offer to sell or a solicitation of an offer to buy Debt
Securities in any jurisdiction in which such offer or solicitation is not
authorized or in which the person making such offer or solicitation is not
qualified to do so or to any person to whom it is unlawful to make such offer or
solicitation.
AVAILABLE INFORMATION
Tyco is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"), all of which may be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the following
Regional Offices of the Commission: Chicago Regional Office, Suite 1400,
Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois 60661;
and New York Regional Office, Seven World Trade Center, 13th Floor, New York,
New York 10048. Copies of such material can be obtained at prescribed rates from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549. The Commission maintains a site on the
World Wide Web, and the reports, proxy statements and other information filed by
Tyco with the Commission may be accessed electronically on the Web at
http://www.sec.gov. Such material may also be inspected at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005, where
Tyco's common shares, par value U.S.$0.20 per share ("Common Shares"), are
listed.
This Prospectus constitutes part of a Registration Statement on Form S-3
filed by the Company and Tyco (together with all amendments, schedules and
exhibits thereto, the "Registration Statement") with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"). This Prospectus omits
certain of the information contained in the Registration Statement in accordance
with the rules and regulations of the Commission. Reference is hereby made to
the Registration Statement and related exhibits for further information.
Statements contained herein concerning the provisions of any document are not
necessarily complete and, in each instance, where a copy of such document has
been filed as an exhibit to the Registration Statement or otherwise has been
filed with the Commission, reference is made to the copy of the applicable
document so filed. Each such statement is qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, which have been filed by Tyco with the Commission
pursuant to the Exchange Act, are hereby incorporated by reference in this
Prospectus:
1. Tyco's Transition Report on Form 10-K for the fiscal year ended
September 30, 1997.
2. Tyco's Transition Report on Form 10-K/A for the fiscal year ended
September 30, 1997.
3. Tyco's Quarterly Report on Form 10-Q for the fiscal quarter ended
December 31, 1997.
4. Tyco's Current Report on Form 8-K filed on March 6, 1998.
5. Tyco's Current Report on Form 8-K filed on March 11, 1998.
6. Tyco's Current Report on Form 8-K filed on April 23, 1998.
2
<PAGE>
All documents filed by Tyco with the Commission 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 Debt Securities made hereby
shall be deemed to be incorporated by reference into this Prospectus from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Tyco and the Company will provide without charge to each person to whom a
copy of this Prospectus is delivered, including any beneficial owner of Debt
Securities, upon the written or oral request of any such person, a copy of any
and all of the documents that have been or may be incorporated by reference
herein other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Such requests
should be directed to J. Brad McGee, Senior Vice President, Tyco International
(US) Inc., One Tyco Park, Exeter, New Hampshire 03833 (telephone: (603)
778-9700).
TYCO INTERNATIONAL LTD.
Tyco International Ltd., a Bermuda company ("Tyco"), through its
subsidiaries, is a diversified manufacturing and service company that operates
in four segments: (i) the design, manufacture and distribution of disposable
medical supplies and other specialty products, and the conduct of vehicle
auctions and related services; (ii) the design, manufacture, installation and
service of fire detection and suppression systems, and the installation,
monitoring and maintenance of electronic security systems; (iii) the design,
manufacture and distribution of flow control products; and (iv) the design,
manufacture and distribution of electrical and electronic components, and the
design, manufacture, installation and service of undersea cable communication
systems.
Tyco's strategy is to be the low-cost, high quality producer and provider in
each of its markets. It promotes its leadership position by investing in
existing businesses, developing new markets and acquiring complementary
businesses and products. Combining the strengths of its existing operations and
its business acquisitions, Tyco seeks to enhance shareholder value through
increased earnings per share and strong cash flows.
On July 2, 1997, Tyco International Ltd., a Massachusetts corporation
("Former Tyco"), merged with a subsidiary of Tyco, with Tyco being the
continuing public company. In connection with the merger, Tyco changed its name
from ADT Limited ("ADT") to Tyco International Ltd.
Tyco's registered and principal executive offices are located at The Gibbons
Building, 10 Queen Street, Hamilton HM11, Bermuda, and its telephone number is
(441) 292-8674. The executive offices of Tyco's principal United States
subsidiary, Tyco International (US) Inc., are located at One Tyco Park, Exeter,
New Hampshire 03833, and its telephone number is (603) 778-9700.
THE COMPANY
Tyco International Group S.A., a Luxembourg company (the "Company"), is a
direct wholly-owned subsidiary of Tyco. The registered and principal executive
offices of the Company are located at Boulevard Royal, 26, Sixth Floor, L-2449
Luxembourg, and its telephone number is (352) 22-9999-5204. Through its
subsidiaries, the Company owns substantially all of the assets, and engages in
substantially all of the businesses, owned or engaged in by Tyco.
3
<PAGE>
ENFORCEMENT OF CIVIL LIABILITIES
The Company and Tyco have consented in the Indenture (as herein defined) to
jurisdiction in the United States federal and state courts in The City of New
York and to service of process in The City of New York in any legal suit, action
or proceeding brought to enforce any rights under or with respect to the
Indenture, the Debt Securities and the Guarantees. However, substantially all of
the Company's directly held assets consists of shares in its wholly-owned
subsidiary Tyco Group S.a.r.l., a Luxembourg company which, through its
subsidiaries, owns substantially all of the assets of the Company. Substantially
all of Tyco's directly held assets consists of shares in the Company.
Accordingly, any judgment against the Company or Tyco in respect of the
Indenture, the Debt Securities or the Guarantees, including for civil
liabilities under the United States federal securities laws, obtained in any
United States federal or state court may have to be enforced in the courts of
Luxembourg. Investors should not assume that the courts of Luxembourg would
enforce judgments of United States courts obtained against the Company or Tyco
predicated upon the civil liability provisions of the United States federal
securities laws or that such courts would enforce, in original actions,
liabilities against the Company or Tyco predicated solely upon such laws.
USE OF PROCEEDS
Except as otherwise described in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Debt Securities to
refinance, in part, existing indebtedness, to finance recently announced
acquisitions and for general corporate purposes. Funds not required immediately
for such purposes may be invested temporarily in short-term marketable
securities.
RATIO OF EARNINGS TO FIXED CHARGES OF TYCO
The following table sets forth the ratio of earnings to fixed charges for
Tyco for the three months ended December 31, 1997, the nine month transitional
fiscal year ended September 30, 1997, and the years ended December 31, 1996,
1995, 1994 and 1993.
<TABLE>
<CAPTION>
THREE MONTHS FISCAL YEAR YEAR ENDED DECEMBER
ENDED ENDED 31,
DECEMBER SEPTEMBER 30, ----------------------
31, 1997 1997(3) 1996 1995
----------------- ------------------- ----- ---------
<S> <C> <C> <C> <C>
Ratio of earnings to fixed charges(1)(2)........................ 6.37 (4) (4) 3.00
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
Ratio of earnings to fixed charges(1)(2)........................ 3.33 2.76
</TABLE>
- ------------------------
(1) For purposes of determining the ratio of earnings to fixed charges, earnings
consist of income (loss) before income taxes, cumulative effect of change in
accounting methods and extraordinary items, and fixed charges. Fixed charges
consist of interest on indebtedness, amortization of debt expenses and
one-third of rent expense which is deemed representative of an interest
factor.
(2) On July 2, 1997, a wholly-owned subsidiary of Tyco merged with Former Tyco.
On August 27, 1997, Tyco consummated a merger with INBRAND, and, on August
29, 1997, Tyco consummated a merger with Keystone. Each of the three merger
transactions qualifies for pooling of interests basis of accounting. As
such, the ratio of earnings to fixed charges for the nine months ended
September 30, 1997 and the years ended December 31, 1996, 1995, 1994 and
1993 include the effect of the mergers, except that the calculation
presented above for periods prior to January 1, 1997 does not include
INBRAND due to immateriality.
Prior to the respective mergers, ADT and Keystone had calendar year ends and
Former Tyco had a June 30 fiscal year end. The historical results upon which
the ratios are based have been combined using a calendar year end for ADT,
Keystone and Former Tyco for the year ended December 31, 1996. For 1995,
1994, and 1993, the ratio of earnings to fixed charges reflects the
combination of ADT and Keystone with a calendar year end and Former Tyco
with a June 30 fiscal year end.
4
<PAGE>
(3) In September 1997, Tyco changed its fiscal year end from December 31 to
September 30. The fiscal year ended September 30, 1997 represents the nine
month period ended September 30, 1997.
(4) Earnings were insufficient to cover fixed charges by $589.7 million and
$61.2 million in 1997 and 1996, respectively.
Earnings for the nine months ended September 30, 1997 and the year ended
December 31, 1996 included merger, restructuring and other nonrecurring
charges of $917.8 million and $246.1 million, respectively. Earnings also
include a charge for the impairment of long-lived assets of $148.4 million
and $744.7 million, respectively, in the 1997 and 1996 periods. The 1997
period also includes a write off of purchased in-process research and
development of $361.0 million.
On a pro forma basis the ratio of earnings to fixed charges excluding merger,
restructuring and other nonrecurring charges, charge for the impairment of
long-lived assets and write-off of purchased in-process research and
development would have been 5.44x and 4.68x for the nine months ended
September 30, 1997 and year ended December 31, 1996, respectively.
5
<PAGE>
DESCRIPTION OF THE DEBT SECURITIES AND THE GUARANTEES
The Debt Securities and the Guarantees offered hereby will be issued under
an indenture (hereinafter the "Indenture"), among the Company, Tyco and the
trustee thereunder (hereinafter referred to as the "Trustee"). The following
statements are subject to the detailed provisions of the Indenture, a copy of
which is filed as an exhibit to this Registration Statement. The Indenture is
subject to, and governed by, the Trust Indenture Act of 1939, as amended. The
statements made hereunder relating to the Indenture and the Debt Securities and
the Guarantees to be issued thereunder are summaries of certain provisions
thereof, do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all provisions of the Indenture and such Debt
Securities and Guarantees. Capitalized terms used but not defined herein shall
have the respective meanings set forth in the Indenture.
The particular terms of the Debt Securities and the Guarantees offered by a
Prospectus Supplement will be described in such Prospectus Supplement, along
with any applicable modifications of or additions to the general terms of the
Debt Securities and the Guarantees as described herein and in the Indenture or
in any supplemental indenture thereto and any applicable material income tax
considerations. Accordingly, for a description of the terms of any series of
Debt Securities and Guarantees, reference must be made to both the Prospectus
Supplement relating thereto and the description of the Debt Securities and the
Guarantees set forth in this Prospectus.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provides that the Debt Securities
may be issued from time to time in one or more series unless otherwise provided
in any supplemental indenture and the applicable Prospectus Supplement.
Unless otherwise provided in any supplemental indenture and specified in the
applicable Prospectus Supplement, Debt Securities offered pursuant to this
Prospectus will be direct, unsecured and unsubordinated obligations of the
Company and will rank equally with other unsecured and unsubordinated
obligations of the Company for money borrowed. The Debt Securities will be
effectively subordinated to all existing and future indebtedness and other
liabilities of the Company's subsidiaries. The Debt Securities will be fully and
unconditionally guaranteed by Tyco. Except as described under "Certain
Covenants" and as may be provided in any supplemental indenture and set forth in
the applicable Prospectus Supplement, the Indenture does not limit other
indebtedness or securities which may be incurred or issued by the Company or any
of its subsidiaries or contain financial or similar restrictions on the Company
or any of its subsidiaries. Except as may be provided in any supplemental
indenture and set forth in the applicable Prospectus Supplement, the Company's
rights and the rights of its creditors, including holders of Debt Securities, to
participate in any distribution of assets of any subsidiary upon the latter's
liquidation or reorganization or otherwise will be effectively subordinated to
the claims of the subsidiary's creditors, except to the extent that the Company
or any of its creditors may itself be a creditor of that subsidiary.
A Prospectus Supplement will set forth where applicable the following terms
of and information relating to the Debt Securities offered pursuant to this
Prospectus: (i) the designation of the Debt Securities; (ii) the aggregate
principal amount of the Debt Securities; (iii) the date or dates on which
principal of, and premium, if any, on the Debt Securities is payable; (iv) the
rate or rates at which the Debt Securities shall bear interest, if any, or the
method by which such rate shall be determined, the date or dates from which
interest will accrue and on which such interest will be payable and the related
record dates; (v) if other than the offices of the Trustee, the place where the
principal of and any premium or interest on the Debt Securities will be payable;
(vi) any redemption, repayment or sinking fund provisions; (vii) if other than
denominations of $1,000 or multiples thereof, the denominations in which the
Debt Securities will be issuable; (viii) if other than the principal amount
thereof, the portion of the principal amount due upon acceleration; (ix) whether
the Debt Securities shall be issued in the form of a global security or
securities; (x) any other specific terms of the Debt Securities (which may, for
example, include
6
<PAGE>
the currency, and any index used to determine the amount, of payment of
principal of and any premium and interest on the Debt Securities); and (xi) if
other than the Trustee, the identity of any trustees, paying agents, transfer
agents or registrars with respect to the Debt Securities.
Unless otherwise provided in any supplemental indenture and specified in the
applicable Prospectus Supplement, Debt Securities offered pursuant to this
Prospectus will be issued either in certificated, fully registered form, without
coupons, or as global notes under a book-entry system.
Upon receipt of an authentication order from the Company together with any
other documentation required by the Indenture or any supplemental indenture
thereto, the Trustee will authenticate Debt Securities in the appropriate form
and for the amount specified in the applicable Prospectus Supplement and the
supplemental indenture relating thereto.
Unless otherwise provided in any supplemental indenture and specified in the
applicable Prospectus Supplement, principal and premium, if any, will be
payable, and the Debt Securities offered pursuant to this Prospectus will be
transferable and exchangeable without any service charge, at the office of the
Trustee. However, the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection with any such
transfer or exchange.
Interest, if any, on any series of Debt Securities offered pursuant to this
Prospectus will be payable on the interest payment dates set forth in the
accompanying Prospectus Supplement to the persons described in the accompanying
Prospectus Supplement.
Unless otherwise provided in any supplemental indenture and described in the
applicable Prospectus Supplement, there are no covenants or provisions contained
in the Indenture which afford the holders of Debt Securities offered pursuant to
this Prospectus protection in the event of a highly leveraged transaction,
reorganization, restructuring, merger or similar transaction involving the
Company. The consummation of any highly leveraged transaction, reorganization,
restructuring, merger or similar transaction could cause a material decline in
the credit quality of the outstanding Debt Securities.
GUARANTEES
Tyco will unconditionally guarantee the due and punctual payment of the
principal of, premium, if any, and interest and any Additional Amounts (as
defined below under "Payment of Additional Amounts"), if any, on the Debt
Securities when and as the same shall become due and payable, whether at
maturity, upon redemption or otherwise. The Guarantees are unsecured and
unsubordinated obligations of Tyco and will rank equally with all other
unsecured and unsubordinated obligations of Tyco. The Guarantees provide that in
the event of a default in payment of principal of, premium, if any, or interest
on a Debt Security, the holder of the Debt Security may institute legal
proceedings directly against Tyco to enforce the Guarantees without first
proceeding against the Company. In addition, under certain circumstances
described under "Certain Covenants--Limitation on Indebtedness of Subsidiaries,"
subsidiaries of the Company (collectively with Tyco, the "Guarantors") may
execute and deliver additional Guarantees.
The obligations of Tyco and any other Guarantor, if any, under their
respective Guarantees are limited to the maximum amount which, after giving
effect to any collections from or payments made by or on behalf of any other
Guarantors in respect of the obligations of such other Guarantors under their
respective Guarantees or pursuant to their contribution obligations under the
Indenture, will result in the obligations of such Guarantors under their
Guarantees not constituting a fraudulent conveyance or fraudulent transfer under
applicable law. Each Guarantor that makes a payment or distribution under its
Guarantee shall be entitled to a contribution from each other Guarantor to the
extent permitted by applicable law.
REDEMPTION UPON CHANGES IN WITHHOLDING TAXES
The Debt Securities of any series may be redeemed, as a whole but not in
part, at the election of the Company, upon not less than 30 nor more than 60
days notice (which notice shall be irrevocable), at a redemption price equal to
100% of the principal amount thereof, together with accrued interest, if any, to
7
<PAGE>
the redemption date and Additional Amounts, if any, if as a result of any
amendment to, or change in, the laws or regulations of Luxembourg or any
political subdivision or taxing authority thereof or therein having power to tax
(a "Taxing Authority"), or any change in the application or official
interpretation of such laws or regulations which amendment or change becomes
effective after the date the applicable Debt Securities are issued, the Company
has become or will become obligated to pay Additional Amounts, on the next date
on which any amount would be payable with respect to the Debt Securities of such
series, and such obligation cannot be avoided by the use of reasonable measures
available to the Company; PROVIDED, HOWEVER, that (a) no such notice of
redemption may be given earlier than 60 days prior to the earliest date on which
the Company would be obligated to pay such Additional Amounts, and (b) at the
time such notice of redemption is given, such obligation to pay such Additional
Amounts remains in effect. Prior to the giving of any notice of redemption
described in this paragraph, the Company shall deliver to the Trustee (i) a
certificate signed by two directors of the Company stating that the obligation
to pay Additional Amounts cannot be avoided by the Company taking reasonable
measures available to it and (ii) a written opinion of independent legal counsel
to the Company of recognized standing to the effect that the Company has or will
become obligated to pay Additional Amounts as a result of a change, amendment,
official interpretation or application described above and that the Company
cannot avoid the payment of such Additional Amounts by taking reasonable
measures available to it.
PAYMENT OF ADDITIONAL AMOUNTS
All payments made by the Company and Tyco under or with respect to the Debt
Securities and the Guarantees will be made free and clear of and without
withholding or deduction for or on account of any present or future taxes,
duties, levies, imposts, assessments or governmental charges of whatever nature
imposed or levied by or on behalf of any Taxing Authority ("Taxes"), unless the
Company or Tyco, as the case may be, is required to withhold or deduct Taxes by
law or by the interpretation or administration thereof. In the event that the
Company or Tyco is required to so withhold or deduct any amount for or on
account of any Taxes from any payment made under or with respect to the Debt
Securities or the Guarantees, as the case may be, the Company or Tyco, as the
case may be, will pay such additional amounts ("Additional Amounts") as may be
necessary so that the net amount received by each holder of Debt Securities
(including Additional Amounts) after such withholding or deduction will equal
the amount that such holder would have received if such Taxes had not been
required to be withheld or deducted; provided that no Additional Amounts will be
payable with respect to a payment made to a holder of Debt Securities to the
extent:
(a) that any such Taxes would not have been so imposed but for the
existence of any present or former connection between such holder and the
Taxing Authority imposing such Taxes (other than the mere receipt of such
payment, acquisition, ownership or disposition of such Debt Securities or
the exercise or enforcement of rights under such Debt Securities, the
Guarantees or the Indenture);
(b) of any estate, inheritance, gift, sales, transfer, or personal
property Taxes imposed with respect to such Debt Securities, except as
otherwise provided herein;
(c) that any such Taxes would not have been so imposed but for the
presentation of such Debt Securities (where presentation is required) for
payment on a date more than 30 days after the date on which such payment
became due and payable or the date on which payment thereof is duly provided
for, whichever is later, except to the extent that the beneficiary or holder
thereof would have been entitled to Additional Amounts had the Debt
Securities been presented for payment on any date during such 30-day period;
or
(d) that such holder would not be liable or subject to such withholding
or deduction of Taxes but for the failure to make a valid declaration of
non-residence or other similar claim for exemption, if (x) the making of
such declaration or claim is required or imposed by statute, treaty,
regulation, ruling or administrative practice of the relevant Taxing
Authority as a precondition to an exemption from, or reduction in, the
relevant Taxes, and (y) at least 60 days prior to the first payment date
with respect to
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which the Company or Tyco shall apply this clause (d), the Company or Tyco
shall have notified all holders of Debt Securities in writing that they
shall be required to provide such declaration or claim.
The Company and Tyco, as applicable, will also (i) make such withholding or
deduction of Taxes and (ii) remit the full amount of Taxes so deducted or
withheld to the relevant Taxing Authority in accordance with all applicable
laws. The Company and Tyco, as applicable, will use their reasonable best
efforts to obtain certified copies of tax receipts evidencing the payment of any
Taxes so deducted or withheld from each Taxing Authority imposing such Taxes.
The Company or Tyco, as the case may be, will, upon request, make available to
the holders of the Debt Securities, within 60 days after the date the payment of
any Taxes so deducted or withheld is due pursuant to applicable law, certified
copies of tax receipts evidencing such payment by the Company or Tyco or if,
notwithstanding the Company's or Tyco's efforts to obtain such receipts, the
same are not obtainable, other evidence of such payments by the Company or Tyco.
At least 30 days prior to each date on which any payment under or with
respect to the Debt Securities is due and payable, if the Company or Tyco will
be obligated to pay Additional Amounts with respect to such payment, the Company
or Tyco will deliver to the Trustee an officer's certificate stating the fact
that such Additional Amounts will be payable, the amounts so payable and such
other information as is necessary to enable such Trustee to pay such Additional
Amounts to holders of Debt Securities on the payment date.
The foregoing provisions shall survive any termination of the discharge of
the Indenture and shall apply mutatis mutandis to any jurisdiction in which any
successor Person to the Company or Tyco, as the case may be, is organized or is
engaged in business for tax purposes or any political subdivisions or taxing
authority or agency thereof or therein.
In addition, the Company will pay any stamp, issue, registration,
documentary or other similar taxes and duties, including interest, penalties and
Additional Amounts with respect thereto, payable in Luxembourg or the United
States or any political subdivision or taxing authority of or in the foregoing
in respect of the creation, issue, offering, enforcement, redemption or
retirement of the Debt Securities.
Whenever in the Indenture, the Debt Securities, in the "Description of the
Notes and the Guarantees" in any Prospectus Supplement or in this "Description
of the Debt Securities and the Guarantees" there is mentioned, in any context,
the payment of principal (and premium, if any), redemption price, interest or
any other amount payable under or with respect to any Debt Security, such
mention shall be deemed to include mention of the payment of Additional Amounts
to the extent that, in such context, Additional Amounts are, were or would be
payable in respect thereof.
BOOK-ENTRY SYSTEM
If so specified in the applicable Prospectus Supplement, Debt Securities of
any series offered pursuant to this Prospectus may be issued under a book-entry
system in the form of one or more global securities ("Global Securities"). Each
Global Security will be deposited with, or on behalf of, a depositary, which,
unless otherwise specified in the accompanying Prospectus Supplement, will be
The Depository Trust Company, New York, New York (the "Depositary"). The Global
Securities will be registered in the name of the Depositary or its nominee. The
specific terms of the depositary arrangement with respect to any series of Debt
Securities, or portion thereof, to be represented by a Global Security will be
provided in the supplemental indenture relating thereto and described in the
applicable Prospectus Supplement.
The Depositary has advised the Company as follows: the Depositary is a
limited purpose trust company organized under the laws of the State of New York,
a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. The
Depositary was created to hold securities of Persons who have accounts with the
Depositary ("participants") and to facilitate the clearance and settlement of
securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of certificates.
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The Depositary's participants include securities brokers and dealers, banks,
trust companies and clearing corporations, and may include certain other
organizations. Indirect access to the Depositary's book-entry system is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly.
Upon the issuance of a Global Security, the Depositary or its nominee will
credit, on its book-entry registration and transfer system, the respective
principal amounts of the Debt Securities represented by such Global Security to
the accounts of participants. The accounts to be credited will be designated by
the underwriters or agents, if any, or by the Company, if such Debt Securities
are offered and sold directly by the Company. Ownership of beneficial interests
in the Global Security will be limited to participants or persons that may hold
interests through participants. Ownership of beneficial interests by
participants in the Global Security will be shown on, and the transfer of that
ownership interest will be effected only through, records maintained by the
Depositary or its nominee for such Global Security. Ownership of beneficial
interests in the Global Security by persons that hold through participants will
be shown on, and the transfer of that ownership interest within such participant
will be effected only through, records maintained by such participant. The laws
of some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and such
laws may impair the ability to transfer beneficial interests in a Global
Security.
So long as the Depositary or its nominee is the registered owner of a Global
Security, it will be considered the sole owner or holder of the Debt Securities
represented by such Global Security for all purposes under the Indenture. Except
as set forth below, owners of beneficial interests in such Global Security will
not be entitled to have the Debt Securities represented thereby registered in
their names, will not receive or be entitled to receive physical delivery of
certificates representing the Debt Securities and will not be considered the
owners or holders thereof under the Indenture.
Payment of principal of, premium, if any, and any interest on Debt
Securities represented by a Global Security will be made to the Depositary or
its nominee, as the case may be, as the registered owner or the holder of the
Global Security. None of the Company, the Guarantor, the Trustee, any paying
agent or registrar for such Debt Securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interest in the Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company has been advised by the Depositary that the Depositary will
credit participants' accounts with payments of principal, premium, if any, or
interest on the payment date thereof in amounts proportionate to their
respective beneficial interests in the principal amount of the Global Security
as shown on the records of the Depositary. The Company expects that payments by
participants to owners of beneficial interests in the Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the account of
customers registered in "street name," and will be the responsibility of such
participants.
A Global Security may not be transferred except as a whole to a nominee or
successor of the Depositary. If the Depositary is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
the Company within ninety days, the Company will issue certificates in
registered form in exchange for the Global Security or securities representing
the Debt Securities. In addition, the Company may at any time and in its sole
discretion determine not to have Debt Securities of a series represented by a
Global Security and, in such event, will issue certificates in definitive form
in exchange for the Global Security representing such Debt Securities.
CERTAIN COVENANTS
Other than the covenants described below, any covenants, including any
restrictive covenants, of the Company with respect to any series of Debt
Securities will be provided in a supplemental indenture and described in the
applicable Prospectus Supplement.
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LIMITATIONS ON LIENS. The Company covenants that, so long as any Debt
Securities remain outstanding (but subject to defeasance, as provided in the
Indenture), it will not, and will not permit any Restricted Subsidiary (as
defined below) to, issue, assume or guarantee any Indebtedness (as defined
below) which is secured by a mortgage, pledge, security interest, lien or
encumbrance (each a "lien") upon any Principal Property (as defined below), or
any shares of stock of or Indebtedness issued by any Restricted Subsidiary,
whether now owned or hereafter acquired, without effectively providing that, for
so long as such lien shall continue in existence with respect to such secured
Indebtedness, the Debt Securities (together with, if the Company shall so
determine, any other Indebtedness of the Company ranking equally with the Debt
Securities) shall be equally and ratably secured with (or at the Company's
option prior to) such secured Indebtedness, except that the foregoing covenant
shall not apply to (a) liens existing on the date the applicable Debt Securities
are issued; (b) liens on the stock, assets or Indebtedness of a Person existing
at the same time such Person becomes a Restricted Subsidiary unless created in
contemplation of such Restricted Subsidiary becoming such; (c) liens on any
assets or Indebtedness of a Person existing at the time such entity is merged
into the Company or a Subsidiary or at the time of a purchase, lease or other
acquisition of the assets of a Person or firm as an entirety or substantially as
an entirety by the Company or a Restricted Subsidiary; (d) liens on any
Principal Property existing at the time of acquisition thereof by the Company or
any Restricted Subsidiary, or liens to secure the payment of the purchase price
of such Principal Property, or to secure Indebtedness incurred, assumed or
guaranteed by the Company or a Restricted Subsidiary for the purpose of
financing all or any part of the purchase price of such Principal Property or
improvements or construction thereon, which Indebtedness is incurred, assumed or
guaranteed prior to, at the time of, or within one year after such acquisition
(or in the case of real property, completion of such improvement or construction
or commencement of full operation of such property, whichever is later); (e)
liens securing Indebtedness owing by any Restricted Subsidiary to the Company,
Tyco or a Subsidiary or by the Company to Tyco; (f) liens in favor of the United
States of America or any State thereof or any other country, or political
subdivision thereof, to secure partial, progress, advance or other payments
pursuant to any contract, statute, rule or regulation or to secure any
Indebtedness incurred or guaranteed for the purpose of financing all or any part
of the purchase price (or, in the case of real property, the cost of
construction or improvement) of the Principal Property subject to such liens
(including but not limited to, liens incurred in connection with pollution
control, industrial revenue or similar financings); (g) pledges, liens or
deposits under worker's compensation or similar legislation, or in connection
with bids, tenders, contracts (other than for the payment of money) or leases to
which the Company or any Restricted Subsidiary is a party, or to secure the
public or statutory obligations of the Company or any Restricted Subsidiary, or
in connection with obtaining or maintaining self-insurance, or to obtain the
benefits of any law, regulation or arrangement pertaining to unemployment
insurance, old age pensions, social security or similar matters, or to secure
surety, performance, appeal or customs bonds to which the Company or any
Restricted Subsidiary is a party, or in litigation or other proceedings in
connection with the matters heretofore referred to in this clause, such as, but
not limited to, interpleader proceedings, and other similar pledges, liens or
deposits made or incurred in the ordinary course of business; (h) certain liens
in connection with legal proceedings, including certain liens arising out of
judgments or awards, to the extent such proceedings are being contested or
appealed in good faith; final unappealable judgment liens which are satisfied
within 15 days of the date of judgment; or liens incurred for the purpose of
obtaining a stay or discharge in the course of any litigation or other
proceeding; (i) liens for certain taxes or assessments, landlord's liens and
liens and charges incidental to the conduct of the business of the Company or
any Restricted Subsidiary, or the ownership of their respective assets, which
were not incurred in connection with the borrowing of money or the obtaining of
advances or credit and which do not, in the opinion of the Board of Directors of
the Company, materially impair the use of such assets in the operation of the
business of the Company or such Restricted Subsidiary or the value of such
Principal Property for the purposes thereof; (j) liens to secure the Company's
or any Restricted Subsidiary's obligations under agreements with respect to
spot, forward, future and option transactions, entered into in the ordinary
course of business; (k) liens not permitted by the foregoing clauses (a) to (j),
inclusive, if at the time of, and after giving effect to, the creation or
assumption of such lien, the aggregate amount of
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all outstanding Indebtedness of the Company and its Restricted Subsidiaries
(without duplication) secured by all liens not so permitted by the foregoing
clauses (a) through (j), inclusive, together with the Attributable Debt (as
defined below) in respect of Sale and Lease-Back Transactions (as defined below)
permitted by paragraph (a) under "Limitation on Sale and Lease-Back
Transactions" below does not exceed the greater of $100,000,000 and 10% of
Consolidated Net Worth (as defined below); and (l) any extension, renewal or
replacement (or successive extensions, renewals or replacements) in whole or in
part, of any lien referred to in the foregoing clauses (a) to (k), inclusive,
except that the principal amount of Indebtedness secured thereby unless
otherwise excepted under clauses (a) through (k) shall not exceed the principal
amount of Indebtedness so secured at the time of such extension, renewal or
replacement and that such extension, renewal or replacement shall be limited to
all or part of the assets (or any replacement therefor) which secured the lien
so extended, renewed or replaced (plus improvements and construction on real
property).
LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS. The Company will not, and
will not permit any Restricted Subsidiary to, enter into any Sale and Lease-Back
Transaction with respect to a Principal Property unless (a) the Company or such
Restricted Subsidiary would, at the time of entering into a Sale and Lease-Back
Transaction, be entitled to incur Indebtedness secured by a lien on the
Principal Property to be leased in an amount at least equal to the Attributable
Debt in respect of such transaction, without equally and ratably securing the
Debt Securities pursuant to the provisions described under "Limitations on
Liens" above, or (b) the direct or indirect proceeds of the sale of the
Principal Property to be leased are at least equal to their fair value (as
determined by the Company's Board of Directors) and an amount equal to the net
proceeds is applied, within 180 days of the effective date of such transaction,
to the purchase or acquisition (or, in the case of real property, commencement
of the construction) of property or assets or to the retirement (other than at
maturity or pursuant to a mandatory sinking fund or mandatory redemption
provision) of Debt Securities, or of Funded Indebtedness (as defined below) of
the Company or a consolidated Subsidiary of the Company that ranks on a parity
with or senior to the Debt Securities (subject to credits for certain voluntary
retirement of Funded Indebtedness and certain delivery of Debt Securities to the
Trustee for retirement and cancellation).
LIMITATION ON INDEBTEDNESS OF SUBSIDIARIES. (a) The Company will not cause
or permit any Subsidiary (which is not a Guarantor), directly or indirectly, to
create, incur, assume, guarantee or otherwise in any manner become liable for
the payment of or otherwise incur (collectively, "incur"), any Indebtedness
(including any Acquired Indebtedness but excluding any Permitted Subsidiary
Indebtedness) unless such Subsidiary simultaneously executes and delivers a
supplemental indenture providing for a Guarantee of the Debt Securities.
(b) Notwithstanding the foregoing, any Guarantee by a Subsidiary of the Debt
Securities shall provide by its terms that it (and all liens securing the same)
shall be automatically and unconditionally released and discharged upon (i) any
sale, exchange or transfer, to any Person not an Affiliate of the Company, of
all of the Company's equity interests in, or all or substantially all the assets
of, such Subsidiary, which transaction is in compliance with the terms of the
Indenture and such Subsidiary is released from all guarantees, if any, by it of
other Indebtedness of the Company or any Subsidiaries, (ii) the payment in full
of all obligations under the Indebtedness giving rise to such Guarantee or (iii)
with respect to Indebtedness described in clause (a) above constituting
guarantees, the release by the holders of such Indebtedness of the guarantee by
such Subsidiary (including any deemed release upon payment in full of all
obligations under such Indebtedness), at such time as (A) no other Indebtedness
(other than Permitted Subsidiary Indebtedness) has been guaranteed by such
Subsidiary, as the case may be, or (B) the holders of all such other
Indebtedness which is guaranteed by such Subsidiary also release the guarantee
by such Subsidiary (including any deemed release upon payment in full of all
obligations under such Indebtedness).
(c) For purposes of this covenant, any Acquired Indebtedness shall not be
deemed to have been incurred until 180 days from the date (A) the Person
obligated on such Acquired Indebtedness becomes a
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Subsidiary or (B) the acquisition of assets in connection with which such
Acquired Indebtedness was assumed is consummated.
DEFINITIONS. "Acquired Indebtedness" means Indebtedness of a Person (i)
existing at the time such Person becomes a Restricted Subsidiary or (ii) assumed
in connection with the acquisition of assets by such Person, in each case, other
than Indebtedness incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary or such acquisition, as the case may be.
"Affiliate" means, with respect to any specified Person: (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person; (ii) any other Person that
owns, directly or indirectly, 10% or more of such specified Person's Capital
Stock or any officer or director of any such specified Person or other Person;
or (iii) any other Person 10% or more of the Voting Stock of which is
beneficially owned or held directly or indirectly by such specified Person. For
the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Attributable Debt" means in connection with a Sale and Lease-Back
Transaction, as of any particular time, the aggregate of present values
(discounted at a rate per annum equal to the average interest borne by all
outstanding Debt Securities determined on a weighted average basis and
compounded semi-annually) of the obligations of the Company or any Restricted
Subsidiary for net rental payments during the remaining term of the applicable
lease (including any period for which such lease has been extended or may, at
the option of the lessor, be extended). The term "net rental payments" under any
lease of any period shall mean the sum of the rental and other payments required
to be paid in such period by the lessee thereunder, not including, however, any
amounts required to be paid by such lessee (whether or not designated as rental
or additional rental) on account of maintenance and repairs, reconstruction,
insurance, taxes, assessments, water rates or similar charges required to be
paid by such lessee thereunder or any amounts required to be paid by such lessee
thereunder contingent upon the amount of sales, maintenance and repairs,
reconstruction, insurance, taxes, assessments, water rates or similar charges.
"Capital Stock" of any Person means any and all shares, interests,
participations, rights in or other equivalents (however designated) of such
Person's capital stock, other equity interests whether now outstanding or issued
after the date of the Indenture, partnership interests (whether general or
limited), any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of assets of,
the issuing Person and any rights (other than debt securities convertible into
Capital Stock), warrants or options exchangeable for or convertible into such
Capital Stock.
"Consolidated Net Worth" means, at any date, the total assets less the total
liabilities, in each case appearing on the most recently prepared consolidated
balance sheet of the Company and its subsidiaries as of the end of a fiscal
quarter of the Company, prepared in accordance with United States generally
accepted accounting principles as in effect on the date of calculation.
"Consolidated Tangible Assets" means, at any date, the total assets less all
intangible assets appearing on the most recently prepared consolidated balance
sheet of the Company and its subsidiaries as of the end of a fiscal quarter of
the Company, prepared in accordance with United States generally accepted
accounting principles as in effect on the date of calculation. "Intangible
Assets" means the amount (if any) which would be stated under the heading "Costs
in Excess of Net Assets of Acquired Companies" or under any other heading
relating to intangible assets separately listed, in each case on the face of the
aforesaid consolidated balance sheet.
"Funded Indebtedness" means any Indebtedness maturing by its terms more than
one year from the date of the determination thereof, including any Indebtedness
renewable or extendible at the option of the obligor to a date later than one
year from the date of the determination thereof.
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"Guarantee" means the unconditional and unsubordinated guarantee by Tyco or
any Guarantor of the due and punctual payment of the principal of and interest
on the Debt Securities (including premium and Additional Amounts, if any) when
and as the same shall become due and payable, whether at the stated maturity, by
acceleration, call for redemption or otherwise, in accordance with the terms of
such Debt Securities and the Indenture.
"Guarantor" means Tyco or any Subsidiary that after the date of the
Indenture executes a guarantee of the Debt Securities contemplated by the
"Limitation on Indebtedness of Subsidiaries" covenant, until a successor
replaces such party pursuant to the applicable provisions of the Indenture and,
thereafter, shall mean such successor.
"Indebtedness" means, without duplication, the principal or face amount of
(i) all obligations for borrowed money, (ii) all obligations evidenced by
debentures, notes or other similar instruments, (iii) all obligations in respect
of letters of credit or bankers acceptances or similar instruments (or
reimbursement obligations with respect thereto), (iv) all obligations to pay the
deferred purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (v) all obligations as lessee which
are capitalized in accordance with United States generally accepted accounting
principles, and (vi) all Indebtedness of others guaranteed by the Company or any
of its Subsidiaries or for which the Company or any of its Subsidiaries is
legally responsible or liable (whether by agreement to purchase indebtedness of,
or to supply funds or to invest in, others).
"Permitted Subsidiary Indebtedness" means any of the following: (i)
Indebtedness in an aggregate amount, without duplication, not to exceed, as of
the date of determination, 5% of the Consolidated Tangible Assets of the Company
(excluding any Indebtedness described in clauses (ii) through (viii) herein);
(ii) Indebtedness owed to the Company, Tyco or any Subsidiary; (iii) obligations
under standby letters of credit or similar arrangements supporting the
performance of a Person under a contract or agreement in the ordinary course of
business; (iv) obligations as lessee in the ordinary course of business which
are capitalized in accordance with United States generally accepted accounting
principles; (v) Indebtedness that was Permitted Subsidiary Indebtedness at the
time that it was first incurred; (vi) Acquired Indebtedness that by its terms is
not callable or redeemable prior to its stated maturity and that remains
outstanding following such time as the Subsidiary obligated under such Acquired
Indebtedness in good faith has made or caused to be made an offer to acquire all
such Indebtedness, including, without limitation, an offer to exchange such
Indebtedness for securities of the Company, on terms which, in the opinion of an
independent investment banking firm of national reputation and standing, are
consistent with market practices in existence at the time for offers of a
similar nature, provided that the initial expiration date of any such offer
shall be not later than the expiration of the time period set forth in paragraph
(c) of the "Limitation of Indebtedness of Subsidiaries" covenant; (vii)
Indebtedness outstanding on the date of the Indenture and (viii) any renewals,
extensions, substitutions, refundings, refinancings or replacements
(collectively, a "refinancing") of any Indebtedness referred to in clause (vii)
of this definition of "Permitted Subsidiary Indebtedness" of a Subsidiary
organized under a jurisdiction other than the United States or any State thereof
or the District of Columbia, including any successive refinancings so long as
the borrower under such refinancing is such Subsidiary and the aggregate
principal amount of Indebtedness represented thereby (or if such Indebtedness
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof, the original
issue price of such Indebtedness plus any accreted value attributable thereto
since the original issuance of such Indebtedness) is not increased by such
refinancing plus the lesser of (A) the stated amount of any premium or other
payment required to be paid in connection with such a refinancing pursuant to
the terms of the Indebtedness being refinanced or (B) the amount of premium or
other payment actually paid at such time to refinance the Indebtedness, plus, in
either case, the amount of expenses of such Restricted Subsidiary incurred in
connection with such refinancing.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
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"Principal Property" means any manufacturing, processing or assembly plant
or facility or any warehouse or distribution facility which is used by any U.S.
Subsidiary after the date hereof, other than any such plants, facilities,
warehouses or portions thereof, which in the opinion of the Board of Directors
of the Company, are not collectively of material importance to the total
business conducted by the Company and its Restricted Subsidiaries as an
entirety, or which, in each case, has a book value, on the date of the
acquisition or completion of the initial construction thereof by the Company, of
less than 1.5% of Consolidated Tangible Assets.
"Restricted Subsidiary" means any Subsidiary which owns or leases a
Principal Property.
"Sale and Lease-Back Transaction" means an arrangement with any Person
providing for the leasing by the Company or a Restricted Subsidiary of any
Principal Property whereby such Principal Property has been or is to be sold or
transferred by the Company or a Restricted Subsidiary to such Person; provided,
however, that the foregoing shall not apply to any such arrangement involving a
lease for a term, including renewal rights, for not more than three years.
"Subsidiary" means any corporation of which at least a majority of the
outstanding Voting Stock shall at the time directly or indirectly be owned or
controlled by the Company or by one or more Subsidiaries or by the Company and
one or more Subsidiaries.
"Voting Stock" of a Person means Capital Stock of such Person of the class
or classes pursuant to which the holders thereof have the general voting power
under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not
at the time Capital Stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
MERGER, CONSOLIDATION, SALE OR CONVEYANCE
The Indenture provides that unless otherwise provided in any supplemental
indenture and described in the applicable Prospectus Supplement, neither the
Company, Tyco nor any other Guarantor will merge or consolidate with any other
corporation and will not sell or convey all or substantially all of its assets
to any Person, unless the Company, Tyco or such other Guarantor, as the case may
be, shall be the continuing corporation, or the successor corporation or Person
that acquires all or substantially all of the assets of the Company, Tyco or
such other Guarantor, as the case may be, shall expressly assume the payment of
principal of, premium, if any, and interest on the Debt Securities and the
observance of all the covenants and agreements under the Indenture to be
performed or observed by the Company, Tyco or such other Guarantor, as the case
may be, and immediately after such merger, consolidation, sale or conveyance,
the Company, Tyco or such other Guarantor, as the case may be, such Person or
such successor corporation shall not be in default in the performance of the
covenants and agreements of the Indenture to be performed or observed by the
Company, Tyco or such other Guarantor, as the case may be; provided that the
foregoing shall not apply to a Guarantor other than Tyco if in connection with
any such merger, consolidation, sale or conveyance the Guarantee of such
Guarantor is released and discharged pursuant to paragraph (b) of the
"Limitation on Indebtedness of Subsidiaries" covenant.
EVENTS OF DEFAULT
Unless otherwise provided in any supplemental indenture and described in the
applicable Prospectus Supplement, an Event of Default with respect to Debt
Securities of any series issued under the Indenture is defined in the Indenture
as being: default for 30 days in payment of any interest on any Debt Securities
of such series; default in any payment of principal of or premium, if any, on
any Debt Securities of such series (including any sinking fund payment); default
by the Company, Tyco or any other Guarantor in performance of any other of the
covenants or agreements in respect of the Debt Securities of such series and
related Guarantees or the Indenture which shall not have been remedied for a
period of 90 days after written notice to the Company by the Trustee or the
holders of at least 25% of the principal amount of all Debt Securities of all
affected series, as provided in the supplemental indenture relating thereto and
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described in the applicable Prospectus Supplement, specifying that such notice
is a "Notice of Default" under the Indenture; default by the Company, Tyco or
any other Guarantor in the payment at the final maturity thereof, after the
expiration of any applicable grace period, of principal of, premium, if any, or
interest on Indebtedness for money borrowed (other than Non-Recourse
Indebtedness, as defined) in the principal amount then outstanding of
$50,000,000 or more, or acceleration of any Indebtedness in such principal
amount so that it becomes due and payable prior to the date on which it would
otherwise have become due and payable and such acceleration is not rescinded
within ten business days after notice to the Company by the Trustee or the
holders of at least 25% of the principal amount of all of the Debt Securities at
the time outstanding (treated as one class); any Guarantee ceases to be, or the
Company or any Guarantor asserts in writing that such Guarantee is not in full
force and effect and enforceable in accordance with its terms; certain events
involving bankruptcy, insolvency or reorganization of the Company, Tyco or any
Significant Subsidiary Guarantor; or any other Event of Default established for
the Debt Securities of such series set forth in the accompanying Prospectus
Supplement. Unless otherwise provided in any supplemental indenture and
described in the applicable Prospectus Supplement, the Indenture provides that
the Trustee shall transmit notice of any uncured default under the Indenture
with respect to any series, within 90 days after the occurrence of such default,
to the holders of Debt Securities of each affected series, except that the
Trustee may withhold notice to the holders of any series of the Debt Securities
of any default (except in payment of principal of, premium, if any, or interest
on such series of Debt Securities) if the Trustee considers it in the interest
of the holders of such series of Debt Securities to do so.
Unless otherwise provided in any supplemental indenture and described in the
applicable Prospectus Supplement, (a) if an Event of Default due to the default
in payment of principal of, premium, if any, or interest on any series of Debt
Securities issued under the Indenture or due to the default in the performance
or breach of any other covenant or agreement of the Company, Tyco or any
Guarantor applicable to the Debt Securities of such series but not applicable to
all outstanding Debt Securities issued under the Indenture shall have occurred
and be continuing, either the Trustee or the holders of not less than 25% in
principal amount of the Debt Securities of each affected series issued under the
Indenture and then outstanding (each such series voting as a separate class) may
declare the principal of all Debt Securities of such affected series and
interest accrued thereon to be due and payable immediately; and (b) if an Event
of Default due to a default in the performance of any other of the covenants or
agreements in the Indenture applicable to all outstanding Debt Securities issued
thereunder and then outstanding, or due to a default in payment at final
maturity or upon acceleration of indebtedness for money borrowed in the
principal amount then outstanding of $50,000,000 or more, or to certain events
of bankruptcy, insolvency and reorganization of the Company, Tyco or any
Significant Subsidiary Guarantor shall have occurred and be continuing, either
the Trustee or the holders of not less than 25% in principal amount of all Debt
Securities issued under the Indenture and then outstanding (treated as one
class) may declare the principal of all such Debt Securities and interest
accrued thereon to be due and payable immediately, but upon certain conditions
such declarations may be annulled and past defaults may be waived (except a non-
payment of such Debt Securities which shall have become due by acceleration) by
the holders of a majority in principal amount of the Debt Securities of all such
affected series then outstanding (each such series voting as a separate class or
all such Debt Securities voting as a single class, as the case may be).
Unless otherwise provided in any supplemental indenture and described in the
applicable Prospectus Supplement, the holders of a majority in principal amount
of the Debt Securities of each series then outstanding and affected (with each
series voting as a separate class) shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee with respect to the Debt Securities of such series under the Indenture,
subject to certain limitations specified in the Indenture.
Unless otherwise provided in any supplemental indenture and described in the
applicable Prospectus Supplement, the Indenture provides that no holder of Debt
Securities of any series may institute any action against the Company under the
Indenture (except actions for payment of overdue principal, premium, if any, or
interest) unless such holder previously shall have given to the Trustee written
notice of default and
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continuance thereof and unless the holders of not less than 25% in principal
amount of the Debt Securities of each affected series (with each series voting
as a separate class) issued under the Indenture and then outstanding shall have
requested the Trustee to institute such action and shall have offered the
Trustee reasonable indemnity, and the Trustee shall not have instituted such
action within 60 days of such request, and the Trustee shall not have received
direction inconsistent with such written request by the holders of a majority in
principal amount of the Debt Securities of each affected series (with each
series voting as a separate class) issued under such Indenture and then
outstanding.
Unless otherwise provided in any supplemental indenture and described in the
applicable Prospectus Supplement, the Indenture requires the annual filing by
the Company with the Trustee of a written statement as to compliance with the
covenants and agreements contained in the Indenture.
"Significant Subsidiary Guarantor" means any one or more Guarantors (other
than Tyco) which, at the date of determination, together with its or their
respective subsidiaries in the aggregate, (i) for the most recently completed
fiscal year of the Company accounted for more than 10% of the consolidated
revenues of the Company or (ii) at the end of such fiscal year, was the owner
(beneficial or otherwise) of more than 10% of the consolidated assets of the
Company, as determined in accordance with United States generally accepted
accounting principles and reflected on the Company's consolidated financial
statements.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise provided in any supplemental indenture and described in the
applicable Prospectus Supplement, the Company may discharge or defease its
obligations under the Indenture as set forth below.
Under terms satisfactory to the Trustee, the Company may discharge this
Indenture with respect to any series of Debt Securities issued under the
Indenture which have not already been delivered to the Trustee for cancellation
and which have either become due and payable or are by their terms due and
payable within one year (or which may be called for redemption within one year)
by irrevocably depositing with the Trustee cash or direct obligations of the
United States as trust funds in an amount certified to be sufficient to pay at
maturity (or upon redemption) the principal of, premium, if any, and interest
and Additional Amounts, if any, on such Debt Securities. However, the Company
may not thereby avoid its duty to register the transfer or exchange of such
series of Debt Securities, to replace any mutilated, destroyed, lost or stolen
Debt Securities of such series or to maintain an office or agency in respect of
such series of Debt Securities.
In the case of any series of Debt Securities in respect of which the exact
amounts of principal of and interest due on such series can be determined at the
time of making the deposit referred to below, the Company at its option at any
time may also (i) discharge any and all of its obligations to holders of such
series of Debt Securities issued under the Indenture ("defeasance"), but may not
thereby avoid its duty to register the transfer or exchange of such series of
Debt Securities, to replace any mutilated, destroyed, lost, or stolen Debt
Securities of such series or to maintain an office or agency in respect of such
series of Debt Securities or (ii) be released with respect to any outstanding
series of Debt Securities issued under the Indenture from the obligations
imposed by the covenants described under the captions "Covenants" and "Merger,
Consolidation, Sale or Conveyance" above and omit to comply with such covenants
without creating an Event of Default ("covenant defeasance"). Defeasance or
covenant defeasance may be effected only if, among other things: (i) the Company
or Tyco irrevocably deposits with the Trustee cash and/or direct obligations of
the United States, as trust funds in an amount certified by a nationally
recognized firm of independent public accountants or a nationally recognized
investment banking firm to be sufficient to pay each installment of principal
of, premium, if any, and interest and Additional Amounts, if any, on all
outstanding Debt Securities of such series issued under the Indenture on the
dates such installments of principal, premium, if any, and interest are due;
(ii) no default or Event of Default shall have occurred and be continuing on the
date of the deposit referred to in clause (i) or, in respect of certain events
of bankruptcy, insolvency or reorganization, during the period ending on the
91st day after the date
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of such deposit (or any longer applicable preference period); and (iii) the
Company delivers to the Trustee (A) an opinion of counsel to the effect that the
holders of such series of Debt Securities will not recognize any income, gain or
loss for United States federal income tax purpose as a result of such deposit
and defeasance or covenant defeasance, as applicable, and will be subject to
United States federal income tax on the same amounts and in the same manner and
at the same times as would have been the case if such deposit and defeasance or
covenant defeasance, as applicable, had not occurred (in the case of defeasance,
such opinion must be based on a ruling of the Internal Revenue Service or a
change in United States federal income tax law occurring after the date of the
Indenture) and (B) an opinion of counsel to the effect that (x) payments from
the defeasance trust will be free and exempt from any and all withholding and
other taxes imposed or levied by or on behalf of Luxembourg or any political
subdivision thereof having the power to tax, and (y) holders of such series of
Debt Securities will not recognize any income, gain or loss for Luxembourg
income tax and other Luxembourg tax purposes as a result of such deposit and
defeasance or covenant defeasance, as applicable, and will be subject to
Luxembourg income tax and other Luxembourg tax on the same amounts, in the same
manner and at the same times as would have been the case if such deposit and
defeasance or covenant defeasance, as applicable, had not occurred.
REDEMPTION
Unless otherwise provided in any supplemental indenture and specified in the
applicable Prospectus Supplement, the following provisions shall be applicable
to any redemption described under "Redemption Upon Changes in Withholding Taxes"
above and to the Debt Securities of any series which are redeemable before their
maturity or to any sinking fund for the retirement of Debt Securities of a
series.
Notice of redemption to the holders of Debt Securities of any series to be
redeemed as a whole or in part shall be given by mailing notice of such
redemption by first class mail, postage prepaid, at least 30 days and not more
than 60 days prior to the date fixed for redemption. The notice of redemption to
each such holder shall specify the principal amount or portion thereof of each
Debt Security of such series held by such holder to be redeemed, the date fixed
for redemption, the redemption price, the place or places of payment, that
payment will be made upon presentation and surrender of such Debt Securities,
that such redemption is pursuant to the mandatory or optional sinking fund, or
both, if such be the case, that interest accrued to the date fixed for
redemption will be paid as specified in such notice and that on and after said
date interest thereon or on the portions thereof to be redeemed will cease to
accrue. At least one business day prior to the redemption date specified in the
notice of redemption given, the Company will deposit with the Trustee or with
one or more paying agents an amount of money sufficient to redeem on the
redemption date all the Debt Securities of such series so called for redemption.
If less than all the Debt Securities of a series are to be redeemed, the Trustee
shall select, in such manner as it shall deem appropriate and fair, Debt
Securities of such series to be redeemed. If notice of redemption has been given
as above provided, on and after the redemption date specified in such notice
(unless the Company shall default in the payment of such Debt Securities at the
redemption price, together with interest accrued to said date) interest on the
Debt Securities or portions of Debt Securities so called for redemption shall
cease to accrue, and the holders thereof shall have no right in respect of such
Debt Securities except the right to receive the redemption price thereof and
unpaid interest to the date fixed for redemption.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company, Tyco and the
Trustee, with the consent of the holders of not less than a majority of
principal amount of the Debt Securities at the time outstanding of all series
affected (voting as one class), to modify the Indenture or any supplemental
indenture or the rights of the holders of the Debt Securities, except that no
such modification shall (i) extend the final maturity of any of the Debt
Securities or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any amount payable on
redemption thereof, or reduce the amount of any original issue discount security
payable upon acceleration or provable in bankruptcy or impair or affect the
right of any holder of the Debt Securities to institute suit for the payment
thereof
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without the consent of the holder of each of the Debt Securities so affected or
(ii) reduce the aforesaid percentage in principal amount of Debt Securities, the
consent of the holders of which is required for any such modification, without
the consent of the holders of all Debt Securities then outstanding.
The Indenture contains provisions permitting the Company, Tyco and the
Trustee, without the consent of any holders of Debt Securities, to enter into a
supplemental indenture, among other things, for purposes of curing any ambiguity
or correcting or supplementing any provision contained in the Indenture or in
any supplemental indenture or making other provisions in regard to the matters
or questions arising under the Indenture or any supplemental indenture as the
Board of Directors of the Company deems necessary or desirable and which does
not adversely affect the interests of the holders of Debt Securities in any
material respect. The Company, Tyco and the Trustee, without the consent of any
holders of Debt Securities, may also enter into a supplemental indenture to
establish the form or terms of any series of Debt Securities as are not
otherwise inconsistent with any of the provisions of the Indenture.
CONCERNING THE TRUSTEE
The Trustee may hold Debt Securities, act as a depository for funds of, make
loans to, or perform other services for, Tyco, the Company and their
subsidiaries as if it were not the Trustee.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through underwriters or dealers,
and also may sell Debt Securities directly to other purchasers or through
agents. Each Prospectus Supplement will describe the method of distribution of
the offered Securities.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Debt Securities, underwriters may receive
compensation from the Company or from purchasers of Debt Securities for whom
they may act as agents in the form of discounts, concessions, or commissions.
Underwriters may sell Debt Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions, or commissions
from the underwriters and/or commissions from the purchasers for whom they may
act as agents. Underwriters, dealers, and agents that participate in the
distribution of Debt 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 Debt Securities by them may be deemed to be underwriting discounts and
commissions, under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from the Company will be
described, in the Prospectus Supplement.
Underwriters and agents who participate in the distribution of Debt
Securities may be entitled under agreements which may be entered into by the
Company to indemnification by the Company and Tyco against certain liabilities,
including liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase offered Debt Securities from
the Company pursuant to contracts providing for payment and delivery on a future
date. Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Company. The obligations of any purchaser
under any such contract will be subject to the condition that the purchase of
the offered Debt Securities shall not at the time of delivery be prohibited
under the laws of the jurisdiction to which such purchaser is subject. The
underwriters and such other agents will not have any responsibility in respect
of the validity or performance of such contracts.
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LEGAL MATTERS
Certain U.S. legal matters regarding the Debt Securities and the Guarantees
will be passed upon for Tyco and the Company by Kramer, Levin, Naftalis &
Frankel, New York, New York, counsel to Tyco and the Company. Joshua M. Berman,
a director and vice president of Tyco, is counsel to Kramer, Levin, Naftalis &
Frankel. Mr. Berman owns beneficially 64,000 common shares of Tyco. Certain
matters under the laws of Bermuda related to the Guarantees of Tyco will be
passed upon for Tyco by Appleby, Spurling & Kempe, Hamilton, Bermuda, Bermuda
counsel to Tyco. Certain matters under the laws of Luxembourg related to the
Debt Securities will be passed upon by Zeyen Beghin Feider Loeff Claeys Verbeke,
Luxembourg counsel to the Company.
EXPERTS
The consolidated financial statements and financial statement schedule
included in Tyco's Transition Report on Form 10-K for fiscal year ended
September 30, 1997 and included in Tyco's Current Report on Form 8-K dated April
23, 1998 and incorporated by reference in this Prospectus have been audited by
Coopers & Lybrand, independent public accountants, as set forth in their reports
included therein. In those reports, that firm states that with respect to
certain subsidiaries its opinion is based on the reports of other independent
public accountants, namely Coopers & Lybrand L.L.P. and Arthur Andersen LLP. The
consolidated financial statements and financial statement schedule referred to
above have been incorporated herein in reliance upon said reports given upon the
authority of those firms as experts in accounting and auditing.
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