<PAGE>
As filed with the Securities and Exchange Commission on October 29, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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WIND RIVER SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-2873391
(State of Incorporation) (I.R.S. Employer Identification No.)
1010 ATLANTIC AVENUE
ALAMEDA, CA 94501
(510) 748-4100
(Address, including zip code, and telephone number, including area
code of Registrant's principal executive offices)
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RICHARD W. KRABER
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
WIND RIVER SYSTEMS, INC.
1010 ATLANTIC AVENUE
ALAMEDA, CA 94501
(510) 748-4100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
ALAN C. MENDELSON, ESQ.
ANDREA VACHSS, ESQ.
COOLEY GODWARD LLP
FIVE PALO ALTO SQUARE
3000 EL CAMINO REAL
PALO ALTO, CA 94306
(650) 843-5000
Approximate date of commencement of proposed sale to the public:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed Maximum Proposed Maximum
Title of Class of Offering Aggregate Amount of
Securities to be Registered Amount to be Registered Price per Share (1) Offering Price (1) Registration Fee
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<S> <C> <C> <C> <C>
5% Convertible $140,000,000 100% $140,000,000 $42,425
Subordinated Notes due
2002
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Common Stock, par value -- -- -- --
$.001 per share (2)
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(i) of the Securities Act of 1933 based upon the
proposed offering price of the convertible securities.
(2) Such currently indeterminate number of shares of Common Stock as shall
be issuable from time to time upon conversion of the 5% Convertible
Subordinated Notes due 2002 being registered hereby.
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The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED OCTOBER 29, 1997
PROSPECTUS
WIND RIVER SYSTEMS, INC.
$140,000,000
5% CONVERTIBLE SUBORDINATED NOTES DUE 2002
AND SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION THEREOF
This Prospectus covers the resale from time to time by the holders (the
"Selling Securityholders") of up to $140,000,000 aggregate principal amount
of 5% Convertible Subordinated Notes due 2002 (the "Notes") of Wind River
Systems, Inc., a Delaware corporation ("Wind River" or the "Company"). This
Prospectus also covers sales by the Selling Securityholders from time to time
of shares of common stock, par value $.001 per share (the "Common Stock") of
the Company into which the Notes are convertible (the "Conversion Shares").
Interest on the Notes is payable on August 1 and February 1 of each year,
commencing February 1, 1998. The Notes will mature on August 1, 2002. The
Notes will be convertible into Common Stock of Wind River at any time after
the 90th day following the last original issue date (July 31, 1997) of the
Notes and prior to the close of business on the maturity date, unless
previously redeemed or repurchased, at a conversion price of $48.50 per share
(equivalent to a conversion rate of approximately 20.62 shares per $1,000
principal amount of Notes), subject to adjustment. See "Description of
Notes-- Conversion."
The Notes are not entitled to any sinking fund. On or after August 2,
2000, the Notes will be redeemable at the option of the Company, in whole or,
from time to time, in part, at the redemption prices set forth in this
Prospectus plus accrued interest. In the event of a Fundamental Change (as
defined), each Holder (as defined) of the Notes may require the Company to
repurchase its Notes, in whole or in part, for cash, at declining redemption
prices, subject to adjustment in certain events as described herein, plus
accrued interest. The Notes also are redeemable by the Company prior to
August 2, 2002 in the event of certain developments involving withholding
taxes of the United States. See "Description of Notes -- Redemption--
Redemption for Taxation Reasons." Otherwise, the Notes are not redeemable
prior to August 2, 2000. See "Description of Notes -- Repurchase at Option of
Holders Upon a Fundamental Change" and "-- Redemption -- Optional
Redemption."
The Notes are general, unsecured obligations of the Company and are
subordinated in right of payment to all existing and future Senior
Indebtedness (as defined) of the Company. The Notes also are structurally
subordinated to all liabilities of subsidiaries of the Company. As of October
29, 1997, the aggregate amount of outstanding Senior Indebtedness of the
Company was $1,000,000. The Indenture (as defined) does not restrict the
Company from incurring additional Senior Indebtedness or other liabilities.
The Notes were issued by the Company on July 31, 1997 in a private
placement (the "Private Placement") to qualified institutional buyers or
other accredited investors in transactions exempt from registration under the
Securities Act of 1933, as amended, (the "Securities Act"), and in sales
outside the United States within the meaning of Regulation S under the
Securities Act. Deutsche Morgan Grenfell Inc., Hambrecht & Quist LLC and
Wessels, Arnold & Henderson, L.L.C. (the "Initial Purchasers") were the
initial purchasers of the Notes.
The Selling Securityholders, directly or through agents, broker-dealers
or underwriters, may sell the Notes or the Conversion Shares offered hereby
from time to time on terms to be determined at the time of sale. Such Notes
or Conversion Shares may be sold at market prices prevailing at the time of
sale or at negotiated prices. The Selling Securityholders and any agents,
broker-dealers or underwriters that participate in the distribution of the
Notes or Conversion Shares may be deemed to be "underwriters" within the
meaning of the Securities Act, and any commission received by them and any
profit on the resale of the Common Stock purchase by them may be deemed to be
underwriting discounts or commissions under the Securities Act. The Company
will not receive any proceeds from the sale of Notes or Conversion Shares by
the Selling Securityholders. See "Selling Securityholders" and "Plan of
Distribution."
The Notes are listed on the Luxembourg Stock Exchange. Prior to this
offering, the Notes have been eligible for trading on the PORTAL Market.
Notes sold hereby are not expected to remain eligible for trading on the
PORTAL Market. The Common Stock is listed on the Nasdaq National Market
under the symbol "WIND." The last reported sale price of the Common Stock on
the Nasdaq National Market on October 28, 1997 was $36.88 per share.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY
INVESTORS IN EVALUATING AN INVESTMENT IN THE SECURITIES OFFERED
HEREBY, SEE "RISK FACTORS" COMMENCING ON PAGE 4.
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THE 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 ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
Expenses of preparing and filing the Registration Statement of which this
Prospectus is a part and all post-effective amendments will be borne by the
Company. No underwriting commissions or discounts will be paid by the Company
in connection with this offering. Estimated expenses payable by the Company
in connection with this offering are approximately $200,000. The aggregate
proceeds to the Selling Securityholders from the Notes or Conversion Shares
will be the price of the Notes or Conversion Shares sold less the aggregate
agents' commissions and underwriters' discounts, if any, and other expenses
of issuance and distribution not borne the Company. The Company has agreed to
indemnify the Initial Purchasers, the Selling Securityholders and certain
other persons against certain liabilities, including liabilities under the
Securities Act. See "Plan of Distribution."
October __, 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information can be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549, and at the
Commission's Regional Offices located at Northwest Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661; and 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. Reports, proxy statements and other information filed electronically
by the Company with the Commission are available at the Commission's
worldwide web site at http://www.sec.gov. The Company's Common Stock is
quoted for trading on the Nasdaq National Market and reports, proxy
statements and other information concerning the Company may also be inspected
at the offices of the National Association of Securities Dealers, 1735 K
Street, N.W., Washington, D.C. 20006.
ADDITIONAL INFORMATION
A registration statement on Form S-3 with respect to the Notes and
Conversion Shares offered hereby (together with all amendments, exhibits and
schedules thereto, the "Registration Statement") has been filed with the
Commission under the Securities Act. This Prospectus does not contain all of
the information contained in such Registration Statement, certain portions of
which have been omitted pursuant to the rules and regulations of the
Commission. For further information with respect to the Company and the Notes
and Conversion Shares offered hereby, reference is made to the Registration
Statement. Statements contained in this Prospectus regarding the contents of
any contract or any other documents are not necessarily complete and, in each
instance, reference is hereby made to the copy of such contract or document
filed as an exhibit to the Registration Statement. The Registration Statement
may be inspected without charge at the Securities and Exchange Commission's
principal office in Washington, D.C., and copies of all or any part thereof
may be obtained from the Public Reference Section, Securities and Exchange
Commission, Washington, D.C., 20549, upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission and are
incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended January 31, 1997;
2. The Company's Quarterly Reports on Form 10-Q for the
quarters ended April 30, 1997 and July 31, 1997;
3. The Company's Current Reports on Form 8-K dated July 17,
1997, July 22, 1997 and July 31, 1997; and
4. The description of the Company's Common Stock set forth in
its Registration Statement on Form 8-A filed with the
Commission on March 12, 1993.
All documents filed by the Company pursuant to Section 13(a), 13(c) or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing 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.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the request of
such person, a copy of any or all of the foregoing documents incorporated
herein by reference, other than exhibits to such documents (unless such
exhibits are specifically
<PAGE>
incorporated by reference into such documents). Requests for such documents
should be directed to Wind River Systems, Inc., Attention: Chief Financial
Officer, 1010 Atlantic Avenue, Alameda, California 94501, telephone (510)
748-4100.
<PAGE>
THE COMPANY
Wind River Systems, Inc. ("Wind River" or the "Company") develops,
markets and supports advanced software operating systems and development
tools that allow customers to create complex, robust, real-time software
applications for embedded computers. An embedded computer is a microprocessor
that is incorporated into a larger device and is dedicated to responding to
external events by performing specific tasks quickly, predictably and
reliably. Some examples of such devices are telecommunications products such
as PABX, routers, central office switches and call processing systems; office
products such as fax machines, laser printers and photocopiers; vehicle
anti-lock brakes and navigation systems; consumer products such as
camcorders, video games and set-top boxes; medical instrumentation and
imaging systems; industrial automation equipment such as robots; and
aerospace devices such as NASA's Mars probe, Pathfinder. Wind River's
flagship product, Tornado-TM-, enables customers to enhance product
performance, standardize designs across projects, reduce research and
development costs and shorten product development cycles. The Company's
principal offices are located at 1010 Atlantic Avenue, Alameda, California
94501 and its telephone number is (510) 748-4100.
RISK FACTORS
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE DISCUSSION IN
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, (THE "SECURITIES ACT")
THAT INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD
DIFFER MATERIALLY FROM THOSE DISCUSSED HERE. FACTORS THAT COULD CAUSE OR
CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE
DISCUSSED BELOW, AS WELL AS THOSE DISCUSSED ELSEWHERE IN THIS PROSPECTUS AND
IN ANY DOCUMENTS INCORPORATED HEREIN BY REFERENCE. IN ADDITION TO THE OTHER
INFORMATION IN THIS PROSPECTUS, THE FOLLOWING FACTORS SHOULD BE CONSIDERED
CAREFULLY IN EVALUATING AN INVESTMENT IN THE SECURITIES OFFERED HEREBY.
RELIANCE ON CORE FAMILY OF PRODUCTS
Revenue from sales of the Tornado-TM- and VxWorks-Registered Trademark-
family of products and services accounted for approximately 90% and 88% of
the Company's revenues in the fiscal year ended January 31, 1997, and the six
months ended July 31, 1997, respectively. The Company's future results depend
heavily on continued market acceptance of these products in the Company's
current markets and successful application in new markets. Any factor
adversely affecting the market for the Tornado-TM- and VxWorks-Registered
Trademark- family of products and services could have a material adverse
effect on the Company's business, financial condition and results of
operations. The Company typically charges a one-time fee for a development
license and a run-time license fee for each copy of the Company's operating
system embedded in the customer's products. A key component of the Company's
strategy is to increase revenue through run-time license fees. Any increase
in the percentage of revenues attributable to run-time licenses will depend
on the Company's successful negotiation of run-time license agreements and on
the successful commercialization by the Company's customers of the underlying
products. To the extent that such customers are not successful, the Company
may not be able to meet its objectives and its business, financial condition
and results of operations would be materially and adversely affected.
RISKS ASSOCIATED WITH NEW AND CHANGING MARKETS
The Company is continuously engaged in product development for new or
changing markets. In particular, the Company has invested significant time
and effort, together with a consortium of industry participants, in the
development of I(2)O, a new specification that is intended to create an open
standard set of interface specifications for high performance I/O systems.
The specification is intended to be used by system, network and peripheral
interface card and operating systems vendors to simplify the task of building
and maintaining high-performance I/O subsystems. The Company also has
developed IxWorks-TM-, a real-time operating system for use in conjunction
with the I(2)O specification. The success of the I(2)O specification and the
IxWorks-TM- product line depends heavily on its
4.
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adoption by a broad segment of the industry. The Company also has expended
substantial time and financial resources developing embedded operating
software and development tools for Internet applications. The commercial
Internet market has only recently begun to develop, is rapidly changing and
is characterized by an increasing number of new entrants with competitive
products. Moreover, there is an increasing number of new Internet protocols
to which the Company's products must be ported. It is unclear which of these
competing protocols ultimately will achieve market acceptance. If the
protocols upon which the Company's Internet products are based ultimately
fail to be widely adopted, the Company's business, financial condition and
results of operations may be materially and adversely affected. It is
difficult to predict with any assurance whether demand for any of these
products will develop or increase in the future. If these markets, or any
other new market targeted by the Company in the future, fail to develop,
develop more slowly than anticipated or become saturated with competitors, if
the Company's products are not developed in a timely manner, or if the
Company's products and services do not achieve or sustain market acceptance,
the Company's business, financial condition and results of operations would
be materially and adversely affected.
SIGNIFICANT FLUCTUATIONS IN OPERATING RESULTS
The Company has experienced significant period-to-period fluctuations in
revenues and operating results and anticipates that such fluctuations will
continue. These fluctuations may be attributable to a number of factors,
including the volume and timing of orders received during the quarter, the
timing and acceptance of new products and product enhancements by the Company
or its competitors, unanticipated sales and buyouts of run-time licenses,
stages of product life cycles, purchasing patterns of customers and
distributors, market acceptance of products sold by the Company's customers,
competitive conditions in the industry, business cycles affecting the markets
in which the Company's products are sold, extraordinary events, such as
acquisitions, including related charges, and economic conditions generally or
in specific geographic areas. The future operating results of the Company may
fluctuate as a result of these and other factors, including the Company's
ability to continue to develop innovative and competitive products. In
addition, the Company has not entered into long-term agreements with its
customers, and the timing of license fees is difficult to predict. The
procurement process of the Company's customers is often several months or
longer from initial inquiry to order and may involve competing
considerations. Further, as licensing of the Company's products increasingly
becomes a more strategic decision made at higher management levels, there can
be no assurance that sales cycles for the Company's products will not
lengthen. Product revenue in any quarter depends on the volume and timing of
orders received in that quarter. The Company has at times recognized a
substantial portion of its total revenue from sales booked and shipped in the
latter part of the quarter; thus, the magnitude of quarterly fluctuations may
not become evident until late in a particular quarter. Because the Company's
staffing and operating expenses are based on anticipated total revenue levels
and a high percentage of the Company's costs are fixed in the short term,
small variations between anticipated orders and actual orders, as well as
non-recurring or large orders, could cause disproportionate variations in the
Company's operating results from quarter to quarter. Revenues also are
typically higher in the fourth quarter than in other quarters of the fiscal
year, which ends on January 31, primarily as a result of purchases by
customers prior to the calendar year end, as well as by customers who
purchase at the commencement of a new calendar year. These trends are
expected to continue.
A number of additional factors may in the future cause the Company's
revenues and operating results to vary significantly from period to period.
These factors include: software "bugs" or other product quality problems;
changes in operating expenses; changes in Company strategy; personnel
changes; foreign currency exchange rates; and mix of products sold. Although
the Company has been profitable for the last several years on an annual
basis, there can be no assurance that the Company will be able to continue
its growth in revenue or sustain its profitability on a quarterly or annual
basis. Due to all of the foregoing factors, the Company believes that
period-to-period comparisons of its results of operations are not necessarily
meaningful and should not be relied upon as an indication of future
performance. It is possible that, in some future quarters, the Company's
operating results will be below the expectations of stock market analysts and
investors. In such event, the price of the Common Stock would likely be
materially and adversely affected.
5.
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DEPENDENCE ON VME MARKET
A significant percentage of the Company's revenues historically has been
derived from sales of systems built to the VME (versabus module eurocard)
standard. These systems typically are used in high cost, low volume
applications, including military, telecommunications, space and research
applications. Although the Company believes that revenues from sales of
products designed for embedded systems applications will account for an
increasing percentage of the Company's revenues in the future, the Company
expects revenues from the VME market to continue to be significant for the
foreseeable future. Academic institutions and defense industry participants,
which generate a significant portion of the Company's VME revenues, are
dependent on government funding, the continued availability of which is
uncertain. Any unanticipated termination or reduction of government funding
of VME customers could have a material adverse effect on the Company's
business, financial condition and results of operations.
COMPETITION
The embedded real-time software industry is highly competitive and is
characterized by rapidly advancing technology. The Company believes that the
principal competitive factors in the industry are functionality, reliability,
service, reputation and pricing. In order to maintain or improve its position
in the industry, the Company must continue to enhance its current products
and develop new products and product extensions rapidly. The Company believes
that its principal competition comes from companies that develop real-time
embedded software development systems in-house rather than purchasing such
systems from independent software vendors such as the Company. Many of these
organizations have substantial internal programming resources with the
capability to develop specific products for their needs. The Company also
competes with other independent software vendors, including Integrated
Systems, Inc., Mentor Graphics, Inc. (through acquisition of Microtec/Ready
Systems), Microware Systems Corporation, Microsoft Corporation, Sun
Microsystems, Inc. (through acquisition of Chorus Systems S.A.) and Lucent
Technologies, Inc. In addition, hardware or other software vendors could seek
to expand their product offerings by designing and selling products that
directly compete with or adversely affect sales of the Company's products.
Many of the Company's existing and potential competitors have substantially
greater financial, technical, marketing and sales resources than the Company.
In addition, the Company is aware of ongoing efforts by competitors to
emulate the performance and functionality of the Company's products, and
there can be no assurance that competitors will not develop equivalent or
superior technology to that of the Company. Because a substantial percentage
of the Company's revenues have been derived from sales of the Tornado-TM- and
VxWorks-Registered Trademark- family of products and services, the effects of
competition could be more adverse than would be the case if the Company had a
broader product offering. In addition, competitive pressures could cause the
Company to reduce the prices of its products, which would result in reduced
profit margins. There can be no assurance that the Company will be able to
compete effectively against its current and future competitors. If the
Company is unable to compete successfully, its business, financial condition
and results of operations would be materially and adversely affected.
MANAGEMENT OF GROWTH; DEPENDENCE ON KEY PERSONNEL; NEED FOR ADDITIONAL
PERSONNEL
The Company has experienced, and expects to continue to experience,
significant growth in the number of employees, the scope and complexity of
its operating and financial systems and the geographic area of its
operations. The Company's continued success will depend significantly on its
ability to integrate new operations and new personnel. There can be no
assurance that the Company will be successful in achieving such integration
efficiently. In addition, the Company anticipates the need to relocate its
management, engineering, marketing, sales and customer support operations to
a new facility within the next several years. The Company has purchased a
32-acre parcel adjacent to its current executive offices and intends to lease
a new facility suitable for its relocation that will be constructed on this
property. There can be no assurance that such facility will be constructed on
a timely basis, that any such relocation will be accomplished efficiently, or
that the Company's operations will not be materially and adversely affected
by such relocation. The Company's future performance depends to a significant
degree upon the continued contributions of its key management, product
development, marketing, sales, customer support and operations personnel,
several of whom have joined the Company only recently. In addition, the
Company believes
6.
<PAGE>
its future success will depend in large part upon its ability to attract and
retain highly-skilled managerial, product development, marketing, sales,
customer support and operations personnel, many of whom are in great demand.
Competition for such personnel is particularly intense in the San Francisco
Bay Area, where the Company is headquartered, and there can be no assurance
that the Company will be successful in attracting and retaining such
personnel. The failure of the Company to attract, integrate and retain the
necessary personnel would have a material adverse effect on the Company's
business, financial condition and results of operations.
RAPID TECHNOLOGICAL CHANGE; DEPENDENCE ON NEW PRODUCTS
The embedded real-time software industry faces a fragmented market
characterized by ongoing technological developments, evolving industry
standards and rapid changes in customer requirements. The Company's success
depends and will continue to depend upon its ability to continue to develop
and introduce in a timely manner new products that take advantage of
technological advances, to identify and adhere to emerging standards, to
continue to improve the functionality of its Tornado-TM- development
environment and the scalability and functionality of the VxWorks-Registered
Trademark- product, to offer its products across a spectrum of microprocessor
families used in the embedded systems market and to respond promptly to
customers' requirements. The Company has from time to time experienced delays
in the development of new products and the enhancement of existing products.
Such delays are commonplace in the software industry. There can be no
assurance that the Company will be successful in developing and marketing, on
a timely basis or at all, competitive products, product enhancements and new
products that respond to technological change, changes in customer
requirements and emerging industry standards, or that the Company's enhanced
or new products will adequately address the changing needs of the
marketplace. The inability of the Company, due to resource constraints or
technological or other reasons, to develop and introduce new products or
product enhancements in a timely manner could have a material adverse effect
on the Company's business, financial condition or results of operations. From
time to time, the Company or its competitors may announce new products,
capabilities or technologies that have the potential to replace or shorten
the life cycles of the Company's existing products. There can be no assurance
that announcements of currently planned or other new products by the Company
or others will not cause customers to defer purchasing existing Company
products. Any failure by the Company to anticipate or respond adequately to
changing market conditions, or any significant delays in product development
or introduction, would have a material adverse effect on the Company's
business, financial condition and results of operations.
RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS
In the fiscal years ended January 31, 1995, 1996 and 1997, the Company
derived approximately 33%, 37% and 34%, respectively, of its total revenue
from sales outside of North America. The Company expects that international
sales will continue to generate a significant percentage of its total revenue
in the foreseeable future. The Company also expects to make substantial
investments to expand further its international operations and to increase
its direct sales force in Europe and Asia. There can be no assurance that
these investments will result in commensurate increases in the Company's
international sales. International operations are subject to certain risks,
including foreign government regulation; more prevalent software piracy;
longer payment cycles; unexpected changes in, or imposition of, regulatory
requirements, tariffs, import and export restrictions and other barriers and
restrictions; greater difficulty in accounts receivable collection;
potentially adverse tax consequences; the burdens of complying with a variety
of foreign laws; staffing and managing foreign operations; political and
economic instability; changes in diplomatic and trade relationships; possible
recessionary environments in economies outside the U.S.; and other factors
beyond the control of the Company. Sales by the Company's foreign
subsidiaries are denominated in the local currency, and an increase in the
relative value of the dollar against such currencies would reduce the
Company's revenues in dollar terms or make the Company's products more
expensive and, therefore, potentially less competitive in foreign markets.
There can be no assurance that the Company's future results of operations
will not be adversely affected by currency fluctuations. The Company relies
on distributors for sales of its products in certain foreign countries and,
accordingly, is dependent on their ability to promote and support the
Company's products and, in some cases, to translate them into foreign
languages. The Company's international
7.
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distributors generally offer products of several different companies,
including in some cases products that are competitive with the Company's
products, and such distributors are not subject to any minimum purchase or
resale requirements. There can be no assurance that the Company's
international distributors will continue to purchase the Company's products
or provide them with adequate levels of support.
RISKS OF PRODUCT DEFECTS; PRODUCT AND OTHER LIABILITY
As a result of their complexity, software products may contain undetected
errors or compatibility issues, particularly when first introduced or as new
versions are released. There can be no assurance that, despite testing by the
Company and testing and use by current and potential customers, errors will
not be found in new products after commencement of commercial shipments. The
occurrence of such errors could result in loss of or delay in market
acceptance of the Company's products, which could have a material adverse
effect on the Company's business, financial condition and results of
operations. The increasing use of the Company's products for applications in
systems that interact directly with the general public, particularly
applications in transportation, medical systems and other markets where the
failure of the embedded system could cause substantial property damage or
personal injury, could expose the Company to significant product liability
claims. In addition, the Company's products may be used for applications in
mission-critical business systems where the failure of the embedded system
could be linked to substantial economic loss. The Company's license and other
agreements with its customers typically contain provisions designed to limit
the Company's exposure to potential product liability and other claims. The
limitation of liability provisions contained in the Company's agreements are
not effective in all circumstances and in all jurisdictions. Although the
Company has not experienced any product liability or economic loss claims to
date, the sale and support of the Company's products entails the risk of such
claims. The Company carries insurance against product liability risks and
errors or omissions coverage, although there can be no assurance that such
insurance will continue to be available to the Company on commercially
reasonable terms or at all. A product liability claim or claim for economic
loss brought against the Company in excess of or outside the limits of its
insurance coverage, or a product recall involving the Company's software,
could have a material adverse effect on the Company's business, financial
condition and results of operations.
LIMITED PROTECTION OF PROPRIETARY TECHNOLOGY
The Company's success is heavily dependent upon its proprietary
technology. To protect its proprietary rights, the Company relies on a
combination of copyright, trade secret, patent and trademark laws,
nondisclosure and other contractual restrictions on copying and distribution.
The Company seeks to protect its software, documentation and other written
materials through trade secret and copyright laws, which provide only limited
protection. The Company has two U.S. patent applications pending. There can
be no assurance that patents will issue from the Company's pending
applications or that any claims allowed will be of sufficient scope or
strength (or be issued in all countries where the Company's products can be
sold) to provide meaningful protection or any commercial advantage to the
Company. As part of its confidentiality procedures, the Company generally
enters into nondisclosure agreements with its employees, consultants,
distributors and corporate partners and limits access to and distribution of
its software, documentation and other proprietary information. End user
licenses of the Company's software are frequently in the form of shrink wrap
license agreements, which are not signed by licensees, and therefore may be
unenforceable under the laws of many jurisdictions. Despite the Company's
efforts to protect its proprietary rights, it may be possible for
unauthorized third parties to copy the Company's products or to reverse
engineer or obtain and use information that the Company regards as
proprietary. There can be no assurance that the Company's competitors will
not independently develop technologies that are substantially equivalent or
superior to the Company's technologies. Policing unauthorized use of the
Company's products is difficult, and, while the Company is unable to
determine the extent to which software piracy of its products exists,
software piracy can be expected to be a persistent problem. In addition,
effective protection of intellectual property rights may be unavailable or
limited in certain countries. The status of U.S. patent protection in the
software industry is not well defined and will evolve as the U.S. Patent and
Trademark Office grants additional patents. Patents have been granted on
fundamental technologies in software, and patents may issue that relate to
fundamental technologies incorporated into the Company's products.
8.
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As the number of patents, copyrights, trademarks and other intellectual
property rights in the Company's industry increases, products based on its
technology may increasingly become the subject of infringement claims. The
Company has received in the past and may receive in the future letters from
third parties asserting infringement claims against the Company. Any such
claims, with or without merit, may be time consuming, result in costly
litigation, cause product shipment delays or require the Company to enter
into royalty or licensing agreements. Such royalty or licensing agreements,
if required, may not be available on terms acceptable to the Company, or at
all, which could have a material adverse effect on the Company's business,
financial condition and results of operations. In addition, the Company may
initiate claims or litigation against third parties for infringement of the
Company's proprietary rights or to establish the validity of the Company's
proprietary rights. Litigation to determine the validity of any claims,
whether or not such litigation is determined in favor of the Company, could
result in significant expense to the Company and divert the efforts of the
Company's technical and management personnel from productive tasks. In the
event of an adverse ruling in any such litigation, the Company might be
required to pay substantial damages, discontinue the use and sale of
infringing products, expend significant resources to develop non-infringing
technology or obtain licenses to infringing technology.
POSSIBLE VOLATILITY OF NOTES AND STOCK PRICE
The market price of the Company's Common Stock has fluctuated in the
past, and is likely to fluctuate in the future. The Company believes that
various factors, including quarterly fluctuations in results of operations,
announcements of new products by the Company or by its competitors, and
changes in the software industry in general may significantly affect the
market price of the Notes and the Common Stock. In addition, in recent years
the stock market in general, and the shares of technology companies in
particular, have experienced extreme price fluctuations. This volatility has
had a substantial effect on the market prices of securities issued by the
Company and other high technology companies, often for reasons unrelated to
the operating performance of the specific companies. The market prices of
many high technology companies' securities, including the stock of the
Company, are at or near their historical highs and reflect price/earnings
ratios substantially above historical norms. There can be no assurance that
the market price of the Common Stock will remain at or near its current
level. In the past, following periods of volatility in the market price of a
company's securities, securities class action litigation has often been
instituted against that company. Such litigation, if instituted against the
Company, could result in substantial costs and a diversion of management
attention and resources, which would have a material adverse effect on the
Company's business, financial condition and results of operations, even if
the Company is successful in such suits. These market fluctuations, as well
as general economic, political and market conditions such as recessions, may
adversely affect the market price of the Common Stock.
LEVERAGE; SUBORDINATION; ABSENCE OF FINANCIAL COVENANTS
In connection with the sale of the Notes, the Company incurred $140
million of indebtedness which resulted in a ratio of long-term debt to total
capitalization at July 31, 1997 of approximately 55.7% on an as adjusted
basis. As a result of this additional indebtedness, the Company's principal
and interest obligations will increase substantially. The degree to which the
Company will be leveraged could materially and adversely affect the Company's
ability to obtain financing for working capital, acquisitions or other
purposes and could make it more vulnerable to industry downturns and
competitive pressures. The Company's ability to meet its debt service
obligations will be dependent upon the Company's future performance, which
will be subject to financial, business and other factors affecting the
operations of the Company, many of which are beyond its control.
The Notes are unsecured and subordinated in right of payment in full to
all existing and future Senior Indebtedness of the Company. As a result of
such subordination, in the event of bankruptcy, liquidation or reorganization
of the Company or certain other events, the assets of the Company will be
available to pay obligations on the Notes only after all Senior Indebtedness
has been paid in full, and there may not be sufficient assets remaining to
pay amounts due on any or all of the Notes then outstanding. The Notes are
also structurally subordinated to the liabilities, including trade payables,
of the Company's subsidiaries. The Indenture does not
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prohibit or limit the incurrence of Senior Indebtedness or the incurrence of
other indebtedness and other liabilities by the Company or its subsidiaries,
and the incurrence of any such additional indebtedness or liabilities could
adversely affect the Company's ability to pay its obligations on the Notes.
As of October 29, 1997, the aggregate amount of Senior Indebtedness was
$1,000,000. The Company anticipates that from time to time it will incur
additional indebtedness, including Senior Indebtedness, and that it and its
subsidiaries will from time to time incur other additional indebtedness and
liabilities. See "Description of Notes -- Subordination."
The Indenture does not contain any financial covenants or restrictions on
the payment of dividends, the incurrence of indebtedness, including Senior
Indebtedness, by the Company or the issuance or repurchase of securities by
the Company. The Indenture contains no covenants or other provisions to
afford protection to holders of the Notes in the event of a highly leveraged
transaction or a change in control of the Company except to the extent
described under "Description of Notes -- Repurchase at Option of Holders Upon
a Fundamental Change."
LIMITATIONS ON REDEMPTION OF NOTES
Upon a Fundamental Change (as defined), each Holder (as defined) of Notes
will have certain rights, at the Holder's option, to require the Company to
redeem all or a portion of such Holder's Notes. If a Fundamental Change were
to occur, there can be no assurance that the Company would have or be able to
obtain sufficient funds to pay the redemption price for all Notes tendered by
the Holders thereof. Any future credit agreements or other agreements
relating to other indebtedness (including other Senior Indebtedness) to which
the Company becomes a party may contain restrictions and provisions which
prohibit the Company from purchasing or redeeming any Notes or provide that a
Fundamental Change would constitute an event of default thereunder. In the
event a Fundamental Change occurs at a time when the Company is prohibited
from purchasing or redeeming Notes, the Company could seek the consent of its
lenders to the purchase of Notes or could attempt to refinance the borrowings
that contain such prohibition. If the Company does not obtain such a consent
or repay such borrowings, the Company would remain prohibited from purchasing
or redeeming Notes. In such case, the Company's failure to redeem tendered
Notes may constitute an Event of Default under the Indenture, which may, in
turn, constitute a further default under the terms of other indebtedness that
the Company may enter into from time to time, including under any Senior
Indebtedness. In such circumstances, the subordination provisions in the
Indenture would likely prohibit the redemption of the Notes. See "Description
of Notes -- Repurchase at Option of Holders upon a Fundamental Change."
LIMITED PUBLIC MARKET FOR THE NOTES AND RESTRICTIONS ON TRANSFER
Prior to this offering, the Notes have been eligible for trading on the
PORTAL Market and are listed on the Luxembourg Stock Exchange. The Notes sold
pursuant to this Registration Statement of which this Prospectus forms a part
are not expected to remain eligible for trading on the PORTAL system. The
Notes are not listed on any national securities exchange in the United States
and are not quoted on the Nasdaq Stock Market. Although Deutsche Morgan
Grenfell Inc. has advised the Company that it currently intends to make a
market in the Notes, it is are not obligated to do so and may discontinue
such market making at any time without notice. In addition, such market
making activity will be subject to the limits imposed by the Securities Act
and the Exchange Act. Accordingly, there can be no assurance that any market
for the Notes will develop or, if one does develop, that it will be
maintained. If an active market for the Notes fails to develop or be
sustained, the trading price of the Notes could be materially adversely
affected.
ANTI-TAKEOVER EFFECTS OF CERTIFICATE OF INCORPORATION, BYLAWS AND
DELAWARE LAW
The Company's Board of Directors has the authority to issue up to
2,000,000 shares of Preferred Stock and to determine the price, rights,
preferences, and privileges of those shares without any further vote or
action by the stockholders. The rights of the holders of Common Stock will be
subject to, and may be adversely affected by, the rights of the holders of
any Preferred Stock that may be issued in the future. The issuance of
Preferred Stock, while
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providing desirable flexibility in connection with possible acquisitions and
other corporate purposes, could have the effect of making it more difficult
for a third party to acquire a majority of the outstanding voting stock of
the Company. The Company has no present plans to issue shares of Preferred
Stock. In addition, the Company is subject to the provisions of Section 203
of the Delaware General Corporation Law, an anti-takeover law. Furthermore,
certain provisions of the Company's Certificate of Incorporation and Bylaws
may have the effect of delaying or preventing changes in control or
management of the Company, which could adversely affect the market price of
the Common Stock. See "Description of Capital Stock--Delaware General
Corporation Law and Selected Provisions of the Certificate of Incorporation
and Bylaws."
11.
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RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31, SIX MONTHS ENDED
-------------------------------------------- ------------------------
JULY 31, JULY 31,
1993 1994 1995 1996 1997 1996 1997
---- ---- ---- ---- ---- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges (1). . . 5.04 2.53 6.28 12.64 28.87 20.74 27.51
</TABLE>
____________________
(1) The ratio of earnings to fixed charges is computed by dividing
(a) earnings before taxes plus fixed charges and income
attributed to minority interests, less losses attributed to
minority interests by (b) fixed charges. Fixed charges consist
of interest and the estimated portion of rental expense deemed
by the Company to be a reasonable approximation of the interest
factor of rental payments under operating leases.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Notes and
the Conversion Shares by the Selling Securityholders in the offering.
DESCRIPTION OF NOTES
The Notes were initially issued on July 31, 1997 under an indenture dated
as of July 31, 1997 (the "Indenture"), between the Company and Deutsche Bank
AG, New York Branch, as trustee (the "Trustee"). A copy of the form of the
Indenture and the Registration Rights Agreement (as defined below) is
available from the Trustee, the Company or the Luxembourg Paying Agent upon
request by a registered holder of Notes (a "Holder"), and the Indenture and
Registration Rights Agreement have been included as exhibits to the
Registration Statement. The following summaries of certain provisions of the
Notes, the Indenture and the Registration Rights Agreement do not purport to
be complete and are subject to, and are qualified in their entirety by
reference to, all of the provisions of the Notes, the Indenture and the
Registration Rights Agreement, including the definitions therein of certain
terms which are not otherwise defined in this Prospectus. Wherever particular
provisions or defined terms of the Indenture (or the form of Note which is a
part thereof) or the Registration Rights Agreement are referred to, such
provisions or defined terms are incorporated herein by reference. References
in this section to the "Company" are solely to Wind River Systems, Inc., a
Delaware corporation, and not its subsidiaries.
GENERAL
The Notes are unsecured subordinated obligations of the Company and are
limited to the aggregate principal amount of $140,000,000. The Notes mature
on August 1, 2002 and are payable at a price of 100% of the principal amount
thereof. The Notes bear interest at a rate of 5% per annum from July 31,
1997, payable semiannually on August 1 and February 1 of each year,
commencing on February 1, 1998. If interest is required to be calculated for
a period of less than a full year, such interest shall be calculated on the
basis of a year of 360 days.
The Notes are convertible into Common Stock initially at the conversion
price of $48.50 per share, subject to adjustment upon the occurrence of
certain events described under " -- Conversion," at any time on or after the
90th day following the last original issue date of the Notes and prior to the
close of business on the maturity date, unless previously redeemed or
repurchased.
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The Notes are redeemable (a) at the option of the Company in the event of
certain developments involving withholding taxes of the U.S. as described
below under " -- Redemption -- Redemption for Taxation Reasons" at a
redemption price of 100% of the principal amount of the Notes to be redeemed,
plus accrued interest to, but excluding, the Redemption Date (as defined) and
(b) at the option of the Company under the circumstances and at the
redemption prices set forth below under "-- Redemption -- Optional
Redemption," plus accrued interest to, but excluding, the Redemption Date.
The Notes are not entitled to any sinking fund.
The Indenture does not contain any financial covenants or restrictions on
the payment of dividends, the incurrence of indebtedness, including Senior
Indebtedness (as defined), by the Company or the issuance or repurchase of
other securities by the Company. The Indenture contains no covenants or other
provisions to afford protection to holders of the Notes in the event of a
highly leveraged transaction or a change in control of the Company except to
the extent described below under " -- Repurchase at Option of Holders Upon a
Fundamental Change."
BOOK ENTRY, DELIVERY AND FORM
The notes were issued in fully registered form, without coupons, in
denominations of $1,000 principal amount and integral multiples thereof.
GLOBAL NOTE; BOOK-ENTRY FORM. Notes held by "qualified institutional
buyers," as defined in Rule 144A under the Securities Act ("QIBs"), or by an
individual, corporation, partnership, joint venture, association, trust,
estate, unincorporated organization or government or any agency or political
subdivision thereof ("Person"), who acquired a Note in an "offshore
transaction" in reliance on Regulation S under the Securities Act (a
"Non-U.S. Person"), but not by other purchasers, may be evidenced by a global
Note (the "Global Note") deposited with, or on behalf of, The Depository
Trust Company, New York, New York ("DTC") and registered in the name of Cede
& Co. ("Cede") as DTC's nominee. Except as set forth below, record ownership
of the Global Note may be transferred, in whole or in part, only to another
nominee of DTC or to a successor of DTC or its nominee.
A QIB may hold its interests in the Global Note directly through DTC if
such QIB is a participant in DTC, or indirectly through organizations which
are participants in DTC (the "Participants"). Transfers between Participants
will be effected in the ordinary way in accordance with DTC rules and will be
settled in same-day funds. The laws of some states require that certain
persons take physical delivery of securities in definitive form.
Consequently, the ability to transfer beneficial interests in the Global Note
to such persons may be limited. Beneficial interests in the Global Note held
by Non-U.S. Persons will be registered in the name of Cede as DTC's nominee,
for the accounts of the Euroclear System ("Euroclear") or Cedel Bank, societe
anonyme ("Cedel"). Cedel and Euroclear will hold interests in the Global Note
on behalf of their participants through DTC. Transfers between participants
in Euroclear and Cedel will be effected in the ordinary way in accordance
with their respective rules and operating procedures.
QIBs and Non-U.S. Persons who are not Participants may beneficially own
interests in the Global Note held by DTC only through Participants, including
Euroclear and Cedel, or certain banks, brokers, dealers, trust companies and
other parties that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly ("Indirect Participants"). So long
as Cede, as the nominee of DTC, is the registered owner of the Global Note,
Cede for all purposes will be considered the sole holder of the Global Note.
Except as provided below and except in certain limited circumstances as
provided in the Indenture, owners of beneficial interests in the Global Note
will not be entitled to have certificates registered in their names, will not
receive or be entitled to receive physical delivery of certificates in
definitive form, and will not be considered holders thereof.
Payment of interest on and the redemption price of the Global Note will
be made to Cede, the nominee for DTC, as the registered owner of the Global
Note, by wire transfer of immediately available funds on each interest
payment date. Neither the Company, the Trustee nor any paying agent will have
any responsibility or liability for
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any aspect of the records relating to or payments made on account of
beneficial ownership interests in the Global Note or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company has been informed by DTC that, with respect to any payment of
interest on, or the redemption price of, the Global Note, DTC's practice is
to credit Participants' accounts on the payment date therefor with payments
in amounts proportionate to their respective beneficial interests in the
Notes represented by the Global Note, as shown on the records of DTC
(adjusted as necessary so that such payments are made with respect to whole
Notes only), unless DTC has reason to believe that it will not receive
payment on such payment date. Payments by Participants to owners of
beneficial interests in Notes represented by the Global Note held through
such Participants will be the responsibility of such Participants, as is now
the case with securities held for the accounts of customers registered in
"street name."
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a Person
having a beneficial interest in the principal amount represented by the
Global Note to pledge such interest to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
interest, may be affected by the lack of a physical certificate evidencing
such interest.
Neither the Company nor the Trustee (or any registrar, paying agent or
conversion agent under the Indenture) has any responsibility for the
performance of DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations. DTC has advised the Company that it will take any action
permitted to be taken by a holder of Notes (including, without limitation,
the presentation of Notes for exchange as described below) only at the
direction of one or more Participants to whose account with DTC interests in
the Global Note are credited and only in respect of the principal amount of
the Notes represented by the Global Note as to which such Participant or
Participants has or have given such direction.
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act, DTC was created to hold
securities for its Participants and to facilitate the clearance and
settlement of securities transactions between Participants through electronic
book-entry changes to accounts of its Participants, thereby eliminating the
need for physical movement of certificates. Participants include securities
brokers and dealers, banks, trust companies and clearing corporations and may
include certain other organizations such as the Initial Purchasers. Certain
of such Participants (or their representatives), together with other
entities, own DTC. Indirect access to the DTC system is 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.
Although DTC has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Note among Participants, it
is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. If DTC is at any time
unwilling or unable to continue as depositary and a successor depositary is
not appointed by the Company within 90 days, the Company will cause the Notes
to be issued in definitive form in exchange for the Global Note.
CERTIFICATED NOTES. Notes sold to investors that are neither QIBs nor
Non-U.S. Persons but that are institutional "accredited investors," within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act, are
issued in definitive registered form and are not represented by the Global
Note. In addition, certificated Notes may be issued in exchange for Notes
represented by the Global Note if no successor depositary is appointed by the
Company as set forth above and as described in the Indenture.
14.
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CONVERSION
The Holder of any Note will have the right at the Holder's option to
convert any Note (in denominations of $1,000 or any integral multiple
thereof) into shares of Common Stock at any time on or after the 90th day
following the last original issue date of the Notes (July 31, 1997) and prior
to the close of business on the maturity date, unless previously redeemed or
repurchased, at a conversion price of $48.50 per share (equivalent to a
conversion rate of approximately 20.62 shares per $1,000 principal amount of
Notes). The conversion price is subject to adjustment from time to time as
described below. The right to convert a Note called for redemption or
delivered for repurchase will terminate at the close of business on the
Business Day prior to the Redemption Date for such Note or the Repurchase
Date (as defined), as the case may be.
Beneficial owners of interests in a Note may exercise their right of
conversion by delivering to DTC the appropriate instruction form for
conversion pursuant to DTC's conversion program and, in the case of
conversions through Euroclear or Cedel, in accordance with Euroclear's or
Cedel's normal operating procedures when application has been made to make
the underlying Common Stock eligible for trading on Cedel or Euroclear. To
convert a Note held in certificated form into shares of Common Stock, a
Holder must (i) complete and manually sign the conversion notice on the back
of the Note (or complete and manually sign a facsimile thereof) and deliver
such notice to the Trustee in New York, New York or the Conversion Agent in
Luxembourg, (ii) surrender the Note to the Trustee in New York, New York or
to the Conversion Agent in Luxembourg, as the case may be, (iii) if required,
furnish appropriate endorsements and transfer documents, (iv) if required,
pay all transfer or similar taxes, and (v) if required, pay funds equal to
interest payable on the next interest payment date. Pursuant to the
Indenture, the date on which all of the foregoing requirements have been
satisfied is the date of surrender for conversion. Such notice of conversion
can be obtained from the Trustee at the Corporate Trust Office or the office
of any Conversion Agent. As promptly as practicable on or after the
conversion date, the Company will issue and deliver to the Trustee a
certificate or certificates for the number of full shares of Common Stock
issuable upon conversion, together with payment in lieu of any fraction of a
share in an amount determined as set forth below. Such certificate will be
sent by the Trustee to the appropriate Conversion Agent for delivery to the
Holder. Such Common Stock issuable upon conversion of the Notes will be fully
paid and nonassessable. Any Note surrendered for conversion during the period
from the close of business on any Regular Record Date to the opening of
business on the next succeeding Interest Payment Date (except Notes called
for redemption on a Redemption Date or to be repurchased on a Repurchase Date
during such period) must be accompanied by payment of an amount equal to the
interest payable on such Interest Payment Date on the principal amount of
Notes being surrendered for conversion. In the case of any Note which has
been converted after any Regular Record Date, but on or before the next
Interest Payment Date, interest the Stated Maturity of which is on such
Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion. Such interest shall be paid to the Holder of
such Note on such Regular Record Date. As a result, a Holder that surrenders
Notes for conversion on a date that is not an Interest Payment Date will not
receive any interest for the period from the Interest Payment Date next
preceding the date of conversion to the date of conversion or for any later
period, even if the Notes are surrendered after a notice of redemption
(except for the payment of interest on Notes called for redemption on a
Redemption Date or to be repurchased on a Repurchase Date between a Regular
Record Date and the Interest Payment Date to which it relates). No other
payment or adjustment for interest, or for any dividends in respect of Common
Stock, will be made upon conversion. Holders of Common Stock issued upon
conversion will not be entitled to receive any dividends payable to holders
of Common Stock as of any record time before the close of business on the
conversion date. No fractional shares will be issued upon conversion but, in
lieu thereof, an appropriate amount will be paid in cash by the Company based
on the market price of Common Stock on the day of conversion.
A Holder delivering a Note for conversion will not be required to pay any
taxes or duties in respect of the issue or delivery of Common Stock on
conversion but will be required to pay any tax or duty which may be payable
in respect of any transfer involved in the issue or delivery of the Common
Stock in a name other than that of the Holder of the Note. Certificates
representing Common Stock will not be issued or delivered unless all taxes
and duties, if any, payable by the Holder have been paid.
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The initial conversion price of $48.50 per share (equivalent to a
conversion rate of approximately 20.62 shares per $1,000 principal amount of
Notes), subject to adjustment in certain events, including: (i) the issuance
of Common Stock as a dividend or distribution on Common Stock of the Company;
(ii) certain subdivisions and combinations of the Common Stock; (iii) the
issuance to all holders of Common Stock of rights or warrants to purchase
Common Stock at a price per share less than the Current Market Price (as
defined), (provided that the conversion price will be readjusted to the
extent that such rights or warrants are not exercised prior to the expiration
thereof); (iv) the distribution to all holders of Common Stock of shares of
capital stock of the Company (other than Common Stock) or evidences of
indebtedness of the Company or assets (including securities, but excluding
those rights, warrants, dividends and distributions referred to above or paid
in cash); (v) distributions consisting of cash, excluding any semiannual cash
dividend on the Common Stock to the extent that the aggregate cash dividend
per share of Common Stock in any semiannual period does not exceed the
greater of (x) the amount per share of Common Stock of the next preceding
semiannual cash dividend on the Common Stock to the extent that such
preceding semiannual dividend did not require an adjustment of the conversion
price pursuant to this clause (v), and (y) 7.5% of the average of the daily
Closing Prices (as defined in the Indenture) of the Common Stock for the ten
consecutive Trading Days (as defined) immediately prior to the date of
declaration of such dividend, and excluding any dividend or distribution in
connection with the liquidation, dissolution or winding up of the Company;
(vi) payment in respect of a tender or exchange offer by the Company or any
subsidiary of the Company for the Common Stock to the extent that the cash
and value of any other consideration included in such payment per share of
Common Stock exceeds the Current Market Price (as defined) per share of
Common Stock on the Trading Day next succeeding the last date on which
tenders or exchanges may be made pursuant to such tender or exchange offer;
and (vii) payment in respect of a tender offer or exchange offer by a Person
other than the Company or any subsidiary of the Company in which, as of the
closing date of the offer, the Board of Directors is not recommending
rejection of the offer. If an adjustment is required to be made as set forth
in clause (v) above as a result of a distribution that is a semiannual
dividend, such adjustment would be based upon the amount by which such
distribution exceeds the amount of semiannual cash dividend permitted to be
excluded pursuant to such clause (v). In the event of a distribution pro rata
to holders of Common Stock of rights or warrants to subscribe for additional
shares of the Company's capital stock (other than rights or warrants
described in clause (iii) above), the Company may, instead of making any
adjustment in the Conversion Price, make proper provision so that each holder
of a Note who converts such Note after the record date for such distribution
and prior to the expiration or redemption of such rights shall be entitled to
receive upon such conversion, in addition to shares of Common Stock, an
appropriate number of such rights or warrants. If an adjustment is required
to be made as set forth in clause (v) above as a result of a distribution
that is not a semiannual dividend, such adjustment would be based upon the
full amount of the distribution. The adjustment referred to in clause (vii)
above will only be made if the tender offer or exchange offer is for an
amount which increases that Person's ownership of Common Stock to more than
25% of the total shares of Common Stock outstanding and if the cash and value
of any other consideration included in such payment per share of Common Stock
exceeds the Current Market Price per share of Common Stock on the business
day next succeeding the last date on which tenders or exchanges may be made
pursuant to such tender or exchange offer. The adjustment referred to in
clause (vii) above will not be made, however, if, as of the closing of the
offer, the offering documents with respect to such offer disclose a plan or
an intention to cause the Company to engage in a consolidation or merger of
the Company or a sale of all or substantially all of the Company's assets. So
long as the Notes are listed on the Luxembourg Stock Exchange and the rules
of the Luxembourg Stock Exchange shall require, notice of any adjustment of
the conversion price will be given to Holders of the Notes by publication in
a daily newspaper of general circulation in Luxembourg (which is expected to
be the LUXEMBURGER WORT) or, if publication in Luxembourg is not practical,
in Western Europe.
In the case of (i) any reclassification of the Common Stock, or
(ii) a consolidation, merger or combination involving the Company or a
sale or conveyance to another Person of the property and assets of the
Company as an entirety or substantially as an entirety, in each case
as a result of which holders of Common Stock shall be entitled to
receive stock, other securities, other property or assets (including
cash) with respect to or in exchange for such Common Stock, the
Holders of the Notes then outstanding will generally be entitled
thereafter to convert such Notes for the kind and amount of shares of
stock, other securities or other property or assets which they would
have
16.
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owned or been entitled to receive upon such reclassification, consolidation,
merger, combination, sale or conveyance had such Notes been converted into
Common Stock immediately prior to such reclassification, consolidation,
merger, combination, sale or conveyance assuming that a Holder of Notes would
not have exercised any rights of election as to the stock, other securities
or other property or assets receivable in connection therewith.
The Company from time to time may to the extent permitted by law reduce
the conversion price by any amount for any period of at least 20 days, in
which case the Issuer shall give at least 15 days' notice of such reduction,
if the Board of Directors of the Company has made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive. The Company may, at its option, make such reductions in
the conversion price, in addition to those set forth above, as the Board of
Directors of the Company deems advisable to avoid or diminish any income tax
to holders of Common Stock resulting from any dividend or distribution of
stock (or rights to acquired stock) or from any event treated as such for
income tax purposes.
No adjustment in the conversion price will be required unless such
adjustment would require a change of at least 1% in the conversion price then
in effect; provided that any adjustment that would otherwise be required to
be made shall be carried forward and taken into account in any subsequent
adjustment. Except as stated above, the conversion price will not be adjusted
for the issuance of Common Stock or any securities convertible into or
exchangeable for Common Stock or carrying the right to purchase any of the
foregoing.
SUBORDINATION
The indebtedness evidenced by the Notes is subordinated in right of
payment to the extent provided in the Indenture to the prior payment in full
of all Senior Indebtedness (as defined). Upon any distribution of assets of
the Company upon any dissolution, winding-up, liquidation or reorganization
(including any of the foregoing as a result of bankruptcy or moratorium of
payment), the payment on account of the principal of, redemption of,
Additional Amounts, if any, Liquidated Damages, if any, or premium, if any,
and interest on the Notes (including on account of a Fundamental Change) is
to be subordinated to the extent provided in the Indenture in right of
payment to the prior payment in full in cash of all Senior Indebtedness. In
the event of any acceleration of the Notes because of an Event of Default (as
defined), the holders of any Senior Indebtedness then outstanding would be
entitled to payment in full in cash of all obligations in respect of such
Senior Indebtedness before the Holders of the Notes are entitled to receive
any payment or other distribution in respect thereof. The Indenture will
require that the Company promptly notify holders of Senior Indebtedness if
payment of the Notes is accelerated because of an Event of Default.
The Company also may not make any payment with respect to the principal
of, premium, if any, or interest on, redemption of, or payment of Liquidated
Damages, if any, or Additional Amounts, if any, on (including on account of a
Fundamental Change) or purchase or otherwise acquire the Notes if (i) a
default in the payment of the principal of, premium, if any, interest, rent
or other obligations in respect of Senior Indebtedness occurs and is
continuing beyond any applicable period of grace or (ii) any other default
occurs and is continuing with respect to Designated Senior Indebtedness (as
defined) that permits holders of the Designated Senior Indebtedness as to
which such default relates to accelerate its maturity and the Trustee
receives a notice of such default (a "Payment Blockage Notice") from the
Company or other Person permitted to give such notice under the Indenture.
Payments on the Notes may and shall be resumed (a) in case of a payment
default, upon the date on which such default is cured or waived and (b) in
case of a nonpayment default, the earlier of the date on which such
nonpayment default is cured or waived or ceases to exist or 179 days after
the date on which the applicable Payment Blockage Notice is received. No new
period of payment blockage may be commenced pursuant to a Payment Blockage
Notice unless and until (i) 365 days have elapsed since the effectiveness of
the immediately prior Payment Blockage Notice and (ii) all scheduled payments
of principal, premium, if any, and interest on the Notes that have come due
have been paid in full in cash. No nonpayment default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the
Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice.
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By reason of the subordination provisions described above, in the event
of the Company's bankruptcy, dissolution or reorganization, holders of Senior
Indebtedness may receive more, ratably, and Holders of the Notes may receive
less, ratably, than the other creditors of the Company. Such subordination
will not prevent the occurrence of any Event of Default under the Indenture.
In the event that, notwithstanding the foregoing, the Trustee or any
Holder of Notes receives any payment or distribution of assets of the Company
of any kind in contravention of any of the subordination provisions of the
Indenture, whether in cash, property or securities, including, without
limitation, by way of set-off or otherwise, in respect of the Notes before
all Senior Indebtedness is paid in full, then such payment or distribution
will be held by the recipient in trust for the benefit of holders of Senior
Indebtedness or their representative or representatives to the extent
necessary to make payment in full of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution, or
provision therefor, to or for the holders of Senior Indebtedness or their
representative or representatives to the extent necessary to make payment in
full of all Senior Indebtedness remaining unpaid, and after giving effect to
any concurrent payment or distribution or provision therefor, to or for the
holders of Senior Indebtedness.
As of October 29, 1997, the aggregate amount of Senior Indebtedness was
$1,000,000. The Indenture does not prohibit or limit the incurrence of
additional Senior Indebtedness or the incurrence of other indebtedness and
other liabilities by the Company or its subsidiaries, and the incurrence of
any such additional indebtedness and other liabilities could adversely affect
the Company's ability to pay its obligations on the Notes. The Company
expects that it and its subsidiaries will from time to time incur additional
indebtedness, including Senior Indebtedness, and other liabilities. See "Risk
Factors --Leverage; Subordination, Absence of Financial Covenants."
The Company is obligated to pay reasonable compensation to the Trustee
and to indemnify the Trustee against any losses, liabilities or expenses
incurred by it in connection with its duties relating to the Notes. The
Trustee's claims for such payments will be senior to those of Holders of the
Notes in respect of all funds collected or held by the Trustee.
The term "Senior Indebtedness" means, with respect to the Company, the
principal of, premium, if any, interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar proceeding,
whether or not a claim for post-petition interest is allowable as a claim in
any such proceeding) and rent payable on or in connection with, and all fees,
costs, expenses and other amounts accrued or due on or in connection with,
Indebtedness (as defined), whether outstanding on the date of the Indenture
or thereafter created, incurred, assumed, guaranteed or in effect guaranteed
by the Company (including all deferrals, renewals, extensions or refundings
of, or amendments, modifications or supplements to, the foregoing), unless in
the case of any particular Indebtedness the instrument creating or evidencing
the same or the assumption or guarantee thereof expressly provides that such
Indebtedness shall not be senior in right of payment to the Notes or
expressly provides that such Indebtedness is PARI PASSU or "junior" to the
Notes. Notwithstanding the foregoing, the Senior Indebtedness does not
include any Indebtedness of the Company to any subsidiary of the Company, a
majority of the voting stock of which is owned, directly or indirectly, by
the Company, but does include Indebtedness to a subsidiary of the Company
arising by reason of guarantees by the Company of Indebtedness of such
subsidiary to a Person that is not a subsidiary of the Company.
The term "Indebtedness" means, with respect to the Company, and
without duplication, (a) all indebtedness, obligations and other
liabilities (contingent or otherwise) of the Company for borrowed
money (including obligations of the Company in respect of overdrafts,
foreign exchange contracts, currency exchange agreements, interest
rate protection agreements, and any loans or advances from banks,
whether or not evidenced by notes or similar instruments) or evidenced
by bonds, debentures, notes or similar instruments (whether or not the
recourse of the lender is to the whole of the assets of the Company or
to only a portion thereof) (other than any account payable or other
accrued current liability or obligation incurred in the ordinary
course of business in connection with the obtaining of materials or
services), (b) all reimbursement obligations and other liabilities
(contingent or otherwise)
18.
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of the Company with respect to letters of credit, bank guarantees or bankers'
acceptances, (c) all obligations and liabilities (contingent or otherwise) in
respect of leases (including synthetic leases) of the Company required, in
conformity with generally accepted accounting principles, to be accounted for
as capitalized lease obligations on the balance sheet of the Company and all
obligations and other liabilities (contingent or otherwise) under any lease
or related document (including a purchase agreement, conditional sale or
other title retention agreement) in connection with the lease of real
property or improvement thereon which provides that the Company is
contractually obligated to purchase or cause a third party to purchase the
leased property or pay an agreed upon residual value of the leased property
to the lessor and the obligations of the Company under such lease or related
document to purchase or to cause a third party to purchase such leased
property or pay an agreed upon residual value of the leased property to the
lessor, (d) all obligations of the Company (contingent or otherwise) with
respect to an interest rate or other swap, cap or collar agreement or other
similar instrument or agreement or foreign currency hedge, exchange, purchase
or similar instrument or agreement, (e) all direct or indirect guaranties or
similar agreements by the Company in respect of, and obligations or
liabilities (contingent or otherwise) of the Company to purchase or otherwise
acquire or otherwise assure a creditor against loss in respect of,
indebtedness, obligations or liabilities of another Person of the kind
described in clauses (a) through (d), (f) any indebtedness or other
obligations described in clauses (a) through (d) secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held
by the Company, regardless of whether the indebtedness or other obligation
secured thereby shall have been assumed by the Company and (g) any and all
deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any indebtedness, obligation or liability of
the kind described in clauses (a) through (f).
The term "Designated Senior Indebtedness" means any particular Senior
Indebtedness in which the instrument creating or evidencing the same or the
assumption or guarantee thereof (or related agreements or documents to which
the Company is a party) expressly provides that such Indebtedness shall be
"Designated Senior Indebtedness" for purposes of the Indenture (provided that
such instrument, agreement or other document may place limitations and
conditions on the right of such Senior Indebtedness to exercise the rights of
Designated Senior Indebtedness).
REDEMPTION
OPTIONAL REDEMPTION
The Notes are not entitled to any sinking fund. At any time on or after
August 2, 2000, the Notes will be redeemable at the Company's option on at
least 20 and not more than 60 days notice as a whole or, from time to time,
in part at the following prices (expressed as percentages of the principal
amount), together with accrued interest to, but excluding, the Redemption
Date:
If redeemed during the 12-month period beginning August 1 (beginning
August 2, 2000 and ending July 31, 2001, in the case of the first such
period):
REDEMPTION
YEAR PRICE
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102%
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101%
and 100% at August 1, 2002 together, in each case, with accrued interest to,
but excluding the applicable record date; provided that any semi-annual
payment of interest becoming due on the Redemption Date shall be payable to
the Holders of record on the Regular Record Date of the Notes being redeemed.
If fewer than all the Notes are to be redeemed, the Trustee will
select the Notes to be redeemed by lot. If any Note is to be redeemed
in part only, a new Note or Notes in principal amount equal to the
unredeemed principal portion thereof will be issued. If a portion of a
Holder's Notes is selected for partial redemption and such Holder
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<PAGE>
converts a portion of such Notes, such converted portion shall be deemed to
be taken from the portion selected for redemption.
REDEMPTION FOR TAXATION REASONS
If the Company determines that potentially, as a result of any change in,
or amendment to, the laws or regulations prevailing in the U.S. or any
political subdivision or taxing authority thereof or therein, which change or
amendment becomes effective on or after the date of this Prospectus or as a
result of any application or official interpretation of such laws or
regulations not generally known before that date (a "Tax Law Change") the
Company is or would be required on the next succeeding Interest Payment Date
to pay Additional Amounts (as defined), and such requirement or obligation
cannot be avoided by the Company taking reasonable measures available to it,
the Company may redeem the affected Notes in whole, but not in part, at any
time, on giving not less than 20 days' notice prior to the Redemption Date,
at a redemption price equal to 100% of the principal amount thereof plus
accrued interest to, but excluding, the Redemption Date and any Additional
Amounts then payable, provided that no such notice of redemption shall be
given earlier than 90 days prior to the earliest date on which the Company
would be obligated to withhold or pay additional amounts were a payment in
respect of the Notes then made.
Prior to the publication of any notice of redemption pursuant to this
paragraph, the Company shall deliver to the Trustee (a) a certificate stating
that the Company is entitled to effect such redemption and setting forth a
statement of facts showing that the conditions precedent to the right of the
Company so to redeem have occurred and (b) an opinion of counsel selected by
the Company and reasonably acceptable to the Trustee, to the effect that the
Company has or will become obligated to pay such Additional Amounts as a
result of a Tax Law Change. The Company's right to redeem the affected Notes
shall continue as long as the Company is obligated to pay Additional Amounts,
notwithstanding that the Company shall have theretofore made payments of
Additional Amounts.
PAYMENT AND CONVERSION
The principal of Notes will be payable in U.S. dollars, against surrender
thereof at the Corporate Trust Office of the Trustee in The City of New York,
or, subject to any applicable laws and regulations, at the office of any
Paying Agent, by dollar check drawn on, or by transfer to a dollar account
(such transfer to be made only to Holders of an aggregate principal amount of
Note in excess of $2,000,000) maintained by the Holder with, a bank in The
City of New York. Payment of any installment of interest on Notes will be
made to the Person in whose name such Notes (or any predecessor Note) is
registered at the close of business on August 1 or February 1 (whether or not
a Business Day) immediately preceding the relevant Interest Payment Date (a
"Regular Record Date"). Payments of such interest will be made by a dollar
check drawn on a bank in The City of New York mailed to the Holder at such
Holder's registered address or, upon application by the Holder thereof to the
Trustee not later than the applicable Regular Record Date, by transfer to a
dollar account (such transfer to be made only to Holders of an aggregate
principal amount of Notes in excess of $2,000,000) maintained by the Holder
with a bank in The City of New York. No transfer to a dollar account will be
made unless the Trustee has received written wire instructions not less than
15 days prior to the relevant payment date.
Any payment on the Notes due on any day which is not a Business Day need
not be made on such day, but may be made on the next succeeding Business Day
with the same force and effect as if made on such due date, and no interest
shall accrue on such payment for the period from and after such date.
"Business Day," when used with respect to any place of payment, place of
conversion or any other place, as the case may be, means each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in such place of payment, place of conversion or other place, as
the case may be, are authorized or obligated by law or executive order to
close; provided, however, that a day on which banking institutions in New
York, New York or Luxembourg, are authorized or obligated by law or executive
order to close shall not be a Business Day for certain purposes.
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Notes may be surrendered for conversion, subject to any applicable laws
and regulations, at the office of any Conversion Agent outside the U.S. In
addition, Notes may be surrendered for conversion at the Corporate Trust
Office of the Trustee in The City of New York. Notes surrendered for
conversion must be accompanied by appropriate notices, any unmatured coupons
and any payments in respect of interest or taxes, as applicable, as described
above under " -- Conversion."
The Company has initially appointed the Trustee at its Corporate Trust
Office in The City of New York and Banque de Luxembourg in Luxembourg as the
Paying Agents and Conversion Agents. The Company may at any time terminate
the appointment of any Paying Agent or Conversion Agent and appoint
additional or other Paying Agents and Conversion Agents, provided that until
the Notes have been delivered to the Trustee for cancellation, or moneys
sufficient to pay the principal of, premium, if any, and interest on the
Notes have been made available for payment and either paid or returned to the
Company as provided in the Indenture, it will maintain an office or agency in
The City of New York and Luxembourg for payments with respect to the Notes
and for the surrender of Notes for conversion. Notice of any such termination
or appointment and of any change in the office through which any Paying Agent
or Conversion Agent will act will be given in accordance with " -- Notices"
below.
Interest payable on Notes on any Redemption Date or Repurchase Date that
is an Interest Payment Date will be paid to the Holders of record as of the
immediately preceding Regular Record Date.
All moneys deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of principal of, premium, if any, or
interest on any Notes which remain unclaimed at the end of the earlier of the
date on which such money escheats to the State or two years after such
payment has become due and payable, will be repaid to the Company, and the
Holder of such Note will thereafter look only to the Company for payment
thereof.
PAYMENT OF ADDITIONAL AMOUNTS
The Company will pay to the Holder of any Note such additional amounts
("Additional Amounts") as may be necessary in order that every net payment of
the principal of, premium, if any, and interest on such Note, after deduction
or withholding for or on account of any present or future tax, assessment or
governmental charge imposed upon or as a result of such payment by the U.S.
or any political subdivision or taxing authority thereof or therein, will not
be less than the amount provided for in such Note to be then due and payable;
provided however, that the foregoing obligation to pay Additional Amounts
will not apply to:
(a) any tax, assessment or other governmental charge which
would not have been so imposed but for (i) the existence of any
present or former connection between such Holder (or between a
fiduciary, settler, beneficiary, member, shareholder of or
possessor of a power over such Holder, if such Holder is an
estate, a partnership or a corporation) and the U.S. or any
political subdivision or taxing authority thereof or therein,
including, without limitation, such Holder (or such fiduciary,
settler, beneficiary, member, shareholder or possessor) being or
having been a citizen, domiciliary or resident of the U.S. or
treated as a resident thereof, or being or having been engaged in
trade or business or present therein, or having or having had a
permanent establishment therein; or (ii) such Holder's present or
former status as a personal holding company, a foreign personal
holding company with respect to the United States, or a foreign
private foundation or foreign tax exempt entity for United States
federal tax purposes, or a corporation which accumulates earnings
to avoid United States federal income tax.
(b) any tax, assessment or other governmental charge which
would not have been so imposed but for the presentation by the
Holder of such Notes appertaining thereto for payment on a date
more than 15 days after the date on which such payment became due
and payable or the date on which payment thereof is duly provided
for, whichever occurs later;
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(c) any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or governmental charge;
(d) any tax, assessment or other governmental charge which
would not have been imposed but for the failure of such Holder
(or such fiduciary, settler, beneficiary, member, shareholder or
possessor) of such Note to comply with a request by the Company
addressed to such Holder (or such fiduciary, settler,
beneficiary, member, shareholder or possessor) (A) to provide
information concerning the nationality, residence or identity of
such Holder (or such fiduciary, settler, beneficiary, member,
shareholder or possessor) or (B) to make any declaration or other
similar claim or satisfy any information or reporting
requirement, which, in the case of (A) or (B), is required or
imposed by a statute, treaty, regulation or administrative
practice of the taxing jurisdiction as a precondition to
exemption from all or part of such tax, assessment or other
governmental charge;
(e) any tax, assessment or other governmental charge which
is payable otherwise than by deduction or withholding from
payments of principal of, premium, if any, or interest on such
Note;
(f) any tax, assessment or other governmental charge imposed
on a Holder that is a partnership or a fiduciary or other than
the sole beneficial owner of such payment, but only to the extent
that any beneficial owner or member of the partnership or
beneficiary or settlor with respect to the fiduciary would not
have been entitled to the payment of Additional Amounts had the
beneficial owner, member, beneficiary or settlor directly been
the Holder of the Note; or
(g) any combination of items (a), (b), (c), (d), (e) and
(f).
Notwithstanding the foregoing, the Company shall not be obligated to pay
Additional Amounts in respect of payments becoming due on the Notes more than
15 days after the Redemption Date with respect to any redemption of the Notes
described in the first paragraph under "Redemption--Redemption for Taxation
Reasons" to the extent that the Company's obligation to pay such Additional
Amounts arises from the Tax Law Change that resulted in such redemption.
REPURCHASE AT OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE
If a Fundamental Change (as defined) occurs, each Holder of Notes shall
have the right, at the Holder's option, to require the Company to repurchase
all of such Holder's Notes, or any portion of a Note that is $5,000 or an
integral multiple of $1,000 in excess thereof, on the date (the "Repurchase
Date") that is 45 days after the date of the Company Notice (as defined), at
a price (the "Repurchase Price") (expressed as a percentage of the principal
amount) equal to 102% if the Repurchase Date is during the period beginning
August 1, 1997 and ending August 1, 2000, and thereafter at the redemption
price set forth under "--Redemption--Optional Redemption" which would apply
to a redemption at the option of the Company on the Repurchase Date; provided
that if the Applicable Price (as defined) is less than the Reference Market
Price (as defined), the Company shall repurchase such Notes at a price equal
to the foregoing redemption price multiplied by the fraction obtained by
dividing the Applicable Price by the Reference Market Price. In each case,
the Company shall also pay accrued interest on the redeemed Notes to, but
excluding, the Repurchase Date. Any Notes repurchased by the Company shall be
canceled.
Within 30 days after the occurrence of a Fundamental Change, the Company
is obligated to give to all Holders of the Notes notice, as provided in the
Indenture (the "Company Notice"), of the occurrence of such Fundamental
Change and of the repurchase right arising as a result thereof. The Company
must also deliver a copy of the Company Notice to the Trustee. To exercise
the repurchase right, a Holder of Notes must deliver on or before the 30th
day after the date of the Company Notice irrevocable written notice to the
Trustee or any Paying Agent of the Holder's exercise of such right, together
with the Notes with respect to which the right is being exercised. Beneficial
owners of an interest in a Global Note may exercise the repurchase right by
delivering the appropriate instruction form for repurchases at the election
of Holders pursuant to the DTC book-entry repurchase program.
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The term "Fundamental Change" means the occurrence of any transaction or
event in connection with which at least 90% of the then outstanding Common
Stock shall be exchanged for, converted into, acquired for or constitute
solely the right to receive, consideration (whether by means of an exchange
offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise) which is at least 90% common
stock or shares which are (or, upon consummation of or immediately following
such transaction or event, will be) listed on a U.S. national securities
exchange or approved for quotation on the Nasdaq National Market or any
similar U.S. system of automated dissemination of quotations of securities
prices. The term "Applicable Price" means (i) in the event of a Fundamental
Change in which the holders of Common Stock receive only cash, the amount of
cash received by the holder of one share of Common Stock and (ii) in the
event of any other Fundamental Change, the average of the last reported sale
price for the Common Stock during the ten Trading Days prior to the record
date for the determination of the holders of Common Shares entitled to
receive cash, securities, property or other assets in connection with such
Fundamental Change or, if no such record date exists, the date upon which the
holders of the Common Shares shall have the right to receive such cash,
securities, property or other assets in connection with the Fundamental
Change. The term "Reference Market Price" shall initially mean $25.67 (which
is equal to 66-2/3% of the last sale price of the Common Share reported on
the Nasdaq National Market on July 22, 1997) and in the event of any
adjustment to the conversion price described above pursuant to the provisions
of the Indenture, the Reference Market Price shall also be adjusted so that
the ratio of the Reference Market Price to the conversion price after giving
effect to any such adjustment shall always be the same as the ratio of $25.67
to the conversion price specified on the cover page of this Prospectus
(without regard to any adjustment thereto).
Rule 13e-4 under the Exchange Act requires the dissemination of certain
information to security holders in the event of an issuer tender offer and
may apply in the event that the repurchase option becomes available to
Holders of the Notes. The Company will comply with this rule and any other
securities laws to the extent applicable at that time.
Upon a Fundamental Change, each Holder of Notes will have certain rights,
at the Holder's option, to require the Company to repurchase all or a portion
of such Holder's Notes. If a Fundamental Change were to occur, there can be
no assurance that the Company would have or be able to obtain sufficient
funds to pay the Repurchase Price for all Notes tendered by the Holders
thereof. Any future credit agreements or other agreements relating to other
indebtedness (including other Senior Indebtedness) to which the Company
becomes a party may contain restrictions and provisions which prohibit the
Company from purchasing or redeeming any Notes or provide that a Fundamental
Change would constitute an event of default thereunder. In the event a
Fundamental Change occurs at a time when the Company is prohibited from
purchasing or redeeming Notes, the Company could seek the consent of its
lenders to the purchase of Notes or could attempt to refinance the borrowings
that contain such prohibition. If the Company does not obtain such a consent
or repay such borrowings, the Company would remain prohibited from purchasing
or redeeming Notes. In such case, the Company's failure to repurchase
tendered Notes would constitute an Event of Default under the Indenture,
which would, in turn, constitute a further default under the other
indebtedness that the Company may enter into from time to time. In such
circumstances, the subordination provisions in the Indenture would likely
restrict payments to the Holders of Notes.
The repurchase option upon a Fundamental Change feature of the
Notes may in certain circumstances make more difficult or discourage a
takeover of the Company and, thus, the removal of incumbent
management. The Fundamental Change purchase feature, however, is not
the result of management's knowledge of any specific effort to
accumulate the Company's stock or to obtain control of the Company by
means of a merger, tender offer, solicitation or otherwise, or part of
a plan by management to adopt a series of antitakeover provisions.
Instead, the Fundamental Change purchase feature is a result of
negotiations between the Company and Initial Purchasers. Management
has no present intention to engage in a transaction involving a
Fundamental Change, although it is possible that the Company could
decide to do so in the future. Subject to the limitations on mergers,
consolidations and sale of assets described herein, the Company could,
in the future, enter into certain transactions, including
acquisitions, refinancings or other recapitalizations, that would not
constitute a Fundamental Change under the Indenture, but that could
increase the amount of indebtedness (including Senior Indebtedness)
outstanding at such time or otherwise affect the Company's capital
structure or credit ratings. The payment of the Fundamental Change
23.
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Repurchase Price is subordinated to the prior payment of Senior Indebtedness
as described under " -- Subordination" above.
The foregoing provisions would not necessarily afford Holders of the
Notes protection in the event of highly leveraged or other transactions
involving the Company that may adversely affect Holders.
MERGERS AND SALES OF ASSETS BY THE COMPANY
The Company may not consolidate with or merge into any other Person (in a
transaction in which the Company is not the surviving entity) or transfer or
lease its properties and assets substantially as an entirety to any Person
unless (i) the Person formed by such merger or into which the Company is
merged or the Person to which the properties and assets of the Company are so
transferred or leased shall expressly assume the payment of the principal of,
premium, if any, and interest on the Notes, (ii) no default and no Event of
Default shall have occurred and be continuing as a result of such
consolidation, merger, conveyance or sale, or such transfer and assignment,
and (iii) the performance of the other covenants of the Company under the
Indenture and certain other conditions are met.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture: (a) failure to
pay principal of or premium, if any, on any Note when due; (b) failure to pay
any interest on, or Additional Amounts or Liquidated Damages with respect to,
any Note when due, continuing for 30 days; (c) failure to perform any other
covenant of the Company in the Indenture, continuing for 60 days after
written notice as provided in the Indenture; and (d) certain events of
bankruptcy, insolvency or reorganization. Subject to the provisions of the
Indenture relating to the duties of the Trustee in case an Event of Default
shall occur and be continuing, the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered to
the Trustee reasonable indemnity. Subject to such provisions for the
indemnification of the Trustee, the Holders of a majority in aggregate
principal amount of the Outstanding Notes will have the right to direct the
time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee.
If an Event of Default (other than as specified in clause (d) above)
shall occur and be continuing, either the Trustee or the Holders of at least
25% in aggregate principal amount of the Outstanding Notes may with written
notice to the Company accelerate the maturity of all Notes; provided,
however, that after such acceleration, but before a judgment or decree based
on acceleration, the Holders of a majority in aggregate principal amount of
Outstanding Notes may, under certain circumstances, rescind and annul such
acceleration if (i) all overdue interest on the Notes, principal of and
premium on Notes which have become due, interest upon overdue interest as
described in the Indenture and all sums paid or advanced by the Trustee, have
been paid and (ii) all Events of Default, other than the non-payment of
accelerated principal, have been cured or waived as provided in the
Indenture. If an Event of Default as specified in clause (d) above occurs and
is continuing, then the principal of, and accrued interest on, all the Notes
shall IPSO FACTO become immediately due and payable without any declaration
or other act on the part of the Holders of the Notes or the Trustee. For
information as to waiver of defaults, see " -- Meetings, Modification and
Waiver."
No Holder of any Note will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder
unless such Holder shall have previously given to the Trustee written
notice of a continuing Event of Default and the Holders of at least
25% in aggregate principal amount of the Outstanding Notes shall have
made written request, and offered reasonable indemnity, to the Trustee
to institute such proceeding as trustee, and the Trustee shall not
have received from the Holders of a majority in aggregate principal
amount of the Outstanding Notes a direction inconsistent with such
request and shall have failed to institute such proceeding within 60
days. However, such limitations do not apply to a suit instituted by a
Holder of a Note for the enforcement of payment
24.
<PAGE>
of the principal of, premium, if any, or interest on such Note on or after
the respective due dates expressed in such Note or of the right to convert
such Note in accordance with the Indenture.
The Company will be required to furnish to the Trustee annually a
statement as to the performance by the Company of certain of its obligations
under the Indenture and as to any default in such performance.
MEETINGS, MODIFICATION AND WAIVER
The Indenture contains provisions for convening meetings of the Holders
of Notes to consider matters affecting their interests.
Modifications and amendments of the Indenture may be made by the Company
and the Trustee, and certain past defaults by the Company may be waived,
either (i) with the written consent of the Holders of not less than a
majority in aggregate principal amount of the Notes at the time Outstanding
or (ii) by the adoption of a resolution, at a meeting of Holders of the Notes
at which a quorum is present, by the Holders of at least the lesser of a
majority in aggregate principal amount of the Notes at the time Outstanding
and 66-2/3% of the aggregate principal amount of the Notes represented and
entitled to vote at such meeting. However, no such modification or amendment
may, without the consent of the Holder of each Outstanding Note or coupon
affected thereby, (a) change the Stated Maturity of the principal of, or any
installment of interest on, any Note or coupon, (b) reduce the principal
amount of, or the premium, if any, or interest on, any Note or coupon, (c)
reduce the amount payable upon a redemption or mandatory repurchase, (d)
modify the provisions with respect to the repurchase right of the Holders in
a manner adverse to the Holders, (e) change the obligation of the Company to
pay Additional Amounts described above in a manner adverse to the Holders,
(f) change the place or currency of payment of principal of, or premium, if
any, or interest on, any Note or coupon, (g) impair the right to institute
suit for the enforcement of any payment on or with respect to any Note, (h)
modify the obligation of the Company to maintain an office or agency in The
City of New York and in a Western European city, (i) adversely affect the
right to convert Notes, (j) modify the subordination provisions in a manner
adverse to the Holders of the Notes, (k) reduce the above-stated percentage
of Outstanding Notes necessary to modify or amend the Indenture, (I) reduce
the percentage of aggregate principal amount of Outstanding Notes necessary
for waiver of compliance with certain provisions of the Indenture or for
waiver of certain defaults, (m) reduce the percentage in aggregate principal
amount of Outstanding Notes required for the adoption of a resolution or the
quorum required at any meeting of Holders of Notes at which a resolution is
adopted, or (n) modify the obligation of the Company to deliver information
required under Rule 144A to permit resales of Notes and Common Shares
issuable upon conversion thereof in the event the Company ceases to be
subject to certain reporting requirements under the U.S. securities laws. The
quorum at any meeting called to adopt a resolution will be persons holding or
representing a majority in aggregate principal amount of the Notes at the
time Outstanding and, at any reconvened meeting adjourned for lack of a
quorum, 25% of such aggregate principal amount.
The Indenture may also be modified or amended without the consent of the
Holders: (i) to evidence the succession of another Person to the Company as
otherwise permitted by the Indenture; (ii) to add to the covenants of the
Company for the benefit of the Holders of the Notes or to surrender any power
conferred upon the Company; (iii) to add any Events of Default; (iv) to
permit or facilitate the issuance of securities in uncertificated form; (v)
to secure the Notes; (vi) to provide for successor or additional trustees; or
(vii) to cure any ambiguity, to correct or supplement any provision which may
be inconsistent with any other provision or to make any other provisions with
respect to matters or questions arising under the Indenture, provided such
action shall not adversely affect the interest of Holders of Notes in any
material respect.
The Holders of a majority in aggregate principal amount of the
Outstanding Notes may waive compliance by the Company with certain
restrictive provisions of the Indenture by written consent or by
adoption of a resolution at a meeting as designated in the Indenture.
The Holders of a majority in aggregate principal amount of the
Outstanding Notes also may waive any past default under the Indenture,
except a default in the payment of principal,
25.
<PAGE>
premium, if any, or interest, by written consent or by adoption of a
resolution at a meeting as designated in the Indenture.
REGISTRATION RIGHTS
Under the Registration Rights Agreement, the Company agreed to file with
the Commission a shelf registration statement covering resales by Holders of
the Notes and the Common Stock issuable upon conversion of the Notes (the
"Shelf Registration Statement") within 90 days after the latest date of
original issuance of the Notes. The Company agreed to use reasonable efforts
to cause the Shelf Registration Statement to become effective as promptly as
is practicable, and in any event within 180 days after the latest date of
original issuance of the Notes, and to keep the Shelf Registration Statement
effective for two years from the latest date of original issuance of Notes or
such earlier date as all of the Notes and the Common Stock issuable upon
conversion of the Notes shall have been disposed of or on which all of such
Notes and Common Stock are held by Persons that are not affiliates of the
Company may be resold without registration pursuant to Rule 144(k) under the
Securities Act. Pursuant to the Registration Rights Agreement, the Company
will be permitted to suspend the use of the prospectus which is a part of the
Shelf Registration Statement for limited periods under certain circumstances
relating to pending corporate developments, public filings with the
Commission and similar events. The Company agreed to pay liquidated damages
to all Holders of Notes and all holders of Common Stock issued upon
conversion of the Notes who have requested to sell pursuant to the Shelf
Registration Statement if the Shelf Registration Statement is not timely
filed or declared effective or if the prospectus is unavailable for periods
in excess of those permitted above. The Company further agreed, if such
failure to file or unavailability continues for an additional 30-day period,
to pay liquidated damages to all Holders of Notes and all holders of Common
Stock issued upon conversion of the Notes, whether or not such holder has
requested to sell pursuant to the registration statement. A holder who sells
Notes or Common Stock issued upon conversion of the Notes pursuant to the
Shelf Registration Statement generally will be required to provide certain
information with respect to such holder and the specifics of the intended
resale, be named as a selling stockholder in the related prospectus, deliver
a prospectus to purchasers, be subject to certain of the civil liability
provisions under the Securities Act in connection with such sales and be
bound by those provisions of the Registration Rights Agreement which are
applicable to such holder (including indemnification provisions). The Company
will pay all expenses of the Shelf Registration Statement, provide to each
registered holder copies of such prospectus, notify DTC when the Shelf
Registration Statement has become effective and take certain other actions as
are required to permit, subject to the foregoing, unrestricted resales of the
Notes and the Common Stock.
TRANSFER AND EXCHANGE
At the option of the Holder upon request confirmed in writing, Notes will
be exchangeable at any time into an equal aggregate principal amount of Notes
of different authorized denominations. See " -- Book Entry, Delivery and
Form."
Notes may be presented for registration of transfer (with the form of
transfer endorsed thereon duly executed) or exchange, at the office of any
note registrar, without service charge but, in the case of a transfer, upon
payment of any taxes and other governmental charges as described in the
Indenture. Any registration of transfer or exchange will be effected upon the
Note Registrar being satisfied with the documents of title and identity of
the person making the request, and subject to such reasonable regulations as
the Company may from time to time agree upon with the Note Registrar, all as
described in the Indenture. Notes may be transferred in whole or in part in
authorized denominations.
The Company has initially appointed the Trustee as Note Registrar
in New York, New York and Banque de Luxembourg as Note Registrar in
Luxembourg. The Issuer reserves the right to vary or terminate the
appointment of the Note Registrar or to appoint additional or other
Note Registrars or to approve any change in the office through which
any Note Registrar acts, provided that there will at all times be a
Note Registrar, so long as the
26.
<PAGE>
Notes are listed on the Luxembourg Stock Exchange and the rules of the
Luxembourg Stock Exchange shall require, in Luxembourg.
In the event of a redemption of less than all of the Notes for any of the
reasons set forth above under "--Redemption," the Issuer will not be required
(a) to register the transfer or exchange of Notes for a period of 15 days
immediately preceding the date notice is given identifying the serial numbers
of the Notes called for such redemption or (b) to register the transfer of or
exchange any Note, or portion thereof, called for redemption.
TITLE
The Company, the Trustee, prior to due presentment for registration of
transfer thereof, the Note Registrar, any Paying Agent and any Conversion
Agent may treat the registered owner (as reflected in the Note Register) of
any Note as the absolute owner thereof (whether or not such Note shall be
overdue) for the purpose of making payment and for all other purposes.
NOTICES
Notice to holders of the Notes will be given by mail to the addresses of
such Holders as they appear in the Note Register (as defined). Such notices
will be deemed to have been given on the date of such mailing or on the date
of the first such publication, as the case may be.
So long as the Notes are listed on the Luxembourg Stock Exchange and the
rules of the Luxembourg Stock Exchange shall require, notices to Holders of
the Notes will be given by publication in a daily newspaper of general
circulation in Luxembourg or, if publication in Luxembourg is not practical,
in Western Europe. Such publication is expected to be made in the LUXEMBURGER
WORT. Such notices will be deemed to have been given on the date of such
publication or, if published in such newspapers on different dates, on the
date of the first such publication.
Notice of a redemption of Notes will be given at least once not less than
20 nor more than 60 days prior to the Redemption Date (which notice shall be
published in accordance with the procedures described in the preceding
paragraphs) and shall be irrevocable and will specify the Redemption Date.
REPLACEMENT OF NOTES
Notes that become mutilated, destroyed, stolen or lost will be replaced
by the Company at the expense of the Holder upon delivery to the Trustee or
to the Note Registrar outside the U.S. of the mutilated Notes or evidence of
the loss, theft or destruction thereof satisfactory to the Company and the
Trustee. In the case of a lost, stolen or destroyed Note, indemnity
satisfactory to the Trustee and the Company may be required at the expense of
the Holder of such Note before a replacement Note will be issued.
PAYMENT OF STAMP AND OTHER TAXES
The Company will pay all stamp and other duties, if any, which may be
imposed by the U.S. or any political subdivision thereof or taxing authority
thereof or therein with respect to the issuance of the Notes or the issuance
of Common Stock upon any conversion of Notes. Except as described under " --
Payment of Additional Amounts," the Company will not be required to make any
payment with respect to any other tax, assessment or governmental charge
imposed by any government or any political subdivision thereof or taxing
authority thereof or therein.
SATISFACTION AND DISCHARGE
The Company may discharge its payment obligations under the Indenture
while Notes remain outstanding if (a)(i) all outstanding Notes have become
due and payable or will become due and payable at their scheduled maturity
27.
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within one year, or (ii) all outstanding Notes are scheduled for redemption
within one year and the Company has deposited with the Trustee an amount
sufficient to pay and discharge the entire indebtedness or all outstanding
Notes on the date of their scheduled maturity or the scheduled date of
redemption and (b) the Company has paid all other sums payable by the Company
under the Indenture.
GOVERNING LAW
The Indenture, the Notes and the Registration Rights Agreement will be
governed by and construed in accordance with the laws of the State of New
York, United States of America.
INFORMATION CONCERNING THE TRUSTEE
Deutsche Bank AG, New York Branch is the Trustee under the Indenture. The
Company may maintain deposit accounts and conduct other banking transactions
with the Trustee in the normal course of business.
In case an Event of Default shall occur (and shall not be cured or waived
in a timely manner), the Trustee will be required to use the degree of care
and skill of a prudent person in the conduct of his own affairs in the
exercise of its powers. Subject to such provisions, the Trustee will be under
no obligation to exercise any of its rights or powers under the Indenture at
the request of any of the Holders of Notes, unless they shall have offered to
the Trustee reasonable security or indemnity.
28.
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SELLING SECURITYHOLDERS
The following table sets forth the names of the Selling Securityholders,
the number of shares of Common Stock owned by each of them as of October 16,
1997 and the principal amount of Notes and number of Conversion Shares which
may be offered pursuant to this Prospectus. This information is based upon
information provided by Deutsche Bank AG, New York Branch, trustee under the
Indenture, and by or on behalf of the Selling Securityholders. The Selling
Securityholders may offer all, some or none of their Notes or Conversion
Shares.
<TABLE>
<CAPTION>
PRINCIPAL
PRINCIPAL AMOUNT OF
AMOUNT OF CONVERTIBLE COMMON STOCK COMMON
CONVERTIBLE NOTES OFFERED OWNED PRIOR TO STOCK OFFERED
NAME NOTES OWNED ($) HEREBY OFFERING (1) HEREBY
<S> <C> <C> <C> <C>
Alexander Global Investment Fund I, Ltd. $700,000 $700,000 14,432 14,432
Arkansas PERS $1,250,000 $1,250,000 25,773 25,773
Baptist Health of South Florida $144,000 $144,000 2,969 2,969
Boston Museum of Fine Art $61,000 $61,000 1,257 1,257
CFW-C, L.P. $1,500,000 $1,500,000 30,927 30,927
Christian Science Trustees for Gifts & Endowments $155,000 $155,000 3,195 3,195
Chrysler Corporation Master Retirement Trust $2,000,000 $2,000,000 41,237 41,237
David Lipscomb University General Endowment $90,000 $90,000 1,855 1,855
Declaration of Trust for the Defined Benefit
Plan of ICI American Holdings Inc. $620,000 $620,000 12,783 12,783
Declaration of Trust for the Defined Benefit
Plan of Zeneca Holdings Inc. $395,000 $395,000 8,144 8,144
Delaware PERS $1,100,000 $1,100,000 22,680 22,680
Delaware State Employees Retirement Fund $2,055,000 $2,055,000 42,371 42,371
Delta Air Lines Master Trust $2,010,000 $2,010,000 41,443 41,443
Deutsche Morgan Grenfell, Inc.(2) $2,241,000 $2,241,000 46,206 46,206
Engineers Joint Pension Fund $225,000 $225,000 4,639 4,639
Equitable Life Assurance Separate Account Balanced $210,000 $210,000 4,329 4,329
Equitable Life Assurance Separate Account
Convertibles $2,975,000 $2,975,000 61,340 61,340
First Church of Christ Scientist - Endowment $170,000 $170,000 3,505 3,505
Franklin U.S. Small Cap Growth Fund $100,000 $100,000 2,061 2,061
The Frist Foundation $325,000 $325,000 6,701 6,701
General Motors Employees Domestic Group Trust $7,395,000 $7,395,000 152,474 152,474
Hawaiian Airlines Employees Pension Plan - IAM $70,000 $70,000 1,443 1,443
Hawaiian Airlines Pension Plan for Salaried
Employees $20,000 $20,000 412 412
Hillside Capital Incorporated Corporate Account $195,000 $195,000 4,020 4,020
Hotel Union & Industry of Hawaii $405,000 $405,000 8,350 8,350
Hudson River Trust Balanced Account $1,250,000 $1,250,000 25,773 25,773
</TABLE>
29.
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
PRINCIPAL AMOUNT OF
AMOUNT OF CONVERTIBLE COMMON STOCK COMMON
CONVERTIBLE NOTES OFFERED OWNED PRIOR TO STOCK OFFERED
NAME NOTES OWNED ($) HEREBY OFFERING (1) HEREBY
<S> <C> <C> <C> <C>
Hudson River Trust Growth & Income Account $1,240,000 $1,240,000 25,567 25,567
Hudson River Trust Growth Investors $1,000,000 $1,000,000 20,618 20,618
Hughes Aircraft Company Master Retirement Trust $1,010,000 $1,010,000 20,824 20,824
ICI American Holdings Pension Trust $435,000 $435,000 8,969 8,969
The J.W. McConnell Family Foundation $415,000 $415,000 8,556 8,556
Kapiolani Medical Center for Women and Children $150,000 $150,000 3,092 3,092
Mainstay Convertible Fund $2,000,000 $2,000,000 41,237 41,237
Memphis Light Water & Gas Retirement Fund $1,245,000 $1,245,000 25,670 25,670
Merrill Lynch Pierce Fenner & Smith Inc. $11,475,000 $11,475,000 236,597 236,597
NALCO Chemical Retirement Trust $200,000 $200,000 4,123 4,123
New York Life Separate Account #7 $1,000,000 $1,000,000 20,618 20,618
Nicholas-Applegate Income & Growth Fund $1,727,000 $1,727,000 35,608 35,608
Occidental College $134,000 $134,000 2,762 2,762
OCM Convertible Limited Partnership $250,000 $250,000 5,154 5,154
OCM Convertible Trust $3,035,000 $3,035,000 62,577 62,577
Partner Reinsurance Company Ltd. $225,000 $225,000 4,639 4,639
PRIM Board $1,700,000 $1,700,000 35,051 35,051
Retirement Plan for Pilots of Hawaiian
Airlines Inc. $100,000 $100,000 2,061 2,061
San Diego City Retirement $448,000 $448,000 9,237 9,237
San Diego County Convertible $1,909,000 $1,909,000 39,360 39,360
Shepherd Investments International Ltd. $1,275,000 $1,275,000 26,288 26,288
SMM Company B.V. $1,900,000 $1,900,000 39,175 39,175
Societe Generale Securities Corporation $5,000,000 $5,000,000 103,092 103,092
South Dakota Retirement Systems $2,500,000 $2,500,000 51,546 51,546
Stark International $1,275,000 $1,275,000 26,288 26,288
Starvest Discretionary $350,000 $350,000 7,216 7,216
State Employees Retirement Plan of the State
of Delaware $795,000 $795,000 16,391 16,391
State of Connecticut Combined Investment Funds $2,420,000 $2,420,000 49,896 49,896
State of Oregon Equity $3,000,000 $3,000,000 61,855 61,855
State of Oregon/SAIF Corporation $3,000,000 $3,000,000 61,855 61,855
Summer Hill Global Partners L.P. $60,000 $60,000 1,237 1,237
The TCW Group, Inc. $8,390,000 $8,390,000 172,989 172,989
Tennessee Consolidated Retirement Systems $2,500,000 $2,500,000 51,546 51,546
Thermo Electron Balanced Investment Fund $540,000 $540,000 11,134 11,134
Vanguard Convertible Securities Fund, Inc. $1,755,000 $1,755,000 36,185 36,185
Wake Forest University $352,000 $352,000 7,257 7,257
Zeneca Holdings Pension Trust $435,000 $435,000 8,969 8,969
</TABLE>
30.
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- ------------
* Less than one percent.
(1) Includes Conversion Shares based on a conversion price of $48.50
per share and a cash payment in lieu of any fractional interest.
(2) Deutsche Morgan Grenfell, Inc. ("DMG") was lead placement agent in the
offering of $140 million 5% Convertible Subordinated Notes due
2002 as listed in the Offering Memorandum dated July 23, 1997.
Deutsche Bank New York ("DBNY") is the trustee for the $140 million
outstanding issue. DMG is an affiliate of DBNY, the trustee under
Indenture for the Notes.
Other than as set forth in the table, none of the Selling Securityholders
listed above had any material relationship with the Company other than as a
result of ownership of the Notes, within the three-year period ending on the
date of this Prospectus.
Because the Selling Securityholders may offer all or some of the Notes
that they hold and/or Conversion Shares pursuant to the offering contemplated
by this Prospectus, and because there are currently no agreements,
arrangements or understandings with respect to the sale of any of the Notes
or Conversion Shares by the Selling Securityholders, no estimate can be given
as to the principal amount of Notes or Conversion Shares that will be held by
the Selling Securityholders after completion of this offering.
31.
<PAGE>
PLAN OF DISTRIBUTION
The Company will not receive any of the proceeds from this offering. The
Selling Securityholders may sell all or a portion of the Notes and the
Conversion Shares beneficially owned by them and offered hereby from time to
time on any exchange on which the securities are listed on terms to be
determined at the times of such sales. The Selling Securityholders may also
make private sales directly or through a broker or brokers. Alternatively,
any of the Selling Securityholders may from time to time offer the Notes or
Conversion Shares beneficially owned by them through underwriters, dealers or
agents, who may receive compensation in the form of underwriting discounts,
commissions or concessions from the Selling Securityholders and the
purchasers of the Notes or Conversion Shares for whom they may act as agent.
Each Selling Securityholder will be responsible for payment of commissions,
concessions and discounts of underwriters, dealers or agents. The aggregate
proceeds to the Selling Securityholders from the sale of the Notes or
Conversion Shares offered by them hereby will be the purchase price of such
Notes or Conversion Shares less discounts and commissions, if any.
The Notes and the Conversion Shares offered hereby may be sold from time
to time by the Selling Securityholders to purchasers directly by any of the
Selling Securityholders acting as principal for its own account in one or
more transactions at a fixed price, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. Such prices
will be determined by the holders of such securities or by agreement between
such holders and underwriters or dealers who may receive fees or commissions
in connection therewith.
The Company's outstanding Common Stock is listed for trading on Nasdaq.
The Initial Purchasers may make a market in the Notes; however, they are not
obligated to do so and any such market-making may be discontinued at any time
without notice, in the sole discretion of the Initial Purchasers. Prior to
this offering, the Notes were eligible for trading on the PORTAL market and
are listed on the Luxembourg Stock Exchange. The Notes sold pursuant to the
Registration Statement of which this Prospectus forms a part are not expected
to remain eligible for trading on the PORTAL system. The Company does not
intend to list the Notes for trading on any national securities exchange or
on the Nasdaq Stock Market. Accordingly, no assurance can be given as to the
development of any trading market that may develop for the Notes. See "Risk
Factors -- Lack of Trading Market for the Notes; Volatility of Note and
Common Stock Prices."
In order to comply with the securities laws of certain states, if
applicable, the Notes and Conversion Shares may be sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition, in
certain states the Notes and Conversion Shares may not be sold unless it has
been registered or qualified for sale or an exemption from registration or
qualification requirements is available and is complied with.
The Selling Securityholders and any underwriters, dealers or agents that
participate in the distribution of the Notes and Conversion Shares offered
hereby may be deemed to be underwriters within the meaning of the Securities
Act, and any discounts, commissions or concessions received by them and any
provided pursuant to the sale of shares by them might be deemed to be
underwriting discounts and commissions under the Securities Act.
In addition, any securities covered by this Prospectus which qualify for
sale pursuant to Rule 144 or Rule 144A of the Securities Act may be sold
under Rule 144 or Rule 144A rather than pursuant to this Prospectus. There is
no assurance that any Selling Securityholder will sell any or all of the
Notes or Conversion Shares described herein, and any Selling Securityholder
may transfer, devise or gift such securities by other means not described
herein.
The Notes were originally sold to the Initial Purchasers in July 1997 in
a private placement. The Company agreed to indemnify and hold the Initial
Purchasers harmless against certain liabilities which they may incur under
the Securities Act, the Exchange Act or otherwise that could arise in
connection with the offering of the Notes by the Initial Purchasers.
32.
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The Company entered into a Registration Agreement with the Initial
Purchasers for the benefit of holders of the Notes to register their Notes
and Conversion Shares under applicable federal and state securities laws
under certain circumstances and at certain times. The Registration Agreement
provides for cross-indemnification of the Selling Securityholders and the
Company to the extent permitted by law, for losses, claims, damages,
liabilities and expenses arising, under certain circumstances, out of any
registration of the Notes and Conversion Shares.
The Company will use its best efforts to cause the Registration Statement
to which this Prospectus relates to become effective as soon as practicable
and to keep the Registration Statement effective for a period of two years
from July 31, 1997 (the latest date of original issuance of the Notes), or
until the Registration Statement is no longer required for transfer of the
Notes or the Conversion Shares. The Company is permitted to suspend the use
of this Prospectus in connection with the sales of Notes and the Conversion
Shares by holders upon the happening of certain events or if there exists any
fact that makes any statement of material fact made in this Prospectus untrue
or that requires the making of additions to or changes in the Prospectus in
order to make the statements herein not misleading until such time as the
Company advises the Selling Securityholders that use of the Prospectus may be
resumed. Expenses of preparing and filing the Registration Statement and all
post-effective amendments will be borne by the Company. Such expenses are
estimated to be $200,000.
33.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a general discussion of certain U.S. federal income tax
considerations relevant to holders of the Notes and Common Stock into which
the Notes may be converted. This discussion is based upon the Internal
Revenue Code of 1986, as amended (the "Code"), Treasury Regulations, Internal
Revenue Service ("IRS") rulings and judicial decisions now in effect, all of
which are subject to change (possibly with retroactive effect) or different
interpretations. This discussion does not purport to deal with all aspects of
federal income taxation that may be relevant to a particular investor's
decision to purchase the Notes, and it is not intended to be wholly
applicable to all categories of investors, some of which, such as dealers in
securities, banks, insurance companies, tax-exempt organizations and non-U.S.
persons, may be subject to special rules. The discussion also does not
discuss any aspect of state, local or foreign law, nor federal estate and
gift tax law. In addition, this discussion is limited to persons that will
hold the Notes represented thereby as a "capital asset" within the meaning of
section 1221 of the Code.
ALL PROSPECTIVE PURCHASERS OF THE NOTES ARE ADVISED TO CONSULT THEIR OWN
TAX ADVISORS REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES
OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES AND THE COMMON STOCK.
INTEREST
Stated interest on the Notes will generally be includable in and taxable
as ordinary income in accordance with the Holder's method of accounting.
CONVERSION OF NOTES INTO COMMON STOCK
In general, no gain or loss will be recognized for federal income tax
purposes on a conversion of the Notes into shares of Common Stock. However,
cash paid in lieu of a fractional share of Common Stock will likely result in
taxable gain (or loss), which will be capital gain (or loss), to the extent
that the amount of such cash exceeds (or is exceeded by) the portion of the
adjusted basis of the Note allocable to such fractional share. The adjusted
basis of shares of Common Stock received on conversion will equal the
adjusted basis of the Note converted, reduced by the portion of adjusted
basis allocated to any fractional share of Common Stock exchanged for cash.
The holding period of an investor in the Common Stock received on conversion
will include the period during which the converted Notes were held.
The conversion price of the Notes is subject to adjustment under certain
circumstances. Section 305 of the Code and the Treasury Regulations issued
thereunder may treat the holders of the Notes as having received a
constructive distribution, resulting in ordinary income (subject to a
possible dividends-received deduction in the case of corporate holders) to
the extent of the Company's current and/or accumulated earnings and profits,
if, and to the extent that certain adjustments in the conversion price that
may occur in limited circumstances (particularly an adjustment to reflect a
taxable dividend to holders of Common Stock) increase the proportionate
interest of a holder of Notes in the fully diluted Common Stock, whether or
not such holder ever exercises its conversion privilege. Moreover, if there
is not a full adjustment to the conversion ratio of the Notes to reflect a
stock dividend or other event increasing the proportionate interest of the
holders of outstanding Common Stock in the assets or earnings and profits of
the Company, then such increase in the proportionate interest of the holders
of the Common Stock generally will be treated as a distribution to such
holders, taxable as ordinary income (subject to a possible dividends-received
deduction in the case of corporate holders) to the extent of the Company's
current and/or accumulated earnings and profits.
MARKET DISCOUNT
Investors acquiring Notes pursuant to this Prospectus should note that
the resale of those Notes may be adversely affected by the market discount
provisions of sections 1276 through 1278 of the Code. Under the market
discount rules, if a holder of a Note purchases it at a market discount
(i.e., at a price below its stated redemption
34.
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price at maturity) in excess of a statutorily-defined DE MINIMIS amount and
thereafter recognizes gain upon a disposition or retirement of the Note, then
the lesser of the gain recognized or the portion of the market discount that
accrued on a ratable basis (or, if elected, on a constant interest rate
basis) generally will be treated as ordinary income at the time of the
disposition. Moreover, any market discount in a Note may be taxable to an
investor to the extent of appreciation at the time of certain otherwise
non-taxable transactions (E.G., gifts). Any accrued market discount not
previously taken into income prior to a conversion of a Note, however, should
(under Treasury Regulations not yet issued) carry over to the Common Stock
received on conversion and be treated as ordinary income upon a subsequent
disposition of such Common Stock, to the extent of any gain recognized on
such disposition. In addition, absent an election to include market discount
in income as it accrues, a holder of a market discount debt instrument may be
required to defer a portion of any interest expense that otherwise may be
deductible on any indebtedness incurred or maintained to purchase or carry
such debt instrument until the holder disposes of the debt instrument in a
taxable transaction.
SALE, EXCHANGE OR RETIREMENT OF THE NOTES AND COMMON STOCK
Except as described under "Conversion of Notes into Common Stock" above,
each holder of Notes generally will recognize gain or loss upon the sale,
exchange, redemption, retirement or other disposition of those Notes measured
by the difference (if any) between (i) the amount of cash and the fair market
value of any property received (except to the extent that such cash or other
property is attributable to the payment of accrued interest not previously
included in income, which amount will be taxable as ordinary income) and (ii)
the holder's adjusted tax basis in those Notes (including any market discount
previously included in income by the holder). Each holder of Common Stock
into which the Notes are converted, in general, will recognize gain or loss
upon the sale, exchange, redemption or other disposition of the Common Stock
measured under rules similar to those described in the preceding sentence for
the Notes. Special rules may apply to redemptions of Common Stock which may
result in different treatment. Any such gain or loss recognized on the sale,
exchange, redemption, retirement or other disposition of a Note or share of
Common Stock should be capital gain or loss (except as discussed under
"Market Discount" above), and would be long-term capital gain or loss if the
Note or the Common Stock had been held or deemed held for more than one year
at the time of the sale or exchange. An investor's initial basis in a Note
will be the cash price it paid therefor. Pursuant to the recently enacted
Taxpayer Relief Act of 1997, long-term capital gains tax rates will apply to
dispositions by individuals of capital assets (such as the Notes or Common
Stock) held for more than 18 months. The maximum long-term capital gains tax
rate applicable to individuals is currently 20% (10% for individuals in the
15% tax bracket). Mid-term capital gains tax rates will apply to
dispositions by individuals of capital assets held for more than one year but
not more than 18 months. The maximum mid-term capital gains tax rate
applicable to individuals is currently 28% (15% for individuals in the 15%
tax bracket). Corporate taxpayers continue to be subject to a maximum
regular tax rate of 35% on all capital gains and ordinary income.
BACKUP WITHHOLDING
A holder of Notes or Common Stock may be subject to "backup withholding"
at a rate of 31% with respect to certain "reportable payments", including
interest payments, dividend payments and, under certain circumstances,
principal payments on the Notes. These backup withholding rules apply if the
holder, among other things, (i) fails to furnish a social security number or
other taxpayer identification number ("TIN") certified under penalties of
perjury within a reasonable time after the request therefor, (ii) furnishes
an incorrect TIN, (iii) fails to report properly interest or dividends, or
(iv) under certain circumstances, fails to provide a certified statement,
signed under penalties of perjury, that the TIN furnished is the correct
number and that such holder is not subject to backup withholding. A holder
who does not provide the Company with its correct TIN also may be subject to
penalties imposed by the IRS. Any amount withheld from a payment to a holder
under the backup withholding rules is creditable against the holder's federal
income tax liability, provided that the required information is furnished to
the IRS. Backup withholding will not apply, however, with respect to payments
made to certain holders, including
35.
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corporations, tax-exempt organizations and certain foreign persons, provided
their exemptions from backup withholding are properly established.
The Company will report to the holders of Notes and Common Stock and to
the IRS the amount of any "reportable payments" for each calendar year and
the amount of tax withheld, if any, with respect to such payments.
LEGAL MATTERS
The validity of the Notes and the Conversion Shares will be passed upon
for the Company by Cooley Godward LLP, Palo Alto, California.
EXPERTS
The consolidated financial statements of the Company incorporated in this
Prospectus by reference to the Annual Report on Form 10-K for the year ended
January 31, 1997, have been so incorporated in reliance on the report of
Price Waterhouse LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
36.
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY
STATE 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. THE
DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
_____________________
TABLE OF CONTENTS
PAGE
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation Of Certain Documents By Reference. . . . . . . . . . . . . 2
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Ratio Of Earnings To Fixed Charges . . . . . . . . . . . . . . . . . . . 12
Use Of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Description Of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Selling Securityholders. . . . . . . . . . . . . . . . . . . . . . . . . 29
Plan Of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Certain Federal Income Tax Considerations. . . . . . . . . . . . . . . . 34
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
_____________________
37.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses, other than the
underwriting discounts and commissions, payable by the Registrant in
connection with the sale of the Common Stock being registered. All the
amounts shown are estimates except for the registration fee and the
NASD filing fee.
Registration fee . . . . . . . . . . . . . . . . . . . . . . . . . .$42,425
Nasdaq listing fee . . . . . . . . . . . . . . . . . . . . . . . . . 17,500
Printing and engraving expenses. . . . . . . . . . . . . . . . . . . 20,000
Legal fees and expenses. . . . . . . . . . . . . . . . . . . . . . . 75,000
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . 10,000
Trustee's fee and expenses . . . . . . . . . . . . . . . . . . . . . 20,000
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,075
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,000
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Under Section 145 of the Delaware General Corporation Law, the
Registrant has broad powers to indemnify its directors and officers
against liabilities they may incur in such capacities, including
liabilities under the Securities Act of 1933, as amended ("Securities
Act"). The Registrant's Bylaws also provide that the Registrant will
indemnify its directors and executive officers and may indemnify its
other officers, employees and other agents to the fullest extent
permitted by Delaware law.
The Registrant's Restated Certificate of Incorporation ("Restated
Certificate") provides that the liability of its directors for
monetary damages shall be eliminated to the fullest extent permissible
under Delaware law. Pursuant to Delaware law, this includes
elimination of liability for monetary damages for breach of the
directors' fiduciary duty of care to the Registrant and its
stockholders. These provisions do not eliminate the directors' duty of
care and, in appropriate circumstances, equitable remedies such as
injunctive or other forms of non-monetary relief will remain available
under Delaware law. In addition, each director will continue to be
subject to liability for breach of the director's duty of loyalty to
the Registrant, for act or omissions not in good faith or involving
intentional misconduct, for knowing violations of law, for any
transaction from which the director derived an improper personal
benefit, and for payment of dividends or approval of stock repurchases
or redemptions that are unlawful under Delaware law. The provision
also does not affect a director's responsibilities under any other
laws, such as the federal securities laws or state or federal
environmental laws.
The Registrant has entered into agreements with its directors and
officers that require the Company to indemnify such persons to the
fullest extent authorized or permitted by the provisions of the
Restated Certificate and Delaware law against expenses, judgements,
fines, settlements and other amounts actually and responsibly incurred
(including expenses of a derivative action) in connection with any
proceeding, whether actual or threatened, to which any such person may
be made a party by reason of the fact that such person is or was a
director, officer, employee or other agent of the Registrant or any of
its affiliated enterprise. Delaware law permits such indemnification,
provided such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interest of
the Registrant and, with respect to any criminal proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The
indemnification agreements also set forth certain procedures that will
apply in the event of a claim for indemnification thereunder.
II-1
<PAGE>
At present, there is no pending litigation or proceeding
involving a director or officer of the Registrant as to which
indemnification is being sought nor is the Registrant aware of any
threatened litigation that may result in claims for indemnification by
any officer or director.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- -------- --------------------------------------------------------
4.1(1) Specimen Stock Certificate
4.2 Form of Note (included in Exhibit 4.1)
4.3(2) Indenture between the Registrant and Deutschebank AG as
Trustee, dated July 31, 1997
4.4 Indenture cross reference sheet
5.1 Opinion of Cooley Godward LLP
10.1(2) Registration Rights Agreement between the Registrant
and Deutsche Morgan Grenfell Inc., Hambrecht &
Quist LLC and Wessels, Arnold & Henderson, L.L.C.,
dated July 31, 1997
10.2(2) Convertible Subordinated Notes Purchase Agreement
between the Registrant and Deutsche Morgan Grenfell
Inc., Hambrecht & Quist LLC and Wessels, Arnold &
Henderson, L.L.C., dated July 22, 1997
12.1 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Cooley Godward LLP (included in Exhibit 5.1)
24.1 Power of Attorney. Reference is made to page II-4.
25.1(3) Statement of Eligibility of Indenture Trustee on Form T-1.
- ---------------------------
(1) Filed as an exhibit to Amendment No.1 the Company's
Registration Statement on Form S-1 (No. 33-59146) and
incorporated herein by reference.
(2) Filed as an exhibit to the Company's Quarterly Report
on Form 10-Q for the quarter ended July 31, 1997 and
incorporated herein by reference.
(3) Certain exhibits to the Form T-1 to be filed by amendment.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement
to include any material informaiton with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securites being registered which remain unsold at
the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")
that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial BONA FIDE offering
thereof.
The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of
periodic report pursuant to Section 13 or 15(d) of the Exchange Act
containing information required to be included in a post-effective
amendment that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering
thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and
controlling persons of the Registrant pursuant to the provisions
described in Item 14 or otherwise, the Registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director,
officer, or controlling person of the Registrant in the successful
defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant undertakes that: (1) for purposes of
determining any liability under the Securities Act, the information
omitted from the form of prospectus as filed as part of the
registration statement in reliance upon Rule 430A and contained in the
form of prospectus filed by the Registrant pursuant to Rule 424(b) (1)
or (4) or 497(h) under the Securities Act shall be deemed to be part
of the registration statement as of the time it was declared
effective, and (2) for the purpose of determining any liability under
the Securities Act, each post-effective amendment that contained a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial BONA FIDE
offering thereof.
The undersigned Registrant hereby undertakes to file an
application for the purpose of determining the eligibility of the
trustee to act under Subsection (a) of Section 310 of the Trust
Indenture Act in accordance with the rules and regulations prescribed
by the Commission under Section 305(b)(2) of the Trust Indenture Act.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3
and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Alameda, State of California, on the 29th day of October, 1997.
WIND RIVER SYSTEMS, INC.
By: /s/ Ronald A. Abelmann
------------------------------------
Ronald A. Abelmann
Chief Executive Officer, President
and Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Ronald A. Abelmann and Richard W.
Kraber, and each or any one of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments and registration statements
filed pursuant to Rule 462) to this Registration Statement, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be
done in connection therewith, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitutes or
substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Ronald A. Abelmann Chief Executive Officer,
- --------------------------- President and Director
Ronald A. Abelmann (PRINCIPAL EXECUTIVE OFFICER) October 29, 1997
/s/ Richard W. Kraber Chief Financial Officer
- --------------------------- (PRINCIPAL FINANCIAL AND
Richard W. Kraber ACCOUNTING OFFICER) October 29, 1997
/s/ Jerry L. Fiddler
- --------------------------- Chairman of the Board October 29, 1997
Jerry L. Fiddler
/s/ David N. Wilner Director and Chief
- --------------------------- Technical Officer October 29, 1997
David N. Wilner
/s/ William B. Elmore
- --------------------------- Director October 29, 1997
William B. Elmore
/s/ David B. Pratt
- --------------------------- Director October 29, 1997
David B. Pratt
II-4
<PAGE>
Exhibit 4.4
WIND RIVER SYSTEMS, INC.
5% CONVERTIBLE SUBORDINATED NOTES DUE 2002
------------
CROSS REFERENCE SHEET TO TRUST INDENTURE ACT OF 1939
Trust Indenture Act Section Number Indenture Section Number
- ---------------------------------- ------------------------
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9; 6.13
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.14
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.14
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.3(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.3(c)
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.4(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.4(a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.4(b)
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.5
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.6
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2; 3.3
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.14
316(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.12; 5.13
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.8
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.13
- ------------------------
This Cross-Reference Sheet is not part of the Indenture.
<PAGE>
Exhibit 5.1
CONSENT OF COOLEY GODWARD LLP
October 29, 1997
Wind River Systems, Inc.
1010 Atlantic Avenue
Alameda, CA 94501
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by Wind River Systems, Inc. (the "Company") of a Registration
Statement on Form S-3 (the "Registration Statement") with the Securities and
Exchange Commission covering the offering of (i) up to $140,000,000 5%
Convertible Subordinated Notes Due 2002 (the "Notes") issued pursuant to the
Indenture dated as of July 31, 1997 between the Company and Deutsche Bank
A.G., New York Branch, as trustee, and (ii) the shares of the Company's
Common Stock, $.001 par value issuable upon conversion of the Notes (the
"Conversion Shares").
In connection with this opinion, we have examined the form of the Notes, the
Indenture, Registration Statement and related Prospectus, your Amended and
Restated Certificate of Incorporation and Bylaws, as amended, and such other
documents, records, certificates, memoranda and other instruments as we deem
necessary as a basis for this opinion. We have assumed the genuineness and
authenticity of all documents submitted to us as originals, the conformity to
originals of all documents submitted to us as copies thereof, and the due
execution and delivery of all documents where due execution and delivery are
a prerequisite to the effectiveness thereof.
With respect to the opinion expressed in paragraph A, we have assumed that
the Notes have been duly authenticated and delivered by the Trustee.
Our opinion is expressed only with respect to the federal laws of the United
States of America, the General Corporation Law of the State of Delaware and
the laws of the State of California. We express no opinion as to whether the
laws of any particular jurisdiction other than those identified above are
applicable to the subject matter hereof. With your permission, we have
assumed that the laws of the state of New York are the same in all material
respects as the laws of the state of California.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that:
A. The Notes have been duly authorized, executed and delivered and are
valid and binding obligations of the Company, subject to applicable
bankruptcy, insolvency, reorganization, arrangement, moratorium or other
similar laws affecting creditors' rights, and subject to general equity
principals and to limitations on availability of equitable relief, including
specific performance.
B. The Conversion Shares, when issued and delivered upon conversion of
the Notes, in accordance with the Indenture, will be validly issued, fully
paid, and nonassessable.
This opinion is intended solely for your benefit and is not to be made
available or relied upon by any other person, firm or entity without our
prior written consent.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
COOLEY GODWARD LLP
By: \S\ ANDREA VACHSS
------------------------------
Andrea Vachss
<PAGE>
<TABLE>
<CAPTION>
Exhibit 12.1
WIND RIVER SYSTEMS, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Year ended January 31, Six months ended July 31,
------------------------------------------------------------------ ----------------------------
1993 1994 1995 1996 1997 1996 1997
------------------------------------------------------------------ ----------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Pre-tax income from continuing
operations $ 2,871,000 $ 653,000 $ 3,905,000 $ 8,791,000 $ 17,957,000 $ 5,780,000 $ 10,657,000
Minority interest in the income
(loss) of majority owned
subsidiary with fixed charges (13,000) 199,000 (76,000) (13,000) 325,000 60,000 (8,000)
-----------------------------------------------------------------------------------------------
2,858,000 852,000 3,829,000 8,778,000 18,282,000 5,840,000 10,649,000
-----------------------------------------------------------------------------------------------
Fixed charges:
Interest expense 299,000 146,000 232,000 199,000 - - -
Appropriate portion (33%) of
rentals (1) 408,416 410,732 492,694 555,189 655,895 295,872 401,682
-----------------------------------------------------------------------------------------------
Total fixed charges 707,416 556,732 724,694 754,189 655,895 295,872 401,682
-----------------------------------------------------------------------------------------------
Earnings before income taxes,
minority interest and fixed
charges $ 3,565,416 $1,408,732 $ 4,553,694 $ 9,532,189 $ 18,937,895 $ 6,135,872 $ 11,050,682
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
Ratio of earnings to fixed
charges 5.04 2.53 6.28 12.64 28.87 20.74 27.51
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
</TABLE>
(1) 33% is the estimated portion of rental expense deemed by the Company to
be a reasonable approximation of the interest factor of rental payments
under operating leases.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated March 10, 1997 appearing in Wind River Systems, Inc.'s
Annual Report on Form 10-K for the year ended January 31, 1997. We also
consent to the reference to us under the heading "Experts" in such
Prospectus.
Price Waterhouse LLP
San Jose, California
October 27, 1997
<PAGE>
COORDINATION WITH DELAYED OFFERING REGISTRATION STATEMENT
When the Form T-1 is used for applications to determine the eligibility of
a trustee pursuant to Section 305(b)(2), the following provisions shall
apply:
1. The file number under the Securities Act of 1933 for the delayed offering
registration statements to which the application applies shall be placed
in the upper right hand corner of the cover page of the Form T-1.
2. The description of the indenture securities included under "Title of
Securities" should specify whether the application relates to a single
tranche or to all of the securities registered pursuant to the delayed
offering registration statement.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939,
AS AMENDED, OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
<TABLE>
<CAPTION>
<S> <C>
Deutsche Bank, AG, New York Branch
- -----------------------------------------------------------------------------------------------------------------------------------
(Exact name of trustee as specified in its charter)
Federal Republic of Germany 13-2944988
- -----------------------------------------------------------------------------------------------------------------------------------
(Jurisdiction of Incorporation or organization if not a U.S. national bank) (I.R.S. Employer Identification Number)
31 West 52nd Street, New York, New York 10004
- ----------------------------------------------------------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Alfred Steffan, Deutsche Bank AG, New York Branch, 31 West 52nd Street, New York, New York 10004 (212) 469-8166
- -----------------------------------------------------------------------------------------------------------------------------------
(Name, address and telephone number of agent for Service)
Wind River Systems Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
(Exact name of obligor as specified in its charter)
Delaware 94-2873391
- -----------------------------------------------------------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
1010 Atlantic Avenue, Alameda, California 94501
- -----------------------------------------------------------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
$140,000,000 aggregate principal amount of 5% Convertible Subordinated Notes due 2002
- -----------------------------------------------------------------------------------------------------------------------------------
(Title of the indenture securities)
</TABLE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
New York State Banking Department
Two Rector Street
New York, New York
Federal Reserve Bank of New York
33 Liberty Street
New York, New York
<PAGE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee.
INSTRUCTIONS.
1. The term "affiliate" is defined in Rule 0-2 of the General Rules and
Regulations under the Act. Attention is also directed to Rule 7a-26.
2. Include the name of each such affiliate and the names of all intermediary
affiliates, if any. Indicate the respective percentage of voting securities
or other bases of control giving rise to the affiliation.
ITEM 3. VOTING SECURITIES OF THE TRUSTEE.
Furnish the following information as to each class of voting securities of
the trustee:
As of OCTOBER 21, 1997 (Insert date within 31 days).
- ------------------------------------------------------------------------------
Col. A. Col. B.
Title of Class Amount Outstanding
- ------------------------------------------------------------------------------
NOT APPLICABLE
INSTRUCTIONS. The term "voting security" is defined in Section 303(16) of the
Act.
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES.
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following
information:
(a) Title of the securities outstanding under each such other indenture.
NONE.
(b) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310(b)(1)
of the Act arises as a result of the trusteeship under any such other
indenture, including a statement as to how the indenture securities
will rank as compared with the securities issued under such other
indenture.
Not Applicable.
ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH THE OBLIGOR
OR UNDERWRITERS.
If the trustee or any of the directors or executive officers of the trustee
is a director, officer, partner, employee, appointee, or representative of
the obligor or of any underwriter for the obligor, identify each such person
having any such connection and state the nature of each such connection.
Dutsche Morgan Grenfell Inc. was an underwriter for the obligor
in connection with the Notes to which this T-1 relates. Deutsche Bank AG
owns Deutsche Morgan Grenfell Inc. and the trustee is a licensed branch of
Deutsche Bank AG. The following individuals are officers and/or employees of
both Deutsche Bank AG, New York Branch and Deutsche Morgan Grenfell Inc.:
Christopher Beaudet, David Bondy, John Cuttig, Kathy DeRuggiero,
Christine Fade, John Hamilton, Julie Harris, Howard Henick, Donald Jones,
Philip Kearns, Sean Kelleher, Doreen Kennedy, Charles W. Kerner, Francisco R.
Kraft, Robert M. Lupoli, Victor T. Mahoney, Lisa Masone, Karen Meyer, Daniel
Park, Dawn Patterson, Gergory Petretti, Hilger Pothmann, Edward Rubin, Richard
Uhlig, Joan Wang and Bernadette Whitaker
2
<PAGE>
INSTRUCTIONS.
1. Notwithstanding General Instruction F, the term "underwriter" as used in
this item does not refer to any person who is not currently engaged in
the business of underwriting.
2. The terms "employee," "appointee," and "representative," as used in this
item, do not include connections in the capacity of transfer agent,
registrar, custodian, paying agent, fiscal agent, escrow agent, or
depositary, or in any other similar capacity or connections in the
capacity of trustee, whether under an indenture or otherwise.
ITEM 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS
OFFICIALS.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner, and
executive officer of the obligor:
As of October 21, 1997 (Insert date within 31 days).
INSTRUCTIONS:
1. Names of persons who do not own beneficially any of the securities
specified may be omitted.
2. No information need be given in any case where the amount of voting
securities of the trustee, owned beneficially by the obligor and its
directors, partners, and executive officers, taken as a group, does not
exceed 1 percent of the outstanding voting securities of the trustee.
- ------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Percentage of Voting
Amount Owned Securities Represented by
Name of Owner Title of Class Beneficially Amount Given in Col. C
- ------------------------------------------------------------------------------
NONE
ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS.
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and each
director, partner, and executive officer of each such underwriter:
As of October 21, 1997 (Insert date within 31 days).
INSTRUCTIONS.
1. Instruction 1 to Item 6 shall be applicable to this item.
2. The name of each director, partner, or executive officer required to be
given in Column A shall be set forth under the name of the
underwriter of which he is a director, partner, or executive officer.
3. No information need be given in any case where the amount of voting
securities of the trustee owned beneficially by an underwriter and its
directors, partners, and executive officers, taken as a group, does not
exceed 1 percent of the outstanding voting securities of the
trustee.
- ------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Percentage of Voting
Amount Owned Securities Represented by
Name of Owner Title of Class Beneficially Amount Given in Col. C
- ------------------------------------------------------------------------------
NONE
ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
Furnish the following information as to securities of the obligor
beneficially or held as collateral security for obligations in default by the
trustee:
As of October 21, 1997 (Insert date within 31 days).
INSTRUCTIONS.
1. As used in this item, the term "securities" includes only such securities
as are generally known as corporate securities, but shall not include
any note or other evidence of indebtedness issued to evidence an obligation
to repay monies lent to a person by one or more banks, trust companies,
or banking firms, or any certificate of interest or participation in any such
note or evidence of indebtedness.
2. For the purposes of this item the trustee shall not be deemed the owner or
holder of (a) any security which it holds as collateral security
(as trustee or otherwise) for an obligation which is not in default, or (b)
any security which it holds as collateral security under
3
<PAGE>
the indenture to be qualified, irrespective of any default thereunder, or (c)
any security which it holds as agent for collection, or as custodian, escrow
agent or depositary, or in any similar representative capacity.
3. No information need be furnished under this item as to holdings by the
trustee of securities already issued under the indenture to be qualified or
securities issued under any other indenture under which the trustee is also
trustee.
4. No information need be given with respect to any class of securities where
the amount of securities of the class which the trustee owns beneficially or
holds as collateral security for obligations in default
does not exceed 1 percent of the outstanding securities of the class.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
<S> <C> <C> <C>
Amount Owned Percentage of Class
Whether the Securities Beneficially or Held as Represented by
are Voting or Collateral Security for Amount Given
Title of Class Nonvoting Securities Obligations in Default in Col. C
- -------------------------------------------------------------------------------------------
</TABLE>
NONE
ITEM 9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor,
furnish the following information as to each class of securities of such
underwriter any of which are so owned or held by the trustee:
As of October 21, 1997 (Insert date within 31 days).
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
<S> <C> <C> <C>
Amount Owned
Beneficially or Held as
Collateral Security for Percentage of Class
Title of Issuer Obligations in Default Represented by Amount
and Title of Class Amount Outstanding by Trustee Given in Col. C
- -------------------------------------------------------------------------------------------
</TABLE>
INSTRUCTION. Instructions 1, 2, and 4 to Item 8 shall be applicable to this
item.
Deutsche Morgan Grenfell Inc. was an underwriter for the obligor in
connection with the Notes to which this T-1 relates. Deutsche Bank AG
owns Deutsche Morgan Grenfell Inc. and the trustee is a licensed branch
of Deutsche Bank AG.
ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF CERTAIN
AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge of
the trustee (1) owns 10 percent or more of the voting securities of the
obligor or (2) is an affiliate, other than a subsidiary, of the obligor,
furnish the following information as to the voting securities of such person:
As of October 21, 1997 (Insert date within 31 days).
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
<S> <C> <C> <C>
Amount Owned
Beneficially or Held as
Collateral Security for Percentage of Class
Title of Issuer Obligations in Default Represented by Amount
and Title of Class Amount Outstanding by Trustee Given in Col. C
- -------------------------------------------------------------------------------------------
</TABLE>
INSTRUCTION. Instructions 1, 2, and 4 to Item 8 shall be applicable to this
item.
NONE
4
<PAGE>
ITEM 11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A PERSON
OWNING 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge of
the trustee, owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such
person any of which are so owned or held by the trustee:
As of October 21, 1997 (Insert date within 31 days).
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
<S> <C> <C> <C>
Amount Owned
Beneficially or Held as
Collateral Security for Percentage of Class
Title of Issuer Obligations in Default Represented by Amount
and Title of Class Amount Outstanding by Trustee Given in Col. C
- -------------------------------------------------------------------------------------------
</TABLE>
INSTRUCTION. Instructions 1, 2 and 4 to Item 8 shall be applicable to this
item.
NONE.
ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:
As of October 21, 1997 (Insert date within 31 days).
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Col. A Col. B Col. C
<S> <C> <C>
Nature of Indebtedness Amount Outstanding Date Due
- -------------------------------------------------------------------------------------------
</TABLE>
NONE
INSTRUCTIONS.
1. No information need be provided as to: (a) the ownership of securities
issued under any indenture, or any security or securities having a
maturity of more than one year at the time of acquisition by the indenture
trustee; (b) disbursements made in the ordinary course of business in the
capacity of trustee of an indenture, transfer agent, registrar, custodian,
paying agent, fiscal agent or depositary, or other similar capacity; (c)
indebtedness created as a result of services rendered or premises rented; or
indebtedness created as a result of goods or securities sold in a cash
transaction; (d) the ownership of stock or of other securities of a
corporation organized under Section 25(a) of the Federal Reserve Act, as
amended, which is directly or indirectly a creditor of an obligor upon the
indenture securities; or (e) the ownership of any drafts, bills of exchange,
acceptances, or obligations which fall within the classification of
self-liquidating paper.
2. Information should be given as to the general type of indebtedness, such
as lines of credit, commercial paper, long-term notes, mortgages, etc.
ITEM 13. DEFAULTS BY THE OBLIGOR.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
NONE.
(b) If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any
other securities, of the obligor are outstanding, or is trustee for more than
one outstanding series of securities under the indenture, state
whether there has been a default under any such indenture or series, identify
the indenture or series affected, and explain the nature of any such
default.
5
<PAGE>
ITEM 14. AFFILIATIONS WITH THE UNDERWRITERS.
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Deutsche Morgan Grenfell Inc. was an underwriter for the obligor in
connection with the Notes to which this T-1 relates. Deutsche Bank AG owns
Deutsche Morgan Grenfell Inc. and the trustee is a licensed branch of
Deutsche Bank AG.
INSTRUCTIONS.
1. The term "affiliate" as defined in Rule 0-2 of the General Rules and
Regulations under the Act. Attention is directed to Rule 7a-26.
2. Include the name of each such affiliate and the names of all intermediate
affiliates, if any. Indicate the respective percentage of voting
securities or other bases of control giving rise to the affiliation.
ITEM 15. FOREIGN TRUSTEE.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be
qualified under the Act.
Section 304(d) of the Trust Indenture Act of 1939
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as a part of this statement of eligibility.
INSTRUCTIONS. Subject to Rule 7a-29 permitting incorporation of exhibits by
reference, the following exhibits are to be filed as a part of the statement
of eligibility of the trustee. Such exhibits shall be appropriately lettered
or numbered for convenient reference. Exhibits incorporated by reference may
be referred to by the designation given in the previous filing. Where
exhibits are incorporated by reference, the reference shall be made in the
list of exhibits called for under Item 16. If the certificate of authority to
commence business (Exhibit 2) and/or the certificate to exercise corporate
trust powers (Exhibit 3) is contained in another exhibit, a statement to that
effect shall be made, identifying the exhibit in which such certificates are
included. If an applicable exhibit is not in English, a translation in
English shall also be filed. In response to Exhibit 7, foreign trustees shall
provide financial information sufficient to provide the information required
by Section 310(a)(2) of the Act.
1. A copy of the articles of association of Deutsche Bank AG.
2. A copy of the Certificate of Authority of the Trustee to Commence
Business.
3. A copy of the Authorization of the Trustee to exercise corporate trust
powers.
4. A copy of the existing By-laws of the Trustee or instruments corresponding
thereto, as amended to date. Not Applicable.
5. A copy of each Indenture referred to in Item 4, if the obligor is in
default. Not Applicable.
6. The consent of United States institutional trustees required by Section
321(b) of the Act.
7. A copy of the latest report of condition of the trustee published pursuant
to law or the requirements of its supervising or examining authority.
8. A copy of any order pursuant to which the foreign trustee is authorized to
act as sole trustee under indentures qualified or to be qualified under
the Act.*
9. Foreign trustees are required to furnish a consent to service of process
(see Rule 10a-4 under the Act). Not applicable
*to be filed by amendment
6
<PAGE>
SIGNATURE
(Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Deutsche Bank AG, New York Branch, a branch licensed to
do business as such under the Banking Law of the State of New York, being a
branch of Deutsche Bank AG, a corporation organized under the laws of the
Federal Republic of Germany, has duly caused this statement of eligibility
and qualification to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of New York, and State of New York, on the
28th day of October 1997.
DEUTSCHE BANK, AG, NEW YORK BRANCH
By: /s/George H. Gregor
--------------------------------
Name: George H. Gregor
Title: Vice President
By: /s/Peter C. Olsen
--------------------------------
Name: Peter C. Olsen
Title: Vice President
INSTRUCTION. The name of each person signing the statement of eligibility
shall be typed or printed beneath the signature.
7
<PAGE>
ARTICLES OF ASSOCIATION OF DEUTSCHE BANK AG
In conformity with the resolutions of the General Meeting on May 20, 1997
Deutsche Bank
<PAGE>
-1-
I. GENERAL PROVISIONS
Section 1
The stock corporation bears the name
Deutsche Bank
Aktiengesellschaft
It is domiciled in Frankfurt (Main).
Section 2
(1) The object of the enterprise is the transaction of banking business
of every kind, the provision of financial and other services, and the
promotion of international economic relations. The Company may realize
this object itself or through subsidiaries and affiliated companies.
(2) To the extent permitted by law, the Company is entitled to transact all
business and take all steps which appear likely to promote the object of
the Company, in particular to acquire and dispose of real estate, to
establish branches at home and abroad, to acquire, administer and dispose
of participations in other enterprises, and to conclude enterprise
agreements.
Section 3
The Company's notices shall be published in the Federal Gazette
(Bundesanzeiger).
II. SHARE CAPITAL AND SHARES
Section 4
(1) The share capital is DM 2,509,233,675.
It is divided into
501,846,735 shares in the nominal amount of DM 5 each.
(2) The Company shall not obtain any lien pursuant to its General Business
Conditions in respect of the shares it has issued except by special
pledging agreements.
(3) Insofar as the Company is authorized under the following subparagraphs
to issue shares in the nominal amount of DM 50 each, it may also, instead
of each share in the nominal amount of DM 50, issue ten shares in the
nominal amount of DM 5 each.
<PAGE>
-2-
(4) The share capital is increased conditionally by a further DM 225,000,000,
divided into 4,500,000 bearer shares in the nominal amount of DM 50 each.
The conditional capital increase shall be effected only to the extent
that holders of warrants from participatory certificates with warrants
issued on or before April 30, 1996 by Deutsche Bank Aktiengesellschaft
exercise their option rights. The new shares should be entitled to
participate in profits from the beginning of the financial year in which
they are issued by virtue of the exercise of option rights.
(5) The Board of Managing Directors is authorized to increase the share
capital with the consent of the Supervisory Board once or more than once
by up to a total of DM 31,852,760 on or before April 30, 2001 through the
issue of new shares against cash payment. Shareholders' pre-emptive rights
are excluded.
(6) The Board of Managing Directors is authorized to increase the share
capital with the consent of the Supervisory Board once or more than once
by up to a total of DM 500,000,000 on or before April 30, 1998 through
the issue of new shares against cash payment. At such time(s), pre-emptive
rights shall be granted to the shareholders, the Board of Managing
Directors is, however, authorized to except fractions from the
shareholders' pre-emptive rights and also to exclude the pre-emptive
rights insofar as is necessary to provide the holders of the warrants and
convertible bonds issued by Deutsche Bank Aktiengesellschaft and its
subsidiaries with such pre-emptive rights to new shares as they would be
entitled to upon exercising the option or conversion rights.
(7) The share capital is increased conditionally by a further DM 200,000,000
divided into 4,000,000 bearer shares of DM 50 par value each. The
conditional capital increase shall be effected only to the extent that
holders of warrants from the participatory certificates with warrants
and the bonds with warrants to be issued on or before April 30, 1998 by
Deutsche Bank Aktiengesellschaft exercise their option rights. The new
shares shall be entitled to participate in profits from the beginning of
the financial year in which they are issued by virtue of the exercise of
option rights.
(8) The Board of Managing Directors is authorized to increase the share
capital with the consent of the Supervisory Board once or more than once
by up to a total of DM 100 million on or before April 30, 2000 through
the issue of new shares against cash payment. At such time(s), pre-emptive
rights shall be granted to the shareholders subject to the following
restrictions. The Board of Managing Directors is, however, authorized to
except fractions from the shareholders' pre-emptive rights and also in
<PAGE>
-3-
exclude the pre-emptive rights insofar as is necessary to provide the
holders of the warrants and convertible bonds issued by Deutsche Bank
Aktiengesellschaft and its subsidiaries with such pre-emptive rights to
new shares as they would be entitled to upon exercising the option of
conversion rights. Furthermore, the Board of Managing Directors is
authorized with the consent of the Supervisory Board to exclude
shareholders' pre-emptive rights when utilizing the authorization if the
issue price of the new shares is not substantially lower than the market
price of the already listed shares with the same terms and conditions at
the time the issue price is fixed.
(9) The Board of Managing Directors is authorized to increase the share
capital with the consent of the Supervisory Board, once or more than once,
by up to a total of DM 500,000,000 on or before April 30, 2002 through
the issue of new shares against cash payment. For this purpose,
shareholders are to be granted pre-emptive rights; however, the Board of
Managing Directors is authorized to except broken amounts from
shareholders' pre-emptive rights and to exclude pre-emptive rights,
insofar as it is necessary to grant to the holders of warrants,
convertible bonds and convertible participatory rights issued by
Deutsche Bank Aktiengesellschaft or its subsidiaries pre-emptive rights
to new shares to the extent to which they would be entitled to such
rights were they to exercise their option or conversion rights.
(10) The share capital is increased conditionally by up to DM 300,000,000
through the issue of up to 60,000,000 new shares in the nominal amount
of DM 5 each. This conditional capital increase will only be affected
insofar as
a) the holders or creditors of conversion rights or warrants linked to
the participatory certificates or convertible bonds or bonds with
warrants to be issued on or before April 20, 2002 by Deutsche Bank
Aktiengesellschaft or its directly or indirectly majority-held
affiliated companies utilize their conversion or option rights, or
b) the holders or creditors with conversion duties relating to
convertible participatory certificates or convertible bonds to be
issued on or before April 30, 2002 by Deutsche Bank
Aktiengesellschaft or its directly or indirectly majority-held
affiliated companies fulfill their conversion duty.
The new shares shall be entitled to participate in profits from the
beginning of the financial year in which they are issued by virtue of
the exercise of conversion or option rights or by virtue of the
fulfillment of conversion duties.
<PAGE>
-4-
Section 5
(1) The shares are bearer shares.
(2) If in the event of the capital being increased the resolution on the
increase does not provide that the new shares are to be made out to
bearer or registered in a name, they shall likewise be made out to
bearer.
(3) The form of the shares and the dividend coupons and talons shall be
determined by the Board of Managing Directors in agreement with the
Supervisory Board. The same shall apply to bonds and interest coupons.
Global certificates may be issued. The claim of shareholders to have
their shares issued in individual certificate form is excluded.
III. THE BOARD OF MANAGING DIRECTORS
Section 6
(1) The Board of Managing Directors shall consist of not less than three
members.
(2) The Supervisory Board shall appoint the members of the Board of Managing
Directors and determine their number. The Supervisory Board may appoint
deputy members of the Board of Managing Directors.
Section 7
(1) The Company shall be legally represented by two members of the Board of
Managing Directors or by one member jointly with a holder of procuration
(Prokurist).
(2) The deputy members of the Board of Managing Directors shall rank equally
with full members in respect of powers of representation.
<PAGE>
-5-
Section 8
For the purpose of closer contact and business consultation with trade and
industry the Board of Managing Directors may form an Advisory Board and
Regional Advisory Councils, lay down rules of procedure for their business
and fix the remuneration of their members. The Supervisory Board shall be
informed of any changes in the membership of the Advisory Board and the
Regional Advisory Councils at the Supervisory Board meeting immediately
following such changes.
IV. THE SUPERVISORY BOARD
Section 9
(1) The Supervisory Board shall consist of 20 members. They are elected
for the period until conclusion of the Shareholders' Meeting which
adopts the resolutions concerning the ratification of acts of
management for the fourth financial year following the beginning of
the term of office. Here, the financial year in which the term of
office begins is not taken into account.
(2) In the election of shareholders' representatives to the Supervisory
Board and any substitute members, the Chairman of the Shareholders
Meeting shall be entitled to take a vote on a list of election
proposals submitted by management or shareholders. If substitute
members are elected on a list, they shall replace shareholders'
representatives prematurely leaving the Supervisory Board in the
order in which they were named, unless resolved otherwise at the vote.
(3) If a Supervisory Board member is elected to replace a member leaving
the Supervisory Board, the new member's term of office shall run for
the remainder of the replaced member's term. In the event that a
substitute member replaces the outgoing member, the substitute member's
term of office shall expire if a new vote to replace the outgoing
member is taken at the next Shareholders' Meeting or the next
Shareholders' Meeting but one, at the end of the said Shareholders'
Meeting, otherwise at the end of the outgoing member's residual term of
office.
(4) Any member of the Supervisory Board may resign from office without
being required to show cause subject to his giving one month's notice
by written declaration addressed to the Board of Managing Directors.
Section 10
(1) Following a Shareholders' Meeting in which all members of the
Supervisory Board to be elected by a Shareholders' Meeting have been
newly elected a meeting of the
<PAGE>
-6-
Supervisory Board shall take place, for which no special invitation
is required. At this meeting, the Supervisory Board under the
chairmanship of its oldest member elected by the shareholders shall
elect from among its members and for the duration of its term of office
the Chairman of the Supervisory Board and his Deputy in accordance with
Section 27 of the Co-determination Act. In the event of the Chairman of
the Supervisory Board or his Deputy leaving before completion of his
term of office, the Supervisory Board shall forthwith elect a
substitute.
(2) The Deputy Chairman of the Supervisory Board shall have the legal
and statutory rights and duties of the Chairman only if the latter is
indisposed. Sections 29 (2) 3 and 31 (4) 3 of the Co-determination Act
remain unaffected.
Section 11
(1) Meetings of the Supervisory Board shall be called by the Chairman
or, if the latter is indisposed, by his Deputy whenever so required by
law or business.
(2) The Supervisory Board shall be deemed to constitute a quorum if the
members have been invited in writing or by cable under their last given
address and not less than half the total members which it is required
to comprise take part in the voting in person or by written vote. The
chair shall be taken by the Chairman or his Deputy. The Chairman of the
meeting shall decide the manner of voting.
(3) Resolutions may also be taken without a meeting being called, by way
of written or cabled or telephoned votes, if so ruled by the Chairman
of the Supervisory Board or his Deputy and provided no member of the
Supervisory Board objects to such procedure. This also applies to
second polls pursuant to Sections 29 (2) 1 and 31 (4) 1 of the
Co-determination Act.
(4) Resolutions of the Supervisory Board are taken with the simple
majority of the votes unless otherwise provided by law. If there is
equality of votes the Chairman shall have the casting vote pursuant
to Sections 29 (2) and 31 (4) of the Co-determination Act; a second
poll within the meaning of these provisions can be demanded by any
member of the Supervisory Board.
(5) If not all the members of the Supervisory Board are present at the
voting and if absent members have not submitted written votes, the
voting shall be postponed at the request of at least two members of the
Supervisory Board who are present. In the event of such postponement,
the new vote shall be taken at the next regular
<PAGE>
-7-
Supervisory Board meeting if no extraordinary meeting is called. At the
new vote a further minority call for postponement is not permitted.
(8) If the Chairman of the Supervisory Board is present at the meeting or if
a member of the Supervisory Board is in possession of his written vote,
subpara. 5 shall not apply if the same number of shareholders'
representatives and employees' representatives are personally present or
participate in the voting by written vote, or if any inequality is
balanced out by individual members of the Supervisory Board not
participating in the voting.
Section 12
(1) The Supervisory Board is authorized to appoint a Presiding Committee and
one or several other Committees from among its members; Section 27(3) of
the Co-determination Act remains unaffected. The functions and powers of
the Committees and the relevant procedures to be adopted shall be
determined by the Supervisory Board. To the extent permitted by law, the
Supervisory Board's powers of decision may also be delegated to the
Committees. Section 11 subparas. 3 and 4 apply to voting in the
Committees unless mandatory provisions of law provide otherwise.
Subparas. 5 and 6 are not applicable.
(2) Declarations of intention on the part of the Supervisory Board and its
Committees shall be made in the name of the Supervisory Board by the
Chairman or his Deputy.
Section 13
(1) The approval of the Supervisory Board is required
a) for the granting of general powers of attorney;
b) for the acquisition and disposal of real estate insofar as the object
involves more than 0.5% of the Company's liable capital and reserves;
c) for the establishment and closure of branches with more than 20
employees;
d) for the granting of credits, including the acquisition of
participations in other companies, for which approval of a credit
institution's Supervisory Board is required under the German Banking
Act:
e) for the acquisition, not only temporarily, of other participations in
other companies where the object exceeds 1% of the Company's liable
capital and reserves.
(2) The Supervisory Board may specify further transactions which are to be
subject to its approval.
<PAGE>
-8-
Section 14
(1) The members of the Supervisory Board shall receive, in addition to
reimbursement of their cash expenses and of turnover tax to be borne by
them in connection with their Supervisory Board activity, a fixed
remuneration payable upon expiration of the financial year. Such
remuneration shall be DM 12,000 for each member, DM 24,000 for the
Chairman and DM 18,000 for the Deputy Chairman.
(2) The Supervisory Board shall in addition be entitled to a remuneration of
DM 50,000 for each percent by which the dividend distribution to the
shareholders exceeds 4% of the share capital. The Supervisory Board shall
resolve on the apportionment of this amount among the members.
V. SHAREHOLDERS' MEETING
Section 15
The Shareholders' Meeting called to adopt the resolutions concerning the
ratification of acts of management of the Board of Managing Directors and the
Supervisory Board, the appropriation of profits, the appointment of the
annual auditor and, as the case may be, the establishment of the annual
statement of accounts (Ordinary Shareholders' Meeting) shall be held within
the first eight months of each financial year.
Section 16
(1) The Shareholders' Meeting shall be called by the Board of Managing
Directors or the Supervisory Board to take place in Frankfurt (Main),
Dusseldorf, or any other German city with over 500,000 inhabitants.
(2) Notice of the meeting must be given in the Federal Gazette
(Bundesanzeiger) not later than one month before the last day of deposit
(Section 17 subpara. 1), not counting the day of publication and the last
day of deposit.
Section 17
(1) All shareholders who have not later than the fifth working day before the
meeting deposited their shares with the Company or the other agencies
announced in the invitation until conclusion of the Shareholders' Meeting
shall be entitled to take part therein and to exercise their voting
rights; for the purpose of this provision Saturday is not considered a
working day. Deposit shall also be deemed to have been properly effected
when shares, with the approval of a depositary, are held blocked for it
with other credit institutions until conclusion of the Shareholders'
Meeting.
<PAGE>
-9-
(2) Details regarding the depositing of shares and the issue of admission
cards must be given in the invitation.
Section 18
(1) The voting right of each share corresponds to its nominal amount.
(2) In the event of shares not having been fully paid up, the voting right
shall commence, in accordance with Section 134(2) 3 and 5 of the German
Stock Corporation Act (Aktiengesez), when the minimum contribution
required by law has been paid.
Section 19
(1) The Chairman of the Supervisory Board or another member of the
Supervisory Board belonging to the Supervisory Board as a representative
of the shareholders shall preside over the Shareholders' Meeting. In the
event that none of these persons takes the chair, the Chairman shall be
elected by the Shareholders' Meeting under the direction of the oldest
shareholder present.
(2) The Chairman shall direct proceedings and determine the sequence in
which the items on the agenda shall be dealt with.
Section 20
(1) The resolutions of the Shareholders' Meeting may be taken by a simple
majority of votes and, insofar as a majority of capital stock is
required, by a simple majority of capital stock, except where law or the
Articles of Association determine otherwise with mandatory effect.
(2) The Chairman shall determine the form and further particulars of the
voting. The voting result shall be obtained by ascertaining the "yes" and
the "no" votes. The Chairman shall also determine the manner in which
the votes are to be ascertained, e.g. by deducting the "yes" or "no"
votes and the abstentions from the overall number of votes to which the
voters are entitled.
(3) The Supervisory Board shall be authorized to amend the Articles of
Association insofar as such amendments merely relate to the wording.
<PAGE>
-10-
VI. ANNUAL STATEMENT OF ACCOUNTS AND APPROPRIATION OF PROFITS
Section 21
The financial year of the Company is the calendar year.
Section 22
(1) The Board of Managing Directors shall within the first three months of
each financial year, prepare the annual statement of accounts (balance
sheet, profit and loss account, notes to the annual statement of
accounts) and the management report for the preceding financial year,
and submit them to the auditor.
(2) The Supervisory Board shall submit its report to the Board of Managing
Directors within one month from the date of receipt of the statements
which must be presented to it. If the report is not submitted to the
Board of Managing Directors within this period, the Board of Managing
Directors shall promptly specify an additional period of not more than
one month within which the Supervisory Board must submit its report. If
the report is not submitted to the Board of Managing Directors prior to
the expiration of such additional period of time either, the annual
statement of accounts shall be deemed not to have been approved by the
Supervisory Board.
Section 23
(1) The distributable profit shall be distributed among the shareholders unless
the Shareholders' Meeting determines otherwise.
(2) Insofar as the Company has issued participatory certificates and the
respective conditions of participatory certificates accord the holders
of the participatory certificates a claim to distribution from the
distributable profit, the claim of the shareholders to this portion of
the distributable profit is excluded (Section 58 (4) of the Joint Stock
Corporation Act).
(3) The dividends due to the shareholders shall always be distributed in
proportion to the contribution made on the nominal amount of the shares
and in proportion to the time which has elapsed since the date fixed for
contribution.
(4) In the event of new shares being issued, a different dividend
entitlement may be established for such shares.
<PAGE>
-11-
VII. FORMATION OF DEUTSCHE BANK AG
Section 24
The Company was formed by the re-amalgamation of Norddeutsche Bank AG.
Deutsche Bank AG West and Suddeutsche Bank AG, which had been founded in 1952
as successor institutions to the former Deutsche Bank, according to the Law
on the Regional Scope of Credit Institutions (Gesetz uber den
Niedartassungabereich von Kreddinstituten).
VIII. CONTRIBUTION AND ACQUISITION PROVISIONS CONTAINED IN THE
DISINCORPORATION AGREEMENT OF SEPTEMBER 27, 1952
Section 25
(1) Pursuant to Section 3 of the Big Bank Law, Deutsche Bank contributes
to the successor institution, Suddeutsche Bank Aktiengesellachaft,
the entire portion of its business which was previously transacted
by Bayerische Creditbank. Sudwestbank in Stuttgart and Mannheim,
Oberrheinische Bank, Wuvtembergische Vereinsbank, Hessische Bank
and Rheinische Kreditbank in the Federal States (Lander) of Bayem,
BadensWurtemberg (now Sudweststaat), Rheinland-Pfalz and Hessen. The
contribution includes all assets, including liabilities, acquired or
created in the course of this business.
(2) The assets include in particular:
a) all real estate and similar rights located in the Federal States
of Bayem, Baden/Wurtiemberg (now Sudweststaat), Hessen and
Rheinland-Pfalz,
b) all mortgage rights (including pre-registrations) held for own
account on real estate in the Federal States of Bayem,
BadensWurtemberg (now Sudweststaat), Hessen and Rheinland-Pfalz,
c) all claims and the related securities as well as all other rights
and assets recorded in the previous institutions' books as
at 31.12.51, in the Federal States of Bayem. Baden/Wurtemberg (now
Sudweststaat), Hessen or Rheinland-Pfalz,
d) Deutsche Bank's equalization claims, allocated in accordance with
Section 8 of the 2nd Conversion Law Implementing Order, arising
out of the contribution balance sheet per 31.12.51. Should these
equalization claims be subsequently increased or reduced pursuant
to a correction of the conversion account, this amendment will be
credited or debited to the successor institution insofar as this
institution has acquired the respective asset or liability in the
conversion account.
<PAGE>
-12-
(3) The liabilities include in particular:
a) all commitments recorded in the previous institutions' books per
31.12.51,
b) all commitments resulting from the trusteeships mentioned under 2
(d).
c) all foreign commitments resulting from Section 6(2) of the 35th
Conversion Law Implementing Order, subject to the provision of
Section 7(2) of the Big Bank Law,
d) all pension liabilities towards entitled persons resident per
31.12.51 in the Federal States of Bayem, Baden/Wurtemberg (now
Sudweststaat), Hessen or Rheinland-Pfalz, subject to the provision
that all expenses under this heading are to be shared between
Suddeutsche Bank Aktiengesellschaft and its sister institutions.
Norddeutsche Bank Aktiengesellschaft and Rheinische-Westfalische
Bank Aktiengesellschaft, according to the formula used so far,
i.e. on the basis of staff expenditure in the respective year.
This does not include retirements from the previous institutions
after 31.12.51, which must be borne by the institution concerned.
Should the aforementioned pension liabilities be otherwise
regulated following a change in the law in the Federal territory
or in West Berlin or in the rest of Germany, the above regulation
will cease to apply, with retroactive effect.
(4) The contribution of assets and the acquisition of liabilities takes
place as at and with effect from 1.152, subject to the provision
that the contributed business of the previous institutions shall be
deemed to have been transacted from the said date for the account
of the new successor institution. The basis for the contributed
assets and acquired liabilities is the
balance sheet per 31.12.51
appended to this document. The assets and liabilities shown in this
balance sheet have been valued provisionally. The definitive
contribution will be effected at the values established with legal
validity in the balance sheet for tax purposes drawn up for
Deutsche Bank's business in the Federal territory per 31.12.51, if,
as a result of the values established--whether by an increase in
assets or a decrease in liabilities--the value of the assets should
rise, then the incremental value--less a reasonable deduction on the
assets side for depreciation in the interim period--must be added
to the successor institution's legal reserve.
(5) According to the balance sheet over 31.12.51, the value of contributed
assets loss acquired liabilities amounts to a total of
<PAGE>
-13-
DM 56,195,000.
Deutsche Bank guarantees that this value exists. As a set-off against
this contribution, Suddeutsche Bank Akdiengesellschaft gives to
Deutsche Bank shares in the nominal amount of DM 39,996,000. Pursuant
to Section 8 and Section 9 of the Big Bank Law, these shares will be
transferred to the Bank deutscher Lander as trustee for the
shareholders of Deutsche Bank.
<PAGE>
EXHIBIT 2
A copy of the Certificate of Authority of the Trustee to Commence Business.
<PAGE>
BANKING DEPARTMENT
[LOGO] FB NO 4066
STATE OF NEW YORK
WHEREAS, DEUTSCHE BANK AG
-------------------------------------------------------------
A BANKING CORPORATION DULY INCORPORATED UNDER THE LAWS OF THE Federal Republic
----------------
OF Germany AND HAVING ITS PRINCIPAL OFFICE IN THE CITY OF
------------------------
Frankfurt am Main, Federal Republic of Germany HAS MADE APPLICATION, UNDER
- -----------------------------------------------
THE TERMS AND CONDITIONS SET FORTH IN SECTION 201 OF THE BANKING LAW, TO
MAINTAIN A BRANCH AT 9 West 57th Street IN THE BOROUGH OF
-----------------------------
Manhattan CITY OF NEW YORK, FOR THE PURPOSE OF TRANSACTING THE BUSINESS
- -----------
OF BUYING, SELLING, PAYING OR COLLECTING BILLS OF EXCHANGE, OR OF ISSUING
LETTERS OF CREDIT OR OF RECEIVING MONEY FOR TRANSMISSION OR TRANSMITTING THE
SAME BY DRAFT, CHECK, NOTE OR OTHERWISE, OR OF MAKING LOANS, OR OF RECEIVING
DEPOSITS, OR ANY PART OF SUCH BUSINESS, AND
WHEREAS, THE SAID CORPORATION HAS COMPLIED WITH THE CONDITIONS IMPOSED
BY THE BANKING LAW AND APPEARS TO BE DULY QUALIFIED TO MAINTAIN SUCH BRANCH
UNDER THE PROVISIONS THEREOF:
NOW, THEREFORE, BE IT KNOWN THAT THE SAID APPLICANT IS HEREBY AUTHORIZED
TO CARRY ON THE BUSINESS HEREINBEFORE SPECIFIED AT THE ABOVE LOCATION.
THIS LICENSE IS TO BE EFFECTIVE ON OR AFTER January 27, 1983 AND
----------------------
SHALL REMAIN IN FULL FORCE AND EFFECT UNTIL SURRENDERED OR REVOKED.
WITNESS MY HAND AND OFFICIAL SEAL OF THE BANKING DEPARTMENT AT THE CITY OF
NEW YORK, 26th DAY OF January
------------- --------------
IN THE YEAR OF OUR LORD One thousand NINE HUNDRED AND eighty-three.
--------------------
[SEAL]
/s/
------------------------------------------
ACTING SUPERINTENDENT OF BANKS
<PAGE>
Exhibit 3
<PAGE>
STATE OF NEW YORK
BANKING DEPARTMENT
WHEREAS, DEUTSCHE BANK AKTIENGESELLSCHAFT, a banking corporation duly
incorporated under the laws of The Federal Republic of Germany, having its
principal office in the City of Frankfurt Am Main Federal Republic of
Germany, and having been duly authorized and licensed pursuant to Article II
of the Banking Law to maintain a branch at 9 West 57 Street, in the borough
of Manhattan, City of New York, has made application to the Superintendent of
Banks for a certificate of authorization to exercise the fiduciary powers
specified in Section 201-b of the Banking Law; and
WHEREAS, the Superintendent of Banks is satisfied that said DEUTSCHE
BANK AKTIENGESELLSCHAFT will exercise such fiduciary powers in accordance with
the requirements of Article V of the Banking Law;
NOW, THEREFORE, I Muriel Siebert, Superintendent of Banks of the State
of New York, hereby issue this certificate authorizing DEUTSCHE BANK
AKTIENGESELLSCHAFT ("The Banking Corporation") to exercise at its authorized
branch at 9 West 57 Street, in the borough of Manhattan, City of New York,
the fiduciary powers specified in Section 201-b of the Banking Law.
WITNESS, MY HAND AND OFFICIAL SEAL OF THE BANKING DEPARTMENT AT THE CITY
OF NEW YORK, THIS 12TH DAY OF JANUARY IN THE YEAR OF OUR
---- -------
LORD ONE THOUSAND NINE HUNDRED AND EIGHTY-TWO
/S/ MURIEL SIEBERT
-----------------------------
Superintendent of Banks.
<PAGE>
DEUTSCHE BANK
AKTIENGESELTSCHAFT
August 15, 1994
Superintendent of Banks of
the State of New York
New York State Banking Department
Two Rector Street
New York, New York 10006
Attention: Mr. Robert H. McCormick
Deputy Superintendent of Banks
Foreign Banks Division
Gentlemen:
Deutsche Bank AG is a banking corporation organized under the
laws of the Federal Republic of Germany and has been licensed pursuant to
Article II of the New York Banking Law (the "Banking Law") to maintain a
branch in the State of New York, which branch (the "Branch") is currently
located at 31 West 52nd Street, New York, New York 10019. Deutsche Bank
hereby notifies the Superintendent of Banks of the State of New York (the
"Superintendent") of its intention to expand the Branch's fiduciary
activities permissible under Section 201-b of the Banking Law to the fullest
extent authorized by Sections 100, 100-a, 100-b and 100-c of the Banking Law
(the "Fiduciary Sections")
I. BACKGROUND
On January 12, 1982, Deutsche Bank received from the
Superintendent an authorization certificate to exercise, through and at the
Branch, certain limited fiduciary powers that were then exercisable by
foreign banking corporations under prior Section 201-b of the Banking Law.
Thereafter, in anticipation of the repeal of the old Section
201-b and the adoption of the current Section 201-b that became effective on
October 8, 1984, Mr. Edward P. Eustace of the New York State Banking
Department notified New York State-licensed branches of foreign banks with
fiduciary powers (including the Branch), in a letter dated July 31, 1984 (the
"July 31, 1984 Letter"), that such branches were not required to submit a new
application in the event that they decided to expand their
<PAGE>
fiduciary activities into those areas newly authorized by the Fiduciary
Sections of the Banking Law. The July 31, 1984 Letter did require, however,
that any New York State-licensed branch of a foreign bank with fiduciary
powers notify the Superintendent and provide certain information described
therein if such branch intends to expand the scope of its fiduciary
activities beyond those previously authorized and into areas newly permitted
by Section 201-b of the Banking Law.
In reliance on the notification-in-lieu-of-application
procedure provided for in the July 31, 1984 Letter, the Branch, in a letter
dated November 5, 1984 to the Superintendent, requested authority under the
new Section 201-b of the Banking Law to engage in the fiduciary activities
permitted under Section 100(2) of the Banking Law, including the power to act
as a corporate trustee. In that letter, the Branch undertook to notify the
Superintendent if the Branch were to exercise fiduciary powers beyond those
permitted under the above-mentioned authorization certificate granted on
January 12, 1982 or under Section 100(2) of the Banking Law.
The Branch now wishes to expand its authority to engage in
fiduciary activities to the fullest extent permitted under the Fiduciary
Sections of the Banking Law. Set forth below in Part II of this notification
is the information relating to the proposed expanded fiduciary activates of
the Branch required under the July 31, 1984 Letter.
II. INFORMATION REQUIRED PURSUANT
TO THE JULY 31, 1984 LETTER
A. TYPES OF FIDUCIARY ACTIVITIES
TO BE UNDERTAKEN
In addition to continuing to exercise its existing fiduciary
powers pursuant to the authorization certificate granted by the
Superintendent on January 12, 1982 and under Section 100(2) of the Banking
Law, the Branch intends to perform all other fiduciary functions, and conduct
all related activities, that may be performed and conducted by a New York
State-chartered trust company pursuant to the Fiduciary Sections. Such
functions and activities will include activities of a fiduciary, agency or
custodial nature and related activities.
The Branch intends, without limiting the generality of the
preceding paragraph, that its services to be provided to individuals, pension
funds, registered investment companies, and other clients will include the
following:
-2-
<PAGE>
- acting as attorney-in-fact or agent of any person or corporation,
foreign or domestic, for any lawful purpose, including engaging in
asset management activities;
- acting in the personal fiduciary capacities authorized by Sections
100(3), (4) and (5) of the Banking Law, including acting as trustee
for INTER VIVOS and testamentary trusts and estates; and
- securities lending in connection with the Branch's custodial and
safekeeping services.
B. Qualifications Of Ohe Officers
Of The Trust Department
The fiduciary activities of the Branch will be conducted or
supervised principally be Ms. Patricia B. Kelly, who will become a Vice
President and Chief Fiduciary Officer of the Branch. Attached hereto as
Exhibit A is a resume of Ms. Kelly, which describes her experience prior to
joining the Branch and her qualifications relating to fiduciary activities.
Confidential treatment of Exhibit A is hereby requested.
C. Organization Of Trust Department
And Plans To Utilize Outside Services
1. ORGANIZATION OF THE TRUST DEPARTMENT
Attached hereto as Exhibit B is an organizational chart depicting
the management of the proposed trust department of the Branch.
Deutsche Bank recognizes the importance of establishing and
enforcing an internal audit and control system for conducting the Branch's
fiduciary activities. In this regard, Deutsche Bank will develop, with the
advice and assistance of its accountants, KPMG Peat Marwick, adequate
internal control and auditing systems and procedures. It is the intention of
Deutsche Bank to establish for the Branch's fiduciary activities internal
control systems that effectively monitor daily transactions to ensure that
they are conducted in accordance with the applicable federal and state laws
and regulations and with appropriate managerial authorization. The internal
control systems will comprise such elements as (i) proper separation of
official responsibilities and duties; (ii) well-defined procedures for
performance of tasks; and (iii) proper information channels between
management and staff. The legal and internal audit staff of Deutsche Bank
North America Holding Corp. will provide legal and internal audit functions
for the Branch's fiduciary activities.
-3-
<PAGE>
2. PLANS TO UTILIZE OUTSIDE SERVICES
The Branch plans to utilize outside services to perform
ministerial, administrative, accounting and recordkeeping tasks to conduct
its fiduciary activities. It will also utilize the services of KPMG Peat
Marwick, White & Case, and Deutsche Asset Management GmbH in an advisory
capacity.
The Branch wishes to commence immediately the fiduciary activities
described above. It is the Branch's understanding that the submission of this
notification to the Superintendent is sufficient to enable the Branch to
commence exercising its expanded authority to engage in fiduciary activities
to the fullest extent permitted under the Fiduciary Sections of the Banking
Law. Notwithstanding the foregoing, however, the Branch, for its internal
recordkeeping purposes, would appreciate receiving from you an acknowledgment
of receipt of this notification.
Please contact either of the undersigned or Kevin F. Barnard, Esq.
of White & Case, counsel to Deutsche Bank in this matter, at (212) 819-8483
if you have any questions or need further information.
Very truly yours,
DEUTSCHE BANK A.G.
New York Branch
/s/ Detlev Staecker /s/ Nathan S. Muller
------------------------ ----------------------------
Detlev Staecker Nathan S. Muller
General Manager and Assistant Vice President and
Executive Vice PResident Counsel
ATTACHMENTS
-4-
<PAGE>
The Superintendent of Banks
of the State of New York
New York State Banking Department
Two World Trade Center
New York, New York 10047
ATT.: Foreign Banks Division
Mr. Edward P. Eustace
Deputy Superintendent of Banks
LEX-CF-AR/mr 8024 November 5, 1984
Gentlemen:
We refer to your letter of July 31, 1984 in which you informed us that
we are not required to submit a new application in case we decide to expand
our trust activities. We have been asked to be the trustee for an industrial
revenue bond issue for one of our customers. Therefore, it is necessary to
expand our trust activities beyond our previously limited fiduciary powers
into the area authorized by Section 100(2) of the New York Banking Law. This
section would enable us to act as a corporate trustee in general. Should we
exercise fiduciary powers beyond those permitted under our license granted
January 12, 1982 and such Section 100(2), we will notify you thereof.
The trust activities of Deutsche Bank AG New York Branch will henceforth
be managed by our Legal Department. The head of the Legal Department is Mr.
Charles R. Fewell, Jr., Vice President and Counsel of Deutsche Bank AG New
York Branch. Mr. Fewell has had extensive experience representing, as counsel,
corporate trustees such as Citibank, Chemical Bank and National Westminster
Bank USA. He is fully familiar with the legal and administrative requirements
of a corporate trustee. Please find enclosed a detailed resume of Mr. Fewell.
We have no plans to utilize outside services in connection with our trust
activities.
<PAGE>
.....Cont'd. -2-
From your letter of July 31, 1984, we assume that we may begin
exercising our expanded fiduciary powers described above unless you promptly
notify us to the contrary. Because of the necessity of moving forward on this
industrial revenue bond transaction described above, we would kindly ask you
to give us this notice on or before November 9, 1984.
Please do not hesitate to contact either of the undersigned if you have
any questions or need further information.
Very truly yours,
Deutsche Bank AG
New York Branch
/s/ /s/
------------------------ ------------------------
H. von Natzmer D. Staecker
Executive Vice President Executive Vice President
and General Manager and General Manager
Enclosure
<PAGE>
DEUTSCHE BANK AG
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that DEUTSCHE BANK AG, a corporation duly
incorporated under the laws of the Federal Republic of Germany, having its
principal office and place of business at 10-14 Grosse Gallusstrasse,
Frankfurt am Main, Federal Republic of Germany (hereinafter referred to as
the "Corporation"):
A. Pursuant to a resolution of its Board of Managing Directors
duly adopted on February 6th, 1978, has nominated, constituted and
appointed and by these presents does nominate, constitute and appoint
ANY TWO OF THE FOLLOWING, ACTING JOINTLY except as hereinafter provided:
1. The Executive Vice President and Manager of the office of the
Corporation's New York Branch at 9 West 57th Street, New
York; New York;
2. The Senior Vice President and Manager of the office of said
New York Branch;
3. The other officers of the office of said New York Branch;
B. Confirms that any two Members of its Board of Managing
Directors are authorized under the law of the Federal Republic of
Germany acting jointly; and
C. Confirms that any two Assistant General Managers of the
Corporation (Generalvollmachtigte) are authorized under general power
of attorney granted by the Corporation (Generalvollmacht);
whose specific identities and names shall be established and evidenced by
certificates of an appropriate official of the Corporation, from time to time
as such positions may be held by different persons, its true and lawful
agents and attorneys-in-fact (hereinafter sometimes referred to as the
"Managers"), generally to represent the New York Branch, located at 9 West
57th Street, New York, New York (herein sometimes called the "New York
Branch" or the "Branch"), with broad authority to manage and conduct the
business, property and affairs of the office of the New York Branch, and
without limiting the generality of such powers, and by way of enumerating
some of the powers which it is intended to repose in such Managers, so acting
jointly, but not severally, to do and perform the following:
1. To manage and control the funds and assets of the Branch and without
limiting this general power, to invest and re-invest the same, to purchase,
arrange for the purchase of or otherwise acquire, sell, arrange for the sale
of, or otherwise
<PAGE>
dispose of, own, hold, exchange, transfer, deliver, pledge, or otherwise deal
in and with bonds, stocks, bills of exchange, acceptances, notes and other
securities or property including, but not limited to, all such securities and
property at any time held or controlled by the Branch, either as collateral,
in custody, or otherwise; to receive the delivery of any securities, or other
property, and if conditionally released by any bank, or person, to execute
trust receipts or security agreements therefore.
2. To purchase, or otherwise acquire, sell or otherwise dispose of, own,
hold, exchange, transfer, deliver, pledge, issue, accept or otherwise deal in
and with the currency of or exchange on any country and spot and forward
contracts therefor; to purchase, or otherwise acquire, sell or otherwise
dispose of, own, hold, exchange, transfer, deliver, pledge, export, import,
transship, store, or otherwise deal in and with, gold and silver coin or
bullion and spot and forward contracts therefor; to receive money for
transmission, or to transmit the same draft, check, letter payment,
telegraph, radio, cable, telex or otherwise, in United States dollars or any
other currency.
3. To pay, or accept for payment at a future date or certify, checks,
drafts, bills of exchange and any other instruments for the payment of money,
whether expressed in United States dollars or in any other currency,
negotiable or non-negotiable, drawn upon the Branch by its head office,
branches, correspondents, customers, or others; and to issue letters of
credit, including commercial or other letters of credit and travellers
letters of credit, authorizing the holder thereof to draw drafts upon the
Branch, its head office, branches or its correspondents at sight, on time or
otherwise in United States dollars or in any other currency.
4. To purchase, or otherwise acquire, own, hold, sell, endorse,
negotiate, assign, transfer, exchange, deliver or otherwise dispose of, make,
draw, sign, issue, open, accept, pay, renew, guarantee, discount, collect,
transmit, protest, create a security interest, mortgage, pledge, hypothecate,
and otherwise deal in and with, notes, drafts, bills of exchange or other
evidences of debt, acceptances, letters of credit, including commercial or
other letters of credit and travellers letters of credit, checks, orders for
the payment of money, stocks, bonds, securities, bills of lading or other
shipping documents, insurance policies, warehouse receipts, trust receipts,
and other instruments, negotiable or non-negotiable, of every kind and
description; to waive presentment, notice of non-payment and protest of any
and all negotiable instruments.
5. To open, maintain, adjust, settle and close any deposit account,
foreign currency account, or other account, in the United States of America
or any other country, for the deposit or collection of funds belonging to the
Branch or to others, with any bank, and to make any agreements or ar-
<PAGE>
rangements and to issue any instruction relative to such accounts; to
designate one or more depositaries for said accounts; to deposit such funds in
said deposit accounts. All said funds shall be subject to withdrawal or charge
at any time and from time to time, upon checks, notes, drafts, bills of
exchange, acceptances, undertakings or other instruments or orders for the
payment of money, when made, signed, drawn, accepted or endorsed by the
Managers, or one of the Managers and a substitute designated by the management
of the New York Branch in the manner specified in Paragraph 37. Each
depository be and it hereby is authorized to pay, cash, certify, give credit
for, accept, or purchase, the same, or make any such charge, without limit as
to amount. Any and all endorsements for or on account of the Branch upon such
checks, notes, drafts, bills of exchange, acceptances, undertakings and other
instruments or orders for the payment of money, tendered for deposit or
collection to any said bank, may be written or stamped endorsements of the
Branch.
6. To open, maintain, adjust, settle and close, custody, safekeeping,
collection, or other accounts with any bank, trust company, or corporation in
the United States of America or any other country; to deliver to, transfer
to, and deposit with any such bank, trust company, or corporation for custody
and safekeeping, and to withdraw, any securities or other property belonging
to the Branch, its customers or others and to execute, any agreements or
other instruments and instructions relative thereto or relative to any
custody or safekeeping account or the securities and property therein; to
have securities of the Corporation, its customers or others, placed or
registered in the name of the depositary's nominee. The Managers may
authorize each such bank, trust company, or corporation to receive and hold
in any such custody or safekeeping account, as depositary, and to sell or
arrange for the sale of, or otherwise dispose of, checks, notes, drafts,
bills of exchange, acceptances, or other instruments for the payment of
money, negotiable or non-negotiable, stocks, bonds, coupons and other
securities and funds not subject to check, to collect all interest, dividends
and other income which may become due and to credit the same to any account
of the Corporation, to receive the proceeds from the sale of securities,
redemption of bonds or other principal cash items for credit to the account
of the Corporation; to exchange securities in temporary form for definitive
securities; to surrender securities matured or called for redemption upon
receiving proper payment therefor for the account of the Corporation; to
execute on behalf of the Corporation all necessary ownership certificates or
other instruments that may be required under any income tax or other laws or
regulations of any Government now or hereafter in effect; to sign, or cause
to be signed from time to time, any proxies received with notices of meetings
or otherwise, covering shares of stock held from time to time for the account
of the Corporation in the name of a nominee, with respect to all stockholders
meetings, regular or special.
7. To hire deposit boxes, safes or other space in any vault of any safe
deposit company, bank or corporation, or in any warehouse or other premises,
subject to the terms, conditions, rules and regulations of any such safe
deposit company, bank or corporation, warehouse or owner of any other
<PAGE>
premises, and to execute any and all agreements and instruments required
therefor.
8. To borrow money, obtain advances, to obtain credit by means of
letters of credit or otherwise, and to borrow securities, upon such terms and
conditions as may be agreed upon between the Managers and the lender, and to
execute any and all notes, collateral notes, undertakings, contracts, or
other instruments binding the Branch to the repayment thereof; and as
security for any obligations of the Branch to create a security interest in,
mortgage, pledge, hypothecate, entrust or deposit any and all bonds, stocks,
securities, bills of exchange, bills of receivable, accounts, notes, drafts,
checks, bills of lading and other shipping documents, insurance policies,
warehouse receipts, other instruments, and other property and assets owned or
held by the Corporation or in which the Corporation may have an interest; and
to execute deeds, conveyances, mortgages, bills of sale, conditional bills of
sale, security agreements, assignments, transfers, or other instruments of
assignment or transfer.
9. To make, or participate in, loans in dollars or in any other
currency, or establish, create, and issue mercantile or other credits in
favor of, or to lend the credit of the Corporation by guaranty, endorsement
or in any other manner, to, or for the accommodation or benefit of, any bank,
person or Government, upon open account or upon real or personal security or
otherwise, and as evidence of such debts to accept notes, collateral notes,
acceptances, bills of exchange, bonds, undertakings, instruments of guaranty,
agreements or other documents and as collateral security therefor to accept
securities, mortgages, pledges, security agreements, trust receipts,
warehouse receipts, bill of lading, insurance policies, chattel mortgages or
other instruments conveying and transferring title to, or granting a lien
upon or security interest in, or pertaining to, any and all goods, wares and
merchandise and securities or other property, real or personal, tangible or
intangible, including but not limited to any such property, imported,
exported, purchased, or dealt with under, or in connection with, such loans
or credit, and also to accept any such property in kind; to enter into
agreements with other lenders as to relative priorities in any such security;
and to subordinate any such loan to any loan made or to be made by another
lender to the same borrower.
10. To the extent permitted by law, to accept, receive, maintain and
manage deposits and safekeeping of custody accounts, or other accounts, from
any person or Government.
11. To receive personal property, both tangible and intangible, of every
kind and description for safekeeping, according to such regulations as the
Managers may prescribe.
<PAGE>
5
12. To receive goods, wares and merchandise, which may be shipped
to or consigned to the Corporation by or for the account of customers or
others or for its own account, or in which the Corporation may be
interested, and to sell, assign, transfer or otherwise dispose of, or deal
with the same, or any part thereof; to transport, store or warehouse the same
or any part thereof in the name of the Corporation or otherwise. To do and
perform any act or thing necessary or proper, in order to obtain clearance
through customs of goods, wares and merchandise, or other property for the
account of the Corporation or its customers or others including but not
limited to the following: to make customs entries; to pay customs duties; to
challenge and contest any duty or tax; to make delivery or other disposition
of such property; to obtain proper dutiable valuation and proper tariff
classification for any such property; to settle and determine all claims,
disputes and matters; and to execute bonds, reports and other instruments in
connection with the foregoing matters.
13. To act as fiscal agent, financial representative or depositary
for any Government, corporation or person, or under or with respect to any
issue of stock, bonds, or other securities, and in such capacity, or
otherwise, to receive and disburse money, currency and gold and silver,
either coin or bullion; to collect, transmit, pay, distribute and otherwise
deal with interest, coupons, dividends, other income, moneys, stocks, bonds
and other securities and property; to transfer, register, and countersign
certificates of stock, bonds and other securities; to underwrite, or
participate in any underwriting with respect to, any issue of bonds, stocks
or other securities, for the account of the Corporation or its customers or
others; to act as attorney-in-fact or agent for any person for any lawful
purpose.
14. To the extent permitted by law, (a) to act as the fiscal or
transfer agent of the Federal Republic of Germany or of any subdivision,
department, municipality, agency or instrumentality thereof, or of any
corporation organized under the laws of the Federal Republic of Germany or
which is doing business in the Federal Republic of Germany or whose principal
business activity consists of investments in the Federal Republic of Germany,
provided such corporation shall have filed with the New York Branch evidence
satisfactory to the Branch that it is so organized, is doing such business,
or has such principal business activity, as the case may be; and in such
capapcity to receive and disburse money, to transfer, register and
countersign certificates of stock, bonds, or other evidences of indebtedness
or other securities, and to act as attorney-in-fact or agent of any of the
foregoing entities, for any lawful purpose; (b) to act as trustee under any
notes,
<PAGE>
6
bonds, debentures or other evidences of indebtedness issued or guaranteed by
the Federal Republic of Germany or by any subdivision, department,
municipality, agency, or instrumentality thereof, or issued by any
corporation organized under the laws of the Federal Republic of Germany or
which is doing business in the Federal Republic of Germany or whose principal
business activity consists of investments in the Federal Republic of Germany;
provided such corporation shall have filed with the New York Branch evidence
satisfactory to the Branch that it is so organized, is doing such business,
or has such principal business activity, as the case may be; (c) to take,
accept and execute any and all such trusts, duties and powers of whatever
nature or description as may be conferred upon or entrusted or committed to
the New York Branch (by grant, assignment, transfer or otherwise), by the
Federal Republic of Germany or by any subdivision, department, municipality,
agency or instrumentality thereof, or by any corporation organized under the
laws of the Federal Republic of Germany or which is doing business in the
Federal Republic of Germany or whose principal business activity consists of
investments in the Federal Republic of Germany, or by any charitable or
religious organization organized under the laws of the Federal Republic of
Germany, or which is engaged in a substantial activity in the Federal
Republic of Germany, provided such corporation or charitable or religious
organization shall have filed with the New York Branch evidence satisfactory
to the Branch that is is so organized, is doing such business, has such
principal business activity, or is so engaged, as the case may be, and to
receive, take, manage, hold and dispose of according to the terms of such
trust, duty or power, any property or estate, real or personal, which may be
the subject of any such trust, duty or power; provided, however, that the New
York Branch shall not have or exercise any right or power to make any
contract, or to accept or execute any trust whatever, which it would not be
lawful for any individual to make, accept or execute; and (d) without
limiting the generality of the foregoing, to exercise any and all fiduciary
powers which the New York Branch may now or hereafter be entitled to exercise
under Section 201-b of the Banking Law of the State of New York as the same
may be amended from time to time.
15. To place or effect insurance of any kind upon any property or
assets of the Corporation or of its customers or others including but not
limited to fire, compensation, fidelity, theft, credit, liability, and public
liability; to obtain binders for, contract for, renew, cancel or make other
disposition of, such insurance; in connection therewith and in case of loss,
to execute proofs of loss, statements, affidavits, agreements or other
documents, and to collect, receive and
<PAGE>
7
acquit for any such insurance, or any sums which may be due the Corporation,
its customers or others in connection therewith.
16. To purchase or otherwise acquire, own, hold, manage, alter,
remodel, repair, lease, rent, and make loans upon, real estate, both improved
and unimproved, and wheresoever located, or any interest therein, and to
construct, erect, build, alter, improve, demolish buildings, and structures
of every kind, in the transaction of the business of the Branch.
17. To act as agents or attorneys-in-fact to any customers of the
Branch or others, either in the name of the Corporation or in the name of a
nominee, in any transaction in which such customers or others may be
interested, and for any purpose for which the Managers might act under this
Power of Attorney in any transaction on behalf of the Corporation.
18. To retain attorneys; to appoint, engage, employ, make
contracts with, manage, and control such sub-managers, agents and sub-agents,
assistants, cashiers, accountants, tellers, clerks, representatives, and
other employees in any agency, branch or other office of the New York Branch,
as the said Managers may deem necessary or advisable. Without limiting the
foregoing general powers, to fix their terms, conditions and agreements of
retainer or employment and salaries or other compensation; to prescribe their
duties, to terminate their employment, and to dismiss or to suspend any of
them, upon such grounds as the said Managers may deem sufficient in the best
interests of the Corporation; to fill vacancies and to increase or decrease
the number of all such employees; to assemble and maintain an adequate and
proper staff; to establish, alter or amend rules and regulations for the
control of such staff, agents and employees; and to make contracts with the
New York Branch's nominee or nominees.
19. To execute such leases, extensions and renewals of leases,
options, service contracts and such other instruments as may be necessary or
proper in the establishment and maintenance of offices for the Corporation
in the City of New York and elsewhere; to purchase, acquire, sell, exchange
or otherwise dispose of such furniture, fixtures, supplies and other personal
property as may be necessary or convenient in connection with the business of
the New York Branch, or any other office maintained by the Corporation.
<PAGE>
8
20. To execute any and all instruments which may be required by
the Federal Reserve Bank of New York or any other Federal Reserve Bank, in
connection with the sale to or purchase by any such Federal Reserve Bank, of
any acceptances, bills of exchange, other commercial paper or other
instruments, negotiable or non-negotiable, made, executed, issued, accepted,
endorsed, negotiated, assigned or delivered by the Corporation or any agency
or branch thereof.
21. To ask, demand, sue for, recover, receive and give
acquittances for any and all moneys, debts and demands, bonds, stocks,
securities and other property due or payable to, or deliverable to the
Corporation or which may hereafter become due, or payable or deliverable to
the Corporation, or to which the Corporation may have the right of immediate
possession, either as principal, interest, dividends or otherwise, and from
any person or Government; to compromise, adjust, settle, compound or
otherwise dispose of all claims, demands, disputes and controversies; to
execute any composition agreement or other debtor or creditor agreement or to
make any arrangement with debtors; to refer any dispute, controversy or
matter to arbitration and to appoint or consent to the appointment of
arbitrators or an umpire, either before or subsequent to the commencement of
legal proceedings; without limiting to any extent the various rights and
remedies which are or might be available to the Corporation, to accept, take
possession of, hold or store any goods, wares or merchandise, or other
personal property whether belonging to the Corporation or held by the
Corporation as security or in trust, or held by any bank or person as
security or in trust or for the account of the Corporation, or otherwise, and
to hold, manage, sell, assign, transfer, lease, create a security interest in,
mortgage, pledge or otherwise deal with the same, or any part thereof.
22. To commence, prosecute, enforce, appear in, intervene in,
accept service of process in, defend, settle, adjust, compromise or
discontinue any action, suit, proceeding or litigation at law or in equity,
in any court, or before any Government; to apply for or consent to the
appointment, removal or substitution of any Receiver, Trustee, Referee,
Master or Arbitrator.
23. To appear in and participate in any bankruptcy, insolvency,
arrangement, reorganization, equity or receivership or other similar
proceeding or suit, or in any matter relating to the assets, estate or
effects, or the winding up of the affairs of, any person, indebted to the
Corporation or its customers; to execute proofs of claim and powers of
attorney; to attend and participate in any and all meetings of creditors,
either prior to the commencement of or in connection with any such proceeding
or suit; to vote in respect of any claim or other matter at any such
meeting; to appoint
<PAGE>
9
proxies; to withdraw, compromise, settle, satisfy and deal with any claim; to
execute petitions in bankruptcy or applications for the appointment of
receivers in any court and under insolvency, bankruptcy, reorganization or
other laws; and to execute any and all other petitions, answers, proofs of
claim, pleadings or other papers which may be necessary or proper.
24. To attend and vote at, or to appoint proxies or other
representatives to attend or vote at, any and all meetings of stockholders,
bondholders, creditors, noteholders, holders of any other securities or
obligations, or of committees representing any class or kind of securities or
property.
25. To execute applications, affidavits, petitions and other
instruments, in order to obtain licenses, permits, franchises and rights from
the Government of the United States of America, the several States,
territories and dependencies thereof, the District of Columbia, or any other
Government, with reference to importing, exporting, selling, exchanging,
storing, transshipping, trucking, moving and otherwise dealing in and with
gold and silver, either coin or bullion, and with reference to the
performance of any act or thing or the exercise of any power granted by this
Power of Attorney.
26. To execute all such tax returns, information returns, schedules,
affidavits, waivers, petitions, applications for refunds, and other
instruments and documents as may be required by or permitted under any tax law,
income tax law or other law, rule, regulation or requirement of any
Government.
27. To execute, and file with the Superintendent of Banks of the State
of New York, any Federal Reserve Bank, or any Government all applications,
certificates, designations, financial statements, powers of attorney and
other instruments, or renewals or substitutions thereof which may be
necessary or proper in order to enable the Corporation to establish an
agency, branch or other office in any other city in the United States, or
elsewhere, or which may be necessary or proper in order to enable the
Corporation to transact its business and manage and control its assets,
business and affairs in connection with the New York Branch or any other
agency, branch or office which is or may be established as aforesaid; to
execute, deliver, file and amend any deposit agreements and other agreements
and instruments which may be necessary or proper in order to enable the
Corporation to comply with any legal requirements for the maintenance of
assets or reserves in connection with the New York Branch and any other
agency, branch or office which is or may be
<PAGE>
10
established as aforesaid; and to execute, and file with the Superintendent of
Banks of the State of New York, a certificate of designation, specifying the
name and address of the officer, agent or other person to whom the
Superintendent of Banks shall forward any process served upon the
Superintendent of Banks in any action or proceeding against the Corporation
on a cause of action arising out of a transaction with the New York Branch;
and to execute, acknowledge and file with the Superintendent of Banks of the
State of New York an application or applications (and renewals or
substitutions thereof) for a certificate or certificates of authorization to
exercise the fiduciary powers specified in Section 201-b of the New York
Banking Law at any or all of the Corporation's authorized branches in the
State of New York and in connection therewith from time to time to take any
and all proceedings and to make, execute, acknowledge, deliver and file any
and all agreements, certificates, financial statements, affidavits, powers of
attorney, and other documents, instruments or papers, and to take or cause to
be taken any and all further action, which may be necessary or proper in
order to enable any or all of the Corporation's said branches to exercise, or
to obtain a certificate of authorization to exercise, said fiduciary powers.
28. Specifically, to sell and assign any and all bonds or obligations
of any description of the United States (or other obligor of any sort) now or
hereafter registered in the name of the Corporation on the books of the
Treasury Department (or on the books of any obligor of any sort, or any
registrar or agent) or which may now or hereafter be assigned to the
Corporation; to exchange registered bonds, or obligations of any description
of the United States (or other obligor of any sort) for coupon bonds or
obligations, and to exchange any such coupon bonds or obligations for
registered bonds or obligations.
29. To designate on any endorsement or separate power in which the
Corporation or any branch, agency or office thereof is appointed attorney to
transfer shares of stock or other registered securities on the books of any
such association, company, or corporation, a substitute or substitutes (with
like power of substitution) to make such transfer.
30. To guarantee the signature or signatures of any person, firm or
corporation, including, without in any way limiting the generality of the
foregoing, the signature of any officers of this Corporation, being known as
Deutsche Bank AG located outside the State of New York, on any shares
<PAGE>
11
of stock or other registered securities or on any power of attorney executed
to secure the transfer of same, and, further, to guarantee the correctness or
authenticity of any instruments or other documents or copies thereof required
in connection with the transfer of any stock or registered securities; and
such guarantee by the New York Branch shall constitute a guarantee not only
of the genuineness of the signatures of the persons signing for the
Corporation's officers, but also the guarantee of their authority to endorse
or assign shares of stock in question; and such guarantee by the New York
Branch is, under all circumstances, to be considered as an unqualified
guarantee of the validity and propriety of each transfer even though the
person or persons so assigning the stock on behalf of the Corporation may no
longer be with the Corporation, or their signatures do not appear in the most
recent specimen signature book or in any other specimen signature book on
file with the respective transfer agents. This authority, given to the New
York Branch, shall continue in full force and effect and be binding on
the Corporation until such time as notice has been given in writing of its
revocation.
31. To endorse or guarantee any or all assignments or powers of
attorney for the transfer of any shares of stock or other registered
securities executed by any person, firm or corporation whatsoever.
32. To do and perform any and all of the foregoing acts and things and
to exercise the broad general powers herein granted as well as the specific
powers mentioned in this instrument within and throughout the State of New
York, the District of Columbia and the several states, territories, and
dependencies of the United States of America and within any other country
except as herein otherwise stated, provided only that the same be not
inconsistent with the laws, statutes, ordinances, rules and regulations of
any Government having valid jurisdiction in the premises.
33. To transact, generally, any and all business on behalf of the
Branch, with full power and authority to do and perform all acts and things
incidental to the exercise of, or requisite, necessary or proper to be done
under and by virtue of the general powers hereby granted as well as the
specific powers herein enumerated, and in and about the premises; to organize
and cause to be organized subsidiary corporations or other corporations; to
act as directors on the Board of Directors of any corporation.
<PAGE>
12
34. To do and perform any and all of the acts and things, and to
exercise all of the powers herein granted, to the extent that the same shall
be in accordance with the laws; rules or regulations of the Government under
whose jurisdiction the same are performed or exercised; should the
performance of any act or thing or the exercise of any power herein granted,
be determined to be illegal or contrary to the laws, rules and regulations of
any such Government, as aforesaid, by any Court of competent jurisdiction, or
pursuant to the opinion of counsel, or otherwise, it is the intention of the
Corporation that this Power of Attorney and all the powers herein granted,
nevertheless, shall be and continue at all times in full force and effect as
to all acts, things and powers the performance and exercise of which shall
not have been held or determined, specifically, as aforesaid to be illegal or
violative of such laws, rules and regulations.
35. In the interpretation and construction of this Power of Attorney,
the several terms hereinafter mentioned shall be defined to include the
meanings indicated, but these definitions shall not be deemed to limit in any
way the broader definitions or meanings that would otherwise be given to them
in law. The term "bank" shall be defined to include any government bank,
central bank, correspondent bank, agency bank, branch bank, private bankers,
banking partnership or firm, or any other banking or financial organization
or institution, public or private. The term "person" shall be defined to
include any individual, firm, partnership, corporation, public or private, or
association, and also any Government bank as herein defined. The term
"execute" or "make" shall be defined to include, make, draw, sign, swear to,
verify, acknowledge, certify, deliver, deposit, send, file and record. The
term "Government" shall be defined to include any nation, country,
principality, state, province, county, dependency, territory, mandate, city,
municipality, as well as the Government thereof, de jure or de facto, and
also any foreign ministry, ministry of finance, department, bureau, board,
administrative authority, court, tribunal, any judicial or semi-judicial body
or authority, commission, sub-division, agency, representative, corporate
subsidiary or affiliate, or officer thereof.
36. The Corporation for itself, its successors and assigns does hereby
ratify, confirm and approve all acts and transactions which the Members of
the Board of Managing Directors,
<PAGE>
13
Assistant General Managers of the Corporation, General Manager and Managers
shall do or cause to be done by virtue of this Power of Attorney. All acts
and transactions of the Members of the Board of Managing Directors, Assistant
General Managers of the Corporation, General Manager and Managers shall,
notwithstanding any prior revocation of this Power of Attorney or the
revocation of the appointment of any Members of the Board of Managing
Directors, Assistant General Managers of the Corporation, General Manager or
Managers thereunder, be valid, effectual and binding upon the Corporation,
unless notice in writing of such revocation of this Power of Attorney as to
any Members of the Board of Managing Directors, Assistant General Managers of
the Corporation, General Manager or Managers shall have been previously
delivered to the bank, corporation or person to whom a copy of this Power of
Attorney shall have been delivered.
37. Instead of two of the Managers acting jointly, any one officer
or employee of the New York Branch who shall be specifically designated so to
do by the management of the New York Branch, which management is hereby
authorized to so designate from time to time, may act singly in instances
where the office of DEUTSCHE BANK AG, New York Branch, has occasion to
(a) guarantee the endorsement of any person in whose name a share
certificate or other corporate security stands;
(b) sign a power of substitution in connection with the transfer of
any share certificate or other corporate security;
(c) guarantee the signature of any of its nominee partnerships or
the nominee partnership of Deutsche Bank AG; or
(d) certify that a transfer of a corporate security (e.g., a stock
certificate or a bond) from any name into any other name, does not
effectuate a change of ownership.
38. Instead of two of the Managers acting jointly, any one officer
or employee who shall be specifically designated to do so by the management
of the New York Branch acting singly may sign:
<PAGE>
14
(a) Debit and credit advices involving amounts not in excess of
$5,000 in connection with the routine operation of deposit accounts of any
depositor (including without limitation correspondent banks and branches,
agencies, offices and affiliates of the Corporation);
(b) Advices accompanying clean drafts or checks sent for collection
to domestic or foreign banks; advices accompanying checks bearing two
signatures, mailed in settlement of collection items;
(c) Debit and credit advices addressed to any branch, agency or
office of the Corporation, confirming the purchase or redemption of
finance company commercial paper or bankers' acceptances; and
(d) Form letters in connection with the routine operations of the
New York Branch (but which in no event involve any liability or engagement
on the part of the Corporation or authorize payments or transfers of funds
or purchase or delivery of securities or other property).
The New York Branch may be operated, and any paper or document may
be executed pursuant hereto, in the name of the Corporation with the addition
of the words "New York Branch".
IN WITNESS WHEREOF, DEUTSCHE BANK AG has caused this Power of
Attorney to be executed by Dr. Wilfried Guth and Dr. Alfred Herrheusen,
Members of its Board of Managing Directors, they being thereunto duly
authorized in accordance with a resolution of the Board of Managing Directors,
this 6th day of February, 1978.
DEUTSCHE BANK AG
By /s/ DR. WILFRIED GUTH
-------------------------------
Dr. Wilfried Guth
Member of Board of Managing
Directors
Dated: 6th of February 1978 By /s/ DR. ALFRED HERRHEUSEN
-------------------------------
Dr. Alfred Herrheusen
Member of Board of Managing
Directors
<PAGE>
ACKNOWLEDGEMENT
FEDERAL REPUBLIC OF GERMANY )
LAND HESSE )
CITY OF FRANKFURT AM MAIN ) ss.:
CONSULATE GENERAL OF THE )
UNITED STATES OF AMERICA )
On this 9th day of February, 1978, before me personally came Dr. Alfred
Herrhausen, who, being by me duly sworn, deposes and says that he resides at
Solingen/Germany; that he is a Member of the Board of Managing Directors of
Deutsche Bank AG, the corporation described in and which executed the
foregoing Power of Attorney; that said corporation has no corporate seal; and
that he signed his name to said Power of Attorney in accordance with a
resolution of the Board of Managing Directors of said corporation.
/s/ J. Peter Becker
---------------------------------------
J. Peter Becker
Counsul of the United States of America
duly commissioned and qualified
(SEAL)
<PAGE>
ACKNOWLEDGEMENT
FEDERAL REPUBLIC OF GERMANY )
LAND HESSE )
CITY OF FRANKFURT AM MAIN ) ss.:
CONSULATE GENERAL OF THE )
UNITED STATES OF AMERICA )
On this 6th day of February, 1978, before me personally came Dr.
Wilfried Guth, who, being by me duly sworn, deposes and says that he resides
at Konigstein/Germany; that he is a Member of the Board of Managing Directors
of Deutsche Bank AG, the corporation described in and which executed the
foregoing Power of Attorney; that said corporation has no corporate seal; and
that he signed his name to said Power of Attorney in accordance with a
resolution of the Board of Managing Directors of said corporation.
/s/ J. Peter Becker
---------------------------------------
J. Peter Becker
Counsul of the United States of America
duly commissioned and qualified
(SEAL)
<PAGE>
Exhibit 6
The consent of United States institutional trustees required by Section
321(b) of the Act.
<PAGE>
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
October 27, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Wind River
Systems, Inc. and Deutsche Bank AG, New York Branch, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, hereby consents that the reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations,
may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.
Very truly yours,
Deutsche Bank AG, New York Branch
By: /s/ George H. Gregor
_______________________________
Name: George H. Gregor
By: /s/ Peter C. Olsen
_______________________________
Name: Peter C. Olsen
<PAGE>
Exhibit 7
A copy of the latest report of condition of the trustee published pursuant to
law or the requirements of its supervising or examining authority.
<PAGE>
<TABLE>
<S> <C>
Approval of the FFIEC expires December 31, 1999.
REPORT OF ASSETS AND LIABILITIES OF U.S. BRANCHES
AND AGENCIES OF FOREIGN BANKS. This report is required by law (12 U.S.C. 3105(b)(2);
12 U.S.C. 1617(a)(1) and (3); and 12 U.S.C. 3102(b)1.
at close of business on June 30, 1997 Instruction ID: B365057000
-------------- ----------
Please read carefully "Instructions for Preparation of the Report of Assets and Liabilities of U.S. Branches and Agencies of
Foreign Banks" and instructions for preparation of the supplement "Report of Assets and Liabilities of a Non-U.S. Branch that is
Managed or Controlled by a U.S. Branch or Agency of a Foreign (Non--U.S.) Bank."
Please indicate legal status: Branch NOTE:
---------------- -----
This report must be signed by an authorized officer and
Indicate FDIC insurance Status (Y/N): N attested by the senior executive officer.
--------
If this report consolidates the statements for multiple
branches or agencies of a foreign bank, indicate the number I, DANIEL C. SELENDORIO
of branches or agencies included in this report: --------------------------------------------------------------
----------- Name of Officer Authorized to Sign Report
DEUTSCHE BANK AG - NEW YORK BRANCH VICE PRESIDENT
- ------------------------------------------------------------ -----------------------------------------------------------------
Legal Title Title of Officer Authorized to Sign Report
31 WEST 52ND STREET of the branch or agency specified do hereby declare that this Report
- ------------------------------------------------------------ of Assets and Liabilities including the supporting schedules and
Street Address supplement have been prepared in conformance with the instructions
issued by the Federal Financial Institutions Examination Council
NEW YORK NEW YORK [ILLEGIBLE] to the best of my knowledge and belief.
- ------------------------------------------------------------
City County
NY 10019 /s/ DANIEL SELENDORIO
- ------------------------------------------------------------ -----------------------------------------------------------------
State Zip Code Signature of Officer Authorized to Sign Report
I, GARY T. HANDEL
- ------------------------------------------------------------ --------------------------------------------------------------
Legal Title Name of Senior Executive Officer
MANAGING DIRECTOR
- ------------------------------------------------------------ -----------------------------------------------------------------
Street Address Title of Senior Executive Officer
attest the correctness of this Report of Assets and Liabilities
- ---------------------------- ----------------------------- (including the supporting schedules and supplement) and declare
City County that it has been examined by us, and to the best of our knowledge
and belief, has been prepared in conformance with the instructions
issued by the Federal Financial Institutions Examination Council
and [ILLEGIBLE] [ILLEGIBLE].
- ---------------------------- ----------------------------- -----------------------------------------------------------------
State Zip Code
- ------------------------------------------------------------
Legal Title
/s/ GARY T. HANDEL
- ------------------------------------------------------------ -----------------------------------------------------------------
Street Address Signature of Senior Executive Officer
- ---------------------------- -----------------------------
City County
- ---------------------------- ----------------------------- Public reporting burden associated with the FFIEC 002 and FFIEC
State Zip Code 002S is estimated to average 22.75 hours per response and 6.0 hours,
respectively, including time to gather and maintain date in the
required form and to review instructions and complete the
DEUTSCHE BANK, AG information collection. A federal agency may not conduct or sponsor,
- ------------------------------------------------------------ and an organization (or a person) is not required to respond to a
Legal Title of Foreign Bank Parent collection of information, unless it displays a currently valid OMB
control number. Comments regarding this burden estimate or any other
FRANKFURT GERMANY aspect of this information collection, including suggestions for
- ---------------------------- ----------------------------- reducing the burden, may be sent to Secretary, Board of Governors of
City Country the Federal Reserve System, Washington, D.C. 20551 and to Office of
Information and Regulatory Affairs, Office of Management and Budget,
BOBBY CHATTERJEE - ASSOCIATE Washington, D.C. 20503.
- ------------------------------------------------------------
Person to be contacted concerning this report
(212) 469-8422
- ------------------------------------------------------------
Telephone Number (including area code and extension)
</TABLE>
Return original and 2 copies to the Federal Reserve Bank in whose district
the branch or agency is located. FDIC-insured branches should file one copy
with the appropriate FDIC Regional Office (Supervision).
<PAGE>
REPORT OF ASSETS AND LIABILITIES OF
DEUTSCHE BANK AG - NEW YORK BRANCH
- ----------------------------------
Legal Title of Branch or Agency
at the close of business on JUNE 30, 1997
-------------
SCHEDULE RAL - ASSETS AND LIABILITIES
All schedules are to be reported in thousands of U.S. dollars. Unless
otherwise indicated, report the amount outstanding as of the last calendar
day of the quarter.
<TABLE>
<CAPTION>
(COLUMN A) (COLUMN B)
TOTAL REPORTING
BRANCH OR AGENCY
ASSETS DOLLAR AMOUNTS IN THOUSANDS INCLUDING ITS IBF IBF ONLY
- --------------------------------------------------------------- ----------------- --------------
<S> <C> <C> <C>
1. Claims on Nonrelated Parties:
(Excludes all claims on related depository institutions
but includes claims on related nondepository institutions.
See instructions for coverage and treatment of "nonrelated"
and "related" institutions.)
RDFC RCFN
a. Cash and balances due from depository institutions ---- ----
(from Schedule A, Item 6) . . . . . . . . . . . . . . . . . . 0010. . 315,582 0010. . 0 1.a.
---------- -------
b. U.S. Government Securities:
(1) U.S. Treasury securities. . . . . . . . . . . . . . . . . 0260. . 711,869 1.b.(1)
----------
(2) U.S. Government agency and corporation obligations. . . . 0371. . 2,083,972 1.b.(2)
----------
c. Other bonds, notes, debentures, and corporate stock
(including state and local securities):
(1) Securities of foreign governments and official
institutions. . . . . . . . . . . . . . . . . . . . . . . A003. . 566,364 A003. . 0 1.c.(1)
---------- -------
(2) All Other . . . . . . . . . . . . . . . . . . . . . . . . A004. . 11,531 A004. . 0 1.c.(2)
---------- -------
d. Federal Funds sold and securities purchased under
agreements to resell:
(1) With U.S. branches and agencies of other foreign banks. . 1631. . 215,000 1631. . 0 1.d.(1)
---------- -------
(2) With other commercial banks in the U.S. . . . . . . . . . 1632. . 0 1632. . 0 1.d.(2)
---------- -------
(3) With others . . . . . . . . . . . . . . . . . . . . . . . 1390. . 2,056,061 1390. . 0 1.d.(3)
---------- -------
e. Loans and leases, net of unearned income (from Schedule C,
item 11). . . . . . . . . . . . . . . . . . . . . . . . . . . 2122. . 6,105,628 2122. .463,357 1.e.
---------- -------
f. Trading Assets. . . . . . . . . . . . . . . . . . . . . . . . 3545. . 2,612,328 3545. . 0 1.f.
---------- -------
g. Customers' liablility to this branch or agency on
acceptances outstanding:
(1) U.S. addressees (domicile). . . . . . . . . . . . . . . . 2156. . 163,000 1.g.(1)
----------
(2) Non-U.S. addressees (domicile). . . . . . . . . . . . . . 2157. . 115,258 1.g.(2)
----------
h. Other assets including other claims on nonrelated parties . . 2151. . 2,148,786 2151. . 10,944 1.h.
---------- -------
i. Total claims on nonrelated parties
(sum of items 1.a through 1.h) . . . . . . . . . . . . . . . 2171. .17,105,379 2171. .474,301 1.i.
---------- -------
2. Net Due from Related Depository institutions:
a. For the reporting branch or agency including its IBF: Net
due from head office and other related depository
institutions (item 4.g minus item 1.i. of Column A if
item 4.g is greater that 1.i; otherwise enter -0-). . . . . . 2154. . 9,793,751 2.a.
----------
b. For the IBF of the reporting branch or agency: Net due from
establishing entity, head office and other related
depository institutions (item 4.g minus item 1.i of
Column 8 if item 4.g is greater than item 1.i; otherwise
enter -0-). . . . . . . . . . . . . . . . . . . . . . . . . . 2154. .411,733 2.b.
-------
3. Total Assets (for Column A, sum of items 1.i and 2.a;
for Column 8, sum of items 1.i and 2.b). . . . . . . . . . . . . 2170. .26,899,130 2170. .886,034 3.
---------- -------
</TABLE>
<PAGE>
Schedule RAL - continued
<TABLE>
<CAPTION>
(COLUMN A) (COLUMN B)
TOTAL REPORTING
BRANCH OR AGENCY
LIABILITIES DOLLAR AMOUNTS IN THOUSANDS INCLUDING ITS IBF IBF ONLY
- --------------------------------------------------------------- ----------------- --------------
<S> <C> <C> <C>
4. Liabilities to nonrelated parties:
(Excludes all liabilities to related depository institutions
but includes all liabilities to related nondepository
institutions. See instructions for coverage and treatment of
"nonrelated" and "related" institutions.)
RCFD RCFN
a. Total deposits and credit balances (from Schedule C, ---- ----
item 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2205. . 17,186,155 2205. . 329,971 4.a.
---------- -------
b. Federal funds purchased and securities sold under
agreements to repurchase:
(1) With U.S. branches and agencies of other foreign banks. . . 2317. . 556,000 2317. . 200,000 4.b.(1)
---------- -------
(2) With other commercial banks in the U.S. . . . . . . . . . . 2318. . 328,094 2318. . 0 4.b.(2)
---------- -------
(3) With others . . . . . . . . . . . . . . . . . . . . . . . . 2820. . 1,939,644 2820. . 339,000 4.b.(3)
---------- -------
c. Other borrowed money (from Schedule P, item 4). . . . . . . . . 3190. . 171,302 3190. . 15,000 4.c.
---------- -------
d. Branch or agency liabliltiy on acceptances executed and
outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . 2920. . 288,430 4.d.
----------
e. Trading liabilities . . . . . . . . . . . . . . . . . . . . . . 3548. . 4,359,929 3548. . 0 4.e.
---------- -------
f. Other liabilities to nonrelated parties . . . . . . . . . . . . 2916. . 1,769,576 2916. . 2,063 4.f.
---------- -------
g. Total liabilities to nonrelated (sum of items 4.a through 4.f). 2927. . 26,899,130 2927. . 886,034 4.g.
---------- -------
5. Net due to related depository institutions;
a. For the reporting branch or agency including its IBF: Net due
to head office and other related depository institutions
(item 1.i minus 4.g of Column A if item 1.i. is greater than
4.g.; otherwise enter -0-). . . . . . . . . . . . . . . . . . . 2944. . 0 5.a.
----------
b. For the IBF of the reporting branch or agency:
Net due to establishing entity, head office and other related
depository institutions (item 1.i. minus item 4.g of Column B
if item 1.i. is greater than item 4.g.; otherwise enter -0-). . 2944. . 0 5.b.
-------
6. Total liabilities (for Column A, sum of item 4.g. and 5.a;
for Column B, sum of item 4.g. and 5.b.) . . . . . . . . . . . . . 2950. . 26,899,130 2950. . 866,034 6.
---------- -------
</TABLE>
<TABLE>
<CAPTION>
MEMORANDA
- --------------------------------------------------------------- ----------------- ---------------
<S> <C> <C> <C>
1. Fair value of held-to-maturity securities . . . . . . . . . . . 1771. . 273,057 1771. . 0 M.1.
---------- -------
2. Amortized cost of held-to-maturity securities . . . . . . . . . 1754. . 272,954 1754. . 0 M.2.
---------- -------
3. Fair value of available-for-sale securities . . . . . . . . . . 1773. . 3,100,782 1773. . 0 M.3.
---------- -------
4. Amortized cost of available-for-sale securities . . . . . . . . 1772. . 3,109,276 1772. . 0 M.4.
---------- -------
5. Fair value of high-risk mortgage securities . . . . . . . . . . 8781. . 0 8781. . 0 M.5.
---------- -------
6. Amortized cost of high-risk mortgage securities . . . . . . . . 8780. . 0 8780. . 0 M.6.
---------- -------
7. Fair Value of structured notes. . . . . . . . . . . . . . . . . 8783. . 0 8783. . 0 M.7.
---------- -------
8. Amortized cost of structured notes. . . . . . . . . . . . . . . 8782. . 0 8782. . 0 M.8.
---------- -------
9. Mutual funds and annuity sales during the quarter . . . . . . . A005. . 0 A005. . 0 M.9.
---------- -------
10. Revaluation gains on interest rate, foreign exchange rate, and
other commodity and equity conracts . . . . . . . . . . . . . . 3543. . 2,562,136 3543. . 0 M.10.
---------- -------
11. Revaluation losses on interest rate, foreign exchange rate, and
other commodity and equity contracts. . . . . . . . . . . . . . 3547. . 3,094,826 3547. . 0 M.11.
---------- -------
12. Amount of assets nested against nondeposit liabilities on the
balance sheet in accordance with generally accepted accounting
principles. . . . . . . . . . . . . . . . . . . . . . . . . . . A526. . 2,538,598 A526. . 0 M.12.
---------- -------
13. If other assets including other claims on nonrelated parties
(item 1.h.) exceeds 5 percent of total assets (item 3.), itemize
and describe amounts that exceed 25 percent of item 1.h.
TEXT RCFD
a. A539: ACCRUED INTEREST RECEIVABLE A539. . 1,067,220 M.13.a.
-------------------------------------------------------- ---------
b. A540: A540. . 0 M.13.b.
-------------------------------------------------------- ---------
c. A541: A541. . 0 M.13.c.
-------------------------------------------------------- ---------
</TABLE>
<PAGE>
SCHEDULE RAL - CONTINUED
14. If other liabilities to nonrelated parties (item 4.f) exceeds 5 percent
of total liabilities (item 6), itemize and describe amounts that exceed 25
percent of item 4.f.
TEXT RCFD
a. A542: ACCRUED INTEREST PAYABLE A542.. 923,641 M.14.a
---------------------------- --------
b. A543: A543.. 0 M.14.b.
---------------------------- --------
c. A544: A544.. 0 M.14.c.
---------------------------- --------
15. Number of full-time equivalent employees of the branch or agency at end
of current period (round to the nearest whole number)..... 4150. 959 M.15
------
To be reported only with the March Report
16. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of audited work performed for the
branch or agency by, or on behalf of, the parent RCFD Number
----- --------
organization during the preceding year..................6726 N/A M.16.
---------
1= Independent annual audit of the branch 4= Review of the financial
or agency conducted in accordance with statements of the branch or
U.S. generally accepted auditing agency by internal auditors.
standards by a certified public accounting 5= Compliation of the financial
firm. statements of the branch or
2= Independent annual audit of the branch or agency by external auditors.
agency conducted in accordance with home 6= Other audit procedures
country auditing standards by an 7= No audit or independent
independent accounting firm. review
3= Review of the financial statements of the
branch or agency by external auditors, as
part of the audit of the parent
organization
SCHEDULE RAL - MEMORANDA
<TABLE>
<CAPTION>
Total Reporting
Branch or Agency
STATUTORY OR REGULATORY REQUIREMENT Dollar Amounts in Thousands Including its IBF
- ---------------------------------------------------------------- -----------------
<S> <C> <C>
as appropriate for the reporting institution (see instructions) RCFD
-----
1. Asset maintenance requirement................................. 3345 0 s.1.
---------
2. Asset pledge requirement/Capital equivalency deposit.......... 3349 2,029,428 s.2.
---------
3. FDIC asset maintenance requirement (for FDIC insured branches
only):
a. Average liabilities........................................ 2334 N/A s.3.a.
---------
b. Eligible assets............................................ 2387 N/A s.3.b.
---------
</TABLE>
<PAGE>
SCHEULE A - CASH AND BALANCES DUE FROM DEPOSITORY INSTITUTIONS
NOTE: EXCLUDE all transactions with related depository institutions
<TABLE>
<CAPTION>
---(Column A)---- ---(Column B)----
Total Reporting
Branch or Agency
Dollar Amounts in Thousands Including its IBF IBF Only
- -------------------------------------------------- ------------------ -----------------
<S> <C> <C> <C>
1. Cash item in process of collection RCFD RCFW
---- ----
and unposted debits............................ 0020.. 46 0020.. 0 1.
----------- ----------
2. Currency and coin (U.S. and foreign)........... 0060.. 59 2.
----------- ----------
3. Balances due from depository institutions in
the U.S.:
a. U.S. branches and agencies of other foreign
banks (including their IBFs) ............... 0083.. 169,000 0083.. 0 3.a.
----------- ----------
b. other depository institutions in the U.S.
(including their IBFs) ..................... 0085.. 17,514 0085.. 0 3.b.
----------- ----------
4. Balances due from banks in foreign countries
and foreign central banks:
a. Foreign branches of U.S. banks.............. 0073.. 0 0073.. 0 4.a.
----------- ----------
b. Other banks in foreign countries and foreign
central banks............................... 1884.. 63,605 1884.. 0 4.b.
----------- ----------
5. Balance due from Federal Reserve Banks......... 0090.. 45,358 5.
----------- ----------
6. Total (sum of items 1 through 5) (must equal RCXY RCXY
---- ----
Schedule RAL, item 1.a.)....................... 0010.. 315,582 0010.. 0 6.
----------- ----------
MEMORANDUM
- ------------
1. Noninterest-bearing balances due from commercial RCFD RCFN
banks in the U.S. (including their IBFs) ---- ----
(included in item 3 above)...................... 0050.. 17,514 0050.. 0 M.1.
----------- ----------
</TABLE>
<PAGE>
SCHEDULE C -- LOANS
Part I. Loans and Leases
Net of unearned income.
NOTE: EXCLUDE all transactions with related depositary institutions.
<TABLE>
<CAPTION>
-----(Column A)----- -----(Column B)-----
Total Reporting
Branch or Agency
Dollar Amounts in Thousands Including its IBF IBF Only
- --------------------------------------------------------------- -------------------- --------------------
<S> <C> <C> <C>
1. Loans secured by RCFD RCFW
---- ----
real estate.................................................. 1410.. 251,772 1410.. 0 1.
-------------- --------------
2. Loans to depository institutions:
a. To commercial banks in the U.S. (including their IBFs):
(1) To U.S. branches and agencies of other foreign banks.. 1506.. 553,254 1506.. 175,254 2.a.(1)
-------------- --------------
(2) To other commercial banks in the U.S.................. 1507.. 26,000 1507.. D 2.a.(2)
-------------- --------------
b. To other depository institutions in the U.S. (including
their IBFs)............................................... 1517.. 0 1517.. 0 2.b.
-------------- --------------
c. To banks in foreign counties:
(1) To foreign branches of U.S. banks..................... 1513.. 0 1513.. 0 2.c.(1)
-------------- --------------
(2) To other banks in foreign countries................... 1516.. 343,227 1516.. 253,569 2.c.(2)
-------------- --------------
3. Loans to other financial institutions........................ 1520.. 2,799,397 1520.. 0 3.
-------------- --------------
4. Commercial and industrial loans:
a. To U.S. addressees (domicile)............................. 1763.. 1,373,431 1763.. 0 4.a.
-------------- --------------
b. To non-U.S. addressees (domicile)......................... 1764.. 276,403 1764.. 34,514 4.b.
-------------- --------------
5. Acceptances of other banks:
a. Of U.S. banks............................................. 1756.. 64 1756.. 0 5.a.
-------------- --------------
b. Of foreign banks.......................................... 1757.. 199 1757.. 0 5.b.
-------------- --------------
6. Loans to foreign governments and official institutions
(including foreign central banks)............................ 2081.. 0 2081.. 0 6.
-------------- --------------
7. Loans for purchasing or carrying securities (secured and
unsecured)................................................... 1545.. 170,619 1545.. 0 7.
-------------- --------------
8. All other loans (include state and local obligations other
than securities and loans to individuals).................... 1685.. 173,348 1685.. 0 8.
-------------- --------------
9. Lease financing receivables (net of unearned income):
a. Of U.S. addressees (domicile)............................. 2182.. 137,914 2182.. 0 9.a.
-------------- --------------
b. Of non-U.S. addressees (domicile)......................... 2183.. 0 2183.. 0 9.b.
-------------- -------------
10. Less: Any unearned income on loans reflect in items 1-8
above........................................................ 2123.. 0 2123.. 0 10.
-------------- --------------
11. Total loans and leases, net of unearned income (sum of items
1 through 9 minus item 10) (must equal Schedule RAL, RCXX RCXY
---- ----
item 1.a).................................................... 2122.. 6,105,628 2122.. 463,357 11.
-------------- --------------
MEMORANDA
- ---------
1. Not applicable............................................... RCFD
----
2. Holdings of own acceptances included in Schedule C, pt 1,
item 4....................................................... 3341.. 168,143 M.2.
--------------
3. Commercial and industrial loans with remaining maturity of
one year or less:
a. With predetermined interest rates......................... 6119.. 837,381 M.3.a.
--------------
b. With floating interest rates.............................. 6120.. 130,502 M.3.b.
--------------
4. Commercial and industrial loans with remaining maturity of
more than one year:
a. With predetermined interest rates......................... 6122.. 654,614 M.4.a.
--------------
b. With floating interest rates.............................. 6123.. 11,500 M.4.b.
--------------
</TABLE>
<PAGE>
SCHEDULE E -- DEPOSIT LIABILITIES AND CREDIT BALANCES
NOTE: EXCLUDE all transactions with related depositary institutions.
<TABLE>
<CAPTION>
-Total Deposit Liabilities and Credit Balances, Excluding IBF-
---------Transaction Accounts--------- Nontransaction Accts.
(Column A) (Column B) (Column C) (Column D)
Total
Total transaction nontransaction
accounts and Memo: Total demand accounts
credit balances deposits (included (including MMDAs) IBF deposit
Dollar Amounts in Thousands (excluding IBF) in Column A) (excluding IBF) liabilities*
- ------------------------------ ------------------ ------------------ -------------------- -----------------
<S> <C> <C> <C> <C> <C>
1. Individuals, partnerships,
and corporations: RCON RCON RCON RDFN
a. U.S. addressees (domicile).... 1641.. 65,856 2223.. 65,856 2242.. 12,545,444 1666 0 1.a
------------ ------------ ------------ ------------
b. Non-U.S. addressees(domicile). 1642.. 251,815 2226.. 251,815 2251.. 181,352 1667.. 88,079 1.b
------------ ------------ ------------ ------------
2. Commercial banks in the U.S.
(including their IBFs):
a. U.S. Branches and agencies of
other foreign banks.......... 1643.. 0 2313.. 0 2347.. 1,418,100 1668.. 10,000 2.a
------------ ------------ ------------ ------------
b. Other commercial banks in the
U.S.......................... 1645.. 0 2316.. 0 2348.. 114,500 1669.. 0 2.b
------------ ------------ ------------ ------------
3. Banks in foreign countries:
a. Foreign branches of U.S.
Banks........................ 1646.. 6 2323.. 6 2367.. 163,750 1671.. 0 3.a
------------ ------------ ------------ ------------
b. Other banks in foreign
countries.................... 1647.. 93,829 2326.. 93,829 2373.. 983,816 1672.. 8,000 3.b
------------ ------------ ------------ ------------
4. Foreign governments and official
institutions (including foreign
central banks).................. 1649.. 1,037 2300.. 1,037 2377.. 690,418 2650.. 223,892 4.
------------ ------------ ------------ ------------
5. All other deposits and credit
balances........................ 1650.. 14,037 1654.. 0 2259.. 300,926 2261.. 0 5.
------------ ------------ ------------ ------------
RCXZ
----
6. Certified and official checks... 2330.. 31,298 2330.. 31,298 6.
------------ ------------
7. Total deposits and credit
balances (sum of Columns A, C,
and D must equal Schedule RAL,
item 4.a, Column A. Column D
must equal Schedule RAL, RCOM RCOM RCOM RCKY
---- ---- ---- ----
item 4.a, Column B)............. 1653.. 457,876 2210.. 443,841 2385.. 16,395,306 2205.. 329,971 7.
------------ ------------ ------------ ------------
</TABLE>
- -------
* Amounts in this column should EXCLUDE those IBF liabilities to be reported as
"Federal Funds purchased and securities sold under agreements to repurchase"
or as "Other borrowed money."
MEMORANDA
<TABLE>
<CAPTION>
Total Reporting
Branch or Agency
Dollar Amounts in Thousands Excluding its IBF
- ------------------------------------------------------------------- ------------------
<S> <C> <C>
1. Components of total nontransaction accounts (included in item RCON
7, Column C): ----
a. Time deposits of $100,000 or more............................ 2604.. 16,397,824 M.1.a
------------
b. Not applicable.
c. Time certificates of deposit of $100,000 or more with
remaining maturity of more than 12 months.................... 6643.. 390,000 M.1.c
------------
</TABLE>
<PAGE>
SCHEDULE K - QUARTERLY AVERAGES (1)
NOTE: EXCLUDE all transactions with related depository institutions.
Total Reporting
Branch or Agency
Dollar Amounts in Thousands including its IBF
- -------------------------------------------------------- -----------------
ASSETS RCFD
- ------ ----
1. Interest-bearing balances due from depository
institutions (corresponds to part of Schedule RAL,
item 1.a, Column A)...................................3381.. 415,769 1.
-----------
2. Federal funds sold and securities purchased under
agreements to recall (corresponds to Schedule RAL,
item 1.d, Column A)...................................3365.. 783,311 2.
-----------
3. Total loans, net of unearned income (corresponds to
Schedule RAL, item 1.e, Column A).....................3360.. 5,208,261 3.
-----------
4. Loans to banks in foreign countries (corresponds to
Schedule C, item 2.c, Column A).......................3105.. 355,182 4.
-----------
5. Total claims on nonrelated parties (corresponds to
Schedule RAL, item 1.l, Column A).....................3106.. 19,655,449 5.
-----------
LIABILITIES
- -----------
6. Time certificates of deposit of $100,000 or more
(corresponds to Schedule E, Memorandum item 1.a)......3545.. 15,262,727 6.
-----------
7. Interest-bearing deposits and credit balances
(corresponds to part of Schedule RAL, item 4.a,
Column A).............................................3107.. 14,694,156 7.
-----------
8. Federal funds purchased and securities sold under
agreements to repurchase (corresponds to Schedule
RAL, item 4.b, Column A)..............................3353.. 2,724,561 8.
-----------
9. Other borrowed money (corresponds to Schedule RAL,
item 4.c, Column A)...................................3355.. 244,126 9.
-----------
- -------------------
(1) For all items, branches and agencies have the option of reporting either
(1) an average of daily figures for the quarter or (2) an average of weekly
figures (i.e., the Wednesday of each week of the quarter).
<PAGE>
<TABLE>
SCHEDULE L - OFF-BALANCE-SHEET ITEMS
NOTE: EXCLUDE all transactions with related depository institutions.
Total Reporting
Branch or Agency
Dollar Amounts in Thousands including its IBF
- -------------------------------------------------------- -----------------
<S> <C>
1. Commitments to make or RCFD
purchase loans........................................3423..23,411,649 1.
----------
2. Spot foreign exchange contracts.......................8765..35,887,055 2.
----------
3. Standby letters of credit:
a. Total..............................................3375.. 3,443,518 3.a.
----------
(1) To U.S. addressees (domicile)..................3376.. 2,737,995 3.a.(1)
----------
(2) To non-U.S. addressees (domicile)..............3377.. 705,523 3.a.(2)
----------
b. Amount of total standby letters of credit in
item 3.a conveyed to others through participation..3378.. 991,868 3.b.
----------
4. Commercial and similar letters of credit..............3411.. 116,911 4.
----------
5. Participations in acceptances conveyed to others
by the reporting branch or agency (as described in
the instructions).....................................3428.. 0 5.
----------
6. Participations in acceptances acquired by the reporting
(non-accepting) branch or agency (as described in the
instructions)........................................3429.. 0 6.
----------
7. All other off-balance-sheet contingent liabilities
greater than or equal to 1/2 percent of total
claims on nonrelated parties as reported on Schedule
RAL, from item 1.i...................................5602.. 4,760,540 7.
----------
List below each component of this item greater than
or equal to 1 percent of total claims on nonrelated
parties as reported on Schedule RAL, item 1.i:
TEXT RCFD
---- ----
a. 5598: BOOK VALUE OF WRAP CONTRACTS 5598..6,507,107 7.a.
--------------------------------- ---------
b. 5600: OUTSTANDING INDENTURES 5600.. 253,433 7.b.
--------------------------------- ---------
c. 5601: 5601.. 0 7.c.
--------------------------------- ---------
8. All other off-balance-sheet contingent claims
(assets) greater than or equal to 1/2 percent of
total claims on nonrelated parties as reported on
Schedule RAL, item 1.i...............................5603.. 0 8.
-----------
List below each component of this item greater than
or equal to 1 percent of total claims on nonrelated
parties as reported on Schedule RAL, item 1.i:
TEXT RCFD
---- ----
a. 5604: 5604.. 0 8.a.
--------------------------------- ---------
b. 5605: 5605.. 0 8.b.
--------------------------------- ---------
c. 5606: 5606.. 0 8.c.
--------------------------------- ---------
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------
(Column A) (Column B) (Column C) (Column D)
Equity Commodity
Off-Balance-Sheet Derivatives Position Interest Rate Foreign Exchange Derivative and Other
Indicators(1) Contracts Contracts(2) Contracts Contracts
- --------------------------------------------------------------------------------------------------------------
9. Gross amounts (e.g., national
amounts): RCFD RCFD RCFD RCFD
---- ---- ---- ----
a. Futures contracts..................8693.. 61,020,633 8694.. 1,159,229 8695.. 0 8696.. 179,425 9.a.
----------- ----------- --------- ---------
b. Forward contracts..................8697.. 65,766,433 8698..252,636,013 8699.. 0 8700..1,655,850 9.b.
----------- ----------- --------- ---------
c. Exchange-traded option contracts:
(1) Written options................8701.. 5,950,468 8702.. 0 8703.. 0 8704.. 38,900 9.c1
----------- ----------- --------- ---------
(2) Purchased options..............8705.. 1,493,301 8706.. 0 8707.. 0 8708.. 33,370 9.c2
----------- ----------- --------- ---------
d. Over-the-counter option contracts:
(1) Written options................8709..232,514,572 8710.. 9,571,359 8711.. 0 8712.. 237,987 9.d1
----------- ----------- --------- ---------
(2) Purchased options..............8713..235,590,532 8714.. 7,734,864 8715.. 0 8716.. 236,283 9.d2
----------- ----------- --------- ---------
e. Swaps..............................3450..477,169,817 3826.. 12,321,416 8719.. 0 8720.. 16,697 9.e
----------- ----------- --------- ---------
</TABLE>
- --------------------
(1) For each column, sum of items 9.a through 9.e must equal sum of items 10,
11.a, and 11.b.
(2) Spot foreign exchange is reported in Schedule L. item 2.
<PAGE>
SCHEDULE L - CONTINUED
NOTE: EXCLUDE all transactions with related depository institutions.
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ----------------------------------------------------------------------------------------------------------------------------------
(Column A) (Column B) (Column C) (Column D)
Foreign Equity Commodity
Off-Balance-Sheet Derivatives Interest Rate Exchange Derivative and other
Position Indicators Contracts Contracts(1) Contracts Contracts
- -------------------------------- ------------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10. Total gross notional amount RCFD RCFD RCFD RCFD
of derivative contracts ---- ---- ---- ----
held for trading ........... A126 1,072,969,075 A127 283,330,794 8723 0 8724 2,398,512 10.
------------- ------------ ------------ -------------
11. Total gross notional amount
of derivative contracts
held for purposes other
than trading:
a. Contracts marked
to market ............... 8725 0 8726 0 8727 0 8728 0 11.a.
------------- ------------ ------------ -------------
b. Contracts not marked
to market ............... 8729 6,578,481 8730 92,887 8731 0 8732 0 11.b.
------------- ------------ ------------ -------------
The following items should be completed by those branches or agencies with total assets of $100 million or more.
Dollar Amounts in Thousands
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(Column A) (Column B) (Column C) (Column D)
- -------------------------------- ------------- ----------- ------------- -------------
12. Gross fair values of
derivative contracts: RCFD RCFD RCFD RCFD
a. Contracts held for ---- ---- ---- ----
trading:
(1) Gross positive fair
value .............. 8733 4,134,570 8734 6,083,748 8735 0 8736 37,854 12.a1
------------- ------------ ------------ -------------
(2) Gross negative fair
value .............. 8737 4,163,767 8738 6,787,833 8739 0 8740 61,349 12.a2
------------- ------------ ------------ -------------
b. Contracts held for
purposes other than
trading that are marked
to market:
(1) Gross positive fair
value .............. 8741 0 8742 0 8743 0 8744 0 12.b1
------------- ------------ ------------ -------------
(2) Gross negative fair
value .............. 8745 0 8746 0 8747 0 8748 0 12.b2
------------- ------------ ------------ -------------
c. Contracts held for
purposes other than
trading that are not
marked to market:
(1) Gross positive
fair value ......... 8749 100,489 8750 0 8751 0 8752 0 12.c1
------------- ------------ ------------ -------------
(2) Gross negative
fair value ......... 8753 35,977 8754 2,944 8755 0 8756 0 12.c2
------------- ------------ ------------ -------------
MEMORANDA
- ---------
1. National amount of all credit derivatives on which the reporting branch or agency
is the guarantor ................................................................................. A534 0 N.1.
------------
2. National amount of all credit derivatives on which the reporting branch or agency
is the beneficiary ............................................................................... A535 0 N.2.
------------
</TABLE>
- -------------------------
(1) Spent foreign exchange is reported in Schedule L, item 2.
<PAGE>
SCHEDULE M - DUE FROM/DUE TO RELATED INSTITUTIONS
IN THE U.S. AND IN FOREIGN COUNTRIES (CONFIDENTIAL)
The Federal Financial Institutions Examination Council regards the individual
respondent information provided by each reporting Institution on this
schedule as confidential. If it should be determined subsequently that any
information collected on this schedule must be released respondents will be
notified.
<TABLE>
<CAPTION>
Total Reporting Branch or Agency
--------including its IBF-------
(Column A) (Column B)
Dollar Amounts in Thousands Gross due from Gross due to
- ------------------------------------------------------------------------ -------------- ------------
<S> <C> <C> <C> <C> <C>
PART I: Transactions of reporting institution including its IBF with
related depository institutions, reflected in net due from/due
to items (items 2.a and 5.a; Column A) in Schedule RAL
Amounts outstanding as of report date:
1. U.S. domiciled offices of related depository institutions
(including their IBFs): RCFD RCFD
a. Related branches and agencies in the U.S.: ---- ----
(1) In same state as the reporting office ........................ 3008 0 3007 0 1.a.(1)
-------------- ------------
(2) In other states .............................................. 3010 0 3009 0 1.a.(2)
-------------- ------------
b. Offices in the U.S. of other related depository Institutions
(including Edge and Agreement corporations and New York
investment companies) ............................................ 3171 0 3172 0 1.b
-------------- ------------
2. Non-U.S. domiciled offices of related depository institutions:
a. Head offices of parent bank ...................................... 3173 2,858,729 3174 3,381,280 2.a.
-------------- ------------
b. Non-U.S. branches and agencies of the parent bank:
(1) Offices in the Caribbean ..................................... 3175 2,404,276 3176 8,018,896 2.b.(1)
-------------- ------------
(2) Other offices ................................................ 3177 13,546,172 3178 423,956 2.b.(2)
-------------- ------------
c. Other non-U.S. offices of related depository institutions ......... 3179 2,639,629 3180 30,925 2.c.
-------------- ------------
3. Total (sum of items 1.a, 1.b, and 2.a through 2.c) .................. 3002 21,648,806 3001 11,855,055 3.
-------------- ------------
4. Net due from head office and other related depository institutions
(item 3, Column A minus Column B - enter the amount with a minus
sign (-) if Column B is greater than Column A. The absolute value
of item 4 must equal Schedule RAL, item e.a if in item 3 above
Column A is greater than Column B, or Schedule RAL, item 5.a if in
item 3 above Column B is greater than RCFD
Column A).................................... ---- .. 9,793,751 4.
3035 -----------
MEMORANDA
- ---------
1. Average daily (or weekly) amounts for the quarter ending with the
report date:
a. Related depository offices domiciled in the U.S. (corresponds
to items 1.a and 1.b of Part 1 above) ............................ 3026 0 3025 0 M.1.a.
-------------- ------------
b. Related depository offices domiciled outside of the U.S.
(corresponds to item 2.a theough 2.c of Part 1 above) ............ 3028 16,921,089 3027 12,575,569 M.1.b.
-------------- ------------
2. Sum of those parts of items 1.b and 2.c of Part 1 above that are
with wholly-owned depository subsidiaries of the parent bank ........ 3181 2,839,629 3182 30,925 M.2.
-------------- ------------
3. Trading assets and liabilities, related parties (amount is
included in item 3 above, and in Schedule RAL, items 2.a and
5.a, respectively) .................................................. A006 549,408 A007 566,241 M.3.
-------------- ------------
</TABLE>
<PAGE>
SCHEDULE M (CONFIDENTIAL) - CONTINUED
<TABLE>
<CAPTION>
------------IBF Only-------------
(Column A) (Column B)
Dollar Amounts in Thousands Gross due from Gross due to
- ---------------------------------------------------- ---------------- --------------
<S> <C> <C> <C>
PART II: Transactions of reporting institution's IBF
with related depository institutions.
Amounts outstanding as of report date:
1. IBF Transactions with related depository
institutions other than transactions with
establishing entity: RCFM BCFN
---- ----
a. IBF transactions with IBFs of related
depository institutions domiciled in the
U.S. (included in Part I, item 1) . . . . . . . . 3004 . . . 0 3003 . . . 0 1.a.
--------- ---------
b. IBF transactions with related depository
institutions domiciled outside the U.S.
(included in Part I, item 2):
(1) Head office of parent bank . . . . . . . . . .3173 . . . 0 3174 . . . 13,936 1.b.(1)
--------- ---------
(2) Non-U.S. branches and agencies of the
parent bank:
(a) Offices in the Caribbean . . . . . . . . 3175 . . . 439,856 3176 . . . 0 1.b.(2)(a)
--------- ---------
(b) Other offices . . . . . . . . . . . . . . 3177 . . . 0 3178 . . . 7,454 1.b.(2)(b)
--------- ---------
(3) Other related depository institutions
domiciled outside the U.S. . . . . . . . . . 3179 . . . 0 3180 . . . 0 1.b.(3)
--------- ---------
c. Total (sum of items 1.a and 1.b(1) through 1.b(3)
above) . . . . . . . . . . . . . . . . . . . . . .3002 . . . 439,856 3001 . . . 21,390 1.c.
--------- ---------
d. IBF net due from related depository institutions
other than establishing entity (item 1.c.,
Column A minus Column B -
enter the amount with a RCFM
minus sign (-) if Column B ----
is greater than Column A) . . . . 3193 . . . 416,466 1.d.
-------
2. IBF net due from establishing
entity (if net due to, enter RCFM
the amount with a minus ----
sign (-) . . . . . . . . . . . . . . 1888 . . . ( 6,733) 2.
-------
3. IBF net due from all related
depository institutions (sum of
items 1.d and 2. above; if
negative, enter the amount with
a minus sign (-)). (If this item
is positive, it must equal
Schedule RAL, item 2.b; if this
item is negative, its absolute RCFM
value must equal Schedule RAL, ----
item 5.b.) . . . . . . . . . . . . . 3194 . . . 411,733 3.
-------
Total Importing Branch or Agency
---------Including its IBF----------
(Column A) (Column B)
Dollar Amounts in Thousands Gross due from Gross due to
- ---------------------------------------------------- -------------- --------------
PART III: Transactions of reporting institution
including its IBF with related
nondepository subsidiaries. These are not
reflected in the net due from/due to items
(items 2.a and 5.a) in Schedule RAL.
Amounts outstanding as of report date with: RCFD RCFD
---- ----
1. Related nondepository majority-owned
subsidiaries in the U.S. . . . . . . . . . . . . . . . 3030 . . . 2,967,094 3029 . . . 293,972
--------- --------- 1.
2. Related nondepository majority-owned subsidiaries
in foreign countries . . . . . . . . . . . . . . . . 3032 . . . 17,407 3031 . . . 102,252 2.
--------- ---------
MEMORANDUM
1. Amount of items 1 and 2 above for wholly-owned
related nondepository subsidiaries. . . . . . . . . . 3034 . . . 2,984,501 3033 . . . 396,224 M.1.
--------- ---------
Total Reporting
Branch or Agency
Dollar Amounts in Thousands Including its IBF
- ------------------------------------------------------------------------------ -------------------
PART IV: Confidential Loan information.
1. Amount of allowance for loan losses, if any, RCFD
carried on the books of the reporting branch ----
or agency including its IBF . . . . . . . . . . . . . . . . . . . . . . . . 3195 . . . 55,833 1.
-------
2. Other real estate owned . . . . . . . . . . . . . . . . . . . . . . . . . . 2150 . . . 0 2.
-------
</TABLE>
<PAGE>
SCHEDULE M (CONFIDENTIAL) - CONTINUED
<TABLE>
<CAPTION>
Total Reporting
Branch or Agency
Dollar Amounts in Thousands Including its IBF
- ------------------------------------------------------------------------------------- -------------------
<S> <C> <C> <C>
PART V: Off-balance-sheet items: with related depository institutions. RCFD
1. Commitments to make or purchase loans . . . . . . . . . . . . . . . . . . . . . . 5766 . . 0 1.
-----------
2. Spot foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . A125 . . 14,259,799 2.
-----------
3. Total standby letters of credit . . . . . . . . . . . . . . . . . . . . . . . . . .5770 . . 26,440 3.
-----------
4. Commercial and similar letters of credit . . . . . . . . . . . . . . . . . . . . . 5771 . . 17,961 4.
-----------
5. Participations in acceptances conveyed to related depository
institutions by the reporting branch or agency (as described in the
instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5772 . . 0 5.
-----------
6. Participations in acceptances acquired from related depository
institutions by the reporting (non-accepting) branch or agency (as described
in the instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5773 . . 0 6.
-----------
7. All other off-balance-sheet contingent liabilities greater than or equal
to 1/2 percent of total claims on related depository institutions as reported
in Schedule M, Part 1, Item 3, Columns . . . . . . . . . . . . . . . . . . . . . . 8569 . . 0 7.
-----------
List below each component of this item greater than or equal to 1 percent
of total claims on related depository institutions as reported on Schedule M,
Part 1, Item 3, Column A:
TEXT RCFD
---- ----
a. 8570: 8570.. 0 7.a.
--------------------------- -------------
b. 8571: 8571.. 0 7.b.
--------------------------- -------------
c. 8572: 8572.. 0 7.c.
--------------------------- -------------
8. All other off-balance-sheet contingent claims (assets) greater than or
equal to 1/2 percent of total claims on related depository institutions as
reported in Schedule M, Part 1, Item 3, Column A . . . . . . . . . . . . . . . . . 8573 . . 0 8.
-----------
List below each component of this item greater than or equal to 1 percent
of total claims on related depository institutions as reported on
Schedule M, Part 1, Item 3, Column A:
TEXT RCFD
---- ----
a. 8574: 8574.. 0 8.a.
--------------------------- -------------
b. 8575: 8575.. 0 8.b.
--------------------------- -------------
c. 8576: 8576.. 0 8.c.
--------------------------- -------------
</TABLE>
<TABLE>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------
(Column A) (Column B) (Column C) (Column D)
Equity Commodity
Off-Balance-Sheet Derivatives Position Interest Rate Foreign Exchange Derivative and Other
Indicators(1) Contracts Contracts(2) Contracts Contracts
- ------------------------------------------ -------------------- ------------------- ------------------- ------------------
<S> <C> <C> <C> <C>
9. Gross amounts (e.g., notional)
amounts: RCFD RCFD RCFD RCFD
---- ---- ---- ----
a. Futures contracts. . . . . . . . . . A008 . . 0 A009 . . 0 A010 . . 0 A037 . . 0 9.a.
---------- ----------- --------- ---------
b. Forward contracts. . . . . . . . . . A038 . . 1,427,514 A039 . . 26,330,666 A040 . . 0 A041 . . 667,428 9.b.
---------- ----------- --------- ---------
c. Exchange-traded option contracts:
(1) Written options . . . . . . . . A042 . . 0 A043 . . 0 A044 . . 0 A045 . . 0 9.c1
---------- ----------- --------- ---------
(2) Purchased options . . . . . . . A046 . . 0 A047 . . 0 A048 . . 0 A049 . . 0 9.c2
---------- ----------- --------- ---------
d. Over-the-counter option contracts:
(1) Written options . . . . . . . . A050 . . 0 A051 . . 8,875,394 A052 . . 0 A053 . . 128,310 9.d1
---------- ----------- --------- ---------
(2) Purchased options . . . . . . . A054 . . 0 A055 . . 10,978,929 A056 . . 0 A057 . . 112,995 9.d2
---------- ----------- --------- ---------
e. Swaps . . . . . . . . . . . . . . . A058 . . 0 A059 . . 0 A060 . . 0 A061 . . 10,018 9.e.
---------- ----------- --------- ---------
10. Total gross notional amount of
derivative contracts held for trading . A042 . . 1,427,514 A063 . . 46,184,989 A064 . . 0 A065 . . 918,751 10.
---------- ----------- --------- ---------
</TABLE>
- --------------------------
(1) For each column, sum of items 9.a through 9.e must equal sum of items 10,
11.a, and 11.b
(2) Spot foreign exchange is reported in Schedule M, Part V, item 2.
<PAGE>
SCHEDULE M (CONFIDENTIAL) - CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ----------------------------------------------------------------------------------------------------------------------------
(Column A) (Column B) (Column C) (Column D)
Equity Commodity
Off-Balance-Sheet Derivatives Position Interest Rate Foreign Exchange Derivative and Other
Indicators Contracts Contracts(1) Contracts Contracts
- ------------------------------------------ ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
11. Total gross notional amount of
derivative contracts held for
purposes other than trading: RCFD RCFD RCFD RCFD
---- ---- ---- ----
a. Contracts marked to market...........A066.. 0 A067.. 0 A068.. 0 A069.. 0 11.a.
----------- ----------- ----------- -----------
b. Contracts not marked to market.......A070.. 0 A071.. 0 A072.. 0 A073.. 0 11.b.
----------- ----------- ----------- -----------
The following items should be completed by those branches or agencies with total assets of $100 million or more.
12. Gross fair values of derivative
contracts:
a. Contracts held for trading: RCFD RCFD RCFD RCFD
---- ---- ---- ----
(1) Gross positive fair value........A074.. 77 A075.. 913,894 A076.. 0 A077.. 6,358 12.a1
----------- ----------- ----------- -----------
(2) Gross negative fair value........A078.. 1,373 A079.. 736,108 A080.. 0 A081.. 10,556 12.a2
----------- ----------- ----------- -----------
b. Contracts held for purposes other
than trading that are marked to
market:
(1) Gross positive fair value........A082.. 0 A083.. 0 A084.. 0 A085.. 0 12.b1
----------- ----------- ----------- -----------
(2) Gross negative fair value........A086.. 0 A087.. 0 A088.. 0 A089.. 0 12.b2
----------- ----------- ----------- -----------
c. Contracts held for purposes other
than trading that are not marked
to market:
(1) Gross positive fair value........A090.. 0 A091.. 0 A092.. 0 A093.. 0 12.c1
----------- ----------- ----------- -----------
(2) Gross negative fair value........A094.. 0 A095.. 0 A096.. 0 A097.. 0 12.c2
----------- ----------- ----------- -----------
MEMORANDA Dollar Amounts in Thousands
- ----------------------------------------------------------------------------------------------------------------------------
1. Notional amount of all credit derivatives on which the reporting branch or agency
in the guarantor..................................................................................A536.. 0 M.1.
-----------
2. Notional amount of all credit derivatives on which the reporting branch or agency
is the beneficiary................................................................................A537.. 0 M.2.
-----------
</TABLE>
- -------------
(1) Spot foreign exchange is reported in Schedule M, part V, item 2.
<PAGE>
SCHEDULE N - PAST DUE, NONACCRUAL, AND RESTRUCTURED LOANS (CONFIDENTIAL)
The FFIEC regards the individual respondent information provided by each
reporting institution on this schedule as confidential. If it should be
determined subsequently that any information collected on this schedule must
be released, respondents will be notified.
NOTE: EXCLUDE all transactions with related depository institutions.
<TABLE>
<CAPTION>
---------------Total Reporting Branch or Agency Including its IBF----------------
(Column A) (Column B) (Column C) (Column D)
Past due 30 Past due 90 days Restructured and
through 89 days or more and in compliance with
Dollar Amounts in Thousands and still accruing still accruing Nonaccrual modified terms
- ---------------------------------------- ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
1. Total loans to U.S. addressees
(domicile): RCFD RCFD RCFD RCFD
---- ---- ---- ----
a. Commercial and industrial Loans......1606.. 0 1607.. 0 1608.. 4,231 1609.. 0 1.a.
------------- ------------- ------------- -------------
b. Loans secured by real estate.........1421.. 0 1422.. 0 1423.. 0 1424.. 0 1.b.
------------- ------------- ------------- -------------
c. All other loans (including all
lease financing receivables..........3183.. 0 3184.. 0 3185.. 0 3186.. 0 1.c.
------------- ------------- ------------- -------------
2. Total loans to non-U.S. addressees
(domicile)..............................1623.. 0 1624.. 0 1625.. 0 1627.. 0 2.
------------- ------------- ------------- -------------
3. Total (sum of items 1.a through 1.c
and 2)..................................1406.. 0 1407.. 0 1403.. 4,231 1404.. 0 3.
------------- ------------- ------------- -------------
MEMORANDUM
1. Book value of loans sold or otherwise
transferred to head office or to related
institutions and still serviced by
the reporting branch or agency..........1628.. 0 1629.. 0 1562.. 0 1637.. 0 M.1.
------------- ------------- ------------- -------------
2. Interest rate, foreign exchange rate,
and other commodity and equity contracts:
a. Book value of amounts carried as
assets...............................3522.. 0 3528.. 0 M.2.a
------------- -------------
b. Replacement cost of contracts with
a positive replacement cost..........3529.. 0 3530.. 0 M.2.b
------------- -------------
</TABLE>
<PAGE>
SCHEDULE O - OTHER DATA FOR DEPOSIT INSURANCE ASSESSMENTS
This schedule is to be completed only by branches whose deposits are insured by
the FDIC.
<TABLE>
<CAPTION>
REPORTING BRANCH
DOLLAR AMOUNTS IN THOUSANDS EXCLUDING ITS IRF
- ------------------------------------------------------------------------------------------- ------------------------
<S> <C> <C> <C> <C> <C>
RCXZ
1. Total deposits of the branch (excluding IBF): ----
a. Total demand deposits (excluding IBF)..................................................2210.. N/A 1.a.
------------
RCON
b. Total time and savings ----
deposits (excluding IBF)...............................................................3511.. N/A 1.b.
------------
c. Interest accrued and unpaid on deposits (excluding IBF)................................5763.. N/A 1.c.
------------
2. Unposted debits:
a. Actual amount of all unposted debits...................................................0030.. N/A 2.a.
------------
OR
b. Separate amount of unposted debits:
(1) Actual amount of unposted debits to demand deposits................................0031.. N/A 2.b.(1)
------------
(2) Actual amount of unposted debits to time and savings deposits......................0032.. N/A 2.b.(2)
------------
3. Unposted credits (see instructions):
a. Actual amount of all unposted credits..................................................3510.. N/A 3.a.
------------
OR
b. Separate amount of unposted credits:
(1) Actual amount of unposted credits to demand deposits...............................3512.. N/A 3.b.(1)
------------
(2) Actual amount of unposted credits to time and savings deposits.....................3514.. N/A 3.b.(2)
------------
4. Deposits of majority-owned depository subsidiaries of the parent foreign bank (not
included in total deposits):
a. Demand deposits of majority-owned depository subsidiaries..............................3141.. N/A 4.a.
------------
b. Time and savings deposits of majority-owned depository subsidiaries....................3142.. N/A 4.b.
------------
c. Interest accrued and unpaid in deposits of majority owned depository subsidiaries......5764.. N/A 4.c.
------------
5. Deposits of wholly-owned nondepository subsidiaries of the parent foreign bank (included
in total deposits):
a. Demand deposits of wholly-owned nondepository subsidiaries.............................3143.. N/A 5.a.
------------
b. Time and savings deposits of wholly-owned nondepository subsidiaries...................3144.. N/A 5.b.
------------
c. Interest accrued and unpaid on deposits of wholly-owned nondepository subsidiaries.....5765.. N/A 5.c.
------------
6. Reserve balances actually passed through to the Federal Reserve by the reporting branch on
behalf of its respondent depository institutions that are also reflected on deposit
liabilities of the reporting branch:
a. Amount reflected in demand deposits (included in item 1.a above).......................2314.. N/A 6.a.
------------
b. Amount reflected in time and savings deposits (included in item 1.b above).............2315.. N/A 6.b.
------------
7. Deposits in lifeline accounts.............................................................5596..//////////// 7.
MEMORANDA
- ---------
1. Total deposits of the branch (excluding IBF)
(sum of Memorandum items 1.a(1) and 1.b(1) must equal sum of items 1.a and 1.b above):
a. Deposit accounts of $100,000 or less: RCON
(1) Amount of deposit accounts of $100,000 or less.....................................2702.. N/A M.1.a.(1)
RCON NUMBER ------------
(2) Number of deposit accounts of ---- ------
$100,000 or less (June report only).................................3779.. N/A M.1.a.(2)
-----------
b. Deposit accounts of more than $100,000:
(1) Amount of deposit accounts of more than $100,000...................................2710.. N/A M.1.b.(1)
RCON NUMBER ------------
(2) Number of deposit accounts of ---- ------
more than $100,000..................................................2772.. N/A M.1.b.(2)
-----------
</TABLE>
<PAGE>
SCHEDULE O - CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS
- ------------------------------------------------------------------------------------------- -------------------------
<S> <C> <C> <C>
MEMORANDA - Continued
- ---------------------
2. Estimated amount of uninsured deposits in the branch (excluding IBF):
a. An estimate of your branch's uninsured deposits can be determined by multiplying the
number of deposits of more than $100,000 reported in Memorandum Item 1.b.(2)
above by $100,000 and subtracting the result from the amount of deposit accounts of
more than $100,000 reported in Memorandum item 1.b.(1) above.
Indicate in the appropriate box at the right whether your branch has a method or YES NO
procedure for determining a better estimate of uninsured deposits than the estimate --- --
described above........................................................................6961 X M.2.a.
b. If the box marked YES has been checked, report the estimate of uninsured deposits
determined by using your branch's method or procedure..................................5597.. N/A M.2.b.
------------
3. Preferred deposits........................................................................5590.. N/A M.3.
------------
4. Adjustments to demand deposits (excluding IBF) reported in Schedule E for certain
reciprocal demand balances:
a. Amount by which demand deposits would be reduced if reciprocal demand balances
between the reporting branch and savings associations were reported on a net basis
rather than a gross basis in Schedule E................................................8785.. N/A M.4.a.
------------
b. Amount by which demand deposits would be increased if reciprocal demand balances
between the reporting branch and U.S. banks were reported on a gross basis rather
than a net basis in Schedule E.........................................................A181 N/A M.4.b.
------------
c. Amount by which demand deposits would be reduced if cash items in process of
collection were included in the calculation of net reciprocal demand balances
between the reporting branch and U.S. banks and savings associations in Schedule E.....A162 N/A M.4.c.
------------
5. Amount of assets netted against deposit liabilities on the balance sheet in
accordance with generally accepted accounting principles..................................A538.. N/A M.5.
------------
</TABLE>
SCHEDULE P - OTHER BORROWED MONEY
Note: EXCLUDE all transactions with related depository institutions.
<TABLE>
<CAPTION>
-----(COLUMN A)---- -----(COLUMN B)----
TOTAL REPORTING
BRANCH OR AGENCY
DOLLAR AMOUNTS IN THOUSANDS INCLUDING ITS IBF IBF ONLY
- ------------------------------------------------------------------- ------------------- -------------------
<S> <C> <C> <C> <C> <C>
1. Owed to nonrelated commercial banks in the U.S. (including
their IBFs): RFCD RCFM
---- ----
a. Owed to U.S. offices of nonrelated U.S. banks..................3312.. 620 3312.. 0 1.a.
------------ ------------
b. Owed to U.S. branches and agencies of nonrelated foreign banks.3313.. 15,000 3313.. 15,000 1.b.
------------ ------------
2. Owed to nonrelated banks in foreign countries:
a. Owed to foreign branches of nonrelated U.S. banks..............3314.. 3,349 3314.. 0 2.a.
------------ ------------
b. Owed to foreign offices of nonrelated foreign banks............3315.. 75,150 3315.. 0 2.b.
------------ ------------
3. Owed to others....................................................2869.. 77,183 2869.. 0 3.
------------ ------------
RCXX RCXY
4. Total (sum of items 1 through 3)(must equal Schedule RAL, ---- ----
item 4.c).........................................................3190.. 171,302 3190.. 15,000 4.
------------ ------------
MEMORANDUM RCFD
- ---------- ----
1. Immediately available funds with a maturity greater than one day
included in other borrowed money..................................2805.. 27,500 M.1.
------------
</TABLE>
<PAGE>
The FFIEC regards the information reported in this supplement as confidential
SUPPLEMENT
REPORT OF ASSETS AND LIABILITIES
Non - U.S. Branch Licensed in CAYMAN ISLANDS (TEXT 9031)
--------------
(country)
that is managed or controlled by DEUTSCHE BANK AG (TEXT 9010)
----------------
(legal title of U.S. branch or agency)
at close of business on June 30, 1997
-------------
<TABLE>
<CAPTION>
Total Reporting
Please read instructions carefully, Dollar Amounts in Thousands Non - U.S. Branch
- ---------------------------------------------------------------------------------------------- ----------------------
<S> <C> <C> <C>
ASSETS CRC?
----
1. Claims on U.S.-domiciled offices of related depository institutions denominated in U.S.
dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5527 . . . 7,393,877 1.
----------
2. Claims on all other U.S. addressees (including related nondepository institutions)
denominated in U.S. dollars:
a. Balances due from nonrelated depository institutions:
(1) With remaining maturities of one day or under continuing contract
("overnight") . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5528 . . . 0 2.a.(1)
----------
(2) All other maturities ("term") . . . . . . . . . . . . . . . . . . . . . . . . . . 5529 . . . 0 2.a.(2)
----------
b. Securities:
(1) U.S. Treasury securities and U.S. Government agency and corporation
obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1918 . . . 0 2.b.(1)
----------
(2) All other securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0373 . . . 0 2.b.(2)
----------
c. Loans:
(1) Loans secured by real estate . . . . . . . . . . . . . . . . . . . . . . . . . 1410 . . . 16,609 2.c.(1)
----------
(2) Loans to nonrelated depository institutions in the United States . . . . . . . 5530 . . . 711,460 2.c.(2)
----------
(3) Commercial and industrial loans . . . . . . . . . . . . . . . . . . . . . . . . 1763 . . . 3,059,743 2.c.(3)
----------
(4) All other loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5531 . . . 5,515,373 2.c.(4)
----------
(5) Less: Any unearned income on loans reflected in Items 2.c.(1) through 2.c.(4)
above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2123 . . . 0 2.c.(5)
----------
(6) Total loans, net of unearned income (sum of items 2.c.(1) through 2.c.(4)
above minus item 2.c.(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2122 . . . 9,303,185 2.c.(6)
----------
d. All other claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5532 . . . 6,091,824 2.d
----------
e. Total claims on U.S. addressees other than related depository institutions,
denominated in U.S. dollars (sum of Items 2.a, 2.b, 2.c.(6), and 2.d) . . . . . . . 5533 . . . 15,395,009 2.e
----------
3. Claims on all U.S. addressees denominated in currencies other than U.S. dollars . . . . . 5534 . . . 1,312,452 3.
----------
4. Claims on home-country addressees denominated in any currency:
a. Related depository institutions . . . . . . . . . . . . . . . . . . . . . . . . . . 3173 . . . 218,663 4.a
----------
b. Nonrelated depository institutions . . . . . . . . . . . . . . . . . . . . . . . . . 5536 . . . 9,356 4.b
----------
c. Home-country government and official institutions (including home-country central
bank) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5537 . . . 0 4.c
----------
d. All other home-country addressees . . . . . . . . . . . . . . . . . . . . . . . . . 5538 . . . 58,712 4.d
----------
5. Claims on all other non-U.S. addressees denominated in any currency . . . . . . . . . . . 5539 . . . 4,042,198 5.
----------
6. All other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2151 . . . 35,647 6.
----------
7. Total assets (sum of Items 1, 2.a, 3, 4, 5, and 6) . . . . . . . . . . . . . . . . . . . 2170 . . . 28,465,914 7.
----------
LIABILITIES
8. Liabilities to U.S.-domiciled offices of related depository institutions denominated in
U.S. dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5540 . . . 912,289 8.
----------
9. Liabilities to all other U.S. addressees (including related nondepository institutions)
denominated in U.S. dollars:
a. Liabilities to nonrelated depository institutions in the U.S.:
(1) With remaining maturities of one day or under continuing contract
("overnight") . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5541 . . . 17,909 9.a.(1)
----------
(2) All other maturities ("term") . . . . . . . . . . . . . . . . . . . . . . . . . 5542 . . . 231,620 9.a.(2)
----------
b. Liabilities to all other U.S. addressees denominated in U.S. dollars:
(1) With remaining maturities of one day or under continuing contract
("overnight") . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5544 . . . 6,426,930 9.b.(1)
----------
(2) All other maturities ("term") . . . . . . . . . . . . . . . . . . . . . . . . . 5545 . . . 9,658,937 9.b.(2)
----------
10. Liabilities to all U.S. addressees denominated in currencies other than U.S. dollars . . 5546 . . . 1,611,429 10.
----------
11. Liabilities to home-country addressees denominated in any currency:
a. Related depository institutions . . . . . . . . . . . . . . . . . . . . . . . . . . 3174 . . . 1,235,408 11.a
----------
b. Nonrelated depository institutions . . . . . . . . . . . . . . . . . . . . . . . . . 5548 . . . 3,094 11.b
----------
c. Home-country government and official institutions (including home-country central
bank) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5549 . . . 0 11.c
----------
d. All other home-country addressees . . . . . . . . . . . . . . . . . . . . . . . . . 5550 . . . 122,718 11.d
----------
12. Liabilities to all other non-U.S. addressees denominated in any currency . . . . . . . . 5551 . . . 7,988,568 12.
----------
13. All other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2916 . . . 257,012 13.
----------
14. Total liabilities (sum of items 8 through 13) . . . . . . . . . . . . . . . . . . . . . . 2950 . . . 28,465,914 14.
----------
</TABLE>
<PAGE>
Non - U.S. Branch Licensed in CAYMAN ISLANDS
--------------
(country)
MEMORANDA - TRANSACTIONS WITH U.S. ADDRESSEES DENOMINATED IN U.S. DOLLARS
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ---------------------------------------------------------------------------------------------- -----------------
<S> <C> <C> <C>
CRC?
----
1. Amount included in items 1 and 2.d above for U.S. Government securities purchased under
agreements to resell:
a. With original maturities of one day or under continuing contract ("overnight") . . . 5552 . . . . . . 0 M1.a
-----
b. All other maturities ("term") . . . . . . . . . . . . . . . . . . . . . . . . . . . 5553 . . . . . . 0
----- M1.b
2. Amount included in items 8 and 9 above for U.S. Government securities sold under
agreements to repurchase:
a. With depository institutions in the U.S. (related and nonrelated) (included in items
8 and 9.a. above):
(1) With original maturities of one day or under continuing contract
("overnight") . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5554 . . . . . . 0
----- M.2.a(1)
(2) All other maturities ("term") . . . . . . . . . . . . . . . . . . . . . . . . . 5555 . . . . . . 0
----- M.2.a(2)
b. With all other U.S. addressees (included in item 9.b above):
(1) With original maturities of one day or under continuing contract
("overnight") . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5556 . . . . . . 0
----- M.2.b(1)
(2) All other maturities ("term") . . . . . . . . . . . . . . . . . . . . . . . . . 5557 . . . . . . 0
----- M.2.b(2)
3. Amount included in item 9.b above for negotiable certificates of deposit issued by the
reporting foreign branch:
a. Held in custody by the reporting foreign branch or by the managing U.S. branch or
agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5558 . . . . . . 0
----- M.3.a.
b. All other negotiable certificates of deposit . . . . . . . . . . . . . . . . . . . . 5559 . . . . . . 0
----- M.3.b.
4. Amount included in item 9.b above for deposits that are guaranteed payable in the U.S.
or for which the depositor is guaranteed payment by a U.S. office:
a. With original maturities of one day or under continuing contract ("overnight") . . . 5560 . . . . . . 0
----- M.4.a.
b. All other maturities ("term") . . . . . . . . . . . . . . . . . . . . . . . . . . . 5561 . . . . . . 0
----- M.4.b.
YES NO
--- --
Does this supplement include data
covering other related U.S. agencies or branches? . . . . . . . . . . . . . . . . . . . . . . 6862 X
</TABLE>
If yes, list the city and state of each other related U.S. agency and branch
included in the report:
- ----------------------------, --------------------------- (TEX1 9130, TEX1 9200)
City, State
- ----------------------------, --------------------------- (TEX2 9130, TEX2 9200)
City, State
- ----------------------------, --------------------------- (TEX3 9130, TEX3 9200)
City, State
- ----------------------------, --------------------------- (TEX4 9130, TEX4 9200)
City, State
