<PAGE>
As Filed with the Securities and Exchange Commission on October 20, 1995
Registration No. 33-62665
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
COLLINS & AIKMAN PRODUCTS CO.
(Exact name of registrant as specified in its charter)
Delaware 38-1954600
(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
and its Guarantor Parent
Collins & Aikman Corporation
(Exact name of registrant as specified in its charter)
Delaware 13-3489233
(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
701 McCullough Drive
Charlotte, North Carolina 28262
(704) 547-8500
Elizabeth R. Philipp, Esq.
Executive Vice President, General Counsel and Secretary
Collins & Aikman Corporation
210 Madison Avenue, 6th Fl.
New York, New York 10016
(212) 578-1336
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
Copies to:
Robert Rosenman, Esq. Robert A. Profusek, Esq.
Cravath, Swaine & Moore Jones, Day, Reavis & Pogue
825 Eighth Avenue 599 Lexington Avenue
New York, New York 10019 New York, New York 10022
Approximate date of commencement of proposed sale to the
public: From time to time after the effective date of this
Registration Statement as determined by market conditions.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following box. [ ]
If any of the securities being registered on this Form
are to be offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest
reinvestment plans, please check the following box. [x]
If this Form is filed to register additional securities
for an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration 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. [ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Aggregate Amount to Proposed Maximum Proposed Maximum Aggregate Amount of Registration
Class of be Registered Aggregate Offering Price Fee
Securities to be Offering Price
Registered Per Unit
<S> <C> <C> <C> <C>
Debt Securities $400,000,000 N/A $400,000,000 (2) $137,931 (3)(5)
Guarantee of the (1) N/A N/A N/A (4)
Debt Securities
</TABLE>
(1) The Debt Securities being registered will be irrevocably and
unconditionally guaranteed on an unsecured senior basis or an unsecured
subordinated basis, as applicable, by Collins & Aikman Corporation.
Collins & Aikman Products Co. is a wholly owned subsidiary of Collins &
Aikman Corporation.
(2) In no event will the aggregate initial offering price of the Debt
Securities issued under this Registration Statement exceed $400,000,000, or
the equivalent thereof in one or more foreign or composite currencies.
(3) Calculated pursuant to Rule 457(o) under the Securities Act of 1933.
(4) No additional registration fee is payable in respect of the
registration of the Guarantees.
(5) Registration Fee previously paid.
The registrants hereby amend this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
registrants 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>
Subject to Completion, Dated October 20, 1995
PROSPECTUS COLLINS & AIKMAN PRODUCTS CO.
Debt Securities
Unconditionally Guaranteed by Collins & Aikman Corporation
Collins & Aikman Products Co. (the "Company") may offer from time to
time, together or separately, unsecured notes, debentures or other
evidences of indebtedness ("Debt Securities"), which may be either senior
(the "Senior Securities") or subordinated (the "Subordinated Securities")
in priority of payment, having an aggregate initial public offering price
not to exceed $400,000,000 (including the U.S. dollar equivalent of
securities for which the initial public offering price is denominated in
one or more foreign currencies or composite currencies). The Debt
Securities may be offered in one or more series, in amounts, at prices and
on terms determined at the time of sale and set forth in a supplement to
this Prospectus (a "Prospectus Supplement").
The Senior Securities will rank equally with all other unsubordinated
and unsecured indebtedness of the Company. The Subordinated Securities
will be unsecured and subordinated as described under "Subordinated
Securities" and the Senior Securities and the Subordinated Securities will
be effectively subordinated to all obligations of the subsidiaries of the
Company.
The Debt Securities will be irrevocably and unconditionally guaranteed
(the "Guarantee") on an unsecured senior basis, in the event Senior
Securities are issued, or on an unsecured subordinated basis, in the event
Subordinated Securities are issued, by Collins & Aikman Corporation ("C&A
Co."). The Company is a wholly owned subsidiary of C&A Co. None of the
subsidiaries of the Company will guarantee the Debt Securities. C&A Co. is
a holding company that derives all its operating income and cash flow from
its subsidiary, the Company, the common stock of which constitutes C&A
Co.'s only material asset.
The specific terms of the Debt Securities in respect of which this
Prospectus is being delivered will be set forth in an accompanying
Prospectus Supplement, including, where applicable, whether they are Senior
Securities or Subordinated Securities, the specific designation, aggregate
principal amount, currency, denomination, maturity (which may be fixed or
extendible), priority, interest rate or rates (or manner of calculation
thereof), if any, time of payment of interest, if any, terms for any
redemption, terms for any repayment at the option of the holder, terms for
any sinking fund payments, the initial public offering price, special
provisions relating to Debt Securities in bearer form, provisions regarding
original issue discount securities, additional covenants including event
risk provisions, and any other specific terms of such Debt Securities.
The Prospectus Supplement will also contain information, where
applicable and material, about certain United States Federal income tax
considerations relating to, and any listing on a securities exchange of,
the Debt Securities covered by the Prospectus Supplement.
For a discussion of risks associated with the Debt Securities, see
"Risk Factors" at page 5.
The Debt Securities may be offered directly, through underwriters,
dealers or agents as designated from time to time, or through a combination
of such methods. See "Plan of Distribution". If any agents of the Company
or any dealers or underwriters are involved in the offering of the Debt
Securities in respect of which this Prospectus is being delivered, the
names of such agents, dealers or underwriters and any applicable
commissions or
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discounts will be set forth in the Prospectus Supplement.
The net proceeds to the Company from such sale will also be set forth in
the Prospectus Supplement. The Company may also issue contracts under
which the counterparty may be required to purchase Debt Securities. Such
contracts would be issued with the Debt Securities in amounts, at prices
and on terms to be set forth in the applicable Prospectus Supplement.
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by a Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1995
(A redherring appears on the left hand side of this page, rotated
90 degrees. Text is as follows:)
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.
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AVAILABLE INFORMATION
C&A Co. is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith,
files reports, proxy statements and other information with the Securities
and Exchange Commission (the "Commission"). Reports, proxy statements and
other information filed by C&A Co. with the Commission pursuant to the
informational requirements of the Exchange Act may be inspected and copied
at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the
Commission's regional offices located at Seven World Trade Center, 13th
Floor, New York, New York 10048 and Citicorp Center, 500 West Madison
Street (Suite 1400), Chicago, Illinois 60661. Copies of such material may
be obtained from the Public Reference Section of the Commission,
Washington, D.C. 20549 at prescribed rates. Such reports, proxy statements
and other information may also be inspected at the offices of the New York
Stock Exchange, Inc. ("NYSE"), 20 Broad Street, New York, New York, on
which C&A Co.'s Common Stock, par value $.01 per share (the "Common
Stock"), is listed. The Company is not currently subject to the periodic
reporting and other informational requirements of the Exchange Act.
This Prospectus constitutes part of a Registration Statement on Form
S-3 (the "Registration Statement") filed by the Company and C&A Co. with
the Commission under the Securities Act of 1933 (the "Securities Act").
This Prospectus omits certain of the information contained in the
Registration Statement in accordance with the rules and regulations of the
Commission. Reference is hereby made to the Registration Statement and
related exhibits for further information with respect to the Company and
the Debt Securities. Statements contained herein concerning the provisions
of any document are not necessarily complete and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INFORMATION INCORPORATED BY REFERENCE
The Company incorporates herein by reference the following documents
filed by C&A Co. with the Commission (File No. 1-10218) pursuant to the
Exchange Act:
(a) C&A Co.'s Annual Report on Form 10-K for the fiscal year
ended January 28, 1995;
(b) C&A Co.'s Quarterly Report on Form 10-Q for the quarter ended
April 29, 1995; and
(c) C&A Co.'s Quarterly Report on Form 10-Q for the quarter ended
July 29, 1995.
All documents and reports subsequently filed by C&A Co. pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to the termination of the offering of the Debt
Securities hereunder shall be deemed to be incorporated herein by reference
and to be a part hereof from the date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
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superseded for purposes of this Prospectus or any Prospectus Supplement to
the extent that a statement contained herein or in any other subsequently
filed document that also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus or any Prospectus
Supplement.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus and the accompanying Prospectus
Supplement are delivered, upon the written or oral request of such person,
a copy of any or all the documents incorporated herein by reference other
than exhibits to such documents unless such exhibits are specifically
incorporated by reference in such documents, and any other documents
specifically identified herein as incorporated by reference into the
Registration Statement to which this Prospectus relates or into such other
documents. Requests should be directed to: Collins & Aikman Products Co.,
701 McCullough Drive, P.O. Box 32665, Charlotte, NC 28232-2665 (telephone:
(704) 548-2370), Attention: Director - Investor Relations.
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RISK FACTORS
In addition to the other information contained in this Prospectus, the
following risk factors should be carefully considered in evaluating an
investment in the Debt Securities.
Cyclicality of Industries
The Company's business segments are highly cyclical. Downturns in
North American automotive production, consumer spending, commercial and
residential construction and renovation could have a material adverse
effect on the Company.
Dependence on Significant Automotive Customers and Car Models
The Company's sales are dependent on certain significant customers.
Sales to General Motors Corporation, Ford Motor Company and Chrysler
Corporation accounted for approximately 18.3%, 12.1% and 10.3%,
respectively, of the Company's 1994 net sales. In addition, certain of the
Company's customers are unionized and have in the past experienced labor
disruptions. The loss of one or more significant customers or a prolonged
disruption in their production could have a material adverse effect on the
Company.
The Company principally competes for new business in its Automotive
Products segment at the design stage of new models and upon the redesign of
existing models. There can be no assurance that the Company will continue
to be able to obtain such new business or to improve or maintain its gross
margins on such new business. In addition, the Company may not be able to
pass on raw material price increases to its customers due to pricing
pressure from its customers. A decrease in demand for the models that
generate the most sales for the Company, the failure of the Company to
obtain purchase orders for new or redesigned models and pricing pressure
from the major automotive companies could have a material adverse effect on
the Company.
Vulnerability to Changes in Consumer Tastes
Consumer tastes in automotive seat fabrics, interior furnishings and
wallcoverings change over time. A shift in consumer preferences away from
the products that the Company produces or has the capability to produce
could have a material adverse effect on the Company.
Competition
The industries in which the Company operates are highly competitive.
There can be no assurance that the Company's products will compete
successfully with those of its competitors. Several competitors are larger
and have greater financial and other resources available to them. There
can be no assurance that the Company will be able to maintain its operating
margins if the competitive environment changes.
Substantial Leverage
The substantial indebtedness of the Company and its subsidiaries could
have important consequences to holders of Debt Securities, including the
following: (i) the ability of the Company and its subsidiaries to obtain
additional financing in the future to refinance maturing debt or for
working capital, capital expenditures, acquisitions and other general
corporate purposes could be impaired; (ii) a substantial portion of the
cash flow from
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operations of the Company and its subsidiaries must be dedicated to
the payment of the principal of and interest on existing
indebtedness, which will have the effect of decreasing the amount
available for working capital, capital expenditures, acquisitions or
other general corporate purposes; (iii) the Company and its
subsidiaries could be more highly leveraged than certain of their
competitors, which may place the Company and its subsidiaries at
a competitive disadvantage; (iv) a significant portion of the
borrowings of the Company and its subsidiaries are at variable rates
of interest, and consequently the Company and its subsidiaries will be
vulnerable to increases in interest rates; and (v) the high degree of
leverage of the Company and its subsidiaries may make the Company
more vulnerable to economic downturns. At July 29, 1995 the
Company had an aggregate of approximately $583.7 million of
indebtedness outstanding (excluding approximately $117.0 million in
off-balance sheet financing under a receivables facility and
approximately $27.2 million of outstanding letters of credit) and
unused borrowing availability of approximately $37.8 million under
a revolving credit facility and $10.0 million under a working
capital facility for a Canadian subsidiary. Issuance of additional
debt would increase this degree of leverage and, therefore, could
exacerbate the consequences described above.
Security Interests
The capital stock of the Company's principal subsidiaries and certain
real estate of the Company and its subsidiaries are subject to various
security interests and liens securing certain indebtedness of the Company
and its subsidiaries. In addition, substantially all the receivables of
the Company and its subsidiaries have been transferred to a trust in
connection with a receivables financing. See "Existing Credit Facilities".
Limitations Imposed by Existing Credit Facilities
The Company's existing credit facilities contain a number of
restrictive covenants which, among other things, limit the ability of the
Company and its subsidiaries to make capital expenditures, to incur other
indebtedness, to create liens and to make certain restricted payments, and
which require the Company to maintain certain specified financial ratios,
some of which become more restrictive over time. A failure by the Company
to satisfy such financial ratios or to comply with the restrictions
contained in its credit facilities could result in a default thereunder,
which in turn could result in such indebtedness being declared immediately
due and payable. If the Company were unable to repay such indebtedness,
the lenders under the Company's credit facilities could proceed against
their collateral, which includes 100% of the common stock of the Company
and of its principal subsidiaries. See "Existing Credit Facilities".
Historical Losses
The Company has experienced net losses in each of the last five fiscal
years and as of July 29, 1995 had an accumulated deficit of $932.2 million.
Even though the Company is operating with lower interest charges and has
been profitable since its initial public offering and recapitalization in
July 1994 (the "Recapitalization"), there can be no assurance as to whether
the Company's operations will remain profitable.
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Collective Bargaining Agreements
The Company is a party to collective bargaining agreements with
respect to hourly employees at seven of its 51 U.S. facilities, its five
Canadian facilities and its three Mexican facilities. Of the Company's
12,000 employees, approximately 2,300 employees, all of whom are employed
in the Company's Automotive Products and Wallcoverings segments, are
covered by such agreements. The Company has not experienced any
significant labor disruptions during the past five years. Although
management believes that its relationship with the employees covered by
collective bargaining agreements is good, there can be no assurance that
the Company will be able to negotiate new agreements on favorable terms.
Environmental Matters and Other Contingencies
The Company is subject to stringent Federal, state , local and foreign
laws and regulations concerning the environment. Changes in environmental
laws and regulations may require the Company to make substantial capital
expenditures and to incur substantial expenses with respect to its ongoing
and divested operations and properties. In addition, the Company has
received notices that it is a potentially responsible party ("PRP") in a
number of proceedings for cleanup of hazardous substances at various sites.
The Company may be named as a PRP at other sites in the future. It is
difficult to estimate the total cost of investigation and remediation due
to various factors including incomplete information regarding particular
sites and other PRPs, uncertainty regarding the extent of environmental
problems and the Company's share, if any, of liability for such problems,
the selection of alternative compliance approaches, the complexity of the
environmental laws and regulations and changes in cleanup standards and
techniques. When it has been possible to provide reasonable estimates of
the Company's liability with respect to environmental sites, provisions
have been made in accordance with generally accepted accounting principles.
However, there can be no assurance that the Company has identified or
properly assessed all potential environmental liabilities arising from the
activities or properties of the Company, its present and former
subsidiaries and their corporate predecessors.
The Company has significant financial and legal obligations with
respect to certain divested and acquired businesses. In connection with
the sale and acquisition of certain businesses, the Company has agreed to
indemnify the purchasers and sellers for certain environmental liabilities,
lease obligations and other matters. In addition, the Company is
contingently liable with respect to certain lease and other obligations
assumed by certain purchasers and may be required to honor such obligations
if such purchasers are unable or unwilling to do so.
Absence of Public Market for the Debt Securities
The Debt Securities will be a new issue of securities with no
established trading market. Any underwriters to whom Debt Securities are
sold by the Company for public offering and sale may make a market in such
Debt Securities, but such underwriters will not be obligated to do so and
may discontinue any market making at any time without notice. No assurance
can be given as to the liquidity of the secondary market for any Debt
Securities.
Potential Applicability of Fraudulent Transfer Laws
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Management believes that each of the Company and C&A Co., after the
issuance of the Debt Securities, will be solvent, will have sufficient
capital for carrying on its respective businesses and will be able to pay
its debts as they become due. Notwithstanding management's belief, if a
court of competent jurisdiction in a suit by an unpaid creditor or a
representative of creditors (such as a trustee in bankruptcy or a debtor in
possession) were to find that either the Company or C&A Co. did not receive
fair consideration or reasonably equivalent value for issuing the Debt
Securities or the Guarantee, respectively, and, at the time of the
incurrence of indebtedness represented by the Debt Securities or the
Guarantee, the Company or C&A Co. was insolvent, was rendered insolvent by
reason of such incurrence, was engaged in a business or transaction for
which its remaining assets constituted unreasonably small capital, intended
to incur, or believed that it would incur, debts beyond its ability to pay
as such debts matured, or intended to hinder, delay or defraud its
creditors, such court could avoid such indebtedness or, quite apart from
the express subordination of such indebtedness of the Company or C&A Co.,
as applicable, such court could subordinate such indebtedness to other
existing and future indebtedness of the Company or C&A Co., as applicable.
The measure of insolvency for purposes of the foregoing will vary depending
upon the law of the relevant jurisdiction. Generally, however, a company
would be considered insolvent for purposes of the foregoing if the sum of
the company's debts is greater than all the company's property at a fair
valuation, or if the present fair saleable value of the company's assets is
less than the amount that will be required to pay its probable liability on
its existing debts as they become absolute and matured.
THE COMPANY
The Company is a leader in each of its three business segments:
Automotive Products, which supplies interior trim products to the North
American automotive industry; Interior Furnishings, which manufactures
residential upholstery and commercial floor coverings for sale in the
United States and for export; and Wallcoverings, which produces residential
and commercial wallpaper for sale in the United States. C&A Co. is a
holding company whose only material asset is the common stock of the
Company. The Company's and C&A Co.'s principal executive offices are
located at 701 McCullough Drive, Charlotte, North Carolina 28262 and the
telephone number at that location is (704) 547-8500.
As used in this Prospectus, the term the "Company" refers to Collins &
Aikman Products Co. and its subsidiaries, unless the context otherwise
indicates.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for C&A Co. is set forth below
for the periods indicated. For periods in which earnings before fixed
charges were insufficient to cover charges, the amount of coverage
deficiency (in millions), instead of the ratio is disclosed.
<TABLE>
<CAPTION>
Six Months
Fiscal Year Ending January Ended
1991 1992 1993 1994 1995 July 29, 1995
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to (Dollar amounts in millions)
fixed charges (or amounts
by which earnings were
inadequate to cover
fixed charges) ($97.2) ($96.6) ($81.6) ($188.4) 1.9X 2.5X
</TABLE>
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For purposes of determining the ratio of earnings to fixed charges,
earnings are defined as income (loss) from continuing operations before
income taxes, plus fixed charges relating to continuing operations. Fixed
charges consist of interest expense on all indebtedness (including
amortization of deferred debt issuance costs), loss on sale of receivables,
preferred stock dividends of subsidiaries and the portion of operating
lease rental expense that is representative of the interest factor.
Earnings were inadequate to cover fixed charges for the fiscal years ending
January 1991 through 1994.
Prior to the Recapitalization, fixed charges were higher due to larger
average outstanding amounts and higher average interest rates under C&A
Co.'s various debt facilities. Additionally, earnings from continuing
operations for the fiscal years prior to the Recapitalization were
negatively impacted by various charges related to restructuring,
compensation and goodwill.
The Recapitalization was effected on July 13, 1994. Accordingly, the
ratio for the fiscal year ending January 1995 reflects the benefits of the
Recapitalization for a part of the year, and the ratio for the subsequent
six month period reflects the benefits of the Recapitalization for the full
period presented.
USE OF PROCEEDS
Except as may otherwise be set forth in the Prospectus Supplement, the
net proceeds from the sale of the Debt Securities will be used for general
corporate purposes, including working capital, capital expenditures and
acquisitions.
EXISTING CREDIT FACILITIES
The Credit Agreement Facilities
C&A Co. and the Company are parties to a credit agreement dated as of
June 22, 1994, as amended (the "Credit Agreement"), with Chemical Bank
("Chemical") and the lenders named therein providing for (i) an eight-year
senior secured term loan facility in an aggregate principal amount of $475
million (the "Term Loan Facility"), which was drawn in full on July 13,
1994 to prepay other indebtedness in connection with the Recapitalization,
and (ii) a seven-year senior secured revolving credit facility (the
"Revolving Facility", and together with the Term Loan Facility, the "Credit
Agreement Facilities") in an aggregate principal amount of up to $150
million. At July 29, 1995, the Company had unused borrowing availability
of approximately $37.8 million under the Revolving Facility.
The Company is the borrower under the Credit Agreement Facilities,
although a portion of the Term Loan Facility has been borrowed by a
Canadian subsidiary of the Company. Loans outstanding under the Credit
Agreement Facilities bear interest, due quarterly, at a per annum rate
equal to the Company's choice of (i) Chemical's Alternate Base Rate (which
is the highest of Chemical's announced prime rate, the Federal Funds Rate
plus 1/2% and Chemical's base certificate of deposit rate plus 1%) plus a
margin ranging from 0% to 3/4 of 1% or (ii) the offered rates for
Eurodollar deposits for one, two, three, six, nine or twelve months (as
selected by the Company) plus a margin ranging from 1% to 1-3/4%. Pursuant
to the terms of the Credit Agreement, at July 29, 1995, the Alternate Base
Rate margin was 1/2 of 1% and the Eurodollar margin was 1-1/2%. Such
margins will increase by 1/4% over
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the margins then in effect on July 13, 1999.
Loans under the Term Loan Facility amortize in annual amounts equal to
(i) $13.2 million in 1995, (ii) $36.9 million in 1996, (iii) $58.1 million
in 1997, (iv) $73.9 million in 1998, (v) $81.8 million in 1999, (vi) $84.4
million in each of 2000 and 2001 and (vii) the remainder in 2002. The
Revolving Facility will mature on July 13, 2001. In addition, the Credit
Agreement provides for mandatory prepayments of the Credit Agreement
Facilities with certain excess cash flow of the Company, net cash proceeds
of certain asset sales or other dispositions by the Company and its
subsidiaries, net cash proceeds of sale/leaseback transactions and net cash
proceeds of certain issuances of debt obligations (which are not expected
to include Debt Securities). Mandatory prepayments will be applied pro
rata across remaining scheduled maturities. Loans under the Credit
Agreement Facilities are voluntarily prepayable by the Company at any time
without penalty. Voluntary prepayments will be applied against the most
current scheduled maturities.
The Credit Agreement Facilities are guaranteed by C&A Co. and each
existing and subsequently acquired or organized United States subsidiary of
C&A Co., subject to certain exceptions (the "Credit Agreement Guarantees").
The Credit Agreement Facilities and the Credit Agreement Guarantees are
secured by a first priority pledge of all the capital stock of the Company
and each subsidiary (other than certain unrestricted subsidiaries) of the
Company (or, in the case of any foreign subsidiary, 65% of the capital
stock of such subsidiary), subject to certain exceptions, and certain
intercompany indebtedness.
The Credit Agreement contains various restrictive covenants, including
limitations on indebtedness of C&A Co. and its subsidiaries (including the
Company); limitations on dividends and on redemptions and repurchases of
capital stock; limitations on prepayments, redemptions and repurchases of
debt; limitations on liens and sale/leaseback transactions; limitations on
loans and investments; limitations on capital expenditures; a prohibition
on C&A Co.'s direct ownership of any subsidiary other than the Company or
certain unrestricted subsidiaries; limitations on mergers, acquisitions and
asset sales; limitations on transactions with affiliates and stockholders;
limitations on fundamental changes in business conducted; and limitations
on the amendment of debt and other material agreements and licenses. In
addition to the foregoing, the Credit Agreement contains financial
covenants applicable to C&A Co. and its subsidiaries (including the
Company) on a consolidated basis. Under these covenants C&A Co. and its
subsidiaries are required: to maintain, for each period of four consecutive
fiscal quarters, a ratio of EBITDA to cash interest expense of 3.25 to 1.00
through January 31, 1996 (which ratio increases annually on each February 1
thereafter, to 4.75 to 1.00 on and after February 1, 1998); to maintain a
ratio of funded debt to EBITDA for the preceding twelve consecutive months
of not more than 3.25 to 1.00 until January 31, 1996 (which ratio decreases
annually on each February 1 thereafter, to 2.25 to 1.00 on and after
February 1, 1999); to have a minimum EBITDA of $175 million in each fiscal
year; and to maintain a ratio of current assets to current liabilities at
the end of each fiscal quarter of at least 1.25 to 1.00.
The Credit Agreement also contains various events of default (with
customary qualifications and exceptions), including nonpayment of principal
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or interest; violation of covenants; material breaches of representations
and warranties; cross default and cross acceleration; bankruptcy; material
undischarged judgments; certain ERISA events; invalidity of security
documents; invalidity of subordination provisions; and Change in Control.
"Change in Control" is defined in the Credit Agreement as (a) a majority of
the board of directors of C&A Co. ceases to be comprised of Continuing
Directors (defined as any director of C&A Co. who either (x) was a member
of the board of directors on July 13, 1994 or (y) after such date became a
member of the board of directors and whose election was approved by vote of
a majority of the Continuing Directors then on the board of directors of
C&A Co., (b) a person or group (other than the Company's current principal
stockholders, Wasserstein Perella Partners, L.P. ("WP Partners"),
Blackstone Capital Partners L.P. ("Blackstone Partners"), and additional
designated persons) beneficially owns, directly or indirectly, shares
representing more than 25% of the aggregate ordinary voting power
represented by the outstanding capital stock of C&A Co. at any time that WP
Partners, Blackstone Partners and additional designated persons do not
beneficially own, free and clear of liens and claims, shares representing
at least 50% of the aggregate ordinary voting power represented by the
outstanding capital stock of C&A Co. or (c) C&A Co. ceases to maintain
direct ownership of the Company, free of liens and claims.
In addition to the foregoing, the Credit Agreement contains other
miscellaneous provisions, including provisions concerning indemnification
by the Company of each lender against losses, claims or other expenses and
payment by the Company of certain fees and expenses of the lenders and
their respective advisors and consultants.
The description of the Credit Agreement Facilities set forth above
does not purport to be complete and is qualified in its entirety by
reference to the Credit Agreement and any amendments thereto which are
filed as exhibits to C&A Co.'s Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q and incorporated by reference into the Registration
Statement of which this Prospectus forms a part.
Receivables Facility
The Company, through a trust (the "Trust") formed by its wholly owned,
bankruptcy remote subsidiary, Carcorp, Inc. ("Carcorp"), is a party to a
receivables facility (the "Receivables Facility") comprised of (i) term
certificates, which were issued on March 31, 1995, in an aggregate face
amount of $110 million and (ii) variable funding certificates, which
represent revolving commitments, of up to an aggregate of $75 million. The
term certificates and the variable funding certificates have a term of five
years. Carcorp purchases on a revolving basis and transfers to the Trust
virtually all trade receivables generated by the Company and certain of its
subsidiaries (the "Sellers"). The certificates represent the right to
receive payments generated by the receivables held by the Trust.
Availability under the variable funding certificates at any time
depends primarily on the amount of receivables generated by the Sellers
from sales to the auto industry, the rate of collection on those
receivables and other characteristics of those receivables which affect
their eligibility (such as bankruptcy or downgrading below investment grade
of the obligor, delinquency and excessive concentration). Based on these
criteria, at July 29, 1995
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approximately $7.0 million was available under the variable funding
certificates, all of which was utilized.
The proceeds received by Carcorp from collections on receivables,
after the payment of expenses and amounts due on the certificates, are used
to purchase new receivables from the Sellers. Collections on receivables
are required to remain in the Trust if at any time the Trust does not
contain sufficient eligible receivables to support the outstanding
certificates. The Receivables Facility contains certain other restrictions
on Carcorp and on the Sellers customary for facilities of this type and
will terminate prior to its term upon the occurrence of certain events of
default. Under the Receivables Facility, the term certificates bear
interest at an average rate equal to the rate on one-month Eurodollar
deposits plus 34 one-hundredths of one percent per annum and the variable
funding certificates bear interest, at Carcorp's option, at a Eurodollar
deposit rate plus 40 one-hundredths of one percent per annum or a prime
rate.
The description of the Receivables Facility set forth above does not
purport to be complete and is qualified in its entirety by reference to the
Receivables Facility and any amendments thereto which are filed as exhibits
to C&A Co.'s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q
and incorporated by reference into the Registration Statement of which this
Prospectus forms a part.
DESCRIPTION OF THE DEBT SECURITIES
General
The Debt Securities will constitute either Senior Securities or
Subordinated Securities. The Senior Securities will be issued under an
Indenture dated as of , 1995 (the "Senior Indenture"), between
the Company and the trustee named in the applicable Prospectus Supplement
as trustee (the "Senior Trustee"). The Subordinated Securities will be
issued under an Indenture dated as of , 1995 (the "Subordinated
Indenture"), between the Company and the trustee named in the applicable
Prospectus Supplement as trustee ("the Subordinated Trustee"). The Senior
Indenture and the Subordinated Indenture are collectively referred to
herein as the "Indentures". References to the "Trustee" shall mean the
Senior Trustee or the Subordinated Trustee, as applicable. The statements
under this caption are brief summaries of certain provisions contained in
the Indentures, do not purport to be complete and are qualified in their
entirety by reference to the applicable Indenture, copies of which are
exhibits to and incorporated in the Registration Statement. Cross
references to Sections of the Indentures relate to both the Senior
Indenture and the Subordinated Indenture, unless otherwise indicated.
The following description of the terms of the Debt Securities sets
forth certain general terms and provisions of the Debt Securities to which
any Prospectus Supplement may relate. The particular terms of any Debt
Securities and the extent, if any, to which such general provisions do not
apply to such Debt Securities will be described in the Prospectus
Supplement relating to such Debt Securities.
Neither of the Indentures limits the amount of Debt Securities which
may be issued thereunder, and each Indenture provides that Debt Securities
of any
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series may be issued thereunder up to the aggregate principal amount
which may be authorized from time to time by the Company's board of
directors or any duly authorized committee of that board ("Board of
Directors") and may be denominated in any currency or composite currency
designated by the Company. (Section 3.01) Neither the Indentures nor the
Debt Securities will limit or otherwise restrict the amount of other
indebtedness which may be incurred or the other securities which may be
issued by the Company or any of its subsidiaries.
Debt Securities of a series may be issuable in registered form with or
without coupons ("Registered Securities"), in bearer form with or without
coupons attached ("Bearer Securities") or in the form of one or more global
securities in registered or bearer form (each a "Global Security").
(Section 3.01) Bearer Securities, if any, will be offered only to non-
United States persons and to offices located outside the United States of
certain United States financial institutions. (Section 3.03) Reference is
made to the Prospectus Supplement for a description of the following terms,
where applicable, of each series of Debt Securities in respect of which
this Prospectus is being delivered: (1) the title of such Debt Securities;
(2) the limit, if any, on the aggregate principal amount or aggregate
initial public offering price of such Debt Securities; (3) the priority of
payment of such Debt Securities; (4) the price or prices (which may be
expressed as a percentage of the aggregate principal amount thereof) at
which the Debt Securities will be issued; (5) the date or dates on which
the principal of the Debt Securities will be payable; (6) the rate or rates
(which may be fixed or variable) per annum at which such Debt Securities
will bear interest, if any, or the method of determining the same; (7) the
date or dates from which such interest, if any, on the Debt Securities will
accrue, the date or dates on which such interest, if any, will be payable,
the date or dates on which payment of such interest, if any, will commence
and the date, if any, specified in the Debt Security as the "Regular Record
Date" for such interest payment dates; (8) the extent to which any of the
Debt Securities will be issuable in temporary or permanent global form, or
the manner in which any interest payable on a temporary or permanent global
Debt Security will be paid; (9) each office or agency where, subject to the
terms of the applicable Indenture, the Debt Securities may be presented for
registration of transfer or exchange; (10) the place or places where the
principal of (and premium, if any) and interest, if any, on the Debt
Securities will be payable; (11) the date or dates, if any, after which
such Debt Securities may be redeemed or purchased in whole or in part, at
the option of the Company or mandatorily pursuant to any sinking, purchase
or analogous fund or may be required to be purchased or redeemed at the
option of the holder, and the redemption or repayment price or prices
thereof; (12) the denomination or denominations in which such Debt
Securities are authorized to be issued; (13) the currency, currencies or
composite currency (including the European Currency Unit as defined and
revised from time to time by the Council of the European Communities
("ECU")) based on or related to currencies for which the Debt Securities
may be purchased and the currency, currencies or composite currency
(including ECU) in which the principal of, premium, if any, and any
interest on such Debt Securities may be payable; (14) any index used to
determine the amount of payments of principal of, premium, if any, and
interest on the Debt Securities; (15) whether any of the Debt Securities
are to be issuable as Bearer Securities and/or Registered Securities, and
if issuable as Bearer Securities, any limitations on issuance of such
Bearer Securities and any provisions
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regarding the transfer or exchange of such Bearer Securities (including
exchange for registered Debt Securities of the same series); (16)
the payment of any additional amounts with respect to the Debt
Securities; (17) whether any of the Debt Securities will be issued as
Original Issue Discount Securities (as defined below); (18)
information with respect to book-entry procedures, if any; (19) any
additional covenants or Events of Default not currently set forth in
the applicable Indenture; and (20) any other terms of such Debt
Securities not inconsistent with the provisions of the applicable
Indenture.
If any of the Debt Securities are sold for one or more foreign
currencies or foreign currency units or if the principal of, premium, if
any, or interest on any series of Debt Securities is payable in one or more
foreign currencies or foreign currency units, the restrictions, elections,
tax consequences, specific terms and other information with respect to such
issue of Debt Securities and such currencies or currency units will be set
forth in the Prospectus Supplement relating thereto. A judgment for money
damages by courts in the United States, including a money judgment based on
an obligation expressed in a foreign currency, will ordinarily be rendered
only in U.S. dollars. New York statutory law provides that a court shall
render a judgment or decree in the foreign currency of the underlying
obligation and that the judgment or decree shall be converted into U.S.
dollars at the exchange rate prevailing on the date of entry of the
judgment or decree.
Debt Securities may be issued as original issue discount Debt
Securities (bearing no interest or interest at a rate which at the time of
issuance is below market rates) ("Original Issue Discount Securities"), to
be sold at a substantial discount below the stated principal amount thereof
due at the stated maturity of such Debt Securities. (Section 3.01) There
may not be any periodic payments of interest on Original Issue Discount
Securities as defined herein. In the event of an acceleration of the
maturity of any Original Issue Discount Security, the amount payable to the
holder of such Original Issue Discount Security upon such acceleration will
be determined in accordance with the Prospectus Supplement, the terms of
such security and the Indenture, but will be an amount less than the amount
payable at the maturity of the principal of such Original Issue Discount
Security. (Section 7.02) Federal income tax considerations with respect
to Original Issue Discount Securities will be set forth in the Prospectus
Supplement relating thereto.
Events of Default, Waivers, Etc.
An Event of Default with respect to Debt Securities of any series is
defined in the Indentures as (i) default in the payment of the principal of
or premium, if any, on any Debt Security of such series when due, (ii)
default in the payment of interest upon any Debt Security of such series
when due and the continuance of such default for a period of 30 days, (iii)
default in the observance or performance of any other covenant or agreement
of the Company or C&A Co. in the Debt Securities of such series or the
Indenture with respect to such Debt Securities of such series and
continuance of such default for 90 days after written notice, (iv) certain
events of bankruptcy, insolvency or reorganization of the Company or C&A
Co. or (v) any other Event of Default provided with respect to Debt
Securities of any series. (Section 7.01)
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If any Event of Default with respect to any series of Debt Securities
for which there are Debt Securities outstanding under the Indentures occurs
and is continuing, either the applicable Trustee or the holders of not less
than 25% in aggregate principal amount of the Debt Securities of such
series may declare the principal amount (or if such Debt Securities are
Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms of that series) of all Debt Securities of
that series to be immediately due and payable. The holders of a majority
in aggregate principal amount of the Debt Securities of any series
outstanding under the Indentures may waive the consequences of an Event of
Default resulting in acceleration of such Debt Securities, but only if all
Events of Default have been remedied and all payments due (other than those
due as a result of acceleration) have been made. (Section 7.02) If an
Event of Default occurs and is continuing, the Trustee may in its
discretion, or at the written request of holders of not less than a
majority in aggregate principal amount of the Debt Securities of any series
outstanding under the Indentures and upon reasonable indemnity against the
costs, expenses and liabilities to be incurred in compliance with such
request and subject to certain other conditions set forth in the
Indentures, proceed to protect the rights of the holders of all the Debt
Securities of such series. (Sections 7.03 and 7.07) If the Trustee fails
within sixty days after its receipt of such a written request and offer of
indemnity to institute any such proceeding, any holder of a Debt Security
who has previously given notice to the Trustee of a continuing Event of
Default may institute such a proceeding. (Section 7.07) The holders of a
majority in aggregate principal amount of Debt Securities of any series
outstanding under the Indentures may waive any past default under the
Indentures except a default in the payment of principal of, premium, if
any, or interest on the Debt Securities of such series and except for the
waiver of a covenant or provision that, pursuant to the Indentures, cannot
be modified or amended without the consent of holders of all such Debt
Securities then outstanding. (Section 7.13)
The Indentures provide that in the event of an Event of Default
specified in clauses (i) or (ii) of the first paragraph under "Events of
Default", the Company will, upon demand of the applicable Trustee, pay to
it, for the benefit of the holder of any such Debt Security, the whole
amount then due and payable on such Debt Security for principal, premium,
if any, and interest. The Indentures further provide that if the Company
fails to pay such amount forthwith upon such demand, the applicable Trustee
may, among other things, institute a judicial proceeding for the collection
thereof. (Section 7.03)
The Indentures also provide that notwithstanding any other provision
of the Indentures, the holder of any Debt Security of any series shall have
the right to institute suit for the enforcement of any payment of principal
of, premium, if any, and interest on such Debt Security when due and that
such right shall not be impaired without the consent of such holder.
(Section 7.08)
The Company is required to file annually with the Trustee a written
statement of officers as to the existence or non-existence of defaults
under the Indentures or the Debt Securities. (Section 5.05)
Guarantee
C&A Co., as primary obligor and not merely as surety, will irrevocably
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and unconditionally guarantee on either an unsecured senior basis, an
unsecured senior subordinated basis or an unsecured junior subordinated
basis, as applicable, the performance and punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all
obligations of the Company under the Senior Indenture, Subordinated
Indenture and the Debt Securities, whether for principal of or interest on
the Debt Securities, expenses, indemnification or otherwise (all such
obligations guaranteed by C&A Co. being herein called the "Guaranteed
Obligations"). C&A Co. will agree to pay, in addition to the amount stated
above, any and all expenses (including reasonable counsel fees and
expenses) incurred by the Trustee or the holders in enforcing any rights
under the Guarantee with respect to C&A Co. (Section 14.01 of Senior
Indenture and Section 15.01 of Subordinated Indenture) Such Guarantee,
however, will be limited in amount to an amount not to exceed the maximum
amount that can be guaranteed by C&A Co. without rendering the Guarantee,
as it relates to C&A Co., voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer. (Section 14.02 of Senior
Indenture and Section 15.02 of Subordinated Indenture) C&A Co. has no
material assets other than the common stock of the Company.
The Guarantee is a continuing guarantee and will (a) remain in full
force and affect until payment in full of all the Guaranteed Obligations,
(b) be binding upon C&A Co. and (c) enure to the benefit of and be
enforceable by the Trustee, the holders and their successors, transferees
and assigns. (Section 14.03 of Senior Indenture and Section 15.03 of
Subordinated Indenture) Upon the failure of the Company to pay the
principal of or interest on any Guaranteed Obligation when and as due,
whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Guaranteed Obligations, C&A Co. shall,
upon receipt of written demand by the Trustee, pay or cause to be paid, in
cash, to the holders or the Trustee an amount equal to the sum of (i)
unpaid principal amount of such Guaranteed Obligations, (ii) accrued and
unpaid interest on such Guaranteed Obligations (but only to the extent not
prohibited by law) and (iii) all other monetary Guaranteed Obligations of
the Company to the holders and the Trustee. See "Events of Default,
Waivers, etc." for a description of rights in an Event of Default.
Registration and Transfer
Unless otherwise indicated in the applicable Prospectus Supplement,
Debt Securities will be issued only as Registered Securities. (Section
2.01) If Bearer Securities are issued, the United States Federal income
tax consequences and other special considerations, procedures and
limitations applicable to such Bearer Securities will be described in the
Prospectus Supplement relating thereto.
Unless otherwise indicated in the applicable Prospectus Supplement,
Debt Securities issued as Registered Securities will be without coupons.
Debt Securities issued as Bearer Securities will have interest coupons
attached, unless issued as zero coupon securities. (Section 2.01)
Registered Securities (other than a Global Security) may be presented
for transfer (with the form of transfer endorsed thereon duly executed) or
exchanged for other Debt Securities of the same series at the office of the
security registrar appointed by the Company (the "Security Registrar")
specified according to the terms of the applicable Indenture. The Company
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has agreed in each of the Indentures that, with respect to Registered
Securities having the City of New York as a place of payment, the Company
will appoint a Security Registrar or a co-security registrar, as may be
appropriate (the "Co-Security Registrar") located in the City of New York
for such transfer or exchange. Unless otherwise provided in the applicable
Prospectus Supplement, such transfer or exchange shall be made without
service charge, but the Company may require payment of any taxes or other
governmental charges as described in the applicable Indenture. Provisions
relating to the exchange of Bearer Securities for other Debt Securities of
the same series (including, if applicable, Registered Securities) will be
described in the applicable Prospectus Supplement. In no event, however,
will Registered Securities be exchangeable for Bearer Securities. (Section
3.05)
Global Securities
Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on
behalf of, a depositary (the "Depositary") identified in the Prospectus
Supplement relating to such series. (Section 3.01) Global Securities may
be issued in either registered or bearer form and in either temporary or
permanent form. (Section 2.04) Unless and until it is exchanged in whole
or in part for the individual Debt Securities represented thereby, a Global
Security may not be transferred except as a whole by the Depositary for
such Global Security to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or
by the Depositary or any nominee to a successor Depositary or any nominee
of such successor. (Section 3.05)
The specific terms of the depositary arrangement with respect to a
series of Debt Securities and certain limitations and restrictions relating
to a series of Bearer Securities in the form of one or more Global
Securities will be described in the Prospectus Supplement relating to such
series. The Company anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book-entry registration and
transfer system, the respective principal amounts of the individual Debt
Securities represented by such Global Security to the accounts of persons
that have accounts with such Depositary. Such accounts shall be designated
by the underwriters or agents with respect to such Debt Securities.
Ownership of beneficial interests in a Global Security will be limited to
persons that have accounts with the applicable Depositary ("participants")
or persons that may hold interests through participants. Ownership of
beneficial interests in such Global Security will be shown on, and the
transfer of that ownership will be effected only through, records
maintained by the applicable Depositary or its nominee (with respect to
interests of participants) and the records of participants (with respect to
interests of persons other than participants). The laws of some states
require that certain purchasers of securities take physical delivery of
such securities in definitive form. Such limits and such laws may impair
the ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is
the
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registered owner of such Global Security, such Depositary or such
nominee, as the case may be, will be considered the sole owner or holder of
the Debt Securities represented by such Global Security for all purposes
under the Indenture governing such Debt Securities. Except as provided
below, owners of beneficial interests in a Global Security will not be
entitled to have any of the individual Debt Securities of the series
represented by such Global Security registered in their names, will not
receive or be entitled to receive physical delivery of any such Debt
Securities or such series in definitive form and will not be considered the
owners or holders thereof under the Indenture governing such Debt
Securities. (Sections 1.12 and 3.08)
Payments of principal of, premium, if any, and interest, if any, on
individual Debt Securities represented by a Global Security registered in
the name of a Depositary or its nominee will be made to the Depositary or
its nominee, as the case may be, as the registered owner of the Global
Security representing such Debt Securities. None of the Company, the
Trustee for such Debt Securities, any person authorized by the Company to
pay the principal of, premium, if any, or interest on any Debt Securities
or any coupons appertaining thereto on behalf of the Company ("Paying
Agent"), and the Security Registrar for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the Global
Security for such Debt Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
(Section 3.08)
Subject to certain restrictions relating to Bearer Securities, the
Company expects that the Depositary for a series of Debt Securities or its
nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Debt
Securities, will credit participants' accounts immediately with payments in
amounts proportionate to their respective beneficial interests in the
principal amount of such Global Security for such Debt Securities as shown
on the records of such Depositary or its nominee. The Company also expects
that payments by participants to owners of beneficial interests in such
Global Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities
held for the accounts of customers in bearer form or registered in "street
name". Such payments will be the responsibility of such participants.
With respect to owners of beneficial interests in a temporary Global
Security representing Bearer Securities, receipt by such beneficial owners
of payments of principal, premium or interest in respect thereof will be
subject to additional restrictions.
If the Depositary for a series of Debt Securities is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Company within 90 days, the Company will
issue individual Debt Securities of such series in definitive form in
exchange for the Global Security representing such series of Debt
Securities. (Section 3.05) In addition, the Company may at any time and in
its sole discretion, subject to any limitations described in the Prospectus
Supplement relating to such Debt Securities, determine not to have any Debt
Securities of a series represented by one or more Global Securities and, in
such event, will issue individual Debt Securities of such series in
definitive form in exchange for the Global Security or Securities
representing such series of Debt Securities. (Section 3.05) Further, if
the Company so specifies with
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respect to the Debt Securities of a series, an owner of a beneficial
interest in a Global Security representing Debt Securities of such
series may, on terms acceptable to the Company, the Trustee and
the Depositary for such Global Security, receive Debt Securities
of such series in definitive form in exchange for such
beneficial interests, subject to any limitations described in
the Prospectus Supplement relating to such Debt Securities. (Section
3.05) In any such instance, an owner of a beneficial interest in a
Global Security will be entitled to physical delivery in definitive form
of Debt Securities of the series represented by such Global Security
equal in principal amount to such beneficial interest and to have such
Debt Securities registered in its name (if the Debt Securities of such
series are issuable as Registered Securities). (Section 3.05) Debt
Securities of such series so issued in definitive form will be
issued (a) as Registered Securities in denominations, unless
otherwise specified by the Company, of $1,000 and integral multiples
thereof if the Debt Securities of such series are issuable as
Registered Securities, (b) as Bearer Securities in the
denomination, unless otherwise specified by the Company, of $5,000 if
the Debt Securities of such series are issuable as Bearer Securities or
(c) as either Registered or Bearer Securities, if the Debt
Securities of such series are issuable in either form. (Sections
3.02 and 3.05) Certain restrictions may apply, however, on the
issuance of a Bearer Security in definitive form in exchange for an
interest in a Global Security.
Payment and Paying Agents
Unless otherwise indicated in an applicable Prospectus Supplement,
payment of principal of and premium, if any, on Registered Securities will
be made at the office of such Paying Agent or Paying Agents as the Company
may designate from time to time. At the option of the Company, payment of
any interest may be made (i) by check mailed to the address of the person
entitled thereto as such address shall appear in the applicable security
register kept by the Company ("Security Register") or (ii) by wire transfer
to an account maintained by the person entitled thereto as specified in the
applicable Security Register. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of any installment of interest on Registered
Securities will be made to the person in whose name such Debt Security is
registered at the close of business on the Regular Record Date for such
payment. (Sections 3.07 and 5.02)
Unless otherwise indicated in an applicable Prospectus Supplement,
payment of principal of, premium, if any, and any interest on Bearer
Securities will be payable, subject to any applicable laws and regulations,
at the offices of such Paying Agents outside the United States as the
Company may designate from time to time or, at the option of the holder, by
check mailed to any address outside the United States or by transfer to an
account maintained by the payee with a bank located outside the United
States. Unless otherwise indicated in an applicable Prospectus Supplement,
payment of interest on Bearer Securities will be made only against
surrender of the coupon relating to such interest payment date. No payment
with respect to any Bearer Security will be made at any office or agency of
the Company in the United States or by check mailed to any address in the
United States or by transfer to an account maintained with a bank located
in the United States. (Sections 3.07, 5.01 and 5.02)
Consolidation, Merger or Sale of Assets
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Each Indenture provides that the Company may not, without the consent
of the holders of the Debt Securities outstanding under the applicable
Indenture, consolidate with, merge into or transfer its assets
substantially as an entirety to any single person, unless (i) any such
successor assumes the Company's obligations on the applicable Debt
Securities and under the applicable Indenture, (ii) after giving effect
thereto, no Event of Default shall have happened and be continuing and
(iii) the Company has delivered to the Trustee an officers' certificate and
an opinion of counsel each stating that such consolidation, merger,
conveyance or transfer and the supplemental indenture pursuant to which the
successor assumes the Company's obligations on the applicable Debt
Securities comply with Article 10 of the applicable Indenture and that all
conditions precedent therein provided for relating to such transaction have
been complied with. (Section 10.01) Accordingly, unless otherwise
specified in an applicable Prospectus Supplement, any such consolidation,
merger or transfer of assets substantially as an entirety that meets the
conditions described above, would not create any Event of Default which
would entitle holders of the Debt Securities, or the Trustee on their
behalf, to take any of the actions described above under "Events of
Default, Waivers, etc." Additionally, upon any such consolidation or
merger, or any such conveyance or transfer of the properties and assets of
the Company substantially as an entirety, the successor person formed by
such consolidation or into which the Company is merged or to which such
conveyance or transfer is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under each Indenture
with the same effect as if such successor person had been named as the
Company. In the event of any such conveyance or transfer, the Company as
the predecessor corporation and C&A Co. shall be relieved of all
obligations and covenants under each Indenture and may be dissolved, wound
up and liquidated at any time thereafter. (Section 10.02)
Leveraged and Other Transactions
Neither Indenture contains provisions which would afford holders of
the Debt Securities protection in the event of a highly leveraged or other
transaction involving the Company which could adversely affect the holders
of Debt Securities. Provisions, if any, applicable to any such transaction
will be described in an applicable Prospectus Supplement.
Modification of the Indenture; Waiver of Covenants
Each Indenture provides that, with the consent of the holders of not
less than a majority in aggregate principal amount of the outstanding Debt
Securities of each affected series, modifications and alterations of such
Indenture may be made which affect the rights of the holders of such Debt
Securities, except that no such modification or alteration may be made
without the consent of the holder of each Debt Security so affected which
would, among other things, (i) change the maturity of the principal of, or
of any installment of interest (or premium, if any) on, any Debt Security
issued pursuant to such Indenture, or reduce the principal amount thereof
or any premium thereon, or change the method of calculation of interest or
the currency of payment of principal or interest (or premium, if any) on,
or reduce the minimum rate of interest thereon, or impair the right to
institute suit for the enforcement of any such payment on or with respect
to any such Debt Security, or reduce the amount of principal of an Original
Issue Discount Security that would be due and payable upon an acceleration
of the
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maturity thereof; or (ii) reduce the above-stated percentage in
principal amount of outstanding Debt Securities required to modify or alter
such Indenture. (Section 9.02)
Each Indenture also provides that, without the consent of any holder
of Debt Securities, the Company, when authorized by a resolution of its
Board of Directors, and the Trustee, at any time and from time to time, may
enter into one or more supplemental indentures to such Indenture to (i)
evidence the succession of another corporation or person to the Company or
C&A Co., as the case may be, in the Indenture and in the Debt Securities,
(ii) evidence and provide for a successor Trustee, (iii) add to the
covenants of the Company or C&A Co. for the benefit of the holders of Debt
Securities of all or any series or to surrender any right or power
conferred upon the Company or C&A Co. in the Indenture, (iv) cure any
ambiguity, correct or supplement any provision which may be inconsistent or
make any other provisions with respect to matters or questions arising
under the Indenture, provided the interests of the holders of Debt
Securities of any series are not adversely affected in any material
respect, (v) add any additional Events of Default, (vi) make certain
changes with respect to Bearer Securities which do not adversely affect the
interests of the holders of Debt Securities of any series in any material
respect, (vii) add to, change or eliminate any provision of the Indenture;
provided that such addition, change or elimination (a) becomes effective
only when there is no Debt Security outstanding of a series created prior
to the execution of such supplemental indenture which is adversely affected
or (b) does not apply to any outstanding Debt Securities, (viii) establish
the form or terms of Debt Securities of any series as permitted under the
Indenture, (ix) add to or change provisions to permit or facilitate the
issuance of Debt Securities convertible into other securities, (x) evidence
any changes to corporate Trustee eligibility authorized by the Trust
Indenture Act of 1939, as in force as of the date an Indenture is executed
and, to the extent required by law, as thereafter amended (the "Trust
Indenture Act"), or (xi) add to or change or eliminate any provision of the
Indenture as necessary to comply with the Trust Indenture Act provided
such action does not adversely affect the interests of the holders of Debt
Securities of any series in any material respect. (Section 9.01).
Governing Law
The Indentures and the Debt Securities will be governed by, and
construed in accordance with, the laws of the State of New York.
Regarding the Trustee
The Indentures contain certain limitations on the right of the
Trustee, if and when the Trustee becomes a creditor of the Company (or any
other obligor upon the Debt Securities), regarding the collection of such
claims against the Company (or any such other obligor). (Section 8.13)
Except as provided in the following sentence, the Indentures do not
prohibit the Trustee from serving as trustee under any other indenture to
which the Company may be a party from time to time or from engaging in
other transactions with the Company. If the Trustee acquires any
conflicting interest and there is a default with respect to any series of
Debt Securities, it must eliminate such conflict or resign. (Section 8.08)
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SENIOR SECURITIES
The Senior Securities will be direct, unsecured obligations of the
Company and will rank pari passu with all outstanding unsecured senior
indebtedness of the Company.
SUBORDINATED SECURITIES
The Subordinated Securities will be direct, unsecured obligations of
the Company and will be subject to the subordination provisions described
below.
Subordination
The payment of the principal of, premium (if any) and interest on the
Subordinated Securities is subordinated in right of payment, as set forth
in the Subordinated Indenture, to the payment when due of all Senior
Indebtedness and, if applicable, Senior Subordinated Indebtedness of the
Company. (Section 14.01 of Subordinated Indenture) However, payment from
the money or the proceeds of U.S. government obligations held in any
defeasance trust is not subordinate to any Senior Indebtedness or, if
applicable, Senior Subordinated Indebtedness or subject to the restrictions
described herein. (Section 14.12 of Subordinated Indenture) At July 29,
1995, outstanding Senior Indebtedness of the Company was $534.8 million
(excluding unused commitments, approximately $48.9 million of indebtedness
of subsidiaries, approximately $ 117.0 million in off-balance sheet
financing under the Receivables Facility and approximately $27.2 million of
outstanding letters of credit), the Company did not have any Senior
Subordinated Indebtedness and the liabilities of the Company's subsidiaries
as recorded in the subsidiaries' financial records aggregated approximately
$197.8 million (excluding intercompany balances). Claims of creditors of
such subsidiaries, including trade creditors, secured creditors and
creditors holding guarantees issued by such subsidiaries, and claims of
preferred stockholders (if any) of such subsidiaries generally will have
priority with respect to the assets and earnings of such subsidiaries over
the claims of creditors of the Company, including holders of the
Subordinated Securities, even though such obligations may not constitute
Senior Indebtedness or Senior Subordinated Indebtedness. The Subordinated
Securities therefore will be effectively subordinated to creditors
(including trade creditors) and preferred stockholders (if any) of
subsidiaries of the Company. The domestic subsidiaries of the Company have
guaranteed the Company's obligations pursuant to the Credit Agreement.
Senior Indebtedness is defined in the Subordinated Indenture as the
principal of, premium, if any, and interest on, (i) all the Company's
indebtedness for money borrowed, other than the subordinated securities
issued under the Subordinated Indenture, whether outstanding on the date of
execution of the Subordinated Indenture or thereafter created, assumed or
incurred, except such indebtedness as is by its terms expressly stated to
be not superior in right of payment to the subordinated securities issued
under the Subordinated Indenture or to rank pari passu with the
subordinated securities issued under the Subordinated Indenture and (ii)
any deferrals, renewals or extensions of any such Senior Indebtedness,
except that Senior Indebtedness will not include (1) any obligation of the
Company to any subsidiary, (2) any liability for Federal, state, local or
other taxes owed or owing by the Company, (3) any accounts payable or other
liability to trade
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creditors arising in the ordinary course of business (including
guarantees thereof or instruments evidencing such liabilities), (4)
any indebtedness, guarantee or obligation of the Company which is
expressly subordinate or junior in right of payment in any respect to
any other indebtedness, guarantee or obligation of the Company,
including any senior subordinated indebtedness and any subordinated
obligations, or (5) any obligations with respect to any capital stock.
The term "indebtedness for money borrowed" as used in the foregoing
sentence includes, without limitation, any obligation of, or any
obligation guaranteed by, the Company for the repayment of borrowed
money, whether or not evidenced by bonds, debentures, notes or other
written instruments, and any deferred obligation for the payment of the
purchase price of property or assets. (Section 1.01 of Subordinated
Indenture) There is no limitation on the issuance of additional
Senior Indebtedness of the Company. The Senior Securities
constitute Senior Indebtedness under the Subordinated Indenture.
The Subordinated Securities may rank pari passu with other
subordinated indebtedness of the Company or may, if indicated in the
applicable Prospectus Supplement, be subordinate to Senior Subordinated
Indebtedness, including other series of Subordinated Securities. (Section
3.01 Subordinated Indenture) "Senior Subordinated Indebtedness" means any
indebtedness of the Company that is not subordinated by its terms in right
of payment to any indebtedness or obligation of the Company which is not
Senior Indebtedness and which is senior in right of payment to the Debt
Securities. (Section 1.01 of Subordinated Indenture)
Neither the Company nor C&A Co. may pay principal of, premium (if any)
or interest on the Subordinated Securities, make any deposits pursuant to
the defeasance provisions in the Subordinated Indenture or otherwise
purchase, redeem or retire any Subordinated Securities (collectively, "pay
the Subordinated Securities") if (i) any Senior Indebtedness and, if
applicable, Senior Subordinated Indebtedness is not paid when due or (ii)
any other default on Senior Indebtedness, and, if applicable, Senior
Subordinated Indebtedness occurs and the maturity of such Senior
Indebtedness, and, if applicable, Senior Subordinated Indebtedness is
accelerated in accordance with its terms unless, in either case, the
default has been cured or waived and any such acceleration has been
rescinded or such Senior Indebtedness and, if applicable, Senior
Subordinated Indebtedness has been paid in full. However, the Company and
C&A Co. may pay the Subordinated Securities without regard to the foregoing
if the Company, C&A Co. and the Trustee receive written notice approving
such payment from the Representatives (as defined below) of the holders of
Senior Indebtedness, and, if applicable, Senior Subordinated Indebtedness
with respect to which either of the events set forth in clause (i) or (ii)
of the immediately preceding sentence has occurred and is continuing.
Representative of the holders of Senior Indebtedness or Senior Subordinated
Indebtedness means a trustee, agent or other representative (if any) for an
issue of such Senior Indebtedness or Senior Subordinated Indebtedness, as
applicable. During the continuance of any default (other than a default
described in clause (i) or (ii) of the second preceding sentence) with
respect to any Senior Indebtedness, and, if applicable, Senior Subordinated
Indebtedness pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required
to effect such acceleration) or the expiration of any applicable grace
periods, neither the Company nor C&A Co. may pay the Subordinated
Securities for a period (a "Payment Blockage Period") commencing
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upon the receipt by the Trustee (with a copy to the Company and C&A Co.)
of written notice (a "Blockage Notice") of such default from the
Representatives of the holders of Senior Indebtedness, and, if
applicable, Senior Subordinated Indebtedness specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter (or
earlier if such Payment Blockage Period is terminated (1) by written
notice to the Trustee, the Company and C&A Co. from the Person or
Persons who gave such Blockage Notice, (2) because the default giving
rise to such Blockage Notice is no longer continuing or (3) because such
Senior Indebtedness, and, if applicable, Senior Subordinated
Indebtedness has been repaid in full). Notwithstanding the
provisions described in the immediately preceding sentence, unless
the holders of Senior Indebtedness and, if applicable Senior
Subordinated Indebtedness or the Representatives of such holders have
accelerated the maturity of such Senior Indebtedness and, if
applicable Senior Subordinated Indebtedness, the Company and C&A Co.
may resume payments on the Subordinated Securities after the end of
such Payment Blockage Period. Not more than one Blockage Notice may be
given in any consecutive 360-day period, irrespective of the number of
defaults with respect to Senior Indebtedness, and, if applicable, Senior
Subordinated Indebtedness during such period. (Section 14.03 of
Subordinated Indenture)
Upon any payment or distribution of the assets of the Company or C&A
Co. to creditors upon a total or partial liquidation or dissolution or
reorganization of or similar proceeding relating to the Company or C&A Co.
or their property, the holders of Senior Indebtedness and, if applicable,
Senior Subordinated Indebtedness will be entitled to receive payment in
full of the Senior Indebtedness and, if applicable, Senior Subordinated
Indebtedness before the holders of Subordinated Securities are entitled to
receive any payment, and until the Senior Indebtedness and, if applicable,
Senior Subordinated Indebtedness is paid in full, any payment or
distribution to which holders of Subordinated Securities would be entitled
but for the subordination provisions of the Subordinated Indenture (other
than distributions of stock and certain debt securities subordinated to the
Senior Indebtedness and, if applicable, the Senior Subordinated
Indebtedness) will be made to holders of the Senior Indebtedness and, if
applicable, Senior Subordinated Indebtedness as their interests may appear.
(Section 14.02 of Subordinated Indenture) If a distribution is made to
holders of Subordinated Securities that, due to the subordination
provisions, should not have been made to them, such holders of Subordinated
Securities are required to hold it in trust for the holders of Senior
Indebtedness or Senior Subordinated Indebtedness, as the case may be, and
pay it over to them as their interests may appear. (Section 14.05 of
Subordinated Indenture)
If payment of the Subordinated Securities is accelerated because of an
Event of Default, the Company, C&A Co. or the Trustee will promptly notify
the holders of Senior Indebtedness and, if applicable, Senior Subordinated
Indebtedness or the Representatives of such holders of the acceleration.
The Company may not pay the Subordinated Securities until five business
days after such holders or the Representatives of the Senior Indebtedness
and, if applicable, Senior Subordinated Indebtedness receive notice of such
acceleration and, thereafter, may pay the Subordinated Securities only if
the subordination provisions of the Subordinated Indenture otherwise permit
payment at that time. (Section 14.04 of Subordinated Indenture)
By reason of such subordination provisions contained in the
Subordinated
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Indenture, in the event of insolvency, creditors of the Company
or C&A Co. who are holders of Senior Indebtedness or Senior
Subordinated Indebtedness may recover more, ratably, than the holders
of Subordinated Securities, and creditors of the Company who are not
holders of Senior Indebtedness or Senior Subordinated Indebtedness
may recover less, ratably, than holders of Senior Indebtedness or
Senior Subordinated Indebtedness, as the case may be, and may recover
more, ratably, than the holders of Subordinated Indebtedness.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities to one or more underwriters
(acting alone or through underwriting syndicates led by one or more
managing underwriters) or dealers for public offering and sale by them or
may sell the Debt Securities to investors directly or through agents
designated from time to time. The Prospectus Supplement with respect to
the Debt Securities offered thereby describes the terms of the offering of
such Debt Securities and the method of distribution of the Debt Securities
offered thereby and identifies any firms acting as underwriters, dealers or
agents in connection therewith.
The Debt Securities may be distributed from time to time in one or
more transactions at a fixed price or prices (which may be changed from
time to time), at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at prices determined as
specified in the Prospectus Supplement. In connection with the sale of the
Debt Securities, underwriters, dealers or agents may be deemed to have
received compensation from the Company in the form of underwriting
discounts or commissions and may also receive commissions from purchasers
of the Debt Securities for whom they may act as agent. Underwriters may
sell the Debt Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions
from the purchasers for whom they may act as agent. Certain of the
underwriters, dealers or agents who participate in the distribution of the
Debt Securities may engage in other transactions with, and perform other
services for, the Company in the ordinary course of business.
Any underwriting compensation paid by the Company to underwriters or
agents in connection with the offering of the Debt Securities, and any
discounts, concessions or commissions allowed by underwriters to dealers,
are set forth in the Prospectus Supplement. Underwriters, dealers and
agents participating in the distribution of the Debt Securities may be
deemed to be underwriters, and any discounts and commissions received by
them and any profit realized by them on the resale of the Debt Securities
may be deemed to be underwriting discounts and commissions under the
Securities Act. Underwriters and their controlling persons, dealers and
agents may be entitled, under agreements entered into with the Company, to
indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company
will authorize underwriters or agents to solicit offers by certain
institutions to purchase Debt Securities from the Company pursuant to
delayed delivery contracts providing for payment and delivery at a future
date. Institutions with which such contracts may be made include
commercial and
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savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but in
all cases such institutions must be approved by the Company. Unless
otherwise set forth in the applicable Prospectus Supplement,
the obligations of any purchaser under any such contract will not be
subject to any conditions except that (i) the purchase of the Debt
Securities shall not at the time of delivery be prohibited under
the laws of the jurisdiction to which such purchaser is subject,
and (ii) if the Debt Securities are also being sold to underwriters
acting as principals for their own account, the underwriters
shall have purchased such Debt Securities not sold for delayed
delivery. The underwriters and such other persons will not have any
responsibility in respect of the validity or performance of such
contracts.
LEGAL OPINIONS
Certain legal matters in connection with the Debt Securities will be
passed upon for the Company by Cravath, Swaine & Moore, Worldwide Plaza,
825 Eighth Ave., New York, NY 10019. Certain legal matters will be passed
upon for the underwriters or agents, if any, named in a Prospectus
Supplement, by Jones, Day, Reavis & Pogue, 599 Lexington Avenue, New York,
New York 10022. From time to time, Jones, Day, Reavis & Pogue provides
legal services to C&A Co. and the Company and other entities in which the
principal stockholders of C&A Co. have equity interests.
EXPERTS
The consolidated financial statements and schedules of C&A Co.
incorporated by reference in this prospectus and elsewhere in the
registration statement to the extent and for the periods indicated in their
reports have been audited by Arthur Andersen LLP, independent public
accountants, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in giving said reports.
No person is authorized to give any information or to make any
representations other than those contained in this Prospectus or any
accompanying Prospectus Supplement in connection with the offer made by
this Prospectus or any Prospectus Supplement, and, if given or made, such
other information or representations must not be relied upon as having been
authorized by the Company or by any underwriter, dealer or agent. This
Prospectus and any Prospectus Supplement do not constitute an offer to sell
or a solicitation of an offer to buy any securities other than those to
which they relate. Neither the delivery of this Prospectus and any
accompanying Prospectus Supplement nor any sale of or offer to sell the
Debt Securities offered hereby shall, under any circumstances, create an
implication that there has been no change in the affairs of the Company or
that the information herein is correct as of any time after the date
hereof. This Prospectus and any accompanying Prospectus Supplement do not
constitute an offer to sell or a solicitation of an offer to buy any of the
Debt Securities
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offered hereby in any state to any person to whom it is
unlawful to make such offer or solicitation in such state.
27
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following statement sets forth the estimated amounts of expenses,
other than underwriting discounts, to be borne by the registrant in
connection with the distribution of the Debt Securities.
Securities and Exchange Commission registration fee... $137,931
Trustees' fees and expenses........................... 20,000
Printing and engraving expenses....................... 25,000
Rating agency fees.................................... 160,000
Accounting fees and expenses.......................... 20,000
Legal fees and expenses............................... 75,000
Blue Sky fees and expenses
(including fees and expenses of counsel).............. 20,000
Miscellaneous expenses................................ 10,000
Total Expenses................................... 467,931
Item 15. Indemnification of Directors and Officers
Each Registrant is a Delaware corporation. Section 145 of the
Delaware General Corporation Law (the "DGCL") provides that a corporation
may indemnify any person who was or is threatened to be made a party to any
threatened, pending or completed actions, suits or proceedings, whether
civil, criminal, administrative or investigative (other than an action by
or in the right of the corporation-a "derivative action"), by reason of the
fact that he or she is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or other
enterprise (an "indemnitee") against expenses (including attorneys' fees),
judgements, fines and amounts paid in settlement actually and reasonably
incurred if such person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal actions or proceedings, had
no reasonable cause to believe his or her conduct was unlawful. A similar
standard is applicable in the case of derivative actions, except that
indemnification only extends to expenses (including attorneys' fees)
actually and reasonably incurred in connection with the defense or
settlement of such action, and the statute requires court approval before
there can be any indemnification where the person seeking indemnification
has been found liable to the corporation with respect to any claim, issue
or matter in the derivative action. The statute further provides for the
mandatory indemnification of an indemnitee who is successful on the merits
or otherwise in defending any action, suit or proceeding described in the
statute or in defence of any claim, issue or matter therein, and authorizes
a corporation to pay in advance any expenses incurred by an indemnitee in
any covered proceeding, provided that a director or officer must furnish to
the corporation on undertaking to repay the amounts advanced if it is
ultimately determined that the director or officer is not entitled to
indemnification. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's charter, by-laws,
disinterested director vote, stockholder vote, agreement or otherwise.
II - 1
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Each Registrant's By-Laws provide that any person made a party to or
threatened to be made a party to or otherwise involved in any action, suit
or proceeding by reason of the fact he or she is or was a director or
officer of the Registrant, or is or was a director, officer, employee or
agent of any other enterprise for which he or she served as such at the
request of the Registrant, shall be indemnified by the Registrant to the
fullest extent authorized by the DGCL against all expenses (including
attorneys' fees) reasonably incurred by such indemnitee (except, with
limited exceptions, for suits brought by the indemnitee unless authorized
by the Board of Directors of the Registrant). Such right of
indemnification includes the right to be paid, in advance, all expenses
incurred in connection with the defense of a proceeding (upon receipt of
any required undertaking) and is a contract right and shall not be deemed
exclusive of any other rights to which such director or officer may be
entitled outside the indemnification provisions of said By-Laws.
Section 102(b)(7) of the DGCL permits a corporation organized
thereunder to include in its certificate of incorporation a provision
eliminating or limiting, with certain exceptions, the personal liability of
a director to the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director. The Certificate of Incorporation
of each of the Registrants eliminates the liability of directors to the
full extent permitted by the DGCL (as it exists or may be amended).
The foregoing statements are subject to the detailed provisions of
Section 145 and 102(b)(7) of the DGCL, Article VIII of Collins & Aikman
Corporation's By-Laws and Article Eighth of its Restated Certificate of
Incorporation and Article VIII of Collins & Aikman Products Co.'s By-Laws
and Article Eight, of its Certificate of Incorporation, as applicable.
C&A Co. has insurance coverage under policies issued to it (which
policies also cover the Company) for losses by any person who is or
hereafter may be a director or officer of C&A Co. arising from claims
against that person for any wrongful act (subject to certain exceptions) in
his or her capacity as a director or officer of C&A Co. or any of its
subsidiaries, including the Company. The policies also provide for
reimbursement to C&A Co. or its subsidiaries for indemnification given by
them pursuant to common or statutory law or the Certificate of
Incorporation or the By-Laws to any such person arising from any such
claims. The policies' present coverage is limited to a maximum of $50
million for claims made in a single year and there is a deductible of $1
million.
Item 16. Exhibits
(1) - Proposed form of Debt Securities Underwriting Agreement.**
(4.1) - Form of Senior Indenture.**
(4.2) - Form of Subordinated Indenture.**
(5) - Opinion of Cravath, Swaine & Moore.**
(12) - Statement regarding the computation of the ratio of earnings
to fixed charges.**
(23.1) - Consent of Arthur Andersen LLP, Independent Public
Accountants.**
(23.2) - Consent of Counsel (included in Exhibit (5)).**
(24) - Powers of Attorney.**
(25) - Statement of Eligibility and Qualification on Form T-1 of
Trustee (bound separately).*
*To be filed.
**Previously filed.
II - 2
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Item 17. Undertakings
A. Undertaking Pursuant to Rule 415
The undersigned Registrants hereby undertake:
(a) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by one of
the Registrants pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that
are incorporated by reference in the Registration Statement;
(b) that, for the purpose of determining any liability under the 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
(c) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. Undertaking Regarding Filings Incorporating Subsequent Exchange Act
Documents by Reference
The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of Collins
& Aikman Corporation's annual report pursuant to Section 13(a) or Section
15(d)
II - 3
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of the Exchange Act that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
C. Undertaking in Respect of Indemnification
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrants pursuant to the provisions described in Item 15
above, or otherwise, the Registrants have 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 either of the Registrants of
expenses incurred or paid by a director, officer or controlling person of
such Registrant in the successful defense of any action, suit or
proceeding) is asserted by such officer, director or controlling person in
connection with the securities being registered, the Registrants will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether or not 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.
D. Undertaking in Respect of Rule 430A
The undersigned Registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrants pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Securities
Act, each post-effective amendment that contains 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.
E. Undertaking in Respect of Qualification of Trust Indentures Under the
Trust Indenture Act of 1939 for Delayed Offerings
The undersigned Registrants hereby undertake 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 - 4
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Amendment to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Charlotte, State of
North Carolina, on October 19, 1995.
COLLINS & AIKMAN PRODUCTS CO.
By /s/ J. Michael Stepp
Name: J. Michael Stepp
Title: Executive Vice President
and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to Registration Statement has been signed below on the dates
indicated by the following persons in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Thomas E. Hannah* Director, President and October 19, 1995
(Thomas E. Hannah) Chief Executive Officer
(Principal Executive Officer)
/s/ J. Michael Stepp Executive Vice President October 19, 1995
(J. Michael Stepp) and Chief Financial Officer
(Principal Financial Officer)
/s/ Anthony Hardwick Vice President and October 19, 1995
(Anthony Hardwick) Controller
(Principal Accounting Officer)
II - 5
<PAGE>
Signature Title Date
/s/ David A. Stockman Co-Chairman of the Board October 19, 1995
(David A. Stockman) of Directors
/s/ Randall J. Weisenburger* Co-Chairman of the Board October 19, 1995
(Randall J. Weisenburger) of Directors
*By /s/ David A. Stockman
David A. Stockman,
Attorney-In-Fact
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Amendment to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Charlotte, State of
North Carolina, on October 19, 1995.
COLLINS & AIKMAN CORPORATION
By /s/ J. Michael Stepp
Name: J. Michael Stepp
Title: Executive Vice President
and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to Registration Statement has been signed below on the dates
indicated by the following persons in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Thomas E. Hannah* Director and Chief October 19, 1995
(Thomas E. Hannah) Executive Officer
(Principal Executive Officer)
II - 6
<PAGE>
Signature Title Date
/s/ J. Michael Stepp Executive Vice President October 19, 1995
(J. Michael Stepp) and Chief Financial Officer
(Principal Financial Officer)
/s/ Anthony Hardwick Vice President and October 19, 1995
(Anthony Hardwick) Controller
(Principal Accounting Officer)
/s/ David A. Stockman Co-Chairman of the Board October 19, 1995
(David A. Stockman) of Directors
/s/ Randall J. Weisenburger* Co-Chairman of the Board October 19, 1995
(Randall J. Weisenburger) of Directors
/s/ Robert C. Clark*
(Robert C. Clark) Director October 19, 1995
/s/ George L. Majoros, Jr.*
(George L. Majoros, Jr.) Director October 19, 1995
/s/ James J. Mossman*
(James J. Mossman) Director October 19, 1995
/s/ Warren B. Rudman*
(Warren B. Rudman) Director October 19, 1995
/s/ Stephen A. Schwarzman*
(Stephen A. Schwarzman) Director October 19, 1995
II - 7
<PAGE>
Signature Title Date
/s/ W. Townsend Ziebold, Jr.*
(W. Townsend Ziebold, Jr.) Director October 19, 1995
*By /s/ David A. Stockman
David A. Stockman,
Attorney-In-Fact
</TABLE>
II - 8
