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As filed with the Securities and Exchange Commission on June 10, 1996
Registration No. 333-4012
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FIRST DATA CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 47-0731996
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
401 Hackensack Avenue
Hackensack, New Jersey 07601
(201) 525-4702
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
David P. Bailis
General Counsel
First Data Corporation
2121 North 117th Avenue
Omaha, Nebraska 68164
(402) 498-2170
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
--------------------
Copies to:
Thomas A. Rossi Jim L. Kaput
First Data Corporation Sidley & Austin
2121 North 117th Avenue One First National Plaza
Omaha, Nebraska 68164 Chicago, Illinois 60603
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
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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. [_]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
SUBJECT TO COMPLETION, DATED JUNE 10, 1996
PROSPECTUS
$500,000,000
First Data Corporation
Securities
First Data Corporation, a Delaware corporation (the "Company" or
"FDC"), may offer from time to time (i) unsecured debt securities ("Debt
Securities") consisting of debentures, notes and/or other unsecured
evidences of indebtedness in one or more series, (ii) shares of preferred
stock, par value $1.00 per share ("Preferred Stock"), in one or more
series, or (iii) shares of common stock, par value $.01 per share ("Common
Stock"), (the Debt Securities, Preferred Stock and Common Stock are
collectively referred to as "Securities"), or any combination of the
foregoing, at an aggregate initial offering price not to exceed $500,000,000
(or the equivalent thereof if Debt Securities are denominated in one or more
foreign currencies or foreign currency units), at prices and on terms to be
determined at or prior to the time of sale.
Specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in an accompanying Prospectus Supplement
(as supplemented by any applicable pricing supplement relating thereto, a
"Prospectus Supplement"), together with the terms of the offering of the
Securities, the initial offering price and the net proceeds to the Company
from the sale thereof. The Prospectus Supplement will set forth, among other
matters, the following with respect to the particular Securities: (i) in the
case of Debt Securities, the specific designation, aggregate principal
amount, ranking as senior debt ("Senior Securities") or subordinated debt
("Subordinated Securities"), authorized denominations, maturity, rate or
method of calculation of interest and dates for payment thereof, any
conversion, redemption, prepayment or sinking fund provisions, and the
currency, currencies or currency units in which principal, premium, if any,
or interest, if any, is payable, (ii) in the case of Preferred Stock, the
designation, number of shares, liquidation preference, initial public
offering price, dividend rate (or method of calculation thereof), dates on
which dividends shall be payable and dates from which dividends shall accrue,
any redemption or sinking fund provisions, any conversion or exchange rights
and (iii) in the case of Common Stock, the number of shares of Common Stock
and the terms of the offering and sale thereof.
----------------------------
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 Company may sell Securities directly to purchasers or through agents
designated from time to time by the Company or to or through underwriters or
a group of underwriters which may be managed by one or more underwriters. If
any agents of the Company or any underwriters are involved in the sale of
Securities in respect of which this Prospectus is being delivered, the names
of such agents or underwriters and any applicable commission or discount will
be set forth in the applicable Prospectus Supplement. The net proceeds to the
Company from the sale of Securities will be the public offering price of such
Securities less such discount, in the case of an offering through an
underwriter, or the purchase price of such Securities less such commission,
in the case of an offering through an agent, and less, in each case, other
expenses of the Company associated with the issuance and distribution of such
Securities.
----------------------------
The date of this Prospectus is , 1996.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). The Company
has filed with the Commission a registration statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Securities offered hereby. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all information set forth in the Registration Statement and reference
is hereby made to the Registration Statement and the exhibits thereto for
further information with respect to the Company and the Securities offered
hereby. Such reports, proxy statements, Registration Statement and exhibits
and other information omitted from this Prospectus can 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 its Northeast
Regional Office located at 7 World Trade Center, Suite 1300, New York, New
York 10048 and Midwest Regional Office located at Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
material can be obtained at prescribed rates from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.
The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission at (http://www.sec.gov). Certain of the
Company's securities are listed on the New York Stock Exchange and such
reports, proxy statements and other information may also be inspected at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Annual Report of the Company on Form 10-K for the year ended
December 31, 1995, the Quarterly Report of the Company on Form 10-Q for the
Quarter ended March 31, 1996, the Current Report of the Company on Form 8-K
dated January 30, 1996 and the registration statement of the Company on Form
8-A, dated March 24, 1992, are incorporated by reference into this
Prospectus. All documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities
contemplated hereby shall be deemed to be incorporated by reference into this
Prospectus and to be made a part hereof from the respective dates of filing
of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of the Registration Statement and this Prospectus
to the extent that a statement contained herein, in the accompanying
Prospectus Supplement or in any subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of the Registration
Statement or this Prospectus.
Copies of the above documents (other than exhibits to such documents
unless such exhibits are specifically incorporated by reference into such
documents) may be obtained upon written or oral request without charge from
the Company, 5660 New Northside Drive, Atlanta, Georgia 30328 (telephone
number (770) 857-7118), Attention: Investor Relations.
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The following trademarks are mentioned in this Prospectus: "First
Data/(R)/" and "First Data Corporation/(R)/" are service marks of First
Data Corporation.
The Company is incorporated in Delaware. Its executive offices are
located at 401 Hackensack Avenue, 7th Floor, Hackensack, New Jersey 07601
(telephone number (201) 525-4702).
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THE COMPANY
The Company provides high-quality, high-volume information processing
and related services including: transaction card issuer services and merchant
processing services, payment instruments, investment processing services,
check acceptance and guaranty services, health care administration services,
receivables management services, in-store banking services, teleservices and
imaging, database and other information management services. The Company's
information processing facilities are comprised of integrated networks of
computer hardware, proprietary software and other telecommunications and
operations systems. The Company has data centers which are capable of
servicing a wide range of client groups, enabling it to process transactions
for thousands of clients in a rapid and cost effective manner and to take
advantage of economies-of-scale when adding new clients. The Company
regularly considers acquisition opportunities as well as other forms of
business combinations and divestitures. Historically, the Company has been
involved in numerous transactions of varying magnitudes, for consideration
which has included cash or securities (including common stock) or
combinations thereof. The Company continues to evaluate and pursue
transaction opportunities as they arise. No assurance can be given with
respect to the timing, likelihood or the financial or business effect of any
possible transaction.
USE OF PROCEEDS
Except as set forth in the Prospectus Supplement for a specific offering
of Securities, the net proceeds from the sale of the Securities will be
applied by the Company for general corporate purposes.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges
for the Company and its consolidated subsidiaries for the periods indicated.
The Company to date has not issued Preferred Stock; therefore, the ratios of
earnings to combined fixed charges and preferred stock dividends are the same
as the ratios of earnings to fixed charges set forth below.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
<S> <C> <C> <C> <C> <C>
1995(A) 1994 1993 1992 1991
----- ---- ---- ---- ----
Ratio of earnings to fixed charges...... 2.03x 6.96x 6.59x 4.25x 4.09x
</TABLE>
The computation of the ratio of earnings to fixed charges is based on
applicable amounts of the Company and its consolidated subsidiaries.
"Earnings" consist of income before income taxes and fixed charges. "Fixed
charges" consist of interest on indebtedness, amortization of debt discount
and expense and an estimated amount of rental expense that is deemed to be
representative of the interest factor.
--------------------
(a) Includes a merger, integration and impairment charge of $645.7 million
relating to the Company's October 27, 1995 merger with First Financial
Management Corporation. The pro forma ratio of earnings to fixed charges
without this charge would have been 6.00x.
DESCRIPTION OF DEBT SECURITIES
The Senior Securities are to be issued under an indenture dated as of
March 26, 1993, as supplemented from time to time (the "Senior Indenture"),
between the Company and Norwest Bank Minnesota, National Association, as
Trustee, and the Subordinated Securities are to be issued under an indenture
dated as of April 1, 1996, as supplemented from time to time (the
"Subordinated Indenture"), between the Company and The Bank of New York, as
Trustee. The term "Trustee" as used herein shall refer to either Norwest Bank
Minnesota, National Association or The Bank of New York, as appropriate, for
Senior Securities or Subordinated Securities. The Senior Indenture and the
Subordinated Indenture (being referred to herein collectively as the
"Indentures" and individually as an "Indenture") are filed as exhibits to the
Registration Statement. The Indentures are subject to and governed by the
Trust Indenture Act of 1939, as amended. The statements made under this
heading relating to the Debt Securities and the Indentures are summaries of
the provisions thereof, and are subject to, and are qualified in their
entirety by reference to the Indentures, including the definitions of certain
terms therein. Certain capitalized terms used below but not
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defined herein have the meanings ascribed to them in the Indentures. Unless
otherwise noted, section references below are to both Indentures.
GENERAL
The Debt Securities will be unsecured obligations of the Company. The
indebtedness represented by the Senior Securities will rank on a parity with
the Company's other unsecured and unsubordinated indebtedness. The
indebtedness represented by the Subordinated Securities will be subordinated
in right of payment to the prior payment in full of the Senior Indebtedness
of the Company as described under "Subordination" below. The Debt Securities
may be issued in one or more series. The particular terms of the Debt
Securities being offered (the "Offered Debt Securities"), any modifications
of or additions to the general terms of the Debt Securities and any
applicable Federal income tax considerations as described herein that may be
applicable in the case of the Offered Debt Securities will be described in
the Prospectus Supplement relating to the Offered Debt Securities.
Accordingly, for a description of the terms of the Offered Debt Securities,
reference must be made both to the Prospectus Supplement relating thereto and
the description of Debt Securities set forth in this Prospectus.
The Company primarily conducts its operations through its subsidiaries.
The rights of the Company and its creditors, including the Holders (as
defined below under "Certain Definitions") of the Debt Securities, to
participate in the assets of any subsidiary upon the latter's liquidation or
reorganization will be subject to the prior claims of the subsidiary's
creditors except to the extent that the Company may itself be a creditor with
recognized claims against the subsidiary.
Reference is made to the Prospectus Supplement for the terms of a series
of Debt Securities being offered, including: (1) the title of such Debt
Securities and whether they are Senior Securities or Subordinated Securities,
(2) the aggregate principal amount of such Debt Securities, (3) the
percentage of the principal amount at which such Debt Securities will be
issued and, if other than the principal amount thereof, the portion of the
principal amount thereof payable upon declaration of acceleration of the
Maturity (as defined below under "Certain Definitions") thereof, (4) the date
or dates on which or periods during which the Debt Securities of a series may
be issued, and the date or dates on which the principal of (and premium, if
any, on) such Debt Securities will be payable, (5) the rate or rates at which
such Debt Securities will bear interest, if any, or the method by which such
rate or rates shall be determined, the date or dates from which such
interest, if any, shall accrue, the interest payment dates on which such
interest will be payable and, in the case of Registered Securities (as
defined below under "Certain Definitions"), the regular record dates, if any,
for the interest payable on such interest payment dates, (6) the additional
offices, if any, where the principal of (and premium, if any) and interest on
Debt Securities of the series shall be payable, (7) the obligation, if any,
of the Company to redeem, repay or purchase Debt Securities of the series
pursuant to any sinking fund or analogous provisions or at the option of the
Holder and the period or periods within which, or the date or dates on which,
the prices at which and the terms and conditions upon which Debt Securities
of the series shall be redeemed, repaid or purchased, in whole or in part,
pursuant to such obligation, (8) the period or periods within which, or the
date or dates on which, the price or prices at which, and the terms and
conditions upon which Debt Securities of the series may be redeemed, if any,
in whole or in part, at the option of the Company or otherwise, (9) if the
coin or currency in which the Debt Securities shall be issuable is U.S.
dollars, the denominations of such Debt Securities if other than
denominations of $1,000 and any integral multiple thereof, (10) whether the
Debt Securities of the series are to be issued as original issue discount
securities ("Discount Securities") and the amount of discount at which such
Debt Securities may be issued and, if other than the principal amount
thereof, the portion of the principal amount of Debt Securities of the series
which shall be payable upon declaration of acceleration of the Maturity
thereof upon an Event of Default (as defined below under "Events of
Default"), (11) provisions, if any, for the defeasance of Debt Securities of
the series, (12) whether Debt Securities of the series are to be issued as
Registered Securities or Bearer Securities or both, and, if Bearer Securities
are issued, whether any interest coupons appertaining thereto ("Coupons")
will be attached thereto, (13) whether provisions for payment of additional
amounts or tax redemptions shall apply and, if such provisions shall apply,
such provisions; and, if Bearer Securities of the series are to be issued,
the applicable procedures and certificates relating to the exchange of
temporary Global Securities for definitive Bearer Securities, (14) if other
than U.S. dollars, the currency, currencies or currency units (the term
"currency" as used herein will include currency units) in which Debt
Securities of the series shall be denominated or in which payment of the
principal of (and premium, if any) and interest on the Debt Securities of the
series may be made, (15) if the principal of (and premium, if any) or
interest on Debt Securities of the series are to be payable, at the election
of the Company or a Holder thereof, in a currency other than that in which
the Debt Securities are denominated or payable without such election, the
period or periods within which and the terms and conditions upon which, such
election may be made, (16) the date as of which any Debt Securities of the
series shall be dated, (17) if the amount of payments of principal of (and
premium, if any) or interest on the Debt Securities of the series may be
determined with reference to an index, the manner in which such amounts shall
be determined, (18) if the Debt Securities of the series are denominated or
payable in a foreign
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currency, any other terms concerning the payment of principal of (and
premium, if any) or any interest on such Debt Securities, (19) any addition
to, or modification or deletion of, any Events of Default or covenants
provided for with respect to Debt Securities of the series, (20) whether the
Debt Securities of the series shall be issued in whole or in part in the form
of one or more Global Securities and,
in such case, the depositary or any common depositary for such Global
Securities; and if the Debt Securities of the series are issuable only as
Registered Securities, the manner in which and the circumstances under which
Global Securities representing Debt Securities of the series may be exchanged
for Registered Securities in definitive form, (21) if the Debt Securities are
Subordinated Securities, whether they will be convertible into shares of
Common Stock and, if so, the terms and conditions, which may be in addition
to or in lieu of the provisions contained in the Subordinated Indenture, upon
which such Debt Securities will be so convertible, and (22) any other terms
not inconsistent with the applicable Indenture. (Section 3.01)
Each Indenture provides that the aggregate principal amount of Debt
Securities that may be issued thereunder is unlimited. The Debt Securities
may be issued in one or more series thereunder, in each case as authorized
from time to time by the Board of Directors of the Company, or any committee
thereof or any duly authorized officers. (Section 3.01)
In the event that Discount Securities are issued, the Federal
income tax consequences and other special considerations applicable to such
Discount Securities will be described in the Prospectus Supplement relating
thereto.
The general provisions of the Indentures do not contain any
provisions that would limit the ability of the Company to incur indebtedness
or that would afford holders of Debt Securities protection in the event of a
highly leveraged or similar transaction involving the Company. However, the
general provisions of the Senior Indenture do provide that neither the
Company nor any Subsidiary (as defined below under "Certain Definitions")
may subject certain of its property or assets to any mortgage or other
encumbrance unless the Debt Securities issued under the Senior Indenture are
secured equally and ratably with or prior to such other indebtedness thereby
secured. See "Certain Covenants of Senior Securities" below. Reference is
made to the Prospectus Supplement related to the Offered Debt Securities for
information with respect to any deletions from, modifications of or additions
to the Events of Default or covenants of the Company that are described
below, including any addition of covenants or other provisions providing
event risk or similar protection.
All of the Debt Securities of a series need not be issued at the
same time, and may vary as to interest rate, maturity and other provisions
and unless otherwise provided, a series may be reopened for issuance of
additional Debt Securities of such series. (Section 3.01)
DENOMINATIONS, EXCHANGE, REGISTRATION AND TRANSFER
Unless otherwise specified in the Prospectus Supplement, the Debt
Securities of any series shall be issuable only as Registered Securities in
denominations of $1,000 and any integral multiple thereof and shall be
payable only in U.S. dollars. (Section 3.02) The Indentures also provide that
Debt Securities of a series may be issuable in global form. See "Book-Entry
Debt Securities." Unless otherwise indicated in the Prospectus Supplement,
Bearer Securities will have Coupons attached. (Section 2.01)
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of like aggregate principal amount
and of like Stated Maturity (as defined below under "Certain Definitions")
and with like terms and conditions. If so provided in the Prospectus
Supplement, at the option of the Holder thereof, to the extent permitted by
law, any Bearer Security of any series which by its terms is registrable as
to principal and interest may be exchanged for a Registered Security of such
series of like aggregate principal amount and of a like Stated Maturity and
with like terms and conditions, upon surrender of such Bearer Security at the
corporate trust office of the applicable Trustee or at any other office or
agency of the Company designated for the purpose of making any such
exchanges. Subject to certain exceptions, any Bearer Security issued with
Coupons surrendered for exchange must be surrendered with all unmatured
Coupons and any matured Coupons in default attached thereto. (Section 3.05)
Notwithstanding the foregoing, the exchange of Bearer Securities
for Registered Securities will be subject to the provisions of United States
income tax laws and regulations applicable to Debt Securities in effect at
the time of such exchange. (Section 3.05)
Except as otherwise specified in the Prospectus Supplement, in no
event may Registered Securities, including Registered Securities received in
exchange for Bearer Securities, be exchanged for Bearer Securities. (Section
3.05)
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Upon surrender for registration of transfer of any Registered Security
of any series at the office or agency of the Company maintained for such
purpose, the Company shall execute, and the applicable Trustee shall
authenticate and deliver, in the name of the designated transferee, one or
more new Registered Securities of the same series of like aggregate principal
amount of such denominations as are authorized for Registered Securities of
such series and of a like Stated Maturity and with like terms and conditions.
No service charge will be made for any transfer or exchange of Debt
Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
(Section 3.05)
The Company shall not be required (i) to register, transfer or exchange
Debt Securities of any series during a period beginning at the opening of
business 15 days before the day of the transmission of a notice of redemption
of Debt Securities of such series selected for redemption and ending at the
close of business on the day of such transmission, or (ii) to register,
transfer or exchange any Debt Security so selected for redemption in whole or
in part, except the unredeemed portion of any Debt Security being redeemed in
part. (Section 3.05)
CERTAIN COVENANTS OF SENIOR SECURITIES
The Senior Indenture contains, among other things, the following
covenants:
Limitation Upon Mortgages and Liens. Neither the Company nor a
Subsidiary may create or assume, except in favor of the Company or a Wholly-
Owned Subsidiary (as defined below under "Certain Definitions"), any
mortgage, pledge, lien or encumbrance upon any Principal Facility (as defined
below under "Certain Definitions") or any stock of any Subsidiary or
indebtedness of any Subsidiary to the Company or any other Subsidiary without
equally and ratably securing the Outstanding Senior Securities. This
limitation will not apply to certain permitted encumbrances as described in
the Senior Indenture, including (a) purchase money mortgages entered into
within specified time limits; (b) liens extending, renewing or refunding any
liens permitted by clause (a) of this covenant; (c) liens existing on
acquired property; (d) certain tax, materialmen's, mechanics' and judgment
liens, certain liens arising by operation of law and certain other similar
liens; (e) liens in connection with certain government contracts; (f) certain
mortgages, pledges, liens or encumbrances in favor of any state or local
government or governmental agency in connection with certain tax-exempt
financings; (g) liens to secure the cost of construction or improvement of
any property entered into within specified time limits; and (h) mortgages,
pledges, liens and encumbrances not otherwise permitted if the sum of the
indebtedness thereby secured plus the aggregate sales price of property
involved in sale and lease back transactions referred to in clause (a) under
"--Limitation Upon Sale and Leaseback Transactions" below does not exceed
the greater of $50,000,000 or 10% of Consolidated Stockholders' Equity (as
defined below under "Certain Definitions"). (Section 12.07 of the Senior
Indenture)
Limitation Upon Sale and Leaseback Transactions. The Company and any
Subsidiary will be prohibited from selling any Principal Facility owned on
the date of the Senior Indenture with the intention of taking back a lease
thereof, other than a temporary lease (a lease of not more than 36 months)
with the intent that the use of the property by the Company or such
Subsidiary will be discontinued at or before the expiration of such period,
unless (a) the sum of the sale price of property involved in sale and
leaseback transactions not otherwise permitted plus all indebtedness secured
by mortgages, pledges, liens and encumbrances referred to in clause (g) under
"--Limitation Upon Mortgages and Liens" above does not exceed the greater
of $50,000,000 or 10% of Consolidated Stockholders' Equity; or (b) the
greater of the net proceeds of such sale or the fair market value of such
Principal Facility (which may be conclusively determined by the Board of
Directors of the Company) are applied within 120 days to the optional
retirement of Outstanding Senior Securities or to the optional retirement of
other Funded Debt (as defined below under "Certain Definitions") of the
Company ranking on a parity with the Senior Securities. (Section 12.08 of the
Senior Indenture)
In addition, unless otherwise specified in the applicable Prospectus
Supplement, the Senior Securities of each series will contain the following
covenant:
Limitation on Indebtedness of Restricted Subsidiaries. No Restricted
Subsidiary (as defined below under "Certain Definitions") will create, incur,
assume or guarantee any Indebtedness (as defined below under "Certain
Definitions") unless immediately thereafter the aggregate amount of all
Indebtedness of Restricted Subsidiaries (excluding Indebtedness owed to the
Company or a Restricted Subsidiary, including any renewal or replacement
thereof) and the discounted present value of all net rentals payable under
leases covered by the covenant entitled "Limitation Upon Sale and Leaseback
Transactions" (and not expressly excluded therefrom) would not exceed 15% of
Consolidated Stockholders' Equity; provided, however, that, solely for
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purposes of this covenant, Indebtedness shall not include indebtedness
incurred in connection with overdraft or similar facilities related to
settlement, clearing and related activities by a Restricted Subsidiary in the
ordinary course of business consistent with past practice to the extent that
such indebtedness remains outstanding for a period not to exceed 72 hours;
and provided, further, that any indebtedness of a Person (i) existing at the
time such Person becomes a Restricted Subsidiary or is merged with or into
the Company or a Restricted Subsidiary or other entity or (ii) assumed by the
Company or a Subsidiary in connection with the acquisition of all or a
portion of the business of such Person, shall not be deemed to be
Indebtedness created, incurred, assumed or guaranteed by a Restricted
Subsidiary or otherwise deemed to be Indebtedness of a Restricted Subsidiary
for the purposes of this covenant.
EVENTS OF DEFAULT
Under the Indentures, "Event of Default" with respect to the Debt
Securities of any series means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law, pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body): (1) default in the payment of any
interest upon any Debt Security or any payment with respect to the Coupons,
if any, of such series when it becomes due and payable, and continuance of
such default for a period of 30 days; (2) default in the payment of the
principal of (and premium, if any, on) any Debt Security of such series at
its Maturity; (3) default in the deposit of any sinking fund payment, when
and as due by the terms of a Debt Security of such series; (4) default in the
performance, or breach of any covenant or warranty in the applicable
Indenture (other than a covenant or warranty a default in whose performance
or whose breach is elsewhere in the applicable Indenture specifically dealt
with or which expressly has been included in the applicable Indenture solely
for the benefit of Debt Securities of a series other than such series), and
continuance of such default or breach for a period of 60 days after there has
been given to the Company by the applicable Trustee or to the Company and the
applicable Trustee by the Holders of at least 25% in principal amount of the
Outstanding Debt Securities of such series, a written notice specifying such
default or breach and requiring it to be remedied; (5) in the case of the
Senior Indenture, default (i) in the payment of any scheduled principal of or
interest on any Indebtedness of the Company or any Subsidiary of the Company
(other than Senior Securities of such series), aggregating more than
$10,000,000 in principal amount, when due after giving effect to any
applicable grace period or (ii) in the performance of any other term or
provision of any Indebtedness of the Company or any Subsidiary of the Company
(other than Senior Securities of such series) in excess of $10,000,000
principal amount that results in such Indebtedness becoming or being declared
due and payable prior to the date on which it would otherwise become due and
payable, and such acceleration shall not have been rescinded or annulled, or
such Indebtedness shall not have been discharged, within a period of 15 days
after there has been given to the Company by the applicable Trustee or to the
Company and the applicable Trustee by the Holders of at least 25% in
principal amount of the Outstanding Senior Securities of such series, a
written notice specifying such default or defaults; (6) in the case of the
Subordinated Indenture, default (i) in the payment of any scheduled principal
of or interest on any Indebtedness of the Company or any Subsidiary of the
Company (other than Subordinated Securities of such series), aggregating more
than $10,000,000 in principal amount at the final stated maturity thereof, or
(ii) in the performance of any term or provision of any Indebtedness of the
Company or any Subsidiary of the Company (other than Subordinated Securities
of such series) in excess of $10,000,000 principal amount, including, without
limitation, the payment of any principal of or interest on such Indebtedness
when due after giving effect to any applicable grace period, that results in
such Indebtedness becoming or being declared due and payable prior to the
date on which it would otherwise become due and payable, and such
acceleration shall not have been rescinded or annulled, or such Indebtedness
shall not have been discharged, within a period of 15 days after there has
been given to the Company by the applicable Trustee or to the Company and the
applicable Trustee by the Holders of at least 25% in principal amount of the
Outstanding Subordinated Securities of such series, a written notice
specifying such default or defaults; (7) in the case of the Senior Indenture,
the entry against the Company or any Subsidiary of the Company of one or more
judgments, decrees or orders by a court from which no appeal may be or is
taken for the payment of money, either individually or in the aggregate, in
excess of $10,000,000, and the continuance of such judgment, decree or order
unsatisfied and in effect for any period of 45 consecutive days after the
amount thereof is due without a stay of execution; (8) certain events of
bankruptcy, insolvency or reorganization with respect to the Company; or (9)
any other Event of Default provided with respect to Debt Securities of that
series pursuant to the applicable Indenture. (Section 5.01)
Each Indenture requires the Company to file with the applicable
Trustee, annually, an officer's certificate as to the Company's compliance
with all conditions and covenants under the applicable Indenture. (Section
12.02) Each Indenture provides that the applicable Trustee may withhold
notice to the Holders of a series of Debt Securities of any default (except
payment defaults on such Debt Securities) if it considers such withholding to
be in the interest of the Holders of such series of Debt Securities to do so.
(Section 6.02)
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If an Event of Default with respect to Debt Securities of any
series at the time Outstanding occurs and is continuing, then in every case
the applicable Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Debt Securities of such series may declare the
principal amount (or, if any Debt Securities of such series are Discount
Securities, such portion of the principal amount of such Discount Securities
as may be specified in the terms of such Discount Securities) of all the Debt
Securities of such series to be due and payable immediately, by a notice in
writing to the Company (and to the applicable Trustee if given by Holders),
and upon any such declaration such principal amount (or specified amount)
shall become immediately due and payable. Upon payment of such amount in the
currency in which such Debt Securities are denominated (except as otherwise
provided in the applicable Indenture or the Prospectus Supplement), all
obligations of the Company in respect of the payment of principal of the Debt
Securities of such series shall terminate. (Section 5.02)
Subject to the provisions of each Indenture relating to the duties of
the applicable Trustee, in case an Event of Default with respect to Debt
Securities of a particular series shall occur and be continuing, the
applicable Trustee shall be under no obligation to exercise any of its rights
or powers under such Indenture at the request, order or direction of any of
the Holders of Debt Securities of that series, unless such Holders shall have
offered to the applicable Trustee reasonable indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with
such request. (Section 6.03) Subject to such provisions for the
indemnification of the applicable Trustee, the Holders of a majority in
principal amount of the Outstanding Debt Securities of such series shall have
the right to direct the time, method and place of conducting any proceeding
for any remedy available to the applicable Trustee under such Indenture, or
exercising any trust or power conferred on the applicable Trustee with
respect to the Debt Securities of that series. (Section 5.12)
At any time after such a declaration of acceleration with respect to
Debt Securities of any series has been made and before a judgment or decree
for payment of the money due has been obtained by the applicable Trustee as
provided in the Indentures, the Holders of a majority in principal amount of
the Outstanding Debt Securities of such series, by written notice to the
Company and the applicable Trustee, may rescind and annul such declaration
and its consequences if (1) the Company has paid or deposited with the
applicable Trustee a sum in the currency in which such Debt Securities are
denominated (except as otherwise provided in the applicable Indenture or the
Prospectus Supplement) sufficient to pay (A) all overdue installments of
interest on all Debt Securities or all overdue payments with respect to any
Coupons of such series, (B) the principal of (and premium, if any, on) any
Debt Securities of such series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates
prescribed therefor in such Debt Securities; (C) to the extent that payment
of such interest is lawful, interest upon overdue installments of interest on
each Debt Security of such series or upon overdue payments on any Coupons of
such series at a rate established for such series, and (D) all sums paid or
advanced by the applicable Trustee and the reasonable compensation, expenses,
disbursements and advances of the applicable Trustee, its agents and counsel;
and (2) all Events of Default with respect to Debt Securities of such series,
other than the nonpayment of the principal of Debt Securities of such series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in the Indentures. No such rescission and waiver
will affect any subsequent default or impair any right consequent thereon.
(Section 5.02)
MERGER OR CONSOLIDATION
Each Indenture provides that the Company may not consolidate with or
merge into any other corporation or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, unless (1) the
corporation formed by such consolidation or into which the Company is merged
or the Person which acquires by conveyance or transfer, or which leases, the
properties and assets of the Company substantially as an entirety (the
"successor corporation") is a corporation organized and existing under the
laws of the United States or any State or the District of Columbia and
expressly assumes by a supplemental indenture the due and punctual payment of
the principal of (and premium, if any) and interest on all the Debt
Securities and the performance of every covenant of the Indentures on the
part of the Company to be performed or observed; (2) immediately after giving
effect to such transaction, no Event of Default, and no event which, after
notice or lapse of time, or both, would become an Event of Default, shall
have happened and be continuing; (3) in the case of the Senior Indenture, if,
as a result of any such consolidation or merger or such conveyance, transfer
or lease, properties or assets of the Company would become subject to a
mortgage, pledge, lien, security interest or other encumbrance which would
not otherwise be permitted by the Senior Indenture without making effective
provision whereby the Outstanding Senior Securities and any other
indebtedness of the Company then entitled thereto will be equally and ratably
secured with any and all indebtedness and obligations secured thereby, the
Company or such successor corporation or Person, as the case may be, will
take such steps as will be necessary effectively to secure all Senior
Securities equally and ratably with (or prior to) all indebtedness secured
thereby; and (4) the Company has delivered to the applicable Trustee an
officers' certificate and an opinion of counsel each stating that such
consolidation, merger, conveyance,
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transfer or lease and such supplemental indenture comply with the applicable
Indenture provisions and that all conditions precedent therein provided for
relating to such transaction have been complied with. (Section 10.01)
MODIFICATION OR WAIVER
Without the consent of any Holders, the Company and the applicable
Trustee, at any time and from time to time, may modify the applicable
Indenture for any of the following purposes: (1) to evidence the succession
of another corporation to the Company and the assumption by such successor of
the covenants of the Company in the Indentures and in the Debt Securities;
(2) to add to the covenants of the Company, for the benefit of the Holders of
all or any series of Debt Securities and the Coupons, if any, appertaining
thereto (and if such covenants are to be for the benefit of less than all
series, stating that such covenants are expressly being included solely for
the benefit of such series), or to surrender any right or power conferred in
the Indentures upon the Company; (3) to add any additional Events of Default
(and if such Events of Default are to be applicable to less than all series,
stating that such Events of Default are expressly being included solely to be
applicable to such series); (4) to add or change any of the provisions of the
applicable Indenture to such extent as shall be necessary to permit or
facilitate the issuance of Debt Securities of any series in bearer form,
registrable or not registrable, and with or without Coupons, to permit Bearer
Securities to be issued in exchange for Registered Securities, to permit
Bearer Securities to be issued in exchange for Bearer Securities of other
authorized denominations or to permit the issuance of Debt Securities of any
series in uncertificated form, provided that any such action shall not
adversely affect the interests of the Holders of Debt Securities of any
series or any related Coupons in any material respect; (5) to change or
eliminate any of the provisions of the applicable Indenture, provided that
any such change or elimination will become effective only when there is no
Outstanding Debt Security or Coupon of any series created prior to such
modification which is entitled to the benefit of such provision and as to
which such modification would apply; (6) to secure the Debt Securities; (7)
to supplement any of the provisions of the applicable Indenture to such
extent as is necessary to permit or facilitate the defeasance and discharge
of any series of Debt Securities, provided that any such action shall not
adversely affect the interests of the Holders of Debt Securities of such
series or any other series of Debt Securities or any related Coupons in any
material respect; (8) to establish the form or terms of Debt Securities and
Coupons, if any, of any series as permitted by the applicable Indenture; (9)
to evidence and provide for the acceptance of appointment thereunder by a
successor Trustee with respect to one or more series of Debt Securities and
to add to or change any of the provisions of the Indentures as is necessary
to provide for or facilitate the administration of the trusts thereunder by
more than one Trustee; or (10) to cure any ambiguity, to correct or
supplement any provision therein which may be defective or inconsistent with
any other provision therein, or to make any other provisions with respect to
matters or questions arising under the applicable Indenture which will not be
inconsistent with any provision of the applicable Indenture; provided such
other provisions shall not adversely affect the interests of the Holders of
Outstanding Debt Securities or Coupons, if any, of any series created prior
to such modification in any material respect. (Section 11.01)
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Debt Securities of each series affected by such
modification voting separately, the Company and the applicable Trustee may
modify the applicable Indenture for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of the
applicable Indenture or of modifying in any manner the rights of the Holders
under the applicable Indenture of such Debt Securities; provided, however,
that no such modification may, without the consent of the Holder of each
Outstanding Debt Security of each such series affected thereby, (1) change
the Stated Maturity of the principal of, or any installment of interest on,
any Debt Security, or reduce the principal amount thereof or the interest
thereon or any premium payable upon redemption thereof, or change the Stated
Maturity of or reduce the amount of any payment to be made with respect to
any Coupon, or change the currency or currencies in which the principal of
(and premium, if any) or interest on such Debt Security is denominated or
payable, or reduce the amount of the principal of a Discount Security that
would be due and payable upon a declaration of acceleration of the Maturity
thereof, or adversely affect the right of repayment or repurchase, if any, at
the option of the Holder, or reduce the amount of, or postpone the date fixed
for, any payment under any sinking fund or analogous provisions for any Debt
Security, or impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or limit the obligation of the
Company to maintain a paying agency outside the United States for payments on
Bearer Securities, or adversely affect the right to convert any Subordinated
Security into shares of Common Stock as may be set forth in the Prospectus
Supplement; (2) reduce the percentage in principal amount of the Outstanding
Debt Securities of any series, the consent of whose Holders is required for
any supplemental indenture, or the consent of whose Holders is required for
any waiver of compliance with certain provisions of the Indentures or certain
defaults thereunder and their consequences provided for in the Indentures;
(3) modify any of the provisions of the applicable Indenture relating to
modifications and waivers of defaults and covenants, except to increase any
such percentage or to provide that certain other provisions of the applicable
Indenture cannot be modified or waived without the consent of the Holder of
each
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Outstanding Debt Security of each series affected thereby; or (4) in the case
of the Subordinated Indenture, modify any of the provisions relating to the
subordination of the Subordinated Securities in a manner adverse to the
Holders thereof. (Section 11.02)
A modification which changes or eliminates any covenant or other
provision of the applicable Indenture with respect to one or more particular
series of Debt Securities and Coupons, if any, or which modifies the rights
of the Holders of Debt Securities and Coupons of such series with respect to
such covenant or other provision, shall be deemed not to affect the rights
under the applicable Indenture of the Holders of Debt Securities and Coupons,
if any, of any other series. (Section 11.02)
In the case of the Subordinated Indenture, no modification may adversely
affect the rights of any holder of Senior Indebtedness under the
subordination provisions of the Subordinated Indenture without the consent of
such holder. (Section 11.08 of the Subordinated Indenture)
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may on behalf of the Holders of all
the Debt Securities of any such series waive any past default under the
applicable Indenture with respect to such series and its consequences, except
a default (1) in the payment of the principal of (or premium, if any) or
interest on any Debt Security of such series, or in the payment of any
sinking fund installment or analogous obligation with respect to the Debt
Securities of such series, or (2) in respect of a covenant or provision
hereof which pursuant to the second paragraph under "Modification or
Waiver" cannot be modified or amended without the consent of the Holder of
each Outstanding Debt Security of such series affected. Upon any such waiver,
such default will cease to exist, and any Event of Default arising therefrom
will be deemed to have been cured, for every purpose of the Debt Securities
of such series under the applicable Indenture, but no such waiver will extend
to any subsequent or other default or impair any right consequent thereon.
(Section 5.13)
The Company may omit in any particular instance to comply with certain
covenants in the Indentures (including, if so specified in the Prospectus
Supplement, any covenant not set forth in the Indentures but specified in the
Prospectus Supplement to be applicable to the Debt Securities of any series,
except as otherwise provided in the Prospectus Supplement, and in the case of
the Senior Indenture, the covenants relating to the limitation upon mortgages
and liens, the limitation upon sale and leaseback transactions and the
limitation on indebtedness of Restricted Subsidiaries) with respect to the
Debt Securities of any series if before the time for such compliance the
Holders of at least a majority in principal amount of the Outstanding Debt
Securities of such series either waive such compliance in such instance or
generally waive compliance with such provisions, but no such waiver may
extend to or affect any term, provision or condition except to the extent
expressly so waived, and, until such waiver becomes effective, the
obligations of the Company and the duties of the applicable Trustee in
respect of any such provision will remain in full force and effect. (Section
12.09)
SUBORDINATION
Upon any distribution of assets of the Company upon the dissolution,
winding up, liquidation or reorganization of the Company, the payment of the
principal of (and premium, if any) and interest on the Subordinated
Securities will be subordinated to the extent provided in the Subordinated
Indenture in right of payment to the prior payment in full of all Senior
Indebtedness (as defined below under "Certain Definitions"), including Senior
Securities (Sections 16.01 and 16.02 of the Subordinated Indenture), but the
obligation of the Company to make payment of principal (and premium, if any)
or interest on the Subordinated Securities will not otherwise be affected.
(Section 16.02 of the Subordinated Indenture) No payment on account of
principal (or premium, if any), sinking fund or interest may be made on the
Subordinated Securities at any time when there is a default in the payment of
principal, premium, if any, sinking fund or interest on Senior Indebtedness.
(Section 16.03 of the Subordinated Indenture) In the event that,
notwithstanding the foregoing, any payment by the Company described in the
foregoing sentence is received by the Trustee under the Subordinated
Indenture or the Holders of any of the Subordinated Securities before all
Senior Indebtedness is paid in full, such payment or distribution shall be
paid over to the holders of such Senior Indebtedness or on their behalf for
application to the payment of all such Senior Indebtedness remaining unpaid
until all such Senior Indebtedness shall have been paid in full, after giving
effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness. Subject to payment in full of Senior Indebtedness, the
Holders of the Subordinated Securities will be subrogated to the rights of
the holders of the Senior Indebtedness to the extent of payments made to the
holders of such Senior Indebtedness out of the distributive share of the
Subordinated Securities. (Section 16.02 of the Subordinated Indenture)
By reason of such subordination, in the event of a distribution of
assets upon insolvency, certain general creditors of the Company may recover
more, ratably, than Holders of the Subordinated Securities. The Subordinated
Indenture provides that the
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subordination provisions thereof shall not apply to money and securities held
in trusts pursuant to the satisfaction and discharge and the legal defeasance
provisions of the Subordinated Indenture. (Sections 4.02 and 15.02 of the
Subordinated Indenture)
If this Prospectus is being delivered in connection with the offering of
a series of Subordinated Securities, the accompanying Prospectus Supplement
or the information incorporated by reference will set forth the approximate
amount of Senior Indebtedness outstanding as of a recent date.
DISCHARGE, LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The applicable Indenture with respect to the Debt Securities of any
series may be discharged, subject to certain terms and conditions, when (1)
either (A) all Debt Securities and the Coupons, if any, of such series have
been delivered to the applicable Trustee for cancellation, or (B) all Debt
Securities and the Coupons, if any, of such series not theretofore delivered
to the applicable Trustee for cancellation (i) have become due and payable,
(ii) will become due and payable at their Stated Maturity within one year, or
(iii) are to be called for redemption within one year under arrangements
satisfactory to the applicable Trustee for the giving of notice by the
applicable Trustee, and the Company, in the case of (i), (ii) or (iii) of
subclause (B), has irrevocably deposited or caused to be deposited with the
applicable Trustee as trust funds in trust for such purpose an amount in the
currency in which such Debt Securities are denominated sufficient to pay and
discharge the entire indebtedness on such Debt Securities for principal (and
premium, if any) and interest to the date of such deposit (in the case of
Debt Securities which have become due and payable) or to the Stated Maturity
or Redemption Date, as the case may be; provided, however, in the event a
petition for relief under any applicable Federal or state bankruptcy,
insolvency or other similar law is filed with respect to the Company within
91 days after the deposit and the applicable Trustee is required to return
the deposited money to the Company, the obligations of the Company under the
applicable Indenture with respect to such Debt Securities will not be deemed
terminated or discharged; (2) the Company has paid or caused to be paid all
other sums payable under the applicable Indenture by the Company; (3) the
Company has delivered to the applicable Trustee an officers' certificate and
an opinion of counsel each stating that all conditions precedent therein
provided relating to the satisfaction and discharge of the applicable
Indenture with respect to such series have been complied with; and (4) the
Company has delivered to the applicable Trustee an opinion of counsel or a
ruling of the Internal Revenue Service to the effect that Holders of the Debt
Securities of the series will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit and discharge. (Section 4.01)
If provision is made for the defeasance of Debt Securities of a series,
and if the Debt Securities of such series are Registered Securities and
denominated and payable only in U.S. dollars, then the provisions of each
Indenture relating to defeasance shall be applicable except as otherwise
specified in the Prospectus Supplement for Debt Securities of such series.
Defeasance provisions, if any, for Debt Securities denominated in a foreign
currency or currencies or for Bearer Securities may be specified in the
Prospectus Supplement. (Section 15.01)
At the Company's option, either (a) the Company shall be deemed to
have been Discharged (as defined below under "Certain Definitions") from
its obligations with respect to Debt Securities of any series ("legal
defeasance option") or (b) the Company shall cease to be under any
obligation to comply with certain provisions of the Indentures relating to
mergers and consolidations of the Company, and in the case of the Senior
Indenture, the provisions relating to limitations upon mortgages and liens,
limitations upon sale and leaseback transactions and the limitation on
indebtedness of Restricted Subsidiaries, with respect to Debt Securities of
any series (and, if so specified, any other obligation of the Company or
restrictive covenant added for the benefit of such series) ("covenant
defeasance option") at any time after the applicable conditions set forth
below have been satisfied: (1) the Company shall have deposited or caused to
be deposited irrevocably with the applicable Trustee as trust funds in trust,
specifically pledged as security for, and dedicated solely to, the benefit of
the Holders of the Debt Securities of such series (i) money in an amount, or
(ii) U.S. Government Obligations (as defined below under "Certain
Definitions") which through the payment of interest and principal in respect
thereof in accordance with their terms will provide, not later than one day
before the due date of any payment, money in an amount, or (iii) a
combination of (i) and (ii), sufficient, in the opinion (with respect to (i)
and (ii)) of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the applicable
Trustee, to pay and discharge each installment of principal (including any
mandatory sinking fund payments) of and premium, if any, and interest on, the
Outstanding Debt Securities of such series on the dates such installments of
interest or principal and premium are due; (2) such deposit shall not cause
the applicable Trustee with respect to the Debt Securities of that series to
have a conflicting interest with respect to the Debt Securities of any
series; (3) such deposit will not result in a breach or violation of, or
constitute a default under, the applicable Indenture or any other agreement
or instrument to which the Company is a party or by which it is bound; (4) if
the Debt Securities of such series are then listed on any national securities
exchange, the Company shall have delivered to the applicable Trustee an
opinion of counsel or a letter or other
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document from such exchange to the effect that the Company's exercise of its
legal defeasance option or the covenant defeasance option, as the case may
be, would not cause such Debt Securities to be delisted; (5) no Event of
Default or event (including such deposit) which, with notice or lapse of time
or both, would become an Event of Default with respect to the Debt Securities
of such series shall have occurred and be continuing on the date of such
deposit and, with respect to the legal defeasance option only, no Event of
Default under the provisions of the Indentures relating to certain events of
bankruptcy or insolvency or event which with the giving of notice or lapse of
time, or both, would become an Event of Default under such bankruptcy or
insolvency provisions shall have occurred and be continuing on the 91st day
after such date; and (6) the Company shall have delivered to the applicable
Trustee an opinion of counsel or a ruling of the Internal Revenue Service to
the effect that the Holders of the Debt Securities of such series will not
recognize income, gain or loss for Federal income tax purposes as a result of
such deposit, defeasance or Discharge. Notwithstanding the foregoing, if the
Company exercises its covenant defeasance option and an Event of Default
under the provisions of the Indentures relating to certain events of
bankruptcy or insolvency or event which with the giving of notice or lapse of
time, or both, would become an Event of Default under such bankruptcy or
insolvency provisions shall have occurred and be continuing on the 91st day
after the date of such deposit, the obligations of the Company referred to
under the definition of covenant defeasance option with respect to such Debt
Securities shall be reinstated. (Section 15.02)
PAYMENT AND PAYING AGENTS
If Debt Securities of a series are issuable only as Registered
Securities, the Company will maintain in each Place of Payment for such
series an office or agency where Debt Securities of that series may be
presented or surrendered for payment, where Debt Securities of that series
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Debt Securities of that
series and the applicable Indenture may be served. If Debt Securities of a
series are issuable as Bearer Securities, the Company will maintain (A) in
the Borough of Manhattan, The City and State of New York, or, in the case of
the Senior Indenture, in Minneapolis, Minnesota, an office or agency where
any Registered Securities of that series may be presented or surrendered for
payment, where any Registered Securities of that series may be surrendered
for registration of transfer, where Debt Securities of that series may be
surrendered for exchange, where notices and demands to or upon the Company in
respect of the Debt Securities of that series and the applicable Indenture
may be served and where Bearer Securities of that series and related Coupons
may be presented or surrendered for payment in the circumstances described in
the following paragraph (and not otherwise), (B) subject to any laws or
regulations applicable thereto, in a Place of Payment for that series which
is located outside the United States, an office or agency where Debt
Securities of that series and related Coupons may be presented and
surrendered for payment (including payment of any additional amounts payable
on Debt Securities of that series, if so provided in such series); provided,
however, that if the Debt Securities of that series are listed on The Stock
Exchange of the United Kingdom and the Republic of Ireland, the Luxembourg
Stock Exchange or any other stock exchange located outside the United States
and such stock exchange shall so require, the Company will maintain a Paying
Agent for the Debt Securities of that series in London, Luxembourg or any
other required city located outside the United States, as the case may be, so
long as the Debt Securities of that series are listed on such exchange, and
(C) subject to any laws or regulations applicable thereto, in a Place of
Payment for that series located outside the United States an office or agency
where any Registered Securities of that series may be surrendered for
registration of transfer, where Debt Securities of that series may be
surrendered for exchange and where notices and demands to or upon the Company
in respect of the Debt Securities of that series and the applicable Indenture
may be served. The Company will give prompt written notice to the applicable
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the applicable Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the corporate trust office of the applicable Trustee (in
the case of Registered Securities) and at the principal London office of the
applicable Trustee (in the case of Bearer Securities), and the Company has
appointed the applicable Trustee as its agent to receive all presentations,
surrenders, notices and demands. (Section 12.03)
No payment of principal, premium or interest on Bearer Securities shall
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; provided, however, that,
if the Debt Securities of a series are denominated and payable in U.S.
dollars, payment of principal of and any premium and interest on Debt
Securities of such series, if so provided in the Prospectus Supplement shall
be made at the office of the Company's Paying Agent in the Borough of
Manhattan, the City and State of New York, or, in the case of the Senior
Indenture, in Minneapolis, Minnesota, if (but only if) payment in U.S.
dollars of the full amount of such principal, premium, interest or additional
amounts, as the case may be, at all offices or agencies outside the United
States maintained for the purpose by the Company in accordance with the
applicable Indenture is illegal or effectively precluded by exchange controls
or other similar restrictions. (Section 12.03)
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BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in
global form that will be deposited with, or on behalf of, a depositary
identified in the Prospectus Supplement. Global securities may be issued in
either registered or bearer form and in either temporary or permanent form
(each a "Global Security"). Payments of principal of (premium, if any) and
interest on Debt Securities represented by a Global Security will be made by
the Company to the applicable Trustee and then by such Trustee to the
depositary.
The Company anticipates that any Global Securities will be deposited
with, or on behalf of, The Depository Trust Company, New York, New York
("DTC"), that such Global Securities will be registered in the name of DTC's
nominee, and that the following provisions will apply to the depositary
arrangements with respect to any such Global Securities. Additional or
differing terms of the depositary arrangements will be described in the
Prospectus Supplement relating to a particular series of Debt Securities
issued in the form of Global Securities.
So long as DTC or its nominee is the registered owner of a Global
Security, DTC or its nominee, as the case may be, will be considered the sole
Holder of the Debt Securities represented by such Global Security for all
purposes under the applicable Indenture. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have Debt
Securities represented by such Global Security registered in their names,
will not receive or be entitled to receive physical delivery of Debt
Securities in certificated form and will not be considered the owners or
Holders thereof under the applicable Indenture. The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in certificated form; accordingly, such laws may limit the
transferability of beneficial interests in a Global Security.
If DTC is at any time unwilling or unable to continue as depositary and
a successor depositary is not appointed by the Company within 90 days, the
Company will issue individual Debt Securities in certificated form in
exchange for the Global Securities. In addition, the Company may at any time,
and in its sole discretion, determine not to have any Debt Securities
represented by one or more Global Securities and, in such event, will issue
individual Debt Securities in certificated form in exchange for the relevant
Global Securities. If Registered Securities of any series shall have been
issued in the form of one or more Global Securities and if an Event of
Default with respect to the Debt Securities of such series shall have
occurred and be continuing, the Company will issue individual Debt Securities
in certificated form in exchange for the relevant Global Securities.
The following is based on information furnished by DTC:
DTC will act as securities depositary for Debt Securities represented by
one or more Global Securities. The Debt Securities will be issued as fully-
registered securities registered in the name of Cede & Co. (DTC's partnership
nominee). One fully-registered Global Security will be issued for each issue
of the Debt Securities, each in an aggregate principal amount of such issue,
and will be deposited with DTC. If, however, the aggregate principal amount
of any issue exceeds the maximum principal amount (if any) permitted by DTC,
one Global Security will be issued with respect to such maximum principal
amount and an additional Global Security will be issued with respect to any
remaining principal amount of such issue.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and
a "clearing agency" registered pursuant to the provisions of Section 17A of
the Exchange Act. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement
among Participants of securities transactions, such as transfers and pledges,
in deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants ("Direct Participants")
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American
Stock Exchange, Inc. and the National Association of Securities Dealers, Inc.
Access to DTC's system is also available to others such as securities brokers
and dealers, banks and trust companies that clear through or maintain a
custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Commission.
Purchases of Debt Securities represented by one or more Global
Securities under DTC's system must be made by or through Direct Participants,
which will receive a credit for the Global Securities on DTC's records. The
ownership interest of each beneficial owner of each Global Security
("Beneficial Owner") is in turn recorded on the Direct and Indirect
Participants' records. A Beneficial Owner will not receive written
confirmation from DTC of its purchase, but such Beneficial Owner is
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expected to receive a written confirmation providing details of such
transaction, as well as periodic statements of its holdings, from the Direct
or Indirect Participant through which such Beneficial Owner entered into such
transaction. Transfers of ownership interests in Global Securities are to be
accomplished by entries made on the books of Participants acting on behalf of
the Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Global Securities, except in the
event that use of the book-entry system for one or more Global Securities is
discontinued.
To facilitate subsequent transfers, all Global Securities deposited
by Participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co. The deposit of Global Securities with DTC and their
registration in the name of Cede & Co. effect no change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the Debt
Securities; DTC records reflect only the identity of the Direct Participants
to whose accounts Global Securities are credited, which may or may not be the
Beneficial Owners. The Participants remain responsible for keeping account of
their holdings on behalf of their customers.
Delivery of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners are governed by
arrangements among them, subject to any statutory or regulatory requirements
as may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the
Global Securities. Under its usual procedures, DTC will mail (an "Omnibus
Proxy") to the issuer as soon as possible after the record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Debt Securities are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Global Securities will be
made to DTC. DTC's practice is to credit Direct Participants' accounts on the
payable date in accordance with their respective holdings shown on DTC's
records unless DTC has reason to believe that it will not receive payment on
the payable date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices, as is the case
with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such
Participant and not of DTC, the Paying Agent or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to DTC is the responsibility of the Company
or the Paying Agent, disbursement of such payments to Direct Participants is
the responsibility of DTC, and disbursement of such payments to the
Beneficial Owners is the responsibility of Direct and Indirect Participants.
A Beneficial Owner shall give notice to elect to have its Global
Securities purchased or tendered, through its Participant, to the Paying
Agent, and shall effect delivery of such Global Securities by causing the
Direct Participant to transfer the Participant's interest in the Global
Securities, on DTC's records, to the Paying Agent. The requirement for
physical delivery of Global Securities in connection with a demand for
purchase or a mandatory purchase will be deemed satisfied when the ownership
rights in the Global Securities are transferred by Direct Participants on
DTC's records.
DTC may discontinue providing its services as securities depositary
with respect to the Debt Securities at any time by giving reasonable notice
to the Company or the Agents. Under such circumstances, in the event that a
successor securities depositary is not appointed, certificates representing
Debt Securities will be printed and delivered in exchange for the Debt
Securities represented by the Global Securities held by DTC.
The Company may decide to discontinue use of the system of book-
entry transfers through DTC (or a successor securities depositary). In that
event, certificates representing Debt Securities will be printed and
delivered in exchange for the Debt Securities represented by the Global
Securities held by DTC.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Company believes to be
reliable, but the Company takes no responsibility for the accuracy thereof.
None of the Company, any underwriter or agent, the applicable
Trustee, any applicable Paying Agent or the registrar of any Debt Securities
will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in
a Global Security, or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
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CONVERSION RIGHTS
The terms and conditions, if any, on which Subordinated Securities
being offered are convertible into Common Stock will be set forth in the
Prospectus Supplement relating thereto. Such terms will include the
conversion price, the conversion period, provisions as to whether conversion
will be at the option of the Holder or the Company, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of such Subordinated Securities.
THE TRUSTEES UNDER THE INDENTURES
Norwest Bank Minnesota, National Association and The Bank of New
York are two of a number of banks with which the Company maintains ordinary
banking relationships and from which the Company has obtained credit
facilities and lines of credit.
CERTAIN DEFINITIONS
Set forth below is a summary of certain defined terms as used in
the applicable Indenture. Reference is made to the applicable Indenture for
the full definition of all such terms.
"Consolidated Stockholders' Equity," at any time, means the total
stockholders' equity of the Company and its consolidated subsidiaries,
determined on a consolidated basis in accordance with generally accepted
accounting principles, as of the end of the most recently completed fiscal
quarter of the Company for which financial information is then available.
(Section 1.01 of the Senior Indenture)
"Bearer Security" means any Debt Security (with or without
Coupons), which is payable to bearer and title to which passes by delivery
only, but does not include any coupons. (Section 1.01)
"Discharged" means that the Company shall be deemed to have paid
and discharged the entire indebtedness represented by, and obligations under,
the Debt Securities of such series and to have satisfied all the obligations
under the applicable Indenture relating to the Debt Securities of such
series, except (i) the rights of Holders of Debt Securities of such series to
receive, from the trust fund described under "Discharge, Legal Defeasance
and Covenant Defeasance" above, payment of the principal of (and premium, if
any) and interest on such Debt Securities when such payments are due, (ii)
the Company's obligations with respect to the Debt Securities of such series
under the provisions relating to exchanges, transfers and replacement of Debt
Securities, the maintenance of an office or agency of the Company and the
defeasance trust fund and (iii) the rights, powers, trusts, duties and
immunities of the applicable Trustee thereunder. (Section 15.02)
"Funded Debt" means any indebtedness for money borrowed, created,
issued, incurred, assumed or guaranteed which would, in accordance with
generally accepted accounting practice, be classified as long-term debt, but
in any event including all indebtedness for money borrowed, whether secured
or unsecured, maturing more than one year or extendible at the option of the
obligor to a date more than one year, after the date of determination thereof
(excluding any amount thereof included in current liabilities). (Section 1.01
of the Senior Indenture)
"Holder" means, with respect to a Registered Security, the Person
in whose name a Registered Security is registered in the Security Register,
and with respect to a Bearer Security or a Coupon, the bearer thereof.
(Section 1.01)
"Indebtedness" means (i) any liability of any Person (a) for
borrowed money, or (b) evidenced by a bond, note, debenture or similar
instrument (including purchase money obligations but excluding trade
payables), or (c) for the payment of money relating to a lease that is
required to be classified as a capitalized lease obligation in accordance
with generally accepted accounting principles, or (d) preferred or preference
stock of a Subsidiary of the Company held by Persons other than the Company
or a Subsidiary of the Company; (ii) any liability of others described in the
preceding clause (i) that the Person has guaranteed, that is recourse to such
Person or that is otherwise its legal liability; and (iii) any amendment,
supplement, modification, deferral, renewal, extension or refunding of any
liability of the types referred to in clauses (i) and (ii) above; provided,
however, that "Indebtedness" shall not include any liabilities of the kind
included opposite the caption "Liabilities relating to TRS financial
instruments sold" on the Company's audited consolidated balance sheet.
(Section 1.01) These liabilities are currently included opposite the
caption "Settlement Obligations" on the Company's consolidated balance sheet.
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"Maturity" when used with respect to any Debt Security means the
date on which the principal of a Debt Security or an installment of principal
becomes due and payable as provided therein or in the Indenture, whether at
the Stated Maturity or by declaration of acceleration, call for redemption,
repayment at the option of the Holder or otherwise. (Section 1.01)
"Outstanding" when used with respect to Debt Securities, means,
as of the date of determination, all Debt Securities theretofore
authenticated and delivered under the applicable Indenture, except as
provided in such Indenture. (Section 1.01)
"Principal Facility" means the real property, fixtures, machinery
and equipment relating to any facility owned by the Company or any
Subsidiary, except any facility that, in the opinion of the Board of
Directors, is not of material importance to the business conducted by the
Company and its Subsidiaries, taken as a whole. (Section 1.01 of the Senior
Indenture)
"Registered Securities" means any Debt Security in the form
established pursuant to Section 2.01 of the applicable Indenture which is
registered as to principal and Interest in the Security Register. (Section
1.01)
"Restricted Subsidiary," at any time, means any Subsidiary which
has revenues, determined on a consolidated basis (with its Subsidiaries) in
accordance with generally accepted accounting principles, equal to or
exceeding 10 percent of the Company's consolidated revenues for the most
recently completed fiscal year of the Company for which financial information
is then available.
"Senior Indebtedness" means the principal of (and premium, if
any) and unpaid interest on (i) Indebtedness of the Company, whether
outstanding on the date of the Subordinated Indenture or thereafter created,
incurred, assumed or guaranteed, for money borrowed (other than the
Indebtedness evidenced by the Subordinated Securities), unless in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding it is provided that such Indebtedness is not senior or prior in
right of payment to the Subordinated Securities or is pari passu or
subordinate by its terms in right of payment to the Subordinated Securities,
and (ii) renewals, extensions and modifications of any such Indebtedness.
"Subsidiary" means any corporation of which at least a majority
of the outstanding stock having by the terms thereof ordinary voting power to
elect a majority of the directors of such corporation, irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening
of any contingency, is at the time, directly or indirectly, owned or
controlled by the Company or by one or more Subsidiaries thereof, or by the
Company and one or more Subsidiaries. (Section 1.01)
"U.S. Government Obligations" means securities that are (i)
direct obligations of the United States for the payment of which its full
faith and credit is pledged, or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States, which, in either case under clauses (i) or
(ii), are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or a specific
payment of interest on or principal of any such U.S. Government Obligation
held by such custodian for the account of the holder of a depository receipt;
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of interest on or principal of
the U.S. Government Obligation evidenced by such depository receipt. (Section
15.02)
"Wholly-Owned Subsidiary" means a Subsidiary of which all of the
outstanding voting stock (other than directors' qualifying shares) is at the
time, directly or indirectly, owned by the Company, or by one or more Wholly-
Owned Subsidiaries of the Company or by the Company and one or more Wholly-
Owned Subsidiaries. (Section 1.01)
DESCRIPTION OF CAPITAL STOCK
As of the date of this Prospectus, the Company's authorized capital
stock consists of 600,000,000 shares of Common Stock and 10,000,000 shares of
Preferred Stock. As of January 31, 1996, approximately 223,848,168 shares of
Common Stock were issued and outstanding. No shares of Preferred Stock are
currently outstanding. The following summary description of the capital stock
of the Company does not purport to be complete and is qualified in its
entirety by reference to the Company's Restated Certificate of Incorporation
(the "Certificate of Incorporation"), and to Delaware corporate law. See
"Available Information."
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COMMON STOCK
Holders of Common Stock are entitled to one vote for each share
held on all matters submitted to a vote of stockholders and do not have
cumulative voting rights. Accordingly, holders of a majority of the shares of
Common Stock entitled to vote in any election of directors may elect all of
the directors standing for election. Holders of Common Stock are entitled to
receive ratably such dividends, if any, as may be declared by the Board of
Directors out of funds legally available therefor, subject to any
preferential dividend rights of outstanding Preferred Stock and certain
dividend limitations contained in the Company's outstanding senior promissory
notes. Upon the liquidation, dissolution or winding up of the Company, the
holders of Common Stock are entitled to receive ratably the net assets of the
Company available after the payment of all debts and other liabilities and
subject to the prior rights of any outstanding Preferred Stock. Holders of
Common Stock have no preemptive, subscription, redemption or conversion
rights. All outstanding shares of Common Stock are duly authorized, validly
issued, fully paid and nonassessable. The rights, preferences and privileges
of holders of Common Stock are subject to, and may be adversely affected by,
the rights of the holders of shares of any series of Preferred Stock which
the Company may designate and issue in the future.
PREFERRED STOCK
Under the Certificate of Incorporation, the Company may issue, in
one or more classes or series, up to 10,000,000 shares of its Preferred
Stock, with such powers, preferences and relative, participating, optional or
other special rights and qualifications, limitations or restrictions as shall
be designated in resolutions adopted by the Board of Directors or a duly
authorized committee thereof. The Preferred Stock will, when issued, be fully
paid and nonassessable and holders thereof will have no preemptive rights.
The specific terms of any Preferred Stock being offered (the
"Offered Preferred Stock") will be described in the Prospectus Supplement
relating to such Offered Preferred Stock. The following summaries of certain
provisions of the Preferred Stock are subject to, and are qualified in their
entirety by reference to, the Certificate of Incorporation and the
Certificate of Designation relating to the particular class or series of
Preferred Stock. Reference is made to the Prospectus Supplement relating to
the Offered Preferred Stock offered thereby for specific terms, including:
(1) The designation of such Preferred Stock.
(2) The number of shares of such Preferred Stock offered, the liquidation
preference per share and the initial offering price of such Preferred
Stock.
(3) The dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation thereof applicable to such Preferred Stock.
(4) The date from which dividends on such Preferred Stock shall accumulate,
if applicable.
(5) The procedures for any auction and remarketing, if any, of such Preferred
Stock.
(6) The provision of a sinking fund, if any, for such Preferred Stock.
(7) The provision for redemption, if applicable, of such Preferred Stock.
(8) Any listing of such Preferred Stock on any securities exchange.
(9) The terms and conditions, if applicable, upon which such Preferred Stock
will be convertible into or exchangeable for Common Stock, and whether at
the option of the holder thereof or the Company.
(10) Whether such Preferred Stock will rank senior or junior to or on a
parity with any other class or series of Preferred Stock.
(11) The voting rights, if any, of such Preferred Stock.
(12) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Stock.
(13) A discussion of Federal income tax considerations applicable to such
Preferred Stock.
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Subject to the Certificate of Incorporation and to any limitations
contained in then outstanding Preferred Stock, the Company may issue
additional classes or series of Preferred Stock, at any time or from time to
time, with such powers, preferences and relative, participating, optional or
other special rights and qualifications, limitations or restrictions thereof,
as the Board of Directors or any duly authorized committee thereof shall
determine, all without further action of the stockholders, including holders
of then outstanding Preferred Stock, of the Company.
CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND BY-LAWS
Certain provisions of the Certificate of Incorporation and By-laws
of the Company summarized below may be deemed to have an anti-takeover effect
and may delay, defer or prevent a tender offer or takeover attempt that a
stockholder might consider in its best interest, including those attempts
that might result in a premium over the market price for the shares held by
stockholders.
The Certificate of Incorporation or By-laws provide (i) that there
shall be three classes of directors serving staggered terms, (ii) that
directors can be removed from office only for cause and only by the
affirmative vote of the holders of a majority of the then outstanding shares
of common stock entitled to vote generally in an election of directors, (iii)
that vacancies on the Board of Directors may be filled only by the remaining
directors and not by the stockholders,(iv) that the Board of Directors may
adopt, amend or repeal the By-laws of the Company, and (v) for an advance
notice procedure for the nomination, other than by or at the direction of the
Board of Directors, of candidates for election as directors as well as for
other stockholder proposals to be considered at annual meetings of
stockholders. In general, notice of intent to nominate a director or raise
business at such meetings must be received by the Company not less than 60
nor more than 90 days prior to the anniversary of the previous year's annual
meeting, and must contain certain information concerning the person to be
nominated or the matters to be brought before the meeting and concerning the
stockholder submitting the proposal. The Certificate of Incorporation also
provides that any action required or permitted to be taken by the
stockholders of the Company may be effected only at an annual or special
meeting of stockholders, and stockholder action by written consent in lieu of
a meeting is prohibited. The affirmative vote of the holders of more than 80
percent of the voting power of the Voting Stock is required to alter, amend
or repeal, or adopt any provision inconsistent with, this provision. In
addition, special meetings of stockholders may be called only by the Chairman
of the Board, Chairman of the Executive Committee, the President or the
Secretary of the Company or any such officer at the request in writing of the
Board of Directors.
The foregoing summary is qualified in its entirety by reference to
the provisions of the Certificate of Incorporation and By-laws.
STATUTORY PROVISIONS
The Company has elected, pursuant to a provision of its Certificate
of Incorporation, not to be governed by Section 203 of the Delaware General
Corporation Law ("DGCL"). Section 203 of the DGCL prohibits certain
transactions between a Delaware corporation and an "interested
stockholder," which is defined as a person who, together with any affiliates
and/or associates of such person, beneficially owns, directly or indirectly,
15 percent or more of the outstanding voting shares of a Delaware
corporation. This provision prohibits certain business combinations (defined
broadly to include mergers, consolidations, sales or other dispositions of
assets having an aggregate value in excess of 10 percent of the consolidated
assets of the corporation, and certain transactions that would increase the
interested stockholder's proportionate share ownership in the corporation)
between an interested stockholder and a corporation for a period of three
years after the date the interested stockholder acquired its stock, unless
(i) the business combination is approved by the corporation's board of
directors prior to the date the interested stockholder acquired shares; (ii)
the interested stockholder acquired at least 85 percent of the voting stock
of the corporation in the transaction in which it became an interested
stockholder; or (iii) the business combination is approved by a majority of
the board of directors and by the affirmative vote of two-thirds of the votes
entitled to be cast by disinterested stockholders at an annual or special
meeting. A Delaware corporation, pursuant to a provision in its certificate
of incorporation or by-laws, may choose not to be governed by Section 203 of
the DGCL in which case such election becomes effective one year after its
adoption.
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TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is Norwest
Bank Minnesota, National Association.
PLAN OF DISTRIBUTION
The Company may sell the Securities in and/or outside the United
States: (i) through underwriters or dealers; (ii) directly to a limited
number of purchasers or to a single purchaser; or (iii) through agents. The
Prospectus Supplement with respect to the Securities being offered (the
"Offered Securities") will set forth the terms of the offering of the
Offered Securities, including the name or names of any underwriters or
agents, the purchase price of the Offered Securities and the proceeds to the
Company from such sale, any underwriting discounts and other items
constituting underwriters' compensation, any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers. Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
If underwriters are used in the sale, the Offered Securities will
be acquired by the underwriters for their own account and may be resold from
time to time in one or more transactions, including negotiated transactions,
at a fixed public offering price or at varying prices determined at the time
of sale. The Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of Securities, or, if an
underwriting syndicate is used, the managing underwriter or underwriters,
will be set forth on the cover of the applicable Prospectus Supplement.
Unless otherwise set forth in the Prospectus Supplement relating thereto, the
obligations of the underwriters to purchase the Offered Securities will be
subject to conditions precedent and the underwriters will be obligated to
purchase all of the Offered Securities if any are purchased.
If dealers are utilized in the sale of Offered Securities in
respect of which this Prospectus is delivered, and if so specified in the
applicable Prospectus Supplement, the Company will sell such Offered
Securities to the dealers as principals. The dealers may then resell such
Offered Securities to the public at varying prices to be determined by such
dealers at the time of resale. The names of the dealers and the terms of the
transaction will be set forth in the applicable Prospectus Supplement.
The Securities may be sold directly by the Company or through
agents designated by the Company from time to time. Any agent involved in the
offer or sale of the Offered Securities in respect to which this Prospectus
is delivered will be named, and any commissions payable by the Company to
such agent will be set forth, in the Prospectus Supplement.
Underwriters, dealers and agents may be entitled under agreements
entered into with the Company to indemnification by the Company against
certain civil liabilities, including liabilities under the Securities Act, or
to contribution with respect to payments which the underwriters, dealers or
agents may be required to make in respect thereof. Underwriters, dealers and
agents may be customers of, may engage in transactions with, or perform
services for, the Company in the ordinary course of business.
LEGAL MATTERS
The legality of the Securities offered hereby will be passed upon
for the Company by Thomas A. Rossi, Esq., Senior Counsel of the Company. Mr.
Rossi is the beneficial owner of Common Stock of the Company.
EXPERTS
The consolidated financial statements and schedule of the Company
appearing in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such report of Ernst & Young LLP, as to
the years ended December 31, 1993 and 1994, is based in part on the report of
Deloitte & Touche LLP, independent auditors. Such consolidated financial
statements and schedule are, and audited financial statements to be included
in subsequently filed documents will be, incorporated herein by reference in
reliance upon the reports of such auditors pertaining to such financial
statements (to the extent covered by consents filed with the Commission)
given upon the authority of such firms as experts in accounting and auditing.
With respect to the unaudited consolidated interim financial information for
the three-month periods ended March 31, 1996 and 1995, incorporated by
reference herein, Ernst & Young LLP have reported that they have applied
limited procedures in accordance with professional standards for a review of
such information. However, their separate report, included in the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996, and
incorporated herein by reference, states that they did not audit and they do
not express an opinion on that interim financial information. Accordingly,
the degree of reliance on their report on such information should be
restricted considering the limited nature of the review procedures applied.
The independent auditors are not subject to the liability provisions of
Section 11 of the Securities Act of 1933 (the "Act") for their report on the
unaudited interim financial information because that report is not a "report"
or a "part" of the Registration Statement prepared or certified by the
auditors within the meaning of Sections 7 and 11 of the Act.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with the
issuance and distribution of the securities being registered, other than
underwriting discounts and commissions. All of the amounts shown are
estimated, except the SEC registration fee.
<TABLE>
<CAPTION>
<S> <C>
SEC registration fee....................... $172,414
Legal fees and expenses.................... 150,000
Printing and engraving..................... 150,000
Fees of accountants........................ 5,000
Fees of trustees....................... 6,000
Blue sky fees and expenses................. 20,000
Rating agency fees......................... 125,000
Miscellaneous.............................. 5,000
--------
$633,414
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law ("DGCL") empowers a
Delaware corporation to indemnify any persons who are, or are threatened to
be made, parties to any threatened, pending or completed legal action, suit
or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation), by reason of
the fact that such person was an officer or director of such corporation, or
is or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation or enterprise. The indemnity may
include expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided that such officer
or director acted in good faith and in a manner he reasonably believed to be
in or not opposed to the corporation's best interests, and, for criminal
proceedings, had no reasonable cause to believe his conduct was illegal. A
Delaware corporation may indemnify officers and directors in an action by or
in the right of the corporation under the same conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation in the performance of
his duty. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation
must indemnify him against the expenses which such officer or director
actually and reasonably incurred.
In accordance with the DGCL, the Restated Certificate of Incorporation of
the Company contains a provision to limit the personal liability of the
directors of the Company for violations of their fiduciary duty. This
provision eliminates each director's liability to the Company or its
stockholders for monetary damages except to the extent provided by the DGCL
(i) for any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the DGCL providing for liability of directors for unlawful payment of
dividends or unlawful stock purchases or redemptions, or (iv) for any
transaction from which a director derived an improper benefit. The effect of
this provision is to eliminate the personal liability of directors for
monetary damages for actions involving a breach of their fiduciary duty of
care, including any such actions involving gross negligence.
The Restated Certificate of Incorporation and the By-laws of the Company
provide for indemnification of the Company's officers and directors to the
fullest extent permitted by applicable law, except that the By-laws provide
that the Company is required to indemnify an officer or director in
connection with a proceeding initiated by such person only if the proceeding
was authorized by the Board of Directors of the Company. In addition, the
Company maintains insurance policies which provide coverage for its officers
and directors in certain situations where the Company cannot directly
indemnify such officers or directors.
ITEM 16. EXHIBITS.
A list of exhibits included as part of this Registration Statements set
forth in the Exhibit Index appearing elsewhere herein and is incorporated
herein by reference.
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(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 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(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)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to section 13(a) or section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) 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 the time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
(d) The undersigned registrant hereby undertakes that:
(1) for purposes of determining any liability under the Securities Act of
1933, 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 registrant 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.
S-2
<PAGE>
(2) For the purpose of determining any liability under the Securities
Act of 1933, 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.
S-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
registration statement amendment to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Hackensack, State of
New Jersey, on June 7, 1996
FIRST DATA CORPORATION
By: /s/ HENRY C. DUQUES
------------------------------
Henry C. Duques
Chairman of the Board
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement amendment has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ HENRY C. DUQUES Chairman of the Board and June 7, 1996
--------------------------- Chief Executive Officer
Henry C. Duques
* Executive Vice President and
--------------------------- Chief Financial Officer June 7, 1996
Lee Adrean (Principal Financial Officer)
* Senior Vice President - Finance June 7, 1996
--------------------------- (Principal Accounting Officer)
Richard Macchia
* Director June 7, 1996
---------------------------
Ben Burdetsky
* Director June 7, 1996
---------------------------
Courtney F. Jones
* Director June 7, 1996
---------------------------
Robert J. Levenson
* Director June 7, 1996
---------------------------
James D. Robinson III
* Director June 7, 1996
---------------------------
Charles T. Russell
* Director June 7, 1996
---------------------------
Bernard L. Schwartz
* Director June 7, 1996
---------------------------
Garen K. Staglin
*By /s/ Thomas A. Rossi
----------------------------------------
Thomas A. Rossi
Attorney-in-Fact
</TABLE>
S-4
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER
------
1.1* Form of Underwriting Agreement.
1.2* Form of Distribution Agreement for Senior Debt Securities.
4.1 Amended and Restated Certificate of Incorporation of the Company
(incorporated by reference to Commission File No. 1-11073, Exhibit
3 to the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1995).
4.2 By-laws of the Company (incorporated by reference to Commission
File No. 1-11073, Exhibit 3(ii) of the Company's Annual Report on
Form 10-K for the year ended December 31, 1995).
4.3 Indenture dated as of March 26, 1993 between the Company and
Norwest Bank Minnesota, National Association, as trustee, relating
to the Senior Debt Securities (incorporated by reference to
Exhibit 4.3 to the Company's Registration Statement on Form S-3
(Registration Number 33-74568)).
4.4* Indenture dated as of April 1, 1996 between the Company and The
Bank of New York, as trustee, relating to the Subordinated
Securities.
4.5* Form of Fixed Rate Note
4.6* Form of Floating Rate Note
5* Opinion of Thomas A. Rossi, Esq., Senior Counsel to the Company.
12 Statement of Calculation of Ratio of Earnings to Fixed Charges
(incorporated by reference to Commission File No. 1-11073, Annual
Report on Form 10-K for the year ended December 31, 1995, Exhibit
12).
15 Letter from Ernst & Young LLP re: unaudited interim financial
information.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Deloitte & Touche LLP.
23.3* Consent of Thomas A. Rossi, Esq. (included in Exhibit 5).
24* Powers of Attorney (included in the signature page of this
Registration Statement)
25.1* Statement of Eligibility of Norwest Bank Minnesota, National
Association under the Trust Indenture Act of 1939 on Form T-1
relating to the Senior Indenture.
25.2* Statement of Eligibility of The Bank of New York under the Trust
Indenture Act of 1939 on Form T-1 relating to the Subordinated
Indenture.
-----------
*Previously filed.
<PAGE>
Exhibit 15
June 7, 1996
The Stockholders and Board of Directors
First Data Corporation
We are aware of the incorporation by reference in Amendment No. 1 to the
Registration Statement on Form S-3 (No. 333-2057) and related Prospectus of
First Data Corporation, pertaining to the registration of up to $500 million in
debt securities, preferred stock and/or common stock, of our report dated May
10, 1996 relating to the unaudited consolidated interim financial statements of
First Data Corporation which are included in its Form 10-Q for the quarter ended
March 31, 1996.
Pursuant to Rule 436(c) of the Securities Act of 1933 our report is not a part
of the registration statements prepared or certified by accountants within the
meaning of Section 7 or 11 of the Securities Act of 1933.
/s/ Ernst & Young LLP
Ernst & Young LLP
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration Statement on Form S-3 (No. 333-2057) and related
Prospectus of First Data Corporation, pertaining to the registration of up to
$500 million in debt securities, preferred stock and/or common stock and to the
incorporation by reference therein of our report dated February 5, 1996, with
respect to the consolidated financial statements and schedule of First Data
Corporation included in its Annual Report (Form 10-K) for the year ended
December 31, 1995, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
New York, New York
June 7, 1996
<PAGE>
Exhibit 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to the
Registration Statement of First Data Corporation on Form S-3 (No. 333-2057) of
our report dated January 27, 1995 (relating to the consolidated financial
statements of First Financial Management Corporation as of December 31, 1994,
and for each of the two years in the period ended December 31, 1994, which are
not presented separately) appearing in the Annual Report on Form 10-K of First
Data Corporation for the year ended December 31, 1995 and to the reference to us
under the heading "Experts" in the Prospectus relating to First Data
Corporation's registration of up to $500 million in unsecured debt securities,
preferred stock, and/or common stock which is part of this Registration
Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Atlanta, Georgia
June 6, 1996
