<PAGE>
As filed with the Securities and Exchange Commission on June 16, 1994
Registration No. 33-53779
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE AMENDMENT
NO. 1 TO
FORM S-3/A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ALCO CAPITAL RESOURCE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 23-2493042
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
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1738 BASS ROAD, MACON, GEORGIA 31210
(Address of principal executive offices)
912-471-2300
(Registrant's telephone number)
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J. KENNETH CRONEY
VICE PRESIDENT & GENERAL COUNSEL
ALCO STANDARD CORPORATION
P.O. BOX 834
VALLEY FORGE, PA 19482
610-296-8000
(Name, address and telephone number of agent for service)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time as determined by market conditions after the effective date of
this Registration Statement.
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IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE
FOLLOWING BOX. [_]
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IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED
ON A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT
OF 1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR
INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING BOX. [X]
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The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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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.
PRELIMINARY PROSPECTUS DATED JUNE 16, 1994
SUBJECT TO COMPLETION
$500,000,000
ALCO CAPITAL RESOURCE, INC.
DEBT SECURITIES
Alco Capital Resource, Inc. (the "Company" or "ACR") may from time to time
offer its Debt Securities consisting of debentures, notes and/or other unsecured
evidences of indebtedness in one or more series at an aggregate initial offering
price not to exceed $500,000,000. The terms of the Debt Securities, including,
where applicable, the specific designation, aggregate principal amount,
denominations, which may include securities denominated in U.S. dollars, in any
other currency or in composite currencies such as the European Currency Unit,
date or dates on which principal is payable, interest rate or rates (which may
be fixed or variable) and time of payment of interest, if any, terms for
redemption at the option of the Company, terms for any repayment of principal
amount at the option of the holder (which option may be conditional), terms for
any sinking fund payments, the initial public offering price, the names of any
underwriters or agents, the principal amounts, if any, to be purchased by
underwriters and the compensation of such underwriters or agents and the other
terms in connection with the offering and sale of the Debt Securities in respect
of which this Prospectus is being delivered, are set forth in the accompanying
Prospectus Supplement. The Debt Securities are solely the obligations of the
Company and are not guaranteed by the Company's parent corporation, Alco
Standard Corporation. This Prospectus may not be used to consummate the sale of
Debt Securities unless accompanied by a Prospectus Supplement.
The Company may sell Debt Securities to or through one or more underwriters
for public offering and sale by them or may sell Debt Securities to investors
directly or through agents. See "Plan of Distribution." Such underwriters or
agents may include one or more of Lehman Brothers Inc., Chase Securities, Inc.,
Goldman, Sachs & Co., Merrill Lynch & Co. and Merrill Lynch, Pierce, Fenner &
Smith Incorporated or a group represented by one or more of such firms or by one
or more other firms.
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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.
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The date of this Prospectus is , 1994.
<PAGE>
AVAILABLE INFORMATION
The Company and Alco Standard Corporation ("Alco Standard"), which
owns 100% of the outstanding common stock of the Company, are subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), and in accordance therewith file reports, proxy material (Alco
Standard only) and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy material and other information can be
inspected and copied at the offices of the Commission at 450 Fifth Street, N.W.,
Washington, D.C., as well as Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois, and 7 World Trade Center, Suite 1300, New
York, New York, and copies can be obtained by mail from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Reports, proxy material and other information concerning Alco
Standard can also be inspected at the offices of the New York, Philadelphia and
Chicago Stock Exchanges.
The Company is not required to deliver an annual report to its
security holders pursuant to Section 14 of the 1934 Act, nor does it currently
intend to deliver to holders of its debt securities any other report that
contains financial information relating to the Company that has been examined
and reported upon, with an opinion expressed by, an independent accountant.
Such information, however, is contained in the Company's Registration Statement
on Form 10 and in other periodic reports filed with the Securities and Exchange
Commission that the Company will provide without charge (without exhibits), upon
request, to any such security holder.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Report on Form 10 filed with the Commission pursuant to
the 1934 Act (as amended by its Form 10-12G/A filed on May 27, 1994 and its Form
10-12G/A filed on June 16, 1994), is hereby incorporated in this Prospectus by
reference.
All other documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the 1934 Act after the date of this Prospectus and prior
to the termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference in this Prospectus. This Prospectus does not contain
all information set forth in the Registration Statement and Exhibits thereto
which the Company has filed with the Commission and to which reference is hereby
made.
The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus has been delivered, upon the written or oral
request of such person, a copy of any or all of the documents referred to above
which have been or may be incorporated in this Prospectus by reference, other
than exhibits to such documents. Requests for such copies should be directed to
Investor Relations Department, Alco Standard Corporation, P.O. Box 834, Valley
Forge, PA, 19482; telephone number 610-296-8000.
THE COMPANY
The Company's principal executive offices are located at 1738 Bass
Road, Macon, Georgia 31210; telephone number: 912-471-2300.
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RELATIONSHIP WITH ALCO STANDARD CORPORATION
The Company, as the captive finance subsidiary of Alco Standard,
derives its customer base from the business sourced by its affiliates within
Alco Standard (the AOP dealers). There are several agreements and programs
between the Company and Alco Standard, which are described below.
SUPPORT AGREEMENTS
The Company and Alco Standard are parties to a Maintenance
Agreement, dated August 15, 1991 (the "1991 Maintenance Agreement"), and an
Operating Agreement, dated August 15, 1991 (the "1991 Operating Agreement" and
together with the 1991 Maintenance Agreement, the "1991 Maintenance and
Operating Agreements"), which are further described below. The Company has
agreed with its lenders pursuant to loan agreements entered into
before June 1, 1994 that it will not amend the 1991 Maintenance and Operating
Agreements without each such lender's consent until all outstanding debt under
such loan agreements shall have been paid.
The Company and Alco Standard entered into a new agreement (the
"1994 Support Agreement") on June 1, 1994. The Company intends to covenant
with noteholders and other lenders after June 1, 1994 that it will not amend
the 1994 Support Agreement except under certain circumstances (See "1994
Support Agreement" below).
THE 1991 MAINTENANCE AND OPERATING AGREEMENTS
The terms of the 1991 Maintenance Agreement provide that Alco Standard
will make a cash payment to the Company (or an investment in the form of equity
or subordinated notes) as needed in amounts sufficient to meet a specified
minimum fixed charge coverage ratio and a maximum debt-to-equity ratio. The
fixed charge coverage ratio requirement is defined as earnings before fixed
charges (primarily interest) and must be at least 1.3 times fixed charges. The
Company has satisfied this requirement independently (without requiring payment
or an investment from Alco Standard) for the last three fiscal years. The
Company's debt-to-equity ratio is limited to 6 to 1 according to the terms of
the 1991 Maintenance Agreement. The Company must also maintain minimum tangible
net worth of not less than $1.00.
Pursuant to the terms of the 1991 Maintenance Agreement, the Company
received capital contributions from Alco Standard of $3,900,000 in the first
six months of 1994, $2,615,000 in 1993 and none in 1992. In 1991, the Company
received capital contributions from Alco of $13,250,000 as a result of the
combined effect of rapid lease portfolio growth in 1991, compliance with a
more conservative debt-to-equity ratio and payment of an intercompany
dividend.
The 1991 Operating Agreement requires the AOP dealers to repurchase
all defaulted lease contracts. A default is defined in the 1991 Operating
Agreement as any receivable which is past due for 120 days or is otherwise
reasonably declared uncollectible by the Company. The repurchase amount is
identified as the net book value of a lease on the default date.
The 1991 Maintenance and Operating Agreements provide for modification
or amendment with both parties' consent and provide for cancellation by either
party upon 90 days' written notice.
THE 1994 SUPPORT AGREEMENT
The 1994 Support Agreement between the Company and Alco Standard
provides that Alco Standard will make a cash payment to the Company (or an
investment in the form of equity or subordinated notes) as needed to comply with
two requirements: i) that the Company will maintain a pre-tax interest coverage
ratio (income before interest expense and taxes divided by interest expense)
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so that the Company's pre-tax income plus interest expense (together with cash
payments from Alco Standard) will not be less than 1.25 times interest
expense, and ii) that the Company will maintain a minimum tangible net worth
of $1.00. The 1994 Support Agreement further provides that Alco Standard may
not assign the 1994 Support Agreement unless: (a) all the outstanding debt of
the Company is repaid or (ii) two nationally recognized securities rating
organizations confirm in writing prior to the effectiveness of any such
assignment that the Company's debt rating would not be downgraded as a result
of any such assignment.
Unlike the 1991 Operating Agreement, the 1994 Support Agreement
does not contain a requirement that the AOP dealers repurchase all
defaulted lease contracts. The 1994 Support Agreement does not include the
repurchase requirement because the Company and Alco wish to preserve the
flexibility, on a prospective basis, to allow the credit risk for defaulted
contracts to remain with the Company. In such event, the credit decision and
reserves for defaulted contracts would become the responsibility of the
Company. If the Company were responsible for the credit risk and costs
associated with defaulted contracts, the Company would increase its current
lease rates in order to offset these increased costs. Consequently, the
Company believes that the impact of any future shift of the credit risk from
the AOP dealers to the Company would not be material to the Company's future
results of operations. The Company's (and Alco's) present intention, however,
is to continue the repurchase arrangement with the AOP dealers as currently in
effect.
The Company will provide in the Indenture or other documentation
governing future debt that the 1994 Support Agreement cannot be amended or
terminated without the consent of noteholders or other lenders unless either i)
all the outstanding debt of the Company is repaid, or ii) two nationally
recognized securities rating organizations confirm in writing prior to the
effectiveness of any such amendment or termination that the Company's debt
rating would not be downgraded as a result of such amendment or termination.
CASH MANAGEMENT PROGRAM
The Company participates in Alco Standard's domestic Cash Management
program. Under this program, the Company has an account with Alco Standard
through which cash in excess of current operating requirements is temporarily
placed on deposit. Similarly, amounts are periodically borrowed from Alco
Standard. Interest is paid (or charged) by Alco Standard on these amounts. The
Company was a net borrower in 1993, 1992, and 1991 incurring net interest costs
of $579,000, $1,090,000, and $510,000, respectively, under this program.
MANAGEMENT FEE
The Company is charged a management fee by Alco Standard to cover
certain corporate overhead expenses. These charges are included as general and
administrative expenses in the Company's financial statements and amounted to
$360,000 in 1993, $192,000 in 1992, and $180,000 in 1991.
FEDERAL INCOME TAX ALLOCATION AGREEMENT
Alco Standard and the Company participate in a Federal Income Tax
Allocation Agreement dated June 30, 1989, in which the Company consents to the
filing of consolidated federal income tax returns with Alco Standard. Alco
Standard agrees to collect from or pay to the Company its allocated share of any
consolidated federal income tax liability or refund applicable to any period for
which the Company is included in Alco Standard's consolidated federal income tax
return.
INTEREST ON INCOME TAX DEFERRALS
The Company provides substantial tax benefits to Alco Standard through
the use of the installment sales method on equipment financed through the
Company. Taxes deferred by Alco Standard due to this tax treatment totalled a
cumulative amount of approximately $67,000,000 at the end of fiscal 1993. Alco
Standard pays the Company interest on the portion of these tax deferrals
(approximately $53,000,000 at the end of fiscal 1993) which arise from tax
deferrals on intercompany sales. In fiscal 1993, interest was earned by the
Company at a rate of 6% and totalled $2,926,000. In fiscal 1992 and 1991, the
interest earned amounted to $3,050,000 and $1,800,000, respectively, and was
computed at a 9% rate.
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LEASE BONUS PROGRAM
In January 1992, a lease bonus subsidy program was initiated which
provides incentives to AOP dealers when AOP customers lease equipment from the
Company. The payments under this program can be reduced or eliminated by the
Company at any time. In fiscal 1992, the program was nine months in duration,
and $3,300,000 in bonus payments were made to the AOP dealers for leases of
certain higher industry segment equipment. Fiscal 1993 bonus payments were
calculated on the basis of the AOP dealer's increase in the percentage of
equipment sales leased through the Company, and totalled $5,900,000. Fiscal
year 1994 lease bonus payments are calculated on the same basis as the 1993
payments; the lease bonus payments were $3,600,000 for the first six months of
fiscal 1994.
ALCO CAPITAL RESOURCE, INC.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Six Months Ended Fiscal Year Ended September 30,
---------------- -------------------------------
March 31, 1994 1993 1992 1991 1990 1989
---------------- -------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges 1.8 1.7 1.5 1.6 1.5 1.9
</TABLE>
ALCO STANDARD CORPORATION AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Six Months Ended Fiscal Year Ended September 30,
---------------- -------------------------------
March 31, 1994 1993 1992 1991 1990 1989
---------------- -------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges 3.5 1.3* 3.5 2.8 2.7 2.9
</TABLE>
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*Including the effect of a pre-tax restructuring charge in the amount of $175
million for fiscal 1993, further described in Alco Standard Corporation's 1993
Annual Report on Form 10-K (as amended by Form 10-K/A), as filed with the
Securities and Exchange Commission.
ALCO STANDARD CORPORATION AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES
(EXCLUDING CAPTIVE FINANCE SUBSIDIARIES)
<TABLE>
<CAPTION>
Six Months Ended Fiscal Year Ended September 30,
---------------- -------------------------------
March 31, 1994 1993 1992 1991 1990 1989
---------------- -------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges 4.3 1.4* 4.2 3.3 3.0 3.3
</TABLE>
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*Including the effect of a pre-tax restructuring charge in the amount of $175
million for fiscal 1993, further described in Alco Standard Corporation's 1993
Annual Report on Form 10-K (as amended by Form 10-K/A), as filed with the
Securities and Exchange Commission.
For purposes of computing the ratio of earnings to fixed charges,
earnings represent pretax income from continuing operations plus fixed charges
(net of capitalized interest). Fixed charges represent interest (whether
expensed or capitalized) and one-third (the proportion deemed representative
of the interest factor) of rents of continuing operations.
USE OF PROCEEDS
The net proceeds from the sale of the Debt Securities offered hereby
will be used by the Company for the financing of future sales and leasing
transactions with AOP customers, and for other corporate purposes. The Company
expects to incur additional indebtedness in connection with its financing
operations. However, the amount, timing and precise nature of such indebtedness
have not yet been determined and will depend upon the volume of the Company's
business, the availability of credit and general market conditions.
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DESCRIPTION OF DEBT SECURITIES
The following description sets forth the material terms and provisions
of the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which the general provisions described below may apply to
the Debt Securities so offered will be described in the Prospectus Supplement
relating to such Debt Securities.
Offered Debt Securities (as defined below) are to be issued under an
Indenture (the "Indenture") dated as of June ., 1994, as supplemented, between
the Company and NationsBank of Georgia, National Association, as Trustee. The
statements under this caption relating to the Debt Securities and the Indenture
are summaries and do not purport to be complete. Such summaries make use of
terms defined in the Indenture and are qualified in their entirety by express
reference to the Indenture and the cited provisions thereof, a copy of which is
filed as an exhibit to the Registration Statement.
GENERAL
The Debt Securities will be unsecured obligations of the Company. The
Indenture does not limit the aggregate principal amount of Debt Securities
which may be issued thereunder and provides that Debt Securities may be issued
thereunder from time to time in one or more series.
Reference is made to the Prospectus Supplement relating to the
particular Debt Securities offered thereby (the "Offered Debt Securities") for
the following terms of the Offered Debt Securities: (1) the title of the
Offered Debt Securities; (2) any limit on the aggregate principal amount of the
Offered Debt Securities; (3) the person to whom any interest shall be payable,
if other than the person in whose name the Offered Debt Security is registered
on the regular record date for such interest; (4) the date or dates on which the
principal of the Offered Debt Securities will be payable; (5) the rate or rates
per annum at which the Offered Debt Securities will bear interest, if any, or
the formula pursuant to which such rate or rates shall be determined, and the
date or dates from which such interest will accrue; (6) the dates on which such
interest, if any, will be payable and the regular record dates for such interest
payment dates; (7) the place or places where principal of (and premium, if any)
and interest on Offered Debt Securities shall be payable; (8) any mandatory or
optional sinking fund or analogous provisions; (9) if applicable, the price at
which, the periods within which, and the terms and conditions upon which the
Offered Debt Securities may, pursuant to any optional or mandatory redemption
provisions, be redeemed at the option of the Company; (10) if applicable, the
terms and conditions upon which the Offered Debt Securities may be repayable
prior to final maturity at the option of the holder thereof (which option may be
conditional); (11) the portion of the principal amount of the Offered Debt
Securities, if other than the principal amount thereof, payable upon
acceleration of maturity thereof; (12) the currency or currencies, including
composite currencies, in which principal of (and premium, if any) and interest
may be payable (which may be other than those in which the Offered Debt
Securities are stated to be payable); (13) any index pursuant to which the
amount of payments of principal and (and premium, if any) or interest may be
determined; (14) whether all or any part of the Offered Debt Securities will be
issued in the form of a Global Security or Securities and, if so, the Depositary
for, and other terms relating to, such Global Security or Securities; and (15)
any other terms of the Offered Debt Securities. (Section 301).
Unless otherwise indicated in the Prospectus Supplement relating
thereto, the Offered Debt Securities are to be issued as registered securities
without coupons in denominations of $1,000 or any integral multiple of $1,000.
(Section 302) No service charge will be made for any transfer or exchange of
such Offered 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 305)
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The applicable Prospectus Supplement will describe any special United
States federal tax consequences and any other special considerations with
respect to the Offered Debt Securities.
CERTAIN RESTRICTIONS
1994 Support Agreement. The Indenture provides that the Company (1)
will observe and perform in all material respects all covenants or agreements of
the Company contained in the 1994 Support Agreement; (2) to the extent
possible, will cause Alco Standard to observe and perform in all material
respects all covenants or agreements of Alco Standard contained in the 1994
Support Agreement; and (3) will not waive compliance under, amend in any
material respect or terminate the 1994 Support Agreement; provided, however,
that the 1994 Support Agreement may be amended or terminated if either (i) all
the outstanding debt of the Company is repaid or (ii) two nationally
recognized securities rating organizations confirm in writing prior to the
effectiveness of any such amendment or termination that the Company's debt
rating would not be downgraded as a result of any such amendment or
termination. (Section 1004)
Restrictions on Liens and Encumbrances. The Company will not create,
assume or guarantee any Secured Debt (as defined below) without making effective
provision for securing the Debt Securities (and, if the Company shall so
determine, any other indebtedness of or guaranteed by the Company), equally and
ratably with such Secured Debt. The term "Secured Debt" shall mean indebtedness
for money borrowed which is secured by a mortgage, pledge, lien, security
interest or encumbrance on any property of any character of the Company. This
covenant does not apply to debt secured by (i) certain mortgages, pledges,
liens, security interests or encumbrances in connection with the acquisition,
construction or improvement of any fixed asset or other physical or real
property by the Company, (ii) mortgages, pledges, liens, security interests or
encumbrances on property existing at the time of acquisition thereof, whether or
not assumed by the Company, (iii) mortgages, pledges, liens, security interests
or encumbrances on property of a corporation existing at the time such
corporation is merged into or consolidated with the Company or at the time of
sale, lease or other disposition of the properties of a corporation or firm as
an entirety or substantially as an entirety to the Company, (iv) mortgages,
including mortgages, pledges, liens, security interests or encumbrances, on
property of the Company in favor of the United States of America, any state
thereof, or any other country, or any agency, instrumentality or political
subdivision thereof, to secure certain payments pursuant to any contract or
statute or to secure indebtedness incurred for the purpose of financing all or
any part of the purchase price or the cost of construction or improvement of the
property subject to such mortgages, (v) any extension, renewal or replacement
(or successive extensions, renewals or replacements), in whole or in part, of
any mortgage, pledge, lien or encumbrance referred to in the foregoing clauses
(i) to (iv), inclusive or (vi) any mortgage, pledge, lien, security interest, or
encumbrance securing indebtedness owing by the Company to one or more wholly
owned Subsidiaries. Notwithstanding the above, the Company may, without
securing the Debt Securities, create, assume or guarantee Secured Debt which
would otherwise be subject to the foregoing restrictions, provided that, after
giving effect thereto, the aggregate amount of all Secured Debt then outstanding
(not including Secured Debt permitted under the foregoing exceptions) at such
time does not exceed 5% of the Consolidated Net Tangible Assets. (Sections 101
and 1005)
The Indenture provides that no consolidation or merger of the Company
and no sale, conveyance or lease of the property of the Company, substantially
as an entirety, shall be made with or to another corporation if as a result
thereof any properties or assets of the Company would become subject to a lien
or mortgage not permitted by the terms of the Indenture unless effective
provision shall be made to secure the Debt Securities equally and ratably with
(or prior to) all indebtedness thereby secured. (Section 801)
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The term "Consolidated Net Tangible Assets" shall mean as of any
particular time the aggregate amount of assets after deducting therefrom (a) all
current liabilities (excluding any such liability that by its terms is
extendable or renewable at the option of the obligor thereon to a time more than
12 months after the time as of which the amount thereof is being computed) and
(b) all goodwill, excess of cost over assets acquired, patents, copyrights,
trademarks, tradenames, unamortized debt discount and expense and other like
intangibles, all as shown in the most recent consolidated financial statements
of the Company and its Subsidiaries prepared in accordance with generally
accepted accounting principles. The term "Subsidiary" with respect to any
Person means any corporation of which more than 50% of the outstanding stock
having ordinary voting power to elect directors is owned directly or indirectly
by such Person or by one or more other corporations more than 50% of such stock
of which is similarly owned or controlled. (Section 101)
THE TRUSTEE
The Indenture contains certain limitations on the right of the
Trustee, as a creditor of the Company, to obtain payment of claims in certain
cases, or to realize on certain property received in respect of any such claim
as security or otherwise. (Section 613) In addition, the Trustee may be deemed
to have a conflicting interest and may be required to resign as Trustee if at
the time of a default under the Indenture it is a creditor of the Company.
NationsBank of Georgia, National Association, the Trustee under the
Indenture, maintains a banking relationship with the Company and Alco Standard.
EVENTS OF DEFAULT AND NOTICE THEREOF
The following events are defined in the Indenture as "Events of
Default" with respect to Debt Securities of any series: (a) failure to pay
principal of or premium, if any, on any Debt Security of that series when due;
(b) failure to pay any interest on any Debt Security of that series when due,
continued for 30 days; (c) failure to deposit any sinking fund payment, when
due, in respect of any Debt Security of that series; (d) default in the
performance, or breach, of any term or provision of the covenant described under
"Certain Restrictions--1994 Support Agreement"; (e) failure to perform any other
covenant of the Company in the Indenture (other than a covenant included in the
Indenture solely for the benefit of a series of Debt Securities other than that
series), continued for 60 days after written notice given to the Company by the
Trustee or the holders of at least 10% in the principal amount of the Debt
Securities outstanding and affected thereby; (f) default in payment of principal
in excess of $15,000,000 or acceleration of any indebtedness for money borrowed
in excess of $15,000,000 by the Company (including a default with respect to
Debt Securities of any series other than that series), if such indebtedness has
not been discharged or become no longer due and payable or such acceleration has
not been rescinded or annulled, within 10 days after written notice given to the
Company by the Trustee or the holders of at least 10% in principal amount of the
outstanding Debt Securities of such series; (g) certain events in bankruptcy,
insolvency or reorganization of the Company; (h) certain events in bankruptcy,
insolvency or reorganization of Alco Standard or one of its subsidiaries if such
event affects any significant part of the assets of the Company or any of its
subsidiaries; and (i) any other Event of Default provided with respect to Debt
Securities of such series. (Section 501)
If an Event of Default with respect to Debt Securities of any series
at the time outstanding shall occur and be continuing, either the Trustee or the
holders of at least 25% in principal amount of the outstanding Debt Securities
of that series may declare the principal amount (or, if the Debt Securities of
that series are Original Issue Discount Securities (as defined in the
Indenture), such portion of the principal amount as may be specified in the
terms of that series) of all Debt Securities to be due and
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<PAGE>
payable immediately; provided, however, that under certain circumstances the
holders of a majority in aggregate principal amount or outstanding Debt
Securities of that series may rescind and annul such declaration and its
consequences. (Section 502)
Reference is made to the Prospectus Supplement relating to any series
of Offered Debt Securities which are Original Issue Discount Securities for the
particular provisions relating to the principal amount of such Original Issue
Discount Securities due on acceleration upon the occurrence of an Event of
Default and the continuation thereof.
The Indenture provides that the Trustee, within 90 days after the
occurrence of a default with respect to any series of Debt Securities, shall
give to the holders of Debt Securities of that series notice of all uncured
defaults known to it (the term default to mean the events specified above
without grace periods), provided that, except in the case of default in the
payment of principal of (or premium, if any) or interest, if any, on any Debt
Security, the Trustee shall be protected in withholding such notice if it in
good faith determines that the withholding of such notice is in the interest of
the holders of Debt Securities. (Section 602)
The Company will be required to furnish to the Trustee annually a
statement by certain officers of the Company to the effect that to the best of
their knowledge the Company is not in default in the fulfillment of any of its
obligations under the Indenture or, if there has been a default in the
fulfillment of any such obligation, specifying each such default. (Section
1006)
The holders of a majority in principal amount of the outstanding Debt
Securities of any series affected will have the right, subject to certain
limitations, to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, exercising any trust or power conferred
on the Trustee with respect to the Debt Securities of such series, and to waive
certain defaults. (Sections 512 and 513)
Under the Indenture, record dates may be set for Acts of the holders
with respect to Events of Default, declaring an acceleration, or rescission and
annulment thereof, the direction of the time, method and place of conducting any
proceeding for any remedy available to the Trustee, exercising any trust or
power conferred on the Trustee, or waiving any default. (Sections 501, 502, 512
and 513)
The Indenture provides that in determining whether the holders of the
requisite principal amount of the outstanding Debt Securities have given any
request, demand, authorization, direction, notice, consent or waiver thereunder
(i) the principal amount of an Original Issue Discount Security that shall be
deemed to be outstanding shall be the amount of the principal thereof that would
be due and payable as of the date of such determination upon acceleration of the
maturity thereof, and (ii) the principal amount of a Debt Security denominated
in a foreign currency or a composite currency shall be the U.S. dollar
equivalent, determined on the basis of the rate of exchange on the business day
immediately preceding the date of original issuance of such Debt Security by the
Company in good faith, of the principal amount of such Debt Security (or, in the
case of an Original Issue Discount Security, the U.S. dollar equivalent,
determined based on the rate of exchange prevailing on the business day
immediately preceding the date of original issuance of such Debt Security, of
the amount determined as provided in (i) above). (Section 101)
The Indenture provides that in case an Event of Default shall occur
and be continuing, the Trustee shall exercise such of its rights and powers
under the Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs. (Section 601) Subject to such provisions, the
Trustee will be under no
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<PAGE>
obligation to exercise any of its rights or powers under the Indenture at the
request of any of the holders of Debt Securities unless they shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request.
(Section 603)
The covenants contained in the Indenture and the Debt Securities would
not necessarily afford Holders of the Debt Securities protection in the event of
a highly leveraged or other transaction involving Alco that may adversely affect
Holders.
MODIFICATION OF THE INDENTURE
Modifications and amendments of the Indenture may be made by the
Company and the Trustee, with the consent of the holders of not less than
66 2/3% in aggregate principal amount of each series of the outstanding Debt
Securities issued under the Indenture which are affected by the modification or
amendment, provided that no such modification or amendment may, without a
consent of each holder of such Debt Securities affected thereby: (1) change the
stated maturity date of the principal of (or premium, if any) or any installment
of interest, if any, on any such Debt Security; (2) reduce the principal amount
of (or premium, if any) or the interest, if any, on any such Debt Security or
the principal amount due upon acceleration of an Original Issue Discount
Security; (3) change the place or currency of payment of principal of (or
premium, if any) or interest, if any, on any such Debt Security; (4) impair the
right to institute suit for the enforcement of any such payment on or with
respect to any such Debt Security; (5) reduce the above-stated percentage of
holders of Debt Securities necessary to modify or amend the Indenture; or (6)
modify the foregoing requirements or reduce the percentage of outstanding Debt
Securities necessary to waive compliance with certain provisions of the
Indenture or for waiver of certain defaults. A record date may be set for any
Act of the holders with respect to consenting to any amendment. (Section 902)
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through one or more
underwriters or dealers and also may sell Debt Securities to other investors
directly or through agents. Any such underwriter or agent involved in the offer
and sale of the Debt Securities will be named in the Prospectus Supplement. The
underwriters or agents may include one or more of Lehman Brothers Inc., Chase
Securities, Inc., Goldman, Sachs & Co., Merrill Lynch & Co. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated or a group of underwriters represented by
one or more of such firms or may be one or more other firms.
Underwriters or agents may offer and sell the Debt Securities at a
fixed price or prices, which may be changed, or from time to time at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. In connection with the sale of the Debt
Securities, underwriters or agents may be deemed to have received compensation
from the Company in the form of underwriting discounts or commissions and may
also receive commissions from purchasers of the Debt Securities for whom they
may act as agent. Underwriters or agents may sell the Debt Securities to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters or commissions from
the purchasers for whom they may act as agent.
The Company does not expect to list the Debt Securities. The Debt
Securities, when first issued, will have no established trading market. Any
underwriters or agents to or through whom Debt Securities are sold by the
Company for public offering and sale may make a market in such Debt
Securities, but such underwriters or agents will not be
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<PAGE>
obligated to do so and may discontinue any market making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
any Debt Securities.
Any underwriters or agents participating in the distribution of the
Debt Securities may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on resale of the
Debt Securities may be deemed to be underwriting discounts and commissions,
under the Securities Act of 1933, as amended. Underwriters or agents may be
entitled, under agreements entered into with the Company, to indemnification
against or contribution toward certain civil liabilities, including liabilities
under the Securities Act of 1933, as amended.
Certain of the underwriters or agents and their associates may be
customers of, engage in transactions with and perform services for, the Company
in the ordinary course of business.
VALIDITY OF DEBT SECURITIES
The validity of the Debt Securities will be passed upon for the
Company by J. Kenneth Croney, General Counsel of Alco Standard, and for any
underwriters or agents by Sullivan & Cromwell, 125 Broad Street, New York, New
York 10004. As of June 1, 1994, Mr. Croney beneficially owned 31,321 shares of
Common Stock of Alco Standard, including 16,860 shares over which he has the
right to acquire beneficial ownership through the exercise of stock options
granted under Alco Standard's 1981 Stock Option Plan or 1986 Stock Option
Plan. Sullivan & Cromwell from time to time performs legal services for Alco
Standard.
EXPERTS
The financial statements of Alco Capital Resource, Inc. for the
three years in the period ended September 30, 1993 appearing in Alco Capital
Resource Inc.'s Registration Statement on Form 10 (as amended by its Form 10-
12G/A filed on May 27, 1994 and its Form 10-12G/A filed on June 16, 1994) have
been audited by Ernst & Young, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
financial statements are incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
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<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*.
The following is an itemized statement of expenses of the Company in connection
with the issue of the Debt Securities.
<TABLE>
<S> <C>
Registration fee.................................... $172,415
Rating Agency fees.................................. 125,000
Fees and expenses of Trustee........................ 10,000
Printing expenses................................... 80,000
Accountants' fees and expenses...................... 50,000
Counsel fees and expenses........................... 60,000
Blue Sky qualification and legal investment survey.. 26,500
Miscellaneous....................................... 6,085
--------
Total............................................ $530,000
========
</TABLE>
_____________________
* All amounts are estimates except for the registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by Delaware law, under which the Company is incorporated, the
Company's Articles of Incorporation and By-Laws provide that officers and
directors of the Company shall be indemnified for expenses (including attorneys'
fees) reasonably incurred in the successful defense of a suit or proceeding
brought by reason of such persons being officers or directors of the Company.
If unsuccessful in defense of a third-party civil suit or a criminal suit,
or if such a suit is settled, such a person shall be indemnified under the By-
Laws against both (1) expenses (including attorneys' fees) and (2) judgments,
fines and amounts paid in settlement if he acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of the
Company, and with respect to any criminal action, if he had no reasonable cause
to believe his conduct was unlawful.
If unsuccessful in defense of a suit brought by or in the right of the
Company, or if such suit is settled, such a person shall be indemnified under
such law only against expenses (including attorneys' fees) incurred in the
defense or settlement of such suit if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Company except that if such a person is adjudged to be liable in such a suit for
negligence or misconduct in the performance of his duty to the Company, he
cannot be indemnified unless specific court approval is obtained.
The Company has purchased liability insurance policies covering its
directors and officers to provide protection where the Company cannot legally
indemnify a director or officer and where a claim arises under the Employee
Retirement Income Security Act of 1974 against a director or officer based upon
an alleged breach of fiduciary duty or other wrongful act.
II-1
<PAGE>
ITEM 16. EXHIBITS.
1 -- Form of Distribution Agreement, filed as Exhibit 1 to
the registrant's Registration Statement No. 33-53779, is
incorporated herein by reference.
4 -- Form of Indenture between the Registrant and NationsBank
of Georgia, National Association, as Trustee, filed as
Exhibit 4 to the registrant's Registration Statement No.
33-53779, is incorporated herein by reference.
5 -- Opinion of J. Kenneth Croney as to legality of the Debt
Securities being registered, filed as Exhibit 5 to the
registrant's Registration Statement No. 33-53779, is
incorporated herein by reference.
12.1 -- Alco Capital Resource, Inc. Statement Setting Forth
Computation of Ratio of Earnings to Fixed Charges, filed
as Exhibit 12.1 to the registrant's Registration
Statement No. 33-53779, is incorporated herein by
reference.
12.2 -- Alco Standard Corporation and Subsidiaries Statement
Setting Forth Computation of Ratio of Earnings to Fixed
Charges.
12.3 -- Alco Standard Corporation and Subsidiaries Statement
Setting Forth Computation of Ratio of Earnings to Fixed
Charges (Excluding Captive Finance Subsidiaries).
23.1 -- Consent of J. Kenneth Croney (included in Exhibit 5),
filed as Exhibit 23.1 to the registrant's Registration
Statement No. 33-53779, is incorporated herein by
reference
23.2 -- Consent of Ernst & Young.
24.1 -- Power of Attorney of Richard P. Maier, filed as Exhibit
24.1 to the registrant's Registration Statement No.
33-53779, is incorporated herein by reference
24.2 -- Power of Attorney of Robert M. Kearns, filed as Exhibit
24.2 to the registrant's Registration Statement No.
33-53779, is incorporated herein by reference
24.3 -- Power of Attorney of James E. Head, filed as Exhibit 24.3
to the registrant's Registration Statement No. 33-53779,
is incorporated herein by reference
25 -- Form T-1 Statement of Eligibility and Qualification
under the Trust Indenture Act of 1939 of NationsBank of
Georgia, National Association, filed as Exhibit 25 to
the registrant's Registration Statement No. 33-53779, is
incorporated herein by reference
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(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; and
(iii) To include any material information, with respect to the
plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section 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.
(4) 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
II-2
<PAGE>
is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(5) 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 provisions described
in Item 15 hereof, or otherwise, (but that term shall not include the
insurance policies referred to in Item 15) the registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act
of 1933 and is therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Pre-Effective
Amendment to Registration Statement No. 33-53779 to be signed on its behalf by
the undersigned, thereunto duly authorized, in Valley Forge, Pennsylvania,
on the 16th day of June, 1994.
ALCO CAPITAL RESOURCE, INC.
By: /s/ Robert M. Kearns
------------------------
Robert M. Kearns
Vice President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED ON THE 16TH DAY OF JUNE, 1994.
<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C>
*
- ------------------------- President
Richard P. Maier (Principal Executive Officer)
*
- ------------------------- Vice President
Robert M. Kearns (Principal Accounting and Financial Officer)
*
- ------------------------- Director
James E. Head
</TABLE>
*By: /s/ Robert M. Kearns
-------------------------
Robert M. Kearns
Attorney-in-fact
II-4
<PAGE>
EXHIBITS
--------
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Exhibit Page
- ------- ------- ------------
<C> <S> <C>
12.2 Alco Standard Corporation and Subsidiaries Statement
Setting Forth Computation of Ratio of Earnings to Fixed
Charges.
12.3 Alco Standard Corporation and Subsidiaries Statement
Setting Forth Computation of Ratio of Earnings to Fixed
Charges (Excluding Captive Finance Subsidiaries).
23.2 Consent of Ernst & Young.
</TABLE>
II-5
<PAGE>
Exhibit 12.2
ALCO STANDARD CORPORATION AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES
(dollars in thousands)
<TABLE>
<CAPTION>
Six Months
Ended
March 31, Fiscal Year Ended September 30
------------------------------
1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ----
Earnings
- --------
<S> <C> <C> <C> <C> <C> <C>
Income from continuing operations $ 69,875 $ 7,615 $104,217 $ 76,642 $ 64,300 $ 81,106
Add:
Loss From unconsolidated affiliate 1,893 2,538
Provision for income taxes 46,570 16,984 68,303 49,160 47,160 16,711
Fixed charges 46,490 86,615 70,168 68,748 66,361 51,412
-------- -------- -------- -------- -------- --------
Earnings, as adjusted (A) $164,828 $113,752 $242,688 $194,550 $177,821 $149,229
======== ======== ======== ======== ======== ========
Fixed charges
- -------------
Other interest expense, including
interest on capital leases $ 35,108 $ 63,851 $ 51,203 $ 53,173 $ 52,942 $ 40,062
Estimated interest component of
rental expense 11,382 22,764 18,965 15,575 13,419 11,350
-------- -------- -------- -------- -------- --------
Total fixed charges (B) $ 46,490 $ 86,615 $ 70,168 $ 68,748 $ 66,361 $ 51,412
======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges
(A) divided by (B) 3.5 1.3* 3.5 2.8 2.7 2.9
--- --- --- --- --- ---
</TABLE>
- ---------
* Includes the effect of a pre-tax restructuring charge in the amount of $175
million for fiscal 1993, further described in Alco Standard Corporation's 1993
Annual Report on Form 10-K (as amended by Form 10-K/A), as filed with the
Securities and Exchange Commission.
<PAGE>
Exhibit 12.3
ALCO STANDARD CORPORATION AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES (EXCLUDING CAPTIVE FINANCE SUBSIDIARIES)
(dollars in thousands)
<TABLE>
<CAPTION>
Six Months
Ended
March 31, Fiscal Year Ended September 30
-------------------------------------------------------------
1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings
- --------
Income (loss) from continuing $64,442 $11,025 $98,162 $73,051 $66,283 $83,330
operations
Add:
Loss From unconsolidated affiliate 1,893 2,538
Provisions for income taxes 43,151 11,512 64,592 46,221 46,781 16,870
Fixed charges 33,454 62,535 50,595 52,951 55,189 44,274
-------- ------- -------- -------- -------- --------
Earnings, as adjusted (A) $142,940 $87,610 $213,349 $172,223 $168,253 $144,474
======== ======= ======== ======== ======== ========
Fixed charges
- -------------
Other interest expense, including
interest on capital leases $22,281 $40,189 $31,680 $37,426 $41,792 $32,949
Estimated interest component of
rental expense 11,173 22,346 18,915 15,525 13,397 11,325
-------- ------- -------- -------- -------- --------
Total fixed charges (B) $33,454 $62,535 $50,595 $52,951 $55,189 $44,274
======== ======= ======== ======== ======== ========
Ratio of earnings to fixed charges
(A) divided by (B) 4.3 1.4* 4.2 3.3 3.0 3.3
--- --- --- --- --- ---
</TABLE>
- ---------
* Includes the effect of a pre-tax restructuring charge in the amount of $175
million for fiscal 1993, further described in Alco Standard Corporation's
1993 Annual Report on Form 10-K (as amended by Form 10-K/A), as filed within
the Securities and Exchange Commission.
<PAGE>
Exhibit 23.2
Consent of Ernst & Young, Independent Auditors
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3 No. 33-53779) and related Prospectus of
Alco Capital Resource, Inc. for the registration of $500,000,000 of debt
securities and to the incorporation by reference therein in our report dated
October 22, 1993, with respect to the financial statements of Alco Capital
Resource, Inc. for the three years in the period ending September 30, 1993
included in its Registration Statement on Form 10-12G/A filed on June 16, 1994
with the Securities and Exchange Commission.
Philadelphia, Pennsylvania
June 16, 1994
