<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 25, 1998
REGISTRATION NO. 333-00014
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
GUIDANT CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<TABLE>
<S> <C>
INDIANA 35-1931722
(State or Other Jurisdiction of incorporation
or organization) (I.R.S. Employer Identification No.)
</TABLE>
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<TABLE>
<S> <C> <C>
111 Monument Circle,
29th Floor Ronald W. Dollens Copies to:
Indianapolis, IN 46204-5129 President and Chief Executive Officer Steven P. Lund Esq.
317-971-2000 Guidant Corporation Dewey Ballantine LLP
(Address, including zip 111 Monument Circle, 29th Floor 1301 Avenue of the Americas
code, and Indianapolis, IN 46204-5129 New York, New York 10019-6092
telephone number, 317-971-2000
including area code of (Name, address, including zip code, and
registrant's principal telephone number,
executive offices) including area code of agent for service)
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
TITLE OF SECURITIES PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED OFFERING PRICE (1)(2) REGISTRATION FEE
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<S> <C> <C>
Senior Debt Securities........ $500,000,000 $172,414(3)
Common Stock.................. (4) (5)
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</TABLE>
(1) In U.S. dollars or the equivalent thereof on foreign currencies or
currency units. Such amount shall be increased, if any of the Senior Debt
Securities are issued at an original issue discount, by an amount such
that the net proceeds to be received by the Registrant shall be equal to
$500,000,000.
(2) Estimated solely for the purpose of determining the registration fee.
(3) The registration fee was previously paid at the time of the filing of the
original registration statement.
(4) Such indeterminate number of shares of Common Stock as may from time to
time be issuable upon the conversion or exchange of Senior Debt Securities
registered hereunder.
(5) No additional consideration will be received for the Common Stock and
therefore no registration fee is required pursuant to Rule 457(i).
----------------
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 11(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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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ +
+THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY +
+NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN +
+OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE +
+SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. WE MAY NOT +
+USE THIS PROSPECTUS TO SELL SENIOR DEBT SECURITIES UNLESS WE ALSO GIVE +
+PROSPECTIVE INVESTORS A PROSPECTUS SUPPLEMENT. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS (SUBJECT TO COMPLETION)
dated November 25, 1998
$500,000,000
GUIDANT CORPORATION
SENIOR DEBT SECURITIES
-----------
WE WILL PROVIDE THE SPECIFIC TERMS OF EACH SERIES OF SENIOR DEBT SECURITIES
WE ISSUE IN SUPPLEMENTS TO THIS PROSPECTUS. YOU SHOULD READ THIS PROSPECTUS AND
THE SUPPLEMENTS CAREFULLY BEFORE YOU INVEST.
WE MAY OFFER THE SECURITIES DIRECTLY OR THROUGH UNDERWRITERS, AGENTS OR
DEALERS. THE SUPPLEMENT WILL DESIGNATE THE TERMS OF THAT PLAN OF DISTRIBUTION.
"PLAN OF DISTRIBUTION" BELOW ALSO PROVIDES MORE INFORMATION ON THIS TOPIC.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
OUR PRINCIPAL EXECUTIVE OFFICES ARE LOCATED AT 111 MONUMENT CIRCLE, 29TH
FLOOR, INDIANAPOLIS, INDIANA 46204-5129, AND OUR TELEPHONE NUMBER IS (317) 971-
2000.
OUR SHARES OF COMMON STOCK ARE LISTED ON BOTH THE NEW YORK STOCK EXCHANGE
UNDER THE TRADING SYMBOL "GDT" AND ON THE PACIFIC EXCHANGE UNDER THE TRADING
SYMBOL "GDT".
The date of this Prospectus is , 1998
<PAGE>
NO PERSON IS AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON A HAVING BEEN AUTHORIZED BY THE COMPANY (AS DEFINED HEREIN) OR
ANY UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS AND ANY ACCOMPANYING
PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
ANY OFFER TO BUY ANY SECURITIES OTHER THAN THE SENIOR DEBT SECURITIES (AS
DEFINED HEREIN) TO ANY PERSON IN MY JURISDICTION IN WHICH IT IS UNLAWFUL TO
MAKE ANY SUCH OFFER OR SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF
THIS PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREBY OR THEREBY SHALL, UNDER ANY CIRCUMSTANCES, IMPLY THAT THE INFORMATION
CONTAINED OR INCORPORATED HEREIN OR THEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE HEREOF OR THEREOF.
AVAILABLE INFORMATION
Guidant Corporation (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
reports, proxy statements and other information filed by the Company with the
Commission are available over the Internet at the Company's web site at
http://www.guidant.com and at the Commission's web site at http://www.sec.gov.
Such filings can also be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549 or its regional offices located at
Suite 1400, Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661-
2511 and at Suite 1300, 7 World Trade Center, New York, New York 10048. Copies
of such material can be obtained by mail from the Public Reference Section of
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The public may call the Commission at 1-800-SEC-
0330 for further information on the public reference rooms and the prescribed
rates. In addition, such reports, proxy statements and other information may be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005 and the Pacific Exchange, Inc., 301 Pine Street,
San Francisco, California 94101.
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 Offered Securities. This Prospectus
does not contain all of the information set forth in the Registration Statement
and the exhibits and schedules thereto. For further information with respect to
the Company and the Offered Securities, reference is hereby made to the
Registration Statement and the exhibits and schedules filed therewith, which
may be obtained from the principal office of the Commission in Washington,
D.C., upon the payment of fees prescribed by the Commission.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission pursuant to
the Exchange Act are incorporated herein by reference: (i) the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1997; (ii) the
Company's Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, 1998, June 30, 1998 and September 30, 1998; (iii) the Company's
Current Report on Form 8-K dated September 15, 1998; and (iv) the description
of the Company's common stock included in the Company's registration statement
on Form 8-A, as amended on October 6, 1994.
All reports and other documents filed by the Company pursuant to Section 13
(a), 13 (c), 14 or 15 (d) of the Exchange Act after the date of this Prospectus
and before the termination of the offering made hereby will be deemed to be
incorporated by reference herein and to be a part hereof from the date of
filing of such reports and documents. Any statement contained in a document
incorporated or deemed to be incorporated by
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reference herein will be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document, which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
Each person, including any beneficial owner, to whom a Prospectus is
delivered, may request a copy of any or all of the documents incorporated
herein by reference (other than exhibits, unless such exhibits specifically are
incorporated by reference into such documents or this Prospectus) at no cost by
writing or calling the Company at the following address and telephone number:
Guidant Corporation, P.O. Box 44906, Indianapolis, Indiana 46244,
(317) 971-2000, Attention: Investor Relations.
THE COMPANY
The Company, an Indiana corporation, is a global company that designs,
develops, manufactures, and markets a broad range of innovative, high-quality
therapeutic devices for use in: (i) cardiac rhythm management (CRM), (ii)
vascular intervention (VI), and (iii) cardiac and vascular surgery (CVS). The
Company is a worldwide leader in automatic implantable cardioverter
defibrillator (AICD) systems. The Company also designs, manufactures, and
markets a full line of implantable pacemaker systems used in the treatment of
slow or irregular arrhythmias. The Company is also a worldwide leader in
minimally invasive procedures used for opening blocked coronary arteries. In
addition, the Company develops, manufactures, and markets products for use in
minimally invasive cardiac and vascular surgeries.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of earnings to fixed
charges for the periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
1998 1997 1997 1996 1995 1994 1993
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<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges...... 28.4 11.2 13.2 8.7 5.5 8.0 17.8
</TABLE>
These computations include the Company and our subsidiaries, and companies in
which we own 50% or less equity. For these ratios, "earnings" is determined by
adding the "total fixed charges" (excluding interest capitalized), income
taxes, minority common stockholders equity in net income and amortization of
interest capitalized to income from continuing operations excluding special
charges. For this purpose, "total fixed charges" consists of (1) interest on
all indebtedness and amortization of debt discount and expense, and (2) an
interest factor attributable to rentals.
USE OF PROCEEDS
Unless otherwise indicated in the Prospectus Supplement, the net proceeds to
be received by the Company from the sale of the Offered Securities will be
added to the Company's general funds and will be used for general corporate
purposes, including capital expenditures, to finance possible acquisitions and
to repay, redeem or repurchase its outstanding indebtedness.
FORWARD-LOOKING STATEMENTS
Under the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995, the Company cautions investors that any forward-looking statements
or projections made by the Company, including those made in this document or
incorporated by reference, are subject to risks and uncertainties which may
cause actual results to differ materially from those projected. Economic,
competitive, governmental, technological, and other factors which may affect
the Company's operations are discussed in the Company's most recent reports on
Forms 10-Q and 10-K filed with the Securities and Exchange Commission.
3
<PAGE>
DESCRIPTION OF THE SENIOR DEBT SECURITIES
The Company may offer and issue from time to time in one or more series its
senior unsecured debt securities (the "Senior Debt Securities"). The Senior
Debt Securities are to be issued under an indenture to be dated as of a date
prior to the first issuance of Senior Debt Securities, as supplemented from
time to time (the "Senior Indenture"), between the Company and Citibank, N.A.,
as Trustee (the "Trustee"). The form of the Senior Indenture as well as the
Form of Supplemental Indenture thereto are filed as exhibits to the
Registration Statement. The Senior Indenture is subject to and governed by the
Trust Indenture Act of 1939, as amended (the "TIA"). The statements made under
this heading relating to the Senior Debt Securities and the Senior Indenture
are summaries of the provisions thereof and do not purport to be complete and
are qualified in their entirety by reference to the Senior Indenture, including
the definitions of certain terms therein and in the TIA. Certain capitalized
terms used below but not defined herein have the meanings ascribed to them in
the Senior Indenture.
The particular terms of the Senior Debt Securities in respect of which this
Prospectus is being delivered (the "Offered Securities"), any modifications of
or additions to the general terms of the Senior Debt Securities as described
herein that may be applicable and any applicable federal income tax
considerations will be described in an accompanying supplement to this
Prospectus (each, a "Prospectus Supplement") relating to the Offered
Securities. Accordingly, for a description of the terms of the Offered
Securities, reference must be made both to the Prospectus Supplement relating
thereto and the description of Senior Debt Securities set forth in this
Prospectus.
GENERAL
The Senior Debt Securities will be direct, unsecured obligations of the
Company. The indebtedness represented by the Senior Debt Securities will rank
senior to all indebtedness of the Company that by its terms is subordinated in
right of payment. The Senior Debt Securities may be issued in one or more
series.
The Senior Indenture provides that the aggregate principal amount of Senior
Debt Securities that may be issued thereunder is unlimited. The terms of each
series of Senior Debt Securities will be established pursuant to a resolution
of the Board of Directors of the Company and set forth or determined in the
manner provided in an Officer's Certificate or by a supplemental indenture.
The Company conducts certain of its operations through its Subsidiaries, and
therefore the Company is dependent on the cash flow of its Subsidiaries to meet
its debt obligations, including its obligations under the Senior Debt
Securities. In addition, the rights of the Company and its creditors, including
the Holders of the Senior 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.
The accompanying Prospectus Supplement will set forth the terms of the
Offered Securities, which may include the following:
(1) The title of the Offered Securities.
(2) The limit, if any, upon the aggregate principal amount of the Offered
Securities.
(3) The date or dates on which or periods during which the Offered
Securities may be issued, and the date or dates, or the method by
which such date or dates will be determined, on which the principal of
(and premium, if any, on) the Offered Securities are, or may be
payable.
(4) The rate or rates at which the Offered 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 or
the method by which such date or dates shall be determined, the
interest payment dates on which such interest will be payable and, if
the Offered Securities are Registered Securities, the
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regular record dates, if any, for the interest payable on such
interest payment dates, and, if the Offered Securities are floating
rate securities, the notice, if any, to Holders regarding the
determination of interest and the manner of giving such notice and any
conditions or contingencies as to the payment of interest in cash or
otherwise, if any.
(5) The place or places where the principal of (and premium, if any) and
interest on the Offered Securities shall be payable.
(6) The obligation, if any, of the Company to redeem, repay, purchase or
offer to purchase the Offered Securities pursuant to any mandatory
redemption, sinking fund or analogous provisions or at the option, of
the Holder thereof and the period or periods within which, or the
dates on which, the prices at which and the terms and conditions upon
which the Offered Securities shall be redeemed, repaid, purchased or
offered to be purchased, in whole or in part, pursuant to such
obligation.
(7) The right, if any, of the Company to redeem the Offered Securities at
its option and 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 Offered Securities may be redeemed, if any, in
whole or in part, at the option of the Company or otherwise.
(8) If other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Registered Securities of the
series shall be issuable, and if other than the denomination of
$5,000, the denomination or denominations in which any Bearer
Securities of the series shall be issuable.
(9) Whether the Offered Securities are to be issued as original issue
discount securities ("Discount Securities") and the amount of discount
at which such Offered Securities may be issued and, if other than the
principal amount thereof, the portion of the principal amount of
Offered Securities which shall be payable upon declaration of
acceleration of the Maturity thereof upon an Event of Default.
(10) Provisions, if any, for the defeasance of the Offered Securities or
for the discharge of certain of the Company's obligations with respect
to the Offered Securities.
(11) Whether the Offered Securities 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, whether such Bearer Securities may be
exchanged for Registered Securities and the circumstances under which,
and the place or places at which, any such exchanges, if permitted,
may be made.
(12) Whether provisions for payment of additional amounts or tax
redemptions shall apply and, if such provisions shall apply, such
provisions; and, if any of the Offered Securities are to be issued as
Bearer Securities, the applicable procedures and certificates relating
to the exchange of temporary Global Securities for definitive Bearer
Securities.
(13) If other than U.S. dollars, the currency, currencies or currency units
(the term "currency" as used herein will include currency units) in
which the Offered Securities shall be denominated or in which payment
of the principal of (and premium, if any) and interest on the Offered
Securities may be made, and particular provisions applicable thereto
and, if applicable, the amount of Offered Securities which entities
the Holder or its proxy to one vote for purposes of the Senior
Indenture.
(14) If the principal of (and premium, if any) or interest on the Offered
Securities are to be payable, at the election of the Company or a
Holder thereof, in a currency other than that in which the Offered
Securities are denominated or payable without such election, in
addition to or in lieu of the applicable provisions of the Senior
Indenture, the period or periods within which and the terms and
conditions upon which, such election may be made and the time and the
manner of determining the exchange rate or rates between the currency
or currencies in which the Offered Securities are denominated or
payable without such election and the currency or currencies in which
the Offered Securities are to be paid if such election is made.
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(15) The date as of which any Offered Securities shall be dated.
(16) If the amount of payments of principal of (and premium, if any) or
interest on the Offered Securities may be determined with reference to
an index, including, but not limited to, an index based on a currency
or currencies other than that in which the Offered Securities are
denominated or payable, or any other type of index, the manner in
which such amounts shall be determined.
(17) If the Offered Securities are denominated or payable in a foreign
currency, any other terms concerning the payment of principal of (and
premium, if any) or any interest on the Offered Securities (including
the currency or currencies of payment thereof); and whether the
judgment currency provisions of the Senior Indenture are established
as terms of the Offered Securities.
(18) The designation of the original currency determination agent, if any.
(19) The applicable overdue interest rate, if any.
(20) If the Offered Securities do not bear interest, applicable dates for
determining record holders of Offered Securities.
(21) Any deletions from, modifications of or additions to any Events of
Default or covenants provided for in the Senior Indenture with respect
to the Offered Securities, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants set
forth in the Senior Indenture.
(22) If any of the Offered Securities are to be issued as Bearer
Securities, (x) whether interest in respect of any portion of a
temporary Offered Security in global form (representing all of the
Outstanding Bearer Securities of the series) payable in respect of any
interest payment date prior to the exchange of such temporary Offered
Security for definitive Offered Securities shall be paid to any
clearing organization with respect to the portion of such temporary
Offered Security held for its account and, in such event, the terms
and conditions (including any certification requirements) upon which
any such interest payment received by a clearing organization will be
credited to the persons entitled to interest payable on such interest
payment date, (y) the terms upon which interests in such temporary
Offered Security in global form may be exchanged for interests in a
permanent Global Security or for definitive Offered Securities and the
terms upon which interests in a permanent Global Security, if any, may
be exchanged for definitive Offered Securities and (z) the cities in
which the Authorized Newspapers designated for the purposes of giving
notices to Holders are published.
(23) Whether the Offered Securities 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 Offered Securities are issuable only as Registered Securities, the
manner in which and the circumstances under which Global Securities
representing Offered Securities may be exchanged for Registered
Securities in definitive form.
(24) The designation, if any, of any depositaries, trustees (other than the
Trustee), paying agents, authenticating agents, security registrars
(other than the Trustee) or other agents with respect to the Offered
Securities.
(25) If the Offered Securities are to be issuable in definitive form only
upon receipt of certain certificates or other documents or upon
satisfaction of certain conditions, the form and terms of such
certificates, documents or conditions.
(26) If any of the Offered Securities are to be issued as Registered
Securities, the person to whom any interest on any Registered Security
shall be payable, if other than the person in whose name that
Registered Security is registered at the close of business on the
Regular Record Date for such interest, and if any of the Offered
Securities are to be issued as Bearer Securities, the manner in which,
or the person to whom, any interest on any Bearer Security shall be
payable, if otherwise than upon the presentation and surrender of the
Coupons, if any, appertaining thereto as they
6
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severally mature, the extent to which, or the manner in which, any
interest payable on an Offered Security in temporary global form on an
interest payment date will be paid and the extent to which, or the
manner in which, any interest payable on an Offered Security in
permanent global form on an interest payment date will be paid.
(27) The provisions, if any, granting special rights to the Holders of
Offered Securities upon the occurrence of such events as may be
specified.
(28) Any other terms or conditions relating to the Offered Securities not
specified in the Senior Indenture (which other terms shall not be
inconsistent with the requirements of the TIA and the provisions of
the Senior Indenture).
(29) The terms of any right to convert or exchange Senior Debt Securities
of the series, either at the option of the Holder thereof or the
Company, into or for shares of Common Stock of the Company or other
securities or property, including without limitation the period or
periods within which and the price or prices (including adjustments
thereto) at which any Senior Debt Securities of the series shall be
converted or exchanged, in whole or in part.
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 Senior Indenture do not contain any provisions
that would afford holders of Senior Debt Securities protection in the event of
a highly leveraged transaction, reorganization, restructuring, merger or
similar transaction involving the Company or its Subsidiaries that may
adversely affect holders of the Senior Debt Securities or, except as described
in "Certain Covenants of Senior Debt Securities," that would limit the ability
of the Company or its Subsidiaries to incur indebtedness. Reference is made to
the Prospectus Supplement relating to the Offered Securities for information
with respect to any deletions from, modifications of or additions to, if any,
the Events of Default or covenants of the Company described below that are
applicable to the Offered Securities.
All of the Senior 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
Senior Debt Securities of such series.
If applicable, the Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other applicable securities laws or regulations
in connection with any repurchase of the Senior Debt Securities of a series at
the option of the Holder.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless specified in the Prospectus Supplement, with respect to any series of
Senior Debt Securities, any Registered Securities of a series, other than
Registered Securities issued in global form (which may be of any
denomination), shall be issuable in denominations of $1,000 and any integral
multiple thereof and any Bearer Securities of a series, other than Bearer
Securities issued in global form (which may be of any denomination), shall be
issuable in denominations of $5,000. Unless specified in the Prospectus
Supplement, the Senior Debt Securities of any series shall be payable in U.S.
dollars. The Senior Indenture also provides that Senior Debt Securities of a
series may be issuable in global form. See " -- Book Entry Senior Debt
Securities." Unless otherwise indicated in the Prospectus Supplement, Bearer
Securities (other than in global form) will have Coupons attached.
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 and with like terms and conditions. If so
specified in the Prospectus Supplement, at the option of the Holder thereof,
to the extent permitted by law, any Bearer Security of any series may be
exchanged for a Registered Security of such series of like aggregate
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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 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.
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 Senior Debt Securities in effect at the
time of such exchange.
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.
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 deliver, in the name of the designated transferred, 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 registration of transfer or exchange of
Senior Debt Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Company shall not be required (i) to register the transfer of or exchange
Senior 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 Senior 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 the transfer of or exchange any Senior Debt Security so selected for
redemption in whole or in part, except the unredeemed portion of any Senior
Debt Security being redeemed in part.
CONVERSION OR EXCHANGE RIGHTS
The terms on which Senior Debt Securities of any series are convertible into
or exchangeable for Common Stock or other securities of the Company will be set
forth in the Prospectus Supplement relating thereto. Such terms will include
provisions as to whether conversion or exchange is mandatory, at the option of
the Holder or at the option of the Company, and may include provisions pursuant
to which the number of shares of Common Stock or other securities of the
Company to be received by the Holders of Senior Debt Securities would be
subject to adjustment.
CERTAIN COVENANTS OF SENIOR DEBT SECURITIES
The Senior Indenture contains, among other things, the following covenants:
Limitation on Liens. The Company will not, and will not permit any Restricted
Subsidiary to, create, incur, assume or suffer to exist any Debt secured by a
Lien on any Principal Property, any shares of Capital Stock of any Restricted
Subsidiary or any Debt of any Restricted Subsidiary without making effective
provision for all outstanding Senior Debt Securities and all other amounts due
under the Senior Indenture to be directly secured equally and ratably with (or,
if such Debt so secured is subordinate in right of payment to the Senior Debt
Securities, prior to) the obligation or liability secured by such Lien;
provided that the foregoing restriction shall not apply to:
(i) any Lien upon any Principal Property acquired, constructed or
improved after the date of the Senior Indenture; provided that (x)
such Lien is created solely for the purpose of securing Debt
incurred to finance the cost (including the cost of construction or
improvement) of the item of property subject thereto and such Lien
is created at the time of or within 270 days
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after the later of the acquisition, the completion of construction
or the commencement of full operation of such property, (y) the
principal amount of the Debt secured by such Lien does not exceed
100% of such cost and (z) any such Lien shall not extend to or
cover any property other than such item of property and any
improvements on such item;
(ii) Liens securing Debt of a Person existing at the time such Person
becomes or is merged into a Restricted Subsidiary and not incurred
in connection with, or in contemplation of, such Person becoming or
being merged into a Restricted Subsidiary; provided that such Liens
do not extend to or cover any property or assets other than those
securing such Debt prior to such Person becoming or being merged
into a Restricted Subsidiary;
(iii) Liens on property existing at the time of acquisition thereof,
whether or not assumed by the Company or a Restricted Subsidiary;
(iv) Liens with respect to the assets of a Restricted Subsidiary granted
by such Restricted Subsidiary to the Company or a Restricted
Subsidiary to secure Debt owing to the Company or such Restricted
Subsidiary;
(v)Liens existing on the date of the Senior Indenture;
(vi) any Lien in favor of the United States or any state or territory
thereof or any other country, or any agency, instrumentality or
political subdivision of any of the foregoing, to secure partial,
progress, advance or other payments or performance pursuant to the
provisions of any contract or statute, or any Liens securing
pollution control, industrial revenue, or similar revenue bonds;
(vii) Liens securing Debt incurred in connection with taxes not yet due
or which are being contested in good faith by appropriate
proceedings;
(viii) Liens incurred or created in the ordinary course of business not
arising in connection with Debt that does not in the aggregate
materially impair the use or value of the properties or assets of
the Company and its Subsidiaries taken as a whole;
(ix) Liens arising out of any legal proceeding or final judgement which
is being contested in good faith, provided enforcement of any such
Lien has been stayed;
(x) any extension, renewal, substitution or replacement (or successive
extensions, renewals, substitutions or replacements), in whole or
in part, of any Lien referred to in the foregoing clauses (i)
through (ix), inclusive; provided that (a) the principal amount of
the Debt secured by such Lien shall not exceed the principal amount
of Debt secured outstanding immediately prior to such extension,
renewal, substitution or replacement and (b) such extension,
renewal, substitution or replacement Lien shall be limited to all
or part of the same property that secured the Lien so extended,
renewed, substituted or replaced; and
(xi) any Lien not permitted by the foregoing clauses (i) through (x)
inclusive; provided that after giving effect thereto, the sum of,
without duplication, (i) the aggregate outstanding principal amount
of Debt secured by such Liens otherwise prohibited by the Senior
Indenture and (ii) the aggregate amount of all Attributable Debt
with respect to outstanding Sale and Leaseback Transactions
otherwise prohibited by the Senior Indenture does not exceed 15% of
Consolidated Net Tangible Assets.
Limitation on Sale and Leaseback Transactions. The Company will not, and
will not permit any Restricted Subsidiary to, enter into any Sale and
Leaseback Transaction on any Principal Property unless (i) the Company or such
Restricted Subsidiary could incur a Lien on such Principal Property securing
Debt in an amount equal to the Attributable Debt with respect to the Sale and
Leaseback Transaction under the covenant described in "-- Limitation on Liens"
above without equally and ratably securing the Senior Debt Securities,
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(ii) such Sale and Leaseback Transactions are between or among the Company and
any of its Restricted Subsidiaries or between or among Restricted Subsidiaries,
(iii) the lease is for a period not exceeding three years and the Company or
the Restricted Subsidiary that is a party to such lease intends that its use of
such Principal Property will be discontinued on or before the expiration of
such period or (iv) the Company applies, or causes the Restricted Subsidiary to
apply, an amount equal to the fair value (as determined by the Board of
Directors), of the Principal Property sold pursuant to such Sale and Leaseback
Transaction to (A) the retirement, within 180 days after the effective date of
any such Sale and Leaseback Transaction, of Funded Debt of the Company or of
the Restricted Subsidiary, or (B) the purchase of other property that will
constitute Principal Property.
Limitation on Funded Debt of Restricted Subsidiaries. The Company will not
permit any Restricted Subsidiary to (a) create, incur, assume or suffer to
exist any Funded Debt other than (i) Funded Debt secured by a Lien on Principal
Property which is permitted under the provision described in "-- Limitations on
Liens" above, (ii) Funded Debt owed to the Company or any Restricted
Subsidiary, (iii) Funded Debt of a corporation which is merged with or into the
Company or a Restricted Subsidiary; provided such Funded Debt was not incurred
in connection with, or in contemplation of such corporation being merged, (iv)
Funded Debt in existence on the date of the Senior Indenture, (v) Funded Debt
created in connection with the issuance of tax exempt governmental obligations
supported by payments to be made by the Company or a Restricted Subsidiary or
(vi) renewals, extensions or replacements of the foregoing; or (b) guarantee,
directly or indirectly through any arrangement that is substantially the
equivalent of a guarantee, the payment of any Funded Debt except for (i)
guarantees existing on the date of the Senior Indenture, (ii) guarantees which,
on the date of the Senior Indenture, a Restricted Subsidiary is obligated to
give, (iii) guarantees of Funded Debt secured by a mortgage, pledge or lien
which is permitted to such Restricted Subsidiary under the provisions described
in "-- Limitation on Liens" above, (iv) renewals, extensions or replacements of
the foregoing or (v) guarantees of Funded Debt permitted under clause (a) of
this paragraph. Notwithstanding the foregoing, any Restricted Subsidiary may
create, incur, assume or guarantee Funded Debt in addition to that permitted in
this paragraph, and renew, extend, substitute or replace such Funded Debt;
provided that at the time of such creation, incurrence, assumption, guarantee,
renewal, extension, substitution or replacement, and after giving effect
thereto, the aggregate amount of all such Funded Debt of such Restricted
Subsidiaries and all such Funded Debt directly or indirectly guaranteed by such
Restricted Subsidiaries does not exceed the greater of (i) $20,000,000 or (ii)
15% of Consolidated Net Worth.
EVENTS OF DEFAULT
The Senior Indenture provides that upon the happening of any Event of Default
(as defined in the Senior Indenture) with respect to any series of Senior Debt
Securities specified therein (unless it is inapplicable to such series of
Senior Debt Securities or it is specifically deleted in a supplemental
indenture or Board Resolution under which such series of Senior Debt Securities
is issued or has been modified in any such supplemental indenture), including
(i) failure to pay interest when due on the Senior Debt Securities or any
payment with respect to the Coupons, if any, of such series outstanding
thereunder, continued for 30 days; (ii) failure to pay principal or premium, if
any, when due (whether at maturity, declaration or otherwise) on the Senior
Debt Securities of such series outstanding thereunder, (iii) failure to observe
or perform any covenant of the Company in the Senior Indenture or the Senior
Debt Securities of such series (other than a covenant included in the Senior
Indenture or the Senior Debt Securities solely for the benefit of a series of
Senior Debt Securities other than such series), continued for 60 days after
written notice from the Trustee or the Holders of 25% or more in aggregate
principal amount, of Senior Debt Securities of such series outstanding
thereunder; (iv) certain events of bankruptcy, insolvency or reorganization;
and (v) any other Event of Default as may be specified for such series, the
Trustee or the Holders of 25% or more in aggregate principal amount of Senior
Debt Securities of such series outstanding thereunder may declare the principal
amount of all Senior Debt Securities of such series to be due and payable
immediately, but if all defaults with respect to the Senior Debt Securities of
such series (other than non-payment of accelerated principal) are cured and
there has been no sale of property under any judgment or decree for the payment
of moneys due which shall have been obtained or
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entered, the Holders of a majority in aggregate principal amount of the Senior
Debt Securities of such series outstanding thereunder may waive the default and
rescind the declaration and its consequences.
MERGER OR CONSOLIDATION
The Senior Indenture provides that the Company may not consolidate with or
merge into any other corporation or sell or convey 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 sale or conveyance, 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 Outstanding Senior Debt Securities and Coupons, if any, issued under
the Senior Indenture and the performance of every covenant in the Senior
Indenture on the part of the Company to be performed or observed; (2)
immediately after giving effect to such transaction, no Event of Default under
the Senior Indenture, and no event which, after notice or lapse of time, or
both, would become such an Event of Default, shall have occurred and be
continuing; and (3) the Company has delivered to the Trustee an officers'
certificate and an opinion of counsel, each stating that such consolidation,
merger, sale or conveyance and such supplemental indenture comply with the
Senior Indenture provisions and that all conditions precedent therein provided
for relating to such transaction have been complied with.
For purposes of this covenant, "sell or convey its properties and assets
substantially as an entirety" shall mean properties and assets contributing in
the aggregate to at least 80% of the Company's total consolidated revenues as
reported in the Company's last available periodic financial report (quarterly
or annual, as the case may be) filed with the Commission.
MODIFICATION OR WAIVER
Without prior notice to or consent of any Holders, the Company and the
Trustee, at any time and from time to time, may modify the Senior Indenture for
any of the following purposes: (1) to evidence the succession of another
corporation or other entity to the rights of the Company and the assumption by
such successor of the covenants and obligations of the Company in the Senior
Indenture and in the Senior Debt Securities and Coupons, if any, issued
thereunder, (2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Senior 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 Senior Indenture 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 Senior Indenture to such extent as shall be necessary to
permit or facilitate the issuance thereunder of Senior 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
Senior Debt Securities of any series in uncertificated form; provided that any
such action shall not adversely affect the interests of the Holders of Senior
Debt Securities of any series or any related Coupons in any material respect;
(5) to change or eliminate any of the provisions of the Senior Indenture;
provided that any such change or elimination will become effective only when
there is no Outstanding Senior Debt Security issued thereunder 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
Senior Debt Securities issued thereunder or to provide that any of the
Company's obligations under the Senior Debt Securities or the Senior Indenture
shall be guaranteed; (7) to supplement any of the provisions of the Senior
Indenture to such extent as is necessary to permit or facilitate the defeasance
and discharge of any series of Senior Debt Securities; provided that any such
action will not adversely affect the interests of the Holders of Senior Debt
Securities of such series or any other series of Senior Debt Securities issued
under the Senior Indenture or any related Coupons in any material respect;
(8) to
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establish the form or terms of Senior Debt Securities and Coupons, if any, as
permitted by the Senior Indenture; (9) to evidence and provide for the
acceptance of appointment thereunder by a successor Trustee with respect to one
or more series of Senior Debt Securities and to add to or change any of the
provisions of the Senior Indenture as is necessary to provide for or facilitate
the administration of the trusts thereunder by more than one Trustee; (10) to
cure any ambiguity, to correct or supplement any provision in the Senior
Indenture which may be defective or inconsistent with any other provision
therein, to eliminate any conflict between the terms of the Senior Indenture
and the Senior Debt Securities issued thereunder and the TIA or to make any
other provisions with respect to matters or questions arising under the Senior
Indenture which will not be inconsistent with any provision of the Senior
Indenture; provided such other provisions shall not adversely affect the
interests of the Holders of Outstanding Senior Debt Securities or Coupons, if
any, of any series created thereunder prior to such modification in any
material respect; or (11) to change or modify any of the provisions of the
Senior Indenture, provided that any such changes or modifications shall not
adversely affect the interests of the Holders of Outstanding Senior Debt
Securities or Coupons, if any, of any series created thereunder prior to such
modification in any material respect.
With the written consent of the Holders of not less than a majority in
principal amount of the Outstanding Senior Debt Securities of each series
affected by such modification voting separately, the Company and the Trustee
may modify the Senior Indenture for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Senior
Indenture or of modifying in any manner the rights of the Holders of Senior
Debt Securities and Coupons, if any, under the Senior Indenture; provided,
however, that no such modification may, without the consent of the Holder of
each Outstanding Senior Debt Security of each such series affected thereby, (1)
change the Stated Maturity of the principal of, or any installment of interest
on, any Senior 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 Senior 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 Senior
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; (2) reduce the percentage in principal amount of the Outstanding
Senior 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 Senior Indenture or
certain defaults or Events of Default thereunder and their consequences
provided for in the Senior Indenture; (3) modify any of the provisions of the
Senior Indenture which provide for waivers by the Holders of Senior Debt
Securities of past defaults or waivers by the Holder of Senior Debt Securities
of compliance by the Company with any covenants, except to increase any such
percentage required to permit such waivers; or (4) modify any of the provisions
of the Senior Indenture which provide that certain other provisions of the
Senior Indenture cannot be modified without the consent of the Holder of each
Outstanding Senior Debt Security of each series affected thereby, except to
require that certain other provisions of the Senior Indenture cannot be
modified without the consent of the Holder of each Outstanding Senior Debt
Security of each series affected thereby.
A modification which changes or eliminates any covenant or other provision of
the Senior Indenture with respect to one or more particular series of Senior
Debt Securities and Coupons, if any, or which modifies the rights of the
Holders of Senior 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 Senior Indenture of the Holders of Senior Debt Securities and
Coupons, if any, of any other series.
The Holders of not less than a majority in principal amount of the
Outstanding Senior Debt Securities of any series may on behalf of the Holders
of all the Senior Debt Securities of any such series waive, by notice to
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the Trustee and the Company, any past default or Event of Default under the
Senior 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 Senior Debt Security of such series, or in the payment of any sinking
fund installment or analogous obligation with respect to the Senior Debt
Securities of such series, or (2) in respect of a covenant or provision hereof
which pursuant to the second paragraph under "Modification and Waiver" cannot
be modified or amended without the consent of the Holder of each Outstanding
Senior 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 Senior Debt Securities of
such series under the Senior Indenture, but no such waiver will extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
The Company may omit in any particular instance to comply with certain
covenants in the Senior Indenture (including, if so specified in the Prospectus
Supplement, any covenant not set forth in the Senior Indenture but specified in
the Prospectus Supplement to be applicable to the Senior Debt Securities of any
series issued thereunder, except as otherwise specified in the Prospectus
Supplement, and including the covenants relating to the maintenance by the
Company of its existence, rights and franchises, the limitation on liens, the
limitation on sale and leaseback transactions and the limitation on funded debt
of certain subsidiaries) if before the time for such compliance the Holders of
at least a majority in principal amount of the Outstanding Senior 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 Trustee in respect of any such provision will
remain in full force and effect.
DISCHARGE, LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Senior Indenture with respect to the Senior Debt Securities of any series
may be discharged, subject to certain terms and conditions, when (1) either (A)
all Senior Debt Securities and the Coupons, if any, of such series have been
delivered to the Trustee for cancellation, or (B) all Senior Debt Securities
and the Coupons, if any, of such series not theretofore delivered to the
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 Trustee
for the giving of notice by the 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 Trustee as trust funds in trust for such purpose an amount
in the currency in which such Senior Debt Securities for principal (and
premium, if any) and interest to the date of such deposit (in the case of
Senior 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 the 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 Trustee is required to return the deposited
money to the Company, the obligations of the Company under the Senior Indenture
with respect to such Senior 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 Senior Indenture by the Company; (3) the Company has
delivered to the 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 Senior Indenture with respect to such series
have been complied with; and (4) the Company has delivered to the Trustee an
opinion of counsel or a ruling of the Internal Revenue Service to the effect
that such deposit and discharge will not cause the Holders of the Senior Debt
Securities of such series to recognize income, gain or loss for federal income
tax purposes.
If provision is made for the defeasance of Senior Debt Securities of a
series, and if the Senior Debt Securities of such series are Registered
Securities and denominated and payable only in U.S. dollars, then the
provisions of the Senior Indenture relating to defeasance shall be applicable
except as otherwise specified in the Prospectus Supplement for Senior Debt
Securities of such series. Defeasance provisions, if any, for Senior Debt
Securities denominated in a foreign currency or currencies or for Bearer
Securities may be specified in the Prospectus Supplement.
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At the Company's option, either (a) the Company shall be deemed to have been
Discharged (as defined below) from its obligations with respect to Senior 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
Senior Indenture relating to mergers and consolidations of the Company, the
provisions relating to limitations on liens, limitations on sale and leaseback
transactions and limitations on funded debt of certain subsidiaries (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
Trustee as trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Senior Debt Securities
of such series, (i) money in an amount, or (ii) U.S. Government Obligations
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 (ii) and (iii)) of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the 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 Senior 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 Trustee with respect to
the Senior Debt Securities of that series to have a conflicting interest with
respect to the Senior Debt Securities of any series; (3) such deposit will not
result in a breach of violation of, or constitute a default under, the Senior
Indenture or any other agreement or instrument to which the Company is a party
or by which it is bound; (4) if the Senior Debt Securities of such series are
then listed on any national securities exchange, the Company shall have
delivered to the Trustee an opinion of counsel or a letter or other 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 Senior 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 Senior 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 Senior Indenture 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) certain other opinions, officers' certificates and
other documents specified in the Senior Indenture, including an opinion of
counsel or a ruling of the Internal Revenue Service to the effect that such
deposit, defeasance or Discharge will not cause the Holders of the Senior Debt
Securities of such series to recognize income, gain or loss for federal income
tax purposes. Notwithstanding the foregoing, if the Company exercises its
covenant defeasance option and an Event of Default under the provisions of the
Senior Indenture 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 Senior Debt Securities shall be
reinstated in full.
PAYMENT AND PAYING AGENTS
If Senior 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 Senior Debt Securities of that series may be
presented or surrendered for payment, where Senior 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 Senior Debt
Securities of that series and the Senior Indenture may be served.
If Senior Debt Securities of a series are issuable as Bearer Securities, the
Company will maintain or cause to be maintained (A) in the Borough of
Manhattan, The City and State of New York, 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 Senior Debt Securities of that
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series may be surrendered for exchange or redemption and where notices and
demands to or upon the Company in respect of the Senior Debt Securities of that
series and the Senior 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 registration applicable thereto, in a Place of Payment
for that series which is located outside the United States, an office or agency
where Senior Debt Securities of that series and related Coupons may be
presented and surrendered for payment (including payment of any additional
amounts payable on Senior Debt Securities of that series, if so provided in
such series); provided however, that if the Senior 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 Senior 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 Senior 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 Senior Debt
Securities of that series may be surrendered for exchange or redemption and
where notices and demands to or upon the Company in respect of the Senior Debt
Securities of that series and the Senior Indenture may be served. The Company
will give prompt written notice to the Trustee of the locations, and any change
in the locations, of such offices or agencies. If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish
the Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the corporate trust office of the Trustee,
except that Bearer Securities of that series and the related Coupons may be
presented and surrendered for payment at the offices specified in the
applicable Senior Debt Security and the Company has appointed the Trustee (or
in the case of Bearer Securities may appoint such other agent as may be
specified in the applicable Prospectus Supplement) as its agent to receive all
presentations, surrenders, notices and demands.
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 Senior Debt Securities of a series are denominated and payable in U.S.
dollars, payment of principal of and any premium and interest on Senior Debt
Securities of such series, if specified in the applicable 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, 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
Senior Indenture is illegal or effectively precluded by exchange controls or
other similar restrictions.
BOOK-ENTRY SENIOR DEBT SECURITIES
The Senior 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 applicable 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 Senior Debt Securities represented by a Global Security will be
made by the Company to the Trustee and then by the Trustee to the depositary.
If specified in the applicable Prospectus Supplement, any Global Securities
will be deposited with, or on behalf of, The Depository Trust Company, New
York, New York ("DTC"), as depositary, or such other depositary as may be
specified in the applicable Prospectus Supplement. In the event that DTC acts
as depositary with respect to any Global Securities, the Company anticipates
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
15
<PAGE>
arrangements, if any, applicable to the Offered Securities, will be described
in the accompanying Prospectus Supplement.
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 Senior Debt Securities represented by such Global Security for all purposes
under the Senior Indenture. Except as provided below, owners of beneficial
interests in a Global Security will not be entitled to have Senior Debt
Securities represented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of Senior Debt
Securities in certificated form and will not be considered the owners or
Holders thereof under the Senior 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 Senior 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 Senior Debt Securities
represented by one or more Global Securities and, in such event, will issue
individual Senior 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 Senior Debt Securities of such series shall have
occurred and be continuing, the Company will issue individual Senior Debt
Securities in certificated form in exchange for the relevant Global Securities.
The following is based on information furnished by DTC:
DTC is a limited-purpose trust company organized under the Banking Law of the
State of New York, a "banking organization" within the meaning of the Banking
Law of the State of New York, 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 include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations ("Direct Participants"). 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 the DTC 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 Senior Debt Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Senior Debt
Securities on DTC's records. The ownership interest of each actual purchaser of
each Senior Debt Security ("Beneficial Owner") is in turn recorded on the
Direct and Indirect Participants' records. A Beneficial Owner does not receive
written confirmation from DTC of its purchase, but such Beneficial Owner is
expected to receive a written confirmation providing details of the
transaction, as well as periodic statements of its holdings, from the Direct or
Indirect Participant through which such Beneficial Owner entered into the
transaction. Transfers of ownership interests in Senior Debt Securities are
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners do not receive certificates representing
their ownership interests in the Senior Debt Securities, except in the event
that use of the book-entry system for the Senior Debt Securities is
discontinued.
To facilitate subsequent transfers, the Senior Debt Securities are registered
in the name of DTC's partnership nominee, Cede & Co. The deposit of the Senior
Debt Securities with DTC and their registration in
16
<PAGE>
the name of Cede & Co. effects no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Senior Debt Securities; DTC
records reflect only the identity of the Direct Participants to whose accounts
Senior Debt 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 Senior
Debt Securities. Under its usual procedures, DTC mails a proxy (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 Senior Debt Securities are credited on the
record date (identified on a list attached to the Omnibus Proxy).
Principal and interest payments on the Senior Debt 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 as 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 will be the
responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depositary with
respect to the Senior Debt Securities at any time by giving reasonable notice
to the Company or the Paying Agent. Under such circumstances, in the event that
a successor securities depositary is not appointed, Senior Debt Security
certificates are required to be printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depositary). In that event,
Senior Debt Security certificates will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources (including DTC) that the Company believes to be
reliable, but the Company takes no responsibility for the accuracy thereof.
Unless stated otherwise in the applicable Prospectus Supplement, the
underwriters or agents with respect to a series of Senior Debt Securities
issued as Global Securities will be Direct Participants in DTC.
None of the Company, any underwriter or agent, the Trustee or any applicable
Paying Agent will have the responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial interests in a
Global Securities, or for maintaining, supervising or reviewing any records
relating to such beneficial interests.
THE TRUSTEE UNDER THE SENIOR INDENTURE
The Company and its Subsidiaries maintain ordinary banking relationships with
Citibank, N.A. and its affiliates and a number of other banks. Citibank, N.A.
and its affiliates, along with a number of other banks, have extended credit
facilities to the Company and its Subsidiaries. In addition, Citibank, N.A.
acts as the Company's issuing and paying agent in connection with the Company's
commercial paper program.
17
<PAGE>
GOVERNING LAW
The Senior Indenture, the Senior Debt Securities and the Coupons for all
purposes will be governed by and construed in accordance with the laws of the
State of New York.
CERTAIN DEFINITIONS
Set forth below is a summary of certain defined terms used in the Senior
Indenture. Reference is made to the Senior Indenture for the full definition of
all such terms.
"Attributable Debt" means, as of any particular time, with respect to a Sale
and Leaseback Transaction with respect to any Principal Property, the lesser of
(a) the fair market value of such property (as determined in good faith by the
Board of Directors) or (b) the present value of the total net amount of rent
required to be paid under such lease during the remaining term thereof
(excluding any amounts payable by the lessee for maintenance, property taxes
and insurance, and including any period for which such lease has been extended
or may, at the option of the lessor, be extended), discounted at the rate of
interest set forth or implicit in the terms of such lease (or, if not
practicable to determine such rate, the weighted average interest rate per
annum borne by Senior Debt Securities then outstanding) compounded semi-
annually.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital stock or equity, including,
without limitation, all Common Stock and Preferred Stock.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's common stock, whether now outstanding or
issued after the date of the Senior Indenture, including, without limitation,
all series and classes of such common stock.
"Consolidated Net Tangible Assets" means, at the time of determination, the
total assets appearing on the most recently prepared consolidated balance sheet
of the Company and its Subsidiaries as of the end of a fiscal quarter of the
Company, prepared in accordance with generally accepted accounting principles,
less all current liabilities as shown on such balance sheet (excluding the
amount of those which are by their terms extendable or renewable at the option
of the obligor to a date more than 12 months after the date as of which the
amount is being determined) and intangible assets. Intangible assets means the
value (net of any applicable reserves) as shown on or reflected in such balance
sheet of all trade names, trademarks, licenses, patents, copyrights, goodwill,
unamortized debt discount and expense and other like intangibles.
"Consolidated Net Worth" means, at any date, shareholders' equity, less any
amounts attributable to Redeemable Stock or any equity security convertible
into or exchangeable for Debt and the cost of treasury stock, as set forth on
the most recently available quarterly or annual consolidated balance sheet of
the Company and its Subsidiaries prepared in conformity with generally accepted
accounting principles.
" Debt" means, with respect to any Person, indebtedness of such Person for
borrowed money and all Debt of other Persons guaranteed by such Person.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Senior Debt Securities of such series and to have satisfied all the obligations
under the Senior Indenture relating to the Senior Debt Securities of such
series, except (i) the rights of Holders of Senior 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 Senior Debt Securities when such payments
are due, (ii) the Company's obligations with respect to the Senior Debt
Securities of such series under the provisions relating to exchanges, transfers
and replacement of Senior Debt Securities, the maintenance of an office or
agency of the Company and the defeasance trust fund, the provisions relating to
compensation and reimbursement of the Trustee and (iii) the rights, powers,
trusts, duties and immunities of the Trustee thereunder.
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<PAGE>
"Funded Debt" means Debt of the Company or its Restricted Subsidiaries which
by its terms matures at, or can be extended or renewed at the option of the
obligor to, a date more than twelve months after the date of the creation of
such Debt.
"Lien" means any mortgage, lien, pledge. security interest, conditional sale
or other title retention agreement or other security interest or encumbrance of
any kind (including any agreement to give any security interest).
"Person" means an individual, a corporation, a partnership, a trust, a joint
venture, an association, a joint stock company, an unincorporated organization
or a government or any agency or political subdivision thereof.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's preferred or preference stock, whether
now outstanding or issued after the date of the Senior Indenture, including,
without limitation, all series and classes of such preferred or preference
stock.
"Principal Property" means any parcel of real property and related fixtures
or improvements (now owned or hereafter acquired) which (a) is owned by the
Company or any Subsidiary; (b) is located within any of the present 50 states
of the United States (or the District of Columbia); (c) has not been determined
in good faith by the Board of Directors of the Company not to be materially
important to the total business conducted by the Company and its Subsidiaries
as a whole; and (d) has an aggregate book value of which, less accumulated
depreciation, on the date of determination exceeds $5,000,000.
"Redeemable Stock" means any class or series of Capital Stock of any Person
that by its terms or otherwise is (i) required to be redeemed prior to the
maturity date of any of the then outstanding Senior Debt Securities, (ii)
redeemable at the option of the holder of such class or series of Capital Stock
at any time prior to the maturity date of any of the then outstanding Senior
Debt Securities, or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Debt having principal scheduled to
mature or which can be required to be repaid prior to the maturity date of any
of the then outstanding Senior Debt Securities.
"Restricted Subsidiary" means any Subsidiary which owns or leases any
Principal Property.
"Sale and Leaseback Transaction" means any arrangement with any Person
providing for the leasing by the Company or any Restricted Subsidiary of any
Principal Property which has been or is to be sold or transferred by the
Company or such Restricted Subsidiary to such Person; provided, however, that
"Sale and Leaseback Transactions" shall not include such arrangements that were
existing on the date of the Senior Indenture.
"Subsidiary" means any corporation or other entity of which a majority of
outstanding stock having voting power under ordinary circumstances for the
election of the board of directors is at the time directly or indirectly owned
by the Company.
"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 clause (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.
19
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities in four ways: (i) directly to
purchasers, (ii) through agents, (iii) through underwriters and (iv) through
dealers.
Offers to purchase Offered Securities may be solicited directly by the
Company and sales thereof may be made by the Company directly to institutional
investors or others. The terms of any such sales will be set forth in the
accompanying Prospectus Supplement.
Offers to purchase Offered Securities may be solicited by agents designated
by the Company from time to time. Any such agent, who may be deemed to be an
underwriter as that term is defined in the Securities Act, involved in the
offer or sale of the Offered Securities in respect of which this Prospectus is
delivered will be named, and any commissions payable by the Company to such
agent set forth, in the accompanying Prospectus Supplement. Unless otherwise
indicated in the accompanying Prospectus Supplement, any such agent will be
acting on a reasonable efforts basis for the period of its appointment. Agents
may be entitled under agreements which may be entered into with the Company to
indemnification by the Company against certain civil liabilities, including
liabilities under the Securities Act, and may engage in transactions with or
perform services for the Company in the ordinary course of business.
If any underwriters are utilized in the sale of the Offered Securities in
respect of which this Prospectus is delivered, the Company will enter into an
underwriting agreement with such underwriters at the time of sale to them and
the names of the specific managing underwriter or underwriters, as well as any
other underwriters and the terms of the transaction will be set forth in the
accompanying Prospectus Supplement, which will be used by the underwriters to
make resales of the Offered Securities in respect of which this Prospectus is
delivered to the public. The underwriters may be entitled, under the relevant
underwriting agreement, to indemnification by the Company against certain
liabilities, including liabilities under the Securities Act, and may engage in
transactions with or perform services for, the Company in the ordinary course
of business.
If a dealer is utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, the Company will sell such Offered
Securities to the dealer, as principal. The dealer may then resell such Offered
Securities to the public at varying prices to be determined by such dealer at
the time of resale. Dealers may be entitled to indemnification by the Company
against certain liabilities, including liabilities under the Securities Act,
and may engage in transactions with or perform services for the Company in the
ordinary course of business.
Offered Securities may also be offered and sold, if so indicated in the
accompanying Prospectus Supplement, in connection with a remarketing upon their
purchase, in accordance with their terms, by one or more firms ("remarketing
firms"), acting as principals for their own accounts or as agents for the
Company. Any remarketing firm will be identified and the terms of its
agreement, if any, with the Company and its compensation will be described in
the accompanying Prospectus Supplement. Remarketing firms may be entitled under
agreements which may be entered into with the Company to indemnification by the
Company against certain civil liabilities, including liabilities under the
Securities Act, and may engage in transactions with or perform services for the
Company in the ordinary course of business.
If so indicated in the accompanying Prospectus Supplement, the Company will
authorize agents and underwriters or dealers to solicit offers by certain
purchasers to purchase Offered Securities from the Company at the public
offering price set forth in the accompanying Prospectus Supplement pursuant to
delayed delivery contracts providing for payments and delivery on a specified
date in the future. Such contracts will be subject to only those conditions set
forth in the accompanying Prospectus Supplement, and the accompanying
Prospectus Supplement will set forth the commission payable for solicitation of
such offers.
20
<PAGE>
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the Company by
Dewey Ballantine LLP, New York, New York, and for any underwriters by counsel
as may be specified in accompanying prospectus supplements. In rendering such
opinion, Dewey Ballantine LLP will be relying as to matters of Indiana law upon
the opinion of Baker & Daniels, Indianapolis, Indiana. J.B. King, Esq., Vice
President, General Counsel, Secretary and a Director of Guidant, also currently
acts as counsel to Baker & Daniels.
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated 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.
21
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee........... $172,414
Printing and engraving........................................ 25,000*
Accounting and services....................................... 19,500*
Legal services................................................ 100,000*
Fees and expenses of Trustee.................................. 10,000*
Rating agency fees............................................ 135,000*
Expenses of qualification under state blue sky laws........... 10,000*
Miscellaneous................................................. 3,086*
========
TOTAL....................................................... $475,000*
</TABLE>
- --------
*Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Indiana Business Corporation Law provides that a corporation, unless
limited by its Articles of Incorporation, is required to indemnify its
directors and officers against reasonable expenses incurred in the successful
defense of any proceeding arising out of their serving as a director or officer
of the corporation.
As permitted by the Indiana Business Corporation Law, the Company's Articles
of Incorporation provide for indemnification of directors, officers, and
employees of the Company against any and all liability and reasonable expense
that may be incurred by them, arising out of any claim or action, civil or
criminal in which they may become involved by reason of being or having been a
director, officer, or employee. To be entitled to indemnification, those
persons must have been wholly successful in the claim or action or the Board of
Directors or independent legal counsel must have determined that such persons
acted in good faith in what they reasonably believed to be in the best interest
of the Company and, in addition, in any criminal action, had no reasonable
cause to believe that their conduct was unlawful.
Officers and directors of the Company are insured, subject to certain
exclusions and deductible and maximum amounts, against loss from claims arising
in connection with their acting in their respective capacities, which include
claims under the Securities Act of 1933.
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement.*
4.1 Form of Indenture between the Company and Citibank, N.A., as Trustee.*
4.2 Form of Supplemental Indenture between the Company and Citibank, N.A., as
Trustee.**
5.1 Opinion of Dewey Ballantine LLP as to legality of the securities being
registered.**
5.2 Opinion of Baker & Daniels as to legality of the securities being
registered.**
12.1 Statement Regarding Computation of Ratio of Earnings to Fixed .**
23.1 Consent of Ernst & Young LLP.**
23.2 Consent of Dewey Ballantine LLP (contained in Exhibit 5.1).**
23.3 Consent of Baker & Daniels (contained in Exhibit 5.2).**
24.1 Power of Attorney (included on signature page).**
25.1 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Citibank, N.A., as Trustee.*
</TABLE>
- --------
*Previously filed.
**Filed herewith.
II-1
<PAGE>
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.
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.
(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) 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 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
that time shall be deemed to be the initial bona fide offering
thereof.
(5) 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.
(6) 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.
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
II-2
<PAGE>
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 Act and will be governed by the final adjudication of such
issue.
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<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 Post-effective
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Indianapolis, State of
Indiana, on November 25, 1998.
GUIDANT CORPORATION
/s/ James M. Cornelius
By ________________________________
James M. Cornelius
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears below
constitutes and appoints Keith E. Brauer and Ronald W. Dollens his true and
lawful attorneys-in-fact and agents, each acting alone, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments to the Registration
Statement and to file the same, with all exhibits thereto, and all documents in
connection therewith, with the Securities and Exchange Commission, granting
unto attorneys-in-fact and agents, and each of them, full power and authority
to do and perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he
might or could do in person, and hereby ratifies and confirms all that said
attorneys-in-fact and agents, each acting alone, or their substitute or
substitutes, may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act of 1933, this Post-
effective Amendment to the Registration Statement has been signed by the
following persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ James M. Cornelius Chairman of the Board and November 25, 1998
____________________________________ Director (principal executive
James M. Cornelius officer)
/s/ Ronald W. Dollens President, Chief Executive November 25, 1998
____________________________________ Officer and Director
Ronald W. Dollens (principal executive officer)
/s/ Keith E. Brauer Chief Financial Officer and November 25, 1998
____________________________________ Vice President, Finance
Keith E. Brauer principal financial officer)
/s/ Roger Marchetti Chief Accounting Officer and November 25, 1998
____________________________________ Corporate Controller
Roger Marchetti principal accounting officer)
/s/ Maurice A. Cox, Jr. Director November 25, 1998
____________________________________
Maurice A. Cox, Jr.
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Enrique C. Falla Director November 25, 1998
____________________________________
Enrique C. Falla
/s/ J. B. King Director, Vice President, November 25, 1998
____________________________________ General Counsel
J. B. King
/s/ J. Kevin Moore Director November 25, 1998
____________________________________
J. Kevin Moore
/s/ Mark Novitch, M.D. Director November 25, 1998
____________________________________
Mark Novitch, M.D.
/s/ Eugene L. Step Director November 25, 1998
____________________________________
Eugene L. Step
/s/ Ruedi E. Wager, Ph.D. Director November 25, 1998
____________________________________
Ruedi E. Wager, Ph.D
/s/ Kim B. Clark, Ph.D. Director November 25, 1998
____________________________________
Kim B. Clark, Ph.D.
/s/ Susan B. King Director November 25, 1998
____________________________________
Susan B. King
</TABLE>
II-5
<PAGE>
EXHIBIT 4.2
SUPPLEMENTAL INDENTURE, dated as of ___________ __, 1998, between
GUIDANT CORPORATION, an Indiana corporation (the "Company"), having its
principal executive office at 111 Monument Circle, 29th Floor, Indianapolis,
Indiana 46204, and Citibank, N.A., a national banking association (the
"Trustee"). Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to them in the Indenture (as defined below).
RECITALS OF THE COMPANY
WHEREAS, the Company has heretofore entered into an Indenture, dated
as of January 2, 1996 (the "Indenture") with the Trustee;
WHEREAS, the Indenture is incorporated herein by this reference;
WHEREAS, pursuant to Section 11.01(11) of the Indenture, the Company
and the Trustee may change or modify any of the provisions of the Indenture
without prior notice to or the consent of any Holders; provided that any such
changes or modifications shall not adversely affect the interests of the Holders
of Outstanding Debt Securities or Coupons, if any, of any series created prior
to the execution of such supplemental indenture in any material respect;
WHEREAS, the Company proposes to change or modify provisions of the
Indenture and such changes or modifications do not adversely affect the
interests of the Holders of Outstanding Debt Securities or Coupons, if any, of
any series created prior to the execution of such supplemental indenture in any
material respect; and
WHEREAS, all conditions necessary to authorize the execution and
delivery of this Supplemental Indenture and to make it a valid and binding
obligation of the Company have been done or performed.
NOW, THEREFORE, in consideration of the agreements and obligations
set forth herein and for other good and valuable consideration, the sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Amendments to the Indenture.
The Indenture is, effective as of the date hereof, hereby amended as
follows:
(a) The following article is to be added in its proper sequential order:
Article XVI.
CONVERSION OF DEBT SECURITIES
<PAGE>
SECTION 16.01. Applicability of Article.
The provisions of this Article shall be applicable to the Debt
Securities of any series which are convertible into shares of Common Stock of
the Company, and the issuance of such shares of Common Stock upon the conversion
of such Debt Securities, except as otherwise specified as contemplated by
Section 3.01 for the Debt Securities of such series. The terms and provisions
applicable to the conversion of Debt Securities of any series into securities of
the Company (other than Common Stock) shall, if applicable, be set forth in an
Officers' Certificate or established in one or more indentures supplemental
hereto, prior to the issuance of Debt Securities of such series in accordance
with Section 3.01.
SECTION 16.02. Exercise of Conversion Privilege.
In order to exercise a conversion privilege, the Holder of a Debt
Security of a series with such privilege shall surrender such Debt Security to
the Company at the office or agency maintained for that purpose pursuant to
Section 12.03, accompanied by written notice to the Company that the Holder
elects to convert such Security or a specified portion thereof. Such notice
shall also state, if different from the name and address of such Holder, the
name or names (with address) in which the certificate or certificates for shares
of Common Stock which shall be issuable on such conversion shall be issued.
Debt Securities surrendered for conversion shall (if so required by the Company
or the Trustee) be duly endorsed by or accompanied by instruments of transfer in
forms satisfactory to the Company and the Trustee duly executed by the
registered Holder or its attorney duly authorized in writing; and Debt
Securities so surrendered for conversion during the period from the close of
business on any Regular Record Date to the opening of business on the next
succeeding Interest Payment Date (excluding Debt Securities or portions thereof
called for redemption during such period) shall also be accompanied by payment
in funds acceptable to the Company of an amount equal to the interest payable on
such Interest Payment Date on the principal amount of such Debt Security then
being converted, and such interest shall be payable to such registered Holder
notwithstanding the conversion of such Debt Security, subject to the provisions
of Section 3.07 relating to the payment of Defaulted Interest by the Company.
As promptly as practicable after the receipt of such notice and of any payment
required pursuant to a Board Resolution and, subject to Section 3.01, set forth,
or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto setting forth the
terms of such series of Debt Security, and the surrender of such Debt Security
in accordance with such reasonable regulations as the Company may prescribe, the
Company shall issue and shall deliver, at the office or agency at which such
Debt Security is surrendered, to such Holder or on its written order, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such Debt Security (or specified portion
thereof), in accordance with the provisions of such Board Resolution, Officers'
Certificate or supplemental indenture, and cash as provided therein in respect
of any fractional share of such Common Stock otherwise issuable upon such
conversion. Such conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which such notice and such
payment, if required, shall have been received in proper order for conversion by
the Company and such Debt Security shall have been surrendered as aforesaid
(unless such
2
<PAGE>
Holder shall have so surrendered such Debt Security and shall have instructed
the Company to effect the conversion on a particular date following such
surrender and such Holder shall be entitled to convert such Debt Security on
such date, in which case such conversion shall be deemed to be effected
immediately prior to the close of business on such date) and at such time the
rights of the Holder of such Debt Security as such Debt Security Holder shall
cease and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock of the Company shall be issuable upon
such conversion shall be deemed to have become the holder or holders of record
of the shares represented thereby. Except as set forth above and subject to
Section 3.07(e), no payment or adjustment shall be made upon any conversion on
account of any interest accrued on the Debt Securities surrendered for
conversion or on account of any dividends on the Common Stock of the Company
issued upon such conversion.
In the case of any Debt Security which is converted in part only, upon
such conversion the Company shall execute and the Trustee shall authenticate and
deliver to or on the order of the Holder thereof, at the expense of the Company,
a new Debt Security or Debt Securities of the same series, of authorized
denominations, in aggregate principal amount equal to the unconverted portion of
such Debt Security.
SECTION 16.03. No Fractional Shares.
No fractional share of Common Stock of the Company shall be issued
upon conversions of Debt Securities of any series. If more than one Debt
Security shall be surrendered for conversion at one time by the same Holder, the
number of full shares which shall be issuable upon conversion shall be computed
on the basis of the aggregate principal amount of the Debt Securities (or
specified portions thereof to the extent permitted hereby) so surrendered. If,
except for the provisions of this Section 16.03, any Holder of a Debt Security
or Debt Securities would be entitled to a fractional share of Common Stock of
the Company upon the conversion of such Debt Security or Debt Securities, or
specified portions thereof, the Company shall pay to such Holder an amount in
cash equal to the current market value of such fractional share computed, (i) if
such Common Stock is listed or admitted to unlisted trading privileges on a
national securities exchange, on the basis of the last reported sale price
regular way on such exchange on the last trading day prior to the date of
conversion upon which such a sale shall have been effected, or (ii) if such
Common Stock is not at the time so listed or admitted to unlisted trading
privileges on a national securities exchange, on the basis of the average of the
bid and asked prices of such Common Stock in the over-the-counter market, on the
last trading day prior to the date of conversion, as reported by the National
Quotation Bureau, Incorporated or similar organization if the National Quotation
Bureau, Incorporated is no longer reporting such information, or if not so
available, the fair market price as determined by the Board of Directors. For
purposes of this Section, "trading day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday other than any day on which the Common Stock is
not traded on the New York Stock Exchange, or if the Common Stock is not traded
on the New York Stock Exchange, on the principal exchange or market on which the
Common Stock is traded or quoted.
3
<PAGE>
SECTION 16.04. Adjustment of Conversion Price.
The conversion price of Debt Securities of any series that is
convertible into Common Stock of the Company shall be adjusted for any stock
dividends, stock splits, reclassification, combinations or similar transactions
in accordance with the terms of the supplemental indenture or Board Resolutions
setting forth the terms of the Debt Securities of such series.
Whenever the conversion price is adjusted, the Company shall compute
the adjusted conversion price in accordance with terms of the applicable Board
Resolution or supplemental indenture and shall prepare an Officers' Certificate
setting forth the adjusted conversion price and showing in reasonable detail the
facts upon which such adjustment is based, and such certificate shall forthwith
be filed at each office or agency maintained for the purpose of conversion of
Debt Securities pursuant to Section 12.03 and, if different, with the Trustee.
The Company shall forthwith cause a notice setting forth the adjusted conversion
price to be mailed, first class postage prepaid, to each Holder of Debt
Securities of such series at its address appearing on the Security Register and
to any conversion agent other than the Trustee.
SECTION 16.05. Notice of Certain Corporate Actions.
In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its retained earnings
(other than a dividend for which approval of any shareholders of the Company is
required); or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights, options or warrants to subscribe for or purchase any
shares of capital stock of any class or of any other rights (other than any such
grant for which approval of any shareholders of the Company is required); or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding shares of Common Stock) or
of any consolidation, merger or share exchange to which the Company is a party
and for which approval of any shareholders of the Company is required, or of the
sale of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed with the Trustee, and shall
cause to be mailed to all Holders at their last addresses as they shall appear
in the Security Register, at least 20 days (or 10 days in any case specified in
clause (a) or (b) above) prior to the applicable record date hereinafter
specified, a notice stating (i) the date on which a record is to be taken for
the purpose of such dividend, distribution, rights, options or warrants, or, if
a record is not to be taken, the date as of which the holders of
4
<PAGE>
Common Stock of record to be entitled to such dividend, distribution, rights,
options or warrants are to be determined, or (ii) the date on which such
reclassification, consolidation, merger, share exchange, sale, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, share exchange,
sale, dissolution, liquidation or winding up. If at any time the Trustee shall
not be the conversion agent, a copy of such notice shall also forthwith be filed
by the Company with the Trustee.
SECTION 16.06. Reservation of Shares of Common Stock.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock or treasury
shares, for the purpose of effecting the conversion of Debt Securities, the full
number of shares of Common Stock of the Company then issuable upon the
conversion of all outstanding Debt Securities of any series that has conversion
rights.
SECTION 16.07. Payment of Certain Taxes upon Conversion.
The Company will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of its Common Stock on conversion of Debt
Securities pursuant hereto. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of its Common Stock in a name other than that of the
Holder of the Debt Security or Debt Securities to be converted, and no such
issue or delivery shall be made unless and until the person requesting such
issue has paid to the Company the amount of any such tax, or has established, to
the satisfaction of the Company, that such tax has been paid.
SECTION 16.08. Nonassessability.
The Company covenants that all shares of its Common Stock which may be
issued upon conversion of Debt Securities will upon issue in accordance with the
terms hereof be duly and validly issued and fully paid and nonassessable.
SECTION 16.09. Effect of Consolidation or Merger on Conversion
Privilege.
In case of any consolidation of the Company with, or merger of the
Company into or with any other Person, or in case of any sale of all or
substantially all of the assets of the Company, the Company or the Person formed
by such consolidation or the Person into which the Company shall have been
merged or the Person which shall have acquired such assets, as the case may be,
shall execute and deliver to the Trustee a supplemental indenture providing that
the Holder of each Debt Security then outstanding of any series that is
convertible into Common Stock of the Company shall have the right, which right
shall be the exclusive conversion right thereafter available to said Holder
(until the expiration of the conversion right of such Debt Security), to convert
such Debt
5
<PAGE>
Security into the kind and amount of shares of stock or other securities or
property (including cash) receivable upon such consolidation, merger or sale by
a holder of the number of shares of Common Stock of the Company into which such
Security might have been converted immediately prior to such consolidation,
merger or sale, subject to compliance with the other provisions of this
Indenture, such Debt Security and such supplemental indenture. Such supplemental
indenture shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in such Debt Security.
The above provisions of this Section shall similarly apply to
successive consolidations, mergers or sales. It is expressly agreed and
understood that anything in this Indenture to the contrary notwithstanding, if,
pursuant to such merger, consolidation or sale, holders of outstanding shares of
Common Stock of the Company do not receive shares of common stock of the
surviving corporation but receive other securities, cash or other property or
any combination thereof, Holders of Debt Securities shall not have the right to
thereafter convert their Debt Securities into common stock of the surviving
corporation or the corporation which shall have acquired such assets, but
rather, shall have the right upon such conversion to receive the other
securities, cash or other property receivable by a holder of the number of
shares of Common Stock of the Company into which the Debt Securities held by
such holder might have been converted immediately prior to such consolidation,
merger or sale, all as more fully provided in the first sentence of this Section
16.09. Anything in this Section 16.09 to the contrary notwithstanding, the
provisions of this Section 16.09 shall not apply to a merger or consolidation of
another corporation with or into the Company pursuant to which both of the
following conditions are applicable: (i) the Company is the surviving
corporation and (ii) the outstanding shares of Common Stock of the Company are
not changed or converted into any other securities or property (including cash)
or changed in number or character or reclassified pursuant to the terms of such
merger or consolidation.
As evidence of the kind and amount of shares of stock or other
securities or property (including cash) into which Debt Securities may properly
be convertible after any such consolidation, merger or sale, or as to the
appropriate adjustments of the conversion prices applicable with respect
thereto, the Trustee shall be furnished with and may accept the certificate or
opinion of an independent certified public accountant with respect thereto; and,
in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely thereon, and shall not be responsible or accountable to any
Holder of Debt Securities for any provision in conformity therewith or approved
by such independent certified accountant which may be contained in said
supplemental indenture.
SECTION 16.10. Duties of Trustee Regarding Conversion.
Neither the Trustee nor any conversion agent shall at any time be
under any duty or responsibility to any Holder of Debt Securities of any series
that is convertible into Common Stock of the Company to determine whether any
facts exist which may require any adjustment of the conversion price, or with
respect to the nature or extent of any such adjustment when made or whether a
supplemental indenture need be entered into, or with respect to the method
employed, whether herein or in any
6
<PAGE>
supplemental indenture, any resolutions of the Board of Directors or written
instrument executed by one or more officers of the Company provided to be
employed in making the same. Neither the Trustee nor any conversion agent shall
be accountable with respect to the validity or value (or the kind or amount) of
any shares of Common Stock of the Company, or of any securities or property,
which may at any time be issued or delivered upon the conversion of any Debt
Securities and neither the Trustee nor any conversion agent makes any
representation with respect thereto. Neither the Trustee nor any conversion
agent shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of its Common Stock or stock certificates or other securities
or property upon the surrender of any Debt Security for the purpose of
conversion or to comply with any of the covenants of the Company contained in
this Article XVI or in the applicable supplemental indenture, resolutions of the
Board of Directors or written instrument executed by one or more duly authorized
officers of the Company.
SECTION 16.11. Repayment of Certain Funds upon Conversion.
Any funds which at any time shall have been deposited by the Company
or on its behalf with the Trustee or any other paying agent for the purpose of
paying the principal of, and premium, if any, and interest, if any, on any of
the Debt Securities (including funds deposited for the sinking fund referred to
in Article III hereof) and which shall not be required for such purposes because
of the conversion of such Debt Securities as provided in this Article XVI shall
after such conversion be repaid to the Company by the Trustee upon the Company's
written request.
(b) The following section is to be added in its proper sequential order:
Section 2.04. Form of Conversion Notice.
The form of conversion notice for the conversion of Debt
Securities into shares of Common Stock or other securities of the
Company shall be in substantially the form included with the
applicable form of Debt Securities as shall be established pursuant to
Section 2.01.
(c) Section 3.01(5) of the Indenture is hereby amended by adding "and
where Debt Securities of the series may be surrendered for conversion or
exchange" after "payable" in the third line thereof.
(d) Section 3.01(27) of the Indenture is hereby amended by deleting "and"
in the last line thereof.
(e) Section 3.01(28) of the Indenture is hereby amended by deleting "." at
the end thereof and replacing it with "; and".
(f) Section 3.01 of the Indenture is hereby amended by adding the
following at the end thereof:
7
<PAGE>
"(29) the terms of any right to convert or exchange Debt
Securities of the series, either at the option of the Holder thereof
or the Company, into or for shares of Common Stock of the Company or
other securities or property, including without limitation the period
or periods within which and the price or prices (including adjustments
thereto) at which any Debt Securities of the series shall be converted
or exchanged, in whole or in part."
(g) Section 11.01(10) of the Indenture is hereby amended by deleting "or"
at the end thereof.
(h) Section 11.01(11) of the Indenture is hereby amended by deleting "."
at the end thereof and replacing it with "; or".
(i) Section 11.01 of the Indenture is hereby amended by adding the
following at the end thereof:
"(12) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article XVI, including
providing for the conversion of the Debt Securities into any security
or property (other than the Common Stock of the Company)."
(j) Section 11.02(2) of the Indenture is hereby amended by deleting "or"
at the end thereof.
(k) Section 11.02(3) of the Indenture is hereby amended by deleting "." at
the end thereof and replacing it with "; or".
(l) Section 11.02 of the Indenture is hereby amended by adding the
following at the end thereof:
"(4) make any change that adversely affects the right to convert
any Debt Security as provided in Article XVI or pursuant to Section
3.01 (except as permitted by Section 11.01) or decrease the conversion
rate or increase the conversion price of any such Debt Security except
as may otherwise be permitted by Article XVI."
(m) Section 12.03 of the Indenture is hereby amended by adding "or
conversion" after "exchange" in both the seventh and seventeenth line.
(n) Section 12.03 of the Indenture is further amended by adding "and
conversion" after "exchange" in the forty-fifth line.
(o) Section 13.03 of the Indenture is hereby amended by adding the
following paragraph after the first paragraph:
8
<PAGE>
"If any Debt Security selected for partial redemption is
converted in part before termination of the conversion right with
respect to the portion of the Debt Security so selected, the converted
portion of such Debt Security shall be deemed (so far as may be) to be
the portion selected for redemption. Debt Securities (as portions
thereof) which have been converted during a selection of Debt
Securities to be redeemed shall be treated by the Trustee as
Outstanding for the purpose of such selection. In any case, where
more than one Debt Security is registered in the same name, the
Trustee in its discretion may treat the aggregate principal amount so
registered as if it were represented by one Debt Security."
(p) Section 13.04(9) of the Indenture is hereby amended by deleting "and"
at the end thereof.
(q) Section 13.04(10) of the Indenture is hereby amended by deleting "."
at the end thereof and replacing it with ", and".
(r) Section 13.04 of the Indenture is hereby amended by adding the
following at the end thereof:
"(11) if applicable, the conversion rate or price, the date on
which the right to convert the Debt Securities to be redeemed will
terminate and the place or places where such Debt Securities may be
surrendered for conversion."
SECTION 2. Trustee Not Responsible.
The recitals contained herein shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representation as to the validity or sufficiency of this
Supplemental Indenture.
SECTION 3. Ratification and Incorporation of Indenture.
As amended hereby, the Indenture is in all respects ratified and
confirmed, and the Indenture and this Supplemental Indenture shall be read,
taken and construed as one and the same instrument.
SECTION 4. Governing Law.
This Supplemental Indenture for all purposes shall be governed by and
construed in accordance with the laws of the State of New York.
9
<PAGE>
SECTION 5. Successors and Assigns.
All covenants and agreements in this Supplemental Indenture by the
parties hereto shall bind their respective successors and assigns and inure to
the benefit of their permitted successors and assigns, whether so expressed or
not.
SECTION 6. Separability Clause
In case any provision in this Supplemental Indenture shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 7. Effect of Headings.
The Section headings provided herein are for convenience only and
shall not affect the construction or interpretation of this Supplemental
Indenture.
SECTION 8. Benefits of Supplemental Indenture.
Nothing in this Supplemental Indenture, express or implied, shall give
to any Person, other than the parties hereto, any Security Registrar, and Paying
Agent and their successors hereunder, and the Holders, any benefit or any legal
or equitable right, remedy or claim under this Supplemental Indenture.
SECTION 9. Counterparts.
This instrument may be executed in any number of counterparts, each of
which is executed shall constitute an original and all of which together shall
constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
10
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
GUIDANT CORPORATION
__________________________ By:__________________________
Attest: Name:
Title: Title:
Seal
CITIBANK, N.A., as Trustee
__________________________ By:__________________________
Attest: Name:
Title: Title:
Seal
11
<PAGE>
Exhibit 5.1
DEWEY BALLANTINE LLP
1301 Avenue of the Americas
New York, New York 10019
November 25, 1998
Guidant Corporation
111 Monument Circle, 29th Floor
Indianapolis, IN 46204-5129
Dear Sirs:
We refer to the Registration Statement on Form S-3 (File No. 333-
00014) as amended by Post-effective Amendment No. 1 (the "Registration
Statement") being filed by Guidant Corporation, an Indiana corporation (the
"Company"), with the Securities and Exchange Commission (the "Commission"),
under the Securities Act of 1933, as amended (the "Securities Act"), relating to
$500,000,000 (or the equivalent thereof in foreign currencies or currency units)
aggregate principal amount of Senior Debt Securities (the "Senior Debt
Securities") of the Company and an indeterminate number of shares of the
Company's common stock ("Common Stock") which may be issuable from time to time
upon the conversion or exchange of one or more series of the Senior Debt
Securities. We also refer to the form of the Indenture and the form of the
Supplemental Indenture (collectively, the "Indenture") to be entered into
between the Company and Citibank, N.A., as trustee (the "Trustee"), which are
Exhibit 4.1 and 4.2 to the Registration Statement.
We have examined and are familiar with originals, or copies certified
or otherwise identified to our satisfaction, of such corporate records of the
Company, certificates of officers of the Company of public officials and such
other documents as we have deemed appropriate as a basis for the opinions
expressed below.
Based upon the foregoing, it is our opinion that:
1. The Company is a corporation duly organized and validly existing
under the laws of the State of Indiana.
2. When the Company and the Trustee execute and deliver the Indenture
and the specific terms of a series of Senior Debt Securities have
been duly authorized and established in accordance with such
Indenture, and such Senior Debt Securities have been duly
authorized, executed, authenticated, issued and delivered in
<PAGE>
Guidant Corporation
November 25, 1998
Page 2
accordance with such Indenture, against payment therefor in
accordance with such Indenture and any applicable underwriting or
other agreement, such Senior Debt Securities will constitute the
valid and binding obligations of the Company, except that (a)
enforcement may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, rearrangement, receivership,
moratorium or other laws and matters of public policy now or
hereafter in effect relating to or affecting enforcement of
creditors' rights, and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought, and except further as
enforcement thereof may be limited by (i) requirements that a
claim with respect to any Senior Debt Securities denominated other
than in U.S. dollars (or a foreign or composite currency judgment
in respect of such claim) be converted into U.S. dollars at a rate
of exchange prevailing on a date determined pursuant to applicable
law, (ii) governmental authority to limit, delay or prohibit the
making of payments outside the United States, and (iii) the
enforceability of forum selection clauses in the federal courts.
3. When any of the shares of Common Stock previously authorized for
issuance upon conversion or exchange of a series of Senior Debt
Securities have been duly issued, the certificates for such Common
Stock have been duly executed by the Company, countersigned by the
transfer agent therefor and duly delivered upon exchange or
conversion of such Senior Debt Securities in accordance with the
Indenture, such Common Stock will be validly issued, fully paid
and nonassessable.
In connection with the opinions expressed above, we have assumed that,
at or prior to the time of delivery of any series of Senior Debt Securities, (i)
the Indenture shall have been duly authorized, executed and delivered by the
Company in accordance with applicable law and the Trustee and shall have been
qualified under the Trust Indenture Act of 1939, as amended, (ii) the Senior
Debt Securities shall have been duly authorized in accordance with the Indenture
and delivered and paid for by the purchasers thereof, and (iii) the Company
shall have taken all appropriate further corporate action. We have also assumed
that none of the terms of any series of Senior Debt Securities to be
established subsequent to the date hereof, nor the issuance and delivery of such
securities, nor the compliance by the Company with the terms of such securities
will violate any applicable law or will result in a violation of any provision
of any instrument or agreement then binding upon the Company, or any restriction
imposed by any court or
<PAGE>
Guidant Corporation
November 25, 1998
Page 3
governmental body having jurisdiction over the Company. Finally, we have assumed
that the Trustee is duly organized and has all requisite power and authority
under the laws of the jurisdiction of its organization to enter into and perform
its obligations under the Indenture and that the Indenture shall constitute a
valid and binding obligation of the Trustee.
In connection with the opinions expressed above, we have also assumed
that at or prior to the time of conversion or exchange of a series of Senior
Debt Securities, (i) the Common Stock shall have been duly authorized for
issuance by the Company, (ii) the certificates for the Common Stock shall have
been duly executed and delivered by the Company, and (iii) the Company shall
have taken all appropriate further corporate action.
We are members of the bar of the State of New York and express no
opinion as to the laws of any jurisdiction except the State of New York and the
federal law of the United States. As to matters governed by Indiana law, we
have relied solely upon the opinion of Baker & Daniels, Indianapolis, Indiana, a
copy of which is enclosed herewith.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to our name in the Prospectus
constituting a part of such Registration Statement under the heading "Legal
Matters." In giving such consent, we do not thereby admit that we come within
the category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Commission promulgated
thereunder.
Very truly yours,
/s/ Dewey Ballantine LLP
<PAGE>
EXHIBIT 5.2
BAKER & DANIELS
300 North Meridian Street, Suite 2700
Indianapolis, IN 46204-1782
November 25, 1998
Guidant Corporation
111 Monument Circle, 29th Floor
Indianapolis, IN 46204-5129
Dear Sirs:
We refer to the Registration Statement on Form S-3 (File No. 333-00014) as
amended by Post-Effective Amendment No. 1 (the "Registration Statement") being
filed by Guidant Corporation, an Indiana corporation (the "Company"), with the
Securities and Exchange Commission (the "Commission"), under the Securities Act
of 1933, as amended (the "Securities Act"), relating to $500,000,000 (or the
equivalent thereof in foreign currencies or currency units) aggregate principal
amount of Senior Debt Securities (the "Senior Debt Securities") of the Company
and an indeterminate number of shares of the Company's common stock ("Common
Stock") which may be issuable from time to time upon the conversion or exchange
of one or more series of the Senior Debt Securities. We also refer to the form
of the Indenture and the form of the Supplemental Indenture (collectively, the
"Indenture") to be entered into the Company and Citibank, N.A., as trustee (the
"Trustee"), which are Exhibits 4.1 and 4.2 to the Registration Statement.
We have examined and are familiar with originals, or copies certified or
otherwise identified to our satisfaction, of such corporate records of the
Company, certificates of officers of the Company and of public officials and
such other documents as we have deemed appropriate as a basis for the opinions
expressed below.
Based upon the foregoing, it is our opinion that:
1. The Company is a corporation duly organized and validly existing under
the laws of the State of Indiana.
<PAGE>
2. When the Company and the Trustee execute and deliver the Indenture and
the specific terms of a series of Senior Debt Securities have been duly
authorized and established in accordance with such Indenture, and such Senior
Debt Securities have been duly authorized, executed, authenticated, issued and
delivered in accordance with such Indenture, against payment therefor in
accordance with such Indenture and any applicable underwriting or other
agreement, such Senior Debt Securities will constitute the valid and binding
obligations of the Company, except that (a) enforcement may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, rearrangement,
receivership, moratorium or other laws and matters of public policy now or
hereafter in effect relating to or affecting enforcement of creditors' rights
and (b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought, and except
further as enforcement thereof may be limited by (i) requirements that a claim
with respect to any Senior Debt Securities denominated other than in U.S.
dollars (or a foreign or composite currency judgment in respect of such claim)
be converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law, (ii) governmental authority to limit,
delay or prohibit the making of payments outside the United States, and (iii)
the enforceability of forum selection clauses in the federal courts.
3. When any of the shares of Common Stock previously authorized for
issuance upon conversion or exchange of a series of Senior Debt Securities have
been duly issued, the certificates for such Common Stock have been duly executed
by the Company, countersigned by the transfer agent therefor and duly delivered
upon exchange or conversion of such Senior Debt Securities in accordance with
the Indenture, such Common Stock will be validly issued, fully paid and
nonassessable.
In connection with the opinions expressed above, we have assumed that, at
or prior to the time of delivery of any series of Senior Debt Securities, (i)
the Board of Directors shall have duly established the terms of such securities
and duly authorized the issuance and sale of such securities, in each case in
accordance with Indiana law, and such authorization shall not have been modified
or rescinded; (ii) the Registration Statement shall have been declared effective
and such effectiveness shall not have been terminated or rescinded; (iii) the
Indenture shall have been duly authorized, executed and delivered by the Company
in accordance with applicable law and the Trustee and shall have been qualified
under the Trust Indenture Act of 1939, as amended; and (iv) there will not have
occurred any change in law affecting the validity or enforceability of such
securities. We have also assumed that none of the terms of any series of Senior
Debt Securities to be established subsequent to the date hereof, nor the
issuance and delivery of such securities, nor the compliance by the Company with
the terms of such securities will violate any applicable law or will result in a
violation of any provision of any instrument or agreement then binding upon the
Company, or any restriction imposed by any court or governmental body having
jurisdiction over the Company. Finally, we have assumed that the Trustee is
duly organized and has all requisite power and authority under the laws of the
jurisdiction of its organization to enter into and perform its
<PAGE>
obligations under the Indenture and that the Indenture shall constitute a valid
and binding obligation of the Trustee.
We are members of the bar of the State of Indiana and express no opinion as
to the laws of any other jurisdiction.
Dewey Ballantine LLP may rely upon this opinion as if this opinion were
addressed to them.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to our name in the Prospectus
constituting a part of such Registration Statement under the heading "Legal
Matters." In giving such consent, we do not thereby admit that we come within
the category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Commission promulgated
thereunder.
Very truly yours,
/s/ Baker & Daniels
<PAGE>
GUIDANT CORPORATION AND SUBSIDIARIES
EXHIBIT 12.1
RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30, December 31,
------------------ ----------------------------------------------
1998 1997 1997 1996 1995 1994 1993
------- ------- ------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Income before income taxes and change
in accounting principle, excluding
special charges.............................. $421.4 $194.4 $317.1 $231.7 $161.5 $148.0 $82.9
Fixed Charges:
Interest expense.............................. 12.0 16.3 21.5 26.4 33.1 18.8 3.0
Interest factor attributable to rentals....... 3.4 2.8 4.5 3.7 2.5 2.3 1.9
------ ------ ------ ------ ------ ------ -----
Total fixed charges........................... 15.4 19.1 26.0 30.1 35.6 21.1 4.9
Earnings before taxes and interest............ 436.8 213.5 343.1 261.8 197.1 169.1 87.8
Earnings before taxes and fixed charges to
Fixed Charges................................ 28.4 11.2 13.2 8.7 5.5 8.0 17.9
</TABLE>
The 1998 calculation excludes purchased research and development charges of
$118.7 million recorded with the asset acquisitions of NeoCardia, LLC and
InControl, Inc. and litigation settlement charges of $260 million.
The third quarter of 1997 calculation excludes a purchased research and
development charge of $57.4 million recorded with the asset acquisition of
NeoCardia, LLC. In addition, the following special charges recorded in the
fourth quarter of 1997 are also excluded from the 1997 year to date calculation:
(i) merger-related costs of $11.1 million recorded in connection with the
acquisition of EndoVasular Technologies, Inc., (ii) a special contribution to
the Guidant Foundation, Inc. of $11.5 million, (iii) a one-time gain on the sale
of the Company's equity investments in Gynecare, Inc. of $23.2 million, and (iv)
corporate legal reserves of $11.5 million.
The 1996 calculation excludes special obsolescence and impairment charges
recorded in the second quarter of 1996. These charges amounted to
$95.7 million.
<PAGE>
EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Post-effective Amendment No. 1 to the Registration Statement on Form S-3 and
related Prospectus of Guidant Corporation dated November 25, 1998 for the
registration of $500,000,000 of debt securities and to the incorporation by
reference therein of our reports dated February 3, 1998 with respect to the
consolidated financial statements of Guidant Corporation incorporated by
reference in its Annual Report (Form 10-K) for the year ended December 31, 1997
and the related financial statement schedule included therein, filed with the
Securities and Exchange Commission.
November 24, 1998
Indianapolis, IN Ernst & Young LLP
