<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 19, 1996
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
U.S. OFFICE PRODUCTS COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 5112 52-1906050
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) Number)
</TABLE>
1440 NEW YORK AVENUE, N.W.
SUITE 310
WASHINGTON, D.C. 20005
(202) 628-9500
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------------
JONATHAN J. LEDECKY
CHAIRMAN OF THE BOARD
U.S. OFFICE PRODUCTS COMPANY
1440 NEW YORK AVENUE, N.W., SUITE 310
WASHINGTON, D.C. 20005
(202) 628-9500
(Name and address, including zip code, and telephone number, including area
code, of agent for service)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
Linda L. Griggs, Esq. Leland E. Hutchinson, Esq.
Morgan, Lewis & Bockius LLP John L. MacCarthy, Esq.
1800 M Street, N.W. Winston & Strawn
Washington, D.C. 20036-5869 35 West Wacker Drive
(202) 467-7000 Chicago, Illinois 60601-9703
(312) 558-5600
</TABLE>
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO PROPOSED MAXIMUM AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED OFFERING PRICE PRICE (1) REGISTRATION FEE
<S> <C> <C> <C> <C>
5 1/2% Convertible Subordinated Notes
due 2003............................. $86,250,000 100.00% $86,250,000 $29,741.40
Common Stock, $.001 par value per
share................................ 1,819,620(2) -- -- --
</TABLE>
(1) Estimated solely for the purposes of calculating the registration fee
pursuant to Rule 457(i).
(2) Such number represents the number of shares of Common Stock initially
issuable upon conversion of the Notes registered hereby and, pursuant to
Rule 416 under the Securities Act of 1933, as amended, such indeterminate
number of shares of Common Stock as may be issued from time to time upon
conversion of the Notes by reason of adjustment of the conversion price
under certain circumstances outlined in the Prospectus.
------------------------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED AUGUST , 1996
[LOGO]
$86,250,000
5 1/2% CONVERTIBLE SUBORDINATED NOTES DUE 2003
1,819,620 SHARES OF
COMMON STOCK
---------------------
This Prospectus relates to the offering by the selling securityholders named
herein (the "Selling Securityholders") of 5 1/2% Convertible Subordinated Notes
due 2003 (the "Notes") of U.S. Office Products Company (the "Company" or "U.S.
Office Products") in the aggregate principal amount of up to $86.25 million (the
"Offered Notes"). In addition, this Prospectus relates to the offering by the
Selling Securityholders of 1,819,620 shares (subject to adjustment under certain
circumstances) of common stock, par value $.001 per share (the "Common Stock"
and, together with the Offered Notes, the "Securities"), issued or issuable upon
conversion of the Offered Notes. This Prospectus does not cover the initial
issuance of shares of Common Stock upon conversion of the Offered Notes.
The Offered Notes were issued and sold in May and June 1996 in transactions
exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act"), to persons reasonably believed by the managers
who placed the Offered Notes (the "Managers") to be "qualified institutional
buyers" (as defined in Rule 144A under the Securities Act) or institutional
accredited investors. In connection with the original issuance of the Offered
Notes, an additional $143.75 million aggregate principal amount of Notes (not
offered hereby) were issued to persons in offshore transactions in reliance upon
Regulation S under the Securities Act.
The Offered Notes are convertible into shares of Common Stock of the
Company, prior to redemption or maturity, at a conversion price of $47.40 per
share, subject to adjustment under certain conditions. See "Description of the
Offered Notes Conversion." The Notes are listed on the Luxembourg Stock Exchange
and, prior to their resale pursuant to this Prospectus, the Offered Notes were
eligible for trading on the Private Offerings, Resales and Trading through
Automated Linkages ("PORTAL") Market. The Offered Notes resold pursuant to this
Prospectus will no longer be eligible for trading on the PORTAL Market. The
Common Stock is traded on the Nasdaq National Market under the symbol "OFIS." On
August 14, 1996, the last reported sale price for the Common Stock on the Nasdaq
National Market was $34.00 per share.
Interest on the Offered Notes is payable semi-annually in arrears on May 15
and November 15 of each year, commencing on November 15, 1996 and ending on May
15, 2003. Payments will be made without deduction for United States withholding
taxes, to the extent described herein. The Offered Notes will mature on May 15,
2003 and are redeemable, in whole or in part, at the option of the Company, on
or after May 22, 1998, at the redemption prices set forth herein, plus accrued
and unpaid interest to the date of redemption. The Offered Notes are not
redeemable at the option of the Company prior to May 22, 1998. At any time on or
after such date, the Offered Notes will be redeemable on at least 20 days'
notice at the option of the Company, in whole or in part at any time, initially
at 103.929% and thereafter at prices declining to 100% at maturity, together
with accrued and unpaid interest, except that the Offered Notes may not be
redeemed prior to May 15, 1999 unless the closing price of the Common Stock is
at least 150% of the conversion price for at least 20 trading days within a
period of 30 consecutive trading days ending on the fifth trading day prior to
the notice of redemption. Upon the occurrence of a Designated Event (as defined
herein), each holder of Notes will have the right to cause the Company to
repurchase the holder's Notes, in whole but not in part, at a price equal to
100% of the principal amount thereof plus accrued and unpaid interest to the
repurchase date. See "Description of the Notes -- Optional Redemption by the
Company" and "Repurchase at Option of Holders Upon a Designated Event."
The Offered Notes are general unsecured obligations of the Company, and are
subordinated in right of payment to all existing and future Senior Indebtedness
(as defined herein) of the Company. The term Senior Indebtedness does not
include the indebtedness of the Company's subsidiaries unless such indebtedness
is secured by the subsidiary and guaranteed by the Company; however,
indebtedness of the Company's subsidiaries decreases the amount of cash flow
available to the Company to service its debt, including the Offered Notes. See
"Description of the Notes -- Subordination." On a pro forma basis as of April
30, 1996 reflecting various acquisitions, issuances of securities and borrowings
incurred to refinance existing indebtedness, the Company had approximately
$190.9 million of Senior Indebtedness and no indebtedness of its subsidiaries
that is not considered Senior Indebtedness. See "Selected Financial Data."
Neither the Indenture (as defined herein) nor the Notes limit the amount of
Senior Indebtedness or other indebtedness that the Company or its subsidiaries
may incur. As of June 29, 1996, the Company had $230.0 million of Notes,
including the $86.25 million of Offered Notes, outstanding and $143.75 million
of 5 1/2% Convertible Subordinated Notes due 2001 outstanding that were sold in
a registered offering completed in February and March 1996 (the "February
Notes").
The Company will not receive any of the proceeds from the sale of the
Securities offered hereby. The Selling Securityholders directly, through agents
designated from time to time, or through dealers or underwriters to be
designated, may sell the Securities from time to time on terms to be determined
at the time of sale. To the extent required, the specific amount of Securities
to be sold, the respective purchase price and public offering price, the names
of any such agent, dealer or underwriter, and any applicable commission or
discount with respect to the particular offer will be set forth in a Prospectus
Supplement. U.S. Office Products has agreed to bear all expenses of registration
of the Securities under federal and state securities laws and to indemnify the
Selling Securityholders against certain liabilities under the Securities Act.
See "Plan of Distribution."
The Selling Securityholders and any broker-dealer, agents or underwriters
that participate with the Selling Securityholders in the distribution of the
Securities may be deemed to be "underwriters" within the meaning of the
Securities Act, and any commissions received by them and any profits on the
resale of the Securities purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
------------------------------
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 11.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS AUGUST , 1996
<PAGE>
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents of the Company filed with the Securities and
Exchange Commission (the "Commission") (File No. 0-25372) are incorporated
herein by reference:
(a) Historical financial statements required by Item 3-05 of Regulation S-X
relating to the following companies acquired by the Company included in the
Company's Amendment No. 1 to Registration Statement on Form S-4 (File No.
333-1928) filed on March 28, 1996: Copenhaver Holdings, Inc.; Carithers-Wallace-
Courtenay, Inc.; National Office Supply; Emmons-Napp Office Products, Inc.;
Price Modern, Inc.; Pence-Dickens & Heeter, Inc.; Office Connection, Inc.;
MISSCO Commercial Division; Oakbrook Office Supply and Equipment Corporation;
and Blue Star Group Limited;
(b) The Company's Annual Report on Form 10-K for the fiscal year ended April
30, 1996 filed with the Commission on July 16, 1996;
(c) The Company's Current Reports on Form 8-K dated July 26, 1996 (as
amended), July 23, 1996, July 16, 1996, May 17, 1996 (as amended) and March 7,
1996; and
(d) The description of the Company's Common Stock under the caption
"Description of Registrant's Securities to be Registered" in the Company's
Amendment No. 1 to Registration Statement on Form 8-A, dated February 13, 1995,
and the Company's Quarterly Report on Form 10-Q for the interim period ended
January 31, 1996 disclosing, among other things, an amendment to the Company's
Restated Certificate of Incorporation.
In addition, all reports and other documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to the termination
of the offering made hereby, shall be deemed to be incorporated by reference
into this Prospectus. Any statement incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM
THE COMPANY BY CONTACTING MARK D. DIRECTOR, 1440 NEW YORK AVENUE, N.W., SUITE
310, WASHINGTON, D.C. ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY
REQUEST SHOULD ALLOW AT LEAST FIVE (5) BUSINESS DAYS FOR DELIVERY.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Incorporation of Certain Information by Reference.......................................................... 2
Available Information...................................................................................... 3
Prospectus Summary......................................................................................... 4
Selected Financial Data.................................................................................... 9
Risk Factors............................................................................................... 11
Price Range of Common Stock................................................................................ 16
Dividend Policy............................................................................................ 16
Description of Notes....................................................................................... 17
Description of Capital Stock............................................................................... 31
Certain Federal Tax Considerations......................................................................... 33
Selling Securityholders.................................................................................... 35
Plan of Distribution....................................................................................... 36
Legal Matters.............................................................................................. 37
Experts.................................................................................................... 37
</TABLE>
AVAILABLE INFORMATION
The Company has filed with the Commission in Washington, D.C. a Registration
Statement on Form S-3 under the Securities Act, with respect to the securities
offered hereby. This Prospectus, which constitutes part of the Registration
Statement, omits certain of the information contained in the Registration
Statement and the exhibits and schedules thereto on file with the Commission
pursuant to the Securities Act and the rules and the regulations of the
Commission thereunder. Statements contained in this Prospectus as to the
contents of any contract or other document referred to are not necessarily
complete and in each instance reference is made to the copy of such contract or
other document filed as an exhibit to the Registration Statement, and each such
statement is qualified in all respects by such reference. The Company is subject
to the informational requirements of the Exchange Act, and, in accordance
therewith, files reports, proxy statements, and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following Regional Offices of the Commission: Seven World
Trade Center, Suite 1300, New York, New York 10048; and 500 West Madison Avenue,
Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained
from the public reference section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates, or from the Commission's internet
web site at http:\\www.sec.gov. In addition, such materials also may be
inspected and copied at the offices of the Nasdaq National Market, 1735 K
Street, N.W., Washington, D.C. 20006.
3
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ IN
CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND THE FINANCIAL STATEMENTS AND
RELATED NOTES THERETO APPEARING ELSEWHERE IN THIS PROSPECTUS OR INCORPORATED BY
REFERENCE HEREIN. SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN RISKS
ASSOCIATED WITH AN INVESTMENT IN THE SECURITIES. UNLESS THE CONTEXT OTHERWISE
REQUIRES, THE TERMS "U.S. OFFICE PRODUCTS" OR THE "COMPANY" REFER TO U.S. OFFICE
PRODUCTS COMPANY, A DELAWARE CORPORATION, AND ITS SUBSIDIARIES AND PREDECESSORS.
ALL REFERENCES TO YEARS, UNLESS OTHERWISE NOTED, REFER TO THE COMPANY'S FISCAL
YEAR, WHICH ENDS ON APRIL 30 OF EACH YEAR. THIS PROSPECTUS IS BEING USED BY THE
SELLING SECURITYHOLDERS TO OFFER $86.25 MILLION AGGREGATE PRINCIPAL AMOUNT OF
OFFERED NOTES AND THE UNDERLYING 1,819,620 SHARES OF COMMON STOCK (SUBJECT TO
ADJUSTMENT UNDER CERTAIN CIRCUMSTANCES) ISSUED OR ISSUABLE UPON CONVERSION OF
THE OFFERED NOTES (THE "OFFERING"). THE DOCUMENTS INCORPORATED HEREIN BY
REFERENCE MAY CONTAIN STATEMENTS DEEMED TO BE FORWARD LOOKING WHICH ARE
INHERENTLY UNCERTAIN. ACTUAL RESULTS MAY DIFFER FROM THOSE DISCUSSED IN SUCH
FORWARD LOOKING STATEMENTS FOR THE REASONS, AMONG OTHERS, SET FORTH UNDER THE
HEADING "RISK FACTORS." THIS PROSPECTUS ALSO CONTAINS PRO FORMA FINANCIAL
INFORMATION THAT GIVES EFFECT TO CERTAIN EVENTS. SUCH INFORMATION IS NOT
NECESSARILY INDICATIVE OF THE RESULTS THAT THE COMPANY WOULD HAVE ATTAINED HAD
THE EVENTS OCCURRED AT THE BEGINNING OF THE PERIOD PRESENTED, AS ASSUMED, OR OF
THE FUTURE RESULTS OF THE COMPANY.
THE COMPANY
U.S. Office Products is one of the world's largest and fastest growing
suppliers of a broad range of office products to corporate, commercial,
industrial and educational customers. From its inception through July 31, 1996,
the Company has acquired 76 companies (the "Completed Acquisitions"). In
addition, as of July 31, 1996, the Company believed that the acquisition of an
additional 36 companies that sell a variety of office supplies, office
furniture, coffee and break room supplies and services and school supplies and
school furniture are probable (the "Pending Acquisitions"). The Company's
objective is to be the leading single source supplier of a broad array of office
and educational products and services for its corporate, commercial, industrial
and educational customers. The Company generally has acquired and seeks to
acquire companies with established sales presences and brand names in given
geographic markets, and seeks to achieve operating efficiencies through
consolidated purchasing of products and services and implementation of
operational improvements. Currently, the Company sells a full range of over
28,000 office and educational products to customers in the United States, New
Zealand and Australia. Assuming that the Completed Acquisitions and the Pending
Acquisitions had occurred at the beginning of fiscal 1996, the Company had pro
forma fiscal 1996 revenues of approximately $2.15 billion.
The Company operates with a decentralized management strategy rather than a
standardized national model in an effort to provide superior customer service
and retain the historical customers of acquired businesses while achieving the
operating efficiencies of a large organization. The Company believes that many
customers purchase office products based on an established long-term business
relationship with one primary supplier. The Company seeks to foster such
long-term relationships by preserving the authority of the local, experienced
management who have the responsibility to provide customers with superior
customer service. The Company believes that its decentralized management
strategy, coupled with operating efficiencies, enables it to compete effectively
in its target markets. The Company has initiated strategies designed to achieve
operating efficiencies by: (i) generating cost savings through volume purchasing
of office products; (ii) combining certain general and administrative functions
at the corporate level and eliminating redundant facilities; (iii) implementing
improved technology and operating systems; (iv) producing a Company-wide
proprietary catalog in order to increase the percentage of office supplies
purchased directly from manufacturers; and (v) increasing sales opportunities by
broadening the complement of products and services it offers.
The Company has an aggressive acquisition program utilizing a "hub and
spoke" strategy for expansion into and around its targeted metropolitan areas.
This strategy involves the acquisition of (i) a larger established, high quality
local company, or hub, and (ii) additional smaller companies, or
4
<PAGE>
spokes, in secondary markets surrounding the hubs. Where possible, the
operations of the acquired spokes are integrated into the operations of existing
hubs, thereby eliminating a portion of the operating expenses of the acquired
spokes. The Company also has begun to develop regional consolidation and
integration plans to enable certain operational activities, such as warehousing,
to be shared among the hubs and spokes that are located within a specific
geographic area. The Company expects this regional approach to permit the
elimination of duplicative facilities and costs. The Company believes that its
decentralized management strategy, which includes the retention of local
management, sales personnel and the names of the acquired companies, and other
operating strategies described above, facilitate the identification of
acquisition candidates and make it an attractive acquiror.
As of July 31, 1996, the following are the principal markets that are served
by the Company:
-DOMESTIC OFFICE SUPPLIES. The Company sells office and related supplies in
the domestic office contract stationer market from locations in 27 states.
The Pending Acquisitions include 11 companies that sell supplies in this
market.
-OFFICE COFFEE SERVICES. The Company sells coffee, food, beverages and
related supplies for the breakroom. The Pending Acquisitions include 16
companies serving this market. Certain of these Pending Acquisitions will
provide the Company with the right to distribute
Starbucks-Registered Trademark- coffee to the corporate office market in
certain geographic regions.
-OFFICE FURNITURE. The Company sells contract, remanufactured and catalog
furniture to the office furniture market. The Pending Acquisitions include
four companies that focus on the furniture market.
-SCHOOL SUPPLIES AND SCHOOL FURNITURE. The Company sells school and office
supplies and school furniture to the kindergarten through 12th grade
educational market through its School Specialty, Inc. subsidiary, which
recently acquired five companies in this market.
-INTERNATIONAL OFFICE PRODUCTS. In addition to its domestic operations, the
Company sells office and educational products and certain other products
and services in New Zealand and Australia through Blue Star Group Limited
("Blue Star"), acquired by the Company in February and June 1996, and
Whitcoulls Group Limited ("Whitcoulls"), which Blue Star acquired in July
1996. See "Recent Developments." Through its subsidiaries, Whitcoulls also
operates numerous retail book and stationery stores throughout New Zealand
and Australia and manufactures commercial, scholastic and household
stationery products. The Pending Acquisitions include five companies that
are located in New Zealand and Australia.
The Company believes that, assuming that the Completed Acquisitions and the
Pending Acquisitions had been completed at the beginning of fiscal 1996, the
Company had pro forma fiscal 1996 revenues of approximately $903 million in the
domestic office contract stationer market, $92 million in the domestic office
coffee services market, $263 million in the domestic office furniture market,
$199 million in the domestic school supplies and school furniture market and
$697 million in the international market.
The Company is a Delaware corporation. Its executive officers are located at
1440 New York Avenue, N.W., Suite 310, Washington, D.C. 20005, and its telephone
number is 202-628-9500.
RECENT DEVELOPMENTS
ACQUISITION ACTIVITY. From the beginning of fiscal 1997 through July 31,
1996, the Company has acquired 28 businesses, of which 16 are contract
stationers, one is an office coffee services company, three are furniture
companies, six are school supplies and school furniture companies and three are
office product companies in New Zealand and Australia. On July 26, 1996, the
Company completed its largest acquisition since its inception when it purchased
all of the outstanding stock of New Zealand-based Whitcoulls for total cash
consideration of $220 million. Whitcoulls operates nine principal
5
<PAGE>
subsidiaries that it has acquired during the past six years. Through its
subsidiaries, Whitcoulls sells a broad array of office, educational and printing
products and services to the commercial, retail, government and school supply
markets throughout New Zealand. In addition, Whitcoulls operates numerous
stationery and book stores (including franchised stores) in New Zealand and
Australia and manufactures commercial, scholastic and household stationery
products. Whitcoulls had revenues of U.S. $450 million and earnings before
interest and taxes of approximately U.S. $31.5 million for its fiscal year ended
June 30, 1996. If the Company had acquired Whitcoulls as well as the other
Completed Acquisitions and the Pending Acquisitions at the beginning of fiscal
1996, the Company's operations in New Zealand and Australia would have accounted
for approximately 32% of the Company's fiscal 1996 pro forma revenues of $2.15
billion.
CREDIT FACILITY. In August 1996, the Company received a commitment letter
from a bank, subject to the satisfaction of a number of conditions, including
execution of a definitive credit agreement and related documentation, for a $500
million credit facility (the "Credit Facility"). The amount available to be
borrowed under the Credit Facility is expected to vary from time to time
depending on the level of, on a pro forma basis reflecting consummated
acquisitions, the Company's consolidated earnings before interest, taxes,
depreciation and amortization ("EBITDA") and the Company's total indebtedness
and related interest expense. The Credit Facility will be available to finance
acquisitions, fund working capital needs, and refinance existing indebtedness of
its subsidiaries, including indebtedness of Blue Star and Whitcoulls. There can
be no assurance that the Credit Facility ultimately will be obtained, or that,
if obtained, will be on terms that are favorable to the Company.
6
<PAGE>
THE OFFERING
THIS PROSPECTUS RELATES TO THE OFFERING BY THE SELLING SECURITYHOLDERS OF
BOTH THE OFFERED NOTES AND, TO THE EXTENT THE OFFERED NOTES HAVE BEEN, OR ARE,
CONVERTED, THE COMMON STOCK. THE FOLLOWING SUMMARY OF CERTAIN TERMS OF THE
OFFERED NOTES IS NOT COMPLETE AND IS QUALIFIED BY ALL OF THE TERMS AND
CONDITIONS CONTAINED IN THE OFFERED NOTES AND IN THE INDENTURE (AS DEFINED
HEREIN). FOR A MORE DETAILED DESCRIPTION OF THE TERMS OF THE OFFERED NOTES, SEE
"DESCRIPTION OF NOTES."
THE COMMON STOCK
<TABLE>
<S> <C>
Common Stock outstanding as of August 8, 1996...................... 38,634,355 shares (1)
Common Stock to be outstanding assuming conversion of the Notes, 52,396,056 shares
including the Offered Notes, the conversion of the February Notes (1)(2)
and consummation of the Pending Acquisitions......................
Nasdaq National Market Symbol...................................... OFIS
</TABLE>
- ------------------------
(1) Excludes 266,917 shares of Common Stock subject to options exercisable as of
July 31, 1996.
(2) Assumes no adjustment to the conversion price of the Notes and the February
Notes.
THE OFFERED NOTES
<TABLE>
<S> <C>
Securities Offered.................. $86,250,000 principal amount of 5 1/2% Convertible
Subordinated Notes due 2003.
Interest Payment Dates.............. May 15 and November 15, beginning November 15, 1996.
Maturity............................ May 15, 2003.
Conversion.......................... The Offered Notes will be convertible, at any time
prior to redemption or maturity, at the holder's
option, into shares of the Company's Common Stock at
an initial conversion price of $47.40 per share
(equivalent to approximately 21.10 shares of Common
Stock for each $1,000 principal amount of Notes)
(the "Conversion Price").
Optional Redemption................. The Offered Notes are not redeemable at the option of
the Company prior to May 22, 1998. At any time on or
after such date, the Offered Notes will be
redeemable on at least 30 days' notice at the option
of the Company, in whole or in part at any time,
initially at 103.929% and thereafter at prices
declining to 100% of the principal amount of the
Offered Notes at maturity, together with accrued and
unpaid interest, except that the Offered Notes may
not be redeemed prior to May 15, 1999 unless the
closing price of the Common Stock is at least 150%
of the Conversion Price for at least 20 trading days
within a period of 30 consecutive trading days
ending on the fifth trading day prior to the notice
of redemption. See "Description of the Notes --
Optional Redemption by the Company."
Repurchase at Option of Holders Upon
a Designated Event................. In the event of a Designated Event (as defined
herein), each holder may require the Company to
repurchase all or a portion of such holder's Offered
Notes at 100% of the
</TABLE>
7
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<TABLE>
<S> <C>
principal amount thereof plus accrued and unpaid
interest to the repurchase date. See "Risk Factors
-- Limitations on Repurchase of Notes Upon a
Designated Event" and "Description of the Notes --
Repurchase at Option of Holders Upon a Designated
Event."
Subordination....................... The Offered Notes are subordinate to all existing and
future Senior Indebtedness of the Company. On a pro
forma basis as of April 30, 1996 reflecting various
acquisitions, issuances of securities and borrowings
incurred to refinance existing indebtedness, the
Company had approximately $190.9 million of Senior
Indebtedness and no indebtedness of its subsidiaries
that is not considered Senior Indebtedness. The
Indenture contains no limitations on the incurrence
of additional Senior Indebtedness or other
indebtedness by the Company and its subsidiaries.
See "Description of the Notes -- Subordination."
Trading............................. The Notes are traded on the Luxembourg Stock Exchange
and, prior to their resale pursuant to this
Prospectus, the Offered Notes were eligible for
trading on the PORTAL Market. The Offered Notes sold
pursuant to this Prospectus will no longer be
eligible for trading on the PORTAL Market.
Risk Factors........................ An investment in the Securities involves a high
degree of risk. See "Risk Factors" for a discussion
of certain factors that should be considered in
evaluating an investment in the Securities.
</TABLE>
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Securities offered hereby.
8
<PAGE>
SELECTED FINANCIAL DATA (1)
The Selected Financial Data for the fiscal years ended April 30, 1994, 1995
and 1996 (except pro forma amounts) have been derived from the Company's
consolidated financial statements that have been audited by Price Waterhouse LLP
and that are incorporated herein by reference. The Selected Financial Data for
the fiscal year ended April 30, 1993 has been derived from the Company's
consolidated financial statements that have been audited by Price Waterhouse
LLP, and for the fiscal year ended April 30, 1992 has been derived from
unaudited combined financial statements, not included elsewhere in this
Prospectus or incorporated herein by reference. These unaudited combined
financial statements have been prepared on the same basis as the audited
consolidated financial statements and, in the opinion of management, contain all
adjustments, consisting only of normal recurring accruals, necessary for a fair
presentation of the financial position and results of operations for the periods
presented.
The pro forma data gives effect, as applicable, to (i) the acquisitions
completed by the Company since May 1, 1995 and the Pending Acquisitions as if
all of such acquisitions had been made on May 1, 1995, (ii) the sale by the
Company of 4,025,000 shares of Common Stock in the second offering in August
1995 (the "Second Offering") as if such sale had been made on May 1, 1995, (iii)
the sales by the Company in February and March 1996 of 5,543,045 shares of
Common Stock and the February Notes in the principal amount of $143.75 million
(the "February Offerings") as if such sales had been made on May 1, 1995, (iv)
the sales by the Company in May and June 1996 of $230 million principal amount
of Notes as if such sales had been made on May 1, 1995, and (v) borrowings
incurred under the proposed Credit Facility being negotiated by the Company to
refinance existing indebtedness. In addition, the pro forma information is based
on available information and certain assumptions and adjustments. The Selected
Financial Data provided herein should be read in conjunction with the historical
financial statements, including the notes thereto, of U.S. Office Products
Company and the other companies whose financial statements are incorporated
herein by reference, the pro forma financial statements, including the notes
thereto, and the "Management's Discussion and Analysis of Financial Condition
and Results of Operations" that are incorporated herein by reference.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED APRIL 30,
------------------------------------------------------------------ PRO FORMA
1992 1993 1994 1995 1996 1996 (2)
----------- ----------- ----------- ----------- -------------- ----------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues............................. $ 205,862 $ 234,351 $ 267,774 $ 355,821 $ 701,949 $ 2,154,190
Cost of revenues..................... 147,746 168,913 192,062 265,690 523,409 1,514,324
----------- ----------- ----------- ----------- -------------- ----------------
Gross profit....................... 58,116 65,438 75,712 90,131 178,540 639,886
Selling, general and administrative
expenses............................ 54,289 61,546 68,926 80,129 152,796 543,570
Nonrecurring acquisition costs....... 8,057
Nonrecurring restructuring costs..... 8,092
Discontinuation of printing division
at subsidiary....................... 682 682
----------- ----------- ----------- ----------- -------------- ----------------
Operating income................... 3,827 3,892 6,786 10,002 17,005 87,522
Interest expense..................... 1,866 1,571 1,609 2,310 6,476 32,163
Interest income...................... (23) (13) (172) (376) (3,097) (917)
Minority interest in subsidiary...... (30) (25) 671 1,235
Other (income) expense............... (1,903) (876) (648) 162 (599) (968)
----------- ----------- ----------- ----------- -------------- ----------------
Income before taxes.................. 3,917 3,235 5,997 7,906 13,554 56,009
Provision for income taxes........... 661 913 1,195 1,761 4,814 23,704
----------- ----------- ----------- ----------- -------------- ----------------
Net income........................... $ 3,256 $ 2,322 $ 4,802 $ 6,145 $ 8,740(3) $ 32,305
----------- ----------- ----------- ----------- -------------- ----------------
----------- ----------- ----------- ----------- -------------- ----------------
Net income per share................. $ 0.37(3) $ .80
-------------- ----------------
-------------- ----------------
Weighted average shares
outstanding......................... 23,385 40,633(4)
Ratio of earnings to fixed charges
(5)................................. 2.7x 2.6x 3.4x 3.3x 2.5x 2.3x
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
APRIL 30,
------------------------------------------------------------ PRO FORMA
1992 1993 1994 1995 1996 1996 (6)
--------- --------- --------- ----------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital.......................... $ 17,549 $ 17,600 $ 19,741 $ 34,018 $ 229,859 $ 142,412
Total assets............................. 66,130 70,610 73,012 139,310 651,527 1,251,637
Long-term debt, less current portion..... 12,389 5,791 8,861 8,051 157,303 387,303
Stockholders' equity..................... 20,698 21,352 22,575 59,306 305,409 473,494
</TABLE>
- ------------------------------
(1) As a result of the substantial continuing interests in the Company of the
former stockholders of the four companies acquired by the Company for a
combination of Common Stock and cash concurrent with the closing of its
initial public offering (the "IPO") (the "Combined Companies"), the
historical financial information of the Combined Companies and the
historical financial information of the businesses that were acquired after
the closing of the IPO in business combinations accounted for under the
pooling-of-interests method (the "Pooled Companies") have been combined on
a historical cost basis in accordance with generally accepted accounting
principles ("GAAP") to present this financial data as if the Combined
Companies and the Pooled Companies had always been members of the same
operating group. The financial information of the businesses acquired in
business combinations accounted for under the purchase method (the
"Purchased Companies") is included from the dates of their respective
acquisitions.
(2) Gives effect to: (i) the acquisitions completed by the Company since May 1,
1995 and the 36 acquisitions that the Company considers probable to occur
as of July 31, 1996 (the "Pending Acquisitions") as if all of such
acquisitions had been made on May 1, 1995; (ii) the sales by the Company in
August 1995 of 4,025,000 shares of Common Stock (the "Second Offering") as
if such sales had been made on May 1, 1995; (iii) the sales by the Company
in February and March 1996 (the "February Offerings") of 5,543,045 shares
of Common Stock and 5 1/2% Convertible Subordinated Notes due 2001 (the
"February Notes") in the principal amount of $143.75 million as if such
sales had been made on May 1, 1995; and (iv) the sales by the Company in
May and June 1996 of $230.0 million of 5 1/2% Convertible Subordinated
Notes due 2003 (the "Notes") as if such sales had been made on May 1, 1995.
(3) Net income and net income per share include nonrecurring acquisition costs
incurred in conjunction with the business combinations with the Pooled
Companies and the costs associated with the discontinuation of the printing
division at a subsidiary. GAAP requires the Company to expense all costs
related to acquisitions accounted for under the pooling-of-interests
method.
(4) For calculation of the pro forma weighted average shares outstanding for
the year ended April 30, 1996, see Note 2(j) of Notes to Pro Forma Combined
Financial Statements incorporated herein by reference.
(5) In computing the ratio of earnings to fixed charges: (i) earnings are based
on income before income taxes and fixed charges, and (ii) fixed charges
consist of interest expense, amortization of deferred financing costs and
the estimated interest component of rent expense.
(6) Gives effect to: (i) acquisitions completed after April 30, 1996 and the
Pending Acquisitions as if such acquisitions had been made on April 30,
1996; (ii) the sales by the Company in May and June 1996 of $230.0 million
of Notes as if such sales had been made on April 30, 1996 and (iii)
borrowings incurred under a credit facility being negotiated by the Company
to refinance existing indebtedness.
10
<PAGE>
RISK FACTORS
PROSPECTIVE PURCHASERS OF THE SECURITIES OFFERED HEREBY SHOULD CONSIDER
CAREFULLY THE FOLLOWING RISK FACTORS, AS WELL AS THE OTHER INFORMATION IN THIS
PROSPECTUS OR INCORPORATED HEREIN BY REFERENCE, IN EVALUATING AN INVESTMENT IN
THE SECURITIES.
RISKS RELATED TO THE COMPANY'S ACQUISITION STRATEGY
One of the Company's strategies is to increase its revenues and the markets
it serves through the acquisition of additional businesses offering a broad
array of office and educational products and services. From its inception
through July 31, 1996, the Company made 76 acquisitions. The Company intends to
continue to make additional acquisitions, including the 36 Pending Acquisitions.
There can be no assurance that acquisitions will occur at the same pace or be
available to the Company on favorable terms, if at all. For example, if the
price of a share of Common Stock declines over a sustained period, the owners of
potential acquisition targets may not be willing to receive shares of Common
Stock in exchange for their businesses, thereby adversely affecting the pace of
the Company's acquisition program. Such an effect on the pace of the Company's
acquisition program could further reduce the price of a share of Common Stock,
to the further detriment of the Company's acquisition strategy. In addition, the
consolidation of the domestic contract stationer industry has reduced the number
of larger companies available for sale, which could lead to higher prices being
paid to acquire the remaining independent companies.
The Company's ability to manage an aggressive consolidation program in
markets other than the domestic contract stationer market, including furniture,
office coffee services and school supplies and school furniture, has not yet
been tested. In addition, there can be no assurance that companies that have
been acquired or that may be acquired in the future will achieve sales and
profitability that justify the investment therein. Acquisitions may involve a
number of special risks that could have a material adverse effect on the
Company's operations and financial performance, including adverse short-term
effects on the Company's reported operating results; diversion of management's
attention; difficulties with the retention, hiring and training of key
personnel; risks associated with unanticipated problems or legal liabilities;
and amortization of acquired intangible assets.
There can be no assurance that any of the terms agreed to in the letters of
intent for the Pending Acquisitions will not change, that definitive agreements
for any of the Pending Acquisitions will be executed or that any of the Pending
Acquisitions will be consummated. The Company is in discussions with additional
acquisition candidates and expects that it will enter into letters of intent or
definitive agreements with respect to the acquisition of such businesses from
time to time.
INTEGRATION OF ACQUISITIONS AND LIMITED COMBINED OPERATING HISTORY
U.S. Office Products was founded in October 1994 and conducted no operations
prior to the acquisition of its founding companies in February 1995. From its
inception through July 31, 1996, U.S. Office Products acquired 76 companies, and
it intends to continue to make acquisitions. In most cases, the managers of the
acquired companies have continued to operate their companies after being
acquired by U.S. Office Products. There can be no assurance that the Company
will be able to successfully integrate these companies within U.S. Office
Products' operations without substantial costs, delays or other problems. In
addition, there can be no assurance that the Company's executive management
group will be able to oversee the combined entity and effectively implement the
Company's operating or growth strategies in each of the markets that the Company
serves. Finally, there can be no assurance that the pace of the Company's
acquisitions will not adversely affect the Company's efforts to integrate
acquisitions and manage those acquisitions profitably.
INTERNATIONAL EXPANSION
As of July 31, 1996, the Company's international operations are in New
Zealand and Australia. The Company recently expanded its international
operations significantly with the acquisition of the remaining 49% of Blue Star
in June 1996 and the acquisition of Whitcoulls in July 1996. In addition to
their core contract stationery, office furniture, and school supply and school
furniture operations, Blue
11
<PAGE>
Star and its subsidiaries, including Whitcoulls, have other operations that the
Company's domestic operations currently do not have, including retail book and
stationery stores, printing operations, office product manufacturing and the
sale, leasing, maintenance and design of telecommunications and office
automation equipment and products. If the Company had acquired Whitcoulls as
well as the other Completed Acquisitions and the Pending Acquisitions at the
beginning of fiscal 1996, the Company's international operations as of July 31,
1996 would have accounted for approximately 32% of the Company's fiscal 1996 pro
forma revenues of $2.15 billion. In fiscal 1996, international operations
constituted approximately 6% of actual 1996 revenues. The Company is making
additional acquisitions in New Zealand and Australia, both directly and through
Blue Star, and plans to enter other international markets, including England.
The Company intends to focus significant attention and resources on
international expansion in the future and expects foreign sales to represent a
significant proportion of the Company's total sales. Expansion into
international markets involves additional risks relating to currency exchange
rates, new and different legal, regulatory and competitive requirements,
difficulties in staffing and managing foreign operations, different business
lines and other factors.
DEPENDENCE ON IMPLEMENTATION AND OPERATION OF SYSTEMS
The Company believes that the successful operation of the businesses that it
has acquired and intends to acquire depends in part on the implementation of
inventory management and financial systems. The Company may experience delays,
complications or expenses in implementing, integrating and operating these
systems, any of which could have a material adverse effect on the Company's
results of operations and financial performance. In addition, interruptions or
disruptions in systems operations could adversely affect the financial results
of particular locations. Finally, while the Company believes that its operating
and technology systems will be adequate for its current needs, such systems will
require modification, improvement or replacement as the Company expands or as
new technologies make the Company's systems obsolete. Such modifications,
improvements or replacements may require substantial expenditures to design and
implement and may require interruptions in operations during periods of
implementation, any of which could have a material adverse effect on the
Company's results of operations and financial performance.
SUBSTANTIAL COMPETITION
The Company operates in a highly competitive environment. In the markets in
which the Company operates, the Company competes with a large number of smaller,
independent companies, many of which are well-established in their markets. In
addition, in the contract stationer market, the Company competes with five large
office products companies, each of which has significant financial resources.
Several of the Company's large competitors operate in many of the Company's
geographic and product markets, and other competitors may choose to enter the
Company's geographic and product markets in the future. In addition, as a result
of this competition, the Company may lose customers or have difficulty acquiring
new customers. As a result of competitive pressures on the pricing of products,
the Company's revenues and/or margins may decline.
INCREASES IN PRICES OF PAPER AND COFFEE
The prices of paper and coffee fluctuate. Although the Company believes
that, to date, it generally has been able to increase its prices to its
customers to reflect increases in paper and coffee costs, it may not be able to
do so in the future. In addition, timing differences between increases in paper
and coffee prices paid by the Company and the implementation of price increases
to the Company's customers may have an adverse effect on the Company's operating
margins.
CONSIDERATION FOR OPERATING COMPANIES EXCEEDS ASSET VALUE
Valuations of the Company's acquisitions have not been established by
independent appraisals, but have been determined, in each case, other than with
respect to one of the founding companies, through arm's-length negotiations
between the Company and representatives of such companies. The consideration for
each such company has been based primarily on the value of such company as a
going concern and not on the value of the acquired assets. Valuations of these
companies determined
12
<PAGE>
solely by appraisals of the acquired assets would have been less than the
consideration paid (or to be paid) for the companies. No assurance can be given
that the future performance of such companies will be commensurate with the
consideration paid. Moreover, the Company has incurred and expects to continue
to incur significant amortization charges resulting from consideration paid in
excess of the book value of the assets of the companies acquired in business
combinations accounted for under the purchase method of accounting.
EFFECT OF QUARTERLY FLUCTUATIONS IN OPERATING RESULTS ON PRICE OF COMMON STOCK
The Company's business is subject to seasonal influences. The Company's
historical sales and profitability in its core office products business have
been lower in the first two quarters of its fiscal year, primarily due to the
lower level of business activity in North America during the summer months. The
seasonality of the core office products business, however, is expected to be
impacted by the seasonality of its other operations, which have been expanding
through acquisitions. For example, the sales and profitability of the Company's
school supplies and school furniture business have been higher during the
Company's first and second quarters and significantly lower in its third and
fourth quarters, and the sales and profitability of the Company's operations in
New Zealand and Australia have generally been higher in the Company's third
quarter. As the Company's mix of businesses evolves through future acquisitions,
these seasonal fluctuations may continue to change. In addition, quarterly
results also may be materially affected by the timing of acquisitions, the
timing and magnitude of costs related to such acquisitions, variations in the
prices paid by the Company for the products it sells, the mix of products sold
and general economic conditions. Therefore, results for any quarter are not
necessarily indicative of the results that the Company may achieve for any
subsequent fiscal quarter or for a full fiscal year. Fluctuations caused by
variations in quarterly operating results may adversely affect the market price
of the Common Stock.
NEED FOR ADDITIONAL FINANCING TO CONTINUE ACQUISITION STRATEGY
The Company has financed most acquisitions, and intends to finance future
acquisitions in the United States, by using cash and shares of Common Stock. The
Company filed a shelf registration statement with the Commission relating to the
offering of 18,565,000 shares of Common Stock to be used as consideration for
acquisitions by the Company, of which approximately 8,900,000 shares will remain
available assuming consummation of the Pending Acquisitions on their original
terms. In addition, the Company has sold debt and equity securities to raise
cash proceeds for acquisitions. In May and June 1996, the Company completed the
sales of $230 million in aggregate principal amount of Notes. The proceeds from
the sale of the Notes have been used for general corporate purposes, including
to pay the cash consideration ($220 million) for the acquisition of Whitcoulls.
The Company expects that future acquisitions outside the United States may be
for cash consideration. See "Recent Developments."
Given the pace of the Company's acquisitions, the Company will need
additional debt or equity financing in order to continue its acquisition
program. There can be no assurance that the Company will be able to obtain such
financing if and when it is needed or that any such financing will be available
on terms the Company deems acceptable. In August 1996, the Company received a
commitment letter from a bank, subject to the satisfaction of a number of
conditions, including execution of a definitive credit agreement and related
documentation, for the $500 million Credit Facility. The amount available to be
borrowed under the Credit Facility is expected to vary from time to time
depending on the level of, on a pro forma basis reflecting consummated
acquisitions, the Company's consolidated earnings before interest, taxes,
depreciation and amortization ("EBITDA") and the Company's total indebtedness
and related interest expense. There can be no assurance that the Credit Facility
ultimately will be obtained. If the Credit Facility is not obtained or if the
Company cannot obtain other debt or equity financing to pay the cash
consideration for acquisitions, or if potential acquisition candidates are
unwilling to accept the Common Stock as part of the consideration for the sale
of their businesses because the Common Stock does not maintain sufficient value
or for other reasons, the Company may be unable to continue the current pace of
its aggressive acquisition program, which could have a material adverse impact
on the Company.
13
<PAGE>
RELIANCE ON KEY PERSONNEL
The Company's operations are dependent on the continued efforts of Jonathan
J. Ledecky, its Chairman of the Board and Chief Executive Officer, Timothy J.
Flynn, its President and Chief Operating Officer, its other executive officers
and the senior management of its subsidiaries. Furthermore, the Company will
likely be dependent on the senior management of companies that may be acquired
in the future. If any of these people become unable to continue in their present
roles, or if the Company is unable to attract and retain other skilled
employees, the Company's business would be adversely affected. The Company
currently does not intend to obtain key man life insurance covering any of its
executive officers or other members of senior management.
CONTROL BY MANAGEMENT AND STOCKHOLDERS
As of August 8, 1996, officers and directors of the Company and its
subsidiaries beneficially own approximately 30.4% of the outstanding shares of
Common Stock. Assuming consummation of all of the Pending Acquisitions, the
officers and directors of the Company and its subsidiaries will beneficially own
26.3 % of the outstanding shares of Common Stock. These stockholders acting
together may be able to elect a sufficient number of directors to control the
Board of Directors and to approve or disapprove any matter submitted to a vote
of stockholders.
RISKS RELATED TO UNIONIZED EMPLOYEES
A small number of the Company's employees are members of labor unions. If
unionized employees were to engage in a strike or other work stoppage, or if
other employees were to become unionized, the Company could experience a
disruption of operations or higher labor costs.
POTENTIAL EFFECT OF SHARES ISSUED IN ACQUISITIONS ON PRICE OF COMMON STOCK
As of August 8, 1996, there were 38,634,355 shares of Common Stock of the
Company outstanding, of which approximately 4,619,054 shares are subject to
contractual restrictions on the transfer thereof (other than restrictions
relating to shares issued in transactions accounted for under the
pooling-of-interests method of accounting, described below). These contractual
restrictions expire at various times, generally up to two years from the date of
issuance of the shares. The contractual restrictions on 2,321,800 shares will
expire at various dates up to February 23, 1997.
The Company has an aggressive acquisition program under which it
periodically makes, and expects to continue to make, acquisitions that are
accounted for under the pooling-of-interests method of accounting. Under the
pooling-of-interests method of accounting, the affiliates of acquired companies
must be free to sell or otherwise transfer shares of the Common Stock received
in the acquisition, subject to their compliance with federal securities laws, as
soon as the Company releases results of operations that reflect the combined
operations of the Company and the acquired company for a minimum of 30 days. For
example, the Company has issued, and expects to issue, approximately 4,864,811
million shares of Common Stock in connection with acquisitions that were
recently completed or are Pending Acquisitions expected to be completed in the
near future and that were or will be accounted for under the
pooling-of-interests method of accounting. Of such shares, approximately 300,000
shares and 4,500,000 shares will become freely transferable at the time the
Company announces publicly its results of operations for its first and second
quarter of fiscal 1997, respectively, subject to certain volume and other
restrictions of Rule 145(d) of the Securities Act applicable to affiliates of
the acquired companies. If acquisitions (in addition to the Pending
Acquisitions) that are accounted for under the pooling-of-interests method of
accounting become consummated prior to September 27, 1996, additional shares of
Common Stock will become freely tradeable (subject to Rule 145(d)) at the time
the Company announces publicly its results of operations for the second quarter
of fiscal 1997. If a large number of shares are sold by such stockholders in the
market as soon as their shares became freely transferable, the price of the
Common Stock could be adversely affected.
14
<PAGE>
ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER PROVISIONS
The Board of Directors of the Company is empowered to issue preferred stock
without stockholder action. The existence of this "blank-check" preferred stock
could render more difficult or discourage an attempt to obtain control of the
Company by means of a tender offer, merger, proxy contest or otherwise.
SUBORDINATION OF NOTES AND ABSENCE OF FINANCIAL COVENANTS
The indebtedness evidenced by the Offered Notes is subordinate to the prior
payment in full of all Senior Indebtedness (as defined herein). On a pro forma
basis as of April 30, 1996 reflecting various acquisitions, issuances of
securities and borrowings incurred to refinance existing indebtedness, the
Company had approximately $190.9 million of Senior Indebtedness and no
indebtedness of its subsidiaries that is not Senior Indebtedness. The Indenture
does not limit the amount of future indebtedness, including Senior Indebtedness,
which the Company or any of its subsidiaries can create, incur, assume or
guarantee. Upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization, the payment of the principal and
interest on the Offered Notes is subordinated to the extent provided in the
Indenture to the prior payment in full of all Senior Indebtedness. The Company
also may not make any payment upon or in respect of the Offered Notes (i) if a
default in the payment of the principal of, premium, if any, interest or other
payment due on Senior Indebtedness occurs and is continuing beyond any
applicable period of grace or (ii) for 180 days if any other default occurs and
is continuing with respect to Designated Senior Indebtedness (as defined herein)
that permits holders of the Designated Senior Indebtedness as to which such
default relates to accelerate its maturity and the Trustee (as defined herein)
and the Company receive a notice of such default from a holder of at least $5
million in outstanding principal amount of Designated Senior Indebtedness. By
reason of the subordination, in the event of the Company's liquidation or
dissolution, holders of Senior Indebtedness may receive more, ratably, and
holders of the Offered Notes may receive less, ratably, than the other creditors
of the Company. In addition, the Offered Notes are obligations exclusively of
the Company and not of any of its subsidiaries. The Company's cash flow and
ability to service debt, including the Offered Notes, may be dependent upon the
earnings of its subsidiaries and the distribution of those earnings to, or upon
the payment of royalties, license fees, loans or other funds by those
subsidiaries to, the Company. The subsidiaries are separate and distinct legal
entities and have no obligation, contingent or otherwise, to pay any amounts due
pursuant to the Offered Notes or to make any funds available therefor, whether
by dividends, loans or other payments. In addition, the payment of dividends and
the making of loans and advances to the Company by its subsidiaries may be
subject to statutory, contractual or other restrictions and are dependent upon
the earnings of those subsidiaries. See "Description of Notes -- Subordination."
LIMITATIONS ON REPURCHASE OF NOTES UPON A DESIGNATED EVENT
Although the Indenture provides each holder of Offered Notes with certain
rights, at the holder's option, to require the Company to repurchase all or a
portion of such holder's Offered Notes upon the occurrence of a Designated Event
(as defined herein), the Company may not be able to repurchase such Offered
Notes. If a Designated Event were to occur, the Company's repurchase of Offered
Notes would be prohibited by the Company's current line of credit, is expected
to be prohibited under the terms of the proposed Credit Facility, and may be
prohibited or limited by, or create an event of default under, the terms of
agreements relating to borrowings which the Company may enter into from time to
time, including agreements relating to Senior Indebtedness. In addition, there
can be no assurance that the Company would have sufficient funds to pay the
repurchase price for Offered Notes tendered by the holders thereof. Failure of
the Company to repurchase Offered Notes at the option of the holder upon a
Designated Event would result in an Event of Default with respect to the Offered
Notes. No Offered Notes may be redeemed at the option of holders upon a
Designated Event if there has occurred and is continuing an Event of Default
(other than a default in payment of the repurchase price with respect to such
Offered Notes on the repurchase date). See "Description of the Notes --
Repurchase at Option of Holders Upon a Designated Event."
15
<PAGE>
ABSENCE OF EXISTING MARKET FOR NOTES
The Notes are listed on the Luxembourg Stock Exchange and, prior to their
resale pursuant to this Prospectus, the Offered Notes were eligible for trading
on the PORTAL Market. The Offered Notes sold pursuant to this Prospectus will no
longer be eligible for trading on the PORTAL Market. There can be no assurance
that an active trading market for the Offered Notes will develop or, if such a
market develops, that the market will be liquid. The Managers have advised the
Company that they currently intend to make a market in the Offered Notes, but
they are not obligated to do so and may discontinue such market making at any
time. There can be no assurance that an active market for the Offered Notes will
develop and continue upon completion of this Offering or that the market price
of the Offered Notes will not decline. Various factors and events such as
increased competition, quarter-to-quarter variations in financial results,
changes in prevailing interest rates, changes in perceptions of the Company's
creditworthiness, or a decline in the market price of the Common Stock could
cause the market price of the Offered Notes to fluctuate significantly.
PRICE RANGE OF COMMON STOCK
The Common Stock has traded on the Nasdaq National Market since February 15,
1995. On August 14, 1996, the last sale price of the Common Stock was $34.00 per
share. On August 8, 1996, there were approximately 385 shareholders of record of
the Company's Common Stock. The following table sets forth the range of high and
low sale prices for the Common Stock, as reported on the Nasdaq National Market,
for the period from February 15, 1995, the date of the Company's initial public
offering, through August 14, 1996.
<TABLE>
<CAPTION>
HIGH LOW
--------- ------------
<S> <C> <C>
FISCAL YEAR 1995
Fourth fiscal quarter.............................................. $ 15.50 $ 10.00(1)
FISCAL YEAR 1996
First fiscal quarter............................................... $ 15.875 $ 10.50
Second fiscal quarter.............................................. $ 18.125 $ 13.50
Third fiscal quarter............................................... $ 26.375 $ 16.25
Fourth fiscal quarter.............................................. $ 40.00 $ 22.00
FISCAL YEAR 1997
First fiscal quarter............................................... $ 45.50 $ 24.50
Second fiscal quarter through August 14, 1996...................... $ 35.50 $ 27.50
</TABLE>
- ------------------------
(1) Represents the initial public offering price.
DIVIDEND POLICY
The Company does not anticipate paying any cash dividends on its shares of
Common Stock in the foreseeable future, because it intends to retain its
earnings, if any, to finance the expansion of its business and for general
corporate purposes. Any payment of future dividends will be at the discretion of
the Board of Directors and will depend upon, among other things, the Company's
earnings, financial condition, capital requirements, level of indebtedness,
contractual restrictions with respect to the payment of dividends and other
factors that the Company's Board of Directors deems relevant. The Company
anticipates that the proposed Credit Facility, if obtained, will limit its
ability to pay dividends.
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<PAGE>
DESCRIPTION OF NOTES
The Notes, including the Offered Notes, were issued under an indenture dated
as of May 22, 1996 (the "Indenture"), between the Company and The Chase
Manhattan Bank, N.A., as trustee (the "Trustee"). The terms of the Notes include
those stated in the Indenture and those made a part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (the "TIA"), as in
effect on the date of the Indenture. The following is a summary of important
terms of the Notes, including the Offered Notes (except as otherwise provided),
and does not purport to be complete. Reference should be made to all provisions
of the Indenture, including the definitions therein of certain terms and all
terms made a part of the Indenture by reference to the TIA, a copy of which is
filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal
year ended April 30, 1996. As used in this "Description of Notes," the "Company"
refers only to U.S. Office Products Company and does not, unless the context
otherwise indicates, include any of its subsidiaries.
GENERAL
In May and June 1996, the Company issued an aggregate principal amount of
$230 million of 5 1/2% Convertible Subordinated Notes due 2003 pursuant to
exemptions from the Securities Act, including Regulation S and, with respect to
the $86.25 million in principal amount of Offered Notes, pursuant to available
exemptions under the Securities Act.
The Notes are general unsecured obligations of the Company subordinate in
right of payment to certain other obligations of the Company as described under
"-- Subordination," and convertible into Common Stock as described under "--
Conversion." The Notes were issued only in denominations of $1,000, $10,000 or
any integral multiple thereof and will mature on May 15, 2003, unless earlier
redeemed at the option of the Company or repurchased by the Company at the
option of the holder upon a Designated Event (as defined herein).
The Notes bear interest from May 22, 1996 at the annual rate of 5 1/2%,
payable semi-annually on May 15 and November 15, commencing on November 15,
1996, to holders at the close of business on the preceding April 30 and October
31, respectively (other than with respect to a Note or portion thereof called
for redemption on a redemption date, or repurchased in connection with a
Designated Event on a repurchase date, at any time during the period from a
record date, but excluding the next succeeding interest payment date in which
case accrued interest shall be payable (unless such Note or portion thereof is
converted) to the holder of the Note or portion thereof redeemed or
repurchased). Interest is computed on the basis of a 360-day year comprised of
twelve 30-day months.
No service charge will be made for any registration or transfer or exchange
of Notes, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. The Company is
not required to register the transfer of or exchange (i) any Note for a period
of 15 days next preceding any selection of Notes to be redeemed, (ii) any Note
or portion thereof selected for redemption, (iii) any Note or portion thereof
surrendered for conversion or (iv) any Note or portion thereof surrendered for
repurchase in connection with a Designated Event.
The Indenture does not contain any restrictions on the payment of dividends
or the repurchase of securities of the Company or any financial covenants. The
Indenture contains no covenants or other provisions to afford protection to
holders of Notes in the event of a highly leveraged transaction or a change in
control of the Company except to the extent described under "-- Repurchase at
Option of Holders Upon a Designated Event" below.
EXCHANGE AND TRANSFER
At the option of the holder thereof and subject to the terms of the Notes
and of the Indenture, the Notes will be exchangeable for an equal aggregate
principal amount of Notes of different authorized denominations, in each case
without service charge (other than the cost of delivery) and upon payment of any
taxes and other governmental charges. The Notes (other than Notes issued
pursuant
17
<PAGE>
to Regulation S of the Secruities Act in bearer form ("Bearer Notes")) shall be
registered as provided in the Indenture. The registered holder of a Note will be
treated by the Company, the Trustee and their respective agents for all purposes
as the owner of such Note.
The transfer of the Notes (other than Bearer Notes) may be registered, and
the Notes may be presented in exchange for other Notes of different authorized
denominations, at the office of the Trustee in The City of New York, without
service charge (other than the cost of delivery) and upon payment of any taxes
or other governmental charges. The Notes may also be presented for purposes of
transfer (other than Bearer Notes) or such exchange at the offices of the paying
agents in London (which will initially be The Chase Manhattan Bank, N.A.) or the
transfer agent in Luxembourg (which will initially be Chase Manhattan Bank
Luxembourg, S.A.), or such other paying agents as may be specified in notices to
the holders of the Notes.
The Company will not be required in the event of a redemption in part, (i)
to register the transfer of the Notes for a period of 15 days immediately
preceding the date on which notice is given identifying the serial numbers of
the Notes called for such redemption; or (ii) to register the transfer of or
exchange any such Notes, or portion thereof, called for redemption.
CONVERSION
The holders of the Notes will be entitled at any time before the close of
business on the last trading day prior to the final maturity date of the Notes,
subject to prior redemption or repurchase, to convert any Notes or portions
thereof (in denominations of $1,000 or multiples thereof) into Common Stock of
the Company, at the conversion price of $47.40 per share, subject to adjustment
as described below. Except as described below, no adjustment will be made on
conversion of any Note for interest accrued thereon or for dividends on any
Common Stock issued. If Notes are converted after a record date for the payment
of interest and prior to the next succeeding interest payment date, such Notes,
other than Notes called for redemption during such period, must be accompanied
by funds equal to the interest payable on such succeeding interest payment date
on the principal amount so converted. The Company is not required to issue
fractional shares of Common Stock upon conversion of Notes and, in lieu thereof,
will pay a cash adjustment based upon the market price of the Common Stock
during the last 10 trading days prior to the date of conversion. In the case of
Notes called for redemption, conversion rights will expire at the close of
business on the trading day preceding the date fixed for redemption, unless the
Company defaults in payment of the redemption price in which case the conversion
right will terminate at the close of business on the date such default is cured.
In the event any holder exercises its repurchase right upon a Designated Event,
such holder's conversion right will terminate upon submission of written notice
of exercise of such repurchase right together with the Notes as to which such
right is being exercised. See "-- Repurchase at Option of Holders Upon a
Designated Event."
The right of conversion attaching to any Note may be exercised by the holder
by delivering the Note at the specified office of a conversion agent,
accompanied by a duly signed and completed notice of conversion, together with
any funds that may be required as described in the preceding paragraph. The
conversion date shall be the date on which the Note, the duly signed and
completed notice of conversion, and any funds that may be required as described
in the preceding paragraph shall have been so delivered. A holder delivering an
Note for conversion will not be required to pay any taxes or duties payable in
respect of the issue or delivery of Common Stock on conversion, but will be
required to pay any tax or duty which may be payable in respect of any transfer
involved in the issue or delivery of the Common Stock in a name other than the
holder of the Note. Certificates representing shares of Common Stock will not be
issued or delivered unless all taxes and duties, if any, payable by the holder
have been paid.
The initial conversion price of $47.40 per share of Common Stock is subject
to adjustment (under formulae set forth in the Indenture) in certain events,
including: (i) the issuance of Common Stock as a dividend or distribution on
Common Stock of the Company; (ii) certain subdivisions and combinations of the
Common Stock; (iii) the issuance to all holders of Common Stock of certain
rights or
18
<PAGE>
warrants to purchase Common Stock at less than the current market price of the
Common Stock; (iv) dividends or other distribution to all holders of Common
Stock of shares of capital stock of the Company (other than Common Stock) or
evidences of indebtedness of the Company, cash or other assets (including
securities, but excluding those rights, warrants, dividends and distributions
referred to in clauses (i) and (iii) above and dividends and distributions paid
exclusively in cash); (v) dividends or other distributions consisting
exclusively of cash (excluding any cash portion of distributions referred to in
clause (iv)) to all holders of Common Stock in an aggregate amount that,
combined together with (A) all other such all-cash distributions made within the
preceding 12 months in respect of which no adjustment has been made plus (B) any
cash and the fair market value of other consideration payable in respect of any
tender offers by the Company or any of its subsidiaries for Common Stock
concluded within the preceding 12 months in respect of which no adjustment has
been made, exceeds 10% of the Company's market capitalization (being the product
of the then current market price of the Common Stock times the number of shares
of Common Stock then outstanding) on the record date for such distribution; (vi)
the purchase of Common Stock pursuant to a tender offer made by the Company or
any of its subsidiaries which involves an aggregate consideration that, together
with (X) any cash and the fair market value of any other consideration payable
in any other tender offer by the Company or any of its subsidiaries for Common
Stock expiring within the 12 months preceding such tender offer in respect of
which no adjustment has been made plus (Y) the aggregate amount of any such
all-cash distributions referred to in clause (v) above to all holders of Common
Stock within the 12 months preceding the expiration of such tender offer in
respect of which no adjustments have been made, exceeds 10% of the Company's
market capitalization on the expiration of such tender offer; and (vii) payment
in respect of a tender offer or exchange offer by a person other than the
Company or any subsidiary of the Company in which, as of the closing of the
offer, the Board of Directors is not recommending rejection of the offer. The
Company is entitled, in lieu of making certain adjustments under clause (v)
above, to provide that, subject to satisfying certain conditions, upon
conversion of the Notes, the holders of the Notes will receive, in addition to
the Common Stock issuable upon conversion of such Notes, the amount of such
distribution referred to in clause (v). The adjustment referred to in clause
(vii) above will only be made if the tender offer or exchange offer is for an
amount which increases that person's ownership of Common Stock to more than 25%
of the total shares of Common Stock outstanding and if the cash and value of any
other consideration included in such payment per share of Common Stock exceeds
the current market price per share of Common Stock on the trading day next
succeeding the last date on which tenders or exchanges may be made pursuant to
such tender or exchange. The adjustment referred to in clause (vii) above will
not be made, however, if, as of the closing of the offer, the offering documents
with respect to such offer disclose a plan or an intention to cause the Company
to engage in any transaction of the type described in "Consolidation, Merger or
Assumption."
No adjustment in the conversion price will be required unless such
adjustment would require a change of at least 1% in the conversion price then in
effect; PROVIDED that any adjustment that would otherwise be required to be made
shall be carried forward and taken into account in any subsequent adjustment.
Except as stated above, the conversion price will not be adjusted for the
issuance of Common Stock or any securities convertible into or exchangeable for
Common Stock or carrying the right to purchase any of the foregoing.
Subject to the rights of holders of Notes described below under "--
Repurchase at Option of Holders Upon a Designated Event," in the case of (i) any
reclassification or change of the outstanding Common Stock (other than changes
in par value or resulting from a subdivision or combination of Common Stock) or
(ii) a consolidation, merger or combination involving the Company or a sale or
conveyance to another corporation of the property and assets of the Company as
an entirety or substantially as an entirety, in each case as a result of which
holders of Common Stock shall be entitled to receive stock, other securities,
other property or assets (including cash) with respect to or in exchange for
such Common Stock, the holders of the Notes then outstanding will be entitled
thereafter to convert such Notes into the kind and amount of shares of stock,
other securities or other property or assets which they would have owned or been
entitled to receive upon such reclassification,
19
<PAGE>
change, consolidation, merger, combination, sale or conveyance had such Notes
been converted into Common Stock immediately prior to such reclassification,
change, consolidation, merger, combination, sale or conveyance (assuming, in a
case in which the Company's stockholders may exercise rights of election, that a
holder of Notes would not have exercised any rights of election as to the stock,
other securities or other property or assets receivable in connection therewith
and received per share the kind and amount received per share by a plurality of
non-electing shares). If the provisions of this paragraph apply to any
reclassification, change of Common Stock, consolidation, merger, combination,
sale or conveyance, then the adjustments to the conversion price described above
will not be made with respect to such reclassification, change of Common Stock,
consolidation, merger, combination, sale or conveyance.
In the event of a taxable distribution to holders of Common Stock (or other
transaction) which results in any adjustment of the conversion price, the
holders of Notes may, in certain circumstances, be deemed to have received a
distribution subject to income tax as a dividend. In certain other
circumstances, the absence of such an adjustment may result in a taxable
dividend to the holders of Common Stock. See "Certain Federal Tax
Considerations."
The Company from time to time may, to the extent permitted by law, reduce
the conversion price of the Notes by any amount for any period of at least 20
days, in which case the Company shall give at least 15 days' notice of such
reduction, if the Board of Directors has made a determination that such a
decrease would be in the best interests of the Company, which determination
shall be conclusive. The Company also may, at its option, make such reductions
in the conversion price, in addition to those set forth above, as the Board of
Directors deems advisable to avoid or diminish any income tax to holders of
Common Stock or rights to purchase Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes. See "Certain Federal Tax Considerations."
OPTIONAL REDEMPTION BY THE COMPANY
The Notes are not redeemable at the option of the Company prior to May 22,
1998. At any time on or after that date the Notes may be redeemed in full at the
Company's option upon notice of a redemption given once not less than 45 and not
more than 60 days prior to such redemption or in part upon notice of a
redemption given twice, the first such notice given not less than 45 and not
more than 60 days prior to such redemption and the second such notice to be
given not less than 30 and not more than 45 days prior to such redemption, at
the following prices (expressed in percentages of the principal amount),
together with accrued interest to, but excluding, the date fixed for redemption;
PROVIDED, HOWEVER, that the Company may not redeem the Notes prior to May 15,
1999 unless the closing price of the Common Stock on the principal stock
exchange or market on which the Common Stock is then quoted or admitted to
trading equals or exceeds 150% of the conversion price for at least 20 trading
days within a period of 30 consecutive trading days ending on the fifth trading
day prior to the date the notice of redemption is first mailed to the holders of
the Notes, provided further, that if a redemption date is an interest payment
date, the semi-annual payment of interest becoming due on such date shall be
payable to the holder of record as of the relevant record date.
If redeemed during the period beginning May 22, 1998 and ending May 14,
1999, the redemption price shall be 103.929%. Thereafter, for the 12-month
period beginning May 15:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- ----------------------------------------------------------------------- -----------
<S> <C>
1999................................................................... 103.143%
2000................................................................... 102.357%
2001................................................................... 101.571%
2002................................................................... 100.786%
</TABLE>
and 100% at May 15, 2003.
20
<PAGE>
If fewer than all the Notes are to be redeemed, the Trustee will select the
Notes to be redeemed in principal amounts of $1,000 or multiples thereof by lot
or, in its sole discretion, on a pro rata basis. If any Note is to be redeemed
in part only, a new Note or Notes in principal amount equal to the unredeemed
principal portion thereof will be issued. If a portion of a holder's Notes is
selected for partial redemption and such holder converts a portion of such
Notes, such converted portion shall be deemed to be taken from the portion
selected for redemption.
No sinking fund is provided for the Notes.
MANDATORY REDEMPTION OF CERTAIN REGULATION S NOTES. Except as set forth in
the next succeeding paragraph, the Company will be required to redeem the Bearer
Notes, in whole but not in part, at 100% of their principal amount, together
with accrued and unpaid interest to the date fixed for redemption, less
applicable withholding taxes, if any, plus any applicable Additional Amounts (as
defined herein) payable in the event the Company determines that payment of
principal, premium, if any, or interest on Bearer Notes or related coupons
outside the United States by the Company or any paying agent would, under any
present or future laws or regulations of the United States, be subject to any
certification, identification or information reporting requirement with regard
to the nationality, residence or identity of the beneficial owner of such Bearer
Notes or coupon who is a United States Alien Holder (as defined herein) (other
than such a requirement (a) that would not be applicable to a payment made by
the Company or any one of its paying agents (i) directly to the beneficial owner
or (ii) to any custodian, nominee or other agent of the beneficial owner, or (b)
that can be satisfied by the custodian, nominee or other agent certifying that
the beneficial owner is a United States Alien Holder, provided that in each case
referred to in clauses (a)(ii) and (b), payment by such custodian, nominee or
other agent of such beneficial owner is not otherwise subject to any such
requirement). The Company shall not so redeem the Bearer Notes, however, if the
Company, based on a written opinion of independent counsel, determines, not less
than 30 days prior to the date fixed for redemption, that no such payment would
be subject to any such requirement, in which case the Company shall notify the
Trustee, which shall give prompt notice of that determination, and any earlier
redemption notice shall thereupon be revoked and of no further effect.
Notwithstanding the immediately preceding paragraph, if and so long as the
certification, identification or information reporting requirement referred to
in the preceding paragraph would be fully satisfied by payment of United States
withholding, backup withholding or similar taxes, the Company may elect, prior
to publication of the notice of redemption and in lieu of redemption of the
Bearer Notes, to pay as Additional Amounts such amounts as are necessary in
order that every net payment made outside the United States by the Company or a
paying agent of the principal of, premium, if any, and interest on the Bearer
Notes or related coupon to a United States Alien Holder (without regard to such
certification, identification or information reporting requirement), after
deduction for United States withholding, backup withholding or similar taxes
(other than a tax (a) that would not be applicable in the circumstances referred
to in the parenthetical clause of the first sentence of the immediately
preceding paragraph or (b) imposed as a result of the presentation of such
Bearer Note or coupon for payment more than 10 days after the date on which such
payment becomes due and payable or on which payment thereof is duly provided
for, whichever occurs later), will not be less than the amount provided in such
Bearer Note or the related coupon to be then due and payable. If the Company
elects to pay such Additional Amounts and as long as it is obligated to pay such
Additional Amounts, the Company may subsequently redeem the Bearer Note, at any
time, in whole but not in part, at 100% of their principal amount, plus accrued
interest to the date fixed for redemption and Additional Amounts, if any.
REPURCHASE AT OPTION OF HOLDERS UPON A DESIGNATED EVENT
The Indenture provides that if a Designated Event (as defined herein)
occurs, each holder of Notes shall have the right, at the holder's option, to
require the Company to repurchase all of such holder's Notes, or any portion
thereof that is a multiple of $1,000, on the date (the "repurchase date") that
is 40 days after the date of the Company Notice (as defined herein), for cash at
a price equal to
21
<PAGE>
100% of the principal amount of the Notes, together with accrued interest, if
any (the "repurchase price"), PROVIDED, HOWEVER, that if a repurchase date is an
interest payment date, the semi-annual payment of interest becoming due on such
date shall be payable to the holder of record as of the relevant record date.
Within 15 days after the occurrence of a Designated Event, the Company is
obligated to mail to all holders of record of the Notes a notice (the "Company
Notice") of the occurrence of such Designated Event and of the repurchase right
arising as a result thereof. The Company must deliver a copy of the Company
Notice to the Trustee and cause a copy or a summary of such notice to be
published in a newspaper of general circulation in The City of New York. To
exercise the repurchase right, a holder of such Notes must deliver, on or before
the 30th day after the date of the Company Notice, irrevocable written notice to
the Company (or an agent designated by the Company for such purpose) and the
Trustee of the holder's exercise of such right, together with the Notes with
respect to which the right is being exercised, duly endorsed for transfer. The
submission of such notice together with such Notes pursuant to the exercise of a
repurchase right will be irrevocable on the part of the holder (unless the
Company fails to repurchase the Notes on the repurchase date) and the right to
convert such Notes will expire upon such submission.
"Designated Event" means a Change in Control (as defined herein) or a
Termination of Trading (as defined herein).
"Change in Control" means an event or series of events as a result of which
(i) any "person" or "group" (as such terms are used in Sections 13(d)(3) and
14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act) of shares representing more than
50% of the combined voting power of the then outstanding securities entitled to
vote generally in elections of directors of the Company ("Voting Stock"); (ii)
approval by stockholders of the Company of any plan or proposal for the
liquidation, dissolution or winding up of the Company; (iii) the Company
consolidates with or merges into any other corporation, or conveys, transfers or
leases all or substantially all of its assets to any person, or any other
corporation merges into the Company, and, in the case of any such transaction,
the outstanding common stock of the Company is changed or exchanged as a result,
unless the stockholders of the Company immediately before such transaction own,
directly or indirectly immediately following such transaction, at least 51% of
the combined voting power of the outstanding voting securities of the
corporation resulting from such transaction in substantially the same proportion
as their ownership of the Voting Stock immediately before such transaction; or
(iv) any time Continuing Directors (as defined herein) do not constitute a
majority of the Board of Directors of the Company (or, if applicable, a
successor corporation to the Company); PROVIDED that a Change in Control shall
not be deemed to have occurred if either (x) the last sale price of the Common
Stock for any five trading days during the 10 trading days immediately preceding
the Change in Control is at least equal to 105% of the conversion price in
effect on such day or (y) at least 90% of the consideration (excluding cash
payments for fractional shares) in the transaction or transactions constituting
the Change in Control consists of common stock or securities convertible into
common stock that are, or upon issuance will be, traded on a United States
national securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States.
A Change in Control shall not be deemed to have occurred if Jonathan J.
Ledecky, the Chairman of the Board and Chief Executive Officer of the Company,
or a group that includes Jonathan J. Ledecky (a "Permitted Investor") becomes
the beneficial owner of more than 50% of the voting stock, PROVIDED that, if as
a consequence of any transaction involving a Permitted Investor, or in which a
Permitted Investor has an interest, less than 30% of the shares of Common Stock
outstanding upon the issuance of the Offered Notes are neither listed for
trading upon a national securities exchange nor approved for trading on an
established over-the-counter trading market in the United States, then a Change
in Control shall be deemed to have occurred upon the consummation of such
transaction.
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<PAGE>
"Continuing Director" means at any date a member of the Company's Board of
Directors (i) who was a member of such board on May 22, 1996 or (ii) who was
nominated or elected by at least a majority of the directors who were Continuing
Directors at the time of such nomination or election or whose election to the
Company's Board of Directors was recommended or endorsed by at least a majority
of the directors who were Continuing Directors at the time of such nomination or
election. (Under this definition, if the current Board of Directors of the
Company were to approve a new director or directors and then resign, no Change
in Control would occur even though the current Board of Directors would
thereafter cease to be in office.).
A "Termination of Trading" shall have occurred if the Common Stock of the
Company (or other common stock into which the Notes are then convertible) is
neither listed for trading on a United States national securities exchange nor
approved for trading on an established automated over-the-counter trading market
in the United States.
No quantitative or other established meaning has been given to the phrase
"all or substantially all" (which appears in the definition of Change in
Control) by courts which have interpreted this phrase in various contexts. In
interpreting this phrase, courts, among other things, make a subjective
determination as to the portion of assets conveyed, considering such factors as
the value of assets conveyed, the proportion of an entity's income derived from
the assets conveyed and the significance of those assets to the ongoing business
of the entity. To the extent the meaning of such phrase is uncertain,
uncertainty will exist as to whether or not a Change in Control may have
occurred (and, accordingly, as to whether or not the holders of Notes will have
the right to require the Company to repurchase their Notes).
In the event of a Designated Event, any repurchase of the Notes could be
prevented by the subordination provisions of the Indenture. See "--
Subordination" below. The Company's repurchase of Notes as a result of the
occurrence of a Designated Event is currently prohibited, absent a waiver, under
the terms of the Company's current line of credit and is expected to be
prohibited under the Credit Facility. As a result, the Company will be precluded
from making payment of the repurchase price unless such provisions are waived by
the lenders or unless the credit facility has been repaid in full and
terminated. Repurchase may also be prohibited or limited by the subordination
provisions applicable to the Notes or be prohibited or limited by, or create an
event of default under, the terms of other agreements relating to borrowings
which constitute Senior Indebtedness which may be entered into, amended,
supplemented or replaced from time to time. Failure of the Company to repurchase
Notes at the option of the holder upon a Designated Event would result in an
Event of Default with respect to the Offered Notes whether or not such
repurchase is prohibited by the subordination provisions or the terms of Senior
Indebtedness. No Notes may be repurchased at the option of holders upon a
Designated Event if there has occurred and is continuing an Event of Default
described under "Events of Default and Remedies" below (other than a default in
the payment of the repurchase price with respect to such Notes on the repurchase
date).
Certain leveraged transactions sponsored by the Company's management or an
affiliate of the Company could constitute a Change in Control that would give
rise to the repurchase right. The Indenture does not provide the Company's Board
of Directors with the right to limit or waive the repurchase right in the event
of any such leveraged transaction. Conversely, the Company could, in the future,
enter into certain transactions, including certain recapitalizations of the
Company, that would not constitute a Change in Control but that would increase
the amount of Senior Indebtedness (or other indebtedness) outstanding at such
time. There are no restrictions in the Indenture or the Notes on the creation of
additional Senior Indebtedness (or any other indebtedness) of the Company or any
of its subsidiaries and the incurrence of significant amounts of additional
indebtedness could have an adverse impact on the Company's ability to service
its debt, including the Notes. The Notes are subordinate in right of payment to
all existing and future Senior Indebtedness as described under "Subordination"
below.
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<PAGE>
The right to require the Company to repurchase Notes as a result of a
Designated Event could have the effect of delaying, deferring or preventing a
Change in Control or other attempts to acquire control of the Company unless
arrangements have been made to enable the Company to repurchase all of the Notes
at the repurchase date. Consequently, such right may render more difficult or
discourage a merger, consolidation or tender offer (even if such transaction is
supported by the Company's Board of Directors or is favorable to the
stockholders), the assumption of control by a holder of a large block of the
Company's shares and the removal of incumbent management.
No modification of the Indenture regarding the provisions on repurchase at
the option of any holder of an Offered Note is permissible without the consent
of the holder of the Note so affected.
Rule 13e-4 under the Exchange Act requires, among other things, the
dissemination of certain information to security holders in the event of an
issuer tender offer and may apply in the event that the repurchase option
becomes available to holders of the Offered Notes. The Company will comply with
this rule to the extent applicable at that time.
SUBORDINATION
The indebtedness evidenced by the Notes is, to the extent provided in the
Indenture, subordinate to the prior payment in full of all Senior Indebtedness
(as defined herein). During the continuance beyond any applicable grace period
of any default in the payment of principal, premium, interest or any other
payment due on any Senior Indebtedness, no payment of principal of, or premium,
if any, or interest on the Notes (including, but not limited to, the redemption
price or repurchase price with respect to the Offered Notes) may be made by the
Company. In addition, upon any distribution of assets of the Company upon any
dissolution, winding up, liquidation or reorganization of the Company, the
payment of the principal of, or premium, if any, and interest on the Notes is to
be subordinated to the extent provided in the Indenture in right of payment to
the prior payment in full of all Senior Indebtedness. Moreover, in the event of
any acceleration of the Notes because of an Event of Default, the holders of any
Senior Indebtedness then outstanding would be entitled to payment in full of all
obligations in respect of such Senior Indebtedness before the holders of the
Notes are entitled to receive any payment or distribution in respect thereof.
The Company also may not make any payment upon or in respect of the Notes if
any default, other than a payment default, occurs and is continuing with respect
to Designated Senior Indebtedness (as defined herein) that permits holders of
the Designated Senior Indebtedness as to which such default related to
accelerate its maturity, and the Trustee and the Company receive a notice of
such default (a "Payment Blockage Notice") under its existing line of credit or
from a holder of at least $5 million in outstanding principal amount of
Designated Senior Indebtedness. Payments of the Notes may and shall be resumed
(a) in case of payment default, on the date on which such default is cured or
waived and (b) in case of nonpayment default, on the earlier of the date on
which such nonpayment default is cured or waived or 179 days after the date on
which the applicable Payment Blockage Notice is received. No new period of
payment blockage may be commenced pursuant to a Payment Blockage Notice unless
(i) 365 days have elapsed since the effectiveness of the immediately prior
Payment Blockage Notice and (ii) all scheduled payments of principal, premium,
if any, and interest on the Offered Notes that have become due have been paid in
cash or the Trustee or the Holders shall not have instituted proceedings to
enforce the holders' right to receive such payments. No nonpayment default that
existed or was continuing on the date of delivery of any Payment Blockage Notice
shall be, or shall be made, the basis for a subsequent Payment Blockage Notice.
By reason of the subordination, in the event of the Company's bankruptcy,
dissolution, liquidation or reorganization, holders of Senior Indebtedness may
receive more, ratably, and holders of the Notes may receive less, ratably, than
the other creditors of the Company. Such subordination will not prevent the
occurrence of an Event of Default under the Indenture.
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Subject to the qualifications described below, the term "Senior
Indebtedness" means the principal of, premium, if any, interest on, and any
other payment due pursuant to, any of the following, whether outstanding on the
date of the Indenture or thereafter incurred or created:
(a) All secured indebtedness of the Company for money borrowed
(including any indebtedness secured by a security interest, mortgage,
conditional sales contract or other lien on the assets of the Company which
is (i) given to secure all or part of the purchase price of property subject
thereto, whether given to the vendor of such property or to another, or (ii)
existing on property at the time of acquisition thereof);
(b) All secured indebtedness of the Company evidenced by notes,
debentures, bonds or other securities (including, but not limited to, those
which are convertible or exchangeable for securities of the Company);
(c) All secured indebtedness of the Company due and owing with respect
to letters of credit and bank guarantees (including, but not limited to,
reimbursement obligations with respect thereto);
(d) All secured indebtedness or other secured obligations of the Company
due and owing with respect to interest rate and currency swap agreements,
cap, floor and collar agreements, currency spot and forward contracts and
other similar agreements and arrangements;
(e) All secured indebtedness consisting of commitment or standby fees
due and payable to lending institutions with respect to credit facilities or
letters of credit available to the Company;
(f) All secured indebtedness of others of the kinds described in any of
the preceding clauses (a), (b), (c), (d) or (e) assumed by or guaranteed in
any manner by the Company or in effect guaranteed by the Company through an
agreement to purchase, contingent or otherwise; and
(g) All secured renewals, extensions, refunding, deferrals, amendments
or modifications of secured indebtedness of the kinds described in any of
the preceding clauses (a), (b), (c), (d), (e) or (f);
unless in the case of any particular indebtedness, obligation, renewal,
extension, refunding, amendment or modification the instrument or other document
creating or evidencing the same or the assumption or guarantee of the same
expressly provides that such indebtedness, obligation, renewal, extension,
refunding, amendment or modification is subordinate to, is PARI PASSU with, or
is not superior to, the Notes. Notwithstanding the foregoing, Senior
Indebtedness shall not include (i) any indebtedness of any kind of the Company
to any subsidiary of the Company, a majority of the voting stock of which is
owned, directly or indirectly, by the Company and (ii) indebtedness for trade
payables or constituting the deferred purchase price of assets or services
incurred in the ordinary course of business.
The term "Designated Senior Indebtedness" means the Company's existing line
of credit or any other Senior Indebtedness if the instrument creating or
evidencing the same or the assumption or guarantee thereof (or related
agreements or documents to which the Company is a party) expressly provides that
such indebtedness shall be "Designated Senior Indebtedness" for purposes of the
Indenture (provided that such instrument, agreement or other document may place
limitations and conditions on the rights of holders of such Senior Indebtedness
to exercise the rights of Designated Senior Indebtedness). If the proposed
Credit Facility is entered into by the Company, it is expected that it will be
considered Designated Senior Indebtedness.
In the event that, notwithstanding the foregoing, the Trustee or any holder
of Notes receives any payment or distribution of assets of the Company of any
kind in contravention of any of the terms of the Indenture, whether in cash,
property or securities, including, without limitation, by way of set-off or
otherwise, in respect of the Notes before all Senior Indebtedness is paid in
full, then such payment or distribution will be held by the recipient in trust
for the benefit of the holders of Senior Indebtedness of the Company, and will
be immediately paid over or delivered to the holders of Senior
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Indebtedness of the Company or their representative or representatives to the
extent necessary to make payment in full of all Senior Indebtedness of the
Company remaining unpaid, after giving effect to any concurrent payment or
distribution, or provision therefor, to or for the holders of Senior
Indebtedness of the Company.
The Notes are obligations exclusively of the Company. As all of the
Company's operations are conducted through subsidiaries, the cash flow and the
consequent ability to service debt, including the Notes, of the Company, is
dependent upon the earnings of its subsidiaries and the distribution of those
earnings to, or upon loans, royalties, license fees, or other payments of funds
by those subsidiaries to, the Company. The subsidiaries are separate and
distinct legal entities and have no obligation, contingent or otherwise, to pay
any amounts due pursuant to the Notes or to make any funds available therefor,
whether by dividends, loans or other payments. In addition, the payment of
dividends and the making of loans and advances to the Company by its
subsidiaries may be subject to statutory or contractual restrictions and are
dependent upon the earnings of those subsidiaries.
Any right of the Company to receive assets of any of its subsidiaries upon
their liquidation or reorganization (and the consequent right of the holders of
the Notes to participate in these assets) will be effectively subordinated to
the claims of that subsidiary's creditors (including trade creditors), except to
the extent that the Company is itself recognized as a creditor of such
subsidiary, in which case the claims of the Company would still be subordinate
to any security interests in the assets of such subsidiary and any indebtedness
of such subsidiary senior to that held by the Company.
The Company is obligated to pay reasonable compensation to the Trustee and
to indemnify the Trustee against any losses, liabilities or expenses incurred by
it in connection with its duties relating to the Notes. The Trustee's claims for
such payments will be senior to those of holders of the Notes in respect of all
funds collected or held by the Trustee.
EVENTS OF DEFAULT AND REMEDIES
An Event of Default is defined in the Indenture as being default in payment
of the principal of, or premium, if any, on the Notes whether or not such
payment is prohibited by the subordination provisions of the Indenture; default
for 30 days in payment of any installment of interest on the Notes whether or
not such payment is prohibited by the subordination provisions of the Indenture;
default in the payment of the repurchase price in respect of any Note on the
repurchase date therefor whether or not such payment is prohibited by the
subordination provisions of the Indenture; failure by the Company to comply with
any of its other agreements in the Notes or the Indenture upon the receipt by
the Company of notice of such default by the Trustee or by holders of not less
than 25% in aggregate principal amount of the Notes then outstanding and the
Company's failure to cure such default within 45 days after receipt by the
Company of such notice (which period may be extended for an additional 45 days
if the Company is contesting in good faith the existence of such default);
default by the Company under and acceleration of the maturity of, or failure to
pay at maturity, certain other indebtedness of the Company for money borrowed
aggregating in excess of $5 million and continuance of such default for 30 days
after notice; or certain events involving bankruptcy, insolvency or
reorganization of the Company or any Significant Subsidiary (as defined herein).
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of a default, give to the registered holders of the Notes notice of
all defaults known to it unless such defaults have been cured or waived before
the giving of such notice, but the Trustee shall be protected in withholding
such notice if it in good faith determines that the withholding of such notice
is in the best interest of such registered holders, except in the case of a
default in the payment of the principal of, or premium, if any, or interest on,
any of the Notes.
The Indenture provides that if any Event of Default shall have occurred and
be continuing, the Trustee or the holders of not less than 25% in principal
amount of the Notes then outstanding may declare the principal of and premium,
if any, and accrued interest on the Notes to be due and payable immediately, but
if the Company shall cure all defaults (except the nonpayment of interest on,
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premium, if any, and principal of any Notes which shall have become due by
acceleration) and certain other conditions are met, such declaration may be
canceled and past defaults may be waived by the holders of a majority in
principal amount of Notes then outstanding. If an Event of Default resulting
from certain events of bankruptcy, insolvency or reorganization were to occur,
all unpaid principal of, premium, if any, and accrued interest on the
outstanding Notes will become due and payable immediately without any
declaration or other act on the part of the Trustee or any holders of Notes,
subject to certain limitations.
The Indenture provides that the holders of a majority in principal amount of
the outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee, subject to certain limitations specified in the
Indenture. Before proceeding to exercise any right or power under the Indenture
at the direction of such holders, the Trustee shall be entitled to receive from
such holders reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in complying with any such direction.
The right of a holder to institute a proceeding with respect to the Indenture is
subject to certain conditions precedent, including the written notice by such
holder of an Event of Default and an offer to indemnify the Trustee, along with
the written request by the holders of not less than 25% in principal amount of
the outstanding Notes that such a proceeding be instituted, but the holder has
an absolute right to institute suit (i) for the enforcement of payment of the
principal of, and premium, if any, and interest on, such holder's Notes when due
and (ii) to enforce such holder's right to convert such Notes.
The holders of not less than a majority in principal amount of the
outstanding Notes may on behalf of the holders of all Notes waive any past
defaults, except (i) a default in payment of the principal of, or premium, if
any, or interest on, any Note when due, (ii) a failure by the Company to convert
any Notes into Common Stock or (iii) in respect of certain provisions of the
Indenture which cannot be modified or amended without the consent of the holders
of all Notes then outstanding.
The Company is required to furnish to the Trustee annually a statement of
certain officers of the Company stating whether or not to the best of their
knowledge the Company is in default in the performance and observation of
certain terms of the Indenture and, if they have knowledge that the Company is
in default, describing such default and its status.
PAYMENTS, PAYING AGENTS AND CONVERSION AGENTS
The principal of and premium on the Offered Notes will be made against
surrender of the Offered Notes at the corporate trust office of the Trustee in
The City of New York or, subject to any applicable laws and regulations, by
United States dollar check drawn on, or wire transfer to a United States dollar
account maintained by the holder with, a bank located in The City of New York.
Payments of any installment of interest on the Offered Notes will be made by a
United States dollar check drawn on a bank in The City of New York mailed to the
holder at such holder's registered address or (if arrangements satisfactory to
the Company and the Trustee are made) by wire transfer to a dollar account
maintained by the holder with a bank in The City of New York. Payment of such
interest on any Interest Payment Date will be made to the person in whose name
such Note is registered at the close of business on the Interest Record Date
prior to the relevant Interest Payment Date. Accrued interest payable on any
Offered Note that is redeemed will be payable against surrender of such Offered
Note in the manner described above with respect to payments of principal on
Offered Notes, except Offered Notes that are redeemed on a date after the close
of business on the Interest Record Date immediately preceding such Interest
Payment Date and on or before the Interest Payment Date, on which interest will
be paid to the holder of record on the Interest Record Date.
The Notes may be surrendered for conversion or exchange at the corporate
trust office of the Trustee in The City of New York, or, at the option of the
holder and subject to applicable laws and regulations, at the office of any of
the conversion agents.
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The Company has initially appointed the Trustee as paying agent and
conversion agent. These appointments may be terminated at any time and
additional or other paying and conversion agents may be appointed, PROVIDED that
until the Offered Notes have been delivered for cancellation, or monies
sufficient to pay the principal of and premium, if any, and interest on the
Notes have been made available for payment and either paid or returned to the
Company as provided in the Indenture, a paying, conversion and transfer agent
will be maintained in The City of New York for the payment of the principal of
and premium, if any, and interest on the Offered Notes only and for the
surrender of Notes for conversion.
All monies paid by the Company to a paying agent for the payment of
principal of, premium, if any, or interest on any Note that remain unclaimed at
the end of two years after such principal, premium or interest shall have become
due and payable will be repaid to the Company, and the holder of such Note or
any related coupon will thereafter look only to the Company for payment thereof.
PAYMENT OF ADDITIONAL AMOUNTS
The Company will pay to the holder of any Note or any related coupon who is
a United States Alien Holder (as defined herein) such additional amounts
("Additional Amounts") as may be necessary in order that every net payment of
the principal of, premium, if any, and interest on such Note, and any cash
payments made in lieu of issuing shares of Common Stock upon conversion of an
Offered Note, after withholding for or on account of any present or future tax,
assessment or governmental charge imposed upon or as a result of such payment by
the United States or any political subdivision or taxing authority thereof or
therein, will not be less than the amount provided for in such Note or in such
coupon to be then due and payable; PROVIDED, HOWEVER, that the foregoing
obligations to pay Additional Amounts shall not apply to any one or more of the
following:
(a) any tax, assessment or other governmental charge which would not
have been so imposed but for (i) the existence of any present or former
connection between such holder (or between a fiduciary, settlor,
beneficiary, member or stockholder of, or a person holding a power over,
such holder, if such holder is an estate, trust, partnership or corporation)
and the United States, including, without limitation, such holder (or such
fiduciary, settlor, beneficiary, member, stockholder or person holding a
power) being or having been a citizen or resident or treated as a resident
thereof or being or having been engaged in a trade business therein or being
or having been present therein or having or having had a permanent
establishment therein, (ii) such holder's present or former status as a
person holding company, foreign personal holding company, passive foreign
investment company, foreign private foundation or other foreign tax-exempt
entity, or controlled foreign corporation for United States federal income
tax purposes or a corporation which accumulates earnings to avoid United
States federal income tax, or (iii) such holder's status as a bank extending
credit pursuant to a loan agreement entered into in the ordinary course of
business;
(b) any tax, assessment or other governmental charge which would not
have been so imposed but for the presentation by the holder of such Note or
any related coupon for payment on a date more than 10 days after the date on
which such payment became due and payable or on the date on which payment
thereof is duly provided, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer or personal or
intangible property tax or any similar tax, assessment or other governmental
charge;
(d) any tax, assessment or other governmental charge which would not
have been imposed but for the failure to comply with certification,
information, documentation or other reporting requirements concerning the
nationality, residence, identity or present or former connection with the
United States of the holder or beneficial owner of such Note if such
compliance is required by statute, regulation or ruling of the United States
or any political subdivision or taxing authority thereof or therein as a
precondition to relief or exemption from such tax, assessment or other
governmental charge;
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(e) any tax, assessment or other governmental charge which is payable
otherwise than by deduction or withholding from payments of principal of and
premium, if any, or interest on such Note;
(f) any tax, assessment or other governmental charge imposed on interest
received by a person holding, actually or constructively, 10% or more of the
total combined voting power of all classes of stock of the Company entitled
to vote; or
(g) any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal of, or premium,
if any, or interest on any Note or interest on any coupon appertaining
thereto if such payment can be made without such withholding by any other
paying agent; nor will Additional Amounts be paid with respect to payment of
the principal of, premium, if any, or interest on any such Note (or cash in
lieu of issuance of shares of Common Stock upon conversion) to a person
other than the sole beneficial owner of such payment, or that is a
partnership or a fiduciary to the extent such beneficial owner, member of
such partnership or beneficiary or settlor with respect to such fiduciary
would not have been entitled to the Additional Amounts had such beneficial
owner, member, beneficiary or settlor been the holder of such Note or any
related coupon.
A "United States Alien Holder" means any holder of an Note that is not a
U.S. Holder. For the purposes of this discussion, a "U.S. Holder" means any
holder of an Note that is (a) a citizen or resident of the United States, (b) a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any state thereof or (c) an estate or trust the
income of which is subject to United States federal income taxation regardless
of its source.
CONSOLIDATION, MERGER OR ASSUMPTION
The Company may, without the consent of the holders of Notes, consolidate
with, merge into, or transfer all or substantially all of its properties to any
other corporation organized under the laws of the United States or any political
subdivision thereof or therein, PROVIDED that the successor corporation assumes
all obligations of the Company under the Indenture and the Notes and that
certain other conditions are met.
MODIFICATIONS OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in principal amount
of the Notes at the time outstanding, to modify the Indenture or any
supplemental indenture or the rights of the holders of the Notes, except that no
such modification shall (i) extend the fixed maturity of any Note, reduce the
rate or extend the time of payment of interest thereon, reduce the principal
amount thereof or premium, if any, thereon, reduce any amount payable upon
redemption or repurchase thereof, change or impair the obligation of the Company
to make repurchase of any Note upon the happening of a Designated Event, impair
or affect the right of a holder to institute suit for the payment thereof,
change the currency in which the Notes are payable, or change or impair the
right to convert the Notes into Common Stock subject to the terms set forth in
the Indenture or modify the provisions of the Indenture with respect to the
subordination of the Notes in a manner adverse to the holders of the Notes,
without the consent of the holder of each Note so affected, or (ii) reduce the
aforesaid percentage of Notes, without the consent of the holders of all of the
Notes then outstanding.
REGISTRATION RIGHTS
This Prospectus is a part of a shelf registration statement filed by the
Company with the Commission (the "Shelf Registration Statement") with respect to
the resale of the Offered Notes and the shares of the Common Stock issued or
issuable upon conversion of the Offered Notes. The Company has agreed to keep
such Shelf Registration Statement effective until three years from the latest
date of original issuance of the Offered Notes or until the Shelf Registration
Statement is no longer required for transfer of the Offered Notes or the shares
of the Common Stock. The Company
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will be required to pay liquidated damages to the holders of the Offered Notes
or the Common Stock issuable upon conversion of the Offered Notes, as the case
may be, under certain circumstances if the Company is not in compliance with its
registration obligations.
TAXATION OF NOTES
See "Certain Federal Tax Considerations" for a discussion of certain federal
tax aspects which will apply to holders of Offered Notes.
NOTICES
Notices to holders of the Notes will be given by publication in a leading
daily newspaper in the English language of general circulation in The City of
New York and in London and, so long as the Notes are listed on the Luxembourg
Stock Exchange, in a daily newspaper of general circulation in Luxembourg or, if
publication in either London or Luxembourg is not practical, in Europe. In
addition, notices to holders of Notes will be given by mail to the addresses of
such holders as they appear in the register maintained by the Trustee on the
fifteenth day prior to such mailing. Such notices will be deemed to have been
given on the date of such publication or mailing or, if published in such
newspaper on different dates, on the date of the first such publication.
SATISFACTION AND DISCHARGE
The Company may discharge its obligations under the Indenture while Notes
remain outstanding if (i) all outstanding Notes will become due and payable at
their scheduled maturity within one year or (ii) all outstanding Notes are
scheduled for redemption within one year, and, in either case, the Company has
deposited with the Trustee an amount sufficient to pay and discharge all
outstanding Notes on the date of their scheduled maturity or the scheduled date
of redemption.
GOVERNING LAW
The Indenture and Notes will be governed by and construed in accordance with
the laws of the State of New York.
CONCERNING THE TRUSTEE
The Chase Manhattan Bank, N.A., the Trustee under the Indenture, has been
appointed by the Company as the initial paying agent, conversion agent and
registrar with regard to the Notes. The Company and its subsidiaries may
maintain deposit accounts and conduct other banking transactions with the
Trustee or its affiliates in the ordinary course of business, and the Trustee
and its affiliates may from time to time in the future provide banking and other
services to the Company in the ordinary course of their business.
During the existence of an Event of Default, the Trustee will be required to
exercise such rights and powers vested in it under the Indenture and use the
same degree and care and skill in its exercise as a prudent person would
exercise under the circumstances in the conduct of such person's own affairs.
Subject to such provisions, the Trustee is under no obligation to exercise any
of its rights or powers under the Indenture at the request of any of the holders
of Notes, unless they shall have offered to the Trustee security and indemnity
satisfactory to it.
The Indenture and the TIA will contain certain limitations on the rights of
the Trustee, should it become a creditor of the Company, to obtain payment of
claims in certain cases or to realize on certain property received in respect of
any such claim as security or otherwise. Subject to the TIA, the Trustee will be
permitted to engage in other transactions, PROVIDED, HOWEVER, that if it
acquires any conflicting interest (as described in the TIA), it must eliminate
such conflict or resign.
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DESCRIPTION OF CAPITAL STOCK
GENERAL
As of August 8, 1996, the Company's authorized capital stock consists of
100,000,000 shares of Common Stock, par value $.001 per share, and 500,000
shares of preferred stock, par value $.001 per share (the "Preferred Stock"). In
connection with the Company's 1996 Annual Meeting of Stockholders to be held on
August 20, 1996, the Company has submitted a proposal to its stockholders that
would amend the Company's Restated Certificate of Incorporation to increase the
number of shares of authorized Common Stock from 100,000,000 to 500,000,000
shares. As of August 8, 1996, the Company had outstanding approximately
38,634,355 shares of Common Stock and no shares of Preferred Stock. As of August
8, 1996, there were approximately 385 record holders of Common Stock.
COMMON STOCK
The holders of Common Stock are entitled to one vote for each share on all
matters voted upon by stockholders, including the election of directors.
Subject to the rights of any then outstanding shares of Preferred Stock, the
holders of the Common Stock are entitled to such dividends as may be declared in
the discretion of the Board of Directors out of funds legally available
therefor. See "Dividend Policy." The holders of Common Stock are entitled to
share ratably in the net assets of the Company upon liquidation after payment or
provision for all liabilities and any preferential liquidation rights of any
Preferred Stock then outstanding. The holders of Common Stock have no preemptive
rights to purchase shares of stock of the Company. Shares of Common Stock are
not subject to any redemption provisions and are not convertible into any other
securities of the Company. All outstanding shares of Common Stock are, and the
shares of Common Stock to be issued by the Company upon conversion of the
Offered Notes will be, upon payment therefor, fully paid and non-assessable.
PREFERRED STOCK
The Preferred Stock may be issued from time to time by the Board of
Directors as shares of one or more classes or series. Subject to the provisions
of the Company's Restated Certificate of Incorporation and limitations
prescribed by law, the Board of Directors is expressly authorized to adopt
resolutions to issue the shares, to fix the number of shares and to change the
number of shares constituting any series, and to provide for or change the
voting powers, designations, preferences and relative, participating, optional
or other special rights, qualifications, limitations or restrictions thereof,
including dividend rights (including whether dividends are cumulative), dividend
rates, terms of redemption (including sinking fund provisions), redemption
prices, conversion rights and liquidation preferences of the shares constituting
any class or series of the Preferred Stock, in each case without any further
action or vote by the stockholders. The Company has no current plans to issue
any shares of Preferred Stock of any class or series.
One of the effects of undesignated Preferred Stock may be to enable the
Board of Directors to render more difficult or to discourage an attempt to
obtain control of the Company by means of a tender offer, proxy contest, merger
or otherwise, and thereby to protect the continuity of the Company's management.
The issuance of shares of the Preferred Stock pursuant to the Board of
Directors' authority described above may adversely affect the rights of the
holders of Common Stock. For example, Preferred Stock issued by the Company may
rank prior to the Common Stock as to dividend rights, liquidation preference or
both, may have full or limited voting rights and may be convertible into shares
of Common Stock. Accordingly, the issuance of shares of Preferred Stock may
discourage bids for the Common Stock or may otherwise adversely affect the
market price of the Common Stock.
STATUTORY BUSINESS COMBINATION PROVISION
The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law ("Section 203"). Section 203 provides, with certain
exceptions, that a Delaware corporation may not engage in any of a broad range
of business combinations with a person or an affiliate, or associate of such
person, who is an "interested stockholder" for a period of three years from the
date that such
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person became an interested stockholder unless: (i) the transaction resulting in
a person becoming an interested stockholder, or the business combination, is
approved by the board of directors of the corporation before the person becomes
an interested stockholder; (ii) the interested stockholder acquired 85% or more
of the outstanding voting stock of the corporation in the same transaction that
makes such person an interested stockholder (excluding shares owned by persons
who are both officers and directors of the corporation, and shares held by
certain employee stock ownership plans); or (iii) on or after the date the
person becomes an interested stockholder, the business combination is approved
by the corporation's board of directors and by the holders of at least 66 2/3%
of the corporation's outstanding voting stock at an annual or special meeting,
excluding shares owned by the interested stockholder. Under Section 203, an
"interested stockholder" is defined as any person who is: (i) the owner of 15%
or more of the outstanding voting stock of the corporation; or (ii) an affiliate
or associate of the corporation if such affiliate or associate was the owner of
15% or more of the outstanding voting stock of the corporation at any time
within the three-year period immediately prior to the date on which it is sought
to be determined whether such person is an interested stockholder.
A corporation may, at its option, exclude itself from the coverage of
Section 203 by amending its certificate of incorporation or bylaws, by action of
its stockholders, to exempt itself from coverage, provided that such bylaws or
certificate of incorporation amendment shall not become effective until 12
months after the date it is adopted. The Company has not adopted such an
amendment to its Amended and Restated Certificate of Incorporation or Amended
and Restated Bylaws.
LIMITATION ON DIRECTORS' LIABILITIES
Pursuant to the Company's Restated Certificate of Incorporation and under
Delaware law, directors of the Company are not liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty, except for
liability in connection with a breach of duty of loyalty, for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, for dividend payments or stock repurchases illegal under Delaware law or
any transaction in which a director has derived an improper personal benefit.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock is American Stock
Transfer & Trust Company.
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CERTAIN FEDERAL TAX CONSIDERATIONS
The following is a general discussion, based upon present law, of certain
United States federal income and estate tax consequences of the purchase,
ownership and disposition of the Offered Notes to the initial purchasers thereof
and the ownership and disposition of shares of Common Stock received upon the
conversion of the Offered Notes.
This discussion does not deal with all aspects of United States federal
income taxation that may be relevant to holders of the Offered Notes or shares
of Common Stock and does not deal with tax consequences arising under the laws
of any foreign, state or local jurisdiction. Further, this discussion is based
upon the provisions of the Internal Revenue Code (the "Code") and regulations,
rulings and judicial decisions thereunder as of the date hereof, and such
authorities may be repealed, revoked or modified so as to result in tax
consequences different from those discussed herein. This discussion assumes that
each holder holds the Offered Notes and the shares of Common Stock received upon
conversion thereof as capital assets. Moreover, this discussion is for general
information only, and does not address all of the tax consequences that may be
relevant to particular purchasers in light of their personal circumstances, or
to certain types of purchasers (such as certain financial institutions,
insurance companies, tax-exempt entities, dealers in securities, persons who
hold the Offered Notes or Common Stock in connection with a straddle, foreign
corporations and individuals who are not citizens or residents of the United
States).
PROSPECTIVE PURCHASERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE
PARTICULAR TAX CONSEQUENCES TO THEM OF THE ACQUISITION, HOLDING AND DISPOSITION
OF THE OFFERED NOTES OR THE SHARES OF COMMON STOCK, INCLUDING THE APPLICABILITY
OF ANY FEDERAL ESTATE OR GIFT TAX LAWS, ANY STATE, LOCAL OR FOREIGN TAX LAWS, OR
CHANGES IN APPLICABLE TAX LAWS.
INTEREST ON OFFERED NOTES
Interest paid on an Offered Note will be taxable to a holder as ordinary
interest income in accordance with the holder's method of tax accounting at the
time that such interest is accrued or (actually or constructively) received.
PREMIUM AND MARKET DISCOUNT
A holder of an Offered Note purchased at a premium (I.E., a cost greater
than its principal amount, reduced by any amount attributable to the conversion
privilege), may amortize such premium. Special rules may require the amount of
premium and the amortization thereof to be determined with reference to the
optional redemption price and date.
If a holder of an Offered Note purchases the Offered Note at an amount that
is less than its principal amount, the Offered Note generally will be considered
to bear "market discount" in the hands of such holder. In such case, gain
realized by the holder on the sale, exchange or retirement, and unrealized
appreciation on certain nontaxable dispositions, of the Offered Note generally
will be treated as ordinary interest income to the extent of the market discount
that accrued on the Offered Note while held by such holder and to the extent it
has not previously been included in income (pursuant to an election by the
holder to include such market discount in income as it accrues). In general
terms, market discount on an Offered Note will be treated as accruing on a
straight-line basis over the term of such Offered Note, or, at the election of
the holder, under a constant yield method. However, market discount is deemed
not to exist if the market discount is less than a statutorily defined DE
MINIMIS amount.
CONVERSION OF OFFERED NOTES
A holder of an Offered Note will not recognize gain or loss on the
conversion of the Offered Note into shares of Common Stock, except with respect
to cash received in lieu of a fractional share of Common Stock. Gain or loss
recognized on the receipt of cash paid in lieu of a fractional share will equal
the difference between the amount of cash received and the amount of tax basis
allocable to such fractional share. The holding period of the shares of Common
Stock received by the holder upon
33
<PAGE>
conversion of the Offered Note will include the period during which it held the
Offered Note prior to the conversion. The Holder's aggregate tax basis in the
shares of Common Stock received upon conversion of the Offered Note will be
equal to the Holder's aggregate basis in the Offered Note exchanged therefor
(less any portion thereof allocable to cash received in lieu of a fractional
share).
CONSTRUCTIVE DIVIDEND
If at any time the Company makes a distribution of property to stockholders
that would be taxable to such stockholders as a dividend for federal income tax
purposes and, in accordance with the anti-dilution provisions of the Offered
Notes, the conversion price of the Offered Notes is decreased, such decrease may
be deemed to be the payment of a taxable dividend to holders of the Offered
Notes. For example, a decrease in the conversion price in the event of
distributions of evidences of indebtedness or assets of the Company will
generally result in deemed dividend treatment to holders of the Offered Notes,
but generally a decrease in the event of stock dividends or the distribution of
rights to subscribe for Common Stock will not.
BACKUP WITHHOLDING TAX
In general, information reporting requirements will apply to certain
payments of principal, interest and premium paid on Offered Notes and to the
proceeds of sale of an Offered Note made to holders other than certain exempt
recipients (such as corporations or foreign persons). A 31% backup withholding
tax will apply to such payments if the holder fails to provide a taxpayer
identification number or certification of foreign or other exempt status or
fails to report in full dividend and interest income. Any amounts withheld under
the backup withholding rules will be allowed as a refund or a credit against
such holder's United States federal income tax liability provided the required
information is furnished to the Internal Revenue Service.
NON-U.S. HOLDERS
Interest paid to a non-U.S. alien individual, foreign corporation or other
non-United States person should constitute "portfolio interest" within the
meaning of 871(h)(3) of the Code; accordingly, if such interest is not
effectively connected with the conduct of a trade or business in the United
States, and, subject to certain exceptions, such holder certifies as to his or
its status as a non-United States person, no United States federal income tax
will be withheld from payments to such holders.
The foregoing is only a brief summary of the United States federal tax
considerations concerning the Offered Notes and the Common Stock underlying the
Offered Notes, and does not address state, local or foreign tax considerations
or all the tax considerations that may apply to a particular holder.
34
<PAGE>
SELLING SECURITYHOLDERS
The Offered Notes were originally issued by the Company in transactions
exempt from the registration requirements of the Securities Act to persons
believed by the Managers to be "qualified institutional buyers" (as defined in
Rule 144A under the Securities Act) or to institutional accredited investors.
The Selling Securityholders (which term includes their transferees, pledgees,
donees and their successors) may from time to time offer and sell pursuant to
this Prospectus any or all of the Offered Notes and the shares of Common Stock
initially issued or issuable upon conversion of the Offered Notes (the
"Conversion Shares").
The following table sets forth information, as of August 2, 1996, with
respect to the Selling Securityholders and the respective principal amount of
Offered Notes beneficially owned by each Selling Securityholder and the number
of Conversion Shares that may be offered pursuant to this Prospectus. None of
the Selling Securityholders has, or within the past three years, has had, any
position, office or other material relationship with the Company or any of its
predecessors or affiliates except as set forth below. Because the Selling
Securityholders may offer all or some portion of the Offered Notes or the
Conversion Shares pursuant to this Prospectus, no estimate can be given as to
the amount of Offered Notes or the Conversion Shares that will be held by the
Selling Securityholders upon termination of any such sales. In addition, the
Selling Securityholders identified below may have sold, transferred or to
otherwise disposed of all or a portion of their Offered Notes since May 22, 1996
in transactions exempt from the registration requirements of the Securities Act.
The table has been prepared based upon information furnished to the Company by
the Trustee, and by The Depositary Trust Company on behalf of the Selling
Securityholders.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT NUMBER OF
OF OFFERED NOTES PERCENT OF CONVERSION SHARES
BENEFICIALLY OUTSTANDING THAT MAY BE
NAME (1) OWNED NOTES SOLD (2)
- --------------------------------------------------------------- ---------------- --------------- -----------------
<S> <C> <C> <C>
Bank of New York............................................... $ 8,675,000 3.7% 183,017
Bankers Trust Company (3)...................................... 23,350,000 10.2 492,616
Barnett Banks Trust Co., N.A................................... 200,000 * 4,219
Bank of Bermuda (NY) Ltd....................................... 250,000 * 5,274
Bankers Trust Co./NatWest Securities, Limited (4).............. 27,000 * 570
Boston Safe Deposit & Trust Co................................. 13,741,000 6.0 289,895
Chase Manhattan Bank, N.A...................................... 335,000 * 6,781
Chemical Bank (Chase).......................................... 530,000 * 11,181
Chase Manhattan Bank........................................... 460,000 * 9,705
CityBank, N.A.................................................. 3,995,000 1.7 84,287
Fiduciary Trust Co. Int'l...................................... 1,200,000 * 25,316
First Tennessee Bank, N.A...................................... 430,000 * 9,072
Fleet Bank of Massachusetts, N.A............................... 90,000 * 1,899
First Nat'l Bank of Boston..................................... 210,000 * 4,430
First National Bank of Maryland................................ 140,000 * 2,954
Investors Bank & Trust/M.F. Custody............................ 1,350,000 * 28,481
Mercantile, Safe Deposit and Trust Co.......................... 2,890,000 1.3 60,970
Merrill Lynch Pierce, Fenner & Smith, Inc. Safekeeping......... 9,500,000 4.1 200,422
Morgan Guaranty Trust Co. NY................................... 2,000,000 * 42,194
Morgan, Stanley & Co., Inc..................................... 1,500,000 * 31,646
NatWest Securities Corp. #2.................................... 30,000 * 633
NatWest Securities Corp........................................ 490,000 * 10,338
Northern Trust Co. -- Trust.................................... 150,000 * 3,165
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT NUMBER OF
OF OFFERED NOTES PERCENT OF CONVERSION SHARES
BENEFICIALLY OUTSTANDING THAT MAY BE
NAME (1) OWNED NOTES SOLD (2)
- --------------------------------------------------------------- ---------------- --------------- -----------------
<S> <C> <C> <C>
Republic New York Securities Corp.............................. 250,000 * 5,274
Robertson, Stephens & Company LLC (5).......................... 646,000 * 13,629
Sanwa Bank California.......................................... 2,255,000 * 53,797
Smith Barney, Inc.............................................. 216,000 * 4,557
State Street Bank (SSB Customs)................................ 8,740,000 3.8 184,388
Wagner, Stott & Co............................................. 250,000 * 5,274
</TABLE>
- ------------------------
* Less than 1.0%
(1) The information set forth herein is as of August 2, 1996 and will be updated
as required.
(2) Assumes conversion of the full amount of Offered Notes held by such holder
at the initial rate of $47.40 in principal amount of Offered Notes per share
of Common Stock. Under the terms of the Indenture, fractional shares will
not be issued upon conversion of the Offered Notes; cash will be paid in
lieu of any fractional shares.
(3) The Company has received a commitment letter, subject to the satisfaction of
a number of conditions and execution of a definitive credit agreement, from
Bankers Trust Company for the Credit Facility; however, there can be no
assurance that the Credit Facility will be obtained.
(4) NatWest Securities Limited served as one of the Managers who placed the
Notes in May and June 1996.
(5) Robertson, Stephens & Company LLC served as one of the Managers who placed
the Notes in May and June 1996. In addition, Robertson, Stephens & Company
LLC served as an underwriter in the following public offerings by the
Company: (i) the sales by the Company in the Company's initial public
offering in February and March 1995 of 3,737,500 shares of Common Stock;
(ii) the sales by the Company in August 1995 of 4,025,000 shares of Common
Stock and (iii) the sales by the Company in February and March 1996 of
5,543,045 shares of Common Stock and 5 1/2% Convertible Subordinated Noted
due 2001 in the principal amount of $143,750,000 and the sales by certain
selling stockholders of 1,356,955 shares of Common Stock.
Information concerning the Selling Securityholders may change from time to
time and will be set forth in Prospectus Supplements. In addition, the per share
Conversion Price, and therefore the number of shares of Common Stock, are
subject to adjustment under certain circumstances. Accordingly, the number of
shares of Common Stock offered hereby may increase or decrease. As of the date
of this Prospectus, the aggregate principal amount of Offered Notes is $86.25
million and the number of shares of Common Stock into which the Offered Notes
may be converted is 1,819,620 shares.
It is not possible to predict the principal amount of Offered Notes or the
number of shares of Common Stock that will be sold hereby. Consequently, it is
not possible to predict the amount of Offered Notes or the number of shares of
Common Stock that will be owned by the Selling Securityholders following
completion of the Securities offered hereby.
PLAN OF DISTRIBUTION
U.S. Office Products will not receive any of the proceeds of the sale of the
Securities offered hereby. The Securities may be sold from time to time to
purchasers directly by the Selling Securityholders. Alternatively, the Selling
Securityholders may from time to time offer the Securities through underwriters,
dealers or agents who may receive compensation in the form of underwriting
discounts, concession or commissions from the Selling Securityholders and/or the
purchasers of the Securities for whom they may act as agent. The Selling
Securityholders and any such underwriters who participate in the distribution of
the Securities may be deemed to be underwriters, and any profits on the sale of
the Securities by them and any discounts, commissions or concessions received by
36
<PAGE>
any such underwriters, dealers or agents might be deemed to be underwriting
discounts and commissions under the Securities Act. To the extent the Selling
Securityholders may be deemed to be underwriters, the Selling Securityholders
may be subject to certain statutory liabilities of the Securities Act,
including, but not limited to, Sections 11, 12 and 17 of the Securities Act and
Rule 10b-5 under the Exchange Act.
The Securities offered hereby may be sold from time to time in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale or at negotiated prices. The
Securities may be sold by one or more of the following methods, without
limitation: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the Securities as agent but may position and resell a portion of
the block as principal to facilitate the transaction; (b) purchases by a broker
or dealer as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; (d) an exchange
distribution in accordance with the rules of such exchange; and (e) face-to-face
transactions between sellers and purchasers without a broker-dealer. At any time
a particular offer of the Securities is made, a Prospectus Supplement, if
required, will be distributed which will set forth the aggregate amount of
Securities being offered and the terms of the offering, including the name or
names of any underwriters, dealers or agents, any discounts, commissions and
other items constituting compensation from the Selling Securityholders and any
discounts, commissions or concessions allowed or reallowed or paid to dealers.
Such Prospectus Supplement and, if necessary, a post-effective amendment to the
registration statement of which this Prospectus is a part will be filed with the
Commission to reflect the disclosure of additional information with respect to
the distribution of the Securities. In addition, the Securities covered by this
Prospectus may be sold in private transactions or under Rule 144 rather than
pursuant to this Prospectus.
The Selling Securityholders and any other persons participating in such
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Rules
10b-6, 10b-7 and 10b-21(T), which may limit the timing or purchases and sales of
any of the Securities by the Selling Securityholders and any other such person.
Furthermore, under Rule 10b-6 under the Exchange Act, any person engaged in the
distribution of the Securities may not simultaneously engage in market making
activities with respect to the particular Securities being distributed for a
period of nine business days prior to the commencement of such distribution. All
of the foregoing may affect the marketability of the Securities and the ability
of any person or entity to engage in market-making activities with respect to
the Securities.
The Company has agreed to pay substantially all of the expenses incidental
to the registration, offering and sale of the Securities to the public other
than commissions, fees and discounts of underwriters, dealers and agents and has
agreed to indemnify the Selling Securityholders against certain liabilities
under the Securities Act.
LEGAL MATTERS
The validity of the issuance of the Securities offered by this Prospectus
has been passed upon for the Company by Morgan, Lewis & Bockius LLP, 1800 M
Street, N.W., Washington, D.C. 20036.
EXPERTS
The consolidated financial statements of the Company as of April 30, 1996
and 1995, and for each year in the three year period ended April 30, 1996, have
been audited by Price Waterhouse LLP, independent accountants, whose report is
incorporated herein by reference. Such financial statements have been included
in reliance on the reports of such independent accountants given on the
authority of such firms as experts in auditing and accounting. The consolidated
financial statements of Copenhaver Holdings, Incorporated as of and for the year
ended September 30, 1994: the consolidated financial statements of
Carithers-Wallace-Courtenay, Incorporated as of and for the year ended June 30,
1995; the financial statements of National Office Supply, Inc. as of September
30, 1995 and
37
<PAGE>
December 31, 1994 and for the nine months ended September 30, 1995 and the year
ended December 31, 1994; the financial statements of Emmons-Napp Office
Products, Inc. as of September 30, 1995 and December 31, 1994 and for the nine
months ended September 30, 1995 and the year ended December 31, 1994; the
consolidated financial statements of Price Modern, Inc. as of and for the year
ended December 31, 1994; the financial statements of Pence-Dickens & Heeter,
Inc. as of and for the year ended December 31, 1994; the financial statements of
Office Connection, Inc. as of September 30, 1995 and for the nine months ended
September 30, 1995; the financial statements of Raleigh Office Supply Company as
of August 31, 1995 and for the year then ended; the combined financial
statements of Kentwood Office Furniture, Inc. and Kentwood Marketing, Inc. as of
December 31, 1995 and for the year then ended; the financial statements of
McWorter Stationery Co. as March 31, 1996 and for the year then ended; the
financial statements of Mark's Office Furniture as of March 31, 1996 and for the
year then ended; the financial statements of David's Office Supply and Furniture
Company, Inc. as of May 31, 1996 and for the year then ended; the financial
statements of Carolina Office Equipment Company as of March 31, 1996 and for the
year then ended; the financial statements of WBT Holdings, Inc. (d.b.a. Office
Furniture Distributors) as of December 31, 1995 and for the year then ended; and
the financial statements of Mile High Office Supply, Inc. as of December 31,
1995 and 1994 and for the years then ended, have been incorporated herein by
reference in reliance on the reports of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
The financial statements of Blue Star as of March 31, 1995 and for the year
ended March 31, 1995 incorporated herein by reference have been so included in
reliance on the report of Price Waterhouse (Auckland, New Zealand), independent
accountants, given on the authority of such firm as experts in auditing and
accounting.
The financial statements of the MISSCO Commercial Division as of March 31,
1995 and 1994, and for the year ended March 31, 1995, the nine-month period
ended March 31, 1994 and the year ended June 30, 1993 and; the financial
statements of The J. Thayer Company as of December 31, 1995 and for the year
then ended, have been incorporated herein by reference in reliance on the
reports of KPMG Peat Marwick LLP, independent certified public accountants, also
incorporated herein by reference, and upon the authority of said firm as experts
in auditing and accounting.
The financial statements of Oak Brook Office Supply and Equipment
Corporation as of August 31, 1995 and 1994 and for each of the years ended
August 31, 1995 and 1994 have been incorporated herein by reference in reliance
on the report of Crowe, Chizek and Company LLP, independent accountants, given
on the authority of such firm as experts in auditing and accounting.
The financial statements of Radar Holdings Corporation as of June 30, 1995
and for the year then ended have been incorporated herein by reference in
reliance on the report of Lattimore, Black, Morgan & Cain, P.C., independent
accountants, given on the authority of such firm as experts in auditing and
accounting.
The financial statements of U-Bix Business Machines Limited as of June 30,
1995 and 1994 and for the years then ended, and as of and for the six months
ended December 31, 1995, have been incorporated herein by reference in reliance
on the report of KPMG Peat Marwick (Auckland, New Zealand), independent
accountants, given on the authority of such firm as experts in auditing and
accounting.
The financial statements of School Specialty, Inc. as of December 31, 1995
and 1994 and for the years then ended, have been incorporated herein by
reference in reliance on the report of Ernst & Young LLP, independent
accountants, given on the authority of such firm as experts in auditing and
accounting.
38
<PAGE>
The financial statements of New Office Plus, Inc as of December 31, 1995 and
for the year then ended, have been incorporated herein by reference in reliance
on the report of Shinners, Hucovski & Co., independent accountants, given on the
authority of such firm as experts in auditing and accounting.
The financial statements of American Loose Leaf/Business Products, Inc. as
of September 30, 1995 and for the year then ended, have been incorporated herein
by reference in reliance on the report of Swink, Fiehler and Hoffman, PC,
independent accountants, given on the authority of such firm as experts in
auditing and accounting.
The financial statements of Re-Print Corporation as of December 31, 1995 and
1994 and for the years then ended, have been incorporated herein by reference in
reliance on the report of BDO Seidman, LLP, independent accountants, given on
the authority of such firm as experts in auditing and accounting.
The financial statements of Pear Commercial Interiors as of December 31,
1995 and for the year then ended, have been incorporated herein by reference in
reliance on the report of Ehrhardt Keefe Steiner & Hottman P.C., independent
accountants, given on the authority of such firm as experts in auditing and
accounting.
The financial statements of Arbuckle Foods, Inc. as of December 31, 1995 and
for the year then ended, have been incorporated herein by reference in reliance
on the report of Thorne Little, independent accountants, given on the authority
of such firm as experts in auditing and accounting.
The financial statements of Prudential of Florida, Inc. as of December 31,
1995 and for the year then ended, have been incorporated herein by reference in
reliance on the report of Joel Baum, independent accountant, given on the
authority of such firm as experts in auditing and accounting.
The financial statements of Wang of New Zealand as of June 30, 1995 and for
the year then ended, have been incorporated herein by reference in reliance on
the report of Ernst & Young (Auckland, New Zealand), independent accountants,
given on the authority of such firm as experts in auditing and accounting.
The financial statements of Whitcoulls Group Limited as of June 30, 1995,
1994, and 1993 and for the years then ended incorporated in this prospectus by
reference from the U.S. Products Company's Current Report on Form 8-K dated July
23, 1996 have been audited by Deloitte Touche Tohmatsu, independent auditors, as
stated in their reports, which are incorporated herein by reference, and have
been so incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
The balance sheet of Thompson Book and Supply Company as of December 31,
1995 has been incorporated herein by reference in reliance on the report of
Hamilton & Associates, independent accountants, given on the authority of such
firm as experts in audited and accounting.
The financial statements of International Interiors, Inc. as of September
30, 1995 and 1994 and for the years then ended have been incorporated herein by
reference in reliance on the report of Petherbridge, Davis & Company, PA,
independent accountants, given on the authority of such firm as experts in
audited and accounting.
39
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses (other than underwriting
compensation expected to be incurred) in connection with the offering described
in this Registration Statement. All of such amounts (except the SEC Registration
Fee) are estimated.
<TABLE>
<CAPTION>
COMPANY
---------
<S> <C>
SEC Registration Fee............................................................... $
Printing and Engraving Costs*......................................................
Legal Fees and Expenses............................................................
Accounting Fees and Expenses*......................................................
Miscellaneous*
---------
Total*......................................................................... $
---------
---------
</TABLE>
- ------------------------
* estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Amended and Restated By-laws provide that the Company shall,
to the fullest extent permitted by Section 145 of the General Corporation Law of
the State of Delaware, as amended from time to time, indemnify all persons whom
it may indemnify pursuant thereto.
Section 145 of the General Corporation Law of the State of Delaware permits
a corporation, under specified circumstances, to indemnify its directors,
officers, employees or agents against expenses (including attorney's fees),
judgments, fines and amounts paid in settlements actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties by reason of the fact that they were or are directors, officers,
employees or agents of the corporation, if such directors, officers, employees
or agents acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reason to believe their conduct was
unlawful. In a derivative action, i.e., one by or in the right of the
corporation, indemnification may be made only for expenses actually and
reasonably incurred by directors, officers, employees or agents in connection
with the defense or settlement of an action or suit, and only with respect to a
matter as to which they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made if such person shall
have been adjudged liable to the corporation, unless and only to the extent that
the court in which the action or suit was brought shall determine upon
application that the defendant directors, officers, employees or agents are
fairly and reasonably entitled to indemnity for such expenses despite such
adjudication of liability.
Article Eight of the Company's Restated Certificate of Incorporation
provides that the Company's directors will not be personally liable to the
Company or its stockholders for monetary damages resulting from breaches of
their fiduciary duty as directors except (a) for any breach of the duty of
loyalty to the Company or its stockholders, (b) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (c) under Section 174 of the General Corporation Law of the State of
Delaware, which makes directors liable for unlawful dividends or unlawful stock
repurchases or redemptions or (d) for transactions from which directors derive
improper personal benefit.
II-1
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------ -----------------------------------------------------------------------------------------------------
<C> <S>
4.1 Form of Indenture relating to the Company's $230 million 5 1/2% Convertible Subordinated Notes due
2003 (including form of Note) (Exhibit 4.1 of the Company's Annual Report on Form 10-K for the
fiscal year ended April 30, 1996 is hereby incorporated by reference)
4.2 Registration Rights Agreement, dated as of May 22, 1996, by and among the Company and Robertson
Stephens & Co LLC and Natwest Securities Limited, as Managers (Exhibit 4.2 of the Company's Annual
Report on Form 10-K for the fiscal year ended April 30, 1996 is hereby incorporated by reference)
5.1 * Opinion of Morgan, Lewis & Bockius LLP
12.1 Statement Re Ratio of Earnings to Fixed Charges
23.1 (a) Consent of Price Waterhouse LLP
23.1 (b) Consent of Price Waterhouse
23.2 Consent of Ernst & Young LLP
23.3 (a) Consent of KPMG Peat Marwick LLP
23.3 (b) Consent of KPMG Peat Marwick LLP
23.3 (c) Consent of KPMG Peat Marwick
23.4 Consent of Crowe, Chizek and Company LLP
23.5 Consent of Lattimore Black Morgan & Cain, P.C.
23.6 Consent of Swink, Fiehler & Hoffman, P.C.
23.7 Consent of Shinners, Hucovski & Company
23.8 Consent of BDO Seidman LLP
23.9 Consent of Thorne Little
23.10 Consent of Ehrhardt Keefe Steiner & Hottman PC
23.11 Consent of Ernst & Young
23.12 Consent of Joel S. Baum
23.13 Consent of Hamilton & Associates
23.14 Consent of Petherbridge, Davis & Company, P.A.
23.15 Consent of Deloitte Touche Tohmatsu
23.16 * Consent of Morgan, Lewis & Bockius LLP (contained in Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
25.1 Form T-1, State of Eligibility and Qualification of The Chase Manhattan Bank, N.A.
</TABLE>
- ------------------------
* To be filed by amendment
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 14, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant
II-2
<PAGE>
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.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which any offers or sales are being
made, a post-effective amendment to the 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 and 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 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 other material change to such information in the registration
statement.
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3, Form S-8 or Form F-3, and
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
the registration statement.
(2) That for the purpose of determining any liability under the Act each
such post-effective amendment may be deemed to be a new registration
statement relating to the securities being offered therein and the offering
of such securities at the time may 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 which are being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Washington, District of Columbia, on August 12,
1996.
U.S. OFFICE PRODUCTS COMPANY
By: /s/ JONATHAN J. LEDECKY
-----------------------------------
Name: Jonathan J. Ledecky
Title: Chief Executive Officer
Each person whose signature appears below hereby appoints Jonathan J.
Ledecky and Mark D. Director, and both of them, either of whom may act without
the joinder of the other, as his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement and any
registration statements for the same offering filed pursuant to Rule 462 under
the Securities Act of 1933, and to file the same, with all exhibits thereto and
all other documents in connection therewith, with the Commission, granting unto
said attorneys-in-fact and agents full power and authority to perform each and
every act and thing appropriate or necessary to be done, as fully and for all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or their substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY IN WHICH SIGNED DATE
- ----------------------------------- ------------------------- ----------------
<C> <S> <C>
Chairman of the Board and
/s/ JONATHAN J. LEDECKY Chief Executive Officer
- ----------------------------------- (Principal Executive August 12, 1996
Jonathan J. Ledecky Officer)
Chief Financial Officer
/s/ DONALD H. PLATT (Principal Financial
- ----------------------------------- Officer and Principal August 12, 1996
Donald H. Platt Accounting Officer)
/s/ TIMOTHY J. FLYNN
- ----------------------------------- Director August 12, 1996
Timothy J. Flynn
/s/ THOMAS J. REASER
- ----------------------------------- Director August 12, 1996
Thomas J. Reaser
/s/ JOHN K. BURGESS
- ----------------------------------- Director August 12, 1996
John K. Burgess
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE CAPACITY IN WHICH SIGNED DATE
- ----------------------------------- ------------------------- ----------------
<C> <S> <C>
/s/ JACK L. BECKER, JR.
- ----------------------------------- Director August 12, 1996
Jack L. Becker, Jr.
/s/ CLIFTON B. PHILLIPS
- ----------------------------------- Director August 12, 1996
Clifton B. Phillips
/s/ MILTON H. KUYERS
- ----------------------------------- Director August 12, 1996
Milton H. Kuyers
/s/ ALLON H. LEFEVER
- ----------------------------------- Director August 12, 1996
Allon H. Lefever
/s/ EDWARD J. MATHIAS
- ----------------------------------- Director August 12, 1996
Edward J. Mathias
/s/ JOHN A. QUELCH
- ----------------------------------- Director August 12, 1996
John A. Quelch
/s/ DAVID C. GEZON
- ----------------------------------- Director August 12, 1996
David C. Gezon
/s/ DAVID C. COPENHAVER
- ----------------------------------- Director August 12, 1996
David C. Copenhaver
/s/ MARK A. SORGENFREI
- ----------------------------------- Director August 12, 1996
Mark A. Sorgenfrei
</TABLE>
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------ -----------------------------------------------------------------------------------------------------
<C> <S>
4.1 Form of Indenture relating to the Company's $230 million 5 1/2% Convertible Subordinated Notes due
2003 (including form of Note) (Exhibit 4.1 of the Company's Annual Report on Form 10-K for the
fiscal year ended April 30, 1996 is hereby incorporated by reference)
4.2 Registration Rights Agreement, dated as of May 22, 1996, by and among the Company and Robertson
Stephens & Co LLC and Natwest Securities Limited, as Managers (Exhibit 4.2 of the Company's Annual
Report on Form 10-K for the fiscal year ended April 30, 1996 is hereby incorporated by reference)
5.1 * Opinion of Morgan, Lewis & Bockius LLP
12.1 Statement Re Ratio of Earnings to Fixed Charges
23.1 (a) Consent of Price Waterhouse LLP
23.1 (b) Consent of Price Waterhouse
23.2 Consent of Ernst & Young LLP
23.3 (a) Consent of KPMG Peat Marwick
23.3 (b) Consent of KPMG Peat Marwick
23.3 (b) Consent of KPMG Peat Marwick
23.4 Consent of Crowe, Chizek and Company LLP
23.5 Consent of Lattimore Black Morgan & Cain, P.C.
23.6 Consent of Swink, Fiehler & Hoffman, P.C.
23.7 Consent of Shinners, Hucovski & Company
23.8 Consent of BDO Seidman LLP
23.9 Consent of Thorne Little
23.10 Consent of Ehrhardt Keefe Steiner & Hottman PC
23.11 Consent of Ernst & Young
23.12 Consent of Joel S. Baum
23.13 Consent of Hamilton & Associates
23.14 Consent of Petherbridge, Davis & Company, P.A.
23.15 Consent of Deloitte Touche Tohmatsu
23.16 * Consent of Morgan, Lewis & Bockius LLP (contained in Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
25.1 Form T-1, State of Eligibility and Qualification of The Chase Manhattan Bank, N.A
</TABLE>
- ------------------------
* To be filed by amendment
<PAGE>
EXHIBIT 12.1
U.S. OFFICE PRODUCTS
STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30
----------------------------------------------------- PRO FORMA
1992 1993 1994 1995 1996 1996
--------- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net Income (loss)..................................... 3,256 2,322 4,802 6,145 8,740 32,305
Income Taxes.......................................... 661 913 1,195 1,761 4,814 23,704
--------- --------- --------- --------- --------- -----------
Pretax Income......................................... 3,917 3,235 5,997 7,906 13,554 56,009
Fixed Charges.........................................
Interest Expense...................................... 1,866 1,571 1,609 2,310 6,476 32,163
Rentals............................................... 389 442 940 1,058 2,720 9,675
--------- --------- --------- --------- --------- -----------
Total Fixed Charges................................... 2,255 2,013 2,549 3,368 9,196 41,838
Earnings Before Income Taxes and Fixed Charges........ 6,172 5,248 8,546 11,274 22,750 97,847
--------- --------- --------- --------- --------- -----------
Fixed Charges......................................... 2,255 2,013 2,549 3,368 9,196 41,838
Ratio of Earnings to Fixed Charges.................... 2.7 2.6 3.4 3.3 2.5 2.3
</TABLE>
<PAGE>
EXHIBIT 23.1(A)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of U.S. Office Products Company, of our reports as of the
dates, and related financial statements of the companies listed below which
appear in the Prospectus included in the Registrartion Statement on Form S-4
(333-1928) filed on March 5, 1996:
<TABLE>
<CAPTION>
COMPANY DATE
- ------------------------------------------------------------------------ ------------------------------
<S> <C>
Copenhaver Holdings, Inc................................................ August 31, 1995
Carithers-Wallace-Courtenay, Inc........................................ November 22, 1995
National Office Supply, Inc............................................. December 11, 1995 except as to
Note 12, which is as of
January 10, 1996
Emmons-Napp Office Products, Inc........................................ December 11, 1995
Price Modern, Inc....................................................... December 11, 1995
Pence/Dickens & Heeter, Inc............................................. December 11, 1995
Office Connection, Inc.................................................. December 29, 1995
</TABLE>
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of U.S. Office Products Company, of our reports as of the
dates and related financial statements of the companies listed below which
appear in the Current Report on Form 8-K dated March 7, 1996 of U.S. Office
Products Company.
<TABLE>
<CAPTION>
COMPANY DATE
- ------------------------------------------------------------------------ ------------------------------
<S> <C>
Raleigh Office Supply Company........................................... March 8, 1996
Kentwood Office Furniture, Inc. and Kentwood Marketing, Inc............. March 8, 1996
</TABLE>
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of U.S. Office Products Company of our report dated May
31, 1996 except as to Note 15, which is as of July 10, 1996 appearing on page 19
of U.S. Office Products Company's annual report on form 10-K
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of U.S. Office Products Company, of our reports as of the
dates and related financial statements of the companies listed below which
appear in the Current Report on Form 8-K dated July 16, 1996 of U.S. Office
Products Company
<TABLE>
<CAPTION>
COMPANY DATE
- ------------------------------------------------------------------------ ------------------------------
<S> <C>
Mile High Office Supply, Inc............................................ June 27, 1996
Davids Office Supply and Furniture Co., Inc............................. July 10, 1996
Carolina Office Equipment Company....................................... July 10, 1996
WBT Holdings, Inc. DBA Office Furniture Distributors.................... July 1, 1996
Mark's Office Furniture................................................. June 25, 1996
McWhorter Stationery Company, Inc....................................... July 12, 1996
</TABLE>
We also consent to the references to us under the headings "Experts" and
"Selected Financial Data" in such Registration Statement. However, it should be
noted that Price Waterhouse LLP has not prepared or certified such "Selected
Financial Data."
/s/ PRICE WATERHOUSE LLP
Minneapolis, Minnesota
August 15, 1996
<PAGE>
EXHIBIT 23.1(B)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of U.S. Office Products Company of our report dated August 4, 1995,
except as to Note 12 which is as of December 11, 1995 related to the financial
statements of Blue Star Group Limited which appears in the Prospectus included
in the Registration Statement on Form S-4 (No. 333-1928). We also consent to the
reference to our firm under the heading "Experts" in such Registration Statement
/s/ Price Waterhouse
Auckland, New Zealand
August 15, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
on Form S-3 of the U.S. Office Products Company of our report dated February 2 ,
1996 with respect to the balance sheets of School Specialty, Inc. as of December
31, 1995 and 1994 the related statements of operations, changes in shareholders'
deficit and cash flows for the years then ended, which report appears in the
Form 8-K of U.S. Office Products Company dated March 7, 1996. We also consent to
the reference to our firm under the heading "Experts" in the Registration
Statement.
/s/ ERNST & YOUNG LLP
Milwaukee, Wisconsin
August 15, 1996
<PAGE>
EXHIBIT 23.3(A)
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
MISSCO Corporation:
We consent to the incorporation by reference in the Form S-3 registration
statement of U.S. Office Products Company of our report dated June 30, 1995 with
respect to the balance sheets of MISSCO Corporation -- Commercial Division as of
March 31, 1994 and 1995 and the related statements of operations, divisional
equity (deficit) and cash flows for the year ended June 30, 1993, the nine-month
period ended March 31, 1994 and the year ended march 31, 1995, which report
appears in Amendment No. 1 to the registration statement on Form S-4 (File No.
333-1928) of U.S. Office Products Company dated March 28, 1996, and to the
reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
Jackson, Mississippi
August 12, 1996
<PAGE>
EXHIBIT 23.3(B)
CONSENT OF INDEPENDENT ACCOUNTANT
The Board of Directors
The J. Thayer Company
We consent to the incorporation by reference in the Registration Statement
on Form S-3 of the U.S. Office Products Company of our report dated February 23,
1996 with respect to the balance sheet of The J. Thayer Company as of December
31, 1995 and the related statements of operations and retained earnings, and
cash flows for the year then ended, which report appears in the Form 8-K of U.S.
Office Products Company dated March 7, 1996. We also consent to the reference to
our firm under the heading "Experts" in the Registration Statement
/s/ KPMG Peat Marwick LLP
Portland, Oregon
August 13, 1996
<PAGE>
EXHIBIT 23.3(C)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this registration
statement on Form S-3 of U.S. Office Products Company of our report dated 9
August 1995 relating to the financial statements of Ubix Business Machines
Limited which appears in the Current Report on Form 8-K dated 7 March 1996 of
U.S. Office Products Company. We also consent to the reference to us under the
heading "Experts" in such Registration Statement
/s/ KPMG Peat Marwick
Auckland, New Zealand
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we consent to the reference to our firm
under the caption "Experts" and to the incorporation by reference in this
Registration Statement on Form S-3 of U.S. Office Products Company of our report
dated October 26, 1995, with respect to the financial statements of Oak Brook
Office Supply and Equipment Corporation included in the Registration Statement
on Form S-4 (333-1928).
/s/ Crowe, Chizek and Company LLP
Oak Brook, Illinois
August 12, 1996
<PAGE>
EXHIBIT 23.5
AUDITORS' CONSENT
We consent to the reference to our firm under the caption "Experts" and to
the incorporation by reference in this Registration Statement on Form S-3 of
U.S. Office Products Company of our report dated March 1, 1996, with respect to
the financial statements of Radar Holdings Corporation and Subsidiaries, which
appears in the Current Report on Form 8-K dated March 7, 1996 of the U.S. Office
Products Company.
/s/ Lattimore, Black, Morgan & Cain,
P.C.
Brentwood, TN
<PAGE>
EXHIBIT 23.6
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated June 26, 1996 relating to the
financial statements of American Loose Leaf/ Business Products, Inc. which
appears in the current report on Form 8-K, dated July 16, 1996 of U.S. Office
Products Company.
We also consent to the reference to us under the heading "experts" in such
registration statement.
/s/ Swink Fiehler & Hoffman
St. Louis, Missouri
August 12, 1996
<PAGE>
EXHIBIT 23.7
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of U.S. Office Products Company of our report dated July
3, 1996, relating to the financial statements of New Office Plus, Inc., which is
included in the Current Report on Form 8-K dated July 16, 1996 of the U.S.
Office Products Company. We also consent to the reference to us under the
caption "Experts" in the Registration Statement.
/s/ Shinners, Hucovski and Company S.C.
Shinners, Hucovski and Company S.C.
Green Bay, Wisconsin
August 15, 1996
<PAGE>
EXHIBIT 23.8
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of U.S. Office Products Company of our report dated
February 8, 1996 relating to the financial statements of The Re-Print
Corporation which is included in the Current Report on Form 8K dated July 16,
1996 of the U.S. Office Products Company.
We also consent to the reference to us under the caption "Experts" in the
Registration Statement.
/s/ BDO Seidman, LLP
August 12, 1996
<PAGE>
EXHIBIT 23.9
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of U.S. Office Products Company of our report dated July
5, 1996 relating to the financial statements of Arbuckle Foods Inc. which appear
in the Current Report on Form 8-K, dated July 16, 1996, of U.S. Office Products
Company. We also consent to the reference to us under the heading "Experts" in
this Registration Statement.
/s/ THORNE LITTLE, Chartered
Accountants
Abbotsford, B.C., Canada
August 12, 1996
<PAGE>
EXHIBIT 23.10
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of U.S. Office Products Company on Form S-3 of our report dated July 3, 1996
incorporated by reference in the Form 8-K of U.S. Office Products Company filed
July 16, 1996 and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
/s/ Ehrhardt Keefe Steiner & Hottman
PC
August 12, 1996
Denver, Colorado
<PAGE>
EXHIBIT 23.11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the reference to our firm under the caption "Experts"
in the Registration Statement (Form S-3) and related Prospectus of U.S. Office
Products Company for the registration of $86,250,000 of 5 1/2% Convertible
Subordinated Notes Due 2003 and 1,819,620 Shares of Common Stock and to the
incorporation by reference therein of our report dated July 28, 1995, with
respect to the consolidated financial statements of Wang New Zealand Limited as
of June 30, 1995 and for the year then ended, included in U.S Office Product's
(Form 8-K) dated July 16, 1996, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young
Auckland, New Zealand
August 14, 1996
<PAGE>
EXHIBIT 23.12
CONSENT OF INDEPENDENT ACCOUNTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of the U.S. Office Products Company of our report dated
April 17, 1996 relating to the financial statements of Prudential of Florida,
INc. which appear in the Current Report of Form 8-K, dated July 16, 1996, of
U.S. Office Products Company. We also consent to the reference to us under the
heading "Experts" in this Registration Statement.
/s/ Joel Baum
Certified Public Accountant
Coral Springs, Florida
August 14, 1996
<PAGE>
EXHIBIT 23.13
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of the U.S. Office Products Company of our report dated
July 12, 1996, relating to the financial statement of Thompson Book and Supply
Company which appear in the Current Report of Form 8-K, dated July 16, 1996, of
U.S. Office Products Company. We also consent to the reference to us under the
heading "Experts" in this Registration Statement.
/s/ Hamilton & Associates, Inc.
Oklahoma City, Oklahoma
August 12, 1996
<PAGE>
EXHIBIT 23.14
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of U.S. Office Products Company of our report dated
November 10, 1995, except for Notes 10 and 11, as to which the date is July 11,
1996, relating to the financial statements of International Interiors, Inc.,
which appear in the Current Report on Form 8-K, dated July 16, 1996, of U.S.
Office Products Company. We also consent to the reference to us under the
heading "Experts" in this Registration Statement.
/s/ Petherbridge, Davis & Company,
P.A.
Jacksonville, Florida
August 12, 1996
<PAGE>
EXHIBIT 23.15
INDEPENDENT AUDITORS' CONSENT
To the Directors of
Whitcoulls Group Limited
Auckland
New Zealand
We consent to the incorporation by reference in this Registration Statement
of our reports dated 7 September 1995 and 16 September 1994 relating to the
financial statements of Whitcoulls Group Limited, which appears in the Current
Report on Form 8-K, dated July 23, 1996 of U.S. Office Products Company. We also
consent to the reference to our firm under the heading "Experts" in the
Registration Statement.
DELOITTE TOUCHE TOHMATSU
August 15, 1996
Auckland, New Zealand
<PAGE>
___________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
_______________________________________________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
________________________________________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
_____________________________________________
U.S. OFFICE PRODUCTS COMPANY
(Exact name of obligor as specified in its charter)
CAYMAN ISLANDS N/A
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
1440 NEW YORK AVENUE N.W.
SUITE 310
WASHINGTON, D.C. 20036
(Address of principal executive offices) (Zip Code)
_________________________
5 1/2 CONVERTIBLE SUBORDINATED NOTES DUE 2003
(Title of Indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New
York 12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of
Amendment dated February 17, 1969, August 31, 1977, December 31, 1980,
September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996.
2. A copy of the Certificate of Authority of the Trustee to
Commence Business (see Exhibit 2 to Form T-1 filed in connection with
Registration Statement No. 33-50010, which is incorporated by reference).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee.
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the
Act (see Exhibit 6 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Chemical Bank, a corporation organized and existing under the laws
of the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the ____ day of _________,
1996.
THE CHASE MANHATTAN BANK
By /s/ [ ILLEGIBLE ]
-------------------------------------
Vice President
<PAGE>
[LOGO]
THE CHASE MANHATTAN BANK
270 Park Avenue
New York, NY 10017-2070
CERTIFICATE
I, Jean E. Rugani, an Assistant Corporate Secretary of The Chase
Manhattan Bank (formerly known as Chemical Bank), a banking organization
organized under the laws of the State of New York, do hereby certify that
attached are true and correct copies of -
(a) the Organization Certificate of Chemical Bank, as approved and
filed in the office of the Superintendent of Banks of the State of
New York on November 26, 1968,
(b) a Certificate of Amendment of the Organization Certificate of
Chemical Bank as approved and filed in the office of the
Superintendent of Banks of the State of New York on February 17,
1969,
(c) a Certificate of Amendment of the Organization Certificate of
Chemical Bank as approved and filed in the office of the
Superintendent of Banks of the State of New York on September 8,
1977,
(d) a Certificate of Amendment of the Organization Certificate of
Chemical Bank as approved and filed in the office of the
Superintendent of Banks of the State of New York on January 29,
1981,
(e) a Certificate of Amendment of the Organization Certificate of
Chemical Bank as approved and filed in the office of the
Superintendent of Banks of the State of New York on September 14,
1982,
(f) a Certificate of Amendment of the Organization Certificate of
Chemical Bank as approved and filed in the office of the
Superintendent of Banks of the State of New York on March 13, 1985;
(g) a Certificate of Amendment of the Organization Certificate of
Chemical Bank as approved and filed in the office of the
Superintendent of Banks of the State of New York on June 4, 1992;
and
(h) a Certificate of Amendment of the Organization Certificate of
Chemical Bank as approved and filed in the office of the
Superintendent of Banks of the State of New York effective as of
July 13, 1996.
I further certify that said Organization Certificate, as amended by
said Certificates of Amendment, is in full force and effect on the date
hereof.
IN WITNESS WHEREOF I have hereunto set my hand and affixed the seal
of The Chase Manhattan Bank as of this 18th day of July 1996.
/s/ Jean E. Rugani
----------------------------------------
Jean E. Rugani
<PAGE>
I, Bernard Gassman , DEPUTY SUPERINTENDENT OF BANKS OF THE STATE OF NEW
YORK, DO HEREBY CERTIFY THAT I HAVE CAUSED THE ANNEXED COPY OF the
Organization Certificate of Chemical Bank dated November 26, 1968, and filed
in the office of the Superintendent of Banks on November 26, 1968 TO BE
COMPARED BY A COMPETENT CLERK WITH THE ORIGINAL ON FILE IN THE BANKING
DEPARMENT, AND THE SAME IS A CORRECT COPY OF SAID Organization Certificate
END OF THE WHOLE THEREOF.
IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND
AND AFFIXED THE OFFICIAL SEAL OF THE BANKING
DEPARTMENT OF NEW YORK, N.Y., THIS 17th
day of February 1968
/s/ Bernard Gassman
-----------------------------------
DEPUTY SUPERINTENDENT
Form Cert. 11-2-65-3M (5A2-409)<PAGE>
<PAGE>
ORGANIZATION CERTIFICATE
OF
CHEMICAL BANK
Received this 25th day of
-------
NOVEMBER 1968
-------------------------- ----------
---------------------------------------
Superintendent of Banks
Filed for examination this 25th day of
-----
NOVEMBER 1968
-------------------------- ----------
---------------------------------------
Superintendent of Banks
APPROVED by the Banking Board by
---------------
unanimous instrument in writing on the
26th day of NOVEMBER 19 68
------- -------------- -------
/s/ [ ILLEGIBLE ]
---------------------------------------
Secretary of the Banking Board
APPROVED this
----------------------------------
26th day of NOVEMBER 19 68
------- -------------- -------
---------------------------------------
Superintendent of Banks
Filed in the office of
Superintendent of Banks
---------------------------------------
26th day of NOVEMBER 19 68
------- -------------- -------
---------------------------------------
Recorded in the office of
---------------------------------------
this day of 19
------------- ----------- ---
<PAGE>
ORGANIZATION CERTIFICATE
OF
CHEMICAL BANK
We, the undersigned all being of full age and citizens of the
United States, two of us being residents of the State of New York and three
of us being residents of states contiguous to the State of New York, for the
purpose of incorporating and organizing a trust company under the banking
laws of the State of New York do hereby certify as follows:
FIRST: The name by which the Corporation is to be known is
CHEMICAL BANK.
SECOND: The place where its office is to be located is 20 Pine
Street, Borough of Manhattan, City, County and State of New York.
THIRD: The amount of authorized capital stock which the
Corporation is hereafter to have is $510,000, and the number of shares into
which such capital stock is to be divided is 42,500 shares, each of the same
class and of the par value of $12 per share.
FOURTH: The names, places of residence and citizenship of the
incorporators and the number of shares of capital stock of the Corporation
subscribed for by each are as follows:
<PAGE>
Number of
Place of Shares
Name Residence Citizenship Subscribed
------ ----------- ----------- ----------
William S. Renchard 200 E. 66th Street U.S. 84
New York, N.Y. 10021
Hulbert S. Aldrich 1088 Park Avenue U.S. 84
New York, N.Y. 10028
Howard W. McCall, Jr. 68 Dorchester Road U.S. 84
Darien, Conn. 06820
Walter M. Ross 442 North Street U.S. 84
Greenwich, Conn. 06830
Arthur P. Ringler 27 Londonberry Way U.S. 84
Summit, New Jersey 07901
FIFTH: The number of directors of the Corporation shall be not
less than five nor more than fifteen; PROVIDED, HOWEVER, that upon
effectiveness of the merger of Chemical Bank New York Trust Company into the
Corporation the number of directors of the Corporation shall be not less than
seven nor more than twenty-five.
SIXTH: The names of the incorporators who are to serve as
directors of the Corporation until the first annual meeting of stockholders
of the Corporation are:
William S. Renchard
Hulbert S. Aldrich
Howard W. McCall, Jr.
Walter M. Ross
Arthur P. Ringler
SEVENTH: The Corporation is to exercise the powers conferred by
Section 100 of the banking laws of the State of New York.<PAGE>
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Certificate
this day of 1968
---- ---------------
/s/ William S. Renchard
-------------------------------------
William S. Renchard, Incorporator
/s/ Hubert S. Aldrich
-------------------------------------
Hubert S. Aldrich, Incorporator
/s/ Howard W. McCall, Jr.
-------------------------------------
Howard W. McCall, Jr., Incorporator
-------------------------------------
Walter M. Ross, Incorporator
/s/ Arthur P. Ringler
-------------------------------------
Arthur P. Ringler, Incorporator
<PAGE>
STATE OF NEW YORK, )
) ss.:
COUNTY OF NEW YORK, )
On this ________ day of _________________________ 1968 personally
appeared before me William S. Renchard, Hulbert S. Aldrich, Howard W. McCall,
Jr., Walter M. Ross and Arthur P. Ringler, to me known to be the persons
described in and who executed the foregoing certificate, and severally
acknowledged that they executed the same.
___________________________________
Notary Public
[Notarial Seal]
<PAGE>
Filed in the Office of the Superintendent
of Banks, State of New York, this
20 day of 19
- ----- --------------- ----
- ------------------------------------------
ADMINISTRATIVE OFFICER
<PAGE>
I, FRANK WILLE, SUPERINTENDENT OF BANKS OF THE STATE OF NEW YORK,
DO HEREBY APPROVE, THE ANNEXED CERTIFICATE ENTITLED "CERTIFICATE OF AMENDMENT
OF THE ORGANIZATION CERTIFICATE OF CHEMICAL BANK
UNDER SECTION 8005 OF THE BANKING LAW" DATED 1969, PROVIDING FOR INCREASE
OF CAPITAL STOCK FROM $ to $
IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND
AND AFFIXED THE OFFICIAL SEAL OF THE BANKING
DEPARTMENT OF ALBANY, THIS 17th day of
------------
FEBRUARY 19 69
------------------- ----
------------------------------------------------
Superintendent of Banks
<PAGE>
I, Bernard Gassman DEPUTY SUPERINTENDENT OF BANKS OF THE
-------------------------------------
STATE OF NEW YORK, DO HEREBY CERTIFY THAT I HAVE CAUSED THE ANNEXED COPY OF
Certificate of Amendment of the Organization Certificate of Chemical Bank dated
- -------------------------------------------------------------------------------
February 10, 1969, and filed in the office of the Superintendent of Banks on
- -------------------------------------------------------------------------------
February 17, 1969 TO BE COMPARED BY A COMPETENT CLERK WITH THE ORIGINAL
- -------------------------
ON FILE IN THE BANKING DEPARTMENT, AND THE SAME IS A CORRECT COPY OF SAID
Certificate of Amendment of Organization Certificate AND OF THE WHOLE THEREOF.
- -----------------------------------------------------
IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND
AND AFFIXED THE OFFICIAL SEAL OF THE BANKING
DEPARTMENT OF NEW YORK, N.Y., THIS 17th day
--------
of FEBRUARY 19 69
------------- ----
/s/ Bernard Gassman
------------------------------------------------
Deputy Superintendent
<PAGE>
CERTIFICATE OF AMENDMENT
OF
THE ORGANIZATION CERTIFICATE
OF
CHEMICAL BANK
UNDER SECTION 8005 OF THE BANKING LAW
We, WILLIAM S. RENCHARD and RAYMOND F. ADAMS, being, respectively,
the President and the Secretary of CHEMICAL BANK, a New York banking
organization, do hereby certify as follows:
1. The name of the Corporation is Chemical Bank.
2. The date on which the Organization Certificate of the
Corporation was filed by the Superintendent of Banks of the State of New York
is November 26, 1968.
3. Paragraph THIRD of the Organization Certificate of the
Corporation, stating that the amount of the its authorized capital stock is
$510,000 and the number of shares into which such capital stock is to be
divided is 42,500 shares, each of the same class and of the par value of $12
per share, is hereby amended to read as follows:
"THIRD: The amount of authorized capital stock which the
Corporation is hereafter to have is $160,731,564 and the number of shares
into which such capital stock is to be divided is 13,394,297 shares, each of
the same class and of the par value of $12 per share."
4. This amendment to the Organization Certificate was approved by
the votes, cast in person or by proxy at a special stockholders' meeting of
the Corporation duly held upon notice on December 30, 1968, by the holders of
record of all the outstanding shares of the capital stock of the Corporation.<PAGE>
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Certificate
this day of February 1969.
-----------------------------------
William S. Renchard
President
-----------------------------------
Raymond F. Adams
Secretary
[Corporate Seal]
<PAGE>
STATE OF NEW YORK, )
) ss.:
COUNTY OF NEW YORK, )
I, RAYMOND F. ADAMS, being duly sworn, depose and say that I, the
said Raymond F. Adams, am the Secretary of CHEMICAL BANK, and that I have
read and signed the foregoing Certificate and known the contents thereof and
the statements therein contained are true.
-----------------------------------
Raymond F. Adams
Secretary
Subscribed and sworn to before me
this day of February 1969.
/s/ Donald E. Gould
- ----------------------------------
Notary Public
<PAGE>
I, William J. Heaney, Deputy SUPERINTENDENT OF BANKS OF
THE STATE OF NEW YORK DO HEREBY APPROVE THE ANNEXED CERTIFICATE ENTITLED
"CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF
UNDER SECTION 8005 OF THE BANKING LAW" DATED 19
PROVIDING FOR INCREASE OF CAPITAL STOCK FROM $ TO $
IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND
AND AFFIXED THE OFFICIAL SEAL OF THE BANKING
DEPARTMENT OF NEW YORK, N.Y., THIS 8th day
---------
of SEPTEMBER 19 77
--------------- ----
Deputy /s/ [ ILLEGIBLE ]
--------------------------------------
Superintendent of Banks
<PAGE>
CERTIFICATE OF AMENDMENT
OF
THE ORGANIZATION CERTIFICATE
OF
CHEMICAL BANK
UNDER SECTION 8005 OF THE BANKING LAW
We, DONALD C. PLATTEN and JOHN B. WYNNE, being, respectively, the
Chairman of the Board and the Secretary of CHEMICAL BANK, a New York banking
organization, do hereby certify as follows:
1. The name of the Corporation is Chemical Bank.
2. The date on which the Organization Certificate of the
Corporation was filed by the Superintendent of Banks of the State of New York
is November 26, 1968.
3. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on February 17, 1969.
4. Paragraph THIRD of the Organization Certificate of the
Corporation, as amended, stating that the amount of its authorized capital
stock is $160,731,564 and the number of shares into which such capital stock
is to be divided is 13,394,297 shares, each of the same class and of the par
value of $12 per share, is hereby amended to read as follows:
<PAGE>
"THIRD: The amount of authorized capital stock which the
Corporation is hereafter to have is $187,200,000 and the number of shares
into which such capital stock is to be divided is 15,600,000 shares, each of
the same class and of the par value of $12 per share."
5. This amendment to the Organization Certificate was approved by
the votes cast in person or by proxy at a special stockholders' meeting, duly
held on August 31, 1977, by the holders of record of all the outstanding
shares of the capital stock of the Corporation.
IN WITNESS WHEREOF, the undersigned have executed this Certificate
this 31st day of August 1977.
-----------------------------------
DONALD C. PLATTEN,
Chairman of the Board
/s/ John B. Wynne
-----------------------------------
JOHN B. WYNNE
Secretary
[Corporate Seal]
<PAGE>
STATE OF NEW YORK, )
) ss. :
COUNTY OF NEW YORK, )
I, JOHN B. WYNNE, being duly sworn, depose and say that I, the said
JOHN B. WYNNE, am the Secretary of CHEMICAL BANK, and that I have read and
signed the foregoing Certificate and know the contents thereof and the
statements therein contained are true.
/s/ John B. Wynne
-----------------------------------
JOHN B. WYNNE
Secretary
Subscribed and sworn to before
me this day of 1977.
- -----------------------------------
Notary Public
<PAGE>
I, DONALD J. KAVANAGH DEPUTY SUPERINTENDENT OF BANKS OF THE STATE OF NEW
YORK, DO HEREBY APPROVE THE ANNEXED CERTIFICATE ENTITLED "CERTIFICATE OF
AMENDMENT OF THE ORGANIZATION CERTIFICATE OF UNDER
SECTION 8005 OF THE BANKING LAW" DATED AS OF 19 ,
PROVIDING FOR INCREASE OF CAPITAL STOCK FROM $ TO
IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND
AND AFFIXED THE OFFICIAL SEAL OF THE BANKING
DEPARTMENT OF NEW YORK, N.Y., THIS 29th day
--------
of JANUARY 19 81
------------- ----
/s/ Donald J. Kavanaugh
------------------------------------------------
Deputy SUPERINTENDENT OF BANKS
<PAGE>
CERTIFICATE OF AMENDMENT
OF
THE ORGANIZATION CERTIFICATE
OF
CHEMICAL BANK
UNDER SECTION 8005 OF THE BANKING LAW
We, DONALD C. PLATTEN and JOHN B. WYNNE, being, respectively, the
Chairman of the Board and the Secretary of CHEMICAL BANK, a New York banking
organization, do hereby certify as follows:
1. The name of the Corporation is Chemical Bank.
2. The date on which the Organization Certificate of the
Corporation was filed by the Superintendent of Banks of the State of New York
is November 26, 1968.
3. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on February 17, 1969.
4. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on September 8, 1977.
5. Paragraph THIRD of the Organization Certificate of the
Corporation, as amended, stating that the amount of its authorized capital
stock is $187,200,000 and the number of shares into which such capital stock
is to be divided is 15,600,000 shares, each of the same class and of the par
value of $12 per share, is hereby amended to read as follows:
<PAGE>
"THIRD: The amount of authorized capital stock
which the Corporation is hereafter to have is $203,580,000
and the number of shares into which such capital stock is to
be divided is 16,965,000 shares, each of the same class and
of the par value of $12 per share."
6. This amendment to the Organization Certificate was approved by
the votes cast in person or by proxy at a special stockholders' meeting, duly
held as of December 31, 1980, by the holders of record of all the outstanding
shares of the capital stock of the Corporation.
IN WITNESS WHEREOF, the undersigned have executed this Certificate
as of December 31, 1980.
-----------------------------------
DONALD C. PLATTEN,
Chairman of the Board
/s/ John B. Wynne
-----------------------------------
JOHN B. WYNNE
Secretary
[Corporate Seal]
<PAGE>
STATE OF NEW YORK, )
) ss. :
COUNTY OF NEW YORK, )
I, JOHN B. WYNNE, being duly sworn, depose and say that I, the
said JOHN B. WYNNE, am the Secretary of CHEMICAL BANK, and that I have read
and signed the foregoing Certificate and know the contents thereof and the
statements therein contained are true.
/s/ John B. Wynne
-----------------------------------
JOHN B. WYNNE
Secretary
Subscribed and sworn to before
me this day of 1977.
- -----------------------------------
Notary Public
<PAGE>
I, PETER M. PHILBIN, DEPUTY SUPERINTENDENT OF BANKS OF THE STATE OF
NEW YORK, DO HEREBY APPROVE THE ANNEXED CERTIFICATE ENTITLED "CERTIFICATE OF
AMENDMENT OF THE ORGANIZATION CERTIFICATE OF UNDER
SECTION 8005 OF THE BANKING LAW" DATED AS OF 19 ,
providing for increase of capital stock from $ to
IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND
AND AFFIXED THE OFFICIAL SEAL OF THE BANKING
DEPARTMENT OF NEW YORK, N.Y., THIS 14th day
--------
of SEPTEMBER 19 82
--------------- ----
------------------------------------------------
Deputy Superintendent of Banks
<PAGE>
CERTIFICATE OF AMENDMENT
OF
THE ORGANIZATION CERTIFICATE
OF
CHEMICAL BANK
UNDER SECTION 8005 OF THE BANKING LAW
We, DONALD C. PLATTEN and JOHN B. WYNNE, being, respectively, the
Chairman of the Board and the Secretary of CHEMICAL BANK, a New York banking
organization, do hereby certify as follows:
1. The name of the Corporation is Chemical Bank.
2. The date on which the Organization Certificate of the
Corporation was filed by the Superintendent of Banks of the State of New York
is November 26, 1968.
3. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on February 17, 1969.
4. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on September 8, 1977.
5. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on January 29, 1981.
<PAGE>
6. Paragraph THIRD of the Organization Certificate of the
Corporation, as amended, stating that the amount of its authorized capital
stock is $203,580,000 and the number of shares into which such capital stock
is to be divided is 16,965,000 shares, each of the same class and of the par
value of $12 per share, is hereby amended to read as follows:
"THIRD: The amount of authorized capital stock which
the Corporation is hereafter to have is $287,580,000 and the
number of shares into which such capital stock is to be
divided is 23,965,000 shares, each of the same class and of
the par value of $12 per share."
7. This amendment to the Organization Certificate was approved by
the votes cast in person or by proxy at a special stockholders' meeting, duly
held as of September 8, 1982, by the holders of record of all the outstanding
shares of the capital stock of the Corporation.
IN WITNESS WHEREOF, the undersigned have executed this Certificate
this 9th day of September 1982.
-----------------------------------
DONALD C. PLATTEN,
Chairman of the Board
/s/ John B. Wynne
-----------------------------------
JOHN B. WYNNE
Secretary
[Corporate Seal]
<PAGE>
STATE OF NEW YORK, )
) ss. :
COUNTY OF NEW YORK, )
I, JOHN B. WYNNE, being duly sworn, depose and say that I, the said
JOHN B. WYNNE, am the Secretary of CHEMICAL BANK, and that I have read and
signed the foregoing Certificate and know the contents thereof and the
statements therein contained are true.
/s/ John B. Wynne
-----------------------------------
JOHN B. WYNNE
Secretary
Subscribed and sworn to before
me this 9th day of September 1982.
- -----------------------------------
Notary Public
<PAGE>
STATE OF NEW YORK,
BANKING DEPARTMENT
I, PETER M. PHILBIN, Deputy Superintendent of Banks of the State of
New York, DO HEREBY APPROVE the annexed certificate entitled "Certificate of
Amendment of the Organization Certificate of Chemical Bank under Section 8005
of the Banking Law" dated February 28, 1985 providing for increase of capital
stock from $287,580,000, consisting of 23,965,000 shares of the par value of
$12 per share, to $315,000,000, consisting of 25,000,000 shares of the same
par value and 15,000,000 shares of preferred stock, par value of $1 per
share, with such terms as may be approved by the Board at the time of
issuance of any class or series of such preferred stock.
WITNESS, my hand and official seal of the Banking Department at the City of New
York, this 13th day of March in the Year of our Lord
-------- ---------------------------
one thousand nine hundred and eighty-five.
<PAGE>
CERTIFICATE OF AMENDMENT
OF
THE ORGANIZATION CERTIFICATE
OF
CHEMICAL BANK
UNDER SECTION 8005 OF THE BANKING LAW
We, WALTER V. SHIPLEY and JOHN B. WYNNE, being, respectively, the
Chairman of the Board and the Secretary of CHEMICAL BANK, a New York banking
organization, do hereby certify as follows:
1. The name of the Corporation is Chemical Bank.
2. The date on which the Organization Certificate of the
Corporation was filed by the Superintendent of Banks of the State of New York
is November 26, 1968.
3. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on February 17, 1969.
4. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on September 8, 1977.
5. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on January 29, 1981.
6. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on September 8, 1982.
<PAGE>
CERTIFICATE OF AMENDMENT
OF
THE ORGANIZATION CERTIFICATE
OF
CHEMICAL BANK
UNDER SECTION 8005 OF THE BANKING LAW
We, WALTER V. SHIPLEY and JOHN B. WYNNE, being, respectively, the
Chairman of the Board and the Secretary of CHEMICAL BANK, a New York banking
organization, do hereby certify as follows:
1. The name of the Corporation is Chemical Bank.
2. The date on which the Organization Certificate of the
Corporation was filed by the Superintendent of Banks of the State of New York
is November 26, 1968.
3. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on February 17, 1969.
4. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on September 8, 1977.
5. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on January 29, 1981.
6. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on September 8, 1982.
<PAGE>
7. Paragraph THIRD of the Organization Certificate of the
Corporation, as amended, stating that the amount of its authorized capital
stock is $287,580,000 and the number of shares into which such capital stock
is to be divided is 23,965,000 shares, each of the same class and of the par
value of $12 per share, is hereby amended to read as follows:
"THIRD: The amount of authorized capital stock which the
Corporation hereafter is to have is $315,000,000 and the number of
shares into which such capital stock is to be divided is 40,000,000
shares consisting of 25,000,000 shares of Common Stock, par value $12
per share, and 15,000,000 shares of Preferred Stock, par value $1 per
share, which shall be issued in one or more classes or series having
such designations, relative rights, preferences or limitations as
fixed by the Board of Directors of the Corporation at the time of
issuance of any such Preferred Stock."
8. This amendment to the Organization Certificate was approved by
a resolution adopted by the written consent of Chemical New York Corporation,
the sole stockholder of the Corporation, on February 28, 1985.
IN WITNESS WHEREOF, the undersigned have executed this Certificate
this 28th day of February 1985.
/s/ Walter V. Shipley
-----------------------------------
Walter V. Shipley
Chairman of the Board
/s/ John B. Wynne
-----------------------------------
JOHN B. WYNNE
Secretary
[Corporate Seal]
<PAGE>
STATE OF NEW YORK
BANKING DEPARTMENT
I, CARMINE M. TENGA, Deputy Superintendent of Banks of the State of
New York, DO HEREBY APPROVE the annexed Certificate entitled "Certificate of
Amendment of the Organization Certificate of CHEMICAL BANK under Section 8005
of the New York Banking Law," dated December 2, 1991, providing for the
following:
1) An increase in capital stock from $315,000,000, consisting of
25,000,000 shares of Common Stock, par value $12 per share, and
15,000,000 shares of Preferred Stock, par value $1 per share, to
$699,000,000, consisting of 57,000,000 shares of Common Stock, par
value $12 per share, and 15,000,000 shares of Preferred Stock, par
value $1 per share; and
2) The location of the Principal office as New York, New York.
Witness, my hand and official seal of the Banking Department of the City of
New York, this 4TH day of JUNE in the Year of our Lord one
--------- ------------
thousand nine hundred and ninety-two
/s/ Carmine H. Tensa
-----------------------------------
Deputy Superintendent of Banks
<PAGE>
STATE OF NEW YORK, )
)
COUNTY OF NEW YORK, )
I, JOHN B. WYNNE, being duly sworn, depose and say that I, the said
JOHN B. WYNNE, am the Secretary of CHEMICAL BANK, and that I have read and
signed the foregoing Certificate and know the contents thereof and the
statements therein contained are true.
/s/ John B. Wynne
-----------------------------------
JOHN B. WYNNE
Secretary
Subscribed and sworn to before
me this 3RD day of DECEMBER 1977.
------- ----------
- ---------------------------------------
Notary Public
<PAGE>
CERTIFICATE OF AMENDMENT
OF
THE ORGANIZATION CERTIFICATE
OF
CHEMICAL BANK
UNDER SECTION 8005 OF THE BANKING LAW
We, WALTER V. SHIPLEY and JOHN B. WYNNE, being, respectively, the
Chairman of the Board and the Secretary of CHEMICAL BANK, a New York banking
organization, do hereby certify as follows:
1. The name of the Corporation is Chemical Bank.
2. The Organization Certificate of Chemical Bank was filed by the
Superintendent of Banks of the State of New York on November 26, 1968.
3. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on February 17, 1969.
4. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on September 8, 1977.
5. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on January 29, 1981.
6. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on September 8, 1982.
7. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on March 13, 1985.
<PAGE>
8. Article SECOND of the Organization Certificate, stating that
the place where the Corporation's office is to be located is 20 Pine Street,
New York, New York, is hereby amended and restated to read in its entirety as
follows:
"SECOND: The principal office of the Corporation is to be located
in New York, New York."
9. Article THIRD of the Organization Certificate, as amended,
stating that the amount of its authorized capital stock is $315,000,000 and
the number of shares into which such capital stock is to be divided is
40,000,000 shares consisting of 25,000,000 shares of Common Stock, par value
$12 per share, and 15,000,000 shares of Preferred Stock, par value $1 per
share, is hereby amended and restated to read in its entirety as follows:
"THIRD: The amount of authorized capital stock which the
Corporation is hereafter to have is $699,000,000 and the number of
shares into which such capital stock is to be divided is 72,000,000
shares consisting of 57,000,000 shares of Common Stock, par value
$12 per share, and 15,000,000 shares of Preferred Stock, par value
$1 per share, which shall be issued in one or more classes or
series having such designations, relative rights, preferences or
limitations as fixed by the Board of Directors of the Corporation
at the time of issuance of any such Preferred Stock."
10. These amendments to the Organization Certificate were approved
by a resolution adopted by the written consent of Chemical Banking
Corporation, the sole stockholder of the Corporation, on December 2, 1991.
IN WITNESS WHEREOF, the undersigned have executed this Certificate
this 2nd day of December 1991.
/s/ Walter V. Shipley
-----------------------------------
Walter V. Shipley
Chairman of the Board
/s/ John B. Wynne
-----------------------------------
JOHN B. WYNNE
Secretary
<PAGE>
STATE OF NEW YORK
BANKING DEPARTMENT
I, PETER M. PHILBIN, Deputy Superintendent of Banks of the State of
New York, DO HEREBY APPROVE the annexed certificate entitled "CERTIFICATE OF
AMENDMENT OF THE ORGANIZATION CERTIFICATE OF CHEMICAL BANK UNDER SECTION 8005
OF THE BANKING LAW" dated July 10, 1996 providing for a change in name from
CHEMICAL BANK to THE CHASE MANHATTAN BANK and an increase in authorized
capital stock from $699,000,000, consisting of 15,000,000 shares with a par
value of $1 each designated as Preferred Stock and 57,000,000 shares with a
par value of $12 each designated as Common Stock to $1,335,000,000 consisting
of 15,000,000 shares with a par value of $1 each designated as Preferred
Stock and 110,000,000 shares with a par value of $12 each designated as
Common Stock. Such name change and increase in capital stock is to be
effective July 13, 1996
Witness, my hand and official seal of the Banking Department at the City of New
York, this 11TH day of JULY in the Year of our Lord
------------ --------------
one thousand nine hundred and NINETY-SIX
-----------------------------------
Deputy Superintendent of Banks
<PAGE>
CERTIFICATE OF AMENDMENT
OF
THE ORGANIZATION CERTIFICATE
OF
CHEMICAL BANK
UNDER SECTION 8005 OF THE NEW YORK BANKING LAW
We, WALTER V. SHIPLEY and ANTHONY J. HORAN, being, respectively,
the Chairman of the Board and the Secretary of CHEMICAL BANK, a New York
banking organization, do hereby certify as follows:
1. The name of the Corporation is Chemical Bank.
2. The Organization Certificate of Chemical Bank was filed by the
Superintendent of Banks of the State of New York on November 26, 1968.
3. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on February 17, 1969.
4. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on September 8, 1977.
5. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on January 29, 1981.
6. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on September 8, 1982.
7. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on March 13, 1985.
<PAGE>
8. A Certificate of Amendment of the Organization Certificate of
Chemical Bank was filed by the Superintendent of Banks of the State of New
York on June 4, 1992.
9. Article FIRST of the Organization Certificate, stating that
the name by which the Corporation is to be known is CHEMICAL BANK, is hereby
amended and restated to read in its entirety as follows:
"FIRST: The name by which the Corporation is to be known is THE
CHASE MANHATTAN BANK."
10. Article THIRD of the Organization Certificate, as amended,
stating that the amount of its authorized stock which the Corporation is
hereafter to have is $699,000,000 and the number of shares into which such
capital stock is to be divided is 72,000,000 shares consisting of 57,000,000
shares of Common Stock, par value $12 per share, and 15,000,000 shares of
Preferred Stock, par value $1 per share, which shall be issued in one of more
classes or series having such designations, relative rights, preferences or
limitations as fixed by the Board of Directors of the Corporation at the time
of issuance of any such Preferred Stock, is hereby amended and restated to
read in its entirety as follows:
"THIRD: The amount of authorized capital stock which the
Corporation is hereafter to have is $1,335,000,000 and the number of shares
into which such capital stock is to be divided is 125,000,000 shares
consisting of 110,000,000 shares of Common Stock, par value $12 per share,
and 15,000,000 shares of Preferred Stock, par value $1 per share, which shall
be issued in one or more classes or series having such designations, relative
rights, preferences or limitations as fixed by the Board of Directors of the
Corporation at the time of issuance of any such Preferred Stock."
11. These amendments to the Organization Certificate were approved
by a resolution adopted by the written consent of The Chase Manhattan
Corporation, the sole stockholder of the Corporation, on July 3, 1996.
IN WITNESS WHEREOF, the undersigned have executed this Certificate
this 10th day of July, 1996.
/s/ Walter V. Shipley
-----------------------------------
Walter V. Shipley
Chairman of the Board
/s/ A. J. Horan
-----------------------------------
Anthony J. Horan
Secretary
<PAGE>
I, ANTHONY J. HORAN, being duly sworn, depose and say that I, the
said ANTHONY J. HORAN, am the Secretary of CHEMICAL BANK, and that I have
read and signed the foregoing Certificate and know the contents thereof and
the statements therein contained are true.
/s/ A. J. Horan
-----------------------------------
Anthony J. Horan
Secretary
Subscribed and sworn to before me
this 10TH day of July 1996.
----------
/s/ Virginia Stank
- ----------------------------------
Notary Public
<PAGE>
BY-LAWS
THE CHASE MANHATTAN BANK
(formerly known as Chemical Bank)
AS AMENDED THROUGH
July 16, 1996
<PAGE>
CONTENTS
SUBJECT
ARTICLE
I MEETINGS OF STOCKHOLDERS
Section 1.01 Annual Meeting
Section 1.02 Special Meetings
Section 1.03 Quorum
II BOARD OF DIRECTORS
Section 2.01 Number
Section 2.02 Vacancies
Section 2.03 Annual Meeting
Section 2.04 Regular Meetings
Section 2.05 Special Meetings
Section 2.06 Quorum
Section 2.07 Rules and Regulations
Section 2.08 Compensation
III COMMITTEES
Section 3.01 Executive Committee
Section 3.02 Examining Committee
Section 3.03 Other Committees
IV OFFICERS AND AGENTS
Section 4.01 Officers
Section 4.02 Clerks and Agents
Section 4.03 Term of Office
Section 4.04 Chairman of the Board
Section 4.05 President
Section 4.06 Vice Chairman of the Board
Section 4.07 Chief Financial Officer
Section 4.08 Controller
Section 4.09 Secretary
Section 4.10 General Auditor
Section 4.11 Powers and Duties of Other Officers
Section 4.12 Fidelity Bonds
V CORPORATE SEAL
VI FISCAL YEAR
VII INDEMNIFICATION
Section 7.01 Right of Indemnification
Section 7.02 Contracts and Funding
Section 7.03 Employee Benefit Plans
Section 7.04 Indemnification Not Exclusive Right
Section 7.05 Advancement of Expenses; Procedures
VII BY-LAWS
Section 8.01 Inspection
Section 8.02 Amendments
Section 8.03 Construction
<PAGE>
BY-LAWS
OF
THE CHASE MANHATTAN BANK
ARTICLE I
MEETINGS OF STOCKHOLDERS
SECTION 1.01. Annual Meeting. The annual meeting of stockholders
of The Chase Manhattan Bank (herein called the Bank), shall be held in the
Borough of Manhattan, City of New York, State of New York, within the first
four months of each calendar year, on such date and at such time and place as
the Board of Directors (herein called the Board), may determine, for the
election of directors and the transaction of such other business as may
properly come before the meeting. Notice of such meeting, stating the
purpose or purposes thereof and the time when and the place where it is to be
held and signed by the Chairman of the Board (herein called the Chairman),
the President, a Vice Chairman of the Board or the Secretary or an Assistant
Corporate Secretary of the Bank, shall be served by personal delivery upon
each stockholder of record entitled to vote at such meeting not less than 10
nor more than 50 days before said meeting.
SECTION 1.02. Special Meetings. A special meeting of the
stockholders may be called at any time by the Board, the Chairman, the
President, or a Vice Chairman of the Board, or upon the request in writing of
the holders of record of not less than 40% of the outstanding capital stock.
Notice of any special meeting, stating the time, place and purpose or
purposes thereof, shall be given by personal delivery to the stockholders in
the manner provided in Section 1.01 for the giving of notice of annual
meetings of stockholders. In the case of any meeting of stockholders, annual
or special, called for a purpose requiring other or further notice. Such
notice shall be give as required by law.
SECTION 1.03. Quorum. A majority of the outstanding common
stock, represented in person or by proxy, shall constitute a quorum at any
meeting of stockholders, unless otherwise provided by law; but less than a
quorum may adjourn any meeting, from time to time, and the meeting may be
held as adjourned, without further notice.
ARTICLE II.
BOARD OF DIRECTORS
SECTION 2.01. Number. The business and affairs of the Bank shall
be managed by or under the direction of a Board of Directors, of such number
as may be fixed from time to time by resolution adopted by the Board, but in
no event less than 7 or more 25, selected, organized and continued in
accordance with the provisions of the New York Banking Law. Each director
hereafter elected shall hold office until the next annual meeting of the
stockholders and until his successor is elected and has qualified, or until
his death or until he shall resign or shall have been removed.
<PAGE>
SECTION 2.02. Vacancies. In case of any increase in the number
of directors, the additional director or directors, and in case of any
vacancy in the board due to death, resignation, removal, disqualification or
any other cause, the successors to fill the vacancies, not exceeding
one-third of the entire Board, shall be elected by a majority of the
directors then in office.
SECTION 2.03. Annual Meeting. An annual meeting of the directors
shall be held each year, without notice, immediately following the annual
meeting of stockholders. The time and place of such meeting shall be
designated by the Board. At such meeting, the directors shall, after
qualifying, elect from their own number a Chairman of the Board, a President
and one or more Vice Chairmen of the Board, and shall elect or appoint such
other officers authorized by these By-laws as they may deem desirable, and
appoint the Committees specified in Article III hereof. The directors may
also elect to serve at the pleasure of the Board, one or more Honorary
Directors, not members of the Board. Honorary Directors of the Board shall be
paid such compensation or such fees for attendance at meetings of the Board,
and meetings of other committees of the Board, as the Board shall determine
from time to time.
SECTION 2.04. Regular Meetings. The Board shall hold a regular
meeting without notice at the principal office of the Bank on the third
Tuesday in each month, with the exception of the month of August, at such
time as shall be determined by the Board, unless another time or place within
or without the State, shall be fixed by resolution of the Board. Should the
day appointed for a regular meeting fall on a legal holiday, the meeting
shall be held at the same time on the preceding day or on such other day as
the Board may order.
SECTION 2.05. Special Meetings. Special meetings of the Board
shall be held whenever called by the Chairman, the President, a Vice Chairman
of the Board, the Secretary or a majority of the directors at the time in
office. A notice shall be given as hereinafter in this Section provided of
each such special meeting, in which shall be stated the time and place of
such meeting, but, except as otherwise expressly provided by law or by these
By-laws, the purposes thereof need not be stated in such notice. Except as
otherwise provided by law, notice of each such meeting shall be mailed to
each director, addressed to him at his residence or usual place of business
at least two (2) days before the day on which such meeting is to be held, or
shall be sent addressed to him at such place by telegraph, cable, wireless or
other form of recorded communication or be delivered personally or by
telephone not later than noon of the calendar day before the day on which
such meeting is to be held. At any regular or special meeting of the Board,
or any committee thereof, one or more Board or committee members may
participate in such meeting by means of a conference telephone or similar
communications equipment allowing all persons participating in the meeting to
hear each other at the same time. This type of participation shall
constitute presence in person at the meeting. Notice of any meeting of the
Board shall not, however, be required to be given to any director who submits
a signed waiver of notice whether before or after the meeting, or if he shall
be present at such meeting; and any meeting of the Board shall be a legal
meeting without any notice thereof having been given if all the directors of
the Bank then in office shall be present thereat.
SECTION 2.06. Quorum. One-third of the members of the entire
Board, or the next highest integer in the event of a fraction, shall
constitute a quorum, but if less than a quorum be present, a majority of
those present may adjourn any meeting from time to time and the meeting may
be held as adjourned without further notice.
<PAGE>
SECTION 2.07 Rules and Regulations. The Board may adopt such
rules and regulations for the conduct of its meetings and the management of
the affairs of the Bank as it may deem proper, not inconsistent with the laws
of the State of New York or these By-laws.
SECTION 2.08. Compensation. Directors shall be entitled to
receive from the Bank such fees for attendance at meetings of the Board or of
any committee, or both, as the Board from time to time determine. The Board
may also likewise provide that the Bank shall reimburse each such director or
member of such committee for any expenses paid by him on account of his
attendance at any such meeting. Nothing in this Section contained shall be
construed to preclude any director from serving the Bank in any other
capacity and receiving compensation therefor.
ARTICLE III
COMMITTEES
SECTION 3.01. Executive Committee. The Board, by resolution
adopted by a majority of the entire Board, shall appoint an Executive
Committee which, when the Board is not in session, shall have and may
exercise all the powers of the Board that lawfully may be delegated
including, without limitation, the power and authority to declare dividends.
The Executive Committee shall consist of such number of directors as the
Board shall from time to time determine, but not less than five and one of
whom shall be designated by the Board as Chairman thereof, as follows: (a)
the Chairman of the Board, the President, the Vice Chairmen of the Boar, and
(b) such other directors, none of whom shall be an officer of the Bank, as
shall be appointed to serve at the pleasure of the Board. The Board, by
resolution adopted by a minority of the entire Board, may designate one or
more directors as alternate members of the Executive Committee and the manner
and circumstances in which such alternate members shall replace or act in the
place of absent or disqualified members of the Executive Committee. The
attendance of one-third of the members of the Committee or their substitutes,
or the next highest integer in the event of a fraction, at any meeting shall
constitute a quorum, and the act of a majority of those present at a meeting
thereof at which a quorum is present shall be the act of the Committee. All
acts done and powers conferred by the Committee from time to time shall be
deemed to be, and may be certified as being done or conferred under authority
of the Board. The Committee shall fix its own rules and procedures, and the
minutes of the meetings of the Committee shall be submitted at the next
regular meeting of the Board at which a quorum is present, or if
impracticable at the next such subsequent meeting. The Committee shall hold
meetings "On Call and such meetings may be called by the Chairman of the
Executive Committee, the Chairman of the Board, the President, a Vice
Chairman of the Board, or the Secretary. Notice of each such meeting of the
Committee shall be given by mail, telegraph, cable, wireless or other form of
recorded communication or be delivered personally or by telephone to each
member of the Committee not later than the day before the day on which such
meeting is to be held. Notice of any such meeting need not be given to any
member of the Committee who submits a signed waiver of notice whether before
or after the meeting, or if he shall be present at such meeting; and any
meeting of the Committee shall be a legal meeting without any notice thereof
having been given, if all the members of the Committee shall be present
thereat. In the case of any meeting, in the absence of the Chairman of the
Executive Committee, such members as shall be designated by the Chairman of
the Executive Committee or the Executive Committee shall act as Chairman of
the meeting.
<PAGE>
SECTION 3.02. Examining Committee. The Board, by resolution
adopted by a majority of the entire Board, shall appoint an Examining
Committee composed of not less than three of its members, none of whom shall
be an officer of the Bank, to hold office at its pleasure and one of whom
shall be designated by the Board as chairman thereof. The Committee shall
make such examination into the affairs of the Bank and its loans and
discounts and make such reports in writing thereof as may be directed by the
Board or required by the Banking Law. The attendance of one third of the
members of the Committee, or the next highest integer in the event of a
fraction, at any meeting shall constitute a quorum, and the act of a majority
of those present at a meeting thereof at which a quorum is present shall be
the act of the Committee.
SECTION 3.03. Other Committees. The Board, by resolution adopted
by a majority of the entire Board, may appoint, from time to time, such other
committees composed of not less than three of its members for such purposes
and with such duties and powers as the Board may determine. The attendance
of one-third of the members of such other committees, or the next highest
integer in the event of a fraction, at any meeting shall constitute a quorum,
and the act of a majority of those present at a meeting thereof at which a
quorum is present shall be the act
ARTICLE IV
OFFICERS AND AGENTS
SECTION 4.01. Officers. The officers of the Bank shall be (a) a
Chairman of the Board, a President and one or more Vice Chairmen of the
Board, each of whom must be a director and shall be elected by the Board; (b)
a Chief Financial Officer, a Controller, a Secretary and a General Auditor,
each of whom shall be elected by the Board; and (c) may include a Chief
Credit Officer, a Chief Administrative Officer, a Chief Technology Officer,
one or more Group Executives and such other officers as may from time to time
be elected by the Board or under its authority, or appointed by the Chairman
or the President or a Vice Chairman of the Board.
SECTION 4.02. Clerks and Agents. The Board may elect and dismiss,
or the Chairman or the President or a Vice Chairman of the Board may appoint
and dismiss, or delegate to any other officers authority to appoint and
dismiss, such clerks, agents and employees as may be deemed advisable for the
prompt and orderly transaction of the Bank's business, and may prescribe, or
authorize the appointing officers to prescribe, their respective duties,
subject to the provisions of these By-laws.
SECTION 4.03. Term of Office. The officers designated in Section
4.01 (a) shall be elected by the Board at its annul meeting. The officers
designated in Section 4.01 (b) may be elected at the annual or any other
meeting of the Board. The officers designated in Section 4.01 (c) may be
elected at the annual or any other meeting of the Board or appointed at any
time by the designated proper officers. Any vacancy occurring in any office
designated in Section 4.01 (a) may be filled at any regular or special
meeting of the Board. The officers elected pursuant to Section 4.01 (a) shall
each hold office for the term of one year and until their successors are
elected, unless sooner disqualified or removed by a vote of two-thirds shall
of the whole Board. The officers elected by the Board pursuant to Section
4.01 (b) of these By-laws shall hold office at the pleasure of the Board.
All other officers, clerks, agents and employees elected by the Board, or
appointed by the Chairman, the President or a Vice Chairman of the Board, or
under their authority, shall hold their respective offices at the pleasure of
the Board or officers elected pursuant to Section 4.01 (a).
<PAGE>
SECTION 4.04. Chairman of the Board. The Chairman shall be the
chief executive officer of the Bank and shall have, subject to the control of
the Board, general supervision and direction of the policies and operations
of the Bank. He shall preside at all meetings of the stockholders and at all
meetings of the Board. He shall have the right to execute any document or
perform any act which could be or is required to be executed or performed by
the President of the Bank. He shall have the power to sign checks, orders,
contracts, leases, notes, drafts and other documents and instruments in
connection with the business of the Bank, and together with the Secretary or
an Assistant Corporate Secretary or execute conveyances of real estate and
other documents and instruments to which the seal of the Bank is affixed. He
shall perform such other duties as from time to time may be prescribed by the
Board.
SECTION 4.05. President. The President shall, subject to the
direction and control of the Board and the Chairman, participate in the
supervision of the policies and operations of the Bank. In general, the
President shall perform all duties incident to the office of President, and
such other duties as from time to time may be prescribed by the Board or the
Chairman. In the absence of the Chairman, the President shall preside at
meetings of stockholders and of the Board. The President shall have the same
power to sign for the Bank as is prescribed in these By-laws for the Chairman.
SECTION 4.06. Vice Chairman of the Board. The Vice Chairman of
the Board, or if there be more than one, then each of them, shall, subject to
the direction and control of the Board and the Chairman, participate in the
supervision of the policies and operations of the Bank, and shall have other
duties as may be prescribed from time to time by the Board or the Chairman.
In the absence of the Chairman and the President, a Vice Chairman, as
designated by the Chairman or the Board, shall preside at meetings of the
stockholders and the Board. Each Vice Chairman have the same power to sign
for the Bank as is prescribed in these By-laws for the Chairman.
SECTION 4.07. Chief Financial Officer. The Chief Financial
Officer shall have such powers and perform such duties as the Board, the
Chairman, the President, or a Vice Chairman of the Board may from time to
time prescribe, which duties may include, without limitation, responsibility
for strategic planning, corporate finance, control, tax and auditing
activities, and shall perform such other duties as may be prescribed by these
By-laws.
SECTION 4.08. Controller. The Controller shall exercise general
supervision of the accounting departments of the Bank. He shall be
responsible to the Chief Financial Officer and shall render reports from time
to time relating to the general financial condition of the Bank. He shall
render such other reports and perform such other duties as from time to time
may be prescribed by the Chief Financial Officer, a Vice Chairman of the
Board, the President or the Chairman.
SECTION 4.09. Secretary. The Secretary shall:
(a) record all the proceedings of the meetings of the
stockholders, the Board and the Executive Committee in one or more books kept
for that purpose;
<PAGE>
(b) see that all notices are duly given in accordance with the
provisions of these By-laws or as required by law;
(c) be custodian of the seal of the Bank; and he may see that such
seal or a facsimile thereof is affixed to any documents the execution of
which on behalf of the Bank is duly authorized and may attest such seal when
so affixed; and
(d) in general, perform all duties incident to the office of
Secretary and such other duties as from time to time may be prescribed by the
Board and the Chairman.
SECTION 4.10. General Auditor. The General Auditor shall exercise
general supervision of the Auditing Division. He shall audit the affairs of
the Bank and its subsidiaries, including appraisal of the soundness and
adequacy of internal controls and operating procedures and shall ascertain
the extent of compliance with policies and procedures of the Bank. He shall
be responsible to the Board and shall make such audits and prepare such
regular reports as the Board, its Examining Committee or the Chairman may,
from time to time, require or as in his judgment are necessary in the
performance of his duties.
SECTION 4.11. Powers and Duties of Other Officers. The powers and
duties of all other officers of the Bank shall be those usually pertaining to
their respective officers, subject to the direction and control of the Board
and as otherwise provided in these By-laws.
SECTION 4.12. Fidelity Bonds. The Board, in its discretion, may
require any or all officers, agents, clerks and employees of the Bank to give
bonds covering the faithful performance of their duties or may obtain
insurance covering the same, in either case in form and amount approved by
the Board, the premiums thereon to be paid by the Bank.
ARTICLE V
CORPORATE SEAL
The corporate seal of the Bank shall be in the form of a circle and
shall bear the full name of the Bank and the words "Corporate Seal New York"
together with the logo of The Chase Manhattan Corporation.
ARTICLE VI
FISCAL YEAR
The fiscal year of the Bank shall be the calendar year.
<PAGE>
ARTICLE VII
INDEMNIFICATION
SECTION 7.01. Right to Indemnification. The Bank shall to the
fullest extent permitted by applicable law as then in effect indemnify any
person (the "Indemnitee") who was or is involved in any manner (including,
without limitation, as a party or a witness), or is threatened to be made so
involved, in any threatened, pending or completed investigation, claim,
action, suit or proceeding, whether civil, administrative or investigative
(including, without limitation, any action, suit or proceeding by or in the
right of the Bank to procure a judgment in its favor) (a "Proceeding") by
reason of the fact that he is or was a director, officer, employee or agent
of the Bank, or is or was serving at the request of the Bank as a director,
officer or employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against all expenses (including attorney's
fees), judgment, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such Proceeding. Such indemnification
shall be a contract right and shall include the right to receive payment in
advance of any expenses incurred by the Indemnitee in connection with such
Proceeding, consistent with the provisions of applicable law as then in
effect.
SECTION 7.02. Contracts and Funding. The Bank may enter into
contracts with any director, officer, employee or agent of the Bank in
furtherance of the provisions of this Article VII and may create a trust
fund, grant a security interest or use other means (including, without
limitation, a letter of credit) to ensure the payment of such amounts as may
be necessary to effect indemnification as provided in this Article VII.
SECTION 7.03. Employee Benefit Plans. For purposes of this
Article VII, references to "other enterprises" shall include employee benefit
plans; references to "fines" shall include any excise taxes assessed on a
person with respect to any employee benefit plan; and references to "serving
at the request of the Bank" shall include any service as a director, officer,
employee, or agent of the Bank which imposes duties on, or involves services
by, such director, officer, employee, or agent with respect to any employee
benefit plan, its participants, or beneficiaries; and a person who acted in
good faith and in a manner he reasonably believed to be in the interest of
the participant and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner not opposed to be the best interests of a
corporation.
SECTION 7.04. Indemnification Not Exclusive Right. The right of
indemnification and advancement of expenses provided in this Article VII
shall not be exclusive of any other rights to which a person seeking
indemnification may otherwise be entitled, under any statute, by-law,
agreement, vote of stockholders or disinterested directors or otherwise, both
as to action in his official capacity and as to action in another capacity
while holding such office. The provisions of this Article VII shall inure to
the benefit of the heirs and legal representatives of any person entitled to
indemnity under this Article VII and shall be applicable to Proceedings
commenced or continuing after the adoption of this Article VII whether
arising from acts or omissions occurring before or after such adoption.
<PAGE>
SECTION 7.05. Advancement of Expenses: Procedures. In
furtherance, but not limitation, of the foregoing provisions, the following
procedures and remedies shall apply with respect to advancement of expenses
and the right to indemnification under this Article VII:
(a) Advancement of Expenses. All reasonable expenses incurred by
or on behalf of the Indemnitee in connection with any Proceeding shall be
advanced to the Indemnitee by the Bank within twenty (20) days after the
receipt by the Bank of a statement or statements from the Indemnitee
requesting such advance or advances from time to time, whether prior to or
after final disposition of such Proceeding. Such statement or statements
shall reasonably evidence the expense incurred by the Indemnitee and, if
required by the law at the time of such advance, shall include or be
accompanied by an undertaking by or on behalf of the Indemnitee to repay the
amounts advanced if, and to the extent, it should ultimately be determined
that the Indemnitee is not entitled to be indemnified against such expenses.
(b) Written Request for Indemnification. To obtain
indemnification under this Article VII, an Indemnitee shall submit to the
Secretary of the Bank a written request, including such documentation and
information as is reasonably available to the Indemnitee and reasonably
necessary to determine whether and to what extent the Indemnitee is entitled
to indemnification (the "Supporting Documentation"). The determination of
the Indemnitee's entitlement to indemnification shall be made within a
reasonable time after receipt by the Bank of the written request for
indemnification together with the Supporting Documentation. The Secretary of
the Bank shall, promptly upon receipt of such a request for indemnification,
advise the Board in writing that the Indemnitee has requested indemnification.
(c) Procedure for Determination. The Indemnitee's entitlement to
indemnification under this Article VII shall be determined (i) by the Board
by a majority vote of a quorum (as defined in Article VII of these By-laws)
consisting of directors who were not parties to such action, suit or
proceeding, or (ii) if such quorum is not obtainable, or, even if obtained, a
quorum of disinterested directors so directs, by independent legal counsel in
a written opinion, or (iii) by the stockholders, but only if a majority of
the disinterested directors, if they constitute a quorum of the Board,
presents the issue of entitlement to indemnification to the stockholders for
their determination.
ARTICLE VIII
BY-LAWS
SECTION 8.01. Inspection. A copy of the By-laws shall at all
times be kept in a convenient place at the principal office of the Bank, and
shall be open for inspection by stockholders during banking hours.
SECTION 8.02. Amendments. Except as otherwise specifically
provided by the statute, these By-laws may be added to, amended, altered or
repealed at any meeting of the Board by vote of a majority of the entire
Board, provided that written notice of any such proposed action shall be
given to each director prior to such meeting, or that notice of such
addition, amendment, alteration or repeal shall have been given at the
preceding meeting of the Board.
<PAGE>
SECTION 8.03. Construction. The masculine gender, where appearing
in these By-laws, shall be deemed to include the feminine gender.
I, JEAN E. RUGANI, Assistant Corporate Secretary of THE CHASE
MANHATTAN BANK, New York, New York, hereby certify that the foregoing is a
true and correct copy of the By-laws of said Bank and that said By-laws are
in full force and effect on the date hereof.
Dated:
/s/ Jean E. Rugani
-----------------------------------
Jean E. Rugani
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business March 31, 1996, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS
ASSETS IN MILLIONS
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................................ $ 3,391
Interest-bearing balances ........................................ 2,075
Securities: ........................................................
Held to maturity securities......................................... 3,607
Available for sale securities....................................... 29,029
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold ............................................... 1,264
Securities purchased under agreements to resell .................. 354
Loans and lease financing receivables:
Loans and leases, net of unearned income ............. $73,216
Less: Allowance for loan and lease losses ............ 1,854
Less: Allocated transfer risk reserve ................ 104
-------
Loans and leases, net of unearned income,
allowance, and reserve ........................................... 71,258
Trading Assets ..................................................... 25,919
Premises and fixed assets (including capitalized
leases)........................................................... 1,337
Other real estate owned ............................................ 30
Investments in unconsolidated subsidiaries and
associated companies.............................................. 187
Customer's liability to this bank on acceptances
outstanding ...................................................... 1,082
Intangible assets .................................................. 419
Other assets ....................................................... 7,406
--------
TOTAL ASSETS ....................................................... $147,358
========
- 4 -
<PAGE>
LIABILITIES
Deposits
In domestic offices .............................................. $ 45,786
Noninterest-bearing .................................... $14,972
Interest-bearing ....................................... 30,814
In foreign offices, Edge and Agreement subsidiaries,
and IBF's ....................................................... 36,550
Noninterest-bearing ................................... $ 202
Interest-bearing ...................................... 36,348
-------
Federal funds purchased and securities sold under agree-
ments to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased .......................................... 11,412
Securities sold under agreements to repurchase ................... 2,444
Demand notes issued to the U.S. Treasury ........................... 699
Trading liabilities................................................. 19,998
Other Borrowed money:
With a remaining maturity of one year or less .................... 11,305
With a remaining maturity of more than one year .................. 130
Mortgage indebtedness and obligations under capitalized
leases ........................................................... 13
Bank's liability on acceptances executed and outstanding ........... 1,089
Subordinated notes and debentures .................................. 3,411
Other liabilities .................................................. 6,778
TOTAL LIABILITIES .................................................. 139,615
--------
EQUITY CAPITAL
Common stock ....................................................... 620
Surplus ............................................................ 4,664
Undivided profits and capital reserves ............................. 3,058
Net unrealized holding gains (Losses)
on available-for-sale securities ................................... (607)
Cumulative foreign currency translation adjustments ................ 8
TOTAL EQUITY CAPITAL ............................................... 7,743
--------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL ......................................... $147,358
========
I, Joseph L. Sclafani, S.V.P. & Controller of the
above-named bank, do hereby declare that this Report of
Condition has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true to the best of my knowledge and
belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
THOMAS G. LABRECQUE )
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