As filed with the Securities and Exchange Commission on December 22, 1998
Registration No. 333-66035
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
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Sequa Corporation
(Exact name of registrant as specified in its charter)
Delaware 13-1885030
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
200 Park Avenue
New York, New York 10166
(212) 986-5500
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
----------------
Norman E. Alexander
Chairman of the Board and Chief Executive Officer
Sequa Corporation
200 Park Avenue
New York, New York 10166
(212) 986-5500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------
Copy to:
W. Leslie Duffy, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
(212) 701-3000
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Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. |_|
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration 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 Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
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<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
PROSPECTUS
Sequa Corporation
$500,000,000
Debt Securities
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At various times we may offer debt securities in one or more series
worth up to $500,000,000 aggregate principal amount. We will provide the
specific terms of each series in supplements to this prospectus. You should read
this prospectus and any supplement carefully before you invest.
----------------------
This investment involves risks. See the Risk Factors section beginning on page
2.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense.
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This prospectus is dated , 1998.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by us with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference as of their
respective dates of filing and shall be deemed to be a part hereof:
1. Our Annual Report on Form 10-K (File No. 1-804) for the year ended
December 31, 1997 (the "1997 Form 10-K").
2. Our Current Reports on Form 8-K (File No. 1-804) filed September 10,
1998 and November 6, 1998.
3. Our Quarterly Reports on Form 10-Q (File No. 1-804) for the quarters
ended March 31, 1998, June 30, 1998 and September 30, 1998.
4. Our Proxy Statement on Schedule 14A (File No. 1-804) filed March 30,
1998.
All documents filed by us pursuant to Sections 13(a), 13(c), 14, or
15(d) of the 1934 Act subsequent to the date of this prospectus and before the
termination of this offering shall be deemed to be incorporated by reference and
a part of this prospectus from the date such documents are filed.
For purposes of this prospectus, any statement in a document
incorporated or deemed incorporated by reference is modified or superseded to
the extent that a statement in this prospectus, or in any subsequently filed
document which is or is deemed to be incorporated by reference, modifies or
supersedes it. Any statement so modified or superseded is not, except as so
modified or superseded, to constitute a part of this prospectus .
We will provide without charge to each person, including any beneficial
owner, to whom a copy of this prospectus has been delivered, on the written or
oral request of any such person, a copy of any or all documents referred to
above which have been or may be incorporated by reference in this prospectus
(not including exhibits to such incorporated information that are not
specifically incorporated by reference into such information). Requests for such
copies should be directed to us at the following address: Sequa Corporation, 200
Park Avenue, New York, New York 10166, Attention: Treasurer (212) 986-5500.
<PAGE>
RISK FACTORS
Before you invest in the debt securities, you should consider carefully
the following factors, in addition to the other information contained in this
prospectus.
Leverage
We now have, and upon the issuance of debt securities will continue to
have, a significant amount of indebtedness. The chart below indicates important
financial statistics as of September 30, 1998:
Total consolidated indebtedness............. $510.7 million
Total shareholders' equity.................. $632.7 million
Debt to equity ratio........................ .81x
Our level of indebtedness could have important consequences to you. For example,
it could adversely affect our ability to:
o generate sufficient cash to service the debt securities;
o generate sufficient cash to service our other debt obligations;
and
o obtain additional financing in the future.
In the event that cash on hand or available through existing credit arrangements
is not sufficient to fund our expenditures and debt service obligations,
including the debt securities, we may need to raise additional funds by:
o selling equity securities;
o refinancing all or a part of our indebtedness; or
o selling some of our assets.
We cannot assure you that any of these alternate sources of funds would be
available in amounts sufficient for us to meet our obligations. Moreover, even
if we could meet our obligations, our leveraged capital structure could limit
our ability to:
o finance capital expenditures;
o compete effectively;
o expand our business; or
o operate successfully under adverse economic conditions.
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Additional Borrowing Available
The agreements governing the debt securities and our other indebtedness will
permit us and our subsidiaries to incur additional indebtedness, including
secured indebtedness under certain circumstances. If new indebtedness is added
to our and our subsidiaries' current debt levels, the related risks that we and
they now face could intensify.
Certain Restrictions
Certain agreements governing our indebtedness impose restrictions on
our operations and activities. In addition, some agreements require us to comply
with certain financial covenants, including the maintenance of certain financial
ratios. If we fail to comply with any of such restrictions or covenants, an
event of default may arise under the applicable instrument. Such an event of
default could permit acceleration of the indebtedness under the applicable
instrument. Moreover, this could result in acceleration of indebtedness under
other instruments which contain cross-acceleration or cross-default provisions.
Holding Company Structure; Subordination
We are both an operating and a holding company. Certain of our more
significant operations are conducted through our subsidiaries. Our ability to
meet our obligations, including with respect to the debt securities, will
largely depend upon distributions and/or borrowings from our subsidiaries. The
ability of our subsidiaries to pay dividends and make other loans and advances
to us depends upon any statutory or contractual restrictions, which may include
requirements to maintain minimum levels of working capital and other assets.
The debt securities will effectively be junior to all liabilities of
our subsidiaries. In the event of a bankruptcy, liquidation or dissolution of a
subsidiary and following the payment of such liabilities, the subsidiary may not
have sufficient assets remaining to make payments to us as a shareholder or
otherwise. As of September 30, 1998, our subsidiaries had $388.7 million of
outstanding liabilities (primarily trade payables, accrued expenses and taxes
payable). Unless otherwise stated in a prospectus supplement with respect to a
series of debt securities, the indenture governing the debt securities will
permit our subsidiaries to incur additional indebtedness, including secured
indebtedness under certain circumstances.
Competition
We encounter substantial competition in each of our product areas. We
believe that the principal competitive factors in each of our segments are
product quality and conformity to customer specifications, design and
engineering capabilities, product development, timeliness of delivery and price.
Our competitors may develop products that are superior to our products or may
adapt more quickly than we do to new technologies or evolving customer
requirements. In addition, certain of our competitors have greater financial and
other resources than we possess. If we are unable to respond successfully to
changing competitive conditions, the demand for our products could be adversely
affected.
Industry and Customer Concentration
Chromalloy Gas Turbine is the largest of our operating units and its
sales represent, in the aggregate, approximately 44% of our total revenue.
Moreover, approximately 80% of Gas Turbine's sales are to the commercial
aviation sector, including sales to original equipment manufacturers (OEMs) and
after-market sales. Sales to these customers are affected by their specific
business requirements and by conditions in the airline industry generally. If we
lose one or more customers in the commercial aviation sector, or if there is a
significant reduction in sales to them, our financial condition and results of
operations may be materially adversely affected. We cannot assure you that we
will be able to retain these customers or that we will continue to sell to them
in the future at current levels. In addition, the airline industry as a whole
may be affected by regulatory changes and/or
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economic downturns. We cannot predict when, or if, such events will occur or
what impact, if any, they would have on our operations, earnings and revenues or
on the operations of our customers.
Environmental Matters
We are subject to federal, state and local environmental laws and
regulations. Such laws relate to, among other things, the discharge of
contaminants into water and air and onto land and the disposal of waste.
We have incurred, and expect to continue to incur, costs arising from
compliance with environmental laws and remedial obligations. We believe that the
ultimate resolution of known environmental matters, net of liabilities already
accrued on our balance sheet, will not have a material adverse effect on our
results of operations or financial condition. However, we cannot predict the
potential existence of currently unknown environmental issues. Moreover, we
cannot predict future changes to environmental laws and regulations or
interpretations or enforcement thereof. We cannot assure you that compliance
with environmental laws or remedial obligations thereunder will not have a
material adverse effect on our results of operations or financial condition in
the future.
Significant Stockholder
Norman E. Alexander, our Chairman of the Board of Directors and Chief
Executive Officer, beneficially owns an aggregate of approximately 38% of all
classes of our stock. Moreover, he controls approximately 53% of the voting
power thereof. Mr. Alexander effectively can direct our policies and the
election of directors. In addition, Mr. Alexander can effectively influence any
merger or sale of all or substantially all of our assets or the initiation of a
"going private" transaction. Mr. Alexander also could effectively prevent or
cause a "change of control" of our company. The interests of Mr. Alexander may
be different than those of the holders of the debt securities.
Impact of Year 2000 Issue
The year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Any of our
computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. If we and/or third parties on
which we rely do not successfully update our programs to avoid this issue, we
could experience system failures or miscalculations. As a result we could
experience disruptions in our ability to engage in normal business activities.
The possible consequences could include, among other things:
o temporary plant closings
o delays in the receipt of key purchased materials and services
o customer and vendor relations problems
o delays in the delivery of finished products
o invoice and collection errors
The occurrence of any or all of these consequences could have a
material adverse impact on our results of operations, financial condition and
cash flows.
No Prior Market for Debt Securities
The debt securities are new securities for which there currently is no
market. We cannot assure you as to the development or liquidity of any market
for the debt securities.
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OUR COMPANY
We are a diversified industrial corporation that produces a broad range
of products through operating units in four industry segments: Aerospace,
Machinery and Metal Coatings, Specialty Chemicals, and Other Products.
Aerospace
The Aerospace segment includes two operating units: Chromalloy Gas
Turbine and ARC Propulsion.
Chromalloy Gas Turbine, the largest of our operating units, repairs and
manufactures components for jet aircraft engines. Gas Turbine provides domestic
and international airlines with technologically advanced repairs and coatings
for turbine airfoils and other critical engine components. The unit also
supplies components to the manufacturers of jet engines and serves both the
general aviation and military markets.
ARC Propulsion, a supplier of solid rocket fuel propulsion systems
since 1949, is a leading developer and manufacturer of advanced rocket
propulsion systems, gas generators and auxiliary rockets. For the military
contract market, ARC Propulsion produces propulsion systems for tactical
weapons. For space applications, ARC Propulsion produces small liquid fueled
rocket engines designed to provide altitude and orbit control for a number of
satellite systems worldwide. ARC Propulsion's commercial market presence derives
from its pioneering development of hybrid inflator systems for automotive
airbags and production of energetic materials for airbag deployment. In early
1998, ARC Propulsion moved to further its role in the automotive market through
the purchase of its partner's share of a venture that produces airbag inflators.
Machinery and Metal Coatings
Our Machinery and Metal Coatings segment is composed of Precoat Metals,
Sequa Can Machinery and MEGTEC Systems.
Precoat Metals, the largest individual unit of the segment, is a leader
in the application of protective and decorative coatings to continuous steel and
aluminum coil. Precoat Metals' principal market is the building products
industry, where coated steel is used for the construction of pre-engineered
building systems, and as components in the industrial, commercial, agricultural
and residential sectors. Precoat Metals also serves the container industry and
has established a presence in other product markets, including heating,
ventilating and air conditioning units, truck trailer panels and office
equipment.
Sequa Can Machinery designs and manufactures equipment for the
two-piece can industry. At a facility on the East Coast, Sequa Can Machinery
manufactures high-speed equipment to coat and decorate two-piece beverage cans,
and at its West Coast plant, Sequa Can Machinery produces equipment used to form
the cup and body of two-piece metal cans.
MEGTEC Systems, which was formed in 1997, supplies equipment for the
web offset printing industry, including pasters and splicers, web guides,
infeeds, chill stands and related equipment for high-speed web presses.
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MEGTEC's products also include air flotation dryers for paper and printing uses
and emission control systems for industrial applications.
Specialty Chemicals
The two operations that make up our Specialty Chemicals segment,
Warwick International and Sequa Chemicals, serve distinctly different markets
with performance-enhancing additives for a broad range of end products.
Warwick International, the larger of the two businesses in the
Specialty Chemicals segment, is a leading producer and supplier of TAED, a
bleach activator for powdered laundry detergent products. The unit also markets
and distributes diverse chemical products including plastics, resins, paints and
cosmetics.
Sequa Chemicals manufactures high-quality performance-enhancing
chemicals for the paper, textile and other industries. Sequa Chemicals produces
key synthetic coating additives for coated papers including Reactopaque(R),
which increases the opacity of finished paper primarily used by the newsprint
industry, supplies the woven and knit fabric market with permanent press resins,
softeners, water repellents, soil release agents and other chemicals to improve
the look, feel and durability of clothing and other textiles and has developed
and patented a unique series of specialty emulsion polymers for a broad range of
commercial applications.
Other Products
The Other Products segment includes three primary businesses: Casco
Products, the men's apparel unit and Northern Can Systems. Casco Products, which
has been serving the automotive products market since 1921, is the world's
leading supplier of automotive cigarette lighters and also offers a growing line
of automotive accessories. The men's apparel unit designs and manufactures men's
formalwear and accessories marketed under the labels Raffinati, Oscar de la
Renta and After Six. Northern Can Systems, which was sold in December 1997,
supplied the domestic and international food processing market with easy-open
lids for cans.
Available Information
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
we file reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy and information statements, and
other information filed by us, can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at certain of its Regional Offices at Seven World
Trade Center, 13th Floor, New York, N.Y. 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, IL 60661. Copies of such material can be
obtained at prescribed rates from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 and by accessing the
Commission's Web site, http://www.sec.gov. The public may obtain information on
the operation of the Public Reference Room by calling the Commission at (800)
SEC-0330. Certain of our securities are listed on the New York Stock Exchange
(the "NYSE"), and reports, proxy statements and other information concerning us
can be inspected at the offices of such Exchange, 20 Broad Street, New York,
N.Y. 10005.
Our principal executive offices are located at 200 Park Avenue, New
York, New York 10166 (telephone (212) 986-5500).
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USE OF PROCEEDS
We will combine the net proceeds from the sale of the debt securities
(the "Debt Securities") with our general funds to repay indebtedness and for
general corporate purposes. We will provide information concerning the use of
proceeds from the sale of each series of the Debt Securities in the prospectus
supplement relating to such series.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges
for each year in the five-year period ended December 31 and for the nine month
period ended September 30, 1998.
<TABLE>
<CAPTION>
Year Ended December 31, Nine Months Ended
1993 1994 1995 1996 1997 September 30, 1998
---- ---- ---- ---- ---- ------------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges: N/A N/A 1.5x 1.4x 1.7x 2.1x
</TABLE>
We have computed the ratio of earnings to fixed charges by dividing
earnings by fixed charges. Earnings consist of income (loss) before income
taxes, extraordinary items and fixed charges and after adjustments for minority
interests in the earnings and losses of majority-owned subsidiaries and after
adjustments for equity in the earnings and losses of less than fifty percent
owned joint ventures. Fixed charges consist of interest expense on all
indebtedness, amortization of debt issuance costs, the portion of rental expense
representative of interest and preference stock dividend requirements of a
majority-owned subsidiary. Our earnings were inadequate to cover fixed charges
by $64.8 million in 1993 and $25.5 million in 1994.
DESCRIPTION OF DEBT SECURITIES
We will issue Debt Securities in one or more series under an Indenture
(the "Indenture") between our company and Bank of Montreal Trust Company, as
Trustee, the form of which we have filed as an exhibit to the Registration
Statement. The following summaries of certain provisions of the Indenture are
not complete and are qualified in their entirety by express reference to the
Indenture and the securities resolutions or the indentures supplemental thereto
(copies of which have been or will be filed with the Commission). Capitalized
terms used in this section without definition have the meanings given such terms
in the Indenture.
General
The Indenture does not limit the amount of Debt Securities that can be
issued thereunder and provides that the Debt Securities may be issued from time
to time in one or more series pursuant to the terms of one or more securities
resolutions or supplemental indentures. As of the date of this prospectus, there
were no Debt Securities outstanding under the Indenture. The Debt Securities
will be unsecured and will rank on a parity with all of our other unsecured and
unsubordinated debt. The Debt Securities will be senior to all of our existing
and future indebtedness which by its terms is made subordinate to the Debt
Securities. Although the Indenture provides for the possible issuance of Debt
Securities in other forms or currencies, the only Debt Securities covered by
this prospectus will be Debt Securities denominated in U.S. dollars in
registered form without coupons.
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Terms
We will determine the terms of the Debt Securities at the time or times
of sale. We will provide the specific terms of each series in supplements to
this prospectus. Reference is made to the prospectus supplement for the
following terms, if applicable, of the Debt Securities offered thereby:
o designation, aggregate principal amount, currency or composite currency and
denominations
o price and, if an index formula or other method is used, the method for
determining amounts of principal or interest
o maturity date and other dates, if any, on which principal will be payable
o interest rate (which may be fixed or variable), if any
o date or dates from which interest will accrue and on which interest will be
payable, and the record dates for the payment of interest
o manner of paying principal and interest
o place or places where principal and interest will be payable
o terms of any mandatory or optional redemption by us including any sinking
fund
o terms of any conversion or exchange right
o tax indemnity provisions
o terms of any redemption at the option of Holders
o if the Debt Securities provide that payments of principal or interest may
be made in a currency other than that in which Debt Securities are
denominated, the manner for determining such payments
o portion of principal payable upon acceleration of a Discounted Security (as
defined below)
o whether and upon what terms Debt Securities may be defeased
o whether the covenant referred to below under "Certain
Covenants--Limitations on Liens" applies, and any events of default or
restrictive covenants in addition to or in lieu of those set forth in the
Indenture
o provisions for electronic issuance of Debt Securities or for Debt
Securities in uncertificated form
o any additional provisions or other special terms not inconsistent with the
provisions of the Indenture, including any terms that may be required or
advisable under United States or other applicable laws or regulations, or
advisable in connection with the marketing of the Debt Securities. (Section
2.01)
We may issue Debt Securities of any series as registered Debt
Securities, bearer Debt Securities or uncertificated Debt Securities, and in
such denominations as specified in the terms of the series. (Section 2.01)
In connection with its original issuance, no bearer Debt Security will
be offered, sold or delivered to any location in the United States, and a bearer
Debt Security in definitive form may be delivered in connection with its
original issuance only upon presentation of a certificate in a form prescribed
by us to comply with United States laws and regulations. (Section 2.04)
Registration of transfer of registered Debt Securities may be requested
upon surrender thereof at any agency of ours maintained for that purpose and
upon fulfillment of all other requirements of the agent. (Sections 2.03 and
2.07)
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Under the Indenture we may issue Debt Securities as Discounted Debt
Securities to be offered and sold at a substantial discount from the principal
amount thereof. Special United States federal income tax and other
considerations applicable thereto will be described in the prospectus supplement
relating to such Discounted Debt Securities. "Discounted Debt Security" means a
Debt Security where the amount of principal due upon acceleration is less than
the stated principal amount. (Section 2.10)
Certain Covenants
The Debt Securities will not be secured by any properties or assets and
will represent senior unsecured debt of our company.
As discussed below, the Indenture includes certain limitations on our
ability to create liens which will apply only if the securities resolution
establishing the terms of a series of Debt Securities so provides (in which
event the prospectus supplement will so state). If applicable, the limitations
are subject to a number of qualifications and exceptions. The Indenture does not
limit our ability to enter into sale and leaseback transactions. In addition,
the Indenture does not limit the ability of our subsidiaries to issue debt, and
the Debt Securities will be effectively subordinated to all existing and future
indebtedness and other liabilities and commitments of our subsidiaries.
Unless otherwise indicated in a prospectus supplement, such covenants,
if applicable, do not afford holders of the Debt Securities protection in the
event of a highly leveraged or other transaction involving us that may adversely
affect holders of the Debt Securities.
Limitation on Liens
If the securities resolution establishing the terms of a series so
provides (in which event the prospectus supplement will so state), the following
provisions of the Indenture will apply for as long as there are outstanding any
Debt Securities of any series to which this limitation applies.
We will not create or suffer to be created or to exist any Lien on any
of our properties or assets, owned as of the date such series is issued or
hereafter acquired, to secure any indebtedness unless the Debt Securities of
such series are equally and ratably secured with any and all such indebtedness
and with any other indebtedness similarly entitled to be equally and ratably
secured. "Lien" includes any mortgage, pledge, security interest or other lien.
This restriction is subject to termination upon defeasance as referred to below.
This restriction does not apply to, or prevent the creation or existence of:
(1) Liens on property existing at the time of the acquisition or
construction of such property (or created within two years after
completion of such acquisition or construction), whether by purchase,
merger, construction or otherwise, or to secure the payment of all or
any part of the purchase price or construction cost thereof, including
the extension of any such Liens to repairs, renewals, replacements,
substitutions, betterments, additions, extensions and improvements then
or thereafter made on the property subject thereto;
(2) a Lien securing any bank indebtedness now or hereafter incurred or
assumed by us;
(3) any extensions, renewals or replacements (or successive extensions,
renewals or replacements), in whole or in part, of Liens permitted by
the foregoing clauses (1) and (2);
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(4) the pledge of any bonds or other securities at any time issued
under any of the Liens permitted by clause (1), (2) or (3) above; or
(5) Permitted Encumbrances. (Section 4.07)
"Permitted Encumbrances" includes, among other items:
(1) the pledge or assignment in the ordinary course of business of
accounts receivable or customers' installment paper;
(2) Liens affixing to our property at the time a person consolidates
with or merges into, or transfers all or substantially all of its
assets to, us, provided that in the opinion of our Board of Directors
or our management (evidenced by a certified Board resolution or an
Officers' Certificate delivered to the Trustee) the property acquired
pursuant to the consolidation, merger or asset transfer is adequate
security for such Lien;
(3) Liens or encumbrances not otherwise permitted if, at the time of
incurrence thereof and after giving effect thereto, the aggregate of
all of our obligations secured thereby does not exceed 10% of Tangible
Net Worth (as defined below);
(4) Liens on securities held by us; and
(5) Liens or encumbrances affixing to the property of a Subsidiary.
"Tangible Net Worth" means:
(1) common stockholders' equity appearing on our most recent balance
sheet (or our consolidated balance sheet including our Subsidiaries if
we then have one or more consolidated Subsidiaries) prepared in
accordance with generally accepted accounting principles, less
(2) intangible assets (excluding intangible assets recoverable through
rates as prescribed by applicable regulatory authorities).
"Subsidiary" of any person means:
(1) a corporation more than 50% of the outstanding voting stock of
which is owned, directly or indirectly, by such person or by one or
more other Subsidiaries of such person or by such person and one or
more Subsidiaries thereof; or
(2) any other person (other than a corporation) in which such person,
or one or more Subsidiaries of such person or such person and one or
more Subsidiaries thereof, directly or indirectly, has at least a
majority ownership and power to direct the policy, management and
affairs thereof. (Section 4.06)
Further, this restriction will not apply to or prevent the creation or
existence of leases made, or existing on property acquired, in the ordinary
course of business. (Section 4.07)
Other Covenants
Any other restrictive covenants which may apply to a particular series
of Debt Securities will be described in the prospectus supplement relating
thereto.
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Successor Obligor
Unless otherwise specified in the securities resolution establishing a
series of Debt Securities, we shall not consolidate with or merge into, or
transfer all or substantially all of our assets to, any person in any
transaction in which we are not the survivor, unless:
(1) the person is organized under the laws of the United States or a
State thereof or is organized under the laws of a foreign jurisdiction
and consents to the jurisdiction of the courts of the United States or
a State thereof;
(2) the person assumes by supplemental indenture all of our obligations
under the Indenture, the Debt Securities and any coupons; and
(3) immediately after the transaction no Default (as defined) exists.
The successor shall be substituted for us, and thereafter all of our
obligations under the Indenture, the Debt Securities and any coupons
shall terminate. (Section 5.01)
Exchange of Debt Securities
Registered Debt Securities may be exchanged for an equal aggregate
principal amount of registered Debt Securities of the same series and date of
maturity in such authorized denominations as may be requested upon surrender of
the registered Debt Securities at an agency of ours maintained for such purpose
and upon fulfillment of all other requirements of such agent. (Section 2.07)
Default and Remedies
Unless the securities resolution establishing the series otherwise
provides (in which event the prospectus supplement will so state), an "Event of
Default" with respect to a series of Debt Securities will occur if:
(1) we default in any payment of interest on any Debt Securities of
such series when the same becomes due and payable and the Default
continues for a period of 60 days;
(2) we default in the payment of the principal and premium, if any, of
any Debt Securities of the series when the same becomes due and payable
at maturity or upon redemption, acceleration or otherwise and such
default shall continue for five or more days;
(3) we default in the payment or satisfaction of any sinking fund
obligation with respect to any Debt Securities of a series as required
by the securities resolution establishing such series and the Default
continues for a period of 60 days;
(4) we default in the performance of any of its other agreements
applicable to the series and the Default continues for 90 days after
the notice specified below;
11
<PAGE>
(5) pursuant to or within the meaning of any Bankruptcy Law:
(a) we commence a voluntary case,
(b) we consent to the entry of an order for relief against us
in an involuntary case,
(c) we consent to the appointment of a Custodian for us or for
all or substantially all of our property, or
(d) we make a general assignment for the benefit of our
creditors;
(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(a) is for relief against us in an involuntary case,
(b) appoints a Custodian for us or for all or substantially
all of our property, or
(c) orders that we be liquidated, and the order or decree
remains unstayed and in effect for 60 days; or
(7) there occurs any other Event of Default provided for in such
series. (Section 6.01)
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or a similar official under any
Bankruptcy Law. (Section 6.01)
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default. A Default under subparagraph (4) above is not an
Event of Default until the Trustee or the Holders of at least 33-1/3% in
principal amount of the series notify us of the Default and we do not cure the
Default within the time specified after receipt of the notice. (Section 6.01)
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Debt Securities of the series. (Section 7.01) Subject to
certain limitations, Holders of a majority in principal amount of the Debt
Securities of the series may direct the Trustee in its exercise of any trust or
power with respect to such series. (Section 6.05) Except in the case of Default
in payment on a series, the Trustee may withhold from Securityholders of such
series notice of any continuing Default (except a Default in payment of
principal or interest) if it determines that withholding notice is in their
interest (Section 7.04) We are required to furnish the Trustee annually a brief
certificate as to our compliance with all conditions and covenants under the
Indenture. (Section 4.04)
The failure to redeem any Debt Securities subject to a Conditional
Redemption (as defined) is not an Event of Default if any event on which such
redemption is so conditioned does not occur and is not waived before the
scheduled redemption date. (Section 6.01)
The Indenture does not have a cross-default provision. Thus, a default
by us on any other debt, including any other series of Debt Securities, would
not constitute an Event of Default.
Amendments and Waivers
The Indenture and the Debt Securities or any coupons of the series may
be amended, and any default may be waived as follows: Unless the securities
resolution otherwise provides (in which event the prospectus supplement will so
state), the Debt Securities and the Indenture may be amended with the consent of
the Holders of a majority in principal amount of the Debt Securities of all
series affected voting as one class. (Section 9.02)
12
<PAGE>
Unless the securities resolution otherwise provides (in which event the
prospectus supplement will so state), a Default on a particular series may be
waived with the consent of the Holders of a majority in principal amount of the
Debt Securities of the series. (Section 6.04)
However, without the consent of each Holder affected, no amendment or waiver
may:
(1) reduce the amount of Debt Securities whose Holders must consent to
an amendment or waiver;
(2) reduce the interest on or change the time for payment of interest
on any Debt Security;
(3) change the fixed maturity of any Debt Security;
(4) reduce the principal of any non-Discounted Debt Security or reduce
the amount of the principal of any Discounted Debt Security that would
be due on acceleration thereof;
(5) change the currency in which the principal or interest on a Debt
Security is payable;
(6) make any change that materially adversely affects the right to
convert any Debt Security; or
(7) waive any Default in payment of interest on or principal of a Debt
Security. (Sections 6.04 and 9.02)
Without the consent of any Holder, the Indenture or the Debt Securities may be
amended:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to provide for assumption of Company obligations to Holders in the
event of a merger or consolidation requiring such assumption;
(3) to provide that specific provisions of the Indenture shall not
apply to a series of Debt Securities not previously issued;
(4) to create a series and establish its terms;
(5) to provide for a separate trustee for one or more series; or
(6) to make any change that does not materially adversely affect the
rights of any Holder. (Section 9.01)
Legal Defeasance and Covenant Defeasance
Debt Securities of a series may be defeased in accordance with their
terms and, unless the securities resolution establishing the terms of the series
otherwise provides, as set forth below. We at any time may terminate as to a
series all of our obligations (except for certain obligations, including
obligations with respect to the defeasance trust and obligations to register the
transfer or exchange of a Debt Security, to replace destroyed, lost or stolen
Debt Securities and coupons and to maintain paying agencies in respect of the
Debt Securities) with respect to the Debt Securities of the series and any
related coupons and the Indenture ("legal defeasance"). We at any time may
terminate as to a series its obligations with respect to the Debt Securities and
coupons of the series under the covenant described under "Certain
Covenants--Limitations on Liens" and any other restrictive covenants which may
be applicable to a particular series ("covenant defeasance").
We may exercise our legal defeasance option notwithstanding our prior
exercise of our covenant defeasance option. If we exercise our legal defeasance
option, a series may not be accelerated because of an
13
<PAGE>
Event of Default. If we exercise our covenant defeasance option, a series may
not be accelerated by reference to the covenant described under "Certain
Covenants--Limitations on Liens" or any other restrictive covenants which may be
applicable to a particular series. (Section 8.01)
To exercise either defeasance option as to a series, we must:
(1) irrevocably deposit in trust (the "defeasance trust") with the
Trustee or another trustee money or U.S. Government Obligations,
deliver a certificate from a nationally recognized firm of independent
accountants expressing their opinion that the payments of principal and
interest when due on the deposited U.S. Government Obligations, without
reinvestment, plus any deposited money without investment will provide
cash at such times and in such amounts as will be sufficient to pay the
principal and interest when due on all Debt Securities of such series
to maturity or redemption, as the case may be, and
(2) comply with certain other conditions.
In particular, we must obtain an opinion of tax counsel that the
defeasance will not result in recognition of any gain or loss to holders for
Federal income tax purposes. "U.S. Government Obligations" means direct
obligations of the United States or an instrumentality of the United States, the
payment of which is unconditionally guaranteed by the United States, which, in
either case, have the full faith and credit of the United States of America
pledged for payment and which are not callable at the issuer's option, or
certificates representing an ownership interest in such obligations. (Section
8.02)
Regarding the Trustee
Bank of Montreal Trust Company will act as Trustee for Debt Securities
issued under the Indenture and, unless otherwise indicated in a prospectus
supplement, the Trustee will also act as Registrar and Paying Agent with respect
to the Debt Securities. (Section 2.03) The Trustee is a member of the syndicate
of lenders with respect to our credit facility.
BOOK-ENTRY
DTC will act as securities depository for the Debt Securities. The Debt
Securities will be issued only as fully registered securities registered in the
name of Cede & Co. (DTC's partnership nominee). One or more fully registered
global certificates will be issued for the Debt Securities representing the
aggregate principal amount of the Debt Securities and will be deposited with
DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the 1934 Act, as
amended, DTC holds securities that its participants (the "Direct Participants")
deposit with DTC. DTC also facilitates the settlement among Direct Participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in Direct
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly (the "Indirect Participants," and
together with the Direct Participants, the "Participants"). The rules applicable
to DTC and its Participants are on file with the SEC.
14
<PAGE>
Purchases of the Debt Securities within the DTC system must be made by
or through Direct Participants which will receive a credit for the Debt
Securities on DTC's records. The ownership interest of each actual purchaser of
each Debt Security (a "Beneficial Owner") will in turn be recorded on the Direct
and Indirect Participants' respective records. Beneficial Owners will not
receive written confirmation from DTC of their purchase, but Beneficial Owners
are expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the Direct
or Indirect Participant through which the Beneficial Owner entered into the
transaction. Transfers of ownership interest in the Debt Securities will be
effected by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interest in Debt Securities except in the event that use of the
book-entry system for the Debt Securities is discontinued.
The deposit of the Debt Securities with DTC and their registration in
the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Debt Securities; DTC's records
reflect only the identity of the Direct Participants to whose accounts such Debt
Securities arecredited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other direct communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Debt Securities of an issue are being redeemed, DTC's practice will determine by
lot the amount of the interest of each Direct Participant in such series to be
redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the
Debt Securities. Under its usual procedures, DTC mails an omnibus proxy (an
"Omnibus Proxy") to the Participants as soon as possible after the record date.
The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those
Direct Participants to whose accounts the Debt Securities are credited on the
record date (identified in a listing attached to the Omnibus Proxy).
Principal, premium, if any, and interest on the Debt Securities will be
paid to DTC. DTC's practice is to credit Direct Participants' accounts on the
relevant payment date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive payment
on such payment date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in
"street-name," and will be the responsibility of such Participant and not of
DTC, the underwriters, or us, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal,
premium, if any, and interest to DTC is the responsibility of us or the Trustee.
Disbursement of such payments to Direct Participants is the responsibility of
DTC, and disbursement of such payments to the Beneficial Owners is the
responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository
with respect to the Debt Securities at any time by giving reasonable notice to
us. Under such circumstances and in the event that a successor securities
depository is not obtained, certificates for the Debt Securities are required to
be printed and delivered. In addition, we may decide to discontinue use of the
system of book-entry transfers through DTC (or any successor securities
depository). In that event, certificates for the Debt Securities will be printed
and delivered.
We will not have any responsibility or obligation to Participants or to
the persons for whom they act as nominees with respect to the accuracy of the
records of DTC, its nominees or any Direct or Indirect Participant
15
<PAGE>
with respect to any ownership interest in the Debt Securities, or with respect
to payments or providing of notice to the Direct Participants, the Indirect
Participants or the Beneficial Owners.
So long as Cede & Co. is the registered owner of the Debt Securities,
as nominee of DTC, references herein to holders of the Debt Securities shall
mean Cede & Co. or DTC and shall not mean the Beneficial Owners of the Debt
Securities.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from DTC.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities through underwriters or dealers,
directly to one or more purchasers or through agents.
The applicable prospectus supplement will set forth the terms of the
offering of any Debt Securities, including:
o the names of any underwriters or agents
o the proceeds to the Company from such sale
o any other items constituting underwriters' compensation
o any discounts or concessions allowed or reallowed or paid to dealers
o the purchase price of such Debt Securities
o any underwriting discounts
o any initial public offering price
o any securities exchanges on which such Debt Securities may be listed
If underwriters are used in the sale, Debt Securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. Such Debt
Securities may be offered to the public either through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate.
Unless otherwise set forth in the applicable prospectus supplement, the
obligations of the underwriters to purchase such Debt Securities will be subject
to certain conditions precedent, and the underwriters will be obligated to
purchase all of such Debt Securities if any of such Debt Securities are
purchased. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time. Only
underwriters named in a prospectus supplement are deemed to be underwriters in
connection with the Debt Securities offered thereby.
We may sell Debt Securities directly or through agents designated by us
from time to time. Any agent involved in the offer or sale of Debt Securities
will be named, and any commissions payable by us to such agent will be set forth
in the applicable prospectus supplement. Unless otherwise indicated in the
applicable prospectus supplement, any such agent will act on a best efforts
basis for the period of its appointment.
If so indicated in a prospectus supplement with respect to Debt
Securities, we will authorize agents, underwriters or dealers to solicit offers
by certain institutions to purchase such Debt Securities from us at the public
offering price set forth in the prospectus supplement pursuant to Delayed
Delivery Contracts ("Contracts") providing for payment and delivery on the date
or dates stated in the prospectus supplement. Each Contract will be for an
amount not less than, and the aggregate principal amount of the Debt Securities
sold pursuant to the Contracts shall be not less nor more than, the respective
amounts stated in the prospectus supplement. Institutions with whom the
Contracts, when authorized, may be made include commercial and savings banks,
insurance
16
<PAGE>
companies, pension funds, investment companies, educational and charitable
institutions, and other institutions, but will in all cases be subject to our
approval. The Contracts will not be subject to any conditions except:
(1) the purchase by an institution of the Debt Securities covered by
its Contract shall not at the time of delivery be prohibited under the
laws of any jurisdiction in the United States to which such institution
is subject, and
(2) if the Debt Securities are being sold to underwriters, we shall
have sold to such underwriters the total principal amount of the Debt
Securities less the principal amount thereof covered by the Contracts.
The underwriters will not have any responsibility in respect of the
validity or performance of the Contracts.
If dealers are utilized in the sale of any Debt Securities, we will
sell such Debt Securities to the dealers, as principal. Any dealer may then
resell such Debt Securities to the public at varying prices to be determined by
such dealer at the time of resale. The name of any dealer and the terms of the
transaction will be set forth in the prospectus supplement with respect to such
Debt Securities being offered thereby.
It has not been determined whether any series of Debt Securities will
be listed on a securities exchange. Underwriters will not be obligated to make a
market in any series of Debt Securities. We cannot predict the level of trading
activity in, or the liquidity of, any series of Debt Securities.
Any underwriters, dealers or agents participating in the distribution
of Debt Securities may be deemed to be underwriters, and any discounts or
commissions received by them on the sale or resale of Debt Securities may be
deemed to be underwriting discounts and commissions under the Securities Act of
1933. Agents and underwriters may be entitled under agreements entered into with
us to indemnification by us against certain liabilities, including liabilities
under the Securities Act of 1933, or to contribution with respect to payments
that the agents or underwriters may be required to make in respect thereof.
Agents and underwriters may be customers of, engaged in transactions with, or
perform services for, us or our affiliates in the ordinary course of business.
LEGAL MATTERS
Certain legal matters with respect to the validity of the issuance of
the Debt Securities will be passed upon for us by Cahill Gordon & Reindel, a
partnership including a professional corporation, New York, New York.
EXPERTS
Our financial statements incorporated by reference in this prospectus
and elsewhere in the Registration Statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.
17
<PAGE>
<TABLE>
<CAPTION>
================================================= =======================================
<S> <C>
No person is authorized to give any information
or to make any representations other than those
contained in this prospectus, including any
prospectus supplement in connection with the
offer of the Debt Securities, and, if given or
made, such information or representations must Sequa Corporation
not be relied upon as having been authorized.
This prospectus does not constitute an offer to
sell or a solicitation of an offer to buy such
securities in any circumstance in which such offer
or solicitation is unlawful. Neither the delivery of
this prospectus nor any sale made hereunder
shall, under any circumstances, create any
implication that there has been no change in our
affairs since the date hereof or that the
information contained or incorporated by ------
reference herein is correct as of any time PROSPECTUS
subsequent to the date of this prospectus. ------
--------------------
TABLE OF CONTENTS
Page
Incorporation of Certain Documents
by Reference.............................. 1 Debt Securities
Risk Factors................................ 2
Our Company................................. 5
Use of Proceeds............................. 7
Ratio of Earnings to Fixed Charges.......... 7
Description of Debt Securities.............. 7
Book-Entry.................................. 14
Plan of Distribution........................ 16 , 1998
Legal Matters............................... 17
Experts..................................... 17
================================================= =======================================
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
An estimate of expenses, other than underwriting discount, follows:
Securities and Exchange Commission registration fee...... $139,000
Trustee's fees and expenses.............................. 10,000
Printing................................................. 40,000
Legal fees and expenses ................................. 45,000
Accountants' fees and expenses........................... 50,000
Rating agencies fees..................................... 325,000
Miscellaneous expenses................................... 12,500
---------
Total ................................ $621,500*
=========
- ----------
* All expenses, except the Securities and Exchange Commission registration
fee, are estimated.
Item 15. Indemnification of Directors and Officers.
Reference is made to Section 102(b)(7) of the Delaware General
Corporation Law (the "DGCL"), which permits a corporation in its certificate of
incorporation or an amendment thereto to eliminate or limit the personal
liability of a director for violations of the director's fiduciary duty, except
(i) for any breach of the director's fiduciary duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
pursuant to Section 174 of the DGCL (providing for liability of directors for
unlawful payment of dividends or unlawful stock purchases or redemptions), or
(iv) for any transaction from which the director derived an improper personal
benefit. The Company's Restated Certificate of Incorporation contains provision
permitted by Section 102(b)(7) of the DGCL.
Reference is made to Section 145 of the DGCL which provides that a
corporation may indemnify any persons, including directors and officers, who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person is or was a director,
officer, employee or agent of another corporation, or is or was serving at the
request of such corporation as a director, officer, employee or agent of another
corporation or enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided such director, officer, employee or agent acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
corporation's best interest and, with respect to any criminal actions or
proceedings, had no reasonable cause to believe that his conduct was unlawful. A
Delaware corporation may indemnify directors and/or officers in an action or
suit by or in the right of the corporation under the same conditions, except
that no indemnification is permitted without judicial approval if the director
or officer is adjusted to be liable to the corporation. Where a director or
officer is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him or her against the
expenses which such director or officer actually and reasonably incurred.
<PAGE>
The Company's Restated Certificate of Incorporation and By-laws provide
for the indemnification of directors and officers of the Company to the fullest
extent permitted by the DGCL.
The Company provides liability insurance for each director and officer
for certain losses arising from claims or charges made against them while acting
in their capacities as directors or officers of the Company.
The Standard Purchase Agreement filed as Exhibit 1 to the Registration
Statement includes provisions requiring underwriters to indemnify the Company as
well as its directors and officers who signed this Registration Statement, as
well as its controlling persons, against certain civil liabilities, including
liabilities under the Securities Act of 1933, in certain circumstances.
Item 16. Exhibits.
The Exhibits to this Registration Statement are listed in the Exhibit
Index on Pages E-1 and E-2 of this Registration Statement, which Index is
incorporated herein by reference.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the Registration Statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment that
contains a form of prospectus shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
II-2
<PAGE>
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
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.
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 under Item 15 above, 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 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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Sequa
Corporation, the Registrant, certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly caused
this Amendment No. 1 to this Registration Statement to be signed on its behalf
by the undersigned, thereunder duly authorized, in the City of New York, New
York on the 17th day of December, 1998.
SEQUA CORPORATION
(Registrant)
By: /s/ Norman E. Alexander
------------------------------------
Norman E. Alexander
Chairman of the Board and Chief
Executive Officer
Each person whose signature appears below appoints Norman E. Alexander,
John J. Quicke and Stuart Z. Krinsly, and each of them, any 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 on Form S-3
and this Amendment No. 1 thereto and to file the same, with all exhibits thereto
and all other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to 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
Amendment No. 1 to this registration statement has been signed below by the
following persons, in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
Chairman of the Board and Chief
/s/ Norman E. Alexander Executive Officer December 17, 1998
- ------------------------------
Norman E. Alexander
President, Chief Operating
/s/ John J. Quicke* Officer and Director December 17, 1998
- ------------------------------
John J. Quicke
Senior Executive Vice
/s/ Stuart Z. Krinsly* President, General Counsel and December 17, 1998
- ------------------------------
Stuart Z. Krinsly Director
Executive Vice President and
/s/ Gerald S. Gutterman Chief Financial Officer December 17, 1998
- ------------------------------
Gerald S. Gutterman
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
Vice President and Controller
/s/ William P. Ksiazek (Chief Accounting Officer) December 17, 1998
- ------------------------------
William P. Ksiazek
/s/ Leon D. Black* Director December 17, 1998
- ------------------------------
Leon D. Black
/s/ Alvin Dworman* Director December 17, 1998
Alvin Dworman
/s/ David S. Gottesman* Director December 17, 1998
- ------------------------------
David S. Gottesman
/s/ Donald D. Kummerfeld* Director December 17, 1998
- ------------------------------
Donald D. Kummerfeld
/s/ Richard S. LeFrak* Director December 17, 1998
- ------------------------------
Richard S. LeFrak
/s/ Michael I. Sovern* Director December 17, 1998
- ------------------------------
Michael I. Sovern
/s/ Fred R. Sullivan* Director December 17, 1998
- ------------------------------
Fred R. Sullivan
/s/ Gerald Tsai, Jr.* Director December 17, 1998
- ------------------------------
Gerald Tsai, Jr.
*By:
/s/ Norman E. Alexander December 17, 1998
- ------------------------------
Norman E. Alexander
Attorney-in-Fact
</TABLE>
II-5
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Exhibit
1 -- Standard Purchase Agreement*
4(a) -- Form of Indenture for Debt Securities*
4(b) -- Form of Securities Resolution*
5 -- Opinion of Cahill Gordon & Reindel*
12 -- Computation of Ratio of Earnings to Fixed Charges
23(a) -- Consent of Cahill Gordon & Reindel (contained in Exhibit 5)*
23(b) -- Consent of Arthur Andersen LLP
24 -- Power of Attorney (set forth on the signature page of this
Registration Statement)
25 -- Statement of Eligibility of Trustee regarding Form of Indenture of
Debt Securities*
- --
* Previously filed.
Exhibit 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES For the Five
Years Ended December 31 and for
the Nine Months Ended September 30, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Nine Months
Ended
Year Ended December 31, September
1993 1994 1995 1996 1997 30, 1998
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Earnings available for fixed charges:
Pre-tax income (loss)before
extraordinary item $ (64,015) $ (27,895) $ 27,479 $ 25,956 $ 41,827 49,488
Add (deduct)
Interest on indebtedness 66,501 59,114 53,302 51,794 50,298 39,288
Proportionate share of interest
on indebtedness of fifty percent
owned joint venture 11 25 1,058 1,256 1,336 164
Amortization of debt expense 4,158 2,389 2,145 2,145 1,381 918
Portion of rents representative
of the interest factor 8,260 5,999 5,942 6,022 5,694 4,258
Equity in the (income) loss of
less than fifty percent owned
joint ventures -- 2,502 3,259 1,297 (219) 1,588
Minority interest in the loss
of subsidiary (376) (131) -- -- -- --
Minority interest in the
income of subsidiary with
fixed charges 2,517 -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Total earnings available for
fixed charges $ 17,056 $ 42,003 $ 93,185 $ 88,470 $ 100,317 $ 95,704
========= ========= ========= ========= ========= =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Fixed charges:
<S> <C> <C> <C> <C> <C> <C>
Preference stock dividend
requirements of majority-owned
subsidiary $ 2,517 $ -- $ -- $ -- $ -- $ --
Ratio of pre-tax income to net
income 1.15 1.13 3.13 2.72 2.13 1.81
------- ------- ------- ------- ------- -------
Preference stock dividend
requirements of majority-owned
subsidiary on pre-tax basis 2,895 -- -- -- -- --
Interest on indebtedness 66,501 59,114 53,302 51,794 50,298 39,288
Proportionate share of interest
on indebtedness of fifty percent
owned joint venture 11 25 1,058 1,256 1,336 164
Amortization of debt expense 4,158 2,389 2,145 2,145 1,381 918
Portion of rents representative
of the interest factor 8,260 5,999 5,942 6,022 5,694 4,258
------- ------- ------- ------- ------- -------
Total Fixed Charges $81,825 $67,527 $62,447 $61,217 $58,709 $44,628
======= ======= ======= ======= ======= =======
Ratio of earnings to fixed charges
(A) (A) 1.5x 1.4x 1.7x 2.1x
======= ======= ======= ======= ======= =======
</TABLE>
(A) As a result of losses incurred in 1993 and 1994, the Company was unable to
fully cover the indicated fixed charges.
-2-
Exhibit 23(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Amendment No. 1 to the Form S-3 Registration
Statement and related Prospectus of Sequa Corporation regarding the registration
of $500.0 million of Debt Securities of our reports dated February 23, 1998
incorporated by reference in Sequa Corporation's Form 10-K for the year ended
December 31, 1997, and to all references to our Firm included in this
Registration Statement and related Prospectus.
ARTHUR ANDERSEN LLP
New York, New York
December 21, 1998
