<PAGE>
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MAY 4, 1998)
$115,000,000
[LOGO]
MEDIUM-TERM NOTES
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
--------------
Thomas & Betts Corporation (the "Company") may offer from time to time up to
$115,000,000 aggregate principal amount of its Medium-Term Notes Due Nine Months
or More from Date of Issue (the "Notes"). The Notes will be unsecured and will
rank equally with all other unsecured indebtedness of the Company and prior to
any of its subordinated indebtedness. The Notes will have maturities of nine
months or more from their respective dates of issue and, unless otherwise
specified in the applicable pricing supplement to this Prospectus Supplement
(each, a "Pricing Supplement"), will not be subject to redemption or repayment
prior to the stated maturity date thereof. The Notes will be denominated in U.S.
dollars.
(CONTINUED ON FOLLOWING PAGE)
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT, ANY PRICING SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
DISCOUNTS AND
PRICE TO PUBLIC(1) COMMISSIONS(2) PROCEEDS TO COMPANY(2)(3)
<S> <C> <C> <C>
Per Note.................. 100% .125%--.750% 99.875%--99.250%
Total..................... $115,000,000 $143,750--$862,500 $114,856,250--$114,137,500
</TABLE>
(1) Unless otherwise specified in the applicable Pricing Supplement, Notes will
be issued at 100% of their principal amount.
(2) The Company will pay a commission to Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation, J.P. Morgan Securities Inc. and Morgan Stanley & Co.
Incorporated (each, an "Agent") in the form of a discount, ranging from
.125% to .750% of the principal amount of any Note, depending upon its
stated maturity, sold through such Agent as agent and may sell Notes to an
Agent, as principal, for resale to investors or other purchasers at varying
prices relating to prevailing market prices at the time of resale as
determined by such Agent or, if so specified in the applicable Pricing
Supplement, for resale at a fixed offering price. Commissions with respect
to Notes with maturities in excess of 30 years will be negotiated between
the Company and the applicable Agent at the time of the sale and indicated
in the pricing supplement. Unless otherwise specified in the applicable
Pricing Supplement, any Note sold to an Agent as principal will be purchased
by such Agent at a price equal to 100% of the principal amount thereof less
a percentage equal to the commission applicable to an agency sale of a Note
of identical maturity. The Company has agreed to indemnify the Agents
against, and to provide contribution with respect to, certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
(3) Before deducting expenses payable by the Company estimated at $75,000.
------------------------
The Notes are being offered on a continuing basis by the Company through the
Agents, which have agreed to use their reasonable efforts to solicit purchases
of the Notes, and Notes may also be sold to an Agent, as principal, for resale
to investors or other purchasers. The Company reserves the right to sell Notes
directly to investors on its own behalf in those jurisdictions where it is
permitted to do so. The Notes will not be listed on any securities exchange, and
there can be no assurance that the Notes offered hereby will be sold or, if
sold, that there will be a secondary market for the Notes or liquidity in such
market if one does develop. The Company reserves the right to withdraw, cancel
or modify the offer made hereby without notice. The Company or an Agent, if it
solicits the offer on an agency basis, may reject any order in whole or in part.
See "Plan of Distribution" in this Prospectus Supplement.
---------------------
MERRILL LYNCH & CO.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
J.P. MORGAN & CO.
MORGAN STANLEY DEAN WITTER
---------------------
The date of this Prospectus Supplement is May 4, 1998.
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
The interest rates on Notes, which may be zero in the case of certain Notes
issued at a price representing a substantial discount from the principal amount
payable upon maturity, stated maturity dates, redemption or repayment
provisions, issue prices and other variable terms of the Notes will be
established by the Company from time to time and will be set forth in the
applicable Pricing Supplement. Such terms are subject to change by the Company,
but no such change will affect any Note theretofore issued or as to which an
offer to purchase has been accepted by the Company. The Company may also issue
Original Issue Discount Notes.
Interest on each Note will accrue from its date of issue and, unless
otherwise provided in the applicable Pricing Supplement, will be payable
semi-annually in arrears on each November 1 and May 1 and at maturity (or, if
applicable, upon earlier redemption).
The Notes will be issued in fully registered form and represented by a
global security (a "Global Note") registered in the name of a nominee of The
Depository Trust Company, as Depository (the "Depository"). Ownership of
beneficial interests in a Global Note will be shown on, and transfers thereof
will be effected only through, records maintained by the Depository and its
participants. Except as described in "Description of Notes--Book-Entry Notes" in
this Prospectus Supplement, owners of beneficial interests in a Global Note will
not be entitled to physical delivery of Notes in certificated form and will not
be considered the owners or Holders thereof under the Indenture (as defined
herein).
IN CONNECTION WITH AN OFFERING OF NOTES PURCHASED BY ONE OR MORE AGENTS AS
PRINCIPAL ON A FIXED OFFERING PRICE BASIS, SUCH AGENT(S) MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE MARKET PRICE OF
SUCH NOTES. SUCH TRANSACTIONS MAY INCLUDE STABILIZING AND THE PURCHASE OF NOTES
TO COVER SHORT POSITIONS OF SUCH AGENT(S). SEE "PLAN OF DISTRIBUTION."
<PAGE>
THOMAS & BETTS CORPORATION
The Company designs, manufactures and markets, on a global basis, electrical
and electronic connectors and components with manufacturing facilities and
marketing activities in North America, Europe and the Far East. The Company's
products are sold worldwide through electrical, electronic and HVAC
distributors, mass merchandisers, catalogs and home centers, and directly to
original equipment manufacturer ("OEM") markets. The Company operates in three
business segments. Electrical Construction and Maintenance Components are sold
primarily in North America, and manufactured and assembled at facilities located
in the United States, Puerto Rico, Canada and Mexico. Electronics/OEM Components
are sold in North America, Europe and Asia, and manufactured at facilities in
the United States, Europe, Mexico, Japan and Singapore. Other Products and
Components--principally heaters, heating and ventilation systems, components for
transmission and distribution of electric power, transmission poles and towers,
and telecommunications products--are sold primarily in North America and
manufactured in the United States, Europe and Mexico.
Selective acquisitions have been made to broaden the Company's business
world-wide. The Company currently is evaluating several acquisition
possibilities, and expects to do so from time to time in the future. The Company
may finance any such acquisitions which it consummates through the issuance of
private or public debt or equity, internally generated funds or a combination of
the foregoing. Under certain circumstances, the Company may become more
leveraged as a result of such acquisitions. The Company's goal is to finance or
refinance any such acquisitions in a manner that will not change the ratings of
its debt securities in the long term. However, no assurance can be given that
the Company will be able to meet this goal.
The Company was established in 1898 as a sales agency for electrical wires
and raceways and was incorporated in New Jersey in 1917 and reincorporated in
Tennessee in May 1996. The Company's executive offices are located at 8155 T&B
Boulevard, Memphis, Tennessee 38125, telephone number (901) 252-5000.
RECENT DEVELOPMENTS
Net earnings for the first quarter of 1998 were $35.3 million, a 16%
increase over last year's first quarter net earnings of $30.3 million. Both
basic and diluted earnings per share for the first quarter were $.64, an
increase of 14% from first quarter 1997 basic and diluted earnings per share of
$.56. Sales for the quarter were $501.3 million compared with $515.9 million
reported in the prior-year quarter. Reported net sales for the first quarter
were reduced by the deconsolidation of automotive electronics businesses
contributed at year-end 1997 to a joint venture. Sales were reduced by the
previously announced, planned phase-out of a large automotive platform, a
refocusing of sales efforts for steel structures and adverse foreign currency
shifts. The 1998 gross margin was 31.5% compared with 1997's 30.8% and 1998's
operating margin rose to 11% compared with an operating margin of 10.4% in the
first quarter of 1997.
Sales of the Electrical Construction and Maintenance Components segment rose
11% from first quarter 1997 reflecting continued strong volume increases
attributable to greater market penetration of the Company's broad product
offering and economic growth throughout North America.
Solid volume gains in the Electronics/OEM Components segment reported a 14%
decrease in sales in the first quarter. Sales in this segment were offset by
deconsolidation of automotive businesses to a joint venture, the phased-out
automotive platform and unfavorable currency shifts.
First quarter sales of Other Products and Components segment were 4% below
the prior-year level due primarily to the one quarter decline in steel
structures sales. Solid sales gains were reported for mechanical products aided
by the increased demand for core utility products and the strong
telecommunications markets in Asia.
S-3
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
The ratio of earnings to fixed charges represents the number of times fixed
charges are covered by earnings from continuing operations. For purposes of
computing this ratio, earnings consist of earnings from continuing operations
before income taxes, plus fixed charges and less capitalized interest and less
undistributed earnings from less than 50 percent owned persons. Fixed charges
consist of interest expense and such portion of rental expense which the Company
estimates to be representative of the interest factor attributable to such
rental expense.
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
- ----------------------------------------------------------------------------------------- --------------------------
JANUARY 2, JANUARY 1, DECEMBER 31, DECEMBER 29, DECEMBER 28, MARCH 30, APRIL 5,
1994 1995 1995 1996 1997 1997 1998
- --------------- --------------- ----------------- ----------------- ----------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
2.8x 1.9x(1) 3.8x(2) 2.3x(3) 4.3x 3.7x 3.7x
</TABLE>
- ------------------------
(1) Reflects non-recurring pretax charges of $79 million associated with various
restructuring activities incurred by the Company in the fiscal year ended
January 1, 1995. If such charges had not been incurred, the ratio of
earnings to fixed charges in such fiscal year would have been 3.8x.
(2) Reflects non-recurring pretax charges of $23 million representing
restructuring costs and other charges incurred by the Company in the fiscal
year ended December 31, 1995. If such charges had not been incurred, the
ratio of earnings to fixed charges in such fiscal year would have been 4.3x.
(3) Reflects non-recurring pretax charges of $97.1 million for merger costs,
restructuring costs and other charges in connection with the acquisition of
Augat Inc. and initiatives affecting certain other operations of the Company
incurred in the fiscal year ended December 29, 1996. If such charges had not
been incurred, the ratio of earnings to fixed charges in such fiscal year
would have been 3.9x.
USE OF PROCEEDS
The Company expects to use the net proceeds of the sale of the Notes to
repay commercial paper issued by the Company within the past year and other
short-term borrowings. The commercial paper and other short-term borrowings were
issued at interest rates ranging from 5.65% to 5.75% with maturities on May 7,
1998.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes (which
represent a new series of, and are referred to in the accompanying Prospectus
as, the "Securities") supplements and, to the extent inconsistent therewith,
replaces the description of the general terms and provisions of the Securities
set forth in the Prospectus. This description will apply to the Notes unless
otherwise specified in the applicable Pricing Supplement. The particular terms
of the Notes offered by this Prospectus Supplement and each Pricing Supplement
will be described herein and therein. Certain capitalized terms used herein are
defined in the Prospectus.
GENERAL
The Notes will be issued under an Indenture, dated as of January 15, 1992
(as supplemented, amended or modified from time to time, the "Indenture"),
between the Company and The Chase Manhattan Bank, as Trustee, which is more
fully described in the Prospectus. The following summaries of certain provisions
of the Indenture do not purport to be complete, are subject to, and are
qualified in their entirety by reference to, all of the provisions of the
Indenture, including the definitions therein of certain terms.
S-4
<PAGE>
The Securities, including the Notes, will be unsecured obligations of the
Company and will rank equally with all other unsecured indebtedness of the
Company and prior to any of its subordinated indebtedness. The Indenture does
not limit the aggregate principal amount of Securities that may be issued
thereunder and provides that Securities may be issued from time to time in one
or more series. The Company may, from time to time, without the consent of the
Holders of the Notes, provide for the issuance of Notes or other Securities
under the Indenture in addition to the $115,000,000 aggregate principal amount
of Notes offered hereby.
The Notes are currently limited to up to $115,000,000 aggregate principal
amount and will be offered on a continuing basis through or to the Agents. The
Notes will mature nine months or more from the date of issue (the "Stated
Maturity Date"), as selected by the purchaser and agreed to by the Company, and
may be subject to redemption at the option of the Company or repayment at the
option of the Holder prior to the Stated Maturity Date upon the terms described
in the applicable Pricing Supplement. Each Note will bear interest at a fixed
rate, which may be zero in the case of a Note issued at a price representing a
substantial discount from the principal amount payable on the Stated Maturity
Date (a "Zero-Coupon Note").
The Notes may be issued as Original Issue Discount Securities ("Original
Issue Discount Notes"). An Original Issue Discount Note is a Note, including any
Zero-Coupon Note, which provides for an amount less than the principal amount
thereof to be due and payable upon acceleration of maturity. In the event of
acceleration of maturity of an Original Issue Discount Note, the amount payable
to the Holder of such Note will be determined in accordance with the terms of
such Note. In addition, a Note issued at a price lower than the principal amount
thereof may, for United States federal income tax purposes, be considered to be
issued with original issue discount, regardless of the amount payable upon
acceleration of maturity. See "United States Taxation--U.S. Holders--Original
Issue Discount" in this Prospectus Supplement.
The Notes will be issued only in fully registered book-entry form. The Notes
will be issued in U.S. dollar denominations of $1,000 or any integral multiple
thereof.
Transfers or exchanges of interests in Notes issued in book-entry form
through the facilities of the Depository may be similarly effected through a
participating member of the Depository. See "--Book-Entry Notes" below. In the
event Notes are issued in certificated form, such Notes may be transferred or
exchanged at the offices described in "--Payment of Principal are Premium and
Interest" below. No service charge will be made for any registration of transfer
or exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith. Prior to due presentment of any Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the person in whose name such Note is registered as the owner and Holder thereof
for all purposes, whether or not such Note may be overdue, and none of the
Company, the Trustee or any such agent will be affected by notice to the
contrary.
Interest rates offered by the Company with respect to the Notes may differ
depending upon, among other things, the aggregate principal amount of Notes
purchased in any single transaction. Notes with different variable terms other
than interest rates may also be offered concurrently to different investors.
Interest rates or formulas and other terms of Notes are subject to change by the
Company from time to time, but no such change will affect any Note theretofore
issued or as to which an offer has been accepted by the Company. The Notes will
be subject to the defeasance and covenant defeasance provisions set forth in the
Indenture.
The Indenture and the Notes will be governed by and construed in accordance
with the laws of the State of New York.
S-5
<PAGE>
PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST
Each Note will bear interest from the date of issue at the rate per annum
stated on the face thereof (which may be zero in the case of a Zero-Coupon Note)
until the principal amount thereof is paid or otherwise made available for
payment. Unless otherwise specified in the applicable Pricing Supplement,
interest on Notes will be payable semi-annually in arrears on November 1 and May
1 of each year to the Holders at the close of business on the preceding October
15 and April 15, whether or not a Business Day each, a "Regular Record Date"
with respect to Notes). Interest is also payable on the Maturity Date to the
persons to whom the principal of the Notes are payable. Interest on Notes will
be computed on the basis of a 360-day year of twelve 30-day months. If any
Interest Payment Date or the Maturity Date of a Note falls on a day that is not
a Business Day, the required payment will be made on the next succeeding
Business Day as if it were made on the date such payment was due, and no
interest will accrue on the amount so payable for the period from and after such
Interest Payment Date or the Maturity Date, as the case may be, to the date of
such payment on the next succeeding Business Day.
Payments of principal, premium, if any, and interest, if any, on Notes
issued in book-entry form will be made to the Depository. See "--Book-Entry
Notes" below. In the event Notes are issued in certificated form, principal,
premium, if any, and interest, if any, will be payable, the transfer of the
Notes will be registrable, and Notes will be exchangeable for Notes bearing
identical terms and provisions at the office or agency of the Trustee in The
City of New York designated for such purpose, which is currently located at 450
West 33rd Street, New York, New York 10001, Attention: Corporate Trust
Department. Payment of interest, other than interest payable on the Maturity
Date, may be made at the option of the Company by check mailed to the Holder of
the applicable Note at the close of business on the relevant Regular Record Date
(as hereinafter defined) or by wire transfer to an account maintained by such
Holder, subject to the provisions of the succeeding paragraph. Interest will be
payable on each date specified in the applicable Pricing Supplement on which an
installment of interest is due and payable (each, an "Interest Payment Date")
and on the Maturity Date. If the original issue date of a Note is between a
Regular Record Date and an Interest Payment Date, the initial interest payment
will be made on the Interest Payment Date following the next succeeding Regular
Record Date to the Holder of such Note on such next succeeding Regular Record
Date.
In the case of Notes issued in certificated form, payment of principal,
premium, if any, and interest, if any, payable on the Maturity Date for each
Note will be made in immediately available funds against presentation of such
Note at the aforementioned office or agency of the Trustee, provided that such
Note is presented to the Trustee in time for the Trustee to make such payments
in such funds in accordance with its normal procedures. Interest payable on the
Maturity Date will be payable to the person to whom the principal of the Note
will be paid.
A Holder of $10,000,000 or more in aggregate principal amount of Notes will
be entitled to receive payments of interest on an Interest Payment Date other
than the Maturity Date by wire transfer of immediately available funds if such
Holder makes a request to such effect, which request includes appropriate wire
transfer instructions and has been received in writing (mailed or hand
delivered) or by cable, telex or facsimile transmission by the Trustee at its
office in The City of New York on or before the Regular Record Date immediately
preceding such Interest Payment Date. The Trustee will, subject to applicable
laws and regulations and until it receives notice to the contrary, make such
interest payment and all succeeding interest payments other than on the Maturity
Date to such Holder by wire transfer to the designated account. If a payment
cannot be made by wire transfer because the required information has not been
received by the Trustee on or before the requisite date, payment will be made by
check or draft mailed to such Holder at its registered address. The Company will
pay any administrative costs imposed by banks in connection with making such
payments by wire transfer, except any tax, assessment or governmental charge
imposed upon payments.
S-6
<PAGE>
Interest payments, if any, on a Note will be equal to the amount of interest
accrued from and including the immediately preceding Interest Payment Date in
respect of which interest has been paid or duly provided for (or from and
including the date of issue, if no interest has been paid or duly provided for
with respect to such Note) to but excluding the applicable Interest Payment Date
or the Maturity Date, as the case may be (each, an "Interest Accrual Period").
REDEMPTION AND REPAYMENT
If set forth in the applicable Pricing Supplement, the Notes will be subject
to redemption by the Company on and after the initial redemption date, if any,
fixed at the time of sale and set forth in the applicable Pricing Supplement
(the "Initial Redemption Date"). If no Initial Redemption Date is indicated with
respect to a Note, such Note will not be redeemable prior to the Stated Maturity
Date. On and after the Initial Redemption Date with respect to any Note, at the
option of the Company such Note will be redeemable in whole or in part in
increments of the minimum denomination in which Notes may be issued at a
redemption price (the "Redemption Price") determined in accordance with the
following paragraph, together with any accrued and unpaid interest thereon
payable to the date of redemption, on notice given no more than 60 nor less than
30 days prior to the date of redemption.
The Redemption Price for each Note subject to redemption will initially be
equal to a certain percentage (the "Initial Redemption Percentage") of the
principal amount of such Note (or, in the case of an Original Issue Discount
Note, such portion of the principal amount of such Note as may be specified in
the terms thereof) to be redeemed and will decline at each anniversary of the
Initial Redemption Date with respect to such Note by a percentage (the "Annual
Redemption Percentage Reduction") of the principal amount of such Note (or, in
the case of an Original Issue Discount Note, such portion of the principal
amount of such Note as may be specified in the terms thereof) to be redeemed
until the Redemption Price is 100% of such principal amount (or in the case of
an Original Issue Discount Note, such portion of the principal amount). The
Initial Redemption Percentage and any Annual Redemption Percentage Reduction
with respect to each Note subject to redemption prior to the Stated Maturity
Date will be fixed at the time of sale and set forth in the applicable Pricing
Supplement.
If set forth in the applicable Pricing Supplement, the Notes will be subject
to repayment at the option of the Holders thereof in accordance with the terms
of the Notes on their respective optional repayment dates, if any, fixed at the
time of sale and set forth in the applicable Pricing Supplement (each, an
"Optional Repayment Date"). If no Optional Repayment Date is indicated with
respect to a Note, such Note will not be repayable at the option of the Holder
prior to the Stated Maturity Date. On any Optional Repayment Date with respect
to any Note, at the option of the Holder thereof such Note will be repayable in
whole or in part in increments of the minimum denomination in which such Note
may be issued at a price equal to 100% of the principal amount of such Note
[(or, in the case of an Original Issue Discount Note, such portion of the
principal amount of such Note as may be specified in the terms thereof)] to be
repaid, together with any accrued and unpaid interest thereon payable to the
Optional Repayment Date, on notice given by such Holder to the Company not more
than 60 nor less than 30 days prior to the Optional Repayment Date.
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will not be subject to any sinking fund.
EVENTS OF DEFAULT
An Event of Default with respect to the Notes is: (a) default in payment of
principal of (or premium, if any, on) any Note at its Maturity; (b) default in
payment of any interest on any Note when due, continued for 30 days; (c) default
in payment of any sinking fund installment when due, continued for 30 days; (d)
failure by the Company for 90 days after due notice in performance of any other
of the covenants or warranties in the Indenture (other than a covenant or
warranty included in the Indenture
S-7
<PAGE>
solely for the benefit of a series of Notes other than that series), and (e)
certain events of bankruptcy, insolvency or reorganization of the Company.
ADDITIONAL PROVISIONS; ADDENDUM
Any provisions with respect to the Notes, including the Interest Payment
Dates, the Maturity Date or any other term relating thereto, may be modified or
supplemented as specified under "Additional Provisions" on the face thereof or
in an Addendum relating thereto, if so specified on the face thereof. Such
provisions will be described in the applicable Pricing Supplement.
ORIGINAL ISSUE DISCOUNT NOTES
The Company may offer Notes ("Original Issue Discount Notes") from time to
time that have an Issue Price (as specified in the applicable Pricing
Supplement) that is less than 100% of the principal amount thereof (i.e. par) by
more than a percentage equal to the product of 0.25% and the number of full
years to the Stated Maturity Date. Original Issue Discount Notes may not bear
any interest currently or may bear interest at a rate that is below market rates
at the time of issuance. The difference between the Issue Price of an Original
Issue Discount Note and par is referred to herein as the "Discount." In the
event of redemption, repayment or acceleration of maturity of an Original Issue
Discount Note, the amount payable to the Holder of such Original Issue Discount
Note will be equal to the sum of (i) the Issue Price (increased by any accruals
of Discount) and, in the event of any redemption of such Original Issue Discount
Note (if applicable), multiplied by the Initial Redemption Percentage (as
adjusted by the Annual Redemption Percentage Reduction, if applicable) and (ii)
any unpaid interest on such Original Issue Discount Note accrued to the date of
such redemption, repayment or acceleration of maturity, as the case may be.
Unless otherwise specified in the applicable Pricing Supplement, for
purposes of determining the amount of Discount that has accrued as of any date
on which a redemption, repayment or acceleration of maturity occurs for an
Original Issue Discount Note, such Discount will be accrued using a constant
yield method. The constant yield will be calculated using a 30-day month,
360-day year convention, a compounding period that, except for the Initial
Period (as hereinafter defined), corresponds to the shortest period between
Interest Payment Dates for the applicable Original Issue Discount Note (with
ratable accruals within a compounding period), a coupon rate equal to the
initial coupon rate applicable to such Original Issue Discount Note and an
assumption that the maturity of such Original Issue Discount Note will not be
accelerated. If the period from the date of issue to the initial Interest
Payment Date for an Original Issue Discount Note (the "Initial Period") is
shorter than the compounding period for such Original Issue Discount Note, a
proportionate amount of the yield for an entire compounding period will be
accrued. If the Initial Period is longer than the compounding period, then such
compounding period will be divided into a regular compounding period and a short
period with the short period being treated as provided in the preceding
sentence. The accrual of the applicable Discount may differ from the accrual of
original issue discount for purposes of the Internal Revenue Code of 1986, as
amended (the "Code"), certain Original Issue Discount Notes may not be treated
as having original issue discount within the meaning of the Code, and Notes
other than Original Issue Discount Notes may be treated as issued with original
issue discount for federal income tax purposes. See "United States Taxation."
BOOK-ENTRY NOTES
The Notes will be issued in book-entry form represented by one fully
registered Note (a "Global Note") which will be deposited with, or on behalf of,
the Depository and registered in the name of the Depository's nominee. The
Company has established a depositary arrangement with The Depository Trust
Company with respect to the Global Note, the terms of which are summarized
below. Any additional or differing terms of the depositary arrangement with
respect to the Global Note will be described in the applicable Pricing
Supplement.
S-8
<PAGE>
Upon issuance, all Notes issued in book-entry form of like tenor and terms
will be represented by a single Global Note. No Global Note may be transferred
except as a whole by a nominee of the Depository to the Depository or to another
nominee of the Depository or by the Depository or such nominee to a successor of
the Depository or a nominee of such successor.
So long as the Depository or its nominee is the registered owner of a Global
Note, the Depository or its nominee, as the case may be, will be the sole Holder
of the Notes issued in book-entry form represented thereby for all purposes
under the Indenture. Except as otherwise provided in this section, the actual
purchasers (the "Beneficial Owners") of Notes issued in book-entry form
represented by the Global Note will not be entitled to receive physical delivery
of Notes in certificated form and will not be considered the Holders thereof for
any purpose under the Indenture. Accordingly, each Beneficial Owner must rely on
the arrangements and procedures of the Depository and, if such Beneficial Owner
is not a participant of the Depository ("Participant"), on the procedures of the
Participant through which such Beneficial Owner owns its interest in order to
exercise any rights of a Holder under such Global Note or the Indenture. The
laws of some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in certificated form. Such limits and laws
may impair the ability to transfer beneficial interests in a Global Note.
Unless otherwise specified in the applicable Pricing Supplement, Notes
issued in book-entry form represented by a Global Note will be exchangeable for
Notes in certificated form of like tenor and terms and of differing authorized
denominations aggregating a like principal amount, only if (i) the Depository
notifies the Company that it is unwilling or unable to continue as Depository
for the Global Notes, (ii) the Depository ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), (iii) the Company in its sole discretion determines that the Global Notes
shall be exchangeable for Notes in certificated form or (iv) there shall have
occurred and be continuing an Event of Default under the Indenture with respect
to the Notes. Upon any such exchange, Notes in certificated form shall be
registered in the names of the Beneficial Owners of the Global Notes
representing the Notes issued in book-entry form, which names shall be provided
by the Depository's relevant Participants (as identified by the Depository) to
the Trustee.
The following is based on information furnished by the Depository:
The Depository will act as securities depository for the Global Notes.
The Global Notes will be issued as fully registered securities registered in
the name of Cede & Co. (the Depository's partnership nominee). One fully
registered Global Note will be issued for each issue of Notes issued in
book-entry form, each in the aggregate principal amount of such issue, and
will be deposited with the Depository.
The Depository is a limited-purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning of the New
York Banking Law, a member of the federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and
a "clearing agency" registered pursuant to the provisions of Section 17A of
the Exchange Act. The Depository holds securities that the Participants
deposit with the Depository. The Depository also facilitates the settlement
among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants of the Depository
("Direct Participants") include securities brokers and dealers (including
the Agents), banks, trust companies, clearing corporations and certain other
organizations. The Depository 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 Depository's system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through
or maintain a custodial relationship with a Direct Participant,
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either directly or indirectly ("Indirect Participants"). The rules
applicable to the Depository and its Participants are on file with the
Securities and Exchange Commission.
Purchases of Notes issued in book-entry form under the Depository's
system must be made by or through Direct Participants, which will receive a
credit for such Notes on the Depository's records. The ownership interest of
each Beneficial Owner of each Note issued in book-entry form which is
represented by a Global Note is in turn to be recorded on the Direct and
Indirect Participants' records. Beneficial Owners will not receive written
confirmation from the Depository 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 Participants through which such Beneficial Owner entered
into the transaction. Transfers of ownership interests in a Global Note are
to be accomplished by entries made on the books of Participants acting on
behalf of Beneficial Owners. Beneficial Owners of a Global Note will not
receive Notes in certificated form representing their ownership interests
therein, except in the event that use of the book-entry system for the
Global Notes is discontinued.
To facilitate subsequent transfers, all Global Notes representing Notes
issued in book-entry form which are deposited with, or on behalf of, the
Depository will be registered in the name of the Depository's nominee, Cede
& Co. The deposit of Global Notes with, or on behalf of, the Depository and
their registration in the name of Cede & Co. effect no change in beneficial
ownership. The Depository has no knowledge of the actual Beneficial Owners
of the Global Notes representing Notes issued in book-entry form; the
Depository's records reflect only the identity of the Direct Participants to
whose accounts such Notes are credited, 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 communications by the Depository to
Direct Participants, by Direct Participants to Indirect Participants, and by
Direct and Indirect Participants to Beneficial Owners will by governed by
arrangements among them, subject to any statutory or regulatory requirements
as may be in effect from time to time.
Neither the Depository nor Cede & Co. will consent or vote with respect
to the Global Notes representing Notes issued in book-entry form. Under its
usual procedures, the Depository mails an Omnibus Proxy to the Company as
soon as possible after the applicable record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts such Notes are credited on the applicable record date
(identified in a listing attached to the Omnibus Proxy).
Principal, premium, if any, and/or interest, if any, payments on the
Global Notes representing Notes issued in book-entry form will be made to
the Depository. The Depository's practice is to credit Direct Participants'
accounts on the applicable payment date in accordance with their respective
holdings shown on the Depository's records unless the Depository has reason
to believe that it will not receive payment on such 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 the Depository,
the Trustee or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal,
premium, if any, and/or interest, if any, to the Depository is the
responsibility of the Company or the Trustee, disbursement of such payments
to Direct Participants shall be the responsibility of the Depository, and
disbursement of such payments to the Beneficial Owners shall be the
responsibility of Direct and Indirect Participants.
If applicable, redemption notices shall be sent to Cede & Co. If less
than all of the Notes within an issue represented by a Global Note are being
redeemed, the Depository's practice is to determine by lot the amount of the
interest of each Direct Participant in such issue to be redeemed.
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A Beneficial Owner shall give notice of any option to elect to have its
Notes issued in book-entry form repaid by the Company, through its
Participant, to the Trustee, and shall effect delivery of such Notes by
causing the Direct Participant to transfer the Participant's interest in the
related Global Note, on the Depository's records, to the Trustee. The
requirement for physical delivery of Notes issued in book-entry form in
connection with a demand for repayment will be deemed satisfied when the
ownership rights in the related Global Note are transferred by Direct
Participants on the Depository's records.
The Depository may discontinue providing its services as securities
depository with respect to the Global Notes at any time by giving reasonable
notice to the Company or the Trustee. Under such circumstances, in the event
that a successor securities depository is not obtained, Notes in
certificated form are required to be printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through the Depository (or a successor securities depository). In
that event, Notes in certificated form will be printed and delivered.
The information in this section concerning the Depository and the
Depository's system has been obtained from sources that the Company believes to
be reliable, but the Company takes no responsibility for the accuracy thereof.
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UNITED STATES TAXATION
The following summary of certain United States federal income tax
consequences of the purchase, ownership and disposition of the Notes is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change (including changes in effective dates) or possible differing
interpretations. It deals only with Notes held as capital assets and does not
purport to deal with persons in special tax situations, such as financial
institutions, insurance companies, regulated investment companies, dealers in
securities or currencies, persons holding Notes as a hedge against currency
risks or as a position in a "straddle" for tax purposes, or persons whose
functional currency is not the United States dollar. It also does not deal with
holders other than original purchasers (except where otherwise specifically
noted). Persons considering the purchase of the Notes should consult their own
tax advisors concerning the application of United States federal income tax laws
to their particular situations as well as any consequences of the purchase,
ownership and disposition of the Notes arising under the laws of any other
taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a Note
that is for United States federal income tax purposes (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof (other than a partnership that is not treated as a United
States person under any applicable Treasury regulations) , (iii) an estate
income of which is subject to United States federal income taxation regardless
of its source, (iv) any trust if a court within the United States is able to
exercise primary supervision over the administration of the trust, and one or
more United States persons have the authority to control all substantial
decisions of the trust, or (v) any other person whose income or gain in respect
of a Note is effectively connected with the conduct of a United States trade or
business. Notwithstanding the preceding clause (iv), to the extent provided in
Treasury regulations, certain trusts in existence on August 20, 1996, and
treated as United States persons under the United States Internal Revenue Code
of 1986, as amended (the "Code") and applicable Treasury regulations thereunder
prior to such date, that elect to continue to be treated as United States
persons under the Code or applicable Treasury regulations thereunder also will
be a U.S. Holder. As used herein, the term "non-U.S. Holder" means a beneficial
owner of a Note that is not a U.S. Holder.
U.S. HOLDERS
PAYMENTS OF INTEREST. Payments of interest on a Note generally will be
taxable to a U.S. Holder as ordinary interest income at the time such payments
are accrued or are received (in accordance with the U.S. Holder's regular method
of tax accounting).
ORIGINAL ISSUE DISCOUNT. The following summary is a general discussion of
the United States federal income tax consequences to U.S. Holders of the
purchase, ownership and disposition of Notes issued with original issue discount
("Discount Notes"). The following summary is based upon final Treasury
regulations (the "OID Regulations") released by the Internal Revenue Service
("IRS") on January 27, 1994, as amended on June 11, 1996, under the original
issue discount provisions of the Code.
For United States federal income tax purposes, original issue discount is
the excess of the stated redemption price at maturity of a Note over its issue
price, if such excess equals or exceeds a de minimis amount (generally 1/4 of 1%
of the Note's stated redemption price at maturity multiplied by the number of
complete years to its maturity from its issue date or, in the case of a Note
providing for the payment of any amount other than qualified stated interest (as
defined below) prior to maturity, multiplied by the weighted average maturity of
such Note). The issue price of each Note in an issue of Notes equals the first
price at which a substantial amount of such Notes has been sold (ignoring sales
to bond houses, brokers, or similar persons or organizations acting in the
capacity of underwriters, placement agents, or wholesalers). The stated
redemption price at maturity of a Note is the sum of all payments provided by
the Note other than "qualified stated interest" payments. The term "qualified
stated interest" generally means stated
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interest that is unconditionally payable in cash or property (other than debt
instruments of the issuer) at least annually at a single fixed rate. In
addition, under the OID Regulations, if a Note bears interest for one or more
accrual periods at a rate below the rate applicable for the remaining term of
such Note (e.g., Notes with teaser rates or interest holidays), and if the
greater of either the resulting foregone interest on such Note or any "true"
discount on such Note (i.e., the excess of the Note's stated principal amount
over its issue price) equals or exceeds a specified de minimis amount, then the
stated interest on the Note would be treated as original issue discount rather
than qualified stated interest.
Payments of qualified stated interest on a Note are taxable to a U.S. Holder
as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting). A U.S. Holder of a Discount Note must include original issue
discount in income as ordinary interest for United States federal income tax
purposes as it accrues under a constant yield method in advance of receipt of
the cash payments attributable to such income, regardless of such U.S. Holder's
regular method of tax accounting. In general, the amount of original issue
discount included in income by the initial U.S. Holder of a Discount Note is the
sum of the daily portions of original issue discount with respect to such
Discount Note for each day during the taxable year (or portion of the taxable
year) on which such U.S. Holder held such Discount Note. The "daily portion" of
original issue discount on any Discount Note is determined by allocating to each
day in any accrual period a ratable portion of the original issue discount
allocable to that accrual period. An "accrual period" may be of any length and
the accrual periods may vary in length over the term of the Discount Note,
provided that each accrual period is no longer than one year and each scheduled
payment of principal or interest occurs either on the final day of an accrual
period or on the first day of an accrual period. The amount of original issue
discount allocable to each accrual period is generally equal to the difference
between (i) the product of the Discount Note's adjusted issue price at the
beginning of such accrual period and its yield to maturity (determined on the
basis of compounding at the close of each accrual period and appropriately
adjusted to take into account the length of the particular accrual period) and
(ii) the amount of any qualified stated interest payments allocable to such
accrual period. The "adjusted issue price" of a Discount Note at the beginning
of any accrual period is the sum of the issue price of the Discount Note plus
the amount of original issue discount allocable to all prior accrual periods
minus the amount of any prior payments on the Discount Note that were not
qualified stated interest payments. Under these rules, U.S. Holders generally
will have to include in income increasingly greater amounts of original issue
discount in successive accrual periods.
A U.S. Holder who purchases a Discount Note for an amount that is greater
than its adjusted issue price as of the purchase date and less than or equal to
the sum of all amounts payable on the Discount Note after the purchase date
other than payments of qualified stated interest, will be considered to have
purchased the Discount Note at an "acquisition premium". Under the acquisition
premium rules, the amount of original issue discount which such U.S. Holder must
include in its gross income with respect to such Discount Note for any taxable
year (or portion thereof in which the U.S. Holder holds the Discount Note) will
be reduced (but not below zero) by the portion of the acquisition premium
properly allocable to the period.
Certain of the Notes (i) may be redeemable at the option of the Company
prior to their stated maturity (a "call option") and/or (ii) may be repayable at
the option of the holder prior to their stated maturity (a "put option"). Notes
containing such features may be subject to rules that differ from the general
rules discussed above. Investors intending to purchase Notes with such features
should consult their own tax advisors, since the original issue discount
consequences will depend, in part, on the particular terms and features of the
purchased Notes.
U.S. Holders may generally, upon election, include in income all interest
(including stated interest, acquisition discount, original issue discount, de
minimis original issue discount, market discount, de minimis market discount,
and unstated interest, as adjusted by any amortizable bond premium or
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acquisition premium) that accrues on a debt instrument by using the constant
yield method applicable to original issue discount, subject to certain
limitations and exceptions.
SHORT-TERM NOTES. Notes that have a fixed maturity of one year or less
("Short-Term Notes") will be treated as having been issued with original issue
discount. In general, an individual or other cash method U.S. Holder is not
required to accrue such original issue discount unless the U.S. Holder elects to
do so. If such an election is not made, any gain recognized by the U.S. Holder
on the sale, exchange or maturity of the Short-Term Note will be ordinary income
to the extent of the original issue discount accrued on a straight-line basis,
or upon election under the constant yield method (based on daily compounding),
through the date of sale or maturity, and a portion of the deductions otherwise
allowable to the U.S. Holder for interest on borrowings allocable to the
Short-Term Note will be deferred until a corresponding amount of income is
realized. U.S. Holders who report income for United States federal income tax
purposes under the accrual method, and certain other holders including banks and
dealers in securities, are required to accrue original issue discount on a
Short-Term Note on a straight-line basis unless an election is made to accrue
the original issue discount under a constant yield method (based on daily
compounding).
MARKET DISCOUNT. If a U.S. Holder purchases a Note, other than a Discount
Note, for an amount that is less than its issue price (or, in the case of a
subsequent purchaser, its stated redemption price at maturity) or, in the case
of a Discount Note, for an amount that is less than its adjusted issue price as
of the purchase date, such U.S. Holder will be treated as having purchased such
Note at a "market discount," unless such market discount is less than a
specified de minimis amount.
Under the market discount rules, a U.S. Holder will be required to treat any
partial principal payment (or, in the case of a Discount Note, any payment that
does not constitute qualified stated interest) on, or any gain realized on the
sale, exchange, retirement or other disposition of, a Note as ordinary income to
the extent of the lesser of (i) the amount of such payment or realized gain or
(ii) the market discount which has not previously been included in income and is
treated as having accrued on such Note at the time of such payment or
disposition. Market discount will be considered to accrue ratably during the
period from the date of acquisition to the maturity date of the Note, unless the
U.S. Holder elects to accrue market discount on the basis of semiannual
compounding.
A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a Note with market discount until the maturity of the Note or
certain earlier dispositions, because a current deduction is only allowed to the
extent the interest expense exceeds an allocable portion of market discount. A
U.S. Holder may elect to include market discount in income currently as it
accrues (on either a ratable or semiannual compounding basis), in which case the
rules described above regarding the treatment as ordinary income of gain upon
the disposition of the Note and upon the receipt of certain cash payments and
regarding the deferral of interest deductions will not apply. Generally, such
currently included market discount is treated as ordinary interest for United
States federal income tax purposes. Such an election will apply to all debt
instruments acquired by the U.S. Holder on or after the first day of the first
taxable year to which such election applies and may be revoked only with the
consent of the IRS.
PREMIUM. If a U.S. Holder purchases a Note for an amount that is greater
than the sum of all amounts payable on the Note after the purchase date other
than payments of qualified stated interest, such U.S. Holder will be considered
to have purchased the Note with "amortizable bond premium" equal in amount to
such excess. A U.S. Holder may elect to amortize such premium using a constant
yield method over the remaining term of the Note and may offset interest
otherwise required to be included in respect of the Note during any taxable year
by the amortized amount of such excess for the taxable year. However, if the
Note may be optionally redeemed after the U.S. Holder acquires it at a price in
excess of its stated redemption price at maturity, special rules would apply
which could result in a deferral of the amortization of some bond premium until
later in the term of the Note. Any election to amortize bond premium applies
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to all taxable debt instruments acquired by the U.S. Holder on or after the
first day of the first taxable year to which such election applies and may be
revoked only with the consent of the IRS.
DISPOSITION OF A NOTE. Except as discussed above, upon the sale, exchange
or retirement of a Note, a U.S. Holder generally will recognize taxable gain or
loss equal to the difference between the amount realized on the sale, exchange
or retirement (other than amounts representing accrued and unpaid interest) and
such U.S. Holder's adjusted tax basis in the Note. A U.S. Holder's adjusted tax
basis in a Note generally will equal such U.S. Holder's initial investment in
the Note increased by any original issue discount included in income (and
accrued market discount, if any, if the U.S. Holder has included such market
discount in income) and decreased by the amount of any payments, other than
qualified stated interest payments, received and amortizable bond premium taken
with respect to such Note. Such gain or loss generally will be long-term capital
gain or loss if the Note were held for more than the applicable holding period.
The Taxpayer Relief Act of 1997 reduces the maximum rates on long-term capital
gains recognized on capital assets held by individual taxpayers for more than
eighteen months as of the date of disposition (and would further reduce the
maximum rates on such gains in the year 2001 and thereafter for certain
individual taxpayers who meet specified conditions). Prospective investors
should consult their own tax advisors concerning these tax law changes.
NON-U.S. HOLDERS
A non-U.S. Holder will not be subject to United States federal income taxes
on payments of principal, premium (if any) or interest (including original issue
discount, if any) on a Note, unless such non-U.S. Holder is a direct or indirect
10% or greater shareholder of the Company, a controlled foreign corporation
related to the Company or a bank receiving interest described in section
881(c)(3)(A) of the Code. To qualify for the exemption from taxation, the last
United States payor in the chain of payment prior to payment to a non-U.S.
Holder (the "Withholding Agent") must have received in the year in which a
payment of interest or principal occurs, or in either of the two preceding
calendar years, a statement that (i) is signed by the beneficial owner of the
Note under penalties of perjury, (ii) certifies that such owner is not a U.S.
Holder and (iii) provides the name and address of the beneficial owner. The
statement may be made on an IRS Form W-8 or a substantially similar form, and
the beneficial owner must inform the Withholding Agent of any change in the
information on the statement within 30 days of such change. If a Note is held
through a securities clearing organization or certain other financial
institutions, the organization or institution may provide a signed statement to
the Withholding Agent. However, in such case, the signed statement must be
accompanied by a copy of the IRS Form W-8 or the substitute form provided by the
beneficial owner to the organization or institution. The Treasury Department is
considering implementation of further certification requirements aimed at
determining whether the issuer of a debt obligation is related to holders
thereof.
Generally, a non-U.S. Holder will not be subject to federal income taxes on
any amount which constitutes capital gain upon retirement or disposition of a
Note, provided the gain is not effectively connected with the conduct of a trade
or business in the United States by the non-U.S. Holder. Certain other
exceptions may be applicable, and a non-U.S. Holder should consult its tax
advisor in this regard.
The Notes will not be includible in the estate of a non-U.S. Holder unless
the individual is a direct or indirect 10% or greater shareholder of the Company
or, at the time of such individual's death, payments in respect of the Notes
would have been effectively connected with the conduct by such individual of a
trade or business in the United States.
Final regulations dealing with withholding tax on income paid to foreign
persons and related matters (the "New Withholding Regulations") were issued by
the Treasury Department on October 6, 1997. The New Withholding Regulations will
generally be effective for payments made after December 31, 1998, subject to
certain transition rules. Prospective Non-U.S. Holders are strongly urged to
consult their own tax advisors with respect to the New Withholding Regulation.
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BACKUP WITHHOLDING
Backup withholding of United States federal income tax at a rate of 31% may
apply to payments made in respect of the Notes to registered owners who are not
"exempt recipients" and who fail to provide certain identifying information
(such as the registered owner's taxpayer identification number) in the required
manner. Generally, individuals are not exempt recipients, whereas corporations
and certain other entities generally are exempt recipients. Payments made in
respect of the Notes to a U.S. Holder must be reported to the IRS, unless the
U.S. Holder is an exempt recipient or establishes an exemption. Compliance with
the identification procedures described in the preceding section would establish
an exemption from backup withholding for those non-U.S. Holders who are not
exempt recipients.
In addition, upon the sale of a Note to (or through) a broker, the broker
must withhold 31% of the entire purchase price, unless either (i) the broker
determines that the seller is a corporation or other exempt recipient or (ii)
the seller provides, in the required manner, certain identifying information
and, in the case of a non-U.S. Holder, certifies that such seller is a non-U.S.
Holder (and certain other conditions are met). Such a sale must also be reported
by the broker to the IRS, unless either (i) the broker determines that the
seller is an exempt recipient or (ii) the seller certifies its non-U.S. status
(and certain other conditions are met). Certification of the registered owner's
non-U.S. status would be made normally on an IRS Form W-8 under penalties of
perjury, although in certain cases it may be possible to submit other
documentary evidence.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States federal income tax provided the required
information is furnished to the IRS.
PLAN OF DISTRIBUTION
The Notes are being offered on a continuing basis for sale by the Company
through the Agents, which have agreed to use their reasonable efforts to solicit
purchasers of the Notes. The Company will pay an Agent a commission which,
depending on the maturity of the Notes, will range from .125% to .750% of the
principal amount of any Note sold through such Agent; provided, that commissions
with respect to Notes with maturities in excess of 30 years will be negotiated
between the Company and the applicable Agent at the time of the sale and
indicated in the pricing supplement. The Company may also sell Notes to one or
more Agents, as principal, at a discount from the principal amount thereof. In
addition, an Agent may offer the Notes it has purchased as principal to other
dealers for resale to investors and other purchasers and may allow all or any
portion of the discount received in connection with such purchase from the
Company to such dealers.
Unless otherwise specified in the applicable Pricing Supplement, any Note
sold to an Agent as principal will be purchased by such Agent at a price equal
to 100% of the principal amount thereof less a percentage equal to the
commission applicable to any agency sale of a Note of identical maturity, and
may be resold by such Agent to investors and other purchasers from time to time
in one or more transactions, including negotiated transactions, at varying
prices determined at the time of sale or, if so specified in the applicable
Pricing Supplement, at a fixed offering price or may be resold to certain
dealers as described above. After the initial public offering of Notes, the
offering price (in the case of Notes to be resold on a fixed offering price
basis), concession and discount may be changed. The Company also may offer and
sell Notes directly to purchasers in those jurisdictions where it is permitted
to do so. No commission will be allowed or payable on any sales made directly by
the Company.
The Company reserves the right to withdraw, cancel or modify the offer made
hereby without notice and may reject orders in whole or in part whether placed
directly by the Company or through the Agents. Each Agent will have the right,
in its discretion reasonably exercised, to reject any offer to purchase Notes
received by it, in whole or in part.
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Unless otherwise specified in the applicable Pricing Supplement, payment of
the purchase price of the Notes will be required to be made in immediately
available funds in The City of New York on the date of settlement.
In connection with the offering of Notes purchased by an Agent or Agents as
principal on a fixed price basis, the Agents are permitted to engage in certain
transactions that stabilize the price of the Notes. Such transactions consist of
bids or purchases for the purpose of pegging, fixing or maintaining the price of
the Notes. If the Agents create a short position in the Notes in connection with
the offering, i.e., if they sell Notes in an aggregate principal amount
exceeding that set forth on the cover page of this Prospectus Supplement, the
Agents may reduce that short position by purchasing Notes in the open market.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases.
Neither the Company nor any of the Agents makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Notes. In addition, neither the
Company nor any of the Agents makes any representation that the Agents will
engage in any such transactions or that such transactions, once commenced, will
not be discontinued without notice.
The Agents may from time to time purchase and sell Notes in the secondary
market, but they are not obligated to do so, and there can be no assurance that
there will be a secondary market for the Notes or liquidity in the secondary
market if one develops. From time to time, the Agents may make a market in the
Notes, but may discontinue any market making activity without notice.
The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended. The Company has agreed to indemnify the
Agents against certain liabilities, including liabilities under such Act, or to
contribute to payments the Agents may be required to make in respect thereof.
The Company has agreed to reimburse the Agents for certain expenses.
Merrill Lynch, Pierce, Fenner & Smith Incorporated has in the past acted as
financial advisor to the Company and received customary compensation therefor.
Morgan Guaranty Trust Company of New York ("Morgan Guaranty"), an affiliate of
J.P. Morgan Securities Inc., is acting as the lead agent and a member of the
bank syndicate under the Company's revolving credit facility. The Company has
other customary banking relationships with Morgan Guaranty, all in the ordinary
course of business.
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PROSPECTUS
[LOGO]
SENIOR DEBT SECURITIES
------------------
Thomas & Betts Corporation (the "Company") intends to sell from time to time
its senior unsecured debt securities (the "Securities"), from which the Company
will receive proceeds of up to $115,000,000 (or the equivalent in foreign
currencies or units of two or more currencies), on terms to be determined at the
time of offering. The Securities will be unsecured and will rank equally with
all other unsecured indebtedness of the Company and prior to any of its
subordinated indebtedness.
The Securities may be issued in one or more series with the same or various
maturities. Securities of a series may be issuable in registered form without
coupons or in the form of one or more global securities (each a "Global
Security"). The terms of the Securities in respect of which this Prospectus is
being delivered (the "Offered Securities"), including, where applicable, the
specific designation, aggregate principal amount offered, currency or currencies
in which the principal (and premium, if any) and interest are payable,
denominations, maturity, interest rate (which may be fixed or variable) or
method of calculating and time of payment of interest, if any, terms for
redemption at the option of the Company or the holder, if any, terms for sinking
fund payments, if any, terms for any other mandatory redemption, the public
offering price, the stock exchanges, if any, on which the Offered Securities may
be listed and any other terms in connection with the offering and sale of the
Offered Securities, will be set forth in a Prospectus Supplement (the
"Prospectus Supplement").
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The Securities may be publicly offered through underwriting syndicates or
through dealers. The Securities may also be sold directly to investors or
through agents. See "Plan of Distribution." An applicable Prospectus Supplement
will set forth the names of such underwriters, dealers or agents, if any, and
any applicable commissions, fees or discounts.
The date of this Prospectus is May 4, 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549 and at its regional offices at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
and at 7 World Trade Center, Suite 1300, New York, New York 10048. Such reports
and other information filed with the Commission may also be available at the
Commission's site on the World Wide Web located at http://www.sec.gov. Such
reports, proxy statements and other information concerning the Company can also
be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
The Company has filed with the Commission a registration statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Securities. This Prospectus does not
contain all the information set forth in the Registration Statement, certain
parts of which have been omitted in accordance with the rules and regulations of
the Commission, and the exhibits relating thereto, which have been filed with
the Commission. Copies of the Registration Statement and the exhibits are on
file at the offices of the Commission and may be obtained upon payment of the
fees prescribed by the Commission, or examined without charge at the public
reference facilities of the Commission described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant to
the Exchange Act are incorporated in this Prospectus by reference:
(i) the Company's Annual Report on Form 10-K for the fiscal year ended
December 28, 1997;
(ii) the Company's Current Reports on Form 8-K dated February 5, 1998 and
February 10, 1998.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing such
documents. Any statement contained in a document incorporated by reference
herein or deemed to be 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 the applicable Prospectus Supplement), or in
any other subsequently filed document that also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will furnish, without charge, to any person to whom a copy of
this Prospectus is delivered, including any beneficial owner, upon such person's
written or oral request, a copy of any and all of the information filed by the
Company that has been incorporated by reference in this Prospectus (not
including exhibits to the information that is incorporated by reference herein
unless such exhibits are specifically incorporated by reference in such
information). Requests for such copies should be directed to the Company at 8155
T&B Boulevard, Memphis, Tennessee 38125, Attention: Secretary (telephone number
(901) 252-5000).
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DESCRIPTION OF SECURITIES
The following description of the terms of the Securities sets forth certain
general terms and provisions. The particular terms of the Securities offered by
any Prospectus Supplement will be described therein. The Securities will be
issued under an Indenture, dated as of January 15, 1992 (as supplemented,
amended or modified from time to time, the "Indenture"), between the Company and
The Chase Manhattan Bank, as Trustee (the "Trustee"), a copy of which is filed
as an exhibit to the Registration Statement. The following summaries of certain
provisions of the Indenture do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, all the provisions of the
Indenture, including the definitions therein of certain terms. Wherever
particular sections or defined terms of the Indenture are referred to or used
herein, such sections or defined terms shall be incorporated herein by reference
as part of the statements made.
GENERAL
The Indenture does not limit the aggregate principal amount of the
Securities or of any particular series of Securities which may be issued
thereunder. The Indenture provides that Securities may be issued from time to
time in one or more series. (Section 301). The Securities will be unsecured
obligations of the Company and will rank equally with all other unsecured
indebtedness of the Company and prior to any of its subordinated indebtedness.
Reference is made to the Prospectus Supplement relating to the particular
series of Securities offered thereby for the following terms or additional
provisions of the Offered Securities:
(1) the title of the Offered Securities;
(2) any limit on the aggregate principal amount of the Offered
Securities;
(3) the price (expressed as a percentage of the aggregate principal
amount thereof) at which the Offered Securities will be issued;
(4) the date or dates on which the Offered Securities will mature;
(5) the rate or rates (which may be fixed or variable) per annum at
which the Offered Securities will bear interest, if any;
(6) the date from which such interest, if any, on the Offered Securities
will accrue, the dates on which such interest, if any, will be
payable, the date on which payment of such interest, if any, will
commence, the Record Dates for any Interest Payment Dates and the
Person, if different than the registered Holder as of the Record
Date, to whom any interest shall be payable;
(7) the dates, if any, on which and the price or prices at which the
Offered Securities will, pursuant to any mandatory sinking fund
provisions, or may, pursuant to any optional sinking fund
provisions, be redeemed by the Company, and the other detailed terms
and provisions of such sinking funds;
(8) the date, if any, after which and the price or prices at which the
Offered Securities may, pursuant to any optional redemption
provisions, be redeemed at the option of the Company or of the
Holder thereof and the other detailed terms and provisions of such
optional redemptions;
(9) any additional restrictive covenants included solely for the benefit
of the Offered Securities;
(10) any addition to, or modification or deletion of, any Events of
Default or any covenants of the Company provided solely with respect
to the Offered Securities;
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(11) the currency or currencies in which the principal of (and premium,
if any) and interest, if any, on the Offered Securities will be
payable;
(12) the index, if any, with reference to which the amount of principal
of (and premium, if any) or interest, if any, on the Offered
Securities will be determined;
(13) whether a Global Security is to be issued with respect to the
Offered Securities, the name of the Depository for such Global
Security and the terms, if any, upon which interests in the Global
Security may be exchanged for definitive Offered Securities; and
(14) any additional terms of the Offered Securities.
Unless otherwise provided in the Prospectus Supplement relating thereto,
principal of (and premium, if any) and interest, if any, on the Securities will
be payable, and the transfer or exchange of the Securities will be registrable,
at the office or agency maintained by the Company for that purpose in New York,
New York. At the option of the Company interest may be paid by check mailed to
the address of the Person entitled thereto as it appears on the Security
Register. (Sections 301, 305 and 1002).
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Securities will be issued only in registered form without coupons and in
denominations of $1,000 and integral multiples thereof. (Section 302). No
service charge will be made for any registration of transfer or exchange of the
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. (Section 305).
Securities may be issued as Original Issue Discount Securities to be sold at
a substantial discount below their principal amount. Special federal income tax,
accounting and other considerations applicable thereto will be described in the
Prospectus Supplement relating thereto. "Original Issue Discount Security" means
any security which provides for an amount less than the principal amount thereof
to be due and payable upon a declaration of acceleration of Maturity thereof.
(Section 101).
CERTAIN COVENANTS OF THE COMPANY
The Indenture contains certain covenants for the benefit of the Offered
Securities, unless otherwise specified in the Prospectus Supplement with respect
to the applicable series of Securities. These covenants include, among others,
the following:
LIMITATIONS UPON LIENS. The Indenture provides that neither the Company nor
any Subsidiary (as defined below) will create, incur, issue or assume any notes,
bonds, debentures or other similar evidences of indebtedness for money borrowed
("Debt") secured by any pledge, mortgage, lien, charge, encumbrance or security
interest ("Lien") on any Principal Property (as defined below) now owned or
hereafter acquired by the Company or any Restricted Subsidiary (as defined
below), and does not permit the Company or any Subsidiary to create, incur,
issue or assume any Debt secured by any Lien on any shares of stock or Debt now
existing or hereafter created or acquired of any Restricted Subsidiary (such
shares of stock or Debt of any Restricted Subsidiary being called "Restricted
Securities"), without in any such case effectively providing concurrently with
the incurrence, issuance or assumption of such Debt or the grant of any Lien
with respect to such Debt that the applicable series of Securities (together
with, if the Company so determines, any other Debt of the Company or such
Subsidiary then existing or thereafter created which is not subordinate to the
Securities) will be secured equally and ratably with (or prior to) such secured
Debt, so long as such secured Debt is so secured. This restriction will not,
however, apply to Debt secured by:
(i) Liens on any Principal Property or Restricted Securities of the
Company or any Subsidiary existing on the date of the original
issuance by the Company of the applicable series of Securities
issued pursuant to the Indenture, or such other date as may be
specified in a
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Prospectus Supplement for an applicable series of Securities issued
pursuant to the Indenture;
(ii) Liens on any Principal Property or Restricted Securities of any
corporation existing at the time such corporation becomes a
Restricted Subsidiary or is merged with or into or consolidated
with the Company or a Restricted Subsidiary, or at the time of a
sale, lease or other disposition of the properties of a corporation
as an entirety or substantially as an entirety to the Company or a
Restricted Subsidiary, or arising thereafter (a) otherwise than in
connection with the borrowing of money arranged thereafter and (b)
pursuant to contractual commitments entered into prior to and not
in contemplation of such corporation becoming a Restricted
Subsidiary and not in contemplation of any such merger or
consolidation or any such sale, lease or other disposition;
(iii) Liens on any Principal Property or Restricted Securities of the
Company or any Subsidiary existing at the time of acquisition
thereof (including acquisition through merger or consolidation) or
securing the payment of all or any part of the purchase price or
construction cost thereof or securing any Debt incurred prior to,
at the time of or within 360 days after, the acquisition of such
Principal Property or Restricted Securities or the completion of
any such construction, whichever is later, for the purpose of
financing all or any part of the purchase price or construction
cost thereof (PROVIDED such Liens are limited to such Principal
Property or Restricted Securities, to improvements on such
Principal Property and to any other property or assets not then
constituting a Principal Property or Restricted Securities);
(iv) Liens on any Principal Property to secure all or any part of the
cost of development, operation, construction, alteration, repair or
improvement of all or any part of such Principal Property, or to
secure Debt incurred prior to, at the time of or within 360 days
after, the completion of such development, operation, construction,
alteration, repair or improvement, whichever is later, for the
purpose of financing all or any part of such cost (PROVIDED such
Liens are limited to such Principal Property, improvements thereon
and any other property or assets not then constituting a Principal
Property);
(v) Liens which secure Debt owing by a Subsidiary to the Company or to a
Restricted Subsidiary;
(vi) Liens on the property of the Company or a Restricted Subsidiary in
favor of the United States of America or any State thereof, or any
department, agency, instrumentality or political subdivision of the
United States of America or any State thereof, to secure partial,
progress, advance or other payments pursuant to any contract or
statute, (ii) securing indebtedness incurred to finance all or any
part of the purchase price or cost of constructing, installing or
improving the property subject to such mortgages including
mortgages to secure Debt of the pollution control or industrial
revenue bond type, or (iii) securing indebtedness issued or
guaranteed by the United States, any State, any foreign country or
any department, agency, instrumentality or political subdivision of
any such jurisdiction; and
(vii) any extension, renewal, substitution or replacement of any of the
Liens referred to in paragraphs (i) through (vi) above or the Debt
secured thereby; PROVIDED that (a) such extension, renewal,
substitution or replacement Lien will be limited to all or any part
of the same Principal Property or Restricted Securities that
secured the Lien extended, renewed, substituted or replaced (plus
improvements on such property, and plus any other property or
assets not then constituting a Principal Property or Restricted
Securities) and (b) in the case of paragraphs (i) through (iii)
above, the Debt secured by such Lien at such time is not increased.
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Notwithstanding the foregoing, the Company and any Subsidiary may create,
incur, issue or assume Debt secured by a Lien which would otherwise be subject
to the foregoing restrictions if the aggregate principal amount of all Debt
secured by Liens on Principal Properties and Restricted Securities then
outstanding (not including any such Debt secured by Liens permitted to be
incurred pursuant to paragraphs (i) through (vii) above) plus Attributable Debt
(as defined below) of the Company and its Restricted Subsidiaries in respect of
sale and leaseback transactions (as defined in "Limitations upon Sales and
Leasebacks" below) that would otherwise be subject to the restrictions described
below under "Limitations upon Sales and Leasebacks" does not at the time such
Debt is incurred exceed an amount equal to 10% of Consolidated Net Assets (as
defined below). (Section 1006).
For the purposes of the "Limitations upon Liens" covenant described herein,
the giving of a guarantee which is secured by a Lien on a Principal Property or
Restricted Securities, and the creation of a Lien on a Principal Property or
Restricted Securities to secure Debt which existed prior to the creation of such
Lien, will be deemed to involve the creation of Debt in an amount equal to the
principal amount guaranteed or secured by such Lien; but the amount of Debt
secured by Liens on Principal Properties and Restricted Securities will be
computed without cumulating the underlying indebtedness with any guarantee
thereof or Lien securing the same. (Section 1006).
LIMITATIONS UPON SALES AND LEASEBACKS. The Indenture provides that neither
the Company nor any Restricted Subsidiary will enter into any arrangement after
the date of the original issuance by the Company of the applicable series of
Securities issued pursuant to the Indenture, or such other date as may be
specified in a Prospectus Supplement for an applicable series of Securities
issued pursuant to the Indenture, with any bank, insurance company or other
lender or investor (other than the Company or another Restricted Subsidiary)
providing for the leasing by the Company or any such Restricted Subsidiary of
any Principal Property for a period of more than three years, which was or is
owned or leased by the Company or a Restricted Subsidiary and which has been or
is to be sold or transferred by the Company or such Restricted Subsidiary, more
than 180 days after the completion of construction and commencement of all
operations thereof by the Company or such Restricted Subsidiary, to such lender
or investor or to any Person to whom funds have been or are to be advanced by
such lender or investor on the security of such Principal Property (herein
referred to as a "sale and leaseback transaction") unless, either:
(i) the Company and its Restricted Subsidiaries would be entitled,
pursuant to the provisions described in the "Limitations upon Liens"
covenant described above, to incur Debt secured by a Lien on such
Principal Property in a principal amount equal to or exceeding the
Attributable Debt in respect of such sale and leaseback transaction
without equally and ratably securing the applicable series of
Securities, or
(ii) the Company, within 180 days after the sale or transfer, applies or
causes a Restricted Subsidiary to apply an amount equal to the net
proceeds of such sale or transfer (as determined by any two of the
following: the Chairman of the Board, the President, any Vice
President, the Treasurer and the Controller of the Company) to the
retirement of Securities of any series or other Funded Debt (as
defined below) of the Company (other than Funded Debt subordinated
to the Securities) or Funded Debt of a Restricted Subsidiary;
PROVIDED that the amount to be so applied will be reduced by (a)
the principal amount of Securities delivered within 180 days after
such sale or transfer to the Trustee for retirement and
cancellation, and (b) the principal amount of any such Funded Debt
of the Company or a Restricted Subsidiary, other than Securities,
voluntarily retired by the Company or a Restricted Subsidiary
within 180 days after such sale or transfer to the Trustee for
retirement and cancellation, excluding in the case of both (a) and
(b), retirement pursuant to any mandatory sinking fund payment or
any mandatory prepayment provision or by payment at maturity.
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Notwithstanding the foregoing, where the Company or any Restricted
Subsidiary is the lessee in any sale and leaseback transaction, Attributable
Debt will not include any Debt resulting from the guarantee by the Company or
any other Restricted Subsidiary of the lessee's obligation thereunder. (Section
1007).
RESTRICTIONS ON FUNDED DEBT OF RESTRICTED SUBSIDIARIES. The Indenture
provides that the Company will not permit any Restricted Subsidiary to create,
incur, issue, assume or guarantee any Funded Debt. This restriction will not
apply if:
(i) the Company or such Restricted Subsidiary could create Debt secured
by Liens in accordance with the "Limitations upon Liens" covenant
described above or enter into a sale and leaseback transaction in
accordance with the "Limitations upon Sales and Leasebacks" covenant
described above in an amount equal to such Funded Debt, without
equally and ratably securing the applicable series of Securities; or
(ii) such Funded Debt existed on the date of the original issuance by
the Company of the applicable series of Securities issued pursuant
to the Indenture, or such other date as may be specified in a
Prospectus Supplement for an applicable series of Securities issued
pursuant to the Indenture; or
(iii) such Funded Debt is owed to the Company or any Subsidiary; or
(iv) such Funded Debt existed at the time the corporation that issued
such Funded Debt became a Restricted Subsidiary, or was merged with
or into or consolidated with such Restricted Subsidiary, or at the
time of a sale, lease or other disposition of the properties of
such corporation as an entirety to such Restricted Subsidiary, or
arising thereafter
(a) otherwise than in connection with the borrowing of money
arranged thereafter and
(b) pursuant to contractual commitments entered into prior to and
not in contemplation of such corporation becoming a Restricted
Subsidiary and not in contemplation of any such merger or
consolidation or any such sale, lease or other disposition; or
(v) such Funded Debt is guaranteed by the Company; or
(vi) such Funded Debt is guaranteed by a governmental agency; or
(vii) such Funded Debt is issued, assumed or guaranteed in connection
with, or with a view to, compliance by such Restricted Subsidiary
with the requirements of any program adopted by any federal, state
or local governmental authority and applicable to such Restricted
Subsidiary and providing financial or tax benefits to such
Restricted Subsidiary which are not available directly to the
Company; or
(viii) such Funded Debt is issued, assumed or guaranteed to pay all or any
part of the purchase price or the construction cost of property or
equipment acquired or constructed by a Restricted Subsidiary,
provided such Funded Debt is incurred within 360 days after
acquisition, completion of construction or commencement of full
operation of such property, whichever is later; or
(ix) such Funded Debt is nonrecourse; or
(x) such Funded Debt is incurred for the purpose of extending, renewing,
substituting, replacing or refunding Funded Debt permitted by the
foregoing.
Notwithstanding the foregoing, any Restricted Subsidiary may create, incur,
issue, assume or guarantee Funded Debt which would otherwise be subject to the
foregoing restrictions in an aggregate principal amount which, together with the
aggregate outstanding principal amount of all other Funded Debt of the Company's
Restricted Subsidiaries which would otherwise be subject to the foregoing
restrictions (not including Funded Debt permitted to be incurred pursuant to
clauses (i) through (x) above), does not at the
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time such Funded Debt is incurred exceed an amount equal to 10% of Consolidated
Net Assets. (Section 1008).
Unless otherwise indicated in the Prospectus Supplement relating to a
particular series of Securities, certain of the covenants described above would
not necessarily afford the Holders protection in the event of a highly leveraged
transaction involving the Company, such as a leveraged buyout.
CERTAIN DEFINITIONS
"Attributable Debt" means, as to any particular lease under which any Person
is at the time liable for a term of more than 12 months, at any date as of which
the amount thereof is to be determined, the total net amount of rent required to
be paid by such Person under such lease during the remaining term thereof
(excluding any subsequent renewal or other extension options held by the
lessee), discounted from the respective due dates thereof to such date at the
interest rate inherent in such lease (such rate to be determined by any two of
the following: the Chairman of the Board, the President, any Vice President, the
Treasurer and the Controller of the Company), compounded annually. The net
amount of rent required to be paid under any such lease for any such period will
be the aggregate amount of the rent payable by the lessee with respect to such
period after excluding amounts required to be paid on account of maintenance and
repairs, services, insurance, taxes, assessments, water rates and similar
charges and contingent rents (such as those based on sales). In the case of any
lease which is terminable by the lessee upon the payment of a penalty, such net
amount of rent will include the lesser of (i) the total discounted net amount of
rent required to be paid from the later of the first date upon which such lease
may be so terminated or the date of the determination of such amount of rent, as
the case may be, and (ii) the amount of such penalty (in which event no rent
shall be considered as required to be paid under such lease subsequent to the
first date upon which it may be so terminated).
"Consolidated Net Assets" means the total amount of assets (less applicable
reserves and other properly deductible items) after deducting therefrom (i) all
current liabilities (excluding any thereof which are by their terms extendible
or renewable at the option of the obligor thereon to a time more than 12 months
after the time as of which the amount thereof is being computed) and (ii)
appropriate adjustments on account of minority interests of other Persons
holding stock of the Company's Subsidiaries, all as set forth on the most recent
balance sheet of the Company and its consolidated Subsidiaries and computed in
accordance with generally accepted accounting principles.
"Funded Debt" means indebtedness created, assumed or guaranteed by a Person
for money borrowed which matures by its terms, or is renewable by the borrower
to a date, more than one year after the date of original creation, assumption or
guarantee.
"Principal Property" means any manufacturing plant or distribution facility,
together with the land upon which it is erected and fixtures comprising a part
thereof, owned by the Company or any Restricted Subsidiary and located in the
United States, the gross book value (without deduction of any reserve for
depreciation) of which on the date as of which the determination is being made
is an amount which exceeds 1% of Consolidated Net Assets, other than any such
manufacturing plant or distribution facility or any portion thereof or any such
fixture (together with the land upon which it is erected and fixtures comprising
a part thereof) (i) which is financed by industrial development bonds,
industrial revenue bonds, pollution control bonds or other similar debt issued
or guaranteed by the United States of America or any State thereof, or any
department, agency, instrumentality or political subdivision of the United
States of America or any State thereof or (ii) which, in the opinion of the
Board of Directors of the Company as evidenced by a Board Resolution, is not of
material importance to the total business conducted by the Company and its
Subsidiaries, taken as a whole.
"Restricted Subsidiary" means any Subsidiary of which, at the time of
determination, all of the outstanding capital stock (other than directors'
qualifying shares) is owned by the Company directly and/or indirectly and which,
at the time of determination, is primarily engaged in manufacturing, except a
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Subsidiary (i) which neither transacts any substantial portion of its business
nor regularly maintains any substantial portion of its fixed assets within the
United States, or (ii) which is engaged primarily in the finance business
including, without limitation thereto, financing the operations of, or the
purchase of products which are products of or incorporate products of, the
Company and/or its Subsidiaries, or (iii) which is primarily engaged in
ownership and development of real estate, construction of buildings, or related
activities, or a combination of the foregoing. In the event that there shall at
any time be a question as to whether a Subsidiary is primarily engaged in
manufacturing or is described in the foregoing clause (i), (ii) or (iii), such
matter will be determined for all purposes of the Indenture by a Board
Resolution.
"Subsidiary" means any corporation of which at the time of determination the
Company, directly and/ or indirectly through one or more Subsidiaries, owns more
than 50% of the shares of Voting Stock.
"Voting Stock" means stock of the class or classes having general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of a corporation (irrespective of whether or not
at the time stock of any other class or classes has or might have voting power
by reason of the happening of any contingency).
EVENTS OF DEFAULT
An Event of Default is defined in the Indenture, with respect to Securities
of any series, unless such event is expressly made inapplicable to such series,
as: (a) default in payment of principal of (or premium, if any, on) any Security
at its Maturity; (b) default in payment of any interest on any Security when
due, continued for 30 days; (c) default in payment of any sinking fund
installment when due, continued for 30 days; (d) failure by the Company for 90
days after due notice in performance of any other of the covenants or warranties
in the Indenture (other than a covenant or warranty included in the Indenture
solely for the benefit of a series of Securities other than that series); (e) an
aggregate principal amount exceeding $25,000,000 becoming due prior to maturity,
without such acceleration; (f) certain events of bankruptcy, insolvency or
reorganization of the Company; and (g) any other Event of Default provided with
respect to Securities of that series. (Section 501).
The Indenture provides that, if any Event of Default with respect to
Securities of any series at the time Outstanding occurs and is continuing,
either the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series may, by notice as provided in the
Indenture, declare the principal amount (or, if the Securities of that series
are Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms of that series) of all Securities of that series
to be due and payable immediately, but upon certain conditions such declaration
may be annulled and past defaults (except, unless theretofore cured, a default
in payment of principal of (or premium, if any) or interest, if any, on the
Securities of that series and certain other specified defaults) may be waived by
the Holders of a majority in principal amount of the Outstanding Securities of
that series on behalf of the Holders of all Securities of that series. (Sections
502 and 513).
The Indenture provides that no holder of any Security of any series will
have any right to institute any proceeding with respect to the Indenture or for
any remedy thereunder unless such Holder shall have previously given to the
Trustee written notice of a continuing Event of Default and unless the Holders
of at least 25% in principal amount of the Outstanding Securities of such series
have made written request and offered reasonable indemnity to the Trustee to
institute such proceeding as trustee and the Trustee has not received from the
Holders of a majority in principal amount of the Outstanding Securities of such
series a direction inconsistent with such request and the Trustee has failed to
institute such proceeding within 60 days. (Section 507). However, the Holder of
any Security of such series will have an absolute right to receive payment of
the principal of (and premium, if any, on) and interest on such Security on or
after the respective Stated Maturities expressed in such Security (or, in the
case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment. (Section 508).
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Reference is made to the Prospectus Supplement relating to each series of
Offered Securities which are Original Issue Discount Securities for the
particular provisions relating to acceleration of the Maturity of a portion of
the principal amount of such Original Issue Discount Securities upon the
occurrence of an Event of Default and the continuation thereof.
The Indenture provides that the Trustee will, within 90 days after the
occurrence of a default with respect to Securities of any series at the time
Outstanding, give to the Holders of the Outstanding Securities of that series
notice of such default known to it if uncured or not waived, provided, that,
except in the case of default in the payment of principal of (or premium, if
any) or interest, if any, on any Security of that series, or in the payment of
any sinking fund installment which is provided, the Trustee will be protected in
withholding such notice if the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders of the Outstanding
Securities of such series; and, provided further, that such notice will not be
given until 90 days after the occurrence of a default with respect to
Outstanding Securities of any series in the performance of a covenant in the
Indenture other than for the payment of the principal of (or premium, if any) or
interest, if any, on any Security of such series or the deposit of any sinking
fund installment with respect to the Securities of such series. The term default
with respect to any series of Outstanding Securities for the purpose only of
this provision means the happening of any of the Events of Default specified in
the Indenture and relating to such series of Outstanding Securities, excluding
any grace periods and irrespective of any notice requirements. (Section 602).
The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during default to act with the required standard of care, to
be indemnified by the Holders of any series of Outstanding Securities before
proceeding to exercise any right or power under the Indenture at the request of
the Holders of such series of Securities. (Section 601). The Indenture provides
that the Holders of a majority in principal amount of Outstanding Securities of
any series may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or other power
conferred on the Trustee, provided that the Trustee may decline to act if such
direction is contrary to law or the Indenture. (Section 512).
The Indenture includes a covenant that the Company will file annually with
the Trustee a certificate of no default, or specifying any default that exists.
(Section 1005).
DEFEASANCE
The Indenture provides that the Company, at its option, (a) will be
discharged from any and all obligations with respect to the Securities (except
for certain obligations which include registering the transfer or exchange of
the Securities, replacing stolen, lost or mutilated Securities, maintaining
paying agencies and holding monies for payment in trust) or (b) need not comply
with certain restrictive
covenants of the Indenture, upon the deposit with the Trustee (and in the case
of a discharge, 91 days after such deposit), in trust, of money, or U.S.
Government Obligations, or a combination thereof, which through the payment of
interest thereon and principal thereof in accordance with their terms will
provide money specifically pledged as security for, and dedicated solely to the
benefit of Holders of the Securities, in an amount sufficient to pay all the
principal of and interest on the Securities and any mandatory sinking fund
payments applicable to the Securities on the date such payments are due in
accordance with the terms of the Securities to their stated maturities or to and
including a redemption date which has been irrevocably designated by the Company
for redemption of the Securities. To exercise any such option, the Company is
required to meet certain conditions, including delivering to the Trustee an
opinion of counsel to the effect that (i) the deposit and related defeasance
would not cause the holders of the Securities to recognize income, gain or loss
for federal income tax purposes and (ii) the holders of the Securities will be
subject to federal income tax on the same amounts and in the same manner and at
the same times as would have been the case had the deposit and related
defeasance not occurred. (Sections 403 and 1009).
10
<PAGE>
MODIFICATION 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 each series of Outstanding Securities affected thereby (voting as a class),
to execute supplemental indentures adding any provisions to or changing or
eliminating any of the provisions of the Indenture or modifying the rights of
the Holder of Outstanding Securities of such series, except that no such
supplemental indenture may without the consent of the Holder of each Outstanding
Security affected thereby (i) change the Stated Maturity of any Security, (ii)
reduce the principal amount of, or the rate of interest or any premium on, any
Security, (iii) change the place or currency of payment on any Security, (iv)
impair the right to institute suit for the enforcement of any payment on or
after the Stated Maturity thereof, (v) reduce the above-stated percentage of
Outstanding Securities necessary to modify or amend the Indenture, or (vi)
reduce the percentage of aggregate principal amount of Outstanding Securities
necessary for waiver of compliance with certain provisions of the Indenture or
for the waiver of certain covenants and defaults. (Section 902).
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indenture contains a provision permitting the Company, without the
consent of the Holders of any of the Outstanding Securities under the Indenture,
to consolidate with or merge into any other corporation or transfer or lease its
assets substantially as an entirety to any Person or to acquire or lease the
assets of any Person substantially as an entirety or to permit any corporation
to merge into the Company, provided that: (i) the successor is a corporation
organized and existing under the laws of any domestic jurisdiction; (ii) the
successor corporation, if other than the Company, assumes the Company's
obligations on the Securities and under the Indenture; and (iii) after giving
effect to the transaction, no Event of Default, and no event which, after notice
or lapse of time, would become an Event of Default, shall have occurred and be
continuing. (Section 801).
OUTSTANDING SECURITIES
The Indenture provides that, in determining whether the Holders of the
requisite principal amount of Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver under the Indenture,
(i) the portion of the principal amount of an Original Issue Discount Security
that will be deemed to be Outstanding for such purposes will be the amount of
the principal thereof that would be due and payable as of the date of
determination upon a declaration of acceleration of the Maturity thereof
pursuant to the terms of such Original Issue Discount Security, (ii) the
principal amount of a Security denominated in a foreign currency or currency
unit will be the U.S. dollar equivalent, determined as of the date of original
issuance of such Security (or, in the case of an Original Issue Discount
Security denominated in a foreign currency or currency unit, the U.S. dollar
equivalent as of the date of original issuance of such Security of the amount
determined as described in clause (i) above), and (iii) Securities owned by the
Company or any obligor upon the Securities or any of its Affiliates shall not be
deemed to be Outstanding. (Section 101).
PLAN OF DISTRIBUTION
The Company may receive and, from time to time, may solicit offers to
purchase all or a part of the Securities at an aggregate initial offering price
not to exceed $115 million to be reoffered to the public through underwriting
syndicates or through dealers. The Securities may also be sold directly to
investors or through agents. A Prospectus Supplement will set forth the terms of
the offering of the particular Securities to which such Prospectus Supplement
relates, including, without limitation, (i) the name or names of any
underwriters or agents with whom the Company has entered into arrangements with
respect to the sale of such Securities, (ii) the initial public offering or
purchase price of such Securities, (iii) any underwriting discounts, commissions
and other items constituting underwriter's compensation from the Company and any
other discounts, concessions or commissions allowed or reallowed or paid by any
11
<PAGE>
underwriters to other dealers, (iv) any commissions paid to any agents, (v) the
net proceeds to the Company and (vi) the securities exchanges, if any, on which
such Securities will be listed.
If underwriters are used in the sale of a series of Securities, unless
otherwise set forth in an applicable Prospectus Supplement, the obligations of
the underwriters to purchase such Securities will be subject to certain
conditions precedent and each of the underwriters with respect to such
Securities will be obligated to purchase all of the Securities allocated to it
if any such 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.
Underwriters, dealers and agents participating in the distribution of
Securities may be deemed to be "underwriters", as that term is defined under the
Securities Act, and any discounts and commissions received by them and any
profit realized by them on the resale thereof may be deemed to be underwriting
discounts and commissions, under the Securities Act.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize the underwriters to solicit offers by certain institutions to purchase
Securities from the Company at the price set forth in such Prospectus Supplement
under delayed delivery contracts providing for payment and delivery at a future
date.
Underwriters, dealers and agents may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act. Such underwriters,
dealers and agents may be customers of, engage in transactions with, or perform
services for the Company in the ordinary course of business.
It has not been determined whether any series of the Securities will be
listed on a securities exchange. Underwriters may, but will not be obligated to,
make a market in any series of Securities. The Company cannot predict the
activity of trading in, or liquidity of, any series of the Securities.
LEGAL MATTERS
Certain legal matters in connection with the offering of the Securities will
be passed upon for the Company by Andrews & Kurth L.L.P., 425 Lexington Avenue,
New York, New York 10017, special counsel for the Company, and by Jerry
Kronenberg, Vice President--General Counsel of the Company. Certain legal
matters in connection with the offering of the Securities will be passed upon
for any underwriters, dealers or agents by Brown & Wood LLP, One World Trade
Center, New York, New York 10048.
EXPERTS
The consolidated financial statements of the Company and its consolidated
subsidiaries, except the consolidated financial statements of Augat Inc. (a
wholly-owned subsidiary of the Company since December 11, 1996) and
subsidiaries, as of December 28, 1997 and for each of the three years in the
period ended December 28, 1997, incorporated in this Prospectus by reference
from the Annual Report on Form 10-K of the Company for year ended December 28,
1997 have been audited by KPMG Peat Marwick LLP as stated in their report, which
is incorporated herein by reference. The financial statements of Augat Inc. and
subsidiaries as of December 29, 1996 and for each of the two years in the period
ended December 29, 1996 (consolidated with those of the Company) have been
audited by Deloitte & Touche LLP, as stated in their report which is
incorporated herein by reference. Such financial statements of the Company and
its consolidated subsidiaries have been so incorporated in reliance upon the
respective reports of such firms given upon their authority as experts in
accounting and auditing. Both of the foregoing firms are independent auditors.
12
<PAGE>
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- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT
OR IN THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS
SUPPLEMENT, ANY PRICING SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE AGENTS. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT, ANY PRICING SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THEREOF. THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT AND THE PROSPECTUS
DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING
SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Thomas & Betts Corporation................................................ S-3
Recent Developments....................................................... S-3
Ratio of Earnings to Fixed Charges........................................ S-4
Use of Proceeds........................................................... S-4
Description of Notes...................................................... S-4
United States Taxation.................................................... S-12
Plan of Distribution...................................................... S-16
Prospectus
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
Description of Securities................................................. 3
Plan of Distribution...................................................... 11
Legal Matters............................................................. 12
Experts................................................................... 12
</TABLE>
$115,000,000
[LOGO]
MEDIUM-TERM NOTES
DUE NINE MONTHS OR
MORE FROM DATE OF ISSUE
----------------------------
PROSPECTUS SUPPLEMENT
----------------------------
MERRILL LYNCH & CO.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
J.P. MORGAN & CO.
MORGAN STANLEY DEAN WITTER
MAY 4, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ISSUER: THOMAS & BETTS CORPORATION PRICING SUPPLEMENT # 2
Medium Term Notes Due Nine Months from Date of Issue
ORIGINAL ISSUE INSTRUCTIONS
<TABLE>
<CAPTION>
<S> <C>
1. Registered Owner/Taxpayer I.D. No . . . . . . . . 22-1326940
2. Certificate No. (FXR - fixed, FLR - floating).. . FXR
3. CUSIP Number. . . . . . . . . . . . . . . . . . . 88431QAB2
4. Principal Amount. . . . . . . . . . . . . . . . . 115,000,000
5. Issue Price (% of principal). . . . . . . . . . . 99.75
6. Trade Date. . . . . . . . . . . . . . . . . . . . May 4, 1998
7. Settlement/Original Issue Date. . . . . . . . . . May 7, 1998
8. Stated Maturity . . . . . . . . . . . . . . . . . May 7, 2008
9. Redemption date(s) and Prices (if any). . . . . . N/A
10. Fixed Rate Note Information:
Interest Rate . . . . . . . . . . . . . . . . . . 6.625%
Initial Interest Payment (Date/Amount). . . . . . November 1, 1998/$3,682,395.83
Ongoing Payments (Date/Amount). . . . . . . . . . May 1, 1999/$3,809,375
Final Interest Payment (Date/Amount). . . . . . . May 7, 2008/$126,979.17
11. Floating Rate Note Information:
Initial Interest Rate.. . . . . . . . . . . . . . N/A
Interest Rate Basis/Spread or Multiplier
Interest Determination Dates.
Initial Interest Payment (Date/Amount)
Ongoing Payment Dates
Record Dates
Calculation Agent
12. Principal & Interest Payment Address . . . . . . . N/A
13. Presenting Agents. . . . . . . . . . . . . . . . . J.P. Morgan & Co.; Donaldson,
Lufkin & Jenrette Securities Corporation; Merrill Lynch 5132 & Co.; and Morgan Stanley Dean Witter
14. Agents' DTC Participant Account No.. . . . . . . . 060; 509; 0050
15. Agents' Commission (%/Amount). . . . . . . . . . . 0.625%/ $718,750
16. Net Proceeds to Issuer . . . . . . . . . . . . . . $113,993,750
17. Wire Instructions - Bank/ABA Number. . . . . . . . Chase Manhattan Bank/ 021000021
Account Number . . . . . . . . . . . . . . 507836839
Price to public set forth on cover page to prospectus supplement dated May 4,
1998 as 100% was in fact 99.75% and yielded proceeds to Company of
$113,993,750.
By: /s/ FRED R. JONES Date: May 4, 1998
---------------------------------------------------
</TABLE>
FRED R. JONES / VICE PRESIDENT - FINANCE AND TREASURER
