<PAGE>
RULE NO. 424(b)(5)
REGISTRATION NO. 33-44153
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED FEBRUARY 10, 1998)
$60,000,000
THOMAS & BETTS [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
$60,000,000 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.
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 August 1 and February 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).
---------------
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.
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<TABLE>
<CAPTION>
DISCOUNTS AND
PRICE TO PUBLIC(1) COMMISSIONS(2) PROCEEDS TO COMPANY(2)(3)
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<S> <C> <C> <C>
Per Note......... 100% .125%-.750% 99.875%-99.250%
- -------------------------------------------------------------------------------
Total............ $60,000,000 $75,000-$450,000 $59,925,000-$59,550,000
</TABLE>
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(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 $125,000.
---------------
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 February 10, 1998.
<PAGE>
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."
S-2
<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 is a worldwide
designer and manufacturer of a broad range of electromechanical components and
subsystems that provide solutions for the automotive, communication and
information industries in North America, Europe and Asia. The Company is also
one of the largest manufacturers in North America of electrical connectors,
components and accessories for industrial, commercial and residential
construction, renovation and maintenance applications, and is a leading
supplier of transmission poles, towers and industrial lighting products to the
electric utility and telecommunications industries and of products and
components to the heating, mechanical and refrigeration markets in North
America and Europe. On a worldwide basis, the Company designs and manufactures
electronic connectors and flat cable, which are sold primarily to OEMs in the
automotive, computer, office equipment, test equipment, instrumentation,
industrial automation and telecommunications industries.
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 fourth quarter of 1997 were $45.9 million ($.84 per
share), a 32% increase over last year's fourth quarter net earnings of $34.8
million ($.66 per share) before special charges. Sales for the quarter were
$532.6 million, 6% higher than last year's $504 million. Fourth quarter
operating income as a percentage of sales rose to 13.9%, compared with 12.1%
before special charges in 1996.
Earnings for 1997 grew 23% to $154.9 million ($2.83 per share) from $125.5
million ($2.36 per share) in the same period of 1996 before special charges.
Sales for 1997 improved 6% to $2,114.7 million from $1,987.6 million in 1996.
Sales of the Electrical Construction and Maintenance Components segment rose
20% from fourth quarter 1996 reflecting continued strong volume increases
attributable to new product lines, market share gains and economic growth
across North America.
S-3
<PAGE>
Fourth quarter sales of core utility and mechanical products were up 6% over
the 1996 quarter reflecting volume gains in all major product lines. Those
gains more than offset decreased sales of steel structures that resulted from
lower demand for cellular communications towers and the absence of sales in
the 1997 quarters of low-margin contract-manufacturing volumes related to
divested product lines. Sales of the Other Products and Components segment
rose 2% from the prior-year quarter (including the results of planned phase
outs of low-margin contract-manufacturing volumes related to divested product
lines).
The Electronics/OEM Components segment reported 3% lower sales in the fourth
quarter compared with the 1996 quarter. Unfavorable foreign currency
translations in the quarter, reduced shipments to automotive customers as a
result of planned model phase outs, delays in several cable installation
projects and the discontinuation of certain product lines in the prior year
also contributed to lower year over year sales in this segment.
Under a receivables sales agreement, the Company sold a defined pool of
trade account receivables for $145.2 million on December 19, 1997. The sold
receivables will be reflected as a reduction of receivables on the Company's
audited balance sheet for the year ended December 28, 1997. Under the
agreement, the maximum amount of the purchaser's investment is $150 million
and is subject to decreases based on the level of eligible receivables and
restrictions on concentrations of receivables. The discount rate on the
receivables sold was 6.1%.
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
- -----------------------------------------------------------------------------------------
JANUARY 2, JANUARY 1, DECEMBER 31, DECEMBER 29, DECEMBER 28,
1994 1995 1995 1996 1997
---------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
2.8x 1.9x(1) 3.8x(2) 2.3x(3) 4.3x
</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 5.55% to 5.72% with maturities on
February 13, 1998.
S-4
<PAGE>
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.
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 $60,000,000 aggregate principal amount
of Notes offered hereby.
The Notes are currently limited to up to $60,000,000 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
S-5
<PAGE>
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.
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 August 1 and
February 1 of each year to the Holders at the close of business on the
preceding July 15 and January 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
S-6
<PAGE>
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.
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 shall 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.
S-7
<PAGE>
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 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."
S-8
<PAGE>
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.
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
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securities brokers and dealers, banks and trust companies that clear
through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The rules
applicable to 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.
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
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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.
DESCRIPTION OF PREFERRED STOCK PURCHASE RIGHTS
On December 3, 1997, the Board of Directors of the Company declared a
dividend of one preferred stock purchase right (a "Right") for each
outstanding share of Common Stock of the Company payable to holders of record
as of the close of business on December 15, 1997 (the "Record Date"). Shares
of Common Stock issued after the Record Date and prior to the Distribution
Date (as defined below) will be issued with a Right attached so that all
shares of Common Stock outstanding prior to the Distribution Date will have
Rights attached. The Rights will expire on December 15, 2000, unless earlier
exchanged or redeemed.
Prior to the Distribution Date, the Rights will be evidenced by the
certificates for, and will be transferred with, the Common Stock, and the
registered holders of the Common Stock will be deemed to be the registered
holders of the Rights. After the Distribution Date, the Rights Agent (as
defined below) will mail separate certificates evidencing the Rights to each
record holder of the Common Stock as of the close of business on the
Distribution Date, and thereafter the Rights will be transferable separately
from the Common Stock. The Rights are listed on the New York Stock Exchange.
The "Distribution Date" means the earlier of (i) the 10th day (or such later
day as may be designated by a majority of the Continuing Directors (as defined
below)) after the date (the "Stock Acquisition Date") or the first public
announcement that a person (other than the Company or any of its subsidiaries
or any employee benefit plan of the Company or any such subsidiary) has
acquired beneficial ownership of 15% or more of the outstanding shares of
Common Stock (an "Acquiring Person") and (ii) the 10th business day (or such
later day as may be designated by a majority of the Continuing Directors)
after the date of the commencement of a tender or exchange offer by any person
which would, if consummated, result in such person becoming an Acquiring
Person.
Prior to the Distribution Date, the Rights will not be exercisable. After
the Distribution Date, each Right will be exercisable to purchase, for $200
(the "Purchase Price"), one two-hundredths of a share of Series A
Participating Cumulative Preferred Stock, no par value per share. The terms
and conditions of the Rights are set forth in a Rights Agreement dated as of
December 3, 1997 between the Company and First Chicago Trust Company of New
York, as Rights Agent.
If any person becomes an Acquiring Person, each Right (other than Rights
beneficially owned by the Acquiring Person and certain affiliated persons)
will entitle the holder to purchase, for the Purchase Price, a number of
shares of Common Stock having a market value of twice the Purchase Price.
If, after any person has become an Acquiring Person, (1) the Company is
involved in a merger or other business combination in which the Company is not
the surviving corporation or its Common Stock is exchanged for other
securities or assets, or (2) the Company or one or more of its subsidiaries
sell or otherwise transfer
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assets or earning power aggregating more than 50% of the assets or earning
power of the Company and its subsidiaries, taken as whole, then each Right
will entitle the holder to purchase, for the Purchase Price, a number of
shares of common stock of the other party to such business combination or sale
(or in certain circumstances, an affiliate) having a market value of twice the
Purchase Price.
At any time after any person has become an Acquiring Person (but before any
person becomes the beneficial owner of 50% or more of the outstanding shares
of Common Stock), a majority of the Continuing Directors may exchange all or
part of the Rights (other than Rights beneficially owned by an Acquiring
Person and certain affiliated persons) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right.
The Board of Directors may redeem all of the Rights at a price of $.005 per
Right at any time prior to the close of business on the 10th day after the
Stock Acquisition Date (or such later date as may be designated by a majority
of the Continuing Directors).
"Continuing Director" means any member of the Board of Directors who was a
member of the Board prior to the time an Acquiring Person becomes such or any
person who is subsequently elected to the Board if such person is recommended
or approved by a majority of the Continuing Directors. Continuing Directors do
not include an Acquiring Person, an affiliate or associate of an Acquiring
Person or any representative or nominee of the foregoing.
ACCOUNTING FOR CERTAIN EQUITY INVESTMENTS
Under the Company's Accounting Policies, summarized in Note 2 of its Annual
Report on Form 10-K for the year ended December 29, 1996, the Company uses the
equity method of accounting for its investments in 20 to 50 percent-owned
companies. Under generally accepted accounting principles ("GAAP"), there is a
presumption that the equity method should be used to account for these
investments. If the Company was to determine that it no longer had the ability
to exercise significant influence over the operating and financial policies of
these companies, GAAP would require the Company to use the cost method rather
than the equity method to account for these investments. The Company regularly
monitors its relationships with these companies and reviews its accounting for
these investments with its outside auditors.
The Company has made investments in several strategic joint ventures and
owns 29.1% of the outstanding common stock (23.55% of the voting common stock)
of Leviton Manufacturing Co., Inc. ("Leviton"), a company engaged in the
business of manufacturing wiring devices and electronic components. The
Company acquired its investment in Leviton in August 1994. Leviton's chief
executive officer opposed the Company's acquisition. The chief executive
officer, with his wife, owns approximately 50.5% of Leviton's outstanding
common stock (76.45% of Leviton's voting common stock) through a voting trust
(a majority sufficient for the approval of all corporate actions which Leviton
might undertake; however, that majority is not sufficient to permit either
federal income tax consolidation or pooling of interests accounting treatment
in a merger). The remainder of the outstanding common stock, all of which is
non-voting, is owned by approximately 19 other Leviton family members. The
opposition of the chief executive officer to the Company's investment has
resulted in litigation between Leviton and the Company consisting of the
Company's proceeding in Delaware in February 1995 to compel Leviton to make
additional financial and other information available to the Company, and
Leviton's subsequent action against the Company and other parties in New York
seeking damages and other relief in connection with the transaction in which
the Company acquired its Leviton investment. The Company does not have and has
not sought representation on Leviton's board of directors which would be
opposed by Leviton's chief executive officer, and does not receive copies of
Leviton's board minutes.
Notwithstanding the existence of an adversarial relationship with the
controlling shareholder of Leviton, the Company has developed relationships
with certain key members of Leviton management and believes that these
relationships and other factors support management's conclusion that the
Company has the ability to exercise significant influence over Leviton's
financial and operating policies. The Company owns more than 20% of
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Leviton's voting stock and there are no restrictions to the Company's ability
to exercise the attributes of ownership (situations have not arisen to date in
which the Company has had an opportunity to vote its Leviton shares in a
matter that would demonstrate significant influence over Leviton's financial
and operating policies). In addition, because the Company is a non-family
shareholder, the Company believes that it has a greater ability than other
shareholders to challenge actions by Leviton management which the Company
considers adverse to shareholder interests. Senior management responsible for
Leviton's day-to-day operations and operating and financial policies have
engaged in an ongoing dialogue over the past 20 months with the Company and
they have acknowledged that the Company's presence as a Leviton shareholder
has influenced the manner in which Leviton conducts business. Further, Leviton
has taken actions following discussions with the Company which in some
instances have been consistent with the Company's requests and suggestions.
The Company's equity in the earnings of Leviton has been typically less than
5% and of late never more than 7% of the Company's net income before special
charges and typically less than 7% and of late never more than 9% of the
Company's net income after special charges. Should the Company determine that
it no longer has the ability to influence the operating and financial policies
of Leviton, the Company, in compliance with GAAP, will adopt the cost method
on a prospective basis.
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).
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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 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.
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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
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
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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 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.
S-16
<PAGE>
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.
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.
S-17
<PAGE>
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.
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.
S-18
<PAGE>
PROSPECTUS
THOMAS & BETTS [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 $175,000,000 (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 February 10, 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 29, 1996;
(ii) the Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 30, 1997, June 29, 1997 and September 28, 1997;
(iii) the Company's Current Reports on Form 8-K dated February 25, 1997,
July 25, 1997, December 4, 1997 and February 5, 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:
Corporate Secretary (telephone number (901) 252-5000).
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<PAGE>
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; (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).
3
<PAGE>
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 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
4
<PAGE>
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.
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
5
<PAGE>
(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.
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 time such Funded
Debt is incurred exceed an amount equal to 10% of Consolidated Net Assets.
(Section 1008).
6
<PAGE>
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 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
7
<PAGE>
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).
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.
8
<PAGE>
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).
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
9
<PAGE>
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 $175 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 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.
10
<PAGE>
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 29, 1996 and January 1, 1996 and for each of the
three years in the period ended December 29, 1996, incorporated in this
Prospectus by reference from the Annual Report on Form 10-K of the Company for
year ended December 29, 1996 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 December 31, 1995 and for each of the three 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.
11
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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>
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PAGE
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<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-5
Description of Preferred Stock Purchase Rights............................. S-11
Accounting for Certain Equity Investments.................................. S-12
United States Taxation..................................................... S-13
Plan of Distribution....................................................... S-17
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Description of Securities.................................................. 3
Plan of Distribution....................................................... 10
Legal Matters.............................................................. 11
Experts.................................................................... 11
</TABLE>
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$60,000,000
THOMAS & BETTS
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
FEBRUARY 10, 1998
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<PAGE>
ISSUER: THOMAS & BETTS CORPORATION PRICING SUPPLEMENT # 1
-------------------------- -----------------------
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............................................... 88431QAA4
4. Principal Amount........................................... 60,000,000
5. Issue Price (% of principal)............................... 100
6. Trade Date................................................. February 10, 1998
7. Settlement/Original Issue Date............................. February 13, 1998
8. Stated Maturity............................................ February 13, 2003
9. Redemption date(s) and Prices (if any)..................... N/A
10. Fixed Rate Note Information:
Interest Rate............................................ 6.29%
Initial Interest Payment (Date/Amount)................... August 1, 1998/$1,761,200
Ongoing Payments (Date/Amount)........................... February 1, 1999/$1,887,000
Final Interest Payment (Date/Amount)..................... February 13, 2003/$125,800
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 & Co.; and Morgan Stanley Dean Witter
14. Agents' DTC Participant Account No........................ 060; 509; 0050; 5132
15. Agents' Commission (%/Amount)............................. 0.50%/$300,000
16. Net Proceeds to Issuer.................................... $59,700,000
17. Wire Instructions - Bank/ABA Number....................... Chase Manhattan Bank/ 021000021
Account Number....................................... 507836839
</TABLE>
By: /s/ Fred R. Jones Date: February 10, 1998
------------------------------- ----------------------------
FRED R. JONES / VICE PRESIDENT - FINANCE AND TREASURER
