<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-05997
INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT IS SUBJECT TO
COMPLETION OR AMENDMENT. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY NOR SHALL THERE BY ANY SALE OF THESE SECURITIES IN ANY STATE
IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION DATED NOVEMBER 20, 1996
PROSPECTUS SUPPLEMENT
(To Prospectus dated November 14, 1996)
LOGO
C. R. BARD, INC.
$150,000,000
% Notes due 2026
Interest payable and
ISSUE PRICE: %
Interest on the % Notes due , 2026 (the "Notes") of C. R. Bard,
Inc. ("Bard" or the "Company") offered hereby is payable semi-annually on
and of each year, beginning , 1997. The Notes will not be
redeemable by the Company prior to maturity and will not be subject to any
sinking fund. The Notes will be redeemable at the option of each of the holders
thereof on , 2006, at a redemption price equal to the principal
amount thereof. To exercise this option, a holder must deliver a notice of
exercise of the redemption option to the Company no earlier than ,
2006 and no later than , 2006, and once given, such notice will be
irrevocable. See "Description of Notes."
The Notes will be represented by one or more global securities (the "Global
Securities") registered in the name of The Depository Trust Company ("DTC") or
its nominee. Beneficial interests in the Global Securities will be shown on, and
transfers thereof will be effected only through, records maintained by DTC and
its participants. Except as provided herein, Notes in definitive form will not
be issued. See "Description of Notes."
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 OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3)
<CAPTION>
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note % % %
- -------------------------------------------------------------------------------------------------------
Total $ $ $
- -------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from , 1996.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deducting expenses payable by the Company, estimated at $393,750.
The Notes are offered, subject to prior sale, when, as and if delivered to and
accepted by the Underwriters, and subject to approval of certain legal matters
by Davis Polk & Wardwell, counsel for the Underwriters. It is expected that
delivery of the Notes will be made on or about , 1996 through the
facilities of DTC, against payment therefor in same-day funds.
J.P. MORGAN & CO.
CS FIRST BOSTON
SALOMON BROTHERS INC
December , 1996
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER.
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY THE NOTES 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 ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS, NOR ANY
SALE MADE HEREUNDER AND THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH
INFORMATION.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
The Company.......................................................................... S-3
Recent Developments.................................................................. S-5
Capitalization....................................................................... S-6
Ratio of Earnings to Fixed Charges................................................... S-6
Use of Proceeds...................................................................... S-6
Selected Pro Forma Financial Information............................................. S-7
Selected Historical Financial Information............................................ S-10
Description of Notes................................................................. S-11
Underwriting......................................................................... S-12
PROSPECTUS
Available Information................................................................ 2
Incorporation of Certain Information by Reference.................................... 2
The Company.......................................................................... 3
Ratio of Earnings to Fixed Charges................................................... 4
Use of Proceeds...................................................................... 4
Description of Debt Securities....................................................... 4
Plan of Distribution................................................................. 11
Legal Matters........................................................................ 12
Experts.............................................................................. 12
</TABLE>
S-2
<PAGE> 3
THE COMPANY
The Company is a leading multinational developer, manufacturer and marketer
of health care products, and a pioneer in the development of single use medical
products for standardized procedures. The Company designs and manufactures
medical, surgical, diagnostic and patient care devices which it markets
worldwide to hospitals, individual health care professionals, extended care
facilities and alternate site facilities.
The Company was started by Charles Russell Bard in 1907. One of its first
medical products was the silk urethral catheter imported from France. In 1923,
the Company was incorporated as C. R. Bard, Inc. and distributed an assortment
of urological and surgical products. Bard became a publicly-traded company in
1963 and five years later was traded on the New York Stock Exchange.
1995 sales of $1.138 billion increased 7% from 1994. 1994 sales of $1.065
billion increased 6% from 1993. Net income for 1995 totaled $86.8 million or
$1.53 per share, and increased 15% and 14%, respectively, against 1994. Net
income for 1994 totaled $75.6 million or $1.34 per share, in each case an
increase of 31% against 1993.
Hospitals, physicians and nursing homes purchase approximately 90% of the
Company's products, most of which are used once and then discarded.
Historically, Bard has been known for its products in the urological field,
where its Foley catheter is the leading device for bladder drainage. Today,
Bard's largest product group is surgical devices, which contributed
approximately 39% of consolidated net sales in 1995. Bard continually expands
its research toward the improvement of existing products and the development of
new ones.
Bard's sales may be grouped into three principal product lines:
cardiovascular, urological and surgical. International sales include most of the
same products manufactured and sold by Bard's domestic operations. Domestic and
international sales are combined for product group sales presentation.
Cardiovascular. Bard's line of cardiovascular products includes balloon
angioplasty catheters, steerable guidewires, guide catheters and inflation
devices; angiography catheters and accessories; introducer sheaths;
electrophysiology products including cardiac mapping and electrophysiology
laboratory systems, and diagnostic and temporary pacing electrode catheters;
cardiopulmonary support systems; and blood oxygenators and related products used
in open-heart surgery.
Urological. Bard offers a complete line of urological products including
Foley catheters, procedural kits and trays and related urine monitoring and
collection systems; biopsy and other cancer monitoring and detection products;
ureteral stents; and specialty devices for incontinence, ureteroscopic
procedures and stone removal.
Surgical. Bard's surgical products include specialty access catheters and
ports; implantable blood vessel replacements; fabrics and meshes for vessel and
hernia repair; surgical suction, irrigation and drainage devices;
gastroenterological products, irrigation devices for orthopaedic and
laparoscopic procedures; laparoscopic accessories; blood management devices and
products for wound management and skin care.
The following table sets forth for the three years ended December 31, 1995
the approximate percentage contribution by product line to Bard's consolidated
net sales on a worldwide basis.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER
31,
--------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Cardiovascular................................................. 33% 35% 38%
Urological..................................................... 28% 27% 25%
Surgical....................................................... 39% 38% 37%
---- ---- ----
Total................................................ 100% 100% 100%
===== ===== =====
</TABLE>
S-3
<PAGE> 4
Bard markets cardiovascular, urological and surgical products throughout
the world. The Company's principal international markets are Japan, Canada, the
United Kingdom and continental Europe. Approximately two-thirds of the sales in
this segment are of products manufactured by Bard in facilities located in
Canada, France, Germany, Ireland, Malaysia and the United Kingdom. The balance
of the sales are from products manufactured in the continental United States,
Puerto Rico or Mexico for export. Bard's foreign operations are subject to the
usual risks of doing business abroad, including restrictions on currency
transfer, exchange fluctuations and possible adverse government regulations.
The Company's products are distributed domestically directly to hospitals
and other institutions as well as through numerous hospital/surgical supply and
other medical specialty distributors with whom the Company has distribution
agreements. In international markets, products are distributed either directly
or through distributors with the practice varying by country. Sales promotion
activities are carried on by full-time representatives of the Company in
domestic and international markets.
Sales to a single distributor (which supplies the Company's products to
many end-users) accounted for approximately 9% of the Company's sales in 1995,
and the Company's five largest distributors combined accounted for approximately
22% of 1995 sales. Combined sales to federal agencies accounted for
approximately 1% of sales in 1995.
In order to service its customers, both inside and outside the United
States, the Company maintains inventories at distribution facilities in most of
its principal marketing areas. Products are normally shipped within a matter of
days after receipt of customer orders, except for items temporarily out of
stock. Backlog is normally not significant in the business of the Company.
Most of the products sold by the Company, whether manufactured by it or by
others, are sold under the BARD trade name or trademark or other trademarks
owned by the Company. Products manufactured for the Company by outside suppliers
are produced according to the Company's specifications.
The Company employs approximately 9,800 persons.
The principal executive offices of the Company are located at 730 Central
Avenue, Murray Hill, New Jersey 07974. The telephone number is (908) 277-8000.
Requests for copies of documents incorporated by reference herein should be
directed to C. R. Bard, Inc. at the above address and telephone number,
Attention: Investor Relations Department.
S-4
<PAGE> 5
RECENT DEVELOPMENTS
RESULTS OF OPERATIONS
Bard reported net sales of $295.8 million for the quarter ended September
30, 1996, an increase of 7% over the $277.6 million of third quarter 1995 sales.
Nonrecurring charges are included in the reported net income results of both the
third quarters of 1996 and 1995. Excluding nonrecurring charges, earnings per
share for the 1996 and 1995 third quarters would have been 43 cents and 42
cents, respectively. Net income as reported for the 1996 third quarter totaled
$11.4 million and earnings per share were 20 cents. In the 1995 third quarter,
reported net income was $14.1 million with earnings per share of 25 cents. Third
quarter 1995 net income included a nonrecurring after-tax charge of $9.9
million, or 17 cents per share, for costs associated with the acquisition of
MedChem, Inc. Third quarter 1996 net income included two nonrecurring after-tax
charges. The first charge of $6.7 million, or 12 cents per share, was for
noncapitalizable expenses related to the acquisition of IMPRA, Inc., which was
completed on September 16, 1996. See "-- Acquisition of IMPRA, Inc." The second
charge of $6.2 million, or 11 cents per share, was for costs to combine certain
existing manufacturing operations.
For the nine months ended September 30, 1996, sales in the United States
were $580.1 million, while international sales totaled $300.1 million. Currency
translations decreased worldwide sales by 2% in the third quarter and 1% for the
nine months. Year-to-date net income and earnings per share, including the third
quarter charges, were $66.0 million and $1.16, respectively, compared with last
year's nine-month results of $64.0 million in net income and $1.13 in earnings
per share.
ACQUISITION OF IMPRA, INC.
Pursuant to an Agreement and Plan of Merger, dated as of August 2, 1996, as
amended (the "Agreement and Plan of Merger"), among Bard, CRB Acquisition
Company, a wholly-owned subsidiary of Bard ("CRB"), and IMPRA, Inc. ("IMPRA"),
on September 16, 1996 CRB was merged with and into IMPRA as a result of which
IMPRA became a wholly-owned subsidiary of Bard (the "IMPRA Acquisition"). The
shares of common stock of IMPRA outstanding immediately prior to the merger were
converted into the right to receive a pro rata portion of $143,196,000. The
purchase price is subject to adjustment based on IMPRA's balance sheet at the
effective time of the merger as provided in the Agreement and Plan of Merger. In
addition, in connection with the merger Bard acquired certain related real
estate from affiliates of IMPRA for $3,000,000. The merger, real estate
acquisition and related costs of the IMPRA Acquisition of approximately $153.0
million were initially financed through the incurrence of short-term
indebtedness under the Company's commercial paper program. The Company expects
to use the proceeds of the offering of the Notes to repay approximately $148.6
million of short-term indebtedness. See "Use of Proceeds."
IMPRA is headquartered in Tempe, Arizona and develops, manufactures and
markets vascular grafts used for blood vessel replacement surgery. IMPRA is an
international leader in the development, manufacturing and marketing of PTFE
grafts used for vascular surgery, offering more than 260 products to the
vascular surgeon as a complete line, full service supplier. Founded in 1974,
IMPRA currently employs approximately 260 people, of which 75% are employed in
locations in the United States.
The Company expects to combine the complementary product lines of its Bard
Vascular Systems Division and IMPRA to form a new division operating under the
name "IMPRA," which will be headquartered in a 33,000 square foot facility
located in Tempe, Arizona. The establishment of the new IMPRA division will
permit the Bard Vascular Systems Division to focus its resources on cardiac
assist and cardiopulmonary market opportunities.
IMPRA has several active R&D programs in vascular graft and endovascular
technology and had sales of $48.8 million for the fiscal year ended June 30,
1996.
S-5
<PAGE> 6
CAPITALIZATION
The following table sets forth (a) the consolidated capitalization of the
Company at September 30, 1996 (reflecting the IMPRA Acquisition) and (b) as
adjusted to reflect the sale of the Notes offered hereby and application of the
net proceeds therefrom to repay existing short-term borrowings. See "Use of
Proceeds."
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
-------------------------
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
Short-term Debt:
Short-term borrowings and current maturities of long-term
debt........................................................... $ 289,400 $ 140,800
---------- -----------
Long-term Debt:
8.69% notes due 1999............................................ 60,000 60,000
7.8% mortgage loan.............................................. 9,700 9,700
Short-term borrowings reclassified as long-term debt*........... 120,000 120,000
% notes due 2026........................................... 0 150,000
Other notes due................................................. 5,300 5,300
---------- -----------
Total long-term debt....................................... 195,000 345,000
---------- -----------
Total debt........................................................... 484,400 485,800
Shareholders' investment............................................. 587,700 587,700
---------- -----------
Total capitalization................................................. $1,072,100 $ 1,073,500
========= =========
</TABLE>
- ---------------
* Borrowings of $120,000,000 under the Company's commercial paper program have
been classified as long-term debt as the Company has both the intention and
ability to refinance these amounts on a long-term basis.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of
the Company for the periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEARS ENDED DECEMBER 31,
SEPTEMBER 30, ------------------------------------
1996 1995 1994 1993 1992 1991
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges................ 3.61* 4.89 5.46 6.41 7.00 5.12
</TABLE>
- ---------------
* During the nine months ended September 30, 1996, the Company recorded (1) a
one-time charge of $10,000,000 related to the reorganization of certain
existing manufacturing operations, (2) a credit of $2,500,000 for the
elimination of a contractual agreement which previously had been accrued, (3)
$9,900,000 of income related to royalties on angioplasty catheter balloon
technology received on sales for prior periods and charges of $31,000,000
($16,800,000 net of tax) related to the writedown of assets and (4)
miscellaneous charges amounting to $6,000,000 primarily related to legal
settlements. Excluding the effects of these unusual items, for the nine months
ended September 30, 1996 earnings before taxes would have been $99,400,000 and
the ratio of earnings to fixed charges would have been 5.02.
For purposes of calculating the ratio of earnings to fixed charges,
earnings consist of income from continuing operations before income taxes and
fixed charges (excluding capitalized interest) but excludes undistributed
earnings of less than 50% owned companies carried at equity. Fixed charges
consist of interest on indebtedness, whether expensed or capitalized, and the
portion of rental expense the Company believes to be representative of interest.
USE OF PROCEEDS
The net proceeds from the offering of the Notes are estimated to be
approximately $148.6 million. The Company expects to use the net proceeds from
the offering of the Notes to repay short-term indebtedness, including
indebtedness incurred to finance the IMPRA Acquisition. The indebtedness to be
repaid bears interest at a weighted average rate of approximately % and will
mature on or about , 1996.
S-6
<PAGE> 7
SELECTED PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma combined condensed balance sheet data set forth
below as of June 30, 1996 and the unaudited pro forma combined condensed income
statement data set forth below for the twelve months ended December 31, 1995 and
the six months ended June 30, 1996 give effect to the IMPRA Acquisition
accounted for under the purchase method of accounting. The unaudited pro forma
combined condensed financial data is based on the historical consolidated
financial statements of Bard and IMPRA under the assumptions and adjustments set
forth in the notes to such pro forma financial data.
The unaudited pro forma combined condensed balance sheet data assumes that
the merger was consummated on June 30, 1996, and the unaudited pro forma
combined condensed income statement data assumes that the merger was consummated
on January 1, 1995. The fiscal year of Bard ends on December 31 and the fiscal
year of IMPRA ends on June 30. For purposes of presenting the unaudited pro
forma combined condensed income statement data the historical financial
statements of IMPRA were compiled on a calendar year basis ended December 31,
1995 and six months ended June 30, 1996 consistent with Bard's calendar
year-end.
Bard incurred approximately $153.0 million in short-term indebtedness to
finance the IMPRA Acquisition and related expenses. For purposes of presenting
the unaudited pro forma combined condensed balance sheet data, IMPRA's assets
and liabilities have been recorded at their estimated fair market values and the
excess purchase price has been assigned to goodwill, which is being amortized
over a 40-year period. The fair value of IMPRA's assets and liabilities is based
on preliminary estimates. Upon completion of a detailed review of assets and
liabilities, including intangibles, certain adjustments may be required to
finalize the purchase accounting. The unaudited pro forma combined condensed
income statement data excludes any benefits that may result due to synergies
that may be derived and the elimination of duplicative efforts in connection
with the IMPRA Acquisition.
The unaudited pro forma combined condensed financial statement data may not
be indicative of the results that actually would have occurred if the IMPRA
Acquisition had been consummated on the dates indicated or which may be obtained
in the future. The unaudited pro forma combined condensed financial statement
data should be read in conjunction with the historical consolidated financial
statements for IMPRA and Bard and Bard's Current Report on Form 8-K, dated
September 16, 1996, as amended, incorporated herein by reference.
S-7
<PAGE> 8
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET DATA
<TABLE>
<CAPTION>
JUNE 30, 1996
----------------------------------------------------
HISTORICAL
--------------------- PRO FORMA
BARD IMPRA ADJUSTMENTS TOTAL
---------- ------- ----------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and short-term investments................ $ 64,500 $ 6,900 $ 71,400
Accounts receivable, net....................... 232,400 7,800 240,200
Inventories.................................... 245,600 3,900 249,500
Other current assets........................... 9,500 4,200 $ (2,500)(1) 11,200
---------- ------- ----------- ----------
Total current assets...................... 552,000 22,800 (2,500) 572,300
---------- ------- ----------- ----------
Property, plant and equipment...................... 214,400 3,000 800(2) 218,200
Intangible assets, net............................. 308,300 600 141,000(3) 449,900
Other assets....................................... 75,100 500 1,500(4) 77,100
---------- ------- ----------- ----------
$1,149,800 $26,900 $ 140,800 $1,317,500
=========== ======== =========== ===========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Short-term borrowings and current maturities of
long-term debt.............................. $ 159,100 $ 2,800 $ (1,700)(5) $ 160,200
Accounts payable............................... 35,700 2,600 38,300
Accrued expenses............................... 129,300 6,000 12,700(6) 148,000
Federal and foreign income taxes............... 3,900 (2,300)(6) 1,600
---------- ------- ----------- ----------
Total current liabilities................. 328,000 11,400 8,700 348,100
---------- ------- ----------- ----------
Long-term debt..................................... 194,800 100 154,300(4) 349,200
---------- ------- ----------- ----------
Other long-term liabilities........................ 43,100 43,100
---------- ------- ----------- ----------
Shareholders' Investment:
Preferred stock................................
Common stock................................... 14,300 14,300
Capital in excess of par value................. 72,300 200 (200)(7) 72,300
Retained earnings.............................. 494,900 15,200 (22,000)(8) 488,100
Other.......................................... 2,400 2,400
---------- ------- ----------- ----------
Total shareholders' investment............ 583,900 15,400 (22,200) 577,100
---------- ------- ----------- ----------
$1,149,800 $26,900 $ 140,800 $1,317,500
=========== ======== =========== ===========
</TABLE>
- ---------------
(1) Represents the settlement of IMPRA's related party notes receivable at the
date of merger.
(2) Represents the acquisition of IMPRA's Tempe manufacturing facility and
adjustments to reflect the fair value of IMPRA's property, plant and
equipment.
(3) Represents the adjustment required to record goodwill related to the IMPRA
Acquisition and adjustments to reflect the fair value of IMPRA's
intangibles. The consideration paid by Bard has been adjusted to include the
direct costs paid by Bard.
(4) Represents the issuance of debt and deferral of debt issuance costs to
acquire the outstanding shares of IMPRA. Although the IMPRA Acquisition was
initially financed with short-term borrowings, at the time of the merger the
Company anticipated refinancing approximately all of this amount through the
issuance of long-term debt. The proceeds from the sale of the Notes will be
used to repay approximately $148.6 million of short-term borrowings of the
Company. The Notes to be issued in this offering will bear interest at
higher rates than such short-term borrowings, and, for pro forma purposes, a
higher assumed interest rate of 7.25% was utilized.
(5) Represents the repayment of various IMPRA bank notes at the closing of the
IMPRA Acquisition.
(6) Represents direct acquisition costs and one-time charges incurred by Bard
related to the integration of the IMPRA business and their associated tax
effects.
(7) Represents the elimination of IMPRA's historical equity.
(8) Represents the balance sheet effect of direct acquisition costs and one-time
charges incurred by Bard related to the integration of the IMPRA business
and their associated tax effects ($6,800) and the elimination of IMPRA's
historical equity ($15,200).
S-8
<PAGE> 9
UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT DATA
<TABLE>
<CAPTION>
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1995
----------------------------------------------------
HISTORICAL
--------------------- PRO FORMA
BARD IMPRA ADJUSTMENTS TOTAL
---------- ------- ----------- ----------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C>
Net sales.......................................... $1,137,800 $45,600 $1,183,400
---------- ------- ----------
Costs and Expenses:
Cost of goods sold............................. 550,000 7,100 557,100
Marketing, selling and administrative.......... 354,600 29,000 $ 3,600(1) 387,200
Research and development....................... 75,600 2,700 78,300
Costs to combine operations.................... 17,700 9,000(2) 26,700
Interest expense (income)...................... 24,200 (300) 11,300(3) 35,200
Other income (expense), net.................... 7,800 (300) 7,500
---------- ------- ----------- ----------
Total costs and expenses:.......................... 1,014,300 38,800 23,900 1,077,000
---------- ------- ----------- ----------
Income (loss) before income taxes.................. 123,500 6,800 (23,900) 106,400
Provision (benefit) for income taxes............... 36,700 2,800 (6,600)(4) 32,900
---------- ------- ----------- ----------
Net income......................................... $ 86,800 $ 4,000 $ (17,300) $ 73,500
=========== ======== =========== ===========
Weighted average number of common shares
outstanding...................................... 56,731,000 56,731,000
Earnings per share................................. $ 1.53 $ 1.30
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1996
----------------------------------------------------
HISTORICAL
--------------------- PRO FORMA
BARD IMPRA ADJUSTMENTS TOTAL
---------- ------- ----------- ----------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C>
Net sales.......................................... $ 584,400 $25,800 $ 610,200
---------- ------- ----------
Costs and Expenses:
Cost of goods sold............................. 283,900 4,300 288,200
Marketing, selling and administrative.......... 176,400 16,600 $ 1,800(1) 194,800
Research and development....................... 39,100 1,600 40,700
Interest expense (income)...................... 12,100 (300) 5,700(3) 17,500
Other income (expense), net.................... (23,300) (300) (23,600)
---------- ------- ----------- ----------
Total costs and expenses:.......................... 534,800 22,500 7,500 564,800
---------- ------- ----------- ----------
Income (loss) before income taxes.................. 49,600 3,300 (7,500) 45,400
Provision (benefit) for income taxes............... (5,000) 1,300 (2,200)(4) (5,900)
---------- ------- ----------- ----------
Net income......................................... $ 54,600 $ 2,000 $ (5,300) $ 51,300
=========== ======== =========== ===========
Weighted average number of common shares
outstanding...................................... 57,009,000 57,009,000
Earnings per share................................. $ .96 $ .90
=========== ===========
</TABLE>
- ---------------
(1) Represents the amortization of additional goodwill over 40 years and the
adjustment to depreciation resulting from the acquisition of IMPRA's Tempe
manufacturing facility.
(2) Represents one-time charges incurred by Bard related to the integration of
the IMPRA business.
(3) Represents the increase in interest expense resulting from the IMPRA
Acquisition. The IMPRA Acquisition was initially financed with short-term
borrowings at an assumed long-term rate of 7.25%. Interest expense includes
amortization of long-term debt issuance costs.
(4) Represents the tax effect of pro forma adjustments.
S-9
<PAGE> 10
SELECTED HISTORICAL FINANCIAL INFORMATION
The selected historical financial information set forth below at December
31, 1995, 1994, 1993, 1992 and 1991 and for the years then ended has been
derived from the Company's consolidated financial statements, which have been
audited by Arthur Andersen LLP, independent public accountants. The selected
historical financial information set forth below at September 30, 1996 and for
the nine month periods ended September 30, 1996 and 1995 has been derived from
the Company's unaudited interim financial statements, which in the opinion of
the Company's management include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the results of
operations for the unaudited interim periods. Interim operating results and
balance sheet information are not necessarily indicative of the operating
results or financial condition that may be expected for the full year. The
selected historical financial information set forth below should be read in
conjunction with the Company's consolidated financial statements and notes
thereto incorporated herein by reference.
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED OR AT FOR THE TWELVE MONTHS
SEPTEMBER 30, ENDED OR AT DECEMBER 31,
----------------------- ------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ---------- --------
(IN THOUSANDS, EXCEPT RATIO DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA
Net sales..................... $ 880,200 $ 846,800 $1,137,800 $1,064,600 $1,008,800 $1,033,800 $903,500
Cost of goods sold............ 430,500 409,000 550,000 513,500 489,100 523,800 473,900
Marketing, selling and
administrative.............. 266,600 262,800 354,600 326,500 320,200 311,400 268,300
Research and development...... 57,800 57,100 75,600 71,600 67,500 62,300 56,700
Costs to combine operations... 9,000 12,500 17,700 -- -- -- --
Interest expense.............. 18,700 18,700 24,200 16,300 12,500 13,400 13,900
Net income.................... $ 66,000 $ 64,000 $ 86,800 $ 75,600 $ 57,800 $ 83,400 $ 65,600
BALANCE SHEET DATA
Total assets.................. $1,317,900 $1,091,000 $1,043,100 $ 881,400 $ 789,200 $736,600
Working capital............... 69,700 230,600 72,300 165,200 213,200 192,900
Long-term debt................ 195,000 198,400 93,400 82,100 84,000 80,000
Total debt.................... 484,400 265,300 294,000 171,000 148,300 142,000
Shareholder's investment...... $ 587,700 $ 564,600 $ 495,400 $ 439,900 $ 444,900 $424,300
Ratio of total debt to total
capitalization.............. 0.452 0.320 0.372 0.280 0.250 0.251
</TABLE>
S-10
<PAGE> 11
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby supplements the description of the general terms of the Debt Securities
(as defined in the accompanying Prospectus) set forth under the heading
"Description of Debt Securities" in the accompanying Prospectus, to which
description reference is hereby made.
GENERAL
The Notes offered hereby will be unsecured general obligations of the
Company, and will constitute a series of Debt Securities to be issued under the
Indenture referred to in the accompanying Prospectus, as such terms are defined
therein. The Notes will be limited to $150,000,000 aggregate principal amount
and will mature on , 2026. The Notes will bear interest at the rate set
forth on the cover page of this Prospectus Supplement from , 1996, or
from the most recent date to which interest has been paid or provided for,
payable semi-annually in arrears on and of each year, commencing
, 1997 to holders of record at the close of business on the preceding
and , as the case may be. The Notes are subject to legal
defeasance and discharge and covenant defeasance, as described under
"Description of Debt Securities -- Defeasance" in the accompanying Prospectus.
REDEMPTION
The Notes are not redeemable by the Company prior to maturity and do not
provide for any sinking fund.
The Notes will be redeemable at the option of each of the holders on
, 2006, at a redemption price equal to the principal amount thereof.
Interest due on , 2006 will be payable to holders at the close of
business on , 2006. To exercise the redemption option, a holder must
deliver a notice of exercise of such option to the Company at the Corporate
Trust Office of the Trustee (or such other location of which the Company shall
notify holders), no earlier than , 2006 and no later than , 2006.
Any such notice of exercise of the redemption option shall be irrevocable. The
redemption option may be exercised by a holder for less than the entire
principal amount of the Notes held by such holder, so long as the principal
amount that is to be redeemed is equal to $1,000 or any integral multiple
thereof.
While the Notes are represented by Global Securities held by or on behalf
of DTC, and registered in the name of DTC or DTC's nominee, the redemption
option for repayment may be exercised by the applicable participant that has an
account with DTC, on behalf of the beneficial owners of the Global Securities,
by delivering a notice thereof to the Trustee at its Corporate Trust Office (or
such other location of which the Company shall notify holders) no earlier than
, 2006 and no later than , 2006. Notices of exercise of the
redemption option from participants on behalf of beneficial owners of the Global
Securities must be received by the Trustee by 5:00 P.M., New York City time, on
the last day for giving such notice. In order to ensure that a notice is
received by the Trustee on a particular day, the beneficial owner of a Global
Security must so direct the applicable participant before such participant's
deadline for accepting instructions for that day. Different firms may have
different deadlines for accepting instructions from their customers.
Accordingly, each beneficial owner of a Global Security should consult the
participant through which it owns its interest therein for the deadlines for
such participant. All notices shall be executed by a duly authorized officer of
such participant (with signature guaranteed) and shall be irrevocable. In
addition, the beneficial owner of a Global Security shall effect delivery at the
time such notices of election are given to DTC by causing the applicable
participant to transfer such beneficial owner's interest in such Global
Security, on DTC's records, to the Trustee. See "-- Global Securities."
GLOBAL SECURITIES
The Notes initially will be issued as Global Securities. See "Description
of Debt Securities -- Book-Entry System" in the accompanying Prospectus for
additional information concerning the Notes, the Indenture and the book-entry
system. DTC will be the depositary with respect to the Notes.
S-11
<PAGE> 12
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters (as defined
below) in immediately available funds. All payments of principal, premium, if
any, and interest will be made by the Company in immediately available funds to
DTC in The City of New York. The Notes will trade in DTC's Same-Day Funds
Settlement System until maturity or earlier redemption, as the case may be, and
secondary market trading activity in the Notes will therefore settle in
immediately available funds.
UNDERWRITING
Subject to the terms and conditions set forth in an Underwriting Agreement
dated the date of this Prospectus Supplement (the "Underwriting Agreement"), the
Company has agreed to sell to each of the underwriters named below (the
"Underwriters") and each of the Underwriters has severally agreed to purchase,
the principal amount of Notes set forth opposite its name below:
<TABLE>
<CAPTION>
NAME PRINCIPAL AMOUNT OF NOTES
--------------------------------------------------------------- -------------------------
<S> <C>
J.P. Morgan Securities Inc. ................................... $
CS First Boston Corporation....................................
Salomon Brothers Inc...........................................
-------------------------
Total................................................ $ 150,000,000
===================
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Notes, if any are
taken.
The Company has been advised by the Underwriters that they initially
propose to offer the Notes directly to the public at the public offering price
set forth on the cover page of this Prospectus Supplement and to certain dealers
at such price less a concession not in excess of . % of the principal
amount of the Notes. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of . % of the principal amount of the Notes on
sales to certain other dealers. After the initial public offering, the public
offering price and such concessions to dealers may be changed by the
Underwriters.
The Notes are a new issue of securities with no established trading market.
The Company has been advised by the Underwriters that the Underwriters intend to
make a market for the Notes, but are not obligated to do so and may discontinue
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Notes.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act of 1933, as
amended, or to contribute to payments which the Underwriters may be required to
make in respect thereof.
In the ordinary course of their respective businesses, the Underwriters and
their affiliates have engaged, are engaging and may in the future engage, in
commercial banking and investment banking transactions with the Company and its
affiliates.
S-12
<PAGE> 13
C. R. BARD, INC.
LOGO DEBT SECURITIES
------------------------
C. R. Bard, Inc. (the "Company") may offer from time to time unsecured debt
securities ("Debt Securities") consisting of debentures, notes and/or other
evidences of unsecured indebtedness in one or more series, or any combination of
the foregoing, at an aggregate initial offering price not to exceed
$200,000,000, or its equivalent if some or all of the Debt Securities are
denominated in one or more foreign currencies, at prices and on terms to be
determined at or prior to the time of sale in light of market conditions at the
time of sale.
Specific terms of the particular Debt Securities in respect of which this
Prospectus is being delivered will be set forth in one or more accompanying
Prospectus Supplements (each a "Prospectus Supplement"), together with the terms
of the offering of the Debt Securities and the initial price and the net
proceeds to the Company from the sale thereof. The Prospectus Supplement will
set forth with regard to the particular Debt Securities, without limitation, the
following: the specific designation, aggregate principal amount, authorized
denomination, maturity, rate or method of calculation of interest and dates for
payment thereof, any exchangeability, conversion, redemption, prepayment or
sinking fund provisions, the currency or currencies or currency unit or currency
units in which principal, premium, if any, or interest, if any, is payable, any
modifications of or additions to the covenants described in this Prospectus and
any other specific terms thereof. The amounts payable by the Company in respect
of Debt Securities may be calculated by reference to the value, rate or price of
one or more specified commodities, currencies or indices to the extent set forth
in the Prospectus Supplement. The Prospectus Supplement will also contain
information, where applicable, about certain United States federal income tax
considerations relating to the Debt Securities covered by the Prospectus
Supplement.
The Company may sell the Debt Securities directly, through agents
designated from time to time or through underwriters or dealers. If any agents
of the Company or any underwriters or dealers are involved in the sale of the
Debt Securities, the names of such agents, underwriters or dealers, any
applicable commissions and discounts, and the net proceeds to the Company will
be set forth in the applicable Prospectus Supplement. See "Plan of Distribution"
for possible indemnification arrangements for agents, underwriters and dealers.
------------------------
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.
------------------------
This Prospectus may not be used to consummate sales of
Debt Securities unless accompanied by a Prospectus Supplement.
The date of this Prospectus is November 14, 1996.
<PAGE> 14
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THE OFFERING DESCRIBED HEREIN, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR BY ANY UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS
PROSPECTUS OR CHANGE IN THE AFFAIRS OF THE COMPANY AT ANY TIME SUBSEQUENT TO THE
DATE HEREOF.
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 Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
at 7 World Trade Center, 13th Floor, New York, NY 10048 and Suite 1400, 500 West
Madison Street, Chicago, Illinois 60661. Copies of such material can be obtained
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such material may also be accessed
electronically by means of the Commission's home page on the Internet at
http://www.sec.gov. The Company's common stock is listed on the New York Stock
Exchange, and reports and other information herein can also be inspected at the
office of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
The Company has filed a registration statement on Form S-3 (herein,
together with all amendments and exhibits, referred to as the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Debt Securities being offered pursuant to this Prospectus.
This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. The Registration Statement may be
inspected and copied at the public reference facilities maintained by the
Commission at the addresses set forth in the preceding paragraph. Statements
contained herein concerning the provisions of any documents are not necessarily
complete and, in each instance that a copy of such document has been filed as an
exhibit to the Registration Statement or otherwise filed with the Commission,
reference is made to the copy so filed. Each such statement is qualified in its
entirety by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents have been filed by the Company with the Commission
(File No. 1-06926) and are hereby incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the year ended December
31, 1995 (which incorporates by reference certain information from the
Company's Proxy Statement relating to the 1996 Annual Meeting of
Shareholders);
(2) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31 and June 30, 1996; and
(3) The Company's Current Report on Form 8-K dated September 16, 1996, as
amended.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated herein by
reference. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus and the Registration Statement of which it is a
part to the extent that a statement contained herein or in any
2
<PAGE> 15
other subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus or such Registration
Statement.
The Company undertakes to provide without charge to each person to whom a
copy of this Prospectus has been delivered, upon written or oral request of such
person, a copy of any or all of the documents which have been or may be
incorporated herein by reference, other than exhibits to such documents (unless
such exhibits are specifically incorporated by reference into such documents).
Requests for such copies should be directed to C. R. Bard, Inc., 730 Central
Avenue, Murray Hill, New Jersey 07974, Attention: Investor Relations Department
(telephone: (908) 277-8000).
THE COMPANY
The Company is a leading multinational developer, manufacturer and marketer
of health care products, and a pioneer in the development of single use medical
products for standardized procedures. The Company designs and manufactures
medical, surgical, diagnostic and patient care devices which it markets
worldwide to hospitals, individual health care professionals, extended care
facilities and alternate site facilities.
Cardiovascular. Bard's line of cardiovascular products includes balloon
angioplasty catheters, steerable guidewires, guide catheters and inflation
devices; angiography catheters and accessories; introducer sheaths;
electrophysiology products including cardiac mapping and electrophysiology
laboratory systems, and diagnostic and temporary pacing electrode catheters;
cardiopulmonary support systems; and blood oxygenators and related products used
in open-heart surgery.
Urological. Bard offers a complete line of urological products including
Foley catheters, procedural kits and trays and related urine monitoring and
collection systems; biopsy and other cancer monitoring and detection products;
ureteral stents; and specialty devices for incontinence, ureteroscopic
procedures and stone removal.
Surgical. Bard's surgical products include specialty access catheters and
ports; implantable blood vessel replacements; fabrics and meshes for vessel and
hernia repair; surgical suction, irrigation and drainage devices;
gastroenterological products, irrigation devices for orthopaedic and
laparoscopic procedures; laparoscopic accessories; blood management devices and
products for wound management and skin care.
The principal executive offices of the Company are located at 730 Central
Avenue, Murray Hill, New Jersey 07974. The telephone number is (908) 277-8000.
3
<PAGE> 16
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of
the Company for the periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED JUNE 30, ------------------------------------
1996 1995 1994 1993 1992 1991
-------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges............... 4.08* 4.89 5.46 6.41 7.00 5.12
</TABLE>
- ---------------
* During the six months ended June 30, 1996, the Company recorded (1) a credit
of $2,500,000 for the elimination of a contractual agreement which previously
had been accrued, (2) $9,900,000 of income related to royalties on angioplasty
catheter balloon technology received on sales for prior periods and charges of
$31,000,000 ($16,800,000 net of tax) related to the writedown of assets and
(3) miscellaneous charges amounting to $6,000,000 primarily related to legal
settlements. Excluding the effects of these unusual items, for the six months
ended June 30, 1996 earnings before taxes would have been $74,200,000 and the
ratio of earnings to fixed charges would have been 5.62.
For purposes of calculating the ratio of earnings to fixed charges,
earnings consist of income from continuing operations before income taxes and
fixed charges (excluding capitalized interest) but excludes undistributed
earnings of less than 50% owned companies carried at equity. Fixed charges
consist of interest on indebtedness, whether expensed or capitalized, and the
portion of rental expense the Company believes to be representative of interest.
USE OF PROCEEDS
Except as may otherwise be disclosed in an applicable Prospectus
Supplement, the net proceeds to the Company from the sale of the Debt Securities
offered hereby are expected to be used for general corporate purposes, which may
include financing capital expenditures and working capital requirements, stock
repurchases, acquisitions or repayment or refinancing of existing indebtedness.
Pending application, proceeds may be invested in short-term, marketable
securities.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be unsecured obligations issued under an Indenture
(the "Indenture"), between the Company and The Chase Manhattan Bank, as Trustee
(the "Trustee"). The following summaries do not purport to be complete and are
subject to the detailed provisions of the Indenture, a copy of which is filed as
an exhibit to the Registration Statement. Wherever particular provisions of the
Indenture or terms defined therein are referred to, such provisions are
incorporated by reference as part of the statements made herein, and such
statements are qualified in their entirety by such reference to the provisions
of the Indenture. Capitalized terms used below and not otherwise defined are
used as defined in the Indenture. Section references are to the Indenture.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provides that the Debt Securities
may be issued from time to time in one or more series. The Debt Securities will
rank equally with all other unsecured and unsubordinated obligations of the
Company. Except as described under "-- Certain Restrictions on the Company," the
Indenture does not limit other indebtedness or securities which may be incurred
or issued by the Company or any of its subsidiaries or contain financial or
similar restrictions on the Company or any of its subsidiaries. The Company's
rights and the rights of its creditors, including holders of Debt Securities, to
participate in any distribution of assets of any subsidiary of the Company upon
the subsidiary's liquidation or reorganization or otherwise are effectively
subordinated to the claims of the subsidiary's creditors, except to the extent
that the Company or any of its creditors may itself be a creditor of that
subsidiary.
4
<PAGE> 17
Reference is made to the applicable Prospectus Supplement for the following
terms of and information relating to the Debt Securities offered thereby (the
"Offered Debt Securities"): (i) the designation of the Offered Debt Securities;
(ii) the aggregate principal amount of the Offered Debt Securities; (iii) the
date or dates on which principal of, and premium, if any, on, the Offered Debt
Securities will be payable; (iv) the rate or rates (which may be fixed or
variable) at which the Offered Debt Securities shall bear interest, if any, or
the method by which such rate or rates shall be determined, the basis on which
such interest, if any, shall be calculated if other than a 360-day year
consisting of twelve 30-day months, the date or dates from which such interest,
if any, will accrue and on which such interest, if any, will be payable and the
related record dates; (v) if other than the offices of the Trustee, the place
where the principal of, and premium, if any, and interest, if any, on, the
Offered Debt Securities will be payable; (vi) any redemption, repayment or
sinking fund provisions; (vii) if other than denominations of $1,000 or
multiples thereof, the denominations in which the Offered Debt Securities will
be issuable; (viii) if other than the principal amount thereof, the portion of
the principal amount due upon acceleration; (ix) if other than U.S. dollars, the
currency or currencies or currency unit or currency units in which the Offered
Debt Securities will be denominated and in which principal of, and premium, if
any, and interest, if any, on, the Offered Debt Securities will or may be
payable; (x) any index used to determine the amount of payments or principal of,
and premium, if any, and interest, if any, on, the Offered Debt Securities; (xi)
the terms and conditions, if any, pursuant to which the Offered Debt Securities
may be converted or exchanged for other securities of the Company or any other
person; (xii) whether the Offered Debt Securities shall be issued in the form of
one or more Global Securities; (xiii) the identity of any trustees,
depositaries, authenticating or paying agents, transfer agents or registrars
with respect to the Offered Debt Securities and (xiv) any other specific terms
of the Offered Debt Securities (Section 2.3).
The Debt Securities will be issued as registered securities either in
certificated form or in the form of one or more global securities under a
book-entry system, as specified in the accompanying Prospectus Supplement. See
"-- Book-Entry System."
Unless otherwise specified in the applicable Prospectus Supplement,
principal and premium, if any, will be payable, and the Debt Securities will be
transferable and exchangeable without any service charge, at the office of the
Trustee. However, the Company may require payment of the sum sufficient to cover
any tax or other governmental charge, payable in connection with any such
transfer or exchange (Sections 2.8 and 3.2).
Unless otherwise specified in the applicable Prospectus Supplement,
interest on any series of Debt Securities will be payable on the interest
payment dates set forth in the applicable Prospectus Supplement to the persons
in whose names the Debt Securities are registered at the close of business on
the related record date and will be paid, at the option of the Company, by wire
transfer or by checks mailed to such persons (Sections 2.7 and 3.1).
If the Debt Securities are issued as Original Issue Discount Securities
(bearing no interest or interest at a rate which at the time of issuance is
below market rates) to be sold at a substantial discount below their stated
principal amount, the material United States federal income tax consequences and
other special considerations applicable to such Original Issue Discount
Securities will be generally described in the applicable Prospectus Supplement.
If any Debt Securities are sold for any foreign currency or currency unit
or if the principal of, or premium, if any, or interest, if any, on, any Debt
Securities is payable in any foreign currency or currency unit, the
restrictions, elections, tax consequences, specific terms and other information
with respect to such Debt Securities and such foreign currency or currency unit
will be set forth in the Prospectus Supplement relating thereto.
Unless otherwise described in the applicable Prospectus Supplement, there
are no covenants or provisions contained in the Indenture which afford the
holders of the Debt Securities protection in the event of a highly-leveraged
transaction involving the Company.
5
<PAGE> 18
BOOK-ENTRY SYSTEM
If so specified in the applicable Prospectus Supplement, Debt Securities of
any series may be issued under a book-entry system in the form of one or more
global securities (each a "Global Security"). Each Global Security will be
deposited with, or on behalf of, a depositary, which, unless otherwise specified
in the applicable Prospectus Supplement, will be The Depository Trust Company,
New York, New York (the "Depositary"). The Global Securities will be registered
in the name of the Depositary or its nominee.
The Depositary has advised the Company that the Depositary is a limited
purpose trust company organized under the laws of the State of New York, 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 Depositary was created
to hold securities of its participants and to facilitate the clearance and
settlement of securities transactions among its participants through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. The Depositary's participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations, some of which (and/or
representatives of which) own the Depositary. Access to the Depositary's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly.
Upon the issuance of a Global Security, the Depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the Debt Securities represented by such Global Security to the accounts of
participants. The accounts to be credited will be designated by the
underwriters, dealers or agents, if any, or by the Company, if such Debt
Securities are offered and sold directly by the Company. Ownership of beneficial
interests in a Global Security will be limited to participants or persons that
may hold interests through participants. Ownership of beneficial interests by
participants in a Global Security will be shown on, and the transfer of that
ownership interest will be effected only through, records maintained by the
Depositary or its nominee (with respect to interests of participants) and on the
records of participants (with respect to interests of persons other than
participants). The laws of some jurisdictions may require that certain
purchasers of securities take physical delivery of such securities in
certificated form. Such laws may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depositary or its nominee is the registered owner of a
Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Debt Securities represented by such
Global Security for all purposes under the Indenture. Except as set forth below,
owners of beneficial interests in such Global Security will not be entitled to
have the Debt Securities represented thereby registered in their names, will not
receive or be entitled to receive physical delivery of certificates representing
the Debt Securities and will not be considered the owners or holders thereof
under the Indenture. Accordingly, each person owning a beneficial interest in
such Global Security must rely on the procedures of the Depositary and, if such
person is not a participant, on the procedures of the participant through which
such person owns its interest, to exercise any rights of a holder under the
Indenture.
Payment of principal of, and premium, if any, and interest, if any, on,
Debt Securities represented by a Global Security will be made to the Depositary
or its nominee, as the case may be, as the registered owner and holder of the
Global Security representing such Debt Securities. None of the Company, the
Trustee, any paying agent or registrar for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Security
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Company expects that the Depositary or its nominee, as the case may be,
upon receipt of any payment of principal, premium or interest in respect of a
Global Security, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Security as shown on the records of the Depositary or its
nominee. The Company also expects that payments by participants to owners of
beneficial interests in such Global Security held through such participants will
be governed by standing instructions and customary practices, as is now the case
with
6
<PAGE> 19
securities held for the accounts of customers registered in "street name," and
will be the responsibility of such participants.
A Global Security may not be transferred except as a whole by the
Depositary to its nominee or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or its nominee to a
successor of the Depositary or a nominee of such successor. If the Depositary
for a Global Security is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by the Company within 90
days, the Company will issue Debt Securities in certificated form in exchange
for all of the Global Securities representing such Debt Securities. In addition,
the Company may at any time and in its sole discretion determine not to have any
Debt Securities represented by one or more Global Securities and, in such event,
will issue Debt Securities in certificated form in exchange for all of the
Global Securities representing such Debt Securities. Further, if the Company so
specifies with respect to the Debt Securities of a series, an owner of a
beneficial interest in a Global Security representing Debt Securities of such
series may, on terms acceptable to the Company and the Depositary, receive Debt
Securities of such series in certificated form. In any such instance, an owner
of a beneficial interest in a Global Security will be entitled to physical
delivery in certificated form of Debt Securities of the series represented by
such Global Security equal in principal amount to such beneficial interest and
to have such Debt Securities registered in its name (Section 2.8).
CERTAIN RESTRICTIONS ON THE COMPANY
Limitations on Liens
So long as any Debt Securities remain outstanding, the Company covenants
that it will not, nor will it permit any Domestic Subsidiary to, incur, issue,
assume or guarantee any Debt secured by any Mortgage on any Principal Property,
or upon shares of stock or Debt of any Domestic Subsidiary, without effectively
providing that the Debt Securities shall be secured equally and ratably with (or
prior to) such secured Debt, so long as such secured Debt shall be so secured.
The foregoing restrictions shall not apply to Debt secured by:
(i) Mortgages on property, shares of stock or Debt of any corporation
existing at the time such corporation became a Domestic Subsidiary or
merged or consolidated with or into the Company or any of its Subsidiaries,
or arising thereafter pursuant to contractual commitments entered into
prior to and not in contemplation of such corporation's becoming a Domestic
Subsidiary or merging or consolidating with or into the Company or any of
its Subsidiaries;
(ii) Mortgages in favor of the Company or any Domestic Subsidiary;
(iii) Mortgages in favor of the United States of America or any state
thereof or any political subdivision thereof, or in favor of any foreign
country or any political subdivision thereof, to secure partial, progress,
advance or other payments pursuant to any contract or statute and any other
Mortgages incurred or assumed in connection with the issuance of any
industrial revenue or private activity bonds;
(iv) Mortgages on property, shares of stock or Debt existing at the
time of acquisition thereof or securing all or any portion of the purchase
price thereof or securing all or any portion of the cost of construction or
alteration of or improvement on any property that are created, or assumed
contemporaneously with, or within 120 days after, such acquisition or
completion of such construction or improvement;
(v) Mortgages existing on the first date on which a Debt Security is
authenticated by the Trustee under the Indenture or provided for under the
terms of agreements existing on such date;
(vi) Mortgages securing judgment or appeal bonds in respect of amounts
being contested in good faith pursuant to appropriate proceedings;
(vii) Mortgages incurred or assumed in connection with taxes,
assessments, governmental changes or claims which are not delinquent or
which are being contested in good faith pursuant to appropriate
proceedings;
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(viii) Mortgages arising by operation of law pursuant to Section
107(1) of the Federal Comprehensive Environmental Response, Compensation
and Liability Act or any similar state law which do not secure any single
obligation in an amount exceeding $10 million; and
(ix) extensions, renewals or replacements (or successive extensions,
renewals or replacements), as a whole or in part, of any Mortgage referred
to in the foregoing clauses (i) to (viii), inclusive (Section 3.6). See
"-- Exempted Debt" below.
Exempted Secured Debt
The Indenture provides that, notwithstanding the foregoing provisions, the
Company may, and may permit Domestic Subsidiaries to, incur, issue, assume or
guarantee Debt secured by Mortgages not excepted as provided above without
equally and ratably securing the Debt Securities; provided, however, that after
so securing such Debt, the aggregate of all such secured Debt plus all
Attributable Debt of the Company and its Domestic Subsidiaries in respect of
sale and leaseback transactions would not exceed 10% of the Company's
Consolidated Net Worth, as set forth in the most recent quarterly balance sheet
of the Company and its consolidated subsidiaries (Section 3.6).
Limitations on Sales and Leasebacks
The Company covenants that it will not, nor will it permit any Domestic
Subsidiary to, enter into any arrangement with any lender or investor providing
for the leasing by the Company or any Domestic Subsidiary for a period,
including renewals, in excess of five years of any Principal Property which has
been or is to be sold or transferred to such lender or investor, unless (i) the
Company or such Domestic Subsidiary could create Debt secured by a Mortgage on
the Principal Property to be leased in an amount equal to the Attributable Debt
in such arrangement without equally and ratably securing the Debt Securities or
(ii) the Company shall apply an amount equal to the greater of the net proceeds
of the sale or the fair market value of the Principal Property at the time of
entering into such arrangement to the retirement or repayment (other than at
maturity or pursuant to a mandatory sinking fund or mandatory redemption
provision) of Funded Debt (defined as indebtedness for money borrowed maturing
more than 12 months after the date of the most recent quarterly balance sheet of
the Company and its consolidated subsidiaries), subject to certain exceptions
set forth in the Indenture (Section 3.7).
Consolidation; Merger; Sale of Assets
The Company covenants that it will not merge or consolidate with any other
corporation or sell or convey all or substantially all of its assets to any
Person, unless (i) either the Company shall be the continuing corporation or the
successor corporation or the Person which acquires substantially all of the
assets of the Company shall be a corporation or entity organized under the laws
of the United States or any state thereof and shall expressly assume the
obligations of the Company under the Indenture and the Debt Securities and (ii)
the Company or such successor corporation or entity, as the case may be, shall
not, immediately after such merger or consolidation, or such sale or conveyance,
be in default in the performance of any covenants or conditions of the Indenture
(Section 9.1).
CERTAIN DEFINITIONS
The term "Attributable Debt" as defined in the Indenture means the total
net amount of rent required to be paid under a lease for the remaining term of
such lease, discounted at the then-current weighted average rate per annum borne
by the Debt Securities then Outstanding compounded semi-annually; provided,
however, that for the purposes of limitations on the Company and its Domestic
Subsidiaries there shall not be any Attributable Debt in respect of a sale and
leaseback transaction if (i) such sale and leaseback is entered into in
connection with the issuance of industrial revenue or private activity bonds;
(ii) the sale or transfer of the Principal Property leased pursuant to such sale
and leaseback is made within a specified period after the later of its
acquisition or construction; (iii) the Company or Domestic Subsidiary applies an
amount equal to the net proceeds of the sale or transfer of a Principal Property
leased pursuant to such sale and leaseback to
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investment in another Principal Property within one year prior to or subsequent
to such sale or transfer; (iv) such sale and leaseback was entered into prior to
the date the Person entering into such sale and leaseback, if other than the
Company, (a) became a Domestic Subsidiary, (b) was merged into or consolidated
with the Company or a Domestic Subsidiary or (c) sold or otherwise disposed of
its properties substantially as an entirety to the Company or a Domestic
Subsidiary; or (v) such sale and leaseback transaction is entered into between
the Company and a Domestic Subsidiary or between Domestic Subsidiaries.
The term "Consolidated Net Worth" as defined in the Indenture means, with
respect to any Person as of any date, all amounts that would be included under
stockholders' equity on a consolidated balance sheet of such Person determined
in accordance with generally accepted accounting principles.
The term "Debt" as defined in the Indenture means any notes, bonds,
debentures or other indebtedness for money borrowed.
The term "Domestic Subsidiary" as defined in the Indenture means a
subsidiary of the Company other than one which (i) (a) neither transacts any
substantial portion of its business nor regularly maintains any substantial
portion of its fixed assets within the United States, or (b) is engaged
primarily in financing the operations of the Company or its subsidiaries, or
both, outside the United States and (ii) does not own any subsidiary of the
Company other than a subsidiary described in the preceding clause (i).
The term "Mortgage" as defined in the Indenture means any mortgage, pledge
or lien securing any Debt.
The term "Principal Property" as defined in the Indenture means any
manufacturing plant located within the United States which is owned or leased by
the Company or any Domestic Subsidiary, the gross book value of which exceeds
1 1/2% of the Company's Consolidated Net Worth, other than any such plant or
portion thereof which, in the opinion of the Board of Directors of the Company,
is not of material importance to the total business conducted by the Company and
its subsidiaries as an entirety.
EVENTS OF DEFAULT
An Event of Default with respect to any series of Debt Securities is
defined in the Indenture as being: (i) default for 30 days in payment of
interest on such series; (ii) default in any payment of the principal of, or
premium, if any, on, any Debt Security of such series either at maturity, upon
redemption, by declaration or otherwise; (iii) default in payment of any sinking
fund installment on any Debt Security of such series; (iv) default by the
Company in the performance of any other of the covenants or agreements with
respect to such series which shall not have been remedied for a period of 90
days after notice; (v) certain events of bankruptcy, insolvency or
reorganization of the Company or (vi) any other Event of Default provided in a
supplemental indenture or resolution of the Board of Directors under which such
series of Debt Securities is issued or in the form of Debt Security for such
series. No Event of Default with respect to any particular series of Debt
Securities necessarily constitutes an Event of Default with respect to any other
series of Debt Securities. In case an Event of Default described in (i), (ii),
(iii), (iv) or (vi) (if such Event of Default described in (iv) or (vi) is with
respect to less than all series of Debt Securities then Outstanding) above shall
occur and be continuing with respect to any series of Debt Securities, the
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Debt Securities of such series then Outstanding (each such series acting as a
separate class) may declare the principal (or, in the case of discounted Debt
Securities, the amount specified in the terms thereof) of the Debt Securities of
such series and the interest accrued thereon, if any, to be due and payable. In
case an Event of Default described in (iv), (v) or (vi) (if such Event of
Default described in (iv) or (vi) is with respect to all series of Debt
Securities then Outstanding) above shall occur and be continuing, the Trustee or
the Holders of not less than 25% in aggregate principal amount of all Debt
Securities then Outstanding (treated as one class) may declare the principal
(or, in the case of discounted Debt Securities, the amount specified in the
terms thereof) of all Outstanding Debt Securities and the interest accrued
thereon, if any, to be due and payable (Section 5.1). Any Event of Default with
respect to a particular series of Debt Securities may be waived by the Holders
of a majority in aggregate principal amount of the Outstanding Debt Securities
of such series (or of all the Outstanding Debt Securities, as the
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case may be), except in each case a failure to pay the principal of, or premium,
if any, or interest on, such Debt Security and subject to certain exceptions set
forth in the Indenture (Section 5.10).
The Holders of a majority in principal amount of the Debt Securities of any
series then Outstanding shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee under
the Indenture; provided, that such Holders shall have offered to the Trustee
reasonable indemnity against expenses and liabilities and subject to certain
exceptions set forth in the Indenture (Sections 5.6, 5.9 and 6.2). The Indenture
requires the annual filing by the Company with the Trustee of a certificate as
to the absence of certain defaults under the Indenture (Section 3.5).
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than 66 2/3% in aggregate principal
amount of the Debt Securities then Outstanding of all series affected by a
supplement to the Indenture (voting as one class), to supplement the Indenture
or any supplemental indenture or modify the rights of the Holders of the Debt
Securities, provided, that no such supplement or modification shall (i) extend
the final maturity of any Debt Security or reduce the principal amount thereof,
reduce the rate or extend the time of payment of interest thereon, reduce any
amount payable on redemption thereof or change the currency in which the Debt
Security is payable, or reduce the amount of an Original Issue Discount Security
payable upon acceleration or the amount provable in bankruptcy, or impair or
affect any Holder's right to institute suit for payment or right of repayment or
(ii) reduce the aforesaid percentage of Debt Securities of any series, in each
case without the consent of the Holders affected thereby (Section 8.2).
The Indenture also contains provisions permitting the Company and the
Trustee to enter into supplemental indentures without the consent of the Holders
of any series of Debt Securities to (i) convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Debt Securities any property or
assets, (ii) evidence the succession of another corporation to the Company,
subject to and upon compliance with the provisions of the Indenture, and the
assumption by such successor corporation of the covenants, agreements and
obligations in the Debt Securities and in the Indenture, (iii) evidence and
provide for a successor Trustee under the Indenture with respect to one or more
series of Debt Securities, (iv) add to the covenants of the Company, (v) cure
any ambiguity or correct or supplement any provision in the Indenture that may
be defective or (vi) establish the form or terms of Debt Securities of any
series (Section 8.1).
DEFEASANCE
The Indenture provides that the Company, at its option, (i) will be
discharged from all obligations in respect of the Debt Securities of a series
(except for certain obligations to register the transfer or exchange of Debt
Securities, replace stolen, lost or destroyed Debt Securities, maintain paying
agencies and hold moneys for payment in trust) or (ii) need not comply with
certain restrictive covenants of the Indenture described under "-- Certain
Restrictions on the Company," in each case if the Company irrevocably deposits
in trust with the Trustee money, or the equivalent in securities of the
government which issued the currency in which the Debt Securities of any then
outstanding series are denominated or securities issued by government agencies
backed by the full faith and credit of such government, which through the
payment of interest thereon and principal thereof in accordance with their terms
will provide money in an amount sufficient to pay all of the principal of
(including any mandatory redemption payments), and premium, if any, and
interest, if any, on, and repurchase obligations, if any, with respect to, the
Debt Securities of such series, on the dates such payments are due in accordance
with terms of such Debt Securities. To exercise either option, the Company is
required to deliver to the Trustee an opinion of independent tax counsel (which
may be counsel to the Company) to the effect that the deposit and related
defeasance would not cause the holders of Debt Securities of such series to
recognize income, gain or loss for United States federal income tax purposes. To
exercise the option described in clause (i) above, such opinion must be based on
a ruling of the Internal Revenue Service, a regulation of the Treasury
Department or a provision of the Internal Revenue Code (Section 10.3).
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CONCERNING THE TRUSTEE
Unless otherwise specified in the applicable Prospectus Supplement, The
Chase Manhattan Bank is the Trustee, paying agent and registrar under the
Indenture.
The Chase Manhattan Bank is a lender and the documentation agent under the
Company's $350 million credit facility and is a lender from time to time to the
Company and its affiliates on an uncommitted basis. In addition, in the ordinary
course of their respective businesses, The Chase Manhattan Bank and its
affiliates have engaged, are engaging and may in the future engage in commercial
banking and investment banking transactions with the Company and its affiliates.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by the laws of the
State of New York.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through underwriters or dealers
and also may sell Debt Securities directly to other purchasers or through
agents. Any such underwriter or agent involved in the offer and sale of Debt
Securities will be named in an applicable Prospectus Supplement.
Underwriters may offer and sell Debt Securities at a fixed price or prices,
which may be changed, or from time to time at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Company may also offer and sell Debt Securities in
exchange for one or more issues of its outstanding debt securities or
exchangeable or convertible debt securities. The Company also may, from time to
time, authorize underwriters acting as the Company's agents to offer and sell
Debt Securities upon the terms and conditions as shall be set forth in any
Prospectus Supplement. In connection with the sale of Debt Securities,
underwriters may be deemed to have received compensation from the Company in the
form of underwriting discounts or commissions and may also receive commissions
from purchasers of Debt Securities for whom they may act as agent. Underwriters
may sell Debt Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions from the purchasers for whom they may act as
agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Debt Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in an applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of Debt Securities may be deemed to
be underwriters, and any discounts and commissions received by them and any
profit realized by them on resale of Debt Securities may be deemed to be
underwriting discounts and commissions, under the Securities Act. Underwriters,
dealers and agents may be entitled, under agreements entered into with the
Company, to indemnification against or contribution toward certain civil
liabilities, including liabilities under the Securities Act, and to
reimbursement by the Company for certain expenses.
If so indicated in an applicable Prospectus Supplement, the Company will
authorize underwriters or dealers acting as the Company's agents to solicit
offers by certain institutions to purchase Debt Securities from the Company
pursuant to Delayed Delivery Contracts ("Contracts") providing for payment and
delivery on the date or dates stated in such Prospectus Supplement. Each
Contract will be for an amount not less than, and the aggregate principal amount
of Debt Securities sold pursuant to Contracts shall not be less nor more than,
the respective amounts stated in such Prospectus Supplement. Institutions with
which Contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutions, but in all cases will be subject
to approval of the Company. Contracts will not be subject to any conditions
except (i) the purchase by an institution of the Debt Securities covered by its
contracts shall not at the time of delivery thereof be prohibited under the laws
of any jurisdiction in the United States to which such institution is subject
and (ii) if any Debt Securities are being sold to underwriters, the Company
shall have sold to such underwriters
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the total principal amount of Debt Securities less the principal amount thereof
covered by Contracts. Agents and underwriters will have no responsibility in
respect of the delivery or performance of Contracts.
All Debt Securities will be a new issue of securities with no established
trading market. Any underwriters or agents to or through whom Debt Securities
are sold by the Company for public offering and sale may make a market in such
Debt Securities, but such underwriters or agents will not be obligated to do so
and may discontinue any market making at any time without notice. No assurance
can be given as to the liquidity of the trading market for any Debt Securities.
Certain of the underwriters or agents and their affiliates may engage in
transactions with, and perform services for, the Company in the ordinary course
of business.
LEGAL MATTERS
The validity of the Debt Securities will be passed upon for the Company by
Richard A. Flink, Vice President and General Counsel of the Company, and Simpson
Thacher & Bartlett (a partnership which includes professional corporations), New
York, New York, who will rely as to all matters of New Jersey law upon the
opinion of Mr. Flink. Mr. Flink is paid a salary by the Company, is a
participant in various employee benefit plans offered to employees of the
Company generally and owns and has options to purchase shares of common stock of
the Company.
Certain legal matters in connection with the offering of the Debt
Securities will be passed upon for any underwriters or agents by Davis Polk &
Wardwell, New York, New York, who will rely as to all matters of New Jersey law
upon the opinion of Mr. Flink.
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in this Prospectus and elsewhere in the Registration Statement to the
extent and for the periods indicated in their report have been audited by Arthur
Andersen LLP, independent public accountants, and are incorporated herein in
reliance upon the authority of said firm as experts in accounting and auditing.
The financial statements of IMPRA, Inc. and its subsidiaries as of June 30,
1996 and 1995 and for the years then ended incorporated in this Prospectus by
reference from the Form 8-K of the Company dated September 16, 1996 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
The financial statements of IMPRA Medica SA, a subsidiary of IMPRA, Inc.,
as of June 30, 1996 and 1995 and for the years then ended have been audited by
Firel & Mandaco SA, independent auditors, as stated in their report, which is
filed as an exhibit to the Registration Statement of which this Prospectus is a
part and is hereby incorporated by reference herein, and such report has been so
filed and incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
The financial statements of IMPRA UK Ltd., a subsidiary of IMPRA, Inc., as
of June 30, 1996 and 1995 and for the years then ended have been audited by
Morley & Co., registered auditors and chartered accountants, as stated in their
report, which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part and is hereby incorporated by reference herein, and such
report has been so filed and incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
The financial statements of IMPRA Medica GmbH, a subsidiary of IMPRA, Inc.,
as of June 30, 1996 and 1995 and for the years then ended have been audited by
Seytter, Oesterle & Portugall, independent auditors, as stated in their report,
which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part and is hereby incorporated by reference herein, and such
report has been so filed and incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
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