As filed with the Securities and Exchange Commission on May 20, 1996
REGISTRATION NO. 33-
Post-Effective Amendment No. 1 to REGISTRATION NO. 33-59451
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
Registration Statement and Post-Effective Amendment No. 1 under the
Securities Act of 1933
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DIAMOND SHAMROCK, INC.
(Exact Name of Registrant as specified in its charter)
Delaware 74-2456753
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
9830 Colonnade Boulevard
San Antonio, Texas 78230
(210) 641-6800
(Address, including zip code, and telephone number,
including area code, of Registrant's principal
executive offices)
---------------------
TIMOTHY J. FRETTHOLD, ESQ.
SENIOR VICE PRESIDENT/GROUP EXECUTIVE AND GENERAL COUNSEL
9830 COLONNADE BOULEVARD
San Antonio, Texas 78230
(210) 641-6800
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
-----------------------
Copies to:
ROBERT A. PROFUSEK, ESQ. JOHN B. TEHAN, ESQ.
JONES, DAY, REAVIS & POGUE SIMPSON THACHER & BARTLETT
599 LEXINGTON AVENUE 425 LEXINGTON AVENUE
30TH FLOOR NEW YORK, NEW YORK 10017
NEW YORK, NEW YORK 10022 (212) 455-2000
(212) 326-3800
-------------------- --------------------
Approximate date of commencement of proposed sale to the
public: From time to time after the Registration Statement becomes
effective, as determined by market conditions.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box. [ ]
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, as amended (the "Securities
Act"), other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following
box. [x]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act Registration
Statement number of the earlier effective Registration Statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act Registration Statement number of the
earlier effective Registration Statement for the same offering.[ ]
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of Each Class Amount to Proposed Maximum Proposed Maximum Amount of
Securities to be be Offering Price Aggregate Offering Registration
Registered(1) Registered Per Share Price (4) (5) Fee
(2)(3)(4)
Debt Securities
Preferred Stock,
Par value $.01
Common Stock,
Par value $1.00(6)
Securities Warrants
Total $100,000,000 - $100,000,000 $34,482.76
(1) This Registration Statement also covers (i) Debt Securities, Common Stock,
and Preferred Stock which may be issued upon the exercise of Securities
Warrants, and (ii) such indeterminate amount of securities as may be issued in
exchange for, or upon conversion of, as the case may be, the securities
registered hereunder. Any of the securities registered hereunder may be sold
seperately or as units with other securities registered hereunder.
(2) Not specified as to each class of securities to be registered hereunder
pursuant to General Instruction II.D of Form S-3 under the Securities Act.
(3) The proposed maximum offering price per unit will be determined from time
to time by the Registrant in connection with, and at the time of, the issuance
by the Registrant of the securities registered hereunder.
(4) In United States Dollars or the equivalent thereof in one or more foriegn
currencies or composite currencies, including European Currency units.
(5) Estimated solely for purposes of calculation of the registration fee
pursuant to Rule 457(o) of the Securities Act.
(6) Includes Preferred Stock Purchase Rights ("Rights"). The Rights are
associated with and trade with the Common Stock. See "Preferred Stock-
Preferred Stock Purchase Rights" in the prospectus contained herein. The
value, if any, attributable to the Rights is reflected in the market price
of the Common Stock.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE
UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
In accordance with Rule 429 under the Securities Act, the
Prospectus contained herein also relates to $150,000,000 of unsold
securities covered by Registration Statement No. 33-59451 of the
Registrant.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR
TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF
THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION, OR
SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER
THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED May 20, 1996
PROSPECTUS
$250,000,000
DIAMOND SHAMROCK, INC.
Debt Securities Preferred Stock
Common Stock Securities Warrants
Diamond Shamrock, Inc. (the "Company") may, from time to time,
offer or solicit offers to purchase its (i) secured or unsecured
senior debt securities, (the "Debt Securities"); (ii) warrants to
purchase the Debt Securities (the "Debt Warrants"); (iii) shares of
preferred stock, par value $0.01 per share (the "Preferred Stock");
(iv) warrants to purchase shares of Preferred Stock ("Preferred
Stock Warrants"); (v) shares of common stock, par value $0.01 per
share (the "Common Stock"); and (vi) warrants to purchase shares of
Common Stock ("Common Stock Warrants"), having an aggregate initial
public offering price not to exceed $250,000,000 or the equivalent
thereof in one or more foreign currencies or composite currencies,
including European Currency Units, on terms to be determined at the
time of sale (the Debt Warrants, Preferred Stock Warrants and
Common Stock Warrants being referred to herein collectively as the
"Securities Warrants"). The Debt Securities, Preferred Stock,
Common Stock and Securities Warrants offered hereby (collectively,
the "Offered Securities") may be offered separately or as units
with other Offered Securities, in separate series, in amounts, at
prices, and on terms, to be determined at the time of sale and to
be set forth in a supplement to this Prospectus (a "Prospectus
Supplement").
The specific terms of the Offered Securities in respect of
which this Prospectus is being delivered, including, where
applicable, (i) in the case of Debt Securities, the specific
designation, aggregate principal amount, denominations, maturity,
interest rate (which may be fixed or variable) and time of payment
of interest, if any, coin or currency in which principal, premium,
if any, and interest, if any, will be payable, any terms for
redemption, exchange, or conversion, any terms for sinking fund
payments; (ii) in the case of Preferred Stock, the specific title
and stated value, number of shares, the dividend, liquidation,
exchange, redemption, conversion, voting, and other rights, and the
initial public offering price; (iii) in the case of Common Stock,
the number of shares and the initial public offering price; (iv) in
the case of Securities Warrants, the designation and the number of
securities issuable upon their exercise, the duration, offering
price, exercise price, number and detachability thereof; and (v) in
the case of all Offered Securities, whether such Offered Securities
will be offered separately or as a unit with other Offered
Securities, will be set forth in the accompanying Prospectus
Supplement.
The Prospectus Supplement will also contain information, where
applicable, concerning certain United States federal income tax
considerations relating to, and any listing on a securities
exchange of, the Offered Securities covered by 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 Offered Securities may be sold directly to purchasers or
through underwriters, dealers, or agents. If any underwriters,
dealers, or agents are involved in the sale of any Offered
Securities, their names and any applicable fee, commission, or
discount arrangements will be set forth in the Prospectus
Supplement. The principal amount or number of shares of Offered
Securities, the purchase price thereof, and the net proceeds to the
Company from sales of Offered Securities will be set forth in the
Prospectus Supplement. The net proceeds to the Company of the sale
of Offered Securities will be the purchase price of such Offered
Securities less attributable issuance expenses, including
underwriters', dealers', or agents' compensation arrangements. See
"Plan of Distribution" for indemnification arrangements for
underwriters, dealers, and agents.
This Prospectus may not be used to consummate sales of Offered
Securities unless accompanied by a Prospectus Supplement.
The date of this Prospectus is May , 1996
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 OR
THE PROSPECTUS SUPPLEMENT DELIVERED HEREWITH AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER, DEALER,
OR AGENT. THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY
ANY OFFERED SECURITIES BY ANYONE IN ANY JURISDICTION IN WHICH THE
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON
MAKING THE OFFER OR SOLICITATION IS NOT AUTHORIZED TO DO SO OR TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
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 filed by the Company can be inspected and copied
at the Public Reference Room of the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 and at the public
reference facilities maintained by the Commission at Seven World
Trade Center, Suite 1300, New York, New York 10048 and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such materials can be obtained at prescribed
rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. Documents filed by the
Company can also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005, on which
exchange certain of the Company's securities are listed.
This Prospectus constitutes a part of a Registration Statement
filed by the Company with the Commission under the Securities Act
of 1933, as amended (the "Securities Act"), relating to the
securities offered hereby. This Prospectus omits certain of the
information contained in the Registration Statement, and reference
is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the
Company and the securities offered hereby. Any statements contained
herein concerning the provisions of any document are not
necessarily complete, and in each instance reference is made to the
copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates into this Prospectus by
reference the Company's (i) Annual Report on Form 10-K for the year
ended December 31, 1995 (the "1995 Form 10-K"), filed pursuant to
the Exchange Act, which contains the consolidated financial
statements of the Company and the report thereon of Price
Waterhouse LLP, (ii) Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996, and Current Report on Form 8-K/A, dated
December 14, 1995 and filed with the Commission on February 14,
1996.
All documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14, or 15(d) of the Exchange Act, prior to
the termination of the offering made hereby, shall be deemed
incorporated by reference in this Prospectus and to be a part of
this Prospectus from the date of the filing of such reports.
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 to the
extent that a statement contained herein or in any subsequently
filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain,
without charge, upon written or oral request, a copy of any of the
documents incorporated by reference herein, except for the exhibits
to such documents (other than the exhibits expressly incorporated
in such documents by reference). Requests should be directed to:
Investor Relations, Diamond Shamrock, Inc., P.O. Box 696000, San
Antonio, Texas 78269-6000 (telephone 210-641-6800).
THE COMPANY
Diamond Shamrock, Inc. is the leading independent refiner and
marketer of petroleum products in the southwestern United States,
and the largest convenience store operator and retail marketer of
gasoline in the state of Texas. Its principal activities consist
of crude oil refining, wholesale marketing of petroleum products,
and retail marketing of petroleum products and merchandise through
Company-operated retail outlets. In addition, the Company
processes petrochemicals and is engaged in the marketing,
distribution, and storage of natural gas liquids.
The Company's principal executive offices are located at 9830
Colonnade Boulevard, San Antonio, Texas 78230 (in person); P.O. Box
696000, San Antonio, Texas 78269-6000 (by mail). Its telephone
number is 210-641-6800.
EARNINGS RATIOS
The following table sets forth the ratio of earnings to fixed
charges and the ratio of earnings to combined fixed charges and
preferred stock dividends for the three-month periods ended March
31, 1996 and 1995 and for each of the years in the five-year period
ended December 31, 1995. For purposes of computing such ratios,
earnings consist of income before income taxes and fixed charges,
and fixed charges consist of interest on outstanding debt,
amortization of debt issuance expense, and one-third of rental
payments on operating leases (such amount having been deemed by the
Company to represent the interest portion of such payments).
Three Months
Ended
March 31 Year Ended December 31,
1996 1995 1995 1994 1993 1992 1991
Ratio of Earnings to
Fixed Charges 1.5 1.5 2.0 3.2 2.0 1.7 2.1
Ratio of Earnings to
Combined Fixed Charges
and Preferred Stock
Dividends 1.4 1.4 1.9 2.9 1.8 1.7 2.1
USE OF PROCEEDS
The Offered Securities may be offered by the Company from time
to time when market conditions are determined by the Company to be
favorable. Unless otherwise indicated in the applicable Prospectus
Supplement, the net proceeds from the sale of the Offered
Securities will be added to the Company's funds and used for
general corporate purposes.
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to
which any Prospectus Supplement may relate. The particular terms of
the Debt Securities offered by any Prospectus Supplement (the
"Offered Debt Securities") and the extent, if any, to which such
general provisions do not apply to the Offered Debt Securities will
be described in the Prospectus Supplement relating to such Offered
Debt Securities.
The Debt Securities to which this Prospectus relates will be
issued under an Indenture dated as of December 15, 1989 (the
"Indenture"), between the Company and The First National Bank of
Chicago, as trustee (the "Trustee"), 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. Numerical references in parentheses
below are to sections in the Indenture. Whenever particular
sections or defined terms of the Indenture are referred to, such
sections or defined terms are incorporated herein by reference.
General
The Indenture does not limit the amount of Debt Securities
which may be issued thereunder and provides that Debt Securities
may be issued thereunder from time to time in one or more series up
to the aggregate principal amount which may be authorized from time
to time by the Company. All Debt Securities will be unsecured and
will rank pari passu with all other unsecured unsubordinated
indebtedness of the Company. The Company is primarily a holding
company and the Debt Securities will not be guaranteed by any of
the Company's Subsidiaries. As a result, the right of creditors of
the Company upon its liquidation, reorganization, or otherwise is
necessarily subject to the claims of creditors of the Company's
Subsidiaries, except to the extent that claims of the Company
itself as a creditor of any of its Subsidiaries may be recognized.
Except as described below, the Indenture does not limit the amount
of other indebtedness or securities which may be issued by the
Company.
Reference is made to the Prospectus Supplement relating to the
particular series of Offered Debt Securities offered thereby for
the following terms of such series of Offered Debt Securities: (i)
the designation, aggregate principal amount, and authorized
denominations of such Offered Debt Securities; (ii) the purchase
price of such Offered Debt Securities (expressed as a percentage of
the principal amount thereof); (iii) the date or dates on which
such Offered Debt Securities will mature; (iv) the rate or rates
per annum, if any (which may be fixed or variable), at which such
Offered Debt Securities will bear interest or the method by which
such rate or rates will be determined; (v) the dates on which such
interest will be payable and the record dates for payment of
interest, if any; (vi) the coin or currency in which payment of the
principal of (and premium, if any) or interest, if any, on such
Offered Debt Securities will be payable; (vii) the terms of any
mandatory or optional redemption (including any sinking fund) or
any obligation of the Company to repurchase Offered Debt
Securities; (viii) whether such Offered Debt Securities are to be
issued in whole or in part in the form of one or more temporary or
permanent global Debt Securities ("Global Securities") and, if so,
the identity of the depositary, if any, for such Global Security or
Securities; and (ix) any other additional provisions or specific
terms which may be applicable to that series of Offered Debt
Securities.
Principal, premium, if any, and interest, if any, will be
payable, and the Debt Securities will be transferable or
exchangeable, at the office or agency of the Company maintained for
such purposes in the Borough of Manhattan, The City of New York,
provided that payment of interest on any Debt Securities may, at
the option of the Company, be made by check mailed to the
registered holders. Interest, if any, will be payable on any
Interest Payment Date to the persons in whose names the Debt
Securities are registered at the close of business on the record
date with respect to such Interest Payment Date (Sections 305, 307
and 1202).
Unless otherwise indicated in the Prospectus Supplement
relating thereto, the Debt Securities will be issued only in fully
registered form, without coupons, in denominations of $1,000 or any
integral multiple thereof. No service charge will be made for any
registration of transfer or exchange of the Debt Securities, but
the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith
(Sections 302 and 305).
Some or all of the Debt Securities may be issued as discounted
Debt 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. Federal
income tax consequences and other special considerations applicable
to any such discounted Debt Securities will be described in the
Prospectus Supplement relating thereto.
The Indenture does not contain provisions permitting the
holders of the Debt Securities to require prepayment in the event
of a change in the management or control of the Company, or in the
event the Company enters into one or more highly leveraged
transactions, nor are any such events deemed to be events of
default under the terms of the Indenture. Should the terms of any
note representing any Offered Debt Securities contain such
provisions, such provisions will be described in the applicable
Prospectus Supplement.
Global Securities
The Debt Securities of a series may be issued in whole or in
part in the form of one or more Global Securities that will be
deposited with or on behalf of a depositary located in the United
States (a "Depositary") identified in the Prospectus Supplement
relating to such series.
The specific terms of the depositary arrangements with respect
to any Debt Securities of a series will be described in the
Prospectus Supplement relating to such series. The Company
anticipates that the following provisions will apply to all
depositary arrangements.
Unless otherwise specified in an applicable Prospectus
Supplement, Debt Securities which are to be represented by a Global
Security to be deposited with or on behalf of a Depositary will be
represented by a Global Security registered in the name of such
depositary or its nominee. Upon the issuance of a Global Security
in registered form, the Depositary for such Global Security 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 institutions that have
accounts with such Depositary or its nominee ("participants"). The
accounts to be credited shall be designated by the underwriters or
agents of such Debt Securities or by the Company, if such Debt
Securities are offered and sold directly by the Company. Ownership
of beneficial interests in such Global Securities will be limited
to participants or persons that may hold interests through
participants. Ownership of beneficial interests by participants in
such Global Securities will be shown on, and the transfer of that
ownership interest will be effected only through, records
maintained by the Depositary or its nominee for such Global
Security. Ownership of beneficial interests in Global Securities
by persons that hold through participants will be shown on, and the
transfer of that ownership interest within such participant will be
effected only through, records maintained by such participant. The
laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to transfer
beneficial interests in a Global Security.
So long as the Depositary for a Global Security in registered
form, or its nominee, is the registered owner of such Global
Security, such 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 governing such Debt Securities. Except as set forth
below, owners of beneficial interests in such Global Security will
not be entitled to have Debt Securities of the series represented
by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of Debt Securities of
such series in definitive form, and will not be considered the
owners or holders thereof under the Indenture.
Payment of principal of, premium, if any, and any interest on
Debt Securities registered in the name of or held by a Depositary
or its nominee will be made to the Depositary or its nominee, as
the case may be, as the registered owner or the holder of the
Global Security representing such Debt Securities. None of the
Company, the Trustee, any Paying Agent, or the Security 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 for
such Debt Securities or for maintaining, supervising, or reviewing
any records relating to such beneficial ownership interests.
The Company expects that the Depositary for Debt Securities of
a series, upon receipt of any payment of principal, premium, or
interest in respect of a permanent Global Security, will credit
immediately 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. 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 securities held for the accounts of customers in bearer form
or registered in "street name," and will be the responsibility of
such participants. However, the Company has no control over the
practices of the Depositary and/or the participants and there can
be no assurance that these practices will not be changed.
A Global Security may not be transferred except as a whole by
the Depositary for such Global Security to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by such Depositary or any
such nominee to a successor of such Depositary or a nominee of such
successor (Section 304). If a Depositary for Debt Securities of a
series 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 definitive
registered form in exchange for the Global Security or 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 in registered form represented by one or more Global
Securities and, in such event, will issue Debt Securities in
definitive form in exchange for the Global Security or Securities
representing such Debt Securities. In any such instance, an owner
of a beneficial interest in a Global Security will be entitled to
physical delivery in definitive 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.
Limitations on the Company and Certain Subsidiaries
Limitations on Mortgages. The Indenture provides that neither
the Company nor any Subsidiary of the Company will issue, assume,
or guarantee any notes, bonds, debentures, or other similar
evidences of indebtedness for money borrowed ("Debt") secured by
any mortgages, liens, pledges, or other encumbrances ("Mortgages")
upon any asset or any interest it may have therein or of or upon
any stock or indebtedness of any Subsidiary, whether now owned or
hereafter acquired, without effectively providing that all Debt
Securities issued under the Indenture (together with, if the
Company so determines, any other indebtedness or obligation then
existing or thereafter created ranking equally with the Debt
Securities) will be secured equally and ratably with (or prior to)
such Debt so long as such Debt will be so secured, except that this
restriction will not apply to: (i) Mortgages securing the purchase
price or cost of construction of property (or additions,
substantial repairs, alterations, or substantial improvements
thereto if the amount of such Debt does not exceed the cost
thereof), provided such Debt and the Mortgages are incurred within
18 months of the acquisition or completion of construction and full
operation, or the completion of such repairs, alterations, or
improvements, as the case may be; (ii) Mortgages existing on
property at the time of its acquisition by the Company or a
Subsidiary or on the property of a corporation at the time of the
acquisition of such corporation by the Company or a Subsidiary
(including acquisitions through merger or consolidation); (iii)
Mortgages to secure Debt on which the interest payments are exempt
from federal income tax under Section 103 of the Internal Revenue
Code of 1986, as amended (the "Code"); (iv) in the case of a
Subsidiary, Mortgages in favor of the Company or a Subsidiary; (v)
Mortgages existing on the date of the Indenture; (vi) certain
Mortgages incurred in the ordinary course of business and Mortgages
to governmental entities; (vii) Mortgages incurred in connection
with the borrowing of funds if within 120 days such funds are used
to repay Debt in the same principal amount secured by other
Mortgages on assets or receivables having a fair market value (as
determined by the chief financial officer of the Company) at least
equal to the fair market value of the assets or receivables which
secure the new Mortgage; (viii) Mortgages incurred within 90 days
(or any longer period, not in excess of one year, as permitted by
law) after acquisition of the property or equipment subject to such
Mortgage arising solely in connection with the transfer of tax
benefits in accordance with Section 168(f)(8) of the Code (or any
similar provision adopted hereafter); (ix) Mortgages on accounts
receivable of the Company or its Subsidiaries which secure
obligations not exceeding at any time the lesser of 90% of
Consolidated Receivables (as defined below) or $100,000,000,
provided that the dollar limitation of $100,000,000 will increase
at a compounded rate of 10% each April 1, with the first such
increase effective on April 1, 1990 and subsequent increases to be
effective on and as of each succeeding April 1, provided further,
however, that in no event will such dollar limitation exceed
$300,000,000; and (x) any extension, renewal, or replacement of any
Mortgage referred to in the foregoing clauses (i) through (ix),
provided the dollar amount secured is not increased (Section 1205).
Limitations on Sale and Lease-Back Transactions. The
Indenture provides that neither the Company nor any Subsidiary will
enter into any Sale and Lease-Back Transaction with respect to any
asset owned by it with any person (other than the Company or a
Subsidiary) unless either (i) the Company or such Subsidiary would
be entitled, pursuant to the provisions described in clauses (i)
through (x) under "Limitations on Mortgages" above, to incur Debt
secured by a Mortgage on the asset to be leased without equally and
ratably securing the Debt Securities, or (ii) the Company during or
immediately after the expiration of 120 days after the effective
date of such transaction applies to the voluntary retirement of its
Funded Debt an amount equal to the greater of the net proceeds of
the sale of the property leased in such transaction or the fair
market value (as determined by the chief financial officer of the
Company) of the leased property at the time such transaction was
entered into, in each case net of the principal amount of all Debt
Securities delivered under the Indenture (Section 1206).
Exempted Transactions. Notwithstanding the foregoing, the
Company and any one or more Subsidiaries may, without securing the
Debt Securities, issue, assume, or guarantee Debt secured by
Mortgages and enter into Sale and Lease-Back Transactions which
would otherwise be subject to the foregoing restrictions in an
aggregate principal amount which, together with all other such Debt
of the Company and its Subsidiaries secured by Mortgages (not
including Debt permitted to be secured pursuant to clauses (i)
through (x) under "Limitations on Mortgages" above) and the
aggregate Attributable Debt (as defined below) in respect of Sale
and Lease-Back Transactions (not including those permitted as
described under "Limitations on Sale and Lease-Back Transactions"
above), does not exceed 15% of Consolidated Net Tangible Assets (as
defined below) of the Company and its consolidated Subsidiaries
(Section 1207).
Certain Definitions. The term "Consolidated Net Tangible
Assets" at any date means the total assets shown on a consolidated
balance sheet of the Company and its Subsidiaries, prepared in
accordance with generally accepted accounting principles, less (i)
all current liabilities, and (ii) goodwill and like intangibles
included on such balance sheet. The term "Attributable Debt" means
(a) as to any capitalized lease obligations, the Debt carried on
the balance sheet in accordance with generally accepted accounting
principles, and (b) as to any operating leases, the total net
amount of rent required to be paid under such leases during the
remaining term thereof discounted at the rate of 1% per annum over
the weighted average yield to maturity of all Debt Securities
issued and outstanding under the Indenture, including any
outstanding Debt Securities, compounded semi-annually. The term
"Consolidated Receivables" at any date means the aggregate amount
of all accounts receivable of the Company and its Subsidiaries at
the end of the most recent fiscal quarter, as shown on the
consolidated balance sheet of the Company and its Subsidiaries in
respect of such quarter, or in respect of the fiscal year in the
case of the fourth quarter (Section 101).
Events of Default
The following are "Events of Default" under the Indenture with
respect to Debt Securities of any series: (i) failure to pay
principal of or any premium on any Debt Security of that series
when due; (ii) failure to pay any interest on any Debt Security of
that series when due, and the continuation of such failure for 30
days; (iii) failure to deposit any sinking fund payment in respect
of any Debt Security of that series when due; (iv) failure to
perform any other covenant of the Company in the Indenture (other
than a covenant included in the Indenture solely for the benefit of
a series of Debt Securities other than the series), continued for
60 days after written notice as provided in the Indenture; (v)
certain events in bankruptcy, insolvency, or reorganization; (vi)
indebtedness for borrowed money of the Company or any Subsidiary in
excess of $10,000,000 (whether such indebtedness now exists or is
hereafter created) is not paid at final maturity or becomes or is
declared due and payable prior to the date or dates on which such
indebtedness would otherwise have become due and payable as a
result of the occurrence of one or more events of default as
defined in any mortgages, indentures, or instruments under which
such indebtedness may have been issued or by which such
indebtedness may have been secured, and such failure to pay shall
not be cured or such acceleration or accelerations, as the case may
be, shall not be rescinded, annulled, or cured, in any case prior
to the expiration of 30 days after the date such failure to pay or
acceleration or accelerations occurred; and (vii) any other Event
of Default provided with respect to Debt Securities of that series
(Section 501). If any Event of Default with respect to Debt
Securities of any series at any time outstanding occurs and is
continuing, either the Trustee or the Holders of at least 25% in
aggregate principal amount of the outstanding Debt Securities of
that series may declare the principal amount (or, if the Debt
Securities of that series are Discount Securities, such portion of
the principal amount as may be specified in the terms of that
series) of all the Debt Securities of that series to be due and
payable immediately. At any time after a declaration of
acceleration with respect to Debt Securities of any series has been
made, but before a judgment or decree based on acceleration has
been obtained, the Holders of a majority in aggregate principal
amount of outstanding Debt Securities of that series may, under
certain circumstances, rescind and annul such acceleration (Section
502).
The Indenture provides that, subject to the duty of the
Trustee during the continuance of an Event of Default to act with
the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless
such Holders have offered to the Trustee reasonable indemnity
(Section 603). Subject to such provisions for the indemnification
of the Trustee, the Holders of a majority in aggregate principal
amount of the outstanding Debt Securities of any series will have
the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the
Debt Securities of that series (Section 512).
The Company is required to furnish the Trustee annually with
a statement as to the performance by the Company of certain of its
obligations under the Indenture and as to any default in such
performance (Section 1208).
Modification and Waiver
Modifications of and amendments to the Indenture may be made
by the Company and the Trustee with the consent of the Holders of
not less than two-thirds in aggregate principal amount of the
outstanding Debt Securities of each series affected by such
modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the Holder of
each outstanding Debt Security affected thereby, (i) change the
Stated Maturity of the principal of, or any installment of
interest, if any, on, any Debt Security, (ii) reduce the principal
amount of, or any premium or interest on, any Debt Security, (iii)
reduce the amount of principal of Discount Securities payable upon
acceleration of the stated maturity thereof, (iv) change the
currency of payment of principal of, or any premium or interest on,
any Debt Security, (v) impair the right to institute suit for the
enforcement of any payment on or with respect to any Debt Security,
or (vi) reduce the percentage in principal amount of outstanding
Debt Securities of any series, the consent of whose Holders is
required for modification or amendment of the Indenture or for
waiver of compliance with certain provisions of the Indenture or
for waiver of certain defaults (Section 1102).
The Holders of a majority in aggregate principal amount of the
outstanding Debt Securities of each series may, on behalf of all
Holders of Debt Securities of that series, waive any past default
under the Indenture with respect to Debt Securities of that series,
except a default in the payment of principal or any premium or
interest or a covenant or provision that cannot be modified or
amended without the consent of the Holders of each outstanding Debt
Security affected thereby (Section 513).
Consolidation, Merger, Sale, or Lease of Assets
The Company, without the consent of the Holders of any of the
outstanding Debt Securities under the Indenture, may consolidate
with or merge into, or transfer or lease its assets substantially
as an entirety to, any corporation organized under laws of any
domestic jurisdiction, provided that the successor corporation
assumes the Company's obligations on the Debt Securities and that
under the Indenture, after giving effect to the transactions, 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, and that certain other conditions are met (Section
1001).
Defeasance
The Indenture provides that the Company, at its option, (i)
will be discharged from any and all obligations in respect of any
series of Debt Securities (except for certain obligations to
register the transfer or exchange of the Debt Securities; replace
stolen, lost, or mutilated Debt Securities; maintain paying
agencies; and hold money for payment in trust), or (ii) will not be
subject to provisions of the Indenture concerning limitations upon
Mortgages; Sale and Lease-Back Transactions; and consolidation,
merger, and sale of assets, in each case if the Company deposits
with the Trustee, in trust, money or U.S. Government Obligations
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 principal, premium, if any, and interest on
the Debt Securities of such series on the dates such payments are
due in accordance with the terms of such Debt Securities. To
exercise any such option, the Company is required, among other
things, to deliver an opinion of counsel to the Trustee to the
effect that (a) the Company has received from or there has been
published by the Internal Revenue Service a ruling to the effect
that the deposit and related defeasance would not cause the Holders
of such series of Debt Securities to recognize income, gain, or
loss for United States federal income tax purposes and (b) if such
series of Debt Securities are then listed on any national
securities exchange, such Debt Securities would not be delisted
from such exchange as a result of the exercise of such option
(Article Fifteen).
Notices
Notices to Holders will be given by mail to the addresses of
such Holders as they appear in the Security Register (Sections 101,
105).
Governing Law
The Indenture and the Debt Securities will be governed by, and
construed in accordance with, the laws of the State of New York
(Section 111).
Concerning the Trustee
The Trustee has normal banking relationships with the Company.
DESCRIPTION OF CAPITAL STOCK
The following description of the Company's capital stock is
subject to the detailed provisions of the Company's Certificate of
Incorporation (the "Certificate"). These statements do not purport
to be complete and are qualified in their entity by reference to
the terms of the Certificate, a copy of which has been filed as an
exhibit to the Registration Statement of which this Prospectus is
a part.
Under the Certificate, the Company has the authority to issue
25,000,000 shares of Preferred Stock, $.01 par value, and
75,000,000 shares of Common Stock, $.01 par value. As of April 30,
1996, 1,725,000 shares of the Company's 5% Cumulative Convertible
Preferred Stock and 29,258,874 shares of Common Stock were issued,
and no shares of Common Stock were held in treasury. The
outstanding shares of Common Stock and Preferred Stock are fully
paid and nonassessable. As of such date, 1,336,029 shares of
Common Stock were reserved for issuance pursuant to the Company's
1987 and 1990 Long-Term Incentive Plans, and 750,000 shares of the
Company's Series A Junior Participating Preferred Stock, $.01 par
value, were reserved for issuance pursuant to the Rights Agreement
(the "Rights Agreement"), dated March 6, 1990, between the Company
and Society National Bank, as Rights Agent. See "-Preferred Stock
- -- Preferred Stock Purchase Rights." An additional 3,254,716
shares of Common Stock are reserved for issuance upon conversion
of the Company's outstanding 5% Cumulative Convertible Preferred
Stock. See "5% Cumulative Convertible Preferred Stock."
Preferred Stock
The following description of the terms of the Preferred Stock
sets forth certain general terms and provisions of the Preferred
Stock to which a Prospectus Supplement may relate. Specific terms
of any series of Preferred Stock offered by a Prospectus Supplement
will be described in the Prospectus Supplement relating to such
series of Preferred Stock. The description set forth below is
subject to and qualified in its entirety by reference to the
Certificate and the form of Certificate of Designations (the
"Designation") establishing a particular series of Preferred Stock
which will be filed with the Commission in connection with the
offering of such series of Preferred Stock.
General. Under the Certificate, the Board of Directors of the
Company (the "Board of Directors") is authorized, without further
shareholder action, to provide for the issuance of up to 25,000,000
shares of Preferred Stock, in one or more series, and to fix the
designations, terms, and relative rights and preferences, including
the dividend rate, voting rights, conversion rights, redemption and
sinking fund provisions and liquidation values of each such series.
The Company may amend the Certificate from time to time to increase
the number of authorized shares of Preferred Stock. Any such
amendment would require the approval of the holders of a majority
of the outstanding shares of all series of Preferred Stock voting
together as a single class without regard to series. As of the
date of this Prospectus, the Company has one series of Preferred
Stock outstanding.
The Preferred Stock will have the dividend, liquidation,
redemption, conversion, and voting rights set forth below unless
otherwise provided in the Prospectus Supplement relating to a
particular series of Preferred Stock. Reference is made to the
Prospectus Supplement relating to the particular series of the
Preferred Stock offered thereby for specific terms, including, (i)
the title and liquidation preference per share of such Preferred
Stock and the number of shares offered; (ii) the price at which
such Preferred Stock will be issued; (iii) the dividend rate (or
method of calculation), the dates on which dividends shall be
payable and the dates from which dividends shall commence to
accumulate; (iv) any redemption or sinking fund provisions of such
Preferred Stock; (v) any conversion or exchange provisions of such
Preferred Stock; (vi) the voting rights, if any, of such Preferred
Stock; and (vii) any additional dividend, liquidation, redemption,
sinking fund and other rights, preferences, privileges,
limitations, and restrictions of such Preferred Stock. The
Preferred Stock will, when issued, be fully paid and nonassessable.
Dividend Rights. The Preferred Stock will be preferred over
the Common Stock as to payment of dividends. Before any dividends
or distributions on the Common Stock shall be declared and set
apart for payment or paid, the holders or shares of each series of
Preferred Stock shall be entitled to receive dividends (either in
cash, shares of Common Stock or Preferred Stock, or otherwise)
when, as, and if declared by the Board of Directors, at the rate
and on the date or dates as set forth in the Prospectus Supplement.
With respect to each series of Preferred Stock, the dividends on
each share of such series with respect to which dividends are
cumulative shall be cumulative from the date of issue of such share
unless some other date is set forth in the Prospectus Supplement
relating to any such series. Accruals of dividends shall not bear
interest.
Rights Upon Liquidation. The Preferred Stock shall be
preferred over the Common Stock as to assets so that the holders of
each series of Preferred Stock shall be entitled to be paid, upon
the voluntary or involuntary liquidation, dissolution, or winding
up of the Company, and before any distribution is made to the
holders of Common Stock, the amount set forth in the Prospectus
Supplement relating to any such series, but in such case the
holders of such series of Preferred Stock shall not be entitled to
any other or further payment. If upon any such liquidation,
dissolution, or winding up of the Company its net assets shall be
insufficient to permit the payment in full of the respective
amounts to which the holders of all outstanding Preferred Stock are
entitled, the entire remaining net assets of the Company shall be
distributed among the holders of each series of Preferred Stock in
amounts proportionate to the full amounts to which the holders of
each such series are respectively so entitled.
Redemption and Conversion. All shares of any series of
Preferred Stock shall be redeemable to the extent set forth in the
Prospectus Supplement relating to any such series. All shares of
any series of Preferred Stock shall be convertible into shares of
Common Stock or into shares of any other series of Preferred Stock
to the extent set forth in the Prospectus Supplement relating to
any such series.
Voting Rights. All shares of any series of Preferred Stock
shall have the voting rights set forth in the prospectus supplement
relating to any such series.
5% Cumulative Convertible Preferred Stock. In June 1993, the
Company issued 1,725,000 shares of 5% Cumulative Convertible
Preferred Stock, $.01 par value per share (the "5% Preferred
Stock"). Each share of 5% Preferred Stock has a liquidation
preference of $50.00 per share, plus accrued and unpaid dividends
thereon. Cash dividends on the 5% Preferred Stock are cumulative
from the date of original issue at an annual rate of $2.50 per
share and are payable quarterly in arrears. Shares of 5% Preferred
Stock are convertible at any time at the option of the holder into
shares of Common Stock of the Company at a conversion price of
$26.50 per share of Common Stock, which is equivalent to a
conversion rate of approximately 1.8868 shares of Common Stock for
each share of 5% Preferred Stock, subject to adjustment in certain
circumstances.
The shares of 5% Preferred Stock are not redeemable prior to
June 15, 1996. On and after such date and from time to time until
June 14, 2000, the 5% Preferred Stock will be redeemable, in whole
or in part, at the option of the Company, for such number of shares
of Common Stock as are issuable at the conversion price for each
share of 5% Preferred Stock. The Company may exercise this option
only if, for 20 trading days within any period of 30 consecutive
trading days, including the last trading day of such 30 trading-day
period, the closing price of the Company's Common Stock on the New
York Stock Exchange exceeds $34.45, subject to adjustment in
certain circumstances. On and after June 15, 2000, the 5%
Preferred Stock will be redeemable for cash at a redemption price
equivalent to $50 per share, plus accrued and unpaid dividends.
Shares of 5% Preferred Stock are not be entitled to the benefit of
any sinking fund.
Preferred Stock Purchase Rights. 750,000 shares of Series A
Junior Participating Preferred Stock, $.01 par value ("Junior
Preferred Stock"), are reserved for issuance pursuant to the Rights
Agreement. Pursuant to the Rights Agreement, one right (a "Right")
to purchase 1/100th of a share of Junior Preferred Stock
(structured so as to be substantially the equivalent of Common
Stock) is attached to each issued and outstanding share of Common
Stock. The Rights are not exercisable and are attached to, and may
not trade separately from, the Common Stock unless certain change
of control events occur.
Common Stock
The holders of the Company's Common Stock are entitled to one
vote per share on all matters voted on by the stockholders,
including elections of directors, and, except as otherwise required
by law or provided in any resolution adopted by the Board of
Directors of the Company with respect to any series of Preferred
Stock, the holders of such shares will exclusively possess all
voting power. Subject to any preferential rights of any
outstanding series of Preferred Stock, the holders of Common Stock
are entitled to such dividends as may be declared from time to time
by the Board of Directors from funds available therefor, and upon
liquidation are entitled to receive pro rata all assets of the
Company available for distribution to such holders. No holder of
Common Stock has any preemptive right to subscribe to any
securities of the Company of any kind or class. The Company's
Common Stock is listed on the New York Stock Exchange and prices
are reported by the New York Stock Exchange Composite Tape under
the symbol DRM. The Transfer Agent and Registrar of the Company's
Common Stock is KeyCorp Shareholder Services, Inc., Cleveland,
Ohio.
Certain Provisions of the Certificate and By-laws
The Certificate and By-laws of the Company contain certain
provisions which may have the effect of delaying, deferring, or
preventing a change of control of the Company. The Certificate
provides that the Board shall be divided into three classes, with
directors serving three-year terms, and limits the ability of
stockholders to change the number of directors. Special meetings
of the Company's stockholders may only be called by the Board of
Directors or the Chairman of the Board, and any action required or
permitted to be taken by the stockholders of the Company must be
effected at an annual or special meeting of stockholders of the
Company and may not be effected by any consent in writing of such
stockholders. In addition, the Board has generally the authority,
without further action by stockholders, to fix the relative powers,
preferences, and rights of the unissued shares of Preferred Stock.
Provisions which could discourage an unsolicited tender offer or
takeover proposal, such as extraordinary voting, dividend,
redemption, or conversion rights, could be included in such
Preferred Stock. See "-Preferred Stock."
Under the Certificate, holders of Common Stock are entitled to
cumulative voting rights in certain limited circumstances in which
the Company becomes aware that a stockholder of the Company (other
than the Company or a subsidiary of the Company) has become the
beneficial owner, directly or indirectly, of 30% or more of the
outstanding capital stock of the Company entitled to vote generally
in the election of Company directors. Holders of Common Stock are
not otherwise entitled to cumulative voting rights. Under
cumulative voting, a stockholder may multiply the number of shares
owned by the number of directors to be elected, and cast that total
number of votes in any proportion among as many nominees as the
stockholder desires.
The By-laws of the Company contain certain requirements
concerning advance notice of (i) nominations by stockholders of
persons for election to the Board, and (ii) other matters
introduced by stockholders at annual meetings.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of
Debt Securities, Preferred Stock or Common Stock. Securities
Warrants may be issued independently or together with Debt
Securities, Preferred Stock or Common Stock offered by any
Prospectus Supplement and may be attached to or separate from any
such Offered Securities. Each series of Securities Warrants will
be issued under a separate warrant agreement (a "Securities Warrant
Agreement") to be entered into between the Company and a bank or
trust company, as warrant agent (the "Securities Warrant Agent"),
all as set forth in the Prospectus Supplement relating to the
particular issue of Securities Warrants. The Securities Warrant
Agent will act solely as an agent of the Company in connection with
the Securities Warrants and will not assume any obligation or
relationship of agency or trust for or with any holders of
Securities Warrants or beneficial owners of Securities Warrants.
The following summary of certain provisions of the Securities
Warrants does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all provisions of the
Securities Warrant Agreements.
Reference is made to the Prospectus Supplement relating to the
particular issue of Securities Warrants offered thereby for the
terms of such Securities Warrants, including, where applicable: (i)
the designation, aggregate principal amount, currencies,
denominations, and terms of the series of Debt Securities
purchasable upon exercise of Debt Warrants and the price at which
such Debt Securities may be purchased upon such exercise; (ii) the
designation, number of shares, stated value, and terms (including,
without limitation, liquidation, dividend, conversion, and voting
rights) of the series of Preferred Stock purchasable upon exercise
of Preferred Stock Warrants and the price at which such number of
shares of Preferred Stock of such series may be purchased upon such
exercise; (iii) the number of shares of Common Stock purchasable
upon the exercise of Common Stock Warrants and the price at which
such number of shares of Common Stock may be purchased upon such
exercise; (iv) the date on which the right to exercise such
Securities Warrants shall commence and the date on which such right
shall expire (the "Expiration Date"); (v) United States federal
income tax consequences applicable to such Securities Warrants; and
(vi) any other terms of such Securities Warrants. Preferred Stock
Warrants and Common Stock Warrants will be offered and exercisable
for U.S. dollars only. Securities Warrants will be issued in
registered form only. The exercise price for Securities Warrants
will be subject to adjustment in accordance with the applicable
Prospectus Supplement.
Each Securities Warrant will entitle the holder thereof to
purchase such principal amount of Debt Securities or such number of
shares of Preferred Stock or Common Stock at such exercise price as
shall in each case be set forth in, or calculable from, the
Prospectus Supplement relating to the Securities Warrants, which
exercise price may be subject to adjustment upon the occurrence of
certain events as set forth in such Prospectus Supplement. After
the close of business on the Expiration Date (or such later date to
which such Expiration Date may be extended by the Company),
unexercised Securities Warrants will become void. The place or
places where, and the manner in which, Securities Warrants may be
exercised shall be specified in the Prospectus Supplement relating
to such Securities Warrants.
Prior to the exercise of any Securities Warrants to purchase
Debt Securities, Preferred Stock, or Common Stock, holders of such
Securities Warrants will not have any of the rights of holders of
the Debt Securities, Preferred Stock, or Common Stock, as the case
may be, purchasable upon such exercise, including the right to
receive payments of principal of, premium, if any, or interest, if
any, on the Debt Securities purchasable upon such exercise or to
enforce covenants in the applicable Indenture, or to receive
payments of dividends, if any, on the Preferred Stock or Common
Stock purchasable upon such exercise, or to exercise any applicable
right to vote.
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities to which this
Prospectus relates to or for resale to the public through one or
more underwriters, acting alone or in underwriting syndicates led
by one or more managing underwriters, and also may sell such
Offered Securities directly to other purchasers or dealers or
through agents.
The distribution of Offered Securities may be effected from
time to time in one or more transactions at a fixed price or
prices, which may be changed 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. Each Prospectus
Supplement will describe the method of distribution of the Offered
Securities.
In connection with the sale of Offered Securities, such
underwriters, dealers, and agents may receive compensation from the
Company, or from purchasers of Offered Securities for whom they may
act as agents, in the form of discounts, concessions, or
commissions. Underwriters, dealers, and agents that participate in
the distribution of Offered Securities and, in certain cases,
direct purchasers from the Company, may be deemed to be
"underwriters" and any discounts or commissions received by them
and any profit on the resale of Offered Securities by them may be
deemed to be underwriting discounts and commissions under the
Securities Act. Any such underwriters, dealers, or agents will be
identified and any such compensation will be described in the
applicable Prospectus Supplement.
Under agreements which may be entered into by the Company,
underwriters, dealers, and agents who participate in the
distribution of Offered Securities may be entitled to
indemnification by the Company against certain liabilities,
including liabilities under the Securities Act. The place and time
of delivery for Offered Debt Securities in respect of which this
Prospectus is delivered will be set forth in the applicable
Prospectus Supplement.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for
the Company by Timothy J. Fretthold, Esq., Senior Vice
President/Group Executive and General Counsel of the Company, and
for the underwriters, dealers, or other agents by Simpson Thacher
& Bartlett (a partnership which includes professional
corporations), New York, New York. As of April 30, 1996, Mr.
Fretthold beneficially owned 56,588 shares of Common Stock of the
Company, including 29,464 shares which he had the right to acquire
within 60 days through the exercise of employee stock options.
EXPERTS
The financial statements incorporated in this Prospectus by
reference to the 1995 Form 10-K have been so incorporated in
reliance on the report of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in
auditing and accounting.
With respect to the unaudited consolidated financial
information of the Company for the three-month periods ended March
31, 1996 and 1995, incorporated by reference in this Prospectus,
Price Waterhouse LLP reported that they have applied limited
procedures in accordance with professional standards for a review
of such information. However, their separate report dated May 10,
1996, incorporated by reference herein, states that they do not
express an opinion on that unaudited consolidated financial
information. Price Waterhouse LLP has not carried out any
significant or additional audit tests beyond those which would have
been necessary if their report had not been included. Accordingly,
the degree of reliance on their report on such information should
be restricted in light of the limited nature of the review
procedures applied. Price Waterhouse LLP is not subject to the
liability provisions of Section 11 of the Securities Act for their
report on the unaudited consolidated financial information because
that report is not a "report" or a "part" of the Registration
Statement prepared or certified by Price Waterhouse LLP within the
meaning of Sections 7 and 11 of the Securities Act.
The consolidated financial statements of National Convenience
Stores Incorporated for the year ended June 30, 1995 incorporated
by reference in this Prospectus from the Company's Current Report
on Form 8-K/A (dated December 14, 1995 and filed with the
Commission on February 14, 1996) have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report dated
September 19, 1995 (insofar as it relates to the consolidated
financial statements of National Convenience Stores Incorporated
for the year ended June 30, 1995), which is incorporated herein by
reference, and such consolidated financial statements have been so
incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Estimated expenses in connection with the issuance and
distribution of the securities to be registered, other than
underwriters' or agents' discounts and commissions, are as follows:
Registration Fee $ 34,483
Blue Sky Fees and Expenses 10,000
Printing Expenses 15,000
Legal Fees and Expenses 20,000
Accounting Fees and Expenses 10,000
Indenture Trustee Fees and Expenses 1,500
Miscellaneous 4,017
Total $ 95,000
Item 15. Indemnification of Directors and Officers
Set forth below is a description of Article Tenth ("Article
Tenth") of the Certificate. This description is intended as a
summary only and is qualified in its entirety by reference to the
Certificate.
Elimination of Liability in Certain Circumstances. Article
Tenth protects the Company's directors against monetary damages for
breaches of their fiduciary duty of care, except as set forth
below. Under the Delaware General Corporation Law (the "Delaware
Law"), absent Article Tenth, directors could generally be held
liable for gross negligence for decisions made in the performance
of their duty of care but not for simple negligence. Article Tenth
eliminates director liability for negligence in the performance of
their duties, including gross negligence. Directors remain liable
for breaches of their duty of loyalty to the Company and its
stockholders, as well as acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law
and transactions from which a director derives improper personal
benefit.
Article Tenth does not limit a stockholder's ability to pursue
injunctive or other equitable relief and does not apply to claims
arising under violations of the federal securities laws.
Indemnification and Insurance. Under Delaware Law, directors
and officers as well as other employees and individuals may be
indemnified against expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement in connection with
specified actions, suits, or proceedings, whether civil, criminal,
administrative, or investigative (other than an action by or in the
right of the corporation such as a derivative action) if they acted
in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable
cause to believe their conduct was unlawful.
Article Tenth provides, in general, that each person who was
or is made a party to, or is involved in, any action, suit, or
proceeding by reason of the fact that he or she is or was a
director, officer, employee, or agent of the Company (or was
serving at the request of the Company as a director, officer,
employee, or agent for another entity) will be indemnified and held
harmless by the Company, to the full extent authorized by Delaware
Law, as currently in effect (or, to the extent indemnification is
broadened, as it may be amended) against all expense, liability, or
loss (including attorneys' fees, judgments, fines, ERISA excise
taxes, or penalties and amounts to be paid in settlement)
reasonably incurred by such person in connection therewith.
Article Tenth provides that persons indemnified thereunder may
bring suit against the Company to recover unpaid amounts claimed
thereunder, and that if such suit is successful, the expenses of
bringing such a suit will be reimbursed by the Company. Article
Tenth further provides that while it is a defense to such a suit
that the person claiming indemnification has not met the applicable
standards of conduct making indemnification permissible under
Delaware Law, the burden of proving the defense will be on the
Company and neither the failure of the Company's Board to have made
a determination that indemnification is proper, nor an actual
determination that the claimant has not met the applicable standard
of conduct will be a defense to the action or create a presumption
that the claimant has not met the applicable standard of conduct.
Article Tenth provides that the Company may maintain
insurance, at its expense, to protect itself and any of its
directors, officers, employees, or agents against any expense,
liability, or loss, whether or not the Company would have the power
to indemnify such person against such expense, liability, or loss
under Delaware Law. Finally, Article Tenth provides that the rights
to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition
conferred therein will not be exclusive of any other right which
any person may have or acquire under any statute, provision of the
Certificate or the Company's By-laws, agreement, or vote of
stockholders or disinterested directors, or otherwise.
The Company and each of the Directors have entered into
indemnification agreements providing for indemnification that is
broader than that provided by Article Tenth. Each of the Directors
of the Company is entitled to indemnification pursuant to the
indemnification agreements whether the Director's acts, failures to
act, neglect, or breach of duty giving rise to the right to
indemnity thereunder occurred prior or subsequent to the date of
such agreement. Such right, however, is not available with respect
to acts, failures to act, neglect, or breaches of duty of a
Director occurring prior to the date such person was elected as a
Director of the Company and does not apply to acts, failures to
act, neglect, or breaches of duty of any Director of the Company
while acting in such Director's prior position, if any, with Maxus
Energy Corporation, the Company's former parent company.
Item 16. Exhibits
Exhibit No. Description
1.1 -- Agency Agreement, dated January 25, 1990 (filed as
Exhibit 1.1 to the Registration Statement, File No.
33-32024 ("Registration Statement No. 33-32024")
and incorporated herein by reference).
1.2 -- Amendment No. 1 to the Agency Agreement (filed as
Exhibit 1.2 to the Registration Statement, File No.
33-43502 and incorporated herein by reference).
1.3 -- Amendment No. 2 to the Agency Agreement (filed as
Exhibit 1.3 to the Registration Statement, File No.
33-58744 and incorporated herein by reference).
1.4 -- Amendment No. 3 to the Agency Agreement.
*1.5 -- Underwriting Agreement Standard Provisions(filed as
Exhibit 1.5 to the Registration Statement No.
33-59451 ("Registration Statement 33-59451") and
incorporated herein by reference).
4.1 -- Indenture, dated as of December 15, 1989, between
the Company and The First National Bank of Chicago,
as trustee (filed as Exhibit 4.1 to Registration
Statement No. 33-32024 and incorporated herein by
reference).
4.2 -- Forms of Medium-Term Notes (filed as Exhibit 4.2 to
the Registration Statement, File No. 33-67556
("Registration Statement No. 33-67556") and
incorporated herein by reference).
4.3 -- Certificate of Incorporation of the Company (filed
as Exhibit 3.1 to the Company's Form 10
Registration No. 1-9409 (the "Form 10") and
incorporated herein by reference).
4.4 -- By-laws of the Company (filed as Exhibit 3.2 to the
Form 10 and incorporated herein by reference).
4.5 -- Form of Common Stock Certificate (filed as Exhibit
4.3 to the Form 10 and incorporated herein by
reference).
4.6 -- Form of Right Certificate (filed as Exhibit 1 to
the Company's Form 8-A Registration Statement,
dated March 6, 1990 (the "Form 8-A"), and
incorporated herein by reference).
4.7 -- Rights Agreement, dated as of March 6, 1990,
between the Company and Ameritrust Company National
Association (filed as Exhibit 2 to the Form 8-A and
incorporated herein by reference).
4.8 -- Form of Certificate of Designations of Series A
Junior Participating Preferred Stock (filed as
Exhibit 3 to the Form 8-A and incorporated herein
by reference).
**4.9 -- Form of Warrant Agreement for Debt Securities.
**4.10 -- Form of Warrant Certificate for Debt Securities.
**4.11 -- Form of Warrant Agreement for Preferred Stock.
**4.12 -- Form of Warrant Certificate for Preferred Stock.
**4.13 -- Form of Warrant Agreement for Common Stock.
**4.14 -- Form of Warrant Certificate for Common Stock.
*5.1 -- Opinion of Timothy J. Fretthold, Esq., Senior
Vice-President/Group Executive and General Counsel
regarding legality of Offered Securities
registered under Registration Statement No. 33-59451
5.2 -- Opinion of Timothy J. Fretthold, Esq., Senior Vice-
President /Group Executive and General Counsel
regarding legality of Offered Securities registered
under this Registration Statement.
12.1 -- Computation of ratio of earnings to fixed charges
and earnings to fixed charges and preferred stock
dividends for the three-month periods ended
March 31, 1996 and 1995 and for each of the five
years ended December 31, 1995.
15.1 -- Independent Accountants Awareness Letter
23.1 -- Consent of Price Waterhouse LLP.
23.2 -- Consent of Timothy J. Fretthold, Esq. (included in
Exhibit 5.1 and Exhibit 5.2).
23.3 -- Consent of Deloitte & Touche, L.L.P.
*24.1 -- Powers of Attorney of directors and officers of the
Company relating to Registration Statement
No. 33-59451.
*24.2 -- Power of Attorney of the Company relating to
Registration Statement 33-59451.
*24.3 -- Certified copy of resolutions of the Board of
Directors of the Company relating to Offered
Securities registered under Registration
Statement 33-59451.
24.4 -- Powers of Attorney of directors and officers of the
Company relating to this Registration Statement
24.5 -- Power of Attorney of the Company relating to this
Registration Statement
24.6 -- Certified copies of resolutions of the Board of
Directors of the Company relating to the Offered
Securities registered under this registration
statement
25.1 -- Statement as to the eligibility of the Trustee
under the Indenture.
* Previously filed as part of Registration Statement No. 33-59451.
** To be filed as an Exhibit to Form 8-K in reference to the
specific offering of Securities Warrants to which it relates.
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement and/or Registration Statement No. 33-59451:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, unless
the information required to be included in
such post-effective amendment is contained in
periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 and
incorporated herein by reference;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
this Registration Statement and/or
Registration Statement No. 33-59451 (or the
most recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in this Registration
Statement and/or Registration Statement No.
33-59451, unless the information required to
be included in such post-effective amendment
is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934
and incorporated herein by reference;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in this Registration
Statement and/or Registration Statement No.
33-59451 or any material change to such
information in this Registration Statement
and/or Registration Statement No. 33-59451;
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof;
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering; and
(4) That for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange
Act that is incorporated by reference in this Registration
Statement and/or Registration Statement No. 33-59451 shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant
of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and
has duly caused this Registration Statement and post-Effective
Amendment No. 1 to Registration Statement No. 33-59451 to be signed
on its behalf by the undersigned, thereunto duly authorized
pursuant to Powers of Attorney executed on behalf of the Registrant
and previously filed with the Securities and Exchange Commission or
contemporaniously filed herewith in the City of San Antonio, State
of Texas on May 20, 1996.
DIAMOND SHAMROCK, INC.
By /S/ TIMOTHY J. FRETTHOLD
Timothy J. Fretthold
Attorney-in-Fact
Pursuant to the requirements of the Securities Act, this
Registration Statement and Post-Effective Amendment to Registration
Statement No. 33-59451 has been signed on May 20, 1996 by the
following persons in the capacities indicated below.
Signature Title
R. R. HEMMINGHAUS* Chairman, President, and
R. R. Hemminghaus Chief Executive Officer
(Principal Executive Officer)
and Director
ROBERT C. BECKER* Vice President and Treasurer
Robert C. Becker (Principal Financial Officer)
GARY E. JOHNSON* Vice President and Controller
Gary E. Johnson (Principal Accounting Officer)
B. CHARLES AMES* Director
B. Charles Ames
E. GLENN BIGGS* Director
E. Glenn Biggs
W. E. BRADFORD* Director
W. E. Bradford
LAURO F. CAVAZOS* Director
Lauro F. Cavazos
W. H. CLARK* Director
W. H. Clark
WILLIAM L. FISHER* Director
William L. Fisher
KATHERINE D. ORTEGA* Director
Katherine D. Ortega
BOB MARBUT* Director
Bob Marbut
* The undersigned, by signing his name hereto, does sign and
execute this Registration Statement pursuant to the Powers of
Attorney executed by the above-named officers and directors and
previously filed with the Securities and Exchange Commission.
/S/ Timothy J. Fretthold
Timothy J. Fretthold
Attorney-in-Fact
INDEX TO EXHIBITS
Exhibit
Number Exhibit
1.1 -- Agency Agreement, dated January 25, 1990 (filed as
Exhibit 1.1 to the Registration Statement, File No.
33-32024 ("Registration Statement No. 33-32024")
and incorporated herein by reference).
1.2 -- Amendment No. 1 to the Agency Agreement (filed as
Exhibit 1.2 to the Registration Statement, File No.
33-43502 and incorporated herein by reference).
1.3 -- Amendment No. 2 to the Agency Agreement (filed as
Exhibit 1.3 to the Registration Statement, File No.
33-58744 and incorporated herein by reference).
1.4 -- Amendment No. 3 to the Agency Agreement.
*1.5 -- Underwriting Agreement Standard Provisions(filed as
Exhibit 1.5 to the Registration Statement No.
33-59451 ("Registration Statement 33-59451") and
incorporated herein by reference).
4.1 -- Indenture, dated as of December 15, 1989, between
the Company and The First National Bank of Chicago,
as trustee (filed as Exhibit 4.1 to Registration
Statement No. 33-32024 and incorporated herein by
reference).
4.2 -- Forms of Medium-Term Notes (filed as Exhibit 4.2 to
the Registration Statement, File No. 33-67556
("Registration Statement No. 33-67556") and
incorporated herein by reference).
4.3 -- Certificate of Incorporation of the Company (filed
as Exhibit 3.1 to the Company's Form 10
Registration No. 1-9409 (the "Form 10") and
incorporated herein by reference).
4.4 -- By-laws of the Company (filed as Exhibit 3.2 to the
Form 10 and incorporated herein by reference).
4.5 -- Form of Common Stock Certificate (filed as Exhibit
4.3 to the Form 10 and incorporated herein by
reference).
4.6 -- Form of Right Certificate (filed as Exhibit 1 to
the Company's Form 8-A Registration Statement,
dated March 6, 1990 (the "Form 8-A"), and
incorporated herein by reference).
4.7 -- Rights Agreement, dated as of March 6, 1990,
between the Company and Ameritrust Company National
Association (filed as Exhibit 2 to the Form 8-A and
incorporated herein by reference).
4.8 -- Form of Certificate of Designations of Series A
Junior Participating Preferred Stock (filed as
Exhibit 3 to the Form 8-A and incorporated herein
by reference).
**4.9 -- Form of Warrant Agreement for Debt Securities.
**4.10 -- Form of Warrant Certificate for Debt Securities.
**4.11 -- Form of Warrant Agreement for Preferred Stock.
**4.12 -- Form of Warrant Certificate for Preferred Stock.
**4.13 -- Form of Warrant Agreement for Common Stock.
**4.14 -- Form of Warrant Certificate for Common Stock.
*5.1 -- Opinion of Timothy J. Fretthold, Esq., Senior
Vice-President/Group Executive and General Counsel
regarding legality of Offered Securities
registered under Registration Statement No. 33-59451
5.2 -- Opinion of Timothy J. Fretthold, Esq., Senior Vice-
President /Group Executive and General Counsel
regarding legality of Offered Securities registered
under this Registration Statement.
12.1 -- Computation of ratio of earnings to fixed charges
and earnings to fixed charges and preferred stock
dividends for the three-month periods ended
March 31, 1996 and 1995 and for each of the five
years ended December 31, 1995.
15.1 -- Independent Accountants Awareness Letter
23.1 -- Consent of Price Waterhouse LLP.
23.2 -- Consent of Timothy J. Fretthold, Esq. (included in
Exhibit 5.1 and Exhibit 5.2).
23.3 -- Consent of Deloitte & Touche, L.L.P.
*24.1 -- Powers of Attorney of directors and officers of the
Company relating to Registration Statement
No. 33-59451.
*24.2 -- Power of Attorney of the Company relating to
Registration Statement 33-59451.
*24.3 -- Certified copy of resolutions of the Board of
Directors of the Company relating to Offered
Securities registered under Registration
Statement 33-59451.
24.4 -- Powers of Attorney of directors and officers of the
Company relating to this Registration Statement.
24.5 -- Power of Attorney of the Company relating to this
Registration Statement
24.6 -- Certified copies of resolutions of the Board of
Directors of the Company relating to the Offered
Securities registered under this registration
statement
25.1 -- Statement as to the eligibility of the Trustee
under the Indenture.
* Previously filed as part of Registration Statement No. 33-59451.
** To be filed as an Exhibit to Form 8-K in reference to the
specific offering of Securities Warrants to which it relates.
W2961.TW