FILED PURSUANT TO RULE 424(B)(5)
REGISTRATION NOS. 333-44100, 333-44100-01,
333-65722 AND 333-65722-01
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 18, 2000)
$1,800,000,000
TYCO INTERNATIONAL GROUP S.A.
$500,000,000 FLOATING RATE NOTES DUE 2003
$600,000,000 4.95% NOTES DUE 2003
$700,000,000 5.80% NOTES DUE 2006
FULLY AND UNCONDITIONALLY GUARANTEED BY
[LOGO]
--------------
Our floating rate notes due 2003 will mature on July 30, 2003 and bear
interest at a floating rate equal to three-month LIBOR plus 0.45%. Our 4.95%
notes due 2003 will mature on August 1, 2003 and our 5.80% notes due 2006 will
mature on August 1, 2006. Interest on the floating rate notes is payable on
January 30, April 30, July 30 and October 30 of each year, beginning on
October 30, 2001. Interest on the fixed rate notes is payable on February 1 and
August 1 of each year, beginning on February 1, 2002.
We may not redeem the notes of any series offered hereby prior to maturity
unless certain changes in withholding taxes as described in this prospectus
supplement have occurred. We do not intend to list any series of notes offered
hereby on any securities exchange.
--------------
UNDERWRITING PROCEEDS, BEFORE
PRICE TO PUBLIC(1) DISCOUNTS EXPENSES, TO US
------------------ ------------ ----------------
Per 2003 Floating Rate Note...................... 100% .35% 99.650%
2003 Floating Rate Note Total.................... $500,000,000 $1,750,000 $498,250,000
Per 2003 Fixed Rate Note......................... 99.987% .35% 99.637%
2003 Fixed Rate Note Total....................... $599,922,000 $2,100,000 $597,822,000
Per 2006 Fixed Rate Note......................... 99.790% .60% 99.190%
2006 Fixed Rate Note Total....................... $698,530,000 $4,200,000 $694,330,000
-------------- ----------- --------------
Total...................................... $1,798,452,000 $8,050,000 $1,790,402,000
(1) Plus accrued interest from July 30, 2001, if settlement occurs after that
date
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The notes will be ready for delivery in book-entry form only through The
Depository Trust Company on or about July 30, 2001.
--------------
JOINT BOOK-RUNNING MANAGERS
JPMORGAN MERRILL LYNCH & CO.
---------
BANC OF AMERICA SECURITIES LLC
BEAR, STEARNS & CO. INC.
COMMERZBANK CAPITAL MARKETS CORP.
CREDIT SUISSE FIRST BOSTON
FIRST UNION SECURITIES, INC.
HSBC
LEHMAN BROTHERS
SALOMON SMITH BARNEY
--------------
The date of this prospectus supplement is July 24, 2001.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
----
Forward Looking Information................................. S-3
Tyco........................................................ S-4
The Company................................................. S-5
Recent Developments of Tyco................................. S-5
Use of Proceeds............................................. S-6
Ratio of Earnings to Fixed Charges of Tyco.................. S-7
Capitalization of Tyco...................................... S-8
Selected Consolidated Historical Financial Data of Tyco..... S-10
Description of the Notes and the Guarantees................. S-12
Certain Luxembourg, Bermuda and United States Federal Income
Tax Consequences.......................................... S-18
Underwriting................................................ S-21
Legal Matters............................................... S-22
Experts..................................................... S-22
PROSPECTUS
Where You Can Find More Information......................... ii
Forward Looking Information................................. iii
Tyco........................................................ 1
The Company................................................. 1
Use of Proceeds............................................. 1
Ratio of Earnings to Fixed Charges of Tyco.................. 2
Description of the Debt Securities and the Guarantees....... 3
Description of the Common Shares............................ 22
Enforcement of Civil Liabilities............................ 25
Plan of Distribution........................................ 25
Legal Matters............................................... 26
Experts..................................................... 27
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS OR TO WHICH WE HAVE REFERRED YOU. THE
COMPANY AND TYCO HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT
INFORMATION. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS ACCURATE AS OF ANY
DATE OTHER THAN THE DATE ON THE FRONT OF THOSE DOCUMENTS.
S-2
FORWARD LOOKING INFORMATION
Certain statements contained or incorporated by reference into this document
are "forward looking statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995. All forward looking statements involve
risks and uncertainties. In particular, any statement contained in this
prospectus supplement and accompanying prospectus regarding the consummation and
benefits of future acquisitions, as well as expectations with respect to future
sales and other results of operations, operating efficiencies and product
expansion, are subject to known and unknown risks, uncertainties and
contingencies, many of which are beyond the control of the Company and Tyco,
which may cause actual results, performance or achievements to differ materially
from anticipated results, performance or achievements. Factors that might affect
such forward looking statements include, among other things:
- overall economic and business conditions;
- the demand for the Company's and Tyco's goods and services;
- competitive factors in the industries in which the Company and Tyco compete;
- changes in U.S. and non-U.S. government regulations;
- changes in tax requirements (including tax rate changes, new tax laws and
revised tax law interpretations);
- results of litigation;
- interest rate fluctuations and other capital market conditions, including
foreign currency rate fluctuations;
- economic and political conditions in international markets, including
governmental changes and restrictions on the ability to transfer capital
across borders;
- the ability to achieve anticipated synergies in connection with Tyco's
recent acquisition of The CIT Group, Inc. and other acquisitions;
- the timing, impact and other uncertainties of future acquisitions by Tyco;
and
- the timing of construction and the successful operation of the TyCom Global
Network by Tyco's majority owned subsidiary, TyCom Ltd., Tyco's undersea
cable communications business.
S-3
TYCO
Tyco is a diversified manufacturing and service company that, through its
subsidiaries:
- designs, manufactures and distributes electrical and electronic components
and multi-layer printed circuit boards;
- designs, engineers, manufactures, installs, operates and maintains
undersea cable communications systems;
- designs, manufactures and distributes disposable medical supplies and
other specialty products;
- designs, manufactures, installs and services fire detection and
suppression systems, installs, monitors and maintains electronic security
systems, and designs, manufactures, distributes and services specialty
valves; and
- offers vendor, equipment, commercial, factoring, consumer and structured
financing and leasing capabilities through its indirect wholly-owned
subsidiary, The CIT Group, Inc., acquired on June 1, 2001.
Tyco operates in more than 100 countries around the world and expects
revenues for its fiscal year ending September 30, 2001 to exceed $38 billion.
Tyco's strategy is to be the low-cost, high-quality producer and provider in
each of its markets. It promotes its leadership position by investing in its
existing businesses, developing new markets and acquiring complementary
businesses and products. Combining the strengths of its existing operations and
its business acquisitions, Tyco seeks to enhance shareholder value through
increased earnings per share and strong cash flows.
Tyco reviews acquisition opportunities in the ordinary course of business,
some of which may be material and some of which are currently under
investigation, discussion or negotiation. There can be no assurance that any of
such acquisitions will be consummated.
Tyco's common shares are listed on the New York Stock Exchange and the
Bermuda Stock Exchange under the symbol "TYC" and on the London Stock Exchange
under the symbol "TYI."
Tyco is a Bermuda company whose registered and principal executive offices
are located at The Zurich Centre, Second Floor, 90 Pitts Bay Road, Pembroke HM
08, Bermuda, telephone number (441) 292-8674. The executive offices of Tyco's
principal United States subsidiaries are located at One Tyco Park, Exeter, New
Hampshire 03833, and the telephone number there is (603) 778-9700.
For additional information regarding the business of Tyco, please see Tyco's
Form 10-K and other filings of Tyco with the SEC, which are incorporated by
reference into this document.
S-4
THE COMPANY
Tyco International Group S.A. was formed as a Luxembourg corporation on
March 30, 1998, as a wholly-owned subsidiary of Tyco. The registered and
principal offices of the Company are located at 6, avenue Emile Reuter, 2nd
Floor, L-2420 Luxembourg, and its telephone number is (352) 464-340-1. The
Company is a holding company whose only business is to own indirectly a
substantial portion of the operating subsidiaries of Tyco and to perform
treasury operations for Tyco companies. Otherwise, it conducts no independent
business.
RECENT DEVELOPMENTS OF TYCO
On May 30, 2001, Tyco announced that a subsidiary of Tyco had entered into a
definitive agreement to acquire C.R. Bard, Inc. ("Bard"), a multinational
developer, manufacturer and marketer of healthcare products used for vascular,
urological and oncological diagnosis and intervention, as well as surgical
specialties. Tyco's subsidiary will acquire Bard in a tax-free stock-for-stock
merger. In the merger, Bard shareholders will receive for each of their Bard
shares either (1) Tyco common shares valued, based upon a measurement period
just prior to the Bard shareholder vote, at $60.00, or, (2) if Tyco common
shares are valued, based upon the measurement period, below $50.00, 1.2 Tyco
common shares. Based on Tyco's May 29, 2001 closing share price on the New York
Stock Exchange of $57.00, Tyco would issue approximately 55 million common
shares in this transaction. The transaction is valued at approximately
$3.2 billion, including the assumption of net debt. The merger is subject to
customary regulatory review and approval by Bard shareholders. If approved, Bard
will be integrated within Tyco's Healthcare group and the transaction will be
accounted for as a purchase.
On June 1, 2001, Tyco acquired CIT, an independent commercial finance
company. Immediately prior to the consummation of the transaction, a subsidiary
of Tyco purchased 71 million shares of CIT for approximately $2.5 billion in
cash from Dai-Ichi Kangyo Bank, Ltd. Additionally, Tyco issued approximately
133.0 million common shares, valued at approximately $7.0 billion. This number
includes approximately 7.1 million shares issuable from time to time on exchange
of certain exchangeable shares issued by a subsidiary of CIT. Tyco is accounting
for the acquisition as a purchase. The historical Consolidated Financial
Statements of CIT as of December 31, 2000 and 1999, and for each of the years in
the three-year period ended December 31, 2000 and the Tyco and CIT unaudited pro
forma combined condensed financial information for the quarter ended
December 31, 2000, for the year ended September 30, 2000 and as of December 31,
2000 were filed by Tyco with the SEC in a Current Report on Form 8-K on
April 3, 2001. The Unaudited Condensed Consolidated Financial Statements of CIT
as of March 31, 2001 and December 31, 2000 and for the three months ended
March 31, 2001 and 2000 and the Tyco and CIT unaudited pro forma combined
condensed financial information for the six months ended March 31, 2001, for the
year ended September 30, 2000 and as of March 31, 2001 were filed by Tyco with
the SEC in a Current Report on Form 8-K on May 24, 2001.
On June 6, 2001, Tyco sold 39 million common shares for approximately
$2.198 billion through Lehman Brothers Inc. in an underwritten public offering.
The offering was made pursuant to Tyco's shelf registration statement. Proceeds
of the offering were used to repay debt incurred to finance recent acquisitions.
On July 3, 2001, Tyco acquired the electronic security systems businesses of
Cambridge Protection Industries, L.L.C., which includes SecurityLink, and
provides services to approximately one million residential, commercial and
government customers. The transaction is valued at approximately $1 billion. The
businesses are being integrated within Tyco's Fire and Security Services segment
and the transaction is being accounted for as a purchase.
On July 18, 2001, Tyco announced its results for the third quarter of fiscal
2001, the three months ended June 30, 2001. Revenues for the quarter rose 25% to
$9.29 billion compared with last year's $7.42 billion. Diluted earnings per
share before extraordinary items for the third quarter of fiscal 2001
S-5
were $0.67, or $1.22 billion, compared to $0.58, or $997.3 million, in the third
quarter of fiscal 2000. Net income before non-recurring and extraordinary items
rose to $1.31 billion, an increase of 32% compared to $992.1 million last year.
Diluted earnings per share before non-recurring and extraordinary items for the
third fiscal quarter ended June 30, 2001 were $0.72, a 24% increase over
earnings of $0.58 per diluted share in the third quarter of fiscal 2000.
The quarterly segment profits and margins for Tyco's Electronics, Healthcare
and Specialty Products, Fire and Security Services and Telecommunications
segments that are presented in the discussion below are operating profits before
non-recurring items, general corporate expenses, goodwill amortization, interest
expense and taxes, consistent with the way management views its results of
operations. Results for Tyco's Financial Services subsidiary, CIT, are pre-tax
profits before goodwill amortization for the period June 2 through June 30, 2001
(CIT was acquired on June 1, 2001). Tyco has also reclassified its Flow Control
segment results for the prior period to the Fire and Security Services and
Electronics segments to conform with current internal reporting structures.
Revenues at Tyco Electronics increased 8% to $3.22 billion, operating
profits increased 7% to $797.7 million and remained constant as a percentage of
revenues at 25% in both the fiscal 2000 third quarter and the fiscal 2001 third
quarter. Revenues at Tyco Healthcare and Specialty Products increased 38% to
$2.27 billion and operating profits increased 41% to $542.0 million and
increased as a percentage of revenues to 24% in the fiscal 2001 third quarter
from 23% in the fiscal 2000 third quarter. Revenues at Tyco Fire and Security
Services increased 27% to $2.69 billion, operating profits increased 38% to
$509.8 million and increased as a percentage of revenues from 17% in the fiscal
2000 third quarter to 19% in the fiscal 2001 third quarter. Revenues at Tyco
Telecommunications decreased 11% to $600.8 million, and operating profits
decreased 8% to $142.6 million; however, operating profits as a percentage of
revenues increased from 23% in the fiscal 2000 third quarter to 24% in the
fiscal 2001 third quarter. Revenues at Tyco Financial Services were
$513.8 million and pre-tax earnings were $138.2 million in the fiscal 2001 third
quarter.
USE OF PROCEEDS
We estimate that the net proceeds from this offering will be approximately
$1.79 billion, after deducting the underwriting discount and certain offering
expenses. We will use the net proceeds to repay a portion of the borrowings
under our $5.86 billion commercial paper program which is backed by a long-term
credit facility. As of July 20, 2001, there was $5.51 billion outstanding under
this program, which was incurred primarily to finance recent acquisitions, and
which bears interest at a weighted average rate of 4.03% and has current
maturities of up to 98 days. For more information, see "Capitalization of Tyco."
Pending the application of the net proceeds, we expect to invest the net
proceeds from this offering in short-term interest-bearing securities.
S-6
RATIO OF EARNINGS TO FIXED CHARGES OF TYCO
The following table sets forth the ratio of earnings to fixed charges of
Tyco for the six months ended March 31, 2001, the fiscal years ended
September 30, 2000, 1999 and 1998, the nine month transition period ended
September 30, 1997 and the year ended December 31, 1996.
SIX MONTHS NINE MONTHS
ENDED YEAR ENDED SEPTEMBER 30, ENDED YEAR ENDED
MARCH 31, ------------------------------------------ SEPTEMBER 30, DECEMBER 31,
2001 2000 1999 1998 1997(4) 1996
---------- -------- -------- -------- ------------- ------------
Ratio of earnings to fixed
charges(1)(2)(3)...................... 6.55 7.51 3.53 5.07 1.00 2.54
- ------------------------
(1) For purposes of determining the ratio of earnings to fixed charges, earnings
consist of income (loss) before income taxes, minority interest,
extraordinary items, cumulative effect of accounting change, fixed charges
and amortization of capitalized interest, less interest capitalized. Fixed
charges consist of interest on indebtedness, amortization of debt expenses
and one-third of rent expense which is deemed representative of an interest
factor.
(2) On April 2, 1999, October 1, 1998, August 29, 1997 and August 27, 1997, Tyco
consummated mergers with AMP Incorporated, United States Surgical
Corporation, Keystone International, Inc. and Inbrand Corporation,
respectively. On July 2, 1997, Tyco, formerly called ADT Limited, merged
with Tyco International Ltd., a Massachusetts corporation at the time
("Former Tyco"). Each of the five merger transactions qualified for the
pooling of interests method of accounting. As such, the ratios of earnings
to fixed charges presented include the effect of mergers, except that the
calculation presented above for the period prior to January 1, 1997 does not
include Inbrand due to immateriality.
(3) Earnings for the six months ended March 31, 2001, the years ended
September 30, 2000, 1999 and 1998, the nine months ended September 30, 1997
and the year ended December 31, 1996 include net merger, restructuring and
other non-recurring charges of $36.7 million (of which $71.4 million is
included in cost of sales), $176.3 million (of which $1.0 million is
included in cost of sales), $1,035.2 million (of which $106.4 million is
included in cost of sales), $256.9 million, $947.9 million and
$344.1 million, respectively. Earnings also include charges for the
impairment of long-lived assets of $25.1 million, $99.0 million,
$507.5 million, $148.4 million and $744.7 million in the six months ended
March 31, 2001, the years ended September 30, 2000 and 1999, the nine months
ended September 30, 1997 and the year ended December 31, 1996, respectively.
Earnings for the six months ended March 31, 2001 also include a
$406.5 million net gain on the sale of businesses and investments. Earnings
for the year ended September 30, 2000 also include a $1.76 billion gain on
the issuance of common shares by a subsidiary. Earnings for the six months
ended March 31, 2001 and the nine months ended September 30, 1997 also
include a write-off of purchased in-process research and development of
$184.3 million and $361.0 million, respectively.
On a pro forma basis, the ratio of earnings to fixed charges excluding net
merger, restructuring and other non-recurring charges, charges for the
impairment of long-lived assets, net gain on the sale of businesses and
investments, gain on the issuance of shares by a subsidiary and the
write-off of purchased in-process research and development would have been
6.26x, 6.02x, 5.82x, 5.68x, 6.81x and 5.76x for the six months ended
March 31, 2001, the fiscal years ended September 30, 2000, 1999 and 1998,
the nine months ended September 30, 1997 and the year ended December 31,
1996, respectively.
(4) In September 1997, Tyco changed its fiscal year end from December 31 to
September 30. Accordingly, the nine-month transition period ended
September 30, 1997 is presented.
S-7
CAPITALIZATION OF TYCO
The following table sets forth the consolidated capitalization at March 31,
2001:
(1) of Tyco on an actual basis;
(2) of CIT on an actual basis (CIT was acquired by Tyco on June 1, 2001. See
"Tyco" for more information);
(3) of pro forma adjustments to give effect to:
- changes in amounts outstanding under Tyco's $5.86 billion commercial paper
program through July 20, 2001, primarily as a result of cash borrowings
made to pay for acquisitions, including the $2.5 billion payment made to
Dai-Ichi Kangyo Bank, Ltd. in connection with the consummation of the
acquisition of CIT and the $1.0 billion payment for the acquisition of
SecurityLink, the repurchase of treasury shares, the repayment of debt
assumed in the acquisition of Scott Technologies, Inc. and the repayment
of the 6.125% public notes which matured on June 15, 2001;
- the issuance by Tyco of approximately 133.0 million common shares in
connection with the acquisition of CIT and the issuance of approximately
7.5 million common shares in connection with the acquisition of Scott
Technologies, Inc.;
- the sale of 39 million common shares for net proceeds of approximately
$2.198 billion in an underwritten public offering; and
- changes in amounts outstanding under CIT's commercial paper program and
changes in the amounts outstanding of CIT's variable-rate senior notes and
fixed-rate senior notes through July 20, 2001.
(4) on a pro forma basis combining Tyco and CIT and giving effect to the pro
forma adjustments described in (3) above; and
(5) as adjusted to give effect to the issuance of the notes offered hereby and
the application of the net proceeds from their sale.
S-8
MARCH 31, 2001
-------------------------------------------------------------------
TYCO CIT PRO FORMA PRO FORMA AS
ACTUAL ACTUAL(1) ADJUSTMENTS(1) COMBINED(1) ADJUSTED(1)
--------- --------- -------------- ------------ -----------
($ IN MILLIONS, EXCEPT SHARE DATA)
Loans payable and current portion of long-term debt:.... $ 1,400.1 $19,048.3 $ 182.7 $20,631.1 $20,631.1
Long-term debt:
Commercial paper program.............................. $ 1,793.8 -- $3,717.1 $ 5,510.9 $ 3,723.0
Euro commercial paper program......................... 165.7 -- -- 165.7 165.7
CIT commercial paper program.......................... -- 9,662.9 932.7 10,595.6 10,595.6
CIT subordinated fixed rate notes due 2001............ -- 100.0 -- 100.0 100.0
6.5% public notes due 2001............................ 299.8 -- -- 299.8 299.8
6.125% public notes due 2001.......................... 749.8 -- (749.8) -- --
Floating rate euro denominated private placement notes
due 2002............................................ 66.5 -- -- 66.5 66.5
6.875% private placement notes due 2002............... 1,026.0 -- -- 1,026.0 1,026.0
CIT variable rate senior notes due 2001 through
2003................................................ -- 10,798.3 (2,141.7) 8,656.6 8,656.6
4.950% public notes due 2003.......................... -- -- -- -- 597.0
Floating rate public notes due 2003................... -- -- -- -- 497.5
6.0% notes due 2003................................... 81.1 -- -- 81.1 81.1
5.875% public notes due 2004.......................... 398.4 -- -- 398.4 398.4
6.375% public notes due 2004.......................... 104.8 -- -- 104.8 104.8
6.375% public notes due 2005.......................... 745.3 -- -- 745.3 745.3
6.75% notes due 2005.................................. 91.3 -- -- 91.3 91.3
5.8% public notes due 2006............................ -- -- -- -- 693.4
6.375% public notes due 2006.......................... 991.0 -- -- 991.0 991.0
6.125% euro denominated public notes due 2007......... 527.4 -- -- 527.4 527.4
6.5% notes due 2007................................... 99.1 -- -- 99.1 99.1
6.125% public notes due 2008.......................... 395.8 -- -- 395.8 395.8
7.2% notes due 2008................................... 398.9 -- -- 398.9 398.9
7.25% senior notes due 2008........................... 8.2 -- -- 8.2 8.2
6.125% public notes due 2009.......................... 367.6 -- -- 367.6 367.6
Zero coupon Liquid Yield Option Notes ("LYONs") due
2010................................................ 31.2 -- -- 31.2 31.2
6.75% public notes due 2011........................... 991.5 -- -- 991.5 991.5
7.0% debentures due 2013.............................. 99.0 -- -- 99.0 99.0
6.25% public Dealer Remarketable Securities due
2013................................................ 756.0 -- -- 756.0 756.0
Zero coupon convertible debentures due 2020........... 3,473.4 -- -- 3,473.4 3,473.4
Zero coupon convertible debentures due 2021........... 2,255.4 -- -- 2,255.4 2,255.4
CIT fixed rate senior notes due 2001 through 2022..... -- 17,157.0 308.2 17,465.2 17,465.2
9.5% public debentures due 2022....................... 49.0 -- -- 49.0 49.0
8.0% public debentures due 2023....................... 50.0 -- -- 50.0 50.0
7.0% public notes due 2028............................ 492.8 -- -- 492.8 492.8
6.875% public notes due 2029.......................... 781.5 -- -- 781.5 781.5
3.5% yen denominated private placement notes due
2030................................................ 242.6 -- -- 242.6 242.6
Other................................................. 727.0 -- -- 727.0 727.0
--------- --------- -------- --------- ---------
Total debt.......................................... 18,259.9 37,718.2 2,066.5 58,044.6 58,044.6
--------- --------- -------- --------- ---------
Less current portion................................ 1,400.1 19,048.3 182.7 20,631.1 20,631.1
--------- --------- -------- --------- ---------
Total long-term debt................................ 16,859.8 18,669.9 1,883.8 37,413.5 37,413.5
--------- --------- -------- --------- ---------
Mandatorily redeemable preference shares................ -- 250.0 -- 250.0 250.0
Shareholders' equity:
Preference shares, $1 par value, 125,000,000
authorized, none issued............................. -- -- -- -- --
Common shares, $0.20 par value, 2,500,000,000 shares
authorized; 1,752,768,324 Tyco shares outstanding
(1,932,240,513 Tyco shares outstanding on a pro
forma combined and as adjusted basis), net of
6,244,508 Tyco shares owned by subsidiaries (2)..... 350.6 2.7 33.2 386.5 386.5
Capital in excess:
Share premium....................................... 5,580.1 -- 2,188.8 7,768.9 7,768.9
Contributed surplus, net of deferred compensation of
$174.4............................................ 5,181.8 3,402.8 3,929.2 12,513.8 12,513.8
Accumulated earnings.................................. 10,500.3 2,736.9 (2,736.9) 10,500.3 10,500.3
Accumulated other comprehensive loss.................. (1,036.5) (171.8) 171.8 (1,036.5) (1,036.5)
--------- --------- -------- --------- ---------
Total shareholders' equity.......................... 20,576.3 5,970.6 3,586.1 30,133.0 30,133.0
--------- --------- -------- --------- ---------
Total capitalization................................ $37,436.1 $24,890.5 $5,469.9 $67,796.5 $67,796.5
========= ========= ======== ========= =========
- ------------------------------
(1) CIT debt is not an obligation of Tyco, and Tyco has not guaranteed this
debt.
(2) The "CIT Actual" column reflects 262,258,673 shares of CIT common stock with
a par value of $0.01 per share outstanding prior to Tyco's acquisition of
CIT. The "Pro Forma Combined" and "As Adjusted" columns include 7,129,245
Tyco common shares issuable upon exchange of exchangeable shares of CIT
Exchangeco Inc., a wholly-owned subsidiary of Tyco.
S-9
SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF TYCO(1)
The following table sets forth selected consolidated financial information
of Tyco for the six months ended March 31, 2001 and 2000, the fiscal years ended
September 30, 2000, 1999 and 1998, the nine months ended September 30, 1997, and
the year ended December 31, 1996. The selected financial information for the six
months ended March 31, 2001 and 2000 was derived from the unaudited Consolidated
Financial Statements included in Tyco's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2001. The data presented for the six months
ended March 31, 2001 and 2000 are unaudited and, in the opinion of Tyco's
management, include all adjustments, consisting of normal recurring adjustments,
necessary for the fair presentation of such data. Tyco's results for the six
months ended March 31, 2001 are not necessarily indicative of the results to be
expected for the fiscal year ending September 30, 2001. The selected financial
information for the fiscal years ended September 30, 2000, 1999 and 1998 was
derived from the audited Consolidated Financial Statements included in Tyco's
Annual Report on Form 10-K for the fiscal year ended September 30, 2000. The
selected financial information for the nine months ended September 30, 1997 was
derived from the audited Consolidated Financial Statements included in Tyco's
Annual Report on Form 10-K/A filed on June 26, 2000. The selected financial
information for the year ended December 31, 1996 was derived from the audited
Consolidated Financial Statements included in Tyco's Current Report on Form 8-K
filed on June 3, 1999.
The information should be read in conjunction with the historical financial
statements and related notes contained in the annual, quarterly and other
reports filed by Tyco with the SEC.
SIX MONTHS ENDED NINE MONTHS
MARCH 31, YEAR ENDED SEPTEMBER 30, ENDED YEAR ENDED
--------------------- --------------------------------- SEPTEMBER 30, DECEMBER 31,
2001(2) 2000(2) 2000(3) 1999(4) 1998(5) 1997(6)(7) 1996 (8)(9)
--------- --------- --------- --------- --------- ------------- ------------
(UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENTS OF
OPERATIONS DATA:
Net sales.................... $16,918.7 $13,708.7 $28,931.9 $22,496.5 $19,061.7 $12,742.5 $14,671.0
Operating income............. 3,085.0 2,536.9 5,474.4 2,190.8 1,948.1 125.8 587.4
Income (loss) from continuing
operations................. 2,156.5 1,612.7 4,520.1 1,067.7 1,168.6 (348.5) 49.4
Income (loss) from continuing
operations per common
share(10):
Basic.................... 1.24 0.95 2.68 0.65 0.74 (0.24) 0.02
Diluted.................. 1.22 0.94 2.64 0.64 0.72 (0.24) 0.02
CASH DIVIDENDS PER COMMON
SHARE(10).................... See (11) below.
CONSOLIDATED BALANCE SHEET DATA
(END OF PERIOD):
Total assets............... $53,440.7 $40,404.3 $32,344.3 $23,440.7 $16,960.8 $14,686.2
Long-term debt............. 16,859.8 9,461.8 9,109.4 5,424.7 2,785.9 2,202.4
Total shareholders'
equity................... 20,576.3 17,033.2 12,369.3 9,901.8 7,478.7 7,022.6
- --------------------------
(1) On April 2, 1999, October 1, 1998, August 29, 1997 and August 27, 1997, Tyco
merged with AMP Incorporated, United States Surgical Corporation, Keystone
International, Inc. and Inbrand Corporation, respectively. On July 2, 1997,
Tyco, formerly called ADT Limited, merged with Tyco International Ltd., a
Massachusetts corporation at the time ("Former Tyco"). These five
combinations were accounted for under the pooling of interests method of
accounting. As such, the consolidated financial data presented above include
the effect of the mergers, except for the period prior to January 1, 1997,
which does not include Inbrand due to immateriality.
(2) Operating income in the six months ended March 31, 2001 includes a charge of
$184.3 million for the write-off of purchased in-process research and
development, a non-recurring charge of $39.0 million related to the write-up
of inventory under purchase accounting, a charge of $25.1 million for the
impairment of
S-10
long-lived assets and a net credit of $2.3 million for restructuring and
other non-recurring items. Operating income in the six months ended
March 31, 2000 includes charges of $99.0 million for the impairment of
long-lived assets and a net credit of $74.4 million for merger,
restructuring and other non-recurring items. See Notes 2, 6 and 7 to the
Consolidated Financial Statements contained in Tyco's quarterly report on
Form 10-Q for the quarterly period ended March 31, 2001, which is
incorporated by reference in this document.
(3) Operating income in the fiscal year ended September 30, 2000 includes a net
charge of $176.3 million, of which $1.0 million is included in cost of
sales, for restructuring and other non-recurring charges, and charges of
$99.0 million for the impairment of long-lived assets. See Notes 12 and 16
to the Consolidated Financial Statements contained in Tyco's Annual Report
on Form 10-K for the fiscal year ended September 30, 2000, which is
incorporated by reference in this document. Income from continuing
operations for the fiscal year ended September 30, 2000 includes a one-time
pre-tax gain of $1,760.0 million related to the issuance of common shares by
a subsidiary. See Note 15 to the Consolidated Financial Statements contained
in Tyco's Annual Report on Form 10-K for the fiscal year ended
September 30, 2000.
(4) Operating income in the fiscal year ended September 30, 1999 includes
charges of $1,035.2 million for merger, restructuring and other
non-recurring charges, of which $106.4 million is included in cost of sales,
and charges of $507.5 million for the impairment of long-lived assets
related to the mergers with U.S. Surgical Corporation and AMP and AMP's
profit improvement plan. See Notes 12 and 16 to the Consolidated Financial
Statements contained in Tyco's Annual Report on Form 10-K for the fiscal
year ended September 30, 2000.
(5) Operating income in the fiscal year ended September 30, 1998 includes
charges of $80.5 million primarily related to costs to exit certain
businesses in U.S. Surgical Corporation's operations and restructuring
charges of $12.0 million related to the continuing operations of U.S.
Surgical Corporation. In addition, AMP recorded restructuring charges of
$185.8 million in connection with its profit improvement plan and a credit
of $21.4 million to restructuring charges representing a revision of
estimates related to its 1996 restructuring activities. See Note 16 to the
Consolidated Financial Statements contained in Tyco's Annual Report on
Form 10-K for the fiscal year ended September 30, 2000.
(6) In September 1997, Tyco changed its fiscal year end from December 31 to
September 30. Accordingly, the nine-month transition period ended
September 30, 1997 is presented.
(7) Operating income in the nine months ended September 30, 1997 includes
charges related to merger, restructuring and other non-recurring costs of
$917.8 million and impairment of long-lived assets of $148.4 million
primarily related to the mergers and integration of ADT, Former Tyco,
Keystone, and Inbrand, and charges of $24.3 million for litigation and other
related costs and $5.8 million for restructuring charges in U.S. Surgical
Corporation's operations. The results for the nine months ended
September 30, 1997 also include a charge of $361.0 million for the write-off
of purchased in-process research and development related to the acquisition
of the submarine systems business of AT&T Corp.
(8) Prior to their respective mergers, ADT, Keystone, U.S. Surgical Corporation
and AMP had December 31 fiscal year ends and Former Tyco had a June 30
fiscal year end. The selected consolidated financial data have been combined
using a December 31 fiscal year end for ADT, Keystone, Former Tyco, U.S.
Surgical Corporation and AMP for the year ended December 31, 1996.
(9) Operating income in 1996 includes non-recurring charges of $744.7 million
related to the adoption of Statement of Financial Accounting Standards
No. 121 "Accounting for the Impairment of Long-Lived Assets to be Disposed
Of," $237.3 million related principally to the restructuring of ADT's
electronic security services business in the United States and the United
Kingdom, $98.0 million to exit various product lines and manufacturing
operations associated with AMP's operations and $8.8 million of fees and
expenses related to ADT's acquisition of Automated Security (Holdings) plc,
a United Kingdom company.
(10) Per share amounts have been retroactively restated to give effect to the
mergers with Former Tyco, Keystone, Inbrand, U.S. Surgical Corporation and
AMP; a 0.48133 reverse stock split (1.92532 after giving effect to the
subsequent stock splits) effected on July 2, 1997; and two-for-one stock
splits distributed on October 22, 1997 and October 21, 1999, both of which
were effected in the form of a stock dividend.
(11) Tyco has paid a quarterly cash dividend of $0.0125 per common share since
July 2, 1997, the date of the Former Tyco/ADT merger. Prior to the merger
with ADT, Former Tyco had paid a quarterly cash dividend of $0.0125 per
share of common stock since January 1992. ADT had not paid any dividends on
its common shares since 1992. U.S. Surgical Corporation paid quarterly
dividends of $0.04 per share in the year ended September 30, 1998 and the
nine months ended September 30, 1997 and aggregate dividends of $0.08 per
share in 1996. AMP paid dividends of $0.27 per share in the first two
quarters of the year ended September 30, 1999, $0.26 per share in the first
quarter and $0.27 per share in the last three quarters of the year ended
September 30, 1998, $0.26 per share in each of the three quarters of the
nine months ended September 30, 1997 and aggregate dividends of $1.00 per
share in 1996. The payment of dividends by Tyco in the future will depend on
business conditions, Tyco's financial condition and earnings and other
factors.
S-11
DESCRIPTION OF THE NOTES AND THE GUARANTEES
The 2003 floating rate notes, the 2003 fixed rate notes and the 2006 notes
offered by this prospectus supplement will be issued as three separate series of
debt securities under an indenture dated as of June 9, 1998, as supplemented by
supplemental indentures nos. 17, 18 and 19, among the Company, Tyco and The Bank
of New York, as trustee. Information about the indenture and the general terms
and provisions of the notes is contained in the accompanying prospectus under
"Description of the Debt Securities and the Guarantees." The following
description is subject to the detailed provisions of the indenture and the
supplemental indentures, copies of which can be obtained upon request from Tyco.
See "Where You Can Find More Information" in the accompanying prospectus. The
statements made in this section relating to the indenture, the supplemental
indentures, the notes and the guarantees are summaries, do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all provisions of the indenture, the supplemental indentures, the notes and
the guarantees. For a full description of the notes and the guarantees,
noteholders should refer to the indenture as supplemented by the respective
supplemental indentures.
GENERAL
The interest rate, aggregate principal amounts and maturity dates of each
series of notes are as follows:
2003 FLOATING 2003 FIXED
RATE NOTES RATE NOTES 2006 NOTES
------------------ ------------------ ------------------
3 month LIBOR
+ 0.45%
Annual Interest Rate........... 4.95% 5.80%
Aggregate Principal Amount..... $500,000,000 $600,000,000 $700,000,000
Maturity Date.................. July 30, 2003 August 1, 2003 August 1, 2006
The 2003 fixed rate notes and the 2006 notes are herein referred to as the
"fixed rate notes."
Interest on the 2003 floating rate notes is payable quarterly on
January 30, April 30, July 30 and October 30 of each year, commencing on
October 30, 2001, to the persons in whose names such notes are registered at the
close of business on January 15, April 15, July 15 or October 15 (whether or not
a Business Day), as the case may be, immediately preceding such interest payment
date. Interest will begin to accrue on the 2003 floating rate notes on July 30,
2001. "Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York City are authorized or obligated by law,
executive order or governmental decree to be closed.
Interest on the fixed rate notes is payable semiannually on February 1 and
August 1 of each year, commencing February 1, 2002, to the persons in whose
names such notes are registered at the close of business on January 15 or
July 15 (whether or not a Business Day), as the case may be, immediately
preceding such interest payment date. Interest will begin to accrue on the notes
on July 30, 2001.
The notes will be unsecured and unsubordinated obligations of the Company
and will be fully and unconditionally guaranteed on an unsubordinated basis by
Tyco. See "Description of the Debt Securities and the Guarantees--Guarantees" in
the accompanying prospectus.
The notes will not be redeemable by the Company prior to maturity except in
the circumstances described below under "--Redemption Upon Changes in
Withholding Taxes."
The notes of each series will be issued in the form of one or more
registered global securities and will be deposited with, or on behalf of, The
Depository Trust Company, as depositary, and registered in the name of the
depositary's nominee. A description of the depositary's procedures with respect
to the
S-12
global securities is set forth in the accompanying prospectus under "Description
of the Debt Securities and the Guarantees--Book Entry, Delivery and Form."
The indenture does not limit the aggregate principal amount of debt
securities which may be issued thereunder. The Company may issue additional 2003
floating rate notes, 2003 fixed rate notes and 2006 notes in the future without
the consent of existing noteholders. If additional notes of any such series are
issued, those notes will contain the same terms as and be deemed part of the
same series as the applicable series of notes offered hereby.
As of the date of this prospectus supplement, $7.77 billion of debt
securities in twelve series are outstanding that were issued under the indenture
by the Company and are guaranteed by Tyco. The interest rate, aggregate
principal amounts and maturity dates of each of such series of debt securities
are as follows:
2002 2004 2005 2006 2007
NOTES NOTES NOTES NOTES NOTES
----------------- ----------------- ---------------- ----------------- -----------------
Interest Rate.................
6 7/8% 5 7/8% 6 3/8% 6.375% 6 1/8%
Aggregate Principal
Amount......................
$1 billion $400 million $750 million $1.0 billion E600 million
Maturity Date.................
September 5, 2002 November 1, 2004 June 15, 2005 February 15, 2006 April 4, 2007
2008
NOTES
-----------------
Interest Rate.................
6 1/8%
Aggregate Principal
Amount......................
$400 million
Maturity Date.................
November 1, 2008
DEALER
REMARKETABLE
2009 2011 SECURITIES(SM) 2028 2029
NOTES NOTES ("DRS.(SM)")* NOTES NOTES
----------------- ----------------- ---------------- ----------------- -----------------
Interest Rate.................
6 1/8% 6.750% 6 1/4%** 7% 6 7/8%
Aggregate Principal
Amount......................
$400 million $1.0 billion $750 million $500 million $800 million
Maturity Date.................
January 15, 2009 February 15, 2011 June 15, 2013 June 15, 2028 January 15, 2029
2030
NOTES
-----------------
Interest Rate.................
3 1/2%
Aggregate Principal
Amount......................
Y30 billion
Maturity Date.................
November 22, 2030
- ----------------------------------
* "Dealer remarketable securities(SM)" and "Drs.(SM)" are service marks of
Chase Securities Inc.
** The Dealer remarketable securities bear interest at the rate of 6 1/4% per
year to June 15, 2003. If J.P. Morgan Securities, Inc. elects to remarket
the Drs., the interest rate will be reset at a fixed rate until June 15,
2013 as determined by the remarketing dealer. If J.P. Morgan Securities,
Inc. does not elect to remarket the Drs., all Drs. must be repurchased by
the Company on June 15, 2003.
RATE OF INTEREST
FLOATING RATE NOTES
RATE OF INTEREST. The rate of interest payable from time to time in respect
of the 2003 floating rate notes, which we refer to as the "Rate of Interest,"
will be a floating rate, subject to adjustment on a quarterly basis and
determined by reference to LIBOR for three-month U.S. dollar deposits,
determined as described below, plus a spread of 0.45% per annum. All percentages
resulting from any calculation on the 2003 floating rate notes will be rounded
to the nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upwards. For example, 9.876545% (or
.09876545) would be rounded to 9.87655% (or .0987655), and all dollar amounts
used in or resulting from such calculation on the 2003 floating rate notes will
be rounded to the nearest cent, with one-half cent being rounded upward.
(1) At approximately 11:00 A.M. (London time) on the second day on which
commercial banks are open for business, including dealings in deposits in U.S.
dollars in London (or, for purposes of paragraph (3) below, New York), prior to
the commencement of the Interest Period (as defined below) for which such rate
will apply (each such day an "Interest Determination Date"), The Bank of New
York, as the calculation agent or its successors in this capacity (the
"Calculation Agent"), will calculate the rate of interest for such Interest
Period at, subject to the provisions described below, the rate per annum equal
to 0.45% above the rate appearing on the Bridge's Telerate Page 3750 (or such
other page as may replace that page on Bridge's Telerate Service or, if such
service is not available, such other service as may be selected by the
Calculation Agent as the information vendor for the purpose of
S-13
displaying the Official British Bankers Association LIBOR Fixing) for
three-month U.S. dollar deposits in the London inter-bank market on such
Interest Determination Date. "Interest Period" means the period beginning on,
and including, July 30, 2001, and ending on, but excluding, the first interest
payment date for the 2003 floating rate notes and each successive period
beginning on, and including, an interest payment date for the 2003 floating rate
notes and ending on, but excluding, the next succeeding interest payment date
for the 2003 floating rate notes.
(2) If on any Interest Determination Date an appropriate rate cannot be
determined from Bridge's Telerate Service or such other service as specified in
(1) above, the Rate of Interest for the next Interest Period shall, subject to
the provisions described below, be the rate per annum that the Calculation Agent
certifies to be 0.45% per annum above the arithmetic mean of the offered
quotations, as communicated to and at the request of the Calculation Agent by
not less than two major banks in London after requesting such quotations from
not less than four major banks in London (the "Reference Banks") selected by the
Calculation Agent, which term shall include any successors nominated by the
Calculation Agent, to leading banks in London by the principal London offices of
the Reference Banks for three-month U.S. dollar deposits in amounts of not less
than $1.0 million in the London inter-bank market as at 11:00 A.M. (London time)
on such Interest Determination Date.
(3) If on any Interest Determination Date fewer than two of such offered
rates are available, the Rate of Interest for the next Interest Period shall be
the Reserve Interest Rate. The "Reserve Interest Rate" refers to the rate per
annum which the Calculation Agent determines to be 0.45% per annum above either:
- The arithmetic mean of the U.S. dollar offered rates which at least two
New York City banks selected by the Calculation Agent are or were
quoting, on the relevant Interest Determination Date, for three-month
deposits in amounts of not less than $1.0 million to the Reference
Banks or those of them (being at least two in number) to which such
quotations are or were, in the opinion of the Calculation Agent, being
so made, or
- In the event that the Calculation Agent can determine no such
arithmetic mean, the arithmetic mean of the U.S. dollar offered rates
which at least two New York City banks selected by the Calculation
Agent are or were quoting on such Interest Determination Date to
leading European banks for a period of three months in amounts of not
less than $1.0 million;
PROVIDED, HOWEVER, that if the banks selected as aforesaid by the
Calculation Agent are not quoting as mentioned above, the Rate of Interest
shall be the Rate of Interest in effect for the last preceding Interest
Period to which (1) or (2) above shall have applied.
DETERMINATION OF RATE OF INTEREST AND CALCULATION OF INTEREST AMOUNT. The
Calculation Agent shall, as soon as practicable after 11:00 A.M. (London time)
on each Interest Determination Date, determine the Rate of Interest and
calculate the amount of interest payable in respect of the following Interest
Period (the "Interest Amount"). The Interest Amount shall be calculated by
applying the Rate of Interest to the principal amount of each floating rate note
outstanding at the commencement of the Interest Period, multiplying each such
amount by the actual number of days in the Interest Period concerned (which
actual number of days shall include the first day but exclude the last day of
such Interest Period) divided by 360 and rounding the resultant figure upwards
to the nearest cent. The determination of the Rate of Interest and the Interest
Amount by the Calculation Agent shall, in the absence of willful default, bad
faith or manifest error, be final and binding on all parties. In no event will
the rate of interest on the floating rate notes be higher than the maximum rate
permitted by New York law, as the same may be modified by United States law of
general application.
CALCULATION AGENT. The Company shall provide that, so long as any of the
2003 floating rate notes remain outstanding, there shall at all times be a
Calculation Agent for the purpose of such notes. In
S-14
the event of the Calculation Agent being unable or unwilling to continue to act
as the Calculation Agent or in the case of the Calculation Agent failing duly to
establish the Rate of Interest for any Interest Period, the Company shall
appoint another leading bank engaged in the London inter-bank market to act as
such in its place. The Calculation Agent may not resign its duties without a
successor having been appointed.
CERTIFICATES TO BE FINAL. All certificates, communications, opinions,
determinations, calculations, quotations and decisions given, expressed, made or
obtained for the purposes of the provisions relating to the payment and
calculation of interest on the 2003 floating rate notes, whether by the
Reference Banks, or any of them, or the Calculation Agent, shall, in the absence
of willful default, bad faith or manifest error, be binding on the Company, the
Calculation Agent and all of the noteholders and no liability shall, in the
absence of willful default, bad faith or manifest error, attach to the
Calculation Agent in connection with the exercise or non-exercise by it of its
powers, duties and discretions.
FIXED RATE NOTES.
The 2003 fixed rate notes will bear interest at 4.95% per annum payable
semiannually in arrears. The 2006 notes will bear interest at 5.80% per annum
payable semiannually in arrears. Interest on the fixed rate notes will be
computed on the basis of a 360-day year consisting of twelve 30-day months.
REDEMPTION UPON CHANGES IN WITHHOLDING TAXES
The Company may redeem all, but not less than all, of the notes of each
series offered hereby under the following conditions:
1. If there is a change or an amendment in the laws or regulations of
Luxembourg or Bermuda or any political subdivisions or taxing authorities
thereof or therein having power to tax (a "Taxing Authority"), or any change in
the application or official interpretation of such laws or regulations.
2. As a result of such change, the Company or Tyco became or will become
obligated to pay Additional Amounts, as defined below in "--Payment of
Additional Amounts," on the next payment date with respect to such notes.
3. The obligation to pay Additional Amounts cannot be avoided through the
Company's or Tyco's reasonable measures.
4. The Company delivers to the trustee:
- a certificate signed by two directors of the Company or two officers of
Tyco, as the case may be, stating that the obligation to pay Additional
Amounts cannot be avoided by the Company or Tyco taking reasonable
measures available to it; and
- a written opinion of independent legal counsel to the Company or Tyco,
as the case may be, of recognized standing to the effect that the
Company or Tyco, as the case may be, has or will become obligated to
pay Additional Amounts as a result of a change, amendment, official
interpretation or application described above and that the Company or
Tyco, as the case may be, cannot avoid the payment of such Additional
Amounts by taking reasonable measures available to it.
5. Following the delivery of the certificate and opinion described in
paragraph 4 above, the Company provides notice of redemption not less than
30 days, but not more than 60 days, prior to the date of redemption. The notice
of redemption cannot be given more than 60 days before the earliest date on
which the Company or Tyco would be otherwise required to pay Additional Amounts,
and the obligation to pay Additional Amounts must still be in effect when the
notice is given.
S-15
Upon the occurrence of each of 1 through 5 above, the Company may redeem the
notes of the applicable series at a redemption price equal to 100% of the
principal amount thereof, together with accrued interest, if any, to the
redemption date, plus any Additional Amounts.
PAYMENT OF ADDITIONAL AMOUNTS
Unless otherwise required by Luxembourg or Bermuda law, neither the Company
nor Tyco will deduct or withhold from payments made with respect to each series
of notes offered hereby and the related guarantees on account of any present or
future taxes, duties, levies, imposts, assessments or governmental charges of
whatever nature imposed or levied by or on behalf of any Taxing Authority
("Taxes"). In the event that the Company or Tyco is required to withhold or
deduct on account of any Taxes from any payment made under or with respect to
such notes or the guarantees, as the case may be, the Company or Tyco, as the
case may be, will pay such additional amounts so that the net amount received by
each holder of notes, including those additional amounts, will equal the amount
that such holder would have received if such Taxes had not been required to be
withheld or deducted. The amounts that the Company or Tyco are required to pay
to preserve the net amount receivable by the holders of notes are referred to as
"Additional Amounts."
Additional Amounts will not be payable with respect to a payment made to a
holder of notes to the extent:
1. that any such Taxes would not have been so imposed but for the existence
of any present or former connection between such holder and the relevant Taxing
Authority imposing such Taxes, other than the mere receipt of such payment,
acquisition, ownership or disposition of such notes or the exercise or
enforcement of rights under such notes, their guarantees or the indenture;
2. of any estate, inheritance, gift, sales, transfer, or personal property
Taxes imposed with respect to such notes, except as otherwise provided in the
indenture;
3. that any such Taxes would not have been imposed but for the presentation
of such notes or guarantees, where presentation is required, for payment on a
date more than 30 days after the date on which such payment became due and
payable or the date on which payment thereof is duly provided for, whichever is
later, except to the extent that the beneficiary or holder thereof would have
been entitled to Additional Amounts had the notes been presented for payment on
any date during such 30-day period; or
4. that such holder would not be liable or subject to such withholding or
deduction of Taxes but for the failure to make a valid declaration of
non-residence or other similar claim for exemption, if:
- the making of such declaration or claim is required or imposed by
statute, treaty, regulation, ruling or administrative practice of the
relevant Taxing Authority as a precondition to an exemption from, or
reduction in, the relevant Taxes; and
- at least 60 days prior to the first payment date with respect to which
the Company or Tyco shall apply this clause 4, the Company or Tyco
shall have notified all holders of notes in writing that they shall be
required to provide such declaration or claim.
Each of the Company and Tyco, as applicable, will also:
- withhold or deduct the Taxes as required;
- remit the full amount of Taxes deducted or withheld to the relevant Taxing
Authority in accordance with all applicable laws;
- use its reasonable best efforts to obtain from each relevant Taxing
Authority imposing such Taxes certified copies of tax receipts evidencing
the payment of any Taxes deducted or withheld; and
S-16
- upon request, make available to the holders of notes, within 60 days after
the date the payment of any Taxes deducted or withheld is due pursuant to
applicable law, certified copies of tax receipts evidencing such payment
by the Company or Tyco or, if, notwithstanding the Company's or Tyco's
efforts to obtain such receipts, the same are not obtainable, other
evidence of such payments.
At least 30 days prior to each date on which any payment under or with
respect to the notes or the guarantees is due and payable, if the Company or
Tyco will be obligated to pay Additional Amounts with respect to such payment,
the Company or Tyco will deliver to the trustee an officer's certificate stating
the fact that such Additional Amounts will be payable, the amounts so payable
and such other information as is necessary to enable the trustee to pay such
Additional Amounts to holders of such notes on the payment date.
The foregoing provisions shall survive any termination or the discharge of
the indenture and shall apply to any jurisdiction in which any successor to the
Company or Tyco, as the case may be, is organized or is engaged in business for
tax purposes or any political subdivisions or taxing authority or agency thereof
or therein.
In addition, the Company will pay any stamp, issue, registration,
documentary or other similar taxes and duties, including interest, penalties and
Additional Amounts with respect thereto, payable in Luxembourg, Bermuda or the
United States or any political subdivision or taxing authority of or in the
foregoing in respect of the creation, issue, offering, enforcement, redemption
or retirement of any notes or guarantees.
Whenever in the indenture, the notes, the guarantees or in this "Description
of the Notes and the Guarantees" there is mentioned, in any context, the payment
of principal, redemption price, interest or any other amount payable under or
with respect to any note or guarantee, such mention shall be deemed to include
the payment of Additional Amounts to the extent payable in the particular
context.
S-17
CERTAIN LUXEMBOURG, BERMUDA AND UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is intended to be a general summary of Luxembourg,
Bermuda and United States federal income tax consequences to holders of notes.
Due to the complexity of the tax laws of these and other taxing jurisdictions,
the uncertainty, in some instances, as to the manner in which such laws apply to
holders and possible changes in law, it is particularly important that each
holder consult with its own tax advisor regarding the tax treatment of the
acquisition, ownership and disposition of notes under the laws of any U.S.
federal, state, local or other taxing jurisdiction.
LUXEMBOURG
Under current law, no withholding or deduction is imposed in Luxembourg in
respect of any payment to be made by the Company in respect of the notes.
Holders of notes who are neither resident in Luxembourg nor engaged in a trade
or business through a permanent establishment or permanent representative in
Luxembourg will not be subject to taxes or duties in Luxembourg with respect to
interest payments on, or gains realized on the disposition of, the notes. No
stamp, registration or similar taxes, duties or charges are payable in
Luxembourg in connection with the issuance of the notes.
BERMUDA
Under current law, no withholding or deduction is imposed in Bermuda in
respect of any payment to be made by the Company in respect of the notes or Tyco
in respect of the guarantees. Holders of notes who are neither resident in
Bermuda nor engaged in a trade or business through a permanent establishment or
permanent representative in Bermuda will not be subject to taxes or duties in
Bermuda with respect to interest payments on, or gains realized on the
disposition of, the notes. No stamp, registration or similar taxes, duties or
charges are payable in Bermuda in connection with the issuance of the notes or
the related guarantees.
UNITED STATES
The following is a general discussion of certain U.S. federal income tax
consequences of the ownership and disposition of the notes to initial holders
purchasing notes at their respective "issue prices." The "issue price" of the
notes will equal the first price at which a substantial amount of the notes is
sold for cash to the public (not including the underwriters or other persons
acting in the capacity of underwriters, placement agents or wholesalers). This
summary is based upon laws, regulations, rulings and decisions currently in
effect, all of which are subject to change or differing interpretations at any
time, possibly with retroactive effect. Moreover, it deals only with purchasers
who hold notes as "capital assets" within the meaning of Section 1221 of the
Internal Revenue Code of 1986, as amended, and does not purport to deal with
persons in special tax situations, such as financial institutions, insurance
companies, regulated investment companies, tax exempt investors, dealers in
securities or currencies, U.S. expatriates, persons holding notes as a position
in a "straddle," "hedge," "conversion" or another integrated transaction for
U.S. federal income tax purposes, persons who own (directly or indirectly)
10 percent or more of the voting power of the Company, or U.S. holders (defined
below) whose functional currency is not the U.S. dollar. Further, this
discussion does not address the consequences under U.S. federal estate or gift
tax laws or the laws of any U.S. state or locality.
Prospective purchasers of the notes are urged to consult their own tax
advisors concerning the consequences, in their particular circumstances, of
ownership of the notes under the U.S. federal income tax laws and the laws of
any relevant state, local or non-U.S. taxing jurisdiction.
S-18
The term "U.S. holder" means a beneficial owner of notes that is, for U.S.
federal income tax purposes:
- a citizen or resident of the United States;
- a corporation or other entity that has elected to be treated as a
corporation, created or organized in or under the laws of the United
States or of any political subdivision thereof;
- an estate whose income is subject to U.S. federal income tax regardless
of its source; or
- a trust if, in general, a court within the United States is able to
exercise primary jurisdiction over its administration and one or more
U.S. persons have authority to control all of its substantial
decisions.
The term "non-U.S. holder" means a beneficial owner, other than a
partnership, of notes that is not a U.S holder for U.S. federal income tax
purposes.
If a partnership, including for this purpose any entity treated as a
partnership for U.S. federal income tax purposes, is a beneficial owner of
notes, the treatment of a partner in the partnership will generally depend upon
the status of the partner and upon the activities of the partnership. A holder
of notes that is a partnership, and partners in such a partnership, should
consult their tax advisors about the U.S. federal income tax consequences of
holding and disposing of notes.
U.S. HOLDERS
INTEREST
The gross amount of interest paid on the notes (including any Additional
Amounts paid in respect of withholding taxes) will be taxable as ordinary income
when received or accrued by a U.S. holder in accordance with such U.S. holder's
method of accounting for U.S. federal income tax purposes. Such interest will be
income from sources outside the United States and, with certain exceptions, will
be treated as "passive" income for purposes of computing the foreign tax credit
allowable under U.S. federal income tax laws. The rules relating to foreign tax
credits and the timing thereof are extremely complex, and U.S. holders should
consult their own tax advisors with regard to the availability of foreign tax
credits and the application of the foreign tax credit limitations to their
particular situations.
DISPOSITION
Upon the sale, redemption or other taxable disposition of a note, a U.S.
holder will recognize capital gain or loss equal to the difference between the
amount realized (excluding any amount attributable to accrued interest not
previously included in income, which will be taxable as ordinary interest
income) and the U.S. holder's tax basis in the notes (generally the U.S.
holder's cost). Such gain or loss will be long term capital gain or loss if the
notes are held for more than one year. The deductibility of capital losses is
subject to certain limitations. For purposes of foreign tax credits under U.S.
federal income tax laws, capital gain recognized by a U.S. holder generally will
be treated as U.S. source income, but any capital loss recognized by a U.S.
holder may be allocable to foreign source income. U.S. holders should consult
their own tax advisors as to the foreign tax credit implications of the
disposition of notes under U.S. federal income tax laws.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Non-exempt U.S. holders may be subject to information reporting with respect
to payments of interest on, and the proceeds of the disposition of, notes.
Non-exempt U.S. holders who are subject to information reporting and who do not
provide appropriate information when requested may be subject to backup
withholding at a rate of up to 31%. U.S. holders should consult their tax
advisors concerning the application of the information reporting and backup
withholding rules.
S-19
NON-U.S. HOLDERS
INTEREST AND DISPOSITION
In general (and subject to the discussion below under "Information Reporting
and Backup Withholding"), a non-U.S. holder will not be subject to U.S. federal
income or withholding tax with respect to payments of interest on, or gain upon
the disposition of, notes, unless:
- the interest or gain is effectively connected with the conduct by the
non-U.S. holder of a trade or business in the United States; or
- in the case of gain upon the disposition of notes, the non-U.S. holder is
an individual who is present in the U.S. for 183 days or more in the
taxable year and certain other conditions are met.
Interest or gain that is effectively connected with the conduct by the
non-U.S. holder of a trade or business in the United States will generally be
subject to regular U.S. income tax in the same manner as if it were realized by
a U.S. holder. In addition, if such non-U.S. holder is a non-U.S. corporation,
such interest or gain may be subject to a branch profits tax at a rate of 30%
(or such lower rate as is provided by an applicable income tax treaty).
INFORMATION REPORTING AND BACKUP WITHHOLDING
If the notes are held by a non-U.S. holder through a non-U.S. (and non-U.S.
related) broker or financial institution, information reporting and backup
withholding generally would not be required. Information reporting, and possibly
backup withholding, may apply if the notes are held by a non-U.S. holder through
a U.S. (or U.S. related) broker or financial institution and the non-U.S. holder
fails to provide appropriate information. Non-U.S. holders should consult their
tax advisors concerning the application of the information reporting and backup
withholding rules.
S-20
UNDERWRITING
The Company is selling the notes to the underwriters named below under an
underwriting agreement dated July 24, 2001. J.P. Morgan Securities Inc. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated are acting as joint
book-running managers. Subject to certain conditions, the Company has agreed to
sell to each of the underwriters, and each of the underwriters has agreed to
purchase, the principal amount of the notes set forth opposite its name below:
PRINCIPAL AMOUNT PRINCIPAL AMOUNT
OF 2003 FLOATING OF 2003 FIXED PRINCIPAL AMOUNT
UNDERWRITER RATE NOTES RATE NOTES OF 2006 NOTES
- ----------- ---------------- ---------------- ----------------
J.P. Morgan Securities Inc..................... $200,000,000 $240,000,000 $280,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................... 200,000,000 240,000,000 280,000,000
Banc of America Securities LLC................. 12,500,000 15,000,000 17,500,000
Bear, Stearns & Co. Inc. ...................... 12,500,000 15,000,000 17,500,000
Commerzbank Capital Markets Corp............... 12,500,000 15,000,000 17,500,000
Credit Suisse First Boston Corporation......... 12,500,000 15,000,000 17,500,000
First Union Securities, Inc. .................. 12,500,000 15,000,000 17,500,000
HSBC Securities (USA) Inc. .................... 12,500,000 15,000,000 17,500,000
Lehman Brothers Inc............................ 12,500,000 15,000,000 17,500,000
Salomon Smith Barney Inc. ..................... 12,500,000 15,000,000 17,500,000
------------ ------------ ------------
Total................................ $500,000,000 $600,000,000 $700,000,000
============ ============ ============
Under the terms and conditions of the underwriting agreement, if the
underwriters take any of the notes offered hereby, then the underwriters are
obligated to take and pay for all of the notes offered hereby.
The notes are new issues of securities with no established trading market
and will not be listed on any national securities exchange. The underwriters
have advised the Company and Tyco that they intend to make a market for the
notes, but they have no obligation to do so and may discontinue market making at
any time without providing any notice. No assurance can be given as to the
liquidity of any trading market for the notes.
The underwriters initially propose to offer the notes directly to the public
at the offering prices described on the cover page and to certain dealers at a
price that represents a concession not in excess of .20% of the principal amount
of the 2003 floating rate notes, .20% of the principal amount of the 2003 fixed
rate notes and .35% of the principal amount of the 2006 notes. Any underwriter
may allow, and any such dealer may reallow, a concession not in excess of .15%
of the principal amount of the 2003 floating rate notes, .15% of the principal
amount of the 2003 fixed rate notes and .25% of the principal amount of the 2006
notes to certain other dealers. After the initial offering of the notes, the
underwriters may from time to time vary the offering price and other selling
terms.
The Company and Tyco have also agreed to indemnify the underwriters against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended, or to contribute to payments which the underwriters may be required to
make in respect of any such liabilities.
In connection with the offering of the notes, the underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
notes. Specifically, the underwriters may overallot in connection with the
offering of the notes, creating a syndicate short position. In addition, the
underwriters may bid for and purchase notes in the open market to cover
syndicate short positions or to stabilize the price of the notes. Finally, the
underwriting syndicate may reclaim selling concessions allowed for distributing
the notes in the offering of the notes, if the syndicate repurchases previously
distributed notes in syndicate covering transactions, stabilization transactions
or otherwise. Any of these
S-21
activities may stabilize or maintain the market price of the notes above
independent market levels. The underwriters are not required to engage in any of
these activities, and may end any of them at any time.
It is expected that delivery of the notes will be made against payment
therefor on or about July 30, 2001, which will be the fourth business day
following the date of pricing of the notes (such settlement cycle being referred
to herein as "T+4"). Under Rule 15c6-1 of the Exchange Act, trades in the
secondary market generally are required to settle in three business days, unless
the parties to any such trade expressly agree otherwise. Accordingly, purchasers
who wish to trade notes on the day of pricing will be required, by virtue of the
fact that the notes initially will settle in T+4, to specify an alternate
settlement cycle at the time of any such trade to prevent a failed settlement.
Purchasers who wish to trade notes on the date of pricing should consult their
own advisors.
Expenses associated with this offering to be paid by the Company, excluding
underwriting discounts, are estimated to be $2.5 million.
In the ordinary course of their respective businesses, certain of the
underwriters and their affiliates have engaged, and may in the future engage, in
commercial banking and/or investment banking transactions with the Company, Tyco
and their affiliates.
LEGAL MATTERS
Certain U.S. legal matters regarding the notes and guarantees will be passed
upon for Tyco by Wilmer, Cutler & Pickering, Washington, D.C., counsel to Tyco
and the Company. Certain matters under the laws of Bermuda related to the
guarantees will be passed upon for Tyco by Appleby Spurling & Kempe, Hamilton,
Bermuda, Bermuda counsel to Tyco. Michael L. Jones, Secretary of Tyco, is a
partner of Appleby Spurling & Kempe. Certain matters under the laws of
Luxembourg related to the notes will be passed upon by Beghin & Feider in
association with Allen & Overy, Luxembourg counsel to the Company. Certain U.S.
legal matters regarding the notes will be passed upon for the underwriters by
Milbank, Tweed, Hadley & McCloy LLP, New York, New York. Milbank, Tweed,
Hadley & McCloy LLP acts as counsel from time to time in matters for Tyco and
certain of its subsidiaries. Wilmer, Cutler & Pickering and Milbank, Tweed,
Hadley & McCloy LLP will rely on the opinion of Appleby Spurling & Kempe with
respect to matters of Bermuda law and on the opinion of Beghin & Feider in
association with Allen & Overy, with respect to matters of Luxembourg law.
EXPERTS
The consolidated financial statements and financial statement schedule of
Tyco as of September 30, 2000 and 1999, and for each of the three years in the
period ended September 30, 2000, included in Tyco's Annual Report on Form 10-K
filed on December 21, 2000, and incorporated by reference into this document,
have been audited by PricewaterhouseCoopers, independent accountants, as set
forth in their report included therein. In its report, that firm states that
with respect to a certain subsidiary its opinion is based upon the report of
other independent accountants, namely Arthur Andersen LLP (as it relates to the
consolidated balance sheet of AMP Incorporated and its subsidiaries as of
September 30, 1998, and the related consolidated statements of income,
shareholders' equity and cash flows for the year ended September 30, 1998). The
consolidated financial statements and financial statement schedule referred to
above have been incorporated herein in reliance on said reports given on the
authority of such firms as experts in auditing and accounting.
The consolidated balance sheets as of December 31, 2000 and 1999 and the
related consolidated statements of income, changes in shareholders' equity and
cash flows of CIT and its subsidiaries for each of the years in the three-year
period ended December 31, 2000 have been incorporated by reference herein in
reliance upon the report of KPMG LLP, independent certified public accountants,
also incorporated by reference herein, and upon the authority of KPMG LLP as
experts in accounting and auditing.
S-22
PROSPECTUS
$3,500,000,000
----------------
TYCO INTERNATIONAL GROUP S.A.
---------------
DEBT SECURITIES
---------------------
Fully and Unconditionally Guaranteed by
[LOGO]
Tyco International Group S.A. (the "Company") may offer from time to time
unsecured debt securities.
The debt securities are unsecured obligations of the Company, which may be
either senior or subordinated. The debt securities are fully and unconditionally
guaranteed on an unsecured basis by Tyco International Ltd. ("Tyco"), the
Company's corporate parent. Tyco's guarantee may be either senior or
subordinate.
Specific terms of the debt securities will be fully described in the
prospectus supplement that will accompany this prospectus. Please read both the
prospectus supplement and this prospectus carefully before you invest.
This prospectus may not be used to sell debt securities unless accompanied
by a prospectus supplement.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION NOR THE REGISTRAR OF COMPANIES OR THE BERMUDA MONETARY AUTHORITY IN
BERMUDA HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
DOCUMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is September 18, 2000
TABLE OF CONTENTS
PAGE
--------
Where You Can Find More Information......................... ii
Forward Looking Information................................. iii
Tyco........................................................ 1
The Company................................................. 1
Use of Proceeds............................................. 1
Ratio of Earnings to Fixed Charges of Tyco.................. 2
Description of the Debt Securities and the Guarantees....... 3
Description of the Common Shares............................ 22
Enforcement of Civil Liabilities............................ 25
Plan of Distribution........................................ 25
Legal Matters............................................... 26
Experts..................................................... 27
------------------------
THE BERMUDA STOCK EXCHANGE TAKES NO RESPONSIBILITY FOR THE CONTENTS OF THIS
DOCUMENT, MAKES NO REPRESENTATIONS AS TO ITS ACCURACY OR COMPLETENESS AND
EXPRESSLY DISCLAIMS ANY LIABILITY WHATSOEVER FOR ANY LOSS HOWSOEVER ARISING FROM
OR IN RELIANCE UPON ANY PART OF THE CONTENTS OF THIS DOCUMENT.
i
WHERE YOU CAN FIND MORE INFORMATION
In connection with this offering of debt securities, the Company and Tyco
have filed with the United States Securities and Exchange Commission a
registration statement under the United States Securities Act of 1933 relating
to the debt securities. As permitted by SEC rules, this document omits certain
information included in the registration statement. For a more complete
understanding of the debt securities and this offering, you should refer to the
registration statement, including its exhibits.
Tyco also files annual, quarterly and current reports, proxy statements and
other information with the SEC. Tyco's filings are available to the public over
the Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document filed by Tyco or the Company with the SEC at the SEC's public
reference rooms in Washington, D.C., New York, New York and Chicago, Illinois.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Tyco's common shares are listed on the New York Stock Exchange,
as well as on the London and Bermuda Stock Exchanges. You can obtain information
about Tyco from the New York Stock Exchange at 20 Broad Street, New York, New
York 10005.
The SEC allows the Company and Tyco to "incorporate by reference"
information in documents filed with the SEC, which means that they can disclose
important information to you by referring you to those documents. These
incorporated documents contain important business and financial information
about the Company and Tyco that is not included in or delivered with this
document. The information incorporated by reference is considered to be part of
this document, and later information filed with the SEC may update and supersede
this information. The Company and Tyco incorporate by reference the documents
listed below and any future filings made with the SEC under Section 13(a),
13(c), 14 or 15(d) of the United States Securities Exchange Act of 1934 prior to
the end of the offering of debt securities under this document.
1. Tyco's Annual Report on Forms 10-K and 10-K/A for the fiscal year ended
September 30, 1999.
2. Tyco's Quarterly Reports on Forms 10-Q and 10-Q/A for the quarters ended
December 31, 1999, March 31, 2000 and June 30, 2000.
3. Tyco's Current Reports on Form 8-K filed on December 9, 1999, December 10,
1999, January 20, 2000 and July 14, 2000.
4. The description of Tyco's common shares as set forth in Tyco's Registration
Statement on Form 8-A/A filed on March 1, 1999.
You may request a copy of these filings at no cost, by writing or calling
Tyco at the following address or telephone number:
Tyco International Ltd.
The Zurich Centre, Second Floor
90 Pitts Bay Road
Pembroke HM 08, Bermuda
(441) 292-8674
Exhibits to the documents will not be sent, however, unless those exhibits
have specifically been incorporated by reference in this document.
YOU SHOULD RELY ONLY ON THE INFORMATION PROVIDED OR INCORPORATED BY
REFERENCE IN THIS DOCUMENT. NEITHER THE COMPANY NOR TYCO HAS AUTHORIZED ANYONE
ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. YOU SHOULD NOT ASSUME THAT THE
INFORMATION IN THIS DOCUMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON
THE FRONT OF THIS DOCUMENT.
References to "$" in this prospectus are to United States dollars.
ii
FORWARD LOOKING INFORMATION
Certain statements contained or incorporated by reference in this document
are "forward looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. All forward looking statements involve
risks and uncertainties. In particular, any statement contained in this document
or any document incorporated by reference in this document regarding the
consummation and benefits of future acquisitions, as well as expectations with
respect to future sales, operating efficiencies and product expansion, are
subject to known and unknown risks, uncertainties and contingencies, many of
which are beyond the control of the Company and Tyco, which may cause actual
results, performance or achievements to differ materially from anticipated
results, performances or achievements. Factors that might affect such forward
looking statements include, among other things:
- overall economic and business conditions;
- the demand for Tyco's goods and services;
- competitive factors in the industries in which the Company and Tyco
compete;
- changes in government regulation;
- changes in tax requirements, including tax rate changes, new tax laws and
revised tax law interpretations;
- results of litigation;
- interest rate fluctuations, foreign currency rate fluctuations and other
capital market conditions;
- economic and political conditions in international markets, including
governmental changes and restrictions on the ability to transfer capital
across borders;
- the ability to achieve anticipated synergies and other costs savings in
connection with acquisitions;
- the timing, impact and other uncertainties of future acquisitions; and
- the timing of construction and the successful operation of the TyCom
Global Network-TM-.
iii
TYCO
Tyco is a diversified manufacturing and service company that, through its
subsidiaries:
- designs, manufactures and distributes electrical and electronic components
and designs, manufactures, installs and services undersea cable
communication systems;
- designs, manufactures and distributes disposable medical supplies and
other specialty products, and conducts auto redistribution services;
- designs, manufactures, installs and services fire detection and
suppression systems and installs, monitors and maintains electronic
security systems; and
- designs, manufactures and distributes flow control products.
Tyco's strategy is to be the low-cost, high-quality producer and provider in
each of its markets. It promotes its leadership position by investing in
existing businesses, developing new markets and acquiring complementary
businesses and products. Combining the strengths of its existing operations and
its business acquisitions, Tyco seeks to enhance shareholder value through
increased earnings per share and strong cash flows.
Tyco reviews acquisition opportunities in the ordinary course of its
business, some of which may be material and some of which are currently under
investigation, discussion or negotiation. There can be no assurance that any of
such acquisitions will be consummated.
Tyco is a Bermuda company whose registered and principal executive offices
are located at The Zurich Centre, Second Floor, 90 Pitts Bay Road, Pembroke HM
08, Bermuda, and its telephone number is (441) 292-8674. The executive offices
of Tyco's principal United States subsidiaries are located at One Tyco Park,
Exeter, New Hampshire 03833. The telephone number there is (603) 778-9700.
THE COMPANY
Tyco International Group S.A., a Luxembourg company, was formed on
March 30, 1998, as a wholly-owned subsidiary of Tyco. The registered and
principal offices of the Company are located at 6, avenue Emile Reuter, Second
Floor, L-2420 Luxembourg, and its telephone number is (352) 46-43-40-1. The
Company is a holding company whose only business is to own indirectly a
substantial portion of the operating subsidiaries of Tyco. Otherwise, it
conducts no independent operations.
USE OF PROCEEDS
Unless otherwise specified in the applicable prospectus supplement, the
Company intends to use the net proceeds from the sale of the debt securities to
refinance, in part, existing indebtedness, to finance recently announced
acquisitions and for general corporate purposes. Funds not required immediately
for these purposes may be invested temporarily in short-term marketable
securities.
1
RATIO OF EARNINGS TO FIXED CHARGES OF TYCO
The following table sets forth the ratio of earnings to fixed charges of
Tyco for the nine months ended June 30, 2000, the years ended September 30, 1999
and 1998, the nine-month transition period ended September 30, 1997 and the
years ended December 31, 1996 and 1995.
NINE MONTHS NINE MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
----------- ------------------- ------------- -------------------
2000 1999 1998 1997(4) 1996 1995
----------- -------- -------- ------------- -------- --------
Ratio of earnings to fixed charges
(1)(2)(3)............................... 5.89 3.53 5.07 1.00 2.54 4.68
- ------------------------
(1) For purposes of determining the ratio of earnings to fixed charges, earnings
consist of income (loss) before income taxes, extraordinary items,
cumulative effect of accounting changes and fixed charges. Fixed charges
consist of interest on indebtedness, amortization of debt expenses and
one-third of rent expense which is deemed representative of an interest
factor.
(2) On July 2, 1997, Tyco, formerly called ADT Limited, merged with Tyco
International Ltd., a Massachusetts corporation ("Former Tyco"). On
April 2, 1999, October 1, 1998, August 29, 1997 and August 27, 1997, Tyco
consummated mergers with AMP Incorporated, United States Surgical
Corporation, Keystone International, Inc. and Inbrand Corporation,
respectively. Each of the five merger transactions qualifies for the pooling
of interests method of accounting. As such, the ratios of earnings to fixed
charges presented above include the effect of the mergers, except that the
calculation presented above for periods prior to January 1, 1997 does not
include Inbrand due to immateriality.
Prior to their respective mergers, AMP, US Surgical, Keystone, and ADT had
December 31 year ends and Former Tyco had a June 30 fiscal year end. The
historical results upon which the ratios are based have been combined using
a December 31 year end for AMP, US Surgical, Keystone, ADT and Former Tyco
for the year ended December 31, 1996. For 1995, the ratio of earnings to
fixed charges reflects the combination of AMP, US Surgical, Keystone and ADT
with a December 31 year end and Former Tyco with a June 30 fiscal year end.
(3) Earnings for the nine months ended June 30, 2000, the years ended
September 30, 1999 and 1998, the nine months ended September 30, 1997 and
the years ended December 31, 1996 and 1995 include merger, restructuring and
other non-recurring (credits) charges of $(81.3) million (of which $1.0
million is included in cost of sales), $1,035.2 million (of which
$106.4 million is included in cost of sales), $256.9 million,
$947.9 million, $344.1 million and $97.1 million, respectively. Earnings
also include charges for the impairment of long-lived assets of $99.0
million, $507.5 million, $148.4 million, $744.7 million and $8.2 million in
the nine months ended June 30, 2000, the year ended September 30, 1999, the
nine months ended September 30, 1997 and the years ended December 31, 1996
and 1995, respectively. The 1997 period also includes a write-off of
purchased in-process research and development of $361.0 million. The 1995
period also includes a net loss on the disposal of businesses of $34.4
million.
On a pro forma basis, the ratio of earnings to fixed charges excluding
merger, restructuring and other non-recurring (credits) charges, charges for
the impairment of long-lived assets, the write-off of purchased in-process
research and development and the net loss on the disposal of businesses
would have been 5.91x, 5.82x, 5.68x, 6.81x, 5.76x and 5.09x for the nine
months ended June 30, 2000, the years ended September 30, 1999 and 1998, the
nine months ended September 30, 1997 and the years ended December 31, 1996
and 1995, respectively.
(4) In September 1997, Tyco changed its fiscal year end from December 31 to
September 30. Accordingly, the nine-month transition period ended
September 30, 1997 is presented.
2
DESCRIPTION OF THE DEBT SECURITIES AND THE GUARANTEES
The debt securities will be either senior debt securities or subordinated
debt securities. The senior debt securities will be issued under an indenture
dated as of June 9, 1998 among the Company, Tyco and the Bank of New York, as
trustee. This indenture is referred to as the "senior indenture." The
subordinated debt securities will be issued under an indenture to be entered
into among the Company, Tyco and the trustee named in a prospectus supplement.
This indenture is referred to as the "subordinated indenture." The senior
indenture and the subordinated indenture together are called the "indentures."
The following description is subject to the detailed provisions of the
indentures, copies of which can be obtained upon request from Tyco. See "Where
You Can Find More Information" on page i. The indentures are subject to, and
governed by, the Trust Indenture Act of 1939. The statements made in this
section relating to the indentures and to the debt securities and guarantees of
the debt securities to be issued under the indentures are summaries, and do not
purport to be complete. For a full description of the terms of the debt
securities and their guarantees, you should refer to the indentures, as
supplemented by any applicable supplemental indentures.
THE FOLLOWING IS A DESCRIPTION OF THE GENERAL TERMS AND PROVISIONS OF THE
DEBT SECURITIES SET FORTH IN THE INDENTURES AND WHICH MAY APPLY TO ANY SERIES OF
DEBT SECURITIES. THE PARTICULAR TERMS OF A SERIES OF DEBT SECURITIES AND THE
EXTENT, IF ANY, TO WHICH THESE GENERAL TERMS DO NOT APPLY TO SUCH DEBT
SECURITIES, WILL BE SET FORTH IN A SUPPLEMENTAL INDENTURE AND DESCRIBED IN A
PROSPECTUS SUPPLEMENT RELATING TO THE PARTICULAR SERIES OF DEBT SECURITIES. SEE
"PROSPECTUS SUPPLEMENTS" BELOW. ACCORDINGLY, FOR A DESCRIPTION OF THE TERMS AND
PROVISIONS OF ANY PARTICULAR SERIES OF DEBT SECURITIES, YOU MUST REFER TO BOTH
THIS DESCRIPTION AND THE DESCRIPTION OF THE PARTICULAR SERIES CONTAINED IN THE
APPLICABLE PROSPECTUS SUPPLEMENT.
GENERAL
The debt securities will be direct, unsecured obligations of the Company in
the form of either senior or subordinated debt. The senior debt securities and
the subordinated debt securities are together referred to in this prospectus as
the "debt securities." The senior debt securities will rank equally with other
unsecured and unsubordinated obligations of the Company for money borrowed. The
subordinated debt securities will be entitled to payment only after payment has
been made on the senior indebtedness.
The debt securities will be effectively subordinated to all existing and
future indebtedness and other liabilities of the Company's 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 upon
a liquidation or reorganization or otherwise of such subsidiary will be
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.
Except as described under "Certain Restrictive Covenants in the Senior
Indenture," the indentures do 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.
There are no covenants or provisions contained in the indentures which afford
the holders of debt securities protection in the event of a highly leveraged
transaction, reorganization, restructuring, merger or similar transaction
involving the Company or Tyco. The consummation of any highly leveraged
transaction, reorganization, restructuring, merger or similar transaction could
cause a material decline in the credit quality of any outstanding debt
securities.
Debt securities may be issued either in certificated, fully registered form,
without coupons, or as global notes under a book-entry system. See "Book-Entry,
Delivery and Form" below. Upon receipt of an authentication order from the
Company together with any other documentation required by the
3
indentures, the trustee will authenticate debt securities in the form and amount
required by the supplemental indenture relating to the series of debt
securities.
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. The Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection with any such transfer or
exchange.
The indentures do not limit the aggregate principal amount of debt
securities which may be issued thereunder.
PROSPECTUS SUPPLEMENTS
The following terms of and information relating to a particular series of
debt securities offered pursuant to this document will be set forth in the
applicable prospectus supplement:
- the title of the debt securities
- the aggregate principal amount of the debt securities
- the date or dates on which principal of, and premium, if any, on the debt
securities is payable
- the rate at which the debt securities shall bear interest, if any, or the
method by which the interest rate will be determined
- the date or dates from which interest will accrue
- the date or dates on which interest will be payable and any related
record dates
- any redemption, repayment or sinking fund provisions
- the terms, if any, upon which the debt securities may be convertible into
or exchanged for securities of any kind of Tyco, the Company or of any
other issuer or obligor and the terms and conditions upon which such
conversion or exchange shall be effected
- the denominations in which the debt securities will be issuable
- any applicable material income tax considerations
- if other than the principal amount of the debt securities, the portion of
the principal amount due upon acceleration
- whether the debt securities will be issued in the form of a global
security or securities
- any subordination provisions if different from those described below
under "Subordinated Debt Securities"
- any other specific terms of the debt securities
- any specific terms and provisions of any guarantees of the debt
securities
- if other than the trustee named in the senior indenture, the identity of
any trustees, paying agents or registrars with respect to the debt
securities
GUARANTEES
Tyco will unconditionally guarantee the due and punctual payment of the
principal of and interest on the debt securities and any other obligations of
the Company under the indentures, as supplemented, when and as the same shall
become due and payable, whether at maturity, upon redemption, by acceleration or
otherwise. Tyco's guarantees are unsecured. With respect to debt securities
issued under the senior indenture, Tyco's guarantee will be an unsubordinated
obligation of
4
Tyco and will rank equally with all other unsecured and unsubordinated
obligations of Tyco. With respect to debt securities issued under the
subordinated indenture, Tyco's guarantee will be a subordinated obligation of
Tyco. The guarantees provide that in the event of a default in payment on a debt
security, the holder of the debt security may institute legal proceedings
directly against Tyco to enforce the guarantees without first proceeding against
the Company. In addition, as described below under "Certain Restrictive
Covenants in the Senior Indenture--Limitation on Indebtedness of Subsidiaries,"
subsidiaries of the Company may execute and deliver additional guarantees.
The obligations of Tyco and any other guarantor of the debt securities, if
any, under their guarantees are limited to the maximum amount which will not
result in the obligations of such guarantors under their guarantees constituting
a fraudulent conveyance or fraudulent transfer under applicable law. Each
guarantor of debt securities that makes a payment or distribution under its
guarantee shall be entitled to a contribution from each other guarantor of such
debt securities to the extent permitted by applicable law.
REDEMPTION
In addition to any other redemption provisions that may be included in any
supplemental indenture, the debt securities may be redeemed as described below.
REDEMPTION UPON CHANGES IN WITHHOLDING TAXES
The Company may redeem all, but not less than all, of the debt securities of
any series if the following occurs:
1. After the date that the debt securities to be redeemed were issued,
there is a change in the laws or regulations of Luxembourg or Bermuda or any
of their respective political subdivisions or taxing authorities, or any
change in the application or official interpretation of such laws or
regulations.
2. As a result of this change, the Company or Tyco became or will
become obligated to pay Additional Amounts, as defined below under "Payment
of Additional Amounts," on the next payment date with respect to the debt
securities to be redeemed.
3. The obligation to pay Additional Amounts cannot be avoided through
the Company's or Tyco's reasonable measures.
4. The Company delivers to the trustee:
- a certificate signed by two directors or by two officers of the Company
or Tyco, or by a combination of officers and directors as described in
the indentures, stating that the obligation to pay Additional Amounts
cannot be avoided by the Company or Tyco taking reasonable measures
available to it; and
- a written opinion of independent legal counsel to the Company or Tyco,
as the case may be, of recognized standing, to the effect that the
Company or Tyco, as the case may be, has or will become obligated to
pay Additional Amounts as a result of a change, amendment, official
interpretation or application described above and that the Company or
Tyco, as the case may be, cannot avoid the payment of such Additional
Amounts by taking reasonable measures available to it.
5. Following the delivery of the certificate and opinion described in
clause 4 above, the Company provides notice of redemption not less than
30 days, but not more than 60 days, prior to the date of redemption. The
notice of redemption cannot be given more than 60 days before the earliest
date on which the Company or Tyco would be otherwise required to pay
Additional Amounts, and the obligation to pay Additional Amounts must still
be in effect when the notice is given.
5
Upon the occurrence of all of 1 through 5 above, the Company may redeem the
debt securities at a redemption price equal to 100% of the principal amount
thereof, together with accrued interest, if any, to the redemption date, plus
any Additional Amounts.
NOTICE OF REDEMPTION
In the event of a redemption of debt securities, the Company must deliver by
first-class mail, postage prepaid, to the holders of the debt securities to be
redeemed, a notice of redemption specifying the following:
- the redemption price,
- the amount of the debt securities held by the holder to be redeemed,
- the redemption date,
- the place of payment,
- that payment will be made when the debt securities are surrendered to the
trustee,
- that interest accrued to the date of redemption will be paid as specified
in the notice, and
- that after the redemption date, and unless the Company defaults in the
payment of the redemption price, interest will stop accruing on the debt
securities or portions thereof to be redeemed.
In connection with redemption, the Company will deposit with the trustee or
with one or more paying agents an amount of money sufficient to redeem on the
redemption date all the debt securities called for redemption. If less than all
the debt securities of a series are to be redeemed, the trustee will select, in
such manner as it deems appropriate and fair, debt securities of such series to
be redeemed. Unless the Company defaults on the redemption payments, on and
after the redemption date specified in the notice of redemption:
- interest on the debt securities called for redemption will cease to
accrue, and
- the holders of such debt securities will have no right in respect of such
debt securities except the right to receive the redemption price thereof
and unpaid interest to the date fixed for redemption.
PAYMENT OF ADDITIONAL AMOUNTS
Unless otherwise required by Luxembourg or Bermuda law, neither the Company,
Tyco nor any other guarantor of the debt securities will deduct or withhold from
payments made with respect to the debt securities and the guarantees on account
of any present or future taxes, duties, levies, imposts, assessments or
governmental charges of whatever nature imposed or levied by or on behalf of any
Luxembourg or Bermuda taxing authority ("Taxes"). In the event that the Company,
Tyco or any other guarantor is required to withhold or deduct on account of any
Taxes from any payment made under or with respect to any debt securities or the
guarantees, the Company, Tyco or such other guarantor, as the case may be, will
pay such additional amounts so that the net amount received by each holder of
debt securities, including the additional amounts, will equal the amount that
such holder would have received if such Taxes had not been required to be
withheld or deducted. The amounts that the Company, Tyco or such other guarantor
are required to pay to preserve the net amount receivable by holders of debt
securities are referred to as "Additional Amounts."
6
Additional Amounts will not be payable with respect to a payment made to a
holder of debt securities to the extent:
1. that any such Taxes would not have been so imposed but for the
existence of any present or former connection between such holder and the
Luxembourg or Bermuda taxing authority imposing such Taxes, other than the
mere receipt of such payment, acquisition, ownership or disposition of such
debt securities or the exercise or enforcement of rights under such debt
securities, their guarantees or the related indenture;
2. of any estate, inheritance, gift, sales, transfer, or personal
property Taxes imposed with respect to such debt securities, except as
otherwise provided in the related indenture;
3. that any such Taxes would not have been imposed but for the
presentation of such debt securities, where presentation is required, for
payment on a date more than 30 days after the date on which such payment
became due and payable or the date on which payment thereof is duly provided
for, whichever is later, except to the extent that the beneficiary or holder
thereof would have been entitled to Additional Amounts had the debt
securities been presented for payment on any date during such 30-day period;
or
4. that such holder would not be liable or subject to such withholding
or deduction of Taxes but for the failure to make a valid declaration of
non-residence or other similar claim for exemption, if:
- the making of such declaration or claim is required or imposed by
statute, treaty, regulation, ruling or administrative practice of the
relevant Luxembourg or Bermuda taxing authority as a precondition to an
exemption from, or reduction in, the relevant Taxes, and
- at least 60 days prior to the first payment date with respect to which
the Company, Tyco or such other guarantor shall apply this clause 4,
the Company, Tyco or such other guarantor has notified all holders of
debt securities in writing that they are required to provide such
declaration or claim.
Each of the Company, Tyco and any other guarantor of the debt securities, as
applicable, will also:
- withhold or deduct Taxes as required,
- remit the full amount of Taxes deducted or withheld to the relevant
Luxembourg or Bermuda taxing authority in accordance with all applicable
laws,
- use its reasonable best efforts to obtain from each Luxembourg or Bermuda
taxing authority imposing such Taxes certified copies of tax receipts
evidencing the payment of any Taxes deducted or withheld, and
- upon request, make available to the holders of the debt securities,
within 60 days after the date the payment of any Taxes deducted or
withheld is due pursuant to applicable law, certified copies of tax
receipts evidencing such payment by the Company, Tyco or such other
guarantor or if, notwithstanding the Company's, Tyco's or such other
guarantor's efforts to obtain such receipts, the same are not obtainable,
other evidence of such payments by the Company, Tyco or such other
guarantor of the debt securities.
At least 30 days prior to each date on which any payment under or with
respect to a series of debt securities is due and payable, if the Company, Tyco
or such other guarantor will be obligated to pay Additional Amounts with respect
to such payment, the Company, Tyco or such other guarantor will deliver to the
trustee an officer's certificate stating the fact that such Additional Amounts
will be payable, the amounts so payable and such other information as is
necessary to enable the trustee to pay such Additional Amounts to holders of
such debt securities on the payment date.
7
The foregoing provisions shall survive any termination or the discharge of
the related indenture and shall apply MUTATIS MUTANDIS to any jurisdiction in
which any successor to the Company, Tyco or any other guarantor of the debt
securities, as the case may be, is organized or is engaged in business for tax
purposes or any political subdivisions or taxing authority or agency thereof or
therein.
In addition, the Company will pay any stamp, issue, registration,
documentary or other similar taxes and duties, including interest, penalties and
Additional Amounts with respect thereto, payable in Luxembourg, Bermuda or the
United States or any political subdivision or taxing authority of or in the
foregoing in respect of the creation, issue, offering, enforcement, redemption
or retirement of any of the debt securities.
Whenever in the indentures, the debt securities, their guarantees and in
this "Description of the Debt Securities and the Guarantees" there is mentioned,
in any context, the payment of principal, and premium, if any, redemption price,
interest or any other amount payable under or with respect to any debt security,
such mention shall be deemed to include mention of the payment of Additional
Amounts to the extent payable in the particular context.
BOOK-ENTRY, DELIVERY AND FORM
THE GLOBAL NOTES
A series of debt securities may be issued in whole or in part in the form of
one or more global securities under a book-entry system. Each global security:
- will be deposited with, or on behalf of, The Depository Trust Company,
and registered in the name of Cede & Co., as DTC's nominee, or
- will remain in the custody of the trustee pursuant to a FAST Balance
Certificate Agreement between DTC and the trustee.
DEPOSITARY PROCEDURES
The descriptions of the operations and procedures of DTC, Euroclear and
Clearstream Banking, societe anonyme, Luxembourg ("Clearstream, Luxembourg") set
forth below are provided solely as a matter of convenience. These operations and
procedures are solely within the control of the respective settlement systems
and are subject to change by them from time to time. The Company takes no
responsibility for these operations and procedures, and urges investors to
contact the system or their participants directly to discuss these matters.
DTC has advised the Company and Tyco that it is a limited purpose trust
company organized under the laws of the State of New York.
DTC was created to hold securities for its participants and to facilitate
the clearance and settlement of securities transactions between its participants
through electronic book-entry changes to the accounts of its participants. DTC's
participants include securities brokers and dealers, banks and trust companies,
clearing corporations and certain other organizations. Access to DTC's system is
also available to other entities such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly. Investors who are not participants
may beneficially own securities held by or on behalf of DTC only through DTC
participants or indirect participants. The ownership interests in, and transfers
of ownership interests in, each security held by or on behalf of DTC are
recorded on the records of the participants.
DTC has also advised the Company and Tyco that pursuant to procedures
established by DTC:
1. upon the deposit of global notes representing debt securities with
DTC, DTC will credit the accounts of its participants with an interest in
the global notes. The accounts to be credited
8
will be designated by the underwriters or agents, if any, or by the Company,
if such debt securities were offered and sold directly by the Company; and
2. ownership of the debt securities will be shown on, and the transfer
of ownership thereof will be effected only through, records maintained by
DTC, with respect to the interests of its participants, and the records of
DTC's participants and indirect participants, with respect to the interests
of other owners of beneficial interest in the debt securities.
The laws of some jurisdictions may require that certain purchasers of
securities take physical delivery of such securities in definitive form.
Accordingly, the ability to transfer interests in debt securities represented by
global notes to such persons may be limited. In addition, because DTC can act
only on behalf of its participants, who in turn act on behalf of persons who
hold interests through a DTC participant, the ability of a person having an
interest in debt securities represented by a global note to pledge or transfer
such interest to persons or entities that do not participate in DTC's system, or
to otherwise take actions in respect of such interest, may be affected by the
lack of a physical definitive security in respect of such interest.
So long as DTC or its nominee is the registered owner of a global note, DTC
or such nominee, as the case may be, will be considered the sole owner or holder
of the debt securities represented by the global note for all purposes under the
indentures. Except as provided below, owners of beneficial interests in a global
note will not be entitled to have debt securities represented by such global
note registered in their names, will not receive or be entitled to receive
physical delivery of certificated debt securities, and will not be considered
the owners or holders thereof under the indentures for any purpose, including
with respect to the giving of any direction, instruction or approval to the
trustee under the related indenture. Accordingly, each holder owning a
beneficial interest in a global note must rely on the procedures of DTC and, if
such holder is not a DTC participant or an indirect participant, on the
procedures of the participant through which such holder owns its interest, to
exercise any rights of a holder of debt securities under the related indenture
or such global note. The Company understands that under existing industry
practice, in the event that the Company requests any action of holders of debt
securities, or a holder that is an owner of a beneficial interest in a global
note desires to take any action that DTC, as the holder of such global note, is
entitled to take, DTC would authorize its participants to take such action and
the participants would authorize holders owning through participants to take
such action or would otherwise act upon the instruction of such holders.
Payments with respect to the principal of, and premium, if any, and interest
on, any debt securities represented by a global note registered in the name of
DTC or its nominee on the applicable record date will be payable by the trustee
to DTC or its nominee in its capacity as the registered holder of the global
note representing the debt securities under the indentures. Under the terms of
the indentures, the Company, Tyco and the trustee may treat the persons in whose
names the global notes are registered as the owners thereof for the purpose of
receiving payments thereon and for any and all other purposes whatsoever.
Consequently, none of the Company, Tyco or the trustee nor any agent of the
Company, Tyco or the trustee has or will have any responsibility or liability
for:
- any aspect of DTC's records or any participant's or indirect participant's
records relating to, or payments (including principal, premium, if any,
and interest) made on account of, any beneficial ownership interest in the
global notes of any series, or for maintaining, supervising or reviewing
any of DTC's records or any participant's or indirect participant's
records relating to the beneficial ownership interests of the global notes
of such series; or
- any other matter relating to the actions and practices of DTC or any of
its participants or indirect participants.
DTC has advised the Company and Tyco that its current practice, upon receipt
of any payment in respect of securities such as the debt securities including
principal and interest, is to credit the accounts
9
of the relevant participants with the payment on the payment date, in amounts
proportionate to their respective holdings in the principal amount of beneficial
interest in the relevant security as shown on the records of DTC, unless DTC has
reason to believe it will not receive payment on such payment date. Payments by
the participants and the indirect participants to the beneficial owners of any
series of debt securities will be governed by standing instructions and
customary practices and will be the responsibility of the participants or the
indirect participants and will not be the responsibility of DTC, the trustee,
the Company or Tyco. None of the Company, Tyco or the trustee will be liable for
any delay by DTC or any of its participants in identifying the beneficial owners
of the debt securities, and the Company and the trustee may conclusively rely on
and will be protected in relying on instructions from DTC or its nominee for all
purposes.
Transfers between participants in DTC will be effected in accordance with
DTC's procedures, and transfers between participants in Euroclear and
Clearstream, Luxembourg will be effected in accordance with their respective
notes and operating procedures.
Transfers between the participants in DTC, on the one hand, and Euroclear or
Clearstream, Luxembourg participants, on the other hand, will be effected
through DTC in accordance with DTC's rules on behalf of Euroclear or
Clearstream, Luxembourg, as the case may be, by its respective depositary;
however, such cross-market transactions will require delivery of instructions to
Euroclear or Clearstream, Luxembourg, as the case may be, by the counterparty in
such system in accordance with the rules and procedures and within the
established deadlines (Brussels time) of such system. Euroclear or Clearstream,
Luxembourg , as the case may be, will, if the transaction meets its settlement
requirements, deliver instructions to its respective depositary to take action
to effect final settlement on its behalf by delivering or receiving interests in
the global note in DTC, and making or receiving payment in accordance with
normal procedures for same-day funds settlement applicable to DTC. Euroclear
participants and Clearstream, Luxembourg participants may not deliver
instructions directly to the depositories for Euroclear or Clearstream,
Luxembourg.
DTC has advised the Company and Tyco that it will take any action permitted
to be taken by a holder of notes of any series only at the direction of one or
more participants to whose account DTC has credited the interests in the global
notes of such series and only in respect of such portion of the aggregate
principal amount of the notes as to which such participant or participants has
or have given such direction. However, if there is an event of default under the
notes, DTC reserves the right to exchange the global notes for legended notes in
certificated form, and to distribute such notes to its participants.
Although DTC, Euroclear and Clearstream, Luxembourg have agreed to the
foregoing procedures to facilitate transfers of interests in the global notes
among participants in DTC, Euroclear and Clearstream, Luxembourg, they are under
no obligation to perform or to continue to perform such procedures, and such
procedures may be discontinued at any time. None of the Company, Tyco or the
trustee or any of their respective agents will have any responsibility for the
performance by DTC, Euroclear or Clearstream, Luxembourg or their respective
participants or indirect participants of their respective obligations under the
rules and procedures governing their operations.
10
CERTIFICATED DEBT SECURITIES
If:
1. the Company notifies the trustee in writing that DTC is no longer
willing or able to act as a depositary or DTC ceases to be registered as a
clearing agency under the Exchange Act and a successor depositary is not
appointed within 90 days of such notice or cessation, or
2. the Company, at its option, notifies the trustee in writing that it
elects to cause the issuance of debt securities in definitive form under the
indenture, or
3. upon the occurrence of certain other events as provided in any
supplemental indenture, then,
upon surrender by DTC of the global notes representing the debt securities,
certificated debt securities will be issued in the names and denominations
requested by DTC in accordance with its customary procedures. Upon any such
issuance, the trustee is required to register the certificated debt securities
in the requested names and cause the certificates to be delivered to the
registered holders.
None of the Company, Tyco or the trustee shall be liable for any delay by
DTC or any DTC participant or indirect participant in identifying the beneficial
owners of the related debt securities and the Company, Tyco and the trustee may
conclusively rely on, and shall be protected in relying on, instructions from
DTC for all purposes.
MERGER, CONSOLIDATION, SALE OR CONVEYANCE
The indentures provide that neither the Company, Tyco nor any other
guarantor of any debt securities issued under the indentures will merge or
consolidate with any other person and will not sell or convey all or
substantially all of its assets to any person, unless:
1. the Company, Tyco or such other guarantor, as the case may be, shall
be the continuing corporation, or
2. the successor corporation or person that acquires all or
substantially all of the assets of the Company, Tyco or such other
guarantor, as the case may be, shall expressly assume,
- the payment of principal of, premium, if any, and interest on all debt
securities issued under the indentures or the obligations under the
guarantees thereof, as the case may be, and
- the observance of all the covenants and agreements under the
indentures to be performed or observed by the Company, Tyco or such
other guarantor, as the case may be,
and in either case, immediately after such merger, consolidation, sale or
conveyance, the Company, Tyco or such other guarantor, as the case may be, or
such successor corporation or person, as the case may be, shall not be in
default in the performance of the covenants and agreements of the indentures to
be performed or observed by the Company, Tyco or such other guarantor, as the
case may be; provided that the foregoing shall not apply to a guarantor other
than Tyco if in connection with any such merger, consolidation, sale or
conveyance the guarantee of such guarantor is released and discharged pursuant
to paragraph 2 of the "Limitation on Indebtedness of Subsidiaries" covenant
related to the senior indenture described below.
EVENTS OF DEFAULT
An event of default with respect to a series of debt securities issued under
either indenture is defined in the related indenture as being:
- default for 30 days in payment of any interest on or any additional
amounts related to any debt securities of such series;
11
- default in any payment of principal of or premium, if any, on any debt
securities of such series, including any sinking fund payment;
- default by the Company, Tyco or any other guarantor in performance of any
other of the covenants or agreements in respect of the debt securities of
such series and related guarantees that continues for 90 days after the
Company receives notice of such failure in accordance with the
indentures;
- any guarantee of the debt securities ceases to be, or the Company or any
guarantor of the debt securities asserts in writing that such guarantee
is not, in full force and effect and enforceable in accordance with its
terms;
- certain events involving bankruptcy, insolvency or reorganization of the
Company or Tyco or, with respect to debt securities issued under the
senior indenture, any Significant Subsidiary Guarantor;
- any other event of default provided in a supplemental indenture, a
resolution of the Board of Directors, or in the form of the security
related to the issuance of a series of debt securities; or
- with respect to debt securities issued under the senior indenture,
default by the Company, Tyco or any other guarantor of the debt
securities in the payment at the final maturity thereof, after the
expiration of any applicable grace period, of principal of, premium, if
any, or interest on indebtedness for money borrowed, other than
non-recourse indebtedness, in the principal amount then outstanding of
$50,000,000 or more, or acceleration of any indebtedness in such
principal amount so that it becomes due and payable prior to the date on
which it would otherwise have become due and payable and such
acceleration is not rescinded within ten business days after notice to
the Company in accordance with the senior indenture.
The indentures provide that the trustee shall transmit notice of any uncured
default under the indentures known to the trustee with respect to any series of
debt securities issued thereunder, within 90 days after the occurrence of such
default, to the holders of the debt securities of each affected series, except
that the trustee may withhold notice to the holders of any series of debt
securities of any default, except in payment of principal of, premium, if any,
or interest on such series, or in the payment of any sinking fund or purchase
installment with respect to the series, if the trustee determines in good faith
in accordance with procedures set forth in the indenture that it is in the
interest of the holders of such series of debt securities to do so.
If an event of default due to:
- the default in payment of interest, principal or sinking fund installment
with respect to any series of debt securities issued under the
indentures;
- the default in the performance or breach of any other covenant or
agreement of the Company, Tyco or any guarantor applicable to the debt
securities of such series but not applicable to all outstanding debt
securities issued under the indentures;
- a guarantee of a series of debt securities ceasing to be, or the Company
or any guarantor asserting that a guarantee of a series of debt
securities no longer is, in full force and effect and enforceable in
accordance with its terms; or
- any other event of default described in a supplemental indenture, board
resolution, or in the form of security related to the issuance of a
series of debt securities
shall have occurred and be continuing, either the trustee or the holders of not
less than 25% in principal amount of the debt securities of such series then
outstanding may declare the principal of all debt securities of such series and
interest accrued thereon to be due and payable immediately.
12
If an event of default due to:
- a default in the performance of any other of the covenants or agreements
applicable to all outstanding debt securities issued under the related
indenture and then outstanding;
- certain events of bankruptcy, insolvency and reorganization of the
Company or Tyco or, with respect to debt securities issued under the
senior indenture, any Significant Subsidiary Guarantor;
- with respect to debt securities issued under the senior indenture, a
default in payment at final maturity or upon acceleration of indebtedness
for money borrowed in the principal amount then outstanding of
$50,000,000 or more; or
- any other event of default described in a supplemental indenture, board
resolution, or in the form of security related to the issuance of a
series of debt securities
shall have occurred and be continuing, either the trustee or the holders of not
less than 25% in principal amount of all debt securities issued under the
related indenture and then outstanding, treated as one class, may declare the
principal of all such debt securities and interest accrued thereon to be due and
payable immediately.
In certain circumstances, such declarations may be annulled and past
defaults may be waived by the holders of a majority in principal amount of the
outstanding debt securities of an affected series, voting as a separate class,
or all debt securities outstanding under the related indenture, voting as a
single class, as the case may be.
The holders of a majority in principal amount of the outstanding debt
securities of each affected series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
trustee with respect to the debt securities of such series, subject to certain
limitations specified in the related indenture.
The indentures provide that no holder of debt securities of any series may
institute any action against the Company under the indentures, except actions
for payment of overdue principal, premium, if any, or interest, unless such
holder previously shall have given to the trustee written notice of default and
continuance thereof and unless the holders of not less than 25% in principal
amount of the debt securities of such series then outstanding shall have
requested the trustee to institute such action and shall have offered the
trustee reasonable indemnity, the trustee shall not have instituted such action
within 60 days of such request, and the trustee shall not have received
direction inconsistent with such request by the holders of a majority in
principal amount of the debt securities of such series then outstanding.
Each of the indentures requires the annual filing by the Company with the
trustee of a written statement as to compliance with the covenants and
agreements contained in the related indenture.
With respect to the senior indenture, "Significant Subsidiary Guarantor"
means any one or more guarantors, other than Tyco, which, at the date of
determination, together with its or their respective subsidiaries in the
aggregate,
- for the most recently completed fiscal year of the Company accounted for
more than 10% of the consolidated revenues of the Company, or
- at the end of such fiscal year, was the owner, beneficial or otherwise,
of more than 10% of the consolidated assets of the Company, as determined
in accordance with United States generally accepted accounting principles
and reflected on the Company's consolidated financial statements.
13
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Company may discharge or defease its obligations under each of the
indentures as set forth below.
Under terms satisfactory to the trustee, the Company or any guarantor of the
debt securities issued under the related indenture may discharge the related
indenture with respect to any series of debt securities issued under that
indenture if all securities in the series have not already been delivered to the
trustee for cancellation and have either become due and payable or are by their
terms due and payable within one year, or may be called for redemption within
one year, by irrevocably depositing with the trustee cash or direct obligations
of the United States as trust funds in an amount certified to be sufficient to
pay at maturity, or upon redemption, the principal of, premium, if any, and
interest and any other sums payable, if any, on such debt securities. However,
the Company maintains any rights to optional redemption and may not avoid
- its duty to register the transfer or exchange of debt securities of such
series, or to replace any mutilated, destroyed, lost or stolen debt
securities of such series,
- the rights of holders of such debt securities to receive from the funds
deposited with the trustee payments of principal and interest and sinking
fund payments, if any, on such securities, on the stated due dates for
such payments, or
- the rights, obligations and immunities of the trustee under the related
indenture.
In the case of any series of debt securities in respect of which the exact
amounts of principal of and interest due on such series can be determined at the
time of making the deposit referred to below, the Company at its option at any
time may also:
1. discharge any and all of its obligations to holders of such series
of debt securities ("defeasance"), but may not thereby avoid the obligations
enumerated in the previous paragraph; or
2. be released with respect to such series of senior debt securities
from the obligations imposed by the covenants described under the caption
"Certain Restrictive Covenants in the Senior Indenture" below and with
respect to both the senior and subordinated debt securities from the
obligation under the caption "Merger, Consolidation, Sale or Conveyance"
above and omit to comply with such covenants without creating an event of
default ("covenant defeasance").
Defeasance or covenant defeasance may be effected only if, among other
things:
1. the Company or Tyco irrevocably deposits with the trustee cash
and/or direct obligations of the United States, as trust funds in an amount
certified by a nationally recognized firm of independent public accountants
or a nationally recognized investment banking firm to be sufficient to pay
each installment of principal and interest and any mandatory sinking fund
payments, if any, on all outstanding debt securities of the relevant series
on the dates such installments of principal, premium, if any, and interest
are due;
2. no default or event of default shall have occurred and be continuing
on the date of the deposit referred to in clause 1 or, in respect of certain
events of bankruptcy, insolvency or reorganization, during the period ending
on the 91st day after the date of such deposit, or any longer applicable
preference period; and
3. the Company delivers to the trustee:
(A) an opinion of counsel to the effect that the holders of such series
of debt securities
- will not recognize any income, gain or loss for United States federal
income tax purposes as a result of such deposit and defeasance or
covenant defeasance, as applicable, and
14
- will be subject to United States federal income tax on the same
amounts and in the same manner and at the same times as would have
been the case if such deposit and defeasance or covenant defeasance,
as applicable, had not occurred.
In the case of defeasance, such opinion must be based on a ruling of
the Internal Revenue Service or a change in United States federal
income tax law occurring after the date of the related indenture; and
(B) an opinion of counsel to the effect that
- payments from the defeasance trust will be free and exempt from any
and all withholding and other taxes imposed or levied by or on behalf
of Luxembourg or any political subdivision thereof having the power
to tax, and
- holders of such series of debt securities will not recognize any
income, gain or loss for Luxembourg income tax and other Luxembourg
tax purposes as a result of such deposit and defeasance or covenant
defeasance, as applicable, and will be subject to Luxembourg income
tax and other Luxembourg tax on the same amounts, in the same manner
and at the same times as would have been the case if such deposit and
defeasance or covenant defeasance, as applicable, had not occurred.
MODIFICATION OF THE INDENTURES
Each indenture contains provisions permitting the Company, Tyco and the
trustee, with the consent of the holders of not less than a majority of the
principal amount of the debt securities issued under the related indenture at
the time outstanding of all series affected, voting as one class, to modify the
related indenture or any supplemental indenture or the rights of the holders of
the debt securities. Without the consent of the holder of each debt security
affected, the related indenture cannot be modified to:
1. extend the final maturity of any of the debt securities 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, reduce
the amount of any original issue discount security payable upon acceleration
or provable in bankruptcy, impair or affect the right of any holder of the
debt securities to institute suit for the payment thereof or, if debt
securities so provide, any optional right of repayment, or
2. reduce the aforesaid percentage in principal amount of debt
securities of any series, the consent of the holders of which is required
for any such supplemental indenture.
Each indenture contains provisions permitting the Company, Tyco and the
trustee, without the consent of any holders of debt securities, to enter into a
supplemental indenture, among other things, for purposes of
- curing any ambiguity,
- correcting or supplementing any provision contained in the indenture or
in any supplemental indenture or making other provisions in regard to the
matters or questions arising under the indenture or any supplemental
indenture as the Board of Directors of the Company deems necessary or
desirable and which does not adversely affect the interests of the
holders of debt securities in any material respect, or
- establishing the form or terms of any series of debt securities as are
not otherwise inconsistent with any of the provisions of the affected
indenture.
15
CERTAIN RESTRICTIVE COVENANTS IN THE SENIOR INDENTURE
The senior indenture contains, among others, the covenants described below.
Some capitalized terms used in this section are defined under "Definitions in
the Senior Indenture" below. These covenants do not apply to debt securities
issued under the subordinated indenture.
LIMITATIONS ON LIENS
The Company covenants that, so long as any debt securities issued under the
senior indenture remain outstanding, but subject to defeasance, as provided in
the indenture, it will not, and will not permit any Restricted Subsidiary to,
incur any indebtedness which is secured by a mortgage, pledge, security
interest, lien or encumbrance (each a "lien") upon:
- any Principal Property, or
- any shares of stock of any Restricted Subsidiary, or indebtedness issued
by any Restricted Subsidiary,
whether now owned or hereafter acquired, without effectively providing that, for
so long as such lien shall continue in existence with respect to such secured
indebtedness, the debt securities issued under the senior indenture, together
with, if the Company shall so determine, any other indebtedness of the Company
ranking equally with such debt securities, shall be equally and ratably secured
with a lien ranking ratably with or equal to, or at the Company's option prior
to, such secured indebtedness.
The foregoing restriction shall not apply to:
1. liens that exist when the applicable debt securities are issued;
2. liens on the stock, assets or indebtedness of a person that exist
when such person becomes a Restricted Subsidiary unless created in
contemplation of such Restricted Subsidiary becoming such;
3. liens on any assets or indebtedness of a person that exist:
- when such person is merged into the Company or a Restricted
Subsidiary of the Company or
- at the time the Company or a Restricted Subsidiary purchases,
leases or otherwise acquires as an entirety or substantially as
an entirety the assets of such person;
4. liens on any Principal Property that exist:
- when the Company or any Restricted Subsidiary acquired such
property,
- to secure the payment or indebtedness for the financing of the
purchase price of such property, or
- to secure indebtedness incurred for the purpose of the financing
of all or any part of improvements or construction on such
property, which indebtedness in each case is incurred before, at
the time of, or within one year after the acquisition of such
property, or in the case of real property, completion of such
improvement or construction or commencement of full operation of
such property, whichever is later;
5. liens that secure indebtedness owed by any Restricted Subsidiary to
the Company, Tyco or a subsidiary of the Company or by the Company to Tyco;
6. liens in favor of any country or state, or political subdivision
thereof:
- to secure payments pursuant to any contract, statute, rule or
regulation or
- to secure any indebtedness incurred for the purpose of financing
all or any part of the purchase price, or, in the case of real
property, the cost of construction or
16
improvement, of the Principal Property subject to such liens,
including, but not limited to, liens incurred in connection with
pollution control, industrial revenue or similar financings;
7. liens or deposits under worker's compensation or similar
legislation, or in connection with bids, tenders, contracts, other than for
the payment of money, or leases to which the Company or any Restricted
Subsidiary is a party, or to secure the public or statutory obligations of
the Company or any Restricted Subsidiary, or in connection with obtaining or
maintaining self-insurance, or to obtain the benefits of any law, regulation
or arrangement pertaining to unemployment insurance, old age pensions,
social security or similar matters, or to secure surety, performance, appeal
or customs bonds to which the Company or any Restricted Subsidiary is a
party, or in litigation or other proceedings in connection with the matters
heretofore referred to in this clause, such as, but not limited to,
interpleader proceedings, and other similar pledges, liens or deposits made
or incurred in the ordinary course of business;
8. certain liens in connection with legal proceedings, as provided in
the senior indenture;
9. liens for certain taxes or assessments, governmental charges or
levies, landlord's liens and liens and charges incidental to the conduct of
the business of the Company or any Restricted Subsidiary, or the ownership
of their respective assets, which were not incurred in connection with the
borrowing of money or the obtaining of advances or credit and which do not,
in the opinion of the Board of Directors of the Company, materially impair
the use of such assets in the operation of the business of the Company or
such Restricted Subsidiary or the value of such Principal Property for the
purposes thereof;
10. liens to secure the Company's or any Restricted Subsidiary's
obligations under agreements with respect to spot, forward, future and
option transactions, entered into in the ordinary course of business;
11. liens not permitted by the foregoing clauses 1 to 10, inclusive, if
at the time of, and after giving effect to, the creation or assumption of
such lien, the aggregate amount of all outstanding indebtedness of the
Company and its Restricted Subsidiaries, without duplication, secured by all
liens not permitted by the foregoing clauses 1 through 10, inclusive,
together with the Attributable Debt in respect of Sale and Lease-Back
Transactions permitted by clause 1 under "Limitation on Sale and Lease-Back
Transactions" below does not exceed the greater of $100,000,000 and 10% of
Consolidated Net Worth; and
12. any total or partial extension, renewal or replacement of any lien
permitted pursuant to exceptions 1 through 11, inclusive, except that the
principal amount of indebtedness secured by such extension, renewal or
replacement, unless otherwise excepted under clauses 1 through 11, shall not
exceed the principal amount of indebtedness of the original permitted lien,
and that such extension, renewal or replacement shall be limited to all or
part of the assets, or any replacement therefor, which secured the original
lien, plus improvements and construction on real property.
LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS
Under the senior indenture, the Company will not, and will not permit any
Restricted Subsidiary to, enter into any Sale and Lease-Back Transaction with
respect to a Principal Property unless:
1. the Company or such Restricted Subsidiary would, at the time of
entering into a Sale and Lease-Back Transaction, be entitled to incur
indebtedness secured by a lien on the Principal Property to be leased in an
amount at least equal to the Attributable Debt in respect of such
transaction, without equally and ratably securing the debt securities issued
under the senior indenture pursuant to the provisions described under
"Limitations on Liens" above, or
17
2. the direct or indirect proceeds of the sale of the Principal
Property to be leased are at least equal to their fair value, as determined
by the Company's Board of Directors, and an amount equal to the net proceeds
is applied, within 180 days of the effective date of such transaction, to
the purchase or acquisition, or, in the case of real property, commencement
of the construction, of property or assets or to the retirement of the debt
securities issued under the senior indenture, other than at maturity or
pursuant to a mandatory sinking fund or a mandatory redemption provision, or
of Funded Indebtedness of the Company or a consolidated subsidiary of the
Company that ranks on a parity with or senior to the debt securities issued
under the senior indenture, subject to credits for certain voluntary
retirement of Funded Indebtedness and certain delivery of debt securities
issued under the senior indenture to the trustee for retirement and
cancellation.
LIMITATION ON INDEBTEDNESS OF SUBSIDIARIES
Under the senior indenture:
1. The Company will not cause or permit any subsidiary of the Company,
which is not a guarantor of the debt securities issued under the senior
indenture, directly or indirectly, to create, assume, guarantee or otherwise
in any manner become liable for the payment of or otherwise incur
(collectively, "incur"), any indebtedness, including any Acquired
Indebtedness but excluding any Permitted Subsidiary Indebtedness, unless
such subsidiary simultaneously executes and delivers a supplemental
indenture providing for a guarantee of the debt securities issued under the
senior indenture.
2. Notwithstanding the foregoing, any guarantee by a subsidiary of the
Company of the debt securities issued under the senior indenture shall
provide by its terms that it, and all liens securing the same, shall be
automatically and unconditionally released and discharged upon
- any sale, exchange or transfer, to any person not an Affiliate of the
Company, of all of the Company's equity interests in, or all or
substantially all the assets of, such subsidiary, which transaction is in
compliance with the terms of the senior indenture and such subsidiary is
released from all guarantees, if any, by it of other indebtedness of the
Company or any subsidiaries of the Company,
- the payment in full of all obligations under the indebtedness described
in clause 1 above giving rise to such guarantee, or
- with respect to indebtedness described in clause 1 above constituting
guarantees of indebtedness, the release by the holders of such
indebtedness of the guarantee by such subsidiary, including any deemed
release upon payment in full of all obligations under such indebtedness,
provided that:
- no other indebtedness, other than Permitted Subsidiary Indebtedness,
has been guaranteed by such subsidiary, or
- the holders of all other indebtedness which is guaranteed by such
subsidiary also release the guarantee by such subsidiary, including
any deemed release upon payment in full of all obligations under such
indebtedness.
3. For purposes of this covenant, any Acquired Indebtedness shall not
be deemed to have been incurred until 180 days from the date
- the person obligated on such Acquired Indebtedness becomes a subsidiary
of the Company, or
- the acquisition of assets in connection with which such Acquired
Indebtedness was assumed is consummated.
18
DEFINITIONS IN THE SENIOR INDENTURE
"Acquired Indebtedness" means indebtedness of a person:
- existing at the time such person becomes a Restricted Subsidiary, or
- assumed in connection with the acquisition of assets by such person,
in each case, other than indebtedness incurred in connection with, or in
contemplation of, such person becoming a Restricted Subsidiary or such
acquisition, as the case may be.
"Affiliate" means, with respect to any specified person:
- any other person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified person;
- any other person that owns, directly or indirectly, 10% or more of such
specified person's capital stock or any officer or director of any such
specified person or other person; or
- any other person 10% or more of the voting stock of which is beneficially
owned or held directly or indirectly by such specified person.
For the purposes of this definition, "control" when used with respect to any
specified person means the power to direct the management and policies of such
person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Attributable Debt" means in connection with a Sale and Lease-Back
Transaction, as of any particular time, the aggregate of present values,
discounted at a rate per annum equal to the average interest borne by all
outstanding debt securities issued under the senior indenture determined on a
weighted average basis and compounded semi-annually, of the obligations of the
Company or any Restricted Subsidiary for net rental payments during the
remaining term of the applicable lease, including any period for which such
lease has been extended or may, at the option of the lessor, be extended. The
term "net rental payments" under any lease of any period shall mean the sum of
the rental and other payments required to be paid in such period by the lessee
thereunder, not including, however, any amounts required to be paid by such
lessee, whether or not designated as rental or additional rental, on account of
maintenance and repairs, reconstruction, insurance, taxes, assessments, water
rates or similar charges required to be paid by such lessee thereunder or any
amounts required to be paid by such lessee thereunder contingent upon the amount
of sales, maintenance and repairs, reconstruction, insurance, taxes,
assessments, water rates or similar charges.
"Consolidated Net Worth" means, at any date, the total assets less the total
liabilities, in each case appearing on the most recently prepared consolidated
balance sheet of the Company and its subsidiaries as of the end of a fiscal
quarter of the Company, prepared in accordance with United States generally
accepted accounting principles as in effect on the date of calculation.
"Consolidated Tangible Assets" means, at any date, the total assets less all
intangible assets appearing on the most recently prepared consolidated balance
sheet of the Company and its subsidiaries as of the end of a fiscal quarter of
the Company, prepared in accordance with United States generally accepted
accounting principles as in effect on the date of calculation. "Intangible
Assets" means the amount, if any, which would be stated under the heading "Costs
in Excess of Net Assets of Acquired Companies" or under any other heading
relating to intangible assets separately listed, in each case on the face of the
aforesaid consolidated balance sheet.
"Funded Indebtedness" means any indebtedness maturing by its terms more than
one year from the date of the determination thereof, including any indebtedness
renewable or extendible at the option of the obligor to a date later than one
year from the date of the determination thereof.
19
"Permitted Subsidiary Indebtedness" means any of the following:
1. indebtedness in an aggregate amount, without duplication, not to
exceed, as of the date of determination, 5% of the Consolidated Tangible
Assets of the Company, excluding any indebtedness described in clauses 2
through 8 below;
2. indebtedness owed to the Company, Tyco or any subsidiary of the
Company;
3. obligations under standby letters of credit or similar arrangements
supporting the performance of a person under a contract or agreement in the
ordinary course of business;
4. obligations as lessee in the ordinary course of business which are
capitalized in accordance with United States generally accepted accounting
principles;
5. indebtedness that was Permitted Subsidiary Indebtedness at the time
that it was first incurred;
6. Acquired Indebtedness that by its terms is not, at the time it
became Acquired Indebtedness or within 180 days thereafter, callable or
redeemable prior to its stated maturity and that remains outstanding
following such time as the subsidiary of the Company obligated under such
Acquired Indebtedness in good faith has made or caused to be made an offer
to acquire all such indebtedness, including, without limitation, an offer to
exchange such indebtedness for securities of the Company, on terms which, in
the opinion of an independent investment banking firm of national reputation
and standing, are consistent with market practices in existence at the time
for offers of a similar nature, provided that the initial expiration date of
any such offer shall be not be later than the expiration of the time period
set forth in clause 3 of the "Limitation on Indebtedness of Subsidiaries"
covenant;
7. indebtedness outstanding on the date of the senior indenture; and
8. any renewals, extensions, substitutions, refundings, refinancings or
replacements (collectively, a "refinancing") of any indebtedness referred to
in clause 7 of this definition of "Permitted Subsidiary Indebtedness" of a
subsidiary organized under a jurisdiction other than the United States or
any State thereof or the District of Columbia, including any successive
refinancings, so long as the borrower under such refinancing is such
subsidiary and the aggregate principal amount of indebtedness represented
thereby, or if such indebtedness provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof, the original issue price of such
indebtedness plus any accreted value attributable thereto since the original
issuance of such indebtedness, is not increased by such refinancing plus the
lesser of (A) the stated amount of any premium or other payment required to
be paid in connection with such a refinancing pursuant to the terms of the
indebtedness being refinanced or (B) the amount of premium or other payment
actually paid at such time to refinance the indebtedness, plus, in either
case, the amount of expenses of such subsidiary incurred in connection with
such refinancing.
"Principal Property" means any manufacturing, processing or assembly plant
or facility or any warehouse or distribution facility which is used by any U.S.
subsidiary of the Company after the date of the senior indenture, other than any
such plants, facilities, warehouses or portions thereof, which in the opinion of
the Board of Directors of the Company, are not collectively of material
importance to the total business conducted by the Company and its Restricted
Subsidiaries as an entirety, or which, in each case, has a book value, on the
date of the acquisition or completion of the initial construction thereof by the
Company, of less than 1.5% of Consolidated Tangible Assets.
"Restricted Subsidiary" means any subsidiary of the Company which owns or
leases a Principal Property.
20
"Sale and Lease-Back Transaction" means an arrangement with any person
providing for the leasing by the Company or a Restricted Subsidiary of any
Principal Property whereby such Principal Property has been or is to be sold or
transferred by the Company or a Restricted Subsidiary to such person; provided,
however, that the foregoing shall not apply to any such arrangement involving a
lease for a term, including renewal rights, for not more than three years.
SUBORDINATED DEBT SECURITIES
The indebtedness evidenced by the subordinated debt securities is
subordinated to the extent provided in the subordinated indenture to the prior
payment in full of all senior indebtedness, including any senior debt
securities. Senior indebtedness generally includes all indebtedness for money
borrowed of the Company, except indebtedness that is expressly stated to not be
superior to the subordinated debt securities or to rank equal to the
subordinated debt securities.
Upon any distribution of the Company's assets upon any dissolution, winding
up, liquidation or reorganization, payments on the subordinated debt securities
will be subordinated in right of payment to the prior payment in full in cash of
all senior indebtedness.
In the event of any acceleration of the subordinated debt securities because
of an event of default, holders of any senior indebtedness would be entitled to
payment in full in cash of all senior indebtedness before the holders of
subordinated debt securities are entitled to receive any payment or
distribution.
The Company is required to promptly notify holders of senior indebtedness if
payment of the subordinated debt securities is accelerated because of an event
of default. The Company may not make payment on the subordinated debt securities
if a default in the payment of senior indebtedness occurs and is continuing.
As a result of these subordination provisions, in the event of the Company's
bankruptcy, dissolution or reorganization, holders of senior indebtedness may
receive more, ratably, and holders of the subordinated debt securities may
receive less, ratably, than the Company's other creditors. The subordination
provisions will not prevent the occurrence of any event of default under the
subordinated indenture.
If the trustee or any holder receives any payment that should not have been
made to them in contravention of subordination provisions before all senior
indebtedness is paid in full, then such payment will be held in trust for the
holders of senior indebtedness.
Tyco's guarantee of subordinated debt securities will be subordinated to
Tyco's senior indebtedness. Tyco's senior indebtedness includes Tyco's guarantee
of debt securities issued under the senior indenture.
CONCERNING THE TRUSTEE
The trustee may hold debt securities issued under each indenture, act as a
depository for funds of, make loans to, or perform other services for, Tyco, the
Company and their subsidiaries as if it were not the trustee.
21
DESCRIPTION OF THE COMMON SHARES
The Company's debt securities may be convertible into or exchangeable for
shares of Tyco's common shares. The following description is a summary of the
terms of Tyco's common shares. This description is not complete and is subject
to the applicable provisions of Bermuda law and Tyco's Memorandum of Association
and Bye-Laws, which are filed as exhibits to the registration statement related
to this prospectus. Tyco has authorized 2,500,000,000 common shares. As of
June 30, 2000 there were 1,687,309,234 common shares outstanding.
DIVIDENDS
Tyco's Board of Directors may declare dividends out of Tyco's available
profits as long as there are no reasonable grounds for believing that:
- Tyco is, or after payment of the dividend would be, unable to pay its
liabilities as they become due, or
- the realizable value of Tyco's assets would thereby be less than the
aggregate of its liabilities and its issued share capital and share
premium accounts.
Subject to special rights of any other Tyco shares, all dividends are payable
according to the amounts paid or credited as paid on common shares. Dividends
are normally payable in U.S. dollars, but holders with a registered address in
the United Kingdom and other countries outside the United States may receive
payment in another currency. Any dividend that is unclaimed may be invested or
otherwise made use of by Tyco's Board, and after a period of 12 years is
forfeited and reverts to Tyco.
VOTING RIGHTS
At any general meeting, votes may be given in person or by proxy. Tyco's
Bye-Laws require that any proxy must be a shareholder of Tyco. Under Tyco's
Bye-Laws, not less than two holders of common shares present, in person or by
proxy, constitute a quorum at a general meeting except as provided under
"Variation of Rights" below.
Under Bermuda law, questions proposed for consideration at a company's
general meeting are decided by a simple majority vote or by the vote required by
the bye-laws, except where a larger majority is required by law. Any question
proposed for consideration at a general meeting may be decided on a show of
hands, in which each shareholder present in person or by proxy is entitled to
one vote and casts this vote by raising his or her hand, unless, before or on
the declaration of the result of a show of hands, a poll is demanded by
- the Chairman of the meeting;
- at least three shareholders present in person or represented by proxy;
- any shareholder or shareholders present in person or represented by proxy
holding individually or between them at least 10% of the total voting
rights of all shareholders having the right to vote at the meeting; or
- a shareholder or shareholders present in person or by proxy holding shares
conferring the right to vote at the meeting and on which an aggregate sum
has been paid equal to at least 10% of the total sum paid up on all shares
entitled to vote.
Tyco's Bye-Laws provide that a shareholder is not entitled, except as proxy
for another shareholder, to be present or vote at any meeting, either personally
or by proxy, in respect of any share held by the shareholder (whether alone or
jointly with any other person) on which there shall not have been paid all calls
due and payable, together with interest and expenses. Tyco's Bye-Laws also
provide
22
that any person who is known or believed by Tyco to be interested in common
shares, and who has failed to comply with a notice from Tyco requesting
specified information regarding that person's interest in common shares, will
lose voting rights for the period the shareholder fails to comply with the
notice, plus an additional 90 days. In addition, a shareholder loses voting
rights,
- if the shareholder has failed to comply with a notice under Tyco's
Bye-Laws requiring the shareholder to make an offer in accordance with the
City Code on Takeovers and Mergers of the United Kingdom, as applied by
Tyco's Bye-Laws, or, as the case may be, in accordance with Tyco's
Bye-Laws,
- for a period of 180 days if the shareholder acquires three percent or more
of the issued share capital of any class of Tyco, either alone or in
concert with others, and fails to notify Tyco of the acquisition within
two days, or, already possessing three percent or more of the issued share
capital of any class of Tyco, fails to notify Tyco of a change in the
shareholder's interests amounting to one percent or more of the share
capital of any class, provided that Tyco notifies the shareholder of the
loss of the voting rights.
LIQUIDATION
On a liquidation of Tyco, holders of common shares are entitled to receive
any assets remaining after the payment of Tyco's debts and the expenses of the
liquidation, subject to special rights of any other class of shares.
SUSPENSION OF RIGHTS
In certain circumstances, the rights of a shareholder to vote and to receive
any payment or income or capital in respect of a common share may be suspended.
Those circumstances include failure to provide information about ownership of
and other interests in common shares, if so required in accordance with Tyco's
Bye-Laws, as discussed above under "Voting Rights."
VARIATION OF RIGHTS
If, at any time, the share capital of Tyco is divided into different classes
of shares, the rights attached to any class (unless otherwise provided by the
terms of issue of the shares of that class) may be varied with written consent
of the holders of three-fourths of the issued shares of that class, or by
resolution passed at a separate general meeting by a majority of three-fourths
of the holders of the shares of that class voting in person or by proxy. Under
Tyco's Bye-Laws, three shareholders holding not less than one-third of the
issued shares of a class, in person or by proxy, constitute a quorum at a
general meeting held for this purpose. At any adjournment of this meeting, two
shareholders of that class, in person or by proxy, constitute a quorum,
irrespective of the amount of their holdings.
SALE, LEASE OR EXCHANGE OF ASSETS AND MERGERS
Under Bermuda law, there is no requirement for a company's shareholders to
approve a sale, lease or exchange of all or substantially all of a company's
property and assets. Bermuda law provides that a company may enter into a
compromise or arrangement in connection with a scheme for the reconstruction of
the company on terms that include, among other things, the transfer of all or
part of the undertaking or the property of the company to another company. Any
compromise or arrangement of this kind requires the approval of a majority in
number representing three-fourths in value of the creditors or shareholders or
class of shareholders, as the case may be, present and voting either in person
or by proxy at the meeting, and the sanction of the Bermuda Supreme Court.
Under Bermuda law, unless the company's bye-laws provide otherwise, an
amalgamation requires the approval of the holders of at least three-fourths of
those voting at a meeting of shareholders at
23
which a requisite quorum is present. Tyco's Bye-Laws do not contain any contrary
provisions. For purposes of approval of an amalgamation, all shares, whether or
not otherwise entitled to vote, carry the right to vote. A separate vote of a
class of shares is required if the rights of that class would be altered by
virtue of the amalgamation.
SHARE ACQUISITIONS, BUSINESS COMBINATIONS AND RELATED PROVISIONS
Under Tyco's Bye-Law 104(1)(A), if any person, whether as a result of one
transaction or a series of transactions, would be obligated to make an offer to
Tyco's security holders under the Rules of the City Code, Tyco's Board may
require that person to make an offer as if the City Code applied to Tyco. The
City Code provides that, when any person (and persons acting in concert with
that person) acquires shares which carry 30% or more of the voting rights of a
company, that person must make an offer for all shares of any class of equity
share capital (whether voting or non-voting) and also any voting non-equity
share capital in which that person or persons hold shares. The offer must be for
cash or offer a cash alternative, in each case at not less than the highest
price paid (in cash or otherwise) by the offeror, or anyone acting in concert
with the offeror, for shares of the same class during the offer period and
within the 12 months before commencement of the offer.
Tyco's Bye-Law 104(3) further provides that, where any person is interested
in 30% or more of Tyco's outstanding common shares, Tyco's Board may serve a
notice requiring that person to make an offer for all of the outstanding
securities of Tyco if Tyco's Board determines that an offer under Tyco's Bye-Law
104(1)(A) is not expedient, or if a person required to make the offer fails to
do so. This offer must be made within 30 days of the demand on terms that
payment in full therefor will be made within 21 days of the offer becoming
unconditional in all respects. If Tyco's Board serves a notice under this
provision, the directors may also require that the offeror offer to purchase
securities of Tyco convertible into voting or non-voting shares of Tyco on terms
considered "fair and reasonable" by the directors in their sole discretion.
Unless Tyco's Board otherwise agrees, the offer must be for cash or must offer a
cash alternative at not less than the highest price paid by the offeror, or any
person acting in concert with the offeror, for shares of that class within the
preceding 12 months or, if that price is unavailable or inappropriate, at a
price fixed by the directors. Any offer of this kind must remain open for at
least 14 days after the date on which it becomes unconditional as to
acceptances.
Tyco's Bye-Law 104(1)(B) provides that when any person has acquired, is in
the process of acquiring, or appears to Tyco's Board likely to acquire an
interest in shares of the Tyco in circumstances in which that person would be
subject to the "Rules Governing Substantial Acquisitions of Shares" issued by
the Takeover Panel of the United Kingdom, the directors may give notice
requiring that person to comply with these rules. If that person fails to
comply, the directors may give further notice requiring that person, within
28 days of the date of the notice, to dispose, or to procure the disposal by any
person with whom the person has acted in concert, of any interest in shares
acquired. These rules provide that a person may not, in any period of seven
days, acquire shares representing 10% or more of the voting rights in a company
if these shares, aggregated with shares already held by the purchaser, would
carry 15% or more, but less than 30%, of the voting rights of the company. The
rules do not apply to an acquisition from a single shareholder if the
acquisition is the only acquisition within a seven-day period and do not apply
to a person who acquires 30% or more of the voting rights in a company.
Under Tyco's Bye-Laws, any person who acquires an interest in three percent
or more of the issued share capital of any class of Tyco is required to notify
Tyco of that interest and of any change in that person's interest amounting to
one percent or more of the issued capital of any class. This notification must
be made within two days (Saturday and Sundays excluded) after the relevant
event. In determining the percentage interest of any person for these purposes
and for the purposes of Bye-Law 104, interests of persons acting in concert may
be aggregated.
24
ENFORCEMENT OF CIVIL LIABILITIES
The Company and Tyco have consented in each of the indentures to
jurisdiction in the United States federal and state courts in The City of New
York and to service of process in The City of New York in any legal suit, action
or proceeding brought to enforce any rights under or with respect to the
indentures, the debt securities and their guarantees. However, substantially all
of the Company's directly held assets consists of shares in its wholly-owned
subsidiary Tyco Group S.a.r.l., a Luxembourg company which, through its
subsidiaries, owns a substantial majority of the assets of the Company. A
substantial majority of Tyco's directly held assets consists of shares in the
Company. Accordingly, any judgment against the Company or Tyco in respect of the
related indenture, the debt securities or their guarantees, including for civil
liabilities under the United States federal securities laws, obtained in any
United States federal or state court may have to be enforced in the courts of
Luxembourg. Investors should not assume that the courts of Luxembourg would
enforce judgments of United States courts obtained against the Company or Tyco
predicated upon the civil liability provisions of the United States federal
securities laws or that such courts would enforce, in original actions,
liabilities against the Company or Tyco predicated solely upon such laws.
PLAN OF DISTRIBUTION
The Company may sell debt securities to or through underwriters or dealers,
through underwriting syndicates led by one or more managing underwriters,
through or in connection with hedging transactions, or directly to other
purchasers or through agents. Each prospectus supplement will describe the
method of distribution of the offered securities, the purchase price and the
proceeds the Company will receive from such sale, any initial public offering
price and any securities exchanges on which the securities of such series may be
listed.
The distribution of the debt securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of debt securities, underwriters may receive
compensation from the Company or from purchasers of debt securities for whom
they may act as agents in the form of discounts, concessions, or commissions.
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 agents. Underwriters, dealers, and agents that participate in the
distribution of debt securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Company and any profit on the
resale of debt securities by them may be deemed to be underwriting discounts and
commissions, under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from the Company will be
described, in the prospectus supplement.
Underwriters and agents who participate in the distribution of debt
securities may be entitled under agreements which may be entered into by the
Company to indemnification by the Company and Tyco against certain liabilities,
including liabilities under the Securities Act, or to contribution with respect
to payments which the agents or underwriters may be required to make relating to
such liabilities.
If so indicated in the applicable prospectus supplement, the Company will
authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase offered debt securities from
the Company pursuant to contracts providing for payment and delivery on a future
date. The applicable prospectus supplement will also set forth the conditions to
these contracts
25
and the commissions payable for solicitation of such contracts. Institutions
with which such contracts may be made include:
- commercial and savings banks,
- insurance companies,
- pension funds,
- investment companies, and
- educational and charitable institutions and others,
but in all cases such institutions must be approved by the Company. The
obligations of any purchaser under any such contract will be subject to the
condition that the purchase of the offered debt securities shall not at the time
of delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject. The underwriters and such other agents will not have any
responsibility in respect of the validity or performance of such contracts.
All of the debt securities will be new issue with no established trading
market. Unless otherwise indicated in a prospectus supplement, the Company does
not currently intend to list any debt securities on any securities exchange. No
assurance can be given that the underwriters, dealers or agents, if any,
involved in the sale of the debt securities will make a market in such debt
securities. Whether or not any of the debt securities are listed on a national
securities exchange or the underwriters, dealers or agents, if any, involved in
the sale of the debt securities make a market in such debt securities, no
assurance can be given as to the liquidity of the trading market for such debt
securities.
To facilitate an offering of securities, certain persons participating in
the offering may engage in transactions that stabilize, maintain, or otherwise
affect the price of the securities. This may include over-allotments or short
sales of the securities, which involves the sale by persons participating in the
offering of more securities than have been sold to them by the Company. In
addition, to cover such over-allotments or short positions, the persons may
purchase in the open market or exercise the over-allotment option granted to
such persons. In addition, such persons may stabilize or maintain the price of
the securities by bidding for or purchasing securities in the open market or by
imposing penalty bids, whereby selling concessions allowed to dealers
participating in any such offering may be reclaimed if securities sold by them
are repurchased in connection with stabilization transactions. The effect of
these transactions may be to stabilize or maintain the market price of the
securities above independent market levels. The persons participating in any
offering are not required to engage in these activities, and may end any of
these activities at any time.
Certain of the underwriters, dealers or agents and their associates may
engage in transactions with and perform services for the Company, Tyco and our
subsidiaries and affiliates in the ordinary course of business for which they
receive customary compensation.
LEGAL MATTERS
Certain U.S. legal matters regarding the debt securities, Tyco's guarantees
of the debt securities and the common shares will be passed upon for Tyco and
the Company by Wilmer, Cutler & Pickering, Washington, D.C. Certain matters
under the laws of Bermuda related to the guarantees of Tyco of the debt
securities and the common shares will be passed upon for Tyco by Appleby
Spurling & Kempe, Hamilton, Bermuda, Bermuda counsel to Tyco. Michael Jones, the
Secretary of Tyco, is a partner of Appleby Spurling & Kempe. Certain matters
under the laws of Luxembourg related to the debt securities will be passed upon
by Beghin & Feider in association with Allen & Overy, Luxembourg counsel to the
Company. Wilmer, Cutler & Pickering will rely on Appleby Spurling & Kempe with
respect to matters of Bermuda law and on Beghin & Feider in association with
Allen & Overy with respect to matters of Luxembourg law.
26
EXPERTS
The consolidated financial statements and financial statement schedule of
Tyco as of September 30, 1999 and 1998, and for the years ended September 30,
1999 and 1998 and the nine months ended September 30, 1997 included in Tyco's
Annual Report on Form 10-K/A filed on June 26, 2000, and incorporated by
reference in this document, have been audited by PricewaterhouseCoopers,
independent accountants, as set forth in their report included therein. In its
report, that firm states that with respect to certain subsidiaries its opinion
is based upon the reports of other independent accountants, namely Deloitte &
Touche LLP (as it relates to the consolidated statements of operations, changes
in stockholders' equity and cash flows of United States Surgical Corporation and
its subsidiaries for the nine-month period ended September 30, 1997 and the
related financial statement schedule for the nine-month period ended
September 30, 1997) and Arthur Andersen LLP (as it relates to the consolidated
balance sheet of AMP Incorporated and subsidiaries as of September 30, 1998 and
the related consolidated statements of income, shareholders' equity and cash
flows for the year ended September 30, 1998 and the nine months ended
September 30, 1997). The consolidated financial statements and financial
statement schedule referred to above have been incorporated herein in reliance
on said reports given on the authority of such firms as experts in auditing and
accounting.
27
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$1,800,000,000
TYCO INTERNATIONAL GROUP S.A.
$500,000,000 FLOATING RATE NOTES DUE 2003
$600,000,000 4.95% NOTES DUE 2003
$700,000,000 5.80% NOTES DUE 2006
FULLY AND UNCONDITIONALLY GUARANTEED BY
[LOGO]
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PROSPECTUS SUPPLEMENT
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JOINT BOOK-RUNNING MANAGERS
JPMORGAN
MERRILL LYNCH & CO.
BANC OF AMERICA SECURITIES LLC
BEAR, STEARNS & CO. INC.
COMMERZBANK CAPITAL MARKETS CORP.
CREDIT SUISSE FIRST BOSTON
FIRST UNION SECURITIES, INC.
HSBC
LEHMAN BROTHERS
SALOMON SMITH BARNEY
JULY 24, 2001
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