As filed with the Securities and Exchange Commission on July 8, 1996
Registration No. 33-__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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HEILIG-MEYERS COMPANY MACSAVER FINANCIAL SERVICES, INC.
(Exact name of registrant as (Exact name of registrant as
specified in its charter) specified in its charter)
Virginia Delaware
(State or other jurisdiction (State or other jurisdiction
of incorporation or organization) of incorporation or organization)
54-0558861 62-1419691
(I.R.S. employer identification number) (I.R.S. employer identification number)
2235 Staples Mill Road 2 Reads Way, Suite 224
Richmond, Virginia 23230 New Castle, Delaware 19720
(804) 359-9171 (302) 325-3841
(Address, including zip code, and (Address, including zip code, and
telephone number, including area telephone number, including area
code, of registrant's principal code, of registrant's principal
executive offices) executive offices)
-----------------------
David W. Robertson, Esq.
McGuire, Woods, Battle & Boothe, L.L.P.
One James Center
901 East Cary Street
Richmond, Virginia 23219
(804) 775-1000
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
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Copies to:
Edwin D. Williamson
Sullivan & Cromwell
1701 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this registration statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. ( )
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. (X)
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. ( )
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. ( )
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. ( )
CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------- ------------------------------- ---------------------------
Title of Each
Class of Securities Proposed Maximum Amount of
to be Registered Aggregate Offering Price (1) Registration Fee
- ---------------------------------------------------------------- ------------------------------- ---------------------------
Common stock of Heilig-Meyers Company (par
value $2 per share) (2)(3)
Warrants of Heilig-Meyers Company (2)(4)
Debt Securities of MacSaver Financial Services, Inc. (2)(5)(6)
Guarantees by Heilig-Meyers Company of Debt Securities of
MacSaver Financial Services, Inc. (2)(7)
Total $400,000,000 $137,932
================================================================ =============================== ---------------------------
(1) Estimated solely for the purpose of determining the
registration fee in accordance with Rule 457(o) under the
Securities Act of 1933.
(2) There are being registered hereunder such principal amount or
number of Securities as may from time to time be issued, but in
no event will the aggregate initial offering price of the
Securities exceed $400,000,000.
(3) Each share of Common Stock being registered hereunder includes a
preferred share purchase right.
(4) Warrants may be sold separately or with Debt Securities or Common
Stock.
(5) Any offering of Debt Securities offered in a currency other than
in U.S. dollars will be treated as the equivalent in U.S. dollars
based on the official exchange rate applicable to the purchase of
Debt Securities from the registrant.
(6) Plus accrued interest, if any.
(7) No separate registration fee is required for the Guarantees in
accordance with Rule 457(n) under the Securities Act of 1933. No
separate consideration will be given for any Guarantee.
--------------------------
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JULY 8, 1996
[Logo]
$400,000,000
HEILIG-MEYERS COMPANY
COMMON STOCK AND WARRANTS
MACSAVER FINANCIAL SERVICES, INC.
(a subsidiary of Heilig-Meyers Company)
GUARANTEED DEBT SECURITIES
Unconditionally guaranteed as to payment of principal,
premium, if any, and interest, if any, by Heilig-Meyers
Company.
Heilig-Meyers Company (the "Company") may offer and sell from time to time,
together or separately, (i) shares of its common stock, $2 par value per share
(the "Common Stock") and (ii) warrants to purchase Common Stock (the
"Warrants"). MacSaver Financial Services, Inc., a wholly-owned subsidiary of the
Company ("MFS"), may offer and sell from time to time its debt securities
consisting of debentures, notes and/or other unsecured evidences of indebtedness
("Debt Securities"). The Debt Securities will be unconditionally guaranteed (the
"Guarantees") as to payment of principal of, and premium and interest on, if
any, the Debt Securities by the Company. The Common Stock, Warrants and Debt
Securities (collectively, together with the Guarantees, the "Securities") may be
offered, separately or together, at prices and terms to be set forth in one or
more supplements to this Prospectus (each a "Prospectus Supplement") up to an
aggregate initial offering price of $400,000,000 (or its equivalent, based on
the applicable exchange rate at the time of sale, in one or more foreign
currencies, currency units or composite currencies as shall be designated by the
Company or MFS, as the case may be).
Specific terms of the Securities for which this Prospectus is being
delivered are set forth in the accompanying Prospectus Supplement including,
where applicable, (i) in the case of Debt Securities, the specific designation,
aggregate principal amount, denominations, currency, maturity, premium, rate of
interest (or method of calculation) and time of payment thereof, terms for
redemption at the option of MFS or the holder, the form of the Debt Securities
(which may be in registered or permanent global form), the initial public
offering price and certain other terms of the offering and sale of the Debt
Securities and the terms of the Guarantees in respect of which this Prospectus
is being delivered; (ii) in the case of Common Stock, the number of shares and
initial public offering price of the Common Stock, and (iii) in the case of
Warrants, the number of shares of Common Stock which are issuable upon exercise,
the exercise period, the methods of distribution, the initial public offering or
purchase price and the exercise price and detachability if issued with other
Securities, of Warrants for which the Prospectus Supplement is being delivered.
The Prospectus Supplement will also contain information, as applicable, about
any listing on a securities exchange of the Securities for which the Prospectus
Supplement is being delivered.
The Securities may be sold by the Company and MFS directly or indirectly
through agents, underwriters or dealers as designated from time to time or
through a combination of such methods. See "Plan of Distribution." The
accompanying Prospectus Supplement sets forth the names of any underwriters,
dealers or agents involved in the sale of the Securities in respect of which
this Prospectus is being delivered and any applicable fee, commission or
discount arrangements with them.
This Prospectus may not be used to consummate sales of Securities unless
accompanied or, to the extent permitted by applicable law, preceded by a
Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is ___________, 1996.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549; and at the Commission's regional offices at
500 West Madison Street, Chicago, Illinois 60606; and 7 World Trade Center, 13th
Floor, New York, New York 10048. Copies of such material can be obtained by mail
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Company's common stock is
listed on the New York and Pacific Stock Exchanges, and such material may also
be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005 and the Pacific Stock Exchange, Incorporated, 301 Pine
Street, San Francisco, California 94104.
The Company and MFS have filed with the Commission a Registration Statement
on Form S-3 (herein, together with all amendments and exhibits, referred to as
the "Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), of which this Prospectus constitutes a part. This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information, reference is made to the
Registration Statement.
In accordance with Staff Accounting Bulletin No. 53, relating to financial
statement requirements in filings involving the guarantee of securities by a
parent corporation, separate financial statements for MFS are not included in
this Prospectus.
The Company intends to ask the staff of the Commission for a "no-action"
letter that it would not raise any objection if MFS does not file periodic
reports under Sections 13 and 15(d) of the Exchange Act. Accordingly, MFS is not
expected to file periodic reports under the Exchange Act.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company are hereby
incorporated by reference into this Prospectus:
1. the annual report on Form 10-K for the fiscal year ended February
29, 1996;
2. the description of the Common Stock contained in the
Registration Statement on Form 8-A filed with the Commission on April 26,
1983 (File No. 1-8484), as amended by amendments on Form 8, filed with the
Commission on April 9, 1985, February 23, 1988, September 20, 1989, July
31, 1990, August 6, 1992 and July 28, 1994, respectively; and
3. the description of the Rights to Purchase Preferred Stock, Series
A contained in the Registration Statement on Form 8-A (File No. 1-8484)
filed with the Commission on February 23, 1988 as amended by an amendment
on Form 8 filed with the Commission on September 20, 1989.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
respective dates of filing of such documents. Any statement contained herein or
in a document all or any portion of which is incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such earlier statement.
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to any person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated herein by reference (other
than certain exhibits to such documents). Requests for such copies should be
directed to Heilig-Meyers Company, 2235 Staples Mill Road, Richmond, Virginia
23230; Attention: Paige H. Wilson, Secretary, telephone (804) 359-9171.
HEILIG-MEYERS COMPANY
BUSINESS
General
The Company is the nation's largest publicly held specialty retailer of
home furnishings with 739 stores (as of May 31, 1996), in 26 states and Puerto
Rico. The Company's stores are primarily located in small towns and rural
markets in the Southeast, Midwest, West and Southwest of the continental United
States. The Company's operating strategy includes: (1) offering a broad
selection of competitively priced home furnishings including furniture, consumer
electronics, appliances, bedding and floor coverings; (2) locating stores
primarily in small towns and rural markets which are at least 25 miles from a
metropolitan area; (3) offering in-house credit programs to provide flexible
financing to its customers; (4) utilizing centralized inventory and distribution
systems in strategic regional locations to support store inventory and
merchandise delivery options; and (5) emphasizing customer service, including
free delivery on most major purchases and repair service for consumer
electronics and other mechanical items. The Company believes this strategy of
offering selection, credit, delivery and service generally allows it to have the
largest market share among home furnishings retailers in most of its small-town
markets.
The Company has undertaken several programs to enhance operating
efficiencies, reduce costs, improve management controls, and manage the growth
of its business. These programs have included: a prototype store program
featuring the latest in display techniques and construction efficiencies; a
remodeling program under which stores are typically remodeled on a seven year
schedule; improved distribution management with eight state-of-the-art
distribution centers which are designed to service stores typically located
within 250 miles of such centers (a ninth distribution center is under
construction and expected to be completed by the end of the current fiscal
year); information systems improvements including a sales and inventory control
system and a company wide hardware upgrade which have allowed numerous system
enhancements including satellite communications; a new purchasing strategy of
consolidating vendors for purchasing advantages due to scale economies and
improved inventory management including electronic data interchange (EDI)
ordering and just-in-time ordering; and increased use of market segmentation
techniques to identify prospective customers and to permit a more targeted
direct mail advertising program.
The Company's executive offices are located at 2235 Staples Mill Road,
Richmond, Virginia 23230. The telephone number is (804) 359-9171. MFS is a
Delaware corporation and a wholly-owned subsidiary of the Company through which
financing is obtained for the operations of the Company and its other
subsidiaries. The executive offices of MFS are located at 2 Reads Way, Suite
224, New Castle, Delaware 19720. The telephone number is (302) 325-3841.
Store Operations
General
The Company believes that locating stores in small towns and rural markets
provides an important competitive advantage. Currently, approximately 80% of all
stores are located in towns with populations under 50,000 and more than 25 miles
from a metropolitan market. As the majority of other home furnishings chains
locate their stores in larger cities, competition in these small towns largely
comes from locally-owned store operations which generally lack the financial
strength to compete effectively with the Company. The Company believes that its
stores have the largest market share among home furnishings retailers in the
majority of their areas.
The Company's stores generally range in size from 10,000 to 35,000 square
feet, with the average being approximately 20,000 square feet. A store's
attached or nearby warehouse usually measures from 3,000 to 5,000 square feet. A
typical store is designed to give the customer an urban shopping experience in a
rural location. The Company's existing store remodeling program, under which
stores are remodeled on a rotational basis, provides the Company's older stores
with a fresh look and up-to-date displays on a periodic basis.
Distribution
The Company currently operates seven distribution centers in the
continental U.S. and one center in Puerto Rico, each of which has cantilever
racking and computer-controlled random-access inventory storage. Over the past
two years, the Company expanded three of its distribution centers to handle
increased sales levels. A ninth distribution center, currently being constructed
in Athens, Texas, is scheduled to be completed by the end of the current fiscal
year.
Credit Operations
The Company believes that offering flexible, in-house credit is an
important part of its business strategy which provides a significant competitive
advantage. Because installment credit is administered at the store level, terms
can generally be tailored to meet the customer's ability to pay. The Company
believes its credit program fosters customer loyalty and repeat business.
Historically, approximately 80% of the Company's sales have been made through
the Company's installment credit program.
The following table sets forth certain data regarding the Company's credit
operations:
Fiscal Years Ended
Feb. 29, Feb. 28, Feb. 28, Feb. 28, Feb. 29,
1996 1995 1994 1993 1992
Average number of installment
accounts receivable(1).................. 1,220,660 972,418 799,501 652,569 557,027
Average initial term of account
(months)(2)............................ 17.2 16.6 16.7 16.6 16.5
Provision for doubtful accounts
as % of sales.......................... 5.7% 4.8% 4.5% 4.4% 4.6%
Net charge-offs as % of sales........... 5.0 4.6 4.1 4.1 4.3
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(1) Includes securitized accounts receivable which are still serviced by the
Company.
(2) For installment contracts originated during the indicated fiscal year,
calculated at the date of origination.
Merchandising
The Company's merchandising strategy is to offer a broad selection of
competitively priced home furnishings, including furniture and accessories,
consumer electronics, appliances, bedding, and other items such as jewelry,
small appliances and seasonal goods. The table below sets forth the percentage
of sales of these items during the last five years:
Fiscal Years Ended
Feb. 29, Feb. 28, Feb. 28, Feb. 28, Feb. 29,
1996 1995 1994 1993 1992
Furniture and accessories... 58% 59% 59% 59% 58%
Consumer electronics........ 12 11 12 13 13
Appliances.................... 9 8 8 8 8
Bedding....................... 11 10 10 10 9
Other items................... 10 12 11 11 12
Advertising and Promotion
In fiscal 1996, the Company distributed over 160 million direct mail
circulars. This included monthly circulars sent by direct mail to over ten
million households on the Company's mailing list and special private sale
circulars mailed to over two million of these households each month, as well as
during special promotional periods. During fiscal 1996, the Company continued to
utilize market segmentation techniques (begun in fiscal 1994) to identify
prospective customers by matching their demographics to those of existing
customers. Management believes ongoing market research and improved mailing
techniques enhance the Company's ability to place circulars in the hands of
potential customers most likely to make a purchase. The Company believes that
availability, as well as the terms of credit, are key determinants in the
purchase decision, and therefore, promotes credit availability by disclosing
monthly payment terms in its circulars. Historically, expenses for advertising
and promotion have been between 6% and 8% of sales. Advertising expense was
above its historical levels in fiscal 1996 at approximately 8.4% of sales.
Corporate Expansion
The Company has grown from 322 stores at February 28, 1991, to 716 stores
at February 29, 1996. Over this time period, the Company has expanded from its
traditional Southeast operating region into the Midwest, West, Southwest and
outside the continental United States into Puerto Rico. The Company currently
operates stores in Alabama, Arizona, Arkansas, California, Colorado, Florida,
Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri,
Nevada, New Mexico, North Carolina, Ohio, Oklahoma, Pennsylvania, South
Carolina, Tennessee, Texas, Virginia, West Virginia, Wisconsin and Puerto Rico.
Management believes that the Company's size and geographically diverse store
locations are competitive advantages and allow for greater stability in its
operations.
USE OF PROCEEDS
Except as otherwise provided in the applicable Prospectus Supplement, the
net proceeds from the sale of the Securities will be used for general corporate
purposes, which may include repayment of outstanding indebtedness, capital
expenditures, working capital requirements and possible future acquisitions. The
precise amount and timing of the application of such proceeds will depend upon
the funding requirements of the Company or MFS, as the case may be, and the
availability and cost of other funds. Allocation of the proceeds of particular
Securities, or the principal reasons for the offering if no such allocation has
been made, will be described in the applicable Prospectus Supplement.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets for the ratios of earnings to fixed charges for
the years indicated:
Year Ended February (28)29
1996 1995 1994 1993 1992
Ratio of Earnings to
Fixed Charges 1.62x 2.28x 2.50x 2.35x 2.06x
For purposes of this ratio, earnings are calculated by adding fixed charges
(excluding capitalized leases) to income before income taxes and extraordinary
items. Fixed charges consist of interest on indebtedness (including amortization
of debt discount and premium) and the portion of rental expense representative
of an interest factor.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions may not apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.
The Debt Securities and related Guarantees are to be issued under an
Indenture (the "Indenture"), among MFS, the Company and First Union National
Bank of Virginia, as trustee (the "Trustee"). A copy of the Indenture is filed
as an exhibit to the Registration Statement of which this Prospectus is a part.
The following summaries of certain provisions of the Debt Securities and the
Indenture do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all the provisions of the Indenture, including
the definitions therein of certain terms. Wherever particular Sections, Articles
or defined terms of the Indenture are referred to, such Sections, Articles or
defined terms are incorporated herein by reference. Article and Section
references used herein are references to Articles and Sections of the Indenture.
Capitalized terms not otherwise defined herein shall have the meaning given in
the Indenture.
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$", "U.S. Dollars"
or "dollars").
General
The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provides that Debt Securities may
be issued thereunder up to an aggregate principal amount which may be authorized
from time to time by MFS. The Debt Securities will be unsecured unsubordinated
obligations of MFS and will rank on a parity in right of payment with all other
unsecured and unsubordinated indebtedness of MFS.
The Debt Securities will be unconditionally guaranteed by the Company as to
payment of principal, premium, if any, and interest. See "Guarantees."
Reference is made to the applicable Prospectus Supplement relating to the
series of Debt Securities offered thereby for specific terms, including (where
applicable): (1) the title or designation of such Debt Securities; (2) any limit
on the aggregate principal amount of such Debt Securities; (3) the price or
prices (expressed as a percentage of the principal amount thereof) at which such
Debt Securities will be issued; (4) the date or dates on which the principal of
and premium, if any, on such Debt Securities will be payable, or the method or
methods, if any, by which such date or dates will be determined; (5) the rate or
rates (which may be fixed or variable) at which such Debt Securities will bear
interest, if any, or the method or methods, if any, by which such rate or rates
are to be determined, the date or dates, if any, from which such interest will
accrue, or the method or methods, if any, by which such date or dates are to be
determined, and whether and under what circumstances Additional Amounts on such
Debt Securities will be payable, and the basis upon which interest will be
calculated if other than that of a 360-day year of twelve 30-day months; (6) the
dates on which such interest, if any, will be payable and the record dates
therefor; (7) the place or places where the principal of, premium, if any, and
interest, if any, on such Debt Securities will be payable and the place or
places where such Debt Securities may be surrendered for registration of
transfer and exchange, if other than The City of New York; (8) the date or dates
on which, the period or periods within which, the price or prices at which and
the other terms and conditions upon which such Debt Securities may be redeemed
at the option of MFS or are subject to repurchase at the option of the holders;
(9) the terms of any sinking fund or analogous provision; (10) if other than
U.S. dollars, the Currency for which the Debt Securities may be purchased and
the Currency in which the payment of principal thereof and premium, if any, and
interest, if any, thereon may be made, and the ability, if any, of MFS, or the
holders of Debt Securities to have payments made in any Currency other than
those in which the Debt Securities are stated to be payable; (11) any addition
to, or modification or deletion of, any covenant or Event of Default with
respect to such Debt Securities; (12) whether any such Debt Securities are to be
issuable in registered or bearer form or both and, if in bearer form, the terms
and conditions relating thereto and any limitations on issuance of such Bearer
Securities (including in exchange for Registered Securities of the same series);
(13) whether any such Debt Securities will be issued in temporary or permanent
global form and, if so, the identity of the depositary for such global Debt
Security; (14) the applicability, if any, of the defeasance or covenant
defeasance provisions of the Indenture applicable to such Debt Securities; (15)
the person to whom any interest on any Registered Securities of the series shall
be payable, if other than the person in whose name the Registered Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, the manner in which, or the person to
whom, any interest on any Bearer Security of the series shall be payable, if
other than upon presentation and surrender of the coupons appertaining thereto
as they severally mature, and the extent to which, or the manner in which, any
interest payable on a temporary global Debt Security will be paid if other than
in the manner provided in the Indenture; (16) the portion of the principal
amount of Debt Securities which shall be payable upon acceleration thereof if
other than the full principal amount thereof; (17) the authorized denominations
in which Debt Securities will be issuable, if other than denominations of $1,000
and any integral multiple thereof (in the case of Registered Securities) or
$5,000 (in the case of Bearer Securities); (18) the terms, if any, upon which
Debt Securities may be exchangeable for other Securities; (19) whether the
amount of payments of principal of, premium, if any, and interest, if any, on
Debt Securities may be determined with reference to an index, formula or other
method or methods (any Debt Securities being hereinafter called "Indexed
Securities") and the manner in which such amounts will be determined; (20) the
terms of the Guarantees in respect of which this Prospectus is being delivered;
and (22) any other terms of such Debt Securities.
As used in this Prospectus and any Prospectus Supplement relating to the
offering of any Debt Securities, references to the principal of and premium, if
any, and interest, if any, on Debt Securities will be deemed to include mention
of the payment of Additional Amounts, if any, required by the terms of Debt
Securities in such context.
Debt Securities may be issued as Original Issue Discount Securities (as
defined in the Indenture) to be sold at a substantial discount below their
principal amount. In the event of an acceleration of the maturity of any
Original Issue Discount Security, the amount payable to the holder thereof upon
such acceleration will be determined in the manner described in the applicable
Prospectus Supplement. Special United States federal income tax considerations
applicable to Debt Securities issued at an original issue discount, including
Original Issue Discount Securities, and special United States tax considerations
applicable to any Debt Securities which are denominated in a currency or
currency unit other than United States dollars, are described below under
"United States Taxation."
If the purchase price of any Debt Securities is payable in a Currency other
than U.S. dollars or if principal of, or premium, if any, or interest, if any,
on any of the Debt Securities is payable in any Currency other than U.S.
dollars, the specific terms and other information with respect to such Debt
Securities and such foreign Currency will be specified in the Prospectus
Supplement relating thereto.
Under the Indenture, the terms of the Debt Securities of any series may
differ and MFS, without the consent of the holders of the Debt Securities of any
series, may reopen a previous series of Debt Securities and issue additional
Debt Securities of such series.
The Indenture does not contain any provisions which may afford the holders
of any of the Debt Securities protection in the event of a highly leveraged
transaction or similar transaction involving the Company or MFS. Any such
provisions, if applicable to any Debt Securities, will be described in the
Prospectus Supplement or Prospectus Supplements relating thereto.
Guarantees; Holding Company Structure
The Company will unconditionally guarantee the due and punctual payment of
principal of, premium, if any, and interest on the Debt Securities, when and as
the same shall become due and payable, whether at the maturity date, by
declaration of acceleration, call for redemption or otherwise. The Guarantees
will remain in effect until the entire principal of, premium, if any, and
interest on the Debt Securities shall have been paid in full or otherwise
discharged in accordance with the provisions of the Indenture.
The Company conducts its operations primarily through its wholly-owned
subsidiaries, including MFS, and substantially all of the Company's consolidated
assets are held by its subsidiaries. Accordingly, the cash flow of the Company
and the consequent ability to service its debt, including its obligations under
the Guarantees, are largely dependent upon the earnings of such subsidiaries.
Because the Company is a holding company, the Company's obligations under
the Guarantees will be effectively subordinated to all existing and future
indebtedness, trade payables, guarantees, lease obligations and letter of credit
obligations of the Company's subsidiaries. Therefore, the Company's rights and
the rights of its creditors, including the holders of the Debt Securities under
the Guarantees, to participate in the assets of any subsidiary (other than MFS)
upon the latter's liquidation or reorganization will be subject to the prior
claims of such subsidiary's creditors, except to the extent that the Company may
itself be a creditor with recognized claims against the subsidiary, in which
case the claims of the Company would still be effectively subordinate to any
security interest in, or mortgages or other liens on, the assets of such
subsidiary and would be subordinate to any indebtedness of such subsidiary
senior to that held by the Company. Although certain debt instruments to which
the Company and its subsidiaries are parties impose limitations on the
incurrence of additional indebtedness, both the Company and its subsidiaries
retain the ability to incur substantial additional indebtedness and lease and
letter of credit obligations.
Registration, Transfer, Payment and Paying Agent
Unless otherwise indicated in the applicable Prospectus Supplement, each
series of Debt Securities will be issued in registered form only, without
coupons. The Indenture, however, provides that MFS may also issue Debt
Securities in bearer form only, or in both registered and bearer form. Bearer
Securities may not be offered, sold, resold or delivered in connection with
their original issuance in the United States or to any United States person (as
defined below) other than offices located outside the United States of certain
United States financial institutions. As used herein, "United States person"
means any citizen or resident of the United States, any corporation, partnership
or other entity created or organized in or under the laws of the United States,
or any estate or trust, the income of which is subject to United States federal
income taxation regardless of its source, and "United States" means the United
States of America (including the states thereof and the District of Columbia),
its territories, its possessions and other areas subject to its jurisdiction.
Purchasers of Bearer Securities will be subject to certification procedures and
may be affected by certain limitations under United States tax laws. Such
procedures and limitations will be described in the Prospectus Supplement
relating to the offering of the Bearer Securities.
Unless otherwise indicated in the applicable Prospectus Supplement,
Registered Securities will be issued in denominations of $1,000 or any integral
multiple thereof, and Bearer Securities will be issued in denominations of
$5,000.
Unless otherwise indicated in the applicable Prospectus Supplement, the
principal, premium, if any, and interest, if any, of or on the Debt Securities
will be payable, and Debt Securities may be surrendered for registration of
transfer or exchange, at an office or agency to be maintained by MFS in the
Borough of Manhattan, The City of New York, provided that payments of interest
with respect to any Registered Security may be made at the option of MFS by
check mailed to the address of the person entitled thereto or by transfer to an
account maintained by the payee with a bank located in the United States. No
service charge shall be made for any registration of transfer or exchange of
Debt Securities, but MFS may require payment of a sum sufficient to cover any
tax or other governmental charge and any other expenses that may be imposed in
connection therewith.
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of, premium, if any, and interest, if any, on Bearer Securities
will be made, subject to any applicable laws and regulations, at such office or
agency outside the United States as specified in the Prospectus Supplement and
as MFS may designate from time to time. Unless otherwise indicated in the
applicable Prospectus Supplement, payment of interest due on Bearer Securities
on any Interest Payment Date will be made only against surrender of the coupon
relating to such Interest Payment Date. Unless otherwise indicated in the
applicable Prospectus Supplement, no payment of principal, premium or interest
with respect to any Bearer Security will be made at any office or agency in the
United States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States;
provided, however, that if amounts owing with respect to any Bearer Securities
shall be payable in U.S. dollars, payment with respect to any such Bearer
Securities may be made at the Corporate Trust Office of the applicable Trustee
or at any office or agency designated by MFS in the Borough of Manhattan, The
City of New York, if (but only if) payment of the full amount of such principal,
premium or interest at all offices outside of the United States maintained for
such purpose by MFS is illegal or effectively precluded by exchange controls or
similar restrictions.
Unless otherwise indicated in the applicable Prospectus Supplement, MFS
will not be required to (i) issue, register the transfer of or exchange Debt
Securities of any series during a period beginning at the opening of business 15
days before any selection of Debt Securities of that series of like tenor to be
redeemed and ending at the close of business on the day of that selection; (ii)
register the transfer of or exchange any Registered Security, or portion
thereof, called for redemption, except the unredeemed portion of any Registered
Security being redeemed in part; (iii) exchange any Bearer Security called for
redemption, except to exchange such Bearer Security for a Registered Security of
that series and like tenor that is simultaneously surrendered for redemption; or
(iv) issue, register the transfer of or exchange any Debt Security which has
been surrendered for repayment at the option of the holder, except the portion,
if any, of such Debt Security not to be so repaid.
Global Securities
The Debt Securities may be issued in whole or in part in the form of one or
more global securities that will be deposited with, or on behalf of, a
depositary (the "Depositary") identified in the Prospectus Supplement relating
to such series. Global Debt Securities may be issued in either registered or
bearer form and in either temporary or permanent form. Unless and until it is
exchanged in whole or in part for individual certificates evidencing Debt
Securities in definitive form represented thereby, a global Debt Security may
not be transferred except as a whole by the Depositary for such global Debt
Security to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor of such Depositary or a nominee of such
successor.
The specific terms of the depositary arrangement with respect to a series
of global Debt Securities and certain limitations and restrictions relating to a
series of global Bearer Securities will be described in the Prospectus
Supplement relating to such series.
Outstanding Debt Securities
In determining whether the holders of the requisite principal amount of
outstanding Debt Securities have given any request, demand, authorization,
direction, notice, consent or waiver under the Indenture, or whether a quorum is
present at a meeting of the holders thereunder, (i) the portion of the principal
amount of an Original Issue Discount Security that shall be deemed to be
outstanding for such purposes shall be that portion of the principal amount
thereof that could be declared to be due and payable upon a declaration of
acceleration thereof pursuant to the terms of such Original Issue Discount
Security as of the date of such determination, (ii) the principal amount of any
Indexed Security that shall be deemed to be outstanding for such purpose shall
be the principal face amount of such Indexed Security determined on the date of
its original issuance, (iii) the principal amount of a Debt Security denominated
in a Currency other than U.S. dollars shall be the U.S. dollar equivalent,
determined on the date of original issue of such Debt Security, of the principal
amount of such Debt Security and (iv) any Debt Security beneficially owned by
the Company or MFS or by any obligor on such Debt Security or any Affiliate of
the Company or MFS or such other obligor shall be deemed not to be outstanding.
Redemption and Repurchase
The Debt Securities of any series may be redeemable at the option of MFS,
may be subject to mandatory redemption pursuant to a sinking fund or otherwise,
or may be subject to repurchase by MFS at the option of the holders, in each
case upon the terms, at the times and at the prices set forth in the applicable
Prospectus Supplement.
Certain Covenants of the Company
Restricted and Unrestricted Subsidiaries. The various restrictive
provisions of the Indenture applicable to the Company and the Restricted
Subsidiaries do not apply to Unrestricted Subsidiaries. The assets of
Unrestricted Subsidiaries are not consolidated with those of the Company and the
Restricted Subsidiaries in calculating Consolidated Net Tangible Assets, and
investments by the Company or by the Restricted Subsidiaries in Unrestricted
Subsidiaries are excluded in calculating Consolidated Net Tangible Assets. A
"Restricted Subsidiary" is MFS and any other subsidiary of the Company or MFS
which is organized under the laws of the United States or any state thereof or
Canada or Puerto Rico, which conducts substantially all of its business and has
substantially all of its assets within the United States or Canada or Puerto
Rico, of which more than 80% (by number of votes) of the voting securities or
other similar ownership interests is owned by the Company and/or one or more
Restricted Subsidiaries and which is not designated by the Company as an
Unrestricted Subsidiary in accordance with the Indenture. An "Unrestricted
Subsidiary" is a subsidiary of the Company or MFS which is designated by the
Company as an Unrestricted Subsidiary in accordance with the Indenture or which
does not come within the definition of a Restricted Subsidiary. (Section 101)
The Company may designate any Restricted Subsidiary, other than MFS, as an
Unrestricted Subsidiary if, immediately after such designation, (i) such
subsidiary does not hold or own, directly or indirectly, any Funded Debt or
capital stock of any Restricted Subsidiary, (ii) the Company could incur
additional Secured Funded Debt in compliance with the Indenture, (iii) neither
the Company nor any Restricted Subsidiary guarantees any obligations of such
subsidiary and (iv) no Default or Event of Default would exist. The Guarantor
may not designate any Unrestricted Subsidiary as a Restricted Subsidiary unless,
immediately after giving effect to such designation, such subsidiary is in
compliance with all of the covenants of the Indenture applicable to Restricted
Subsidiaries, the Company could incur additional Secured Funded Debt (without
securing the Debt Securities equally and ratably) in compliance with the
Indenture and no Default or Event of Default would exist. The Company must at
all times ensure that MFS is a wholly-owned Restricted Subsidiary. (Section
1010)
Restrictions on Secured Funded Debt. The Company may not, and may not
permit any Restricted Subsidiary to, issue, assume, guarantee, incur, create or
otherwise become liable in respect of any Secured Funded Debt, unless the Debt
Securities are secured equally and ratably with (or prior to) such Secured
Funded Debt, except (i) Secured Funded Debt of a Restricted Subsidiary
outstanding at the date of the Indenture (there was no such Secured Funded Debt
outstanding as of June 28, 1996), (ii) Secured Funded Debt of a Restricted
Subsidiary payable to the Company or to a Restricted Subsidiary, (iii) Secured
Funded Debt of any corporation or other entity outstanding at the time such
corporation or other entity became a Restricted Subsidiary (and not incurred in
contemplation thereof), (iv) Secured Funded Debt otherwise permitted under the
Indenture (see "Restrictions on Liens"), (v) Attributable Debt otherwise
permitted under the Indenture (see "Restrictions on Sale and Leaseback
Transactions"), (vi) Secured Funded Debt not otherwise permitted by clauses (i)
through (v) above, provided that, (1) at the time of the issuance, assumption,
guarantee, incurrence or creation thereof no Default or Event of Default is
continuing or would be created thereby and (2) after giving effect thereto and
to the application of the proceeds thereof, no Default or Event of Default shall
have occurred and be continuing and the aggregate amount of all Secured Funded
Debt does not exceed 5% of Consolidated Net Tangible Assets as of the end of the
immediately preceding fiscal quarter and (vii) renewals, extensions or
refundings of Secured Funded Debt permitted by clauses (i) through (vi) above,
provided that the amount of such Secured Funded Debt is not increased unless
otherwise permitted by such clauses. (Section 1007)
"Secured Funded Debt" means Funded Debt of any Restricted Subsidiary (other
than MFS) or which is secured by a mortgage, security interest, pledge,
conditional sale or other title retention agreement or other lien upon any
assets of the Company, MFS or any other Restricted Subsidiary (other than
liabilities in connection with capital lease obligations or industrial
development bonds). (Section 101)
"Funded Debt" means Indebtedness having a final maturity of more than one
year from the date of determination thereof or which is renewable or extendible
at the option of the obligor for a period or periods more than one year from
such date of determination. (Section 101)
"Indebtedness" means all obligations of the Company, MFS or any other
Restricted Subsidiary which, in accordance with generally accepted accounting
principles consistently applied, shall be classified as liabilities on the most
recently available consolidated balance sheet of the Company and the Restricted
Subsidiaries (other than liabilities for minority interests or deferred taxes),
together with the following obligations of the Company, MFS or any other
Restricted Subsidiary, determined in accordance with generally accepted
accounting principles consistently applied, whether or not classified as
liabilities (other than obligations with respect to leases of real property or
interests therein that are classified as operating leases in accordance with
generally accepted accounting principles consistently applied): (i) indebtedness
for borrowed money and deferred payment obligations representing the unpaid
purchase price of property, assets or services; (ii) capitalized lease
obligations; (iii) guarantees and endorsements of obligations of others,
directly or indirectly, and all other repurchase agreements and indebtedness in
effect guaranteed through an agreement, contingent or otherwise, to purchase
such indebtedness, or to purchase or sell property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment of
the indebtedness or to assure the owner of the indebtedness against loss, or to
supply funds to or in any manner invest in the debtor, or otherwise to assure a
creditor against loss (but excluding guarantees and endorsements of notes, bills
and checks made in the ordinary course of business and of obligations of
Restricted Subsidiaries); and (iv) indebtedness secured by any mortgage, lien,
pledge, conditional sale agreement, title retention agreement, or other security
interest or encumbrance upon property owned by the Company, MFS or any other
Restricted Subsidiary, even though such indebtedness has not been assumed and
notwithstanding that the rights and remedies of the seller, lender or lessor
under such agreement in the event of default may be limited to repossession or
sale of such property. (Section 101)
"Attributable Debt" means the obligations incurred by MFS, the Company or
any Restricted Subsidiary as lessee in connection with sale and leaseback
transactions, in each case valued at the lesser of (i) the fair market value of
the property subject to such transaction or (ii) the present value (discounted
to present value in accordance with generally accepted accounting principles
consistently applied) of the obligation of the lessee for rental payments (other
than contingent rental payments and amounts required to be paid on account of
maintenance, repairs, insurance, taxes, assessments and similar charges) during
the term of such lease. (Section 101)
"Consolidated Net Tangible Assets" means the total amount of all assets of
the Company, MFS and the other Restricted Subsidiaries determined on a
consolidated basis in accordance with generally accepted accounting principles
consistently applied, less the sum (without duplication) of (i) the amount, if
any, at which intangible assets (including goodwill, trade names, trademarks,
patents, organization expenses and other similar intangibles) and unamortized
debt discount and expense appear on a consolidated balance sheet, (ii) any
write-up of tangible assets after the date of the Indenture, (iii) all
investments, loans or advances made by the Company, MFS or any other Restricted
Subsidiary in or to any Unrestricted Subsidiary (valued at the book value
thereof) and (iv) all liabilities other than minority interests, deferred taxes
and the aggregate amount of Funded Debt of the Company, MFS and the other
Restricted Subsidiaries on a consolidated basis (eliminating intercompany
items). (Section 101)
Restrictions on Liens. The Company may not, and may not permit any
Restricted Subsidiary to, create or incur, or suffer to be incurred or to exist,
any mortgage, pledge, security interest, lien, encumbrance or charge of any kind
on its or such Restricted Subsidiary's property or assets, whether now owned or
hereafter acquired, or upon any income or profits therefrom, or transfer any
property for the purpose of subjecting the same to the payment of obligations in
priority to the payment of its or any Restricted Subsidiary's general creditors,
or acquire or agree to acquire any property or assets upon conditional sale
agreements or other title retention devices, except (i) liens securing
Indebtedness existing on the date of the Indenture (the principal amount of such
Indebtedness outstanding on June 28, 1996 was $4,052,402), (ii) liens securing
Indebtedness incurred to finance the purchase, construction or other acquisition
of assets after the date of the Indenture, provided that (A) any such lien shall
attach only to such asset and (B) at the time of acquisition of such asset, the
amount remaining unpaid on the Indebtedness secured by such lien shall not
exceed 100% of the lesser of the total purchase price or fair market value of
such asset, (iii) liens for property taxes and assessments or governmental
charges or levies, and liens securing claims or demands of mechanics, suppliers,
carriers, landlords and other like Persons, provided that payment thereof is
being contested in good faith by appropriate proceedings and adequate reserves
have been set aside with respect thereto, (iv) liens incurred or deposits made
in the ordinary course of business (A) in connection with worker's compensation,
unemployment insurance, social security and other like laws or (B) to secure the
performance of letters of credit, bids, tenders, sales contracts, leases,
statutory obligations, surety, appeal and performance bonds and other similar
obligations, in each case not incurred in connection with the borrowing of
money, the obtaining of advances or the payment of the deferred purchase price
of property, (v) attachment, judgment and other similar liens arising in
connection with court proceedings, provided that execution and other enforcement
are effectively stayed and all claims which the liens secure are being contested
in good faith by appropriate proceedings, (vi) liens securing Indebtedness of a
Restricted Subsidiary to the Company or to a Restricted Subsidiary, (vii) liens
on real property, interests therein or related fixtures and equipment subject to
leases that are classified as operating leases in accordance with generally
accepted accounting principles consistently applied, (viii) minor reservations,
exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions and other minor title exceptions and (ix) liens securing
Indebtedness incurred after the date of the Indenture and not otherwise
permitted by clauses (i) through (viii) above, provided that, (1) at the time of
the issuance, assumption, guarantee, incurrence or creation thereof no Default
or Event of Default is continuing or would be created thereby, and (2) after
giving effect thereto and to the application of the proceeds thereof, the
aggregate amount of all such Indebtedness does not exceed 10% of Consolidated
Net Tangible Assets as of the end of the immediately preceding fiscal quarter.
(Section 1008)
The Company, MFS or any other Restricted Subsidiary may subject any of its
properties to any lien or encumbrance otherwise prohibited by the foregoing
paragraph provided that, concurrently with the imposition of any such lien, the
Debt Securities are secured equally and ratably with all other obligations
secured thereby (as evidenced by an opinion of counsel). (Section 1008)
Restrictions on Sale and Leaseback Transactions. The Company may not, and
may not permit any Restricted Subsidiary to, sell any property and then lease
back that property or similar property under a lease that (i) is entered into
more than 365 days after the later of the date of acquisition of such property
by the Company, MFS or any other Restricted Subsidiary or the date of completion
and occupancy by the Company, MFS or any other Restricted Subsidiary of
improvements constructed on such property and (ii) has a term of more than three
years, or is renewable or extendible for a total term of more than three years,
unless, after giving effect to such transaction and to the application of the
proceeds thereof, no Default or Event of Default shall have occurred and be
continuing and the aggregate amount of all Attributable Debt does not exceed 10%
of Consolidated Net Tangible Assets as of the end of the immediately preceding
fiscal quarter.
(Section 1009)
Restrictions on Mergers, Consolidations, Conveyances and Transfers. The
Company may not, and may not permit any Restricted Subsidiary to, merge or
consolidate with or into any other Person or convey, transfer or lease its
properties or assets substantially as an entirety to any other Person, except
(i) any Restricted Subsidiary may merge or consolidate with or into the Company
or any wholly-owned Restricted Subsidiary so long as, in any merger or
consolidation involving the Company, the Company is the surviving or continuing
corporation, (ii) any wholly-owned Restricted Subsidiary formed solely to
facilitate transfers of properties or assets accounted for as sales under
generally accepted accounting principles consistently applied may convey or
transfer such properties or assets substantially as an entirety to any other
Person and (iii) the Company or any Restricted Subsidiary may merge or
consolidate with or into any other Person or convey, transfer or lease its
properties or assets substantially as an entirety to any other Person if (A) the
Person into which the Company or such Restricted Subsidiary is merged or the
Person formed by such consolidation, or the Person that acquires by conveyance
or transfer, or that leases, the properties or assets of the Company or such
Restricted Subsidiary substantially as an entirety, is organized and validly
existing under the laws of the United States and expressly assumes, by written
instrument, all of the obligations of the Company or MFS, as the case may be,
under the Indenture, (B) at the time of such transaction and after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing
and (C) certain other conditions are met. (Article VIII)
Events of Default
An Event of Default with respect to the Debt Securities of any series is
defined in the Indenture as being: (i) default for 30 days in payment of any
interest with respect to any Debt Security of such series; (ii) default in
payment of principal or any premium with respect to any Debt Security of such
series when due upon maturity, redemption or otherwise; (iii) default in making
any sinking fund payment or payment under any analogous provision when due with
respect to any Debt Security of such series; (iv) default by MFS in the
performance, or breach, of any other covenant or warranty in the Indenture
(other than a covenant or warranty included therein solely for the benefit of
series of Debt Securities other than that series) or any Debt Security of such
series which shall not have been remedied for a period of 60 days after notice
to MFS by the Trustee or the holders of not less than 25% in aggregate principal
amount of the Debt Securities of such series then outstanding; (v) certain
events of bankruptcy, insolvency or reorganization of the Company or MFS; (vi)
any acceleration of the maturity of any Indebtedness of the Company, MFS or any
other Restricted Subsidiary for borrowed money in an aggregate principal amount
exceeding $20,000,000, or a failure to pay such Indebtedness at its stated
maturity; provided, that an Event of Default shall not be deemed to occur with
respect to the acceleration of the maturity of any such Indebtedness if the
event that caused such acceleration shall be cured or such acceleration shall be
rescinded within 10 days, or (vii) any other Event of Default established for
the Debt Securities of such series. No Event of Default with respect to any
particular series of Debt Securities necessarily constitutes an Event of Default
with respect to any other series of Debt Securities. The Indenture provides that
the Trustee thereunder may withhold notice to the holders of the Debt Securities
of any series of the occurrence of a default with respect to the Debt Securities
of such series (except a default in payment of principal, premium, if any,
interest, if any, or sinking fund payments, if any) if the Trustee considers it
in the interest of the holders to do so.
The Indenture provides that if an Event of Default with respect to any
series of Debt Securities issued thereunder shall have occurred and be
continuing, either the Trustee or the holders of at least 25% in principal
amount of the Debt Securities of such series then outstanding may declare the
principal amount (or if any Debt Securities of such series are Original Issue
Discount Securities, such lesser amount as may be specified in the terms
thereof) of all the Debt Securities of such series to be due and payable
immediately; provided that in the case of certain events of bankruptcy,
insolvency or reorganization, such principal amount (or portion thereof) shall
automatically become due and payable. However, at any time after an acceleration
with respect to the Debt Securities of any series has occurred, but before a
judgment or decree based on such acceleration has been obtained, the holders of
a majority in principal amount of the outstanding Debt Securities of such series
may, under certain circumstances, rescind and annul such acceleration (Section
502). For information as to waiver of defaults, see "Description of Debt
Securities -- Modification, Waiver and Meetings." Reference is made to the
Prospectus Supplement relating to each series of Debt Securities which are
Original Issue Discount Securities or Indexed Securities for the particular
provisions relating to acceleration of the Maturity of a portion of the
principal amount of such Original Issue Discount Securities or Indexed
Securities upon the occurrence of an Event of Default and the continuation
thereof.
Subject to the provisions of Trust Indenture Act of 1939 requiring the
Trustee, during an Event of Default under the Indenture, to act with the
requisite standard of care, a Trustee is under no obligation to exercise any of
its rights or powers under the Indenture at the request or direction of any of
the holders of Debt Securities of any series unless such holders have offered
such Trustee reasonable indemnity. Subject to the foregoing, holders of a
majority in principal amount of the then outstanding Debt Securities of any
series shall have the right, subject to certain limitations, to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee under the Indenture with respect to such series. The Indenture requires
the annual filing by the Company and MFS with the Trustee of a certificate as to
whether or not the Company or MFS is in default under the terms of the
Indenture.
No holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the Indenture, or for the appointment of a
receiver or a trustee, or for any other remedy thereunder, unless (i) such
holder has previously given to the Trustee written notice of a continuing Event
of Default with respect to the Debt Securities of that series, (ii) the holders
of at least 25% in aggregate principal amount of the outstanding Debt Securities
of that series have made written request, and such holder or holders have
offered reasonable indemnity, to such Trustee to institute such proceeding as
trustee and (iii) such Trustee has failed to institute such proceeding, and has
not received from the holders of a majority in aggregate principal amount of the
outstanding Debt Securities of that series a direction inconsistent with such
request, within 60 days after such notice, request and offer (Section 507).
However, such limitations do not apply to a suit instituted by a holder of a
Debt Security for the enforcement of payment of the principal of or any premium
or interest on such Debt Security on or after the applicable due date specified
in such Debt Security (Section 508).
The Company and MFS each will be required to furnish to the Trustee
annually a statement by certain of its officers as to whether or not, to their
knowledge, it is in default in the performance or observance of any of the
terms, provisions and conditions of the Indenture and, if so, specifying all
such known defaults (Section 1005).
Modification, Waivers and Meetings
The Indenture contains provisions permitting the Company or MFS and the
Trustee thereunder, with the consent of the holders of a majority in principal
amount of the outstanding Debt Securities of each series and affected by a
modification or amendment, to modify or amend any of the provisions of the
Indenture or of the Debt Securities of such series or the rights of the holders
of the Debt Securities of such series under the Indenture, provided that no such
modification or amendment shall, among other things, (i) change the stated
maturity of the principal of, or premium, if any, or any installment of
interest, if any, on any Debt Securities or reduce the principal amount thereof
or any premium thereon, or reduce the rate of interest thereon, or reduce the
amount of principal of any Original Issue Discount Securities that would be due
and payable upon an acceleration of the maturity thereof, or adversely affect
any right of repayment at the option of any holder, or change any place where,
or the Currency in which, any Debt Securities issued under the Indenture are
payable, or impair the holder's right to institute suit to enforce the payment
of any such Debt Securities, or make any change that adversely affects the
right, if any, to convert or exchange such Debt Securities for other securities
in accordance with their terms or (ii) reduce the aforesaid percentage of Debt
Securities of any series, the consent of the holders of which is required for
any such modification or amendment or the consent of whose holders is required
for any waiver (of compliance with certain provisions of the Indenture or
certain defaults thereunder and their consequences) or reduce the requirements
for a quorum or voting at a meeting of holders of such Debt Securities. The
Indenture also contains provisions permitting the Company, MFS, and the Trustee,
without the consent of the holders of any Debt Securities issued thereunder, to
modify or amend the Indenture in order to, among other things, (a) add to the
Events of Default or the covenants of the Company or MFS for the benefit of the
holders of all or any series of Debt Securities; (b) to add or change any
provisions of the Indenture to facilitate the issuance of Bearer Securities; (c)
to establish the form or terms of Debt Securities of any series and any related
coupons; (d) to cure any ambiguity or correct or supplement any provision
therein which may be inconsistent with other provisions therein, or to make any
other provisions with respect to matters or questions arising under the
Indenture which shall not adversely affect the interests of the holders of any
series of Debt Securities in any material respect; or (e) to amend or supplement
any provision contained in the Indenture, provided that such amendment or
supplement does not apply to any outstanding Debt Securities issued prior to the
date of such amendment or supplement and entitled to the benefits of such
provision.
The holders of a majority in aggregate principal amount of the outstanding
Debt Securities of any series may waive, insofar as that series is concerned,
compliance by the Company or MFS with certain restrictive provisions of the
Indenture. The holders of a majority in aggregate principal amount of the
outstanding Debt Securities of any series may, on behalf of all holders of Debt
Securities of that series, waive any past default under the Indenture with
respect to Debt Securities of that series and its consequences, except a default
in the payment of the principal of, or premium, if any, or interest, if any, on
any Debt Securities of such series or in respect of a covenant or provision
which cannot be modified or amended without the consent of the holder of each
outstanding Debt Securities of such series affected.
The Indenture contains provisions for convening meetings of the holders of
Debt Securities of each series. A meeting may be called at any time by the
Trustee, and also, upon request, by MFS or the holders of at least 10% in
principal amount of the outstanding Debt Securities of such series, in any such
case upon notice given in accordance with the provisions of the Indenture.
Except for any consent which must be given by the holder of each outstanding
Debt Security affected thereby, as described above, any resolution presented at
a meeting or adjourned meeting duly reconvened at which a quorum (as described
below) is present may be adopted by the affirmative vote of the holders of a
majority in principal amount of the outstanding Debt Securities of that series;
provided, however, that any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action which may be
made, given or taken by the holders of a specified percentage, which is less
than a majority, in principal amount of the outstanding Debt Securities of a
series may be adopted at a meeting or adjourned meeting duly reconvened at which
a quorum is present by the affirmative vote of the holders of such specified
percentage in principal amount of the outstanding Debt Securities of that
series. Any resolution passed or decision taken at any meeting of holders of
Debt Securities of any series duly held in accordance with the Indenture will be
binding on all holders of Debt Securities of that series and the related
coupons. The quorum at any meeting called to adopt a resolution, and at any
reconvened meeting, will be persons holding or representing a majority in
principal amount of the outstanding Debt Securities of a series, subject to
certain exceptions.
Discharge, Defeasance and Covenant Defeasance
Upon the direction of MFS, the Indenture shall cease to be of further
effect with respect to any series of Debt Securities issued thereunder specified
by MFS (subject to the survival of certain provisions thereof, including the
obligation to pay Additional Amounts to the extent described below) when (i)
either (A) all outstanding Debt Securities of such series and, in the case of
Bearer Securities, all coupons appertaining thereto, have been delivered to the
Trustee for cancellation (subject to certain exceptions) or (B) all Debt
Securities of such series have become due and payable or will become due and
payable at their stated maturity within one year or are to be called for
redemption within one year and MFS has deposited with the Trustee, in trust,
funds in U.S. dollars or in such other currency in which such Debt Securities
are payable in an amount sufficient to pay the entire indebtedness on such Debt
Securities in respect of principal (and premium, if any) and interest, if any,
(and, to the extent that (x) the Debt Securities of such series provide for the
payment of Additional Amounts upon the occurrence of certain events of taxation,
assessment or governmental charge with respect to payments on such Debt
Securities and (y) the amount of any such Additional Amounts is at the time of
deposit reasonably determinable by MFS, any such Additional Amounts) to the date
of such deposit (if such Debt Securities have become due and payable) or to the
Maturity thereof, as the case may be, (ii) MFS has paid all other sums payable
under the Indenture with respect to the Debt Securities of such series, and
(iii) certain other conditions are met. If the Debt Securities of any such
series provide for the payment of Additional Amounts, MFS will remain obligated,
following such deposit, to pay (and the Guarantee of the Company will continue
to apply to such payment of) Additional Amounts on such Debt Securities to the
extent that the amount thereof exceeds the amount deposited in respect of such
Additional Amounts as aforesaid.
Unless otherwise provided in the applicable Prospectus Supplement, MFS may
elect with respect to any series of Debt Securities either (a) to defease and be
discharged from any and all obligations with respect to such Debt Securities
(except for, among other things, the obligation to pay Additional Amounts, if
any, upon the occurrence of certain events of taxation, assessment or
governmental charge with respect to payments on such Debt Securities to the
extent that the amount thereof exceeds the amount deposited in respect of such
Additional Amounts as provided below, and the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or mutilated,
destroyed, lost or stolen Debt Securities, to maintain an office or agency in
respect of such Debt Securities, to hold moneys for payment in trust, and, if
applicable, to exchange or convert such Debt Securities into other securities in
accordance with their terms) ("defeasance"), or (b) to omit to comply with its
obligations with respect to certain restrictive covenants in Section 1005
(Statement as to Compliance), Section 1010 (Waiver of Certain Covenants), and,
to the extent specified pursuant to Section 301 (Amount Unlimited; Issuable in
Series), and any other covenant applicable to such Debt Securities in the
Indenture and, if indicated in the applicable Prospectus Supplement, its
obligations with respect to any other covenant applicable to the Debt Securities
of such series, and any omission to comply with such obligations shall not
constitute a default or an Event of Default with respect to the Debt Securities
of such series ("covenant defeasance"), in either case upon the irrevocable
deposit with the Trustee (or other qualifying trustee), in trust for such
purpose, of an amount, in U.S. dollars or in such other currency in which such
Debt Securities are payable at Stated Maturity, and/or Government Obligations
(as defined in the Indenture) which through the payment of principal and
interest in accordance with their terms will provide money, in an amount
sufficient to pay the principal of and any premium and any interest on (and, to
the extent that (x) the Debt Securities of such series provide for the payment
of Additional Amounts and (y) the amount of any such Additional Amounts is at
the time of deposit reasonably determinable by MFS, any such Additional Amounts
with respect to) such Debt Securities, and any mandatory sinking fund or
analogous payments thereon, on the due dates therefor, whether upon maturity,
redemption or otherwise.
Such defeasance or covenant defeasance shall only be effective if, among
other things, (i) it shall not result in a breach or violation of, or constitute
a default under, the Indenture or any other material agreement to which MFS is a
party or is bound, and (ii) MFS has delivered to the Trustee an opinion of
counsel (as specified in the Indenture) to the effect that the holders of such
Debt Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such defeasance or covenant defeasance, as the case may
be, and will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such defeasance or
covenant defeasance had not occurred. It shall also be a condition to the
effectiveness of such defeasance (but not covenant defeasance) that no Event of
Default or event which with notice or lapse of time or both would become an
Event of Default with respect to Debt Securities of such series shall have
occurred and been continuing on the date of, or during the period ending on the
91st day after the date of, such deposit into trust.
Unless otherwise provided in the applicable Prospectus Supplement, if after
MFS has deposited funds and/or Government Obligations to effect defeasance or
covenant defeasance with respect to Debt Securities of any series, (a) the
holder of a Debt Security of such series is entitled to, and does, elect
pursuant to the Indenture or the terms of such Debt Security to receive payment
in a Currency other than that in which such deposit has been made in respect of
such Debt Security, or (b) a Conversion Event (as defined below) occurs in
respect of the Foreign Currency in which such deposit has been made, the
indebtedness represented by such Debt Security shall be deemed to have been, and
will be, fully discharged and satisfied through the payment of the principal of
(and premium, if any) and interest, if any, on such Debt Security as such Debt
Security becomes due out of the proceeds yielded by converting the amount so
deposited in respect of such Debt Security into the currency in which such Debt
Security becomes payable as a result of such election or such Conversion Event
based on (x) in the case of payments made pursuant to clause (a) above, the
applicable market exchange rate for such Foreign Currency in effect on the
second business day prior to such payment date, or (y) with respect to a
Conversion Event, the applicable market exchange rate for such Foreign Currency
in effect (as nearly as feasible) at the time of the Conversion Event.
"Conversion Event" means the cessation of use of (i) a Foreign Currency both by
the government of the country or the confederation which issued such Foreign
Currency and for the settlement of transactions by a central bank or other
public institutions of or within the international banking community, (ii) the
ECU both within the European Monetary System and for the settlement of
transactions by public institutions of or within the European Union or (iii) any
currency unit or composite currency other than the ECU for the purposes for
which it was established.
In the event MFS effects covenant defeasance with respect to any Debt
Securities and such Debt Securities are declared due and payable because of the
occurrence of any Event of Default other than an Event of Default with respect
to any other covenant as to which there has been covenant defeasance, the amount
of monies and/or Government Obligations deposited with the Trustee to effect
such covenant defeasance may not be sufficient to pay amounts due on such Debt
Securities at the time of any acceleration resulting from such Event of Default.
However, MFS would remain liable to make payment of such amounts due at the time
of acceleration.
The applicable Prospectus Supplement may further describe the provisions,
if any, permitting or restricting such defeasance or covenant defeasance with
respect to the Debt Securities of a particular series.
Title
The Company, MFS, the Trustee and any agent of any of them may treat the
person in whose name a registered Debt Security is registered as the absolute
owner thereof (whether or not such Debt Security may be overdue) for the purpose
of making payment and for all other purposes (Section 308).
Governing Law
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York.
Regarding the Trustee
The Trust Indenture Act of 1939 contains limitations on the rights of a
trustee, should it become a creditor of the Company or MFS, as the case may be,
to obtain payment of claims in certain cases or to realize on certain property
received by it in respect of any such claims, as security or otherwise. The
Trustee is permitted to engage in other transactions with MFS, the Company and
its other subsidiaries from time to time, provided that if such Trustee acquires
any conflicting interest it must eliminate such conflict upon the occurrence of
an Event of Default under the Indenture, or else resign. In that event, MFS
would be required to appoint a successor Trustee.
DESCRIPTION OF COMMON STOCK
The Company has authorized 250,000,000 shares of Common Stock, par value
$2.00 per share. As of May 31, 1996, there were 48,596,271 shares of Common
Stock outstanding. The following brief description of the Common Stock does not
purport to be complete and is subject in all respects to applicable Virginia law
and to the provisions of the Company's Restated Articles of Incorporation and
its By-laws, copies of which have been filed with the Commission.
Holders of Common Stock are entitled to such dividends as may be declared
by the Board of Directors out of funds legally available therefor after payment
of dividends on any outstanding Preferred Stock and are entitled to one vote for
each share of Common Stock held by them with respect to all matters upon which
they are entitled to vote.
The Company's Restated Articles of Incorporation contain a provision that
reduces the shareholder vote required for amending the Articles of Incorporation
in certain circumstances from the two-thirds vote generally applicable to a
simple majority vote. The majority vote will be applicable except when the
effect of the amendment is (a) to reduce the shareholder vote required to
approve a merger, a statutory share exchange, a sale of all or substantially all
of the assets of the Company or the dissolution of the Company, or (b) to delete
all or any part of such provision. In addition, the vote required by other
provisions of the Restated Articles of Incorporation is necessary if such
provisions require the approval of more than a majority of the votes entitled to
be cast.
Preferred Stock
The Company has authorized 3,000,000 shares of Preferred Stock, par value
$10.00 per share. As of May 31, 1996, there were no shares of Preferred Stock
outstanding. The Board of Directors of the Company, without further action by
the stockholders, is authorized to designate and issue in series Preferred Stock
and to fix as to any series the dividend rate, redemption prices, preferences on
dissolution, the terms of any sinking fund, conversion rights, voting right, and
any other preferences of special rights and qualifications. Shares of Common
Stock would be subject to the preferences, rights and powers of any such shares
of Preferred Stock as set forth in the Company's Restated Articles of
Incorporation and the resolutions establishing one or more series of Preferred
Stock. Holders of the Preferred Stock, if and when issued, will be entitled to
vote as required under applicable Virginia law. Such law includes provisions for
the voting of the Preferred Stock in the case of any amendment to the Restated
Articles of Incorporation affecting the rights of holders of the Preferred
Stock, the payment of certain stock dividends, merger or consolidation, sale of
all or substantially all of the Company's assets and dissolution. There are no
agreements or understandings for the designation of series of Preferred Stock or
the issuance of shares thereunder, except pursuant to the Shareholders' Rights
Plan discussed below.
Shareholders' Rights Plan
The following summary of certain provisions of the Company's Shareholders'
Rights Plan and the Rights Agreement dated as of February 17, 1988 between the
Company and Crestar Bank as Rights Agent, as amended by Supplements No. 1
through No. 4 dated as of September 15, 1989 (together, as amended, the "Rights
Agreement"), does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, including the form of Rights Certificate
attached thereto, each of which has been filed with the Commission and is
incorporated by reference herein.
On February 17, 1988 the Board of Directors of the Company declared a
dividend distribution of one preferred share purchase right (a "Right") on each
outstanding share of Common Stock pursuant to a Shareholders' Rights Plan. The
Rights are exercisable only upon the attainment of, or the commencement of a
tender offer to attain, a specified ownership interest in the Company by a
person or group. When exercisable, each Right would entitle its holder to
purchase one-hundredth of a newly issued share of cumulative Participating
Preferred Stock, Series A, par value $10.00 per share (the "Series A Preferred
Stock") at an exercise price of $75, subject to adjustment. A total of 750,000
shares of Series A Preferred Stock has been reserved. Each share of Series A
Preferred Stock shall entitle the holder to 100 votes and has an aggregate
dividend rate of 100 times the amount paid to holders of the Common Stock. Upon
occurrence of certain events, each holder of a Right will become entitled to
purchase shares of Common Stock having a value of twice the Right's then current
exercise price in lieu of Series A Preferred Stock. Each share of Common Stock
offered pursuant to this Prospectus and an accompanying Prospectus Supplement
shall have one Right attached to it.
Virginia Stock Corporation Act
The Virginia Stock Corporation Act contains provisions governing
"Affiliated Transactions." These provisions, with several exceptions discussed
below, require approval of certain material transactions between a Virginia
corporation and any beneficial holder of more than 10% of any class of its
outstanding voting shares (an "Interested Shareholder") by the holders of at
least two-thirds of the remaining voting shares. Affiliated Transactions subject
to this approval requirement include mergers, share exchanges, material
dispositions of corporate assets not in the ordinary course of business, any
dissolution of the corporation proposed by or on behalf of an Interested
Shareholder, or any reclassification, including reverse stock splits,
recapitalization or merger of the corporation with its subsidiaries which
increases the percentage of voting shares owned beneficially by an Interested
Shareholder by more than 5%.
For three years following the time that an Interested Shareholder becomes
an owner of 10% of the outstanding voting shares, a Virginia corporation cannot
engage in an Affiliated Transaction with such Interested Shareholder without
approval of two-thirds of the voting shares other than those shares beneficially
owned by the Interested Shareholder, and majority approval of the "Disinterested
Directors." A Disinterested Director means, with respect to a particular
Interested Shareholder, a member of the Company's Board of Directors who was (1)
a member on the date on which an Interested Shareholder became an Interested
Shareholder and (2) recommended for election by, or was elected to fill a
vacancy and received the affirmative vote of, a majority of the Disinterested
Directors then on the Board. At the expiration of the three year period, the
statute requires approval of Affiliated Transactions by two-thirds of the voting
shares other than those beneficially owned by the Interested Shareholder.
The principal exceptions to the special voting requirement apply to
transactions proposed after the three year period has expired and require either
that the transaction be approved by a majority of the corporation's
Disinterested Directors or that the transaction satisfy the fair-price
requirements of the statute. In general, the fair-price requirements provide
that in a two-step acquisition transaction, the Interested Shareholder must pay
the shareholders in the second step either the same amount of cash or the same
amount and type of consideration paid to acquire the Virginia corporation's
shares in the first step.
None of the foregoing limitations and special voting requirements applies
to a transaction with an Interested Shareholder who has been an Interested
Shareholder since the effective date of the statute (January 26, 1988) or who
became an Interested Shareholder by gift or inheritance from such a person or
whose acquisition of shares making such person an Interested Shareholder was
approved by a majority of the Virginia corporation's Disinterested Directors.
These provisions were designed to deter certain takeovers of Virginia
corporations. In addition, the statute provides that, by affirmative vote of a
majority of the voting shares other than shares owned by any Interested
Shareholder, a corporation can adopt an amendment to its articles of
incorporation or bylaws providing that the Affiliated Transactions provisions
shall not apply to the corporation. The Company has not "opted out" of the
Affiliated Transactions provisions.
Virginia law provides that shares acquired in a transaction that would
cause the acquiring person's voting strength to meet or exceed any of three
thresholds (20%, 33-1/3% or 50%) have no voting rights unless granted by a
majority vote of shares not owned by the acquiring person or any officer or
employee-director of the Virginia corporation. This provision empowers an
acquiring person to require the Virginia corporation to hold a special meeting
of shareholders to consider the matter within 50 days of its request. The Board
of Directors of a Virginia corporation can opt out of this provision at any time
before four days after receipt of a control share acquisition notice.
Transfer Agent
The transfer agent for the Common Stock is Wachovia Bank of North Carolina,
N.A.
DESCRIPTION OF WARRANTS
The Company may issue (either separately or together with other Securities)
warrants for the purchase of Common Stock (the "Warrants"). The Warrants are to
be issued under warrant agreements (each a "Warrant Agreement") to be entered
into between the Company and a bank or trust company, as warrant agent ("Warrant
Agent"), all as set forth in the Prospectus Supplement relating to the
particular issue of Warrants. The form of Warrant Agreement, including the form
of certificates representing the Warrants ("Warrant Certificates"), that will be
entered into with respect to a particular offering of Warrants will be filed as
an exhibit to or incorporated by reference in the Registration Statement. The
following summary of certain provisions of the Warrant Agreement and the
Warrants and the summary of certain terms of the particular Warrant Agreement
and Warrants set forth in the applicable Prospectus Supplement do not purport to
be complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the particular Warrant Agreement and the related
Warrant Certificates, all of which are incorporated herein by reference.
The following description of the Warrants sets forth certain general terms
and provisions of the Warrants and the related Warrant Agreement to which any
Prospectus Supplement may relate. Certain other terms of any Warrants and the
related Warrant Agreement will be described in the applicable Prospectus
Supplement. If so indicated in the accompanying Prospectus Supplement, the terms
of the Warrants offered thereby and the related Warrant Agreement may differ
from the terms set forth below.
General
Reference is made to the applicable Prospectus Supplement for the terms of
the Warrants offered thereby, including (where applicable): (1) the title and
aggregate number of such Warrants; (2) the number of shares of Common Stock that
may be purchased upon exercise of each such Warrant; (3) the price, or the
manner of determining the price, at which such shares may be purchased upon such
exercise; (4) if other than cash, the property and manner in which the exercise
price of such Warrants may be paid; and any minimum number of such Warrants that
are exercisable at any one time; (5) the time or times at which, or period or
periods during which, such Warrants may be exercised and the expiration date of
such Warrants; (6) the terms of any right of the Company to redeem such
Warrants; (7) the terms of any right of the Company to accelerate the exercise
of such Warrants upon the occurrence of certain events; (8) whether such
Warrants will be sold with any other Securities, and the date, if any, on and
after which such Warrants and any such other Securities will be separately
transferable; (9) whether Warrants will be issued in registered or bearer form;
(10) a discussion of certain Federal income tax, accounting and other special
considerations, procedures and limitations relating to such Warrants; and (11)
any other terms of such Warrants.
Warrant Certificates may be surrendered for transfer or exchange for new
Warrant Certificates of authorized denominations at any office or agency of the
relevant Warrant Agent maintained for such purpose, subject to the terms of the
related Warrant Agreement. Unless otherwise specified in the applicable
Prospectus Supplement, Warrant Certificates will be issued in denominations
evidencing any whole number of Warrants. No service charge will be made for any
permitted transfer or exchange of Warrant Certificates, but the Company or the
Warrant Agent may require payment of any tax or other governmental charge
payable in connection therewith.
Exercise of Warrants
Each Warrant will entitle the holder to purchase such number of shares of
Common Stock at such exercise price as shall in each case be set forth in, or be
determinable from, the Prospectus Supplement relating to such Warrants, by
payment of such exercise price in the Currency and in the manner specified in
the Prospectus Supplement. Warrants may be exercised at any time up to the date
and time specified in the applicable Prospectus Supplement for the expiration
thereof. After the specified expiration time on the specified date of
expiration, unexercised Warrants will become void.
Upon receipt at an office or agency indicated in the applicable Prospectus
Supplement of (i) payment of the exercise price and (ii) the Warrant Certificate
properly completed and duly executed, the Company will, as soon as practicable,
issue and deliver the shares of Common Stock purchasable upon such exercise.
Unless otherwise indicated in the applicable Prospectus Supplement, fractional
shares of Common Stock will not be issued upon the exercise of Warrants and, in
lieu thereof, the Company will make a cash payment in an amount determined as
provided in the applicable Prospectus Supplement. If less than all of the
Warrants represented by such Warrant Certificate are exercised, a new Warrant
Certificate will be issued for the remaining number of Warrants. The holder of a
Warrant will be required to pay any tax or other governmental charge that may be
imposed in connection with any transfer involved in the issuance of Common Stock
purchased upon such exercise.
Modifications
Any Warrant Agreement and the terms of the related Warrants may be modified
or amended by the Company and the applicable Warrant Agent, without the consent
of any holder of the related Warrants, for the purpose of curing any ambiguity,
or of curing, correcting or supplementing any defective or inconsistent
provision contained therein, or in any other manner that the Company deems
necessary or desirable and that will not materially and adversely affect the
interests of the holders of the related Warrants.
The Company and the applicable Warrant Agent may also modify or amend the
applicable Warrant Agreement and the terms of the related Warrants with the
consent of the holders of not less than a majority in number of the then
outstanding unexercised Warrants affected thereby; provided that no such
modification or amendment that accelerates the expiration date, increases the
exercise price, or reduces the number of outstanding Warrants the consent of
whose holders is required for any such amendment or modification, may be made
without the consent of each holder affected thereby.
No Rights as Holders
Holders of Warrants for the purchase of shares of Common Stock are not
entitled, by virtue of being such holders, to vote, consent or receive notice as
stockholders of the Company in respect of any meeting of stockholders for the
election of directors of the Company or any other matter, or to exercise any
other rights whatsoever as stockholders of the Company, or to receive any
dividends or distributions, if any, on the Common Stock.
UNITED STATES TAXATION
The following summary of the principal United States federal income tax
consequences of ownership of Debt Securities is based upon the opinion of
McGuire, Woods, Battle & Boothe, L.L.P., special tax counsel to the Company and
MFS. It deals only with Debt Securities held as capital assets, and not with
special classes of holders, such as dealers in securities or currencies, banks,
tax-exempt organizations, life insurance companies, persons that hold Debt
Securities that are part of a hedge or that are hedged against currency risks or
that are part of a straddle or conversion transaction, or persons whose
functional currency is not the U.S. dollar. It also does not deal with Holders
other than original purchasers who purchase Debt Securities at the original
offering price and thus does not deal with the "market discount rules."
Moreover, the summary deals only with Debt Securities that are due to mature not
later than 30 years from the date on which they are issued. The United States
federal income tax consequences of ownership of Debt Securities that are due to
mature more than 30 years from their date of issue will be discussed in an
applicable Prospectus Supplement. The summary is based on the Internal Revenue
Code of 1986, as amended (the "Code"), its legislative history, existing and
proposed regulations thereunder, judicial decisions, and published rulings and
other administrative guidance issued by the Internal Revenue Service (the
"Service"), as currently in effect, all of which are subject to change at any
time, possibly with retroactive effect. Additionally, the discussions below
under "Original Issue Discount -- Debt Securities Subject to Contingencies
Including Optional Redemption" and "Original Issue Discount -Variable Debt
Securities" take into account Treasury Regulations that were issued as final
regulations on June 11, 1996 and that will apply to Debt Securities issued on or
after August 13, 1996.
Prospective purchasers of Debt Securities should consult their own tax
advisors concerning the consequences of ownership of Debt Securities, in their
particular circumstances, under the Code and the applicable laws of any State,
local or foreign taxing jurisdiction.
The federal income tax consequences of ownership of other Securities,
including Common Stock and Warrants, will be discussed in an applicable
Prospectus Supplement.
United States Holders
Payments of Interest
Except as provided below under "Original Issue Discount", interest on a
Debt Security (including "qualified stated interest" on a "Discount Debt
Security", as defined below) will be taxable to a United States Holder as
ordinary income at the time it is received or accrued, depending on the holder's
method of accounting for tax purposes. A United States Holder is a beneficial
owner who or that is (i) a citizen or resident of the United States, (ii) a
domestic corporation or (iii) otherwise subject to United States federal income
taxation on a net income basis in respect of the Debt Security.
If an interest payment is denominated in, or determined by reference to, a
currency, composite currency or basket of currencies other than the U.S. dollars
(a "foreign currency"), the amount of income recognized by a cash basis United
States Holder will be the U.S. dollar value of the interest payment, based on
the exchange rate in effect on the date of receipt, regardless of whether the
payment is in fact converted into U.S. dollars.
An accrual basis United States Holder may determine the amount of income
recognized with respect to an interest payment denominated in, or determined by
reference to, a foreign currency in accordance with either of two methods. Under
the first method, the amount of income accrued will be based on the average
exchange rate in effect during the interest accrual period (or, with respect to
an accrual period that spans two taxable years, the part of the period within
the taxable year).
Under the second method, the United States Holder may elect to determine
the amount of income accrued on the basis of the exchange rate in effect on the
last day of the accrual period or, in the case of an accrual period that spans
two taxable years, the exchange rate in effect on the last day of the part of
the period within the taxable year. Additionally, if a payment of interest is
actually received within five business days of the last day of the accrual
period or taxable year, an electing accrual basis United States Holder may
instead translate such accrued interest into U.S. dollars at the exchange rate
in effect on the day of actual receipt. Any such election must apply to all debt
instruments held by the United States Holder at the beginning of the first
taxable year to which the election applies or thereafter acquired by the United
States Holder, and may not be revoked without the consent of the Service.
Upon receipt of an interest payment (including a payment attributable to
accrued but unpaid interest upon the sale or retirement of a Debt Security)
denominated in, or determined by reference to, a foreign currency, the accrual
basis United States Holder will recognize ordinary income or loss measured by
the difference between (x) the average exchange rate used to accrue the interest
income represented by such payment, or the exchange rate as determined under the
second method described above if the United States Holder elects that method,
and (y) the exchange rate in effect on the date of receipt, regardless of
whether the payment is in fact converted into U.S. dollars.
Original Issue Discount
General. A Debt Security with a maturity of more than one year from the
date of issue will be treated as issued at an original issue discount (a
"Discount Debt Security") if its "stated redemption price at maturity" exceeds
its issue price by more than a "de minimis amount" (as defined below).
Generally, the issue price of a Debt Security will be the first price at which a
substantial amount of Debt Securities included in the issue of which the Debt
Security is a part are sold to persons other than bond houses, brokers, or
similar persons or organizations acting in the capacity of underwriters,
placement agents, or wholesalers. The stated redemption price at maturity of a
Debt Security is the total of all payments provided by the Debt Security that
are not payments of "qualified stated interest." A qualified stated interest
payment generally is any one of a series of stated interest payments on a Debt
Security that are unconditionally payable at least annually at a single fixed
rate (with certain exceptions for lower rates paid during some periods) applied
to the outstanding principal amount of the Debt Security. Special rules for
determining qualified stated interest payable on certain Debt Securities bearing
interest at a variable rate are described below under "Original Issue Discount -
- - Variable Rate Debt Securities".
In general, if a Debt Security's stated redemption price at maturity
exceeds its issue price by less than an amount equal to 1/4 of 1 percent of the
Debt Security's stated redemption price at maturity multiplied by the number of
complete years to its maturity (the "de minimis amount"), then such excess, if
any, constitutes "de minimis original issue discount" and the Debt Security is
not a Discount Debt Security. Unless the election described below under
"Election to Treat All Interest as Original Issue Discount" is made, a United
States Holder of a Debt Security with de minimis original issue discount must
include such de minimis original issue discount in income as stated principal
payments on the Debt Security are made. The includible amount with respect to
each such payment will equal the total amount of the Debt Security's de minimis
original issue discount multiplied by a fraction, the numerator of which is the
amount of the principal payment made and the denominator of which is the stated
principal amount of the Debt Security.
United States Holders of Discount Debt Securities having a maturity of more
than one year from their date of issue must, generally, include in computing
their taxable income original issue discount ("OID") calculated on a
constant-yield method before the receipt of cash attributable to such income,
and generally will have to include in income increasingly greater amounts of OID
over the life of the Debt Security. The amount of OID includible in income by a
United States Holder of a Discount Debt Security is the sum of the daily
portions of OID with respect to the Discount Debt Security for each day during
the taxable year or portion of the taxable year on which the United States
Holder holds such Discount Debt Security ("accrued OID"). The daily portion is
determined by allocating to each day in any "accrual period" a pro rata portion
of the OID allocable to that accrual period. Accrual periods with respect to a
Debt Security may be of any length selected by the United States Holder and may
vary in length over the term of the Debt Security as long as (i) no accrual
period is longer than one year and (ii) each scheduled payment of interest or
principal on the Debt Security occurs on either the final or first day of an
accrual period. The amount of OID allocable to an accrual period equals the
excess of (a) the product of the Discount Debt Security's adjusted issue price
at the beginning of the accrual period and such Debt Security's yield to
maturity (determined on the basis of compounding at the close of each accrual
period and properly adjusted for the length of the accrual period) over (b) the
sum of the payments of qualified stated interest on the Debt Security allocable
to the accrual period. The "adjusted issue price" of a Discount Debt Security at
the beginning of any accrual period is the issue price of the Debt Security
increased by (x) the amount of accrued OID for y made on the Debt Security that
were not qualified stated interest payments. For purposes of determining the
amount of OID allocable to an accrual period, if an interval between payments of
qualified stated interest on the Debt Security contains more than one accrual
period, the amount of qualified stated interest payable at the end of the
interval (including any qualified stated interest that is payable on the first
day of the accrual period immediately following the interval) is allocated pro
rata on the basis of relative lengths of each accrual period in the interval,
and the adjusted issue price at the beginning of each accrual period in the
interval must be increased by the amount of any qualified stated interest that
has accrued prior to the first day of the accrual period but that is not payable
until the end of the interval. The amount of OID allocable to an initial short
accrual period may be computed using any reasonable method if all other accrual
periods other than a final short accrual period are of equal length. The amount
of OID allocable to the final accrual period is the difference between (x) the
amount payable at the maturity of the Debt Security (other than any payment of
qualified stated interest) and (y) the Debt Security's adjusted issue price as
of the beginning of the final accrual period.
Acquisition Premium. A United States Holder that purchases a Debt Security
for an amount less than or equal to the sum of all amounts payable on the Debt
Security after the purchase date (other than payments of qualified stated
interest) but in excess of its adjusted issue price (any such excess being
"acquisition premium") and that does not make the election described below under
"Election to Treat All Interest as Original Issue Discount" is permitted to
reduce the daily portions of OID by a fraction, the numerator of which is the
excess of the United States Holder's adjusted basis in the Debt Security
immediately after its purchase over the adjusted issue price of the Debt
Security, and the denominator of which is the excess of the sum of all amounts
payable on the Debt Security after the purchase date, other than payments of
qualified stated interest, over the Debt Security's adjusted issue price.
Pre-Issuance Accrued Interest. If (i) a portion of the initial purchase
price of a Debt Security is attributable to pre-issuance accrued interest, (ii)
the first stated interest payment on the Debt Security is to be made within one
year of the Debt Security's issue date and (iii) the payment will equal or
exceed the amount of pre-issuance accrued interest, then the United States
Holder may elect to decrease the issue price of the Debt Security by the amount
of pre-issuance accrued interest. In that event, a portion of the first stated
interest payment will be treated as a return of the excluded pre-issuance
accrued interest and not as an amount payable on the Debt Security.
Debt Securities Subject to Contingencies Including Optional Redemption. In
the case of Debt Securities issued on or after August 13, 1996, in general, if a
Debt Security provides for an alternative payment schedule or schedules
applicable upon the occurrence of a contingency or contingencies (other than a
remote or incidental contingency) and the timing and amounts of the payments
that comprise each payment schedule are known as of the issue date, special
rules apply for purposes of determining the yield and maturity of the Debt
Security. If, based on all the facts and circumstances as of the issue date, a
single payment schedule, including the stated payment schedule, is significantly
more likely than not to occur, then, in general, the yield and maturity of the
Debt Security are computed based on that payment schedule.
If there is no single payment schedule that is significantly more likely
than not to occur (other than because of a mandatory sinking fund), the amount
of interest taken into account for each accrual period would be determined by
constructing a projected payment schedule for the Debt Security and applying
rules similar to those for accruing OID on a noncontingent debt instrument. This
method is applied by first determining the yield at which MFS would issue a
fixed rate debt instrument with terms and conditions similar to the contingent
payment Debt Security (the comparable yield) and then determining a payment
schedule as of the issue date that would produce the comparable yield.
Notwithstanding the general rules for determining yield and maturity in the
case of Debt Securities subject to contingencies, if MFS or the Holder has an
unconditional option or options that, if exercised, would require payments to be
made on the Debt Security under an alternative payment schedule or schedules,
then (i) in the case of an option or options of MFS, MFS will be deemed to
exercise or not exercise an option or combination of options in the manner that
minimizes the yield on the Debt Security and (ii) in the case of an option or
options of the Holder, the Holder will be deemed to exercise or not exercise an
option or combination of options in the manner that maximizes the yield on the
Debt Security. If both MFS and the Holder have options described in the
preceding sentence, those rules apply to such options in the order in which they
may be exercised. For purposes of those calculations, the yield on the Debt
Security is determined by using any date on which the Debt Security may be
redeemed or repurchased as the maturity date and the amount payable on such date
in accordance with the terms of the Debt Security as the principal amount
payable at maturity.
If a contingency (including the exercise of an option) fails to occur, or
actually occurs but in a manner inconsistent with the assumption made according
to the above rules (a "change in circumstances") then, except to the extent that
a portion of the Debt Security is repaid as a result of the change in
circumstances and solely for purposes of the accrual of OID, the yield and
maturity of the Debt Security are redetermined by treating the Debt Security as
having been retired and reissued on the date of the change in circumstances for
an amount equal to the Debt Security's adjusted issue price on that date.
The federal income tax treatment of Debt Securities providing for
alternative payment schedules applicable upon the occurrence of one or more
contingencies will be described in greater detail in the applicable Prospectus
Supplement.
Election to Treat All Interest as Original Issue Discount. A United States
Holder may elect to include in gross income all interest that accrues on a Debt
Security using the constant-yield method described above under the heading
"Original Issue Discount -- General", with the modifications described below.
For purposes of this election, interest includes stated interest, OID, de
minimis original issue discount, market discount, de minimis market discount and
unstated interest, as adjusted by any amortizable bond premium (described below
under "Debt Securities Purchased at a Premium") or acquisition premium.
In applying the constant-yield method to a Debt Security with respect to
which this election has been made, the issue price of the Debt Security will
equal the electing United States Holder's adjusted basis in the Debt Security
immediately after its acquisition, the issue date of the Debt Security will be
the date of its acquisition by the electing United States Holder, and no
payments on the Debt Security will be treated as payments of qualified stated
interest. This election will generally apply only to the Debt Security with
respect to which it is made and may not be revoked without the consent of the
Service. If this election is made with respect to a Debt Security with
amortizable bond premium, then the electing United States Holder will be deemed
to have elected to apply amortizable bond premium against interest with respect
to all debt instruments with amortizable bond premium (other than debt
instruments the interest on which is excludible from gross income) held by the
electing United States Holder as of the beginning of the taxable year in which
the Debt Security with respect to which the election is made is acquired or
thereafter acquired. The deemed election with respect to amortizable bond
premium may not be revoked without the consent of the Service.
Variable Rate Debt Securities. A "Variable Rate Debt Security" is a Debt
Security that: (i) has an issue price that does not exceed the total
noncontingent principal payments by more than the lesser of (1) .015 multiplied
by the product of (x) the total noncontingent principal payments and (y) the
number of complete years to maturity from the issue date, or (2) 15 percent of
the total noncontingent principal payments; (ii) does not provide for any stated
interest other than stated interest compounded or paid at least annually at (1)
one or more "qualified floating rates", (2) a single fixed rate and one or more
qualified floating rates, (3) a single "objective rate" or (4) a single fixed
rate and a single objective rate that is a "qualified inverse floating rate";
(iii) provides that a qualified floating rate or objective rate in effect at any
time during the term of the instrument must be set at a "current value" of that
rate (i.e., the value of the rate on any day that is no earlier than 3 months
prior to the first day on which that value is in effect and no later than 1 year
following that first day); and (iv) does not provide for any contingent
principal payments other than as provided in clause (i) of this sentence.
In the case of Debt Securities issued on or after August 13, 1996, a
variable rate is a "qualified floating rate" if (i) variations in the value of
the rate can reasonably be expected to measure contemporaneous variations in the
cost of newly borrowed funds in the currency in which the Debt Security is
denominated or (ii) it is equal to the product of a qualified floating rate
described in clause (i) and either (a) a fixed multiple that is greater than .65
but not more than 1.35, or (b) a fixed multiple greater than .65 but not more
than 1.35, increased or decreased by a fixed rate. A rate is not a qualified
floating rate, however, if the rate is subject to certain restrictions
(including caps, floors, governors or other similar restrictions) unless such
restrictions are fixed throughout the term of the Debt Security or are not
reasonably expected to significantly affect the yield on the Debt Security.
In the case of Debt Securities issued on or after August 13, 1996, an
"objective rate" is a rate, other than a qualified floating rate, that is
determined using a single, fixed formula and that is based on objective
financial or economic information, including one or more qualified floating
rates or the yield or changes in the price of one or more actively traded items
of personal property other than stock or debt of the issuer or a related party.
A variable rate is not an objective rate, however, if it is based on information
within the control of the issuer or a related party or is unique to the
circumstances of the issuer or a related party, or if it is reasonably expected
that the average value of the rate during the first half of the Debt Security's
term will be either significantly less than or significantly greater than the
average value of the rate during the final half of the Debt Security's term. An
objective rate is a "qualified inverse floating rate" if (i) the rate is equal
to a fixed rate minus a qualified floating rate, and (ii) the variations in the
rate can reasonably be expected to inversely reflect contemporaneous variations
in the cost of the qualified floating rate.
In general, if a Variable Rate Debt Security provides for stated interest
at a single qualified floating rate or objective rate, all stated interest on
the Debt Security is qualified stated interest and the amount of OID, if any, is
determined by using, in the case of a qualified floating rate or qualified
inverse floating rate, a fixed rate equal to the value as of the issue date of
the qualified floating rate or qualified inverse floating rate, or, in the case
of any other objective rate, a fixed rate that reflects the yield reasonably
expected for the Debt Security.
If a Variable Rate Debt Security does not provide for stated interest at a
single qualified floating rate or objective rate or at a fixed rate (other than
at a single fixed rate for an initial period), the amount of interest and OID
accruals on the Debt Security are generally determined by (i) determining a
fixed rate substitute for each variable rate provided under the Variable Rate
Debt Security (generally, the value of each variable rate as of the issue date
or, in the case of an objective rate that is not a qualified inverse floating
rate, a rate that reflects the reasonably expected yield on the note), (ii)
constructing the equivalent fixed rate debt instrument (using the fixed rate
substitute described above), (iii) determining the amount of qualified stated
interest and OID with respect to the equivalent fixed rate debt instrument, and
(iv) making the appropriate adjustments for actual variable rates during the
applicable accrual period.
If a Variable Rate Debt Security provides for stated interest either at one
or more qualified floating rates or at a qualified inverse floating rate, and in
addition provides for stated interest at a single fixed rate (other than at a
single fixed rate for an initial period), the amount of interest and OID
accruals are determined as in the immediately preceding paragraph with the
modification that the Variable Rate Debt Security is treated, for purposes of
the first three steps of the determination, as if it provided for a qualified
floating rate (or a qualified inverse floating rate, as the case may be) rather
than the fixed rate. The qualified floating rate (or qualified inverse floating
rate) replacing the fixed rate must be such that the fair market value of the
Variable Rate Debt Security as of the issue date would be approximately the same
as the fair market value of an otherwise identical debt instrument that provides
for the qualified floating rate (or qualified inverse floating rate) rather than
the fixed rate.
The federal income tax treatment of any Debt Security that provides for
payments of stated interest at a variable rate, but does not meet the foregoing
requirements of a Variable Rate Debt Security, will be described in the
applicable Prospectus Supplement.
Short-Term Debt Securities. In general, an individual or other cash basis
United States Holder of a Debt Security with a term of one year or less (a
"short-term Debt Security") is not required to accrue OID (as specially defined
below for the purposes of this paragraph) for United States federal income tax
purposes unless it elects to do so (but may be required to include any stated
interest in income as the interest is received). Accrual basis United States
Holders and certain other United States Holders, including banks, regulated
investment companies, dealers in securities, common trust funds, United States
Holders who hold Debt Securities as part of certain identified hedging
transactions, certain pass-through entities and cash basis United States Holders
who so elect, are required to accrue OID on short-term Debt Securities on either
a straight-line basis or under the constant-yield method (based on daily
compounding), at the election of the United States Holder.
In the case of a United States Holder not required and not electing to
include OID in income currently, any gain realized on the sale or retirement of
the short-term Debt Security will be ordinary income to the extent of the OID
accrued on a straight-line basis (unless an election is made to accrue the OID
under the constant-yield method) through the date of sale or retirement. United
States Holders who are not required and do not elect to accrue OID on short-term
Debt Securities will be required to defer deductions for interest on borrowings
allocable to short-term Debt Securities in an amount not exceeding the deferred
income until the deferred income is realized.
For purposes of determining the amount of OID subject to these rules, all
interest payments on a short-term Debt Security, including stated interest, are
included in the short- term Debt Security's stated redemption price at maturity.
Foreign Currency Discount Debt Securities. OID for any accrual period on a
Discount Debt Security that is denominated in, or determined by reference to, a
foreign currency will be determined in the foreign currency and then translated
into U.S. dollars in the same manner as stated interest accrued by an accrual
basis United States Holder, as described under "Payments of Interest". Upon
receipt of an amount attributable to OID (whether in connection with a payment
of interest or the sale or retirement of a Debt Security), a United States
Holder may recognize ordinary income or loss.
Debt Securities Purchased at a Premium
A United States Holder that purchases a Debt Security for an amount in
excess of its principal amount may elect to treat such excess as "amortizable
bond premium", in which case the amount required to be included in the United
States Holder's income each year with respect to interest on the Debt Security
will be reduced by the amount of amortizable bond premium allocable (based on
the Debt Security's yield to maturity) to such year. In the case of a Debt
Security that is denominated in, or determined by reference to, a foreign
currency, bond premium will be computed in units of foreign currency, and
amortizable bond premium will reduce interest income in units of the foreign
currency. At the time amortized bond premium offsets interest income, exchange
gain or loss (taxable as ordinary income or loss) is realized measured by the
difference between exchange rates at that time and at the time of the
acquisition of the Debt Securities. Any election to amortize bond premium shall
apply to all bonds (other than bonds the interest on which is excludible from
gross income) held by the United States Holder at the beginning of the first
taxable year to which the election applies or thereafter acquired by the United
States Holder, and is irrevocable without the consent of the Service. See also
"Original Issue Discount - Election to Treat All Interest as Original Issue
Discount."
Purchase, Sale and Retirement of the Debt Securities
A United States Holder's tax basis in a Debt Security will generally be its
U.S. dollar cost (as defined below), increased by the amount of any OID or
market discount included in the United States Holder's income with respect to
the Debt Security and the amount, if any, of income attributable to de minimis
original issue discount and de minimis market discount included in the United
States Holder's income with respect to the Debt Security, and reduced by (i) the
amount of any payments that are not qualified stated interest payments, and (ii)
the amount of any amortizable bond premium applied to reduce interest on the
Debt Security. The U.S. dollar cost of a Debt Security purchased with a foreign
currency will generally be the U.S. dollar value of the purchase price on the
date of purchase or, in the case of Debt Securities traded on an established
securities market, as defined in the applicable Treasury Regulations, that are
purchased by a cash basis United States Holder (or an accrual basis United
States Holder that so elects), on the settlement date for the purchase.
A United States Holder will generally recognize gain or loss on the sale or
retirement of a Debt Security equal to the difference between the amount
realized on the sale or retirement and its tax basis in the Debt Security. The
amount realized on a sale or retirement for an amount in foreign currency will
be the U.S. dollar value of such amount on (i) the date payment is received in
the case of a cash basis United States Holder, (ii) the date of disposition in
the case of an accrual basis United States Holder or (iii) in the case of Debt
Securities traded on an established securities market, as defined in the
applicable Treasury Regulations, sold by a cash basis United States Holder (or
an accrual basis United States Holder that so elects), on the settlement date
for the sale. Except to the extent described above under "Original Issue
Discount - Short-Term Debt Securities" or described in the next succeeding
paragraph or attributable to accrued but unpaid interest, gain or loss
recognized on the sale or retirement of a Debt Security will be capital gain or
loss and will be long-term capital gain or loss if the Debt Security was held
for more than one year.
Gain or loss recognized by a United States Holder on the sale or retirement
of a Debt Security that is attributable to changes in exchange rates will be
treated as ordinary income or loss. However, exchange gain or loss is taken into
account only to the extent of total gain or loss realized on the transaction.
Exchange of Amounts in Other Than U.S. Dollars
Foreign currency received as interest on a Debt Security or on the sale or
retirement of a Debt Security will have a tax basis equal to its U.S. dollar
value at the time such interest is received or at the time of such sale or
retirement. Foreign currency that is purchased will generally have a tax basis
equal to the U.S. dollar value of the foreign currency on the date of purchase.
Any gain or loss recognized on a sale or other disposition of a foreign currency
(including its use to purchase Debt Securities or upon exchange for U.S.
dollars) will be ordinary income or loss.
Indexed Debt Securities
The applicable Prospectus Supplement will contain a discussion of any
special United States federal income tax rules with respect to Indexed
Securities (other than Debt Securities subject to the rules governing Variable
Rate Debt Securities).
United States Alien Holders
For purposes of this discussion, a "United States Alien Holder" is any
holder of a Debt Security who is (i) a nonresident alien individual or (ii) a
foreign corporation, partnership or estate or trust, in each case not subject to
United States federal income tax on a net income basis in respect of income or
gain from a Debt Security. This discussion assumes that the Debt Security or
coupon is not subject to the rules of Section 871(h) (4) (A) of the Code
(relating to interest payments that are determined by reference to the income,
profits, changes in the value of property or other attributes of the debtor or a
related party). In addition, solely with respect to United States federal estate
tax, the discussion assumes that the Debt Security had a maturity date, when
issued, that was not less than 184 days from the date of issuance.
Under present United States federal income and estate tax law, and subject
to the discussion of backup withholding below:
(1) payments of principal, premium (if any) and interest, including OID, by
MFS or any of its paying agents to any holder of a Debt Security or coupon that
is a United States Alien Holder will not be subject to United States federal
withholding tax if, in the case of interest or OID, (i) the beneficial owner of
the Debt Security or coupon does not actually or constructively own 10% or more
of the total combined voting power of all classes of stock of MFS entitled to
vote, (ii) the beneficial owner of the Debt Security is not a controlled foreign
corporation that is related to MFS through stock ownership, and (iii) if the
Debt Security is a Registered Security, either (a) the beneficial owner of the
Debt Security certifies to MFS or its agent, under penalties of perjury, that it
is not a United States Holder and provides its name and address or (b) a
securities clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business (a
"financial institution") and holds the Debt Security on behalf of a beneficial
owner certifies to MFS or its agent, under penalties of perjury, that such
statement has been received from the beneficial owner by it or by a financial
institution between it and the beneficial owner and furnishes the payor with a
copy thereof; and (iv) in the case of a Debt Security which is not a Registered
Security, the Debt Security is offered, sold and delivered in compliance with
applicable restrictions relating to issuance of debt obligations which are not
in registered form and payments on the Debt Securities are made in accordance
with the applicable procedures relating to the issuance of debt obligations
which are not in registered form (both of which restrictions and procedures will
be described in the applicable Prospectus Supplement);
(2) a United States Alien Holder of a Debt Security or coupon will not be
subject to United States federal withholding tax on any gain realized on the
sale or exchange of a Debt Security or coupon; and
(3) a Debt Security or coupon held by an individual who at death is not a
citizen or resident of the United States will not be includible in the
individual's gross estate for purposes of the United States federal estate tax
as a result of the individual's death if (a) the individual did not actually or
constructively own 10% or more of the total combined voting power of all classes
of stock of MFS entitled to vote and (b) the income on the Debt Security would
not have been effectively connected with a United States trade or business of
the individual at the individual's death.
Recently proposed Internal Revenue Service Treasury regulations (the
"Proposed Regulations") would provide alternative methods for satisfying the
certification requirement described in clause (1)(iii) above. The Proposed
Regulations also would require in the case of Debt Securities held by a foreign
partnership, that (x) the certification described in clause (1)(iii) above be
provided by the partners rather than by the foreign partnership and (y) the
partnership provide certain information, including a United States taxpayer
identification number. A look-through rule would apply in the case of tiered
partnerships. The Proposed Regulations are proposed to be effective for payments
made after December 31, 1997. There can be no assurance that the Proposed
Regulations will be adopted or as to the provisions that they will include if
and when adopted in temporary or final form.
Backup Withholding and Information Reporting
United States Holders. In general, information reporting requirements will
apply to payments of principal, any premium and interest on a Debt Security and
the proceeds of the sale of a Debt Security before maturity within the United
States to, and to the accrual of OID on a Discount Debt Security with respect
to, non-corporate United States Holders, and "backup withholding" at a rate of
31% will apply to such payments and to payments of OID if the United States
Holder fails to provide an accurate taxpayer identification number or to report
all interest and dividends required to be shown on its federal income tax
returns.
United States Alien Holders. Under current law, information reporting and
backup withholding will not apply to payments of principal, premium (if any) and
interest (including OID) made by the Company or a paying agent to a United
States Alien Holder on a Debt Security if, in the case of Debt Securities which
are Registered Securities, either of the certifications described in clause (1)
(iii) under 'United States Alien Holders' above is received, provided that the
payor does not have actual knowledge that the holder is a United States person.
The Company or a paying agent, however, may report (on Internal Revenue Service
Form 1042S) payments of interest (including OID) on Debt Securities that are
Registered Securities. See the discussion above with respect to the Proposed
Regulations.
Payments of the proceeds from the sale by a United States Alien Holder of a
Debt Security made to or through a foreign office of a broker will not be
subject to information reporting or backup withholding, except that if the
broker is a United States person, a controlled foreign corporation for United
States tax purposes or a foreign person 50% or more of whose gross income is
effectively connected with a United States trade or business for a specified
three-year period, information reporting may apply to such payments. Payments of
the proceeds from the sale of a Debt Security to or through the United States
office of a broker is subject to information reporting and backup withholding
unless the holder or beneficial owner certifies as to its non-United States
status or otherwise establishes an exemption from information reporting and
backup withholding.
PLAN OF DISTRIBUTION
The Company or MFS may sell Securities to or through underwriters, and also
may sell Securities directly to other purchasers or through agents.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Sales of Common Stock offered hereby may be effected from time to time in
one or more transactions on the NYSE or in negotiated transactions or a
combination of such methods of sale, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at other negotiated
prices. In connection with distributions of Common Stock or otherwise, the
Company may enter into hedging transactions with broker-dealers in connection
with which such broker-dealers may sell Common Stock registered hereunder in the
course of hedging through short sales the positions they assume with the
Company.
In connection with the sale of Securities, underwriters or agents may
receive compensation from the Company or MFS or from purchasers of Securities
for whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters may sell 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 Securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Company or MFS and any profit
on the resale of Securities by them may be deemed to be underwriting discounts
and commissions, under the Securities Act of 1933 (the "Act"). Any such
underwriter or agent will be identified, and any such compensation received from
the Company or MFS will be described, in the Prospectus Supplement.
Under agreements which may be entered into by the Company and, in the case
of Debt Securities, MFS, underwriters and agents who participate in the
distribution of Securities may be entitled to indemnification by the Company
and, in the case of Debt Securities, MFS against certain liabilities, including
liabilities under the Act.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for the Company or MFS in
the ordinary course of business.
VALIDITY OF SECURITIES
The validity of the Securities to which this Prospectus relates will be
passed upon for the Company and, in the case of Debt Securities, MFS by McGuire,
Woods, Battle & Boothe, L.L.P., Richmond, Virginia, which serves as general
counsel to the Company. As of June 27, 1996, partners and associates of McGuire,
Woods, Battle & Boothe, L.L.P., who performed services in connection with the
offering made by this Prospectus, owned of record and beneficially 2574 shares
of Common Stock. Robert L. Burrus, Jr., a director of the Company, is a partner
of that firm. The validity of the Securities offered hereby will be passed upon
for any relevant Underwriters by Sullivan & Cromwell, New York, New York, who
will rely upon the opinion of McGuire, Woods, Battle & Boothe, L.L.P. with
respect to matters of Virginia law.
EXPERTS
The consolidated financial statements and the related financial statement
schedule incorporated in this Prospectus by reference from Heilig-Meyers
Company's Annual Report on Form 10-K for the year ended February 29, 1996, have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report which is incorporated herein by reference, and has been so incorporated
in reliance upon the report of such firm given their authority as experts in
accounting and auditing.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
SEC registration fee..........................................$137,932
Accountants' fees and expenses................................$ 35,000
Attorneys' fees and expenses..................................$100,000
Printing and engraving expenses...............................$ 15,000
Fees and expenses of trustee..................................$ 10,000
State qualification fees and expenses.........................$ 23,500
Rating agencies' fees.........................................$150,000
Miscellaneous.................................................$ 3,568
Total....................................................$475,000
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All fees and expenses other than the SEC registration fee are estimated.
Item 15. Indemnification of Directors and Officers
Article V of the Restated Articles of Incorporation of the Company provides:
1. Definitions. For purposes of this Article the following definitions
shall apply:
(a) "Corporation" means this Corporation only and no predecessor
entity or other legal entity;
(b) "expenses" include counsel fees, expert witness fees, and costs of
investigation, litigation and appeal, as well as any amounts expended in
asserting a claim for indemnification;
(c) "liability" means the obligation to pay a judgment, settlement,
penalty, fine, or other such obligation, including, without limitation, any
excise tax assessed with respect to an employee benefit plan;
(d) "legal entity" means a corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise;
(e) "predecessor entity" means a legal entity the existence of which
ceased upon its acquisition by the Corporation in a merger or otherwise; and
(f) "proceeding" means any threatened, pending, or completed action,
suit, proceeding or appeal whether civil, criminal, administrative or
investigative and whether formal or informal.
2. Limit On Liability. In every instance permitted by the Virginia Stock
Corporation Act, as it exists on the date hereof or may hereafter be amended,
the liability of a director or officer of the Corporation to the Corporation or
its shareholders arising out of a single transaction, occurrence or course of
conduct shall be eliminated.
3. Indemnification of Directors and Officers. The Corporation shall
indemnify any individual who is, was or is threatened to be made a party to a
proceeding (including a proceeding by or in the right of the Corporation)
because such individual is or was a director or officer of the Corporation or
because such individual is or was serving the Corporation or any other legal
entity in any capacity at the request of the Corporation while a director or
officer of the Corporation against all liabilities and reasonable expenses
incurred in the proceeding, except such liabilities and expenses as are incurred
because of such individual's willful misconduct or knowing violation of the
criminal law. Service as a director or officer of a legal entity controlled by
the Corporation shall be deemed service at the request of the Corporation. The
determination that indemnification under this Section 3 is permissible and the
evaluation as to the reasonableness of expenses in a specific case shall be
made, in the case of a director, as provided by law, and in the case of an
officer, as provided in Section 4 of this Article; provided, however, that if a
majority of the directors of the Corporation has changed after the date of the
alleged conduct giving rise to a claim for indemnification, such determination
and evaluation shall, at the option of the person claiming indemnification, be
made by special legal counsel agreed upon by the Board of Directors and such
person. Unless a determination has been made that indemnification is not
permissible, the Corporation shall make advances and reimbursements for expenses
incurred by a director or officer in a proceeding upon receipt of an undertaking
from such director or officer to repay the same if it is ultimately determined
that such director or officer is not entitled to indemnification. Such
undertaking shall be an unlimited, unsecured general obligation of the director
or officer and shall be accepted without reference to such director's or
officer's ability to make repayment. The termination of a proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent shall not of itself create a presumption that a director or
officer acted in such a manner as to make such director or officer ineligible
for indemnification. The Corporation is authorized to contract in advance to
indemnify and make advances and reimbursements for expenses to any of its
directors or officers to the same extent provided in this Section.
4. Indemnification of Others. The Corporation may, to a lesser extent or to
the same extent that it is required to provide indemnification and make advances
and reimbursements for expenses to its directors and officers pursuant to
Section 3, provide indemnification and make advances and reimbursements for
expenses to its employees and agents, the directors, officers, employees and
agents of its subsidiaries and predecessor entities, and any person serving any
other legal entity in any capacity at the request of the Corporation, and may
contract in advance to do so. The determination that indemnification under this
Section 4 is permissible, the authorization of such indemnification and the
evaluation as to the reasonableness of expenses in a specific case shall be made
as authorized from time to time by general or specific action of the Board of
Directors, which action may be taken before or after a claim for indemnification
is made, or as otherwise provided by law. No person's rights under Section 3 of
this Article shall be limited by the provisions of this Section 4.
5. Miscellaneous. The rights of each person entitled to indemnification
under this Article shall inure to the benefit of such person's heirs, executors
and administrators. Special legal counsel selected to make determinations under
this Article may be counsel for the Corporation. Indemnification pursuant to
this Article shall not be exclusive of any other right of indemnification to
which any person may be entitled, including indemnification pursuant to a valid
contract, indemnification by legal entities other than the Corporation and
indemnification under policies of insurance purchased and maintained by the
Corporation or others. However, no person shall be entitled to indemnification
by the Corporation to the extent such person is indemnified by another,
including an insurer. The Corporation is authorized to purchase and maintain
insurance against any liability it may have under this Article or to protect any
of the persons named above against any liability arising from their service to
the Corporation or any other legal entity at the request of the Corporation
regardless of the Corporation's power to indemnify against such liability. The
provisions of this Article shall not be deemed to preclude the Corporation from
entering into contracts otherwise permitted by law with any individuals or legal
entities, including those named above. If any provision of this Article or its
application to any person or circumstance is held invalid by a court of
competent jurisdiction, the invalidity shall not affect other provisions or
applications of this Article, and to this end the provisions of this Article are
severable.
6. Application; Amendments. The provisions of this Article shall be
applicable from and after its adoption even though some or all of the underlying
conduct or events relating to a proceeding may have occurred before its
adoption. No amendment, modification or repeal of this Article shall diminish
the right provided hereunder to any person arising from conduct or events
occurring before the adoption of such amendment, modification or repeal.
The Ninth Article of the Certificate of Incorporation of MFS provides:
NINTH: This Corporation shall, to the maximum extent permitted from time to
time under the law of the State of Delaware, indemnify and upon request shall
advance expenses to any person who is or was a party or is threatened to be made
a party to any threatened, pending or completed action, suit, proceeding or
claim, whether civil, criminal, administrative or investigative, by reason of
the fact that such person is or was or has agreed to be a director or officer of
this corporation or while a director or officer is or was serving at the request
of this corporation as a director, officer, partner, trustee, employee or agent
of any corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, against expenses
(including attorney's fees and expenses), judgment, fines, penalties and amounts
paid in settlement incurred in connection with the investigation, preparation to
defend or defense of such action, suit, proceeding or claim; provided, however,
that the foregoing shall not require this corporation to indemnify or advance
expenses to any person in connection with any action, suit, proceeding, claim or
counterclaims initiated by or on behalf of such person. Such indemnification
shall not be exclusive of other indemnification rights arising under any by-law,
agreement, vote of directors or stockholders or otherwise and shall inure to the
benefit of the heirs and legal representatives of such person. Any person
seeking indemnification under this Ninth Paragraph shall be deemed to have met
the standard of conduct required for such indemnification unless the contrary
shall be established. Any repeal or modification of the foregoing provisions of
this Ninth Paragraph shall not adversely effect any right or protection of a
director or officer of this corporation with respect to any acts or omissions of
such director or officer occurring prior to such repeal or modification.
The Company and MFS maintain liability insurance which may provide
indemnification, including indemnification against liabilities under the
Securities Act of 1933, to the officers and directors of the Company and MFS in
certain circumstances.
In the Underwriting Agreements, forms of which are filed as Exhibit 1.1 and
1.2 hereto, the Underwriters will agree to indemnify, under certain conditions,
the Company and MFS, their directors, certain of their officers and persons who
control the Company and MFS within the meaning of the Securities Act of 1933, as
amended (the "Securities Act") against certain liabilities.
Item 16. Exhibits
1.1 Proposed form of Underwriting Agreement for Common Stock.
1.2 Proposed form of Underwriting Agreement for Debt Securities.
4.1 Proposed form of Indenture among the Company, MFS and First Union National
Bank of Virginia, as Trustee, including proposed form of Debt Securities
and Guarantees.
4.2 Company's Restated Articles of Incorporation, filed with the Commission as
Exhibit 3a to Company's Annual Report on Form 10-K for the fiscal year
ended February 28, 1990, are expressly incorporated herein by this
reference.
4.3 Articles of Amendment to Company's Restated Articles of Incorporation,
filed with the Commission as Exhibit 4 to Company's Form 8 (Amendment No. 5
to Form 8-A filed April 26, 1983) filed August 6, 1992, are expressly
incorporated herein by this reference.
4.4 Articles of Amendment to Company's Restated Articles of Incorporation,
filed with the Commission as Exhibit 3(c) to Company's Annual Report on
Form 10-K for the fiscal year ended February 28, 1993, are expressly
incorporated herein by this reference.
4.5 Articles of Amendment to Company's Restated Articles of Incorporation,
filed with the Commission as Exhibit 3(d) to Company's Annual Report on
Form 10-K for the fiscal year ended February 28, 1995, are expressly
incorporated herein by this reference.
4.6 Company's By-laws, as amended.
4.7 Certificate of Incorporation of MFS as in effect since December 21, 1989.
4.8 By-laws of MFS as in effect since February 27, 1990.
4.9 Rights Agreement dated as of February 17, 1988 (the "Rights Agreement")
between Company and Crestar Bank, filed with the Commission as Exhibit (2)
to Company's Registration Statement on Form 8-A dated February 19, 1988, is
expressly incorporated herein by this reference.
4.10Supplements Nos. 1-4 dated September 15, 1989 to Rights Agreement filed
with the Commission as Exhibits 2(a)-(d) to Form 8 filed with the
Commission on September 20, 1989, are expressly incorporated herein by this
reference.
5.1 Opinion and consent of McGuire, Woods, Battle & Boothe, L.L.P. as to the
validity of the Securities.
8.1 Opinion and consent of McGuire, Woods, Battle & Boothe, L.L.P. as to
certain tax matters.
12.1 Computation of ratio of earnings to fixed charges.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consents of McGuire, Woods, Battle & Boothe, L.L.P. (included as part of
Exhibits 5.1 and 8.1).
25.1 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of First Union National Bank of
Virginia.
Item 17. Undertakings
1. The undersigned registrants hereby undertake:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) under the Securities Act of 1933 if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Exchange Act that are incorporated by reference in
the registration statement.
(b) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
2. The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the
registrants' annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
3. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Company certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Richmond and Commonwealth of Virginia, on July 8, 1996.
HEILIG-MEYERS COMPANY
By: /s/ William C. DeRusha
---------------------------
William C. DeRusha
Chairman of the Board
Principal Executive Officer
Pursuant to the requirements of the Securities Act, this registration statement
has been signed below by the following persons in the capacities and on the date
indicated.
Signature Title Date
/s/ William C. DeRusha Chairman of the Board; July 8, 1996
- ----------------------------- Principal Executive
William C. DeRusha Officer; Director
/s/ Troy A. Peery, Jr. President; Director July 8, 1996
- -------------------------------
Troy A. Peery, Jr.
/s/ Joseph R. Jenkins Executive Vice July 8, 1996
- --------------------------------- President; Principal
Joseph R. Jenkins Financial Officer
/s/ William J. Dieter Senior Vice President, July 8, 1996
- --------------------------------- Accounting; Principal
William J. Dieter Accounting Officer
/s/ Hyman Meyers Director July 8, 1996
- -----------------------------
Hyman Meyers
/s/ S. Sidney Meyers Director July 8, 1996
- -----------------------------
S. Sidney Meyers
/s/ Nathaniel Krumbein Director July 8, 1996
- -----------------------------
Nathaniel Krumbein
/s/ Alexander Alexander Director July 8, 1996
- -----------------------------
Alexander Alexander
/s/ Robert L. Burrus, Jr. Director July 8, 1996
- -----------------------------
Robert L. Burrus, Jr.
/s/ Benjamin F. Edwards, III Director July 8, 1996
- -----------------------------
Benjamin F. Edwards, III
/s/ Alan G. Fleischer Director July 8, 1996
- -----------------------------
Alan G. Fleischer
/s/ Lawrence N. Smith Director July 8, 1996
- -----------------------------
Lawrence N. Smith
/s/George A. Thornton, III Director July 8, 1996
- -----------------------------
George A. Thornton, III
Pursuant to the requirements of the Securities Act, MFS certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing
on Form S-3 and has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the County of New
Castle and State of Delaware, on June 28, 1996.
MACSAVER FINANCIAL SERVICES, INC.
By: s/Joseph R. Jenkins
--------------------------
Joseph R. Jenkins
President
Pursuant to the requirements of the Securities Act, this registration statement
has been signed below by the following persons in the capacities and on the date
indicated.
Signature Title Date
/s/ Joseph R. Jenkins President and Principal June 28, 1996
- -------------------------------- Executive Officer; Director
Joseph R. Jenkins
/s/ Roy B. Goodman Vice President and Principal June 28, 1996
- ----------------------------- Financial Officer; Director
Roy B. Goodman
/s/ William J. Dieter Director June 28, 1996
- -----------------------------
William J. Dieter
/s/ William E. Helms Director June 28, 1996
- -----------------------------
William E. Helms
EXHIBIT INDEX
Exhibit
No. Description
1.1 Proposed form of Underwriting Agreement for Common Stock.
1.2 Proposed form of Underwriting Agreement for Debt Securities.
4.1 Proposed form of Indenture among the Company, MFS and First Union
National Bank of Virginia, as Trustee, including
proposed form of Debt Securities and Guarantees.
4.6 Company's By-laws, as amended.
4.7 Certificate of Incorporation of MFS as in effect since December 21, 1989.
4.8 By-laws of MFS as in effect since February 27, 1990.
5.1 Opinion and consent of McGuire, Woods, Battle & Boothe, L.L.P. as to the
validity of the Securities.
8.1 Opinion and consent of McGuire, Woods, Battle & Boothe, L.L.P. as to
certain tax matters.
12.1 Computation of ratio of earnings to fixed charges.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consents of McGuire, Woods, Battle & Boothe, L.L.P. (included as part of
Exhibits 5.1 and 8.1).
25.1 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of First Union National Bank of
Virginia.