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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 28, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
INTERSTATE HOTELS COMPANY
(Exact name of Registrant as specified in its charter)
PENNSYLVANIA 25-1788101
(State of incorporation) (I.R.S. Employer Identification No.)
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FOSTER PLAZA TEN
680 ANDERSEN DRIVE
PITTSBURGH, PENNSYLVANIA 15220
(412) 937-0600
(Address and telephone number of Registrant's principal executive offices)
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MARVIN I. DROZ, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
FOSTER PLAZA TEN
680 ANDERSEN DRIVE
PITTSBURGH, PENNSYLVANIA 15220
(412) 937-0600
(Name, address and telephone number of agent for service)
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COPY TO:
ROBERT A. PROFUSEK, ESQ.
JONES, DAY, REAVIS & POGUE
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
(212) 326-3939
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
From time to time after the effective date of the Registration Statement, as
determined by market conditions and other factors.
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, 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
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AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF TO BE AGGREGATE OFFERING AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PRICE PER UNIT(1)(2) PRICE(1)(2)(3)(4) REGISTRATION FEE
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Common Stock (5)(6)...........................
Preferred Stock (5)...........................
Senior Debt Securities (5)....................
Subordinated Debt Securities (5)..............
Warrants......................................
Total..................................... $700,000,000 $700,000,000 $700,000,000 $212,122
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(1) Such amount represents the aggregate offering price of the securities
registered hereunder and the exercise price of any securities issuable upon
exercise of Warrants. If any securities are issued at an original issue
discount, then such greater amount as shall result in an aggregate initial
offering price of $700,000,000.
(2) Not specified as to each class of securities to be registered, pursuant to
General Instruction II.D. of Form S-3.
(3) Estimated for the sole purpose of computing the registration fee pursuant to
Rule 457(o) under the Securities Act of 1933.
(4) The number of shares of Common Stock registered hereunder and to be issued
by the Registrant is limited to that which is permissible under Rule
415(a)(4) of the Securities Act of 1933.
(5) Also includes such indeterminate number of shares of Preferred Stock and
Common Stock as may be issued upon conversion of or exchange for any Senior
Debt Securities, Subordinated Debt Securities or Preferred Stock that
provide for conversion or exchange into other securities.
(6) Includes 6,986,466 shares of Common Stock that may be offered by selling
shareholders from time to time at indeterminate prices.
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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.
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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 THE REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JULY 28, 1997
PROSPECTUS
$700,000,000
INTERSTATE HOTELS COMPANY
COMMON STOCK
PREFERRED STOCK
DEBT SECURITIES
WARRANTS
Interstate Hotels Company (the "Company") may offer from time to time,
together or separately, (i) shares of its Common Stock ("Common Stock"), (ii)
shares of its Preferred Stock ("Preferred Stock"), (iii) debt securities
consisting of notes, debentures or other evidences of indebtedness in one or
more series ("Debt Securities"), and (iv) warrants or other rights to purchase
Common Stock, Preferred Stock, Debt Securities or any combination thereof, as
may be designated by the Company at the time of the offering ("Warrants") in
amounts, at prices and on terms to be determined at the time of the offering. In
addition, certain shareholders of the Company (collectively, the "Selling
Shareholders") may offer from time to time up to 6,986,466 shares of Common
Stock in amounts, at prices and on terms to be determined at the time of the
offering. The Common Stock, Preferred Stock, Debt Securities and Warrants are
collectively called the "Securities."
The Securities may be offered in separate series or issuances at an
aggregate initial public offering price not to exceed $700,000,000 or, if
applicable, the equivalent thereof in other currencies, at prices and on terms
to be determined at the time or times of offering.
The specific terms of the Securities with respect to which this Prospectus
is being delivered are set forth in the accompanying Prospectus Supplement and
include, where applicable, (i) in the case of Common Stock, the number of
shares, the initial public offering price and whether the shares are being sold
by the Company or Selling Shareholders; (ii) in the case of Preferred Stock, the
number of shares, the specific title, the aggregate amount, any dividend
(including the method of calculating payment of dividends), seniority,
liquidation, redemption, voting and other rights, any terms for any conversion
or exchange into other Securities, any listing on a securities exchange, the
initial public offering price and any other terms; (iii) in the case of Debt
Securities, the specific designation, aggregate principal amount, ranking as
senior debt ("Senior Securities") or subordinated debt ("Subordinated
Securities"), purchase price, maturity, rate (or method of calculation thereof)
and time of payment of interest, if any, any conversion or exchange provisions,
any redemption provisions, any subordination provisions and any other specific
terms of the Debt Securities offered hereby not set forth herein under the
caption "Description of Debt Securities" in this Prospectus, and any listing
thereof on a securities exchange; and (iv) in the case of Warrants, the
designation and number, the exercise price, any listing of the Warrants or the
underlying Securities on a securities exchange and any other terms in connection
with the offering, sale and exercise of the Warrants.
The Common Stock is listed on the New York Stock Exchange (the "NYSE")
under the trading symbol "IHC." Any Common Stock sold pursuant to a Prospectus
Supplement will be listed on the NYSE, subject to official notice of issuance.
Any statement contained in this Prospectus will be deemed to be modified or
superseded by any inconsistent statement contained in the accompanying
Prospectus Supplement.
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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.
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The date of this Prospectus is , 1997.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the public reference facilities
maintained by the Commission at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511, and at 7 World Trade Center, Suite 1300, New
York, New York 10048. Copies of such materials can also be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a Web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission and that is
located at http://www.sec.gov. Documents filed by the Company can also be
inspected at the offices of the NYSE, 20 Broad Street, New York, New York 10005,
on which exchange the Common Stock is listed.
The Company has filed a Registration Statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus omits certain of the information contained in
the Registration Statement, and reference is hereby made to the Registration
Statement and to the exhibits relating thereto for further information with
respect to the Company and the securities offered hereby. Any statements
contained herein concerning the provisions of any document are not necessarily
complete, and in each instance reference is made to the copy of such document
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this Prospectus (i) the
Company's Annual Report on Form 10-K for the year ended December 31, 1996; (ii)
the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1997; (iii) the Company's Current Report on Form 8-K filed January 13, 1997; and
(iv) the description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-A (Commission File No. 1-11731) filed May 17,
1996.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering
made hereby, shall be deemed incorporated by reference in this Prospectus and to
be a part of this Prospectus from the date of the filing of such reports.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain, without charge,
upon written or oral request, a copy of any of the documents incorporated by
reference herein, except for the exhibits to such documents (other than the
exhibits expressly incorporated in such documents by reference). Requests should
be directed to: Interstate Hotels Company, Foster Plaza Ten, 680 Andersen Drive,
Pittsburgh, Pennsylvania 15220, Attention: Lisa M. O'Connor, Director of Finance
and Investor Relations (telephone: (412) 937-0600).
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THE COMPANY
In this Prospectus, except as otherwise specified herein, (i) the term the
"Company" refers to Interstate Hotels Company, a Pennsylvania corporation, its
subsidiaries and its predecessors and certain of their affiliates and (ii) all
statistics relating to the Company's portfolio hotels are as of July 1, 1997.
The Company is the largest independent hotel management company in the
United States based on number of properties, number of rooms and total revenues
produced for owners. As of July 1, 1997, the Company owned, managed, leased or
performed related services for 230 hotels with a total of 45,499 rooms in the
United States, Canada, the Caribbean, Panama and Russia. The Company owned or
had a controlling interest in 32 of these properties with 9,261 rooms (the
"Owned Hotels"), all of which are geographically diverse upscale or luxury
properties operating under various brand names. The Owned Hotels operate under
the Embassy Suites(R), Hilton(TM), Holiday Inn(R), Marriott(R), Radisson(TM) and
Westin(TM) trade names principally in major metropolitan markets such as
Atlanta, Boston, Chicago, Denver, Fort Lauderdale, Houston, Los Angeles, Miami,
Philadelphia, Phoenix, Pittsburgh, St. Louis and Washington, D.C.
The Company is the largest franchisee of upscale hotels in the Marriott(R)
system, owning, managing or providing services to 39 hotels with 13,339 rooms,
bearing the Marriott(R) flag. The Company also operates in the mid-scale, upper
economy and budget segments of the lodging industry and is the largest
franchisee and independent manager in the Hampton Inn(R) system, providing
services to 72 hotels with 8,673 rooms, bearing the Hampton Inn(R) flag.
The Company's principal executive offices are located at Foster Plaza Ten,
680 Andersen Drive, Pittsburgh, Pennsylvania 15220, and its telephone number is
(412) 937-0600.
USE OF PROCEEDS
Except as may be set forth in an accompanying Prospectus Supplement, the
net proceeds from the sale of Securities by the Company will be applied for
general corporate purposes, which may include the repayment of indebtedness
outstanding from time to time, acquisitions and other general corporate
purposes. The Company will not receive any proceeds from the sale of shares of
Common Stock by the Selling Shareholders.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges for
the Company and its consolidated subsidiaries for each of the periods indicated.
To date, the Company has not issued any Preferred Stock; therefore, the ratios
of earnings to combined fixed charges and preferred stock dividends are the same
as the ratios of earnings to fixed charges set forth below.
YEAR ENDED DECEMBER 31, THREE MONTHS
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1992 1993 1994 1995 1996 MARCH 31, 1997
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Ratio of earnings to fixed charges
(unaudited) (1).................. 20.57x 29.79x 46.55x 27.14x 2.39x 2.94x
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(1) For purposes of computing the ratio of earnings to fixed charges, earnings
consist of income before income tax expense and extraordinary items plus
fixed charges (excluding capitalized interest). Fixed charges represent
interest incurred, amortization of debt expense and that portion of rental
expense on operating leases deemed to be the equivalent of interest.
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SELLING SHAREHOLDERS
The following table sets forth the names of the Selling Shareholders, the
number of shares of Common Stock which may be deemed to be beneficially owned by
each Selling Shareholder as of the date hereof and the maximum number of shares
which may be offered by each Selling Shareholder.
NUMBER MAXIMUM
OF SHARES NUMBER OF
BENEFICIALLY SHARES TO BE
SELLING SHAREHOLDER OWNED OFFERED
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Milton Fine (1)..................................................... 6,218,640 2,500,000
Blackstone Real Estate Advisors L.P. (2)............................ 2,528,571 2,528,571
Trust Leasing, Inc. and Trust Management, Inc. (3).................. 1,957,895 1,957,895
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(1) Includes 5,000 shares owned by Mr. Fine's wife, 2,500 shares owned by Mr.
Fine's wife in trust for her children and 6,211,140 of 12,782,940 shares
beneficially owned by five family trusts, one of which Milton Fine is the
trustee and four of which Mr. Fine's son, David J. Fine, is the trustee.
Milton Fine is the co-founder of the Company. He served as the Company's
Chief Executive Officer through March 1996 and currently is the Chairman of
the Board.
(2) These shares are owned by Blackstone Real Estate Advisors L.P. or affiliates
thereof.
(3) As of the date of this Prospectus, these shares are owned of record by
Crossroads/Memphis Partnership, L.P., in which the Company owns a 50%
general and limited partnership interest and in which Trust Leasing, Inc.
("Trust Leasing") and Trust Management, Inc. ("Trust Management") together
own a 50% limited partnership interest. Trust Leasing and Trust Management
have the right to exchange their partnership interests at any time for the
shares.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The Company's Articles of Incorporation provide that the authorized capital
stock of the Company consists of 75,000,000 shares of Common Stock, par value
$.01 per share, and 25,000,000 shares of Preferred Stock, par value $.01 per
share. As of July 1, 1997, 35,326,468 shares of Common Stock were issued and
outstanding, and no shares of Preferred Stock were issued or outstanding.
COMMON STOCK
The holders of Common Stock are entitled to one vote per each share owned
of record on all matters voted upon by shareholders. Subject to preferential
rights that may be applicable to any Preferred Stock outstanding, holders of
Common Stock are entitled to receive dividends if, as and when declared by the
Board out of funds legally available therefor. In the event of a liquidation,
dissolution or winding-up of the Company, holders of Common Stock are entitled
to share equally and ratably in the assets of the Company, if any, remaining
after the payment of all liabilities of the Company and the liquidation
preferences of any outstanding Preferred Stock. Holders of the Common Stock have
no preemptive rights and no rights to convert their Common Stock to any other
securities, and there are no redemption or sinking fund provisions with respect
to the Common Stock. The Company is subject to provisions of the Pennsylvania
Business Corporation Law (the "BCL") which provide for cumulative voting.
PREFERRED STOCK
The Board has the authority to issue the authorized shares of Preferred
Stock in one or more series and to fix the designations, relative powers,
preferences, rights, qualifications, limitations and restrictions of all shares
of each such series, including without limitation dividend rates, conversion
rights, voting rights, redemption and sinking fund provisions, liquidation
preferences and the number of shares constituting each such series,
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without any further vote or action by the shareholders. The issuance of
Preferred Stock could decrease the amount of earnings and assets available for
distribution to holders of Common Stock or adversely affect the rights and
powers, including voting rights, of the holders of Common Stock. The issuance of
Preferred Stock also could have the effect of delaying, deferring or preventing
a change in control of the Company.
CERTAIN CORPORATE GOVERNANCE MATTERS
The Company's Articles of Incorporation and Bylaws provide, in general,
that (i) the number of directors of the Company will be fixed, within a
specified range, by a majority of the total number of the directors of the
Company (assuming no vacancies) or by the holders of at least 80% of the
Company's voting stock, (ii) shareholder action can be taken only at an annual
or special meeting of shareholders and not by written consent in lieu of a
meeting, (iii) except as described below, special meetings of shareholders may
be called only by the Chairman of the Board or by 80% of the total number of
directors of the Company (assuming no vacancies) and the business permitted to
be conducted at any such meeting is limited to that brought before the meeting
by the Company's Chairman of the Board or his specific designee or by 80% of the
total number of directors of the Company (assuming no vacancies), (iv) the
Chairman of the Board may be removed only by the holders of at least 80% of the
Company's voting stock, (v) directors of the Company may be removed only for
cause and (vi) the Board or the Chairman of the Board may postpone and
reschedule any previously scheduled annual or special meeting of shareholders.
The Company's Bylaws also require that shareholders desiring to bring any
business before an annual meeting of shareholders deliver written notice thereof
to the Secretary of the Company not later than 60 days in advance of the meeting
of shareholders; provided, however, that in the event that the date of the
meeting is not publicly announced by the Company by press release or inclusion
in a report filed with the Commission or furnished to shareholders more than 75
days prior to the meeting, notice by the shareholder to be timely must be
delivered to the Secretary of the Company not later than the close of business
on the tenth day following the day on which such announcement of the date of the
meeting was so communicated. The Company's Bylaws further require that the
notice by the shareholder set forth a description of the business to be brought
before the meeting and the reasons for conducting such business at the meeting
and certain information concerning the shareholder proposing such business and
the beneficial owner, if any, on whose behalf the proposal is made, including
their names and addresses, the class and number of shares of the Company that
are owned beneficially and of record by each of them and any material interest
of either of them in the business proposed to be brought before the meeting.
Upon the written request of the holders of not less than 25% of the Company's
voting stock or upon the request of the Chairman of the Board, the Board will be
required to call a meeting of shareholders for the purpose specified in such
written request and fix a record date for the determination of shareholders
entitled to notice of and to vote at such meeting (which record date may not be
later than 60 days after the date of receipt of notice of such meeting),
provided that (i) in the event that the Board calls an annual or special meeting
of shareholders to be held not later than 90 days after receipt of any such
written request, no separate special meeting of shareholder as so requested will
be required to be convened provided that the purposes of such annual or special
meeting called by the Board include (among others) the purposes specified in
such written request of the shareholders and (ii) unless otherwise determined by
the Chairman of the Board or vote of a majority of the members of the Board then
in office, action may not be taken at a special meeting of the shareholders in
respect of the removal of directors other than for cause, any change in the
number of directors or any other matter affecting the composition of the Board
or any directorate committee.
Under applicable provisions of Pennsylvania law, the approval of a
Pennsylvania company's board of directors, in addition to shareholder approval,
is required to adopt any amendment to the company's articles of incorporation,
but a company's bylaws may be amended either by action of its shareholders or,
if the company's articles of incorporation so provide, its board of directors.
The Company's Articles of Incorporation and Bylaws provide that except as
described below, the provisions summarized above and the provisions relating to
nomination procedures may not be amended by the shareholders, nor may any
provision inconsistent therewith be adopted by the shareholders, without the
affirmative vote of the holders of at least 80% of the Company's voting stock,
voting together as a single class, except that if any such action (other than
any direct or indirect amendments to the provision requiring that shareholder
action be taken at a meeting of shareholders rather than by written consent in
lieu of a meeting) is approved by the holders of a majority, but
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less than 80%, of the then-outstanding voting stock (in addition to any other
approvals required by law, including approval by the Board with respect to any
amendment to the Company's Articles of Incorporation), such action will be
effective as of one year from the date of adoption.
The foregoing provisions of the Company's Articles of Incorporation and
Bylaws may discourage or make more difficult the acquisition of control of the
Company by means of a tender offer, open market purchase, proxy contest or
otherwise. These provisions may have the effect of discouraging certain types of
coercive takeover practices and inadequate takeover bids and to encourage
persons seeking to acquire control of the Company first to negotiate with the
Company. The Company's management believes that the foregoing measures provide
benefits to the Company and its shareholders by enhancing the Company's ability
to negotiate with the proponent of any unfriendly or unsolicited proposal to
take over or restructure the Company and that such benefits outweigh the
disadvantages of discouraging such proposals because, among other things,
negotiation of such proposals could result in an improvement of their terms.
The Company is subject to provisions of the BCL which require that a
merger, consolidation, share exchange or sale of assets between a public
corporation, or a subsidiary thereof, and a shareholder be approved by a
majority of voting shares outstanding other than those held by the "interested
shareholder" (which includes a shareholder who is a party to the proposed
transaction or who is treated differently from other shareholders) unless (i)
the transaction has been approved by a majority of the corporation's directors
who are not affiliated with the interested shareholder and first elected to the
board within 24 months of the vote to approve such transaction, or (ii) the
transaction results in the payment to all other shareholders of an amount not
less than the highest amount paid for the same class of shares by the interested
shareholder. In addition, subject to certain exceptions, a "business
combination" with a shareholder or group of shareholders beneficially owning
more than 20% of the voting power of a public corporation (excluding certain
shares) is prohibited for a five-year period following the date on which the
holder acquired the 20% or greater voting power and, unless certain other
conditions are satisfied, requires approval of a majority of voting shares
outstanding other than those held by such interested shareholder. Moreover, the
BCL provides that any profit realized from the disposition of an equity security
of a corporation by a shareholder who disposes of such security within 18 months
after obtaining control must be returned to the corporation. These and other
related BCL provisions may discourage open market purchases of a corporation's
stock or a non-negotiated tender or exchange offer for such stock and,
accordingly, may limit a shareholder's ability to realize a premium over the
market price of the Common Stock in connection with any such transaction.
TRANSFER AGENT AND REGISTRAR
ChaseMellon Shareholder Services L.L.C. is the transfer agent and registrar
for the Common Stock.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Senior Securities will be issued under one or more indentures dated as
of a date prior to the first issuance of Senior Securities, as supplemented from
time to time (the "Senior Indenture"), between the Company and a trustee to be
named in the applicable Prospectus Supplement (the "Senior Trustee"), and the
Subordinated Securities will be issued under an indenture to be dated as of a
date prior to the first issuance of Subordinated Securities, as supplemented
from time to time (the "Subordinated Indenture"), between the Company and a
trustee to be named in the applicable Prospectus Supplement (the "Subordinated
Trustee"). The term "Indenture" as used herein refers to either the Senior
Indenture or the Subordinated Indenture, as appropriate, and the term "Trustee"
as used herein refers to either the Senior Trustee or the Subordinated Trustee,
as appropriate. The Indentures will be subject to and governed by the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The statements
made under this heading relating to the Debt Securities and the Indentures are
summaries of the anticipated provisions thereof, do not purport to be complete
and are qualified in their entirety by reference to the Debt Securities and
Indentures.
The Debt Securities will be direct, unsecured obligations of the Company.
The indebtedness represented by the Senior Securities will rank equally with all
other unsecured and unsubordinated indebtedness of the
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Company. The indebtedness represented by the Subordinated Securities will be
subordinated in right of payment to the prior payment in full of senior
indebtedness of the Company as described under "--Subordination" below. The Debt
Securities may be issued from time to time in one or more series. A supplemental
indenture to the applicable Indenture (a "Supplemental Indenture") will be
entered into by the Company and the applicable Trustee with respect to the
issuance of each series of Debt Securities, which will set forth the terms and
provisions of such series of Debt Securities. Reference is made to the
Prospectus Supplement relating to the Debt Securities being offered for the
specific terms thereof, including: (i) the title of such Debt Securities and
whether they are Senior Securities or Subordinated Securities; (ii) any limit on
the aggregate principal amount of such Debt Securities; (iii) the date or dates
(or manner of determining the same) on which the principal of such Debt
Securities will be payable; (iv) the rate or rates (or manner of determining the
same) at which such Debt Securities will bear interest, if any, and the date or
dates from which such interest will accrue; (v) the dates (or the manner of
determining the same) on which such interest will be payable, the record dates
for such interest payment dates (or the manner of determining the same), the
persons to whom such interest will be payable and the basis upon which interest
will be calculated; (vi) the place or places where the principal of and any
premium and interest on such Debt Securities will be payable; (vii) the period
or periods, if any, within which, and the price or prices at which, such Debt
Securities may be redeemed, in whole or in part, at the option of the Company;
(viii) any mandatory or optional sinking fund or analogous provisions; (ix) the
denominations in which any Debt Securities will be issuable; (x) the currency or
currency units, if other than currency of the United States of America, in which
payment of the principal of and any premium or interest on such Debt Securities
will be payable, and the terms and conditions of any elections that may be made
available with respect thereto; (xi) any index or formula used to determine the
amount of payments of principal of and any premium or interest on such Debt
Securities; (xii) whether the Debt Securities are to be issued in whole or in
part in the form of one or more global securities ("Global Securities") and, if
so, the identity of the depositary, if any, for such Global Securities; (xiii)
the terms and conditions, if any, pursuant to which such Debt Securities are
convertible into or exchangeable for Common Stock or other securities; (xiv) the
applicability of the provisions described in "--Defeasance" below; (xv) any
subordination provisions applicable to such Debt Securities in addition to or
different than those described under "--Subordination" below; (xvi) any addition
to, or modification or deletion of, any Events of Default (as defined in the
applicable Indenture) or covenants with respect to such Debt Securities,
including without limitation the amount to be specified in connection with
clause (v) under "--Events of Default" below; and (xvii) any other terms of the
Debt Securities.
Debt Securities may be issued at a discount from their stated principal
amount. Certain federal income tax considerations and other special
considerations applicable to any Debt Security issued with original issue
discount (an "Original Issue Discount Security") will be described in an
applicable Prospectus Supplement.
If the purchase price of any Debt Securities is denominated, or any premium
or interest on Debt Securities is payable, in a foreign currency, the
restrictions, elections, general tax considerations, specific terms and other
information with respect to such issue of Debt Securities and such foreign
currency will be set forth in an applicable Prospectus Supplement.
Unless otherwise indicated in an applicable Prospectus Supplement, (i) the
Debt Securities will be issued only in fully registered form in denominations of
$1,000 or integral multiples thereof and (ii) payment of principal, premium (if
any) and interest on the Debt Securities will be payable, and the exchange,
conversion and transfer of Debt Securities will be registerable, at the office
or agency of the Company maintained for such purposes and at any other office or
agency maintained for such purpose. No service charge will be made for any
registration of transfer or exchange of the Debt Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge imposed in connection therewith.
CERTAIN COVENANTS IN THE INDENTURES
Existence. Except as permitted as described under "--Limitations on Merger
and Certain Other Transactions," the Company will be required to preserve and
keep in full force its existence, charter rights, statutory rights and
franchises, except to the extent that failure to do so would not have a material
adverse effect on the business, assets, financial condition or results of
operations of the Company (a "Material Adverse
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Effect"), except that the Company will not be required to preserve any right or
franchise if it determines that the preservation is no longer desirable in the
conduct of its business.
Maintenance of Properties. The Company will be required to cause all
properties used in its business to be maintained and kept in good condition,
repair and working order, except to the extent that the failure to do so would
not have a Material Adverse Effect, except that the Company will not be required
to continue the operation or maintenance of any such property or be prevented
from disposing of such property if the Company determines that such
discontinuance or disposal is desirable in the conduct of its business.
Payment of Taxes and Other Claims. The Company will be required to pay and
discharge, before the same become delinquent, (i) all taxes, assessments and
governmental charges levied or imposed upon the Company or its properties and
(ii) all claims that if unpaid would result in a lien on its property and have a
Material Adverse Effect, unless the same is being contested by proper
proceedings.
Compliance with Laws. The Company will be required to comply with all
applicable laws to the extent the failure to do so would have a Material Adverse
Effect.
Additional Covenants. Any additional covenants applicable to any series of
Debt Securities will be described in an applicable Prospectus Supplement.
EVENTS OF DEFAULT
Each Indenture will provide that certain events will constitute Events of
Default with respect to the Debt Securities, which Events of Default may include
the following: (i) default in the payment of the principal of, or premium, if
any, on, the Debt Security when it becomes due and payable; (ii) default in the
payment of any interest on the Debt Security when it becomes due and payable,
and continuance of such default for a period of 30 calendar days; (iii) default
in the making of any sinking fund payment as and when due by the terms of the
Debt Securities; (iv) default in the performance, or breach, of any other
covenant or warranty of the Company in such Indenture (other than a covenant
included in such Indenture solely for the benefit of a series of Debt Securities
other than that series) and continuance of such default for a period of 60
calendar days after written notice thereof has been given to the Company as
provided in such Indenture; (v) any nonpayment at maturity or other default
(beyond any applicable grace period) under any agreement or instrument relating
to any other indebtedness of the Company the principal amount of which is not
less than the amount specified in the applicable Supplemental Indenture, which
default results in such indebtedness becoming due prior to its stated maturity
or occurs at the final maturity thereof; (vi) certain events of bankruptcy,
insolvency or reorganization involving the Company; and (vii) any other Event of
Default provided with respect to Debt Securities of that series. Pursuant to the
Trust Indenture Act, the applicable Trustee will be required, within 90 calendar
days after the occurrence of a default under the applicable Indenture, to give
to the holders of the Debt Securities notice of all such uncured defaults known
to it (except that, in the case of a default in the performance of any covenant
of the character contemplated in clause (iv) of the preceding sentence, no such
notice to holders of the Debt Securities of such series will be given until at
least 30 calendar days after the occurrence thereof), except that, other than in
the case of a default of the character contemplated in clause (i), (ii) or (iii)
of the preceding sentence, the applicable Trustee may withhold such notice if
and so long as it in good faith determines that the withholding of such notice
is in the interests of the holders of the Debt Securities.
If an Event of Default occurs and is continuing, either the applicable
Trustee or the holders of at least 25% in principal amount of the Debt
Securities of that series by notice as provided in the applicable Indenture may
declare the principal amount (or, if the Debt Securities are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of that series) of all Debt Securities of that series to be due and
payable immediately. However, at any time after a declaration of acceleration
with respect to Debt Securities has been made, but before a judgment or decree
based on such acceleration has been obtained, the holders of a majority in
principal amount of the Debt Securities of that series may, under certain
circumstances, rescind and annul such acceleration. See "--Modification and
Waiver" below. If an Event of Default under clause (vi) of the immediately
preceding paragraph occurs, then the principal of and premium,
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if any, and accrued interest on the Debt Securities will become immediately due
and payable without any declaration or other act on the part of the applicable
Trustee of any holder of the Debt Securities.
An Indenture may provide that, subject to the duty of the applicable
Trustee thereunder during an Event of Default to act with the required standard
of care, such Trustee will be under no obligation to exercise any of its rights
or powers under the applicable Indenture at the request or direction of any of
the holders of the Debt Securities, unless such holders have offered to such
Trustee reasonable security or indemnity. Subject to certain provisions,
including those requiring security or indemnification of the applicable Trustee,
the holders of a majority in principal amount of the Debt Securities of any
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to such Trustee, or exercising any trust
or power conferred on such Trustee, with respect to the Debt Securities of that
series.
No holder of a Debt Security will have any right to institute any
proceeding with respect to the applicable Indenture or for any remedy thereunder
unless such holder has previously given to the applicable Trustee written notice
of a continuing Event of Default and unless the holders of at least 25% in
aggregate principal amount of the outstanding Debt Securities of the same series
have also made written request, and offered reasonable indemnity, to such
Trustee to institute such proceeding as trustee, and such Trustee has received
from the holders of a majority in aggregate principal amount of the outstanding
Debt Securities of the same series a direction inconsistent with such request
and has failed to institute such proceeding within 60 calendar days. However,
such limitations will not apply to a suit instituted by a holder of a Debt
Security for enforcement of payment of the principal of and interest on such
Debt Security on or after the respective due dates expressed in such Debt
Security.
The Company will be required to furnish to each Trustee annually a
statement as to the performance by the Company of its obligations under the
applicable Indenture and as to any default in such performance thereunder.
Any additional Events of Default with respect to Debt Securities, and any
variations from the foregoing Events of Default, will be described in an
applicable Prospectus Supplement.
MODIFICATION AND WAIVER
Modifications and amendments of an Indenture may be made by the Company and
the applicable Trustee with the consent of the holders of not less than a
majority in aggregate principal amount of the Debt Securities series affected
thereby, except that no such modification or amendment may, without the consent
of the holder of each Debt Security affected thereby, (i) change the stated
maturity of, or any installment of principal of, or interest on, any Debt
Security; (ii) reduce the principal amount of, the rate of interest on, or the
premium, if any, payable upon the redemption of, any Debt Security; (iii) reduce
the amount of principal of an Original Issue Discount Security payable upon
acceleration of the maturity thereof; (iv) change the place or currency of
payment of principal of, or premium, if any, or interest on, any Debt Security;
(v) impair the right to institute suit for the enforcement of any payment on or
with respect to any Debt Security on or after the stated maturity or prepayment
date thereof; (vi) reduce the percentage in principal amount of Debt Securities
of any series, the consent of the holders of which is required for modification
or amendment of the applicable Indenture or for waiver of compliance with
certain provisions of such Indenture or for waiver of certain defaults; or (vii)
in the case of the Subordinated Indenture, modify any of the provisions relating
to the subordination of the Subordinated Securities in a manner adverse to the
holders thereof.
The holders of at least a majority in aggregate principal amount of the
Debt Securities of any series may on behalf of the holders of all Debt
Securities of that series waive compliance by the Company with certain covenants
of the applicable Indenture. The holders of not less than a majority in
principal amount of the Debt Securities of any series may, on behalf of the
holders of all Debt Securities of that series, waive any past default under the
applicable Indenture with respect to that series, except a default in the
payment of the principal of, or premium, if any, or interest on, any Debt
Security of that series or in respect of a provision which under such Indenture
cannot be modified or amended without the consent of the holder of each Debt
Security of that series affected thereby.
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DEFEASANCE
An Indenture may provide that the Company may elect either (i) to defease
and be discharged from any and all obligations with respect to the Debt
Securities of any series pursuant to such Indenture, except for the obligation
to pay additional amounts, if any, upon the occurrence of certain events of tax,
assessment or governmental charge with respect to payments on such Debt
Securities and the obligations to register the transfer or exchange of such Debt
Securities, to replace temporary or mutilated, destroyed, lost or stolen Debt
Securities and to maintain an office or agency in respect of such Debt
Securities and to hold moneys for payment in trust or (ii) to be released from
its obligations with respect to such Debt Securities under certain sections of
such Indenture (including the restrictions described under "--Certain Covenants
in the Indentures") and, if provided pursuant to such Indenture, its obligations
with respect to any other covenant, and any failure to comply with such
obligations will not constitute an Event of Default with respect to such Debt
Securities if, in either case, the Company irrevocably deposits with the
applicable Trustee, in trust, money or direct obligations of the United States
of America for the payment of which the full faith and credit of the United
States of America is pledged or obligations of an agency or instrumentality of
the United States of America the payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States of America, which, in
either case, are not callable at the issuer's option ("U.S. Government
Obligations") or certain depositary receipts therefor that through the payment
of interest thereon and principal thereof in accordance with their terms will
provide money in an amount sufficient to pay all the principal of and premium,
if any, and any interest on, the Debt Securities on the dates such payments are
due in accordance with the terms of such Debt Securities. Such defeasance may be
effected only if, among other things, (a) no Event of Default or event which
with the giving of notice or lapse of time, or both, would become an Event of
Default under the applicable Indenture has occurred and is continuing on the
date of such deposit, (b) no Event of Default described under clause (vi) under
"--Events of Default" above or event that with the giving of notice or lapse of
time, or both, would become an Event of Default described under such clause (vi)
has occurred and is continuing at any time on or prior to the 90th calendar day
following such date of deposit, (c) in the event of defeasance under clause (i)
above, the Company has delivered an opinion of counsel, stating that (1) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling or (2) since the date of the applicable Indenture there has
been a change in applicable federal law, in either case to the effect that, the
holders of the Debt Securities will not recognize gain or loss for United States
federal income tax purposes as a result of such deposit or defeasance and will
be subject to United States federal income tax in the same manner as if such
defeasance had not occurred and (d) in the event of defeasance under clause (ii)
above, the Company has delivered an opinion of counsel to the effect that, among
other things, the holders of the Debt Securities will not recognize gain or loss
for United States federal income tax purposes as a result of such deposit or
defeasance and will be subject to United States federal income tax in the same
manner as if such defeasance had not occurred. In the event the Company fails to
comply with its remaining obligations under the applicable Indenture after a
defeasance of such Indenture with respect to Debt Securities as described under
clause (ii) above and the Debt Securities are declared due and payable because
of the occurrence of any undefeased Event of Default, the amount of money and
U.S. Government Obligations on deposit with the applicable Trustee may be
insufficient to pay amounts due on the Debt Securities of such series at the
time of the acceleration resulting from such Event of Default. However, the
Company will remain liable in respect of such payments.
SATISFACTION AND DISCHARGE
The Company may be permitted under the applicable Indenture to discharge
certain obligations to holders of Debt Securities that have not already been
delivered to the Trustee for cancellation and that either have become due and
payable or will become due and payable within one year (or scheduled for
redemption within one year) by irrevocably depositing with the Trustee, in
trust, funds in such 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 to the date of such
deposit (if such Debt Securities have become due and payable) or to the stated
maturity or redemption date, as the case may be.
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SUBORDINATION
Upon any distribution of assets of the Company upon the dissolution,
winding up, liquidation or reorganization of the Company, the payment of the
principal of (and premium, if any) and interest on the Subordinated Securities
will be subordinated to the extent provided in the Subordinated Indenture in
right of payment to the prior payment in full of all senior indebtedness,
including Senior Securities, but the obligation of the Company to make payment
of principal (and premium, if any) or interest on the Subordinated Securities
will not otherwise be affected. No payment on account of principal (or premium,
if any), sinking fund or interest may be made on the Subordinated Securities at
any time when there is a default in the payment of principal, premium, if any,
sinking fund or interest on senior indebtedness. In the event that,
notwithstanding the foregoing, any payment by the Company described in the
foregoing sentence is received by the Subordinated Trustee under the
Subordinated Indenture or the holders of any of the Subordinated Securities
before all senior indebtedness is paid in full, such payment or distribution
will be paid over to the holders of such senior indebtedness or on their behalf
for application to the payment of all senior indebtedness remaining unpaid until
all such senior indebtedness has been paid in full, after giving effect to any
concurrent payment or distribution to the holders of such senior indebtedness.
Subject to payment in full of senior indebtedness, the holders of the
Subordinated Securities will be subrogated to the rights of the holders of the
senior indebtedness to the extent of payments made to the holders of such senior
indebtedness out of the distributive share of the Subordinated Securities.
By reason of such subordination, in the event of a distribution of assets
upon insolvency, certain general creditors of the Company may recover more,
ratably, than holders of the Subordinated Securities. A Subordinated Indenture
may provide that the subordination provisions thereof will not apply to money
and securities held in trust pursuant to the satisfaction and discharge and the
legal defeasance provisions of the Subordinated Indenture.
If this Prospectus is being delivered in connection with the offering of a
series of Subordinated Securities, the accompanying Prospectus Supplement or the
information incorporated by reference therein will set forth the approximate
amount of senior indebtedness outstanding as of a recent date.
LIMITATIONS ON MERGER AND CERTAIN OTHER TRANSACTIONS
An Indenture may provide that, prior to the satisfaction and discharge of
the Company obligations to holders of Debt Securities, the Company may not
consolidate with or merge with or into any other person, or transfer all or
substantially all of its properties and assets to another person, unless (i)
either (a) the Company is the continuing or surviving person in such a
consolidation or merger or (b) the person (if other than the Company) formed by
such consolidation or into which the Company is merged or to which all or
substantially all of the properties and assets of the Company are transferred
(the Company or such other person being referred to as the "Surviving Person")
is a corporation organized and validly existing under the laws of the United
States, any state thereof or the District of Columbia, and expressly assumes, by
an indenture supplement, all the obligations of the Company under the Debt
Securities and the applicable Indenture and (ii) immediately after the
transaction and the incurrence or anticipated incurrence of any indebtedness to
be incurred in connection therewith, no Event of Default exists. The Surviving
Person will succeed to and be substituted for the Company with the same effect
as if it had been named in the applicable Indenture as a party thereto, and
thereafter the predecessor corporation will be relieved of all obligations and
covenants under such Indenture and the Debt Securities.
CONVERSION RIGHTS
The terms and conditions, if any, on which Debt Securities being offered
are convertible into Common Stock or other Securities of the Company will be set
forth in the Prospectus Supplement relating thereto. Such terms will include the
conversion price, the conversion period, provisions as to whether conversion
will be at the option of the holder or the Company, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of such Debt Securities.
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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 or its nominee identified in an applicable Prospectus Supplement. In
such a case, one or more Global Securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of the Debt Securities to be represented by such Global Securities. The specific
terms of the depositary arrangement with respect to Debt Securities to be
represented by a Global Security will be described in an applicable Prospectus
Supplement.
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Common Stock, Debt
Securities, Preferred Stock or any combination thereof. Warrants may be issued
independently or together with any other Securities offered by a Prospectus
Supplement and may be attached to or separate from such Securities. Warrants may
be issued under warrant agreements (each, a "Warrant Agreement") to be entered
into between the Company and a warrant agent specified in the applicable
Prospectus Supplement (the "Warrant Agent"). The Warrant Agent will act solely
as an agent of the Company in connection with the Warrants of a particular
series and will not assume any obligation or relationship of agency or trust for
or with any holders or beneficial owners of Warrants. The following sets forth
certain general terms and provisions of Warrants which may be offered. Further
terms of the Warrants and the applicable Warrant Agreement will be set forth in
the applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the terms of the
Warrants in respect of which the Prospectus is being delivered, including, where
applicable, the following: (i) the title of such Warrants; (ii) the aggregate
number of such Warrants; (iii) the price or prices at which such Warrants will
be issued; (iv) the designation, number and terms of the Common Stock, Preferred
Stock, Debt Securities, or combination thereof, purchasable upon exercise of
such Warrants; (v) the designation and terms of the other Securities, if any,
with which such Warrants are issued and the number of such Warrants issued with
each such Security; (vi) the date, if any, on and after which such Warrants and
the related underlying Securities will be separately transferable; (vii) the
price at which each underlying Security purchasable upon exercise of such
Warrants may be purchased; (viii) the date on which the right to exercise such
Warrants will commence and the date on which such right will expire; (ix) the
minimum amount of such Warrants which may be exercised at any one time; (x)
information with respect to book-entry procedures, if any; (xi) a discussion of
any applicable federal income tax considerations; and (xii) any other terms of
such Warrants, including terms, procedures and limitations relating to the
transferability, exchange and exercise of such Warrants.
PLAN OF DISTRIBUTION
The Company and the Selling Shareholders may sell the Securities in any one
or more of the following ways: (i) through one or more underwriters, (ii)
through one or more dealers or agents (which may include one or more
underwriters), (iii) directly to one or more purchasers, or (iv) through an
exchange distribution in accordance with the rules of such exchange, including
the NYSE, or in transactions in the over-the-counter market.
The distribution of the Securities may be effected from time to time in one
or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. In
connection with the sale of the Securities, underwriters, dealers and agents may
receive compensation from the Company, the Selling Shareholders or purchasers of
the Securities in the form of discounts, concessions or commissions.
Underwriters, dealers and agents who participate in the distribution of the
Securities may be deemed to be underwriters, and any discounts or commissions
received by them from the Company or the Selling Shareholders and any profit on
the resale of Securities by them may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such underwriter, dealer or agent will
be identified and any such compensation received from the Company or the Selling
Shareholders will be
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described in an applicable Prospectus Supplement. Any initial public offering
price and any discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time.
Under agreements which may be entered into by the Company and the Selling
Shareholders, underwriters, dealers and agents who participate in the
distribution of the Securities may be entitled to indemnification by the Company
or the Selling Shareholders against certain liabilities, including under the
Securities Act, or contribution from the Company or the Selling Shareholders to
payments which the underwriters, dealers or agents may be required to make in
respect thereof. The underwriters, dealers and agents may engage in transactions
with, or perform services for, the Company and the Selling Shareholders in the
ordinary course of business.
All Securities will be a new issue of securities with no established
trading market, other than the Common Stock, which is listed on the NYSE. Any
Common Stock sold pursuant to a Prospectus Supplement will be listed on the
NYSE, subject to official notice of issuance. Any underwriters to whom
Securities are sold by the Company for public offering and sale may make a
market in such Securities, but such underwriters will not be obligated to do so
and may discontinue any market making at any time without notice. No assurance
can be given as to the liquidity of the secondary market for any Securities.
LEGAL MATTERS
The validity of the Securities offered hereby has been passed upon for the
Company by Jones, Day, Reavis & Pogue, New York, New York.
EXPERTS
The consolidated financial statements incorporated by reference in this
Prospectus have been audited by Coopers & Lybrand L.L.P., independent
accountants, as set forth in their reports accompanying such financial
statements, and are incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
reports given upon the authority of such firm as experts in accounting and
auditing.
Any financial statements and schedules hereafter incorporated by reference
in the Registration Statement of which this Prospectus is a part that have been
audited and are the subject of a report by independent accountants will be so
incorporated by reference in reliance upon such reports and upon the authority
of such firms as experts in accounting and auditing to the extent covered by
consents filed with the Commission.
FORWARD-LOOKING INFORMATION
This Prospectus contains certain forward-looking statements and information
relating to the Company that are based on the beliefs of the Company's
management as well as assumptions made by and information currently available to
the Company's management. When used in this Prospectus, words such as
"anticipate," "believe," "estimate," "expect," "intend" and similar expressions,
as they relate to the Company or the Company's management, identify
forward-looking statements. Such statements reflect the current views of the
Company with respect to future events and are subject to certain risks,
uncertainties and assumptions, relating to the operations and results of
operations of the Company, the Company's rapid expansion, the ownership and
leasing of real estate, competition from other hospitality companies and changes
in economic cycles, as well as the other factors described in this Prospectus.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results or outcomes may vary
materially from those described herein as anticipated, believed, estimated,
expected or intended.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses to be incurred in connection with the issuance and
distribution of the Securities covered by this Registration Statement, other
than underwriting discounts and commissions (which will be described in an
applicable Prospectus Supplement), are estimated as follows:
Securities and Exchange Commission filing fee............. $212,122
Printing expenses......................................... 150,000
Accounting fees and expenses.............................. 100,000
Legal fees and expenses................................... 200,000
Miscellaneous............................................. 52,878
--------
Total..................................................... $715,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 1741 through 1750 of Subchapter D, Chapter 17, of the Pennsylvania
Business Corporation Law of 1988, as amended (the "BCL"), contain provisions for
mandatory and discretionary indemnification of a corporation's directors,
officers and other personnel, and related matters.
Under Section 1741, subject to certain limitations, a corporation has the
power to indemnify directors and officers under certain prescribed circumstances
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with an action or
proceeding, whether civil, criminal, administrative or investigative (other than
derivative actions), to which any of them is a party or is threatened to be made
a party by reason of his being a representative of the corporation or serving at
the request of the corporation as a representative of another corporation,
partnership, joint venture, trust or other enterprise, if he acted in good faith
and in a manner he reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal proceeding, had
no reasonable cause to believe his conduct was unlawful.
Section 1742 permits indemnification in derivative actions if the
appropriate standard of conduct is met, except in respect of any claim, issue or
matter as to which the person has been adjudged to be liable to the corporation
unless and only to the extent that the proper court determines upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, the person is fairly and reasonably entitled to indemnity for the
expenses that the court deems proper.
Under Section 1743, indemnification is mandatory to the extent that the
officer or director has been successful on the merits or otherwise in defense of
any action or proceeding referred to in Section 1741 or 1742.
Section 1744 provides that, unless ordered by a court, any indemnification
under Section 1741 or 1742 shall be made by the corporation only as authorized
in the specific case upon a determination that the representative met the
applicable standard of conduct and that such determination will be made (i) by
the board of directors by a majority vote of a quorum of directors not parties
to the action or proceeding; (ii) if a quorum is not obtainable, or if
obtainable and a majority of disinterested directors so directs, by independent
legal counsel; or (iii) by the shareholders.
Section 1745 provides that expenses incurred by an officer or director in
defending an action or proceeding may be paid by the corporation in advance of
the final disposition of such action or proceeding upon receipt of an
undertaking by or on behalf of such person to repay such amount if it shall
ultimately be determining that he is not entitled to be indemnified by the
corporation.
Section 1746 provides generally that the indemnification and advancement of
expenses provided by Subchapter 17D of the BCL (i) will not be deemed exclusive
of any other rights to which a person seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of shareholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding that office, and (ii) may not
be made in any case where the act or failure to act giving rise to the claim for
indemnification is determined by a court to have constituted willful misconduct
or recklessness.
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Section 1747 grants a corporation the power to purchase and maintain
insurance on behalf of any director or officer against any liability incurred by
him in his capacity as officer or director, whether or not the corporation would
have the power to indemnify him against that liability under Subchapter 17D of
BCL.
Sections 1748 and 1749 extend the indemnification and advancement of
expenses provisions contained in Subchapter 17D of the BCL to successor
corporations in fundamental corporate changes and to representatives serving as
fiduciaries of employee benefit plans.
Section 1750 provides that the indemnification and advancement of expenses
provided by, or granted pursuant to, Subchapter 17D of the BCL shall, unless
otherwise provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs and personal representative of such person.
The Company's Bylaws provide in general that the Company shall indemnify
its officers and directors to the fullest extent permitted by law. The Bylaws
further provide that any alteration, amendment, or repeal of the indemnification
provisions, if not approved by 80% of the total number of directors of the
Company, requires the affirmative vote of shareholders owning at least 80% of
the outstanding shares entitled to vote.
As authorized by the Company's Articles of Incorporation, the Company
entered into indemnification agreements with each of its directors. These
indemnification agreements provide for, among other things, (i) the
indemnification by the Company of the indemnitees thereunder to the extent
described above, (ii) the advancement of attorney's fees and other expenses, and
(iii) the establishment, upon approval by the Board, of trusts or other funding
mechanisms to fund the Company's indemnification obligations thereunder.
ITEM 16. EXHIBITS
1.1* Underwriting Agreement
3.1 Amended and Restated Certificate of Incorporation of the Company (previously filed
with the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1996 and incorporated herein by reference)
3.2 Amended and Restated Bylaws of the Company (previously filed with the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 and incorporated
herein by reference)
4.1* Form of Senior Indenture between the Company and the Senior Trustee relating to
the Senior Securities
4.2* Form of Subordinated Indenture between the Company and Subordinated Trustee
relating to the Subordinated Securities
4.3* Supplemental Indenture
4.4* The form of Securities with respect to each particular series of Securities
registered hereunder
5.1 Opinion of Jones, Day, Reavis & Pogue
12.1 Statement regarding Computation of Ratios
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1)
24.1 Powers of attorney
25.1* Statement of Eligibility and Qualification under the Trust Indenture Act of 1939
on Form T-1 of the Senior Trustee to act as Trustee under the Senior Indenture
25.2* Statement of Eligibility and Qualification under the Trust Indenture Act of 1939
on Form T-1 of the Subordinated Trustee to act as Trustee under the Subordinated
Indenture
- ---------
* To be filed by amendment or incorporated by reference in connection with the
offering of Securities.
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17
ITEM 17. UNDERTAKINGS
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(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 a prospectus
filed with the Commission pursuant to Rule 424(b) 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; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(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 Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering;
(4) That for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in this Registration Statement 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;
(5) That, for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed
as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective and (ii) for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus 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; and
(6) To file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a) of Section 310 of
the Trust Indenture Act of 1939 in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the
Trust Indenture Act of 1939.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public
II-3
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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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pittsburgh, Commonwealth of Pennsylvania on July 28,
1997.
INTERSTATE HOTELS COMPANY
By: /s/ W. THOMAS PARRINGTON, JR.
------------------------------------
W. Thomas Parrington, Jr.
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on July 28, 1997.
SIGNATURES TITLE
- --------------------------------------------- ----------------------------------------------
/s/ W. THOMAS PARRINGTON, JR. President and Chief Executive Officer;
- --------------------------------------------- Director (Principal Executive Officer)
W. Thomas Parrington, Jr.
* Executive Vice President and Chief Financial
- --------------------------------------------- Officer (Principal Financial and Accounting
J. William Richardson Officer)
* Director
- ---------------------------------------------
Milton Fine
* Director
- ---------------------------------------------
David J. Fine
* Director
- ---------------------------------------------
R. Michael McCullough
* Director
- ---------------------------------------------
Thomas J. Saylak
* Director
- ---------------------------------------------
Steven J. Smith
*By:/s/ W. THOMAS PARRINGTON, JR.
-----------------------------------
W. Thomas Parrington, Jr.
Attorney-in-Fact
Pursuant to a Power of Attorney
filed herewith the Securities and
Exchange Commission
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ------------ -------------------------------------------------------------------------------
1.1* Underwriting Agreement
3.1 Amended and Restated Certificate of Incorporation of the Company (previously
filed with the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996 and incorporated herein by reference)
3.2 Amended and Restated Bylaws of the Company (previously filed with the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 and
incorporated herein by reference)
4.1* Form of Senior Indenture between the Company and the Senior Trustee relating to
the Senior Securities
4.2* Form of Subordinated Indenture between the Company and Subordinated Trustee
relating to the Subordinated Securities
4.3* Supplemental Indenture
4.4* The form of Securities with respect to each particular series of Securities
registered hereunder
5.1 Opinion of Jones, Day, Reavis & Pogue
12.1 Statement regarding Computation of Ratios
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1)
24.1 Powers of attorney
25.1* Statement of Eligibility and Qualification under the Trust Indenture Act of
1939 on Form T-1 of the Senior Trustee to act as Trustee under the Senior
Indenture
25.2* Statement of Eligibility and Qualification under the Trust Indenture Act of
1939 on Form T-1 of the Subordinated Trustee to act as Trustee under the
Subordinated Indenture
- ---------
* To be filed by amendment or incorporated by reference in connection with the
offering of Securities.