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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 19, 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
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UNITED COMPANIES FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
LOUISIANA
(State or other jurisdiction of incorporation or organization)
4041 ESSEN LANE
BATON ROUGE, LOUISIANA 70809
(504) 924-6007
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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71-0430414
(I.R.S. Employer Identification Number)
DALE E. REDMAN
CHIEF FINANCIAL OFFICER
4041 ESSEN LANE
BATON ROUGE, LOUISIANA 70809
(504) 924-6007
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
REED D. AUERBACH, ESQ. LEE C. KANTROW, ESQ. PETER J. GORDON, ESQ.
STROOCK & STROOCK & LAVAN LLP KANTROW, SPAHT, WEAVER & BLITZER SIMPSON THACHER & BARTLETT
180 MAIDEN LANE (A PROFESSIONAL LAW CORPORATION) 425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10038-4982 POST OFFICE BOX 2997 NEW YORK, NEW YORK 10017-3909
BATON ROUGE, LOUISIANA 70821-2997
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APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, please check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
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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. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. [X]
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM
AGGREGATE OFFERING AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED PRICE(1) REGISTRATION FEE(2)
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Debt Securities; Preferred Stock; Common Stock(3)(4)........ $500,000,000 $151,515.15
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Depositary Shares(5)........................................ (6) 0
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(1) Estimated solely for purposes of computing the registration fee.
(2) The registration fee has been calculated in accordance with Rule 457(o)
under the Securities Act of 1933, as amended, and reflects the offering
price rather than the principal amount of any Debt Securities issued at a
discount.
(3) In addition to any Debt Securities and shares of Common Stock and Preferred
Stock that may be issued directly under this registration statement, there
are being registered hereunder an indeterminate amount of Debt Securities
and shares of Common Stock and Preferred Stock as may be issued upon
conversion or exchange of Debt Securities or Preferred Stock, as the case
may be. No separate consideration will be received for any Debt Securities
or shares of Common Stock or Preferred Stock so issued upon such conversion
or exchange.
(4) Includes Preferred Stock Purchase Rights ("Rights"). The Rights are
associated with and trade with the Common Stock. The value, if any,
attributable to the Rights is reflected in the market price of the Common
Stock.
(5) There are being registered hereunder an indeterminate number of Depositary
Shares to be evidenced by Depositary Receipts issued pursuant to a Deposit
Agreement. In the event that the Registrant elects to offer to the public
fractional interests in shares of the Preferred Stock registered hereunder,
Depositary Receipts will be distributed to those persons purchasing such
fractional interests and the underlying Preferred Stock will be issued to
the Depositary under the Deposit Agreement.
(6) No separate consideration will be received for the Depositary Shares.
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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 registration or qualification under the securities laws
of any such State.
SUBJECT TO COMPLETION, DATED FEBRUARY 19, 1997
PROSPECTUS
UNITED COMPANIES FINANCIAL CORPORATION
DEBT SECURITIES, PREFERRED STOCK AND COMMON STOCK
United Companies Financial Corporation ("UCFC" or the "Company") may offer
from time to time, together or separately, (i) its unsecured debt securities,
which may be either senior (the "Senior Debt Securities") or subordinated (the
"Subordinated Debt Securities" and, together with the Senior Debt Securities,
the "Debt Securities"), (ii) shares of its preferred stock, par value $2.00 per
share (the "Preferred Stock"), and (iii) shares of its common stock, par value
$2.00 per share (the "Common Stock") (the Debt Securities, the Preferred Stock
and the Common Stock are collectively referred to herein as the "Securities"),
in amounts, at prices and on terms to be determined at the time of the offering
thereof. The Debt Securities may be convertible or exchangeable into other
series of Debt Securities, shares of Preferred Stock or shares of the Common
Stock of the Company and the Preferred Stock may be convertible or exchangeable
into other series of Preferred Stock, Debt Securities or shares of the Common
Stock of the Company. The Securities offered pursuant to this Prospectus may be
issued in one or more series or issuances the aggregate offering price of which
will not exceed $500,000,000 (or the equivalent thereof if the Debt Securities
are denominated in one or more foreign currencies or foreign currency units).
The specific terms of the Securities in respect of which this Prospectus is
being delivered (the "Offered Securities") will be set forth in an accompanying
supplement to this Prospectus (each, a "Prospectus Supplement"), including,
where applicable (i) in the case of Debt Securities, the specific designation,
aggregate principal amount, ranking as Senior Debt Securities or Subordinated
Debt Securities, authorized denominations, maturity, any premium, rate or method
of calculation of interest, if any, and dates for payment thereof, any terms for
optional or mandatory redemption, any sinking fund provisions, any terms for
conversion or exchange into other series of Debt Securities, Preferred Stock or
Common Stock and any other special terms, and (ii) in the case of the Preferred
Stock, the specific designation, the aggregate number of shares offered, the
dividend rate (or method of calculation thereof), the dividend period and
dividend payment dates, whether such dividends will be cumulative or
noncumulative, the liquidation preference, voting rights, if any, any terms for
optional or mandatory redemption, any terms for conversion or exchange into
other series of Preferred Stock, Debt Securities or Common Stock and any other
special terms, and (iii) in the case of Common Stock, the aggregate number of
shares offered. If so specified in the applicable Prospectus Supplement, Debt
Securities of a series may be issued in whole or in part in the form of one or
more temporary or permanent global securities.
The Senior Debt Securities will rank equally with all other unsubordinated
and unsecured indebtedness of the Company. The Subordinated Debt Securities will
be subordinate in right of payment to all existing and future Senior
Indebtedness (as defined herein) of the Company.
The Securities may be sold (i) through underwriting syndicates represented
by managing underwriters, or by underwriters without a syndicate, with such
underwriters to be designated at the time of sale; (ii) through agents
designated from time to time; or (iii) directly by the Company. The names of any
underwriters or agents of UCFC involved in the sale of the Securities, the
public offering price or purchase price thereof, any applicable commissions or
discounts, any other terms of the offering of such Securities and the net
proceeds to the Company from such sale, will be set forth in the applicable
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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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, previously filed by the Company with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), are incorporated herein
by reference:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1995, as amended by Amendments Nos. 1, 2 and 3 on Form 10-K/A;
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996, June 30, 1996 and September 30, 1996;
(c) The Company's Current Reports on Form 8-K filed on February 9,
1996, August 8, 1996, November 27, 1996, December 2, 1996, December 5, 1996
and December 19, 1996;
(d) The Company's Proxy Statement dated May 21, 1996 in connection
with the Company's Annual Meeting of Shareholders held on June 28, 1996;
(e) The description of the Company's Preferred Share Purchase Rights
contained in the Company's Registration Statement on Form 8-A filed on
August 5, 1994; and
(f) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed on August 30, 1996.
All reports and any definitive proxy or information statements filed by the
Company with the Commission 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 offered hereby shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such 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 EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A
COPY OF ANY OR ALL OF THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER THAN
EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE
IN SUCH DOCUMENTS). WRITTEN REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO DALE
E. REDMAN, CHIEF FINANCIAL OFFICER, UNITED COMPANIES FINANCIAL CORPORATION, 4041
ESSEN LANE, BATON ROUGE, LOUISIANA 70809. TELEPHONE REQUESTS MAY BE DIRECTED TO
MR. REDMAN AT (504) 924-6007.
AVAILABLE INFORMATION
UCFC is subject to the informational requirements of the Exchange Act and,
in accordance therewith, files reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information can be
inspected and copied at the following public reference facilities maintained by
the Commission: Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549; Seven World Trade Center, Suite 1300, New York, New York 10048; and
the Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material may also be obtained by mail from
the Public Reference Section of the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, upon payment of prescribed
rates. The Commission maintains an Internet web site that contains reports,
proxy and information statements and other information regarding the registrants
that file electronically with the Commission, including the Company. The address
of such Internet web site is (http://www.sec.gov). In addition, reports, proxy
statements and other information concerning UCFC may be inspected at the offices
of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission on Form S-3 under the Securities Act of 1933, as
amended (the "Securities Act"). This
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Prospectus omits certain of the information contained in the Registration
Statement, and reference is hereby made to the Registration Statement and
related exhibits for further information with respect to the Company and the
securities offered hereby. 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. These documents may be inspected
without charge at the office of the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and copies may be obtained at fees and
charges prescribed by the Commission.
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THE COMPANY
GENERAL
United Companies Financial Corporation (the "Company" or "UCFC"), founded
in 1946, is a financial services holding company engaged in consumer lending.
The Company's lending operations primarily are focused on the origination,
purchase, sale and servicing of first mortgage, non-conventional, home equity
loans which typically are not loans for the purchase of homes. These home equity
loans, which are fixed and variable rate mortgage loans, are made primarily to
individuals who may not otherwise qualify for conventional loans which are
readily marketable to government-sponsored mortgage agencies or conduits and
available through most commercial banks and many other lending institutions.
The Company's home equity loan originations are accomplished primarily
through the following distribution channels: (i) a retail branch network
conducted through United Companies Lending Corporation(R) ("UC Lending"), (ii) a
wholesale operation conducted through UNICOR MORTGAGE(R), Inc. and through
GINGER MAE(R), a division of UC Lending, each of which offer home equity loan
products, and (iii) a bulk loan purchase program conducted through Southern
Mortgage Acquisition, Inc., which from time to time purchases pools of home
equity loans from other lenders. In addition, the Company's lending operations
include manufactured housing loan products offered through its wholly owned
subsidiary, United Companies Funding, Inc. These manufactured housing contracts
are made primarily to finance the purchase of new or used manufactured homes and
typically are secured by a first lien security interest in the manufactured
homes. The Company also began offering in mid-1996 a secured credit card product
targeted to the Company's home equity loan customer base. These credit card
loans typically are secured by a second lien, behind the Company's first lien,
on the borrower's residence.
Loan production is funded principally through proceeds of loan facilities
pending loan sales. Substantially all of the loans originated or purchased by
the Company are sold in the secondary market principally through securitization
transactions.
The Company is incorporated in the State of Louisiana, its headquarters is
located at 4041 Essen Lane, Baton Rouge, Louisiana 70809, and its telephone
number is (504) 924-6007.
GOVERNMENT REGULATION AND LEGISLATION
The Company's lending operations are subject to extensive regulation,
supervision and licensing by federal and state authorities. Regulated matters
include, without limitation, maximum interest rates and fees which may be
charged by the Company, disclosure in connection with loan originations, credit
reporting requirements, servicing requirements, federal and state taxation, and
multiple qualification and licensing requirements for doing business in various
jurisdictions.
FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements. This Prospectus and any
accompanying Prospectus Supplement contain and incorporate by reference
forward-looking statements that reflect the Company's current views with respect
to future events and financial performance. These forward-looking statements are
subject to certain risks and uncertainties, including those identified below,
which could cause actual results to differ materially from historical results or
those anticipated. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of their dates. The Company
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
The following non-exclusive factors could cause actual results to differ
materially from historical results or those anticipated: (1) changes in the
performance of the financial markets, in the demand for and market acceptance of
the Company's products, and in general economic conditions, including interest
rates; (2) the presence of competitors with greater financial resources and the
impact of competitive products and pricing; (3) the effect of the Company's
policies; and (4) the continued availability to the Company of adequate funding
sources.
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USE OF PROCEEDS
Except as may otherwise be set forth in the applicable Prospectus
Supplement, the net proceeds from the sale of the Offered Securities will be
used for general corporate purposes.
RATIOS OF EARNINGS
The following tables set forth the ratio of earnings to fixed charges and
the ratio of earnings to combined fixed charges and preferred stock dividends
for the Company for the nine months ended September 30, 1996 and for each of the
years in the five-year period ended December 31, 1995.
The ratio of earnings to fixed charges has been computed by dividing
earnings by fixed charges. The ratio of earnings to combined fixed charges and
preferred stock dividends has been computed by dividing earnings by the sum of
fixed charges and preferred stock dividend requirements. Earnings consist of
income before income taxes plus fixed charges. Fixed charges consist of interest
on all indebtedness and the portion of rental expense considered to be
representative of interest.
RATIO OF EARNINGS TO FIXED CHARGES
NINE MONTHS YEAR ENDED DECEMBER 31,
ENDED SEPTEMBER 30, --------------------------------
1996 1995 1994 1993 1992 1991
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4.3x 4.7x 5.9x 4.6x 2.4x 1.4x
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS*
NINE MONTHS YEAR ENDED DECEMBER 31,
ENDED SEPTEMBER 30, --------------------------------
1996 1995 1994 1993 1992 1991
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3.5x 4.0x 5.9x 4.4x 2.4x 1.4x
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* The Company had no preferred stock outstanding other than for a portion of the
year ended December 31, 1993 and from and after June 16, 1995. The preferred
stock dividends declared during such period have been increased to an amount
representing the pre-tax earnings which would be required to cover such
dividends.
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DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
being offered (the "Offered Debt Securities"), any modifications of or additions
to the general terms and provisions of the Debt Securities as described herein
that may be applicable in the case of the Offered Debt Securities and any
applicable Federal income tax considerations will be described in the Prospectus
Supplement relating to the Offered Debt Securities. Accordingly, for a
description of the terms of the Offered Debt Securities, reference must be made
both to the Prospectus Supplement relating thereto and the description of Debt
Securities set forth in this Prospectus.
The Company primarily conducts its operations through its Subsidiaries. The
rights of the Company and its creditors, including the Holders of the Debt
Securities, to participate in the assets of any Subsidiary upon the latter's
liquidation or reorganization will be subject to the prior claims of the
Subsidiary's creditors except to the extent that the Company may itself be a
creditor with recognized claims against the Subsidiary.
The Senior Debt Securities are to be issued under an indenture dated as of
October 1, 1994, as supplemented from time to time (the "Senior Indenture"),
between the Company and The First National Bank of Chicago, as Trustee (the
"Senior Trustee"), and the Subordinated Debt Securities are to be issued under
an indenture dated as of February 19, 1997, as supplemented from time to time
(the "Subordinated Indenture"), between the Company and The Bank of New York, as
Trustee (the "Subordinated Trustee"). The term "Trustee" as used herein shall
refer to either the Senior Trustee or the Subordinated Trustee, as appropriate,
for Senior Debt Securities or Subordinated Debt Securities. The Senior Indenture
and the Subordinated Indenture (being referred to herein collectively as the
"Indentures" and individually as an "Indenture") are filed as exhibits to the
Registration Statement. The Indentures are subject to and governed by the Trust
Indenture Act of 1939, as amended (the "TIA"). The statements made under this
heading relating to the Debt Securities and the Indentures are summaries of the
provisions thereof, do not purport to be complete and are qualified in their
entirety by reference to the Indentures, including the definitions of certain
terms therein and in the TIA. Certain capitalized terms used below but not
defined herein have the meanings ascribed to them in the applicable Indenture.
Unless otherwise noted below, section references below are to both Indentures.
GENERAL
The Debt Securities will be direct, unsecured obligations of the Company.
The indebtedness represented by the Senior Debt Securities will rank equally
with all other unsecured and unsubordinated indebtedness of the Company. The
indebtedness represented by the Subordinated Debt Securities will be
subordinated in right of payment to the prior payment in full of the Senior
Indebtedness of the Company (including the Senior Debt Securities) as described
under "-- Subordination" below. The Debt Securities may be issued in one or more
series.
The accompanying Prospectus Supplement will set forth the terms of the
Offered Debt Securities, which may include the following:
(1) The title of the Offered Debt Securities and whether they are
Senior Debt Securities or Subordinated Debt Securities.
(2) The aggregate principal amount of the Offered Debt Securities and
any limit on the aggregate principal amount of the Offered Debt Securities.
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(3) The percentage of the principal amount at which the Offered Debt
Securities will be issued and, if other than the principal amount thereof,
the portion of the principal amount thereof payable upon declaration of
acceleration of the Maturity thereof or the method by which such portion
shall be determined.
(4) The date or dates on which or periods during which the Offered
Debt Securities may be issued, and the date or dates, or the method by
which such date or dates will be determined, on which the principal of (and
premium, if any, on) the Offered Debt Securities will be payable.
(5) The rate or rates at which the Offered Debt Securities will bear
interest, if any, or the method by which such rate or rates shall be
determined, the date or dates from which such interest, if any, shall
accrue or the method by which such date or dates shall be determined, the
interest payment dates on which such interest will be payable and, if the
Offered Debt Securities are Registered Securities, the regular record
dates, if any, for the interest payable on such interest payment dates,
and, if the Offered Debt Securities are floating rate securities, the
notice, if any, to Holders regarding the determination of interest and the
manner of giving such notice.
(6) The place or places where the principal of (and premium, if any)
and interest on the Offered Debt Securities shall be payable; the extent to
which, or the manner in which, any interest payable on any Global Note (as
defined below) on an interest payment date will be paid, and the manner in
which any principal of, or premium, if any, on, any Global Note will be
paid.
(7) The obligation, if any, of the Company to redeem, repay or
purchase the Offered Debt Securities pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of the Holder thereof
and the period or periods within which, or the dates on which, the prices
at which and the terms and conditions upon which the Offered Debt
Securities shall be redeemed, repaid or purchased, in whole or in part,
pursuant to such obligation.
(8) The right, if any, of the Company to redeem the Offered Debt
Securities at its option and the period or periods within which, or the
date or dates on which, the price or prices at which, and the terms and
conditions upon which Offered Debt Securities may be redeemed, if any, in
whole or in part, at the option of the Company or otherwise.
(9) If the coin or currency in which the Offered Debt Securities
shall be issuable is U.S. dollars, the denominations of the Offered Debt
Securities if other than denominations of $1,000 and any integral multiple
thereof.
(10) Whether the Offered Debt Securities are to be issued as original
issue discount securities ("Discount Securities") and the amount of
discount at which such Offered Debt Securities may be issued and, if other
than the principal amount thereof, the portion of the principal amount of
Offered Debt Securities which shall be payable upon declaration of
acceleration of the Maturity thereof upon an Event of Default.
(11) Provisions, if any, for the defeasance of Offered Debt Securities
or certain of the Company's obligations with respect to the Offered Debt
Securities.
(12) Whether the Offered Debt Securities are to be issued as
Registered Securities or Bearer Securities or both, and, if Bearer
Securities are issued, whether any interest coupons appertaining thereto
("Coupons") will be attached thereto, whether such Bearer Securities may be
exchanged for Registered Securities and the circumstances under which, and
the place or places at which, any such exchanges, if permitted, may be
made.
(13) Whether provisions for payment of additional amounts or tax
redemptions shall apply and, if such provisions shall apply, such
provisions; and, if any of the Offered Debt Securities are to be issued as
Bearer Securities, the applicable procedures and certificates relating to
the exchange of temporary Global Notes for definitive Bearer Securities.
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(14) If other than U.S. dollars, the currency, currencies or currency
units (the term "currency" as used herein will include currency units) in
which the Offered Debt Securities shall be denominated or in which payment
of the principal of (and premium, if any) and interest on the Offered Debt
Securities may be made, and particular provisions applicable thereto and,
if applicable, the amount of Offered Debt Securities which entitles the
Holder of an Offered Debt Security or its proxy to one vote for purposes of
voting at a meeting of Holders of the Offered Debt Securities.
(15) If the principal of (and premium, if any) or interest on the
Offered Debt Securities is to be payable, at the election of the Company or
a Holder thereof, in a currency other than that in which the Debt
Securities is denominated or payable without such election, in addition to
or in lieu of the applicable provisions of the Indentures, the period or
periods within which and the terms and conditions upon which, such election
may be made and the time and the manner of determining the exchange rate or
rates between the currency or currencies in which the Offered Debt
Securities are denominated or payable without such election and the
currency or currencies in which the Offered Debt Securities are to be paid
if such election is made.
(16) The date as of which any Offered Debt Securities shall be dated.
(17) If the amount of payments of principal of (and premium, if any)
or interest on the Offered Debt Securities may be determined with reference
to an index, including, but not limited to, an index based on a currency or
currencies other than that in which the Offered Debt Securities are
denominated or payable, or any other type of index, the manner in which
such amounts shall be determined.
(18) If the Offered Debt Securities are denominated or payable in
foreign currency, any other terms concerning the payment of principal of
(and premium, if any) or any interest on the Offered Debt Securities
(including the currency or currencies of payment thereof).
(19) The designation of the original Currency Determination Agent, if
any.
(20) The applicable Overdue Rate, if any.
(21) If the Offered Debt Securities do not bear interest, the
applicable dates upon which the Company will furnish or cause to be
furnished to the Trustee a list of the names and addresses of the
Registered Holders of the Offered Debt Securities.
(22) Any addition to, or modification or deletion of, any Events of
Default or covenants provided for in the applicable Indenture with respect
to the Offered Debt Securities.
(23) If any of the Offered Debt Securities are to be issued as Bearer
Securities, (x) whether interest in respect of any portion of a temporary
Offered Debt Security in global form (representing all of the Outstanding
Bearer Securities of the series) payable in respect of any interest payment
date prior to the exchange of such temporary Offered Debt Security for
definitive Offered Debt Securities shall be paid to any clearing
organization with respect to the portion of such temporary Offered Debt
Security held for its account and, in such event, the terms and conditions
(including any certification requirements) upon which any such interest
payment received by a clearing organization will be credited to the Persons
entitled to interest payable on such interest payment date, (y) the terms
upon which interests in such temporary Offered Debt Security in global form
may be exchanged for interests in a permanent Global Note or for definitive
Offered Debt Securities and the terms upon which interests in a permanent
Global Note, if any, may be exchanged for definitive Offered Debt
Securities and (z) the cities in which the Authorized Newspapers designated
for the purposes of giving notices to Holders are published.
(24) Whether the Offered Debt Securities shall be issued in whole or
in part in the form of one or more Global Notes and, in such case, the
depositary or any common depositary for such Global Notes; and if the
Offered Debt Securities are issuable only as Registered Securities, the
manner in which and the circumstances under which Global Notes representing
Offered Debt Securities may be exchanged for Registered Securities in
definitive form.
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(25) The designation, if any, of any depositaries, trustees (other
than the applicable Trustee), paying agents, authenticating agents,
security registrars (other than the applicable Trustee) or other agents
with respect to the Offered Debt Securities.
(26) If the Offered Debt Securities are to be issuable in definitive
form only upon receipt of certain certificates or other documents or upon
satisfaction of certain conditions, the form and terms of such
certificates, documents or conditions.
(27) If the Offered Debt Securities are Subordinated Debt Securities,
whether they will be convertible or exchangeable into shares of Common
Stock and, if so, the terms and conditions, which may be in addition to or
in lieu of the provisions contained in the Subordinated Indenture, upon
which such Offered Debt Securities will be so convertible or exchangeable,
including the conversion or exchange price and the conversion or exchange
period.
(28) Any other terms of the Offered Debt Securities not specified in
the Indenture under which such Offered Debt Securities are to be issued
(which other terms shall not be inconsistent with the provisions of such
Indenture).
Each Indenture provides that the aggregate principal amount of Debt
Securities that may be issued thereunder is unlimited. The Debt Securities may
be issued in one or more series thereunder, in each case as authorized from time
to time by the Board of Directors of the Company, or any committee thereof or
any duly authorized officer or pursuant to any modification of an Indenture.
(Section 3.01)
In the event that Discount Securities are issued, the Federal income tax
consequences and other special considerations applicable to such Discount
Securities will be described in the Prospectus Supplement relating thereto.
The general provisions of the Indentures do not contain any provisions that
would limit the ability of the Company or its Subsidiaries to incur indebtedness
or that would afford holders of Debt Securities protection in the event of a
highly leveraged or similar transaction involving the Company or its
Subsidiaries. Reference is made to the accompanying Prospectus Supplement for
information with respect to any deletions from, modifications of or additions,
if any, to the Events of Default or covenants of the Company described below
that are applicable to the Offered Debt Securities, including any addition of
covenants or other provisions providing event risk or similar protection.
All of the Debt Securities of a series need not be issued at the same time,
and may vary as to denomination, interest rate, maturity and other provisions
and unless otherwise provided, a series may be reopened for issuance of
additional Debt Securities of such series. (Section 3.01)
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless specified in the Prospectus Supplement, the Debt Securities of any
series shall be issuable only as Registered Securities in denominations of
$1,000 and any integral multiple thereof and shall be payable only in U.S.
dollars. (Section 3.02) The Indentures also provide that Debt Securities of a
series may be issuable in global form. See "-- Book-Entry Debt Securities."
Unless otherwise indicated in the Prospectus Supplement, Bearer Securities
(other than in global form) will have Coupons attached. (Section 2.01)
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of like aggregate principal amount and
of like Stated Maturity and with like terms and conditions. If so specified in
the Prospectus Supplement, at the option of the Holder thereof, to the extent
permitted by law, any Bearer Security of any series which by its terms is
registrable as to principal and interest may be exchanged for a Registered
Security of such series of like aggregate principal amount and of a like Stated
Maturity and with like terms and conditions, upon surrender of such Bearer
Security at the corporate trust office of the applicable Trustee or at any other
office or agency of the Company designated for the purpose of making any such
exchanges. Subject to certain exceptions, any Bearer Security issued with
Coupons surrendered for exchange must be surrendered with all unmatured Coupons
and any matured Coupons in default attached thereto. (Section 3.05)
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Notwithstanding the foregoing, the exchange of Bearer Securities for
Registered Securities will be subject to the provisions of United States income
tax laws and regulations applicable to Debt Securities in effect at the time of
such exchange. (Section 3.05)
Except as otherwise specified in the Prospectus Supplement, in no event may
Registered Securities, including Registered Securities received in exchange for
Bearer Securities, be exchanged for Bearer Securities. (Section 3.05)
Upon surrender for registration of transfer of any Registered Security of
any series at the office or agency of the Company maintained for such purpose,
the Company shall deliver, in the name of the designated transferee, one or more
new Registered Securities of the same series of like aggregate principal amount
of such denominations as are authorized for Registered Securities of such series
and of a like Stated Maturity and with like terms and conditions. No service
charge will be made for any transfer or exchange of Debt Securities, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. (Section 3.05)
The Company shall not be required (i) to register, transfer or exchange
Debt Securities of any series during a period beginning at the opening of
business 15 days before the day of the transmission of a notice of redemption of
Debt Securities of such series selected for redemption and ending at the close
of business on the day of such transmission, or (ii) to register, transfer or
exchange any Debt Security so selected for redemption in whole or in part,
except the unredeemed portion of any Debt Security being redeemed in part.
(Section 3.05)
EVENTS OF DEFAULT
Under the Indentures, "Event of Default" with respect to the Debt
Securities of any series means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law, pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any administrative or
governmental body): (1) default in the payment of any interest upon any Debt
Security or any payment with respect to the Coupons, if any, of such series when
it becomes due and payable, and continuance of such default for a period of 30
days; (2) default in the payment of the principal of (and premium, if any, on)
any Debt Security of such series at its Maturity; (3) default in the deposit of
any sinking fund payment, when and as due by the terms of a Debt Security of
such series; (4) default in the performance, or breach of any covenant or
warranty in the applicable Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in the applicable
Indenture specifically dealt with or which expressly has been included in the
applicable Indenture solely for the benefit of Debt Securities of a series other
than such series), and continuance of such default or breach for a period of 60
days after there has been given to the Company by the applicable Trustee or to
the Company and the applicable Trustee by the Holders of at least 25% in
principal amount of the Outstanding Debt Securities of such series, a written
notice specifying such default or breach and requiring it to be remedied; (5)
certain events of bankruptcy, insolvency or reorganization with respect to the
Company; or (6) any other Event of Default provided with respect to Debt
Securities of that series pursuant to the applicable Indenture. (Section 5.01)
Each Indenture requires the Company to file with the applicable Trustee,
annually, an officers' certificate as to the Company's compliance with all
conditions and covenants under the applicable Indenture. (Section 12.02) Each
Indenture provides that the applicable Trustee may withhold notice to the
Holders of a series of Debt Securities of any default (except payment defaults
on such Debt Securities) if it considers such withholding to be in the interest
of the Holders of such series of Debt Securities to do so. (Section 6.02)
If an Event of Default with respect to Debt Securities of any series at the
time outstanding occurs and is continuing, then in every case the applicable
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debt Securities of such series may declare the principal amount (or,
if any Debt Securities of such series are Discount Securities, such portion of
the principal amount of such Discount Securities as may be specified in the
terms of such Discount Securities) of the Debt Securities of such series to be
due and payable immediately, by a notice in writing to the Company (and to the
applicable Trustee if given by
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Holders), and upon any such declaration such principal amount (or specified
amount), plus accrued and unpaid interest (and premium, if any) shall become
immediately due and payable. Upon payment of such amount in the currency in
which such Debt Securities are denominated (except as otherwise provided in the
applicable Indenture or specified in the Prospectus Supplement), all obligations
of the Company in respect of the payment of principal of the Debt Securities of
such series shall terminate. (Section 5.02)
Subject to the provisions of each Indenture relating to the duties of the
applicable Trustee, in case an Event of Default with respect to Debt Securities
of a particular series shall occur and be continuing, the applicable Trustee
shall be under no obligation to exercise any of its rights or powers under such
Indenture at the request, order or direction of any of the Holders of Debt
Securities of that series, unless such Holders shall have offered to the
applicable Trustee reasonable indemnity against the expenses and liabilities
which might be incurred by it in compliance with such request. (Section 5.07)
Subject to such provisions for the indemnification of the applicable Trustee,
the Holders of a majority in principal amount of the Outstanding Debt Securities
of such series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the applicable Trustee
under such Indenture, or exercising any trust or power conferred on the
applicable Trustee with respect to the Debt Securities of that series provided
that such direction does not conflict with law or with the applicable Indenture.
(Section 5.12)
At any time after such a declaration of acceleration with respect to Debt
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the applicable Trustee as provided
in the applicable Indenture, the Holders of a majority in principal amount of
the Outstanding Debt Securities of such series, by written notice to the Company
and the applicable Trustee, may rescind and annul such declaration and its
consequences if (1) the Company has paid or deposited with the applicable
Trustee a sum in the currency in which such Debt Securities are denominated
(except as otherwise provided in the applicable Indenture or specified in the
Prospectus Supplement) sufficient to pay (A) all overdue installments of
interest on all Debt Securities or all overdue payments with respect to any
Coupons of such series, (B) the principal of (and premium, if any, on) any Debt
Securities of such series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates prescribed
therefor in such Debt Securities, (C) to the extent that payment of such
interest is lawful, interest upon overdue installments of interest on each Debt
Security of such series or upon overdue payments on any Coupons of such series
at a rate established for such series, and (D) all sums paid or advanced by the
applicable Trustee and the reasonable compensation, expenses, disbursements and
advances of the applicable Trustee, its agents and counsel; and (2) all Events
of Default with respect to Debt Securities of such series, other than the
nonpayment of the principal of Debt Securities of such series which have become
due solely by such declaration of acceleration, have been cured or waived as
provided in the applicable Indenture. No such rescission and waiver will affect
any subsequent default or impair any right consequent thereon. (Section 5.02)
MODIFICATION OR WAIVER
Without prior notice to or consent of any Holders, the Company and the
applicable Trustee, at any time and from time to time, may modify the applicable
Indenture for any of the following purposes: (1) to evidence the succession of
another corporation to the rights of the Company and the assumption by such
successor of the covenants and obligations of the Company in the applicable
Indenture and in the Debt Securities and Coupons, if any, issued thereunder; (2)
to add to the covenants of the Company for the benefit of the Holders of all or
any series of Debt Securities and the Coupons, if any, appertaining thereto (and
if such covenants are to be for the benefit of less than all series, stating
that such covenants are expressly being included solely for the benefit of such
series), or to surrender any right or power conferred in the applicable
Indenture upon the Company; (3) to add any additional Events of Default (and if
such Events of Default are to be applicable to less than all series, stating
that such Events of Default are expressly being included solely to be applicable
to such series); (4) to add or change any of the provisions of the applicable
Indenture to such extent as shall be necessary to permit or facilitate the
issuance thereunder of Debt Securities of any series in bearer form, registrable
or not registrable, and with or without Coupons, to permit Bearer Securities to
be issued in exchange for Registered Securities, to permit Bearer Securities to
be issued in exchange for Bearer Securities of other authorized denominations or
to permit the issuance of Debt Securities of any series in uncertificated
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form, provided that any such action shall not adversely affect the interests of
the Holders of Debt Securities of any series or any related Coupons in any
material respect; (5) to change or eliminate any of the provisions of the
applicable Indenture, provided that any such change or elimination will become
effective only when there is no Outstanding Debt Security issued thereunder or
Coupon of any series created prior to such modification which is entitled to the
benefit of such provision and as to which such modification would apply; (6) to
secure the Debt Securities issued thereunder; (7) to supplement any of the
provisions of the applicable Indenture to such extent as is necessary to permit
or facilitate the defeasance and discharge of any series of Debt Securities,
provided that any such action will not adversely affect the interests of the
Holders of Debt Securities of such series or any other series of Debt Securities
issued under such Indenture or any related Coupons in any material respect; (8)
to establish the form or terms of Debt Securities and Coupons, if any, as
permitted by the applicable Indenture; (9) to evidence and provide for the
acceptance of appointment thereunder by a successor Trustee with respect to one
or more series of Debt Securities and to add to or change any of the provisions
of the applicable Indenture as is necessary to provide for or facilitate the
administration of the trusts thereunder by more than one Trustee; or (10) to
cure any ambiguity, to correct or supplement any provision in the applicable
Indenture which may be defective or inconsistent with any other provision
therein, to eliminate any conflict between the terms of the applicable Indenture
and the Debt Securities issued thereunder and the TIA or to make any other
provisions with respect to matters or questions arising under the applicable
Indenture which will not be inconsistent with any provision of the applicable
Indenture; provided such other provisions shall not adversely affect the
interests of the Holders of Outstanding Debt Securities or Coupons, if any, of
any series created thereunder prior to such modification in any material
respect. (Section 11.01)
With the written consent of the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of each series affected by
such modification voting separately, the Company and the applicable Trustee may
modify the applicable Indenture for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the applicable
Indenture or of modifying in any manner the rights of the Holders of Debt
Securities and Coupons, if any, under the applicable Indenture; provided,
however, that no such modification may, without the consent of the Holder of
each Outstanding Debt Security of each such series affected thereby (1) change
the Stated Maturity of the principal of, or any installment of interest on, any
Debt Security, or reduce the principal amount thereof or the interest thereon or
any premium payable upon redemption thereof, or change the Stated Maturity of or
reduce the amount of any payment to be made with respect to any Coupon, or
change the currency or currencies in which the principal of (and premium, if
any) or interest on such Debt Security is denominated or payable, or reduce the
amount of the principal of a Discount Security that would be due and payable
upon a declaration of acceleration of the Maturity thereof, or adversely affect
the right of repayment or repurchase, if any, at the option of the Holder, or
reduce the amount of, or postpone the date fixed for, any payment under any
sinking fund or analogous provisions for any Debt Security, or impair the right
to institute suit for the enforcement of any payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date), or limit the obligation of the Company to maintain a paying agency
outside the United States for payments on Bearer Securities, or adversely affect
the right to convert any Subordinated Debt Security into shares of Common Stock
as may be set forth in the Prospectus Supplement; (2) reduce the percentage in
principal amount of the Outstanding Debt Securities of any series, the consent
of whose Holders is required for any such modification, or the consent of whose
Holders is required for any waiver of compliance with certain provisions of the
applicable Indenture or certain defaults or Events of Default thereunder and
their consequences provided for in such Indenture; (3) modify any of the
provisions of the applicable Indenture relating to modifications and waivers of
defaults and covenants, except to increase any such percentage or to provide
that certain other provisions of the applicable Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Debt Security of
each series affected thereby; provided, however, that certain of such
modifications may be made without the consent of any Holder of any Debt
Security; or (4) in the case of the Subordinated Indenture, modify any of the
provisions relating to the subordination of the Subordinated Debt Securities in
a manner adverse to the Holders thereof. (Section 11.02)
A modification which changes or eliminates any covenant or other provision
of the applicable Indenture with respect to one or more particular series of
Debt Securities and Coupons, if any, or which modifies the rights of the Holders
of Debt Securities and Coupons of such series with respect to such covenant or
other
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provision, shall be deemed not to affect the rights under the applicable
Indenture of the Holders of Debt Securities and Coupons, if any, of any other
series. (Section 11.02)
In the case of the Subordinated Indenture, no modification may adversely
affect the rights of any holder of Senior Indebtedness under the subordination
provisions of the Subordinated Indenture without the consent of such holder.
(Section 11.08 of the Subordinated Indenture)
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may on behalf of the Holders of all
the Debt Securities of any such series waive, by notice to the applicable
Trustee and the Company, any past default or Event of Default under the
applicable Indenture with respect to such series and its consequences, except a
default (1) in the payment of the principal of (or premium, if any) or interest
on any Debt Security of such series, or in the payment of any sinking fund
installment or analogous obligation with respect to the Debt Securities of such
series, or (2) in respect of a covenant or provision hereof which pursuant to
the second paragraph under "-- Modification or Waiver" cannot be modified or
amended without the consent of the Holder of each Outstanding Debt Security of
such series affected. Upon any such waiver, such default will cease to exist,
and any Event of Default arising therefrom will be deemed to have been cured,
for every purpose of the Debt Securities of such series under the applicable
Indenture, but no such waiver will extend to any subsequent or other default or
Event of Default or impair any right consequent thereon. (Section 5.13)
The Company may omit in any particular instance to comply with certain
covenants in the applicable Indenture (including, if so specified in the
Prospectus Supplement, any covenant not set forth in the applicable Indenture
but specified in the Prospectus Supplement to be applicable to the Debt
Securities of any series issued thereunder, except as otherwise specified in the
Prospectus Supplement, and including the covenants relating to the maintenance
by the Company of its existence, rights and franchises), if before the time for
such compliance the Holders of at least a majority in principal amount of the
Outstanding Debt Securities of such series either waive such compliance in such
instance or generally waive compliance with such provisions, but no such waiver
may extend to or affect any term, provision or condition except to the extent
expressly so waived, and, until such waiver becomes effective, the obligations
of the Company and the duties of the applicable Trustee in respect of any such
provision will remain in full force and effect. (Section 12.09 of the Senior
Indenture; Section 12.07 of the Subordinated Indenture)
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 Debt
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 Debt Securities (Sections 16.01 and 16.02 of the
Subordinated Indenture), but the obligation of the Company to make payment of
principal (and premium, if any) or interest on the Subordinated Debt Securities
will not otherwise be affected. (Section 16.02 of the Subordinated Indenture) No
payment on account of principal (or premium, if any), sinking funds or interest
may be made on the Subordinated Debt Securities (including, without limitation,
payment of any Coupons) unless full payment of amounts then due for principal,
premium, if any, sinking funds and interest on Senior Indebtedness has been made
or duly provided for. (Section 16.03 of the Subordinated Indenture) In the event
that, notwithstanding the foregoing, any payment by the Company described in the
foregoing sentence is received by the Trustee under the Subordinated Indenture,
any Paying Agent or the Holders of any of the Subordinated Debt Securities
before all Senior Indebtedness is paid in full, such payment or distribution
shall be paid over to the holders of such Senior Indebtedness or on their behalf
for application to the payment of all such Senior Indebtedness remaining unpaid
until all such Senior Indebtedness shall have 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 Debt 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 Debt
Securities. (Section 16.02 of the Subordinated Indenture)
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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 Debt Securities. The Subordinated
Indenture provides that the subordination provisions thereof shall not apply to
money and securities held in trust pursuant to the satisfaction and discharge
and the legal defeasance provisions of the Subordinated Indenture. (Sections
4.02 and 15.02 of the Subordinated Indenture)
If this Prospectus is being delivered in connection with the offering of a
series of Subordinated Debt 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.
DISCHARGE, LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The applicable Indenture with respect to the Debt Securities of any series
may be discharged, subject to certain terms and conditions, when (1) either (A)
all Debt Securities and the Coupons, if any, of such series have been delivered
to the applicable Trustee for cancellation, or (B) all Debt Securities and the
Coupons, if any, of such series not theretofore delivered to the applicable
Trustee for cancellation (i) have become due and payable, (ii) will become due
and payable at their Stated Maturity within one year, or (iii) are to be called
for redemption within one year under arrangements satisfactory to the applicable
Trustee for the giving of notice by the applicable Trustee, and the Company, in
the case of (i), (ii) or (iii) of subclause (B), has irrevocably deposited or
caused to be deposited with the applicable Trustee as trust funds in trust for
such purpose an amount in the currency in which such Debt Securities are
denominated sufficient to pay and discharge the entire indebtedness on such Debt
Securities for principal (and premium, if any) and interest to the date of such
deposit (in the case of Debt Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be; provided, however,
in the event a petition for relief under the applicable Federal or state
bankruptcy, insolvency or other similar law is filed with respect to the Company
within 91 days after the deposit and the applicable Trustee is required to
return the deposited money to the Company, the obligations of the Company under
the applicable Indenture with respect to such Debt Securities will not be deemed
terminated or discharged; (2) the Company has paid or caused to be paid all
other sums payable under the applicable Indenture by the Company; (3) the
Company has delivered to the applicable Trustee an officers' certificate and an
opinion of counsel each stating that all conditions precedent therein provided
relating to the satisfaction and discharge of the applicable Indenture with
respect to such series have been complied with; and (4) the Company has
delivered to the applicable Trustee an opinion of counsel or a ruling of the
Internal Revenue Service to the effect that such deposit and discharge will not
cause the Holders of the Debt Securities of the series to recognize income, gain
or loss for Federal income tax purposes. (Section 4.01)
If provision is made for the defeasance of Debt Securities of a series, and
if the Debt Securities of such series are Registered Securities and denominated
and payable only in U.S. dollars, then the provisions of each Indenture relating
to defeasance shall be applicable except as otherwise specified in the
Prospectus Supplement for Debt Securities of such series. Defeasance provisions,
if any, for Debt Securities denominated in a foreign currency or currencies or
for Bearer Securities may be specified in the Prospectus Supplement. (Section
15.01)
At the Company's option, either (a) the Company shall be deemed to have
been Discharged (as defined below) from its obligations with respect to Debt
Securities of any series (including, in the case of Subordinated Debt
Securities, the provisions described under "-- Subordination" herein) ("legal
defeasance option") or (b) the Company shall cease to be under any obligation to
comply with any obligation of the Company in the applicable Indenture including
any restrictive covenants described in the accompanying Prospectus Supplement
and any other covenants applicable to the Debt Securities which are subject to
covenant defeasance (including, in the case of Subordinated Debt Securities, the
provisions described under "-- Subordination" herein) ("covenant defeasance
option") at any time after the applicable conditions set forth below have been
satisfied: (1) the Company shall have deposited or caused to be deposited
irrevocably with the applicable Trustee as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the Holders of
the Debt Securities of such series (i) money in an amount, or (ii) U.S.
Government Obligations which through the payment of interest and principal in
respect thereof in
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accordance with their terms will provide, not later than one day before the due
date of any payment, money in an amount, or (iii) a combination of (i) and (ii),
sufficient, in the opinion (with respect to (i) and (ii)) of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the applicable Trustee, to pay and discharge
each installment of principal (including any mandatory sinking fund payments) of
(and premium, if any) and interest on, the Outstanding Debt Securities of such
series on the dates such installments of interest or principal and premium are
due; (2) such deposit shall not cause the applicable Trustee with respect to the
Debt Securities of that series to have a conflicting interest with respect to
the Debt Securities of any series; (3) such deposit will not result in a breach
or violation of, or constitute a default under, the applicable Indenture or any
other agreement or instrument to which the Company is a party or by which it is
bound; (4) if the Debt Securities of such series are then listed on any national
securities exchange, the Company shall have delivered to the applicable Trustee
an opinion of counsel or a letter or other document from such exchange to the
effect that the Company's exercise of its legal defeasance option or the
covenant defeasance option, as the case may be, would not cause such Debt
Securities to be delisted; (5) no Event of Default or event (including such
deposit) which, with notice or lapse of time or both, would become an Event of
Default with respect to the Debt Securities of such series shall have occurred
and be continuing on the date of such deposit and, with respect to the legal
defeasance option only, no Event of Default under the provisions of the
applicable Indenture relating to certain events of bankruptcy or insolvency or
event which with the giving of notice or lapse of time, or both, would become an
Event of Default under such bankruptcy or insolvency provisions shall have
occurred and be continuing on the 91st day after such date; and (6) certain
other opinions, officers' certificates and other documents specified in the
applicable Indenture, including an opinion of counsel or a ruling of the
Internal Revenue Service to the effect that such deposit, defeasance or
Discharge will not cause the Holders of the Debt Securities of such series to
recognize income, gain or loss for Federal income tax purposes. Notwithstanding
the foregoing, if the Company exercises its covenant defeasance option and an
Event of Default under the provisions of the Indentures relating to certain
events of bankruptcy or insolvency or event which with the giving of notice or
lapse of time, or both, would become an Event of Default under such bankruptcy
or insolvency provisions shall have occurred and be continuing on the 91st day
after the date of such deposit, the obligations of the Company referred to under
the definition of covenant defeasance option with respect to such Debt
Securities shall be reinstated in full. (Section 15.02)
PAYMENT AND PAYING AGENTS
If Debt Securities of a series are issuable only as Registered Securities,
the Company will maintain in each Place of Payment for such series an office or
agency where Debt Securities of that series may be presented or surrendered for
payment, where Debt Securities of that series may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Debt Securities of that series and the applicable
Indenture may be served. (Section 12.03)
If Debt Securities of a series are issuable as Bearer Securities, the
Company will maintain (A) in the Borough of Manhattan, The City and State of New
York, an office or agency where any Registered Securities of that series may be
presented or surrendered for payment, where any Registered Securities of that
series may be surrendered for registration of transfer, where Debt Securities of
that series may be surrendered for exchange or redemption, where Debt Securities
of that series that are convertible may be surrendered for conversion, where
notices and demands to or upon the Company in respect of the Debt Securities of
that series and the applicable Indenture may be served and where Bearer
Securities of that series and related Coupons may be presented or surrendered
for payment in the circumstances described in the following paragraph (and not
otherwise), (B) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series which is located outside the United States, an
office or agency where Debt Securities of that series and related Coupons may be
presented and surrendered for payment (including payment of any additional
amounts payable on Debt Securities of that series, if so provided in such
series); provided, however, that if the Debt Securities of that series are
listed on the London Stock Exchange, the Luxembourg Stock Exchange or any other
stock exchange located outside the United States and such stock exchange shall
so require, the Company will maintain a Paying Agent for the Debt Securities of
that series in London, Luxembourg or any other required city located outside the
United States, as the case may be, so long as the Debt Securities of that
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series are listed on such exchange, and (C) subject to any laws or regulations
applicable thereto, in a Place of Payment for that series located outside the
United States an office or agency where any Registered Securities of that series
may be surrendered for registration of transfer, where Debt Securities of that
series may be surrendered for exchange or redemption, where Debt Securities of
that series that are convertible may be surrendered for conversion and where
notices and demands to or upon the Company in respect of the Debt Securities of
that series and the applicable Indenture may be served. The Company will give
prompt written notice to the applicable Trustee of the locations, and any change
in the locations, of such offices or agencies. If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish the
applicable Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the corporate trust office of the
applicable Trustee, except that Bearer Securities of that series and the related
coupons may be presented and surrendered for payment at the offices specified in
the applicable Debt Security and the Company has appointed the applicable
Trustee (or in the case of Bearer Securities may appoint such other agent as may
be specified in the applicable Prospectus Supplement) as its agent to receive
all presentations, surrenders, notices and demands. (Section 12.03)
No payment of principal, premium or interest on Bearer Securities shall be
made at any office or agency of the Company 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
the Debt Securities of a series are denominated and payable in U.S. dollars,
payment of principal of and any premium and interest on Bearer Securities of
such series, if specified in the applicable Prospectus Supplement, shall be made
at the office of the applicable Trustee or the Company's Paying Agent in the
Borough of Manhattan, the City and State of New York, if (but only if) payment
in U.S. dollars of the full amount of such principal, premium, interest or
additional amounts, as the case may be, at all offices or agencies outside the
United States maintained for the purpose by the Company in accordance with the
applicable Indenture is illegal or effectively precluded by exchange controls or
other similar restrictions. (Section 12.03)
BOOK-ENTRY DEBT SECURITIES
The Depository Trust Company. The Debt Securities of a series may be issued
in whole or in part in global form that will be deposited with, or on behalf of,
a depositary identified in the Prospectus Supplement. Global Notes may be issued
in either registered or bearer form and in either temporary or permanent form
(each a "Global Note"). Payments of principal of (and premium, if any) and
interest on Debt Securities represented by a Global Note will be made by the
Company to the applicable Trustee and then by such Trustee to the depositary.
If specified in the applicable Prospectus Supplement, any Global Notes will
be deposited with, or on behalf of, The Depository Trust Company, New York, New
York ("DTC"), as depositary, or such other depositary as may be specified in the
applicable Prospectus Supplement. In the event that DTC acts as depositary with
respect to any Global Notes, the Company anticipates that such Global Notes will
be registered in the name of DTC's nominee, and that the following provisions
will apply to the depositary arrangements with respect to any such Global Notes.
Additional or differing terms of the depositary arrangements, if any, applicable
to the Offered Debt Securities, will be described in the accompanying Prospectus
Supplement.
So long as DTC or its nominee is the registered owner of a Global Note, DTC
or its nominee, as the case may be, will be considered the sole Holder of the
Debt Securities represented by such Global Note for all purposes under the
applicable Indenture. Except as provided below, owners of beneficial interests
in a Global Note will not be entitled to have Debt Securities represented by
such Global Note registered in their names, will not receive or be entitled to
receive physical delivery of Debt Securities in certificated form and will not
be considered the owners or Holders thereof under the applicable Indenture. The
laws of some states require that certain purchasers of securities take physical
delivery of such securities in certificated form; accordingly, such laws may
limit the transferability of beneficial interests in a Global Note.
If DTC is at any time unwilling or unable to continue as depositary and a
successor depositary is not appointed by the Company within 90 days, the Company
will issue individual Debt Securities in certificated
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form in exchange for the Global Notes. In addition, the Company may at any time,
and in its sole discretion, determine not to have any Debt Securities
represented by one or more Global Notes and, in such event, will issue
individual Debt Securities in certificated form in exchange for the relevant
Global Notes. If Registered Securities of any series shall have been issued in
the form of one or more Global Notes and if an Event of Default with respect to
the Debt Securities of such series shall have occurred and be continuing, the
Company will issue individual Debt Securities in certificated form in exchange
for the relevant Global Notes. (Section 3.04)
The Prospectus Supplement related to a given series will specify whether
the holders of the Debt Securities may hold their securities through DTC if they
are participants of DTC, or indirectly through organizations that are
participants in DTC.
The following is based on information furnished by DTC:
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange,
Inc., the American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available to others
such as securities brokers and dealers, banks, and trust companies that clear
through or maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and its Participants are on file with the Commission.
Purchases of Debt Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Debt Securities
on DTC's records. The ownership interest of each actual purchaser of each Debt
Security ("Beneficial Owner") is in turn recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in Debt Securities are to be accomplished by entries made on the books
of Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in Debt
Securities, except in the event that use of the book entry system for the Debt
Securities is discontinued.
To facilitate subsequent transfers, the Debt Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of the Debt Securities with DTC and their registration in
the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Debt Securities; DTC records
reflect only the identity of the Direct Participants to whose accounts Debt
Securities are credited, which may or may not be the Beneficial Owners. The
Participants remain responsible for keeping account of their holdings on behalf
of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners are governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the Debt
Securities. Under its usual procedures, DTC mails a proxy (an "Omnibus Proxy")
to the issuer as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants to
whose
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accounts the Debt Securities are credited on the record date (identified on a
list attached to the Omnibus Proxy).
Principal and interest payments on the Debt Securities will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on the payable date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on payable date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC, the Paying Agent or the
Company, subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of principal and interest to DTC is the
responsibility of the Company or the Paying Agent, disbursement of such payments
to Direct Participants is the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners will be the responsibility of Direct and
Indirect Participants.
DTC may discontinue providing its services as securities depositary with
respect to the Debt Securities at any time by giving reasonable notice to the
Company or the Paying Agent. Under such circumstances, in the event that a
successor securities depositary is not appointed, Debt Security certificates are
required to be printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depositary). In that event,
Debt Security certificates will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources (including DTC) that the Company believes to be
reliable, but the Company takes no responsibility for the accuracy thereof.
Unless stated otherwise in the applicable Prospectus Supplement, the
underwriters or agents with respect to a series of Debt Securities issued as
Global Notes will be Direct Participants in DTC.
None of the Company, any underwriter or agent, the applicable Trustee or
any applicable Paying Agent will have the responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
interests in a Global Note, or for maintaining, supervising or reviewing any
records relating to such beneficial interests.
Cedel Bank and Euroclear. If so specified in the applicable Prospectus
Supplement, Debt Securities of a series to be issued in book-entry form and to
be sold or traded in Europe may be represented by one or more Global Notes held
through Cedel Bank, societe anonyme ("Cedel Bank") or Morgan Guaranty Trust
Company of New York, Brussels office, as operator of the Euroclear System (the
"Euroclear Operator" or "Euroclear") and the holders of the Debt Securities may
hold their securities through Cedel Bank or Euroclear if they are participants
of such systems, or indirectly through organizations that are participants in
such systems. Cedel Bank and Euroclear will hold omnibus positions on behalf of
Cedel Bank Participants and Euroclear Participants (each as hereinafter
defined), respectively, on the books of their respective depositaries (each, a
"Euro-Depositary"), which in turn will hold such positions on the books of DTC.
Transfers between Cedel Bank Participants and Euroclear Participants will
occur in the ordinary way in accordance with their applicable rules and
operating procedures. Cross-market transfers between persons holding directly or
indirectly through DTC in the United States, on the one hand, and directly or
indirectly through Cedel Bank Participants or Euroclear Participants, on the
other, will be effected by DTC in accordance with DTC rules on behalf of the
relevant European international clearing system by its Euro-Depositary. Such
cross-market transactions, however, will require delivery of instructions to the
relevant European international clearing system by the counterparty in such
system in accordance with its rules and procedures and within its established
deadlines. The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to its
Euro-Depositary to take action to effect final settlement on its behalf by
delivering or receiving securities in DTC, and making or receiving in accordance
with normal procedures for same-day funds settlement applicable to DTC. Cedel
Bank Participants and Euroclear Participants may not deliver instructions
directly to the Euro-Depositaries.
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Because of time-zone differences, credits for securities in Cedel Bank or
Euroclear as a result of a transaction with a DTC Participant will be made
during the subsequent securities settlement processing, and will be dated the
business day following the DTC settlement date, and such credits or any
transactions in such securities settled during such processing will be reported
to the relevant Cedel Bank Participant or Euroclear Participant on such business
day. Cash received in Cedel Bank or Euroclear as a result of sales of securities
by or through a Cedel Bank Participant or a Euroclear Participant to a DTC
Participant will be received with value on the DTC settlement date but will be
available in the relevant Cedel Bank or Euroclear cash account only as of the
business day following settlement in DTC.
Cedel Bank is incorporated under the laws of Luxembourg as a professional
depository. Cedel Bank holds securities for its participating organizations
("Cedel Participants") and facilitates the clearance and settlement of
securities transactions between Cedel Participants through electronic book-entry
changes in accounts of Cedel Participants, thereby eliminating the need for
physical movement of certificates. Transactions may be settled by Cedel Bank in
any of 28 currencies, including United States dollars. Cedel Bank provides to
Cedel Participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Cedel Bank interfaces with domestic
markets in several countries. As a professional depository, Cedel Bank is
subject to regulation by the Luxembourg Monetary Institute. Cedel Participants
consist of recognized financial institutions around the world, including
underwriters, securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations and may include the underwriters or
agents with respect to a particular series of Debt Securities. Indirect access
to Cedel Bank is also available to others, such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
Cedel Participant, either directly or indirectly.
The Euroclear System (the "Euroclear System") was created in 1968 to hold
securities for participants of the Euroclear System ("Euroclear Participants")
and to clear and settle transactions between Euroclear Participants through
simultaneous electronic book-entry delivery against payment, thereby eliminating
the need for physical movement of certificates and any risk from lack of
simultaneous transfers of securities and cash. Transactions now may be settled
by Euroclear in any of 32 currencies, including United States dollars. The
Euroclear System includes various other services, including securities lending
and borrowing and interfaces with domestic markets in several countries
generally similar to the arrangements for cross-market transfers with DTC
described above. The Euroclear System is operated by the Euroclear Operator,
under contract with Euroclear Clearance System, S.C., a Belgian cooperative
corporation (the "Cooperative"). All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear Operator, not the Cooperative. The
Cooperative establishes policy for the Euroclear System on behalf of Euroclear
Participants. Euroclear Participants include banks (including central banks),
securities brokers and dealers and other professional financial intermediaries
and may include the underwriters or agents with respect to a particular series
of Debt Securities. Indirect access to the Euroclear System is also available to
other firms that clear through or maintain a custodial relationship with a
Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Brussels branch of a New York banking
corporation that is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Federal Reserve Board and the New York State
Banking Department, as well as the Belgian Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within the Euroclear System, withdrawal of
securities and cash from the Euroclear System and receipts of payments with
respect to securities in the Euroclear System. All securities in the Euroclear
System are held on a fungible basis without attribution of specific certificates
to specific securities clearance accounts. The Euroclear Operator acts under the
Terms and Conditions only on behalf of Euroclear Participants and has no record
of or relations with persons holding through Euroclear Participants.
Distributions with respect to Debt Securities of a series held through
Cedel Bank or Euroclear will be credited to the cash accounts of Cedel
Participants or Euroclear Participants in accordance with the relevant
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system's rules and procedures, to the extent received by its respective
Euro-Depositary. Such distributions will be subject to tax reporting in
accordance with relevant United States tax laws and regulations. The applicable
Prospectus Supplement with respect to a series of Debt Securities held through
Cedel Bank or Euroclear will set forth certain income tax consequences to
foreign investors. Cedel Bank or the Euroclear Operator, as the case may be,
will take any other action permitted to be taken by a holder of Debt Securities
under the applicable Indenture on behalf of a Cedel Participant or Euroclear
Participant only in accordance with its relevant rules and procedures and
subject to its respective Euro-Depositary's ability to effect such actions on
its behalf through DTC.
Although Cedel Bank and Euroclear have agreed to the foregoing procedures
in order to facilitate transfers of applicable Debt Securities among
participants of DTC, Cedel Bank and Euroclear, they are under no obligation to
perform or continue to perform such procedures, and such procedures may be
discontinued at any time.
Conversion or Exchange Rights
The terms and conditions, if any, upon which Debt Securities being offered
are convertible or exchangeable into Common Stock will be set forth in the
Prospectus Supplement relating thereto. Such terms will include the conversion
or exchange price, the conversion or exchange period, provisions as to whether
conversion or exchange will be at the option of the Holder or the Company, the
events requiring an adjustment of the conversion or exchange price and
provisions affecting conversions or exchanges in the event of the redemption of
such Debt Securities.
Concerning the Trustees
The Company may from time to time maintain deposit accounts and conduct
other banking transactions with The First National Bank of Chicago or The Bank
of New York and their affiliated entities in the ordinary course of business.
Certain Definitions
Set forth below is summary of certain defined terms used in the applicable
Indenture. Reference is made to the applicable Indenture for the full definition
of all such terms.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Debt Securities of such series and to have satisfied all the obligations under
the applicable Indenture relating to the Debt Securities of such series, except
(i) the right of Holders of Debt Securities of such series to receive, from the
trust fund described under "Discharge, Legal Defeasance and Covenant Defeasance"
above, payment of the principal of (and premium, if any) and interest on such
Debt Securities when such payments are due, (ii) the Company's obligations with
respect to the Debt Securities of such series under the provisions relating to
exchanges, transfers and replacement of Debt Securities, the maintenance of an
office or agency of the Company and the defeasance trust fund, the provisions
relating to compensation and reimbursement of the applicable Trustee and (iii)
the rights, powers, trusts, duties and immunities of the applicable Trustee
thereunder. (Section 15.02)
"Indebtedness" means (i) any liability of any Persons (a) for borrowed
money, or (b) evidenced by a bond, note, debenture or similar instrument
(including purchase money obligations but excluding trade payables), or (c) for
the payment of money relating to a lease that is required to be classified as a
capitalized lease obligation in accordance with generally accepted accounting
principles, or (d) preferred or preference stock of a Subsidiary of the Company
held by Persons other than the Company or a Subsidiary of the Company; (ii) any
liability of others described in the preceding clause (i) that the Person has
guaranteed, that is recourse to such Person or that is otherwise its legal
liability; and (iii) any amendment, supplement, modification, deferral, renewal,
extension or refunding of any liability of the types referred to in clauses (i)
and (ii) above. (Section 1.01)
"Senior Indebtedness" means the principal of (and premium, if any) and
unpaid interest on (i) Indebtedness of the Company, whether outstanding on the
date of the Subordinated Indenture or
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thereafter created, incurred, assumed or guaranteed, for money borrowed (other
than the Indebtedness evidenced by the Subordinated Debt Securities of any
series), unless in the instrument creating or evidencing the same or pursuant to
which the same is outstanding it is provided that such Indebtedness is not
senior or prior in right of payment to the Subordinated Debt Securities or is
pari passu or subordinate by its terms in right of payment to the Subordinated
Debt Securities and (ii) renewals, extensions and modifications of any such
Indebtedness. (Section 1.01 of the Subordinated Indenture)
"Subsidiary" means any Corporation of which at least a majority of the
outstanding stock having by the terms thereof ordinary voting power to elect a
majority of the directors of such Corporation, irrespective of whether or not at
the time stock of any other class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency, is at the
time, directly or indirectly, owned or controlled by the Company or by one or
more Subsidiaries thereof, or by the Company and one or more Subsidiaries
thereof. (Section 1.01)
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States for the timely payment of which its full faith
and credit is pledged, or (ii) obligations of a Person controlled or supervised
by and acting as an agency or instrumentality of the United States the payment
of which is unconditionally guaranteed as a full faith and credit obligation by
the United States, which, in either case under clauses (i) or (ii), are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such U.S. Government Obligation or a specific payment of interest
on (or principal of) any such U.S. Government Obligation held by such custodian
for the account of the holder of a depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian in respect of the U.S. Government Obligation or the specific
payment of interest on or principal of the U.S. Government Obligation evidenced
by such depository receipt. (Section 15.02)
DESCRIPTION OF CAPITAL STOCK
GENERAL
Set forth below is a description of the material terms and provisions of
the equity securities of the Company. The following description does not purport
to be complete and is subject to and qualified in its entirety by reference to
the Restatement of Articles of Incorporation of the Company (the "Articles of
Incorporation") and the By-Laws, as amended, of the Company (the "By-Laws") and
the Rights Plan of the Company dated as of July 27, 1994 between the Company and
ChaseMellon Shareholders Services, L.L.C., as Rights Agent (the "Rights Plan").
The Articles of Incorporation are an exhibit to the Company's Current Report on
Form 8-K dated November 27, 1996, the By-Laws are an exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, and the
Rights Plan is an exhibit to Company's Registration Statement on Form 8-A.
The Company is authorized to issue (i) 100,000,000 shares of Common Stock,
par value $2.00 per share and (ii) 20,000,000 shares of Preferred Stock, par
value $2.00 per share, which may be issued in one or more series with such
voting powers, designations, preferences, rights, qualifications, limitations
and restrictions as shall be specified by the Board of Directors. The Board of
Directors may issue one or more series of preferred stock with voting and
conversion rights which could adversely affect the voting power of the holders
of Common Stock and the holders of other series of Preferred Stock, and which
could, among other things, have the effect of delaying, deferring or preventing
a change in control of the Company. In connection with the Rights Plan, the
Board of Directors authorized the issuance of 1,000,000 shares of Series A
Junior Participating Preferred Stock to holders of rights issued under the
Rights Plan. See "-- Rights Plan" below.
As of December 31, 1996, 28,468,052 shares of Common Stock were issued and
outstanding, excluding 1,159,682 treasury shares, and 1,955,000 shares of
Preferred Redeemable Increased Dividend Equity SecuritiesSM, 6 3/4% PRIDESSM,
Convertible Preferred Stock, par value $2.00 per share ("PRIDES") were issued
and outstanding.
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COMMON STOCK
Dividends
Holders of the Company's Common Stock are entitled to receive such
dividends as may be legally declared by the Board of Directors. The declaration
and amount of future dividends may depend, in part, on restrictive covenants
contained in certain loan agreements.
Voting Rights
Holders of Common Stock are entitled to one vote for each share held of
record. Except as discussed below, action of the stockholders may generally be
taken by the affirmative vote of a majority of the shares present or represented
at a duly called meeting at which a quorum is present or represented.
Other Rights
Holders of Common Stock have no preemptive or subscription rights and have
no liability for further calls or assessments. All shares of Common Stock are
entitled to share ratably in the net assets of the Company upon liquidation.
The transfer agent and registrar for the Common Stock is ChaseMellon
Shareholders Services, L.L.C. of New York, New York.
PRIDES
General
The PRIDES are shares of convertible preferred stock and rank prior to the
Common Stock as to payment of dividends and distribution of assets upon
liquidation. The shares of PRIDES mandatorily convert into shares of Common
Stock on July 1, 2000 (the "Mandatory Conversion Date") and the Company has the
option to redeem the shares of PRIDES, in whole or in part, at any time and from
time to time on or after July 1, 1998, and prior to the Mandatory Conversion
Date at the Call Price (as defined herein), payable in shares of Common Stock.
In addition, the shares of PRIDES are convertible into shares of Common Stock at
the option of the holder at any time prior to the Mandatory Conversion Date as
set forth below.
Dividends
Holders of shares of PRIDES are entitled to receive annual cumulative
dividends at a rate per annum of 6 3/4% of the stated liquidation preference
(equivalent to a rate of $2.97 per annum for each share of PRIDES), from the
date of initial issuance, payable quarterly in arrears on each January 1, April
1, July 1, and October 1, or, if any such date is not a business day, on the
next succeeding business day, commencing July 1, 1995.
Mandatory Conversion
On the Mandatory Conversion Date, unless previously redeemed or converted,
each outstanding share of PRIDES are mandatorily convertible into (i) one share
of Common Stock, subject to adjustment in certain events, and (ii) the right to
receive cash in an amount equal to all accrued and unpaid dividends thereon
(other than previously declared dividends payable to a holder of record as of a
prior date).
Optional Redemption
Shares of PRIDES are not redeemable prior to July 1, 1998. At any time and
from time to time on or after July 1, 1998, and ending immediately prior to the
Mandatory Conversion Date, the Company may redeem any or all of the outstanding
shares of PRIDES. Upon any such redemption, each holder will receive, in
exchange for each share of PRIDES, the number of shares of Common Stock equal to
the Call Price divided by the Current Market Price (as defined herein) on the
applicable date of determination, but in no event less than .826 of a share of
Common Stock at the time of issuance of the PRIDES, subject to adjustment as
described herein. The number of shares of Common Stock to be delivered in
payment of the
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applicable Call Price will be determined on the basis of the Current Market
Price of the Common Stock prior to the announcement of the redemption, and the
market price of the Common Stock may vary between the date of such determination
and the subsequent delivery of such shares.
The "Call Price" of each share of PRIDES is the sum of (i) $45.188 on and
after July 1, 1998, to and including September 30, 1998, $45.040 on and after
October 1, 1998, to and including December 31, 1998, $44.891 on and after
January 1, 1999, to and including March 31, 1999, $44.743 on and after April 1,
1999, to and including June 30, 1999, $44.594 on and after July 1, 1999, to and
including September 30, 1999, $44.446 on and after October 1, 1999, to and
including December 31, 1999, $44.297 on and after January 1, 2000, to and
including March 31, 2000, $44.149 on and after April 1, 2000, to and including
May 31, 2000, and $44.00, on and after June 1, 2000, to and including July 1,
2000, and (ii) all accrued and unpaid dividends thereon to but not including the
date fixed for redemption (other than previously declared dividends payable to a
holder of record as of a prior date).
The "Current Market Price" per share of the Common Stock on any date of
determination means the lesser of (x) the average of the Closing Prices (as
defined below) of the Common Stock for the 15 consecutive trading days ending on
and including such date of determination and (y) the Closing Price of the Common
Stock for such date of determination; provided, however, that, with respect to
any redemption of shares of PRIDES, if any event resulting in an adjustment of
the Common Equivalent Rate occurs during the period beginning on the first day
of such 15-day period and ending on the applicable redemption date, the Current
Market Price as determined pursuant to the foregoing will be appropriately
adjusted to reflect the occurrence of such event. The term "Closing Price" on
any day means the last reported sales price on such day or, in case no such sale
takes place on such day, the average of the reported closing high and low
quotations, in each case on the Nasdaq National Market, or, if the Common Stock
is not listed on the Nasdaq National Market, on the principal national
securities exchange on which the Common Stock is listed or admitted to trading,
or, if not listed or admitted to trading on any national securities exchange,
the average of the high bid and low-asked quotations of the Common Stock in the
over-the-counter market on the day in question as reported by the National
Quotation Bureau Incorporated, or a similarly generally accepted reporting
service, or, if no such quotations are available, the fair market value of the
Common Stock as determined by any New York Stock Exchange member firm selected
from time to time by the Board of Directors of the Company for such purpose.
The "Common Equivalent Rate" is initially one share of Common Stock for
each share of PRIDES and is subject to adjustment as appropriate in certain
circumstances, including if the Company shall (a) pay a stock dividend or make a
distribution with respect to its Common Stock in shares of Common Stock, (b)
subdivide or split its outstanding Common Stock, (c) combine its outstanding
Common Stock into a smaller number of shares, (d) issue by reclassification of
its shares of Common Stock any shares of Common Stock, (e) issue certain rights
(excluding the Rights (as defined under "Description of Capital Stock -- Rights
Plan")) or warrants to all holders of its Common Stock unless such rights or
warrants are issued to each holder of shares of PRIDES on a pro rata basis with
the shares of Common Stock based on the Common Equivalent Rate in effect on the
date immediately preceding such issuance, or (f) pay a dividend or distribute to
all holders of its Common Stock evidences of its indebtedness, cash or other
assets (including capital stock of the Company but excluding any cash dividends
or distributions, other than certain extraordinary cash distributions, and
dividends referred to in clause (a) above) unless such dividend or distribution
is made to each holder of shares of PRIDES on a pro rata basis with the shares
of Common Stock based on the Common Equivalent Rate in effect on the date
immediately preceding such dividend or distribution.
Conversion at the Option of the Holder
At any time prior to the Mandatory Conversion Date, unless previously
redeemed, each share of PRIDES is convertible at the option of the holder
thereof into .826 of a share of Common Stock at the time of issuance of the
PRIDES (the "Optional Conversion Rate"), equivalent to the Conversion Price of
$53.24 per share of Common Stock at the time of issuance of the PRIDES, subject
to adjustment as described herein. The number of shares of Common Stock a holder
will receive upon redemption, and the value of the shares received upon
conversion, will vary depending on the market price of the Common Stock from
time to time,
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all as set forth herein. The right of holders to convert shares of PRIDES called
for redemption will terminate immediately prior to the close of business on the
redemption date.
Voting Rights
The holders of shares of PRIDES have the right with the holders of Common
Stock to vote in the election of Directors and upon each other matter coming
before any meeting of the holders of Common Stock on the basis of 4/5 of a vote
for each share of PRIDES. On such matters, the holders of shares of PRIDES and
the holders of Common Stock will vote together as one class except as otherwise
provided by law or the Company's Articles of Incorporation. In addition, (i)
whenever dividends on the shares of PRIDES or any other series of the Company's
preferred stock (all series of which, including the shares of PRIDES,
hereinafter are called the "Preferred Stock") with like voting rights are in
arrears and unpaid for six quarterly dividend periods, and in certain other
circumstances, the holders of the shares of PRIDES (voting separately as a
class) will be entitled to vote, on the basis of one vote for each share of
PRIDES, for the election of two Directors of the Company, such Directors to be
in addition to the number of Directors constituting the Board of Directors
immediately prior to the accrual of such right, and (ii) the holders of the
shares of PRIDES may have voting rights with respect to certain alterations of
the Company's Articles of Incorporation and certain other matters, voting on the
same basis or separately as a series.
Liquidation Preference and Ranking
The shares of PRIDES rank prior to the Common Stock as to payment of
dividends and distribution of assets upon liquidation. The liquidation
preference of each share of PRIDES is an amount equal to the sum of (i) $44.00
and (ii) all accrued and unpaid dividends thereon.
PREFERRED STOCK
The description of certain provisions of the Preferred Stock set forth
below and in any Prospectus Supplement does not purport to be complete and is
subject to and qualified in its entirety by reference to the Company's Articles
of Incorporation and the Articles of Amendment relating to each such series of
Preferred Stock, which will be filed with the Commission in connection with the
offering of such series of Preferred Stock.
General
Under the Company's Articles of Incorporation, the Board of Directors may,
by resolution, establish series of Preferred Stock having such voting powers,
and such designations, preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions thereof,
as the Board of Directors may determine.
The Preferred Stock offered hereby will have the dividend, liquidation and
voting rights set forth below unless otherwise provided in the Prospectus
Supplement relating to a particular series of Preferred Stock. Reference is made
to the Prospectus Supplement relating to the particular series of Preferred
Stock offered thereby for specific terms, including: (1) the designation and
stated value per share of such Preferred Stock and the number of shares offered;
(2) the amount of liquidation preference per share; (3) the price at which such
Preferred Stock will be issued; (4) the dividend rate (or method of
calculation), the dates on which dividends will be payable, whether such
dividends will be cumulative or noncumulative and, if cumulative, the dates from
which dividends will commence to cumulate; (5) any redemption or sinking fund
provisions; (6) any terms by which such series of Preferred Stock may be
convertible into or exchanged for Common Stock or Debt Securities; and (7) any
additional or other rights, preferences, privileges, limitations and
restrictions relating to such series of Preferred Stock.
The Preferred Stock offered hereby will be issued in one or more series.
The holders of Preferred Stock will have no preemptive rights. Preferred Stock
will be fully paid and nonassessable upon issuance against full payment of the
purchase price therefor. Unless otherwise specified in the Prospectus Supplement
relating to a particular series of Preferred Stock, each series of Preferred
Stock will, with respect to dividend rights and
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rights on liquidation, dissolution and winding up of the Company, rank prior to
the Common Stock (the "Junior Stock") and on a parity with each other series of
Preferred Stock offered hereby (the "Parity Stock").
Dividend Rights
Holders of the Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board of Directors of the Company, out of funds
legally available therefor, cash dividends at such rates and on such dates as
are set forth in the Prospectus Supplement relating to such series of Preferred
Stock. Such rate may be fixed or variable or both. Each such dividend will be
payable to the holders of record as they appear on the stock books of the
Company on such record dates as will be fixed by the Board of Directors of the
Company. Dividends on any series of the Preferred Stock may be cumulative or
noncumulative, as provided in the Prospectus Supplement relating thereto. If the
Board of Directors of the Company fails to declare a dividend payable on a
dividend payment date on any series of Preferred Stock for which dividends are
noncumulative, then the right to receive a dividend in respect of the dividend
period ending on such dividend payment date will be lost, and the Company will
have no obligation to pay the dividend accrued for that period, whether or not
dividends are declared for any future period. Dividends on shares of each series
of Preferred Stock for which dividends are cumulative will accrue from the date
set forth in the applicable Prospectus Supplement.
The Preferred Stock of each series will include customary provisions (1)
restricting the payment of dividends or the making of other distributions on, or
the redemption, purchase or other acquisition of, Junior Stock unless full
dividends, including, in the case of cumulative Preferred Stock, accruals, if
any, in respect of prior dividend periods, on the shares of such series of
Preferred Stock have been paid and (2) providing for the pro rata payment of
dividends on such series and other Parity Stock when dividends have not been
paid in full upon such series and other Parity Stock.
Rights Upon Liquidation
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of each series of Preferred Stock will be
entitled to receive out of assets of the Company available for distribution to
stockholders, before any distribution of assets is made to holders of Junior
Stock, liquidating distributions in the amount set forth in the Prospectus
Supplement relating to such series of Preferred Stock plus an amount equal to
accrued and unpaid dividends. If, upon any voluntary or involuntary liquidation,
dissolution or winding up of the Company, the amounts payable with respect to
the Preferred Stock of any series and any Parity Stock are not paid in full, the
holders of the Preferred Stock of such series and of such Parity Stock will
share ratably in any such distribution of assets of the Company in proportion to
the full respective preferential amounts (which may include accumulated
dividends) to which they are entitled. After payment of the full amount of the
liquidating distribution to which they are entitled, the holders of such series
of Preferred Stock will have no right or claim to any of the remaining assets of
the Company. Neither the sale of all or a portion of the Company's assets nor
the merger or consolidation of the Company into or with any other corporation
shall be deemed to be a dissolution, liquidation or winding up, voluntarily or
involuntarily, of the Company.
Voting Rights
The holders of Preferred Stock of a series offered hereby will not be
entitled to vote except as indicated in the Prospectus Supplement relating to
such series of Preferred Stock or as required by applicable law. Unless
otherwise specified in the Prospectus Supplement relating to a particular series
of Preferred Stock, when and if any such series is entitled to vote, each share
in such series will be entitled to one vote.
DEPOSITARY SHARES
General
UCFC may elect to offer fractional interests in the Preferred Stock rather
than whole shares of such securities. In such event, UCFC will provide for the
issuance by a Depositary (as hereinafter defined) to the
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public of receipts ("Depositary Receipts") evidencing depositary shares (the
"Depositary Shares"), each of which will represent a fractional interest in a
share of a particular series of the Preferred Stock, as set forth in the
Prospectus Supplement for such series of Preferred Stock.
Certain general terms and provisions of the form of Deposit Agreement (as
hereinafter defined), the Depositary Shares and the form of Depositary Receipts
to which a Prospectus Supplement may relate are set forth below. The particular
terms of the Preferred Stock offered by any Prospectus Supplement and the
extent, if any, to which such general provisions may apply to the Depositary
Shares will be described in the applicable Prospectus Supplement. The
descriptions below and in any Prospectus Supplement do not purport to be
complete and are subject to and qualified in their entirety by reference to the
Deposit Agreement and the Depositary Receipts, the forms of which are
incorporated by reference in the Registration Statement of which this Prospectus
is a part and the definitive forms of which will be filed with the Commission at
the time of sale of such Depositary Shares.
The shares of any series of Preferred Stock underlying Depositary Shares
will be deposited under a separate Deposit Agreement (the "Deposit Agreement")
between the Company and a bank or trust company selected by the Company having
its principal office in the United States and having a combined capital and
surplus of at least $5,000,000 (the "Depositary"). The applicable Prospectus
Supplement will set forth the name and address of the Depositary. Subject to the
terms of the Deposit Agreement, each owner of a Depositary Share will be
entitled, in proportion to the applicable fractional interest in a share of
Preferred Stock underlying such Depositary Share, to all the rights and
preferences of the Preferred Stock underlying such Depositary Share (including
dividend, voting, redemption, conversion and liquidation rights).
Depositary Shares will be evidenced by Depositary Receipts issued pursuant
to a Deposit Agreement. Depositary Receipts will be distributed to those persons
purchasing the fractional shares of the related series of Preferred Stock in
accordance with the terms of the offering as described in the applicable
Prospectus Supplement.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of the Company, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at the Company's expense.
Upon the surrender of Depositary Receipts at the office of the Depositary
(unless the Depositary Shares have been previously called for redemption) and
upon payment by the holder of the charges provided in the Deposit Agreement and
subject to the terms thereof, a holder of Depositary Shares is entitled to have
the Depositary deliver to such holder the number of whole shares of the
Preferred Stock underlying the Depositary Shares evidenced by the surrendered
Depositary Receipts; provided, however, that the holder of such shares of
Preferred Stock will not thereafter be entitled to receive Depositary Shares
therefor. If the Depositary Receipts delivered by the holder evidence a number
of Depositary Shares in excess of the number of Depositary Shares representing
the number of whole shares of the related series of Preferred Stock to be
withdrawn, the Depositary will deliver to such holder at the same time a new
Depositary Receipt evidencing such excess number of Depositary Shares.
Dividends and Other Distributions
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
number of such Depositary Shares owned by such holders on the relevant record
date. The Depositary shall distribute only such amount, however, as can be
distributed without attributing to any holder of Depositary Shares a fraction of
one cent, and any balance not so distributed shall be added to and treated as
part of the next sum received by the Depositary for distribution to record
holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not
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feasible to make such distribution, in which case the Depositary, with the
approval of the Company, may sell such property and distribute the net proceeds
from such sale to such holders.
Redemption of Depositary Shares
If a series of Preferred Stock underlying Depositary Shares is subject to
redemption, the Depositary Shares will be redeemed from the proceeds received by
the Depositary resulting from the redemption, in whole or in part, of such
series of Preferred Stock held by the Depositary. The Depositary shall mail
notice of redemption not less than 30 and not more than 45 days prior to the
date fixed for redemption to the record holders of the Depositary Shares to be
so redeemed at their respective addresses appearing in the Depositary's books.
The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Preferred Stock. Whenever the Company redeems Preferred Stock held by the
Depositary, the Depositary will redeem as of the same redemption date the number
of Depositary Shares relating to the Preferred Stock so redeemed. If less than
all the Depositary Shares are to be redeemed, the Depositary Shares to be
redeemed will be selected by lot or pro rata as may be determined by the
Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which the
holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
Voting the Preferred Stock
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock held by the Depositary are entitled to vote, the Depositary will mail the
information contained in such notice of meeting to the record holders of the
Depositary Shares relating to such Preferred Stock. Each record holder of such
Depositary Shares on the record date (which will be the same date as the record
date for the Preferred Stock) will be entitled to instruct the Depositary as to
the exercise of the voting rights pertaining to the amount of Preferred Stock
underlying such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the amount of Preferred Stock underlying such
Depositary Shares in accordance with such instructions, and the Company will
agree to take all action which may be deemed necessary by the Depositary in
order to enable the Depositary to do so. The Depositary will abstain from voting
Preferred Stock to the extent it does not receive specific instructions from the
holders of Depositary Shares relating to such Preferred Stock.
Amendment and Termination of the Deposit Agreement
The form of Depositary Receipt evidencing Depositary Shares and any
provision of a Deposit Agreement may at any time be amended by agreement between
the Company and the Depositary. However, any amendment which materially and
adversely alters the rights of the existing holders of Depositary Shares will
not be effective unless such amendment has been approved by the record holders
of at least a majority in interest of the Depositary Shares then outstanding. A
Deposit Agreement may be terminated by the Company or the Depositary only if (i)
all outstanding Depositary Shares relating thereto have been redeemed or (ii)
there has been a final distribution in respect of the Preferred Stock underlying
such Depositary Shares in connection with any liquidation, dissolution or
winding up of the Company.
Charges of Depositary
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of
Preferred Stock and any redemption of Preferred Stock. Holders of Depositary
Shares will pay other transfer and other taxes and governmental charges and such
other charges as are expressly provided in the Deposit Agreements to be for
their accounts.
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Miscellaneous
The Depositary will forward to the holders of Depositary Shares all reports
and communications from the Company which are delivered to the Depositary and
which the Company is required to furnish to the holders of Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under a Deposit Agreement. The obligations of the Company and the
Depositary under a Deposit Agreement will be limited to performance in good
faith of their respective duties thereunder and neither entity will be obligated
to prosecute or defend any legal proceeding in respect of any Depositary Shares
or Preferred Stock unless satisfactory indemnity is furnished. Each entity may
relay upon written advice of counsel or accountants, or information provided by
persons presenting Preferred Stock for deposit, holders of Depositary Shares or
other persons believed to be competent and on documents believed to be genuine.
Resignation and Removal of Depositary
The Depositary may resign at any time by delivering to the Company notice
of its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect only upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at least $5,000,000.
SPECIAL CHARTER, BY-LAW AND LOUISIANA LAW PROVISIONS
Certain provisions of the Company's Articles of Incorporation, the
Company's By-Laws, Louisiana law, and the Company's Rights Plan, may have the
effect of delaying, deterring or discouraging, among other things, a
non-negotiated tender or exchange offer for the Company's Common Stock or a
proxy contest for control of the Company.
Anti-Takeover Provisions in the Company's Articles of Incorporation and
By-Laws
The Company's By-Laws, among other things: (1) authorize the Board of
Directors exclusively to fix the number of directors by no less than a 66 2/3%
vote and classify the Board into three classes with staggered terms; (2) provide
procedures for the removal of directors and for filling vacancies on the Board;
(3) provide advance notice procedures for shareholder nominations and proposals;
and (4) provide procedures for the calling of a special meeting of the
shareholders.
In addition, the Company's Articles of Incorporation, among other things,
require the affirmative vote of the holders of not less than 80% of the total
voting power of the Company to alter, amend or repeal the foregoing provisions
of the Company's By-Laws.
Other provisions of the Company's Articles of Incorporation: (a) provide
that no action may be taken by the shareholders except at an annual or special
meeting; (b) provide that a special meeting of the shareholders may be called
only by a written request signed by the holders of no less than 66 2/3% of the
total voting power of the Company; (c) provide that provisions (a) and (b) may
not be amended, altered or repealed except by the affirmative vote of the
holders of no less than 80% of the total voting power of the Company; and (d)
eliminate the right of a director absent from a meeting of the Board or any
committee thereof to give a proxy to another director or to a shareholder.
Taken together, the foregoing provisions of the Articles of Incorporation
and By-Laws of the Company (which provisions may not be amended, altered or
repealed without the 80% shareholder vote) make more difficult, and thus may
discourage, any attempt to gain control of the Company through a proxy contest
or through the acquisition of the Company's Common Stock, and as a result, will
tend to perpetuate the control of present management. The 80% voting
requirements in certain of the foregoing provisions could allow the holders of
just over 20% of the total voting power of the Company to defeat proposed
actions that might be supported by persons holding a majority of the total
voting power of the Company. As of December 31, 1996,
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the directors and executive officers of the Company were the beneficial owners
of 5.2% of the outstanding shares of Common Stock.
The Company's Articles of Incorporation contain other provisions that have
intended "anti-takeover" effects. The Articles of Incorporation of the Company
include certain provisions (the "Special Vote Provisions") requiring the
affirmative vote of 80% of the outstanding shares of the Company's voting stock
before the Company may enter into (i) a merger or consolidation with any other
corporation, (ii) a sale or lease of substantially all of the assets of the
Company to any other corporation, person or entity, or (iii) a sale or lease to
the Company by any other corporation, person or other entity of assets having a
value greater than $1 million in exchange for voting stock of the Company, in
each case if such other corporation, person or other entity, directly or
indirectly, owns or controls 10% or more of the Company's voting stock prior to
any such transaction. The Special Vote Provisions apply only to the
above-described transactions which do not receive prior approval of the Board of
Directors.
The Articles of Incorporation of the Company also contain certain
provisions (the "Takeover Consideration Provisions") authorizing the Board of
Directors, in evaluating an offer from a third party to merge with or acquire
the shares or assets of the Company, to give due consideration to certain
factors not directly related either to the price per share offered for or the
then market price of the Company's Common Stock. The factors that the Board of
Directors is authorized to consider under the Takeover Consideration Provisions
include, without limitation: (i) the consideration being offered in the
acquisition proposal as it relates to the then current value of the Company in a
freely negotiated transaction, and to the Board of Directors' then estimate of
the future value of the Company as an independent entity; (ii) the social, legal
and economic effects of the acquisition proposal on the Company and its
subsidiaries, and the franchisees, employees, suppliers, customers, creditors
and business of the Company and its subsidiaries; (iii) the financial condition
and earnings prospects of the potential offeror, including but not limited to,
debt service and other existing or likely financial obligations of the potential
offeror, and the possible effect of such condition upon the Company and its
subsidiaries and other elements of the communities in which the Company and its
subsidiaries operate or are located; and (iv) the competence, experience and
integrity of the potential offeror.
Pursuant to Section 92G of the Louisiana Business Corporation Law (the
"LBCL"), the Board of Directors is also authorized to consider the factors set
forth therein (which are generally comparable to those set forth in the Takeover
Consideration Provisions) and any other factors which it deems relevant in
evaluating a tender offer or an offer to make a tender or exchange offer or to
effect a merger or consolidation.
The Special Vote Provisions and the Takeover Consideration Provisions may
be altered only by the affirmative vote of 80% of the outstanding shares of the
Company's voting stock.
Directors' and Officers' Exculpation and Indemnification
The Articles of Incorporation provide that no director or officer of the
Company shall be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director or officer except
for liability (i) for breach of the director's or officer's duty of loyalty to
the Company or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 92D of the LBCL, which specifies certain corporate transactions, such as
certain dividend declarations and dispositions of assets, as unlawful, or (iv)
for any transaction from which the director or officer derived an improper
personal benefit. With the exception of the items noted in (i) through (iv)
above, the effect of this provision of the Articles of Incorporation is to
eliminate the rights of the Company and its stockholders (through stockholders'
derivative suits on behalf of the Company) to recover monetary damages against a
director or officer for breach of his or her fiduciary duty as a director or
officer. This provision does not limit or eliminate the rights of the Company or
any stockholders to seek non-monetary relief, such as an injunction or
rescission in the event of a breach of a director's or officer's fiduciary duty.
Pursuant to Section 83 of the LBCL, the Company has adopted provisions in
its Articles of Incorporation which require the Company to indemnify its
directors and officers to the fullest extent permitted by Louisiana law.
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The Company has also entered into indemnification agreements with its
directors and certain of its officers.
Louisiana Fair Price and Control Share Acquisition Statutes
As a Louisiana corporation, the Company is subject to the provisions of the
LBCL which contain "fair price" and "control share acquisition" provisions. Each
of these provisions imposes significant restrictions on the ability of an
acquiror of a large block of voting stock of a Louisiana corporation to exercise
control over the corporation.
The "fair price" provisions are set forth in Sections 132-134 of the LBCL
and are designed to restrict the ability of a Louisiana corporation to enter
into mergers or other extraordinary corporate transactions with certain
stockholders. These provisions require that certain business combinations
between a Louisiana corporation and "interested stockholders" must be approved
by (i) the corporation's Board of Directors, (ii) the affirmative vote of at
least 80% of the voting stock of the corporation, and (iii) the affirmative vote
of two-thirds of the voting stock of the corporation (excluding stock held by
the interested stockholders), unless the business combination satisfies certain
"fair price" tests regarding the payments to be made to stockholders and meets
certain other procedural requirements. An "interested stockholder" is defined as
any person (other than the corporation, any subsidiary of the corporation or any
employee benefit plan of the corporation or any subsidiary) that is the
beneficial owner of 10% or more of the voting stock of the corporation. In
general, the "fair price" tests measure the value stockholders receive for their
stock from an interested stockholder in transactions within a two year period.
The "control share acquisition" provisions of the LBCL are set forth in
Sections 135-140.2. In general, these provisions provide that persons who, after
May 4, 1987, acquire stock that would normally entitle them to exercise 20% or
more of the voting power of the corporation will not be able to vote the shares
acquired by them in excess of 20% of such voting power unless their ability to
vote is reinstated by the stockholders of the corporation at a meeting held
after the acquiring person requests such a vote. A corporation is required to
call such a meeting only if the person proposing to make a control share
acquisition (an "acquiring stockholder") has demonstrated a financial ability to
make a successful acquisition and such proposed acquisition is lawful. At such a
meeting, the voting rights of the acquiring stockholder will be reinstated for
shares held by the acquiring stockholder in excess of 20% of the Company's
voting power if approved by the affirmative vote of (i) a majority of all shares
of the Company then entitled to vote and (ii) a majority of all shares of the
Company then entitled to vote (excluding shares beneficially owned by the
acquiring stockholder, its officers and its directors who are also its
employees). If the voting rights of the acquiring stockholder are reinstated,
such stockholder can acquire additional voting shares within certain threshold
levels, without obtaining additional stockholder approval. However, if the
acquiring stockholder acquires additional shares in an acquisition that places
such stockholder above the threshold ownership levels of one-third and one-half
of all voting shares, the additional shares acquired in such an acquisition in
excess of such ownership levels will not have voting rights unless reinstated by
the stockholders pursuant to the voting procedures described above. A
corporation must call a stockholders' meeting within 50 days of the date that
both the corporation and the proposed acquiring stockholder file definitive
proxy materials with the Commission.
RIGHTS PLAN
On July 27, 1994, the Board of Directors of the Company redeemed the rights
issued under the rights plan adopted in February 1989, adopted the Rights Plan,
declared a dividend of one preferred stock purchase right (a "Right") for each
outstanding share of Common Stock on August 6, 1994, and authorized the issuance
of one Right with respect to each share of Common Stock issued after August 6,
1994, and before the earliest of the Distribution Date, the Redemption Date and
the Final Expiration Date (as such terms are hereinafter defined). The Rights
have anti-takeover effects. The Rights will cause substantial dilution to a
person or group that attempts to acquire the Company on terms not approved by
the Board of Directors, except pursuant to an offer conditioned on a substantial
number of Rights being acquired.
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Each Right entitles the registered holder upon exercise on and after the
Distribution Date to purchase from the Company one one-hundredth of a share of
Series A Junior Participating Preferred Stock, par value $2.00 per share (the
"Preferred Shares"), of the Company at a price of $240.00 per one one-hundredth
of a Preferred Share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights, and the Preferred Shares into which such
Rights are exercisable, are set forth in the Rights Plan.
The "Distribution Date" occurs on the earliest of the close of business on
(i) the tenth day following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired beneficial
ownership of 20% or more of the outstanding shares of Common Stock, (ii) the
tenth day (or such later date as may be determined by action of the Board of
Directors of the Company prior to such time as any person becomes an Acquiring
Person) following the commencement of, or announcement of an intention to make,
a tender offer or exchange offer, the consummation of which would result in the
beneficial ownership by a person or group of 25% or more of the outstanding
shares of Common Stock, or (iii) 10 days after the Board of Directors shall
declare any person to be an "Adverse Person," upon a determination that such
person, alone or together with its affiliates and associates, has become the
beneficial owner of 10% or more of the outstanding shares of Common Stock and a
determination by at least a majority of the Board of Directors who are not
officers of the Company, after reasonable inquiry and investigation, including
consultation with such persons as such directors shall deem appropriate, that
(a) such beneficial ownership by such person is intended to cause, is reasonably
likely to cause or will cause the Company to repurchase the shares of Common
Stock beneficially owned by such person or to cause pressure on the Company to
take action or enter into a transaction or series of transactions intended to
provide such person with short-term financial gain under circumstances where the
Board of Directors determines that the best long-term interests of the Company
and its stockholders would not be served by taking such action or entering into
such transactions or series of transactions at that time or (b) such beneficial
ownership is causing or is reasonably likely to cause a material adverse impact
(including, but not limited to, impairment of relationships with customers or
impairment of the Company's ability to maintain its competitive position) on the
business or prospects of the Company. However, the Board of Directors may not
declare a person to be an Adverse Person if, prior to the time that the person
acquired 10% or more of the shares of Common Stock then outstanding, such person
provided to the Board of Directors in writing a statement of the person's
purpose and intentions in connection with the proposed acquisition of Common
Stock, together with any other information reasonably requested of the person by
the Board of Directors, and the Board of Directors, based on such statement and
reasonable inquiry and investigation as it deems appropriate, determines to
notify and notifies such person in writing that it will not declare the person
to be an Adverse Person; provided, however, that the Board of Directors may
expressly condition in any manner a determination not to declare a person an
Adverse Person on such conditions as the Board of Directors may select,
including without limitation, such person not acquiring more than a specified
amount of stock and/or such person not taking actions inconsistent with the
purposes and intentions disclosed by such person in the statement provided to
the Board of Directors. In the event that the Board of Directors should at any
time determine, upon reasonable inquiry and investigation, that such person has
not met or complied with any conditions specified by the Board of Directors, the
Board of Directors may at any time thereafter declare the person to be an
Adverse Person. Until the Distribution Date, the Rights will be transferred with
and only with shares of Common Stock. The Rights will expire on July 31, 2004
(the "Final Expiration Date"), unless the Rights are earlier redeemed or
exchanged by the Company.
The Purchase Price payable, and the number of Preferred Shares or other
securities of property issuable, on exercise of the Rights are subject to
adjustment from time to time to prevent dilution in the event of a stock
dividend on the Preferred Shares or other events described in the Rights Plan.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per share of Common Stock.
In the event of liquidation, the holders of the Preferred Shares will be
entitled to a minimum preferential liquidation payment of $100.00 per share but
will be entitled to an aggregate payment of 100 times the payment made per share
of Common Stock. Each Preferred Share will have 100 votes, voting together with
the Common Stock, Finally, in the event of merger, consolidation or other
transaction in which shares of Common Stock are exchanged,
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each Preferred Share will be entitled to receive 100 times the amount received
per share of Common Stock. The Rights are protected by customary antidilution
provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one one-hundredth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
share of Common Stock.
The Rights Plan contains a "flip-over" feature allowing the exercise of the
Rights so that the holder thereof (except those Rights held by the Acquiring
Person) will receive shares of Common Stock of the Acquiring Person at half
price, causing substantial dilution to the Acquiring Person. In general, this
"flip-over" feature provides that in the event that the Company is acquired by
an Acquiring Person in a merger or other business combination transaction or 50%
or more of its consolidated assets or earning power are sold to an Acquiring
Person, proper provision will be made so that each holder of a Right, other than
Rights that are or were beneficially owned by the Acquiring Person after the
date upon which the Acquiring Person became such (which will thereafter be
void), will thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price, that number of shares of common stock of the
Acquiring Person which at the time of such transaction will have a market value
of two times the Purchase Price.
The Rights Plan also contains a "flip-in" feature allowing holders of
Rights (except those held by an Acquiring Person) to purchase Common Stock of
the Company at half price, causing substantial dilution to the Acquiring Person.
In general, this "flip-in" feature provides that in the event that (i) any
person becomes the beneficial owner of 25% or more of the outstanding Common
Stock (unless such person first acquires 25% or more of the outstanding Common
Stock by a purchase pursuant to a tender offer for all of the Common Stock which
the independent directors determine to be fair to and otherwise in the best
interests of the Company and its stockholders, employees, customers and
communities in which the Company does business), (ii) any person is declared by
the Board of Directors to be an Adverse Person, (iii) an Acquiring Person
engages in one or more "self-dealing" transactions set forth in the Rights Plan,
or (iv) during such time as there is an Acquiring Person, there shall be a
reclassification of securities or a recapitalization or reorganization of the
Company or other transaction or series of transactions involving the Company
which has the effect of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity securities of the Company or any
of its subsidiaries beneficially owned by the Acquiring Person, proper provision
shall be made so that each holder of a Right, other than Rights that are or were
beneficially owned by the Acquiring Person after the date upon which the
Acquiring Person became such (which will thereafter be void), will thereafter
have the right to receive upon exercise that number of shares of Common Stock
(or, in the event that there are insufficient authorized shares of Common Stock
substitute consideration such as cash, property, or other securities of the
Company) having a market value of two times the Purchase Price.
At any time after the acquisition by an Acquiring Person of beneficial
ownership of 20% or more of the outstanding Common Stock and prior to the
acquisition by such person of 25% or more of the outstanding Common Stock, the
Board of Directors of the Company may exchange the Rights (other than Rights
owned by such person which have become void), in whole or in part, at an
exchange ratio of one share of Common Stock, or one one-hundredth of a Preferred
Share (or of a share of a class or series of the Company's preferred stock
having equivalent rights, preferences and privileges), per Right (subject to
adjustment).
At any time prior to the tenth day following a public announcement that an
Acquiring Person has acquired beneficial ownership of 20% or more of the
outstanding Common Stock, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $.001 per Right (the "Redemption
Price"). Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holder of the Rights will be
to receive the Redemption Price. The date on which the redemption of the Rights
occurs pursuant to the foregoing provisions is referred to herein as the
"Redemption Date."
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an amendment
to lower certain thresholds described above to not less than the greater of (i)
any percentage greater than the largest percentage of the outstanding shares of
the Common Stock then known to the Company to be beneficially owned by any
Acquiring Person and (ii) 10%,
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except that from and after such time as any person becomes an Acquiring Person
no such amendment may adversely effect the interests of the holders of the
Rights.
Until a Right is exercised, the holder of a Right will not, by reason of
being such a holder, have rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
PLAN OF DISTRIBUTION
The Company may offer and sell the Offered Securities in one or more of the
following ways: (i) through underwriters or dealers; (ii) through agents; or
(iii) directly by the Company to one or more purchasers. The Prospectus
Supplement with respect to a particular offering of a series of Offered
Securities will set forth the terms of the offering of such Offered Securities,
including the name or names of any underwriters or agents with whom UCFC has
entered into arrangements with respect to the sale of such Offered Securities,
the public offering or purchase price of such Offered Securities and the
proceeds to the Company from such sales, and any underwriting discounts, agency
fees or commissions and other items constituting underwriters' compensation, the
initial public offering price, any discounts or concessions to be allowed or
reallowed or paid to dealers and any securities exchange on which such Offered
Securities may be listed. Dealer trading may take place in certain of the
Offered Securities, including Offered Securities not listed on any securities
exchange.
If underwriters are used in the offer and sale of Offered Securities, the
Offered Securities will be acquired by the underwriters for their own account
and may be resold 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. The Offered Securities may be offered to the
public either through underwriting syndicates represented by managing
underwriters, or by underwriters without a syndicate, all of which underwriters
in either case will be designated in the applicable Prospectus Supplement.
Unless otherwise set forth in the applicable Prospectus Supplement, under the
terms of the underwriting agreement, the obligations of the underwriters to
purchase Offered Securities will be subject to certain conditions precedent and
the underwriters will be obligated to purchase all the Offered Securities if any
are purchased. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
Offered Securities may be offered and sold directly by the Company or
through agents designated by the Company from time to time. Any agent involved
in the offer or sale of the Offered Securities with respect to which this
Prospectus is delivered will be named in, and any commissions payable by the
Company to such agent will be set forth in or calculable from, the applicable
Prospectus Supplement. Unless otherwise indicated in the Prospectus Supplement,
any such agent will be acting on a best-efforts basis for the period of its
appointment.
The Offered Securities will be new issues of securities with no established
trading market. Any underwriters to whom Offered Securities are sold by the
Company for public offering and sale may make a market in such Offered
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 trading market for any Offered Securities.
Any underwriter, dealer or agent participating in the distribution of the
Offered Securities may be deemed to be an underwriter, as that term is defined
in the Securities Act, of the Offered Securities so offered and sold, and any
discounts or commissions received by it from UCFC and any profit realized by it
on the sale or resale of the Offered Securities may be deemed to be underwriting
discounts and commissions under the Securities Act.
Under agreements entered into with the Company, underwriters, dealers and
agents may be entitled to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which the underwriters or agents may be required to
make in respect thereof.
Underwriters, dealers and agents also may be customers of, engage in
transactions with, or perform other services for the Company in the ordinary
course of business.
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35
LEGAL OPINIONS
The legality of the Debt Securities will be passed upon for the Company by
Stroock & Stroock & Lavan LLP, New York, New York. The legality of the Common
Stock and Preferred Stock will be passed upon for the Company by Kantrow, Spaht,
Weaver & Blitzer (A Professional Law Corporation), Baton Rouge, Louisiana.
Certain legal matters in connection with any offering of Securities involving
any underwriters or dealers will be passed upon for such underwriters or dealers
by Simpson Thacher & Bartlett (a partnership which includes professional
corporations), New York, New York. As to matters governed by the laws of the
State of Louisiana, Stroock & Stroock & Lavan LLP and Simpson Thacher & Bartlett
will rely upon Kantrow, Spaht, Weaver & Blitzer (A Professional Law
Corporation). As of December 31, 1996, individual stockholders of the firm of
Kantrow, Spaht, Weaver & Blitzer (A Professional Law Corporation) owned,
directly or indirectly, approximately 50,000 shares of the Company's Common
Stock.
EXPERTS
The consolidated financial statements and the related financial statement
schedules incorporated in this Prospectus by reference from UCFC's Annual Report
on Form 10-K for the year ended December 31, 1995, as amended by Amendments Nos.
1, 2 and 3 on Form 10-K/A, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for the periods
ended March 31, 1996, June 30, 1996 and September 30, 1996, which is
incorporated herein by reference, Deloitte & Touche LLP have applied limited
procedures in accordance with professional standards for a review of such
information. However, as stated in their reports included in the Company's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996, June 30,
1996 and September 30, 1996 and incorporated by reference herein, they did not
audit and they do not express an opinion on that interim financial information.
Accordingly, the degree of reliance on their reports on such information should
be restricted in light of the limited nature of the review procedures applied.
Deloitte & Touche LLP are not subject to the liability provisions of Section 11
of the Securities Act for their reports on the unaudited interim financial
information because those reports are not "reports" or a "part" of the
registration statement prepared or certified by an accountant within the meaning
of Sections 7 and 11 of the Securities Act.
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36
NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED
OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO
SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
---------------------
TABLE OF CONTENTS
PAGE
----
PROSPECTUS
Incorporation of Certain Documents by
Reference............................. 2
Available Information................... 2
The Company............................. 4
Use of Proceeds......................... 5
Ratios of Earnings...................... 5
Description of Debt Securities.......... 6
Description of Capital Stock............ 21
Plan of Distribution.................... 33
Legal Opinions.......................... 34
Experts................................. 34
UNITED COMPANIES
FINANCIAL CORPORATION
[UNITED COMPANIES FINANCIAL LOGO]
PROSPECTUS
DATED , 1997
37
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The registration fee and the estimated expenses, other than underwriting or
broker-dealer fees, discounts and commissions, in connection with the offering
are as follows:
Registration Fee -- Securities and Exchange Commission...... $ 151,515.15
Printing and Engraving Expenses............................. 275,000.00
Legal Fees and Expenses..................................... 475,000.00
Accounting Fees and Expenses................................ 75,000.00
Blue Sky Fees and Expenses.................................. 15,000.00
Indenture Trustees Expenses................................. 14,500.00
Rating Agency Fees and Expenses............................. 500,000.00
Transfer Agent Fees......................................... 15,000.00
Listing Fees................................................ 15,000.00
Miscellaneous............................................... 200,000.00
-------------
Total............................................. $1,736,015.15
=============
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 83 of the Louisiana Business Corporation Law (the "LBCL") provides
that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any action, suit or proceeding, whether civil,
criminal, administrative, or investigative (other than an action by or in the
right of the corporation), by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee, or agent of another
business, foreign or nonprofit corporation, partnership, joint venture, or other
enterprise. The indemnity may include expenses, including attorney fees,
judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit, or proceeding 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
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. Section 83 further provides that a Louisiana corporation may indemnify
officers and directors in an action by or in the right of the corporation under
the same conditions except that no indemnification is permitted without judicial
approval if the director or officer shall have been adjudged to be liable for
willful or intentional misconduct in the performance of his duty to the
corporation. Where an officer or director is successful on the merits or
otherwise in any defense of any action referred to above or any claim therein,
the corporation must indemnify him against such expenses that such officer or
director actually incurred. Section 83 permits a corporation to pay expenses
incurred by the officer or director in defending an action, suit or proceeding
in advance of the final disposition thereof if approved by the board of
directors.
Pursuant to Section 83 of the LBCL, the Company has adopted provisions in
its Articles of Incorporation which require the Company to indemnify its
directors and officers to the fullest extent permitted by the LBCL.
The Articles of Incorporation, as amended, provide that no director or
officer of the Company shall be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director or
officer except for liability (i) for breach of the directors' or officers' duty
of loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 92(D) of the LBCL, or (iv) for any transaction from
which the director or officer derived an improper personal benefit. Section
92(D) of the LBCL specifies certain corporate transactions, such as certain
dividend declarations and dispositions of assets, as unlawful. The effect of
this provision of the Articles of Incorporation is to eliminate the rights of
the Company and its stockholders (through stockholders' derivative suits on
behalf of the Company) to recover monetary damages against a director or officer
for breach of fiduciary duty as a director or officer. This provision does not
limit or eliminate the rights of the Company or any stockholders to seek
non-monetary relief, such as an injunction or recession in the event of a breach
of a director's or officer's fiduciary duty.
The Company has entered into indemnification agreements with its directors
and certain of its officers which provide that the Company will, if certain
conditions are met and the director or officer acted in
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accordance with the applicable standard and subject to certain procedures and
exceptions, indemnify such persons for claims, judgments and related expenses
resulting from their service on behalf of the Company and its affiliated
entities in any pending, threatened or completed action, suit or proceeding,
whether civil, administrative or criminal, except where (i) the Company is
prohibited by law from providing such indemnification; (ii) payment of the
indemnification amounts has been made under an insurance policy; and (iii) the
director or officer gained a personal profit to which he or she was not legally
entitled including profits arising from the violation of certain securities
laws. A form of the indemnification agreements referenced above has been filed
by the Company as an exhibit to its Quarterly Report on Form 10-Q for the
quarter ended March 31, 1995.
ITEM 16. LIST OF EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
1.1(1) -- Form of Underwriting Agreement for Securities
4.1(2) -- Series A Junior Participating Preferred Stock Purchase
Rights
4.2(3) -- Senior Indenture
4.3(3) -- Form of Senior Note (included in Exhibit 4.2)
4.4(1) -- Subordinated Indenture
4.5(1) -- Form of Subordinated Note (included in Exhibit 4.4)
4.6(4) -- Form of Articles of Amendment for Preferred Stock
4.7(5) -- Specimen Preferred Stock Certificate
4.8(6) -- Articles of Amendment for PRIDES
4.9(7) -- Specimen Certificate of PRIDES
4.10(1) -- Specimen Common Stock Certificate
4.11(1) -- Form of Deposit Agreement
4.12(1) -- Form of Depositary Receipt (included in Exhibit 4.11)
5.1(1) -- Opinion of Stroock & Stroock & Lavan LLP regarding
legality of securities being registered
5.2(1) -- Opinion of Kantrow, Spaht, Weaver & Blitzer (A
Professional Law Corporation) regarding legality of
securities being registered
12.1(8) -- Statement of Computation of Ratio of Earnings to Fixed
Charges
12.2(9) -- Statement of Computation of Ratio of Earnings to Combined
Fixed Charges and Preferred Stock Dividends
15.1(1) -- Letter of Deloitte & Touche LLP regarding unaudited
financial information
23.1(1) -- Consent of Stroock & Stroock & Lavan LLP (included in
Exhibit 5.1)
23.2(1) -- Consent of Kantrow, Spaht, Weaver & Blitzer (A
Professional Law Corporation) (included in Exhibit 5.2)
23.3(1) -- Consent of Deloitte & Touche LLP
24.1(1) -- Powers of Attorney (included in Part II of this
Registration Statement)
25.1(1) -- Statement of Eligibility of Senior Trustee on Form T-1
25.2(1) -- Statement of Eligibility of Subordinated Trustee on Form
T-1
- ---------------
(1) Filed herewith.
(2) Incorporated by reference to Exhibit 1 to the Company's Registration
Statement on Form 8-A filed on August 5, 1994.
(3) Incorporated by reference to Exhibit 4.1 to the Company's Current Report on
Form 8-K filed on June 16, 1995.
(4) Incorporated by reference to Exhibit 4.7 to the Company's Registration
Statement on Form S-3 (Registration No. 33-60367) filed on June 19, 1995.
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(5) Incorporated by reference to Exhibit 4.8 to the Company's Registration
Statement on Form S-3 (Registration No. 33-60367) filed on June 19, 1995.
(6) Incorporated by reference to Exhibit 4.9 to the Company's Registration
Statement on Form S-3 (Registration No. 33-60367) filed on June 19, 1995.
(7) Incorporated by reference to Exhibit 4.4 to the Company's Current Report on
Form 8-K filed on June 16, 1995.
(8) Incorporated by reference to Exhibit 12.1 to the Company's Current Report
on Form 8-K filed on December 5, 1996.
(9) Incorporated by reference to Exhibit 12.2 to the Company's Current Report
on Form 8-K filed on December 5, 1996.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to the Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(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) if, in the aggregate, the
changes in volume and price represent no more than 20 percent 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 (1)(i) and (1)(ii) do not apply if
the Registration Statement is on Form S-3 or Form S-8 and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed with or furnished to the Commission
by the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise,
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the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 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 Securities
Act of 1933 and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that, (1) for purposes of
determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as a part of this Registration
Statement in reliance upon Rule 430A and contained in a form of prospectus filed
by the Registrant pursuant to Rules 424(b)(1) or (4) or 497(h) under the
Securities Act of 1933 shall be deemed to be part of this Registration Statement
as of the time it was declared effective, and (2) for the purpose of determining
any liability under the Securities Act of 1933, 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.
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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 Baton Rouge, State of Louisiana on February 19, 1997.
UNITED COMPANIES FINANCIAL CORPORATION
By: /s/ SHERRY E. ANDERSON
-----------------------------------------
Sherry E. Anderson
Senior Vice President and Secretary
Known all men by these presents, that each person whose signature appears
below constitutes and appoints Sherry E. Anderson, Dale E. Redman and J. Terrell
Brown, acting singly, as his true and lawful attorney-in-fact and agent, with
full power of substitution, and for him and in his name, place and stead, in any
and all capacities, to sign any and all amendments or post-effective amendments
to this Registration Statement and any registration statement relating to any
offering made pursuant to this Registration Statement that is to be effective
upon filing pursuant to Rule 462(b) under the Securities Act, and to file the
same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto each of said
attorneys-in-fact and agents, full power and authority to do and perform each
and every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitutes may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ J. TERRELL BROWN Chairman of the Board and February 19, 1997
- ----------------------------------------------------- Chief Executive Officer
J. Terrell Brown (Principal Executive
Officer)
/s/ JOHN D. DIENES President, Chief Operating February 19, 1997
- ----------------------------------------------------- Officer and Director
John D. Dienes
/s/ DALE E. REDMAN Executive Vice President, February 19, 1997
- ----------------------------------------------------- Chief Financial Officer and
Dale E. Redman Director (Principal
Financial Officer)
/s/ JESSE O. GRIFFIN Senior Vice President and February 19, 1997
- ----------------------------------------------------- Controller (Principal
Jesse O. Griffin Accounting Officer)
/s/ JAMES J. BAILEY, III Director February 19, 1997
- -----------------------------------------------------
James J. Bailey, III
/s/ ROBERT H. BARROW Director February 19, 1997
- -----------------------------------------------------
Robert H. Barrow
/s/ RICHARD A. CAMPBELL Director February 19, 1997
- -----------------------------------------------------
Richard A. Campbell
/s/ HARRIS J. CHUSTZ, JR. Director February 19, 1997
- -----------------------------------------------------
Harris J. Chustz, Jr.
II-5
42
SIGNATURE TITLE DATE
--------- ----- ----
/s/ ROY G. KADAIR, M.D. Director February 19, 1997
- -----------------------------------------------------
Roy G. Kadair, M.D.
/s/ O. MILES POLLARD, JR. Director February 19, 1997
- -----------------------------------------------------
O. Miles Pollard, Jr.
/s/ WILLIAM H. WRIGHT, JR. Director February 19, 1997
- -----------------------------------------------------
William H. Wright, Jr.
II-6
43
EXHIBIT INDEX
EXHIBIT PAGE
NUMBER DESCRIPTION OF DOCUMENT NUMBER
------- ----------------------- ------
1.1(1) -- Form of Underwriting Agreement for Securities
4.1(2) -- Series A Junior Participating Preferred Stock Purchase
Rights
4.2(3) -- Senior Indenture
4.3(3) -- Form of Senior Note (included in Exhibit 4.2)
4.4(1) -- Subordinated Indenture
4.5(1) -- Form of Subordinated Note (included in Exhibit 4.4)
4.6(4) -- Form of Articles of Amendment for Preferred Stock
4.7(5) -- Specimen Preferred Stock Certificate
4.8(6) -- Articles of Amendment for PRIDES
4.9(7) -- Specimen Certificate of PRIDES
4.10(1) -- Specimen Common Stock Certificate
4.11(1) -- Form of Deposit Agreement
4.12(1) -- Form of Depositary Receipt (included in Exhibit 4.11)
5.1(1) -- Opinion of Stroock & Stroock & Lavan LLP regarding
legality of securities being registered
5.2(1) -- Opinion of Kantrow, Spaht, Weaver & Blitzer (A
Professional Law Corporation) regarding legality of
securities being registered
12.1(8) -- Statement of Computation of Ratio of Earnings to Fixed
Charges
12.2(9) -- Statement of Computation of Ratio of Earnings to Combined
Fixed Charges and Preferred Stock Dividends
15.1(1) -- Letter of Deloitte & Touche LLP regarding unaudited
financial information
23.1(1) -- Consent of Stroock & Stroock & Lavan LLP (included in
Exhibit 5.1)
23.2(1) -- Consent of Kantrow, Spaht, Weaver & Blitzer (A
Professional Law Corporation) (included in Exhibit 5.2)
23.3(1) -- Consent of Deloitte & Touche LLP
24.1(1) -- Powers of Attorney (included in Part II of this
Registration Statement)
25.1(1) -- Statement of Eligibility of Senior Trustee on Form T-1
25.2(1) -- Statement of Eligibility of Subordinated Trustee on Form
T-1
- ---------------
(1) Filed herewith.
(2) Incorporated by reference to Exhibit 1 to the Company's Registration
Statement on Form 8-A filed on August 5, 1994.
(3) Incorporated by reference to Exhibit 4.1 to the Company's Current Report on
Form 8-K filed on June 16, 1995.
(4) Incorporated by reference to Exhibit 4.7 to the Company's Registration
Statement on Form S-3 (Registration No. 33-60367) filed on June 19, 1995.
(5) Incorporated by reference to Exhibit 4.8 to the Company's Registration
Statement on Form S-3 (Registration No. 33-60367) filed on June 19, 1995.
(6) Incorporated by reference to Exhibit 4.9 to the Company's Registration
Statement on Form S-3 (Registration No. 33-60367) filed on June 19, 1995.
(7) Incorporated by reference to Exhibit 4.4 to the Company's Current Report on
Form 8-K filed on June 16, 1995.
(8) Incorporated by reference to Exhibit 12.1 to the Company's Current Report
on Form 8-K filed on December 5, 1996.
(9) Incorporated by reference to Exhibit 12.2 to the Company's Current Report
on Form 8-K filed on December 5, 1996.