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As filed with the Securities and Exchange Commission on February 18, 1994
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIELDCREST CANNON, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 56-0586036
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
326 EAST STADIUM DRIVE, EDEN, NORTH CAROLINA 27288
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
M. KENNETH DOSS
Vice President, Secretary
and General Counsel
326 East Stadium Drive
Eden, North Carolina 27288
(910) 627-3258
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
JOHN K.P. STONE, III, ESQ.
Hale and Dorr
60 State Street
Boston, MA 02109
(617) 526-6000
Approximate date of commencement of proposed sale to public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
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If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
CALCULATION OF REGISTRATION FEE
________________________________________________________________________
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
EACH CLASS OF AMOUNT OFFERING AGGREGATE AMOUNT OF
SECURITIES TO TO BE PRICE PER OFFERING REGISTRATION
BE REGISTERED REGISTERED(1) SHARE (1) PRICE (1) FEE
$3.00 Series A
Convertible
Preferred Stock,
$.01 par value 1,500,000 $56.50 $84,750,000 $29,224.34
Common Stock,
$1.00 par value (2) -- -- None
<FN>
________________________________________________________________________
(1) Estimated solely for the purpose of calculating the registration
fee.
(2) The number of shares of Common Stock required for conversion of the
$3.00 Series A Convertible Preferred Stock at the initial conversion
price, together with such additional indeterminate number of shares
of Common Stock as may become issuable upon conversion by reason of
adjustments in the conversion price. Pursuant to Rule 457(i), no
registration fee is required for the shares of Common Stock reserved
for issuance upon conversion because such shares will be issued for
no additional consideration.
________________________________________________________________________
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 18, 1994
PROSPECTUS
FIELDCREST CANNON, INC.
1,500,000 SHARES OF $3.00 SERIES A CONVERTIBLE PREFERRED STOCK
($.01 PAR VALUE)
2,564,100 SHARES OF COMMON STOCK
($1.00 PAR VALUE)
This Prospectus covers the resale of 1,500,000 shares (the
"Preferred Shares") of $3.00 Series A Convertible Preferred Stock,
$.01 par value per share (the "Preferred Stock") of Fieldcrest
Cannon, Inc. (the "Company") and the issuance by the Company of
2,564,100 shares (subject to adjustment) (the "Common Shares") of
Common Stock, $1.00 par value per share (the "Common Stock"), of
the Company issuable upon the conversion of the Company's
outstanding Preferred Stock. All of the Preferred Shares offered
hereby are being sold by certain stockholders of the Company
("Selling Stockholders"). See "Selling Stockholders." The
Company will not receive any of the proceeds from the sale of the
Preferred Shares by the Selling Stockholders nor will the Company
receive any consideration for the Common Shares issuable upon the
conversion of the outstanding Preferred Shares.
The Selling Stockholders have advised the Company that they
propose to sell, from time to time, the Preferred Shares offered
hereby in the over-the-counter market, in ordinary brokerage
transactions or otherwise at market prices prevailing at the time
of sale or at negotiated prices. See "Plan of Distribution."
Each share of Preferred Stock is convertible into Common
Stock, at the option of the holder at any time after 45 days after
the original issuance thereof, unless previously redeemed, at a
rate, (subject to adjustment in certain events) of 1.7094 shares
of Common Stock for each share of Preferred Stock, equivalent to
an initial conversion price of $29.25 for each share of Common
Stock.
The Preferred Shares are not redeemable prior to September 1,
2004. On and after September 1, 2004, the Company may redeem the
Preferred Shares, in whole or in part, at $50 per share, plus
accrued and unpaid dividends. Notwithstanding the foregoing, in
the event the Company's 11.25% Senior Subordinated Debentures are
not outstanding or have been defeased or amended to permit such
redemption, the Preferred Shares may be redeemed, in whole or in
part, at the option of the Company during the period from
September 10, 1998 through August 31, 1999, at a redemption price
equal to $51.50 per share, and thereafter declining ratably
annually to $50 per share on or after September 1, 2003, plus
accrued and unpaid dividends. Dividends on the Preferred Stock
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are cumulative from the date of issuance and are payable quarterly
in arrears commencing December 1, 1993. See "Description of
Capital Stock -- $3.00 Series A Convertible Preferred Stock."
The Common Stock is traded on the New York Stock Exchange
under the symbol "FLD." On February 15, 1994, the reported last
sale price of the Common Stock on the New York Stock Exchange was
$26.50 per share. Application has been made to list the Preferred
Stock on the New York Stock Exchange under the symbol "FLDPrA."
____________________________________
FOR A DISCUSSION OF CERTAIN MATTERS THAT SHOULD BE CONSIDERED
CAREFULLY BY POTENTIAL INVESTORS IN THE PREFERRED AND COMMON
SHARES, SEE "INVESTMENT CONSIDERATIONS."
____________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE. ____________________________________
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED
IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED IN THIS
PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY FIELDCREST CANNON, INC. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
OTHER THAN THE SHARES OF PREFERRED STOCK AND COMMON STOCK COVERED
BY THIS PROSPECTUS, NOR 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 ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
____________________________________
The date of this Prospectus is _____________ __, _____.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other information
filed by the Company with the Commission pursuant to the
informational requirements of the Exchange Act may be inspected
and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and
at the Commission's regional offices located at 7 World Trade Center,
Suite 1300, New York, New York 10048, and at Northern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such materials also may be obtained from
the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The
Common Stock and Preferred Stock of the Company is listed on the
New York Stock Exchange. Reports and other information concerning
the Company may be inspected at the New York Stock Exchange, 20
Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration
Statement on Form S-3 (herein, together with all amendments and
exhibits, referred to as the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act") with
respect to the Preferred Shares and Common Shares offered hereby.
This Prospectus does not contain all the information set forth in
the Registration Statement and the exhibits and schedules thereto,
as certain items are omitted in accordance with the rules and
regulations of the Commission. For further information pertaining
to the Company and the Shares offered hereby, reference is made to
such Registration Statement and the exhibits and schedules
thereto, which may be inspected without charge at the office of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and copies of which may be obtained from the Commission at
prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the
Commission are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992, filed March 23, 1993
(specifically excluding the financial statements thereto
and specifically including the financial statement
schedules);
(2) The Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1993, June 30, 1993 and
September 30, 1993;
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(3) The Company's Current Reports on Form 8-K dated June 3,
1993, July 30, 1993 and November 24, 1993;
(4) The Company's Registration Statement on Form 8-A filed
December 3, 1993 registering the Preferred Stock
Purchase Rights of the Company under Section 12(b) of
the Exchange Act;
(5) The Company's Registration Statement on Form 8-A filed
February __, 1994 registering the $3.00 Series A
Convertible Preferred Stock of the Company under
Section 12(b) of the Exchange Act;
(6) The financial statements and notes thereto of Fieldcrest
Cannon, Inc. and Amoskeag Company for the three years
ended December 31, 1992 included in the Company's
Definitive Consent Statement on Schedule 14A dated
November 4, 1993;
(7) Quarterly Report on Form 10-Q of Amoskeag Company for
the quarter ended September 30, 1993; and
(8) The financial statement schedules included in the Annual
Report on Form 10-K of Amoskeag Company for the fiscal
year ended December 31, 1992.
All documents filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date hereof and prior to the termination of the
offering of the Preferred Shares and the Common Shares registered
hereby shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of filing 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 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, upon a written request of such
person, a copy of any or all of the foregoing documents
incorporated by reference into this Prospectus (without exhibits
to such documents other than exhibits specifically incorporated by
reference into such documents). Requests for such copies should
be directed to Shareowner Records Department, Fieldcrest Cannon,
Inc., 326 East Stadium Drive, Eden, North Carolina 27288.
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THE COMPANY
The Company is the leading manufacturer of towels, third
largest manufacturer of sheets and second largest manufacturer of
blankets in the United States. The Company believes that its
principal brand names, which include "Fieldcrest," "Royal Velvet,"
"Charisma," "St. Marys," "Cannon," "Royal Family" and
"Monticello," are among the most widely recognized in the
industry, and represent excellence and value in product quality,
fashion and design. Approximately 93% of the Company's 1992 net
sales of bed and bath products carried the Company's principal
brand names, while the remaining 7% were from sales of private
label and non-brand items.
The Company offers a broad product range of home furnishing
textile products, including towels, sheets, blankets, comforters
and bath tugs, which appeal to consumers across a variety of price
points, quality levels and designs. Design leadership is a key
element of the company's marketing strategy. The Company employs
a 22 person in-house design staff and also incorporates licensed
designer names such as Waverly, Adrienne Vittadini and court of
Versailles into its product offerings. Another cornerstone of the
Company's business strategy is its ability to offer quality
products across a variety of price points, from value-oriented
opening price points to the finest 100% Pima and Supima(R) Cotton
products.
The Company's bathroom products include bath, hand and
fingertip towels, washcloths and bath mats, using primarily 100%
cotton, as well as cotton/polyester blends. The Company is
recognized as a supplier of premier fashion colors and as a color
innovator in the towel industry. The towel line includes solid
color cam and dobby towels, woven stripes and fancy jacquards and
printed towels. The Company produces a wide variety of sheets
ranging from an opening price point 128-thread count sheet of
blended cotton and polyester to a top-of-the line 310-thread count
100% cotton sheet. The Company is recognized for its solid color
sheets and coordinated decorative bedding accessories and its
expertise and efficiency in print design. In addition to sheets,
the Company's product lines in bedding include matching
comforters, duvet covers and pillow shams, along with coordinated
ruffled or pleated bed sheets.
The Company's products are marketed worldwide by its 131
person sales and marketing staff and are distributed nationally to
customers for ultimate retail sale. The Company's products are
sold principally through mass merchants, chain stores and
warehouse clubs. Sales to Wal-Mart Stores, Inc. ("Wal-Mart"),
Kmart corporation and Dayton Hudson corporation accounted for an
aggregate of 28.2% of the Company's 1992 net sales for such year
after giving effect to the sale of the carpet and rug division.
The Company's mid-to-high end brand name products are distributed
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to leading department stores, specialty home furnishing stores and
catalog merchants. In addition, the Company distributes private
label products through a broad range of retailers pursuant to
private label contracts, as well as contract products directly to
government and other institutional customers. As a supplement to
its primary distribution channels, the Company operates retail
outlet stores which sell the Company's bed and bath products
directly to customers. These stores sell both first quality
merchandise and off-goods. The Company believes that its retail
outlet stores provide an effective channel for the distribution of
its inventory of second quality merchandise and enhances its
distribution of first quality products in regions where consumers
would not otherwise have access to the Company's products.
The Company's manufacturing operations are vertically
integrated in that it purchases raw materials, principally cotton
and synthetic fibers, and converts these materials into finished
consumer products. Since 1988, the Company has made a significant
commitment to increase the manufacturing productivity of its bed
and bath division and has implemented an aggressive program to
enhance its operating efficiencies. From December 31, 1988 to
December 31, 1993, the Company has invested $205.7 million in
capital improvements, a significant portion of which has been
spent on plant modernization designed to improve the overall
efficiency of the Company's manufacturing process. For example,
at its Dumaine plant in Fieldale, Virginia, where the Company
manufactures many of its high-end towels, the Company has replaced
its weaving capacity with state-of-the-art rapier looms, a
development which has reduced unit cost and the amount of off-
goods production which must be sold at lower margins.
In addition to the manufacturing cost savings and quality
improvements resulting from the Company's capital investment in
its bed and bath production assets, the Company has also
instituted an aggressive program to reduce its costs and improve
its productivity by more effectively utilizing its fixed asset
base, improving its administrative systems and rationalizing its
employment levels. This improved productivity has enabled the
Company to reduce its employee base by 27% since December 31,
1987.
The Company has improved its operating efficiency and
inventory management systems through the implementation of
"electronic data interchange" (EDI) with approximately 55 of its
largest customers. The implementation of EDI allows the Company
to respond rapidly to the demands of its high volume customers,
while minimizing its finished goods inventory and permitting a
more efficient, targeted manufacturing schedule. These programs
improve efficiencies and reduce lead times by improving
communication, planning and processing times at various stages of
production. The Company has also reduced the number of stock
keeping units in order to focus on the Company's popular items and
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reduce slower moving inventory (e.g., reduced sheet fabric
varieties from seven to five).
International sales accounted for approximately 5.7% of the
Company's net sales in 1992. During 1993, the Company continued
to pursue international expansion through the acquisition of the
Caldwell towel brand, the leading towel brand in Canada with a 27%
market share, and the consummation of a new distribution agreement
with a new Mexican distributor, Grupo Kaltex, S.A. The Company
intends to continue to actively pursue other opportunities to
expand its business worldwide.
The Company's principal executive offices are located at 326
East Stadium Drive, Eden, North Carolina 27288, and its telephone
number is (910) 627-3000.
The following trademarks are used in this offering Circular:
"Fieldcrest ", "Royal Velvet ", "Charisma ", "St. Marys ",
"Cannon ", "Royal Family " and "Monticello ", each of which is a
registered trademark of the Company.
INVESTMENT CONSIDERATIONS
Prior to deciding to purchase the Shares offered hereby,
potential purchasers should consider carefully certain matters
associated with investment in the home furnishings textile
industry and the matters relating to the Company set forth herein
together with the information contained in the rest of this
Prospectus and the information incorporated herein by reference.
LEVERAGE; ABILITY TO SERVICE DEBT
The Company is highly leveraged and as such, will be required
to generate and allocate significant cash flow to service its
debt. At December 31, 1993, the Company's ratio of total debt to
short-term debt and capitalization was 61%. The Company's ratio
of earnings to fixed charges for the nine months ended
September 30, 1993 was 1.48. In addition, substantially all of
the Company's assets are pledged to secure certain of the
Company's senior borrowings. See "Additional Borrowings for
Capital Expenditures" below.
DIVIDEND RESTRICTIONS AND COVENANT LIMITATIONS
Dividends on the Common Stock and the Preferred Stock are
payable at the discretion of the Company's Board of Directors out
of funds legally available therefor. Future payments of dividends
(and the amounts thereof) will depend on the Company's financial
condition, results of operations, capital requirements, and with
respect to the Common Stock, such other factors as the Board of
Directors of the Company deems relevant.
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Certain of the Company's debt agreements contain restrictive
covenants that limit the Company from paying dividends in certain
instances and that require the Company to maintain certain
financial ratios. Under the terms of the Company's Revolving
Credit Facility, the Company was prohibited from paying dividends
before December 31, 1992 and, thereafter, is permitted to pay
dividends only upon compliance with a financial covenant relating
to interest coverage. In addition, the Revolving Credit Facility,
as amended, limits the dividends that may be paid by the Company
during any twelve-month period after December 31, 1992 to the
lesser of 40% of the Company's net income during the immediately
preceding twelve months or $15.0 million and contains additional
financial covenants which may further restrict the ability of the
Company to pay dividends. The terms of the Company's 11.25%
Senior Subordinated Debentures due 2004 also contain restrictive
limitations on the Company's ability to pay dividends based upon
future net income of the Company.
CYCLICALITY AND SEASONALITY
The home furnishings textile industry is highly cyclical, and
the Company's performance can be negatively affected by downturns
in consumer spending associated with recessionary economic
environments. The Company believes that its 1990, 1991 and 1992
results were significantly affected by the current downturn in
consumer spending.
The Company experiences greater sales volume in the last
three quarters of the calendar year, primarily because the
Company's retail customers have higher sales in the second half of
the calendar year. In addition, the Company typically increases
its borrowings, particularly in the third and fourth quarters, in
order to finance its seasonal working capital requirements.
IMPORTANCE OF SINGLE CUSTOMER
Net sales to Wal-Mart accounted for approximately 16.0% and
17.4% of the Company's net sales during 1992 and 1993,
respectively, after giving effect to the sale of the Company's
carpet and rug division in July 1993. Although management of the
Company believes that the Company's relationship with Wal-Mart is
excellent and the loss of this customer is unlikely, the loss of
Wal-Mart as a customer would have a material adverse effect on the
Company's business. No other single customer accounted for more
than 10% of net sales in 1992 or 1993, although the Company's five
largest customers accounted, in the aggregate, for approximately
34.2% and 35.3% of the Company's net sales, respectively, during
such periods, after giving effect to the sale of the Company's
carpet and rug division.
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RAW MATERIALS
The Company's primary raw materials are cotton and synthetic
fibers. These materials are generally available from a wide
variety of sources and no significant shortage of such materials
is currently anticipated. The Company uses significant quantities
of cotton which are subject to ongoing price fluctuations. The
Company in the ordinary course of business arranges for purchase
commitments with vendors for future cotton requirements.
COMPETITION
The home furnishings textile industry is highly competitive.
Among the Company's competitors are a number of domestic and
foreign companies with significant financial resources,
experience, manufacturing capabilities and brand name identity.
The Company's ability to operate profitability in this environment
will depend on continued market acceptance of the Company's
products and the Company's efforts to control costs and produce
new and innovative products in response to competitive pressures
and changes in consumer demand.
ADDITIONAL BORROWINGS FOR CAPITAL EXPENDITURES
The Company has budgeted approximately $90 million over the
next three years for expansion and upgrading of certain of its
manufacturing and warehouse facilities and an additional $20
million to $25 million for a new warehouse facility in Kannapolis,
North Carolina. The Company anticipates funding these
expenditures principally through internally generated funds as
well as through additional borrowings under its available credit
lines. Although the Company believes that it will have adequate
funding over the next several years, there can be no assurance
that funds will continue to be available or that the cost of such
funds will not increase.
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RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratios of earnings to
fixed charges for the Company for the periods indicated. These
ratios were computed by dividing earnings from continuing
operations, before income taxes and fixed charges, by fixed
charges.
NINE MONTHS
ENDED YEARS ENDED DECEMBER 31,
SEPT. 30, 1993 1992 1991 1990 1989 1988
1.48 1.66 1.08 (a) 2.35 1.97
<FN>
(a) For the year ended December 31, 1990, earnings were
insufficient to cover fixed charges; the coverage deficiency
was $48.5 million.
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CONDENSED CONSOLIDATED STATEMENTS
DOLLARS IN THOUSANDS, THREE MONTHS TWELVE MONTHS
EXCEPT PER SHARE DATA ENDED DECEMBER 31 ENDED DECEMBER 31
CONSOLIDATED STATEMENT OF INCOME 1993 1992 1993 1992
(unaudited) (unaudited)
Net sales $ 282,932 $270,862 $1,000,107 $981,773
Income from continuing operations
before extraordinary charge and
accounting changes 8,670 5,801 14,966 15,690
Net income (loss) $ 8,670 $ 7,827 $ (42,931) $ 15,250
Earnings per share:
Income from continuing operations
before extraordinary charge
and accounting changes $ .77 $ .48 $ 1.24 $ 1.39
Net income (loss) per share $ .77 $ .65 $ (3.70) $ 1.35
DOLLARS IN THOUSANDS
DECEMBER 31
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 1993 1992
(unaudited)
Current assets:
Cash $ 3,865 $ 4,665
Accounts receivable 164,419 181,056
Inventories 209,834 244,321
Deferred tax assets - 23,202
Net assets held for sale 32,536 -
Other prepaid expenses and current assets 2,491 7,303
-------- --------
Total current assets 413,145 460,547
-------- --------
Plant and equipment, net 294,277 372,432
Deferred charges and other assets 33,024 31,012
-------- --------
Total assets $740,446 $863,991
======== ========
Current Liabilities:
Short-term borrowings $ - $ 14,056
Accounts and drafts payable 61,365 69,399
Federal and state income taxes 262 3,627
Deferred income taxes 14,799 -
Accrued liabilities 65,996 66,592
Current portion of long-term debt 8,397 10,293
-------- --------
Total current liabilities 150,819 163,967
-------- --------
Long-term debt 294,611 353,419
Deferred income taxes 35,182 41,484
Other non-current liabilities 66,504 20,643
Shareowners' equity 193,330 284,478
-------- --------
Total liabilities and shareowners' equity $740,446 $863,991
======== ========
USE OF PROCEEDS
None of the proceeds from the sale of the Preferred Shares
and Common Shares will be received by the Company.
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DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
The Company's authorized capital stock consists of 25,000,000
shares of Common Stock, 15,000,000 shares of Class B Common Stock
and 10,000,000 shares of Preferred Stock, of which 1,600,000
shares have been designated "$3.00 Series A Convertible Preferred
Stock" (the "Preferred Stock") and 500,000 shares have been
designated Series B Junior Participating Preferred Stock
("Series B Junior Preferred Stock"). The Company's Board of
Directors has authority to divide the preferred stock into one or
more series and has broad authority to fix and determine the
relative rights and preferences, including the voting rights, of
the shares of each series. Certain terms and provisions of the
Preferred Stock are summarized below. Such summary does not
purport to be complete and is subject to, and qualified in its
entirety by reference to, all of the provisions of the Company's
Certificate of Incorporation, as amended to date, filed as an
exhibit hereto, including the definitions therein of certain
terms.
$3.00 SERIES A CONVERTIBLE PREFERRED STOCK
There are currently 1,500,000 shares of Preferred Stock outstanding.
DIVIDENDS. Holders of shares of Preferred Stock will be
entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available therefor, cash dividends
at an annual rate of $3.00 per share, payable quarterly in arrears
on March 1, June 1, September 1 and December 1 of each year,
commencing December 1, 1993 (with respect to the period from the
date of initial issuance of such shares of Preferred Stock to such
date), except that if any such date is a Saturday, Sunday or legal
holiday then such dividend shall be payable on the next day that
is not a Saturday, Sunday or legal holiday. Dividends will accrue
and be cumulative from such date of initial issuance and will be
payable to holders of record as they appear on the stock transfer
books on such record dates as are fixed by the Company's Board of
Directors.
The Preferred Stock will have priority as to dividends over
the Common Stock and any other series or class of the Company's
stock hereafter issued that ranks junior as to dividends to the
Preferred Stock, when and if issued (collectively, "Junior
Dividend Stock"), and no dividend (other than dividends payable
solely in stock that is Junior Dividend Stock and that ranks
junior to the Preferred Stock as to distributions of assets upon
liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary (such stock that is junior as to
liquidation rights, "Junior Liquidation Stock") (the Common Stock
and any other capital stock of the Company that is both Junior
Dividend Stock and Junior Liquidation Stock, "Junior Stock")) may
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be paid on any Junior Dividend Stock, and no payment may be made
on account of the purchase, redemption, retirement or other
acquisition of Junior Dividend Stock or Junior Liquidation Stock
(other than such acquisitions pursuant to employee or director
incentive or benefit plans or arrangements, or acquisitions or
exchanges solely for Junior Stock), unless all accrued and unpaid
dividends on the Preferred Stock for all dividend payment periods
ending on or before the date of payment of such dividends on
Junior Dividend Stock, or such payment for such Junior Dividend
Stock or Junior Liquidation Stock, as the case may be, have been
paid or declared and set apart for payment. The Company may not
pay dividends on the Preferred Stock unless it has paid or
declared and set apart for payment or contemporaneously pays or
declares and sets apart for payment all accrued and unpaid
dividends for all dividend payment periods on any class or series
of stock having parity with the Preferred Stock as to dividends
("Parity Dividend Stock") ratably, so that the amount of dividends
declared and paid per share on the Preferred Stock and such Parity
Dividend Stock will bear to each other the same ratio that the
accrued and unpaid dividends to the date of payment on Preferred
Stock and such Parity Dividend Stock bear to each other. No
payment may be made on account of the purchase, redemption,
retirement or other acquisition of shares of Parity Dividend Stock
or other class or series of the Company's capital stock ranking on
a parity with the Preferred Stock as to distributions of assets
upon liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary (such stock that has parity with
the Preferred Stock as to liquidation rights, "Parity Liquidation
Stock") (other than such acquisitions pursuant to employee or
director incentive or benefit plans or arrangements, or
acquisitions or exchanges solely for Junior Stock) unless all
accrued and unpaid dividends on the Preferred Stock for all
dividend payment periods ending on or before the date of payment
on account of such acquisition of such Parity Dividend Stock or
Parity Liquidation Stock shall have been paid or declared and set
apart for payment.
The amount of dividends payable per share of Preferred Stock
for each quarterly dividend period will be computed by dividing
the annual dividend amount by four. The amount of dividends
payable for the initial period and for any period shorter than a
full quarterly dividend period will be computed on the basis of a
360-day year of twelve 30-day months. No interest will be payable
in respect of any dividend payment on the Preferred Stock which
may be in arrears.
Under Delaware law, the Company may declare and pay dividends
or make other distributions on its capital stock only out of
surplus, as defined in the Delaware General Corporation Law, or,
in case there is no such surplus, out of its net profits for the
fiscal year in which the dividend or distribution is declared
and/or the preceding fiscal year. No dividends or distributions
- 13 -
16
may be declared, paid or made if the Company is or would be
rendered insolvent by virtue of such dividend or distribution, or
if such declaration, payment or distribution would contravene the
Company's Certificate of Incorporation. In addition, the
Company's outstanding indebtedness contains covenants that may
restrict the Company's ability to pay dividends. See "Investment
Considerations -- Dividend Restrictions and Covenant Limitations."
LIQUIDATION RIGHTS. In the case of the voluntary or
involuntary liquidation, dissolution or winding up of the Company,
holders of shares of Preferred Stock are entitled to receive the
liquidation preference of $50 per share, plus an amount equal to
any accrued and unpaid dividends to the payment date, before any
payment or distribution is made to the holders of Common Stock or
any other series or class of stock hereafter issued that ranks
junior as to distributions upon such liquidation, dissolution or
winding up, but the holders of the shares of the Preferred Stock
will not be entitled to receive the liquidation preference of such
shares until the liquidation preference of any other series or
class of stock hereafter issued that ranks senior as to
liquidation rights to the Preferred Stock ("Senior Liquidation
Stock") has been paid in full. The holders of Preferred Stock and
all series or classes of stock hereafter issued that rank on a
parity as to distributions of assets upon such liquidation,
dissolution or winding up of the Company with the Preferred Stock
are entitled to share ratably, in accordance with the respective
preferential amounts payable on such stock, in any distribution
(after payment of the liquidation preference of the Senior
Liquidation Stock) which is not sufficient to pay in full the
aggregate of the amounts payable thereon. After payment in full
of the liquidation preference of the shares of the Preferred
Stock, the holders of such shares will not be entitled to any
further participation in any distribution of assets of the
Company. Neither a consolidation or merger of the Company with
another corporation nor a sale or transfer of all or part of the
Company's assets for cash, securities or other property will be
considered a liquidation, dissolution or winding up of the
Company.
VOTING RIGHTS. The holders of the Preferred Stock will have
no voting rights except as described below or as required by law.
In exercising any such vote, each outstanding share of Preferred
Stock will be entitled to one vote, excluding shares held by the
Company or any entity controlled by the Company, which shares
shall have no voting rights.
Whenever dividends on the Preferred Stock or on any
outstanding shares of Parity Dividend Stock have not been paid in
an aggregate amount equal to at least six quarterly dividends on
such shares (whether or not consecutive), the number of members of
the Company's Board of Directors will be increased by two, and the
holders of the Preferred Stock, voting separately as a class with
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17
the holders of Parity Dividend Stock on which like voting rights
have been conferred and are exercisable, will be entitled to elect
such two additional directors at any meeting of stockholders at
which directors are to be elected held during the period such
dividends remain in arrears. Such voting rights will terminate
when all such dividends accrued and unpaid have been declared and
paid or set apart for payment. The term of office of all
directors so elected will terminate immediately upon the
termination of such voting rights.
In addition, so long as any Preferred Stock is outstanding,
pursuant to the terms of the Preferred Stock the Company will not,
without the affirmative vote or consent of the holders of at least
66 2/3% (unless a higher percentage shall then be required by
applicable law) of all outstanding shares of Preferred Stock,
voting separately as a class, (i) amend, alter or repeal any
provision of the Company's Certificate of Incorporation or By-Laws
so as to affect adversely the relative rights, preferences,
qualifications, limitations or restrictions of the Preferred
Stock, or (ii) create, authorize or issue, or reclassify any
authorized stock of the Company into, or increase the authorized
amount of, any series or class of stock that ranks senior to the
Preferred Stock as to dividends or distributions of assets upon
liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, or any security convertible into any
such class or series of such stock.
REDEMPTION AT OPTION OF THE COMPANY. The Preferred Stock may
not be redeemed prior to September 1, 2004. On or after
September 1, 2004, the Company may redeem the Preferred Stock, at
its option, in whole or in part, at $50 per Share, plus accrued
and unpaid dividends. Notwithstanding the foregoing, in the event
the Company's 11.25% Senior Subordinated Debentures are not
outstanding or have been defeased or amended to permit such
redemption, the Preferred Stock may be redeemed, in whole or in
part, at the option of the Company, at a redemption price of
$51.50 per Share if redeemed during the period September 10, 1998
through August 31, 1999 and thereafter at the following redemption
prices per Share if redeemed during the 12-month period beginning
September 1:
PRICE
YEAR PER SHARE
1999....................................... $51.20
2000....................................... 50.90
2001....................................... 50.60
2002....................................... 50.30
and on September 1, 2003 and thereafter at $50 per share, in each
case plus accrued and unpaid dividends to but excluding the
redemption date. If fewer than all of the outstanding shares of
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18
Preferred Stock are to be redeemed, the Company will select those
shares to be redeemed pro rata or by lot or in such other manner
as the Board of Directors may determine to be fair. There is no
mandatory redemption or sinking fund obligation with respect to
the Preferred Stock. If at any time dividends on the Preferred
Stock are in arrears, the Company may not redeem less than all of
the then-outstanding shares of the Preferred Stock until all
accrued dividends for all past dividend periods have been paid in
full.
Notice of redemption will be mailed at least 20 days but not
more than 60 days before the date fixed for redemption to each
holder of record of shares of Preferred Stock to be redeemed at
the address shown on the stock transfer books. No fractional
shares of Preferred Stock will be issued upon a redemption of less
than all of the Preferred Stock, but in lieu thereof, an
appropriate amount will be paid in cash based on the value for the
shares of Preferred Stock as determined in good faith by the Board
of Directors. After the date fixed for redemption, dividends will
cease to accrue on the shares of Preferred Stock called for
redemption and all conversion privileges and other rights of the
holders of such shares will terminate, except the right to receive
the redemption price without interest.
CONVERSION RIGHTS. The holder of any shares of Preferred
Stock will have the right, at the holder's option, to convert any
or all such shares into Common Stock at any time after 45 days
after the initial issuance of the Preferred Stock at a rate of
1.7094 shares of Common Stock for each share of Preferred Stock
(an aggregate of 2,564,100 shares of Common Stock), equivalent to
an initial conversion price of $29.25 for each share of Common
Stock. The conversion price is subject to adjustment as described
below. In the event the Preferred Stock is called for redemption,
the conversion right will terminate at the close of business on
the fifth business day prior to the date fixed for such
redemption. Except as provided in the next paragraph, no payment
or adjustment will be made upon any conversion of any share of
Preferred Stock or on account of any dividends on the Common Stock
issued upon conversion, and the holder will lose any right to
payment of dividends on the shares surrendered for conversion. No
fractional shares of Common Stock will be issued upon conversion
but, in lieu thereof, an appropriate amount will be paid in cash
based on the reported last sale price for the shares of Common
Stock on the New York Stock Exchange on the day of such
conversion.
If the Company, by dividend or otherwise, declares or makes a
distribution on its Common Stock referred to in clause (iv) or (v)
below, the holders of the Preferred Stock, upon the conversion
thereof subsequent to the close of business on the date fixed for
the determination of stockholders entitled to receive such
distribution and prior to the effectiveness of the conversion
- 16 -
19
price adjustment in respect of such distribution, will be entitled
to receive for each share of Common Stock into which each such
share of Preferred Stock is converted the portion of the shares of
Common Stock, rights, warrants, evidences of indebtedness, shares
of capital stock, cash and assets so distributed applicable to one
share of Common Stock, provided, however, that the Company may,
with respect to all holders so converting, in lieu of distributing
any portion of such distribution not consisting of cash or
securities of the Company, pay such holder cash equal to the fair
market value thereof (as determined by the Board of Directors).
The conversion price will be subject to adjustment in certain
events including, without duplication: (i) dividends (and other
distributions) payable in Common Stock on any class of capital
stock of the Company; (ii) the issuance to all holders of Common
Stock of rights or warrants, entitling holders of such rights or
warrants to subscribe for or purchase Common Stock at less than
the current market price (as defined); (iii) subdivisions and
combinations of Common Stock; (iv) distributions to all holders of
Common Stock of evidences of indebtedness of the Company, shares
of capital stock, cash or assets (including securities, but
excluding those rights, warrants, dividends and distributions
referred to above and dividends and distributions paid exclusively
in cash); (v) distributions consisting of cash, excluding (A) cash
that is part of a distribution referred to in (iv) above, and
(B) any cash representing an amount per share of Common Stock of
any quarterly cash dividend to the extent it does not exceed the
amount per share of Common Stock of the next preceding quarterly
cash dividend (as adjusted to reflect any of the events referred
to in clauses (i) through (vi) of this sentence), or all of any
such quarterly cash dividend if the amount thereof per share of
Common Stock multiplied by four does not exceed 15 percent of the
current market price (as defined) of the Common Stock on the
trading day (as defined) next preceding the date of declaration of
such dividend; and (vi) payment in respect of a tender or exchange
offer by the Company or any subsidiary of the Company for Common
Stock if the cash and value of any other consideration included in
such payment per share of Common Stock (as determined by the Board
of Directors) exceeds the current market price (as defined) per
share of Common Stock on the trading day next succeeding the last
date tenders or exchanges may be made pursuant to such tender or
exchange offer. If any adjustment is required to be made as set
forth in (v) above as a result of a distribution which is a
quarterly cash dividend, such adjustment would be based upon the
amount by which such distribution exceeds the amount of the next
preceding quarterly cash dividend. If an adjustment is required
to be made as set forth in (v) above as a result of a distribution
which is not a quarterly cash dividend, such adjustment would be
based upon the full amount of such distribution.
The Company may, at its option, make such reductions in the
conversion price, in addition to those set forth above, as the
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20
Board of Directors deems advisable to avoid or diminish any income
tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to
acquire stock) or from any event treated as such for income tax
purposes.
Notwithstanding any other provision in the preceding
paragraphs to the contrary, if any Fundamental Change (as defined)
occurs, then the conversion price applicable to any Preferred
Stock remaining outstanding after such Fundamental Change will be
adjusted immediately after such Fundamental Change as described
below. In addition, in the event of a Common Stock Fundamental
Change (as defined), each share of the Preferred Stock shall be
convertible solely into Common Stock of the kind received by
holders of Common Stock as the result of such Common Stock
Fundamental Change.
For purposes of calculating any adjustment to be made
pursuant to the preceding paragraph in the event of a Fundamental
Change, immediately after such Fundamental Change:
(i) in the case of a Non-Stock Fundamental Change (as
defined), the conversion price of the Preferred Stock will
thereupon become the lower of (A) the conversion price in
effect immediately prior to such Non-Stock Fundamental
Change, but after giving effect to any other prior
adjustments, and (B) the result obtained by multiplying the
greater of the Applicable Price (as defined) or the then
applicable Reference Market Price (as defined) by a fraction
of which the numerator will be $50 and the denominator will
be the then current redemption price per share (or, for
periods prior to September 10, 1998, an amount per share
determined in accordance with the Certificate of
Designations); and
(ii) in the case of a Common Stock Fundamental Change,
the conversion price of the Preferred Stock in effect
immediately prior to such Common Stock Fundamental Change,
but after giving effect to any other prior adjustments, will
thereupon be adjusted by multiplying such conversion price by
a fraction, of which the numerator will be the Purchaser
Stock Price (as defined) and the denominator will be the
Applicable Price; provided, however, that in the event of a
Common Stock Fundamental Change in which (A) 100 percent of
the value of the consideration received by a holder of Common
Stock is common stock of the successor, acquiror or other
third party (and cash, if any, is paid with respect to any
fractional interests in such common stock resulting from such
Common Stock Fundamental Change) and (B) all of the Common
Stock will have been exchanged for, converted into, or
acquired for, common stock (and cash with respect to
fractional interests) of the successor, acquiror or other
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21
third party, the conversion price of the Preferred Stock in
effect immediately prior to such Common Stock Fundamental
Change will thereupon be adjusted by multiplying such
conversion price by a fraction, of which the numerator will
be one (1) and the denominator will be the number of shares
of common stock of the successor, acquiror or other third
party received by a holder of one share of Common Stock as a
result of such Common Stock Fundamental Change.
Depending upon whether the Fundamental Change is a Non-Stock
Fundamental Change or Common Stock Fundamental Change, a holder
may receive significantly different consideration upon conversion.
In the event of a Non-Stock Fundamental Change, the holder has the
right to convert each share of the Preferred Stock into the kind
and amount of the shares of stock and other securities or property
or assets receivable by a holder of the number of shares of Common
Stock issuable upon conversion of such share of the Preferred
Stock immediately prior to such Non-Stock Fundamental Change, but
after giving effect to the adjustment described above. However,
in the event of a Common Stock Fundamental Change in which less
than 100 percent of the value of the consideration received by a
holder of Common Stock is common stock of the acquiror or other
third party, a holder of a share of the Preferred Stock who
converts a share following the Common Stock Fundamental Change
will receive consideration in the form of such common stock only,
whereas a holder who has converted his share prior to the Common
Stock Fundamental Change will receive consideration in the form of
common stock as well as any other securities or assets (which may
include cash) receivable thereupon by a holder of the number of
shares of Common Stock issuable upon conversion of such share of
Preferred Stock immediately prior to such Common Stock Fundamental
Change.
The term "Applicable Price" means (i) in the event of a Non-
Stock Fundamental Change in which the holders of the Common Stock
receive only cash, the amount of cash received by the holder of
one share of Common Stock and (ii) in the event of any other Non-
Stock Fundamental Change or any Common Stock Fundamental Change,
the average of the last reported sales price for the Common Stock
during the ten trading days (as defined) prior to and including
the record date for the determination of the holders of Common
Stock entitled to receive cash, securities, property or other
assets in connection with such Non-Stock Fundamental Change or
Common Stock Fundamental Change, or, if there is no such record
date, the date upon which the holders of the Common Stock shall
have the right to receive such cash, securities, property or other
assets, in each case, as adjusted in good faith by the Board of
Directors to appropriately reflect any of the events referred to
in clauses (i) through (vi) of the third paragraph of this
subsection.
- 19 -
22
The term "Common Stock Fundamental Change" means any
Fundamental Change in which more than 50 percent of the value (as
determined in good faith by the Board of Directors of the Company)
of the consideration received by holders of Common Stock consists
of common stock that for each of the ten consecutive trading days
referred to in the preceding paragraph has been admitted for
listing or admitted for listing subject to notice of issuance on a
national securities exchange or quoted on the National Market
System of the National Association of Securities Dealers, Inc.,
provided, however, that a Fundamental Change shall not be a Common
Stock Fundamental Change unless either (i) the Company continues
to exist after the occurrence of such Fundamental Change and the
outstanding shares of Preferred Stock continue to exist as
outstanding shares of Preferred Stock, or (ii) not later than the
occurrence of such Fundamental Change, the outstanding shares of
Preferred Stock are converted into or exchanged for shares of
convertible preferred stock of a corporation succeeding to the
business of the Company, which convertible preferred stock has
powers, preferences and relative, participating, optional or other
rights, and qualifications, limitations and restrictions,
substantially similar to those of the Preferred Stock.
The term "Fundamental Change" means the occurrence of any
transaction or event in connection with a plan pursuant to which
all or substantially all the Common Stock shall be exchanged for,
converted into, acquired for or constitute solely the right to
receive cash, securities, property or other assets (whether by
means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification,
recapitalization or otherwise) provided, in the case of a plan
involving more than one such transaction or event, for purposes of
adjustment of the conversion price, such Fundamental Change shall
be deemed to have occurred when substantially all of the Common
Stock of the Company shall be exchanged for, converted into, or
acquired for or constitute solely the right to receive cash,
securities, property or other assets, but the adjustment shall be
based upon the highest weighted average per share consideration
which a holder of Common Stock could have received in such
transactions or events as a result of which more than 50 percent
of the Common Stock of the Company shall have been exchanged for,
converted into, or acquired for or constitute solely the right to
receive cash, securities, property or other assets.
The term "Non-Stock Fundamental Change" means any Fundamental
Change other than a Common Stock Fundamental Change.
The term "Purchaser Stock Price" means, with respect to any
Common Stock Fundamental Change, the average of the last reported
sales price for the common stock, on the principal national
securities exchange or National Market System on which such common
stock is listed, received in such Common Stock Fundamental Change
for the ten consecutive trading days prior to and including the
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23
record date for the determination of the holders of Common Stock
entitled to receive such common stock, or if there is no such
record date, the date upon which the holders of the Common Stock
shall have the right to receive such common stock, in each case,
as adjusted in good faith by the Board of Directors to
approximately reflect any of the events referred to in clauses
(i) through (vi) of the third paragraph of this subsection;
provided, however, if no such last reported sales price for the
common stock during the last ten trading days prior to the record
date exists, then the Purchaser Stock Price shall be set at a
price determined in good faith by the Board of Directors of the
Company.
The term "Reference Market Price" shall initially mean
$15.833 (which is an amount equal to 66 2/3% of the reported last
sale price for the Common Stock on the New York Stock Exchange on
September 13, 1993), and in the event of any adjustment to the
conversion price other than as a result of a Fundamental Change,
the Reference Market Price shall also be adjusted so that the
ratio of the Reference Market Price to the conversion price after
giving effect to any such adjustment shall always be the same as
the ratio of $15.833 to the initial conversion price specified in
the first sentence of this subsection.
In the event that the Company is a party to any transaction
(including, without limitation, a merger, consolidation, sale of
all or substantially all of the Company's assets or
recapitalization or reclassification of the Common Stock (each of
the foregoing being referred to as a "Transaction")), in each case
(except in the case of a Common Stock Fundamental Change) as a
result of which shares of Common Stock shall be converted into the
right to receive securities, cash or other property, each share of
the Preferred Stock remaining outstanding shall thereafter be
convertible into the kind and amount of securities, cash and other
property receivable upon the consummation of such Transaction by a
holder of that number of shares of Common Stock into which one
share of the Preferred Stock was convertible immediately prior to
such Transaction (but after giving effect to any adjustment
discussed above relating to a Fundamental Change if such
Transaction constitutes a Fundamental Change, and subject to funds
being legally available for such purpose under applicable law at
the time of such conversion).
Notwithstanding the foregoing provisions, the issuance of any
shares of Common Stock pursuant to any plan providing for the
reinvestment of dividends or interest payable on securities of the
Company and the investment of additional optional amounts in
shares of Common Stock under any such plan, and the issuance of
any shares of Common Stock or options or rights to purchase such
shares pursuant to any employee benefit plan or program of the
Company or pursuant to any option, warrant, right or exercisable,
exchangeable or convertible security outstanding as of the date
- 21 -
24
the Preferred Stock was first designated, shall not be deemed to
constitute an issuance of Common Stock or exercisable,
exchangeable or convertible securities by the Company to which any
of the adjustment provisions described above applies. There shall
also be no adjustment of the conversion price in case of the
issuance of any stock (or securities convertible into or
exchangeable for stock) of the Company, except as specifically
described above. If any action would require adjustment of the
conversion price pursuant to more than one of the provisions
described above, only one adjustment shall be made and such
adjustment shall be the amount of adjustment which has the highest
absolute value to holders of the Preferred Stock. No adjustment
in the conversion price will be required unless such adjustment
would require an increase or decrease of at least 1% of the
conversion price, but any adjustment that would otherwise be
required to be made shall be carried forward and taken into
account in any subsequent adjustment.
COMMON STOCK
VOTING RIGHTS. Holders of the Common Stock are entitled to
cast one vote per share, and holders of Class B Common Stock are
entitled to cast ten votes per share, except with respect to any
proposed merger, consolidation or sale of substantially all the
assets of the Company with a person controlling, or under common
control with, the Company, in which event each share of Class B
Common Stock will have only one vote. Approval of all matters
requires the affirmative vote of the holders of shares of Common
Stock entitled to cast a majority of the votes, except that the
approval of a merger of the Company with another corporation
(other than a subsidiary) requires the approval of the holders
entitled to cast two-thirds of the votes. The Company currently
has no shares of Class B Common Stock issued and outstanding.
Pursuant to the Certificate of Incorporation of the Company, the
Company may not issue any additional Class B Common Stock without
the approval of the holders of a majority of the shares of Common
Stock.
DIVIDENDS. Dividends may be payable when, as and if declared
by the Board of Directors.
OTHER RIGHTS. Holders of Common Stock have no cumulative
voting rights or preemptive rights to subscribe to new shares.
All of the outstanding shares of Common Stock are validly issued,
fully paid and non-assessable.
The Common Stock is traded on the New York Stock Exchange
under the symbol "FLD."
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25
SELLING STOCKHOLDERS
On November 24, 1993, the Company sold the Preferred Shares
to The First Boston Corporation (the "Initial Purchaser"). The
Company has been advised by the Initial Purchaser that the Initial
Purchaser has resold the Preferred Shares initially at $50.00 per
share within the United States to Qualified Institutional Buyers
in reliance on Rule 144A under the Securities Act or to
"accredited investors," within the meaning of Rule 501(a) under
the Securities Act, that agree in writing to comply with certain
transfer restrictions and other conditions, and outside the United
States to certain persons in reliance on Regulation S under the
Securities Act. All of these shares may be offered hereby. The
following table sets forth certain information regarding the
holders of the Preferred Shares, each of whom may be a selling
stockholder of either the Preferred Shares or the Common Shares
issuable upon conversion of the Preferred Shares.
NAME OF SHARES OWNED SHARES TO
SELLING STOCKHOLDER PRIOR TO OFFERING BE SOLD
[To Be Completed]
PLAN OF DISTRIBUTION
The Common Shares are offered by the Company to holders of
the outstanding Preferred Shares and will be issuable upon
conversion of the Preferred Shares. The Preferred Shares may be
offered and sold from time to time directly by the Selling
Stockholders. The Selling Stockholders will act independently of
the Company and each other in making decisions with respect to the
timing, manner and size of each sale. The Selling Stockholders
may, from time to time, offer the Preferred Shares through
underwriters, dealers or agents. The distribution of the
Preferred Shares by the Selling Stockholders may be effected from
time to time in one or more transactions that may take place on
one or more exchanges or in the over-the-counter market, including
ordinary broker's transactions, privately-negotiated transactions
or through sales to one or more brokers/dealers for resale of such
securities as principals, at market prices prevailing at the time
of sale, at prices related to such prevailing market prices or at
negotiated prices. Usual and customary or specifically negotiated
brokerage fees or commission may be paid by the Selling
Stockholders in connection with such sales.
The public offering of the Preferred Shares and the Common
Shares will terminate on the earliest of (a) _____________, 1997,
(b) the date on which all Preferred Shares offered hereby have
been sold by the Selling Stockholders or (c) the date on which all
of the Preferred Shares have been converted into Common Shares.
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26
The Company will pay certain expenses related to the
registration of the Preferred Shares and Common Shares.
The Company will not pay for, among other expenses, selling
expenses, underwriting discounts or fees and expenses for
the Selling Stockholders.
LEGAL MATTERS
The validity of the shares of Preferred Stock and Common
Stock will be passed upon for the Company by Hale and Dorr,
Boston, Massachusetts.
EXPERTS
The consolidated financial statements of Fieldcrest Cannon,
Inc. and Amoskeag Company at December 31, 1992 and 1991, and for
each of the three years in the period ended December 31, 1992
appearing in the Definitive Consent Statement dated November 4,
1993, incorporated in this Prospectus and Registration Statement
have been audited by Ernst & Young, independent public
accountants, as stated in their reports, included therein and
incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon
such reports given upon the authority of such firm as experts in
accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses in
connection with the sale and distribution of the securities being
registered, other than the underwriting discounts and commissions:
SEC Registration Fee...................... $ 28,450
NYSE Listing Fees.........................
Legal and Accounting fees................. 20,000
Miscellaneous.............................
Total................................. $ *
<FN>
____________
*Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides
that a corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or proceeding, whether civil, criminal,
administrative or investigative, 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 its request in such capacity in another
corporation or business association, against expenses (including
attorneys' 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 102(b)(7) of the Delaware General Corporation Law
permits a corporation to provide in its certificate of
incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of
loyalty to the corporation 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 174
of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal
benefit.
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Article 6 of the Registrant's By-Laws, as amended, requires
the Registrant to indemnify each person who is or was a director
or officer of the Registrant against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
to the extent permitted from time to time under the Delaware
General Corporation Law, as amended. Article Eighth of the
Registrant's Restated Certificate of Incorporation, as amended,
requires the Registrant to indemnify to the full extent permitted
under applicable law, any person made or threatened to be made a
party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director
or officer of the Registrant. In addition, Article Tenth of the
Registrant's Restated Certificate of Incorporation, as amended,
provides that no director of the Registrant shall be liable for
any breach of fiduciary duty, except to the extent that the
Delaware General Corporation Law prohibits the elimination or
limitation of liability of directors for breach of fiduciary duty.
ITEM 16. EXHIBITS.
See Exhibit Index included immediately preceding the Exhibits
to this Registration Statement, which is incorporated herein by
reference.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement (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, or (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 such post-effective amendment will not be
filed if the information required to be included therein pursuant
to clauses (i) and (ii) above is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by
reference in this 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
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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 Shares being registered in this
Registration Statement which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for
purposes of determining 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 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, 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 Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing a 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 Kannapolis on the 11th day of February, 1994.
FIELDCREST CANNON, INC.
By: /s/ James M. Fitzgibbons
---------------------------
James M. Fitzgibbons
Chairman of the Board of
Directors and Chief
Executive Officer
Each person whose signature appears below constitutes and
appoints James M. Fitzgibbons, M. Kenneth Doss and John K.P.
Stone, III, Esq., and each of them, his true and lawful attorneys-
in-fact and agents, with full power of substitution and
resubstitution in each of them, for him and in his name, place and
stead, and in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this
Registration Statement on Form S-3 of Fieldcrest Cannon, Inc. and
to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and
each of them, 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 full 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 any of them or their or his
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
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Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following
persons in the capacities indicated on the 11th day of February,
1994.
SIGNATURE TITLE
/s/ James M. Fitzgibbons Chairman of the Board of Directors
---------------------------- and Chief Executive Officer
James M. Fitzgibbons (Principal Executive Officer)
/s/ Thomas R. Staab Vice President - Chief Financial
---------------------------- Officer (Principal Financial
Thomas R. Staab Officer)
/s/ Clifford D. Paulsen Controller (Principal Accounting
---------------------------- Officer)
Clifford D. Paulsen
/s/ Charles G. Horn President, Chief Operating Officer
---------------------------- and Director
Charles G. Horn
/s/ Tom H. Barrett Director
----------------------------
Tom H. Barrett
/s/ C.R. Charbonnier Director
----------------------------
C.R. Charbonnier
---------------------------- Director
John C. Harned
/s/ C.J. Kjorlien Director
----------------------------
C.J. Kjorlien
/s/ W. Duke Kimbrell Director
----------------------------
W. Duke Kimbrell
/s/ William E. Ford Director
----------------------------
William E. Ford
/s/ S. Roger Horchow Director
----------------------------
S. Roger Horchow
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EXHIBIT INDEX
EXHIBIT DESCRIPTION OF EXHIBIT PAGE
3.1 Restated Certificate of Incorporation
of the Registrant, as amended to date ...........
3.1.2 Rights Agreement dated as of November 24,
1993 between the Registrant and the First
National Bank of Boston is incorporated
herein by reference to Exhibit __ to the
Registrant's Registration statement on
Form 8-A filed December 3, 1993..................
5 Opinion of Hale and Dorr.........................
12 Statement regarding computation of ratios........
23.1 Consent of Ernst & Young.........................
23.2 Consent of Ernst & Young.........................
23.3 Consent of Hale and Dorr (included in
Exhibit 5).......................................
24 Power of Attorney (appears on page II-4).........
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