1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 5, 1995
REGISTRATION NOS. 33- AND 33- -01
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
BFGOODRICH CAPITAL THE B.F.GOODRICH COMPANY
(Exact name of registrant as specified in its (Exact name of registrant as specified in its
charter) charter)
DELAWARE NEW YORK
(State of incorporation or organization) (State of incorporation)
34-7031378 34-0252680
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
------------------
3925 EMBASSY PARKWAY
AKRON, OHIO 44333-1799
(216) 374-3985
(Address, including zip code, and telephone number,
including area code, of Registrants' principal executive offices)
------------------
NICHOLAS J. CALISE, SECRETARY
THE B.F.GOODRICH COMPANY
3925 EMBASSY PARKWAY
AKRON, OHIO 44333-1799
(216) 374-3778
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
------------------
COPIES TO:
FRANK L. SCHIFF ROBERT H. CRAFT, JR.
White & Case Sullivan & Cromwell
1155 Avenue of the Americas 1701 Pennsylvania Avenue, N.W.
New York, New York 10036 Washington, D.C. 20006
------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS POSSIBLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED UNIT(1) PRICE(1), (2) FEE
- ------------------------------------------------------------------------------------------------------------------------------
BFGoodrich Capital % Cumulative Quarterly Income
Preferred Securities, Series A.................... 5,060,000 $25.00 $126,500,000 $43,621
Preferred
Securities
- ------------------------------------------------------------------------------------------------------------------------------
The B.F.Goodrich Company Guarantee with respect to
BFGoodrich Capital % Cumulative Quarterly Income
Preferred Securities, Series A(3).................
- ------------------------------------------------------------------------------------------------------------------------------
The B.F.Goodrich Company % Junior Subordinated
Debentures, Series A, Due 2025(4).................
- ------------------------------------------------------------------------------------------------------------------------------
Total........................................... 5,060,000
Preferred $25.00 $126,500,000 $43,621
Securities
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of determining the registration fee.
(2) Exclusive of accrued distributions, if any.
(3) No separate consideration will be received for The B.F.Goodrich Company
Guarantee.
(4) The Junior Subordinated Debentures will be purchased by BFGoodrich Capital
with the proceeds of the sale of the Preferred Securities. No separate
consideration will be received for the Junior Subordinated Debentures.
------------------
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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2
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 JUNE 5, 1995
4,400,000 PREFERRED SECURITIES
BFGOODRICH CAPITAL
% CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES, SERIES A ("QUIPS"*)
(LIQUIDATION PREFERENCE $25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT THE ISSUER HAS FUNDS AS SET FORTH HEREIN BY
THE B.F.GOODRICH COMPANY
------------------
The % Cumulative Quarterly Income Preferred Securities, Series A (the
"Preferred Securities"), representing the trust certificates offered hereby, are
being issued by BFGoodrich Capital, a trust formed under the laws of the State
of Delaware (the "Issuer" or the "Trust"). The B.F.Goodrich Company, a New York
corporation ("BFG"), is the owner of the trust interests represented by common
securities (the "Common Securities") issued by the Issuer. The Bank of New York
and The Bank of New York (Delaware) are the Trustee and the Delaware Trustee,
respectively, of the Issuer. The Issuer exists for the sole purpose of issuing
its trust interests and investing the proceeds thereof in % Junior
Subordinated Debentures, Series A, Due 2025 (the "Junior Subordinated
Debentures") issued by BFG. The preferred interests represented by the Preferred
Securities will have a preference under certain circumstances with respect to
cash distributions and amounts payable on liquidation, redemption or otherwise
over the trust interests represented by the Common Securities issued by the
Issuer. See "Description of the Preferred Securities -- Subordination of Common
Securities".
Holders of the Preferred Securities will be entitled to receive cumulative
cash distributions accruing from the date of original issuance and payable
quarterly in arrears on the last day of March, June, September and December of
each year, commencing , 1995, at the rate of % per annum. BFG has
the right to defer payments of interest on the Junior Subordinated Debentures by
extending the interest payment period thereon at any time for up to 20
consecutive quarters (each an "Extension Period"). If interest payments are so
deferred, distributions on the Preferred Securities will also be deferred.
During an Extension Period, distributions will continue to accrue, and holders
of Preferred Securities will be required to accrue interest income for United
States Federal income tax purposes. See "Description of the Junior Subordinated
Debentures -- Option to Extend Interest Payment Period" and "United States
Taxation -- Potential Extension of Interest Payment Period and Original Issue
Discount".
The payment of distributions, out of moneys held by the Issuer, and payments
on liquidation of the Issuer or the redemption of Preferred Securities, as set
forth below, are guaranteed to the extent set forth herein by BFG (the
"Guarantee"). See "Description of the Guarantee". If BFG fails to make interest
payments on the Junior Subordinated Debentures held by the Issuer, the Issuer
will have insufficient funds to pay distributions on the Preferred Securities.
The Guarantee does not cover payment of distributions when the Issuer does not
have sufficient funds to pay such distributions. In such event, the remedy of a
holder of Preferred Securities is to enforce the rights of the Issuer under the
Junior Subordinated Debentures held by the Issuer. BFG's obligations under the
Guarantee are subordinate and junior in right of payment to all other
liabilities of BFG except any liabilities that may be made pari passu expressly
by their terms.
The Preferred Securities are subject to mandatory redemption upon repayment
of the Junior Subordinated Debentures at maturity or their earlier redemption.
See "Description of Preferred Securities -- Redemption". BFG will have the
option at any time on or after , 2000 to redeem, in whole or in part,
the Junior Subordinated Debentures. BFG also will have the right at any time,
upon occurrence of a Tax Event (as defined herein), to redeem, in whole but not
in part, the Junior Subordinated Debentures. In either such case, the principal
amount of Junior Subordinated Debentures so redeemed may not exceed 103% of the
amount of proceeds derived by BFG or its subsidiaries from the issuance and sale
of Common Stock of BFG within two years preceding the date fixed for redemption.
See "Description of Junior Subordinated Debentures -- Optional Redemption".
The Junior Subordinated Debentures are subordinated and junior in right of
payment to all Senior Indebtedness (as defined herein) of BFG. As of April 30,
1995, BFG had approximately $609.5 million of principal amount of indebtedness
for borrowed money and capital lease obligations constituting Senior
Indebtedness. The terms of the Junior Subordinated Debentures do not limit BFG's
ability to incur additional Senior Indebtedness. See "Description of the Junior
Subordinated Debentures -- Subordination".
In the event of the liquidation of the Issuer, the holders of the Preferred
Securities will be entitled to receive for each Preferred Security a liquidation
preference of $25 plus accrued and unpaid distributions thereon to the date of
payment, subject to certain limitations. See "Description of the Preferred
Securities -- Liquidation Distribution Upon Dissolution".
Application will be made to list the Preferred Securities on the New York
Stock Exchange.
The Preferred Securities will be represented by global certificates
registered in the name of The Depository Trust Company ("DTC") or its nominee.
Beneficial interests in the Preferred Securities will be shown on, and transfers
thereof will be effected only through, records maintained by participants in
DTC. Except as described herein, Preferred Securities in certificated form will
not be issued in exchange for the global certificates. See "Description of
Preferred Securities -- Book-Entry-Only Issuance -- The Depository Trust
Company".
------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 3 HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE PREFERRED SECURITIES.
------------------
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.
------------------
INITIAL PUBLIC UNDERWRITING PROCEEDS TO THE
OFFERING PRICE COMMISSION(1) ISSUER(2),(3)
--------------- -------------------- -----------------
Per Preferred Security....................... $25.00 (2) $25.00
Total(4)..................................... $110,000,000 (2) $110,000,000
- ---------------
(1) The Issuer and BFG have agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933,
as amended. See "Underwriting".
(2) In view of the fact that the proceeds of the sale of the Preferred
Securities will be used to purchase the Junior Subordinated Debentures, the
Underwriting Agreement provides that BFG will pay to the Underwriters, as
compensation ("Underwriters' Compensation") for their arranging the
investment therein of such proceeds, $.7875 per Preferred Security (or
$3,465,000 in the aggregate). See "Underwriting".
(3) Expenses of the offering, which are payable by BFG, are estimated to be
$450,000.
(4) The Trust and BFG have granted the Underwriters an option for 30 days to
purchase up to an additional 660,000 Preferred Securities at the initial
public offering price per Preferred Security, solely to cover
over-allotments. BFG will pay Underwriters' Compensation in the amounts per
Preferred Security set forth in Note 2 with respect to such additional
Preferred Securities. If such option is exercised in full, the total Initial
Public Offering Price, Underwriting Commission and Proceeds to the Issuer
will be $126,500,000, $3,984,750 and $126,500,000, respectively. See
"Underwriting".
----------------------
The Preferred Securities offered hereby are offered severally by the
Underwriters, as specified herein, and subject to receipt and acceptance by them
and subject to their right to reject any order in whole or in part. It is
expected that delivery of the Preferred Securities will be made only in
book-entry form through the facilities of DTC on or about , 1995.
- ---------------
*QUIPS is a servicemark of Goldman, Sachs & Co.
GOLDMAN, SACHS & CO.
------------------
The date of this Prospectus is , 1995.
3
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
---------------
FOR NORTH CAROLINA PURCHASERS: THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA,
NOR HAS THE COMMISSIONER OF INSURANCE RULED UPON THE ACCURACY OR ADEQUACY OF
THIS DOCUMENT.
---------------
AVAILABLE INFORMATION
BFG is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information filed by BFG may be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices located at 500
West Madison Street, Suite 1400, Chicago, Illinois 60661, and 7 World Trade
Center, New York, New York 10048. Copies of such materials can be obtained by
mail from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. In addition, such material
may also be inspected and copied at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005, on which certain of BFG's
securities are listed.
BFG and the Issuer have filed with the Commission a registration statement
on Form S-3 (herein, together with all amendments and exhibits, referred to as
the "Registration Statement") under the Securities Act of 1933, as amended (the
"Act"). This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is hereby made to the Registration Statement.
No separate financial statements of the Issuer are included herein. BFG
considers that such financial statements would not be material to holders of the
Preferred Securities because (i) all of the common securities of the Issuer are
owned by BFG, a reporting company under the Exchange Act; (ii) the Issuer has no
independent operations, but exists for the sole purpose of issuing securities
representing undivided beneficial interests in the assets of the Issuer and
investing the proceeds thereof in the Junior Subordinated Debentures; and (iii)
the obligations of the Issuer under the securities issued thereby, to the extent
funds are available therefor, are fully and unconditionally guaranteed to the
extent set forth herein by BFG.
---------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by BFG with the Commission (File No. 1-892)
pursuant to the Exchange Act are incorporated herein by reference:
1. BFG's Annual Report on Form 10-K for the year ended December 31,
1994; and
2. BFG's Quarterly Report on Form 10-Q for the quarter ended March 31,
1995.
All other documents filed by BFG 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 this offering shall be deemed to be incorporated by reference
into this Prospectus and to be a part hereof from the respective dates of the
filing of such documents. Any statement contained herein or in a document all or
a portion of which is incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or
2
4
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.
BFG will provide without charge to each person, including a beneficial
owner, to whom a copy of this Prospectus has been delivered, upon the written or
oral request of any such person, a copy of any and all of the documents which
are incorporated herein by reference, other than exhibits to such information
(unless such exhibits are specifically incorporated by reference into such
documents). Requests for such copies should be directed to The B.F.Goodrich
Company, 3925 Embassy Parkway, Akron, Ohio 44333-1799, Attention: Secretary,
telephone: (216) 374-3985.
RISK FACTORS
Prospective purchasers of Preferred Securities should carefully review the
information contained elsewhere in this Prospectus and should particularly
consider the following matters:
SUBORDINATION OF GUARANTEE AND JUNIOR SUBORDINATED DEBENTURES. BFG's
obligations under the Guarantee are subordinate and junior in right of payment
to all other liabilities of BFG, except any liabilities that may be made pari
passu expressly by their terms. The obligations of BFG under the Junior
Subordinated Debentures are subordinate and junior in right of payment to Senior
Indebtedness (as defined herein) of BFG. As of April 30, 1995, BFG had
approximately $609.5 million of principal amount of indebtedness for borrowed
money and capital lease obligations constituting Senior Indebtedness on a
consolidated basis. In addition, as of April 30, 1995, there were approximately
$70 million of contingent obligations constituting Senior Indebtedness where
there exists a financially viable and unrelated primary obligor and where the
risk of loss to BFG is, in the opinion of BFG, remote. There are no terms of the
Preferred Securities, the Junior Subordinated Debentures or the Guarantee that
limit BFG's ability to incur additional indebtedness, including indebtedness
that would rank senior to the Junior Subordinated Debentures and the Guarantee.
See "Description of the Guarantee -- Status of the Guarantee" and "Description
of the Junior Subordinated Debentures -- Subordination".
The ability of the Issuer to pay amounts due on the Preferred Securities is
solely dependent upon BFG making payments on the Junior Subordinated Debentures
as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES. BFG has the
right under the Indenture to extend the interest payment period from time to
time on the Junior Subordinated Debentures for a period not exceeding 20
consecutive quarters. Upon the termination of any such extended interest payment
period and the payment of all amounts then due, BFG may select a new extended
interest payment period, subject to the requirements described herein. During
any such extended interest payment period, quarterly distributions on the
Preferred Securities would be deferred (but would continue to accrue with
interest thereon) by the Issuer. In the event that BFG exercises this right,
during such period BFG may not declare or pay dividends or distributions (other
than dividends or distributions in common stock of BFG) on, or redeem, purchase,
acquire, or make a liquidation payment with respect to any of its capital stock,
or make any guarantee payment with respect to the foregoing (other than payments
under the Guarantee). Prior to the termination of any such extended interest
payment period, BFG may further extend the interest payment period, provided
that such extended interest payment period together with all such previous and
further extensions thereof may not exceed 20 consecutive quarters and that such
extended interest payment period may not extend beyond the maturity date of the
Junior Subordinated Debentures. If BFG should determine to exercise its
extension right in the future, the market price of the Preferred Securities is
likely to be affected. The Issuer and BFG believe that such an extension of an
interest payment period on the Junior Subordinated Debentures is unlikely to
occur. See "Description of the Preferred Securities -- Distributions" and
"Description of the Junior Subordinated Debentures -- Option to Extend Interest
Payment Period".
Should an extended interest payment period occur, Preferred Security
holders will continue to accrue interest income for United States Federal income
tax purposes. As a result, such a holder will be required
3
5
to include such interest in gross income for United States Federal income tax
purposes in advance of the receipt of cash, and such holder will not receive the
cash from the Issuer related to such income if such holder disposes of its
Preferred Securities prior to the record date for payment of distributions. See
"United States Taxation -- Potential Extension of Interest Payment Period and
Original Issue Discount".
RIGHTS UNDER THE GUARANTEE. The Guarantee will be qualified as an indenture
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
The Bank of New York will act as indenture trustee under the Guarantee for the
purposes of compliance with the Trust Indenture Act (the "Guarantee Trustee").
The Guarantee Trustee will also be the trustee for the Junior Subordinated
Debentures and will hold the Guarantee for the benefit of the holders of the
Preferred Securities.
The Guarantee guarantees to the holders of the Preferred Securities the
payment (but not the collection) of (i) any accrued and unpaid distributions
required to be paid on the Preferred Securities, to the extent the Issuer has
funds legally available therefor, (ii) the Redemption Price (as defined herein),
including all accrued and unpaid distributions, with respect to Preferred
Securities called for redemption by the Issuer, to the extent the Issuer has
funds legally available therefor and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in connection
with a redemption of all of the Preferred Securities), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid distributions on
the Preferred Securities to the date of payment, to the extent the Issuer has
funds legally available therefor and (b) the amount of assets of the Issuer
remaining available for distribution to holders of the Preferred Securities in
liquidation of the Issuer. The holders of a majority in liquidation amount of
the Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee or
to direct the exercise of any trust or power conferred upon the Guarantee
Trustee under the Guarantee. If the Guarantee Trustee fails to enforce the
Guarantee, any holder of Preferred Securities may, after a period of 30 days has
elapsed from such holder's written request to the Guarantee Trustee to enforce
the Guarantee, institute a legal proceeding directly against BFG to enforce the
Guarantee Trustee's rights under the Guarantee without first instituting a legal
proceeding against the Issuer, the Guarantee Trustee or any other person or
entity. If BFG were to default on its obligations under the Junior Subordinated
Debentures, the Issuer would lack available funds for the payment of
distributions or amounts payable on redemption of the Preferred Securities or
otherwise, and in such event holders of the Preferred Securities would not be
able to rely upon the Guarantee for payment of such amounts. Instead, holders of
the Preferred Securities would be required to rely on the enforcement by the
Trustee of its rights, as registered holder of the Junior Subordinated
Debentures, against BFG pursuant to the terms of the Junior Subordinated
Debentures. See "Description of the Guarantee -- Status of the Guarantee" and
"Description of the Junior Subordinated Debentures -- Subordination" herein. The
Trust Agreement provides that each holder of Preferred Securities by acceptance
thereof agrees to the provisions of the Guarantee and the Indenture.
TAX EVENT REDEMPTION. Upon the occurrence of a Tax Event, BFG has the right
to redeem the Junior Subordinated Debentures, in whole but not in part, in which
event the Issuer will redeem the Preferred Securities. The stated liquidation
preference of the Preferred Securities redeemed upon such redemption of Junior
Subordinated Debentures may not exceed the amount derived, directly or
indirectly, by BFG or its subsidiaries from the issuance and sale of BFG's
common stock within two years preceding the date fixed for such redemption. See
"Description of the Preferred Securities -- Redemption" and "United States
Taxation."
LIMITED VOTING RIGHTS. Holders of Preferred Securities will have limited
voting rights and, except upon the occurrence of certain events described
herein, will not be entitled to vote to appoint, remove or replace the Trustee,
which voting rights are vested exclusively in the holder of the Common
Securities.
TRADING CHARACTERISTICS OF PREFERRED SECURITIES. The Preferred Securities
are expected to be approved for listing as an equity security on the New York
Stock Exchange. Accordingly, the Preferred Securities are expected to trade at a
price that takes into account the value, if any, of accrued and unpaid
distributions; thus, purchasers will not pay and sellers will not receive any
accrued and unpaid interest with respect to their undivided interests in Junior
Subordinated Debentures owned through the Preferred
4
6
Securities that is not included in the trading price of the Preferred
Securities. However, interest on the Junior Subordinated Debentures will be
included in the gross income of U.S. Holders (as defined herein) of Preferred
Securities as it accrues, rather than when it is paid. See "United States
Taxation -- Income from Preferred Securities" and "-- Sale of Preferred
Securities".
BFGOODRICH CAPITAL
BFGoodrich Capital (the "Issuer") is a statutory business trust formed
under Delaware law pursuant to (i) a trust agreement executed by BFG, as sponsor
for the Issuer, and the Trustee and the Delaware Trustee (each as defined
herein) of such trust and (ii) the filing of a certificate of trust with the
Delaware Secretary of State on June 1, 1995. Such trust agreement will be
amended and restated in its entirety (as so amended and restated, the "Trust
Agreement") substantially in the form filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. The Trust Agreement will be
qualified as an indenture under the Trust Indenture Act. The Issuer exists for
the exclusive purposes of (i) issuing the Preferred Securities and Common
Securities representing undivided beneficial interests in the assets of such
Issuer, (ii) investing the gross proceeds of the sale of the Preferred
Securities and Common Securities in the Junior Subordinated Debentures and (iii)
engaging in only those other activities necessary or incidental thereto. All of
the Common Securities will be owned by BFG. The Common Securities will rank pari
passu, and payments will be made thereon pro rata, with the Preferred
Securities, except that upon the occurrence and continuance of an event of
default under the Trust Agreement, the rights of the holders of the Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Preferred Securities. BFG will acquire Common Securities having an aggregate
liquidation amount equal to 3% of the total capital of the Issuer. The Issuer
has a term of approximately 35 years, but may terminate earlier as provided in
the Trust Agreement. The Issuer's business and affairs will be conducted by the
Trustee. The holder of the Common Securities, or the holders of a majority in
liquidation preference of the Preferred Securities if an Event of Default (as
defined herein) has occurred and is continuing, will be entitled to appoint,
remove or replace the Trustee and the Delaware Trustee of the Issuer. The duties
and obligations of the Trustee and the Delaware Trustee shall be governed by the
Trust Agreement. BFG will pay all fees and expenses related to the Issuer and
the offering of Securities. The office of the Delaware Trustee in the State of
Delaware is White Clay Center, Route 273, Newark, Delaware 19711. The principal
place of business of the Issuer is c/o The B.F.Goodrich Company, 3925 Embassy
Parkway, Akron, Ohio 44333 (telephone number (216) 374-3985).
THE B.F.GOODRICH COMPANY
BFG manufactures and supplies a wide variety of supplies and component
parts for the aerospace industry and provides maintenance, repair and overhaul
services on commercial, regional and general aviation aircraft. BFG also
manufactures specialty plastics, specialty additives, sealants, coatings and
adhesives products for a variety of end user applications. In addition, BFG
produces chlor-alkali and olefins.
BFG, with 1994 sales of $2.2 billion, is organized into two principal
business segments: B.F.Goodrich Aerospace ("Aerospace") and B.F.Goodrich
Specialty Chemicals ("Specialty Chemicals").
BFG's Aerospace business is conducted through four major business groups:
- Landing Systems Group manufactures landing gear and aircraft wheels and
brakes for commercial, military, regional and business aviation
customers.
- Sensors and Integrated Systems Group manufactures sensors and related
equipment; fuel and integrated utility measurement and management
systems; engine ignition system components; electromechanical actuators;
and aircraft windshield wiper systems for commercial, military, regional
and business aviation customers.
5
7
- Safety Systems Group manufactures aircraft evacuation slides and rafts;
aircraft and helicopter de-icing systems; navigation, traffic alert and
collision avoidance systems; weather detection systems; and airport and
aircraft lighting components for commercial, military, regional, business
and general aviation customers.
- Maintenance, Repair and Overhaul Group provides maintenance, repair and
overhaul of commercial airframes and components including landing gear,
wheels and brakes, and instruments and avionics for commercial, regional,
business and general aviation customers.
BFG's Specialty Chemicals business is conducted through three major
business groups:
- Specialty Plastics Group manufactures thermoplastic polyurethane;
high-heat, corrosion-resistant and low-combustibility plastics; and
thermoset resins for reaction liquid polymer molded parts. Products are
marketed and sold to manufacturers for film and sheet applications;
fabric coatings; wire and cable coating and magnetic media. Specialty
plastics are also used in automotive products; recreational vehicles and
products; lawn and garden equipment; plumbing and industrial pipe; fire
sprinkler systems and building material components.
- Specialty Additives Group manufactures synthetic thickeners and
emulsifiers; controlled release and suspension agents; polymer emulsions;
dissolvable films; rubber and lubricant additives and plastic and
adhesive modifiers. These products are used by manufacturers of personal
care products; pharmaceuticals; liquid soaps and detergents; water
treatment products; electronics; tires and petroleum products and molded
plastics. Specialty additives are also used in textile printing
manufacturing; nonwoven manufacturing; paper coating and saturation;
graphic arts; and paints and industrial coatings.
- Sealants, Coatings and Adhesives Group manufactures insulating glass
sealants; construction sealants and water proofing coatings; commercial
glazing products and roofing products. This Group also manufactures
automotive sealants; adhesives and paint products; structural adhesives;
laminating adhesives and rust paints and primers. Products are sold to
manufacturers of windows; the construction and building maintenance
industry; and automotive and aircraft assembly industries. Other products
are sold in the automotive repair and residential maintenance markets.
BFG's Other Operations consist of the chlor-alkali and olefins businesses
which participate in a highly cyclical chlorine, caustic soda, ethylene and
olefin co-product commodity market. Sales and operating results are largely
dependent on industry supply and demand. BFG believes it does not have a
significant market share and, as a result, products produced by this business
are sold at established market prices.
BFG maintains patent and technical assistance agreements, licenses and
trademarks on its products, process technologies and expertise in most of the
countries in which it operates. BFG conducts its business through numerous
business groups of BFG and wholly- and majority-owned subsidiaries worldwide.
6
8
The net sales and operating income for BFG for the periods shown were as
follows:
THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
----------------- ----------------------------------
1995 1994 1994 1993 1992
------ ------ -------- -------- --------
(DOLLARS IN MILLIONS)
NET SALES:
Aerospace...................... $276.6 $255.8 $1,050.3 $ 855.4 $ 750.0
Specialty Chemicals............ 261.5 209.7 988.6 829.6 825.1
Other Operations............... 55.9 36.9 160.3 133.3 72.8
------ ------ -------- -------- --------
Total.......................... $594.0 $502.4 $2,199.2 $1,818.3 $1,647.9
====== ====== ======== ======== ========
OPERATING INCOME:
Aerospace...................... $ 27.8 $ 28.7 $ 121.9 $ 91.3 $ 83.2
Specialty Chemicals............ 12.0 10.1 86.7 45.0 40.9
Other Operations............... 19.4 (1.2) 24.1 4.0 14.5
Corporate...................... (11.7) (11.4) (53.0) (57.6) (63.6)
------ ------ -------- -------- --------
Total.......................... $ 47.5 $ 26.2 $ 179.7 $ 82.7 $ 75.0
====== ====== ======== ======== ========
The principal executive offices of BFG are located in Bath Township, Summit
County, Ohio with a mailing address at 3925 Embassy Parkway, Akron, Ohio
44333-1799 (telephone (216) 374-3985).
The Company was incorporated under the laws of the State of New York on May
2, 1912 as the successor to a business founded in 1870.
7
9
SUMMARY FINANCIAL INFORMATION OF BFG
The selected financial data presented below under the captions "Statement
of Income Data" and "Balance Sheet Data" have been derived from the consolidated
financial statements of BFG for each of the years in the five-year period ended
December 31, 1994, which have been audited by Ernst & Young LLP, independent
auditors. The selected financial data presented below for each of the quarters
ended March 31, 1995 and 1994 have been derived from BFG's unaudited
consolidated financial statements and reflect all adjustments and accruals that
are, in the opinion of BFG's management, necessary for a fair presentation of
BFG's results of operations and financial position for such quarters.
The audited consolidated financial statements of BFG as of December 31,
1994 and 1993 and for each of the years in the three-year period ended December
31, 1994, and the independent auditor's report thereon, and the unaudited
consolidated financial statements as of March 31, 1995 and 1994 and for each of
the periods then ended, have been incorporated by reference herein. See
"Incorporation of Certain Documents by Reference". This summary financial data
should be read in conjunction with such consolidated financial statements and
notes thereto.
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
---------------------------------------------------- -------------------
1990 1991 1992 1993 1994 1994 1995
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
STATEMENT OF INCOME DATA1/:
Sales from continuing operations............. $1,420.5 $1,572.5 $1,647.9 $1,818.3 $2,199.2 $ 502.4 $ 594.0
Cost of sales................................ 964.8 1,098.4 1,133.1 1,278.3 1,523.3 359.0 416.1
Gross profit................................. 455.7 474.1 514.8 540.0 675.9 143.4 177.9
Selling and administrative expenses.......... 335.0 369.5 429.1 444.0 496.2 117.2 130.4
Total operating income....................... 120.7 93.1 75.0 82.7 179.7 26.2 47.5
Interest expense............................. 21.5 37.1 39.3 38.3 47.7 11.7 12.4
Interest income.............................. 24.8 10.7 3.9 5.2 1.8 .4 .4
Income tax (expense)......................... (4.4) (22.5) (2.5) -- (42.9) (3.1) (11.0)
Income from continuing operations before
cumulative effect of change in method of
accounting................................. 99.8 21.6 11.9 15.3 65.7 4.9 17.6
Income (loss) from discontinued operations... 36.5 (102.2) (21.3) 113.0 10.0 -- --
Cumulative effect of change in method of
accounting................................. -- -- (286.5) -- -- -- --
Net income (loss)............................ 136.3 (80.6) (295.9) 128.3 75.7 4.9 17.6
Income from continuing operations per share
of common stock............................ $ 3.60 $ .52 $ .14 $ .28 $ 2.24 $ .11 $ .61
Net income (loss) per share of common
stock...................................... 5.04 (3.50) (11.90) 4.68 2.63 .11 .61
Dividends per share of common stock.......... 2.12 2.20 2.20 2.20 2.20 .55 .55
Ratio of earnings to fixed charges2/......... 4.23 1.83 1.20 1.19 2.64 2.68
Ratio of earnings to fixed charges and
preferred dividends3/...................... 3.01 1.38 -- -- 2.20 2.27
Pro forma ratio of earnings to fixed
charges(4)................................. 2.31 2.36
Pro forma ratio of earnings to fixed charges
and preferred dividends(4)................. 2.31 2.36
BALANCE SHEET DATA:
Current assets............................... $ 947.6 $ 775.9 $ 797.1 $ 793.8 $ 878.8 $ 813.4 $ 920.8
Current liabilities.......................... 667.2 530.0 565.5 469.4 638.0 522.2 677.4
Net working capital.......................... 280.4 245.9 231.6 324.4 240.8 291.2 243.4
Net property................................. 1,155.3 1,171.0 1,215.8 836.0 873.3 834.9 877.8
Total assets................................. 2,414.2 2,270.6 2,451.7 2,359.9 2,468.9 2,378.1 2,510.8
Non-current long-term debt and capital lease
obligations................................ 209.8 344.2 403.1 486.5 427.1 460.1 419.7
Redeemable preferred stocks.................. 8.7 7.5 6.3 3.8 -- 3.8 --
Total shareholders' equity................... 1,358.9 1,214.0 828.8 895.3 922.6 886.2 924.6
- ---------------
1/ All Statement of Income Data have been restated to exclude results of the
former Geon Vinyl Division which was divested in 1993 and is now accounted
for as discontinued operations.
2/ For the purpose of computing the ratio of earnings to fixed charges,
"earnings" represent income from continuing operations before income taxes
and cumulative effect of change in method of accounting, fixed charges
(excluding capitalized interest), amortization of previously capitalized
interest and undistributed earnings (losses) of affiliated companies that are
accounted for on the equity method. "Fixed charges" consist of interest
expense (including capitalized interest and interest costs on company-owned
life insurance policies), amortization of deferred debt expenses and discount
or premium and the portion of rental expense representative of an interest
factor.
3/ In 1992 and 1993, earnings were insufficient to cover fixed charges and
preferred stock dividends by $0.6 and $0.9, respectively.
4/ Assuming the Underwriters' over-allotment option is not exercised.
8
10
USE OF PROCEEDS
The proceeds from the sale of the Preferred Securities will be used by the
Issuer to purchase the Junior Subordinated Debentures issued by BFG, as
described herein. BFG expects to use the proceeds to redeem all of the
outstanding shares of BFG's $3.50 Cumulative Convertible Preferred Stock, Series
D, or for other general corporate purposes.
CAPITALIZATION
The following table sets forth the consolidated capitalization of BFG as of
March 31, 1995, and as adjusted to reflect the application of the estimated net
proceeds from the sale of the Preferred Securities (assuming the Underwriters'
over-allotment option is not exercised) as described under "Use of Proceeds".
MARCH 31, 1995
--------------------------
ACTUAL AS ADJUSTED
---------- -----------
(DOLLARS IN MILLIONS)
Short-term bank debt............................................. $ 121.1 $ 121.1
Current maturities of long-term debt and capital lease
obligations.................................................... 55.3 55.3
Long-term debt and capital lease obligations..................... 419.7 419.7
Company-obligated minority interest in subsidiary(1)............. -- 106.1
Shareholders' Equity:
$3.50 Cumulative Convertible Preferred Stock, Series D...... 110.0 --
Common Stock................................................ 129.8 129.8
Additional Capital.......................................... 402.5 402.5
Income retained in the business............................. 307.1 305.6
Translation adjustments, minimum pension liability and
unearned stock awards..................................... (21.3) (21.3)
Common stock held in Treasury............................... (3.5) (3.5)
-------- --------
Total Shareholders' Equity.................................. 924.6 813.1
-------- --------
Total Capitalization............................................. $1,520.7 $ 1,515.3
======== ========
- ---------------
(1) As described herein, the assets of the Issuer will include $110 of Junior
Subordinated Debentures of BFG which will constitute approximately 97% of
the total assets of the Issuer less issuance costs.
RECENT DEVELOPMENTS
On May 4, 1995 BFG sold its wholly-owned subsidiary, Arrowhead Industrial
Water, Inc., for $80 million in cash, subject to adjustments. The proceeds were
used to reduce short-term debt. In addition, on May 17, 1995, BFG issued $20
million of long-term debt. These proceeds were also used to reduce short-term
debt.
DESCRIPTION OF THE PREFERRED SECURITIES
The Trust Agreement among BFG as Depositor (the "Depositor"), The Bank of
New York, as Trustee, and The Bank of New York (Delaware), as Delaware Trustee,
authorizes and creates the Issuer. Pursuant to the terms of the Trust Agreement,
the Trustee has created the Preferred Securities and the Common Securities
(together, the "Issuer Securities"). The Preferred Securities represent
undivided beneficial interests in the Issuer and entitle the holders thereof to
a preference in certain circumstances with respect to distributions and amounts
payable on redemption or liquidation over the Common Securities, as well as
other benefits as described in the Trust Agreement. The following summaries of
certain provisions of the Trust Agreement do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all the
provisions of the Trust Agreement, including the
9
11
definitions therein of certain terms, and the Trust Indenture Act. Wherever
particular sections or defined terms of the Trust Agreement are referred to,
such sections or defined terms are incorporated herein by reference. The Trust
Agreement has been filed as an exhibit to the Registration Statement of which
this Prospectus forms a part.
GENERAL
All of the Common Securities are owned by BFG. The Common Securities rank
pari passu, and payments will be made thereon pro rata, with the Preferred
Securities except as described under "-- Subordination of Common Securities".
(Section 4.03) The Junior Subordinated Debentures will be owned by the Trustee
and held in trust for the benefit of the holders of the Issuer Securities.
(Section 2.09) The Guarantee is a full and unconditional guarantee with respect
to the Preferred Securities but does not guarantee payment of distributions or
amounts payable on redemption or liquidation of the Preferred Securities when
the Issuer does not have funds legally available to make such payments.
DISTRIBUTIONS
The distributions payable on each Preferred Security will be fixed at a
rate per annum of % of the stated liquidation preference of $25 per Preferred
Security. Distributions that are in arrears for more than one quarter will bear
interest on the amount thereof at the rate per annum of % thereof. The term
"distributions" as used herein includes any such interest payable, unless
otherwise stated. The amount of distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months. (Sections
4.01(a) and 4.01(b)).
Distributions on the Preferred Securities will be cumulative, will accrue
from , 1995, the date of initial issuance thereof, and will be
payable quarterly in arrears, on March 31, June 30, September 30 and December 31
of each year, commencing , 1995, except as otherwise described
below. In the event that any date on which distributions are otherwise payable
on the Preferred Securities is not a Business Day, payment of the distribution
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect to any such delay)
except that, if such Business Day is in the next succeeding calendar year,
payment of such distribution shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date (each
date on which distributions are otherwise payable in accordance with the
foregoing, a "Distribution Date"). A "Business Day" shall mean any day other
than a Saturday or a Sunday or a day on which banking institutions in The City
of New York are authorized or required by law or executive order to remain
closed or a day on which the Corporate Trust Office of the Trustee or the
Debenture Trustee (as defined herein) is closed for business. (Section 4.01(a)).
BFG has the right, under the Indenture pursuant to which it will issue the
Junior Subordinated Debentures (the "Indenture"), to extend the interest payment
period from time to time on the Junior Subordinated Debentures to a period not
exceeding 20 consecutive quarters, with the consequence that quarterly
distributions on the Preferred Securities would be deferred (but would continue
to accrue with interest thereon, including interest payable on unpaid interest
at the rate per annum set forth above, compounded quarterly) by the Issuer
during any such extended interest payment period. In the event that BFG
exercises this right, during such period BFG may not declare or pay any
dividends or distributions (other than dividends or distributions in common
stock of BFG) on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of its capital stock, or make any guarantee payments with
respect to the foregoing (other than payments under the Guarantee). Prior to the
termination of any such extended interest payment period, BFG may further extend
the interest payment period, provided that such extended interest payment period
together with all such previous and further extensions thereof may not exceed 20
consecutive quarters or extend beyond the maturity of the Junior Subordinated
Debentures. Upon the termination of any extended interest payment period and the
payment of all amounts then due, BFG may select a new extended interest payment
period, subject to the above requirements. See "Description of the Junior
Subordinated Debentures -- Interest" and "-- Option to Extend Interest Payment
Period".
10
12
It is anticipated that the income of the Issuer available for distribution
to the holders of the Preferred Securities will be limited to payments under the
Junior Subordinated Debentures in which the Issuer will invest the proceeds from
the issuance and sale of the Preferred Securities and the Common Securities. See
"Description of the Junior Subordinated Debentures". If BFG does not make
interest payments on the Junior Subordinated Debentures, the Trustee will not
have funds available to pay distributions on the Preferred Securities. The
payment of distributions (if and to the extent the Issuer has funds legally
available for the payment of such distributions and cash sufficient to make such
payments) is guaranteed on a limited basis by BFG as set forth herein under
"Description of the Guarantee".
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the register of the Issuer on the relevant record
dates, which, as long as the Preferred Securities remain in book-entry-only
form, will be one Business Day prior to the relevant Distribution Date. Subject
to any applicable laws and regulations and the provisions of the Trust
Agreement, each such payment will be made as described under "Book-Entry-Only
Issuance -- The Depository Trust Company" below. In the event the Preferred
Securities do not remain in book-entry-only form, the relevant record date shall
be the date 15 days prior to the relevant Distribution Date. (Section 4.01(d)).
REDEMPTION
Upon the repayment of the Junior Subordinated Debentures, whether at
maturity or upon earlier redemption as provided in the Indenture, the proceeds
from such repayment shall be applied by the Trustee to redeem a Like Amount (as
defined below) of Preferred Securities, upon not less than 30 nor more than 60
days' notice, at the Redemption Price. Such payment in redemption shall be due
without limitation and in all events. See "Description of the Junior
Subordinated Debentures -- Optional Redemption".
BFG has the right to redeem the Junior Subordinated Debentures (a) on or
after , 2000, in whole or in part, subject to the conditions
described under "Description of the Junior Subordinated Debentures -- Optional
Redemption", or (b) at any time, in whole but not in part, on occurrence of a
Tax Event (as defined below) and subject to the further conditions described
under "Description of the Junior Subordinated Debentures -- Optional
Redemption".
The stated liquidation preference of the Preferred Securities redeemed
pursuant to a redemption of the Junior Subordinated Debentures in either of the
circumstances referred to above may not exceed the amount derived, directly or
indirectly, by BFG from the issuance and sale of BFG's common stock within two
years preceding the date fixed for such redemption.
"Tax Event" means the receipt by the Issuer of an opinion of counsel
experienced in such matters to the effect that, as a result of (a) any amendment
to, clarification of, or change (including any announced prospective change) in,
the laws or treaties (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein affecting taxation,
or (b) any judicial decision, official administrative pronouncement, ruling,
regulatory procedure, notice or announcement (including any notice or
announcement of intent to adopt such procedures or regulations) ("Administrative
Action"), or (c) any amendment to, clarification of, or change in the official
position or the interpretation of such Administrative Action or judicial
decision or any interpretation or pronouncement that provides for a position
with respect to such Administrative Action or judicial decision that differs
from the theretofore generally accepted position, in each case, by any
legislative body, court, governmental authority or regulatory body, irrespective
of the manner in which such amendment, clarification or change is made known,
which amendment, clarification, or change is effective or such pronouncement or
decision is announced on or after the date of issuance of the Preferred
Securities, there is more than an insubstantial risk that (i) the Issuer is, or
will be, subject to United States Federal income tax with respect to interest
received on the Junior Subordinated Debentures, (ii) interest payable by BFG on
the Junior Subordinated Debentures is not, or will not be, fully deductible for
United States Federal income tax purposes, or (iii) the Issuer is or will be
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
11
13
"Like Amount" means (i) with respect to a redemption of Preferred
Securities, Preferred Securities having a Liquidation Amount equal to the
principal amount of Junior Subordinated Debentures to be contemporaneously
redeemed in accordance with the Indenture and the proceeds of which will be used
to pay the Redemption Price of such Preferred Securities and (ii) with respect
to a distribution to holders of Preferred Securities of Junior Subordinated
Debentures in connection with a liquidation of the Issuer upon the bankruptcy,
dissolution or liquidation of BFG, Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Preferred Securities of
the holder to whom such Junior Subordinated Debentures are distributed.
REDEMPTION PROCEDURES
Preferred Securities redeemed on each redemption date shall be redeemed at
the Redemption Price with the proceeds from the contemporaneous redemption of
Junior Subordinated Debentures. Redemptions of the Preferred Securities shall be
made and the Redemption Price shall be deemed payable on each Redemption Date
only to the extent that the Issuer has funds legally available for the payment
of such Redemption Price. (Section 4.02(e)). See also "-- Subordination of
Common Securities".
If the Issuer gives a notice of redemption in respect of Preferred
Securities (which notice will be irrevocable), then, by 12:00 noon, New York
time, on the Redemption Date, the Trustee will irrevocably deposit with DTC
funds sufficient to pay the applicable Redemption Price and will give DTC
irrevocable instructions and authority to pay the Redemption Price to the
holders of the Preferred Securities. See "Book-Entry-Only Issuance -- The
Depository Trust Company". If the Preferred Securities are no longer in
book-entry-only form, the Issuer will irrevocably deposit with the paying agent
for the Preferred Securities funds sufficient to pay the applicable Redemption
Price and will give such paying agent irrevocable instructions and authority to
pay the Redemption Price to the holders thereof upon surrender of their
certificates evidencing Preferred Securities. Notwithstanding the foregoing,
distributions payable on or prior to the redemption date for any Preferred
Securities called for redemption shall be payable to the holders of such
Preferred Securities on the relevant record dates for the related Distribution
Dates. If notice of redemption shall have been given and funds deposited as
required, then upon the Redemption Date, all rights of holders of such Preferred
Securities so called for redemption will cease, except the right of the holders
of such Preferred Securities to receive the Redemption Price, but without
interest on such Redemption Price, and such Preferred Securities will cease to
be outstanding. In the event that any date fixed for redemption of Preferred
Securities is not a Business Day, then payment of the Redemption Price payable
on such date will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such delay), except
that, if such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day. In the event that payment of the
Redemption Price in respect of Preferred Securities called for redemption is
improperly withheld or refused and not paid either by the Issuer or by BFG
pursuant to the Guarantee described herein under "Description of the Guarantee",
distributions on such Preferred Securities will continue to accrue at the then
applicable rate, from the original redemption date to the date of payment, in
which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), BFG or its subsidiaries may at any time and from time
to time purchase outstanding Preferred Securities by tender, in the open market
or by private agreement.
Payment of the Redemption Price on the Preferred Securities to holders of
Preferred Securities shall be made to the recordholders thereof as they appear
on the register for the Preferred Securities on the relevant record date, which
shall be one Business Day prior to the relevant Redemption Date; provided,
however, that in the event that the Preferred Securities do not remain in
book-entry-only form, the relevant record date shall be the date 15 days prior
to the Redemption Date. (Section 4.02(g)).
If less than all the securities issued by the Issuer are to be redeemed on
a Redemption Date, then the aggregate liquidation preference of such securities
to be redeemed shall be allocated 3% to the Common Securities and 97% to the
Preferred Securities. The particular Preferred Securities to be redeemed shall
12
14
be selected not more than 60 days prior to the Redemption Date by the Trustee
from the outstanding Preferred Securities not previously called for redemption,
by such method as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to $25 or integral
multiples thereof) of the liquidation preference of Preferred Securities of a
denomination larger than $25. The Trustee shall promptly notify the security
registrar in writing of the Preferred Securities selected for redemption and, in
the case of any Preferred Securities selected for partial redemption, the
liquidation preference thereof to be redeemed. For all purposes of the Trust
Agreement, unless the context otherwise requires, all provisions relating to the
redemption of Preferred Securities shall relate, in the case of any Preferred
Securities redeemed or to be redeemed only in part, to the portion of the
liquidation preference of Preferred Securities that has been or is to be
redeemed. (Section 4.02(h)).
SUBORDINATION OF COMMON SECURITIES
Payment of distributions on, and the Redemption Price of, the Issuer
Securities, as applicable, shall be made pro rata based on the liquidation
preference of the Issuer Securities; provided, however, that if on any
Distribution Date or Redemption Date an Event of Default (as defined below, see
"-- Events of Default; Notice") under the Trust Agreement shall have occurred
and be continuing, no payment of any Distribution on, or Redemption Price of,
any Common Security, and no other payment on account of the redemption,
liquidation or other acquisition of Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid distributions on all
outstanding Preferred Securities for all distribution periods terminating on or
prior thereto, or in the case of payment of the Redemption Price the full amount
of such Redemption Price on all outstanding Preferred Securities, shall have
been made or provided for, and all funds available to the Trustee shall first be
applied to the payment in full in cash of all distributions on, or Redemption
Price of, Preferred Securities then due and payable. (Section 4.03).
In the case of any Event of Default under the Trust Agreement resulting
from an "Event of Default" under the Indenture, the holder of Common Securities
will be deemed to have waived any such Event of Default under the Trust
Agreement until the effect of all such Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated. Until any
such Events of Default under the Trust Agreement with respect to the Preferred
Securities have been so cured, waived or otherwise eliminated, the Trustee shall
act solely on behalf of the holders of the Preferred Securities and not the
holder of the Common Securities, and only the holders of the Preferred
Securities will have the right to direct the Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Pursuant to the Trust Agreement, the Issuer shall be liquidated by the
Trustee on the first to occur of: (i) December 31, 2030, the expiration of the
term of the Trust; (ii) the bankruptcy, dissolution or liquidation of BFG; and
(iii) the redemption of all of the Preferred Securities. (Sections 9.01 and
9.02).
If an early termination occurs as described in clause (ii) above, the
Issuer shall be liquidated by the Trustee as expeditiously as the Trustee
determines to be appropriate by distributing to each holder of Preferred
Securities and Common Securities a Like Amount of Junior Subordinated
Debentures, unless such distribution is determined by the Trustee not to be
practical, in which event such holders will be entitled to receive, out of the
assets of the Issuer available for distribution to holders after satisfaction of
liabilities of creditors, an amount equal to, in the case of holders of
Preferred Securities, the aggregate of the stated liquidation preference of $25
per Preferred Security plus accrued and unpaid distributions thereon to the date
of payment (such amount being the "Liquidation Distribution"). If such
Liquidation Distribution can be paid only in part because the Issuer has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Issuer on the Preferred
Securities shall be paid on a pro rata basis. The holder(s) of the Common
Securities will be entitled to receive distributions upon any such dissolution
pro rata with the holders of the Preferred Securities, except that if an Event
of Default has occurred and is continuing under the Trust Agreement, the
Preferred Securities shall have a preference over the Common Securities.
(Sections 9.04(a) and 9.04(d)).
13
15
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under the
Trust Agreement with respect to the Preferred Securities issued thereunder
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the occurrence of an "Event of Default" as defined in Section 501
of the Indenture (see "Description of Junior Subordinated Debentures --
Events of Default"); or
(ii) default by the Trustee in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of
30 days; or
(iii) default by the Trustee in the payment of any Redemption Price of
any Preferred Security or Common Security when it becomes due and payable;
or
(iv) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Trustee in the Trust Agreement (other
than a covenant or warranty a default in the performance of which or the
breach of which is specifically dealt with in clause (ii) or (iii) above),
and continuation of such default or breach for a period of 60 days after
there has been given, by registered or certified mail, to the Trustee by
the Holders of at least 10% in Liquidation Amount of the outstanding
Preferred Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Trustee.
Within five Business Days after the occurrence of any Event of Default, the
Trustee shall transmit notice of any such Event of Default actually known to the
Trustee to the holders of Preferred Securities and the Depositor, unless such
Event of Default shall have been cured or waived.
Unless an Event of Default shall have occurred and be continuing, the
Trustee may be removed at any time by act of the holder of the Common
Securities. If an Event of Default has occurred and is continuing, the Trustee
may be removed at such time by act of the holders of a majority in liquidation
preference of the Preferred Securities, delivered to the Trustee (in its
individual capacity and on behalf of the Issuer). No registration or removal of
the Trustee and no appointment of a successor trustee shall be effective until
the acceptance of appointment by the successor Trustee in accordance with the
provisions of the Trust Agreement. (Section 8.10).
If an Event of Default has occurred and is continuing, the Preferred
Securities shall have a preference over the Common Securities upon dissolution
of the Issuer as described above. See "-- Liquidation Distribution Upon
Dissolution".
MERGER OR CONSOLIDATION OF THE TRUSTEE OR THE DELAWARE TRUSTEE
Any corporation into which the Trustee or the Delaware Trustee may be
merged or with which it may be consolidated, or any corporation resulting from
any merger, conversion or consolidation to which the Trustee or the Delaware
Trustee shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Trustee or the Delaware Trustee, shall
be the successor to the Trustee or the Delaware Trustee under the Trust
Agreement, provided such corporation shall be otherwise qualified and eligible.
(Section 8.12).
VOTING RIGHTS
Except as provided below and under "Description of the Guarantee --
Amendments and Assignment" and as otherwise required by law and the Trust
Agreement, the holders of the Preferred Securities will have no voting rights.
(Section 6.01(a)).
If any proposed amendment to the Trust Agreement provides for, or the
Issuer otherwise proposes to effect (i) any action that would adversely affect
the powers, preferences or special rights of the holders of the Preferred
Securities, whether by way of amendment to the Trust Agreement or otherwise or
(ii) the
14
16
dissolution, winding-up or termination of the Issuer, other than pursuant to the
Trust Agreement, then the holders of outstanding Preferred Securities will be
entitled to vote on such amendment or proposal of the Trustee (but not on any
other amendment or proposal as a class), and such amendment or proposal shall
not be effective except with the approval of the holders of 66 2/3% in
liquidation preference of such outstanding Preferred Securities. (Section
6.02(c)).
So long as any Junior Subordinated Debentures are held by the Trustee, the
Trustee shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee (as defined
herein), or executing any trust or power conferred on the Debenture Trustee with
respect to the Junior Subordinated Debentures, (ii) waive any past default which
is waivable under Section 513 of the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Junior Subordinated
Debentures shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Junior Subordinated
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the holders of at least 66 2/3% in liquidation
preference of the outstanding Preferred Securities; provided, however, that
where a consent under the Indenture would require the consent of each holder of
Junior Subordinated Debentures affected thereby, no such consent shall be given
by the Trustee without the prior consent of each holder of Preferred Securities.
The Trustee shall not revoke any action previously authorized or approved by a
vote of the Preferred Securities. The Trustee shall notify all holders of the
Preferred Securities of any notice of default received from the Debenture
Trustee. In addition to obtaining the foregoing approvals of the holders of the
Preferred Securities, prior to taking any of the foregoing actions, the Trustee
shall obtain an opinion of counsel experienced in such matters to the effect
that the Issuer will not be classified as a corporation or partnership for
United States federal income tax purposes on account of such action. (Section
6.01(b)).
Any required approval of holders of Preferred Securities may be given at a
separate meeting of holders of Preferred Securities convened for such purpose or
pursuant to written consent. The Trustee will cause a notice of any meeting at
which holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be given
to each holder of record of Preferred Securities in the manner set forth in the
Trust Agreement. (Section 6.02).
No vote or consent of the holders of Preferred Securities will be required
for the Issuer to redeem and cancel Preferred Securities in accordance with the
Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by BFG, the Trustee or any affiliate of BFG or the
Trustee, shall, for purposes of such vote or consent, be treated as if they were
not outstanding.
CO-TRUSTEES AND SEPARATE TRUSTEE
Unless an Event of Default under the Trust Agreement shall have occurred
and be continuing, at any time or times, for the purpose of meeting the legal
requirements of the Trust Indenture Act or of any jurisdiction in which any part
of the Trust Property (as defined in the Trust Agreement) may at the time be
located, the holder of the Common Securities and the Trustee shall have power to
appoint, and upon the written request of the Trustee, BFG, as Depositor, shall
for such purpose join with the Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to appoint one
or more persons approved by the Trustee either to act as co-trustee, jointly
with the Trustee, of all or any part of such Trust Property, or to act as
separate trustee of any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such person or persons
in such capacity, any property, title, right or power deemed necessary or
desirable, subject to the provisions of the Trust Agreement provisions of this
Section. If BFG, as Depositor, does not join in such appointment within 15 days
after the receipt by it of a request so to do, or in case an Event of Default
under the Indenture has occurred and is continuing, the Trustee alone shall have
power to make such appointment. (Section 8.09).
15
17
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to DTC, which
shall credit the relevant accounts at DTC on the applicable Distribution Dates
or, if the Preferred Securities are not held by DTC, such payments shall be made
by check mailed to the address of the holder entitled thereto as such address
shall appear on the Register. The Paying Agent shall initially be BFG. The
Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Trustee and the Depositor. In the event that BFG shall no longer
be the Paying Agent, the Trustee shall appoint a successor to act as Paying
Agent (which shall be a bank or trust company). (Sections 4.04 and 5.09).
BOOK-ENTRY-ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
DTC will act as securities depository for the Preferred Securities. The
Preferred Securities will be issued only as fully-registered securities
registered in the name of Cede & Co. (DTC's nominee). One or more
fully-registered global Preferred Security certificates will be issued,
representing in the aggregate the total number of Preferred Securities, and will
be deposited with 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 Securities Exchange
Act of 1934, as amended (the "Exchange Act"). DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement of securities transactions among Participants 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 "New York Stock Exchange"), 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 Securities and
Exchange Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
each Preferred Security ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Preferred Securities.
Transfers of ownership interests in the Preferred 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 Preferred Securities, except in the event that use
of the book-entry system for the Preferred Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants will 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 will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
16
18
Redemption notices shall be sent to Cede & Co. If less than all of the
Preferred Securities are being redeemed, DTC's practice is to determine by lot
the amount of the interest of each Direct Participant in such series to be
redeemed.
Although voting with respect to the Preferred Securities is limited to the
holders of record of the Preferred Securities, in those cases where a vote is
required, neither DTC nor Cede & Co. will itself consent or vote with respect to
Preferred Securities. Under its usual procedures, DTC would mail 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 accounts the Preferred Securities are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Distribution payments on the Preferred Securities will be made by the
Issuer to DTC. DTC's practice is to credit Direct Participants' accounts on the
relevant payment date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive payments
on such payment date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices and will be the
responsibility of such Participant and not of DTC, the Issuer or BFG, subject to
any statutory or regulatory requirements as may be in effect from time to time.
Payment of distributions to DTC is the responsibility of the Issuer,
disbursement of such payments to Direct Participants is the responsibility of
DTC, and disbursement of such payments to the Beneficial Owners is the
responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to the Preferred Securities at any time by giving reasonable notice to
the Issuer. If DTC stops providing such services and a successor securities
depository is not obtained, Preferred Security certificates must be printed and
delivered. Additionally, the Issuer (with the consent of BFG) could decide to
discontinue use of the system of book-entry transfers through DTC (or a
successor depository). In that event, definitive certificates for the Preferred
Securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Issuer believes to be reliable, but the
Issuer takes no responsibility for the accuracy thereof. The Issuer has no
responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
REGISTRAR AND TRANSFER AGENT
The Bank of New York will act as registrar and transfer agent for the
Preferred Securities.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of the Issuer, but upon payment (with the giving of such
indemnity as the Issuer or BFG may require) in respect of any tax or other
governmental charges which may be imposed in relation to it.
The Issuer will not be required to register or cause to be registered any
transfer of Preferred Securities after they have been called for redemption.
CONCERNING THE TRUSTEE
BFG and certain of its subsidiaries maintain deposit accounts and conduct
other banking transactions with the Trustee in the ordinary course of their
businesses.
MISCELLANEOUS
Application has been made to list the Preferred Securities on the New York
Stock Exchange.
The Trustee is authorized and directed to conduct its affairs and to
operate the Issuer so that the Issuer will not be deemed to be an "investment
company" required to be registered under the 1940 Act or taxed as a corporation
for United States Federal income tax purposes and so that the Junior
Subordinated Debentures will be treated as indebtedness of BFG for United States
Federal income tax purposes. In this connection, the Trustee is authorized to
take any action, not inconsistent with applicable law, the certificate of trust
or the Trust Agreement, that the Trustee determines in its discretion to be
17
19
necessary or desirable for such purposes, as long as such action does not
adversely affect the interests of the holders of the Preferred Securities.
Holders of the Preferred Securities have no preemptive rights.
DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of information concerning the Guarantee that
will be executed and delivered by BFG for the benefit of the holders from time
to time of Preferred Securities. The Guarantee will be qualified as an indenture
under the Trust Indenture Act. The Bank of New York will act as indenture
trustee (the "Guarantee Trustee") under the Guarantee for the purposes of
compliance with the Trust Indenture Act. The terms of the Guarantee will be
those set forth in such Guarantee and those made part of such Guarantee by the
Trust Indenture Act. The summary does not purport to be complete and is subject
in all respects to the provisions of, and is qualified in its entirety by
reference to, the Guarantee, which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, and the Trust Indenture Act.
The Guarantee Trustee will hold the Guarantee for the benefit of the holders of
the Preferred Securities.
GENERAL
BFG will fully and unconditionally agree, to the extent set forth herein,
to pay the Guarantee Payments (as defined below) in full to the holders of the
Preferred Securities (except to the extent paid by or on behalf of the Issuer),
as and when due, regardless of any defense, right of set-off or counterclaim
that the Issuer may have or assert. The following payments with respect to the
Preferred Securities, to the extent not paid by or on behalf of the Issuer (the
"Guarantee Payments"), will be subject to the Guarantee (without duplication):
(i) any accrued and unpaid distributions required to be paid on the Preferred
Securities, to the extent the Issuer has funds legally available therefor, (ii)
the redemption price, including all accrued and unpaid distributions (the
"Redemption Price"), with respect to any Preferred Securities called for
redemption by the Issuer, to the extent the Issuer has funds legally available
therefor and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Issuer (other than in connection with a redemption of all of
the Preferred Securities), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid distributions on the Preferred Securities to
the date of payment, to the extent the Issuer has funds legally available
therefor, and (b) the amount of assets of the Issuer remaining available for
distribution to holders of Preferred Securities in liquidation of the Issuer.
BFG's obligation to make a Guarantee Payment may be satisfied by direct payment
of the required amounts by BFG to the holders of Preferred Securities or by
causing the Issuer to pay such amounts to such holders.
The Guarantee will be a full and unconditional guarantee with respect to
the Preferred Securities issued by the Issuer from the time of issuance of the
Preferred Securities, but will not apply to any payment of distributions if and
to the extent that the Issuer does not have funds legally available to make such
payments or to collection of payment. If BFG does not make interest payments on
the Junior Subordinated Debentures held by the Issuer, it is expected that the
Issuer will not pay distributions on the Preferred Securities. The Guarantee
will rank subordinate and junior in right of payment to all liabilities of BFG
(except those made pari passu by their terms). See "-- Status of the Guarantee".
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Preferred Securities (in which case no vote will be required), the
terms of the Guarantee may be changed only with the prior approval of the
holders of not less than 66 2/3% in liquidation preference of the outstanding
Preferred Securities. All guarantees and agreements contained in the Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
BFG and shall inure to the benefit of the holders of the Preferred Securities
then outstanding.
18
20
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of BFG
to perform any of its payment obligations thereunder. The holders of a majority
in liquidation amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of the Guarantee or to direct the exercise of
any trust or power conferred upon the Guarantee Trustee under the Guarantee.
If the Guarantee Trustee fails to enforce the Guarantee, any holder of
Preferred Securities may, after a period of 30 days has elapsed from such
holder's written request to the Guarantee Trustee to enforce the Guarantee,
institute a legal proceeding directly against BFG to enforce the Guarantee
Trustee's rights under such Guarantee without first instituting a legal
proceeding against the Issuer, the Guarantee Trustee or any other person or
entity.
BFG will be required to provide annually to the Guarantee Trustee a
statement as to the performance by BFG of certain of its obligations under the
Guarantee and as to any default in such performance.
BFG will also be required to file annually with the Guarantee Trustee an
officer's certificate as to BFG's compliance with all conditions under the
Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default by BFG in
performance of the Guarantee, undertakes to perform only such duties as are
specifically set forth in the Guarantee and, after default with respect to the
Guarantee, must exercise the same degree of care as a prudent individual would
exercise in the conduct of his or her own affairs. Subject to this provision,
the Guarantee Trustee is under no obligation to exercise any of the powers
vested in it by the Guarantee at the request of any holder of Preferred
Securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of all Preferred Securities, the
distribution of Junior Subordinated Debentures to holders of Preferred
Securities in exchange for all of the Preferred Securities or upon full payment
of the amounts payable upon liquidation of the Issuer. The Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of Preferred Securities must restore payment of any sums paid
under the Preferred Securities or the Guarantee.
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of BFG and will rank
(i) subordinate and junior in right of payment to all liabilities of BFG (except
liabilities that may be made pari passu by their terms), (ii) pari passu with
the most senior preferred or preference stock now or hereafter issued by BFG and
with any guarantee now or hereafter entered into by BFG in respect of any
preferred or preference stock of any affiliate of BFG and (iii) senior to BFG's
common stock. The Trust Agreement provides that each holder of Preferred
Securities by acceptance thereof agrees to the subordination provisions and
other terms of the Guarantee.
The Guarantee will constitute a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity).
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
19
21
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
Set forth below is a description of the specific terms of the Junior
Subordinated Debentures in which the Issuer will invest the proceeds of the
issuance and sale of the Issuer Securities. The following description does not
purport to be complete and is qualified in its entirety by reference to the
description in the Indenture (the "Indenture") dated as of , 1995,
between BFG and The Bank of New York, as trustee with respect to the Junior
Subordinated Debentures (the "Debenture Trustee"), which is filed as an exhibit
to the Registration Statement of which this Prospectus forms a part. Whenever
particular provisions or defined terms in the Indenture are referred to herein,
such provisions or defined terms are incorporated by reference herein. Section
references used herein are references to provisions of the Indenture unless
otherwise noted.
GENERAL
The Junior Subordinated Debentures will be limited in aggregate principal
amount to approximately $130.4 million, such amount being the sum of the
aggregate stated liquidation preference of the Preferred Securities and the
consideration paid by BFG for the Common Securities. The Junior Subordinated
Debentures are unsecured, subordinated obligations of BFG which rank junior to
all of BFG's Senior Indebtedness (as defined below).
The entire outstanding principal amount of the Junior Subordinated
Debentures will become due and payable, together with any accrued and unpaid
interest thereon, including Additional Interest (as hereinafter defined), if
any, on , 2025.
OPTIONAL REDEMPTION
On or after , 2000 and subject to the Equity Call Requirement (as
defined below), BFG will have the right, at any time and from time to time, to
redeem the Junior Subordinated Debentures, in whole or in part, at a redemption
price equal to 100% of the principal amount of the Junior Subordinated
Debentures being redeemed, together with any accrued but unpaid interest,
including Additional Interest, if any, to the redemption date.
If a Tax Event shall occur and be continuing and, subject to the Equity
Call Requirement, BFG shall have the right to redeem the Junior Subordinated
Debentures in whole but not in part, at a Redemption Price equal to 100% of the
principal amount of Junior Subordinated Debentures then outstanding plus any
accrued and unpaid interest, including Additional Interest, if any, to the
redemption date.
The principal amount of the Junior Subordinated Debentures redeemed in the
circumstances described in either of the two immediately preceding paragraphs
may not exceed 103% of the amount of the proceeds derived, directly or
indirectly, by BFG or its subsidiaries from the issuance and sale of BFG's
common stock within two years preceding the date fixed for redemption (the
"Equity Call Requirement"). For so long as the Issuer is the holder of all the
outstanding Junior Subordinated Debentures, the proceeds of any such redemption
will be used by the Issuer to redeem Preferred Securities in accordance with
their terms. BFG may not redeem the Junior Subordinated Debentures in part
unless all accrued and unpaid interest (including any Additional Interest) has
been paid in full on all outstanding Junior Subordinated Debentures for all
quarterly interest periods terminating on or prior to the date of redemption.
Any optional redemption of the Junior Subordinated Debentures shall be made
upon not less than 30 nor more than 60 days' notice, as provided in the
Indenture.
INTEREST
The Junior Subordinated Debentures shall bear interest at the rate of %
per annum. Such interest is payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year (each, an "Interest Payment Date"),
commencing , 1995, to the person in whose name each Junior
Subordinated Debenture is registered, subject to certain exceptions, by the
close of business on
20
22
the Business Day next preceding such Interest Payment Date. It is anticipated
that the Issuer will be the sole holder of the Junior Subordinated Debentures.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Junior Subordinated Debentures is not a Business Day,
then payment of the interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date the payment was originally payable.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
BFG shall have the right at any time during the term of the Junior
Subordinated Debentures to extend the interest payment period from time to time
to a period not exceeding 20 consecutive quarters (the "Extension Period")
during which period interest will compound quarterly. At the end of this
Extension Period BFG must pay all interest then accrued and unpaid (together
with interest thereon at the rate specified for the Junior Subordinated
Debentures to the extent permitted by applicable law). However, during any such
Extension Period, BFG shall not declare or pay any dividend or distribution
(other than a dividend or distribution in common stock of BFG) on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock, or make any guarantee payments with respect to the foregoing
(other than payments under the Guarantee). Prior to the termination of any such
Extension Period, BFG may further extend the interest payment period, provided
that such Extension Period together with all such previous and further
extensions thereof shall not exceed 20 consecutive quarters at any one time or
extend beyond the maturity date of the Junior Subordinated Debentures. Upon the
termination of any such Extension Period and the payment of all amounts then
due, BFG may select a new Extension Period, subject to the above requirements.
No interest shall be due and payable during an Extension Period, except at the
end thereof. BFG must give the Issuer and the Debenture Trustee notice of its
selection of such Extension Period at least one Business Day prior to the
earlier of (i) the date the distributions on the Preferred Securities are
payable or (ii) the date the Issuer is required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization or to holders of
the Preferred Securities of the record date or the date such distributions are
payable, but in any event not less than one Business Day prior to such record
date. BFG shall cause the Trustee to give notice of BFG's selection of such
Extension Period to the holders of the Preferred Securities.
ADDITIONAL INTEREST
If at any time the Issuer shall be required to pay any interest on
distributions in arrears in respect of the Preferred Securities pursuant to the
terms thereof, BFG will pay as interest to the Issuer as the holder of the
Junior Subordinated Debentures an amount of additional interest ("Additional
Interest") equal to such interest on distributions in arrears. In addition, if
the Issuer would be required to pay any taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes) imposed
by the United States or any other taxing authority, then, in any case, BFG will
also pay as Additional Interest such amounts as shall be required so that the
net amounts received and retained by the Issuer after paying such taxes, duties,
assessments or governmental charges will be not less than the amounts the Issuer
would have received had no such taxes, duties, assessments or governmental
charges been imposed.
SET-OFF
Notwithstanding anything to the contrary in the Indenture, BFG shall have
the right to set-off any payment it is otherwise required to make thereunder to
the extent BFG has theretofore made, or is concurrently on the date of such
payment making, a payment under the Guarantee.
21
23
SUBORDINATION
The Junior Subordinated Debentures are subordinate and junior in right of
payment to all Senior Indebtedness (as defined below) of BFG as provided in the
Indenture. The Junior Debentures rank equal with obligations to trade creditors
of BFG. No payment of principal of (including redemption and sinking fund
payments), or interest on, the Junior Subordinated Debentures may be made if BFG
has defaulted on any payment of Senior Indebtedness when due, any applicable
grace period with respect to such default has ended and such default has not
been cured or waived, or if the maturity of any Senior Indebtedness has been
accelerated because of a default. (Section 1102). Upon any distribution of
assets of BFG to creditors upon any dissolution, winding-up, liquidation or
reorganization, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all principal of, and premium, if any, and
interest due or to become due on, all Senior Indebtedness must be paid in full
before the holders of the Junior Subordinated Debentures are entitled to receive
or retain any payment thereon. (Section 1103). Subject to the prior payment of
all Senior Indebtedness, the rights of the holders of the Junior Subordinated
Debentures will be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions applicable to Senior
Indebtedness until all amounts owing on the Junior Subordinated Debentures are
paid in full. (Section 1104).
The term "Senior Indebtedness" shall mean the principal of, premium, if
any, interest on and any other payment due pursuant to any of the following,
whether outstanding at the date of execution of the Indenture or thereafter
incurred, created or assumed:
(a) all indebtedness of BFG on a consolidated basis (other than any
obligations to trade creditors) evidenced by notes, debentures, bonds or
other securities sold by BFG for money borrowed and capitalized lease
obligations;
(b) all indebtedness of others of the kinds described in the preceding
clause (a) assumed by or guaranteed in any manner by BFG or in effect
guaranteed by BFG; and
(c) all renewals, extensions or refundings of indebtedness of the
kinds described in either of the preceding clauses (a) or (b), unless, in
the case of any particular indebtedness, renewal, extension or refunding,
the instrument creating or evidencing the same or the assumption or
guarantee of the same expressly provides that such indebtedness, renewal,
extension or refunding is not superior in right of payment to or is pari
passu with the Junior Subordinated Debentures. (Section 101).
The Indenture does not limit the aggregate amount of Senior Indebtedness
that may be issued. As of April 30, 1995, BFG had approximately $609.5 million
of principal amount of indebtedness for borrowed money constituting Senior
Indebtedness on a consolidated basis. In addition, as of April 30, 1995, there
were approximately $70 million of contingent obligations constituting Senior
Indebtedness where there exists a financially viable and unrelated primary
obligor and where the risk of loss to BFG is, in the opinion of BFG, remote.
CERTAIN COVENANTS OF BFG
Pursuant to the Indenture, BFG will covenant that it will not declare or
pay any dividends or distributions (other than dividends or distributions in
common stock of BFG) on, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock, or make any guarantee
payments with respect to the foregoing (other than payments under the Guarantee)
if at such time (i) there shall have occurred any event of which BFG has actual
knowledge that (a) with the giving of notice or the lapse of time, or both,
would constitute an Event of Default under the Indenture and (b) in respect of
which BFG shall not have taken reasonable steps to cure, (ii) BFG shall be in
default with respect to its payment of any obligations under the Guarantee or
(iii) BFG shall have given notice of its selection of an extended interest
payment period as provided in the Indenture and such period, or any extension
thereof, shall be continuing. (Section 1008). BFG will also covenant (i) to
maintain 100% ownership of the Common Securities of the Issuer, (ii) not to
voluntarily dissolve, wind-up or terminate the Trust, except in connection with
the distribution of the Junior Subordinated Debentures to the holders
22
24
of the Preferred Securities in liquidation of the Issuer or in connection with
certain mergers, consolidations or amalgamations permitted by the Trust
Agreement and (iii) to use its reasonable efforts, consistent with the terms and
provisions of the Trust Agreement, to cause the Issuer to remain a business
trust and otherwise not to be classified as a corporation for United States
Federal income tax purposes. (Section 1008).
EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events, that has occurred and is continuing constitutes an "Event of Default"
with respect to the Junior Subordinated Debentures:
(a) failure for 10 days to pay interest on the Junior Subordinated
Debentures, including any Additional Interest in respect thereof, when due
(subject to the deferral of any due date in the case of an Extension
Period); or
(b) failure to pay principal on the Junior Subordinated Debentures
when due whether at maturity, upon redemption by declaration or otherwise;
or
(c) failure to observe or perform in any material respect any other
covenant contained in the Indenture for 90 days after written notice to BFG
from the Debenture Trustee or the holders of at least 25% in principal
amount of the outstanding Junior Subordinated Debentures; or
(d) certain events in bankruptcy, insolvency or reorganization of BFG.
(Section 501).
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Debenture
Trustee. (Section 512). The Debenture Trustee or the holders of not less than
25% in aggregate outstanding principal amount of the Junior Subordinated
Debentures may declare the principal due and payable immediately upon an Event
of Default, and should the Debenture Trustee or such holders of Junior
Subordinated Debentures fail to make such declaration the holders of at least
25% in aggregate liquidation preference of Preferred Securities shall have such
right. The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debentures may annul such declaration and waive the
default if the default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration and
any applicable premium has been deposited with the Debenture Trustee. (Section
502).
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures affected thereby may, on behalf of the holders of
all the Junior Subordinated Debentures, waive any past default, except a default
in the payment of principal or interest (unless such default has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee) or
in respect of a covenant or provision which under the Indenture cannot be
modified or amended without the consent of the holder of each outstanding Junior
Subordinated Debenture. (Section 513). BFG is required to file annually with the
Debenture Trustee a certificate as to whether or not BFG is in compliance with
all the conditions and covenants applicable to it under the Indenture. (Section
1004).
In case any Event of Default (as defined in the Indenture) shall occur and
be continuing, the Issuer will have the right to declare the principal of and
the interest on the Junior Subordinated Debentures (including any Additional
Interest) and any other amounts payable under the Indenture to be forthwith due
and payable and to enforce its other rights as a creditor with respect to the
Junior Subordinated Debentures.
A voluntary or involuntary dissolution of the Issuer prior to redemption or
maturity of the Junior Subordinated Debentures would not constitute an Event of
Default with respect to the Junior Subordinated Debentures. If the Issuer is
dissolved, an event BFG and the Issuer consider to be remote, any of the
following, among other things, could occur: (i) a distribution of the Junior
Subordinated Debentures to the holders of the Preferred Securities, (ii) a cash
distribution to the holders of the Preferred Securities out of the sale of
assets of the Issuer, after satisfaction of liabilities to creditors, (iii) a
permitted
23
25
redemption at par of the Junior Subordinated Debentures, and a consequent
redemption of a Like Amount of the Preferred Securities, at the option of BFG
under the circumstances described in "-- Optional Redemption" or (iv) the
rollover of the Trust Property into another entity with similar characteristics.
FORM, EXCHANGE, AND TRANSFER
The Junior Subordinated Debentures will be issuable only in registered
form, without coupons and only in denominations of $25 and integral multiples
thereof. (Section 302)
Subject to the term of the Indenture, Junior Subordinated Debentures may be
presented for registration of transfer (duly endorsed or with the form of
transfer endorsed thereon duly executed) at the office of the Security Registrar
or at the office of any transfer agent designated by BFG for such purpose. No
service charge will be made for any registration of transfer or exchange of
Junior Subordinated Debentures, but BFG may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Such transfer or exchange will be effected upon the Security Registrar or such
transfer agent, as the case may be, being satisfied with the documents of title
and identity of the person making the request. BFG has appointed the Trustee as
Security Registrar. (Section 305) BFG may at any time designate additional
transfer agents or rescind the designation of any transfer agent or approve a
change in the office through which any transfer agent acts. (Section 1002)
If the Junior Subordinated Debentures are to be redeemed in part, BFG will
not be required to issue, register the transfer of or exchange any Junior
Subordinated Debentures during a period beginning at the opening of business 15
days before the day of mailing of a notice of redemption of any such Junior
Subordinated Debentures that may be selected for redemption and ending at the
close of business on the day of such mailing, except the unredeemed portion of
any such Junior Subordinated Debentures being redeemed in part. (Section 305)
PAYMENT AND PAYING AGENTS
Payment of interest on a Junior Subordinated Debenture on any Interest
Payment Date will be made to the Person in whose name such Junior Subordinated
Debenture (or one or more predecessor securities) is registered at the close of
business on the Regular Record Date for such interest. (Section 307)
Principal of and any interest on the Junior Subordinated Debentures will be
payable at the office of such Paying Agent or Paying Agents as BFG may designate
for such purpose from time to time, except that at the option of BFG payment of
any interest may be made by check mailed to the address of the Person entitled
thereto as such address appears in the Security Register. The corporate trust
office of the Trustee in The City of New York is designated as BFG's sole Paying
Agent for payments with respect to the Junior Subordinated Debentures. BFG may
at any time designate additional Paying Agents or rescind the designation of any
Paying Agent or approve a change in the office through which any Paying Agent
acts. (Section 1002)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting BFG and the Debenture Trustee,
with the consent of the holders of not less than a majority in principal amount
of the outstanding Junior Subordinated Debentures, to modify the Indenture in a
manner affecting the rights of the holders of the Junior Subordinated
Debentures; provided that no such modification may, without the consent of the
holder of each outstanding Junior Subordinated Debenture, (i) extend the fixed
maturity of the Junior Subordinated Debentures, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon,
or (ii) reduce the percentage of principal amount of Junior Subordinated
Debentures, the holders of which are required to consent to any such
modification of the Indenture. (Section 902).
24
26
CONSOLIDATION, MERGER AND SALE
The Indenture does not contain any covenant that restricts BFG's ability to
merge or consolidate with or into any other corporation, sell or convey all or
substantially all of its assets to any person, firm or corporation or otherwise
engage in restructuring transactions. (Section 801).
SATISFACTION AND DISCHARGE
Under the terms of the Indenture, BFG will be discharged from any and all
obligations in respect of the Junior Subordinated Debentures (except in each
case for certain obligations to register the transfer or exchange of Junior
Subordinated Debentures, replace stolen, lost or mutilated Junior Subordinated
Debentures and hold moneys for payment in trust) if BFG deposits with the
Debenture Trustee, in trust, moneys in an amount sufficient to pay all the
principal of, and interest on, the Junior Subordinated Debentures on the dates
such payments are due in accordance with the terms of such Junior Subordinated
Debentures. (Section 401).
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed by,
and construed in accordance with, the laws of the State of New York. (Section
112).
MISCELLANEOUS
BFG will have the right at all times to assign any of its rights or
obligations under the Indenture to a direct or indirect wholly-owned subsidiary
of BFG; provided, that, in the event of any such assignment, BFG will remain
liable for all such obligations. The Issuer may not assign any of its rights
under the Indenture without the prior written consent of BFG. Subject to the
foregoing, the Indenture will be binding upon and inure to the benefit of the
parties thereto and their respective successors and assigns. The Indenture
provides that it may not otherwise be assigned by the parties thereto. (Section
).
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debentures, such payments will be sufficient to cover
distributions and other payments due on the Preferred Securities, primarily
because (i) the aggregate principal amount of Junior Subordinated Debentures
will be equal to the sum of the aggregate stated liquidation preference of the
Preferred Securities and the Common Securities; (ii) the interest rate and
interest and other payment dates on the Junior Subordinated Debentures will
match the distribution rate and distribution and other payment dates for the
Preferred Securities; (iii) the Trust Agreement provides that BFG shall pay for
all, and the Issuer shall not be obligated to pay, directly or indirectly, for
any, costs, expenses and liabilities of the Issuer, including any income taxes,
duties and other governmental charges, and all costs and expenses with respect
thereto, to which the Issuer may become subject, except for United States
withholding taxes and the Issuer's obligations to Preferred Securityholders
under the Preferred Securities; and (iv) the Trust Agreement further provides
that the Trustee shall not cause or permit the Issuer to, among other things,
engage in any activity that is not consistent with the limited purposes of the
Issuer.
Payments of distributions and other amounts due on the Preferred Securities
(to the extent the Issuer has funds legally available for the payment of such
distributions) are guaranteed by BFG as and to the extent set forth under
"Description of the Guarantee." If and to the extent that BFG does not make
payments on the Junior Subordinated Debentures, the Issuer will not pay
distributions or other amounts due on the Preferred Securities.
If the Guarantee Trustee fails to enforce the Guarantee, a holder of a
Preferred Security may, after a period of 30 days has elapsed from the date of
such holder's written request to the Guarantee Trustee to enforce the Guarantee,
institute a legal proceeding directly against BFG to enforce its rights under
the Guarantee without first instituting a legal proceeding against the Issuer or
any other person or entity.
25
27
The Preferred Securities evidence the rights of the holders thereof to the
benefits of the Trust, a trust that exists for the sole purpose of issuing its
Issuer Securities and investing the proceeds thereof in debt securities of BFG,
while the Junior Subordinated Debentures represent indebtedness of BFG. A
principal difference between the rights of a holder of a Preferred Security and
a holder of a Junior Subordinated Debenture is that a holder of a Junior
Subordinated Debenture will accrue, and (subject to the permissible extension of
the interest period) is entitled to receive, interest on the principal amount of
Junior Subordinated Debentures held, while a holder of Preferred Securities is
only entitled to receive distributions if and to the extent the Issuer has funds
legally available for the payment of such distributions.
Upon any voluntary or involuntary dissolution, winding-up or termination of
the Issuer, the holders of Preferred Securities will be entitled to receive, out
of assets legally available for distribution to holders, the Liquidation
Distribution in cash. See "Description of the Preferred Securities --
Liquidation Distribution Upon Dissolution". Upon any voluntary or involuntary
liquidation or bankruptcy of BFG, the Issuer, as holder of the Junior
Subordinated Debentures, would be a subordinated creditor of BFG, subordinated
in right of payment to all Senior Indebtedness, but entitled to receive payment
in full of principal and interest, before any stockholders of BFG receive
payments or distributions. Since BFG is Guarantor under the Guarantee and has
agreed to pay for all costs, expenses and liabilities of the Issuer (other than
United States withholding taxes and other than the Issuer's obligations to
Preferred Securityholders under the Preferred Securities), the positions of a
holder of Preferred Securities and a holder of Junior Subordinated Debentures
relative to other creditors and to stockholders of BFG in the event of
liquidation or bankruptcy of BFG would be substantially the same.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Junior Subordinated
Debentures. However, in the event of payment defaults under, or acceleration of,
Senior Indebtedness, the subordination provisions of the Junior Subordinated
Debentures provide that no payments may be made in respect of the Junior
Subordinated Debentures until such Senior Indebtedness has been paid in full or
any payment default thereunder has been cured or waived. Failure to make
required payments on the Junior Subordinated Debentures would constitute an
Event of Default under the Indenture.
UNITED STATES TAXATION
GENERAL
This section is a summary of the principal United States Federal income tax
considerations that may be relevant to prospective purchasers of Preferred
Securities and represents the opinion of White & Case, special counsel to BFG
and the Issuer, insofar as it relates to matters of law and legal conclusions
with respect thereto. This section is based upon current provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed
Treasury Regulations thereunder and current administrative rulings and court
decisions, all of which are subject to change (which change may be retroactive).
Subsequent changes may cause tax consequences to vary substantially from the
consequences described below.
The following discussion does not address all United States Federal income
tax matters affecting holders of Preferred Securities ("Preferred
Securityholders"). Moreover, the discussion addresses the United States Federal
income tax considerations of Preferred Securityholders who are citizens or
residents of the United States, corporations, partnerships or other entities
created or organized in or under the laws of the United States or any political
subdivision thereof or therein, estates or trusts the income of which is subject
to United States Federal income taxation regardless of its source or other
holders who otherwise are subject to United States Federal income taxation on a
net income basis with respect to Preferred Securities ("U.S. Holders") that hold
the Preferred Securities as a capital asset and does not address the tax
consequences to Preferred Securityholders who are not U.S. Holders ("Non-U.S.
Holders"). This summary does not address tax considerations applicable to
Preferred Securityholders that may be subject to special tax rules, such as
banks, insurance companies, tax-exempt organizations or dealers in securities or
currencies, or to Preferred Securityholders that will hold Preferred
26
28
Securities as part of a position in a "straddle" or as part of a "hedging" or
"conversion" transaction for United States Federal income tax purposes or that
have a "functional currency" other than the United States dollar. In addition,
this summary does not address the tax consequences to Preferred Securityholders
that do not purchase Preferred Securities as part of their initial distribution.
Accordingly, each prospective Preferred Securityholder, including Non-U.S.
Holders, should consult, and should depend on, his or her own tax advisor in
analyzing the United States Federal, state, local and foreign tax consequences
of the purchase, ownership, sale or exchange of Preferred Securities.
While the Company believes, based upon the advice of its special counsel,
that the Junior Subordinated Debentures should be treated as indebtedness for
United States Federal income tax purposes, Preferred Securityholders should note
that the Internal Revenue Service (the "Service") may attempt to treat the
Junior Subordinated Debentures as equity rather than indebtedness for tax
purposes. If the Service were successful in such attempt, the Preferred
Securities would be subject to redemption at the option of BFG as described
under "Description of the Preferred Securities -- Redemption."
INCOME FROM PREFERRED SECURITIES
In the opinion of White & Case, the Issuer will not be classified as an
association taxable as a corporation for United States Federal income tax
purposes. Each Preferred Securityholder will be treated as owning an undivided
beneficial interest in the Junior Subordinated Debentures. Accordingly, each
U.S. Holder will be required to include in its gross income its share of the
interest income accrued with respect to the Junior Subordinated Debentures
whether or not actually distributed to the Preferred Securityholders. No portion
of such income will be eligible for the dividends received deduction.
SALE OF PREFERRED SECURITIES
Any gain or loss will be recognized by a U.S. Holder on a sale of Preferred
Securities, including a redemption for cash, and will be equal to the difference
between the amount realized and the Preferred Securityholder's adjusted tax
basis in the Preferred Securities sold. A U.S. Holder's adjusted tax basis in a
Preferred Security generally will equal the issue price of such Preferred
Security increased by the amount of original issue discount previously
includible in the gross income of such holder and decreased by the amount of any
payments received on such Preferred Security. Any gain or loss recognized by a
U.S. Holder on the sale of a Preferred Security held for more than one year
generally will be taxable as long-term capital gain or loss.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE DISCOUNT
Under the Indenture, BFG has the option to extend from time to time the
interest payment period on the Junior Subordinated Debentures to a period not
exceeding 20 consecutive quarters but not beyond the maturity date of the Junior
Subordinated Debentures. BFG's option to extend the interest payment period will
cause the Junior Subordinated Debentures to be treated as issued with "original
issue discount" for United States Federal income tax purposes. Accordingly, a
U.S. Holder will accrue interest income (i.e., original issue discount) under a
constant yield basis over the term of the Junior Subordinated Debentures
(including any Extension Period), regardless of the receipt of cash with respect
to the period to which such income is attributable.
As a result, U.S. Holders of record during an Extension Period will include
interest in gross income in advance of the receipt of cash, and any such holders
who dispose of Preferred Securities prior to the record date for the payment of
distributions following such Extension Period will include interest in gross
income but will not receive any cash related thereto. The tax basis of a
Preferred Security will be increased by the amount of any original issue
discount that is included in income without a receipt of cash, and will be
decreased when and if such cash is subsequently received by such U.S. Holder.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
In general, information reporting requirements will apply to payments on,
and proceeds from the sale of, a Preferred Security to a noncorporate United
States person within the United States and "backup withholding" at a rate of 31%
will apply to such payments if such United States person fails to provide an
27
29
accurate taxpayer identification number. Generally, such information reporting
will be made on Forms 1099 by the 31st of January following each calendar year.
Payments of the proceeds from the sale of Preferred Securities to or
through the United States office of a broker is subject to information reporting
and backup withholding unless the holder or beneficial owner certifies as to its
non-United States status or otherwise establishes an exemption from information
reporting and backup withholding.
These backup withholding tax and information reporting rules are subject to
proposed Treasury Regulations and currently are under review by the United
States Treasury. Accordingly, the application of such rules to the Preferred
Securities could be changed.
28
30
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, BFG and
the Issuer have agreed that the Issuer will issue and sell to each of the
Underwriters named below, and each of the Underwriters, for whom Goldman, Sachs
& Co. are acting as Representatives, has severally agreed to purchase from the
Issuer the respective number of Preferred Securities set forth opposite its name
below:
NUMBER OF
UNDERWRITER PREFERRED SECURITIES
----------- --------------------
Goldman, Sachs & Co...............................................
---------
Total................................................... 4,400,000
=========
Subject to the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all the Preferred Securities
offered hereby, if any are taken.
The Underwriters propose to offer the Preferred Securities in part directly
to the public at the initial public offering price set forth on the cover page
of this Prospectus, and in part to certain securities dealers at such price less
a concession of $.50 per Preferred Security. The Underwriters may allow, and
such dealers may reallow, a concession not in excess of $.25 per Preferred
Security to certain brokers and dealers. After the Preferred Securities are
released for sale to the public, the offering price and other selling terms may
from time to time be varied by the Representative.
The Issuer has granted the Underwriters an option exercisable for 30 days
after the date of this Prospectus to purchase up to 660,000 additional Preferred
Securities to cover over-allotments, if any, at the initial public offering
price (with additional Underwriters' Compensation), as set forth on the cover
page of this Prospectus. If the Underwriters exercise their over-allotment
option, the Underwriters have severally agreed, subject to certain conditions,
to purchase approximately the same percentage thereof that the number of
Preferred Securities to be purchased by each of them, as shown in the foregoing
table, bears to the number of Preferred Securities initially offered hereby.
In view of the fact that the proceeds of the sale of the Preferred
Securities will be used to purchase the Junior Subordinated Debentures, the
Underwriting Agreement provides that BFG will pay as compensation
("Underwriters' Compensation"), for the Underwriters' arranging the investment
therein of such proceeds, an amount in New York Clearing House (next day) funds
of $.7875 per Preferred Security for the accounts of the several Underwriters.
BFG and the Issuer have agreed, during the period beginning from the date
of the Underwriting Agreement and continuing to and including the earlier of (i)
the date, after the closing date, on which the distribution of the Preferred
Securities and the Guarantee ceases, as determined by the Underwriters, or (ii)
90 days after the closing date, not to offer, sell, contract to sell, or
otherwise dispose of any Preferred Securities, any other interests of the
Issuer, or any preferred stock or any other securities of the Issuer or BFG
which are substantially similar to the Preferred Securities including the
Guarantee, or any securities convertible into or exchangeable for Preferred
Securities, preferred stock or such substantially similar securities of either
the Issuer or BFG, without the prior written consent of the Representatives.
In accordance with Section 34 of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., no sales of Preferred Securities may be
made to a discretionary account without the prior written approval of the
customer.
Prior to this offering, there has been no public market for the Preferred
Securities. Application will be made to list the Preferred Securities on the New
York Stock Exchange (the "Exchange"). In order to meet one of the requirements
for listing the Preferred Securities on the Exchange, the Underwriters will
29
31
undertake to sell lots of 100 or more Preferred Securities to a minimum of 400
beneficial holders. Trading of the Preferred Securities on the Exchange is
expected to commence within a seven-day period after the initial delivery of the
Preferred Securities. The Representatives have advised BFG that they intend to
make a market in the Preferred Securities prior to commencement of trading on
the Exchange, but are not obligated to do so and may discontinue any such market
making at any time without notice.
The Issuer and BFG have agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended.
Certain of the Underwriters engage in transactions with, and from time to
time have performed services for, BFG in the ordinary course of business. John
L. Weinberg, Senior Chairman and a retired general partner of Goldman, Sachs &
Co., is a director of the Company. Goldman, Sachs & Co. has rendered financial
advisory services to the Company from time to time and has received customary
fees for its services.
30
32
EXPERTS
The consolidated financial statements of The B.F.Goodrich Company
incorporated by reference in The B.F.Goodrich Company's Form 10-K for the year
ended December 31, 1994, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
VALIDITY OF THE SECURITIES
Certain matters of Delaware law relating to the validity of the Preferred
Securities, the validity of the Trust Agreement and the formation of the Issuer
are being passed upon by White & Case, counsel to BFG and the Issuer. The
validity of the Guarantee and the Junior Subordinated Debentures will be passed
upon on behalf of the Issuer and BFG by Nicholas J. Calise, Vice President,
Associate General Counsel and Secretary of BFG, and on behalf of the
Underwriters by Sullivan & Cromwell, counsel to the Underwriters. As of May 27,
1995, Mr. Calise owned approximately 3,420 shares of BFG's Common Stock. In
addition, he held 2,000 shares of Restricted Stock and 6,100 Performance Shares
under BFG's Key Employees' Stock Option Plan and Performance Share Plan, all of
which are subject to forfeiture; held options to purchase 35,500 shares of
Common Stock; and had credited to his account in BFG's Retirement Plus Savings
Plan approximately 6,126 shares of Common Stock.
31
33
- ------------------------------------------------------
- ------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
DESCRIBED IN THIS PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION
IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF
SUCH INFORMATION.
------------------
TABLE OF CONTENTS
PAGE
----
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Risk Factors.......................... 3
BFGoodrich Capital.................... 5
The B.F.Goodrich Company.............. 5
Summary Financial Information of
BFG................................. 8
Use of Proceeds....................... 9
Capitalization........................ 9
Description of the Preferred
Securities.......................... 9
Description of the Guarantee.......... 18
Description of the Junior Subordinated
Debentures.......................... 20
Relationship Among the Preferred
Securities, the Junior Subordinated
Debentures and the Guarantee........ 25
United States Taxation................ 26
Underwriting.......................... 29
Experts............................... 31
Validity of the Securities............ 31
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
4,400,000
PREFERRED SECURITIES
BFGOODRICH CAPITAL
% CUMULATIVE
QUARTERLY INCOME PREFERRED
SECURITIES, SERIES A
guaranteed to the extent
set forth herein by
THE B.F.GOODRICH
COMPANY
-------------------
PROSPECTUS
-------------------
GOLDMAN, SACHS & CO.
REPRESENTATIVES OF THE UNDERWRITERS
- ------------------------------------------------------
- ------------------------------------------------------
34
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
Securities and Exchange Commission registration fee................... $ 43,621
Printing expenses..................................................... 60,000
Rating agency fees.................................................... 101,000
New York Stock Exchange listing fee................................... 48,000
Trustee's fees........................................................ 18,000
Legal fees............................................................ 100,000
Accounting expenses................................................... 25,000
Blue Sky fees and expenses............................................ 18,000
Other................................................................. 36,379
--------
Total............................................................ $450,000
=========
- ---------------
*All amounts other than the registration fee are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under BFG's Restated Certificate of Incorporation no member of the Board of
Directors shall have any personal liability to BFG or its shareholders for
damages for any breach of duty in such capacity, provided that such liability
shall not be limited if a judgment or other final adjudication adverse to the
Director establishes that his or her acts or omissions were in bad faith or
involved intentional misconduct or a knowing violation of law or that the
Director personally gained in fact a financial profit or other advantage to
which he or she was not legally entitled or that the Director's acts violated
section 719 of the New York Business Corporation Law ("B.C.L.") (generally
relating to the improper declaration of distributions, improper purchases of
shares, improper distribution of assets after dissolution, or making any
improper loans to directors contrary to specified statutory provisions).
Reference is made to Article TWELFTH of BFG's Restated Certificate of
Incorporation filed as Exhibit 3(a) to BFG's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1988.
Under BFG's By-Laws, any person made, or threatened to be made, a party to
an action or proceeding by reason of the fact that he, his testator or intestate
is or was a director or officer of BFG or served any other corporation in any
capacity at the request of BFG shall be indemnified by BFG to the extent and in
a manner permissible under the laws of the State of New York.
In addition, BFG's By-Laws provide indemnification for directors and
officers where they are acting on behalf of BFG where the final judgment does
not establish that the director or officer acted in bad faith or was
deliberately dishonest, or gained a financial profit or other advantage to which
he was not legally entitled. The By-Laws provide that the indemnification rights
shall be deemed to be "contract rights" and continue after a person ceases to be
a director or officer or after rescission or modification of the By-Laws with
respect to prior occurring events. They also provide directors and officers with
the benefit of any additional indemnification which may be permitted by later
amendment to the B.C.L. The By-Laws further provide for advancement of expenses
and specify procedures in seeking and obtaining indemnification. Reference is
made to Article VI of BFG's By-Laws filed as Exhibit 3(b) to BFG's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1988.
BFG has insurance to indemnify its directors and officers, within the
limits of BFG's insurance policies, for those liabilities in respect of which
such indemnification insurance is permitted under the laws of the State of New
York.
Reference is made to Sections 721 through 726 of the B.C.L., which are
summarized below.
Section 721 of the B.C.L. provides that indemnification pursuant to the
B.C.L. shall not be deemed exclusive of other indemnification rights to which a
director or officer may be entitled, provided that no
II-1
35
indemnification may be made if a judgment or other final adjudication adverse to
the director or officer establishes that (i) his acts were committed in bad
faith or were the result of active and deliberate dishonesty, and, in either
case, were material to the cause of action so adjudicated, or (ii) he personally
gained in fact a financial profit or other advantage to which he was not legally
entitled.
Section 722(a) of the B.C.L. provides that a corporation may indemnify a
director or officer made, or threatened to be made, a party to any civil or
criminal action, other than a derivative action, against judgments, fines,
amounts paid in settlement and reasonable expenses actually and necessarily
incurred as a result of such action or proceeding, or any appeal therein, if
such director or officer acted in good faith, for a purpose which he reasonably
believed to be in the best interests of the corporation and, in criminal actions
or proceedings, in addition, had no reasonable cause to believe that his conduct
was unlawful. With respect to derivative actions, Section 722(c) of the B.C.L.
provides that a director or officer may be indemnified only against amounts paid
in settlement and reasonable expenses, including attorneys' fees, actually and
necessarily incurred in connection with the defense or settlement of such
action, or any appeal therein, if such director or officer acted in good faith,
for a purpose which he reasonably believed to be in the best interests of the
corporation and that no indemnification shall be made in respect of (1) a
threatened action, or a pending action which is settled or otherwise disposed
of, or (2) any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and to the extent an appropriate
court determines that the person is fairly and reasonably entitled to partial or
full indemnification.
Section 723 of the B.C.L. specifies the manner in which payment of such
indemnification may be authorized by the corporation. It provides that
indemnification by a corporation is mandatory in any case in which the director
or officer has been successful, whether on the merits or otherwise, in defending
an action. In the event that the director or officer has not been successful or
the action is settled, indemnification may be made by the corporation only if
authorized by any of the corporate actions set forth in such Section 723 (unless
the corporation has provided for indemnification in some other manner as
otherwise permitted by Section 721 of the B.C.L.).
Section 724 of the B.C.L. provides that upon proper application by a
director or officer, indemnification shall be awarded by a court to the extent
authorized under Sections 722 and 723 of the B.C.L. Section 725 of the B.C.L.
contains certain other miscellaneous provisions affecting the indemnification of
directors and officers, including provision for the return of amounts paid as
indemnification if any such person is ultimately found not to be entitled
thereto.
Section 726 of the B.C.L. authorizes the purchase and maintenance of
insurance to indemnify (1) a corporation for any obligation which it incurs as a
result of the indemnification of directors and officers under the above
sections, (2) directors and officers in instances in which they may be
indemnified by a corporation under such sections, and (3) directors and officers
in instances in which they may not otherwise be indemnified by a corporation
under such sections, provided the contract of insurance covering such directors
and officers provides, in a manner acceptable to the New York State
Superintendent of Insurance, for a retention amount and for co-insurance.
In the Trust Agreement, BFG has agreed to indemnify the Trustees for, and
to hold the Trustees harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of the Trust Agreement, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.
II-2
36
ITEM 16. EXHIBITS
1.1 Form of Underwriting Agreement
4.1 Certificate of Trust of BFGoodrich Capital
4.2 Form of Amended and Restated Trust Agreement
4.3 Form of Indenture among BFG, the Issuer and The Bank of New York, as Debenture
Trustee
4.4 Form of Preferred Security (included in Exhibit 4.2)
4.5 Form of Junior Subordinated Debenture (included in Exhibit 4.3)
4.6 Form of Guarantee by BFG and The Bank of New York, as Guarantee Trustee
*5.1 Opinion of White & Case re validity of Preferred Securities
*5.2 Opinion of Nicholas J. Calise, Esq., Vice President, Associate General Counsel
and Secretary of BFG, re validity of Guarantee and Junior Subordinated
Debentures
*8.1 Opinion of White & Case re tax matters
12.1 Computation of Ratios of Earnings to Fixed Charges
12.2 Computation of Ratios of Earnings to Fixed Charges and Preferred Dividends
23.1 Consent of Ernst & Young LLP, independent auditors
23.2 Consent of White & Case (included in Exhibit 5.1 above)
23.3 Consent of Nicholas J. Calise, Esq. (included in Exhibit 5.2 above)
23.4 Consent of White & Case (included in Exhibit 8.1 above)
24.1 Power of Attorney of BFG
25.1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Bank of New York, as Debenture Trustee under the Indenture
25.2 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Bank of New York, as Trustee under the Trust Agreement of the Issuer
25.3 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Bank of New York, as Guarantee Trustee under the Guarantee
- ---------------
* To be filed by amendment.
ITEM 17. UNDERTAKINGS
The undersigned Registrant, The B.F.Goodrich Company, hereby undertakes
that, for purposes of determining any liability under the Securities Act of 1933
(the "Act"), each filing of such 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 each
of the Registrants pursuant to the provisions described under Item 15 above, or
otherwise, each of the Registrants 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
either of the Registrants of expenses incurred or paid by a director, officer or
controlling person of such Registrant in the successful defense of an action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, each of the Registrants
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.
II-3
37
Each of the undersigned registrants hereby undertakes that:
(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrants pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
II-4
38
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
B.F.GOODRICH COMPANY CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW YORK, ON JUNE 5, 1995.
THE B.F.GOODRICH COMPANY
By: /s/ N. J. CALISE
----------------------------------
Nicholas J. Calise
Vice President, Associate General
Counsel and Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW ON JUNE 5, 1995 BY THE FOLLOWING
PERSONS IN THE CAPACITIES INDICATED.
*STEVEN G. ROLLS *JEANETTE GRASSELLI BROWN
- --------------------------------------------- ---------------------------------------------
(STEVEN G. ROLLS) (JEANNETTE GRASSELLI BROWN)
Vice President and Controller Director
(Principal Accounting Officer)
*GEORGE A. DAVIDSON, JR. *JAMES J. GLASSER
- --------------------------------------------- ---------------------------------------------
(GEORGE A. DAVIDSON, JR.) (JAMES J. GLASSER)
Director Director
*THOMAS H. O'LEARY *JOHN D. ONG
- --------------------------------------------- ---------------------------------------------
(THOMAS H. O'LEARY) (JOHN D. ONG)
Director Chairman of the Board, President,
Chief Executive Officer and Director
(Principal Executive Officer)
*JOSEPH A. PICHLER *ALFRED M. RANKIN, JR.
- --------------------------------------------- ---------------------------------------------
(JOSEPH A. PICHLER) (ALFRED M. RANKIN, JR.)
Director Director
*IAN M. ROSS *D. LEE TOBLER
- --------------------------------------------- ---------------------------------------------
(IAN M. ROSS) (D. LEE TOBLER)
Director Executive Vice President and Director
(Principal Financial Officer)
*WILLIAM L. WALLACE
- --------------------------------------------- ---------------------------------------------
(WILLIAM L. WALLACE) (JOHN L. WEINBERG)
Director Director
*A. THOMAS YOUNG
- ---------------------------------------------
(A. THOMAS YOUNG)
Director
*By /s/ N. J. CALISE
------------------------------------------
NICHOLAS J. CALISE,
Attorney-in-Fact
II-5
39
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, BFGOODRICH
CAPITAL 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 NEW YORK, STATE OF NEW YORK, ON JUNE , 1995.
BFGOODRICH CAPITAL
By: THE BANK OF NEW YORK
By: /s/ MARY JANE MORRISSEY
------------------------------
Name: Mary Jane Morrissey
Title: Assistant Vice President
II-6
40
EXHIBIT INDEX
1.1 Form of Underwriting Agreement
4.1 Certificate of Trust of BFGoodrich Capital
4.2 Form of Amended and Restated Trust Agreement
4.3 Form of Indenture among BFG, the Issuer and The Bank of New York, as Debenture
Trustee
4.4 Form of Preferred Security (included in Exhibit 4.2)
4.5 Form of Junior Subordinated Debenture (included in Exhibit 4.3)
4.6 Form of Guarantee by BFG and The Bank of New York, as Guarantee Trustee
*5.1 Opinion of White & Case re validity of Preferred Securities
*5.2 Opinion of Nicholas J. Calise, Esq., Vice President, Associate General Counsel
and Secretary of BFG, re validity of Guarantee and Junior Subordinated
Debentures
*8.1 Opinion of White & Case re tax matters
12.1 Computation of Ratios of Earnings to Fixed Charges
12.2 Computation of Ratios of Earnings to Fixed Charges and Preferred Dividends
23.1 Consent of Ernst & Young LLP, independent auditors
23.2 Consent of White & Case (included in Exhibit 5.1 above)
23.3 Consent of Nicholas J. Calise, Esq. (included in Exhibit 5.2 above)
23.4 Consent of White & Case (included in Exhibit 8.1 above)
24.1 Power of Attorney of BFG
25.1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Bank of New York, as Debenture Trustee under the Indenture
25.2 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Bank of New York, as Trustee under the Trust Agreement of the Issuer
25.3 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Bank of New York, as Guarantee Trustee under the Guarantee
- ---------------
* To be filed by amendment.
II-7