As Filed with the Securities and Exchange Commission on September 14, 1995
Registration No.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
COLLINS & AIKMAN PRODUCTS CO.
(Exact name of registrant as specified in its charter)
Delaware 38-1954600
(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
and its Guarantor Parent
Collins & Aikman Corporation
(Exact name of registrant as specified in its charter)
Delaware 13-3489233
(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
701 McCullough Drive
Charlotte, North Carolina 28262
(704) 547-8500
Elizabeth R. Philipp, Esq.
Executive Vice President, General Counsel and Secretary
Collins & Aikman Corporation
210 Madison Avenue, 6th Fl.
New York, New York 10016
(212) 578-1336
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Robert Rosenman, Esq. Robert A. Profusek, Esq.
Cravath, Swaine & Moore Jones, Day, Reavis & Pogue
825 Eighth Avenue 599 Lexington Avenue
New York, New York 10019 New York, New York 10022
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement as
determined by market conditions.
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, please check the following box. ( X )
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration number of the earlier effective
registration statement for the same offering. ( )
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. ( )
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. ( )
CALCULATION OF REGISTRATION FEE
Title of Each Aggregate Amount to Proposed Proposed Maximum Aggregate Amount of Registration
Class of be Registered Maximum Offering Price Fee
Securities to be Aggregate
Registered Offerinq Price
Per Unit
Debt Securities $400,000,000 N/A $400,000,000 (2) $137,931 (3)
Guarantee of the (1) N/A N/A N/A (4)
Debt Securities
(1) The Debt Securities being registered will be irrevocably and
unconditionally guaranteed on an unsecured senior basis or an unsecured
subordinated basis, as applicable, by Collins & Aikman Corporation. Collins
& Aikman Products Co. is a wholly owned subsidiary of Collins & Aikman
Corporation.
(2) In no event will the aggregate initial offering price of the Debt
Securities issued under this Registration Statement exceed $400,000,000, or
the equivalent thereof in one or more foreign or composite currencies.
(3) Calculated pursuant to Rule 457(o) under the Securities Act of 1933.
(4) No additional registration fee is payable in respect of the registration
of the Guarantees.
The registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrants
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.
(red herring language appears on left side of page rotated 90 degrees)
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 September 14, 1995
PROSPECTUS
COLLINS & AIKMAN PRODUCTS CO.
Debt Securities
Unconditionally Guaranteed by Collins & Aikman Corporation
Collins & Aikman Products Co. (the "Company") may offer from time to
time, together or separately, unsecured notes, debentures or other evidences
of indebtedness ("Debt Securities"), which may be either senior (the "Senior
Securities" ) or subordinated (the "Subordinated Securities" ) in priority of
payment, having an aggregate initial public offering price not to exceed
$400,000,000 (including the U.S. dollar equivalent of securities for which
the initial public offering price is denominated in one or more foreign
currencies or composite currencies). The Debt Securities may be offered in
one or more series, in amounts, at prices and on terms determined at the time
of sale and set forth in a supplement to this Prospectus (a "Prospectus
Supplement").
The Senior Securities will rank equally with all other unsubordinated
and unsecured indebtedness of the Company. The Subordinated Securities will
be unsecured and subordinated as described under "Subordinated Securities"
and the Senior Securities and the Subordinated Securities will be effectively
subordinated to all obligations of the subsidiaries of the Company.
The Debt Securities will be irrevocably and unconditionally guaranteed
(the "Guarantee") on an unsecured senior basis, in the event Senior
Securities are issued, or on an unsecured subordinated basis, in the event
Subordinated Securities are issued, by Collins & Aikman Corporation ("C&A
Co."). The Company is a wholly owned subsidiary of C&A Co. None of the
subsidiaries of the Company will guarantee the Debt Securities. C&A Co. is
a holding company that derives all its operating income and cash flow from
its subsidiary, the Company, the common stock of which constitutes C&A Co.'s
only material asset.
The specific terms of the Debt Securities in respect of which this
Prospectus is being delivered will be set forth in an accompanying Prospectus
Supplement, including, where applicable, whether they are Senior Securities
or Subordinated Securities, the specific designation, aggregate principal
amount, currency, denomination, maturity (which may be fixed or extendible),
priority, interest rate or rates (or manner of calculation thereof), if any,
time of payment of interest, if any, terms for any redemption, terms for any
repayment at the option of the holder, terms for any sinking fund payments,
the initial public offering price, special provisions relating to Debt
Securities in bearer form, provisions regarding original issue discount
securities, additional covenants including event risk provisions, and any
other specific terms of such Debt Securities.
The Prospectus Supplement will also contain information, where
applicable and material, about certain United States Federal income tax
considerations relating to, and any listing on a securities exchange of, the
Debt Securities covered by the Prospectus Supplement.
For a discussion of risks associated with the Debt Securities, see "Risk
Factors" at page 5.
The Debt Securities may be offered directly, through underwriters,
dealers or agents as designated from time to time, or through a combination
of such methods. See "Plan of Distribution". If any agents of the Company
or any dealers or underwriters are involved in the offering of the Debt
Securities in respect of which this Prospectus is being delivered, the names
of such agents, dealers or underwriters and any applicable commissions or
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discounts will be set forth in the Prospectus Supplement. The net proceeds
to the Company from such sale will also be set forth in the Prospectus
Supplement. The Company may also issue contracts under which the
counterparty may be required to purchase Debt Securities. Such contracts
would be issued with the Debt Securities in amounts, at prices and on terms
to be set forth in the applicable Prospectus Supplement.
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by a Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1995
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AVAILABLE INFORMATION
C&A Co. is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed by C&A Co. with the Commission pursuant to the
informational requirements of the Exchange Act may be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and at the Commission's
regional offices located at Seven World Trade Center, 13th Floor, New York,
New York 10048 and Citicorp Center, 500 West Madison Street (Suite 1400),
Chicago, Illinois 60661. Copies of such material may be obtained from the
Public Reference Section of the Commission, Washington, D.C. 20549 at
prescribed rates. Such reports, proxy statements and other information may
also be inspected at the offices of the New York Stock Exchange, Inc.
("NYSE"), 20 Broad Street, New York, New York, on which C&A Co.'s Common
Stock, par value $.01 per share (the "Common Stock"), is listed. The Company
is not currently subject to the periodic reporting and other informational
requirements of the Exchange Act.
This Prospectus constitutes part of a Registration Statement on Form S-3
(the "Registration Statement") filed by the Company and C&A Co. with the
Commission under the Securities Act of 1933 (the "Securities Act"). This
Prospectus omits certain of the information contained in the Registration
Statement in accordance with the rules and regulations of the Commission.
Reference is hereby made to the Registration Statement and related exhibits
for further information with respect to the Company and the Debt Securities.
Statements contained herein concerning the provisions of any document are not
necessarily complete and, in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entirety
by such reference.
INFORMATION INCORPORATED BY REFERENCE
The Company incorporates herein by reference the following documents
filed by C&A Co. with the Commission (File No. 1-10218) pursuant to the
Exchange Act:
(a) C&A Co.'s Annual Report on Form 10-K for the fiscal year ended
January 28, 1995;
(b) C&A Co.'s Quarterly Report on Form 10-Q for the quarter ended
April 29, 1995; and
(c) C&A Co.'s Quarterly Report on Form 10-Q for the quarter ended
July 29, 1995.
All documents and reports subsequently filed by C&A Co. pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the Debt
Securities hereunder shall be deemed to be incorporated herein by reference
and to be a part hereof from the date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
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superseded for purposes of this Prospectus or any Prospectus Supplement to
the extent that a statement contained herein or in any other subsequently
filed document that 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 or any Prospectus Supplement.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus and the accompanying Prospectus
Supplement are delivered, upon the written or oral request of such person, a
copy of any or all the documents incorporated herein by reference other than
exhibits to such documents unless such exhibits are specifically incorporated
by reference in such documents, and any other documents specifically
identified herein as incorporated by reference into the Registration
Statement to which this Prospectus relates or into such other documents.
Requests should be directed to: Collins & Aikman Products Co., 701 McCullough
Drive, P.O. Box 32665, Charlotte, NC 28232-2665 (telephone: (704) 548-2370),
Attention: Director - Investor Relations.
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RISK FACTORS
In addition to the other information contained in this Prospectus, the
following risk factors should be carefully considered in evaluating an
investment in the Debt Securities.
Cyclicality of Industries
The Company's business segments are highly cyclical. Downturns in North
American automotive production, consumer spending, commercial and residential
construction and renovation could have a material adverse effect on the
Company.
Dependence on Significant Automotive Customers and Car Models
The Company's sales are dependent on certain significant customers.
Sales to General Motors Corporation, Ford Motor Company and Chrysler
Corporation accounted for approximately 18.3%, 12.1% and 10.3%, respectively,
of the Company's 1994 net sales. In addition, certain of the Company's
customers are unionized and have in the past experienced labor disruptions.
The loss of one or more significant customers or a prolonged disruption in
their production could have a material adverse effect on the Company.
The Company principally competes for new business in its Automotive
Products segment at the design stage of new models and upon the redesign of
existing models. There can be no assurance that the Company will continue to
be able to obtain such new business or to improve or maintain its gross
margins on such new business. In addition, the Company may not be able to
pass on raw material price increases to its customers due to pricing pressure
from its customers. A decrease in demand for the models that generate the
most sales for the Company, the failure of the Company to obtain purchase
orders for new or redesigned models and pricing pressure from the major
automotive companies could have a material adverse effect on the Company.
Vulnerability to Changes in Consumer Tastes
Consumer tastes in automotive seat fabrics, interior furnishings and
wallcoverings change over time. A shift in consumer preferences away from
the products that the Company produces or has the capability to produce could
have a material adverse effect on the Company.
Competition
The industries in which the Company operates are highly competitive.
There can be no assurance that the Company's products will compete
successfully with those of its competitors. Several competitors are larger
and have greater financial and other resources available to them. There can
be no assurance that the Company will be able to maintain its operating
margins if the competitive environment changes.
Substantial Leverage
The substantial indebtedness of the Company and its subsidiaries could
have important consequences to holders of Debt Securities, including the
following: (i) the ability of the Company and its subsidiaries to obtain
additional financing in the future to refinance maturing debt or for working
capital, capital expenditures, acquisitions and other general corporate
purposes could be impaired; (ii) a substantial portion of the cash flow from
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operations of the Company and its subsidiaries must be dedicated to the
payment of the principal of and interest on existing indebtedness, which will
have the effect of decreasing the amount available for working capital,
capital expenditures, acquisitions or other general corporate purposes;
(iii) the Company and its subsidiaries could be more highly leveraged than
certain of their competitors, which may place the Company and its
subsidiaries at a competitive disadvantage; (iv) a significant portion of the
borrowings of the Company and its subsidiaries are at variable rates of
interest, and consequently the Company and its subsidiaries will be
vulnerable to increases in interest rates; and (v) the high degree of
leverage of the Company and its subsidiaries may make the Company more
vulnerable to economic downturns. At July 29, 1995 the Company had an
aggregate of approximately $583.7 million of indebtedness outstanding
(excluding approximately $117.0 million in off-balance sheet financing under
a receivables facility and approximately $27.2 million of outstanding letters
of credit) and unused borrowing availability of approximately $37.8 million
under a revolving credit facility and $10.0 million under a working capital
facility for a Canadian subsidiary. Issuance of additional debt would
increase this degree of leverage and, therefore, could exacerbate the
consequences described above.
Security Interests
The capital stock of the Company's principal subsidiaries and certain
real estate of the Company and its subsidiaries are subject to various
security interests and liens securing certain indebtedness of the Company and
its subsidiaries. In addition, substantially all the receivables of the
Company and its subsidiaries have been transferred to a trust in connection
with a receivables financing. See "Existing Credit Facilities".
Limitations Imposed by Existing Credit Facilities
The Company's existing credit facilities contain a number of restrictive
covenants which, among other things, limit the ability of the Company and its
subsidiaries to make capital expenditures, to incur other indebtedness, to
create liens and to make certain restricted payments, and which require the
Company to maintain certain specified financial ratios, some of which become
more restrictive over time. A failure by the Company to satisfy such
financial ratios or to comply with the restrictions contained in its credit
facilities could result in a default thereunder, which in turn could result
in such indebtedness being declared immediately due and payable. If the
Company were unable to repay such indebtedness, the lenders under the
Company's credit facilities could proceed against their collateral, which
includes 100% of the common stock of the Company and of its principal
subsidiaries. See "Existing Credit Facilities".
Historical Losses
The Company has experienced net losses in each of the last five fiscal
years and as of July 29, 1995 had an accumulated deficit of $932.2 million.
Even though the Company is operating with lower interest charges and has been
profitable since its initial public offering and recapitalization in July
1994 (the "Recapitalization"), there can be no assurance as to whether the
Company's operations will remain profitable.
6
Collective Bargaining Agreements
The Company is a party to collective bargaining agreements with respect
to hourly employees at seven of its 51 U.S. facilities, its five Canadian
facilities and its three Mexican facilities. Of the Company's 12,000
employees, approximately 2,300 employees, all of whom are employed in the
Company's Automotive Products and Wallcoverings segments, are covered by such
agreements. The Company has not experienced any significant labor
disruptions during the past five years. Although management believes that
its relationship with the employees covered by collective bargaining
agreements is good, there can be no assurance that the Company will be able
to negotiate new agreements on favorable terms.
Environmental Matters and Other Contingencies
The Company is subject to stringent Federal, state, local and foreign
laws and regulations concerning the environment. Changes in environmental
laws and regulations may require the Company to make substantial capital
expenditures and to incur substantial expenses with respect to its ongoing
and divested operations and properties. In addition, the Company has
received notices that it is a potentially responsible party ("PRP") in a
number of proceedings for cleanup of hazardous substances at various sites.
The Company may be named as a PRP at other sites in the future. It is
difficult to estimate the total cost of investigation and remediation due to
various factors including incomplete information regarding particular sites
and other PRPs, uncertainty regarding the extent of environmental problems
and the Company's share, if any, of liability for such problems, the
selection of alternative compliance approaches, the complexity of the
environmental laws and regulations and changes in cleanup standards and
techniques. When it has been possible to provide reasonable estimates of the
Company's liability with respect to environmental sites, provisions have been
made in accordance with generally accepted accounting principles. However,
there can be no assurance that the Company has identified or properly
assessed all potential environmental liabilities arising from the activities
or properties of the Company, its present and former subsidiaries and their
corporate predecessors.
The Company has significant financial and legal obligations with respect
to certain divested and acquired businesses. In connection with the sale and
acquisition of certain businesses, the Company has agreed to indemnify the
purchasers and sellers for certain environmental liabilities, lease
obligations and other matters. In addition, the Company is contingently
liable with respect to certain lease and other obligations assumed by certain
purchasers and may be required to honor such obligations if such purchasers
are unable or unwilling to do so.
Absence of Public Market for the Debt Securities
The Debt Securities will be a new issue of securities with no
established trading market. Any underwriters to whom Debt Securities are
sold by the Company for public offering and sale may make a market in such
Debt Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can
be given as to the liquidity of the secondary market for any Debt Securities.
Potential Applicability of Fraudulent Transfer Laws
7
Management believes that each of the Company and C&A Co., after the
issuance of the Debt Securities, will be solvent, will have sufficient
capital for carrying on its respective businesses and will be able to pay its
debts as they become due. Notwithstanding management's belief, if a court of
competent jurisdiction in a suit by an unpaid creditor or a representative of
creditors (such as a trustee in bankruptcy or a debtor in possession) were to
find that either the Company or C&A Co. did not receive fair consideration or
reasonably equivalent value for issuing the Debt Securities or the Guarantee,
respectively, and, at the time of the incurrence of indebtedness represented
by the Debt Securities or the Guarantee, the Company or C&A Co. was
insolvent, was rendered insolvent by reason of such incurrence, was engaged
in a business or transaction for which its remaining assets constituted
unreasonably small capital, intended to incur, or believed that it would
incur, debts beyond its ability to pay as such debts matured, or intended to
hinder, delay or defraud its creditors, such court could avoid such
indebtedness or, quite apart from the express subordination of such
indebtedness of the Company or C&A Co., as applicable, such court could
subordinate such indebtedness to other existing and future indebtedness of
the Company or C&A Co., as applicable. The measure of insolvency for
purposes of the foregoing will vary depending upon the law of the relevant
jurisdiction. Generally, however, a company would be considered insolvent
for purposes of the foregoing if the sum of the company's debts is greater
than all the company's property at a fair valuation, or if the present fair
saleable value of the company's assets is less than the amount that will be
required to pay its probable liability on its existing debts as they become
absolute and matured.
THE COMPANY
The Company is a leader in each of its three business segments:
Automotive Products, which supplies interior trim products to the North
American automotive industry; Interior Furnishings, which manufactures
residential upholstery and commercial floor coverings for sale in the United
States and for export; and Wallcoverings, which produces residential and
commercial wallpaper for sale in the United States. C&A Co. is a holding
company whose only material asset is the common stock of the Company. The
Company's and C&A Co.'s principal executive offices are located at 701
McCullough Drive, Charlotte, North Carolina 28262 and the telephone number at
that location is (704) 547-8500.
As used in this Prospectus, the term the "Company" refers to Collins &
Aikman Products Co. and its subsidiaries, unless the context otherwise
indicates.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for C&A Co. is set forth below
for the periods indicated. For periods in which earnings before fixed
charges were insufficient to cover charges, the amount of coverage deficiency
(in millions), instead of the ratio is disclosed.
Six Months
Fiscal Year Ending January Ended
1991 1992 1993 1994 1995 July 29, 1995
(Dollar amounts in millions)
Ratio of earnings to
fixed charges (or amounts
by which earnings were
inadequate to cover
fixed charges) ($97.2) ($96.6) ($81.6) ($188.4) 1.9X 2.5X
8
For purposes of determining the ratio of earnings to fixed charges,
earnings are defined as income (loss) from continuing operations before
income taxes, plus fixed charges relating to continuing operations. Fixed
charges consist of interest expense on all indebtedness (including
amortization of deferred debt issuance costs), loss on sale of receivables,
preferred stock dividends of subsidiaries and the portion of operating lease
rental expense that is representative of the interest factor. Earnings were
inadequate to cover fixed charges for the fiscal years ending January 1991
through 1994.
Prior to the Recapitalization, fixed charges were higher due to larger
average outstanding amounts and higher average interest rates under C&A Co.'s
various debt facilities. Additionally, earnings from continuing operations
for the fiscal years prior to the Recapitalization were negatively impacted
by various charges related to restructuring, compensation and goodwill.
The Recapitalization was effected on July 13, 1994. Accordingly, the
ratio for the fiscal year ending January 1995 reflects the benefits of the
Recapitalization for a part of the year, and the ratio for the subsequent six
month period reflects the benefits of the Recapitalization for the full
period presented.
USE OF PROCEEDS
Except as may otherwise be set forth in the Prospectus Supplement, the
net proceeds from the sale of the Debt Securities will be used for general
corporate purposes, including working capital, capital expenditures and
acquisitions.
EXISTING CREDIT FACILITIES
The Credit Agreement Facilities
C&A Co. and the Company are parties to a credit agreement dated as of
June 22, 1994, as amended (the "Credit Agreement"), with Chemical Bank
("Chemical") and the lenders named therein providing for (i) an eight-year
senior secured term loan facility in an aggregate principal amount of $475
million (the "Term Loan Facility"), which was drawn in full on July 13, 1994
to prepay other indebtedness in connection with the Recapitalization, and
(ii) a seven-year senior secured revolving credit facility (the "Revolving
Facility", and together with the Term Loan Facility, the "Credit Agreement
Facilities") in an aggregate principal amount of up to $150 million. At July
29, 1995, the Company had unused borrowing availability of approximately
$37.8 million under the Revolving Facility.
The Company is the borrower under the Credit Agreement Facilities,
although a portion of the Term Loan Facility has been borrowed by a Canadian
subsidiary of the Company. Loans outstanding under the Credit Agreement
Facilities bear interest, due quarterly, at a per annum rate equal to the
Company's choice of (i) Chemical's Alternate Base Rate (which is the highest
of Chemical's announced prime rate, the Federal Funds Rate plus 1/2% and
Chemical's base certificate of deposit rate plus 1%) plus a margin ranging
from 0% to 3/4 of 1% or (ii) the offered rates for Eurodollar deposits for
one, two, three, six, nine or twelve months (as selected by the Company) plus
a margin ranging from 1% to 1-3/4%. Pursuant to the terms of the Credit
Agreement, at July 29, 1995, the Alternate Base Rate margin was 1/2 of 1% and
the Eurodollar margin was 1-1/2%. Such margins will increase by 1/4% over
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the margins then in effect on July 13, 1999.
Loans under the Term Loan Facility amortize in annual amounts equal
to (i) $13.2 million in 1995, (ii) $36.9 million in 1996, (iii) $58.1
million in 1997, (iv) $73.9 million in 1998, (v) $81.8 million in
1999, (vi) $84.4 million in each of 2000 and 2001 and (vii) the
remainder in 2002. The Revolving Facility will mature on July 13,
2001. In addition, the Credit Agreement provides for mandatory
prepayments of the Credit Agreement Facilities with certain excess
cash flow of the Company, net cash proceeds of certain asset sales or
other dispositions by the Company and its subsidiaries, net cash
proceeds of sale/leaseback transactions and net cash proceeds of certain
issuances of debt obligations (which are not expected to include Debt
Securities). Mandatory prepayments will be applied pro rata across
remaining scheduled maturities. Loans under the Credit Agreement
Facilities are voluntarily prepayable by the Company at any time without
penalty. Voluntary prepayments will be applied against the most
current scheduled maturities.
The Credit Agreement Facilities are guaranteed by C&A Co. and each
existing and subsequently acquired or organized United States subsidiary of
C&A Co., subject to certain exceptions (the "Credit Agreement Guarantees").
The Credit Agreement Facilities and the Credit Agreement Guarantees are
secured by a first priority pledge of all the capital stock of the Company
and each subsidiary (other than certain unrestricted subsidiaries) of the
Company (or, in the case of any foreign subsidiary, 65% of the capital stock
of such subsidiary), subject to certain exceptions, and certain intercompany
indebtedness.
The Credit Agreement contains various restrictive covenants, including
limitations on indebtedness of C&A Co. and its subsidiaries (including the
Company); limitations on dividends and on redemptions and repurchases of
capital stock; limitations on prepayments, redemptions and repurchases of
debt; limitations on liens and sale/leaseback transactions; limitations on
loans and investments; limitations on capital expenditures; a prohibition on
C&A Co.'s direct ownership of any subsidiary other than the Company or
certain unrestricted subsidiaries; limitations on mergers, acquisitions and
asset sales; limitations on transactions with affiliates and stockholders;
limitations on fundamental changes in business conducted; and limitations on
the amendment of debt and other material agreements and licenses. In
addition to the foregoing, the Credit Agreement contains financial covenants
applicable to C&A Co. and its subsidiaries (including the Company) on a
consolidated basis. Under these covenants C&A Co. and its subsidiaries are
required: to maintain, for each period of four consecutive fiscal quarters,
a ratio of EBITDA to cash interest expense of 3.25 to 1.00 through January
31, 1996 (which ratio increases annually on each February 1 thereafter, to
4.75 to 1.00 on and after February 1, 1998); to maintain a ratio of funded
debt to EBITDA for the preceding twelve consecutive months of not more than
3.25 to 1.00 until January 31, 1996 (which ratio decreases annually on each
February 1 thereafter, to 2.25 to 1.00 on and after February 1, 1999); to
have a minimum EBITDA of $175 million in each fiscal year; and to maintain a
ratio of current assets to current liabilities at the end of each fiscal
quarter of at least 1.25 to 1.00.
The Credit Agreement also contains various events of default (with
customary qualifications and exceptions), including nonpayment of principal
10
or interest; violation of covenants; material breaches of representations and
warranties; cross default and cross acceleration; bankruptcy; material
undischarged judgments; certain ERISA events; invalidity of security
documents; invalidity of subordination provisions; and Change in Control.
"Change in Control" is defined in the Credit Agreement as (a) a majority of
the board of directors of C&A Co. ceases to be comprised of Continuing
Directors (defined as any director of C&A Co. who either (x) was a member of
the board of directors on July 13, 1994 or (y) after such date became a
member of the board of directors and whose election was approved by vote of
a majority of the Continuing Directors then on the board of directors of C&A
Co., (b) a person or group (other than the Company's current principal
stockholders, Wasserstein Perella Partners, L.P. ("WP Partners"), Blackstone
Capital Partners L.P. ("Blackstone Partners"), and additional designated
persons) beneficially owns, directly or indirectly, shares representing more
than 25% of the aggregate ordinary voting power represented by the
outstanding capital stock of C&A Co. at any time that WP Partners, Blackstone
Partners and additional designated persons do not beneficially own, free and
clear of liens and claims, shares representing at least 50% of the aggregate
ordinary voting power represented by the outstanding capital stock of C&A Co.
or (c) C&A Co. ceases to maintain direct ownership of the Company, free of
liens and claims.
In addition to the foregoing, the Credit Agreement contains other
miscellaneous provisions, including provisions concerning indemnification by
the Company of each lender against losses, claims or other expenses and
payment by the Company of certain fees and expenses of the lenders and their
respective advisors and consultants.
The description of the Credit Agreement Facilities set forth above does
not purport to be complete and is qualified in its entirety by reference to
the Credit Agreement and any amendments thereto which are filed as exhibits
to C&A Co.'s Annual Report on Form 1O-K and Quarterly Reports on Form 10-Q
and incorporated by reference into the Registration Statement of which this
Prospectus forms a part.
Receivables Facility
The Company, through a trust (the "Trust") formed by its wholly owned,
bankruptcy remote subsidiary, Carcorp, Inc. ("Carcorp"), is a party to a
receivables facility (the "Receivables Facility") comprised of (i) term
certificates, which were issued on March 31, 1995, in an aggregate face
amount of $110 million and (ii) variable funding certificates, which
represent revolving commitments, of up to an aggregate of $75 million. The
term certificates and the variable funding certificates have a term of five
years. Carcorp purchases on a revolving basis and transfers to the Trust
virtually all trade receivables generated by the Company and certain of its
subsidiaries (the "Sellers"). The certificates represent the right to
receive payments generated by the receivables held by the Trust.
Availability under the variable funding certificates at any time depends
primarily on the amount of receivables generated by the Sellers from sales to
the auto industry, the rate of collection on those receivables and other
characteristics of those receivables which affect their eligibility (such as
bankruptcy or downgrading below investment grade of the obligor, delinquency
and excessive concentration). Based on these criteria, at July 29, 1995
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approximately $7.0 million was available under the variable funding
certificates, all of which was utilized.
The proceeds received by Carcorp from collections on receivables, after
the payment of expenses and amounts due on the certificates, are used to
purchase new receivables from the Sellers. Collections on receivables are
required to remain in the Trust if at any time the Trust does not contain
sufficient eligible receivables to support the outstanding certificates. The
Receivables Facility contains certain other restrictions on Carcorp and on
the Sellers customary for facilities of this type and will terminate prior to
its term upon the occurrence of certain events of default. Under the
Receivables Facility, the term certificates bear interest at an average rate
equal to the rate on one-month Eurodollar deposits plus 34 one-hundredths of
one percent per annum and the variable funding certificates bear interest, at
Carcorp's option, at a Eurodollar deposit rate plus 40 one-hundredths of one
percent per annum or a prime rate.
The description of the Receivables Facility set forth above does not
purport to be complete and is qualified in its entirety by reference to the
Receivables Facility and any amendments thereto which are filed as exhibits
to C&A Co.'s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q
and incorporated by reference into the Registration Statement of which this
Prospectus forms a part.
DESCRIPTION OF THE DEBT SECURITIES
General
The Debt Securities will constitute either Senior Securities or
Subordinated Securities. The Senior Securities will be issued under an
Indenture dated as of , 1995 (the "Senior Indenture"), between the
Company and the trustee named in the applicable Prospectus Supplement as
trustee (the "Senior Trustee") . The Subordinated Securities will be issued
under an Indenture dated as of , 1995 (the "Subordinated Indenture"),
between the Company and the trustee named in the applicable Prospectus
Supplement as trustee ("the Subordinated Trustee"). The Senior Indenture and
the Subordinated Indenture are collectively referred to herein as the
"Indentures". References to the "Trustee" shall mean the Senior Trustee or
the Subordinated Trustee, as applicable. The statements under this caption
are brief summaries of certain provisions contained in the Indentures, do not
purport to be complete and are qualified in their entirety by reference to
the applicable Indenture, copies of which are exhibits to and incorporated in
the Registration Statement. Whenever defined terms are used but not defined
herein, such terms shall have the meanings ascribed to them in the applicable
Indenture, it being intended that such defined terms shall be incorporated
herein by reference. Cross references to Sections of the Indentures relate
to both the Senior Indenture and the Subordinated Indenture, unless otherwise
indicated.
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of any Debt
Securities and the extent, if any, to which such general provisions do not
apply to such Debt Securities will be described in the Prospectus Supplement
relating to such Debt Securities.
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Neither of the Indentures limits the amount of Debt Securities which may
be issued thereunder, and each Indenture provides that Debt Securities of any
series may be issued thereunder up to the aggregate principal amount which
may be authorized from time to time by the Company's Board of Directors and
may be denominated in any currency or composite currency designated by the
Company. (Section 3.01) Neither the Indentures nor the Debt Securities will
limit or otherwise restrict the amount of other indebtedness which may be
incurred or the other securities which may be issued by the Company or any of
its subsidiaries.
Debt Securities of a series may be issuable in registered form with or
without coupons ("Registered Securities"), in bearer form with or without
coupons attached ("Bearer Securities") or in the form of one or more global
securities in registered or bearer form (each a "Global Security"). (Section
3.01) Bearer Securities, if any, will be offered only to non-United States
persons and to offices located outside the United States of certain United
States financial institutions. (Section 3.03) Reference is made to the
Prospectus Supplement for a description of the following terms, where
applicable, of each series of Debt Securities in respect of which this
Prospectus is being delivered: (l) the title of such Debt Securities: (2) the
limit, if any, on the aggregate principal amount or aggregate initial public
offering price of such Debt Securities; (3) the priority of payment of such
Debt Securities; (4) the price or prices (which may be expressed as a
percentage of the aggregate principal amount thereof) at which the Debt
Securities will be issued; (5) the date or dates on which the principal of
the Debt Securities will be payable; (6) the rate or rates (which may be
fixed or variable) per annum at which such Debt Securities will bear
interest, if any, or the method of determining the same; (7) the date or
dates from which such interest, if any, on the Debt Securities will accrue,
the date or dates on which such interest, if any, will be payable, the date
or dates on which payment of such interest, if any, will commence and the
Regular Record Dates for such Interest Payment Dates; (8) the extent to which
any of the Debt Securities will be issuable in temporary or permanent global
form, or the manner in which any interest payable on a temporary or permanent
global Debt Security will be paid; (9) each office or agency where, subject
to the terms of the applicable Indenture, the Debt Securities may be
presented for registration of transfer or exchange; (10) the place or places
where the principal of (and premium, if any) and interest, if any, on the
Debt Securities will be payable; (11) the date or dates, if any, after which
such Debt Securities may be redeemed or purchased in whole or in part, at the
option of the Company or mandatorily pursuant to any sinking, purchase or
analogous fund or may be required to be purchased or redeemed at the option
of the holder, and the redemption or repayment price or prices thereof; (12)
the denomination or denominations in which such Debt Securities are
authorized to be issued; (13) the currency, currencies or composite currency
(including ECU) based on or related to currencies for which the Debt
Securities may be purchased and the currency, currencies or composite
currency (including ECU) in which the principal of, premium, if any, and any
interest on such Debt Securities may be payable; (14) any index used to
determine the amount of payments of principal of, premium, if any, and
interest on the Debt Securities; (15) whether any of the Debt Securities are
to be issuable as Bearer Securities and/or Registered Securities, and if
issuable as Bearer Securities, any limitations on issuance of such Bearer
Securities and any provisions regarding the transfer or exchange of such
Bearer Securities (including exchange for registered Debt Securities of the
13
same series); (16) the payment of any additional amounts with respect to the
Debt Securities; (17) whether any of the Debt Securities will be issued as
Original Issue Discount Securities (as defined below); (18) information with
respect to book-entry procedures, if any; (19) any additional covenants or
Events of Default not currently set forth in the applicable Indenture; and
(20) any other terms of such Debt Securities not inconsistent with the
provisions of the applicable Indenture.
If any of the Debt Securities are sold for one or more foreign
currencies or foreign currency units or if the principal of, premium, if any,
or interest on any series of Debt Securities is payable in one or more
foreign currencies or foreign currency units, the restrictions, elections,
tax consequences, specific terms and other information with respect to such
issue of Debt Securities and such currencies or currency units will be set
forth in the Prospectus Supplement relating thereto. A judgment for money
damages by courts in the United States, including a money judgment based on
an obligation expressed in a foreign currency, will ordinarily be rendered
only in U.S. dollars. New York statutory law provides that a court shall
render a judgment or decree in the foreign currency of the underlying
obligation and that the judgment or decree shall be converted into U.S.
dollars at the exchange rate prevailing on the date of entry of the judgment
or decree.
Debt Securities may be issued as original issue discount Debt Securities
(bearing no interest or interest at a rate which at the time of issuance is
below market rates) ("Original Issue Discount Securities"), to be sold at a
substantial discount below the stated principal amount thereof due at the
stated maturity of such Debt Securities. (Section 3.01) There may not be
any periodic payments of interest on Original Issue Discount Securities as
defined herein. In the event of an acceleration of the maturity of any
Original Issue Discount Security, the amount payable to the holder of such
Original Issue Discount Security upon such acceleration will be determined in
accordance with the Prospectus Supplement, the terms of such security and the
Indenture, but will be an amount less than the amount payable at the maturity
of the principal of such Original Issue Discount Security. (Section 7.02)
Federal income tax considerations with respect to Original Issue Discount
Securities will be set forth in the Prospectus Supplement relating thereto.
Events of Default, Waivers, Etc.
An Event of Default with respect to Debt Securities of any series is
defined in the Indentures as (i) default in the payment of the principal of
or premium, if any, on any Debt Security of such series when due, (ii)
default in the payment of interest upon any Debt Security of such series when
due and the continuance of such default for a period of 30 days, (iii)
default in the observance or performance of any other covenant or agreement
of the Company or C&A Co. in the Debt Securities of such series or the
Indenture with respect to such Debt Securities of such series and continuance
of such default for 90 days after written notice, (iv) certain events of
bankruptcy, insolvency or reorganization of the Company or C&A Co. or (v) any
other Event of Default provided with respect to Debt Securities of any
series. (Section 7.01)
If any Event of Default with respect to any series of Debt Securities
for which there are Debt Securities outstanding under the Indentures occurs
14
and is continuing, either the applicable Trustee or the holders of not less
than 25% in aggregate principal amount of the Debt Securities of such series
may declare the principal amount (or if such Debt Securities are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms of that series) of all Debt Securities of that series
to be immediately due and payable. The holders of a majority in aggregate
principal amount of the Debt Securities of any series outstanding under the
Indentures may waive the consequences of an Event of Default resulting in
acceleration of such Debt Securities, but only if all Events of Default have
been remedied and all payments due (other than those due as a result of
acceleration) have been made. (Section 7.02) If an Event of Default occurs
and is continuing, the Trustee may in its discretion, or at the written
request of holders of not less than a majority in aggregate principal amount
of the Debt Securities of any series outstanding under the Indentures and
upon reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request and subject to certain other
conditions set forth in the Indentures, proceed to protect the rights of the
holders of all the Debt Securities of such series. (Sections 7.03 and 7.07)
If the Trustee fails within sixty days after its receipt of such a written
request and offer of indemnity to institute any such proceeding, any holder
of a Debt Security who has previously given notice to the Trustee of a
continuing Event of Default may institute such a proceeding. (Section 7.07)
The holders of a majority in aggregate principal amount of Debt Securities of
any series outstanding under the Indentures may waive any past default under
the Indentures except a default in the payment of principal of, premium, if
any, or interest on the Debt Securities of such series and except for the
waiver of a covenant or provision that, pursuant to the Indentures, cannot be
modified or amended without the consent of holders of all such Debt
Securities then outstanding. (Section 7.13)
The Indentures provide that in the event of an Event of Default
specified in clauses (i) or (ii) of the first paragraph under "Events of
Default", the Company will, upon demand of the applicable Trustee, pay to it,
for the benefit of the holder of any such Debt Security, the whole amount
then due and payable on such Debt Security for principal, premium, if any,
and interest. The Indentures further provide that if the Company fails to
pay such amount forthwith upon such demand, the applicable Trustee may, among
other things, institute a judicial proceeding for the collection thereof.
(Section 7.03)
The Indentures also provide that notwithstanding any other provision of
the Indentures, the holder of any Debt Security of any series shall have the
right to institute suit for the enforcement of any payment of principal of,
premium, if any, and interest on such Debt Security when due and that such
right shall not be impaired without the consent of such holder. (Section
7.08 )
The Company is required to file annually with the Trustee a written
statement of officers as to the existence or non-existence of defaults under
the Indentures or the Debt Securities. (Section 5.05)
Guarantee
C&A Co., as primary obligor and not merely as surety, will irrevocably
and unconditionally guarantee on either an unsecured senior basis, an
unsecured senior subordinated basis or an unsecured junior subordinated
15
basis, as applicable, the performance and punctual payment when due, whether
at Stated Maturity, by acceleration or otherwise, of all obligations of the
Company under the Senior Indenture, Subordinated Indenture and the Debt
Securities, whether for principal of or interest on the Debt Securities,
expenses, indemnification or otherwise (all such obligations guaranteed by
C&A Co. being herein called the "Guaranteed Obligations"). C&A Co. will
agree to pay, in addition to the amount stated above, any and all expenses
(including reasonable counsel fees and expenses) incurred by the Trustee or
the Holders in enforcing any rights under the Guarantee with respect to C&A
Co. (Section 14.01 of Senior Indenture and Section 15.01 of Subordinated
Indenture) Such Guarantee, however, will be limited in amount to an amount
not to exceed the maximum amount that can be guaranteed by C&A Co. without
rendering the Guarantee, as it relates to C&A Co., voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer. (Section 14.02
of Senior Indenture and Section 15.02 of Subordinated Indenture) C&A Co. has
no material assets other than the common stock of the Company.
The Guarantee is a continuing guarantee and will (a) remain in full
force and affect until payment in full of all the Guaranteed Obligations, (b)
be binding upon C&A Co. and (c) enure to the benefit of and be enforceable by
the Trustee, the Holders and their successors, transferees and assigns.
(Section 14.03 of Senior Indenture and Section 15.03 of Subordinated
Indenture)
Registration and Transfer
Unless otherwise indicated in the applicable Prospectus Supplement, Debt
Securities will be issued only as Registered Securities. (Section 2.01) If
Bearer Securities are issued, the United States Federal income tax
consequences and other special considerations, procedures and limitations
applicable to such Bearer Securities will be described in the Prospectus
Supplement relating thereto.
Unless otherwise indicated in the applicable Prospectus Supplement, Debt
Securities issued as Registered Securities will be without coupons. Debt
Securities issued as Bearer Securities will have interest coupons attached,
unless issued as zero coupon securities. (Section 2.01)
Registered Securities (other than a Global Security) may be presented
for transfer (with the form of transfer endorsed thereon duly executed) or
exchanged for other Debt Securities of the same series at the office of the
Security Registrar specified according to the terms of the applicable
Indenture. The Company has agreed in each of the Indentures that, with
respect to Registered Securities having the City of New York as a place of
payment, the Company will appoint a Security Registrar or Co-Security
Registrar located in the City of New York for such transfer or exchange.
Unless otherwise provided in the applicable Prospectus Supplement, such
transfer or exchange shall be made without service charge, but the Company
may require payment of any taxes or other governmental charges as described
in the applicable Indenture. Provisions relating to the exchange of Bearer
Securities for other Debt Securities of the same series (including, if
applicable, Registered Securities) will be described in the applicable
Prospectus Supplement. In no event, however, will Registered Securities be
exchangeable for Bearer Securities. (Section 3.05)
16
Global Securities
Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on
behalf of, a depositary (the "Depositary") identified in the Prospectus
Supplement relating to such series. (Section 3.01) Global Securities may be
issued in either registered or bearer form and in either temporary or
permanent form. (Section 2.04) Unless and until it is exchanged in whole or
in part for the individual Debt Securities represented thereby, a Global
Security may not be transferred except as a whole by the Depositary for such
Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any nominee to a successor Depositary or any nominee of such
successor. (Section 3.05)
The specific terms of the depositary arrangement with respect to a
series of Debt Securities and certain limitations and restrictions relating
to a series of Bearer Securities in the form of one or more Global Securities
will be described in the Prospectus Supplement relating to such series. The
Company anticipates that the following provisions will generally apply to
depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book-entry registration and
transfer system, the respective principal amounts of the individual Debt
Securities represented by such Global Security to the accounts of persons
that have accounts with such Depositary. Such accounts shall be designated
by the underwriters or agents with respect to such Debt Securities.
Ownership of beneficial interests in a Global Security will be limited to
persons that have accounts with the applicable Depositary ("participants") or
persons that may hold interests through participants. Ownership of
beneficial interests in such Global Security will be shown on, and the
transfer of that ownership will be effected only through, records maintained
by the applicable Depositary or its nominee (with respect to interests of
participants) and the records of participants (with respect to interests of
persons other than participants). The laws of some states require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to
transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture governing such Debt Securities. Except as provided below, owners
of beneficial interests in a Global Security will not be entitled to have any
of the individual Debt Securities of the series represented by such Global
Security registered in their names, will not receive or be entitled to
receive physical delivery of any such Debt Securities or such series in
definitive form and will not be considered the owners or holders thereof
under the Indenture governing such Debt Securities. (Sections 1.12 and 3.08)
Payments of principal of, premium, if any, and interest, if any, on
individual Debt Securities represented by a Global Security registered in the
name of a Depositary or its nominee will be made to the Depositary or its
17
nominee, as the case may be, as the registered owner of the Global Security
representing such Debt Securities. None of the Company, the Trustee for such
Debt Securities, any Paying Agent, and the Note Registrar for such Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Security for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. (Section 3.08)
Subject to certain restrictions relating to Bearer Securities, the
Company expects that the Depositary for a series of Debt Securities or its
nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Debt
Securities, will credit participants' accounts immediately with payments in
amounts proportionate to their respective beneficial interests in the
principal amount of such Global Security for such Debt Securities as shown on
the records of such Depositary or its nominee. The Company also expects that
payments by participants to owners of beneficial interests in such Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name".
Such payments will be the responsibility of such participants. With respect
to owners of beneficial interests in a temporary Global Security representing
Bearer Securities, receipt by such beneficial owners of payments of
principal, premium or interest in respect thereof will be subject to
additional restrictions.
If the Depositary for a series of Debt Securities is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Company within 90 days, the Company will
issue individual Debt Securities of such series in definitive form in
exchange for the Global Security representing such series of Debt Securities.
(Section 3.05) In addition, the Company may at any time and in its sole
discretion, subject to any limitations described in the Prospectus Supplement
relating to such Debt Securities, determine not to have any Debt Securities
of a series represented by one or more Global Securities and, in such event,
will issue individual Debt Securities of such series in definitive form in
exchange for the Global Security or Securities representing such series of
Debt Securities. (Section 3.05) Further, if the Company so specifies with
respect to the Debt Securities of a series, an owner of a beneficial interest
in a Global Security representing Debt Securities of such series may, on
terms acceptable to the Company, the Trustee and the Depositary for such
Global Security, receive Debt Securities of such series in definitive form in
exchange for such beneficial interests, subject to any limitations described
in the Prospectus Supplement relating to such Debt Securities. (Section
3.05) In any such instance, an owner of a beneficial interest in a Global
Security will be entitled to physical delivery in definitive form of Debt
Securities of the series represented by such Global Security equal in
principal amount to such beneficial interest and to have such Debt Securities
registered in its name (if the Debt Securities of such series are issuable as
Registered Securities). (Section 3.05) Debt Securities of such series so
issued in definitive form will be issued (a) as Registered Securities in
denominations, unless otherwise specified by the Company, of $1,000 and
integral multiples thereof if the Debt Securities of such series are issuable
as Registered Securities, (b) as Bearer Securities in the denomination,
18
unless otherwise specified by the Company, of $5,000 if the Debt Securities
of such series are issuable as Bearer Securities or (c) as either Registered
or Bearer Securities, if the Debt Securities of such series are issuable in
either form. (Sections 3.02 and 3.05) Certain restrictions may apply,
however, on the issuance of a Bearer Security in definitive form in exchange
for an interest in a Global Security.
Payment and Paying Agents
Unless otherwise indicated in an applicable Prospectus Supplement,
payment of principal of and premium, if any, on Registered Securities will be
made at the office of such Paying Agent or Paying Agents as the Company may
designate from time to time. At the option of the Company, payment of any
interest may be made (i) by check mailed to the address of the person
entitled thereto as such address shall appear in the applicable Note Register
or (ii) by wire transfer to an account maintained by the person entitled
thereto as specified in the applicable Security Register. Unless otherwise
indicated in an applicable Prospectus Supplement, payment of any installment
of interest on Registered Securities will be made to the person in whose name
such Debt Security is registered at the close of business on the Regular
Record Date for such payment. (Sections 3.07 and 5.02)
Unless otherwise indicated in an applicable Prospectus Supplement,
payment of principal of, premium, if any, and any interest on Bearer
Securities will be payable, subject to any applicable laws and regulations,
at the offices of such Paying Agents outside the United States as the Company
may designate from time to time or, at the option of the Holder, by check
mailed to any address outside the United States or by transfer to an account
maintained by the payee with a bank located outside the United States.
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
interest on Bearer Securities will be made only against surrender of the
coupon relating to such Interest Payment Date. No payment with respect to
any Bearer Security will be made at any office or agency of the Company in
the United States or by check mailed to any address in the United States or
by transfer to an account maintained with a bank located in the United
States. (Sections 3.07, 5.01 and 5.02)
Consolidation, Merger or Sale of Assets
Each Indenture provides that the Company may not, without the consent of
the holders of the Debt Securities outstanding under the applicable
Indenture, consolidate with, merge into or transfer its assets substantially
as an entirety to any single person, unless (i) any such successor assumes
the Company's obligations on the applicable Debt Securities and under the
applicable Indenture, (ii) after giving effect thereto, no Event of Default
shall have happened and be continuing and (iii) certain other conditions
under the applicable Indenture are met. (Section 10.01) Accordingly, unless
otherwise specified in an applicable Prospectus Supplement, any such
consolidation, merger or transfer of assets substantially as an entirety that
meets the conditions described above, would not create any Event of Default
which would entitle holders of the Debt Securities, or the Trustee on their
behalf, to take any of the actions described above under "Senior Securities -
Events of Default, Waivers, etc." Additionally, upon any such consolidation
or merger, or any such conveyance or transfer of the properties and assets of
the Company substantially as an entirety, the successor person formed by such
19
consolidation or into which the Company is merged or to which such conveyance
or transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under each Indenture with the
same effect as if such successor person had been named as the Company. In
the event of any such conveyance or transfer, the Company as the predecessor
corporation and C&A Co. shall be relieved of all obligations and covenants
under each Indenture and may be dissolved, wound up and liquidated at any
time thereafter. (Section 10.02)
Leveraged and Other Transaction
Neither Indenture contains provisions which would afford holders of the
Debt Securities protection in the event of a highly leveraged or other
transaction involving the Company which could adversely affect the holders of
Debt Securities. Provisions, if any, applicable to any such transaction will
be described in an applicable Prospectus Supplement.
Modification of the Indenture; Waiver of Covenants
Each Indenture provides that, with the consent of the holders of not
less than a majority in aggregate principal amount of the outstanding Debt
Securities of each affected series, modifications and alterations of such
Indenture may be made which affect the rights of the holders of such Debt
Securities, except that no such modification or alteration may be made
without the consent of the holder of each Debt Security so affected which
would, among other things, (i) change the maturity of the principal of, or of
any installment of interest (or premium, if any) on, any Debt Security issued
pursuant to such Indenture, or reduce the principal amount thereof or any
premium thereon, or change the method of calculation of interest or the
currency of payment of principal or interest (or premium, if any) on, or
reduce the minimum rate of interest thereon, or impair the right to institute
suit for the enforcement of any such payment on or with respect to any such
Debt Security, or reduce the amount of principal of an Original Issue
Discount Security that would be due and payable upon an acceleration of the
maturity thereof; or (ii) reduce the above-stated percentage in principal
amount of outstanding Debt Securities required to modify or alter such
Indenture. (Section 9.02)
Each Indenture also provides that, without the consent of any holder of
Debt Securities, the Company, when authorized by a resolution of its Board of
Directors, and the Trustee, at any time and from time to time, may enter into
one or more supplemental indentures to such Indenture to (i) evidence the
succession of another corporation or person to the Company or C&A Co., as the
case may be, in the Indenture and in the Debt Securities, (ii) evidence and
provide for a successor Trustee, (iii) add to the covenants of the Company or
C&A Co. for the benefit of the holders of Debt Securities of all or any
series or to surrender any right or power conferred upon the Company or C&A
Co. in the Indenture, (iv) cure any ambiguity, correct or supplement any
provision which may be inconsistent or make any other provisions with respect
to matters or questions arising under the Indenture, provided the interests
of the holders of Debt Securities of any series are not adversely affected in
any material respect, (v) add any additional Events of Default, (vi) make
certain changes with respect to Bearer Securities which do not adversely
affect the interests of the holders of Debt Securities of any series in any
material respect, (vii) add to, change or eliminate any provision of the
20
Indenture; provided that such addition, change or elimination (a) becomes
effective only when there is no Debt Security outstanding of a series created
prior to the execution of such supplemental indenture which is adversely
affected or (b) does not apply to any outstanding Debt Securities, (viii)
establish the form or terms of Debt Securities of any series as permitted
under the Indenture, (ix) add to or change provisions to permit or facilitate
the issuance of Debt Securities convertible into other securities, (x)
evidence any changes to corporate Trustee eligibility authorized by the Trust
Indenture Act, or (xi) add to or change or eliminate any provision of the
Indenture as necessary to comply with the Trust Indenture Act provided such
action does not adversely affect the interests of the holders of Debt
Securities of any series in any material respect. (Section 9.02)
Governing Law
The Indentures and the Debt Securities will be governed by, and
construed in accordance with, the laws of the State of New York.
Regarding the Trustee
The Indentures contain certain limitations on the right of the Trustee,
if and when the Trustee becomes a creditor of the Company (or any other
obligor upon the Debt Securities), regarding the collection of such claims
against the Company (or any such other obligor). (Section 8.13) Except as
provided in the following sentence, the Indentures do not prohibit the
Trustee from serving as trustee under any other indenture to which the
Company may be a party from time to time or from engaging in other
transactions with the Company. If the Trustee acquires any conflicting
interest and there is a default with respect to any series of Debt
Securities, it must eliminate such conflict or resign. (Section 8.08)
SENIOR SECURITIES
The Senior Securities will be direct, unsecured obligations of the
Company and will rank pari passu with all outstanding unsecured senior
indebtedness of the Company.
SUBORDINATED SECURITIES
The Subordinated Securities will be direct, unsecured obligations of the
Company and will be subject to the subordination provisions described below.
Subordination
The payment of the principal of, premium (if any) and interest on the
Subordinated Securities is subordinated in right of payment, as set forth in
the Subordinated Indenture, to the payment when due of all Senior Indebted-
ness and, if applicable, Senior Subordinated Indebtedness of the Company.
(Section 14.01 of Subordinated Indenture) However, payment from the money or
the proceeds of U.S. government obligations held in any defeasance trust is
not subordinate to any Senior Indebtedness or, if applicable, Senior
Subordinated Indebtedness or subject to the restrictions described herein.
(Section 14.12 of Subordinated Indenture) At July 29, 1995, outstanding
Senior Indebtedness of the Company was $534.8 million (excluding unused
21
commitments, approximately $48.9 million of indebtedness of subsidiaries,
approximately $117.0 million in off-balance sheet financing under the
Receivables Facility and approximately $27.2 million of outstanding letters
of credit), the Company did not have any Senior Subordinated Indebtedness and
the liabilities of the Company's subsidiaries as recorded in the
subsidiaries' financial records aggregated approximately $197.8 million
(excluding intercompany balances). Claims of creditors of such subsidiaries,
including trade creditors, secured creditors and creditors holding guarantees
issued by such subsidiaries, and claims of preferred stockholders (if any) of
such subsidiaries generally will have priority with respect to the assets and
earnings of such subsidiaries over the claims of creditors of the Company,
including holders of the Subordinated Securities, even though such
obligations may not constitute Senior Indebtedness or Senior Subordinated
Indebtedness. The Subordinated Securities therefore will be effectively
subordinated to creditors (including trade creditors) and preferred
stockholders (if any) of subsidiaries of the Company. The domestic
subsidiaries of the Company have guaranteed the Company's obligations
pursuant to the Credit Agreement.
Senior Indebtedness is defined in the Subordinated Indenture as the
principal of, premium, if any, and interest on, (i) all the Company's
indebtedness for money borrowed, other than the subordinated securities
issued under the Subordinated Indenture, whether outstanding on the date of
execution of the Subordinated Indenture or thereafter created, assumed or
incurred, except such indebtedness as is by its terms expressly stated to be
not superior in right of payment to the subordinated securities issued under
the Subordinated Indenture or to rank pari passu with the subordinated
securities issued under the Subordinated Indenture and (ii) any deferrals,
renewals or extensions of any such Senior Indebtedness, except that Senior
Indebtedness will not include (1) any obligation of the Company to any
subsidiary, (2) any liability for Federal, state, local or other taxes owed
or owing by the Company, (3) any accounts payable or other liability to trade
creditors arising in the ordinary course of business (including guarantees
thereof or instruments evidencing such liabilities), (4) any indebtedness,
guarantee or obligation of the Company which is expressly subordinate or
junior in right of payment in any respect to any other indebtedness,
guarantee or obligation of the Company, including any senior subordinated
indebtedness and any subordinated obligations, or (5) any obligations with
respect to any capital stock. The term "indebtedness for money borrowed" as
used in the foregoing sentence includes, without limitation, any obligation
of, or any obligation guaranteed by, the Company for the repayment of
borrowed money, whether or not evidenced by bonds, debentures, notes or other
written instruments, and any deferred obligation for the payment of the
purchase price of property or assets. (Section 1.01 of Subordinated
Indenture) There is no limitation on the issuance of additional Senior
Indebtedness of the Company. The Senior Securities constitute Senior
Indebtedness under the Subordinated Indenture.
The Subordinated Securities may rank pari passu with other subordinated
indebtedness of the Company or may, if indicated in the applicable Prospectus
Supplement, be subordinate to Senior Subordinated Indebtedness, including
other series of Subordinated Securities. (Section 3.01 Subordinated
Indenture) "Senior Subordinated Indebtedness" means any indebtedness of the
Company that is not subordinated by its terms in right of payment to any
indebtedness or obligation of the Company which is not Senior Indebtedness
22
and which is senior in right of payment to the Debt Securities. (Section
1.01 of Subordinated Indenture)
Neither the Company nor C&A Co. may pay principal of, premium (if any)
or interest on the Subordinated Securities, make any deposits pursuant to the
defeasance provisions in the Subordinated Indenture or otherwise purchase,
redeem or retire any Subordinated Securities (collectively, "pay the
Subordinated Securities") if (i) any Senior Indebtedness and, if applicable,
Senior Subordinated Indebtedness is not paid when due or (ii) any other
default on Senior Indebtedness, and, if applicable, Senior Subordinated
Indebtedness occurs and the maturity of such Senior Indebtedness, and, if
applicable, Senior Subordinated Indebtedness is accelerated in accordance
with its terms unless, in either case, the default has been cured or waived
and any such acceleration has been rescinded or such Senior Indebtedness and,
if applicable, Senior Subordinated Indebtedness has been paid in full.
However, the Company and C&A Co. may pay the Subordinated Securities without
regard to the foregoing if the Company, C&A Co. and the Trustee receive
written notice approving such payment from the Representatives of the holders
of Senior Indebtedness, and, if applicable, Senior Subordinated Indebtedness
with respect to which either of the events set forth in clause (i) or (ii) of
the immediately preceding sentence has occurred and is continuing. During
the continuance of any default (other than a default described in clause (i)
or (ii) of the second preceding sentence) with respect to any Senior
Indebtedness, and, if applicable, Senior Subordinated Indebtedness pursuant
to which the maturity thereof may be accelerated immediately without further
notice (except such notice as may be required to effect such acceleration) or
the expiration of any applicable grace periods, neither the Company nor C&A
Co. may pay the Subordinated Securities for a period (a "Payment Blockage
Period") commencing upon the receipt by the Trustee (with a copy to the
Company and C&A Co.) of written notice (a "Blockage Notice") of such default
from the Representatives of the holders of Senior Indebtedness, and, if
applicable, Senior Subordinated Indebtedness specifying an election to effect
a Payment Blockage Period and ending 179 days thereafter (or earlier if such
Payment Blockage Period is terminated (1) by written notice to the Trustee,
the Company and C&A Co. from the Person or Persons who gave such Blockage
Notice, (2) because the default giving rise to such Blockage Notice is no
longer continuing or (3) because such Senior Indebtedness, and, if
applicable, Senior Subordinated Indebtedness has been repaid in full).
Notwithstanding the provisions described in the immediately preceding
sentence, unless the holders of Senior Indebtedness and, if applicable Senior
Subordinated Indebtedness or the Representatives of such holders have
accelerated the maturity of such Senior Indebtedness and, if applicable
Senior Subordinated Indebtedness, the Company and C&A Co. may resume payments
on the Subordinated Securities after the end of such Payment Blockage Period.
Not more than one Blockage Notice may be given in any consecutive 360-day
period, irrespective of the number of defaults with respect to Senior
Indebtedness, and, if applicable, Senior Subordinated Indebtedness during
such period. (Section 14.03 of Subordinated Indenture)
Upon any payment or distribution of the assets of the Company or C&A Co.
to creditors upon a total or partial liquidation or dissolution or
reorganization of or similar proceeding relating to the Company or C&A Co. or
their property, the holders of Senior Indebtedness and, if applicable, Senior
Subordinated Indebtedness will be entitled to receive payment in full of the
Senior Indebtedness and, if applicable, Senior Subordinated Indebtedness
23
before the holders of Subordinated Securities are entitled to receive any
payment, and until the Senior Indebtedness and, if applicable, Senior
Subordinated Indebtedness is paid in full, any payment or distribution to
which holders of Subordinated Securities would be entitled but for the
subordination provisions of the Subordinated Indenture (other than
distributions of stock and certain debt securities subordinated to the Senior
Indebtedness and, if applicable, the Senior Subordinated Indebtedness) will
be made to holders of the Senior Indebtedness and, if applicable, Senior
Subordinated Indebtedness as their interests may appear. (Section 14.02 of
Subordinated Indenture) If a distribution is made to holders of Subordinated
Securities that, due to the subordination provisions, should not have been
made to them, such holders of Subordinated Securities are required to hold it
in trust for the holders of Senior Indebtedness or Senior Subordinated
Indebtedness, as the case may be, and pay it over to them as their interests
may appear. (Section 14.05 of Subordinated Indenture)
If payment of the Subordinated Securities is accelerated because of an
Event of Default, the Company, C&A Co. or the Trustee will promptly notify
the holders of Senior Indebtedness and, if applicable, Senior Subordinated
Indebtedness or the Representatives of such holders of the acceleration. The
Company may not pay the Subordinated Securities until five Business Days
after such holders or the Representatives of the Senior Indebtedness and, if
applicable, Senior Subordinated Indebtedness receive notice of such
acceleration and, thereafter, may pay the Subordinated Securities only if the
subordination provisions of the Subordinated Indenture otherwise permit
payment at that time. (Section 14.04 of Subordinated Indenture)
By reason of such subordination provisions contained in the Subordinated
Indenture, in the event of insolvency, creditors of the Company or C&A Co.
who are holders of Senior Indebtedness or Senior Subordinated Indebtedness
may recover more, ratably, than the holders of Subordinated Securities, and
creditors of the Company who are not holders of Senior Indebtedness or
Senior Subordinated Indebtedness may recover less, ratably, than holders of
Senior Indebtedness or Senior Subordinated Indebtedness, as the case may be,
and may recover more, ratably, than the holders of Subordinated Indebtedness.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities to one or more underwriters
(acting alone or through underwriting syndicates led by one or more managing
underwriters) or dealers for public offering and sale by them or may sell the
Debt Securities to investors directly or through agents designated from time
to time. The Prospectus Supplement with respect to the Debt Securities
offered thereby describes the terms of the offering of such Debt Securities
and the method of distribution of the Debt Securities offered thereby and
identifies any firms acting as underwriters, dealers or agents in connection
therewith.
The Debt Securities may be distributed from time to time in one or more
transactions at a fixed price or prices (which may be changed from time to
time), at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at prices determined as specified in the
Prospectus Supplement. In connection with the sale of the Debt Securities,
underwriters, dealers or agents may be deemed to have received compensation
24
from the Company in the form of underwriting discounts or commissions and may
also receive commissions from purchasers of the Debt Securities for whom they
may act as agent. Underwriters may sell the Debt Securities to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions from the purchasers for whom they may act as
agent. Certain of the underwriters, dealers or agents who participate in the
distribution of the Debt Securities may engage in other transactions with,
and perform other services for, the Company in the ordinary course of
business.
Any underwriting compensation paid by the Company to underwriters or
agents in connection with the offering of the Debt Securities, and any
discounts, concessions or commissions allowed by underwriters to dealers, are
set forth in the Prospectus Supplement. Underwriters, dealers and agents
participating in the distribution of the Debt Securities may be deemed to be
underwriters, and any discounts and commissions received by them and any
profit realized by them on the resale of the Debt Securities may be deemed to
be underwriting discounts and commissions under the Securities Act.
Underwriters and their controlling persons, dealers and agents may be
entitled, under agreements entered into with the Company, to indemnification
against and contribution toward certain civil liabilities, including
liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company
will authorize underwriters or agents to solicit offers by certain
institutions to purchase Debt Securities from the Company pursuant to delayed
delivery contracts providing for payment and delivery at a future date.
Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Company. Unless otherwise set forth in
the applicable Prospectus Supplement, the obligations of any purchaser under
any such contract will not be subject to any conditions except that (i) the
purchase of the Debt Securities shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which such purchaser is
subject, and (ii) if the Debt Securities are also being sold to underwriters
acting as principals for their own account, the underwriters shall have
purchased such Debt Securities not sold for delayed delivery. The
underwriters and such other persons will not have any responsibility in
respect of the validity or performance of such contracts.
LEGAL OPINIONS
Certain legal matters in connection with the Debt Securities will be
passed upon for the Company by Cravath, Swaine & Moore, Worldwide Plaza, 825
Eighth Ave., New York, NY 10019. Certain legal matters will be passed upon
for the underwriters or agents, if any, named in a Prospectus Supplement, by
Jones, Day, Reavis & Pogue, 599 Lexington Avenue, New York, New York 10022.
From time to time, Jones, Day, Reavis & Pogue provides legal services to C&A
Co. and the Company and other entities in which the principal stockholders of
C&A Co. have equity interests.
25
EXPERTS
The consolidated financial statements and schedules of C&A Co.
incorporated by reference in this prospectus and elsewhere in the
registration statement to the extent and for the periods indicated in their
reports have been audited by Arthur Andersen LLP, independent public
accountants, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in giving said reports.
________________
No person is authorized to give any information or to make any
representations other than those contained in this Prospectus or any
accompanying Prospectus Supplement in connection with the offer made by this
Prospectus or any Prospectus Supplement, and, if given or made, such other
information or representations must not be relied upon as having been
authorized by the Company or by any underwriter, dealer or agent. This
Prospectus and any Prospectus Supplement do not constitute an offer to sell
or a solicitation of an offer to buy any securities other than those to which
they relate. Neither the delivery of this Prospectus and any accompanying
Prospectus Supplement nor any sale of or offer to sell the Debt Securities
offered hereby shall, under any circumstances, create an implication that
there has been no change in the affairs of the Company or that the
information herein is correct as of any time after the date hereof. This
Prospectus and any accompanying Prospectus Supplement do not constitute an
offer to sell or a solicitation of an offer to buy any of the Debt Securities
offered hereby in any state to any person to whom it is unlawful to make such
offer or solicitation in such state.
26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following statement sets forth the estimated amounts of expenses,
other than underwriting discounts, to be borne by the registrant in
connection with the distribution of the Debt Securities.
Securities and Exchange Commission registration fee.....$137,931
Trustees' fees and expenses...............................20,000
Printing and engraving expenses...........................25,000
Rating agency fees.......................................160,000
Accounting fees and expenses..............................20,000
Legal fees and expenses...................................75,000
Blue Sky fees and expenses
(including fees and expenses of counsel)..................20,000
Miscellaneous expenses....................................10,000
Total Expenses......................................467,931
Item 15. Indemnification of Directors and Officers
Each Registrant is a Delaware corporation. Section 145 of the Delaware
General Corporation Law (the "DGCL") provides that a corporation may
indemnify any person who was or is threatened to be made a party to any
threatened, pending or completed actions, suits or proceedings, whether
civil, criminal, administrative or investigative (other than an action by or
in the right of the corporation-a "derivative action"), by reason of the fact
that he or she is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or other
enterprise (an "indemnitee") against expenses (including attorneys' fees),
judgements, fines and amounts paid in settlement actually and reasonably
incurred if such person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal actions or proceedings, had no
reasonable cause to believe his or her conduct was unlawful. A similar
standard is applicable in the case of derivative actions, except that
indemnification only extends to expenses (including attorneys' fees) actually
and reasonably incurred in connection with the defense or settlement of such
action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found
liable to the corporation with respect to any claim, issue or matter in the
derivative action. The statute further provides for the mandatory
indemnification of an indemnitee who is successful on the merits or otherwise
in defending any action, suit or proceeding described in the statute or in
defence of any claim, issue or matter therein, and authorizes a corporation
to pay in advance any expenses incurred by an indemnitee in any covered
proceeding, provided that a director or officer must furnish to the
corporation on undertaking to repay the amounts advanced if it is ultimately
determined that the director or officer is not entitled to indemnification.
The statute provides that it is not exclusive of other indemnification that
may be granted by a corporation's charter, by-laws, disinterested director
vote, stockholder vote, agreement or otherwise.
II - 1
Each Registrant's By-Laws provide that any person made a party to or
threatened to be made a party to or otherwise involved in any action, suit or
proceeding by reason of the fact he or she is or was a director or officer of
the Registrant, or is or was a director, officer, employee or agent of any
other enterprise for which he or she served as such at the request of the
Registrant, shall be indemnified by the Registrant to the fullest extent
authorized by the DGCL against all expenses (including attorneys' fees)
reasonably incurred by such indemnitee (except, with limited exceptions, for
suits brought by the indemnitee unless authorized by the Board of Directors
of the Registrant). Such right of indemnification includes the right to be
paid, in advance, all expenses incurred in connection with the defense of a
proceeding (upon receipt of any required undertaking) and is a contract right
and shall not be deemed exclusive of any other rights to which such director
or officer may be entitled outside the indemnification provisions of said By-
Laws.
Section 102(b)(7) of the DGCL permits a corporation organized thereunder
to include in its certificate of incorporation a provision eliminating or
limiting, with certain exceptions, the personal liability of a director to
the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director. The Certificate of Incorporation of each of
the Registrants eliminates the liability of directors to the full extent
permitted by the DGCL (as it exists or may be amended).
The foregoing statements are subject to the detailed provisions of
Section 145 and 102(b)(7) of the DGCL, Article VIII of Collins & Aikman
Corporation's By-Laws and Article Eighth of its Restated Certificate of
Incorporation and Article VIII of Collins & Aikman Products Co.'s By-Laws and
Article Eight, of its Certificate of Incorporation, as applicable.
C&A Co. has insurance coverage under policies issued to it (which
policies also cover the Company) for losses by any person who is or hereafter
may be a director or officer of C&A Co. arising from claims against that
person for any wrongful act (subject to certain exceptions) in his or her
capacity as a director or officer of C&A Co. or any of its subsidiaries,
including the Company. The policies also provide for reimbursement to C&A
Co. or its subsidiaries for indemnification given by them pursuant to common
or statutory law or the Certificate of Incorporation or the By-Laws to any
such person arising from any such claims. The policies' present coverage is
limited to a maximum of $50 million for claims made in a single year and
there is a deductible of $1 million.
Item 16. Exhibits
(1) - Proposed form of Debt Securities Underwriting Agreement.
(4.1) - Form of Senior Indenture.
(4.2) - Form of Subordinated Indenture.
(5) - Opinion of Cravath, Swaine & Moore.
(12) - Statement regarding the computation of the ratio of earnings
to fixed charges.
(23.1) - Consent of Arthur Andersen LLP, Independent Public
Accountants.
(23.2) - Consent of Counsel (included in Exhibit (5)).
(24) - Powers of Attorney (Set Forth on Signature Pages).
(25) - Statement of Eligibility and Qualification on Form T-l of
Trustee (bound separately).*
*To be filed.
II - 2
Item 17. Undertakings
A. Undertaking Pursuant to Rule 415
The undersigned Registrants hereby undertake:
(a) to file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section lO(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by one of the
Registrants pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), that are
incorporated by reference in the Registration Statement;
(b) that, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(c) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. Undertaking Regarding Filings Incorporating Subsequent Exchange Act
Documents by Reference
The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of Collins &
Aikman Corporation's annual report pursuant to Section 13(a) or Section l5(d)
II - 3
of the Exchange Act that is incorporated by reference in the Registration
Statement shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
C. Undertaking in Respect of Indemnification
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the provisions described in Item 15 above, or
otherwise, the Registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by either of the Registrants of expenses incurred or paid by
a director, officer or controlling person of such Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
officer, director or controlling person in connection with the securities
being registered, 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 of whether or not such indemnification
by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
D. Undertaking in Respect of Rule 430A
The undersigned Registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
E. Undertaking in Respect of Qualification of Trust Indentures Under the
Trust Indenture Act of 1939 for Delayed Offerings
The undersigned Registrants hereby undertake to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Trust Indenture Act.
II - 4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on
September 12, 1995.
COLLINS & AIKMAN PRODUCTS CO.
By /s/ J. Michael Stepp
Name: J. Michael Stepp
Title: Executive Vice President
and Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below on this Registration Statement
hereby constitutes and appoints Thomas E. Hannah, David A. Stockman and
Randall J. Weisenburger, and each of them, with full power to act without the
other, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities (until revoked in writing) to sign any and all
amendments (including post-effective amendments and amendments thereto) to
this Registration Statement on Form S-3 of Collins & Aikman Products Co., and
to file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary fully to
all intents and purposes as he might or could do in person thereby ratifying
and confirming all that said attorneys-in-fact and agents or either of them,
or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on the dates indicated by the
following persons in the capacities indicated.
Signature Title Date
/s/ Thomas E. Hannah Director, President and September 12, 1995
(Thomas E. Hannah) Chief Executive Officer
(Principal Executive Officer)
II - 5
Signature Title Date
/s/ J. Michael Stepp Executive Vice President September 12, 1995
(J. Michael Stepp) and Chief Financial Officer
(Principal Financial Officer)
/s/ Anthony Hardick Vice President and September 12, 1995
(Anthony Hardick) Controller
(Principal Accounting Officer)
/s/ David A. Stockman Co-Chairman of the Board September 12, 1995
(David A. Stockman) of Directors
/s/ Randall J. Weisenburger Co-Chairman of the Board September 12, 1995
(Randall J. Weisenburger) of Directors
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on
September 12, 1995.
COLLINS & AIKMAN CORPORATION
By /s/ J. Michael Stepp
Name: J. Michael Stepp
Title: Executive Vice President
and Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below on this Registration Statement
hereby constitutes and appoints Thomas E. Hannah, David A. Stockman and
Randall J. Weisenburger, and each of them, with full power to act without the
other, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities (until revoked in writing) to sign any and all
amendments (including post-effective amendments and amendments thereto) to
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this Registration Statement on Form S-3 of Collins & Aikman Corporation, and
to file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary fully to
all intents and purposes as he might or could do in person thereby ratifying
and confirming all that said attorneys-in-fact and agents or either of them,
or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on the dates indicated by the
following persons in the capacities indicated.
Signature Title Date
/s/ Thomas E. Hannah Director and Chief September 12, 1995
(Thomas E. Hannah) Executive Officer
(Principal Executive Officer)
/s/ J. Michael Stepp Executive Vice President September 12, 1995
(J. Michael Stepp) and Chief Financial Officer
(Principal Financial Officer)
/s/ Anthony Hardwick Vice President and September 12, 1995
(Anthony Hardwick) Controller
(Principal Accounting Officer)
/s/ David A. Stockman Co-Chairman of the Board September 12, 1995
(David A. Stockman) of Directors
/s/ Randall J. Weisenburger Co-Chairman of the Board September 12, 1995
(Randall J. Weisenburger) of Directors
/s/ Robert C. Clark
(Robert C. Clark) Director September 12, 1995
/s/ George L. Majoros, Jr.
(George L. Majoros, Jr.) Director September 12, 1995
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Signature Title Date
/s/ James J. Mossman
(James J. Mossman) Director September 12, 1995
/s/ Warren B. Rudman
(Warren B. Rudman) Director September 12, 1995
/s/ Stephen A. Schwarzman
(Stephen A. Schwarzman) Director September 12, 1995
/s/ W. Townsend Ziebold. Jr.
(W. Townsend Ziebold, Jr.) Director September 12, 1995
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