AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 11, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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M.D.C. HOLDINGS, INC. DELAWARE 84-0622967
MDC CAPITAL FUNDING TRUST I DELAWARE TO BE APPLIED FOR
MDC CAPITAL FUNDING TRUST II DELAWARE TO BE APPLIED FOR
(Exact name of each registrant (State of incorporation or organization (I.R.S. Employer Identification Numbers)
as specified in its charter) of each registrant)
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3600 S. YOSEMITE STREET
SUITE 900
DENVER, COLORADO 80237
(303) 773-1100
(Address, including zip code and telephone number, including area code, of each
registrants principal executive office)
DANIEL S. JAPHA, ESQ.
SECRETARY AND GENERAL COUNSEL - CORPORATE
3600 S. YOSEMITE STREET, SUITE 900
DENVER, COLORADO 80237
(303) 773-1100
(Name, address, including zip code and telephone number, including area code,
of agent for service)
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COPIES TO:
NICK NIMMO, ESQ. DANIEL J. ZUBKOFF, ESQ.
HOLME ROBERTS & OWEN LLP CAHILL GORDON & REINDEL
1700 LINCOLN STREET, SUITE 4100 EIGHTY PINE STREET
DENVER, COLORADO 80203 NEW YORK, NY 10005
(303) 861-7000 (212) 701-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
promptly as practicable after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, 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, check the following box and
list the Securities Act registration statement number of 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. / /
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CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF SECURITIES TO BE AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM
REGISTERED REGISTERED OFFERING PRICE PER SECURITY (5) AGGREGATE OFFERING PRICE (5)(6)
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M.D.C. HOLDINGS, INC.
Common Stock, par value $.01 per share
(1)
Preferred Stock, par value $.01 per share
Debt Securities (2)
Stock Purchase Contracts (3)
Guarantee of Trust Capital Securities of {$175,000,000 100% $175,000,000
MDC Capital Funding Trust I (4)
Guarantee of Trust Capital Securities of
MDC Capital Funding Trust II (4)
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MDC CAPITAL FUNDING TRUST I
Trust Capital Securities
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MDC CAPITAL FUNDING TRUST II
Trust Capital Securities
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF SECURITIES TO BE AMOUNT OF
REGISTERED REGISTRATION FEE
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M.D.C. HOLDINGS, INC.
Common Stock, par value $.01 per share
(1)
Preferred Stock, par value $.01 per share
Debt Securities (2)
Stock Purchase Contracts (3)
Guarantee of Trust Capital Securities of $48,650}
MDC Capital Funding Trust I (4)
Guarantee of Trust Capital Securities of
MDC Capital Funding Trust II (4)
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MDC CAPITAL FUNDING TRUST I
Trust Capital Securities
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MDC CAPITAL FUNDING TRUST II
Trust Capital Securities
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(1) Includes (a) shares of Common Stock into which certain series of Debt
Securities and Preferred Stock may be converted and for which no separate
consideration will be received and (b) shares of Common Stock issuable upon
settlement of the Stock Purchase Contracts being registered hereunder.
(2) Includes senior debt securities, senior subordinated debt securities and
junior subordinated debt securities, including debt securities ("Trust
Debentures") to be purchased by MDC Capital Funding Trust I or MDC Capital
Funding Trust II with the proceeds from the sale of the Trust Capital
Securities being registered hereunder (which Trust Debentures in certain
circumstances may later be distributed to the holders of Trust Capital
Securities of a Trust upon a dissolution of such Trust and a distribution
of the assets thereof).
(3) Contracts to purchase shares of Common Stock of M.D.C. Holdings, Inc. may
be offered as part of units that also include the Trust Capital Securities
being registered hereunder (or beneficial interests therein) or debt
obligations of third parties, including U.S. Treasury securities, purchased
with the proceeds of the sale of such units and pledged to secure the
obligations of the holders to purchase such shares of Common Stock.
(4) Includes the rights of holders of the Trust Capital Securities under these
Guarantees and back-up undertakings, consisting of obligations of M.D.C.
Holdings, Inc. as set forth in the declarations of trust of MDC Capital
Funding Trust I and MDC Capital Funding Trust II (including the obligation
of M.D.C. Holdings, Inc. to pay and be responsible for certain expenses,
costs, liabilities and debts of the trusts) and the indentures governing
the Trust Debentures of M.D.C. Holdings, Inc., in each case as further
described in this Registration Statement.
(5) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as amended.
M.D.C. Holdings, Inc. is registering an indeterminate amount of Common
Stock, Preferred Stock, Debt Securities, Stock Purchase Contracts and Trust
Capital Securities Guarantees of M.D.C. Holdings, Inc. and an indeterminate
amount of Trust Capital Securities of MDC Capital Funding Trust I and MDC
Capital Funding Trust II. Any securities registered hereunder may be sold
separately or as units with other securities, including those registered
hereunder. One or more of these securities may be sold under marketing
service marks of the underwriters for such securities.
(6) Exclusive of accrued interest or dividends, if any.
Pursuant to Rule 429 under the Securities Act of 1933, this Registration
Statement contains a combined prospectus that also relates to $125,000,000 of
other securities registered on Form S-3, File No. 333-36631 (the "Previously
Registered Securities"), which have not been offered or sold as of the date of
the filing of this Registration Statement. This Registration Statement
constitutes Post-Effective Amendment No. 1 to Registration Statement File No.
333-36631, pursuant to which the total amount of unsold Previously Registered
Securities registered on Registration Statement File No. 333-36631, without
limitation as to class of securities, may be offered and sold as any of the
securities registered hereunder. In the event the Previously Registered
Securities are offered and sold prior to the effective date of this Registration
Statement, the amount of Previously Registered Securities so sold will not be
included in the prospectus hereunder.
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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, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
[OBJECT OMITTED]
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and we are not soliciting offers to buy these
securities in any state where the offer is not permitted.
PROSPECTUS SUBJECT TO COMPLETION,
JANUARY 11, 1999
M.D.C. HOLDINGS, INC.
MDC CAPITAL FUND TRUST I
MDC CAPITAL FUND TRUST II
3600 S. YOSEMITE STREET
SUITE 900
DENVER, COLORADO 80237
(303) 773-1100
$300,000,000
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The following are types of securities that we may offer and sell
under this prospectus:
- Common Stock - Debt Securities
- Preferred Stock - Stock Purchase Contracts
In addition, we, in conjunction with our newly created trust subsidiaries,
may offer and sell:
- Trust Capital Securities and related guarantees
We may offer these securities separately or as units which may include
other securities. We will describe in a prospectus supplement, which must
accompany this prospectus, the securities we are offering and selling, as well
as the specific terms of the securities. Those terms may include:
- Maturity - Redemption terms
- Interest rate - Listing on a securities exchange
- Sinking fund terms - Amount payable at maturity
- Currency of payments
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THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE
NOT APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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We may offer the securities in amounts, at prices and on terms determined
at the time of offering. We may sell the securities directly to you, through
agents we select, or through underwriters and dealers we select. If we use
agents, underwriters or dealers to sell the securities, we will name them and
describe their compensation in a prospectus supplement.
January , 1999
TABLE OF CONTENTS
Where You Can Find More Information............................................................1
Incorporation of Certain Documents by Reference................................................2
M.D.C. Holdings,Inc............................................................................4
The Trusts.....................................................................................5
Use of Proceeds................................................................................7
Ratio of Earnings to Fixed Charges.............................................................7
Description of Common Stock....................................................................8
Description of Preferred Stock.................................................................9
Description of Trust Capital Securities........................................................11
Description of Trust Capital Securities Guarantees.............................................13
Description of the Debt Securities.............................................................16
Relationship among the Trust Capital Securities, the Trust Debentures
and the Trust Capital Securities Guarantee.....................................................25
Description of Stock Purchase Contracts and Stock Purchase
Units.....................................................................................26
Book-Entry Issuance............................................................................27
Plan of Distribution...........................................................................29
Legal Matters..................................................................................32
Experts........................................................................................32
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WHERE YOU CAN FIND MORE INFORMATION
M.D.C. Holdings, Inc. ("MDC" or the "Company") files annual, quarterly and
special reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission") under the Securities Exchange Act of 1934
(the "Exchange Act"). You may read and copy this information at the following
locations of the Commission:
Judiciary Plaza, Room 10024 Seven World Trade Center,
450 Fifth Street, N.W. Street Suite 1300
Washington, D.C. 20549 New York, New York 10048
Citicorp Center
500 West Madison Street
Suite 1400
Chicago, Illinois 60661
You can also obtain copies of this information by mail from the Public
Reference Room of the Commission, 450 Fifth Street, N.W., Room 10024, Washington
D.C. 20549, at prescribed rates. You may obtain information on the operation of
the Public Reference Room by calling the Commission at (800) SEC-0330.
2
The Commission also maintains an internet world wide web site that contains
reports, proxy statements and other information about issuers, like MDC, who
file electronically with the Commission. The address of that site is
http://www.sec.gov.
You can also inspect reports, proxy statements and other information about
us at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005.
MDC and its trust subsidiaries have filed jointly with the Commission a
registration statement on Form S-3 that registers the securities they are
offering (the "Registration Statement"). The Registration Statement, including
the attached exhibits and schedules, contains additional relevant information
about MDC, the trusts and the securities offered. The rules and regulations of
the Commission allow us to omit certain information included in the Registration
Statement from this prospectus.
There are no separate financial statements of the trusts in this
prospectus. We do not believe such financial statements would be material to the
holders of the Trust Capital Securities because (1) all of the voting securities
of the Trusts will be owned, directly or indirectly, by MDC, a reporting company
under the Exchange Act, (2) the Trusts have no independent operations and exist
for the sole purpose of issuing the securities representing undivided beneficial
interests in their respective assets and investing the proceeds thereof in the
Trust Debentures, (3) the obligations of MDC under the Trust Capital Securities
Guarantee and the Trust Common Securities Guarantee have the effect of providing
a full, irrevocable and unconditional guarantee of the trusts' obligations under
their securities, to the extent set forth in such guarantees. Neither trust is
currently subject to the information reporting requirements of the Exchange Act.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to "incorporate by reference" information into
this prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the Commission. The
information incorporated by reference is considered to be part of this
prospectus, except for any information that is superseded by information that is
included directly in this document.
This prospectus includes by reference the documents listed below that we
have previously filed with the Commission and that are not included in or
delivered with this document. They contain important information about our
company and its financial condition.
FILING PERIOD
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Annual Report on Form 10-K Year ended December 31, 1997
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FILING PERIOD
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Quarterly Reports on Form 10-Q Quarter ended September 30, 1998
Quarter ended June 30, 1998
Quarter ended March 31, 1998
Current Reports on Form 8-K Filed March 27, 1998
Filed January 22, 1998
Filed January 14, 1998
We incorporate by reference additional documents that we may file with the
Commission between the date of this prospectus and the date of the closing of
this offering. These documents include periodic reports, such as Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as
well as proxy statements.
You can obtain any of the documents incorporated by reference in this
document from MDC without charge, excluding any exhibits to those documents
unless the exhibit is specifically incorporated by reference as an exhibit to
this prospectus. You can obtain documents incorporated by reference in this
prospectus by requesting them in writing or by telephone from MDC at the
following address:
Daniel S. Japha
Secretary
M.D.C. Holdings, Inc.
3600 South Yosemite Street
Suite 900
Denver, Colorado 80237
(303) 773-1100.
We have not authorized anyone to give any information or make any
representation about us that is different from, or in addition to, that
contained in this prospectus or in any of the materials that we have
incorporated by reference into this document. Therefore, if anyone does give you
information of this sort, you should not rely on it. If you are in a
jurisdiction where offers to exchange or sell, or solicitations of offers to
exchange or purchase, the securities offered by this document or the
solicitation of proxies is unlawful, or if you are a person to whom it is
unlawful to direct these types of activities, then the offer presented in this
document does not extend to you. The information contained in this document
speaks only as of the date of this document, unless the information specifically
indicates that another date applies.
4
M.D.C. HOLDINGS, INC.
THE HOLDING COMPANY
M.D.C. Holdings, Inc. ("MDC" or the "Company") is a Delaware corporation
which was formed in 1972. MDC's primary business is owning and managing
subsidiary companies which build homes under the name "Richmond American Homes."
MDC also owns and manages HomeAmerican Mortgage Corporation which originates
mortgage loans.
THE HOMEBUILDING COMPANIES
Richmond American Homes builds homes in several growth markets, including
Denver where we are the largest homebuilder. We also build homes in the suburban
Washington, D.C. area in both Virginia and Maryland and rank as the second
largest builder in that market. We are also one of the larger homebuilders in
Phoenix, Tucson, Las Vegas and Colorado Springs. We have a growing presence in
several Southern California counties as well as the San Francisco Bay area.
OUR HOMEBUILDING STRATEGY
We focus on building quality homes at affordable prices. Most of our home
buyers are buying either their first or second home.
HOME SELLING PRICES
Most of our homes range in price from under $100,000 to $400,000, although
some homes we build cost as much as $900,000. In 1997, the average selling price
of our homes was $179,000 compared with $195,500 in the first nine months of
1998.
HOMEAMERICAN MORTGAGE CORPORATION
Our mortgage company provides mortgage loans to most of our home buyers.
For the convenience of the home buyers, we have loan offices in all of the
locations where we build homes.
LOCATION OF EXECUTIVE OFFICES
The principal executive offices of the Company are at 3600 South Yosemite
Street, Suite 900, Denver, Colorado 80237 (telephone (303) 773-1100). We also
offer homes and mortgages through our Internet web site.
5
You can obtain additional information about us in the reports and other
documents incorporated by reference in this prospectus. See "Where You Can Find
More Information" and "Incorporation of Certain Documents by Reference."
THE TRUSTS
MDC created two Delaware business trusts pursuant to two Declarations of
Trust executed by MDC as sponsor for each trust and the appointed trustee for
each trust and filing of a Certificate of Trust for each Trust with the Delaware
Secretary of State. The trusts are named MDC Capital Funding Trust I and MDC
Capital Funding Trust II (collectively, the "Trusts," and individually, each a
"Trust"). MDC will file an Amended and Restated Declaration of Trust (a
"Declaration") for each Trust, which will state the terms and conditions for
each Trust to issue and sell its capital securities ("Trust Capital Securities")
and common securities ("Trust Common Securities," and together with the Trust
Capital Securities, the "Trust Securities"). A form of Declaration is filed as
an exhibit to the registration statement of which this prospectus forms a part.
Each trust will exist solely to:
- - issue and sell its Trust Securities;
- - use the proceeds from the sale of its Trust Securities to purchase and hold
a series of MDC's senior or subordinated notes (the "Trust Debentures");
- - maintain its status as a grantor trust for federal income tax purposes; and
- - engage in other activities that are necessary or incidental to these
purposes.
MDC will purchase all of the Trust Common Securities of each Trust. The
Trust Common Securities will represent an aggregate liquidation amount equal to
at least 3% of each Trust's total capitalization. The Trust Capital Securities
will represent the remaining 97% of such Trust's total capitalization. The Trust
Common Securities will have terms substantially identical to, and will rank
equal in priority of payment with, the Trust Capital Securities. However, if MDC
defaults on the Trust Debentures, then cash distributions and liquidation,
redemption and other amounts payable on the Trust Common Securities will be
subordinate to the Trust Capital Securities in priority of payment.
MDC will guarantee the Trust Capital Securities as described later in this
prospectus.
6
MDC has appointed The First National Bank of Chicago as trustee to conduct
each Trust's business and affairs.
Only MDC, as owner of the Trust Common Securities, can remove or replace
the trustee. In addition, MDC can increase or decrease the number of trustees. A
majority of the trustees (the "Regular Trustees") of each Trust will be persons
who are employees or officers of or affiliated with the Company. One Trustee of
each Trust will be a financial institution which will be unaffiliated with the
Company and which shall act as property trustee and as indenture trustee for
purposes of the Trust Indenture Act of 1939 (the "Trust Indenture Act"),
pursuant to the terms set forth in a prospectus supplement (the "Property
Trustee"). In addition, unless the Property Trustee maintains a principal place
of business in the State of Delaware, and otherwise meets the requirements of
applicable law, another trustee of each Trust will either be a natural person
who is a resident of the State of Delaware or an entity which has its principal
place of business or reside in the State of Delaware (the "Delaware Trustee").
MDC will pay all fees and expenses related to each Trust and each offering of
the related Trust Capital Securities and will pay all ongoing costs and expenses
of each Trust, except such Trust's obligations under the related Trust
Securities. MDC will fully and unconditionally guarantee the payment of such
fees and expenses.
The Trusts will not have separate financial statements. The statements
would not be material to holders of the Trust Capital Securities because neither
Trust will have independent operations. Each Trust exists solely for the reasons
described above.
The Property Trustee will hold title to the Trust Debentures for the
benefit of the holders of the Trust Securities, and the Property Trustee will
have the power to exercise all rights, powers and privileges as the holder of
the Trust Debentures under the indenture pursuant to which the Trust Debentures
are issued (the "Debenture Indentures"). In addition, the Property Trustee will
maintain exclusive control of a segregated non-interest bearing bank account
(the "Property Account") to hold all payments made in respect of the Trust
Debentures for the benefit of the holders of the Trust Securities. The Property
Trustee will make payments of distributions and payments on liquidation,
redemption and otherwise to the holders of the Trust Securities out of funds
from the Property Account. The Guarantee Trustee (defined herein) will hold the
Trust Capital Securities Guarantee (defined herein) for the benefit of the
holders of the Trust Capital Securities. MDC, as the direct or indirect holder
of all the Trust Common Securities, will have the right to appoint, remove or
replace any Regular Trustee and to increase or decrease the number of Regular
Trustees. Holders of the Trust Common Securities will have the right to replace
the Property Trustee (or, upon the occurrence and continuance of an event of
default under the Declaration, the holders of a majority in liquidation amount
of the Trust Capital Securities), provided that the successor Property Trustee
shall be a corporation with trust powers organized under the laws of the United
States or any State thereof with a combined capital and surplus of at least $50
million. Pursuant to the Debenture Indenture, MDC, as borrower, will pay all
fees and expenses related to the Trusts and the offering of the Trust
Securities.
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The rights of the holders of the Trust Capital Securities, including
economic rights, rights to information and voting rights, are set forth in the
Declaration and the Delaware Business Trust Act (the "Trust Act"). The principal
place of business of the Trusts is c/o M.D.C. Holdings, Inc., 3600 S. Yosemite
Street, Suite 900, Denver, Colorado 80327, and its telephone number is (303)
773-1100.
USE OF PROCEEDS
Except as may otherwise be described in the prospectus supplement relating
to an offering of securities, the net proceeds from the sale of the securities
(including Trust Debentures issued to the Trusts in connection with the
investment by the Trusts of all of the proceeds from the sale of the Trust
Securities) offered pursuant to this prospectus and such prospectus supplement
(the "Offered Securities") will be used by the Company primarily in its real
estate acquisition and development and home-building activities . The remainder
of the net proceeds will be used for general corporate purposes. Any specific
allocation of the net proceeds of an offering of securities to a specific
purpose will be determined at the time of such offering and will be described in
the related prospectus supplement.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratios of earnings to fixed
charges for the periods shown:
Nine Months Ended
September 30, Fiscal Year Ended December 31,
------------------ ----------------------------------------------
1998 1997 1997 1996 1995 1994 1993
--------- -------- --------- -------- --------- -------- ---------
Ratio of earnings to fixed charges
(unaudited)(1) 4.67 2.29 2.55 2.02 1.79 1.81 1.71
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(1) In computing the ratio of earnings to fixed charges, fixed charges consist
of homebuilding and corporate interest expense plus (i) amortization and
expensing of debt expenses; (ii) amortization of discount or premium
relating to indebtedness; and (iii) capitalized interest. Earnings are
computed by adding fixed charges (except capitalized interest) and
amortization of previously capitalized interest during the period to pretax
earnings from continuing operations.
8
DESCRIPTION OF COMMON STOCK
MDC has authorized 100,000,000 shares of Common Stock, $.01 par value
("Common Stock").
At December 31, 1998, approximately 27,858,000 shares of the Common Stock
were issued and approximately 21,982,000 shares were outstanding. Holders of
shares of Common Stock are entitled to one vote for each share held of record on
matters submitted to a vote of stockholders. Holders of shares of the Common
Stock do not have cumulative voting rights in the election of directors to our
Board of Directors. The Board of Directors is divided into three classes, with
members of each class serving a three-year term.
A vote by the holders of a majority of shares of the Common Stock present
at a meeting at which a quorum is present is necessary to take action, except
for certain extraordinary matters which require the approval of the holders of
80% of the outstanding shares of voting stock. In addition, the holders of 80%
of the shares of outstanding voting stock must approve any of the following
matters, unless approved by a majority of Continuing Directors (as defined in
the Certificate of Incorporation) or unless certain minimum price and procedural
requirements are met:
(1) certain Business Combinations (as defined in our Certificate of
Incorporation) must be approved by the holders of 80% of the
shares of outstanding voting stock, unless approved by a majority
of Continuing Directors (as defined in the Certificate of
Incorporation) or unless certain minimum price and procedural
requirements are met. The types of Business Combinations a merger
or consolidation of the Company with any holder (directly or
indirectly) of more than 10% of the outstanding shares of voting
stock of the Company (an "Interested Stockholder") or certain
related parties;
(2) the sale or other disposition by the Company of any assets or
securities to an Interested Stockholder involving assets or
securities having a value of $15,000,000 or more than 15% of the
book value of the total assets or 15% of the stockholders' equity
of the Company; the adoption of any plan or proposal for the
liquidation or dissolution of the Company;
(3) the adoption of any amendment to our Bylaws; or
(4) any reclassification of securities, recapitalization, merger with
a subsidiary or other transaction which has the effect of
increasing an Interested Stockholder's proportionate ownership of
the capital stock of the Company)
9
involving the Company and an Interested Stockholder. In the case
of any Business Combination involving payments to holders of
shares of the Common Stock, the fair market value per share of
such payments would have to be at least equal to the highest
value determined under the following alternatives: (i) the
highest price per share of the Common Stock paid by or on behalf
of the Interested Stockholder during the two years prior to the
public announcement of the proposed Business Combination (the
"Announcement Date") or in the transaction in which it became an
Interested Stockholder, whichever is higher; and (ii) the fair
market value per share of the Common Stock on the Announcement
Date or on the date on which the Interested Stockholder became an
Interested Stockholder, whichever is higher. "Fair market value"
is defined in the Certificate of Incorporation to mean, in the
case of exchange-listed or Nasdaq-quoted stock, the highest
closing price or closing bid in the 30 days preceding the date in
question, and, in the case of other property, the fair market
value as determined by a majority of the Continuing Directors.
Subject to the preferences applicable to any outstanding shares of
Preferred Stock of the Company, holders of shares of Common Stock are entitled
to dividends when declared by the Board of Directors of the Company from funds
legally available therefor and are entitled, in the event of liquidation, to
share ratably in all assets remaining after payment of liabilities. The shares
of Common Stock are neither redeemable nor convertible, and the holders of
Common Stock have no preemptive or subscription rights to purchase any
securities of the Company. All issued and outstanding shares of Common Stock are
validly issued, fully paid and nonassessable.
The transfer agent and registrar for the Common Stock is Continental Stock
Transfer & Trust Company, New York, New York.
DESCRIPTION OF PREFERRED STOCK
The following description of the Company's preferred stock, par value $.01
per share ("Preferred Stock"), is not complete. You should look at our
Certificate of Incorporation and By-laws.
GENERAL
Under the Certificate of Incorporation, the Company has authority to issue
up to 25 million shares of Preferred Stock, none of which were issued and
outstanding as of December 31, 1998. Shares of Preferred Stock may be issued
from time to time, in one or more series, as authorized by our Board of
Directors with any terms, preferences, conversion or other rights,
10
voting powers, restrictions, limitations as to dividends or other distributions,
qualifications and terms or conditions of redemption as are determined by our
Board of Directors and permitted by Delaware law. At such time as our Board of
Directors determines the terms of the Preferred Stock, such terms will be set
forth in a Certificate of Designations to be filed with the Secretary of State
of Delaware. Upon filing, the Certificate of Designations will constitute an
amendment to the Certificate of Incorporation pursuant to the Delaware General
Corporation Law (the "DGCL"). The Preferred Stock will, when issued, be fully
paid and nonassessable and will have no preemptive rights. Our Board of
Directors may authorize the issuance of Preferred Stock with terms and
conditions that could have the effect of discouraging a takeover or other
transaction that holders of Common Stock might believe to be in their best
interests or in which holders of some, or a majority, of the shares of Common
Stock might receive a premium for their shares over the then market price of
such shares of Common Stock.
TERMS
The terms of each series of Preferred Stock will be described in any
prospectus supplement related to such series of Preferred Stock and may include
the following:
(1) the title and stated value of such Preferred Stock;
(2) the number of shares of such Preferred Stock offered and the
offering price and liquidation preference per share of such
Preferred Stock;
(3) the dividend rate(s), period(s) and/or payment date(s) or
method(s) of calculation thereof applicable to such Preferred
Stock;
(4) the date from which dividends on such Preferred Stock shall
accumulate, if applicable;
(5) the procedures for any auction and remarketing, if any, for such
Preferred Stock;
(6) the provision for a sinking fund, if any, for such Preferred
Stock;
(7) the provision for redemption, if applicable, of such Preferred
Stock;
(8) any voting rights of holders of such Preferred Stock;
(9) any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Stock;
11
(10) the relative ranking and preference of such Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or
winding up of the affairs of the Company;
(11) any limitations on issuance of any series of Preferred Stock
ranking senior to or on a parity with such series of Preferred
Stock as to dividend rights and rights upon liquidation,
dissolution or winding up of the affairs of the Company; and
(12) the terms and conditions, if applicable, upon which such
Preferred Stock will be convertible into or participate in
dividends, if any, paid on the Common Stock, including the
conversion price (or manner of calculation thereof).
TRANSFER AGENT
The transfer agent and registrar for the Preferred Stock will be identified
in the applicable prospectus supplement.
DESCRIPTION OF THE TRUST CAPITAL SECURITIES
Each Trust may issue only one series of Trust Capital Securities having
terms described in the prospectus supplement relating thereto. The Declaration
of each Trust authorizes the Regular Trustees of such Trust to cause such Trust
to issue one series of Trust Capital Securities. Each Declaration will be
qualified as an indenture under the Trust Indenture Act. The Trust Capital
Securities will have such terms, including distributions, redemption, voting,
liquidation rights and such other preferred, deferred or other special rights or
such restrictions as shall be set forth in each Declaration or made part of each
Declaration by the Trust Indenture Act and the Trust Act. Reference is made to
the prospectus supplement relating to the Trust Capital Securities of a Trust
for specific terms, including:
(1) the distinctive designation of such Trust Capital Securities;
(2) the number of Trust Capital Securities issued by such Trust;
(3) the annual distribution rate (or method of deter mining such
rate) for Trust Capital Securities issued by such Trust and the
date or dates upon which such distributions shall be payable;
provided, however, that distributions on such Trust Capital
Securities shall be payable on a quarterly basis to
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holders of Trust Capital Securities as of a record date in each
quarter during which such Trust Capital Securities are
outstanding;
(4) whether distributions on Trust Capital Securities issued by such
Trust shall be cumulative, and, in the case of Trust Capital
Securities having such cumulative distribution rights, the
date(s) or method of determining the date(s) from which
distributions on Trust Capital Securities issued by such Trust
shall be cumulative;
(5) the amount(s) which shall be paid out of the assets of such Trust
to purchase or redeem Trust Capital Securities issued by such
Trust and the price(s) at which, the period(s) within which, and
the terms and conditions upon which, Trust Capital Securities
issued by such Trust shall be purchased or redeemed, in whole or
in part, pursuant to such obligation;
(6) the voting rights, if any, of Trust Capital Securities issued by
such Trust in addition to those required by law, including any
requirement for the approval by the holders of Trust Capital
Securities, or of Trust Capital Securities issued by one or more
Trusts, or of both, as a condition to specified action or
amendments to the Declaration of such Trust; and
(7) any other relevant rights, preferences, privileges, limitations
or restrictions of Trust Capital Securities issued by such Trust
not inconsistent with the Declaration of such Trust or with
applicable law. All Trust Capital Securities offered hereby will
be guaranteed by the Company as described under "Description of
the Trust Capital Securities Guarantees" below. Any applicable
United States federal income tax considerations applicable to any
offering of Trust Capital Securities will be described in the
prospectus supplement relating thereto.
In connection with the issuance of Trust Capital Securities, each Trust
will issue one series of Trust Common Securities. The Declaration of each Trust
authorizes the Regular Trustees of such Trust to issue on behalf of such Trust
one series of Trust Common Securities having such terms including distributions,
redemption, voting, liquidation rights or such restrictions as shall be set
forth therein. The terms of the Trust Common Securities issued by a Trust will
be substantially identical to the terms of the Trust Capital Securities issued
by such Trust and the Trust Common Securities will rank pari passu, and payments
will be made thereon pro rata, with the Trust Capital Securities except that,
upon an event of default under the Declaration, the rights of the holders of
13
the Trust Common Securities to payment in respect of distributions and payments
upon liquidation, redemption and otherwise will be subordinated to the rights of
the holders of the Trust Capital Securities. All of the Trust Common Securities
of a Trust will be directly or indirectly owned by the Company.
DESCRIPTION OF THE TRUST CAPITAL SECURITIES GUARANTEES
Set forth below is a summary of information concerning the guarantees of
the Trust Capital Securities (the "Trust Capital Securities Guarantees") which
will be executed and delivered by the Company for the benefit of the holders
from time to time of Trust Capital Securities. Each Trust Capital Securities
Guarantee will be qualified as an indenture under the Trust Indenture Act.
Initially, The First National Bank of Chicago will act as indenture trustee
under each Trust Capital Securities Guarantee (the "Guarantee Trustee"). The
terms of each Trust Capital Securities Guarantee will be those set forth in such
Trust Capital Securities Guarantee and the prospectus supplement relating
thereto and those made part of such Trust Capital Securities Guarantee by the
Trust Indenture Act. The following summary does not purport to be complete and
is subject in all respects to the provisions of, and is qualified in its
entirety by reference to, the form of Trust Capital Securities Guarantee, which
is filed as an exhibit to the Registration Statement of which this prospectus
forms a part, the Trust Indenture Act and the prospectus supplement relating
thereto. Each Trust Capital Securities Guarantee will be held by the Guarantee
Trustee for the benefit of the holders of the Trust Capital Securities of the
applicable Trust.
GENERAL
Pursuant to each Trust Capital Securities Guarantee, the Company will
irrevocably and unconditionally agree to pay in full the Guarantee Payments (as
defined herein) (except to the extent paid by such Trust), to the holders of the
Trust Capital Securities issued by a Trust, as and when due, regardless of any
defense, right to set-off or counterclaim which such Trust may have or assert.
The following payments with respect to Trust Capital Securities issued by a
Trust, to the extent not paid by such Trust (the "Guarantee Payments"), will be
subject to the Trust Capital Securities Guarantee thereon (without duplication):
(1) any accrued and unpaid distributions which are required to be
paid on such Trust Capital Securities, to the extent such Trust
shall have funds available therefor;
(2) the redemption price, including all accrued and unpaid
distributions to the redemption date (the "Redemption Price"), to
the extent such Trust has funds available therefor, with respect
to any Trust Capital Securities called for redemption by such
Trust; and
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(3) upon a voluntary or involuntary termination, dissolution or
winding-up of such Trust (other than in connection with the
distribution of Trust Debentures to the holders of Trust Capital
Securities in exchange for their Trust Capital Securities), the
lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid distributions on such Trust Capital Securities
to the date of payment and (b) the amount of assets of such Trust
remaining available for distribution to holders of such Trust
Capital Securities in liquidation of such Trust.
The Company's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Company to the holders of Trust
Capital Securities or by causing the applicable Trust to pay such amounts to
such holders.
Each Trust Capital Securities Guarantee will be a full and unconditional
guarantee with respect to the Trust Capital Securities issued by the applicable
Trust from the time of issuance of such Trust Capital Securities, but will not
apply to any payments or distributions when the Trust does not have sufficient
funds available to make such payments or distributions. If the Company does not
make interest payments on the Trust Debentures purchased by a Trust, such Trust
will not pay distributions on the Trust Capital Securities issued by such Trust
and will not have funds available therefor. See "Description of the Debt
Securities--Certain Covenants."
The Company has also agreed separately to guarantee the obligations of the
Trusts with respect to the Trust Common Securities (the "Trust Common Securities
Guarantees") to the same extent as the Trust Capital Securities Guarantee,
except that upon the occurrence and during the continuation of an event of
default under the Declaration, holders of Trust Capital Securities shall have
priority over holders of Trust Common Securities with respect to distributions
and payments on liquidation, redemption or otherwise.
CERTAIN COVENANTS OF THE COMPANY
In each Trust Capital Securities Guarantee, the Company will make certain
covenants that will be described in the prospectus supplement. The covenants
will remain in place so long as any Trust Capital Securities issued by the
applicable Trust remain outstanding. These covenants may provide that if any
event that would constitute an event of default shall exist under such Trust
Capital Securities Guarantee or the Declaration of such Trust, then certain
restrictions would be imposed on the Company.
MODIFICATION OF THE TRUST CAPITAL SECURITIES GUARANTEES; ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of Trust Capital Securities (in which case no vote will be required),
each Trust Capital Securities
15
Guarantee may be amended only with the prior approval of the holders of not less
than a majority in aggregate liquidation amount of the outstanding Trust Capital
Securities issued by the applicable Trust. The manner of obtaining any such
approval of holders of such Trust Capital Securities will be as set forth in an
accompanying prospectus supplement. All guarantees and agreements contained in a
Trust Capital Securities Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Company and shall inure to the
benefit of the holders of the Trust Capital Securities then outstanding of the
applicable Trust.
TERMINATION
Each Trust Capital Securities Guarantee will terminate as to the Trust
Capital Securities issued by the applicable Trust upon full payment of the
Redemption Price of all Trust Capital Securities of such Trust, upon
distribution of the Trust Debentures held by such Trust to the holders of the
Trust Capital Securities of such Trust in liquidation of such holders' interest
in such Trust Capital Securities or upon full payment of the amounts payable in
accordance with the Declaration of such Trust upon liquidation of such Trust.
Each Trust Capital Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of Trust Capital
Securities issued by the applicable Trust must restore payment of any sums paid
under such Trust Capital Securities or such Trust Capital Securities Guarantee.
EVENTS OF DEFAULT
An event of default under a Trust Capital Securities Guarantee will occur
upon the failure of the Company to perform any of its payment or other
obligations thereunder. The holders of a majority in liquidation amount of the
Trust Capital Securities relating to such Trust Capital Securities Guarantee
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee in respect of such Trust
Capital Securities Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under such Trust Capital Securities
Guarantee. If the Guarantee Trustee fails to enforce such Trust Capital
Securities Guarantee, any holder of Trust Capital Securities relating to such
Trust Capital Securities Guarantee may institute a legal proceeding directly
against the Company to enforce the Guarantee Trustee's rights under such Trust
Capital Securities Guarantee, without first instituting a legal proceeding
against the relevant Trust, the Guarantee Trustee or any other person or entity.
In addition, any record holder of Trust Capital Securities relating to such
Trust Capital Securities Guarantee shall have the right, which is absolute and
unconditional, to proceed directly against the Company to obtain Guarantee
Payments thereunder, without first waiting to determine if the Guarantee Trustee
has enforced such Trust Capital Securities Guarantee or instituting a legal
proceeding against the Trust which issued such Trust Capital Securities, the
Guarantee Trustee or any other person or entity.
16
STATUS OF THE TRUST CAPITAL SECURITIES GUARANTEES
Unless otherwise set forth in the applicable prospectus supplement, the
Trust Capital Securities Guarantees will constitute unsecured obligations of the
Company. The ranking of the Trust Capital Securities Guarantees, including
subordination, if any, will be set forth in the prospectus supplement relating
thereto. The terms of the Trust Capital Securities provide that each holder of
Trust Capital Securities issued by such Trust by acceptance thereof agrees to
the terms of the Trust Capital Securities Guarantee relating thereto.
The Trust Capital Securities Guarantees will constitute a guarantee of
payment and not of collection. This means the guaranteed party may institute a
legal proceeding directly against the guarantor to enforce its rights under the
guarantee without instituting a legal proceeding against any other person or
entity.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with respect to
a Trust Capital Securities Guarantee, undertakes to perform only such duties as
are specifically set forth in such Trust Capital Securities Guarantee and, after
default, shall exercise the same degree of care as a prudent individual would
exercise in the conduct of his or her own affairs. Subject to such provisions,
the Guarantee Trustee is under no obligation to exercise any of the powers
vested in it by the Trust Capital Securities Guarantee at the request of any
holder of Trust Capital Securities, unless offered reasonable indemnity against
the costs, expenses and liabilities which might be incurred thereby.
The Guarantee Trustee may serve as trustee under other indentures pursuant
to which unsecured debt securities, including the Trust Debentures, of the
Company may be issued.
GOVERNING LAW
The Trust Capital Securities Guarantees will be governed by and construed
in accordance with the internal laws of the State of New York.
DESCRIPTION OF THE DEBT SECURITIES
GENERAL
The Debt Securities will be direct unsecured obligations of the Company and
may be senior Debt Securities ("Senior Debt Securities"), senior subordinated
Debt Securities ("Senior Subordinated Debt Securities") or junior subordinated
Debt Securities ("Junior Subordinated
17
Debt Securities"). The Debt Securities will be issued under one or more
indentures, each dated as of a date prior to the issuance of the Debt Securities
to which the indenture relates. Senior Debt Securities, Senior Subordinated Debt
Securities and Junior Subordinated Debt Securities may be issued pursuant to
separate indentures (respectively, a "Senior Indenture", a "Senior Subordinated
Indenture" and a "Junior Subordinated Indenture"), in each case between the
Company and a trustee (the "Trustee"), which may be the same Trustee, and in the
form that has been filed as an exhibit to the Registration Statement of which
this prospectus is a part, subject to such amendments or supplements as may be
adopted from time to time. The Senior Indenture, the Senior Subordinated
Indenture and the Junior Subordinated Indenture, as amended or supplemented from
time to time, are sometimes hereinafter referred to individually as an
"Indenture" and collectively as the "Indentures." The Indentures will be subject
to and governed by the Trust Indenture Act of 1939, as amended (the "TIA"). The
statements made relating to the Debt Securities and the Indentures are summaries
of the anticipated provisions thereof, do not purport to be complete and are
qualified in their entirety by reference to the Indentures, the applicable
prospectus supplements and such Debt Securities.
Capitalized terms used herein and not defined shall have the meanings
assigned to them in the applicable Indenture.
TRUST DEBENTURES
The Company may issue Debt Securities to one or both of the Trusts ("Trust
Debentures") which would purchase such Debt Securities with the proceeds from
the issuance and sale of its Trust Common Securities and Trust Capital
Securities. The terms of Trust Debentures would be set forth in a prospectus
supplement.
If provided in the applicable prospectus supplement, in certain
circumstances, Trust Debentures purchased by a Trust may be distributed pro rata
to the holders of Trust Securities of such Trust in connection with the
dissolution of Trust upon the occurrence of certain events described in this
prospectus or in the prospectus supplement relating to the Trust Securities.
Only one series of Trust Debentures will be issued to each Trust or a Regular
Trustee of such Trust in connection with the issuance of Trust Securities by
such Trust.
If provided in the applicable prospectus supplement, the Company shall have
the right, at any time and from time to time during the term of the Trust
Debentures, to defer the payment of interest for such number of consecutive
interest payment periods as may be specified in the applicable prospectus
supplement, subject to the terms, conditions and covenants, if any, specified in
such prospectus supplement, provided that such extension period may not extend
beyond the stated maturity of the final installment of principal of the Trust
Debentures. Certain material United States federal income tax consequences and
special considerations applicable to the Trust Debentures will be described in
the applicable prospectus supplement.
18
TERMS
The Debt Securities will be direct, unsecured obligations of the Company.
The indebtedness represented by Senior Subordinated Debt Securities or Junior
Subordinated Debt Securities will be subordinated in right of payment to the
prior payment in full of senior indebtedness of the Company. The particular
terms of the Debt Securities (including any Trust Debentures) offered by a
prospectus supplement and any applicable federal income tax considerations will
be described in the applicable prospectus supplement. Accordingly, for a
description of the terms of any series of Debt Securities, reference must be
made to both the prospectus supplement relating thereto and the description of
the Debt Securities set forth in this prospectus.
Except as set forth in any prospectus supplement, the Debt Securities may
be issued without limit as to aggregate principal amount, in one or more series.
Specific terms of each series of Debt Securities will be contained in
authorizing resolutions or a supplemental indenture and described in an
applicable prospectus supplement. All Debt Securities of one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the holders of the Debt Securities of such
series, for issuance of additional Debt Securities of such series.
The prospectus supplement relating to the series of Debt Securities being
offered will describe the specific terms of the Debt Securities (including any
Trust Debentures). These terms may include some of the following:
(1) the title of such Debt Securities and whether such Debt
Securities are Senior Debt Securities, Senior Subordinated Debt
Securities or Junior Subordinated Debt Securities;
(2) the aggregate principal amount of such Debt Securities and any
limit on such aggregate principal amount;
(3) the price (expressed as a percentage of the principal amount
thereof) at which such Debt Securities will be issued and, if
other than the principal amount thereof, the portion of the
principal amount thereof payable upon declaration of acceleration
of the maturity thereof, or (if applicable) the portion of the
principal amount of such Debt Securities that is convertible into
Common Stock or Preferred Stock, and the method by which any such
portion shall be determined;
(4) if convertible or exchangeable, the terms on which such Debt
Securities are convertible or exchangeable, including the initial
conversion or exchange price or rate and the conversion or
exchange period and any
19
applicable limitations on the ownership or transferability of the
Common Stock or Preferred Stock or other securities receivable on
conversion or exchange;
(5) the date(s), or the method for determining such date(s), on which
the principal of such Debt Securities will be payable;
(6) the rate(s) (which may be fixed or variable), or the method by
which such rate(s) shall be determined, at which such Debt
Securities will bear interest, if any;
(7) the date(s), or the method for determining such date(s), from
which any such interest will accrue, the date(s) on which any
such interest will be payable, the record date(s) for such
interest payments, or the method by which such date(s) shall be
determined, the persons to whom such interest shall be payable,
and the basis upon which interest shall be calculated if other
than that of a 360-day year of twelve 30-day months;
(8) the right, if any, of the Company to defer or extend the date(s)
on which interest shall be payable;
(9) the place(s) where the principal of and interest, if any, on such
Debt Securities will be payable, where such Debt Securities may
be surrendered for registration of transfer or exchange and where
notices or demands to or upon the Company in respect of such Debt
Securities and the applicable Indenture may be served;
(10) the period(s), if any, within which, the price(s) at which, and
the other terms and conditions upon which, such Debt Securities
may, pursuant to any optional or mandatory redemption provisions,
be redeemed, as a whole or in part, at the option of the Company;
(11) the obligation, if any, of the Company to redeem, repay or
purchase such Debt Securities pursuant to any sinking fund or
analogous provision or at the option of a holder thereof, and the
period(s) within which, the price or prices at which and the
other terms and conditions upon which such Debt Securities will
be redeemed, repaid or purchased, as a whole or in part, pursuant
to such obligation;
20
(12) any changes to the Events of Default of the Company with respect
to Debt Securities of the series, whether or not such Events of
Default are consistent with the Events of Default described
herein;
(13) the applicability, if any, of the defeasance and covenant
defeasance provisions of the Indenture to the Debt Securities of
the series; and
(14) any other terms of the series (which terms shall not be
inconsistent with the provisions of the Indenture under which the
Debt Securities are issued).
If so provided in the applicable prospectus supplement, the Debt Securities
may be issued at a discount below their principal amount and provide for less
than the entire principal amount thereof to be payable upon declaration of
acceleration of the maturity thereof ("Original Issue Discount Securities"). In
such cases, all material U.S. federal income tax, accounting and other
considerations applicable to Original Issue Discount Securities will be
described in the applicable prospectus supplement.
Except as may be set forth in any prospectus supplement, the Debt
Securities will not contain any provisions that would limit the ability of the
Company to incur indebtedness or that would afford holders of Debt Securities
protection in the event of a highly leveraged or similar transaction involving
the Company or in the event of a change of control. The applicable prospectus
supplement will contain information with respect to any deletions from,
modifications of, or additions to, the events of default or covenants of the
Company that are described below, including any addition of a covenant or other
provision providing event risk or similar protection.
CERTAIN COVENANTS
The applicable prospectus supplement will describe any material covenants
to which a series of Debt Securities will be subject.
EVENTS OF DEFAULT, NOTICE AND WAIVER
The applicable prospectus supplement and each Indenture will provide the
events that constitute "Events of Default" with respect to any series of Debt
Securities issued thereunder, including the following:
(1) default in the payment of any interest on any Debt Security of
such series when such interest becomes due and payable that
continues for a period of 30 days;
21
(2) default in the payment of the principal of any Debt Security of
such series when due and payable;
(3) default in the performance, or breach of any other covenant or
warranty of the Company in the applicable Indenture with respect
to the Debt Securities of such series and continuance of such
default or breach for a period of 90 days after written notice as
provided in the Indenture; and (4) any other event of default
provided with respect to a particular series of Debt Securities.
If an Event of Default under any Indenture occurs and is continuing, then
the applicable Trustee or the holders of not less than 25% in principal amount
of the Debt Securities of that series will have the right to declare the
principal amount (or, if the Debt Securities of that series are Original Issue
Discount Securities or indexed securities, such portion of the principal amount
as may be specified in the terms thereof) of all the Debt Securities of that
series to be due and payable immediately by written notice thereof to the
Company (and to the applicable Trustee if given by the holders). However, at any
time after such a declaration of acceleration with respect to Debt Securities of
such series has been made, but before a judgment or decree for payment of the
money due has been obtained by the applicable Trustee, the holders of not less
than a majority of the principal amount of outstanding Debt Securities of such
series may rescind and annul the acceleration if all conditions set forth in the
applicable Indenture are met. The Indentures also will provide that the holders
of not less than a majority of the principal amount of the outstanding Debt
Securities of any series may waive any past default with respect to such series
and its consequences, except a default (1) in the payment of the principal of or
interest on any Debt Security of such series or (2) in respect of a covenant or
provision contained in the applicable Indenture that cannot be modified or
amended without the consent of the holder of each outstanding Debt Security
affected thereby.
The Indentures will provide for other procedures that may be followed by
holders of Debt Securities, the Trustee of any series of Debt Securities, or
both, upon the occurrence of an Event of Default.
MODIFICATION OF THE INDENTURES
Modifications and amendments of an Indenture will be permitted only with
the consent of the holders of not less than a majority in principal amount of
all outstanding Debt Securities issued under such Indenture affected by such
modification or amendment. No such modification or amendment may, without the
consent of the holder of each such Debt Security affected thereby:
22
(1) reduce the amount of Debt Securities whose holders must consent
to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest,
including defaulted interest, on any Debt Security;
(3) reduce the principal of or change the fixed maturity of any Debt
Security or alter the provisions (including related definitions)
with respect to redemption of Debt Securities or with respect to
any obligations on the part of the Company to offer to purchase
or to redeem Debt Securities;
(4) modify the ranking or priority of the Debt Securities or any
guarantee thereof;
(5) release any guarantor from any of its obligations under its
guarantee otherwise than in accordance with the terms of the
applicable Indenture;
(6) waive a continuing default or Event of Default in the payment of
the principal of or interest on any Debt Security; or
(7) make any Debt Security payable at a place or in money other than
that stated in the Debt Security, or impair the right of any
holder of Debt Securities to bring suit.
The holders of a majority in aggregate principal amount of the outstanding
Debt Securities of each series may, on behalf of all holders of Debt Securities
of that series, waive, insofar as that series is concerned, compliance by the
Company with certain restrictive covenants of the applicable Indenture.
Certain modifications and amendments of an Indenture will be permitted to
be made by the Company and the respective Trustee thereunder without the consent
of any holder of Debt Securities as set forth in the applicable Indenture and as
described in the applicable prospectus supplement.
SUBORDINATION
Senior Subordinated Debt Securities and Junior Subordinated Debt
Securities, if any, will be subject to the subordination provisions set forth in
the applicable prospectus supplement.
If this prospectus is being delivered in connection with a series of Senior
Subordinated Debt Securities and Junior Subordinated Debt Securities, the
accompanying prospectus supplement or the information incorporated herein by
reference will set forth the approximate amount
23
of Senior Indebtedness (as defined in the applicable Indenture) outstanding as
of the end of the Company's most recent fiscal quarter.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise specified in the applicable prospectus supplement, when,
among other things, all Debt Securities of a series not previously delivered to
the applicable Trustee for cancellation (1) have become due and payable or (2)
will become due and payable at their stated maturity within one year, and the
Company deposits or causes to be deposited with such Trustee, as trust funds in
trust for the purpose, an amount in the currency or currencies in which such
series of Debt Securities are payable sufficient to pay and discharge the entire
indebtedness on such series of Debt Securities not previously delivered to such
Trustee for cancellation, for the principal (and premium, if any) and interest
to the date of the deposit or to the stated maturity, as the case may be, then
the applicable Indenture will cease to be of further effect with respect to such
series (except as to the Company's obligations to pay all other sums due
pursuant to such Indenture, rights of registration of transfer or exchange of
Debt Securities and rights with respect to temporary, and mutilated, lost or
destroyed Debt Securities), and the Company will be deemed to have satisfied and
discharged such Indenture with respect to such series.
The Indentures will provide that, unless otherwise indicated in the
applicable prospectus supplement, the Company may elect either (a) to defease
and be discharged from any and all obligations with respect to any series of
Debt Securities (except for the obligations to register the transfer or exchange
of such Debt Securities, to replace temporary or mutilated, destroyed, lost or
stolen Debt Securities, to maintain an office or agency in respect of such Debt
Securities, and to hold moneys for payment in trust) ("defeasance") or (b) to be
released from certain obligations with respect to such Debt Securities under the
applicable Indenture or, if provided in the applicable prospectus supplement,
its obligations with respect to any other covenant, and any omission to comply
with such obligations shall not constitute an Event of Default with respect to
such Debt Securities ("covenant defeasance"), in either case upon the
irrevocable deposit by the Company with the applicable Trustee, in trust, of an
amount, which through the scheduled payment of principal and interest in
accordance with their terms will provide money in an amount sufficient to pay
the principal of and interest on such Debt Securities, and any mandatory sinking
fund or analogous payments thereon, on the scheduled due dates therefor.
Such a trust will be permitted to be established only if, among other
conditions, the Company has delivered to the applicable Trustee an opinion of
counsel to the effect that the holders of such Debt Securities will not
recognize income, gain or loss for U.S. federal income tax purposes as a result
of such defeasance or covenant defeasance and will be subject to U.S. federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance or covenant defeasance had not
occurred. In the event of such defeasance, the
24
holders of such Debt Securities would thereafter be able to look only to such
trust fund for payment of principal and interest.
The applicable prospectus supplement may further describe the provisions
and additional conditions, if any, permitting such defeasance or covenant
defeasance, including any modifications to the provisions described above, with
respect to the Debt Securities or a particular series.
BOOK-ENTRY SYSTEM
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities ("Global Securities"). Global Securities
will be deposited with, or on behalf of, a depository (the "Depository")
identified in the prospectus supplement relating to such series. Global
Securities, if any, issued in the United States are expected to be deposited
with The Depository Trust Company ("DTC"). Global Securities may be issued in
fully registered form and may be issued in either temporary or permanent form.
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 Depository for such Global Security to a nominee of such
Depository or by a nominee of such Depository to such Depository or another
nominee of such Depository or by such Depository or any nominee of such
Depositor to a successor Depository or any nominee of such successor. The
specific terms of the depository arrangement with respect to a series of Debt
Securities will be described in the prospectus supplement relating to such
series.
PAYMENT AND PAYING AGENTS
Unless otherwise specified in the applicable prospectus supplement, the
principal of and interest on any series of Debt Securities will be payable at
the corporate trust office of the Trustee, the address of which will be stated
in the applicable prospectus supplement; provided that, at the option of the
Company, payment of interest may be made by check mailed to the address of the
person entitled thereto as it appears in the applicable register for such Debt
Securities or by wire transfer of funds to such person at an account maintained
within the United States.
All moneys paid by the Company to a paying agent or a Trustee for the
payment of the principal of or interest on any Debt Security which remain
unclaimed at the end of two years after such payment has become due and payable
will be repaid to the Company, and the holder of such Debt Security thereafter
may look only to the Company for payment thereof.
25
RELATIONSHIP AMONG THE TRUST CAPITAL SECURITIES, THE TRUST
DEBENTURES AND THE TRUST CAPITAL SECURITIES GUARANTEE
As set forth in their respective Declarations, the sole purpose of each
Trust is to issue the Trust Securities evidencing undivided beneficial ownership
interests in the assets of such Trust, and to invest the proceeds from such
issuance and sale in the Trust Debentures.
As long as payments of interest and other payments are made when due on the
Trust Debentures, such payments will be sufficient to cover distributions and
payments due on the Trust Securities because of the following factors:
(1) the aggregate principal amount of Trust Debentures will be equal
to the sum of the aggregate stated liquidation amount of the
Trust Securities;
(2) the interest rate and the interest and other payment dates on the
Trust Debentures will match the distribution rate and
distribution and other payment dates for the Trust Capital
Securities;
(3) pursuant to the Debenture Indenture, the Company, as borrower,
shall pay, and neither of the Trusts shall be obligated to pay,
directly or indirectly, all of their respective costs, expenses,
debts and obligations (other than with respect to the Trust
Securities); and
(4) the Declaration of each Trust further provides that the Trustees
thereof shall not take or cause or permit such Trust to, among
other things, engage in any activity that is not consistent with
the purposes of such Trust.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Trust Capital Securities (to the extent funds therefor
are available) are guaranteed by the Company as and to the extent set forth
under "Description of the Trust Capital Securities Guarantee." If the Company
does not make interest payments on the Trust Debentures purchased by either of
the Trusts, it is expected that such Trust will not have sufficient funds to pay
distributions on its Trust Capital Securities. The Trust Capital Securities
Guarantee is a full guarantee with respect to the Trust Capital Securities
issued by the Trusts from the time of their issuance but does not apply to any
payment of distributions unless and until the Trust which has issued such Trust
Capital Securities has sufficient funds for the payment of such distributions.
The Trust Capital Securities Guarantee covers the payment of distributions and
other payments on the Trust Capital Securities only if and to the extent that
the Company has made a payment of interest or principal on the Trust Debentures
held by the Trust which has issued such Trust Capital Securities as its sole
asset. The Trust Capital Securities Guarantee, when taken together with the
26
Company's obligations under the Trust Debentures, the Debenture Indenture and
the respective Declaration of each of the Trusts, including the Company's
obligations to pay costs, expenses, debts and liabilities of each of the Trusts
(other than with respect to the Trust Securities), provides a full and
unconditional guarantee of amounts payable on the Trust Capital Securities.
Notwithstanding anything to the contrary in the Debenture Indenture, the
Company has the right to set-off any payment it is otherwise required to make
under the Debenture Indenture with and to the extent the Company has already
made, or is concurrently on the date of such payment making, a payment under the
Trust Capital Securities Guarantee.
If the Guarantee Trustee fails to enforce the Trust Capital Securities
Guarantee, a holder of a Trust Capital Security may institute a legal proceeding
directly against the Company to enforce its rights under the Trust Capital
Securities Guarantee without first instituting a legal proceeding against the
Guarantee Trustee, the Trust which has issued such Trust Capital Securities or
any other person or entity.
The Trust Capital Securities of an issuing Trust evidence undivided
beneficial ownership interests in the assets of such Trust. A principal
difference between the rights of a holder of a Trust Capital Security and a
holder of a Trust Debenture is that a holder of a Trust Debenture will accrue,
and (subject to the permissible extension of the interest period) is entitled to
receive, interest on the principal amount of Trust Debentures held, while a
holder of Trust Capital Securities of either of the Trusts is entitled to
receive distributions only if and to the extent the Trust which has issued such
Trust Capital Security has funds available for the payment of such
distributions.
Upon any voluntary or involuntary dissolution of either of the Trusts
involving the liquidation of the Trust Debentures, the holders of Trust Capital
Securities of such Trust will be entitled to receive, out of assets held by such
Trust, the Liquidation Distribution in cash. See "Description of the Trust
Capital Securities." Upon any voluntary or involuntary liquidation or bankruptcy
of the Company, the Property Trustee as holder of the Trust Debentures would be
entitled to receive payment in full of principal and interest, before any
stockholders of the Company receive payments or distributions.
DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, including contracts
obligating holders to purchase from the Company, and the Company to sell to the
holders, a specified number of shares of Common Stock at a future date or dates
("Stock Purchase Contracts"). The consideration
27
per share of Common Stock may be fixed at the time the Stock Purchase Contracts
are issued or may be determined by reference to a specific formula set forth in
the Stock Purchase Contracts. The Stock Purchase Contracts may be issued
separately or as part of units consisting of a Stock Purchase Contract and Debt
Securities, Trust Capital Securities or debt obligations of third parties,
including U.S. Treasury securities, securing the holders' obligations to
purchase the Common Stock under the Stock Purchase Contracts ("Stock Purchase
Units"). The Stock Purchase Contracts may require the Company to make periodic
payments to the holders of the Stock Purchase Units or vice versa, and such
payments may be unsecured or prefunded on some basis. The Stock Purchase
Contracts may require holders to secure their obligations thereunder in a
specified manner.
The applicable prospectus supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units. The description in the prospectus
supplement will not necessarily be complete, and reference will be made to the
Stock Purchase Contracts, and, if applicable, collateral or depositary
arrangements, relating to such Stock Purchase Contracts or Stock Purchase Units.
Certain material United States federal income tax considerations applicable to
the Stock Purchase Units and the Stock Purchase Contracts will be discussed in
the prospectus supplement relating thereto.
BOOK-ENTRY ISSUANCE
Unless otherwise specified in the applicable prospectus supplement, The
Depositary Trust Company ("DTC") will act as depositary for Securities issued in
the form of Global Securities. Such Securities will be issued only as
fully-registered securities registered in the name of Cede & Co. (DTC's
nominee). One or more fully-registered Global Securities will be issued for such
Securities representing in the aggregate the total number of such Securities,
and will be deposited with or on behalf of DTC.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its Participants deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange,
28
Inc. and the National Association of Securities Dealers, Inc. Access to the DTC
system is also available to others such as securities brokers and dealers, banks
and trust companies that clear through or maintain custodial relationships with
Direct Participants, either directly or indirectly ("Indirect Participants").
The rules applicable to DTC and its Participants are on file with the
Commission.
Purchases of Securities within the DTC system must be made by or through
Direct Participants, which will receive a credit for such Securities on DTC's
records. The ownership interest of each actual purchaser of each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchases, but Beneficial Owners are expected
to receive written confirmations providing details of the transactions, as
well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Securities.
Transfers of ownership interests in Securities issued in the form of Global
Securities are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in such
Securities, except in the event that use of the book-entry system for such
Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Securities
issued in the form of Global Securities. DTC's records reflect only the identity
of the Direct Participants to whose accounts such Securities are credited, which
may or may not be the Beneficial Owners. The Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. as the registered holder of
Securities issued in the form of Global Securities. If less than all of a series
of such Securities are being redeemed, DTC's current practice is to determine by
lot the amount of the interest of each Direct Participant to be redeemed.
Although voting with respect to Securities issued in the form of Global
Securities is limited to the holders of record of such Securities, in those
instances in which a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to such Securities. Under its usual procedures, DTC
would mail an omnibus proxy (the "Omnibus Proxy") to the issuer of such
Securities as soon as possible after the record date. The Omnibus Proxy assigns
Cede &
29
Co.'s consenting or voting rights to those Direct Participants to whose accounts
such Securities are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Payments in respect of Securities issued in the form of Global Securities
will be made by the issuer of such Securities to DTC. DTC's practice is to
credit Direct Participants' accounts on the relevant payment date in accordance
with their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payments on such payment date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices and will be the responsibility of such Participant and not
of DTC, the Institutional Trustee, either Trust or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payments to DTC are the responsibility of the issuer of the applicable
Securities, disbursement of such payments to Direct Participants is the
responsibility of DTC, and disbursements of such payments to the Beneficial
Owners is the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depositary with respect to
any Securities at any time by giving reasonable notice to the issuer of such
Securities. In the event that a successor depositary is not obtained, individual
Security certificates representing such Securities are required to be printed
and delivered. The Company, at its option, may decide to discontinue use of the
system of book-entry transfers through DTC (or a successor depositary).
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Trust and the Company believe to be
accurate, but the Trust and the Company assume no responsibility for the
accuracy thereof. Neither the Trust nor the Company has any responsibility for
the performance by DTC or its Participants of their respective obligations as
described herein or under the rules and procedures governing their respective
operations.
PLAN OF DISTRIBUTION
Any of the securities being offered hereby (the "Securities") may be sold
in any one or more of the following ways from time to time: (i) through agents;
(ii) to or through underwriters; (iii) through dealers; and (iv) directly by the
Company or, in the case of Trust Capital Securities, by a Trust to purchasers.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices.
30
Offers to purchase Securities may be solicited by agents designated by the
Company from time to time. Any such agent involved in the offer or sale of the
Securities in respect of which this prospectus is delivered will be named, and
any commissions payable by the Company or the Trusts to such agent will be set
forth, in the applicable prospectus supplement. Unless otherwise indicated in
such prospectus supplement, any such agent will be acting on a reasonable best
efforts basis for the period of its appointment. Any such agent may be deemed to
be an underwriter, as that term is defined in the Securities Act, of the
Securities so offered and sold.
If Securities are sold by means of an underwritten offering, the Company
and, in the case of an offering of Trust Capital Securities, the Trust will
execute an underwriting agreement with an underwriter or underwriters at the
time an agreement for such sale is reached, and the names of the specific
managing underwriter or underwriters, as well as any other underwriters, the
respective amounts underwritten and the terms of the transaction, including
commissions, discounts and any other compensation of the underwriters and
dealers, if any, will be set forth in the applicable prospectus supplement which
will be used by the underwriters to make resales of the Securities in respect of
which this prospectus is being delivered to the public. If underwriters are
utilized in the sale of any Securities in respect of which this prospectus is
being delivered, such Securities will be acquired by the underwriters for their
own account and may be resold from time to time in one or more transactions,
including negotiated transactions, at fixed public offering prices or at varying
prices determined by the underwriters at the time of sale. Securities may be
offered to the public either through underwriting syndicates represented by
managing underwriters or directly by one or more underwriters. If any
underwriter or underwriters are utilized in the sale of Securities, unless
otherwise indicated in the applicable prospectus supplement, the underwriting
agreement will provide that the obligations of the underwriters are subject to
certain conditions precedent and that the underwriters with respect to a sale of
such Securities will be obligated to purchase all such Securities if any are
purchased.
The Company or the Trusts, as applicable, may grant to the underwriters
options to purchase additional Securities, to cover over-allotments, if any, at
the initial public offering price (with additional underwriting commissions or
discounts), as may be set forth in the prospectus supplement relating thereto.
If the Company or the Trusts, as applicable, grant any over-allotment option,
the terms of such over-allotment option will be set forth in the prospectus
supplement for such Securities.
If a dealer is utilized in the sale of the Securities in respect of which
this prospectus is delivered, the Company or the Trusts, as applicable, will
sell such Securities to the dealer as principal. The dealer may then resell such
Securities to the public at varying prices to be determined by such dealer at
the time of resale. Any such dealer may be deemed to be an underwriter, as such
term is defined in the Securities Act, of the Securities so offered and sold.
The name of the dealer and the terms of the transaction will be set forth in the
prospectus supplement relating thereto.
31
Offers to purchase Securities may be solicited directly by the Company or
the Trusts, as applicable, and the sale thereof may be made by the Company or
the Trusts directly to institutional investors or others, who may be deemed to
be underwriters within the meaning of the Securities Act with respect to any
resale thereof. The terms of any such sales will be described in the prospectus
supplement relating thereto.
Securities may also be offered and sold, if so indicated in the applicable
prospectus supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment pursuant to their terms, or otherwise,
by one or more firms ("remarketing firms"), acting as principals for their own
accounts or as agents for the Company or the Trust, as applicable. Any
remarketing firm will be identified and the terms of its agreement, if any, with
the Company or the Trusts and its compensation will be described in the
applicable prospectus supplement. Remarketing firms may be deemed to be
underwriters, as that term is defined in the Securities Act, in connection with
the Securities remarketed thereby.
If so indicated in the applicable prospectus supplement, the Company or the
Trusts, as applicable, may authorize agents and underwriters to solicit offers
by certain institutions to purchase Securities from the Company or the Trusts at
the public offering price set forth in the applicable prospectus supplement
pursuant to delayed delivery contracts providing for payment and delivery on the
date or dates stated in the applicable prospectus supplement. Such delayed
delivery contracts will be subject to only those conditions set forth in the
applicable prospectus supplement. A commission indicated in the applicable
prospectus supplement will be paid to underwriters and agents soliciting
purchases of Securities pursuant to delayed delivery contracts accepted by the
Company or the Trusts, as applicable.
Agents, underwriters, dealers and remarketing firms may be entitled under
relevant agreements with the Company or the Trusts, as applicable, to
indemnification by the Company or the Trusts against certain liabilities,
including liabilities under the Securities Act, or to contribution with respect
to payments which such agents, underwriters, dealers and remarketing firms may
be required to make in respect thereof.
Each series of Securities will be a new issue and, other than the Common
Stock, which is listed on the New York Stock Exchange, will have no established
trading market. The Company may elect to list any series of Securities on an
exchange, and in the case of the Common Stock, on any additional exchange, but,
unless otherwise specified in the applicable prospectus supplement, the Company
shall not be obligated to do so. No assurance can be given as to the liquidity
of the trading market for any of the Securities.
Agents, underwriters, dealers and remarketing firms may be customers of,
engage in transactions with, or perform services for, the Company and its
subsidiaries in the ordinary course of business.
32
LEGAL MATTERS
The validity of the Trust Capital Securities will be passed upon on behalf
of MDC and the Trusts by Prickett, Jones, Elliot, Kristol & Schnee, Wilmington,
Delaware, special Delaware counsel to MDC and the Trusts. The validity of the
Common Stock, the Preferred Stock, the Trust Debentures, the Trust Capital
Securities Guarantee, the Debt Securities, the Stock Purchase Contracts and
Stock Purchase Units and certain matters relating thereto will be passed upon
for MDC and the Trusts by Holme Roberts & Owen LLP, Denver, Colorado. Certain
legal maters will be passed on for any underwriters, agents and dealers by
Cahill Gordon & Reindel (a partnership including a professional corporation),
New York, New York.
EXPERTS
The financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-K for the year ended December 31, 1997, have been
so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses payable by the Company in
connection with the issuance and distribution of the Securities, other than
underwriting discounts and commissions. The Company will bear all of such
expenses. All the amounts shown are estimates, except the registration fee.
Registration
Fee.......................................................................$
Fees and expenses of accountants................................................
Fees and expenses of counsel to the Company.....................................
Fees and expenses of Trustees and counsel.......................................
Printing and engraving..........................................................
Blue Sky fees and expenses (including counsel...................................
NYSE Listing fee................................................................
Rating agency fees..............................................................
Miscellaneous...................................................................
Total..........................................................................$
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The By-Laws and Certificates of Incorporation of the Company provide for
indemnification of the officers and directors of those corporations to the
fullest extent permitted by applicable law. The governing documents of the other
Co-Registrants do not provide for the indemnification of directors or officers
against any liability which they may incur in their capacities as such.
Section 145 of the Delaware General Corporation Law provides in part that a
corporation shall have the power to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding (other than an action by or in the right of the
corporation) by reason of the fact that such person 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, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. Similar
indemnity is authorized for such persons against expenses (including attorneys'
fees) actually and reasonably incurred in defense or settlement of any
threatened, pending or completed action or suit by or in the right of the
corporation, if such
2
person acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and provided further
(unless a court of competent jurisdiction otherwise provides) such person shall
not have been adjudged liable to the corporation. Any such indemnification may
be made only as authorized in each specific case upon a determination by the
stockholders or disinterested directors that indemnification is proper because
the indemnitee has met the applicable standard of conduct.
Additionally, the Certificates of Incorporation of the Company eliminates
in certain circumstances the monetary liability of directors for breach of their
fiduciary duty as directors. This provision does not eliminate the liability of
a director (i) for a breach of the director's duty of loyalty to the respective
corporation or its stockholders; (ii) for acts or omissions by the director not
in good faith or which involve intentional misconduct or a knowing violation of
law; (iii) for liability arising under Section 174 of the Delaware General
Corporation Law (relating to the declaration of dividends and purchase or
redemption of shares in violation of the Delaware General Corporation Law); or
(iv) for any transaction from which the director derived an improper personal
benefit.
The Company has obtained Directors and Officers Liability Insurance that
provides insurance coverage for certain liabilities that may be incurred by the
directors and officers of the Company and the Co-Registrants in their capacity
as such.
The Amended and Restated Declaration of Trust for each of the Trusts will
provide for the indemnification by the sponsor of such Trust, of a trustee, any
affiliate of a trustee, any officers, directors, shareholders, members,
partners, employees, representatives or agents of a trustee, or any employee or
agent of the Trusts or their affiliates.
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER EXHIBITS
1.1* Form of Underwriting Agreement.
4.1** Form of Certificate for shares of the Company's common stock.
4.2++ Form of Certificate for shares of the Company's preferred stock.
4.3*** Form of Senior Indenture by and between M.D.C. Holdings, Inc.
and ____________________, as Trustee, including a
form of senior debt security.
4.4*** Form of Senior Subordinated Indenture by and between M.D.C.
Holdings, Inc. and ___________________, as Trustee,
including a form of senior subordinated debt security.
4.5*** Form of Junior Subordinated Indenture by and between M.D.C.
Holdings, Inc. and ___________________, as Trustee,
including a
3
form of junior subordinated debt security.
4.6+ Certificate of Trust of MDC Capital Funding Trust I.
4.7+ Declaration of Trust of MDC Capital Funding Trust I
4.8+ Certificate of Trust of MDC Capital Funding Trust II.
4.9+ Declaration of Trust of MDC Capital Funding Trust II
4.10+ Form of Amended and Restated Declaration
of Trust for each of MDC Capital Funding
Trust I and MDC Capital Funding Trust II,
including a form of Trust Capital Security
Certificate and Trust Common Security
Certificate.
4.11+ Form of Capital Securities Guarantee Agreement with respect to the
Trust Capital Securities of each of MDC Capital
Funding Trust I and MDC Capital Funding Trust II.
4.12+ Form of Common Securities Guarantee Agreement with respect to the
Trust Common Securities of each of MDC Capital
Funding Trust I and MDC Capital Funding Trust II.
4.13++ Form of Purchase Contract Agreement.
5.1++ Opinion of Holme Roberts & Owen LLP.
5.2++ Opinion of Prickett, Jones, Elliot, Kristol & Schnee, as to the validity
of the Trust Capital Securities.
12.1++ Computation of ratios of earnings to fixed charges.
23.1+ Consent of Independent Accountants.
23.2++ Consent of Holme Roberts & Owen LLP (included in Exhibit 5.1).
23.3++ Consent of Prickett, Jones, Elliot, Kristol & Schnee (included in Exhibit 5.2).
24+ Powers of Attorney (included on the signature pages hereof).
25.1+ Form T-1 Statement of Eligibility of The First National Bank of Chicago, as
Property Trustee for MDC Capital Funding Trust I.
25.2+ Form T-1 Statement of Eligibility of The First National Bank of Chicago, as
Property Trustee for MDC Capital Funding Trust II.
25.3+ Form T-1 Statement of Eligibility of The First National Bank of Chicago, as
Guarantee Trustee under the Trust Capital Securities Guarantee Agreements
for each of MDC Capital Funding Trust I and MDC Capital Funding Trust II.
* The Company will file any underwriting agreement that it may enter into as
an exhibit to a Current Report on Form 8-K which is incorporated by
reference into this Registration Statement.
** Filed as an exhibit to the Company's Registration Statement on Form S-3,
Registration No. 33-426, and incorporated herein by reference.
4
*** Filed as an exhibit to the Company's Registration Statement on Form S-3,
Registration No. 33-36631, and incorporated herein by reference.
+ Filed herewith.
++ To be filed by amendment.
ITEM 17. UNDERTAKINGS.
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement; notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of 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 percent change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table
in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Company pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
5
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(4) For purposes of determining any liability under the
Securities Act, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the
time it was declared effective.
(5) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains
a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof.
(b) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) 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) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to any charter provision, by-law,
contract, arrangement, statute, or otherwise, the Company has been
advised that in the opinion of the 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
the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted against the Company by such
director, officer or controlling person in
6
connection with the securities being registered, the Company will,
unless in the opinion of counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
M.D.C. Holdings, Inc. certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and have duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, State of Colorado, on the 7th
day of January, 1999.
M.D.C. HOLDINGS, INC.
By: /s/ PARIS G. REECE III
----------------------------
Paris G. Reece III
Senior Vice President
POWER OF ATTORNEY
Each of the undersigned constitutes and appoints Paris G. Reece III,
Michael Touff and Daniel S. Japha, and each of them, as attorneys for him and in
his name, place, and stead, and in his capacity as a Director, Officer, or both,
of the Company and/or any of the co-registrants, to execute and file any amended
registration statement or statements or supplements thereto (including any
post-effective amendments, including any registration statement filed under Rule
462(b) under the Securities Act of 1933), with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises as fully, to all intents and purposes, as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed by the following
persons in the capacities indicated , on the 7th day of January, 1999.
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MDC OFFICERS AND DIRECTORS
Principal Executive Officer:
/s/ LARRY A. MIZEL
---------------------------------
Larry A. Mizel,
Chairman of the Board of Directors,
President and Chief Executive Officer
Chief Operating Officer:
/s/ DAVID D. MANDARICH
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David D. Mandarich,
Director, Executive Vice President -
Real Estate and Chief Operating Officer
Principal Financial and Accounting
Officer:
/s/ PARIS G. REECE III
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Paris G. Reece III,
Senior Vice President,
Chief Financial Officer and
Principal Accounting Officer
Other Directors:
/s/ STEVEN J. BORICK
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Steven J. Borick
/s/ WILLIAM B. KEMPER
---------------------------------
William B. Kemper
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/s/ HERBERT T. BUCHWALD
---------------------------------
Herbert T. Buchwald
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed by the following in
the capacity indicated , on the 7th day of January, 1999.
/s/ GILBERT GOLDSTEIN
---------------------------------
Gilbert Goldstein
Director
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of
MDC Capital Funding Trust I and MDC Capital Funding Trust II certifies that it
has reasonable grounds to believe that it meets all the requirements for filing
on Form S-3 and has duly caused this Registration Statement on Form S-3 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Denver, State of Colorado, on the 7th day of January, 1999.
MDC Capital Funding Trust I
MDC Capital Funding Trust II
By: DANIEL S. JAPHA
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Daniel S. Japha
Regular Trustee