This Registration Statement also Constitutes Post-Effective Amendment No. 1
to Registration Statement No. 333-08933
As filed with the Securities and Exchange Commission on January 24, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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UNISYS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 38-0387840
(State of Incorporation) (I.R.S. Employer Identification No.)
Township Line and Union Meeting Roads
Blue Bell, Pennsylvania 19424
(215) 986-4011
(Address, including zip code, and telephone number, including area code,
of principal executive offices)
HAROLD S. BARRON
Senior Vice President,
General Counsel and Secretary
Unisys Corporation
Township Line and Union Meeting Roads
Blue Bell, Pennsylvania 19424
(215) 986-5299
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
Copies to:
NANCY STRAUS SUNDHEIM, ESQ. GARY L. SELLERS, ESQ.
UNISYS CORPORATION SIMPSON THACHER & BARTLETT
Township Line and Union Meeting Roads 425 Lexington Avenue
Blue Bell, Pennsylvania 19424 New York, New York 10017
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Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this registration statement
as determined in light of market conditions and other factors.
------------
If the only securities being registered on this form are being offered
pursuant to a dividend or interest reinvestment plan, please check the
following box. [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, as amended, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
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
- -------------------------------------------------------------------
Proposed Maximum Amount of
Title of Each Class of Agregate Offering Registration
Securities to be Registered Price(1)(2) Fee(3)
- -------------------------------------------------------------------
Senior Debt Securities;
Subordinated Debt Securities;
Common Stock, par value $.01
per share(4)(5);Preferred Stock,
par value $1 per share(5); $450,000,000 $136,364
Warrants
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(1) In U.S. dollars or the equivalent thereof in foreign currencies or
foreign currency units.
(2) Estimated solely for purposes of calculating the registration fee.
(3) The registration fee has been calculated in accordance with Rule 457(o)
under the Securities Act of 1933, as amended, and reflects the offering
price rather than the principal amount of any Debt Securities issued at
a discount.
(4) Includes Preferred Share Purchase Rights ("Rights"). The Rights are
associated with and trade with the Common Stock. The value, if any,
attributable to the Rights is reflected in the market price of the Common
Stock.
(5) In addition to any Common Stock or Preferred Stock that may be issued
directly under this Registration Statement, there are being registered
hereunder such indeterminate number of shares of Common Stock or
Preferred Stock as may be issued upon conversion or exchange of Debt
Securities or Preferred Stock. No separate consideration will be
received for any Common Stock or Preferred Stock so issued upon
conversion or exchange.
PURSUANT TO RULE 429 OF THE RULES AND REGULATIONS OF THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT CONTAINS A COMBINED PROSPECTUS THAT ALSO RELATES TO A REGISTRATION
STATEMENT ON FORM S-3 (NO. 333-08933) (RELATING TO AN AGGREGATE $299,000,000
OF SECURITIES) PREVIOUSLY FILED BY THE REGISTRANT AND DECLARED EFFECTIVE ON
AUGUST 8, 1996. THIS REGISTRATION STATEMENT CONSTITUTES POST-EFFECTIVE
AMENDMENT NO. 1 TO THE REGISTRANT'S REGISTRATION STATEMENT ON FORM S-3 (NO.
333-08933) WITH RESPECT TO THE REMAINING $50,000,000 OF UNSOLD SECURITIES
THEREUNDER, AND SUCH POST-EFFECTIVE AMENDMENT SHALL HEREAFTER BECOME
EFFECTIVE CONCURRENTLY WITH THE EFFECTIVENESS OF THIS REGISTRATION STATEMENT
AND IN ACCORDANCE WITH SECTION 8(c) OF THE SECURITIES ACT OF 1933.
------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT
BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH
OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JANUARY 24, 1997
PROSPECTUS
$500,000,000
Unisys Corporation
Securities
------------
Unisys Corporation (the "Company") may offer from time to time,
together or separately, (1) its unsecured debt securities (the "Debt
Securities"), which may be either senior debt securities ("Senior Debt
Securities") or subordinated debt securities ("Subordinated Debt
Securities"); (2) shares of its Common Stock, par value $.01 per share
("Common Stock"); (3) shares of its Preferred Stock, par value $1 per
share ("Preferred Stock") and (4) warrants or similar rights
("Warrants") to purchase Debt Securities, Common Stock or Preferred
Stock (the Debt Securities, the Common Stock, the Preferred Stock and
the Warrants are collectively referred to as the "Securities"), in
amounts, at prices and on terms to be determined at the time of
offering. The Securities offered pursuant to this Prospectus may be
issued in one or more series or issuances and will be limited to
$500,000,000 aggregate offering price (or its equivalent, if Debt
Securities are issued with principal amounts denominated in one or
more foreign currencies or foreign currency units). Certain specific
terms of the particular Securities in respect of which this Prospectus
is being delivered (the "Offered Securities") will be set forth in a
Prospectus Supplement (the "Prospectus Supplement"), including, where
applicable (1) in the case of Debt Securities, the specific
designation (including whether senior or subordinated and whether
convertible), aggregate principal amount, currency or currency unit
for which the Debt Securities may be purchased or in which the
principal and any premium or interest is payable, maturity, premium,
if any, rate and times of payment of any interest, any terms for
optional or mandatory redemption, the terms for any conversion into
Common Stock, the initial public offering price and other special
terms; (2) in the case of Preferred Stock, the specific title and
stated value, any dividend, liquidation, redemption, voting and other
rights, any terms for conversion into Common Stock, the initial public
offering price and other special terms and (3) in the case of
Warrants, the number and terms thereof, the designation and the number
of securities issuable upon exercise, the purchase price and, where
applicable, the duration and detachability thereof.
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SEE "RISK FACTORS" COMMENCING ON PAGE 3 FOR A DISCUSSION OF CERTAIN
FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SECURITIES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
------------
The Securities will be sold either through underwriters, dealers
or agents, or directly by the Company. The accompanying Prospectus
Supplement will set forth the names of any underwriters or agents
involved in the sale of the Securities in respect of which this
Prospectus is being delivered, the proposed amounts, if any, to be
purchased by underwriters and the compensation, if any, of such
underwriters or agents.
The aggregate proceeds to the Company from all Securities will be
the purchase price of Securities sold less the aggregate of agents'
commissions and underwriters' discounts and other expenses of issuance
and distribution. See "Plan of Distribution."
, 1997
-2-
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission
(the "Commission") a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Securities being offered hereby (the "Registration
Statement"). As permitted by the rules and regulations of the
Commission, this Prospectus, which constitutes a part of the
Registration Statement, does not contain certain information, exhibits
and undertakings contained in the Registration Statement. Such
additional information can be inspected at and obtained from the
Commission in the manner set forth below. For further information,
reference is made to the Registration Statement and to the exhibits
thereto. Statements contained herein concerning any documents are not
necessarily complete and, in each instance, reference is made to the
copy of such document filed as an exhibit to the Registration
Statement. Each such statement is qualified in its entirety by such
reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
in accordance therewith is required to file periodic reports, proxy
statements and other information with the Commission relating to its
business, financial statements and other matters. Such reports, proxy
statements and other information, as well as the Registration
Statement, may be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Regional
Offices of the Commission located in the Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and 7 World
Trade Center, New York, New York 10048. Copies of such material can
also be obtained from the Commission at prescribed rates by addressing
written requests for such copies to the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
Such reports, proxy statements and other information are also
available for inspection at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York, 10005. The
Commission maintains a Web site, which contains reports, proxy and
information statements and other information regarding registrants
that, like the Company, file electronically with the Commission, at
the following address: http://www.sec.gov.
INFORMATION INCORPORATED BY REFERENCE
The following documents have been filed with the Commission
pursuant to the Exchange Act and are incorporated by reference into
this Prospectus:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1995 (as amended on Forms 10-K/A dated May 31, 1996 and
June 24, 1996).
2. The Company's Current Reports on Form 8-K dated February 22, 1996,
March 4, 1996, March 29, 1996 and October 1, 1996.
3. The Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 1996, June 30, 1996 and September 30, 1996.
4. The description of the Company's Common Stock contained in the
registration statement of Burroughs Corporation ("Burroughs"), the
predecessor to the Company, on Form 8-B dated May 22, 1984 (as amended
on Form 8 dated May 7, 1991), filed pursuant to Section 12 of the
Exchange Act, including any amendment or report filed for the purpose
of updating such description.
5. The description of the Company's Preferred Share Purchase Rights
contained in the Registration Statement of Burroughs on Form 8-A dated
March 11, 1986 (as amended on Forms 8 dated, respectively, April 16,
1986, July 8, 1987 and May 7, 1991 and on Form 8-A/A dated February
26, 1996), filed pursuant to Section 12 of the Exchange Act, including
any amendment or report filed for the purpose of updating such
description.
All documents filed by the Company with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date hereof and prior to the termination of the offering of the
Securities shall be deemed to be incorporated by reference herein and
to be a part hereof from the date of filing of such documents. Any statements
contained in a document incorporated by reference herein shall be deemed to
be modified or superseded for purposes hereof to the extent that a
statement contained herein, in the accompanying Prospectus Supplement or in
-3-
any other subsequently filed document which also is incorporated by
reference herein modifies or supersedes such statement. Any statement
so modified or superseded shall not be deemed to constitute a part hereof
except as so modified or superseded.
The Company will provide without charge to each person to whom a
copy of this Prospectus is delivered, on written or oral request,
copies of any or all documents incorporated by reference herein (other
than the exhibits thereto unless such exhibits are incorporated
specifically by reference therein). Requests should be directed to
Unisys Corporation, Township Line and Union Meeting Roads, Blue Bell,
Pennsylvania 19424, Attention: Corporate Secretary; Telephone (215)
986-5934.
THE COMPANY
The Company is an information management company that provides
information services, technology, software and customer support on a
worldwide basis. The Company operates in the information management
business segment.
The Company was incorporated in February 1984 under the laws of
Delaware and is the successor by merger to Burroughs Corporation, a
Michigan corporation incorporated in 1905. In November 1986, Sperry
Corporation, a Delaware corporation incorporated in 1955, was merged
with and into the Company, and the Company's name was changed to
Unisys Corporation.
The principal executive offices of the Company are located at
Township Line and Union Meeting Roads, Blue Bell, Pennsylvania 19424.
The Company's telephone number is (215) 986-4011.
RISK FACTORS
Prospective investors should consider carefully, in addition to
the other information contained herein, the following factors before
deciding to purchase the Securities offered hereby.
RESTRUCTURINGS AND NET LOSSES
The Company operates in an industry that has undergone dramatic
changes, including, in the case of the Company, a shift from higher
margin to lower margin products and services. In order to improve its
operating results, the Company has moved aggressively to realign its
operations to reflect the rapidly changing market for information
processing products and services. In 1995, the Company reported a
net loss of $624.6 million, which included a fourth quarter pretax
restructuring charge of $717.6 million, primarily relating to the
internal realignment of the Company into three operating units and
covering work force reductions, product and program discontinuances
and consolidation of office facilities and manufacturing capacity.
For the year ended December 31, 1996, the Company reported net
income of $49.7 million, or a loss of 41 cents per share after
payment of preferred dividends. In the fourth quarter
of 1996, the Company reversed certain reserves established under
the 1995 restructuring plan, due to lower-than-anticipated costs
for work force reductions. This reversal was offset by charges of
$84 million relating to the refocusing and discontinuance of certain
products and programs. The Company recorded special pretax
charges of $186.2 million in 1994, $1.2 billion in 1991, $181.0
million in 1990 and $231.0 million in 1989. Principally due to
these special charges, the Company had net losses of $1.4 billion
in 1991, $436.7 million in 1990 and $639.3 million in 1989.
No assurance can be given that the Company will not experience
losses in the future.
-4-
HIGH LEVERAGE AND CASH REQUIREMENTS
At December 31, 1996, the Company had approximately $2.3 billion
principal amount of debt, an increase of approximately $400 million
from December 31, 1995. Total interest expense for 1996 and 1995
was $249.7 million and $202.1 million, respectively. Long-term debt of
$5.8 million, $213.0 million and $345.0 million is scheduled to
mature in 1997, 1998 and 1999, respectively.
The Company has outstanding $1.6 billion of Series A, B and C
convertible preferred stock. Dividends paid on preferred stock in 1996
amounted to $120.8 million ($106.5 million - Series A; $14.3 million - Series
B and C). The Company will redeem all $150 million of its outstanding
Series B and C preferred stock for cash during the first half of 1997.
Cash requirements for the restructuring actions discussed above
are expected to be approximately $200 million in 1997. The Company
estimates that the restructuring actions have generated annualized
savings of approximately $475 million as of the end of 1996 and
expects these annualized savings to be approximately $600
million by the end of 1997. The degree to which cash savings
from the restructuring actions offset cash requirements depends upon
the timing of implementation of the restructuring actions. Cash
requirements for the restructuring actions and the annualized savings
expected from such actions are forward-looking statements (as such
term is used in the Private Securities Litigation Reform Act of 1995),
and several factors, particularly the timing of implementation of the
restructuring, could cause actual cash requirements and savings to be
different.
During 1996, net cash used for continuing operations was
approximately $65 million. During this period, proceeds from the
issuance of debt exceeded principal payments of debt by $373.3 million.
During 1995, net cash used for continuing operations was $412.4
million (including principal payments of debt of $68.2 million).
In 1995, discontinued operations provided cash of $658.3 million,
primarily from the sale of the Company's defense systems business.
The Company may require continued access to financing sources to
meet its cash requirements for debt maturities, restructuring and
operating activities. There can be no assurance that such access will
always be available to the Company or that the Company would be
permitted to incur additional indebtedness under its then existing set
of restrictive covenants.
In June 1996, the Company entered into a one-year $200 million
revolving credit facility replacing the prior facility which expired
in May 1996. Conditions precedent to a borrowing under the facility
include minimum cash balances and compliance with net worth and
interest coverage covenants. In addition, if any borrowings are
outstanding, the Company is required to maintain full compensating
balances with the bank group unless waived by a supermajority of the
banks. The Company does not currently anticipate that it will borrow
under this facility.
COMPETITION
The Company's business is affected by rapid change in technology
in the information systems and services field and aggressive
competition from many domestic and foreign companies, including
computer hardware manufacturers, software providers and information
services companies. The Company competes primarily on the basis of
product performance, service, technological innovation and price.
Many of the Company's competitors have greater financial, marketing or
other resources than the Company. The Company's results depend upon
its ability to compete successfully in the United States and abroad.
-5-
SYSTEMS INTEGRATION CONTRACTS
Certain of the Company's systems integration contracts are fixed-
price contracts under which the Company assumes the risk for the
delivery of the contracted services at an agreed-upon fixed price.
The Company has at times experienced problems in performing certain of
its fixed-price contracts on a profitable basis and has provided
periodically for adjustments to the cost to complete such contracts.
In the fourth quarter of 1995, the Company recorded a significant
pretax charge for contract losses of $129.0 million, primarily
relating to a few large multi-year, fixed-price systems integration
contracts. There can be no assurance that the Company will not
experience such contract performance problems in the future, which
problems could affect the Company's results of operations.
IMPORTANCE OF INTERNATIONAL OPERATIONS
Revenue from international operations accounted for approximately
60% of the Company's total revenue in each of the last three years.
There is no material concentration of revenues in any particular
country. Due to its foreign operations, the Company is exposed
to the effects of foreign exchange rate fluctuations on the
U.S. dollar. The Company uses foreign exchange forward contracts and
options, generally having maturities of less than nine months, to
reduce such exposure. Such contracts and options are entered into for
the sole purpose of hedging certain transactional exposures. The Company
does not hold or issue financial instruments for speculative trading
purposes. In addition to fluctuations in foreign currency exchange
rates, the Company's international business could be affected by many
factors beyond its control, such as instability of foreign economies,
U.S. and foreign government laws and policies affecting trade and
investment, and governmental changes. Although the Company has not
experienced any significant problems in foreign countries arising from
such factors, there can be no assurance that such problems will not
arise in the future.
NO DIVIDENDS ON COMMON STOCK; DIVIDEND LIMITATIONS
The Company has not declared or paid any cash dividends on its
Common Stock since 1990 and does not anticipate declaring or paying
dividends on the Common Stock in the foreseeable future. Certain of
the Company's debt instruments and credit facilities contain financial
covenants which could limit the payment of dividends on the Company's
capital stock.
USE OF PROCEEDS
Except as may otherwise be set forth in the applicable Prospectus
Supplement, net proceeds from the sale of the Offered Securities will
be used for general corporate purposes and to reduce or refinance
indebtedness.
RATIOS OF EARNINGS
The following tables set forth the ratio of earnings to fixed
charges and the ratio of earnings to combined fixed charges and
preferred stock dividends for the Company for each of the years in the
five-year period ended December 31, 1995 and for the nine months ended
September 30, 1996.
The ratio of earnings to fixed charges has been computed by
dividing earnings by fixed charges. The ratio of earnings to combined
fixed charges and preferred stock dividends has been computed by
dividing earnings by the sum of fixed charges and preferred dividend
requirements. Earnings consist of income (loss) from continuing
operations before income taxes, extraordinary items and changes in
accounting principles minus undistributed earnings of associated
companies plus fixed charges. Fixed charges consist of interest on
all indebtedness, amortization of debt issuance expenses and the
portion of rental expense representative of interest.
-6-
Ratio of Earnings to Fixed Charges
Nine Months
Ended
September 30 Year Ended December 31
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1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
* * 1.11 2.21 1.72 *
__________
* Earnings for the nine months ended September 30, 1996 and for
the years ended December 31, 1995 and 1991 were inadequate to cover
fixed charges by $4.8 million, $776.1 million and $1,432.1 million,
respectively.
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
Nine Months
Ended
September 30 Year Ended December 31
------------ ----------------------------------------
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
* * * 1.39 1.17 *
__________
* Earnings for the nine months ended September 30, 1996 and for
the years ended December 31, 1995, 1994 and 1991 were inadequate to
cover combined fixed charges and preferred stock dividends by $144.2
million, $961.2 million, $153.6 million and $1,630.8 million,
respectively.
DESCRIPTION OF THE DEBT SECURITIES
The following sets forth certain general terms and provisions of
the Indentures under which the Debt Securities are to be issued. The
particular terms of a series of Debt Securities will be set forth in
the Prospectus Supplement or Prospectus Supplements relating to such
Debt Securities.
The Senior Debt Securities are to be issued under an Indenture
dated as of August 6, 1992 (the "Senior Indenture") between the
Company and Bank One, Columbus NA, as Trustee (the "Senior Trustee").
The Subordinated Debt Securities are to be issued under an Indenture
dated as of March 1, 1996 (the "Subordinated Indenture") between the
Company and The Bank of New York, as Trustee (the "Subordinated
Trustee"). The Senior Indenture and the Subordinated Indenture are
sometimes referred to individually as an "Indenture" and collectively
as the "Indentures". The Senior Trustee and the Subordinated Trustee
are sometimes referred to individually as a "Trustee" and collectively
as the "Trustees". The Senior Indenture and the Subordinated
Indenture are filed as exhibits to the Registration Statement. The
following are brief summaries of certain provisions of the Indentures
and are subject to the detailed provisions of the Indentures, to which
reference is hereby made for a complete statement of such provisions.
Capitalized terms used herein and not otherwise defined shall have the
meanings specified in the Indentures.
General
The Indentures do not limit the aggregate principal amount of
Debt Securities which may be issued thereunder and provide that Debt
Securities may be issued from time to time in series.
The Senior Debt Securities will be unsecured obligations of the
Company and will rank on a parity with all other unsecured and
unsubordinated indebtedness of the Company. The Subordinated Debt
Securities will be unsecured obligations of the Company and will be
subordinated in right of payment to all Senior Indebtedness (as
defined below in "Subordination of Debt Securities").
-7-
The applicable Prospectus Supplement will describe the following
terms of the Debt Securities offered thereby: (1) the title of such
Debt Securities; (2) whether such Debt Securities are Senior Debt
Securities or Subordinated Debt Securities; (3) any limit on the
aggregate principal amount of such Debt Securities; (4) the date or
dates on which such Debt Securities may be issued and are or will be
payable; (5) the rate or rates per annum (which may be fixed or
variable) at which such Debt Securities will bear interest, if any, or
the method by which such rate or rates shall be determined, and the
date or dates from which such interest, if any, will accrue; (6) the
date or dates on which interest, if any, on such Debt Securities will
be payable and the regular record date or dates therefor; (7) the
place or places where the principal of, and premium, if any, and any
interest on such Debt Securities will be payable; (8) the period or
periods within which, the price or prices at which, the currency or
currencies (including currency units) in which, and the terms and
conditions upon which such Debt Securities may be redeemed at the
option of the Company; (9) the obligation, if any, of the Company to
redeem, to repay or purchase such Debt Securities pursuant to any
sinking fund or analogous provisions, upon the happening of a
specified event or at the option of a holder thereof, and the period
or periods within which, the price or prices at which and the terms
and conditions upon which such Debt Securities will be redeemed,
repaid or purchased pursuant to any such obligations; (10) whether
such Debt Securities are to be issued in registered form without
coupons, in bearer form with or without coupons, including temporary
and definitive global form, or a combination thereof and the
circumstances, if any, upon which such Debt Securities may be
exchanged for Debt Securities issued in a different form; (11) whether
such Debt Securities are to be issued in whole or in part in the form
of one or more Global Notes (as defined under "Denominations,
Registration and Transfer") and, if so, the identity of the
depositary, if any, for such Global Note or Notes; (12) whether and
under what circumstances the Company will pay additional amounts to
any holder of Debt Securities who is not a U.S. Person (as defined
under "Limitations on Issuance of Bearer Securities") in respect of
any tax, assessment or other governmental charge required to be
withheld or deducted and, if so, whether the Company will have the
option to redeem rather than pay any additional amounts; (13) if other
than dollars, the foreign currency or currencies (including currency
units) in which the principal of, and premium, if any, and any
interest on such Debt Securities shall or may be paid and, if
applicable, whether at the election of the Company and/or the holder,
and the conditions and manner of determining the exchange rate or
rates; (14) any index used to determine the amount of payment of
principal of, and premium, if any, and any interest on such Debt
Securities; (15) whether such Debt Securities are convertible into
shares of Common Stock and the terms and conditions upon which any
conversion will be effected, including the conversion price, the
conversion period and other conversion provisions; (16) any addition
to, or modification or deletion of, any Events of Default or covenants
provided for with respect to such Debt Securities and (17) any other
detailed terms and provisions of such Debt Securities which are not
inconsistent with the Indentures.
Debt Securities may be issued at or above par or with an original
issue discount. Federal income tax consequences and other special
considerations applicable to any Debt Securities issued with original
issue discount or above par will be described in the applicable
Prospectus Supplement.
If the purchase price of any of the Debt Securities is
denominated in one or more foreign currencies or currency units, or if
the principal of or any premium or interest on any series of Debt
Securities is payable in one or more foreign currencies or currency
units, the restrictions, elections, Federal income tax considerations,
specific terms and other information with respect to such series and
such foreign currency or currency units will be described in the
applicable Prospectus Supplement.
Denominations, Registration and Transfer
Debt Securities may be issued in fully registered form, without
coupons ("Registered Securities"), in bearer form with or without
coupons ("Bearer Securities") or in the form of one or more global
securities (each a "Global Note"). Registered Securities which are
book-entry securities ("Book-Entry Notes") will be issued as
registered Global Notes. Bearer Securities may be issued in the form
of temporary or definitive Global Notes. Unless otherwise provided in
an applicable Prospectus Supplement with respect to a series of Debt
Securities, the Debt Securities will be issued as Registered
Securities in denominations of $1,000 or any integral multiple
thereof. One or more Global Notes will be issued in denominations or
aggregate denominations equal to the aggregate principal amount of
outstanding Debt Securities of the series to be represented by such
Global Note or Notes.
-8-
Registered Securities of any series (other than a Book-Entry
Note) may be exchanged for other Registered Securities of the same
series and of a like aggregate principal amount and tenor of different
authorized denominations. Whenever any such Registered Securities are
surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Registered Securities which the
holder making the exchange is entitled to receive. In addition, if so
provided in an applicable Prospectus Supplement, Bearer Securities of
any series which is registrable as to principal and interest may, at
the option of the holder and subject to the terms of the applicable
Indenture, be exchangeable into Registered Securities of the same
series of any authorized denominations and of a like aggregate
principal amount and tenor. Any Bearer Security surrendered for
exchange shall be surrendered with all unmatured coupons and all
matured coupons in default, except that any Bearer Security
surrendered in exchange for a Registered Security between a regular
record date or a special record date and the relevant date for payment
of interest shall be surrendered without the coupon relating to such
date for payment of interest, and interest due on such date will not
be payable in respect of the Registered Security issued in exchange
for such Bearer Security, but will be payable only to the holder of
such coupon when due in accordance with the terms of the applicable
Indenture. Except as provided in an applicable Prospectus Supplement,
Bearer Securities will not be issued in exchange for Registered
Securities.
Debt Securities may be presented for exchange as provided above,
and Registered Securities (other than Book-Entry Notes) may be
presented for registration of transfer (with the form of transfer
endorsed thereon duly executed), at the office of the Security
Registrar designated by the Company for such purpose with respect to
any series of Debt Securities and referred to in an applicable
Prospectus Supplement, without service charge and upon payment of any
taxes and other governmental charges as described in the applicable
Indenture. Such transfer or exchange will be effected upon the
Security Registrar being satisfied with the documents of title and
identity of the person making the request. The Company has appointed
the Trustee under each Indenture as Security Registrar for the
applicable Debt Securities.
For a discussion of restrictions on the exchange, registration
and transfer of Global Notes, see "Global Notes".
Payment and Paying Agents
Unless otherwise indicated in an applicable Prospectus
Supplement, payment of principal of, and premium, if any, and any
interest on Bearer Securities will be payable, subject to any
applicable laws and regulations, at the offices of such Paying Agents
outside the United States as the Company may designate from time to
time, and payment of interest on Bearer Securities on any interest
payment date will be made only against surrender of the coupon
relating to such interest payment date. Presentation of coupons for
payment or other demands for payment of Bearer Securities must be made
outside the United States, and no payment with respect to any Bearer
Security will be made at any office or agency of the Company in the
United States or by check mailed to any address in the United States
or by transfer to an account maintained in the United States. No
payment of interest on a Bearer Security will be made unless, on the
earlier of the date of the first such payment by the Company or the
date of delivery by the Company of the Bearer Security in definitive
form, a written certificate, in the form required by the applicable
Indenture, is provided to the Company stating that on such date the
Bearer Security is not owned by or on behalf of a U.S. Person or, if a
beneficial interest in such Bearer Security is owned by or on behalf
of a U.S. Person, that such U.S. Person is (1) a foreign branch of a
United States financial institution; (2) acquired and holds the Bearer
Security through the foreign branch of a United States financial
institution (and, in either case (1) or (2), such financial
institution agrees to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as
amended (the "Code"), and the regulations thereunder) or (3) is a
financial institution purchasing for resale during the "restricted
period" (as defined under "Global Notes-Temporary and Definitive
Global Notes") only to non-U.S. Persons outside the United States.
Notwithstanding the foregoing, payment of principal of, and premium,
if any, and any interest on Bearer Securities will be made at the
office of the Company's Paying Agent in the United States if (but only
if) (1) payment of the full amount thereof at all offices or agencies
outside the United States is illegal or effectively precluded by
exchange controls or other similar restrictions and (2) such payment
is then permitted by applicable laws.
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Unless otherwise indicated in an applicable Prospectus
Supplement, payment of principal of, and premium, if any, and any
interest on Registered Securities will be made at the office of such
Paying Agent or Paying Agents as the Company may designate from time
to time, except that at the option of the Company payment of any
interest may be made (1) by check mailed to the address of the person
entitled thereto as such address shall appear in the Security Register
or (2) by wire transfer to an account maintained by the person
entitled thereto. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of any installment of interest on
Registered Securities will be made to the person in whose name such
Registered Security is registered at the close of business on the
regular record date for such interest.
Unless otherwise indicated in an applicable Prospectus
Supplement, the Trustee under the applicable Indenture will act as the
Company's sole Paying Agent through its principal office with respect
to Debt Securities which are issuable solely as Registered Securities.
Any Paying Agents outside the United States and other Paying Agents in
the United States initially designated by the Company for the offered
Debt Securities will be named in an applicable Prospectus Supplement.
The Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agent or approve a change in the
office through which any Paying Agent acts, except that, if Debt
Securities of a series are issuable only as Registered Securities, the
Company will be required to maintain a Paying Agent in each Place of
Payment for such series and, if Debt Securities of a series may be
issuable as Bearer Securities, the Company will be required to
maintain (1) a Paying Agent in the United States, for payments with
respect to any Registered Securities of the series (and for payments
with respect to Bearer Securities of the series in the circumstances
described above, but not otherwise) and (2) a Paying Agent in a Place
of Payment located outside the United States where Debt Securities of
such series and any coupons appertaining thereto may be presented and
surrendered for payment; provided that if the Debt Securities of such
series are listed on The International Stock Exchange of the United
Kingdom and the Republic of Ireland Limited or the Luxembourg Stock
Exchange or any other stock exchange located outside the United States
and such stock exchange shall so require, the Company will maintain a
Paying Agent in London or Luxembourg or any other required city
located outside the United States, as the case may be, for the Debt
Securities of such series.
All moneys paid by the Company to the Trustee or a Paying Agent
for the payment of principal of, and premium, if any, and any interest
on any Debt Security that remain unclaimed at the end of two years
after such principal, premium or interest shall have become due and
payable will be repaid to the Company, and the holder of such Debt
Security or any coupon will thereafter look only to the Company for
payment thereof.
Global Notes
The Debt Securities of a series may be issued in whole or in part
in the form of one or more Global Notes that will be deposited with,
or on behalf of, a depositary located in the United States (a "U.S.
Depositary") or a common depositary located outside the United States
(a "Common Depositary") identified in the Prospectus Supplement
relating to such series. Global Notes may be issued in either
registered or bearer form and in either temporary or definitive form.
The specific terms of the depositary arrangement with respect to
any Debt Securities of a series will be described in the Prospectus
Supplement relating to such series. The Company anticipates that the
following provisions will apply to all depositary arrangements.
Book-Entry Notes
Unless otherwise specified in an applicable Prospectus
Supplement, Debt Securities which are to be represented by a Global
Note to be deposited with or on behalf of a U.S. Depositary will be
represented by a Global Note registered in the name of such depositary
or its nominee. Upon the issuance of a Global Note in registered
form, the U.S. Depositary for such Global Note will credit, on its
book-entry registration and transfer system, the respective principal
amounts of the Debt Securities represented by such Global Note to the
accounts of institutions that have accounts with such Depositary or
its nominee ("participants"). The accounts to be credited shall be
designated by the underwriters or agents of such Debt Securities, or
by the Company if such Debt Securities are offered and sold directly
by the Company. Ownership of beneficial interests in such Global
Notes will be limited to participants or persons that may hold
interests through participants. Ownership of beneficial
interests by participants in such Global Notes
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will be shown on, and the transfer of that ownership interest will be
effected only through, records maintained by the U.S. Depositary or
its nominee for such Global Note. Ownership of beneficial interests
in Global Notes by persons that hold through participants will be
shown on, and the transfer of that ownership interest within such
participant will be effected only through, records maintained by such
participant. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to
transfer beneficial interests in a Global Note.
So long as the U.S. Depositary for a Global Note in registered
form, or its nominee, is the registered owner of such Global Note,
such depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Debt Securities represented
by such Global Note for all purposes under the Indenture governing
such Debt Securities. Except as set forth below, owners of beneficial
interests in such Global Notes will not be entitled to have Debt
Securities of the series represented by such Global Note registered in
their names, will not receive or be entitled to receive physical
delivery of Debt Securities of such series in definitive form and will
not be considered the owners or holders thereof under the applicable
Indenture.
Payment of principal of, and premium, if any, and any interest on
Debt Securities registered in the name of or held by a U.S. Depositary
or its nominee will be made to the U.S. Depositary or its nominee, as
the case may be, as the registered owner or the holder of the Global
Note representing such Debt Securities. None of the Company, any
Trustee, any Paying Agent or the Security Registrar for such Debt
Securities will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial
ownership interests in a Global Note for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Company expects that the U.S. Depositary for Debt Securities
of a series or its nominee, upon receipt of any payment of principal,
premium or interest in respect of a permanent Global Note, will credit
immediately participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the
principal amount of such Global Note as shown on the records of such
depositary or nominee. The Company also expects that payments by
participants to owners of beneficial interests in such Global Note
held through such participants will be governed by standing
instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or
registered in "street name", and will be the responsibility of such
participants.
Unless and until it is exchanged in whole for Debt Securities in
definitive form, a Global Note may not be transferred except as a
whole by the U.S. Depositary for such Global Note to a nominee of such
depositary or by a nominee of such depositary to such depositary or
another nominee of such depositary or by such depositary or any such
nominee to a successor of such depositary or a nominee of such
successor. If a U.S. Depositary for Debt Securities in registered
form is at any time unwilling or unable to continue as depositary and
a successor depositary is not appointed by the Company within ninety
days, the Company will issue Debt Securities in definitive registered
form in exchange for the Global Note or Notes representing such Debt
Securities. In addition, the Company may at any time and in its sole
discretion determine not to have any Debt Securities in registered
form represented by one or more Global Notes and, in such event, will
issue Debt Securities in definitive registered form in exchange for
the Global Note or Notes representing such Debt Securities. Further,
if the Company so specifies with respect to the Debt Securities of a
series, an owner of a beneficial interest in a Global Note
representing Debt Securities of such series may, on terms acceptable
to the Company and the U.S. Depositary for such Global Note, receive
Debt Securities of such series in definitive form. In any such
instance, an owner of a beneficial interest in a Global Note will be
entitled to physical delivery in definitive form of Debt Securities of
the series represented by such Global Note equal in principal amount
to such beneficial interest and to have such Debt Securities
registered in its name.
Temporary and Definitive Global Notes
If so specified in an applicable Prospectus Supplement, all
Bearer Securities of a series will initially be issued in the form of
one or more temporary Global Notes, to be deposited with a Common
Depositary in London for Morgan Guaranty Trust Company of New York,
Brussels Office, as operator of the Euro-clear System ("Euro-clear
Operator") and CEDEL, S.A. ("CEDEL") for credit to the designated
accounts. On and after the exchange date determined as provided in
any such temporary Global Note and described in the applicable
Prospectus Supplement, each such temporary Global Note will be
exchangeable for definitive Debt Securities in bearer form, registered
form, definitive global bearer form or any combination thereof, as
specified in the Prospectus Supplement, upon written certification (as
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described under "Payment and Paying Agents") of non-United States
beneficial ownership. No Bearer Security delivered in exchange for a
portion of a temporary Global Note shall be mailed or otherwise
delivered to any location in the United States.
Unless otherwise specified in an applicable Prospectus
Supplement, interest in respect of any portion of a temporary Global
Note payable in respect of an interest payment date occurring prior to
the issuance of definitive Debt Securities will be paid to each of the
Euro-clear Operator and CEDEL with respect to the portion of the
temporary Global Note held for its account upon delivery by the Euro-
clear Operator and CEDEL to the Trustee of a certificate or
certificates of non-United States beneficial ownership in the form
required by the applicable Indenture.
If any Debt Securities of a series are issuable in definitive
global bearer form, the Prospectus Supplement will describe the
circumstances, if any, under which beneficial owners of interests in
any such definitive Global Notes may exchange such interests for Debt
Securities of such series and of like tenor and principal amount in
any authorized form and denomination. No Bearer Security delivered in
exchange for a portion of a definitive Global Note shall be mailed or
otherwise delivered to any location in the United States in connection
with such exchange.
In connection with the sale of a Bearer Security during the
"restricted period" as defined in Section 1.163-5(c)(2)(i)(D)(7) of
the United States Treasury regulations (generally, the first 40 days
after the closing date and, with respect to unsold allotments, until
sold), no Bearer Security (including a definitive Bearer Security in
global form) shall be mailed or otherwise delivered to any location in
the United States, and a Bearer Security sold during the restricted
period (other than a temporary Bearer Security in global form) may be
delivered only if the person entitled to receive such Bearer Security
(including a definitive Bearer Security in global form) furnishes
written certification, in the form required by the applicable
Indenture, to the effect that such Bearer Security is not being
acquired by a U.S. Person, or, if a beneficial interest in such Bearer
Security is being acquired by a U.S. Person, that such U.S. Person (1)
is a foreign branch of a United States financial institution; (2)
acquired and holds the Bearer Security through the foreign branch of a
United States financial institution (and, in either case (1) or (2),
such financial institution agrees to comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Code and the regulations
thereunder) or (3) is a financial institution purchasing for resale
during the restricted period only to non-U.S. Persons outside the
United States. See "Limitations on Issuance of Bearer Securities".
Limitations on Issuance of Bearer Securities
Generally, in compliance with United States Federal tax laws and
regulations, Bearer Securities may not be offered or sold during the
restricted period or delivered in connection with their sale during
the restricted period in the United States or to U.S. Persons (each
as defined below) other than to foreign branches of United States
financial institutions which agree in writing to comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Code or
purchase for resale during the restricted period only to non-U.S.
Persons outside the United States (or as otherwise permitted under
United States Treasury regulations), and any underwriters, agents and
dealers participating in the offering of Debt Securities must agree
that they will not offer or sell any Bearer Securities in the United
States or to U.S. Persons (other than as described above) nor deliver
Bearer Securities within the United States.
Bearer Securities and their interest coupons will bear a legend
substantially to the following effect: "Any U.S. Person who holds
this obligation will be subject to limitations under the United States
income tax laws, including the limitations provided in Sections 165(j)
and 1287(a) of the Internal Revenue Code". The Sections referred to
in the legend provide that, with certain exceptions, a U.S. Person
holding a Bearer Security or coupon will not be permitted to deduct
any loss, and will not be eligible for capital gain treatment with
respect to any gain, realized on a sale, exchange or redemption of
such Bearer Security or coupon.
As used in this Prospectus, "U.S. Person" means a citizen or
resident of the United States, a corporation, partnership or other
entity created or organized in or under the laws of the United States,
or an estate or trust the income of which is subject to United States
Federal income taxation regardless of its source, and the term "United
States" means the United States of America (including the States and
the District of Columbia) and its possessions, including Puerto Rico,
the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
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Certain Covenants Applicable to Senior Debt Securities
Unless otherwise indicated in the applicable Prospectus
Supplement with respect to Senior Debt Securities of a series, Senior
Debt Securities will have the benefit of the following covenants
contained in the Senior Indenture. Unless otherwise indicated in the
applicable Prospectus Supplement with respect to Subordinated Debt
Securities of a series, the Subordinated Debt Securities will not have
the benefit of such covenants.
Limitation Upon Mortgages and Liens
Neither the Company nor a Subsidiary will create or assume,
except in favor of the Company or a Wholly-Owned Subsidiary, any
mortgage, pledge, lien or encumbrance upon any Principal Manufacturing
Property or any stock or indebtedness of any Subsidiary without
equally and ratably securing the outstanding Senior Debt Securities.
For the purpose of providing such equal and ratable security, the
principal amount of outstanding Senior Debt Securities issued with
original issue discount shall be such portion of the principal amount
as may be specified in the terms of that series. This limitation will
not apply to certain permitted encumbrances as described in the Senior
Indenture, including (1) purchase money mortgages entered into within
specified time limits; (2) liens existing on acquired property; (3)
certain tax, materialmen's, mechanics' and judgment liens, certain
liens arising by operation of law and certain other similar liens; (4)
liens in connection with certain government contracts; (5) certain
mortgages, pledges, liens or encumbrances in favor of any state or
local government or governmental agency in connection with certain
tax-exempt financings; (6) pledges of customers' accounts or paper;
(7) certain mortgages, pledges, liens or encumbrances securing the
payment of any V Loan Debt (as defined in the Senior Indenture) and
(8) mortgages, pledges, liens and encumbrances not otherwise permitted
if the sum of the indebtedness thereby secured plus the aggregate
sales price of property involved in certain sale and leaseback
transactions does not exceed the greater of $250,000,000 or 5% of
Consolidated Shareholders' Equity.
Limitation Upon Sale and Leaseback Transactions
The Company and any Subsidiary will be prohibited from selling
any Principal Manufacturing Property owned on the date of the Senior
Indenture with the intention of taking back a lease thereof, other
than a temporary lease (a lease of not more than 36 months) with the
intent that the use of the property by the Company or such Subsidiary
will be discontinued before the expiration of such period, unless (1)
the sum of the sale price of property involved in sale and leaseback
transactions not otherwise permitted plus all indebtedness secured by
certain mortgages, pledges, liens and encumbrances does not exceed the
greater of $250,000,000 or 5% of Consolidated Shareholders' Equity or
(2) the greater of the net proceeds of such sale or the fair market
value of such Principal Manufacturing Property (which may be
conclusively determined by the Board of Directors of the Company) are
applied within 120 days to the optional retirement of outstanding
Senior Debt Securities or to the optional retirement of other Funded
Debt (as defined) of the Company ranking on a parity with outstanding
Senior Debt Securities.
Certain Definitions
Certain terms defined in the Senior Indenture and applicable to
the foregoing covenants are summarized below:
"Consolidated Shareholders' Equity" means the total shareholders'
equity of the Company and its consolidated subsidiaries which, under
generally accepted accounting principles, would appear on a
consolidated balance sheet of the Company and its subsidiaries,
excluding the separate component of shareholders' equity
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attributable to foreign currency translation adjustments pursuant to
"Statement of Financial Accounting Standards No. 52-Foreign Currency
Translation" or any successor provision or principle of generally
accepted accounting principles.
"Principal Manufacturing Property" means any manufacturing
property located within the United States of America (other than its
territories or possessions) owned by the Company or any Subsidiary,
except for any manufacturing property that, in the opinion of the
Board of Directors, is not of material importance to the business
conducted by the Company and its Subsidiaries, taken as a whole.
"Subsidiary" means any corporation of which at least a majority
of the outstanding voting stock is owned by the Company or by other
Subsidiaries, but will not include any such corporation (an
"Affiliated Corporation") which (1) does not transact any substantial
portion of its business or regularly maintain any substantial portion
of its operating assets in the United States; (2) is principally
engaged in financing sales or leases of merchandise, equipment or
services by the Company, a Subsidiary or another Affiliated
Corporation; (3) is principally engaged in holding or dealing in real
estate or (4) is principally engaged in the holding of stock in,
and/or the financing of operations of, Affiliated Corporations.
"Wholly-Owned Subsidiary" means a Subsidiary of which all of the
outstanding voting stock (other than directors' qualifying shares) is
at the time, directly or indirectly, owned by the Company and/or by
one or more Wholly-Owned Subsidiaries.
Consolidation, Merger, Sale or Lease of Assets
Each Indenture provides that the Company, without the consent of
the holders of any of the outstanding Debt Securities, may consolidate
with or merge into, or transfer or lease its assets substantially as
an entirety to, any corporation organized under the laws of any
domestic jurisdiction, provided that (1) the successor corporation
assumes the Company's obligations under such Indenture and the Debt
Securities issued thereunder; (2) after giving effect to the
transaction, no Event of Default and no event which, after notice or
lapse of time, would become an Event of Default shall have occurred
and be continuing and (3) certain other conditions are met.
Events of Default
The following are Events of Default under the Indentures with
respect to Debt Securities of any series: (1) failure to pay principal
of or any premium on any Debt Security of that series when due; (2)
failure to pay any interest on any Debt Security of that series when
due, continued for 30 days; (3) failure to deposit any sinking fund
payment in respect of any Debt Security of that series when due; (4)
failure to perform any other covenant of the Company in the applicable
Indenture (other than a covenant included in such Indenture solely for
the benefit of a series of Debt Securities other than that series),
continued for 60 days (90 days in the case of the Subordinated
Indenture) after written notice as provided in the Indenture; (5)
certain events of bankruptcy, insolvency or reorganization and (6) any
other Event of Default provided with respect to Debt Securities of
that series. Such other Events of Default, if any, will be described
in the Prospectus Supplement relating to such Debt Securities.
If any Event of Default with respect to Debt Securities of any
series at the time outstanding occurs and is continuing, either the
Trustee or the holders of at least 25% in aggregate principal amount
of the outstanding Debt Securities of that series may declare the
principal amount (or, if the Debt Securities of that series are issued
with original issue discount, such portion of the principal amount as
may be specified in the terms of that series) of all the Debt
Securities of that series to be due and payable immediately. At any
time after a declaration of acceleration with respect to Debt
Securities of any series has been made, but before a judgment or
decree based on acceleration has been obtained, the holders of a
majority in aggregate principal amount of outstanding Debt Securities
of that series may, under certain circumstances, rescind and annul
such acceleration.
The Indentures provide that, subject to the duty of the Trustee
during default to act with the required standard of care, the Trustee
will be under no obligation to exercise any of its rights or powers
under the Indenture at the request or direction of any of the holders,
unless such holders shall have offered to the Trustee reasonable
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indemnity. Subject to such provisions for the indemnification of the
Trustee, the holders of a majority in aggregate principal amount of
the outstanding Debt Securities of any series will have the right to
direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, with respect to the Debt Securities of that
series.
The Company is required to furnish the Trustees annually with a
statement as to the performance by the Company of certain of its
obligations under the Indentures and as to any default in such
performance.
Modification and Waiver
Each Indenture provides that the Company and the Trustee may,
without the consent of any holders of Debt Securities, enter into
supplemental indentures for the purposes, among other things, of
adding to the Company's covenants, adding any additional Events of
Default, establishing the form or terms of Debt Securities or curing
ambiguities or inconsistencies in such Indentures or making other
provisions; provided such action shall not adversely affect the
interests of the holders of any series of outstanding Debt Securities
in any material respect.
Modifications of and amendments to the Indentures may be made by
the Company and the Trustee with the consent of the holders of a
majority (66 2/3% in the case of the Senior Indenture) in aggregate
principal amount of the outstanding Debt Securities of each series
affected by such modification or amendment; provided, however, that no
such modification or amendment may without the consent of the holder
of each outstanding Debt Security affected thereby (1) change the
stated maturity of the principal of, or any installment of principal
or interest on, any Debt Security; (2) reduce the principal amount of,
or any premium or interest on, any Debt Security; (3) reduce the
amount of principal of Debt Securities issued with original issue
discount payable upon acceleration of the maturity thereof; (4) change
the currency of payment of principal of, or any premium or interest
on, any Debt Security; (5) impair the right to institute suit for the
enforcement of any payment on or with respect to any Debt Security;
(6) reduce the percentage in principal amount of outstanding Debt
Securities of any series, the consent of whose holders is required for
modification or amendment of the Indenture or for waiver of compliance
with certain provisions of, or of certain defaults under, such
Indenture or (7) limit certain obligations of the Company to maintain
an office or agency in the places and for the purposes required by
such Indenture.
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 any past default
under the applicable Indenture with respect to Debt Securities of that
series, except a default in the payment of the principal of or any
premium or interest on any of the Debt Securities of such series or in
respect of a covenant or provision of such Indenture that cannot,
under the terms of such Indenture, be modified or amended without the
consent of the holders of each outstanding Debt Security affected
thereby.
Defeasance
Each Indenture provides that, if such provision is made
applicable to the Debt Securities of any series, the Company, at its
option, will be discharged from its obligations in respect of the
outstanding Debt Securities of a series (except for certain
obligations to register the transfer or exchange of Debt Securities of
such series, convert Debt Securities of such series, replace stolen,
lost or mutilated Debt Securities of such series, maintain paying
agencies and hold moneys for payment in trust) or, in the case of
Senior Debt Securities, will not be subject to certain covenants
applicable to the Debt Securities of such series, in each case if the
Company deposits with the Trustee, in trust, money or U.S. Government
Obligations which through the payment of interest thereon and
principal thereof in accordance with their terms will provide money in
an amount sufficient to pay all the principal of, and premium, if any,
and any interest on the Debt Securities of such series on the dates
such payments are due in accordance with the terms of such Debt
Securities. To exercise any such option, the Company is required,
among other things, to deliver to the Trustee an opinion of counsel to
the effect that the deposit and related defeasance would not cause the
holders of the Debt Securities of such series to recognize income,
gain or loss for United States income tax purposes.
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Conversion Rights
The terms on which and the prices at which Subordinated Debt
Securities of a series may be convertible into Common Stock will be
set forth in the Prospectus Supplement relating thereto. Such terms
will include provisions as to whether conversion is mandatory, at the
option of the holder or at the option of the Company.
Subordination Provisions
Except as described in the applicable Prospectus Supplement, the
indebtedness evidenced by the Subordinated Debt Securities will be
subordinate in right of payment to all Senior Indebtedness (as
hereinafter defined).
No payment shall be made by the Company on account of principal
of, and premium, if any, or interest on the Subordinated Debt
Securities or on account of the purchase, redemption or other
acquisition of the Subordinated Debt Securities if there shall have
occurred and be continuing any default in the payment of principal,
premium, if any, or interest on any Senior Indebtedness continuing
beyond the period of grace, if any, specified in the instrument
evidencing such Senior Indebtedness.
Upon any distribution of assets of the Company upon any
dissolution, winding up, liquidation or reorganization, the payment of
the principal of, and premium, if any, and interest on the
Subordinated Debt Securities is to be subordinated to the extent
provided in the Subordinated Indenture in right of payment to the
prior payment in full of all Senior Indebtedness. By reason of this
provision, in the event of the Company's dissolution or insolvency,
holders of Senior Indebtedness may receive more, ratably, and holders
of Subordinated Debt Securities may receive less, ratably, than the
other creditors of the Company.
The foregoing subordination provisions will not prevent the
occurrence of any Event of Default under the Subordinated Indenture.
The term "Senior Indebtedness" will be defined to mean the
principal of, premium, if any, and any interest on, and any other
payment due pursuant to the terms of an instrument (including, without
limitation, fees, expenses, collection expenses (including attorneys'
fees), interest yield amounts, post-petition interest and taxes)
creating, securing or evidencing any of the following, whether
outstanding on the date of the Subordinated Indenture or thereafter
incurred or created:
(1) All indebtedness of the Company for money borrowed or
constituting reimbursement obligations with respect to letters of
credit (including indebtedness secured by a mortgage, conditional
sales contract or other lien which is (A) given to secure all or
a part of the purchase price of property subject thereto, whether
given to the vendor of such property or to another, or (B)
existing on property at the time of acquisition thereof);
(2) All indebtedness of the Company evidenced by notes,
debentures, bonds or other securities;
(3) All indebtedness of others of the kinds described in either of
the preceding clauses (1) or (2) assumed by or guaranteed in any
manner by the Company or in effect guaranteed by the Company
through an agreement to purchase, contingent or otherwise; and
(4) All renewals, deferrals, increases, extensions or refundings
of and modifications to indebtedness of the kinds described in
any of the preceding clauses (1), (2) or (3);
except (A) the Subordinated Debt Securities, (B) certain outstanding
subordinated indebtedness of the Company, which indebtedness at
December 31, 1996 was approximately $644 million and (C) any
indebtedness, renewal, extension or refunding that, under the
provisions of the instrument creating, evidencing, or assuming or
guaranteeing it, is not superior in right of payment to the
Subordinated Debt Securities or is subordinate by its terms in right
of payment to the Subordinated Debt Securities.
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As of December 31, 1996, the Company had Senior Indebtedness
(excluding accrued interest and premium, if any) of approximately $1.6
billion. The amount of Senior Indebtedness may change in the future.
The Subordinated Indenture contains no limitations on the incurrence
of Senior Indebtedness.
Notices
Except as otherwise provided in the Indentures, notices to
holders of Bearer Securities will be given by publication at least
twice in a daily newspaper in The City of New York and, if Debt
Securities of such series are then listed on The International Stock
Exchange of the United Kingdom and the Republic of Ireland Limited or
the Luxembourg Stock Exchange or any other stock exchange located
outside the United States and such stock exchange shall so require, in
a daily newspaper in London or Luxembourg or any other required city
located outside the United States, as the case may be, or, if not
practicable, elsewhere in Europe. Notices to holders of Registered
Securities will be given by mail to the addresses of such holders as
they appear in the Security Register.
Governing Law
The Indentures, the Debt Securities and the coupons, if any, will
be governed by, and construed in accordance with, the laws of the
State of New York.
Concerning the Trustees
Each Trustee has normal banking relationships with the Company
and also serves as trustee under other indentures with the Company
pursuant to which unsecured debt securities are currently outstanding.
DESCRIPTION OF CAPITAL STOCK
The following descriptions do not purport to be complete and are
subject to, and qualified in their entirety by reference to, the more
complete descriptions thereof set forth in (1) the Company's
Certificate of Incorporation; (2) the Company's By-Laws and (3) the
Rights Agreement (as defined below), all of which are exhibits to the
Registration Statement.
The Company's authorized capital stock consists of 360,000,000
shares of Common Stock, par value $.01 per share, and 40,000,000
shares of Preferred Stock, par value $1 per share.
As of December 31, 1996, there were 174.8 million shares of Common
Stock outstanding, and the Company had reserved 158.2 million
additional shares of Common Stock for issuance pursuant to
various employee benefit plans and upon the conversion of outstanding
shares of Preferred Stock and other outstanding securities.
The Board of Directors has authorized the issuance of 30,000,000
shares of Series A Cumulative Convertible Preferred Stock (the "Series
A Preferred Stock"), 10 shares of Series B Cumulative Convertible
Preferred Stock (the "Series B Preferred Stock") and 20 shares of
Series C Cumulative Preferred Stock (the "Series C Preferred Stock")
and 1,500,000 shares of Junior Participating Preferred Stock (the
"Junior Preferred Stock"). As of December 31, 1996, there were
28.4 million shares of Series A Preferred Stock, 10 shares of Series B
Preferred Stock, 20 shares of Series C Preferred Stock and no shares
of Junior Preferred Stock outstanding.
The Series A Preferred Stock, the Series B Preferred Stock and
the Series C Preferred Stock rank on a parity with each other, and
prior to the Common Stock and the Junior Preferred Stock, as to
payment of dividends and as to distribution of assets upon
liquidation, dissolution or winding up of the Company. Unless
otherwise set forth in the applicable Prospectus Supplement, each
series of Preferred Stock offered hereby will rank on a parity with
each other such series and with the Series A, Series B and Series C
Preferred Stock.
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Common Stock
General
Subject to the rights of the holders of shares of Preferred
Stock, holders of shares of Common Stock (1) are entitled to receive
dividends when and as declared by the Board of Directors of the
Company from funds legally available for that purpose; (2) have the
exclusive right, except as otherwise may be required by law, to vote
for the election of directors and for all other purposes and (3) are
entitled, upon any liquidation, dissolution or winding up of the
Company, to a pro rata distribution of the assets and funds of the
Company available for distribution to stockholders. Each share of
Common Stock is entitled to one vote on all matters on which
stockholders generally are entitled to vote. Holders of shares of
Common Stock do not have preemptive rights to subscribe for additional
shares of Common Stock or securities convertible into shares of Common
Stock. The Common Stock is traded on the New York Stock Exchange and
prices are reported by the New York Stock Exchange Composite Tape
under the symbol UIS. Harris Trust Company of New York is the
transfer agent for the Common Stock.
Dividend Limitations
The Company has not declared or paid any cash dividends on the
Common Stock since 1990 and does not anticipate declaring or paying
dividends on the Common Stock in the foreseeable future. In addition,
the Company's most restrictive outstanding debt instruments generally
limit aggregate dividends paid on the Company's capital stock since
June 30, 1992 (other than $185 million paid in respect of dividends in
arrears) to an amount no greater than 50% of cumulative consolidated
net income since July 1, 1992 plus $150 million.
Preferred Share Purchase Rights and Junior Participating Preferred Stock
The Company has distributed to its stockholders one Preferred
Share Purchase Right (the "Rights") with respect to each outstanding
share of Common Stock pursuant to a Rights Agreement (the "Rights
Agreement") dated as of March 7, 1986 between the Company and Harris
Trust Company of New York, as Rights Agent. Each Right entitles the
holder thereof, until the earlier of March 17, 2001 or the redemption
of the Rights, to buy one three-hundredth of a share of the Junior
Preferred Stock at an exercise price of $75. The Rights are
represented by the certificates for shares of Common Stock and will
not be exercisable, or transferable apart from the shares of Common
Stock, until the earlier of the tenth day after the announcement that
a person or group has acquired beneficial ownership of 20% or more of
the shares of Common Stock (a "20% holder") or the tenth day after a
person commences, or announces an intention to commence, an offer, the
consummation of which would result in a person beneficially owning 30%
or more of the shares of Common Stock as of such date (the earlier of
such dates being called the "Distribution Date"). The Rights could
then begin trading separately from the shares of Common Stock.
In the event that the Company is acquired in a merger or other
business combination transaction, each Right will entitle its holder
to purchase, at the exercise price of the Right, that number of shares
of common stock of the surviving company which, at the time of such
transaction, would have a market value of two times the exercise price
of the Right. Alternatively, if a 20% holder were to acquire the
Company by means of a reverse merger in which the Company and its
stock survive, or were to engage in certain "self-dealing"
transactions, each Right not owned by the 20% holder would become
exercisable for the number of shares of Common Stock which, at that
time, would have a market value of two times the exercise price of the
Right.
The Rights are redeemable at $.01 2/3 per Right at any time prior
to the time that a person or group has acquired beneficial ownership
of 20% of the shares of Common Stock. The Rights will expire on March
17, 2001 (the "Final Expiration Date"), unless the Final Expiration
Date is extended or unless the Rights are earlier redeemed by the
Company in accordance with their terms. At no time will the Rights
have any voting rights.
The foregoing summary of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement, which is an exhibit to the Registration Statement.
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The shares of Junior Preferred Stock purchasable upon exercise of
the Rights will be nonredeemable. Each share of Junior Preferred
Stock will have a minimum preferential quarterly dividend of $15 per
share, but will be entitled to a dividend of 300 times the aggregate
dividend declared per share of Common Stock. In the event of
liquidation, the holders of the shares of Junior Preferred Stock will
receive a preferred liquidation payment of $100 per share, but will be
entitled to receive an aggregate liquidation payment per share equal
to 300 times the payment made per share of Common Stock. Each share
of the Junior Preferred Stock will have 300 votes, voting together
with the shares of Common Stock. In the event of any merger,
consolidation or other transaction in which shares of Common Stock are
exchanged, each share of the Junior Preferred Stock will be entitled
to receive 300 times the amount received per share of Common Stock.
The Junior Preferred Stock has customary antidilution provisions to
protect the dividend, liquidation and voting rights described above.
The purchase price payable, and the number of shares of Junior
Preferred Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to time to
prevent dilution (1) in the event of a stock dividend on, or a
subdivision, combination or reclassification of the shares of Junior
Preferred Stock; (2) as a result of the grant to holders of the shares
of Junior Preferred Stock of certain rights or warrants to subscribe
for shares of Junior Preferred Stock or of securities convertible into
shares of Junior Preferred Stock (at a price, or with a conversion
price, respectively, less than the then current market price for the
shares of Junior Preferred Stock) or (3) as a result of the
distribution to holders of the shares of Junior Preferred Stock of
evidences of indebtedness or assets (excluding regular periodic cash
dividends at a rate not in excess of 125% of the rate of the last cash
dividend theretofore paid or dividends payable in shares of Junior
Preferred Stock) or of subscription rights or warrants (other than
those referred to above). With certain exceptions, no adjustment in
the purchase price will be required until cumulative adjustments
require an adjustment of at least 1% in such purchase price. The
percentage of a share of Junior Preferred Stock for which a Right is
exercisable and the number of Rights outstanding are also subject to
adjustment in the event of dividends on the shares of Common Stock
payable in shares of Common Stock or subdivisions, combinations or
consolidations of the shares of Common Stock, occurring, in any case,
before the Rights become exercisable or transferable apart from the
shares of Common Stock.
One Right is presently associated with each issued and
outstanding share of Common Stock. The Company will issue one Right
with each share of Common Stock issued prior to the Final Expiration
Date unless, prior to such issuance, the Rights are redeemed or become
exercisable and transferable apart from the shares of Common Stock.
The Rights have certain anti-takeover effects. The Rights may
cause substantial dilution to a person or group that attempts to
acquire the Company on terms that the Board of Directors determines
are not in the best interests of the Company's stockholders, except
pursuant to an offer conditioned on a substantial number of Rights
being acquired. The Rights should not interfere with any merger or
other business combination approved by the Board of Directors since
the Rights may be redeemed by the Company at $.01 2/3 per Right prior
to the time that a person or group has acquired beneficial ownership
of 20% or more of the shares of Common Stock.
Anti-Takeover Provisions
The Company is a Delaware corporation and subject to Section 203
of the Delaware General Corporation Law. Generally, Section 203
prohibits a publicly held Delaware corporation from engaging in a
"business combination" with an "interested stockholder" for a period
of three years after the date of the transaction in which the person
became an interested stockholder, unless (1) prior to such date,
either the business combination or such transaction is approved by the
board of directors of the corporation; (2) upon consummation of the
transaction which resulted in the stockholder becoming an interested
stockholder, the interested stockholder owns at least 85% of the
outstanding voting stock or (3) on or after such date the business
combination is approved by the board and by the affirmative vote of at
least 66 2/3% of the outstanding voting stock that is not owned by the
interested stockholder. A "business combination" includes mergers,
asset sales and other transactions resulting in a financial benefit to
the interested stockholder. An "interested stockholder" is a person
who, together with affiliates and associates, owns (or within three
years, did own) 15% or more of the corporation's outstanding voting
stock.
The Company's Certificate of Incorporation and By-Laws
contain certain anti-takeover provisions that are intended
to enhance the likelihood of continuity and stability
in the composition of the Board of Directors and that
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may have the effect of delaying, deferring or preventing
a future takeover or change in control of the Company unless
such takeover or change in control is approved by the Board of
Directors. Such provisions may also render the removal of the current
Board of Directors more difficult.
The Company's Certificate of Incorporation and By-Laws provide
that the Board of Directors shall consist of not less than 10 nor more
than 20 directors (subject to any rights of the holders of shares of
Preferred Stock to elect additional directors), with the exact number
to be fixed by the Board of Directors pursuant to a resolution adopted
by a majority of the entire Board. The Board of Directors is divided
into three classes of directors, which classes are as nearly equal in
number as possible. One class of directors is elected each year for a
term of three years. Directors may be removed from office only for
cause and only by the affirmative vote of the holders of at least 80%
of the voting power of all capital stock of the Company entitled to
vote generally in the election of directors (the "Voting Stock"),
voting as a single class. Subject to any rights of the holders of
shares of Preferred Stock, vacancies in the Board of Directors and
newly created directorships are filled for the unexpired term only by
the vote of a majority of the remaining directors in office. Pursuant
to the Certificate of Incorporation, advance notice of stockholder
nominations for the election of directors must be given in the manner
provided in the Company's By-Laws. The By-Laws provide that written
notice of the intent of a stockholder to make a nomination at a
meeting of stockholders must be delivered to the Secretary of the
Company not less than 90 days prior to the date of the meeting, in the
case of an annual meeting, and not more than seven days following the
date of notice of the meeting, in the case of a special meeting. The
notice must contain certain background information about the nominee
and the number of shares of the Company's capital stock beneficially
owned by the nominee. The affirmative vote of the holders of 80% or
more of the voting power of the then outstanding shares of Voting
Stock, voting as a single class, is required to amend, alter or repeal
the provisions of the Certificate of Incorporation and the By-Laws
discussed above.
The Company's Certificate of Incorporation also provides that
certain mergers, consolidations, sales or other transfers of assets
of, issuances or reclassifications of securities of, or adoptions of
plans of liquidation by the Company (individually, a "Business
Combination") must be approved by an affirmative vote of the holders
of 80% or more of the voting power of the then outstanding shares of
Voting Stock, voting as a single class, when such action involves a
person (an "Interested Stockholder") who beneficially owns more than
20% of the voting power of the then outstanding shares of Voting
Stock, unless certain minimum price, form of consideration and
procedural requirements (the "Fair Price Provisions") are satisfied or
unless a majority of the directors not affiliated with the Interested
Stockholder approve the Business Combination. The affirmative vote of
the holders of 80% or more of the voting power of the then outstanding
shares of Voting Stock, voting as a single class, is required to
amend, alter or repeal such provisions of the Certificate of
Incorporation.
Under the Certificate of Incorporation and By-Laws, except as
otherwise required by law and subject to the rights of the holders of
shares of Preferred Stock, stockholders may not call a special meeting
of stockholders. Only the Board of Directors, pursuant to a resolution
adopted by a majority of the entire Board, may call a special meeting
of stockholders. The General Corporation Law of the State of Delaware
provides that, unless specifically prohibited by the certificate of
incorporation, any action required or permitted to be taken by
stockholders of a corporation may be taken without a meeting, without
prior notice, and without a stockholder vote if a written consent or
consents setting forth the action to be taken is signed by the holders
of outstanding shares of capital stock having the requisite number of
votes that would be necessary to authorize or take such action at a
meeting of stockholders. The Company's Certificate of Incorporation
requires that stockholder action be taken at a meeting of stockholders
and prohibits stockholder action by written consent. The affirmative
vote of the holders of 80% or more of the voting power of the then
outstanding shares of Voting Stock, voting as a single class, is
required to amend, alter or repeal the provisions of the Certificate
of Incorporation and By-Laws discussed above.
The purpose of certain provisions of the Certificate of
Incorporation and By-Laws discussed above relating to (1) a classified
Board of Directors; (2) the removal of directors and the filling of
vacancies; (3) the prohibition of stockholder action by written
consent and (4) supermajority voting requirements for the repeal of
provisions (1) through (3) is to help assure the continuity and
stability of the business strategies and policies of the Company and
to discourage certain types of transactions that involve an actual or
threatened change of control of the Company. They are designed to
make it more difficult and time-consuming to change majority control
of the Board of Directors and thus to reduce the vulnerability of the
Company to an unsolicited takeover proposal that does not
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contemplate the acquisition of at least 80% of the voting power
of all of the Voting Stock or to an unsolicited proposal for the
restructuring or sale of all or part of the Company.
Such charter and by-law provisions may make more difficult or
discourage a proxy contest, or the assumption of control, by a holder
of a substantial block of shares of Common Stock, or the removal of
the incumbent Board of Directors, and could thus increase the
likelihood that incumbent directors will retain their positions. In
addition, since the Fair Price Provisions discussed above provide that
certain business combinations involving the Company and a certain type
of stockholder which do not meet specified criteria or are not
approved by supermajority vote cannot be consummated without the
approval of a majority of those directors who are not affiliated with
such stockholder, such provisions could give incumbent management the
power to prevent certain takeovers. The Fair Price Provisions may
also discourage attempts to effect a "two-step" acquisition in which a
third party purchases a controlling interest in cash and acquires the
balance of the voting stock of the Company for less desirable
consideration. Under the classified board and related provisions, the
third party would not immediately obtain the ability to control the
Board of Directors through its first-step acquisition and, under the
Fair Price Provisions, having made the first-step acquisition, the
third party could not acquire the balance of the Voting Stock for a
lower price without a supermajority vote or the approval of a majority
of such unaffiliated directors.
These provisions of the Certificate of Incorporation and By-Laws
help ensure that the Board of Directors, if confronted with an
unsolicited proposal from a third party which has acquired a block of
shares of Common Stock, will have sufficient time to review the
proposal and appropriate alternatives for the Company's stockholders.
Such charter and by-law provisions are intended to encourage
persons seeking to acquire control of the Company to initiate such an
acquisition through arm's-length negotiations with the Board of
Directors, who would then be in a position to negotiate a transaction
which would treat all stockholders in substantially the same manner.
Such provisions may have the effect of discouraging a third party from
making an unsolicited tender offer or otherwise attempting to obtain
control of the Company, even though such an attempt might be
beneficial to the Company and its stockholders. In addition, since the
provisions are designed to discourage accumulations of large blocks of
shares of Common Stock by purchasers whose objective is to have such
shares repurchased by the Company at a premium, such provisions could
tend to reduce the temporary fluctuations in the market price of
Common Stock caused by such accumulations. Accordingly, stockholders
of the Company could be deprived of certain opportunities to sell
their shares at a temporarily higher market price.
The Rights could also have the effect of delaying, deferring or
preventing a takeover or change in control of the Company. See
"Common Stock-Preferred Share Purchase Rights and Junior Participating
Preferred Stock".
Preferred Stock
The following description sets forth certain general terms and
provisions of the Preferred Stock to which any Prospectus Supplement
may relate. Certain other terms of a particular series of Preferred
Stock will be described in the Prospectus Supplement relating to that
series. If so indicated in the Prospectus Supplement, the terms of
any such series may differ from the terms set forth below. The
description of certain provisions of the Preferred Stock set forth
below and in any Prospectus Supplement does not purport to be complete
and is subject to and qualified in its entirety by reference to the
Company's Certificate of Incorporation and the Certificate of
Designation relating to each such series of Preferred Stock, which
will be filed with the Commission in connection with the offering of
such series of Preferred Stock.
Under the Company's Certificate of Incorporation, the Board of
Directors may, by resolution, establish series of Preferred Stock
having such voting powers, and such designations, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as the Board of
Directors may determine.
The Preferred Stock offered hereby will have the dividend,
liquidation, redemption and voting rights set forth below unless
otherwise provided in the Prospectus Supplement relating to a particular
series of Preferred Stock. Reference is made to the Prospectus Supplement
relating to the particular series of Preferred Stock offered thereby
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for specific terms, including: (1) the designation and stated value
per share of such Preferred Stock and the number of shares offered;
(2) the amount of liquidation preference per share; (3) the price at
which such Preferred Stock will be issued; (4) the dividend rate (or
method of calculation), the dates on which dividends will be payable,
whether such dividends will be cumulative or noncumulative and, if
cumulative, the dates from which dividends will commence to cumulate;
(5) any redemption or sinking fund provisions; (6) any conversion
rights and (7) any additional voting, dividend, liquidation, redemption,
sinking fund and other rights, preferences, privileges, limitations
and restrictions.
The Preferred Stock offered hereby will be issued in one or more
series. The holders of Preferred Stock will have no pre-emptive
rights. Preferred Stock will be fully paid and nonassessable upon
issuance against full payment of the purchase price therefor. Unless
otherwise specified in the Prospectus Supplement relating to a
particular series of Preferred Stock, each series of Preferred Stock
will, with respect to dividend rights and rights on liquidation,
dissolution and winding up of the Company, rank prior to the Common
Stock and the Junior Preferred Stock (the "Junior Stock") and on a
parity with the Series A, Series B and Series C Preferred Stock and
each other series of Preferred Stock offered hereby (the "Parity
Stock").
Dividend Rights
Holders of the Preferred Stock of each series will be entitled to
receive, when, as and if declared by the Board of Directors of the
Company, out of funds legally available therefor, cash dividends at
such rates and on such dates as are set forth in the Prospectus
Supplement relating to such series of Preferred Stock. Such rate may
be fixed or variable or both. Each such dividend will be payable to
the holders of record as they appear on the stock books of the Company
on such record dates as will be fixed by the Board of Directors of the
Company. Dividends on any series of the Preferred Stock may be
cumulative or noncumulative, as provided in the Prospectus Supplement
relating thereto. If the Board of Directors of the Company fails to
declare a dividend payable on a dividend payment date on any series of
Preferred Stock for which dividends are noncumulative, then the right
to receive a dividend in respect of the dividend period ending on such
dividend payment date will be lost, and the Company will have no
obligation to pay the dividend accrued for that period, whether or not
dividends are declared for any future period. Dividends on shares of
each series of Preferred Stock for which dividends are cumulative will
accrue from the date set forth in the applicable Prospectus
Supplement.
The Preferred Stock of each series will include customary
provisions (1) restricting the payment of dividends or the making of
other distributions on, or the redemption, purchase or other
acquisition of, Junior Stock unless full dividends, including, in the
case of cumulative Preferred Stock, accruals, if any, in respect of
prior dividend periods, on the shares of such series of Preferred
Stock have been paid and (2) providing for the pro rata payment of
dividends on such series and other Parity Stock when dividends have
not been paid in full upon such series and other Parity Stock.
See "Certain Provisions of Outstanding Preferred Stock" for a
description of provisions of the Company's Series A, Series B and
Series C Preferred Stock that could limit the Company's ability to pay
dividends on the Preferred Stock offered hereby.
Rights Upon Liquidation
In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company, the holders of each series
of Preferred Stock will be entitled to receive out of assets of the
Company available for distribution to stockholders, before any
distribution of assets is made to holders of Junior Stock, liquidating
distributions in the amount set forth in the Prospectus Supplement
relating to such series of Preferred Stock plus an amount equal to
accrued and unpaid dividends. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the amounts
payable with respect to the Preferred Stock of any series and any
Parity Stock are not paid in full, the holders of the Preferred Stock
of such series and of such Parity Stock will share ratably in any such
distribution of assets of the Company in proportion to the full
respective preferential amounts (which may include accumulated
dividends) to which they are entitled. After payment of the full
amount of the liquidating distribution to which they are entitled, the
holders of such series of Preferred Stock will have no right or claim to any
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of the remaining assets of the Company. Neither the sale of
all or a portion of the Company's assets nor the merger or consolidation
of the Company into or with any other corporation shall be deemed to
be a dissolution, liquidation or winding up, voluntarily or involuntarily,
of the Company.
Redemption
The terms, if any, on which shares of a series of Preferred Stock
may be subject to optional or mandatory redemption will be set forth
in the Prospectus Supplement relating to such series.
Conversion
The terms, if any, on which shares of any series of Preferred
Stock are convertible into Common Stock will be set forth in the
Prospectus Supplement relating thereto.
Voting Rights
The holders of Preferred Stock of a series offered hereby will
not be entitled to vote except as indicated below or in the Prospectus
Supplement relating to such series of Preferred Stock or as required
by applicable law. Unless otherwise specified in the Prospectus
Supplement relating to a particular series of Preferred Stock, when
and if any such series is entitled to vote, each share in such series
will be entitled to one vote.
Unless otherwise specified in the related Prospectus Supplement,
holders of shares of a series of Preferred Stock will have the
following voting rights. If, on the date used to determine
stockholders of record for any meeting of stockholders of the Company
at which directors are to be elected, dividends payable on any series
of Preferred Stock offered hereby and any other series of Parity Stock
are in arrears in an amount equal to at least six quarterly dividends,
the number of directors of the Company will be increased by two and
the holders of all such series of Preferred Stock, voting as a class
without regard to series, will be entitled to elect such two
additional directors at such meeting. The affirmative vote or consent
of the holders of at least a majority of the outstanding shares of a
series of Preferred Stock and any other series of Parity Stock also
being affected, voting as a single class without regard to series,
will be required for any amendment of the Company's Certificate of
Incorporation if the amendment would have a materially adverse effect
on the powers, preferences or special rights of such series. The
affirmative vote or consent of the holders of at least two-thirds of
the outstanding shares of a series of Preferred Stock and any other
series of Parity Stock, voting as a single class without regard to
series, will be required to authorize, create or issue, or increase
the authorized amount of, any class or series of capital stock ranking
prior to such series of Preferred Stock as to dividends or upon
liquidation.
Certain Provisions of Outstanding Preferred Stock
As of December 31, 1996, there were 28.4 million shares of Series
A Preferred Stock, 10 shares of Series B Preferred Stock and 20 shares
of Series C Preferred Stock outstanding. The Series A Preferred Stock
accrues quarterly cumulative dividends at the annual rate of $3.75 per
share and is entitled to receive $50 per share, plus accrued and
unpaid dividends, upon liquidation. Each of the Series B Preferred
Stock and the Series C Preferred Stock has a stated value of $5
million per share, accrues quarterly cumulative dividends based on
such stated value at the rate of 9 1/2% per annum, accrues dividends on
the amount of any unpaid dividends and is entitled to receive the
stated value, plus accrued and unpaid dividends, upon liquidation.
Each of the Series A, Series B and Series C Preferred Stock
prohibits the payment of cash dividends or other distributions on, and
the purchase, redemption or other acquisition of, any shares of Junior
Stock until all accrued and unpaid dividends on such series of
Preferred Stock have been paid. When dividends are not paid in full on
such series of Preferred Stock, all dividends paid upon shares of such
series and Parity Stock must be paid pro rata so that the amount of
dividends paid per share on such series and the Parity Stock bear to
each other the same ratio that accrued dividends per share on such
series and the Parity Stock bear to each other.
-23-
DESCRIPTION OF THE WARRANTS
The Company may issue Warrants for the purchase of Debt
Securities, Preferred Stock or Common Stock. Warrants may be issued
independently or together with Debt Securities, Preferred Stock or
Common Stock offered by any Prospectus Supplement and may be attached
to or separate from any such Securities. Each series of Warrants will
be issued under a separate warrant agreement (a "Warrant Agreement")
to be entered into between the Company and a bank or trust company, as
warrant agent (the "Warrant Agent"). The Warrant Agent will act
solely as an agent of the Company in connection with the Warrants and
will not assume any obligation or relationship of agency or trust for
or with any holders or beneficial owners of Warrants. The following
summary of certain provisions of the Warrants does not purport to be
complete and is subject to, and qualified in its entirety by reference
to, the provisions of the Warrant Agreement that will be filed with
the Commission in connection with the offering of such Warrants.
Debt Warrants
The Prospectus Supplement relating to a particular issue of
Warrants for the purchase of Debt Securities ("Debt Warrants") will
describe the terms of such Debt Warrants, including the following: (1)
the title of such Debt Warrants; (2) the offering price for such Debt
Warrants, if any; (3) the aggregate number of such Debt Warrants; (4)
the designation and terms of the Debt Securities purchasable upon
exercise of such Debt Warrants; (5) if applicable, the designation and
terms of the Debt Securities with which such Debt Warrants are issued
and the number of such Debt Warrants issued with each such Debt
Security; (6) if applicable, the date from and after which such Debt
Warrants and any Debt Securities issued therewith will be separately
transferable; (7) the principal amount of Debt Securities purchasable
upon exercise of a Debt Warrant and the price at which such principal
amount of Debt Securities may be purchased upon exercise (which price
may be payable in cash, securities, or other property); (8) the date
on which the right to exercise such Debt Warrants shall commence and
the date on which such right shall expire; (9) if applicable, the
minimum or maximum amount of such Debt Warrants that may be exercised
at any one time; (10) whether the Debt Warrants represented by the
Debt Warrant certificates or Debt Securities that may be issued upon
exercise of the Debt Warrants will be issued in registered or bearer
form; (11) information with respect to book-entry procedures, if any;
(12) the currency or currency units in which the offering price, if
any, and the exercise price are payable; (13) if applicable, a
discussion of material United States federal income tax
considerations; (14) the antidilution provisions of such Debt
Warrants, if any; (15) the redemption or call provisions, if any,
applicable to such Debt Warrants; and (16) any additional terms of the
Debt Warrants, including terms, procedures, and limitations relating
to the exchange and exercise of such Debt Warrants.
Stock Warrants
The Prospectus Supplement relating to any particular issue of
Warrants for the purchase of Common Stock or Preferred Stock will
describe the terms of such Warrants, including the following: (1) the
title of such Warrants; (2) the offering price for such Warrants, if
any; (3) the aggregate number of such Warrants; (4) the designation
and terms of any Preferred Stock purchasable upon exercise of such
Warrants; (5) if applicable, the designation and terms of the
Securities with which such Warrants are issued and the number of such
Warrants issued with each such Security; (6) if applicable, the date
from and after which such Warrants and any Securities issued therewith
will be separately transferable; (7) the number of shares of Common
Stock or Preferred Stock purchasable upon exercise of a Warrant and
the price at which such shares may be purchased upon exercise (which
price may be payable in cash, securities or other property); (8) the
date on which the right to exercise such Warrants shall commence and
the date on which such right shall expire; (9) if applicable, the
minimum or maximum amount of such Warrants that may be exercised at
any one time; (10) the currency or currency units in which the
offering price, if any, and the exercise price are payable; (11) if
applicable, a discussion of material United States federal income tax
considerations; (12) the antidilution provisions of such Warrants, if
any; (13) the redemption or call provisions, if any, applicable to
such Warrants; and (14) any additional terms of the Warrants,
including terms, procedures, and limitations relating to the exchange
and exercise of such Warrants.
-24-
PLAN OF DISTRIBUTION
The Offered Securities may be sold to underwriters for public
offering pursuant to terms of offering fixed at the time of sale. In
addition, the Offered Securities may be sold by the Company to other
purchasers directly or through agents. Any such underwriter or agent
involved in the offer and sale of the Offered Securities will be named
in an applicable Prospectus Supplement.
Underwriters may offer and sell the Offered Securities at a fixed
price or prices, which may be changed, or from time to time at market
prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Company also
may offer and sell the Offered Securities in exchange for one or more
of its outstanding issues of debt securities. The Company also may,
from time to time, authorize underwriters acting as the Company's
agents to offer and sell the Offered Securities upon the terms and
conditions as shall be set forth in an applicable Prospectus
Supplement. In connection with the sale of Offered Securities,
underwriters may be deemed to have received compensation from the
Company in the form of underwriting discounts or commissions and may
also receive commissions from purchasers of Offered Securities for
whom they may act as agents. Underwriters may sell Offered Securities
to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the
underwriters and/or commissions (which may be changed from time to
time) from the purchasers for whom they may act as agents.
Any underwriting compensation paid by the Company to underwriters
or agents in connection with the offering of Offered Securities, and
any discounts, concessions or commissions allowed by underwriters to
participating dealers, will be set forth in an applicable Prospectus
Supplement. Underwriters, dealers and agents participating in the
distribution of the Offered Securities may be deemed to be
underwriters, and any discounts and commissions received by them and
any profit realized by them on resale of the Offered Securities may be
deemed to be underwriting discounts and commissions under the
Securities Act. Underwriters, dealers and agents may be entitled,
under agreements entered into with the Company, to indemnification
against and contribution toward certain civil liabilities, including
liabilities under the Securities Act, and to reimbursement by the
Company for certain expenses.
If so indicated in an applicable Prospectus Supplement, the
Company may authorize agents, underwriters or dealers acting as the
Company's agents to solicit offers from certain institutional
investors to purchase Offered Securities from the Company at the
public offering price set forth in the Prospectus Supplement pursuant
to Delayed Delivery Contracts ("Contracts") providing for payment and
delivery on a future date or dates specified therein. There may be
limitations on the minimum amount which may be purchased by any such
institutional investor or on the portion of the aggregate amount of
the particular Offered Securities which may be sold pursuant to such
arrangements. Institutional investors to which such offers may be
made, when offered, include commercial and savings banks, insurance
companies, pension funds, investment banks, educational and charitable
institutions and such other institutions as may be approved by the
Company. Each Contract will be subject to the approval of the
Company. Contracts will not be subject to any conditions except (1)
purchase shall not at the time of delivery be prohibited under the
laws of any jurisdiction in the United States to which the purchaser
is subject and (2) if the Offered Securities are being sold to
underwriters, the Company shall have sold to underwriters the total
amount of the Offered Securities less the amount covered by Contracts.
Agents or underwriters will have no responsibility in respect of the
delivery or performance of Contracts.
Each underwriter, dealer and agent participating in the
distribution of any Offered Securities which are Bearer Securities
will agree that it will not offer, sell or deliver, directly or
indirectly, Bearer Securities in the United States or to U.S. Persons
(other than qualifying financial institutions), in connection with the
original issuance of the Offered Securities. See "Limitations on
Issuance of Bearer Securities".
LEGAL MATTERS
Unless otherwise indicated in an accompanying Prospectus
Supplement, certain legal matters in connection with the Offered
Securities will be passed upon for the Company by Harold S. Barron,
Esq., Senior Vice President, General Counsel and Secretary of the
Company, and for any agents or underwriters by Simpson Thacher & Bartlett
-25-
(a partnership which includes professional corporations). As
of the date of this Prospectus, Mr. Barron owns 68,295 shares
(including 66,695 restricted shares) of Common Stock and holds options
to purchase 228,000 shares of Common Stock.
EXPERTS
The consolidated financial statements of the Company at December
31, 1995 and 1994, and for each of the three years in the period ended
December 31, 1995 incorporated by reference or appearing in the
Company's Annual Report (Form 10-K) for the year ended December 31,
1995, have been audited by Ernst & Young LLP, independent auditors, as
set forth in their report thereon incorporated therein and
incorporated herein by reference. Such consolidated financial
statements are, and audited financial statements to be included in
subsequently filed documents will be, incorporated herein in reliance
upon the reports of Ernst & Young LLP pertaining to such financial
statements (to the extent covered by consents filed with the
Commission) given upon the authority of such firm as experts in
accounting and auditing.
- ----------------------------------- ---------------------------------
No dealer, salesman or other
person has been authorized to
give any information or to make UNISYS
any representations other than
those contained or incorporated
by reference in this Prospectus
or any accompanying Prospectus
Supplement, and, if given or
made, such information or
representations must not be $500,000,000
relied upon as having been
authorized. Neither the
delivery of this Prospectus nor UNISYS CORPORATION
any accompanying Prospectus
Supplement nor any sale made Securities
hereunder shall under any
circumstances create an
implication that there has been
no change in the affairs of the
Company since the date of this
Prospectus or any accompanying
Prospectus Supplement. Neither
this Prospectus nor any
accompanying Prospectus
Supplement constitutes an offer ----------
or solicitation by anyone in PROSPECTUS
any jurisdiction in which such ----------
offer or solicitation is not
authorized or in which the
person making such offer or
solicitation is not qualified
to do so or to anyone to whom
it is unlawful to make such
offer or solicitation.
___________
TABLE OF CONTENTS
Page
----
Available Information......2
Information Incorporated
by Reference.............2
The Company................3
Risk Factors...............3
Use of Proceeds............5
Ratios of Earnings.........5
Description of the Debt
Securities...............6
Description of
Capital Stock...........16
Description of
the Warrants............23
Plan of Distribution......24 , 1997
Legal Matters.............24
Experts...................25
- ----------------------------------- ---------------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following statement sets forth the estimated amounts of
expenses, other than underwriting discounts and commissions, to be
borne by the registrant in connection with the distribution of the
Securities:
Securities and Exchange Commission Registration Fee $136,364
Trustees' and Transfer Agents' Fees 25,000
Printing and Engraving Expenses 175,000
Rating Agency Fees 200,000
Accounting Fees and Expenses 75,000
Blue Sky Fees and Expenses 20,000
New York Stock Exchange listing fees, if applicable 20,000
Miscellaneous Expenses 8,636
--------
Total $660,000
__________ ========
All of the amounts are estimated except for the Securities and
Exchange Commission registration fee.
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law (the "DGCL")
provides for, among other things:
a. permissive indemnification for expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by
designated persons, including directors and officers of a
corporation, in the event such persons are parties to
litigation other than stockholder derivative actions if
certain conditions are met;
b. permissive indemnification for expenses actually and
reasonably incurred by designated persons, including directors
and officers of a corporation, in the event such persons are
parties to stockholder derivative actions if certain
conditions are met;
c. mandatory indemnification for expenses actually and reasonably
incurred by designated persons, including directors and
officers of a corporation, in the event such persons are
successful on the merits or otherwise in litigation covered by
a. and b. above; and
d. that the indemnification provided for by Section 145 shall not
be deemed exclusive of any other rights which may be provided
under any by-law, agreement, stockholder or disinterested
director vote, or otherwise.
The Company's Certificate of Incorporation provides that a
director of the Company shall not be personally liable to the Company
or its stockholders for monetary damages for breach of fiduciary duty
as a director except for liability (i) for any breach of the
director's duty of loyalty to the Company or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) for paying a dividend
or approving a stock repurchase in violation of Section 174 of the
DGCL or (iv) for any transaction from which the director derived an
improper personal benefit.
The Certificate of Incorporation also provides that each person
who was or is made a party to, or is involved in, any action, suit or
proceeding by reason of the fact that he or she is or was a director or
officer of the Company (or was serving at the request of the Company as
a director, officer, employee or agent for another entity) shall be
indemnified and held harmless by the Company, to the fullest extent
authorized by the DGCL, as in effect (or, to the extent indemnification
is broadened, as it may be amended) against all expense, liability or
loss reasonably incurred by such person in connection therewith. The
Certificate of Incorporation further provides that such rights to
indemnification are contract rights and shall include the right to be
paid by the Company the expenses incurred in defending the proceedings
specified above, in advance of their final disposition, provided that,
if the DGCL so requires, such payment shall only be made upon delivery
to the Company by the indemnified party of an undertaking to repay all
amounts so advanced if it shall ultimately be determined that the
person receiving such payment is not entitled to be indemnified.
Persons so indemnified may bring suit against the Company to recover
unpaid amounts claimed thereunder, and if such suit is successful, the
expense of bringing such suit shall be reimbursed by the Company. The
Certificate of Incorporation provides that the right to indemnification
and to the advance payment of expenses shall not be exclusive of any
other right which any person may have or acquire under any statute,
provision of the Company's Certificate of Incorporation or By-Laws, or
otherwise. By resolution effective September 16, 1986, the Board of
Directors extended the right to indemnification provided directors and
officers by the Certificate of Incorporation to employees of the
Company. The Certificate of Incorporation also provides that the
Company may maintain insurance, at its expense, to protect itself and
any of its directors, officers, employees or agents against any
expense, liability or loss, whether or not the Company would have the
power to indemnify such person against such expense, liability or loss
under the DGCL.
On April 28, 1988, at the Company's 1988 Annual Meeting of
Stockholders, the stockholders authorized the Company to enter into
indemnification agreements ("Indemnification Agreements") with its
directors, and such Indemnification Agreements have been executed with
each of the directors of the Company. The Indemnification Agreements
provide that the Company shall, except in certain situations specified
below, indemnify a director against any expense, liability or loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement) incurred by the director in
connection with any actual or threatened action, suit or proceeding
(including derivative suits) in which the director may be involved as
a party or otherwise, by reason of the fact that the director is or
was serving in one or more capacities as a director or officer of the
Company or, at the request of the Company, as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other entity or enterprise.
The Indemnification Agreements require indemnification except to
the extent (i) payment for any liability is made under an insurance
policy provided by the Company, (ii) indemnification is provided by
the Company under the Certificate of Incorporation or By-Laws, the
DGCL or otherwise than pursuant to the Indemnification Agreement,
(iii) the liability is based upon or attributable to the director
gaining any personal pecuniary profit to which such director is not
legally entitled or is determined to result from the director's
knowingly fraudulent, dishonest or willful misconduct, (iv) the
liability arises out of the violation of certain provisions of the
Securities Exchange Act of 1934 or (v) indemnification has been
determined not to be permitted by applicable law.
The Indemnification Agreements further provide that, in the event
of a Potential Change in Control (as defined therein), the Company
shall cause to be maintained any then existing policies of directors'
and officers' liability insurance for a period of six years from the
date of a Change in Control (as defined therein) with coverage at
least comparable to and in the same amounts as that provided by such
policies in effect immediately prior to such Potential Change in
Control. In the event of a Potential Change in Control, the
Indemnification Agreements also provide for the establishment by the
Company of a trust (the "Trust"), for the benefit of each director,
upon the written request by the director. The Trust shall be funded
by the Company in amounts sufficient to satisfy any and all
liabilities reasonably anticipated at the time of such request, as
agreed upon by the director and the Company.
The Indemnification Agreements also provide that no legal actions
may be brought by or on behalf of the Company, or any affiliate of the
Company, against a director after the expiration of two years from the
date of accrual of such cause of action, and that any claim or cause
of action of the Company or its affiliate shall be extinguished and
deemed released unless asserted by the timely filing of a legal action
within such two year period.
The directors and officers of the Company are insured against
certain civil liabilities, including liabilities under federal
securities laws, which might be incurred by them in such capacity.
Item 16. Exhibits
See Index to Exhibits.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933 (the "Securities Act"), unless
the information required to be included in such post-
effective amendment is contained in a periodic report filed
by the registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 (the "Exchange Act") and
incorporated herein by reference;
(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, unless the information required to
be included in such post-effective amendment is contained in
a periodic report filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act and
incorporated herein by reference;
(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;
(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) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant'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;
(5) That, 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 the 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; and
(6) That, 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.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described in Item
15 above, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person
of the registrant in the successful defense of any action, suit or
proceeding) is asserted against the registrant by such director,
officer or controlling person in connection with the Securities being
registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Township of Whitpain,
Commonwealth of Pennsylvania, on January 23, 1997.
UNISYS CORPORATION
By: /s/JAMES A. UNRUH
--------------------------------
James A. Unruh
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby
authorizes Harold S. Barron, Janet M. Brutschea Haugen and James A.
Unruh, and each of them, with full power of substitution and full
power to act without the other, his or her true and lawful attorney-
in-fact and agent in his or her name, place and stead, to execute in
the name and on behalf of such person, individually and in each
capacity stated below, any and all amendments (including post-
effective amendments) to this Registration Statement and all documents
relating thereto, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and
Exchange Commission, and generally to do all such things in his or her
name and on his or her behalf in his or her respective capacities as
officers or directors of Unisys Corporation to comply with the
provisions of the Securities Act of 1933, as amended, and all
requirements of the Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on January 23, 1997.
Signature Title
--------- -----
/s/ James A. Unruh Chairman of the Board and Chief
----------------------------------- Executive Officer (principal
James A. Unruh executive office) and Director
/s/ Janet M. Brutschea Haugen Vice President and Controller
----------------------------------- (principal accounting officer)
Janet M. Brutschea Haugen
/s/ J.P. Bolduc Director
-----------------------------------
J.P. Bolduc
/s/ James J. Duderstadt Director
-----------------------------------
James J. Duderstadt
/s/ Gail D. Fosler Director
-----------------------------------
Gail D. Fosler
/s/ Melvin R. Goodes Director
-----------------------------------
Melvin R. Goodes
/s/ Edwin A. Huston Director
-----------------------------------
Edwin A. Huston
/s/ Kenneth A. Macke Director
-----------------------------------
Kenneth A. Macke
/s/ Theodore E. Martin Director
-----------------------------------
Theodore E. Martin
/s/ Robert McClements, Jr. Director
-----------------------------------
Robert McClements, Jr.
/s/ Alan E. Schwartz Director
-----------------------------------
Alan E. Schwartz
EXHIBIT INDEX
Exhibit
Number Document Description
- ------- --------------------
1.1 Form of Underwriting Agreement Basic Provisions (with
forms of Terms Agreement attached) (incorporated by
reference to Exhibit 1.1 to the registrant's
Registration Statement on Form S-3 (Registration No.
333-08933))
1.2 Agency Agreement (to be filed as an Exhibit to a
report of the registrant pursuant to Section 13(a) or
15(d) of the Exchange Act and incorporated herein by
reference)
4.1 Indenture dated as of August 6, 1992 between Unisys
Corporation and Bank One, Columbus NA (incorporated
by reference to Exhibit 4.2 to the registrant's
Current Report on Form 8-K dated July 30, 1992)
4.2 Form of Indenture dated as of March 1, 1996 between
Unisys Corporation and The Bank of New York
(incorporated by reference to Exhibit 4.2 to the
registrant's Current Report on Form 8-K dated March
4, 1996)
4.3 Restated Certificate of Incorporation of Unisys
Corporation (incorporated by reference to Exhibit
3(a) to the registrant's Annual Report on Form 10-K
for the year ended December 31, 1992)
4.4 By-Laws of Unisys Corporation (incorporated by
reference to Exhibit 3 to the registrant's Quarterly
Report on Form 10-Q for the quarterly period ended
June 30, 1995)
4.5 Form of Rights Agreement dated as of March 7, 1986
between Burroughs Corporation and Harris Trust
Company of New York, as Rights Agent (incorporated by
reference to Exhibit 1 to the registrant's
Registration Statement on Form 8-A, dated March 11, 1986)
4.6 Amendment No. 1 to Rights Agreement dated as of
February 22, 1996 (incorporated by reference to
Exhibit 4 to the registrant's Current Report on Form
8-K dated February 22, 1996)
4.7 Form of Warrant Agreement (to be filed as an Exhibit
to a report of the registrant pursuant to Section
13(a) or 15(d) of the Exchange Act and incorporated
herein by reference)
5 Opinion of Harold S. Barron, Senior Vice President,
General Counsel and Secretary of Unisys Corporation
12.1 Statement of Computation of Ratio of Earnings to
Fixed Charges (incorporated by reference to Exhibit
12 to the registrant's Quarterly Report on Form 10-Q
for the quarterly period ended September 30, 1996)
12.2 Statement of Computation of Ratio of Earnings to
Combined Fixed Charges and Preferred Stock Dividends
23.1 Consent of Ernst & Young LLP (independent auditors)
23.2 Consent of Harold S. Barron (included in Exhibit 5)
24 Power of Attorney (included on pages II-4 and II-5 of
this Registration Statement)
25.1 Statement of Eligibility on Form T-1 of Bank One,
Columbus NA, as Senior Trustee (incorporated by
reference to Exhibit 25(a) to the registrant's
Registration Statement on Form S-3 (Registration No. 33-64396))
25.2 Statement of Eligibility on Form T-1 of The Bank of
New York, as Subordinated Trustee (incorporated by
reference to Exhibit 25(b) to the registrant's
Registration Statement on Form S-3 (Registration No. 33-64396))
January 23, 1997
Unisys Corporation
Township Line and Union Meeting Roads
P. O. Box 500
Blue Bell, PA 19424
RE: Registration Statement on Form S-3
Gentlemen:
I am Senior Vice President, General Counsel and Secretary of Unisys
Corporation, a Delaware corporation (the "Company"), and have
represented the Company, with assistance from attorneys under my
supervision in the Company's Office of the General Counsel (the
"Unisys Attorneys"), in connection with the preparation of a
Registration Statement on Form S-3 (the "Registration Statement") to
be filed with the Securities and Exchange Commission (the
"Commission") in connection with the registration under the Securities
Act of 1933, as amended (the "Act"), of $450,000,000 in the aggregate
of the Company's (a) debt securities (the "Debt Securities"), (b)
common stock, par value $.01 per share, and associated preferred share
purchase rights (the "Common Stock"), (c) preferred stock, par value
$1 per share (the "Preferred Stock") and (d) warrants to purchase Debt
Securities, Preferred Stock or Common Stock (the "Warrants" and
collectively with the Debt Securities, the Common Stock and the
Preferred Stock, the "Securities"). The Registration Statement will
also constitute Post-Effective Amendment No. 1 to a Registration
Statement on Form S-3 (No. 333-08933) previously filed by the Company
and declared effective on August 8, 1996. Pursuant to Rule 429 of the
rules and regulations of the Commission under the Act, the prospectus
contained in the Registration Statement is a combined prospectus that
also relates to an additional $50,000,000 of securities remaining
unsold under such Registration Statement (No. 333-08933).
In connection with this opinion, I or the Unisys Attorneys have
reviewed (a) the Registration Statement, (b) the Indentures (the
"Indentures") pursuant to which the Debt Securities are to be issued,
(c) the Company's Certificate of Incorporation and (d) the Company's
By-laws. In addition, I or the Unisys Attorneys have examined such
corporate records of the Company, such certificates of public
officials, officers and representatives of the Company and such other
certificates and instruments and have made such investigations of law
as I or they have deemed appropriate for purposes of giving the
opinions hereinafter expressed.
Unisys Corporation
January 23, 1997
Page 2
With respect to the opinions set forth below, I have assumed that,
when the Securities are issued, sold and delivered by the Company,
neither the terms of the Securities at the time of such issuance, sale
and delivery nor any change in any law or regulation relating to or
affecting the Company at the time of such issuance, sale and delivery
will affect the legality, validity or binding nature of the
Securities. I have also assumed that the Securities will be issued,
sold and delivered in a manner consistent with the Delaware General
Corporation Law and the Company's Certificate of Incorporation and By-
laws as in effect at the time of such issuance, sale and delivery.
With respect to the opinions set forth in paragraphs 2 and 3 below, I
have assumed that the Company will have a sufficient number of shares
of Common Stock and Preferred Stock, respectively, authorized for
issuance and that the consideration received by the Company upon
issuance of the shares of Common Stock and Preferred Stock,
respectively, will be at least equal to the par value of such shares.
Based upon the foregoing and subject to the limitations set forth
below, I am of the opinion that:
1. When (a) the terms of the Debt Securities have been established in
accordance with the applicable Indenture and the resolutions of the
Company's Board of Directors authorizing the creation, issuance and
sale of the Debt Securities, (b) the Debt Securities have been
executed and authenticated in accordance with the terms of the
applicable Indenture and (c) the Debt Securities have been issued,
sold and delivered as described in the Registration Statement and
any prospectus supplement relating thereto (and, in the case of Debt
Securities issuable upon conversion or exercise of other Securities,
in accordance with the terms of such Security or the instrument
governing such Security providing for such conversion or exercise),
and in accordance with the terms of the applicable Indenture, the
Debt Securities will be legal, valid and binding obligations of the
Company, enforceable in accordance with their terms except as may be
limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws affecting the
enforcement of creditors' rights and by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
2. The Common Stock when (a) authorized or reserved for issuance by, or
in accordance with, appropriate resolutions of the Company's Board
of Directors and (b) issued, sold and delivered as described in the
Registration Statement and any prospectus supplement relating
thereto (and, in the case of shares of Common Stock issuable upon
conversion or exercise of other Securities, in accordance with the
terms of such Security or the instrument governing such Security
providing for such conversion or exercise) will be validly issued,
fully paid and nonassessable.
Unisys Corporation
January 23, 1997
Page 3
3. When (a) the number and terms of any particular series of Preferred
Stock have been established in accordance with the resolutions of
the Company's Board of Directors authorizing the issuance and sale
of Preferred Stock, (b) a certificate of designations conforming to
the Delaware General Corporation Law regarding such series has been
filed with the Secretary of State of the State of Delaware and (c)
the Preferred Stock of such series has been issued, sold and
delivered as described in the Registration Statement and any
prospectus supplement relating thereto (and, in the case of shares
of Preferred Stock issuable upon conversion or exercise of other
Securities, in accordance with the terms of such Security or the
instrument governing such Security providing for such conversion or
exercise), and in accordance with the terms of such series, the
Preferred Stock of such series will be validly issued, fully paid
and non-assessable.
4. When (a) the terms of the Warrants have been established in
accordance with the resolutions of the Company's Board of Directors
authorizing the creation, issuance and sale of the Warrants, (b) the
Warrant Agreement or Agreements relating to the Warrants have been
duly authorized and validly executed and delivered by the Company
and the Warrant Agent appointed by the Company, (c) the Warrants or
certificates representing the Warrants have been executed and
countersigned in accordance with the applicable Warrant Agreement
and (d) the Warrants have been issued, sold and delivered as
described in the Registration Statement, any prospectus supplement
relating thereto and the applicable Warrant Agreement, the Warrants
will be validly issued.
I hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to the reference to me under the caption
"Legal Matters" in the prospectus contained therein. In giving such
consent, I do not thereby admit that I am an expert with respect to
any part of the Registration Statement, including this exhibit, within
the meaning of the term "expert" as used in the Act or the rules and
regulations issued thereunder.
Unisys Corporation
January 23, 1997
Page 4
I am admitted to practice in the State of New York. This opinion is
limited to the laws of that State, the General Corporation Law of the
State of Delaware and the federal laws of the United States of
America.
Very truly yours,
Harold S. Barron
cg
Exhibit 12.2
UNISYS CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (UNAUDITED)
($ in millions)
Nine
Months
Ended Years Ended December 31
Sept 30, -------------------------------------------
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
Income (loss) from continuing
operations before income taxes $ 9.2 $(781.1) $ 14.6 $370.9 $301.3 $(1,425.6)
Add (deduct) share of loss (income)
of associated companies (14.0) 5.0 16.6 14.5 3.2 (6.5)
------ ------- ------- ------ ------ ---------
Subtotal (4.8) (776.1) 31.2 385.4 304.5 (1,432.1)
------ ------- ------- ------ ------ ---------
Interest expense (net of interest
capitalized) 185.5 202.1 203.7 241.7 340.6 407.6
Amortization of debt issuance
expenses 4.5 5.1 6.2 6.6 4.8 1.8
Portion of rental expense
representative of interest 48.9 65.3 65.0 70.5 78.8 80.9
------ ------- ------- ------ ------ ---------
Total Fixed Charges 238.9 272.5 274.9 318.8 424.2 490.3
------ ------- ------- ------ ------ ---------
Earnings (loss) from continuing
operations before income taxes,
fixed charges and preferred
stock dividend requirements $234.1 $(503.6) $306.1 $704.2 $728.7 $ (941.8)
======= ======= ======= ====== ====== =========
Amounts charged to income $238.9 $ 272.5 $274.9 $318.8 $424.2 $ 490.3
Preferred stock
dividend requirements 139.4 185.1 184.8 187.1 200.2 198.7
------ ------- ------- ------ ------ ---------
Total fixed charges and preferred
stock dividend requirements $378.3 $ 457.6 $459.7 $505.9 $624.4 $ 689.0
======= ======= ======= ====== ====== =========
Ratio of earnings to fixed charges
and preferred stock dividends * * * 1.39 1.17 *
======= ======= ======= ====== ====== =========
* Earnings for the nine months ended September 30, 1996 and for the years ended December 31,
1995, 1994 and 1991 were inadequate to cover fixed charges and preferred stock dividends by
$144.2 million, $961.2 million, $153.6 million and $1,630.8 million, respectively.
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated January 26, 1996, in the Registration Statements
(Form S-3 No. 333-XXXXX and post-effective Amendment No. 1 to Form S-3
No. 333-08933) and related Prospectus of Unisys Corporation for the
registration of $500,000,000 of Securities.
We also consent to the incorporation by reference therein of our report
with respect to the financial statement schedule of Unisys Corporation for
the years ended December 31, 1995, 1994, and 1993 included in the Annual
Report (Form 10-K) for 1995 filed with the Securities & Exchange Commission.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
January 22, 1997
