View:
This Registration Statement also Constitutes Post-Effective Amendment No. 1
to Registration Statement No. 33-64396
As filed with the Securities and Exchange Commission on July 26, 1996
Registration No. 333-
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);Preferred Stock,
par value $1 per share............$299,000,000 $103,104
- -------------------------------------------------------------------
(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.
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. 33-64396) (RELATING TO AN AGGREGATE $350,000,000
OF SECURITIES) PREVIOUSLY FILED BY THE REGISTRANT AND DECLARED EFFECTIVE ON
AUGUST 5, 1993. THIS REGISTRATION STATEMENT CONSTITUTES POST-EFFECTIVE
AMENDMENT NO. 1 TO THE REGISTRANT'S REGISTRATION STATEMENT ON FORM S-3 (NO.
33-64396) WITH RESPECT TO THE REMAINING $201,000,000 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 July 26, 1996
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"), and (3) shares
of its Preferred Stock, par value $1 per share ("Preferred Stock") (the Debt
Securities, the Common Stock and the Preferred Stock are collectively referred
to as the "Securities"), in amounts, at prices and on terms to be determined
at the time of offering. The Subordinated Debt Securities may be issued as
convertible Debt Securities which will be convertible into shares of Common
Stock. 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 and (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. If so specified in the applicable Prospectus
Supplement, Debt Securities of a series may be issued in whole or in part in
the form of one or more temporary or permanent global securities.
The Senior Debt Securities will rank equally with all other unsubordinated
and unsecured indebtedness of the Company. The Subordinated Debt Securities
will be subordinated in right of payment to all Senior Indebtedness of the
Company (as hereinafter defined).
------------
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."
, 1996
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 and March 29, 1996.
3. The Company's Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 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
2
for purposes hereof to the extent that a statement contained herein, in the
accompanying Prospectus Supplement or in 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.
LOSSES IN 1995; RESTRUCTURINGS
The Company reported a net loss of $624.6 million, or $4.35 per primary
and fully diluted common share, in 1995. The loss included a fourth quarter
pretax restructuring charge of $717.6 million, $581.9 million after tax, or
$3.39 per common share, primarily relating to the internal realignment of the
Company into three operating units and covering work force reductions of
approximately 7,900 people, product and program discontinuances and
consolidation of office facilities and manufacturing capacity. In the fourth
quarter of 1995, the Company also recorded a pretax charge for contract losses
of $129.0 million, $88.6 million after tax, or $.51 per common share, relating
primarily to a few large multi-year, fixed price systems integration contracts.
Stockholders' equity decreased $744.3 million during 1995, principally
reflecting the net loss of $624.6 million and the declaration of preferred
stock dividends of $123.7 million. As expected, the restructuring actions had
a disruptive effect on the Company's results of operations in the first quarter
of 1996. Total customer revenue for the quarter was down 3% from the first
quarter of 1995, and the Company reported a loss from continuing operations of
$13.4 million, or $.25 per primary and fully diluted common share, for the
first quarter of 1996, compared to income from continuing operations of $32.1
million, or $.02 per primary and fully diluted common share, for the first
quarter of 1995. No assurance can be given that the Company will not
experience losses in the future.
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
addition to the 1995 restructuring charge, 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.
3
HIGH LEVERAGE AND CASH REQUIREMENTS
At March 31, 1996, the Company had approximately $2.6 billion principal
amount of debt, a large portion of which is scheduled to mature during the
next two years. As of December 31, 1995, total debt maturing in 1996 and
1997 was $355.6 million and $431.8 million, respectively. The percentage of
total debt to total capitalization for the Company was 59.1% at March 31,
1996. Total interest expense for the three months ended March 31, 1996 and
for the full year 1995 was $50.5 million and $202.1 million, respectively.
In addition, dividends paid on preferred stock for the three months ended
March 31, 1996 and for the full year 1995 amounted to $30.2 million and
$120.2 million, respectively.
Cash requirements for the restructuring actions discussed above are
expected to be approximately $400 million in 1996 and $150 million in 1997.
The Company expects the restructuring actions to generate annualized savings
in excess of $500 million by the end of 1996 and $600 million by the end of
1997. The degree to which cash savings from the restructuring actions will
offset the 1996 cash requirement will depend upon the timing of implementation.
The restructuring is proceeding on plan. The Company estimates that as of
March 31, 1996, the restructuring actions have generated annualized cost
savings of approximately $90 million. 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.
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.
During 1995, the 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 has a $200 million revolving credit facility that expires on
June 25, 1997. 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. The
Company does not currently anticipate that it will borrow under this facility.
SERIES B AND C PREFERRED STOCK
The Company has outstanding $150 million of Series B and C convertible
preferred stock. If such preferred stock has not been previously converted
by the holder or redeemed by the Company, the Company will be required to
convert it into Common Stock, based on the then-current market price, and
conduct a managed sale program of the Common Stock, which must, in general,
be completed by June 28, 1997. The Company's current intention is to redeem
the preferred stock for cash prior to June 28, 1997.
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.
4
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 pretax charge for contract losses of $129.0 million relating to certain
services contracts, primarily a few large multi-year, fixed-price systems
integration contracts. Included in this amount was $65.5 million related to
fourth quarter developments with respect to contract terminations and $63.5
million related to contract performance issues, including schedule slippages,
late deliveries and cost overruns, that arose in that quarter. 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 61%, 60% and 58% of
total revenue of the Company in 1995, 1994 and 1993, respectively. Revenue
from international operations in 1995 was $3.8 billion. 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 long-term investments in foreign subsidiaries and
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 three months ended March 31, 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.
5
RATIO OF EARNINGS TO FIXED CHARGES
Three Months
Ended
March 31 Year Ended December 31
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
* * 1.11 2.21 1.72 *
__________
* Earnings for the three months ended March 31, 1996 and for the years
ended December 31, 1995 and 1991 were inadequate to cover fixed charges by
$21.5 million, $776.1 million and $1,432.1 million, respectively.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Three Months
Ended
March 31 Year Ended December 31
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
* * * 1.39 1.17 *
__________
* Earnings for the three months ended March 31, 1996 and for the years
ended December 31, 1995, 1994 and 1991 were inadequate to cover combined fixed
charges and preferred stock dividends by $68.0 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").
6
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.
7
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.
8
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
9
participants or persons that may hold interests through participants.
Ownership of beneficial interests by participants in such Global Notes 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
10
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 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.
11
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.
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 attributable to foreign currency translation adjustments
12
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 indemnity. Subject to such provisions
13
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.
14
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 March 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.
15
As of March 31, 1996, the Company had Senior Indebtedness (excluding
accrued interest and premium, if any) of approximately $2.0 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 March 31, 1996, there were 173,403,099 shares of Common Stock
outstanding, and the Company had reserved approximately 158,400,000 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 March 31,
1996, there were 28,404,849 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.
16
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.
17
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.
18
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 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
19
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 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.
20
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 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
21
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 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 March 31, 1996, there were 28,404,849 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
22
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.
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".
23
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 (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.
24
UNISYS
$500,000,000
Unisys Corporation
Securities
-------------------
PROSPECTUS
-------------------
, 1996
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE 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 RELIED UPON AS HAVING BEEN AUTHORIZED.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE 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 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
Plan of Distribution 23
Legal Matters 24
Experts 24
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 $103,104
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 6,896
--------
Total $625,000
__________
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
II-1
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:
II-2
(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.
II-3
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 July 25, 1996.
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, Edward A. Blechschmidt, 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 July 25, 1996.
Signature Title
/s/ James A. Unruh Chairman of the Board and Chief Executive
- ----------------------------- Officer (principal executive officer) and
James A. Unruh Director
/s/ Edward A. Blechschmidt Senior Vice President and Chief Financial
- ----------------------------- Officer (principal financial officer)
Edward A. Blechschmidt
/s/ Janet M. Brutschea Haugen Vice President and Controller (principal
- ----------------------------- accounting officer)
Janet M. Brutschea Haugen
/s/ J.P. Bolduc Director
- -----------------------------
J.P. Bolduc
II-4
Signature Title
/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
II-5
EXHIBIT INDEX
Exhibit
Number Document Description
1.1 Form of Underwriting Agreement Basic Provisions (with forms of Terms
Agreement attached)
1.2 Agency Agreement (to be supplied by Form 8-K)
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)
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 March 31, 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))
UNISYS CORPORATION
Securities
UNDERWRITING AGREEMENT BASIC PROVISIONS
July, 1996
1. Introductory. Unisys Corporation, a Delaware corporation
(the "Company"), proposes to issue and sell from time to time senior debt
securities, subordinated debt securities, convertible subordinated debt
securities (collectively, "Debt Securities"), preferred stock and common
stock registered under the registration statement referred to in Section
2(a) ("Registered Securities"). If specified in a Terms Agreement referred
to in Section 3, the Company proposes to grant to the underwriters an option
to purchase up to that amount of Registered Securities specified in such
Terms Agreement (herein called the Option Securities). The Debt Securities
will be issued under indentures (as they may be amended or supplemented from
time to time, the "Indentures"), more particularly described in a Terms
Agreement, between the Company and the trustees named therein (the
"Trustee(s)"), in one or more series, which series may vary as to interest
rates, maturities, redemption provisions, selling prices and other terms,
with all such terms for any particular series of the Debt Securities being
determined at the time of sale. The preferred stock will be issued in one
or more series, which series may vary as to voting rights, dividends,
optional and mandatory redemption provisions, liquidation preference and
conversion provisions and other terms, with all such terms for any particular
series or issue of the preferred stock being determined at the time of issue.
The Registered Securities will be sold pursuant to a Terms Agreement, for
resale in accordance with terms of offering determined at the time of sale.
The Registered Securities (together with the Option Securities)
involved in any such offering are hereinafter referred to as the
"Securities." The firm or firms which agree to purchase the Securities
are hereinafter referred to as the "Underwriters" of such Securities, and
the representative or representatives of the Underwriters, if any, specified
in a Terms Agreement are hereinafter referred to as the "Representatives";
provided, however, that if the Terms Agreement does not specify any
representative of the Underwriters, the term "Representatives," as used in
this Agreement (other than in Sections 2(b), 5(c) and 6 and the second
sentence of Section 3) shall mean the Underwriters.
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each Underwriter that:
(a) A registration statement on Form S-3, including a form of
prospectus, relating to the Registered Securities and more particularly
described in the Terms Agreement relating to the Securities has been
prepared by the Company and filed with, and has been declared effective
by, the Securities and Exchange Commission ("Commission"). If any
post-effective amendment to such registration statement has been filed
with the Commission prior to the date of the applicable Terms Agreement,
the most recent such amendment has been declared effective by the
Commission. For purposes of this Agreement, "Effective Date" means
the date as of which such registration statement, or the most recent
post-effective amendment thereto, if any, was declared effective by
the Commission. Such registration statement, as amended at the Effective
Date, including all material incorporated by reference therein and, if
the date of the Terms Agreement is on or before the fifteenth business
day after the Effective Date, including all information deemed to be a
part thereof as of the Effective Date pursuant to paragraph (b) of Rule
430A under the Securities Act of 1933, as amended ("Act"), is
hereinafter referred to as the "Registration Statement," and the form
of prospectus relating to the Securities, as first filed pursuant to
paragraph (1) or (4) of Rule 424(b) ("Rule 424(b)") under the Act or,
if the date of the Terms Agreement is after the fifteenth business day
after the Effective Date, pursuant to Rule 424(b)(2) or (5), as
supplemented as contemplated by Section 3 to reflect the terms of the
Securities and the terms of offering thereof, including all documents
incorporated by reference therein, is hereinafter referred to as the
"Prospectus."
(b) On the Effective Date, such Registration Statement conformed
in all respects to the requirements of the Act, the Trust Indenture
Act of 1939, as amended ("Trust Indenture Act"), if applicable, and
the rules and regulations of the Commission ("Rules and Regulations")
and did not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, and on the date of the
applicable Terms Agreement, and at the time of filing of the Prospectus
pursuant to Rule 424(b)(1) and (4), the Registration Statement and
the Prospectus will conform in all respects to the requirements of
the Act, the Trust Indenture Act, if applicable, and the Rules and
Regulations, and neither of such documents will include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, except that the foregoing does not apply to
statements in or omissions from any of such documents based upon
written information furnished to the Company by or on behalf of any
Underwriter through the Representatives, if any, specifically for
use therein.
(c) (i) The Indenture, if any, described in the Terms Agreement
has been duly authorized and, when executed by the proper officers of
the Company and delivered (assuming due execution and delivery thereof
by the Trustee), will constitute the valid and legally binding
instrument of the Company. The Debt Securities, if any, described in
the Terms Agreement have been duly and validly authorized and will be,
when validly executed, authenticated and delivered in accordance with
the terms of the Indenture, issued and outstanding obligations of the
Company entitled to the benefits of the Indenture. (ii) If any
Securities to be issued are convertible, the shares of common stock
issuable upon conversion are duly and validly authorized; have been
duly reserved for issuance upon conversion of the Securities; when
issued upon the conversion of the Securities, will be duly and validly
issued, fully paid and non-assessable. (iii) The common stock and
preferred stock, if any, described in the Terms Agreement have been
duly and validly authorized and when issued will be fully paid and
non-assessable. (iv) No further approval or authority of the
stockholders or the Board of Directors of the Company will be
required for the issuance and sale of the Securities as contemplated
herein or the issuance of the shares of common stock upon conversion
of the Securities. (v) The Securities conform to the description
thereof in the Prospectus.
3. Purchase and Offering of Securities. The obligation of the
Underwriters to purchase the Securities will be evidenced by an exchange of
a telegram, telex or other written communications ("Terms Agreement") at
each time the Company determines to sell the Securities. Each Terms
Agreement will be in the form of Annex II (A) or (B) attached hereto and
will incorporate by reference the provisions of this Agreement, except as
otherwise provided therein, and will specify the firm or firms which will
be Underwriters, the names of any Representatives, the amount to be
purchased by each Underwriter, the purchase price to be paid by the
Underwriters and certain terms of the Securities and whether any of the
Securities may be sold to institutional investors pursuant to Delayed
Delivery Contracts (as defined below). The Terms Agreement will also
specify the time and date of delivery and payment (such time and date,
or such other time not later than seven full business days thereafter as
the Representatives and the Company agree as the time for payment and
delivery, being herein and in the Terms Agreement referred to as the
"Closing Date"), the place of delivery and payment and any details of the
terms of public offering that should be reflected in the prospectus
supplement relating to the offering of the Securities. The obligations
of the Underwriters to purchase the Securities will be several and not
joint. It is understood that the Underwriters propose to offer the
Securities for sale as set forth in the Prospectus. The Debt Securities
delivered to the Underwriters on the Closing Date will be in definitive
fully registered form, in such denominations and registered in such names
as the Underwriters may request.
If specified in a Terms Agreement, on the basis of the
representations, warranties and covenants herein contained, and subject
to the terms and conditions herein set forth, the Company grants an option to
the several Underwriters to purchase, severally and not jointly, up to that
amount of the Option Securities, as shall be specified in the Terms Agreement,
from the Company at the same price as the Underwriters shall pay for the
Securities. Said option may be exercised only to cover over-allotments in
the sale of the Securities by the Underwriters and may be exercised in whole
or in part at any time (but not more than once) on or before the thirtieth
day after the date of the Terms Agreement upon written or telegraphic notice
by you to the Company setting forth the amount of the Option Securities as to
which the several Underwriters are exercising the option. The amount of
Option Securities to be purchased by each Underwriter shall be the same
percentage of the total amount of the Option Securities to be purchased by
the several Underwriters as such Underwriter is purchasing of the Securities,
as adjusted by you in such manner as you deem advisable to avoid fractional
shares/units.
If the Terms Agreement provides for sales of Securities
pursuant to delayed delivery contracts, the Company authorizes the
Underwriters to solicit offers to purchase Securities pursuant to delayed
delivery contracts substantially in the form of Annex I attached hereto
("Delayed Delivery Contract") with such changes therein as the Company may
authorize or approve. Delayed Delivery Contracts are only to be with
institutional investors, including commercial and savings banks, insurance
companies, pension funds, investment companies and educational and charitable
institutions. On the Closing Date the Company will pay, as compensation, to
the Representatives for the accounts of the Underwriters, the fee set forth
in such Terms Agreement in respect of the amount of Securities to be sold
pursuant to Delayed Delivery Contracts ("Contract Securities"). The
Underwriters will not have any responsibility in respect of the validity
or the performance of Delayed Delivery Contracts. If the Company executes
and delivers Delayed Delivery Contracts, the Contract Securities will be
deducted from the Securities to be purchased by the several Underwriters
and the aggregate amount of Securities to be purchased by each Underwriter
will be reduced pro rata in proportion to the amount of Securities set forth
opposite each Underwriter's name in such Terms Agreement, except to the
extent that the Representatives determine that such reduction shall be
otherwise than pro rata and so advise the Company. The Company will
advise the Representatives not later than the business day prior to the
Closing Date of the amount of Contract Securities.
4. Certain Agreements of the Company. The Company agrees with
the several Underwriters that it will furnish to Simpson Thacher & Bartlett,
counsel for the Underwriters, one signed copy of the registration statement
relating to the Registered Securities, including all exhibits, in the form it
became effective and of all amendments thereto and that, in connection with
each offering of Securities:
(a) The Company will file the Prospectus with the Commission (i)
pursuant to Rule 424(b)(1) (or, if applicable and if consented to by
the Representatives, pursuant to Rule 424(b)(4)) not later than the
Commissions' close of business on the earlier of (A) the second
business day following the date of the Terms Agreement or (B) the
fifteenth business day after the Effective Date, or (ii) if the date
of the Terms Agreement is after the fifteenth business day after the
Effective Date, pursuant to Rule 424(b)(2) (or, if applicable and if
consented to by the Representatives, pursuant to Rule 424(b)(5)) not
later than the second business day following the date of a Terms
Agreement; the Company will advise you promptly of any such filing
pursuant to Rule 424(b); the Company will advise the Representatives
promptly of any proposal to amend or supplement the Registration
Statement or the Prospectus and will afford the Representatives a
reasonable opportunity to comment on any such proposed amendment or
supplement; and the Company will also advise the Representatives
promptly of the filing and effectiveness of any such amendment or
supplement and of the institution by the Commission of any stop order
proceedings in respect of the Registration Statement or of any part
thereof and will use its best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if
issued.
(b) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs in the
reasonable judgment of the Underwriters or the Company as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company promptly will prepare and file with the Commission an
amendment or supplement which will correct such statement or omission
or an amendment which will effect such compliance.
(c) As soon as practicable after the date of each Terms Agreement,
but in no event later than twelve months after the later of (i) the
effective date of the registration statement relating to the Registered
Securities, (ii) the effective date of the most recent post-effective
amendment to the Registration Statement to become effective prior to
the date of such Terms Agreement and (iii) the date of the Company's
most recent Annual Report on Form 10-K filed with the Commission prior
to the date of such Terms Agreement, the Company will make generally
available to its security holders an earning statement which will
satisfy the provisions of Section 11(a) of the Act.
(d) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related preliminary
prospectus, any related preliminary prospectus supplement, the
Prospectus and all amendments and supplements to such documents, in each
case as soon as available and in such quantities as are reasonably
requested.
(e) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as the
Representatives designate and will continue such qualifications in
effect so long as required for the distribution.
(f) During the period, if any, specified in the Terms Agreement
after the date of such Terms Agreement or for such shorter period as
the Securities remain outstanding, the Company will furnish to the
Representatives and, upon request, to each of the other Underwriters,
if any, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year; and the
Company will furnish to the Representatives (i) as soon as available,
a copy of each report or definitive proxy statement of the Company
filed with the Commission under the Securities Exchange Act of 1934,
as amended ("Exchange Act") or mailed to stockholders, and (ii) from
time to time, such other information concerning the Company as the
Representatives may reasonably request.
(g) The Company will pay the costs incident to the authorization,
issuance, sale and delivery of the Securities to be sold by the
Company to the Underwriters and any taxes payable in that connection;
the costs incident to the preparation, printing and filing under the
Act of the Registration Statement and any amendments and exhibits
thereto; the costs incident to the preparation, printing and filing
of any document and any amendments and exhibits thereto required to
be filed by the Company under the Exchange Act; the cost of
distributing the Registration Statement to the Underwriters as
originally filed and each amendment thereto, each post-effective
amendment thereof (including exhibits), any preliminary prospectus,
the Prospectus and any amendment or supplement to the Prospectus and
any documents incorporated by reference in any of the foregoing
documents as provided in this Agreement; the costs of filing with
the National Association of Securities Dealers, Inc., if necessary;
the fees and expenses of qualifying the Securities under the
securities laws of the several jurisdictions as provided in this
subsection and of preparing and printing a Blue Sky memorandum and
a memorandum concerning the legality of the Securities as an
investment (including fees of counsel to the Underwriters in
connection therewith); the costs of printing and issuance of
certificates; any transfer agent's fees; the costs of preparation,
printing and filing of any Indenture and any Trustees' fees and
expenses; and all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement
provided that, except as provided in this subsection and Section 8,
the Underwriters shall pay their own costs and expenses, including
the fees and expenses of their counsel, any transfer taxes on the
Securities which they may sell, the expenses of advertising any
offering of the Securities made by the Underwriters and the cost
of printing any Agreement among Underwriters, and provided, further,
that after nine months from the date of the Terms Agreement, the
Underwriters shall pay the costs of printing any additional
Registration Statements or Prospectuses, or any amendments or
supplements thereto, required for their own use.
(h) Without the prior consent of the Representatives, the Company
will not, (A) in the event of an offering of common stock, preferred
stock or convertible debt securities, offer, sell, contract to sell
or otherwise dispose of any shares of common stock or any securities
convertible into or exchangeable or exercisable for or any rights to
purchase or acquire common stock for that period specified in the
Terms Agreement, other than shares of common stock or options to
purchase common stock granted under the Company's employee benefit
plans and, (B) for a period beginning at the time of execution of the
Terms Agreement and ending on the Closing Date, in the event of an
offering of Debt Securities, will not offer, sell, contract to sell
or otherwise dispose of any debt securities of the Company with
maturities longer than one year, other than (i) the Debt Securities
to the Underwriters or the Contract Securities; (ii) borrowings in
the ordinary course of business; and (iii) other borrowings in an
aggregate principal amount not to exceed $100 million.
5. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the
Securities will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the
statements of Company officers made pursuant to the provisions hereof,
to the performance by the Company of its obligations hereunder and to
the following additional conditions precedent:
(a) On or prior to the Closing Date, the Representatives shall
have received a letter, dated the date of delivery thereof and any
later date on which Option Securities are purchased if specified in a
Terms Agreement, of Ernst & Young LLP, or such other independent
accountants acceptable to the Representatives, addressed to the
Underwriters and the Board of Directors of the Company, confirming
that they are independent accountants within the meaning of the Act
and are in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission and covering such other matters as the
Representatives shall request. Such letter shall be in form and
substance satisfactory to the Representatives.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement; no stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued
and no proceedings for that purpose shall have been instituted or, to
the knowledge of the Company or any Underwriter, shall be contemplated
by the Commission.
(c) Subsequent to the execution of the Terms Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or
properties of the Company or its subsidiaries which, in the judgment
of a majority in interest of the Underwriters, including any
Representatives, materially impairs the investment quality of the
Securities or the Registered Securities; (ii) any downgrading in the
rating of the Company's debt securities by any of Duff & Phelps,
Standard & Poor's Corporation or Moody's Investors Services, Inc.;
(iii) any suspension of trading in securities generally on the New
York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market; (iv) any
banking moratorium declared by Federal or New York authorities; or
(v) any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency
if, in the judgment of a majority in interest of the Underwriters,
including any Representatives, the effect of any such outbreak,
escalation, declaration, calamity or emergency makes it impracticable
or inadvisable to proceed with completion of the sale of and payment
for the Securities.
(d) The Representatives shall have received an opinion, dated
the Closing Date, of the General Counsel of the Company, or such other
counsel for the Company acceptable to the Representatives and if Option
Securities are purchased at any date after the Closing Date as specified
in a Terms Agreement, additional opinions from each such counsel,
addressed to the Underwriters and dated such later date, confirming
that the statements expressed as of the Closing Date in such opinions
remain valid as of such later date, to the effect that:
(i) The Company and each of its significant subsidiaries (as
defined in Rule 405 under the Act) have been duly incorporated and
are validly existing and in good standing under the laws of their
respective jurisdictions of incorporation, are duly qualified to do
business and in good standing as foreign corporations in all
jurisdictions in which their respective ownership of property or
the conduct of their respective businesses requires such
qualification (except where the failure to so qualify could not have
a material adverse effect upon the Company or the Company and its
subsidiaries taken as a whole), and have all power and authority
necessary to own their respective properties and conduct the
businesses in which they are engaged as described in the Prospectus.
Except as may be disclosed in the Registration Statement, to the
knowledge of such counsel, the Company owns the shares of capital
stock of its significant subsidiaries directly, or indirectly
through wholly-owned subsidiaries, free and clear of any lien,
pledge or encumbrance or any claim of any third party;
(ii) The Indenture, if any, described in the Terms
Agreement has been duly authorized, executed and delivered by the
Company and has been duly qualified under the Trust Indenture Act;
the Debt Securities, if any, described in the Terms Agreement have
been duly authorized; the Debt Securities other than any Contract
Securities have been duly executed, authenticated, issued and
delivered; such Indenture and the Debt Securities other than any
Contract Securities constitute, and any Contract Securities, when
executed, authenticated, issued and delivered in the manner provided
in the Indenture and sold pursuant to Delayed Delivery Contracts,
will constitute, valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equity principles
(whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing;
(iii) If any Securities to be issued are convertible, the
shares of common stock into which the Securities will be initially
convertible are duly and validly authorized; have been duly reserved
for issuance upon conversion of the Securities; and when issued
upon the conversion of the Securities, will be duly and validly
issued, fully paid and non-assessable;
(iv) The common stock and preferred stock, if any, described
in the Terms Agreement have been duly and validly authorized and
issued and are fully paid and non-assessable;
(v) The Securities other than any Contract Securities
conform, and any Contract Securities, when so issued and delivered
and sold, will conform, in all material respects to the description
thereof contained in the Prospectus;
(vi) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by the Terms
Agreement (including the provisions of this Agreement) in connection
with the issuance or sale of the Securities by the Company, except
such as have been obtained and made under the Act and the Trust
Indenture Act, if applicable, and such as may be required under
state securities laws;
(vii) The execution, delivery and performance of the
Indenture, if any, described in the Terms Agreement, the Terms
Agreement (including the provisions of this Agreement) and any
Delayed Delivery Contracts and the issuance and sale of the
Securities and compliance with the terms and provisions thereof
will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, rule,
regulation or order known to such counsel of any governmental
agency or body or any court having jurisdiction over the Company
or any significant subsidiary or any of their properties or any
material agreement or instrument known to such counsel to which
the Company or any such subsidiary is a party or by which the
Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject, or
the charter or by-laws of the Company or any such subsidiary, and
the Company has full power and authority to authorize, issue and
sell the Securities as contemplated by the Terms Agreement
(including the provisions of this Agreement);
(viii) The Registration Statement has become effective under
the Act as of the date specified in such opinion, the Prospectus was
filed with the Commission pursuant to Rule 424(b) on the date
specified in such opinion, and, to the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement
or of any part thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under
the Act, and the Registration Statement relating to the Registered
Securities, as of its Effective Date, the Registration Statement
and the Prospectus, as of the date of the Terms Agreement, any
amendment or supplement thereto, as of its date, and the documents
incorporated by reference therein, as of their respective filing
dates, complied as to form in all material respects with the
requirements of the Act, the Exchange Act, the Trust Indenture Act,
if applicable, and the Rules and Regulations; such counsel has no
reason to believe that such Registration Statement, as of its
Effective Date, the Registration Statement or the Prospectus, as of
the date of the Terms Agreement, or any such amendment or supplement,
as of its date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; any
descriptions in the Registration Statement and Prospectus of statutes,
legal and governmental proceedings and contracts and other documents
are accurate and fairly present the information required to be shown;
and such counsel does not know of any legal or governmental
proceedings required to be described in the Prospectus which are not
described as required or of any contracts or documents of a character
required to be described in the Registration Statement or Prospectus
or to be filed as exhibits to the Registration Statement which are
not described and filed as required; it being understood that such
counsel need express no opinion as to the financial statements or
other financial data contained in the Registration Statement or the
Prospectus; and
(ix) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company.
(e) The Representatives shall have received from Simpson Thacher
& Bartlett, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, with respect to the incorporation of the
Company, the validity of the Securities, the Registration Statement,
the Prospectus and other related matters as they may require, and the
Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(f) The Representatives shall have received a certificate, dated
the Closing Date and on any later date on which Option Securities are
purchased if specified in a Terms Agreement, of the Chairman of the
Board, the Vice Chairman of the Board, the President or any Vice
President and a principal financial or accounting officer of the
Company in which such officers, to the best of their knowledge after
reasonable investigation, shall state that the representations and
warranties of the Company in this Agreement are true and correct,
that the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date, that no stop order suspending the
effectiveness of the Registration Statement or of any part thereof
has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission and that, subsequent
to the date of the most recent financial statements in the Prospectus,
there has been no material adverse change in the financial position or
results of operation of the Company and its subsidiaries except as set
forth in or contemplated by the Prospectus or as described in such
certificate.
The Company will furnish the Representatives with such conformed copies of
such opinions, certificates, letters and documents as they reasonably request.
6. Indemnification and Contribution. (a) The Company will
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any
Underwriter through the Representatives, if any, specifically for use
therein; and provided further, that as to any related preliminary prospectus
or preliminary prospectus supplement this indemnity agreement shall not inure
to the benefit of any Underwriter on account of any loss, claim, damage or
liability (or action in respect thereof) arising from the sale of the
Securities to any person by that Underwriter if that Underwriter failed to
send or give a copy of the Prospectus, as the same may be amended or
supplemented, to that person within the time required by the Act, and the
untrue statement or alleged untrue statement of any material fact or omission
or alleged omission to state any material fact in such preliminary prospectus
or preliminary prospectus supplement was corrected in the Prospectus, unless
such failure resulted from non-compliance by the Company with Section 4(d).
For purposes of the second proviso to the immediately preceding sentence, the
term Prospectus shall not be deemed to include the documents incorporated by
reference therein, and no Underwriter shall be obligated to send or give any
supplement or amendment to any document incorporated by reference in a
preliminary prospectus, a preliminary prospectus supplement or the Prospectus
to any person other than a person to whom such Underwriter has delivered such
incorporated documents in response to a written request therefor.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Prospectus, or any amendment
or supplement thereto, or any related preliminary prospectus or preliminary
prospectus supplement, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of such Underwriter through the Representatives, if any,
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses
are incurred.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above. In case any such
action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided that the Representatives shall have the
right to employ one counsel to represent the Representatives and those other
Underwriters who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Underwriters against the
Company under this Section if, in the reasonable judgement of outside counsel
to the Underwriters, it is advisable for the Representatives and those other
Underwriters to be represented by separate counsel because separate defenses
are available to such Underwriters, and in that event the fees and expenses of
such separate counsel shall be paid by the Company.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other from
the offering of the Securities or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
clause (i) above but also the relative fault of the Company on the one hand
and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from
the offering (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this Section were
to be determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purposes) or by any other method of allocation which
does not take into account the equitable considerations referred to herein.
The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection
(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
action or claim which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon
the same terms and conditions, to each director of the Company, to each
officer of the Company who has signed the Registration Statement and to each
person, if any, who controls the Company within the meaning of the Act.
7. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase securities under the Terms Agreement
and the aggregate amount of the Securities that such defaulting Underwriter
or Underwriters agreed but failed to purchase does not exceed 10% of the total
amount of the Securities, the Representatives may make arrangements
satisfactory to the Company for the purchase of such Securities by other
persons, including any of the Underwriters, but if no such arrangements are
made by the Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments under this Agreement
and the Terms Agreement, to purchase the Securities that such defaulting
Underwriters agreed but fail to purchase. If any Underwriter or Underwriters
so default and the aggregate amount of the Securities with respect to which
such default or defaults occur exceeds 10% of the total amount of the
Securities and arrangements satisfactory to the Representatives and the
Company for the purchase of such Securities by other persons are not made
within 36 hours after such default, such Terms Agreement will terminate
without liability on the part of any non-defaulting Underwriter or the
Company, except as provided in Section 8. As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under
this Section. Nothing herein will relieve a defaulting Underwriter from
liability for its default. The respective commitments of the several
Underwriters for the purposes of this Section shall be determined without
regard to reduction in the respective Underwriters' obligations to purchase
the amounts of the Securities set forth opposite their names in the Terms
Agreement as a result of Delayed Delivery Contracts entered into by the
Company.
The foregoing obligations and agreements set forth in this Section
will not apply if the Terms Agreement specifies that such obligations and
agreements will not apply.
8. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Underwriters
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results
thereof, made by or on behalf of any Underwriter, the Company or any of their
respective representatives, officers or directors or any controlling person
and will survive delivery of and payment for the Securities. If the
obligations of the Underwriters with respect to any offering of Securities
are terminated pursuant to Section 7 or if for any reason the purchase of the
Securities by the Underwriters under a Terms Agreement is not consummated, the
Company shall remain responsible for the expenses to be paid or reimbursed by
it pursuant to Section 4 and the respective obligations of the Company and the
Underwriters pursuant to Section 6 shall remain in effect. If for any reason
the purchase of the Securities by the Underwriters is not consummated other
than because of the termination of this Agreement pursuant to Section 7 or a
failure to satisfy the conditions set forth in Section 5(c), the Company shall
reimburse the Underwriters, severally, for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Securities.
9. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters, will be mailed, delivered, telexed or telecopied
and confirmed to them at their addresses furnished to the Company in writing
for the purpose of communications hereunder or, if sent to the Company, will
be mailed, delivered, telexed or telecopied and confirmed to it at Township
Line and Union Meeting Roads, Blue Bell, Pennsylvania 19424, Attention:
Treasurer, with a copy to the Chief Financial Officer.
10. Successors. This Agreement will inure to the benefit of and
be binding upon the Company and such Underwriters as are identified in Terms
Agreements and their respective successors and the officers and directors and
controlling persons referred to in Section 6, and no other person will have
any right or obligation hereunder.
11. Certain Definitions. For purposes of this Agreement and the
Terms Agreement, (a) "business day" means any day on which the New York
Stock Exchange is open for trading and (b) "subsidiary" and "significant
subsidiary" have the meanings set forth in Rule 405 of the Rules and
Regulations.
12. Applicable Law. This Agreement and the Terms Agreement shall
be governed by, and construed in accordance with, the laws of the State of
New York.
ANNEX I
(Three copies of this Delayed Delivery Contract should be signed and returned
to the address shown below so as to arrive not later than 9:00 A.M., New
York time, on , 19 *.)
DELAYED DELIVERY CONTRACT
[Insert date of
initial public
offering]
UNISYS CORPORATION
c/o [Name and address
of Underwriter[s]]
Gentlemen:
The undersigned hereby agrees to purchase from UNISYS CORPORATION,
a Delaware corporation ("Company"), and the Company agrees to sell to the
undersigned, [If one delayed closing, insert---as of the date hereof, for
delivery on __________________, 19__ ("Delivery Date"),]
[$] ___________________________
principal amount of the Company's [Insert title of securities] ("Securities"),
offered by the Company's Prospectus dated ______________, 19__ and a
Prospectus Supplement dated ______________, 19__, relating thereto, receipt
of copies of which is hereby acknowledged, at __% of the principal amount
thereof plus accrued interest from ______________, 19__, if any, and on the
further terms and conditions set forth in this Delayed Delivery Contract
("Contract").
[If two or more delayed closings, insert the following:
The undersigned will purchase from the Company as of the date hereof,
for delivery on the dates set forth below, Securities in the principal amounts
set forth below:
Delivery Date Principal Amount
_________________________ [$]______________
_________________________ [$]______________
*/ Insert date which is third full business day prior to Closing Date
under the Terms Agreement.
Each of such delivery dates is hereinafter referred to as a Delivery
Date.]
Payment for the Securities that the undersigned has agreed to
purchase for delivery on---the--each--Delivery Date shall be made to the
Company or its order by wire transfer of immediately available funds to a
bank account designated by the Company upon delivery to the undersigned of
the Securities to be purchased by the undersigned---for delivery on such
Delivery Date--in definitive fully registered form and in such denominations
and registered in such names as the undersigned may designate by written or
telegraphic communication addressed to the Company not less than three full
business days prior to--the---such--Delivery Date.
It is expressly agreed that the provisions for delayed delivery and
payment are for the sole convenience of the undersigned; that the purchase
hereunder of Securities is to be regarded in all respects as a purchase as of
the date of this Contract; that the obligation of the Company to make delivery
of and accept payment for, and the obligation of the undersigned to take
delivery of and make payment for, Securities on--the--each--Delivery Date
shall be subject only to the conditions that (1) investment in the Securities
shall not at--the--such--Delivery Date be prohibited under the laws of any
jurisdiction in the United States to which the undersigned is subject and (2)
the Company shall have sold to the Underwriters the total principal amount of
the Securities less the principal amount thereof covered by this and other
similar Contracts. The undersigned represents that its investment in the
Securities is not, as of the date hereof, prohibited under the laws of any
jurisdiction to which the undersigned is subject and which governs such
investment.
Promptly after completion of the sale to the Underwriters the
Company will mail or deliver to the undersigned at its address set forth
below, notice to such effect, accompanied by a copy of the opinion of counsel
for the Company delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the acceptance of any such Contract is in the
Company's sole discretion and, without limiting the foregoing, need not be on
a first-come, first-served basis. If this Contract is acceptable to the
Company, it is requested that the Company sign the form of acceptance below
and mail or deliver one of the counterparts hereof to the undersigned at its
address set forth below. This will become a binding contract between the
Company and the undersigned when such counterpart is so mailed or delivered.
Yours very truly,
_____________________________
(Name of purchaser)
By __________________________
__________________________
(Title of Signatory)
__________________________
__________________________
(Address of Purchaser)
Accepted, as of the above date,
UNISYS CORPORATION
By
Name:
Title:
ANNEX II (A)
UNISYS CORPORATION
("Company")
Debt Securities
TERMS AGREEMENT
____________,19__
Unisys Corporation
Township Line and Union Meeting Roads
Blue Bell, Pennsylvania 19424
Attention: Vice President and Treasurer
Dear Sirs:
[On behalf of the several Underwriters named in Schedule A hereto
and for their respective accounts, we] [We] offer to purchase, on and subject
to the terms and conditions of the Underwriting Agreement Basic Provisions
filed as an exhibit to the Company's registration statement on Form S-3 (No.
333-___) ("Underwriting Agreement"), the following securities ("Securities")
to be issued under an indenture, dated ________, 19__, between the Company
and _______________, as Trustee, on the following terms:
Title: [ %] [Floating Rate] [Senior] [Subordinated] [Notes]
[Debentures]
Due _____
Principal Amount: [$]
Interest: [ % per annum, from , 19 , payable
semiannually on and commencing , 19 , to holders
of record on the preceding or , as the case may be.]
Maturity: , 19 .
Optional Redemption:
Sinking Fund:
[Period Designated Pursuant to Section 4(f) of the Underwriting
Agreement: _____ years.]
[Conversion Provisions]:
[Other Terms]
Delayed Delivery contracts: [None.] [Delivery Date[s] shall be
, 19 . Underwriters' fee is % of the principal amount of the
Contract Securities.]
Purchase Price: % of principal amount, plus accrued interest
[, if any,] from , 19 .
Expected Reoffering Price: % of principal amount, subject to
change by the undersigned.
Closing Date: A.M. on , 19 , at
in New York Federal (same-day) funds.
[Name[s] and Address[es] of Representative[s]:]
The respective principal amounts of the Securities to be purchased by
each of the Underwriters are set forth opposite their names in Schedule A
hereto.
[If appropriate, insert--It is understood that we may, with your
consent, amend this offer to add additional Underwriters and reduce the
aggregate principal amount to be purchased by the Underwriters listed in
Schedule A hereto by the aggregate principal amount to be purchased by
such additional Underwriters.]
The provisions of the Underwriting Agreement are incorporated herein
by reference [If appropriate, insert--, except that the obligations and
agreements set forth in Section 7 ("Default of Underwriters") of the
Underwriting Agreement shall not apply to the obligations of the Underwriters
to purchase the above Securities].
The Securities will be made available for checking and packaging at
the office of at least 24 hours prior to the Closing Date.
[Please signify your acceptance of our offer by signing the enclosed
response to us in the space provided and returning it to us.]
[Please signify your acceptance of the aforegoing by return wire not
later than P.M. today.]
Very truly yours,
[Insert name(s) of Representatives
or Underwriters] [On behalf of--
themselves--itself---and as
Representative[s] of the Several]
[As] Underwriters[s]
[By [Name of Representative]]
By_______________________
Name:
Title:
SCHEDULE A
Principal
Underwriter Amount
Total. . . . . . . . . . . . . . . . . . . . . . [$]
=========
To: [Insert name(s) of Representatives
or Underwriters]
As [Representative[s] of the Several]
Underwriter[s],
[c/o [Name of Representative]]
We accept the offer contained in your [letter] [wire], dated
, 19 , relating to [$]________ principal amount of our [Insert
title of Securities]. We also confirm that, to the best of our knowledge
after reasonable investigation, the representations and warranties of the
undersigned in the Underwriting Agreement filed as an exhibit to the
undersigned's registration statement on Form S-3 (No. 333- )
("Underwriting Agreement") are true and correct, no stop order suspending
the effectiveness of the Registration Statement (as defined in the
Underwriting Agreement) or of any part thereof has been issued and no
proceedings for that purpose have been instituted or, to the knowledge of
the undersigned, are contemplated by the Securities and Exchange Commission
and, subsequent to the respective dates of the most recent financial
statements in the Prospectus (as defined in the Underwriting Agreement),
there has been (or in the case of a form of prospectus filed pursuant to Rule
424(b)(1) or (4) there will be, as of the date of such prospectus) no material
adverse change in the financial position or results of operations of the
undersigned and its subsidiaries except as set forth in or contemplated by
the Prospectus.
Very truly yours,
UNISYS CORPORATION
By
Name:
Title:
ANNEX II (B)
UNISYS CORPORATION
("Company")
Equity Securities
TERMS AGREEMENT
,19__
Unisys Corporation
Township Line and Union Meeting Roads
Blue Bell, Pennsylvania 19424
Attention: Vice President and Treasurer
Dear Sirs:
[On behalf of the several Underwriters named in Schedule A hereto
and for their respective accounts, we] [We] offer to purchase, on and subject
to the terms and conditions of the Underwriting Agreement Basic Provisions
filed as an exhibit to the Company's registration statement on Form S-3 (No.
333-___) ("Underwriting Agreement"), the following securities ("Securities")
on the following terms:
Title: [Common Stock] [Preferred Stock, Series ______]
Number of Shares to be issued: [ shares]
[For Preferred Stock:
Voting Rights:
Preferred Stock Dividends: [cash dividends of $ to $ per
share payable quarterly in arrears on _____ __, ______ __, _______ __ and
_______ __.]
Optional Redemption:
Mandatory Redemption/Sinking Fund:
Liquidation Preference: [$ per share plus ].
Name of Exchange or Market: [New York Stock Exchange] [NASDAQ
National Market System] [American Stock Exchange]
[Period Designated Pursuant to Section 4(f) of the Underwriting
Agreement: years.]
[Period Designated Pursuant to Section 4(h) of the Underwriting
Agreement: ______ days.]
[Conversion Provisions]:
[Other Terms]
Price to Public: $ per share
Underwriting Discounts and Commission:
Proceeds to Company:
Over-Allotment Option:
Closing Date: A.M. on , 19 , at
in New York Federal (same-day) funds.
Name of Transfer Agent and Registrar:
[Name[s] and Address[es] of Representative[s]:]]
[For Common Stock:
Name of Exchange or Market: [New York Stock Exchange] [NASDAQ
National Market System] [American Stock Exchange]
[Period Designated Pursuant to Section 4(f) of the Underwriting
Agreement: years.]
[Period Designated Pursuant to Section 4(h) of the Underwriting
Agreement: ______ days.]
[Other Terms]
Price to Public: $ per share
Underwriting Discounts and Commission:
Proceeds to Company:
Over-Allotment Option:
Closing Date: A.M. on , 19 , at
in New York Federal (same-day) funds.
Name of Transfer Agent and Registrar:
[Name[s] and Address[es] of Representative[s]:]]
The respective shares of the Securities to be purchased by each of the
Underwriters are set forth opposite their names in Schedule A hereto.
[If appropriate, insert--It is understood that we may, with
your consent, amend this offer to add additional Underwriters and reduce the
number of shares to be purchased by the Underwriters listed in Schedule A
hereto by the number of shares to be purchased by such additional
Underwriters.]
The provisions of the Underwriting Agreement are incorporated herein
by reference [If appropriate, insert--, except that the obligations and
agreements set forth in Section 7 ("Default of Underwriters") of the
Underwriting Agreement shall not apply to the obligations of the Underwriters
to purchase the above Securities].
The Securities will be made available for checking and packaging
at the office of at least 24 hours prior to the Closing
Date.
[Please signify your acceptance of our offer by signing the enclosed
response to us in the space provided and returning it to us.]
[Please signify your acceptance of the aforegoing by return
wire not later than P.M. today.]
Very truly yours,
[Insert name(s) of Representatives
or Underwriters] [On behalf of--
themselves--itself---and as
Representative[s] of the Several]
[As] Underwriters[s]
[By [Name of Representative]]
By
Name:
Title:
SCHEDULE A
Number of
Underwriter Shares
Total. . . . . . . . . . . . . . . . . . . . . .
=========
To: [Insert name(s) of Representatives
or Underwriters]
As [Representative[s] of the Several]
Underwriter[s],
[c/o [Name of Representative]]
We accept the offer contained in your [letter] [wire], dated
, 19 , relating to _______________ shares of our [Insert title of
Securities] (the "Terms Agreement"). We also confirm that, to the best
of our knowledge after reasonable investigation, the representations and
warranties of the undersigned in the Underwriting Agreement Basic Provisions
filed as an exhibit to the undersigned's registration statement on Form S-3
(No. 333-____) (together with the Terms Agreement, the "Underwriting
Agreement") are true and correct, no stop order suspending the effectiveness
of the Registration Statement (as defined in the Underwriting Agreement) or
of any part thereof has been issued and no proceedings for that purpose have
been instituted or, to the knowledge of the undersigned, are contemplated by
the Securities and Exchange Commission and, subsequent to the respective dates
of the most recent financial statements in the Prospectus (as defined in the
Underwriting Agreement), there has been (or in the case of a form of prospectus
filed pursuant to Rule 424(b)(1) or (4) there will be, as of the date of such
prospectus) no material adverse change in the financial position or results of
operations of the undersigned and its subsidiaries except as set forth in or
contemplated by the Prospectus.
Very truly yours,
UNISYS CORPORATION
By
Name:
Title:
July 25, 1996
Unisys Corporation
Township Line and Union Meeting Roads
P. O. Box 500
Blue Bell, PA 19424
RE: Registration Statement on Form S-3
with respect to debt and equity securities
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 $299,000,000 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") and (c) preferred stock, par value $1 per share (the
"Preferred Stock" and, collectively with the Debt Securities and the Common
Stock, the "Securities"). The Registration Statement will also constitute
Post-Effective Amendment No. 1 to a Registration Statement on Form S-3 (No.
33-64396) previously filed by the Company and declared effective on August 5,
1993. 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 $201,000,000 of
securities remaining unsold under such Registration Statement (No. 33-64396).
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.
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, any prospectus supplement relating thereto,
and 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 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 of other
Securities, in accordance with the terms of the applicable Indenture and/or
convertible Security) will be duly and validly issued, fully paid and
nonassessable.
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 accordance
with the terms of such series, the Preferred Stock of such series will be
duly and validly issued, fully paid and non-assessable.
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.
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
Senior Vice President,
General Counsel and Secretary
Exhibit 12.2
UNISYS CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS (UNAUDITED)
($ in millions)
Three
Months
Ended
March 31, Years Ended December 31
--------------------------------------
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
Income (loss) from
continuing operations
before income taxes $(20.3) $(781.1) $ 14.6 $370.9 $301.3 $(1,425.6)
Add (deduct) share of
loss (income) of
associated companies ( 1.2) 5.0 16.6 14.5 3.2 (6.5)
------ ------- ------ ------ ------ ---------
Subtotal (21.5) (776.1) 31.2 385.4 304.5 (1,432.1)
------ ------- ------ ------ ------ ---------
Interest expense (net of
interest capitalized) 50.5 202.1 203.7 241.7 340.6 407.6
Amortization of debt
issuance expenses 1.2 5.1 6.2 6.6 4.8 1.8
Portion of rental expense
representative of
interest 16.3 65.3 65.0 70.5 78.8 80.9
------ ------- ------ ------ ------ ---------
Total Fixed Charges 68.0 272.5 274.9 318.8 424.2 490.3
------ ------- ------ ------ ------ ---------
Earnings (loss) from
continuing operations
before income taxes,
fixed charges and
preferred stock dividend
requirements $ 46.5 $(503.6) $306.1 $704.2 $728.7 $ (941.8)
====== ======= ====== ====== ====== =========
Amounts charged to
income $ 68.0 $ 272.5 $274.9 $318.8 $424.2 $ 490.3
Preferred stock dividend
requirements 46.5 185.1 184.8 187.1 200.2 198.7
------ ------- ------ ------ ------ ---------
Total fixed charges
and preferred stock
dividend requirements $114.5 $ 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 three months ended March 31, 1996 and for the years ended
December 31, 1995, 1994 and 1991 were inadequate to cover fixed charges
and preferred stock dividends by $68.0 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. 33-64396) 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, 1993 included in the Annual Report
(Form 10-K) for 1995 filed with the Securities & Exchange Commission.
/s/ Enrst & Young LLP
Philadelphia, Pennsylvania
July 25, 1996