As filed with the Securities and Exchange Commission on March 23, 2004
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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METTLER-TOLEDO INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 3826 13-3668641
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
IM LANGACHER, P.O. BOX MT-100
CH 8606 GREIFENSEE, SWITZERLAND
+41-1-944-22-11
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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PETER EDWARDS
1900 POLARIS PARKWAY
COLUMBUS, OHIO 43240
(614) 438-4870
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
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COPY TO:
TIMOTHY PETERSON
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON (LONDON) LLP
99 CITY ROAD
LONDON EC1Y 1AX, UK
+44 207 972 9676
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED EXCHANGE OFFER: As soon
as practicable after the effective date of this Registration Statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. |_|
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. |_|
_________
If this form is a post-effective amendment filed pursuant to Rule
462(d) 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. |_|
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CALCULATION OF REGISTRATION FEE
===================================== ================== =================== ===================== =================
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF CLASS OF TO BE AGGREGATE PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT (1) OFFERING PRICE (1) FEE
------------------------------------- ------------------ ------------------- --------------------- -----------------
4.85% SENIOR NOTES DUE 2010.... $150,000,000 100% $150,000,000 $19,005
===================================== ================== =================== ===================== =================
(1) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457(f)(2) under the Securities Act of 1933.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
SUBJECT TO COMPLETION, DATED MARCH 23, 2004
PROSPECTUS
METTLER-TOLEDO INTERNATIONAL INC.
EXCHANGE OFFER FOR
$150,000,000
4.85% SENIOR NOTES DUE 2010
We are offering to exchange 4.85% Senior Notes due 2010 for our
currently outstanding 4.85% Senior Notes due 2010. The exchange notes are
the same as the outstanding notes, except that the exchange notes will have
been registered under the federal securities laws and will not bear any
legend restricting their transfer. The exchange notes will represent the
same debt as the outstanding notes, and we will issue the exchange notes
under the same indenture.
We will pay interest on the notes on May 15 and November 15 of each
year, beginning on May 15, 2004. The notes will bear interest at a rate of
4.85% per year and will mature on November 15, 2010. The notes will be
unsecured senior obligations and will rank equally with all of our
unsecured and unsubordinated indebtedness.
We may redeem some or all of the notes at any time by paying the
greater of the principal amount of the notes and a "make-whole" amount, in
each case, plus accrued interest. See "Description of the Exchange Notes --
Optional Redemption."
The principal features of the exchange offer are as follows:
o Expires 5:00 p.m., New York City time, on , 2004,
unless extended.
o We will exchange all outstanding notes that are validly tendered
and not validly withdrawn prior to the expiration date of the
exchange offer.
o You may withdraw tendered outstanding notes at any time prior to
the expiration of the exchange offer.
o The exchange of outstanding notes for exchange notes pursuant to
the exchange offer will be a tax free event for U.S. federal tax
purposes.
o We will not receive any proceeds from the exchange offer.
o We do not intend to apply for listing of the exchange notes on
any securities exchange or automated quotation system.
INVESTING IN THE EXCHANGE NOTES INVOLVES RISKS THAT ARE DESCRIBED IN THE
"RISK FACTORS" SECTION BEGINNING ON PAGE 4 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is , 2004.
IN MAKING YOUR INVESTMENT DECISION, YOU SHOULD RELY ONLY ON THE INFORMATION
CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU
WITH ANY OTHER INFORMATION. IF YOU RECEIVE ANY OTHER INFORMATION YOU SHOULD
NOT RELY ON IT.
YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS IS
ACCURATE AS OF ANY OTHER DATE THAN ON THE FRONT COVER OF THIS PROSPECTUS.
TABLE OF CONTENTS
Where You Can Find More Information.................................ii
Incorporation of Certain Documents by Reference.....................ii
Prospectus Summary...................................................1
Risk Factors.........................................................4
Use of Proceeds.....................................................11
Ratio of Earnings to Fixed Charges..................................11
Description of the Exchange Notes...................................12
The Exchange Offer..................................................24
Registration Rights; Additional Interest............................31
Material U.S. Federal Tax Considerations............................33
Plan of Distribution................................................39
Legal Matters.......................................................40
Experts.............................................................40
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Mettler-Toledo International Inc. is a Delaware corporation. Our
principal executive offices are located at Im Langacher, P.O. Box MT-100,
CH 8606 Greifensee, Switzerland and our telephone number at that address is
+41-1-944-22-11. We are a leading global supplier of precision instruments
and services.
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"Outstanding notes" refers to all the 4.85% Senior Notes due 2010 that
were issued on November 12, 2003 and "exchange notes" refers to the 4.85%
Senior Notes due 2010 offered pursuant to this prospectus. We sometimes
refer to the outstanding notes and the exchange notes collectively as the
"notes."
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NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY US. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, OR SOLICITATION OF AN OFFER TO BUY, TO ANY
PERSON IN ANY JURISDICTION IN WHICH SUCH AN OFFER TO SELL OR SOLICITATION
WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE OF THIS PROSPECTUS.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration statement of Form S-4 that
we filed with the Securities and Exchange Commission (the "SEC"). This
prospectus does not contain all of the information in that registration
statement. For further information with respect to us and the notes, see
the registration statement, including the exhibits.
We are subject to the reporting requirements of the U.S. Securities
Exchange Act of 1934 and in accordance with its requirements file annual,
quarterly and current reports, proxy statements and other information with
the SEC. These reports, proxy statements and other information may be
obtained:
o at the public reference room of the SEC, Room 1024 Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549; or
o from the Internet site maintained by the SEC at
http://.www.sec.gov, which contains reports, proxy and
information statements and other information regarding issuers,
including us, that file electronically with the SEC.
Some locations may charge prescribed rates or modest fees for copies.
For more information on the public reference room, call the SEC at
1-800-SEC-0330. Our filings will also be available to the public from
commercial document retrieval services.
Statements made in this prospectus as to the contents of any contract,
agreement, or other documents referred to are not necessarily complete. For
a more complete understanding and description of each contract, agreement
or other document filed as an exhibit to the registration statement, we
encourage you to read the documents contained in the exhibits.
Following the consummation of the exchange offer, whether or not
required by the SEC, we will file a copy of all the information mentioned
above with the SEC for public availability within the time periods
specified in the SEC's rules and regulations (unless the SEC will not accept
such a filing) and make such information available to securities analysts
and prospectus investors upon request.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information that
we file with them in other documents, which means that we can disclose
important information to you by referring to those documents. The
information incorporated by reference is considered to be part of this
prospectus, and later information that we file with the SEC will
automatically update and supersede this information. This prospectus
incorporates by reference all documents filed by us in the future with the
SEC under Section 13(a), 13(c), 14, or 15(d) of the U.S. Securities
Exchange Act of 1934 until the termination of the offering to which this
prospectus relates. We incorporate by reference in this prospectus the
document listed below:
o Our annual report on Form 10-K for the fiscal year ended December
31, 2003.
On request, we will provide at no cost to each person who receives a
copy of this prospectus, a copy of any or all of the documents incorporated
in this prospectus by reference. We will not provide exhibits to any of the
documents listed above, however, unless those exhibits are specifically
incorporated by reference into those documents. You should direct your
request to:
Investor Relations
Mettler-Toledo, Inc.
1900 Polaris Parkway, Columbus, OH 43240
(614) 438-4748
You should rely only on the information that we incorporate by
reference or provide in this prospectus. You should consider any statement
contained in a document incorporated or considered incorporated by
reference into this prospectus to be modified or superseded to the extent
that a statement contained in this prospectus, or in any other subsequently
filed document that is also incorporated or deemed to be incorporated by
reference in this prospectus, modifies or conflicts with the earlier
statement. You should not consider any statement modified or superseded,
except as so modified or superseded, to constitute a part of this
prospectus. We have not authorized anyone else to provide you with
different information. You should not assume that the information in this
prospectus or the information incorporated by reference in this prospectus
is accurate as of any date other than the date of this prospectus or the
document from which such information is incorporated.
FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus and in documents
incorporated by reference constitute "forward-looking statements" within
the meaning of Section 27A of the U.S. Securities Act of 1933 and Section
21E of the U.S. Securities Exchange Act of 1934. These statements relate to
future events or our future financial performance, including, but not
limited to, strategic plans, potential growth opportunities in both
developed markets and emerging markets, planned research and development
efforts, product introductions and innovation, manufacturing capacity,
expected customer demand, meeting customer expectations, planned
operational changes and productivity improvements, research and development
expenditures, competitors' product development, expected capital
expenditures, future cash sources and requirements, liquidity, impact of
taxes, expected compliance with laws, impact of environmental costs,
expected cost savings and benefits of completed or future acquisitions,
which involve known and unknown risks, uncertainties and other factors that
may cause our or our businesses' actual results, levels of activity,
performance or achievements to be materially different from those expressed
or implied by any forward-looking statements. In some cases, you can
identify forward-looking statements by terminology such as "may," "will,"
"could," "would," "should," "expect," "plan," "anticipate," "intend,"
"believe," "estimate," "predict," "potential" or "continue" or the negative
of those terms or other comparable terminology. These statements are only
predictions. Actual events or results may differ materially because of
market conditions in our industries or other factors. Moreover, we do not,
nor does any other person, assume responsibility for the accuracy and
completeness of those statements. Unless otherwise required by applicable
laws, we disclaim any intention or obligation to publicly update or revise
any of the forward-looking statements after the date of this prospectus to
conform them to actual results, whether as a result of new information,
future events, or otherwise. All of the forward-looking statements are
qualified in their entirety by reference to the factors discussed under the
caption "Risk Factors" in this prospectus and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" of our most
recent Form 10-K (incorporated by reference in this prospectus) and similar
sections in our future filings that we incorporate by reference in this
prospectus, which describe risks and factors that could cause results to
differ materially from those projected in those forward-looking statements.
We caution the reader that the above list of risks and factors that
may affect results addressed in the forward-looking statements may not be
exhaustive. Other sections of this prospectus and other documents
incorporated by reference may describe additional risks or factors that
could adversely impact our business and financial performance. We operate
in a continually changing business environment, and new risk factors emerge
from time to time. Management cannot predict these new risk factors, nor
can it assess the impact, if any, of these new risk factors on our
businesses or the extent to which any factor, or combination of factors,
may cause actual results to differ materially from those projected in any
forward-looking statements. Accordingly, forward-looking statements should
not be relied upon as a prediction of actual results.
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this
prospectus. This summary is not complete and does not contain all of the
information that may be important to you. We urge you to read this entire
prospectus carefully, including the "Risk Factors" section and our
consolidated financial statements and related notes.
THE COMPANY
Mettler-Toledo International Inc. is a leading global supplier of
precision instruments and services. We are the world's largest manufacturer
of weighing instruments for use in laboratory, industrial, packaging,
logistics and food retailing applications. We also hold top-three market
positions in several related analytical instruments, and are a leading
provider of automated chemistry systems used in drug and chemical compound
discovery and development. In addition, we are the world's largest
manufacturer and marketer of metal detection and other end-of-line
inspection systems used in production and packaging, and hold a leading
position in certain process analytics applications.
We focus on the high value-added segments of our markets by providing
innovative instruments that are often integrated into application-specific
solutions for customers. We design our instruments not only to capture
valuable data but also to facilitate the processing and transfer of this
data into customers' management information systems.
THE EXCHANGE OFFER
On November 12, 2003, we completed the offering of $150 million
aggregate principal amount of 4.85% Senior Notes due 2010 in a transaction
exempt from registration under the U.S. Securities Act of 1933, as amended
(the "Securities Act"). The net proceeds of this transaction were used to
repay our previous senior credit facility. In connection with this
transaction, we entered into a registration rights agreement with the
initial purchasers of the outstanding notes, in which we agreed to commence
this exchange offer. Accordingly, you may exchange your outstanding notes
for exchange notes which have substantially the same terms. You should read
the discussion under the headings "The Exchange Offer" and "Description of
the Exchange Notes" for further information regarding the exchange notes to
be issued in the exchange offer.
Securities offered............Up to $150 million in principal amount of
4.85% Senior Notes due 2010, registered under
the Securities Act. The terms of the exchange
notes offered in the exchange offer are
substantially identical to those of the
outstanding notes, except that the transfer
restrictions, registration rights and penalty
interest provisions relating to the
outstanding notes do not apply to the
exchange notes.
The exchange offer............We are offering exchange notes in exchange
for a like principal amount of our
outstanding notes. We are offering these
exchange notes to satisfy our obligations
under a registration rights agreement which
we entered into with the initial purchasers
of the outstanding notes. You may tender your
outstanding notes for exchange by following
the procedures described under the heading
"The Exchange Offer."
Tenders; expiration
date; withdrawal..............The exchange offer will expire at 5:00 p.m.,
New York City time, on , 2004, unless
we extend it. If you decide to exchange your
outstanding notes for exchange notes, you
must acknowledge that you are not engaged in,
and do not intend to engage in, a
distribution of the exchange notes. You may
withdraw any outstanding notes that you
tender for exchange at any time prior to the
expiration date of this exchange offer. See
"The Exchange Offer--Terms of the Exchange
Offer" for a more complete description of the
tender and withdrawal period.
Material U.S. federal
tax considerations............Your exchange of outstanding notes for
exchange notes to be issued in the exchange
offer will not result in any gain or loss to
you for U.S. federal income tax purposes. See
"Material U.S. Federal Tax Considerations"
for a summary of material U.S. federal income
tax consequences associated with the exchange
of outstanding notes for the exchange notes
and the ownership and disposition of those
exchange notes.
Use of proceeds...............We will not receive any cash proceeds from
the exchange offer.
Exchange agent................JPMorgan Chase Bank.
Shelf registration............If applicable interpretations of the staff of
the SEC do not permit us to effect the
exchange offer, we will be required to use
our reasonable best efforts to file, and
cause to become effective, a shelf
registration statement under the Securities
Act, which would cover resales of outstanding
notes. See "Registration Rights; Additional
Interest."
Consequences of failure to
exchange your outstanding
notes.........................Outstanding notes not exchanged in the
exchange offer will continue to be subject to
the restrictions on transfer that are
described in the legend on the outstanding
notes. In general, you may offer or sell your
outstanding notes only if they are registered
under, or offered or sold under an exemption
from, the Securities Act and applicable state
securities laws. We do not currently intend
to register the outstanding notes under the
Securities Act. If your notes are not
tendered and accepted in the exchange offer,
it may become more difficult for you to sell
or transfer your outstanding notes.
Consequences of exchanging
your outstanding notes........Based on interpretations of the staff of the
SEC, we believe that you may offer for
resale, resell or otherwise transfer the
exchange notes that we issue in the exchange
offer without complying with the registration
and prospectus delivery requirements of the
Securities Act if:
o you acquire the exchange notes issued in
the exchange offer in the ordinary
course of your business;
o you are not participating, do not intend
to participate, and have no arrangement
or undertaking with anyone to
participate, in the distribution of the
exchange notes issued to you in the
exchange offer; and
o you are not an "affiliate" of us, as
described in Rule 405 of the Securities
Act.
If any of these conditions are not satisfied
and you transfer any exchange notes issued to
you in the exchange offer without delivering
a proper prospectus or without qualifying for
a registration exemption, you may incur
liability under the Securities Act. We will
not be responsible for, or indemnify you
against, any liability you incur.
Any broker-dealer that acquires exchange
notes in the exchange offer for its own
account in exchange for outstanding notes
which it acquired through market-making or
other trading activities must acknowledge
that it will deliver a prospectus when it
resells or transfers any exchange notes
issued in the exchange offer. See "Plan of
Distribution" for a description of the
prospectus delivery obligations of
broker-dealers in the exchange offer.
THE EXCHANGE NOTES
The following is a brief summary of the terms of the exchange notes.
For a more complete description of the terms of the exchange notes, see
"Description of the Exchange Notes" in this prospectus.
Issuer...................... Mettler-Toledo International Inc., a Delaware
corporation.
Securities offered......... $150,000,000 in aggregate principal amount of
4.85% senior notes due 2010, referred to as
the exchange notes.
Maturity date.............. November 15, 2010.
Interest payment dates..... May 15 and November 15, commencing on May 15,
2004.
Ranking.................... The exchange notes will be senior unsecured
obligations and will rank equally with all of
our unsecured and unsubordinated debt.
Holders of the exchange notes will generally
have a position junior to the claims of the
creditors, including the trade creditors, of
our subsidiaries.
Optional redemption........ We may redeem all or part of the exchange
notes at our option at a redemption price
equal to the greater of:
o 100% of the principal amount of the
notes being redeemed; and
o the Make-Whole Amount, as defined in
"Description of the Exchange Notes--
Optional Redemption";
plus, in each case, accrued interest to the
redemption date.
Covenants.................. We will issue the exchange notes under the
same indenture which governs the issuance of
the outstanding notes. The terms of the notes
contain covenants for your benefit. These
covenants restrict our ability to:
o incur debt secured by liens; and
o engage in sale and leaseback
transactions.
These covenants are, however, subject to
significant exceptions. See "Description of
the Exchange Notes-- Covenants."
Registration rights;
additional interest........ In connection with the offering of the
outstanding notes, we entered into a
registration rights agreement pursuant to
which we are obligated to file with the SEC
this registration statement. Alternatively,
if the exchange offer is not available or
cannot be completed or some holders are not
able to participate in the exchange offer, we
are required to file a shelf registration
statement to cover resales of the notes under
the Securities Act. If we do not comply with
these obligations, we will be required to pay
additional interest on the notes under
specified circumstances. See "Registration
Rights; Additional Interest."
RISK FACTORS
You should carefully consider all the information in this prospectus prior
to participating in the exchange offer. In particular, we urge you to
consider carefully the factors set forth under "Risk Factors" beginning on
the following page of this prospectus.
RISK FACTORS
WE HAVE SUBSTANTIAL DEBT AND WE MAY INCUR SUBSTANTIALLY MORE DEBT, WHICH
COULD AFFECT OUR ABILITY TO MEET OUR OBLIGATIONS UNDER THE NOTES AND MAY
OTHERWISE RESTRICT OUR ACTIVITIES.
We have substantial debt, and we may be able to incur substantial
additional debt in the future. As of December 31, 2003, we had total
indebtedness of approximately $196.4 million, net of cash of $45.1 million.
We are also permitted by the terms of the notes to incur substantial
additional indebtedness, subject to the restrictions therein.
Our debt could have important consequences to you. For example, it
could:
o make it more difficult for us to satisfy our obligations under
the notes;
o require us to dedicate a substantial portion of our cash flow to
payments on our indebtedness, which would reduce the amount of
cash flow available to fund working capital, capital
expenditures, product development and other corporate
requirements;
o increase our vulnerability to general adverse economic and
industry conditions, including changes in raw material costs;
o limit our ability to respond to business opportunities;
o limit our ability to borrow additional funds, which may be
necessary; and
o subject us to financial and other restrictive covenants, which,
if we fail to comply with these covenants and our failure is not
waived or cured, could result in an event of default under our
debt.
TO SERVICE OUR DEBT, WE WILL REQUIRE A SIGNIFICANT AMOUNT OF CASH. OUR
ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS BEYOND OUR CONTROL.
Our ability to make payments on our debt, including the notes, and to
fund planned capital expenditures and research and development efforts will
depend on our ability to generate cash in the future. This, to an extent,
is subject to general economic, financial, competitive, legislative,
regulatory and other factors, including those described in this "Risk
Factors" section, that are beyond our control.
We cannot assure you that our business will generate sufficient cash
flow from operations or that future borrowings will be available to us
under our new senior credit facility in an amount sufficient to enable us
to pay our debt, including the notes, or to fund our other liquidity needs.
We may need to refinance all or a portion of our indebtedness, including
the notes, on or before maturity. We cannot assure you that we will be able
to refinance any of our debt, including our new senior credit facility and
the notes, on commercially reasonable terms or at all.
THE AGREEMENTS GOVERNING THE NOTES AND OUR OTHER DEBT IMPOSE RESTRICTIONS
ON OUR BUSINESS.
The indenture governing the notes and the agreements governing our new
senior credit facility contain a number of covenants imposing significant
restrictions on our business. These restrictions may affect our ability to
operate our business and may limit our ability to take advantage of
potential business opportunities as they arise. The restrictions these
covenants place on us and our restricted subsidiaries include limitations
on our ability and the ability of our restricted subsidiaries to:
o enter into sale and leaseback arrangements;
o incur liens; and
o consolidate, merge, sell or lease all or substantially all of our
assets.
Our new senior credit facility also requires us to maintain a
consolidated interest coverage ratio of more than 3.5 to 1.0 and a
consolidated leverage ratio of less than 3.25 to 1.0 as defined in the
senior credit facility.
Our ability to comply with these agreements may be affected by events
beyond our control, including prevailing economic, financial and industry
conditions and is subject to the risks in this "Risk Factors" section. The
breach of any of these covenants or restrictions could result in a default
under the indenture governing the notes or our senior credit facility. An
event of default under our senior credit facility would permit our lenders
to declare all amounts borrowed from them to be immediately due and
payable. Acceleration of our other indebtedness may cause us to be unable
to make interest payments on the notes and repay the principal amount of
the notes.
YOU MAY HAVE DIFFICULTY SELLING THE NOTES WHICH YOU DO NOT EXCHANGE.
If you do not exchange your outstanding notes for the exchange notes
offered in this exchange offer, you will continue to be subject to the
restrictions on the transfer of your outstanding notes. Those transfer
restrictions are described in the indenture and in the legend contained on
the outstanding notes, and arose because we originally issued the
outstanding notes under exemptions from, and in transactions not subject
to, the registration requirements of the Securities Act.
In general, you may offer or sell your outstanding notes only if they
are registered under the Securities Act and applicable state securities
laws, or if they are offered and sold under an exemption from those
requirements. We do not intend to register the outstanding notes under the
Securities Act.
If a large number of outstanding notes are exchanged for notes issued
in the exchange offer, it may be more difficult for you to sell your
unexchanged notes. In addition, if you do not exchange your outstanding
notes in the exchange offer, you will no longer be entitled to have those
notes registered under the Securities Act.
See "The Exchange Offer--Consequences of Failure to Exchange
Outstanding Notes" for a discussion of the possible consequences of failing
to exchange your outstanding notes.
A SUBSTANTIAL PORTION OF OUR OPERATIONS ARE CONDUCTED THROUGH OUR DIRECT
AND INDIRECT SUBSIDIARIES AND, BECAUSE THE NOTES ARE OUR UNSECURED
OBLIGATIONS, THE CLAIMS OF CREDITORS OF OUR SUBSIDIARIES ARE EFFECTIVELY
SENIOR TO CLAIMS OF HOLDERS OF THE NOTES.
The notes are our unsecured obligations and will rank equally in right
of payment with all of our other existing and future unsecured,
unsubordinated obligations. The notes are not secured by any of our assets.
Any future claims of secured lenders with respect to assets securing their
loans will be prior to any claim of the holders of the notes with respect
to those assets.
A significant portion of our operations are conducted through our
subsidiaries. As a result, our ability to service our debts, including our
obligations under the notes and other obligations, is dependent to some
extent on the earnings of our subsidiaries and the payment of those
earnings to us in the form of dividends, loans or advances and through
repayment of loans or advances from us. Our subsidiaries are separate and
distinct legal entities. Our subsidiaries have no obligation to pay any
amounts due on the notes or to provide us with funds to meet our payment
obligations on the notes, whether in the form of dividends, distributions,
loans or other payments. In addition, any payment of dividends, loans or
advances by our subsidiaries could be subject to statutory or contractual
restrictions. Payments to us by our subsidiaries will also be contingent
upon our subsidiaries' earnings and business considerations.
Our right to receive any assets of any of our subsidiaries upon our
liquidation or reorganization, and therefore the right of the holders of
the notes to participate in those assets, will be effectively subordinated
to the claims of that subsidiary's creditors, including trade creditors. In
addition, even if we are a creditor of any of our subsidiaries, our rights
as a creditor would be subordinate to any security interest in the assets
of our subsidiaries and any indebtedness of our subsidiaries senior to that
held by us.
AN ACTIVE TRADING MARKET FOR THE NOTES MAY NOT DEVELOP.
The exchange notes constitute a new issue of securities for which
there is no existing trading market. An active trading market for the notes
may not develop. If a market develops, the notes could trade at prices that
may be higher or lower than the initial offering price or the price at
which an investor purchased the notes depending on many factors, including
prevailing interest rates, our financial performance, developments in the
industries in which we conduct business and changes in the overall market
for investment grade securities. If no active trading market develops, you
may not be able to resell your notes at a satisfactory price or at all.
RISKS RELATED TO OUR BUSINESS
CURRENCY FLUCTUATIONS MAY AFFECT OUR OPERATING PROFITS.
Because we conduct operations in many countries, our operating income
can be significantly affected by fluctuations in currency exchange rates.
Swiss franc-denominated expenses represent a much greater percentage of our
operating expenses than Swiss franc-denominated sales represent of our net
sales. In part, this is because most of our manufacturing costs in
Switzerland relate to products that are sold outside Switzerland. Moreover,
a substantial percentage of our research and development expenses, and
general and administrative expenses are incurred in Switzerland. Therefore,
if the Swiss franc strengthens against all or most of our major trading
currencies (e.g., the U.S. dollar, the euro, other major European
currencies and the Japanese yen), our operating profit is reduced. We also
have significantly more sales in European currencies (other than the Swiss
franc) than we have expenses in those currencies. Therefore, when European
currencies weaken against the U.S. dollar and the Swiss franc, it also
decreases our operating profits. Accordingly, the Swiss franc exchange rate
to the euro is an important cross-rate monitored by the Company. We
estimate that a 1% strengthening of the Swiss franc against the euro would
result in a decrease in our earnings before tax of $0.8 million to $1.2
million on an annual basis. In addition to the effects of exchange rate
movements on operating profits, our debt levels can fluctuate due to
changes in exchange rates, particularly between the U.S. dollar and the
Swiss franc. Based on our outstanding debt at December 31, 2003, we
estimate that a ten percent weakening of the U.S. dollar against the
currencies in which our debt is denominated would result in an increase of
approximately $4.7 million in the reported U.S. dollar value of the debt.
WE ARE SUBJECT TO CERTAIN RISKS ASSOCIATED WITH OUR INTERNATIONAL
OPERATIONS AND FLUCTUATING CONDITIONS IN EMERGING MARKETS.
We conduct business in many countries, including emerging markets in
Asia, Latin America and Eastern Europe. In addition to the currency risks
discussed above, international operations pose other substantial risks and
problems for us. For instance, various local jurisdictions in which we
operate may revise or alter their respective legal and regulatory
requirements. In addition, we may encounter one or more of the following
obstacles or risks:
o tariffs and trade barriers;
o difficulties in staffing and managing local operations;
o credit risks arising from financial difficulties facing local
customers and distributors;
o difficulties in protecting intellectual property;
o nationalization of private enterprises;
o restrictions on investments and/or limitations regarding foreign
ownership;
o adverse tax consequences, including imposition or increase of
withholding and other taxes on remittances and other payments by
subsidiaries; and
o uncertain local economic, political and social conditions,
including hyper-inflationary conditions.
We must also comply with a variety of regulations regarding the
conversion and repatriation of funds earned in local currencies. For
example, converting earnings from our operations in China into other
currencies and repatriating these funds require governmental approvals. If
we cannot comply with these or other applicable regulations, we may face
increased difficulties in utilizing cash flow generated by these operations
outside of China.
Economic conditions in emerging markets have from time to time
deteriorated significantly, and some emerging markets are experiencing
recessionary trends, severe currency devaluations and inflationary prices.
Moreover, economic problems in individual markets can spread to other
economies, adding to the adverse conditions we face in emerging markets. We
remain committed to emerging markets, particularly those in Asia, Latin
America and Eastern Europe. However, we expect the fluctuating economic
conditions will affect our results of operations in these markets for the
foreseeable future.
The past outbreak and possible recurrence of severe acute respiratory
syndrome, or SARS, or other public health-related developments could have a
negative impact on our results of operations. In particular, SARS-related
factors may reduce our sales to affected regions and disrupt our
manufacturing centers located in China. Any disruption to our manufacturing
operations could result in reduced sales and increased supply chain costs.
WE OPERATE IN HIGHLY COMPETITIVE MARKETS, AND IT MAY BE DIFFICULT TO
PRESERVE OPERATING MARGINS, GAIN MARKET SHARE AND MAINTAIN A TECHNOLOGICAL
ADVANTAGE.
Our markets are highly competitive. Weighing and analytical
instruments markets are also fragmented both geographically and by
application, particularly the industrial and food retailing markets. As a
result, we face numerous regional or specialized competitors, many of whom
are well established in their markets. In addition, some of our competitors
are divisions of larger companies with potentially greater financial and
other resources than our company. Taken together, the competitive forces
present in our markets can impair our operating margins in certain product
lines and geographic markets. We expect our competitors to continue to
improve the design and performance of their products and to introduce new
products with competitive prices. Although we believe that we have certain
technological and other advantages over our competitors, we may not be able
to realize and maintain these advantages.
OUR PRODUCT DEVELOPMENT EFFORTS MAY NOT PRODUCE COMMERCIALLY VIABLE
PRODUCTS IN A TIMELY MANNER.
We must introduce new products and enhancements in a timely manner, or
our products could become technologically obsolete over time, which would
harm our operating results. To remain competitive, we must continue to make
significant investments in research and development, sales and marketing
and customer service and support. We cannot be sure that we will have
sufficient resources to continue to make these investments. In developing
new products, we may be required to make substantial investments before we
can determine their commercial viability. As a result, we may not be
successful in developing new products and we may never realize the benefits
of our research and development activities.
A PROLONGED DOWNTURN OR ADDITIONAL CONSOLIDATION IN THE PHARMACEUTICAL,
FOOD, FOOD RETAILING AND CHEMICALS INDUSTRIES COULD ADVERSELY AFFECT OUR
OPERATING RESULTS.
Our products are used extensively in the pharmaceutical, food and
beverage and chemical industries. Consolidation in the pharmaceutical and
chemicals industries hurt our sales in prior years. A prolonged downturn or
additional consolidation in any of these industries could adversely affect
our operating results. In addition, the capital spending policies of our
customers in these industries are based on a variety of factors we cannot
control, including the resources available for purchasing equipment, the
spending priorities among various types of equipment and policies regarding
capital expenditures generally. Any decrease or delay in capital spending
by our customers would cause our revenues to decline and could harm our
profitability.
WE MAY FACE RISKS ASSOCIATED WITH FUTURE ACQUISITIONS.
We plan to pursue acquisitions of complementary product lines,
technologies or businesses. Acquisitions involve numerous risks, including:
o difficulties in the assimilation of the acquired operations,
technologies and products;
o diversion of management's attention from other business concerns;
and
o potential departures of key employees of the acquired company.
If we successfully identify acquisitions in the future, completing
such acquisitions may result in:
o new issuances of our stock that may be dilutive to current
owners;
o increases in our debt and contingent liabilities; and
o additional amortization expenses related to intangible assets.
Any of these acquisition-related risks could materially adversely
affect our profitability.
We may not be able to identify, successfully complete or integrate
potential acquisitions in the future. However, even if we can do so, we
cannot be sure that these acquisitions will have a positive impact on our
business or operating results.
OUR NEW SENIOR CREDIT FACILITY RESTRICTS OUR ABILITY TO TAKE CERTAIN
ACTIONS.
Covenants in our new senior credit facility restrict our ability to
incur additional indebtedness, incur liens and change our business. We are
also subject to financial ratio covenants. Our ability to comply with these
covenants may be affected by events beyond our control, including economic,
financial and industry conditions. A failure to comply with the covenants
and restrictions contained in our debt obligations or any other agreements
with respect to any additional financing could result in an acceleration of
the amount we owe under our debt agreements.
IF WE CANNOT PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, OR IF WE INFRINGE OR
MISAPPROPRIATE THE PROPRIETARY RIGHTS OF OTHERS, OUR OPERATING RESULTS
COULD BE HARMED.
Our success depends on our ability to obtain and enforce patents on
our technology and to protect our trade secrets. Our patents may not
provide complete protection, and competitors may develop similar products
that are not covered by our patents. Our patents may also be challenged by
third parties and invalidated or narrowed. Although we take measures to
protect confidential information, improper use or disclosure of our trade
secrets may still occur.
We may be sued for infringing on the intellectual property rights of
others. The cost of any litigation could affect our profitability
regardless of the outcome, and management attention could be diverted. If
we are unsuccessful in such litigation, we may have to pay damages, stop
the infringing activity and/or obtain a license. If we fail to obtain a
required license, we may be unable to sell some of our products, which
could result in a decline in our revenues.
DEPARTURES OF KEY EMPLOYEES COULD IMPAIR OUR OPERATIONS.
We have employment contracts with each of our key employees. In
addition, our key employees own shares of our common stock and have options
to purchase additional shares. Nevertheless, such individuals could leave
the Company. If any key employees stopped working for us, our operations
could be harmed. We have no key man life insurance policies with respect to
any of our senior executives.
WE MAY BE ADVERSELY AFFECTED BY ENVIRONMENTAL LAWS AND REGULATIONS.
We are subject to various environmental laws and regulations,
including those relating to:
o air emissions;
o wastewater discharges;
o the handling and disposal of solid and hazardous wastes; and
o the remediation of contamination associated with the use and
disposal of hazardous substances.
We incur capital and operating expenditures in complying with
environmental laws and regulations both in the U.S. and abroad. We are
currently involved in, or have potential liability with respect to, the
remediation of past contamination in facilities both in the U.S. and
abroad. In addition, some of these facilities have or had been in operation
for many decades and may have used substances or generated and disposed of
wastes that are hazardous or may be considered hazardous in the future.
These sites and disposal sites owned by others to which we sent waste may
in the future be identified as contaminated and require remediation.
Accordingly, it is possible that we could become subject to additional
environmental liabilities in the future that may harm our results of
operations or financial condition.
WE MAY BE ADVERSELY AFFECTED BY FAILURE TO COMPLY WITH REGULATIONS OF
GOVERNMENTAL AGENCIES.
Our products are subject to regulation by governmental agencies. These
regulations govern a wide variety of activities relating to our products,
from design and development, to labeling, manufacturing, promotion, sales
and distribution. If we fail to comply with these regulations, we may have
to recall products and cease their manufacture and distribution. In
addition, we could be subject to fines or criminal prosecution.
GUIDELINES RELATING TO ACCOUNTING FOR GOODWILL COULD MAKE OUR
ACQUISITION-RELATED CHARGES LESS PREDICTABLE IN ANY GIVEN REPORTING PERIOD.
Starting in 2002, our goodwill amortization charges have ceased. As at
December 31, 2003, our consolidated balance sheet included goodwill of
$421.9 million and other intangible assets of $126.9 million.
Our business acquisitions typically result in goodwill and other
intangible assets, which affect the amount of future period amortization
expense and possible impairment expense that we will incur. The
determination of the value of such intangible assets requires management to
make estimates and assumptions that affect our consolidated financial
statements.
In accordance with SFAS No. 142, "Goodwill and Other Intangible
Assets" ("SFAS 142"), our goodwill and indefinite-lived intangible assets
are not amortized, but are evaluated for impairment annually in the fourth
quarter, or more frequently if events or changes in circumstances indicate
that an asset might be impaired. The annual evaluation is based on
valuation models that estimate fair value based on expected future cash
flows and profitability projections. In preparing the valuation models we
consider a number of factors, including operating results, business plans,
economic conditions, future cash flows, and transactions and market place
data. There are inherent uncertainties related to these factors and our
judgment in applying them to the impairment analyses. The significant
estimates and assumptions within our fair value models include sales
growth, controllable cost growth, perpetual growth, effective tax rates and
discount rates. Our assessments to date have indicated that there has been
no impairment of these assets.
Our drug discovery reporting unit is sensitive to changes in biotech
and pharmaceutical capital spending and drug discovery experienced a
double-digit decline in revenue and profitability during 2003. However, the
fair value of the Company's drug discovery reporting unit exceeded its
carrying value of $29 million as of September 30, 2003 and December 31,
2003. In accordance with the provisions of SFAS 142, the Company will
monitor the fair value of this reporting unit closely to determine if the
2004 business plan is being achieved. For example, we will monitor whether
the forecasted benefits of our drug discovery cost reduction programs are
being realized, including the program of manufacturing site rationalization
currently in progress.
Should any of these estimates or assumptions in the preceding
paragraphs not be accurate, or should we incur lower than expected
operating performance or cash flows, we may experience a triggering event
that requires a new fair value assessment for our reporting units prior to
the required annual assessment. These types of events and resulting
analysis could result in impairment charges for goodwill and other
indefinite-lived intangible assets if the fair value estimate declines
below the carrying value.
Our amortization expense related to intangible assets with finite
lives may materially change should our estimates of their useful lives
change.
IF WE ARE REQUIRED TO ACCOUNT FOR EMPLOYEES' OPTIONS UNDER OUR STOCK OPTION
PLAN AS A COMPENSATION EXPENSE, IT WOULD REDUCE OUR NET EARNINGS.
There has been increasing public debate in the U.S. and elsewhere
about the proper accounting treatment for employee stock options. Although
we are not currently required to record any compensation expense in
connection with option grants that have an exercise price at or above fair
market value, it is possible that future laws or regulations will require
us to treat all stock options as a compensation expense. Note 12 to our
financial statements shows the impact that such a change in accounting
treatment would have had on our net earnings and earnings per share if it
had been in effect during the past three fiscal years and if the
compensation expense were calculated as described in Note 12.
UNANTICIPATED CHANGES IN OUR TAX RATES OR EXPOSURE TO ADDITIONAL INCOME TAX
LIABILITIES COULD IMPACT OUR PROFITABILITY.
We are subject to income taxes in both the United States and various
other foreign jurisdictions, and our domestic and international tax
liabilities are subject to allocation of expenses among different
jurisdictions. Our effective tax rates could be adversely affected by:
o changes in the mix of earnings by jurisdiction;
o changes in tax laws or tax rates;
o changes in the valuation of deferred tax assets and liabilities;
and
o material audit adjustments.
In particular, the carrying value of deferred tax assets, which are
predominantly in the U.S., is dependent upon our ability to generate future
taxable income in the U.S. In addition, the amount of income taxes we pay
is subject to ongoing audits in various jurisdictions and a material
assessment by a governing tax authority could affect our profitability.
USE OF PROCEEDS
We will not receive any proceeds in connection with the exchange
offer. In consideration for issuing the exchange notes in exchange for the
outstanding notes as described in this prospectus, we will receive, retire
and cancel the outstanding notes tendered in the exchange offer. The net
proceeds from the sale of the outstanding notes, after deducting fees and
expenses, were approximately $148.8 million. We used all of the net
proceeds to repay indebtedness owing under our previous senior credit
facility.
RATIO OF EARNINGS TO FIXED CHARGES
YEAR ENDED DECEMBER 31,
--------------------------------------
1999 2000 2001 2002 2003
------ ------ ------ ------ ------
Ratio of earnings to 3.9 4.9 5.8 5.2 6.7
fixed charges (a)
(a) In calculating the ratio of earnings to fixed charges, earnings consist
of income before taxes plus fixed charges. Fixed charges consist of
interest expense and amortization of deferred financing fees, whether
capitalized or expensed, plus one-third of rental expense under operating
lease (the portion that has been deemed by us to be representative of an
interest factor).
DESCRIPTION OF THE EXCHANGE NOTES
The exchange notes will be issued under an indenture, dated as of
November 12, 2003, between us and JPMorgan Chase Bank, as trustee (the
"Trustee"), filed as an exhibit to the registration statement of which this
prospectus is a part. The Indenture contains provisions which define your
rights under the notes. In addition, the Indenture governs the obligations
of the Company. The terms of the exchange notes include those stated in the
Indenture and, upon effectiveness of a registration statement with respect
to the exchange notes, those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended.
The following summary of provisions of the indenture and the notes
does not purport to be complete and is subject to, and qualified in its
entirety by reference to, all of the provisions of the indenture, including
definitions therein of certain terms. This summary may not contain all
information that you may find useful. You should read the indenture and the
notes, copies of which are available from us upon request. Capitalized
terms used and not defined in this summary have the meaning specified in
the indenture. References to "the Company" in this section of the
prospectus are to Mettler-Toledo International Inc. (parent company only).
GENERAL
The notes will have the following basic terms:
o the notes will be our senior unsecured obligations and will rank
equally with all of our other current and future unsecured and
unsubordinated debt;
o the notes will initially be limited to $150 million aggregate
principal amount;
o the notes will accrue interest at a rate of 4.85% per year;
o interest will accrue on the notes from the most recent interest
payment date to or for which interest has been paid or duly
provided (or if no interest has been paid or duly provided for,
from November 12, 2003), payable semi-annually in arrears on May
15 and November 15 of each year, beginning on May 15, 2004;
o the notes will mature on November 15, 2010, unless redeemed prior
to that date; and
o we may redeem the notes at any time at our option as described
under "--Optional Redemption."
Interest will be paid to the person in whose name a note is registered
at the close of business on May 1 or November 1, as the case may be,
immediately preceding the relevant interest payment date. Interest on the
notes will be computed on the basis of a 360-day year composed of twelve
30-day months.
If any interest or other payment date of a note falls on a day that is
not a business day, the required payment of principal, premium, if any, and
interest will be made on the next succeeding business day as if made on the
date that the payment was due and no interest will accrue on that payment
for the period from and after that interest or other payment date, as the
case may be, to the date of that payment on the next succeeding business
day. The term "business day" means, with respect to any note, any day other
than a Saturday, a Sunday or a day on which banking institutions or trust
companies in The City of New York are authorized or required by law,
regulation or executive order to close.
The notes will be issued only in registered form without coupons in
denominations of $1,000 and any integral multiple of $1,000 above that
amount. The notes will be represented by one or more global notes
registered in the name of a nominee of DTC.
The notes will not be subject to any sinking fund.
We may, subject to compliance with applicable law, at any time,
purchase notes in the open market or otherwise.
RANKING
Payment of the principal of and premium, if any, and interest on the
notes will rank equally with all of our other current and future unsecured
and unsubordinated debt.
Because a significant portion of our operations are conducted through
our subsidiaries, the cash flow and the consequent ability to service our
indebtedness, including the notes, is dependent to some extent upon the
earnings of our subsidiaries and the distribution of those earnings or upon
the payments of funds by those subsidiaries to us. Our subsidiaries are
separate and distinct legal entities and have no obligation, contingent or
otherwise, to pay any amounts due pursuant to the notes or to make funds
available to us, whether by dividends, loans or other payments. In
addition, the payment of dividends and the making of loans and advances to
us by our subsidiaries may be subject to contractual or statutory
restrictions, depend upon the earnings of those subsidiaries and are
subject to various business considerations.
Any right we may have to receive assets of any of our subsidiaries
upon their liquidation or reorganization (and the consequent right of the
holders of the notes to participate in those assets) will be effectively
subordinated to the claims of such subsidiary's creditors, including trade
creditors. In addition, the notes will effectively rank junior in right of
payment to any secured indebtedness which we may incur in the future to the
extent of the assets securing such indebtedness.
OPTIONAL REDEMPTION
We may redeem any of the notes in whole or in part, at our option, at
any time prior to their maturity, at a redemption price equal to the
greater of (1) 100% of the principal amount of such notes and (2) the sum
of the present values of the remaining scheduled payments of principal and
interest thereon (exclusive of interest accrued to the date of redemption)
discounted to the redemption date on a semiannual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate plus 20 basis
points (the "Make-Whole Amount"), and in each case, plus accrued interest
thereon to the redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate
per annum equal to the semiannual equivalent yield to maturity or
interpolated (on a day count basis) of the Comparable Treasury Issue,
assuming a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price
for such redemption date.
"Comparable Treasury Issue" means the U.S. Treasury security or
securities selected by an Independent Investment Banker as having an actual
or interpolated maturity comparable to the remaining term of the notes to
be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities of a comparable maturity to the remaining term of
such notes.
"Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by the Company.
"Comparable Treasury Price" means, with respect to any redemption
date, (1) the average of the Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest such Reference
Treasury Dealer Quotation or (2) if the Company obtains fewer than four
such Reference Treasury Dealer Quotations, the average of all such
quotations.
"Reference Treasury Dealer" means Merrill Lynch, Pierce, Fenner &
Smith Incorporated and its affiliates which are primary U.S. government
securities dealers, and their respective successors, and three other firms
which are primary U.S. government securities dealers that the Company
selects; provided, however, that if any of the foregoing shall cease to be
a primary U.S. government securities dealer in The City of New York, the
Company will substitute therefor another such primary U.S. government
securities dealer.
"Reference Treasury Dealer Quotation" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as
determined by the Company, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Company by such Reference Treasury Dealer
at 3:30 p.m. New York time on the third business day preceding such
redemption date.
We will mail notice of any redemption at least 30 days, but not more
than 60 days, before the redemption date to each holder of notes to be
redeemed. If less than all the notes are to be redeemed at any time, the
trustee will select notes to be redeemed by lot, on a pro rata basis or by
another method the trustee deems fair and appropriate.
Unless we default in payment of the redemption price, on and after the
redemption date, interest will cease to accrue on the notes or portion
thereof called for redemption.
COVENANTS
The indenture will not:
o limit the amount of indebtedness or lease obligations that may be
incurred by us and our subsidiaries; or
o contain provisions which would give holders of the notes the
right to require us to repurchase their notes in the event of a
decline in the credit rating of our debt securities resulting
from a change in control, recapitalization or similar
restructuring or from any other event.
LIMITATION ON LIENS
The indenture will provide that the Company will not, and will not
permit any Restricted Subsidiary to, issue, assume or guarantee any notes,
bonds, debentures or other evidences of indebtedness for money borrowed
(notes, bonds, debentures, or other evidences of indebtedness for money
borrowed ("Debt")) secured by a lien, mortgage, security interest, pledge
or other encumbrance ("Lien") on any Principal Property, or shares of
capital stock or Debt of any Restricted Subsidiary, unless the Company
secures or causes such Restricted Subsidiary to secure the notes (together
with, if the Company shall so determine, any other Debt of the Company or
any Restricted Subsidiary then existing or thereafter created which is not
subordinate to the notes) equally and ratably with such secured Debt,
unless the aggregate amount of all such secured Debt, together with all
Attributable Debt outstanding pursuant to the first paragraph of the "--
Limitation on Sale and Lease-Back Transactions" covenant described below,
would not exceed 10% of Consolidated Net Worth.
The limitation on liens will not apply to Debt secured by the
following:
o Liens on property of any corporation existing at the time such
corporation becomes a Restricted Subsidiary;
o Liens on any property existing at the date of the indenture (as
set forth on a schedule to the indenture) or at the time of
acquisition by the Company or a Restricted Subsidiary;
o Liens securing Debt of a Restricted Subsidiary to the Company or
to another Restricted Subsidiary;
o Liens on property to secure the payment of all or any part of the
purchase price of such property upon the acquisition of such
property by the Company or a Restricted Subsidiary or to secure
any Debt incurred prior to, at the time of, or within 120 days
after, the later of the date of acquisition of such property and
the date such property is placed in service, for the purpose of
financing all or any part of the purchase price thereof, or Liens
to secure any Debt incurred for the purpose of financing the cost
to the Company or a Restricted Subsidiary of improvement to such
acquired property;
o Liens on property of a corporation existing at the time such
corporation is merged or consolidated with the Company or a
Restricted Subsidiary or at the time of a sale, lease or other
disposition of the properties of a corporation as an entirety or
substantially as an entirety to the Company or a Restricted
Subsidiary; provided, that such Lien as a result of such merger,
consolidation, sale, lease or other disposition is not extended
to property owned by the Company or such Restricted Subsidiary
immediately prior thereto;
o mechanics' liens, tax liens, liens in favor of any governmental
body to secure progress, advance or other payments or the
acquisition of real or personal property from any governmental
body pursuant to contract or provision of statute, and other
liens, charges and encumbrances incidental to construction,
conduct of business or ownership of property of the Company or
any Restricted Subsidiary which were not incurred in connection
with borrowing money, obtaining advances or credits or the
acquisition of property and in the aggregate do not materially
impair use of any Principal Property or which are being contested
in good faith; or
o any extension, renewal or replacement (including successive
extensions, renewals, or replacements), as a whole or in part, of
any of the aforementioned Liens; provided that (1) such
extension, renewal, or replacement Liens are limited to all or
part of the same property, shares of stock or Debt that secured
the Liens extended, renewed, or replaced (plus improvements on
such property) and (2) the principal amount of Debt secured by
such Liens at such time is not increased.
LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS
The indenture will provide that neither the Company nor any Restricted
Subsidiary may enter into any sale and lease-back transaction involving any
Principal Property unless the aggregate amount of all Attributable Debt
with respect to such transactions, together with all Debt outstanding
pursuant to the first paragraph of the "-- Limitation on Liens" covenant
described above, would not exceed 10% of Consolidated Net Worth.
The limitation on sale and lease-back transactions will not apply to
any sale and lease-back transaction if:
o the lease is for a period of not more than three years;
o the purchaser's commitment is obtained within 120 days after the
acquisition, construction or placing in service of the Principal
Property;
o the transaction is between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries;
o the Company or such Restricted Subsidiary would be entitled under
the "-- Limitation on Liens" covenant described above to incur
Debt secured by a Lien on such Principal Property to be leased
back in an amount equal to the Attributable Debt with respect to
such sale and leaseback transaction without equally and ratably
securing the notes; or
o the Company or such Restricted Subsidiary, within 180 days after
the effective date of the transaction, applies to the retirement
of notes or other Debt of the Company or a Restricted Subsidiary
an amount equal to the greater of (1) the net proceeds of the
sale or transfer of the Principal Property so sold and leased
back pursuant to such arrangement and (2) the fair market value
(as determined by the Board of Directors) of the Principal
Property so sold and leased back pursuant to such arrangement
minus the amount equal to the principal amount of notes delivered
to the trustee within such 180 days for cancellation and the
principal amount of Debt voluntarily retired (including any
premium or fee paid in connection therewith) within such 180
days.
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may consolidate or merge with or into any other corporation, and we
may sell or transfer all or substantially all of our assets to another
corporation, provided, among other things, that the following conditions
are satisfied:
o the corporation formed by or resulting from any such
consolidation or merger or the transferee of such assets will be
the Company or a corporation organized and existing under the
laws of the U.S., any state thereof or the District of Columbia
and will expressly assume by supplemental indenture payment of
the principal of and premium, if any, and interest on the notes
and all of the obligations of the Company under the indenture;
o immediately thereafter no Default or Event of Default under the
indenture has occurred and is continuing; and
o the trustee receives, if requested, an officer's certificate and
an opinion of counsel that the merger, consolidation or transfer
and such supplemental indenture, as the case may be, complies
with the applicable provisions of the indenture.
DEFINITIONS
"Attributable Debt" means, in respect of any sale and lease-back
transaction, as of the time of the determination, the lesser of (1) the
sale price of the Principal Property so leased multiplied by a fraction the
numerator of which is the remaining portion of the base term of the lease
included in such transaction and the denominator of which is the base term
of such lease, and (2) the total obligation (discounted to present value at
the implicit interest factor, determined in accordance with generally
accepted financial practice, included in the rental payments or, if such
interest factor cannot readily be determined, at a rate of interest of 10%
per annum, compounded semi-annually) of the lessee for rental payments
(other than amounts required to be paid on account of property taxes as
well as maintenance, repairs, insurance, water rates and other items which
do not constitute payments for property rights) during the remaining
portion of the base term of the lease included in such transaction.
"Consolidated Net Worth" means the excess over current liabilities of
all assets properly appearing on a consolidated balance sheet of the
Company and its consolidated Subsidiaries after deducting the minority
interests of others in Subsidiaries.
"Principal Property" means any facility (together with the land on
which it is erected and fixtures comprising a part of the land) used
primarily for manufacturing or processing, located in the U.S., owned by or
leased to us or a Subsidiary, exclusive of the following:
o any property financed through obligations issued by a state or
possession of the U.S., or any political subdivision or
instrumentality of the foregoing, on which the interest is not,
in the opinion of tax counsel of recognized standing or in
accordance with a ruling issued by the Internal Revenue Service,
includable in gross income of the holder by reason of Section
103(a) of the Internal Revenue Code (or any successor to such
provision) as in effect at the time of the issuance of such
obligations;
o any real property held for development or sale; or
o any property the gross book value of which (including related
land and improvements thereon and all machinery and equipment
included therein without deduction of any depreciation reserves)
is less than 10% of Consolidated Net Worth or which the board of
directors of the Company determines is not material to the
operation of the business of the Company and its Subsidiaries
taken as a whole.
"Restricted Subsidiary" means a Subsidiary incorporated in any state
of the U.S. which owns a Principal Property; provided, however, that the
term shall not include any Subsidiary which is solely or primarily engaged
in the business of providing or obtaining financing for the sale or lease
of products sold or leased by the Company or any Subsidiary.
"Subsidiary" means any corporation of which at least a majority of all
outstanding stock having ordinary voting power in the election of directors
of such corporation is at the time, directly or indirectly, owned by the
Company or by one or more Subsidiaries of the Company or by the Company and
one or more Subsidiaries.
EVENTS OF DEFAULT
Each of the following events will be defined in the indenture as an
"Event of Default" (whatever the reason for such Event of Default and
whether or not it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court
or any order, rule or regulation of any administrative or governmental
body) with respect to the notes:
(1) default in the payment of any installment of interest on the
notes for 30 days after becoming due;
(2) default in the payment of principal or premium, if any, of the
notes when it becomes due and payable at its maturity;
(3) default in the performance, or breach, of any covenant or
agreement of the Company in the indenture with respect to the
notes (other than a covenant or agreement referred to in clauses
(1) or (2) above), which continues for a period of 90 days after
written notice to the Company by the trustee or to the Company
and the trustee by the holders of at least 25% in principal
amount of the outstanding notes, which notice specifies such
default or breach and requires it to be remedied and states that
such notice is a "Notice of Default" under the indenture;
(4) involuntary acceleration of the maturity of other Debt of the
Company or any Restricted Subsidiary in excess of $25 million,
which acceleration shall not be rescinded or annulled, or which
Debt shall not be discharged, within 30 days after notice;
(5) entry of one or more final, non appealable judgments, decrees or
orders of any court or regulatory or administrative agency which
would require the Company or any Restricted Subsidiary to make
payments exceeding $25 million and where 60 days have passed
since the entry of the judgments, decrees or orders without it or
them having been satisfied or stayed;
(6) the Company or any Restricted Subsidiary pursuant to or within
the meaning of the Bankruptcy Law:
o commences a voluntary case proceeding;
o consents to the entry of an order for relief against it in
an involuntary case or proceeding;
o consents to the appointment of a Custodian of it or for all
or substantially all of its property;
o makes a general assignment for the benefit of its creditors;
o files a petition in bankruptcy or answer or consent seeking
reorganization or relief;
o consents to the filing of such petition or the appointment
of or taking possession by a Custodian; or
o takes any comparable action under any foreign laws relating
to insolvency; or
(7) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
o is for relief against the Company or a Restricted Subsidiary
in an involuntary case, or adjudicates the Company or a
Restricted Subsidiary insolvent or bankrupt;
o appoints a Custodian of the Company or a Restricted
Subsidiary or for all or substantially all of the Company's
or any Restricted Subsidiary's property; or
o orders the winding-up or liquidation of the Company or a
Restricted Subsidiary (or any similar relief is granted
under any foreign laws), and the order or decree remains
unstayed and in effect for 60 days.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state or foreign law for the relief of debtors.
"Custodian" means any custodian, receiver, trustee, assignee,
liquidator or other similar official under any Bankruptcy Law.
If an Event of Default shall occur and be continuing, either the
trustee or the holders of at least 25% in principal amount of the
outstanding notes may declare the entire principal amount of all the notes
to be due and payable.
The indenture will provide that the trustee will, within 90 days after
the occurrence of default with respect to the notes, give the holders of
the notes notice of such default known to it; provided that, except in the
case of default in the payment of principal or premium, if any, or
interest, if any, on any of the notes, the trustee will be protected in
withholding such notice if it in good faith determines the withholding of
such notice is in the interest of the holders of the notes.
We are required to furnish the trustee annually a statement by certain
of our officers to the effect that, to the best of their knowledge, we are
not in default in the fulfillment of any of our obligations under the
indenture or, if there has been a default in the fulfillment of any such
obligation, specifying each such default.
No holder of any note will have any right to institute any judicial or
other proceeding with respect to the indenture, or for the appointment of a
receiver or trustee, or for any other remedy unless:
(1) an Event of Default shall have occurred and be continuing and
such holder shall have given the trustee prior written notice of
such continuing Event of Default;
(2) the holders of not less than 25% of the outstanding principal
amount of notes shall have requested the trustee for such series
to institute proceedings in respect of such Event of Default;
(3) the trustee shall have been offered reasonable indemnity against
its costs, expenses and liabilities in complying with such
request;
(4) the trustee shall have failed to institute proceedings 60 days
after the receipt of such notice, request and offer of indemnity;
and
(5) no direction inconsistent with such written request shall have
been given for 60 days by the holders of a majority in principal
amount of the outstanding notes.
The holders of a majority in principal amount of notes outstanding
will have the right, subject to certain limitations, to direct the time,
method and place of conducting any proceeding for any remedy available to
the trustee with respect to the notes or exercising any trust or power
conferred to the trustee, and to waive certain defaults. The indenture will
provide that in case an Event of Default shall occur and be continuing, the
trustee will exercise such of its rights and powers under the indenture,
and use the same degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the conduct of such
person's own affairs. Subject to such provisions, the trustee will be under
no obligation to exercise any of its rights or powers under the indenture
at the request of any of the holders of the notes unless they shall have
offered to the trustee security or indemnity reasonably satisfactory to the
trustee against the costs, expenses and liabilities which might be incurred
by it in compliance with such request.
MODIFICATION AND WAIVERS
Modification and amendments of the indenture and the notes may be made
by us and the trustee with the consent of the holders of not less than a
majority in aggregate principal amount of the outstanding notes affected
thereby; provided, however, that no such modification or amendment may,
without the consent of the holder of each outstanding note affected
thereby:
o change the stated maturity of the principal of, or premium, if
any, or installment of interest on, any note;
o reduce the principal amount of, or the rate of interest on, any
notes;
o reduce any premium payable on the redemption of the note or
change the date on which the note may or must be redeemed;
o change the place of payment (except as otherwise described in
this offering memorandum) or the coin or currency in which the
principal of or, premium, if any, or interest on any note is
payable;
o impair the right to institute suit for the enforcement of any
payment on or after the stated maturity of any note;
o reduce the percentage in principal amount of the outstanding
notes, the consent of whose holders is required in order to take
certain actions;
o reduce the requirements for quorum or voting by holders of notes
in the indenture;
o modify any of the provisions in the indenture regarding the
waiver of past defaults and the waiver of certain covenants by
the holders of notes except to increase any percentage vote
required or to provide that certain other provisions of the
indenture cannot be modified or waived without the consent of the
holder of each note affected thereby; or
o modify any of the above provisions.
In addition, we and the trustee may, without the consent of any
holders, change the terms of the indenture and the notes with respect to
certain matters, including:
o to cure any ambiguity, omission, defect or inconsistency in the
indenture;
o to provide for the assumption, by a successor person or the
acquiror of all or substantially all of our assets, of our
obligations under the indenture and the notes;
o to add any additional events of default;
o to add to our covenants for the benefit of holders of the notes
or to surrender any right or power conferred upon us;
o to add one or more guarantees for the benefit of holders of the
notes;
o to secure the notes pursuant to the covenants of the indenture;
o to add or appoint a successor or separate trustee or other agent;
o to comply with any requirement in connection with the
qualification of an indenture under the Trust Indenture Act of
1939, as amended;
o to provide for uncertificated notes in addition to or in place of
certificated notes;
o to provide for the issuance of the exchange notes, which will
have terms substantially identical in all material respects to
the notes (except that the transfer restrictions contained in the
notes will be modified or eliminated, as appropriate);
o to provide for the issuance of any additional notes, which will
have terms substantially identical in all material respects to
the notes or the exchange notes (in each case, other than with
respect to the date of issuance, issue price and amount of
interest payable on the first payment date applicable thereto),
as the case may be, and which will be treated, together with any
outstanding notes and any additional notes, as a single issue of
securities; and
o to change any other provision if the change does not adversely
affect the interests of any holder of notes.
The holders of at least a majority in aggregate principal amount of
the notes may, on behalf of the holders of all notes, waive compliance by
the Company with certain restrictive provisions of the indenture. The
holders of not less than a majority in aggregate principal amount of the
outstanding notes may, on behalf of the holders of all notes, waive any
past default and its consequences under the indenture with respect to the
notes, except a default (a) in the payment of principal or premium, if any,
or interest on notes or (b) in respect of a covenant or provision of the
indenture that cannot be modified or amended without the consent of the
holder of each note. Upon any such waiver, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have
been cured, for every purpose of the indenture; but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
rights consequent thereon.
Under the indenture, we will be required to furnish the trustee
annually a statement as to performance by us of certain of our obligations
under the indenture and as to any default in such performance. We are also
required to deliver to the trustee, within five days after occurrence
thereof, written notice of any Event of Default or any event which after
notice or lapse of time or both would constitute an Event of Default.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
We may discharge certain obligations to holders of the notes that have
not already been delivered to the trustee for cancellation and that either
have become due and payable or will become due and payable within one year
(or scheduled for redemption within one year) by depositing with the
trustee, in trust, funds in U.S. dollars in an amount sufficient to pay the
entire indebtedness including the principal and premium, if any, and
interest to the date of such deposit (if the notes have become due and
payable) or to the maturity thereof or the date of redemption of the notes,
as the case may be.
The indenture will provide that we may elect either (a) to defease and
be discharged from any and all obligations with respect to the notes
(except for, among other things, other obligations to register the transfer
or exchange of the notes, to replace temporary or mutilated, destroyed,
lost or stolen notes, to maintain an office or agency with respect to the
notes and to hold moneys for payment in trust) ("legal defeasance") or (b)
to be released from our obligations to comply with the restrictive
covenants under the indenture, and any omission to comply with such
obligations will not constitute a default or an Event of Default with
respect to the notes and clauses (4) and (5) under "-- Events of Default"
will no longer be applied ("covenant defeasance"). Legal defeasance or
covenant defeasance, as the case may be, will be conditioned upon, among
other things, the irrevocable deposit by us with the trustee, in trust, of
an amount in U.S. dollars, or U.S. Government obligations, or both,
applicable to the notes which through the scheduled payment of principal
and interest in accordance with their terms will provide money in an amount
sufficient to pay the principal or premium, if any, and interest on the
notes on the scheduled due dates therefor.
If we effect covenant defeasance with respect to the notes and the
notes are declared due and payable because of the occurrence of any Event
of Default other than under clauses (4) and (5) of "-- Events of Default",
the amount in U.S. dollars, or U.S. Government obligations, or both, on
deposit with the trustee will be sufficient to pay amounts due on the notes
at the time of the stated maturity but may not be sufficient to pay amounts
due on the notes at the time of the acceleration resulting from such Event
of Default. However, we would remain liable to make payment of such amounts
due at the time of acceleration.
We will be required to deliver to the trustee an opinion of counsel
that the deposit and related defeasance would not cause the holders of the
notes to recognize income, gain or loss for federal income tax purposes. If
we elect legal defeasance, that opinion of counsel must be based upon a
ruling from the U.S. Internal Revenue Service or a change in law to that
effect.
SAME-DAY SETTLEMENT AND PAYMENT
The notes will trade in the same-day funds settlement system of DTC
until maturity or until we issue the notes in certificated form. DTC will
therefore require secondary market trading activity in the notes to settle
in immediately available funds. We can give no assurance as to the effect,
if any, of settlement in immediately available funds on trading activity in
the notes.
FURTHER ISSUES
We may from time to time, without notice to or the consent of the
holders of the notes, create and issue additional debt securities having
the same terms as, and ranking equally and ratably with, the notes in all
respects (or in all respects except for the payment of interest accruing
prior to the issue date of such additional debt securities, or except for
the first payment of interest following the issue date of such additional
debt securities), so that such additional debt securities will be
consolidated and form a single series with, and have the same terms as to
status, redemption or otherwise as, the notes.
BOOK-ENTRY; DELIVERY AND FORM; GLOBAL NOTES
The notes will be represented by one or more global notes in
definitive, fully registered form without interest coupons. Each global
note will be deposited with the trustee as custodian for DTC and registered
in the name of a nominee of DTC in New York, New York for the accounts of
participants in DTC.
Investors may hold their interests in a global note directly through
DTC if they are DTC participants, or indirectly through organizations that
are DTC participants. Except in the limited circumstances described below,
holders of notes represented by interests in a global note will not be
entitled to receive their notes in fully registered certificated form.
DTC has advised us as follows: DTC is a limited-purpose trust company
organized under New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities of institutions that have accounts with DTC ("participants") and
to facilitate the clearance and settlement of securities transactions among
its participants in such securities through electronic book-entry changes
in accounts of the participants, thereby eliminating the need for physical
movement of securities certificates. DTC's participants include securities
brokers and dealers (which may include the initial purchasers), banks,
trust companies, clearing corporations and certain other organizations.
Access to DTC's book-entry system is also available to others such as
banks, brokers, dealers and trust companies that clear through or maintain
a custodial relationship with a participant, whether directly or
indirectly.
Ownership of Beneficial Interests
Upon the issuance of each global note, DTC will credit, on its
book-entry registration and transfer system, the respective principal
amount of the individual beneficial interests represented by the global
note to the accounts of participants. Ownership of beneficial interests in
each global note will be limited to participants or persons that may hold
interests through participants. Ownership of beneficial interests in each
global note will be shown on, and the transfer of those ownership interests
will be effected only through, records maintained by DTC (with respect to
participants' interests) and such participants (with respect to the owners
of beneficial interests in the global note other than participants).
So long as DTC or its nominee is the registered holder and owner of a
global note, DTC or such nominee, as the case may be, will be considered
the sole legal owner of the notes represented by the global note for all
purposes under the indenture, the notes and applicable law. Except as set
forth below, owners of beneficial interests in a global note will not be
entitled to receive certificated notes and will not be considered to be the
owners or holders of any notes under the global note. We understand that
under existing industry practice, in the event an owner of a beneficial
interest in a global note desires to take any actions that DTC, as the
holder of the global note, is entitled to take, DTC would authorize the
participants to take such action, and that participants would authorize
beneficial owners owning through such participants to take such action or
would otherwise act upon the instructions of beneficial owners owning
through them. No beneficial owner of an interest in a global note will be
able to transfer the interest except in accordance with DTC's applicable
procedures, in addition to those provided for under the indenture. Because
DTC can only act on behalf of participants, who in turn act on behalf of
others, the ability of a person having a beneficial interest in a global
note to pledge that interest to persons that do not participate in the DTC
system, or otherwise to take actions in respect of that interest, may be
impaired by the lack of physical certificate of that interest.
All payments on the notes represented by a global note registered in
the name of and held by DTC or its nominee will be made to DTC or its
nominee, as the case may be, as the registered owner and holder of the
global note.
We expect that DTC or its nominee, upon receipt of any payment of
principal, premium, if any, or interest in respect of a global note, will
credit participants' accounts with payments in amounts proportionate to
their respective beneficial interests in the principal amount of the global
note as shown on the records of DTC or its nominee. We also expect that
payments by participants to owners of beneficial interests in the global
note held through such participants will be governed by standing
instructions and customary practices as is now the case with securities
held for accounts for customers registered in the names of nominees for
such customers. These payments, however, will be the responsibility of such
participants and indirect participants, and neither we, the initial
purchasers, the trustee nor any paying agent will have any responsibility
or liability for any aspect of the records relating to, or payments made on
account of, beneficial ownership interests in any global note or for
maintaining, supervising or reviewing any records relating to such
beneficial ownership interests or for any other aspect of the relationship
between DTC and its participants or the relationship between such
participants and the owners of beneficial interests in the global note.
Unless and until it is exchanged in whole or in part for certificated
notes, each global note may not be transferred except as a whole by DTC to
a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC.
Transfers between participants in DTC will be effected in the ordinary way
in accordance with DTC rules and will be settled in same-day funds.
We expect that DTC will take any action permitted to be taken by a
holder of notes (including the presentation of notes for exchange as
described below) only at the direction of one or more participants to whose
account the DTC interests in a global note are credited and only in respect
of such portion of the aggregate principal amount of the notes as to which
such participant or participants has or have given such direction. However,
if there is an Event of Default under the notes, DTC will exchange each
global note for certificated notes, which it will distribute to its
participants. These certificated notes will be subject to certain
restrictions on registration of transfers described under "Transfer
Restrictions" and will bear the legend set forth thereunder.
Although we expect that DTC will agree to the foregoing procedures in
order to facilitate transfers of interests in each global note among
participants of DTC, DTC is under no obligation to perform or continue to
perform such procedures, and such procedures may be discontinued at any
time. Neither we, the initial purchasers nor the trustee will have any
responsibility for the performance or nonperformance by DTC or their
participants or indirect participants of their respective obligations under
the rules and procedures governing their operations.
The indenture provides that if (1) DTC notifies us that it is
unwilling or unable to continue as depository or if DTC ceases to be
eligible under the indenture and we do not appoint a successor depository
within 90 days, (2) we determine that the notes shall no longer be
represented by global notes and execute and deliver to the trustee a
company order to such effect or (3) an event of default with respect to the
notes shall have occurred and be continuing, the global notes will be
exchanged for notes in certificated form of like tenor and of an equal
principal amount, in authorized denominations. These certificated notes
will be registered in such name or names as DTC shall instruct the trustee.
It is expected that such instructions may be based upon directions received
by DTC from participants with respect to ownership of beneficial interests
in global securities. The certificated notes will be subject to certain
restrictions on registration of transfers described under "Transfer
Restrictions," and will bear the legend set forth thereunder.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that we believe to be reliable, but
we do not take responsibility for its accuracy.
Euroclear and Clearstream, Luxembourg
If the depositary for a global security is DTC, you may hold interests
in the global security through Clearstream Banking, societe anonyme, which
we refer to as "Clearstream, Luxembourg," or Euroclear Bank S.A./ NV, as
operator of the Euroclear System, which we refer to as "Euroclear," in each
case, as a participant in DTC. Euroclear and Clearstream, Luxembourg will
hold interests, in each case, on behalf of their participants through
customers' securities accounts in the names of Euroclear and Clearstream,
Luxembourg on the books of their respective depositaries, which in turn
will hold such interests in customers' securities in the depositaries'
names on DTC's books.
Payments, deliveries, transfers, exchanges, notices and other matters
relating to the notes made through Euroclear or Clearstream, Luxembourg
must comply with the rules and procedures of those systems. Those systems
could change their rules and procedures at any time. We have no control
over those systems or their participants, and we take no responsibility for
their activities. Transactions between participants in Euroclear or
Clearstream, Luxembourg, on one hand, and other participants in DTC, on the
other hand, would also be subject to DTC's rules and procedures.
Investors will be able to make and receive through Euroclear and
Clearstream, Luxembourg payments, deliveries, transfers, exchanges, notices
and other transactions involving any securities held through those systems
only on days when those systems are open for business. Those systems may
not be open for business on days when banks, brokers and other institutions
are open for business in the U.S.
In addition, because of time-zone differences, U.S. investors who hold
their interests in the notes through these systems and wish on a particular
day, to transfer their interests, or to receive or make a payment or
delivery or exercise any other right with respect to their interests, may
find that the transaction will not be effected until the next business day
in Luxembourg or Brussels, as applicable. Thus, investors who wish to
exercise rights that expire on a particular day may need to act before the
expiration date. In addition, investors who hold their interests through
both DTC and Euroclear or Clearstream, Luxembourg may need to make special
arrangements to finance any purchase or sales of their interests between
the U.S. and European clearing systems, and those transactions may settle
later than transactions within one clearing system.
GOVERNING LAW
The indenture and the notes will be governed by, and construed in
accordance with, the laws of the State of New York.
REGARDING THE TRUSTEE
The trustee is permitted to engage in other transactions with us and
our subsidiaries from time to time, provided that if the trustee acquires
any conflicting interest it must eliminate such conflict upon the
occurrence of an Event of Default, or else resign.
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
When we sold the outstanding notes on November 12, 2003, we entered
into a registration rights agreement with the initial purchasers of the
outstanding notes, which requires us to:
o file with the SEC a registration statement related to the
exchange notes;
o use our best efforts to have the registration statement declared
effective by the SEC under the Securities Act on or before June
9, 2004; and
o promptly after the date the registration statement is declared
effective by the SEC, we have further agreed to offer the
exchange notes in exchange for surrender of the notes.
If we fail to satisfy our registration and exchange obligations under
the registration rights agreement, we will be required to pay additional
interest to the holders of the notes.
A copy of the registration rights agreement is filed as an exhibit to
the registration statement of which this prospectus is a part.
TERMS OF THE EXCHANGE OFFER
This prospectus and the accompanying letter of transmittal together
constitute the exchange offer. Upon the terms and subject to the conditions
set forth in this prospectus and in the letter of transmittal, we will
accept for exchange outstanding notes which are properly tendered on or
before the expiration date and are not withdrawn as permitted below. The
expiration date for this exchange offer is 5:00 p.m., New York City time,
on ____________, 2004, or such later date and time to which we, in our sole
discretion, extend the exchange offer.
The form and terms of the exchange notes are the same as the form and
terms of the outstanding notes, except that:
o the exchange notes will have been registered under the Securities
Act;
o the exchange notes will not bear the restrictive legends
restricting their transfer under the Securities Act; and
o the exchange notes will not contain the registration rights
additional interest provisions contained in the outstanding
notes.
Notes tendered in the exchange offer must be in minimum denominations
of $1,000 and integral multiples of $1,000 in excess thereof.
We expressly reserve the right, in our sole discretion:
o to extend the expiration date;
o to delay accepting any outstanding notes;
o if any of the conditions set forth below under "--Conditions to
the Exchange Offer" have not been satisfied, to terminate the
exchange offer and not accept any outstanding notes for exchange;
or
o to amend the exchange offer in any manner.
We will give oral or written notice of any extension, delay,
non-acceptance, termination or amendment as promptly as practicable by a
public announcement, and in the case of an extension, no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled expiration date.
During an extension, all outstanding notes previously tendered will
remain subject to the exchange offer and may be accepted for exchange by
us. Any outstanding notes not accepted for exchange for any reason will be
returned without cost to the holder that tendered them as promptly as
practicable after the expiration or termination of the exchange offer.
HOW TO TENDER NOTES FOR EXCHANGE
When the holder of outstanding notes tenders, and we accept, such
notes for exchange, a binding agreement between us and the tendering holder
is created, subject to the terms and conditions set forth in this
prospectus and the accompanying letter of transmittal. Except as set forth
below, a holder of outstanding notes who wishes to tender such notes for
exchange must, on or prior to the expiration date:
o transmit a properly completed and duly executed letter of
transmittal, including all other documents required by such
letter of transmittal, to the JPMorgan Chase Bank, which will act
as the exchange agent, at the address set forth below under the
heading "--The Exchange Agent"; or
o if outstanding notes are tendered pursuant to the book-entry
procedures set forth below, the tendering holder must transmit an
agent's message to the exchange agent at the address set forth
below under the heading "--The Exchange Agent."
In addition, either:
o the exchange agent must receive the certificates for the
outstanding notes and the letter of transmittal;
o the exchange agent must receive, prior to the expiration date, a
timely confirmation of the book-entry transfer of the outstanding
notes being tendered into the exchange agent's account at The
Depository Trust Company, or DTC, along with the letter of
transmittal or an agent's message; or
o the holder must comply with the guaranteed delivery procedures
described below.
The term "agent's message" means a message, transmitted to DTC and
received by the exchange agent and forming a part of a book-entry transfer,
or "book-entry confirmation," which states that DTC has received an express
acknowledgement that the tendering holder agrees to be bound by the letter
of transmittal and that we may enforce the letter of transmittal against
such holder.
The method of delivery of the outstanding notes, the letters of
transmittal and all other required documents is at the election and risk of
the holders. If such delivery is by mail, we recommend registered mail,
properly insured, with return receipt requested. In all cases, you should
allow sufficient time to assure timely delivery. No letters of transmittal
or notes should be sent directly to us.
Signatures on a letter of transmittal or a notice of withdrawal, as
the case may be, must be guaranteed unless the outstanding notes
surrendered for exchange are tendered:
o by a registered holder of the outstanding notes; or
o for the account of an eligible institution.
An "eligible institution" is a firm which is a member of a registered
national securities exchange or a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the U.S.
If signatures on a letter of transmittal or notice of withdrawal are
required to be guaranteed, the guarantor must be an eligible institution.
If outstanding notes are registered in the name of a person other than the
signer of the letter of transmittal, the outstanding notes surrendered for
exchange must be endorsed by, or accompanied by a written instrument or
instruments of transfer or exchange, in satisfactory form as determined by
us in our sole discretion, duly executed by the registered holder with the
holder's signature guaranteed by an eligible institution.
We will determine all questions as to the validity, form, eligibility
(including time of receipt) and acceptance of outstanding notes tendered
for exchange in our sole discretion. Our determination will be final and
binding. We reserve the absolute right to:
o reject any and all tenders of any outstanding note improperly
tendered;
o refuse to accept any outstanding note if, in our judgment or the
judgment of our counsel, acceptance of the outstanding note may
be deemed unlawful; and
o waive any defects or irregularities or conditions of the exchange
offer as to any particular outstanding note either before or
after the expiration date, including the right to waive the
ineligibility of any holder who seeks to tender outstanding notes
in the exchange offer.
Our interpretation of the terms and conditions of the exchange offer
as to any particular outstanding notes either before or after the
expiration date, including the letter of transmittal and the instructions
to it, will be final and binding on all parties. Holders must cure any
defects and irregularities in connection with tenders of notes for exchange
within such reasonable period of time as we will determine, unless we waive
such defects or irregularities. Neither we, the exchange agent nor any
other person shall be under any duty to give notification of any defect or
irregularity with respect to any tender of outstanding notes for exchange,
nor shall any of us incur any liability for failure to give such
notification.
If a person or persons other than the registered holder or holders of
the outstanding notes tendered for exchange signs the letter of
transmittal, the tendered outstanding notes must be endorsed or accompanied
by appropriate powers of attorney, in either case signed exactly as the
name or names of the registered holder or holders that appear on the
outstanding notes.
If trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity sign the letter of transmittal or any outstanding notes or any
power of attorney, such persons should so indicate when signing, and you
must submit proper evidence satisfactory to us of such person's authority
to so act unless we waive this requirement.
By tendering, each holder will represent to us that, among other
things, the person acquiring exchange notes in the exchange offer is
obtaining them in the ordinary course of its business, whether or not such
person is the holder, and neither the holder nor such other person has any
arrangement or understanding with any person to participate in the
distribution of the exchange notes issued in the exchange offer. If any
holder or any such other person is an "affiliate," as defined under Rule
405 of the Securities Act, of us, or is engaged in or intends to engage in
or has an arrangement or understanding with any person to participate in a
distribution of such notes to be acquired in the exchange offer, such
holder or any such other person:
o may not rely on applicable interpretations of the staff of the
SEC; and
o must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale
transaction.
Each broker-dealer who acquired its outstanding notes as a result of
market-making activities or other trading activities, and thereafter
receives exchange notes issued for its own account in the exchange offer,
must acknowledge that it will deliver a prospectus in connection with any
resale of such exchange notes issued in the exchange offer. The letter of
transmittal states that by so acknowledging and by delivering a prospectus,
a broker-dealer will not be deemed to admit that it is an "underwriter"
within the meaning of the Securities Act. See "Plan of Distribution" for a
discussion of the exchange and resale obligations of broker-dealers in
connection with the exchange offer.
ACCEPTANCE OF OUTSTANDING NOTES FOR EXCHANGE; DELIVERY OF NOTES ISSUED IN
THE EXCHANGE OFFER
Upon satisfaction or waiver of all the conditions to the exchange
offer, we will accept, promptly after the expiration date, all outstanding
notes properly tendered and will issue exchange notes registered under the
Securities Act. For purposes of the exchange offer, we shall be deemed to
have accepted properly tendered outstanding notes for exchange when, as and
if we have given oral or written notice to the exchange agent, with written
confirmation of any oral notice to be given promptly thereafter. See
"--Conditions to the Exchange Offer" for a discussion of the conditions
that must be satisfied before we accept any outstanding notes for exchange.
For each outstanding note accepted for exchange, the holder will
receive an exchange note registered under the Securities Act having a
principal amount equal to that of the surrendered outstanding note.
Accordingly, registered holders of exchange notes issued in the exchange
offer on the relevant record date for the first interest payment date
following the consummation of the exchange offer will receive interest
accruing from the most recent date to which interest has been paid.
Outstanding notes that we accept for exchange will cease to accrue interest
from and after the date of consummation of the exchange offer. Under the
registration rights agreement, we may be required to make additional
payments in the form of penalty interest to the holders of the outstanding
notes under circumstances relating to the timing of the exchange offer.
In all cases, we will issue exchange notes for outstanding notes that
are accepted for exchange only after the exchange agent timely receives:
o certificates for such outstanding notes or a timely book-entry
confirmation of such outstanding notes into the exchange agent's
account at DTC;
o a properly completed and duly executed letter of transmittal or
an agent's message; and
o all other required documents.
If for any reason set forth in the terms and conditions of the
exchange offer we do not accept any tendered outstanding notes, or if a
holder submits outstanding notes for a greater principal amount than the
holder desires to exchange, we will return such unaccepted or non-exchanged
notes without cost to the tendering holder. In the case of outstanding
notes tendered by book-entry transfer into the exchange agent's account at
DTC, such non-exchanged notes will be credited to an account maintained
with DTC. We will return the outstanding notes or have them credited to DTC
account as promptly as practicable after the expiration or termination of
the exchange offer.
BOOK ENTRY TRANSFER
The exchange agent will make a request to establish an account with
respect to the outstanding notes at DTC for purposes of the exchange offer
within two business days after the date of this prospectus. Any financial
institution that is a participant in DTC's system must make book-entry
delivery of outstanding notes by causing DTC to transfer such outstanding
notes into the exchange agent's account at DTC in accordance with DTC's
Automated Tender Offer Program ("ATOP") procedures for transfer. Such
participant should transmit its acceptance to DTC on or prior to the
expiration date or comply with the guaranteed delivery procedures described
below. DTC will verify such acceptance, execute a book-entry transfer of
the tendered outstanding notes into the exchange agent's account at DTC and
then send to the exchange agent confirmation of such book-entry transfer.
The confirmation of such book-entry transfer will include an agent's
message confirming that DTC has received an express acknowledgment from
such participant that such participant has received and agrees to be bound
by the letter of transmittal and that we may enforce the letter of
transmittal against such participant. Delivery of exchange notes issued in
the exchange offer may be effected through book-entry transfer at DTC.
However, the letter of transmittal or facsimile thereof or an agent's
message, with any required signature guarantees and any other required
documents, must:
o be transmitted to and received by the exchange agent at the
address set forth below under "--The Exchange Agent" on or prior
to the expiration date; or
o comply with the guaranteed delivery procedures described below.
GUARANTEED DELIVERY PROCEDURES
If a holder of outstanding notes desires to tender such notes and the
holder's outstanding notes are not immediately available, or time will not
permit such holder's outstanding notes or other required documents to reach
the exchange agent before the expiration date, or the procedure for
book-entry transfer cannot be completed on a timely basis, a tender may be
effected if:
o the holder tenders the outstanding notes through an eligible
institution;
o prior to the expiration date, the exchange agent receives from
such eligible institution a properly completed and duly executed
notice of guaranteed delivery, acceptable to us, by telegram,
telex, facsimile transmission, mail or hand delivery, setting
forth the name and address of the holder of the outstanding notes
tendered and the amount of the outstanding notes being tendered.
The notice of guaranteed delivery shall state that the tender is
being made and guarantee that within three New York Stock
Exchange trading days after the date of execution of the notice
of guaranteed delivery, the certificates for all physically
tendered outstanding notes, in proper form for transfer, or a
book-entry confirmation, as the case may be, together with a
properly completed and duly executed letter of transmittal or
agent's message with any required signature guarantees and any
other documents required by the letter of transmittal will be
deposited by the eligible institution with the exchange agent;
and
o the exchange agent receives the certificates for all physically
tendered outstanding notes, in proper form for transfer, or a
book-entry confirmation, as the case may be, together with a
properly completed and duly executed letter of transmittal or
agent's message with any required signature guarantees and any
other documents required by the letter of transmittal, within
three New York Stock Exchange trading days after the date of
execution of the notice of guaranteed delivery.
WITHDRAWAL RIGHTS
You may withdraw tenders of your outstanding notes at any time prior
to 5:00 p.m., New York City time, on the expiration date.
For a withdrawal to be effective, you must send a written notice of
withdrawal to the exchange agent at one of the addresses set forth below
under "--The Exchange Agent." Any such notice of withdrawal must:
o specify the name of the person that has tendered the outstanding
notes to be withdrawn;
o identify the outstanding notes to be withdrawn, including the
principal amount of such outstanding notes; and
o where certificates for outstanding notes are transmitted, specify
the name in which outstanding notes are registered, if different
from that of the withdrawing holder.
If certificates for outstanding notes have been delivered or otherwise
identified to the exchange agent, then, prior to the release of such
certificates, the withdrawing holder must also submit the serial numbers of
the particular certificates to be withdrawn and signed notice of withdrawal
with signatures guaranteed by an eligible institution unless such holder is
an eligible institution. If outstanding notes have been tendered pursuant
to the procedure for book-entry transfer described above, any notice of
withdrawal must specify the name and number of the account at DTC to be
credited with the withdrawn notes and otherwise comply with the procedures
of such facility. We will determine all questions as to the validity, form
and eligibility (including time of receipt) of such notices and our
determination will be final and binding on all parties. Any tendered notes
so withdrawn will be deemed not to have been validly tendered for exchange
for purposes of the exchange offer. Any outstanding notes which have been
tendered for exchange but which are not exchanged for any reason will be
returned to the holder thereof without cost to such holder. In the case of
outstanding notes tendered by book-entry transfer into the exchange agent's
account at DTC, the outstanding notes withdrawn will be credited to an
account maintained with DTC for the outstanding notes. The outstanding
notes will be returned or credited to DTC account as soon as practicable
after withdrawal, rejection of tender or termination of the exchange offer.
Properly withdrawn outstanding notes may be re-tendered by following one of
the procedures described under "-- How to tender notes for exchange" above
at any time on or prior to 5:00 p.m., New York City time, on the expiration
date.
CONDITIONS TO THE EXCHANGE OFFER
We are not required to accept the outstanding notes in the exchange
offer or to issue the exchange notes. We may terminate or amend the
exchange offer if at any time before the acceptance of such outstanding
notes for exchange:
o any federal law, statute, rule or regulation shall have been
adopted or enacted which, in our judgment, would reasonably be
expected to impair our ability to proceed with the exchange
offer;
o any stop order shall be threatened or in effect with respect to
the registration statement of which this prospectus constitutes a
part or the qualification of the indenture under the Trust
Indenture Act of 1939, as amended; or
o there shall occur a change in the current interpretation by the
staff of the SEC which permits the notes issued in the exchange
offer in exchange for the outstanding notes to be offered for
resale, resold and otherwise transferred by such holders, other
than broker-dealers and any such holder which is an "affiliate"
of us within the meaning of Rule 405 under the Securities Act,
without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such notes
acquired in the exchange offer are acquired in the ordinary
course of such holder's business and such holder has no
arrangement or understanding with any person to participate in
the distribution of such notes issued in the exchange offer.
The preceding conditions are for our sole benefit, and we may assert
them regardless of the circumstances giving rise to any such condition. We
may waive the preceding conditions in whole or in part at any time and from
time to time in our sole discretion. Our failure at any time to exercise
the foregoing rights shall not be deemed a waiver of any such right, and
each such right shall be deemed an ongoing right which we may assert at any
time and from time to time.
THE EXCHANGE AGENT
JPMorgan Chase Bank has been appointed as our exchange agent for the
exchange offer. All executed letters of transmittal should be directed to
our exchange agent at the address set forth below. Questions and requests
for assistance, requests for additional copies of this prospectus or of the
letter of transmittal and requests for notices of guaranteed delivery
should be directed to the exchange agent addressed as follows:
By mail (registered or certified ITS Bond Events
mail is recommended) P.O. Box 2320
Dallas TX 75224
Attention: Frank Ivins
By hand or overnight mail: ITS Bond Events
2001 Bryan Street, 9th Floor
Dallas TX 75201
Attention: Frank Ivins
Facsimile: (214) 468 6494
Originals of all documents sent by facsimile should be promptly sent
to the exchange agent by registered or certified mail, by hand, or by
overnight delivery service.
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF SUCH LETTER OF TRANSMITTAL VIA FACSIMILE
OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF SUCH
LETTER OF TRANSMITTAL.
FEES AND EXPENSES
We will not make any payment to brokers, dealers or others soliciting
acceptance of the exchange offer except for reimbursement of mailing
expenses.
The cash expenses to be incurred in connection with the exchange offer
will be paid by us. These expenses include fees and expenses of the
exchange agent and trustee, accounting and legal fees and printing costs,
among others.
TRANSFER TAXES
Holders who tender their outstanding notes for exchange notes will not
be obligated to pay any transfer taxes in connection with the exchange. If,
however, exchange notes issued in the exchange offer are to be delivered
to, or are to be issued in the name of, any person other than the holder of
the outstanding notes tendered, or if a transfer tax is imposed for any
reason other than the exchange of outstanding notes in connection with the
exchange offer, then the holder must pay any such transfer taxes, whether
imposed on the registered holder or on any other person. If satisfactory
evidence of payment of, or exemption from, such taxes is not submitted with
the letter of transmittal, the amount of such transfer taxes will be billed
directly to the tendering holder.
CONSEQUENCES OF FAILURE TO EXCHANGE OUTSTANDING NOTES
Holders who desire to tender their outstanding notes in exchange for
notes registered under the Securities Act should allow sufficient time to
ensure timely delivery. Neither the exchange agent nor our company is under
any duty to give notification of defects or irregularities with respect to
the tenders of notes for exchange.
Outstanding notes that are not tendered or are tendered but not
accepted will, following the consummation of the exchange offer, continue
to accrue interest and to be subject to the provisions in the indenture
regarding the transfer and exchange of the outstanding notes and the
existing restrictions on transfer set forth in the legend on the
outstanding notes and in the offering memorandum dated November 3, 2003
relating to the outstanding notes. Except in limited circumstances with
respect to specific types of holders of outstanding notes, we will have no
further obligation to provide for the registration under the Securities Act
of such outstanding notes. In general, outstanding notes, unless registered
under the Securities Act, may not be offered or sold except pursuant to an
exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. We do not currently anticipate that we
will take any action to register the outstanding notes under the Securities
Act or under any state securities laws.
Upon completion of the exchange offer, holders of the outstanding
notes will not be entitled to any further registration rights under the
registration rights agreement, except under limited circumstances.
CONSEQUENCES OF EXCHANGING OUTSTANDING NOTES
Based on interpretations of the staff of the SEC, as set forth in
no-action letters to third parties, we believe that the notes issued in the
exchange offer may be offered for resale, resold or otherwise transferred
by holders of such notes, other than by any holder which is an "affiliate"
of us within the meaning of Rule 405 under the Securities Act. Such notes
may be offered for resale, resold or otherwise transferred without
compliance with the registration and prospectus delivery provisions of the
Securities Act, if:
o such holder is not a broker-dealer tendering notes acquired
directly from us;
o such notes issued in the exchange offer are acquired in the
ordinary course of such holder's business; and
o such holder, other than broker-dealers, has no arrangement or
understanding with any person to participate in the distribution
of such notes issued in the exchange offer.
However, the SEC has not considered the exchange offer in the context
of a no-action letter, and we cannot guarantee that the staff of the SEC
would make a similar determination with respect to the exchange offer as in
such other circumstances.
Each holder, other than a broker-dealer, must furnish a written
representation, at our request, that:
o it is not an affiliate of us;
o it is not a broker-dealer tendering notes acquired directly from
us;
o it is not engaged in, and does not intend to engage in, a
distribution of the notes issued in the exchange offer and has no
arrangement or understanding to participate in a distribution of
notes issued in the exchange offer; and
o it is acquiring the notes issued in the exchange offer in the
ordinary course of its business.
Each broker-dealer that receives notes issued in the exchange offer
for its own account in exchange for outstanding notes must acknowledge that
such outstanding notes were acquired by such broker-dealer as a result of
market-making or other trading activities and that it will deliver a
prospectus in connection with any resale of such notes issued in the
exchange offer. See "Plan of Distribution" for a discussion of the exchange
and resale obligations of broker-dealers in connection with the exchange
offer.
In addition, to comply with state securities laws of certain
jurisdictions, the notes issued in the exchange offer may not be offered or
sold in any state unless they have been registered or qualified for sale in
such state or an exemption from registration or qualification is available
and complied with by the holders selling the exchange notes. We have not
agreed to register or qualify the exchange notes for offer or sale under
state securities laws.
REGISTRATION RIGHTS; ADDITIONAL INTEREST
We entered into a registration rights agreement with the initial
purchasers on the closing date for the outstanding notes. In that
agreement, we agreed for the benefit of the holders of the notes that we
will use our best efforts to file with the SEC and cause to become
effective a registration statement relating to an offer to exchange the
notes for an issue of SEC-registered notes with terms identical to the
notes (except that the exchange notes will not be subject to restrictions
on transfer or to any increase in annual interest rate as described below).
When the SEC declares this exchange offer registration statement
effective, we will offer the exchange notes in return for the notes. The
exchange offer will remain open for at least 20 business days after the
date we mail notice of the exchange offer to noteholders. For each note
surrendered to us under the exchange offer, the noteholder will receive an
exchange note of equal principal amount. Interest on each exchange note
will accrue from the last interest payment date on which interest was paid
on the notes or, if no interest has been paid on the notes, from the
closing date.
If applicable interpretations of the staff of the SEC do not permit us
to effect the exchange offer, we will use our best efforts to cause to
become effective a shelf registration statement relating to resales of the
notes and use our reasonable efforts to keep that shelf registration
statement effective until the expiration of the time period referred to in
Rule 144(k) under the Securities Act, or such shorter period that will
terminate when all notes covered by the shelf registration statement have
been sold. We will, in the event of such a shelf registration, provide to
each noteholder copies of a prospectus, notify each noteholder when the
shelf registration statement has become effective and take certain other
actions to permit resales of the notes. A noteholder that sells notes under
the shelf registration statement generally will be required to make certain
representation to us (as described in the registration rights agreement),
to be named as a selling security holder in the related prospectus and to
deliver a prospectus to purchasers, will be subject to certain of the civil
liability provisions under the Securities Act in connection with those
sales and will be bound by the provisions of the registration rights
agreement that are applicable to such a noteholder (including certain
indemnification obligations). Holders of notes will also be required to
suspend their use of the prospects included in the shelf registration
statement under specified circumstances upon receipt of notice from us.
If the exchange offer is not completed (or, if required, the shelf
registration statement is not declared effective) on or before the date
that is 240 days after the closing date, the annual interest rate borne by
the outstanding notes will be increased by 0.25% per annum, increasing an
additional 0.25% per annum every 90 days thereafter, up to a maximum
aggregate increase of 0.50% per annum, until the exchange offer is
completed or the shelf registration statement is declared effective.
Following the cure of all registration defaults, the accrual of this
interest will cease.
If we effect the exchange offer, we will be entitled to close the
exchange offer 30 calendar days after its commencement, provided that we
have accepted all notes validly surrendered in accordance with the terms of
the exchange offer. Notes not tendered in the exchange offer shall bear
interest at the rate of 4.85% per annum and be subject to all the terms and
conditions specified in the indenture, including transfer restrictions.
This summary of the provisions of the registration rights agreement does
not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all the provisions of the registration rights
agreement, which has been filed as an exhibit to the registration statement
of which this prospectus is a part.
MATERIAL U.S. FEDERAL TAX CONSIDERATIONS
The following summary describes the material U.S. federal income tax
consequences and, in the case of a holder that is a non-U.S. holder (as
defined below), the material U.S. federal estate tax consequences, of
purchasing, owning and disposing of the exchange notes.
This summary deals only with exchange notes held as capital assets
(generally, investment property) and does not deal with special tax
situations such as:
o partnerships;
o dealers in securities or currencies;
o traders in securities;
o U.S. holders (as defined below) whose functional currency is not
the U.S. dollar;
o persons holding exchange notes as part of a hedge, straddle,
conversion or other integrated transaction;
o certain U.S. expatriates;
o financial institutions;
o insurance companies; and
o entities that are tax-exempt for U.S. federal income tax
purposes.
This summary does not discuss all of the aspects of U.S. federal
income and estate taxation that may be relevant to you in light of your
particular investment or other circumstances. If a partnership or other
entity treated as a partnership for U.S. federal income tax purposes holds
the note, the tax treatment of a partner generally will depend upon the
status of the partner and the activities of the partnership. A partnership
holding notes or a partner of a partnership that is a holder of the notes
should consult its own tax advisor. In addition, this summary does not
discuss any U.S. state or local income or foreign income or other tax
consequences. This summary is based on U.S. federal income tax law,
including the provisions of the Internal Revenue Code of 1986, as amended
(the "Internal Revenue Code"), Treasury regulations, administrative rulings
and judicial authority, all as in effect as of the date of this prospectus.
Subsequent developments in U.S. federal tax law, including changes in law
or differing interpretations, which may be applied retroactively, could
have a material effect on the U.S. federal tax consequences of purchasing,
owning and disposing of exchange notes as set forth in this summary. You
should consult your own tax advisor regarding the particular U.S. federal,
state and local and foreign income and other tax consequences of acquiring,
owning and disposing of the exchange notes that may be applicable to you.
U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OFFER
The exchange of the outstanding notes for the exchange notes in the
exchange offer will not be a taxable exchange for U.S. federal income tax
purposes and, accordingly, for such purposes you will not recognize any
taxable gain or loss as a result of such exchange and you will have the
same tax basis and holding period in the exchange notes as you had in your
outstanding notes immediately before the exchange.
U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR U.S. HOLDERS
The following summary applies to you only if you are a U.S. holder (as
defined below).
DEFINITION OF A U.S. HOLDER
A "U.S. holder" is a beneficial owner of an exchange note or notes who
or which is for U.S. federal income tax purposes:
o an individual citizen or resident of the U.S.;
o a corporation (or other entity classified as a corporation for
these purposes) created or organized in or under the laws of the
U.S. or of any political subdivision of the U.S., including any
State;
o an estate, the income of which is subject to U.S. federal income
taxation regardless of the source of that income; or
o a trust, if, (1) in general, a U.S. court is able to exercise
primary supervision over the trust's administration and one or
more U.S. persons (within the meaning of the Internal Revenue
Code) has the authority to control all of the trust's substantial
decisions, or (2) it has a valid election in effect under
applicable U.S. Treasury regulations to be treated as a U.S.
person.
PAYMENTS OF STATED INTEREST
Payments of stated interest on your exchange notes will be taxed as
ordinary interest income. In addition:
o if you use the cash method of accounting for U.S. federal income
tax purposes, you will have to include the stated interest on
your exchange notes in your gross income at the time you receive
the interest; and
o if you use the accrual method of accounting for U.S. federal
income tax purposes, you will have to include the stated interest
on your exchange notes in your gross income at the time the
interest accrues.
MARKET DISCOUNT AND BOND PREMIUM
If you purchase an exchange note (or purchased the outstanding note
for which the exchange note was exchanged, as the case may be) at a price
that is less than its principal amount, the excess of the principal amount
over your purchase price will be treated as "market discount." However, the
market discount will be considered to be zero if it is less than 1/4 of 1%
of the principal amount multiplied by the number of complete years to
maturity from the date you purchased the exchange note or outstanding note,
as the case may be.
Under the market discount rules of the Internal Revenue Code, you
generally will be required to treat any principal payment on, or any gain
realized on the sale, exchange, retirement or other disposition of, an
exchange note as ordinary income (generally treated as interest income) to
the extent of the market discount which accrued but was not previously
included in income. In addition, you may be required to defer, until the
maturity of the exchange note or its earlier disposition in a taxable
transaction, the deduction of all or a portion of your interest expense on
any indebtedness incurred or continued to purchase or carry the exchange
note (or the outstanding note for which the exchange note was exchanged, as
the case may be). In general, market discount will be considered to accrue
ratably during the period from the date of the purchase of the exchange
note (or outstanding note for which the exchange note was exchanged, as the
case may be) to the maturity date of the exchange note, unless you make an
irrevocable election (on an instrument-by-instrument basis) to accrue
market discount under a constant yield method. You may elect to include
market discount in income currently as it accrues (under either a ratable
or constant yield method), in which case the rules described above
regarding the treatment as ordinary income of gain upon the disposition of
the exchange note and upon the receipt of certain payments and the deferral
of interest deductions will not apply. The election to include market
discount in income currently, once made, applies to all market discount
obligations acquired on or after the first day of the first taxable year to
which the election applies, and may not be revoked without the consent of
the Internal Revenue Service.
If you purchase an exchange note (or purchased the outstanding note
for which the exchange note was exchanged, as the case may be) for an
amount in excess of the amount payable at maturity of the exchange note,
you will be considered to have purchased the exchange note (or outstanding
note) with "bond premium" equal to the excess of your purchase price over
the amount payable at maturity (or on an earlier call date if it results in
a smaller amortizable bond premium). You may elect to amortize the premium
using a constant yield method over the remaining term of the exchange note
(or until an earlier call date, as applicable). The amortized amount of the
premium for a taxable year generally will be treated first as a reduction
of interest on the exchange note included in such taxable year to the
extent thereof, then as a deduction allowed in that taxable year to the
extent of your prior interest inclusions on the exchange note, and finally
as a carryforward allowable against your future interest inclusions on the
exchange note. The election, once made, is irrevocable without the consent
of the Internal Revenue Service and applies to all taxable bonds held
during the taxable year for which the election is made or subsequently
acquired.
SALE OR OTHER DISPOSITION OF THE EXCHANGE NOTES
Upon the sale, exchange, retirement, redemption or other taxable
disposition of an exchange note, you generally will recognize taxable gain
or loss in an amount equal to the difference, if any, between the amount
realized on the disposition and your adjusted tax basis in the exchange
note. Your adjusted tax basis in an exchange note will generally equal the
cost of the exchange note (or, in the case of an exchange note acquired in
exchange for an outstanding note in the exchange offer, the basis of the
outstanding note), increased by the amount of any market discount
previously included in your gross income, and reduced by the amount of any
amortizable bond premium applied to reduce, or allowed as a deduction
against, interest with respect to your exchange note.
Your gain or loss generally will be capital gain or loss (except with
respect to any amount received that is attributable to accrued but unpaid
interest, which will be taxable in the manner described above under "--U.S.
federal income tax considerations for U.S. holders--Payments of stated
interest" and except with respect to accrued market discount that has not
previously been included in income, as discussed above under "--U.S.
federal income tax considerations for U.S. holders--Market discount and
bond premium"). Such capital gain or loss will be long-term capital gain or
loss if the exchange note has been held for more than one year at the time
of the disposition (taking into account for this purpose, in the case of an
exchange note received in exchange for an outstanding note in the exchange
offer, the period of time that the outstanding note was held).
Subject to limited exceptions, your capital losses cannot be used to offset
your ordinary income. If you are a non-corporate U.S. holder, your
long-term capital gain generally will be subject to a maximum tax rate of
20%.
BACKUP WITHHOLDING AND INFORMATION REPORTING
In general, backup withholding, currently at a rate of 30%, may apply:
o to any payments made to you of principal of and interest on your
exchange note, and
o to payment of the proceeds of a sale or other disposition of your
exchange note,
if you are a non-corporate U.S. holder and fail to provide a correct
taxpayer identification number or otherwise comply with applicable
requirements of the backup withholding rules. Information reporting may
also apply to payments made with respect to your exchange note.
Backup withholding is not an additional tax and may be credited
against your U.S. federal income tax liability, provided that correct
information is provided to the Internal Revenue Service.
U.S. FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS FOR NON-U.S. HOLDERS
The following summary applies to you if you are a beneficial owner of
an exchange note who or which is not a U.S. holder (as defined above) (a
"non-U.S. holder"). An individual may, subject to exceptions, be deemed to
be a resident alien, as opposed to a non-resident alien, by among other
ways being present in the U.S.:
o for at least 31 days in the calendar year, and
o for an aggregate of at least 183 days during a three-year period
ending in the current calendar year, counting for such purposes
all of the days present in the current year, one-third of the
days present in the immediately preceding year, and one-sixth of
the days present in the second preceding year.
Resident aliens are subject to U.S. federal income tax as if they were
U.S. citizens.
U.S. FEDERAL WITHHOLDING TAX
Under current U.S. federal income tax laws, and subject to the
discussion below, U.S. federal withholding tax will not apply to payments
by us or our paying agent (in its capacity as such) of principal of and
interest on your exchange notes under the "portfolio interest" exception of
the Internal Revenue Code, provided that you comply with the following
requirements:
o you do not, directly or indirectly, actually or constructively,
own 10% or more of the total combined voting power of all classes
of our stock entitled to vote within the meaning of section
871(h)(3) of the Internal Revenue Code and the Treasury
regulations thereunder;
o you are not (i) a controlled foreign corporation for U.S. federal
income tax purposes that is related, directly or indirectly, to
us through sufficient stock ownership (as provided in the
Internal Revenue Code), or (ii) a bank receiving interest
described in section 881(c)(3)(A) of the Internal Revenue Code;
o such interest is not effectively connected with your conduct of a
U.S. trade or business; and
o you provide a properly completed Internal Revenue Service Form
W-8BEN, signed under penalties of perjury, which can reliably be
related to you, certifying that you are not a U.S. person within
the meaning of the Internal Revenue Code and providing your name
and address to:
(A) us or our paying agent; or
(B) a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary
course of its trade or business and holds your exchange notes on
your behalf and that certifies to us or our paying agent under
penalties of perjury that it, or the bank or financial
institution between it and you, has received from you your Form
W-8BEN and provides us or our paying agent with a copy of this
statement.
Certain Treasury regulations provide alternative methods for
satisfying the certification requirement described in this section. In
addition, under these Treasury regulations:
o if you are a foreign partnership, the certification requirement
will generally apply to partners in you, and you will be required
to provide certain information;
o if you are a foreign trust, the certification requirement will
generally be applied to you or your beneficial owners depending
on whether you are a "foreign complex trust," "foreign simple
trust," or "foreign grantor trust" as defined in the Treasury
regulations; and
o look-through rules will apply for tiered partnerships, foreign
simple trusts and foreign grantor trusts.
If you are a foreign partnership or a foreign trust, you should
consult your own tax advisor regarding your status under these Treasury
regulations and the certification requirements applicable to you.
If you do not satisfy the requirements described above, payments of
interest made to you will be subject to the 30% U.S. federal withholding
tax, unless you provide us with a properly executed (1) Internal Revenue
Service Form W-8BEN claiming an exemption from or reduction in withholding
under the benefit of an applicable tax treaty or (2) Internal Revenue
Service Form W-8ECI stating that the interest paid on an exchange note is
not subject to withholding tax because it is effectively connected with
your conduct of a trade or business in the U.S.
U.S. FEDERAL INCOME TAX
Except for the possible application of U.S. withholding tax (see "U.S.
federal withholding tax" above) and backup withholding tax (see "Backup
withholding and information reporting" below), you generally will not have
to pay U.S. federal income tax on payments of principal of and interest on
your exchange notes, or on any gain or income realized from the sale,
redemption, retirement at maturity or other disposition of your exchange
notes (provided that, in the case of proceeds representing accrued
interest, the conditions described in "U.S. federal withholding tax" are
met) unless:
o in the case of gain, you are an individual who is present in the
U.S. for 183 days or more during the taxable year of the sale or
other disposition of your exchange notes, and specific other
conditions are met; or
o the gain is effectively connected with your conduct of a U.S.
trade or business, and, if an income tax treaty applies, is
generally attributable to a U.S. "permanent establishment"
maintained by you.
If you are engaged in a trade or business in the U.S. and interest,
gain or any other income in respect of your exchange notes is effectively
connected with the conduct of your trade or business, and, if an income tax
treaty applies, you maintain a U.S. "permanent establishment" to which the
interest, gain or other income is generally attributable, you generally
will be subject to U.S. income tax on a net basis on the interest, gain or
income in the same manner as if you were a U.S. holder (although interest
is exempt from the withholding tax discussed in the preceding paragraphs
provided that you provide a properly executed applicable Internal Revenue
Service Form W-8ECI on or before any payment date to claim the exemption).
In addition, if you are a foreign corporation, you may be subject to a
branch profits tax equal to 30% of your effectively connected earnings and
profits for the taxable year, as adjusted for certain items, unless a lower
rate applies to you under a U.S. income tax treaty with your country of
residence. For this purpose, you must include interest, gain or income on
your exchange notes in the earnings and profits subject to the branch
profits tax if these amounts are effectively connected with the conduct of
your U.S. trade or business.
U.S. FEDERAL ESTATE TAX
If you are an individual and are not a U.S. citizen or a resident of
the U.S. (as specially defined for U.S. federal estate tax purposes) at the
time of your death, your exchange notes will generally not be subject to
the U.S. federal estate tax, unless, at the time of your death:
o you directly or indirectly, actually or constructively, own 10%
or more of the total combined voting power of all classes of our
stock entitled to vote within the meaning of section 871(h)(3) of
the Internal Revenue Code and the Treasury regulations
thereunder; or
o your interest on the exchange notes is effectively connected with
your conduct of a U.S. trade or business.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Information reporting will generally apply to payments of interest to
non-U.S. holders of the notes and the amount of tax, if any, withheld with
respect to such payments. Copies of the information returns reporting such
interest payments and any withholding may also be made available to the tax
authorities in the country in which the non-U.S. holder resides under the
provisions of an applicable income tax treaty. Under current Treasury
regulations, backup withholding will not apply to payments made by us or
our paying agent (in its capacity as such) to you if you have provided the
required certification that you are a non-U.S. holder as described in "U.S.
federal withholding tax" above, and provided that neither we nor our paying
agent has actual knowledge that you are a U.S. holder (as described in
"Definition of a U.S. holder" above).
The gross proceeds from the disposition of your exchange notes may be
subject to information reporting and backup withholding tax at a rate that
is currently 28%. If you sell your exchange notes outside the U.S. through
a non-U.S. office of a broker and the sales proceeds are paid to you
outside the U.S., then the U.S. backup withholding and information
reporting requirements generally (except as provided in the following
sentence) will not apply to that payment. However, U.S. information
reporting, but not backup withholding, will apply to a payment of sales
proceeds, even if that payment is made outside the U.S., if you sell your
exchange notes though a non-U.S. office of a broker that:
o is a U.S. person (as defined in the Internal Revenue Code);
o derives 50% or more of its gross income in specific periods from
the conduct of a trade or business in the U.S.;
o is a "controlled foreign corporation" for U.S. federal income tax
purposes; or
o is a foreign partnership, if at any time during its tax year:
o one or more of its partners are U.S. persons who in the aggregate
hold more than 50% of the income or capital interests in the
partnership; or
o the foreign partnership is engaged in a U.S. trade or business,
unless the broker has documentary evidence in its files that you are a
non-U.S. person and certain other conditions are met or you otherwise
establish an exemption. If you receive payments of the proceeds of a sale
of your exchange notes to or through a U.S. office of a broker, the
payments are subject to both U.S. backup withholding and information
reporting unless you provide a Form W-8BEN certifying that you are a
non-U.S. person or you otherwise establish an exemption.
You should consult your own tax advisor regarding application of
backup withholding in your particular circumstances and the availability of
and procedure for obtaining an exemption from backup withholding under
current Treasury regulations. Any amounts withheld under the backup
withholding rules from a payment to you will be allowed as a refund or
credit against your U.S. federal income tax liability, provided the
required information is furnished to the Internal Revenue Service.
PLAN OF DISTRIBUTION
Based on interpretations by the staff of the SEC set forth in
no-action letters issued to third parties, we believe that the exchange
notes issued pursuant to the exchange offer in exchange for the outstanding
notes may be offered for resale, resold and otherwise transferred by
holders thereof, other than any holder which is (A) an "affiliate" of our
company within the meaning of Rule 405 under the Securities Act, (B) a
broker-dealer who acquired notes directly from our company or (C)
broker-dealers who acquired notes as a result of market-making or other
trading activities, without compliance with the registration and prospectus
delivery provisions of the Securities Act provided that such exchange notes
are acquired in the ordinary course of such holders' business, and such
holders are not engaged in, and do not intent to engage in, and have no
arrangement or understanding with any person to participate in, a
distribution of such exchange notes. However, broker-dealers receiving the
exchange notes in the exchange offer will be subject to a prospectus
delivery requirement with respect to resales of such exchange notes. To
date, the staff of the SEC has taken the position that these broker-dealers
may fulfill their prospectus delivery requirements with respect to
transactions involving an exchange of securities such as the exchange
pursuant to the exchange offer, other than a resale of an unsold allotment
from the sale of the outstanding notes to the initial purchasers thereof,
with the prospectus contained in the exchange offer registration statement.
Pursuant to the registration rights agreement, we have agreed to permit
these broker-dealers to use this prospectus in connection with the resale
of such exchange notes. We have agreed that we will make this prospectus,
and any amendment or supplement to this prospectus, available to any
broker-dealer that requests such documents in the letter of transmittal.
Each holder of the outstanding notes who wishes to exchange its
outstanding notes for exchange notes in the exchange offer will be required
to make certain representations to us as set forth in "The Exchange Offer."
Each broker-dealer that receives exchange notes for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange notes. This
prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of exchange notes
received in exchange for outstanding notes where such outstanding notes
were acquired as a result of market-making activities or other trading
activities.
We will not receive any proceeds from any sale of exchange notes by
broker-dealers. Exchange notes received by broker-dealers for their own
account pursuant to the exchange offer may be sold from time to time in one
or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the exchange notes or a
combination of such methods of resale, at market prices prevailing at the
time of resale, at prices related to such prevailing market prices or
negotiated prices. Any such resale may be directly to purchasers or to or
through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer or the purchasers of
any such exchange notes. Any broker-dealer that resells exchange notes that
were received by it for its own account in the exchange offer and any
broker or dealer that participates in a distribution of such exchange notes
may be deemed to be an "underwriter" within the meaning of the Securities
Act, and any profit on any such resale of exchange notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The letter of
transmittal states that, by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act.
We have agreed to pay certain expenses incident to the exchange offer
and will indemnify the holders of the exchange notes, including any
broker-dealers, against certain liabilities, including liabilities under
the Securities Act, as set forth in the registration rights agreement.
LEGAL MATTERS
The validity of the exchange notes will be passed upon for us by
Fried, Frank, Harris, Shriver & Jacobson (London) LLP, London, UK.
EXPERTS
The financial statements as of December 31, 2003 and 2002 and for each
of the three years in the period ended December 31, 2003 included in this
prospectus have been so incorporated by reference in reliance on the report
of PricewaterhouseCoopers AG, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
We are incorporated under the laws of the State of Delaware. Section
145 of the Delaware General Corporation Law ("DGCL") provides that a
Delaware corporation may indemnify directors and officers as well as other
employees and individuals against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement in connection with
specified actions, suits and proceedings, whether civil, criminal,
administrative or investigative (other than action by or in the right of
the Corporation - a "derivative action"), if they acted in good faith and
in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful.
A similar standard is applicable in the case of derivative actions,
except that indemnification only extends to expenses (including attorneys'
fees) incurred in connection with the defense or settlement of such action,
and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found
liable to the corporation. The statute provides that it is not exclusive of
other indemnification that may be granted by a corporation's certificate of
incorporation, bylaws, disinterested director vote, stockholder vote,
agreement, or otherwise.
The DGCL further authorizes a Delaware corporation to purchase and
maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation or enterprise, against any liability asserted against
him and incurred by him in any such capacity, arising out of his status as
such, whether or not the corporation would otherwise have the power to
indemnify him under Section 145.
The Company's Amended and Restated Certificate of Incorporation and
Amended By-laws provide for the indemnification of the Company's directors
to the fullest extent permitted under Delaware law. The Company's Amended
and Restated Certificate of Incorporation limits the personal liability of
a director to the corporation or its stockholders to damages for breach of
the director's fiduciary duty. The Company has purchased insurance on
behalf of its directors and officers.
ITEM 21. EXHIBITS
(A) EXHIBITS
The following is a list of all the documents filed as part of the
Registration Statement
NUMBER DESCRIPTION
------ -----------
3.1 Amended and Restated Certificate of Incorporation of
the Company (1)
3.2 Amended By-laws of the Company (2)
4.1 The Indenture, dated as of November 12, 2003, among the
Company and JPMorgan Chase Bank as trustee relating to
the 4.85% Senior Notes due 2010 (3)
4.2 The form of Note *
4.3 The Registration Rights Agreement, dated November 12,
2003 among the Company, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, the other Initial Purchasers named
in Schedule I thereto relating to the 4.85% Senior
Notes due 2010 (3)
5.1 Opinion of Fried, Frank, Harris, Shriver & Jacobson
(London) LLP, as to the legality of the securities **
12.1 Statement regarding calculation of ratio of earnings to
fixed charges *
21.1 Subsidiaries of the Company (3)
23.1 Consent of Fried, Frank, Harris, Shriver & Jacobson
(London) LLP (included in Exhibit 5.1) **
23.2 Consent of PricewaterhouseCoopers *
24.1 Powers of Attorney *
25.1 Statement of Eligibility and Qualification of Trustee
on Form T-1 of JPMorgan Chase Bank under the Trust
Indenture Act of 1939 *
99.1 Form of Letter of Transmittal, with respect to
outstanding notes and exchange notes *
99.2 Form of Notice of Guaranteed Delivery, with respect to
outstanding notes and exchange notes *
99.3 Form of Instructions to Registered Holder and/or
Book-Entry Transfer Facility Participant From
Beneficial Owners *
99.4 Letter to our clients *
(1) Incorporated by reference to the Company's Report on Form 10-K dated
March 13, 1998.
(2) Incorporated by reference to the Company's Report on Form 10-K dated
March 14, 2003.
(3) Incorporated by reference to the Company's Report on Form 10-K dated
March 15, 2004.
-----------------
* Filed herewith.
** To be filed by amendment.
ITEM 22. UNDERTAKINGS
The Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement.
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the SEC
pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in effective
registration statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
(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 means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering;
(4) to respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13
of this form, within one business day of receipt of such request,
and to send the incorporated documents by first class mail or
equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the
registration statement through the date of responding to the
request;
(5) to supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved
therein, that was not the subject of and included in the
registration statement when it became effective; and
(6) to file an application for purposes of determining the
eligibility of the trustee to act under subsection (a) of Section
310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the SEC under Section 305(b)(20) of the
Trust Indenture Act.
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 foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the SEC
such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer of
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act Mettler-Toledo
International Inc. has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in Greifensee,
Switzerland on March 23, 2004.
Mettler-Toledo International Inc.
By: /s/ Dennis W. Braun
----------------------------------
Dennis W. Braun
Vice President and Chief Financial
Officer
Pursuant to the requirements of the Securities Exchange Act of 1933,
this registration statement has been signed by the following persons in the
capacities indicated and on the dates indicated.
Signature Title
--------- -----
Chairman of the Board,
* President and
--------------------------------------- Chief Executive Officer -------------------------------------
Robert F. Spoerry Date
Vice President and
Chief Financial Officer
/s/ Dennis W. Braun (principal financial and accounting
--------------------------------------- officer) -------------------------------------
Dennis W. Braun Date
*
--------------------------------------- Director -------------------------------------
Philip Caldwell Date
*
--------------------------------------- Director -------------------------------------
John T. Dickson Date
*
--------------------------------------- Director -------------------------------------
Philip H. Geier Date
*
--------------------------------------- Director -------------------------------------
John D. Macomber Date
*
--------------------------------------- Director -------------------------------------
Hans Ulrich Maerki Date
*
--------------------------------------- Director -------------------------------------
George M. Milne Date
*
--------------------------------------- Director -------------------------------------
Thomas P. Salice Date
* By James T. Bellerjeau pursuant to a Power of Attorney executed by the
directors listed above, which Power of Attorney has been filed with
the Securities and Exchange Commission.
By: /s/ James T. Bellerjeau
-----------------------------------------
James T. Bellerjeau
EXHIBIT INDEX
NUMBER DESCRIPTION
------ -----------
3.1 Amended and Restated Certificate of Incorporation of
the Company (1)
3.2 Amended By-laws of the Company (2)
4.1 The Indenture, dated as of November 12, 2003, among the
Company and JPMorgan Chase Bank as trustee relating to
the 4.85% Senior Notes due 2010 (3)
4.2 The form of Note *
4.3 The Registration Rights Agreement, dated November 12,
2003 among the Company, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, the other Initial Purchasers named
in Schedule I thereto relating to the 4.85% Senior
Notes due 2010 (3)
5.1 Opinion of Fried, Frank, Harris, Shriver & Jacobson
(London) LLP, as to the legality of the securities **
12.1 Statement regarding calculation of ratio of earnings to
fixed charges *
21.1 Subsidiaries of the Company (3)
23.1 Consent of Fried, Frank, Harris, Shriver & Jacobson
(London) LLP (included in Exhibit 5.1) **
23.2 Consent of PricewaterhouseCoopers *
24.1 Powers of Attorney *
25.1 Statement of Eligibility and Qualification of Trustee
on Form T-1 of JPMorgan Chase Bank under the Trust
Indenture Act of 1939 *
99.1 Form of Letter of Transmittal, with respect to
outstanding notes and exchange notes *
99.2 Form of Notice of Guaranteed Delivery, with respect to
outstanding notes and exchange notes *
99.3 Form of Instructions to Registered Holder and/or
Book-Entry Transfer Facility Participant From
Beneficial Owners *
99.4 Letter to our clients *
(1) Incorporated by reference to the Company's Report on Form 10-K dated
March 13, 1998.
(2) Incorporated by reference to the Company's Report on Form 10-K dated
March 14, 2003.
(3) Incorporated by reference to the Company's Report on Form 10-K dated
March 15, 2004.
-----------------
* Filed herewith.
** To be filed by amendment.