e424b2
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-167507
CALCULATION
OF REGISTRATION FEE
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Title of Each
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Proposed Maximum
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Proposed Maximum
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Class of Securities
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Amount To Be
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Offering Price Per
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Aggregate Offering
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Amount of
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To Be Registered
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Registered
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Unit
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Price
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Registration Fee (1)
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5.00% Senior Notes due 2020
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$
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375,000,000
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99.465
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%
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$
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372,993,750
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$
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26,737.50
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(1) |
The filing fee of $26,737.50 is calculated in accordance with
Rule 457(r) of the Securities Act of 1933, as amended.
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(To prospectus dated June 15, 2010)
$375,000,000
Pall Corporation
5.00% Senior Notes due
2020
We are offering $375,000,000 aggregate principal amount of our
5.00% Senior Notes due 2020 (the notes). We
will pay interest on these notes semi-annually in arrears on
June 15 and December 15 of each year, beginning on
December 15, 2010. The notes will mature on June 15,
2020.
The notes may be redeemed at our option, at any time in whole or
from time to time in part, as described in this prospectus
supplement under the caption Description of the
NotesOptional Redemption. If we experience a change
in control triggering event, we may be required to offer to
purchase the notes from holders.
The notes will be our unsecured senior obligations and will rank
equally with all of our other unsecured and unsubordinated
indebtedness from time to time outstanding.
We do not intend to apply for listing of the notes on any
securities exchange or for inclusion of the notes in any
automated dealer quotation system. Currently, there is no public
market for the notes.
Investing in the notes involves substantial risks. You should
carefully consider the risks described under the Risk
Factors section of this prospectus supplement beginning on
page S-5
and similar sections in our filings with the Securities and
Exchange Commission incorporated by reference herein before
investing in any of the notes offered hereby.
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Per Note
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Total
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Public offering price (1)
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99.465%
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$372,993,750
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Underwriting discount
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0.650%
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$2,437,500
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Proceeds, before expenses, to us (1)
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98.815%
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$370,556,250
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(1) Plus accrued interest, if any, from June 18, 2010,
if settlement occurs after such date.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus supplement or the
accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The underwriters expect to deliver the notes only in book-entry
form through the facilities of The Depository Trust Company
for the accounts of its participants, including Euroclear Bank
S.A./N.V., as operator of the Euroclear System, and Clearstream
Banking, société anonyme, on or about June 18,
2010.
Joint Book-Running Managers
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BofA
Merrill Lynch |
J.P. Morgan |
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HSBC
Securities (USA) |
Wells Fargo Securities |
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Daiwa
Capital Markets America |
Mitsubishi UFJ Securities (USA) |
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ANZ Securities
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Banca IMI
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BNP PARIBAS
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COMMERZBANK
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ING
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The date of this prospectus supplement is June 15, 2010.
TABLE OF
CONTENTS
Prospectus
Supplement
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s-ii
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s-ii
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s-iii
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s-iv
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S-1
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S-5
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S-8
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S-9
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S-10
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S-21
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S-23
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S-26
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S-26
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Prospectus
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About This Prospectus
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ii
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Cautionary Statement Concerning Forward-Looking Statements
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iii
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The Company
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1
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Risk Factors
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1
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Use of Proceeds
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2
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Ratio of Earnings to Fixed Charges
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2
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Description of Debt Securities
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3
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Plan of Distribution
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10
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Legal Matters
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Experts
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Where You Can Find More Information
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Incorporation by Reference
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13
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We are responsible for the information contained and
incorporated by reference in this prospectus supplement, the
accompanying prospectus and in any related free-writing
prospectus we prepare or authorize. We have not authorized
anyone to give you any other information, and we take no
responsibility for any other information that others may give
you. If you are in a jurisdiction where offers to sell, or
solicitations of offers to purchase, the notes offered by this
document are unlawful, or if you are a person to whom it is
unlawful to direct these types of activities, then the offer
presented in this document does not extend to you. You should
assume that the information contained and incorporated by
reference in this prospectus supplement, the accompanying
prospectus and any free writing prospectus with respect to this
offering filed by us with the Securities and Exchange Commission
(the SEC) is only accurate as of the respective
dates of such documents. Our business, financial condition,
results of operations and prospects may have changed since those
dates.
s-i
ABOUT
THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is this prospectus
supplement, which describes the specific terms of this offering
of the notes and also adds to and updates information contained
in the accompanying prospectus and the documents incorporated by
reference into this prospectus supplement and the accompanying
prospectus. The second part, the accompanying prospectus, gives
more general information about us and the debt securities we may
offer from time to time under our shelf registration statement,
some of which may not apply to this offering of the notes.
If the description of this offering of the notes in the
accompanying prospectus is different from the description in
this prospectus supplement, you should rely on the information
contained in this prospectus supplement.
You should read this prospectus supplement, the accompanying
prospectus, the documents incorporated by reference into this
prospectus supplement and the accompanying prospectus and the
additional information described under Where You Can Find
More Information and Information Incorporated by
Reference in this prospectus supplement before deciding
whether to invest in the notes offered by this prospectus
supplement.
Unless we have indicated otherwise, or the context otherwise
requires, references in this prospectus supplement and the
accompanying prospectus to the Company,
we, us and our refer to Pall
Corporation and its subsidiaries.
You should not consider any information in this prospectus
supplement or the accompanying prospectus to be investment,
legal or tax advice. You should consult your own counsel,
accountants and other advisers for legal, tax, business,
financial and related advice regarding the purchase of any of
the notes offered by this prospectus supplement.
Currency amounts in this prospectus supplement are stated in
U.S. dollars.
WHERE YOU
CAN FIND MORE INFORMATION
We are subject to the information reporting requirements of the
Securities Exchange Act of 1934, as amended (the Exchange
Act), and, in accordance with these requirements, we are
required to file periodic reports and other information with the
SEC. The reports and other information filed by us with the SEC
may be inspected and copied at the public reference facilities
maintained by the SEC as described below.
This prospectus supplement is part of a registration statement
that we filed with the SEC. The registration statement,
including the attached exhibits, contains additional relevant
information about us. The rules of the SEC allow us to omit from
this prospectus supplement and the accompanying prospectus some
of the information included in the registration statement. You
may read and copy the registration statement, including the
exhibits thereto, and any periodic reports and other information
referred to above on file at the SECs Public Reference
Room at 100 F Street, N.E., Washington, D.C.
20549. Please call the SEC at
1-800-SEC-0330
for further information on the operation of the Public Reference
Room. The SEC filings are also available to the public from
commercial document retrieval services. These filings are also
available at the Internet website maintained by the SEC at
http://www.sec.gov
and may also be inspected and copied at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New
York 10005.
s-ii
INFORMATION
INCORPORATED BY REFERENCE
The rules of the SEC allow us to incorporate by reference
information into this prospectus supplement. The information
incorporated by reference is considered to be a part of this
prospectus supplement, and information that we file later with
the SEC will automatically update and supersede this
information. This prospectus supplement incorporates by
reference the documents listed below:
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Our annual report on
Form 10-K
for the fiscal year ended July 31, 2009, filed with the SEC
on September 29, 2009;
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Our Definitive Proxy Statement filed on October 9, 2009
(other than information in the Definitive Proxy Statement that
is not specifically incorporated by reference in our Annual
Report on
Form 10-K
for the fiscal year ended July 31, 2009);
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Our quarterly reports on
Form 10-Q
for the fiscal quarters ended October 31, 2009, filed with
the SEC on December 10, 2009, January 31, 2010, filed
with the SEC on March 12, 2010, and April 30, 2010,
filed with the SEC on June 9, 2010; and
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Our current reports on
Form 8-K
filed with the SEC on September 25, 2009, October 7,
2009, November 23, 2009, April 29, 2010 and
May 13, 2010.
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We also incorporate by reference into this prospectus supplement
additional documents that we may file with the SEC under
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act from
the date of this prospectus supplement to the end of the
offering. These documents include our annual reports on
Form 10-K,
quarterly reports on
Form 10-Q
and current reports on
Form 8-K
(other than current reports furnished on
Form 8-K
pursuant to Item 2.02 or 7.01 of
Form 8-K)
that are identified in those forms as being incorporated into
this prospectus supplement and that are filed after the date of
this prospectus supplement and prior to the termination of the
offering made by this prospectus supplement.
Any statement made in this prospectus supplement, the
accompanying prospectus or in a document incorporated by
reference in this prospectus supplement will be deemed to be
modified or superseded for purposes of this prospectus
supplement to the extent that a statement contained in this
prospectus supplement or in any other subsequently filed
document that is also incorporated by reference in this
prospectus supplement modifies or supersedes that statement. Any
statement so modified or superseded will not be deemed, except
as so modified or superseded, to constitute a part of this
prospectus supplement.
You may obtain copies of any of these filings through the
Company as described below, through the SEC or through the
SECs Internet website as described above. Documents
incorporated by reference are available without charge,
excluding all exhibits unless an exhibit has been specifically
incorporated by reference into this prospectus supplement, by
requesting them in writing or by telephone at: Pall Corporation,
25 Harbor Park Drive, Port Washington, New York 11050,
Attention: Investor Relations (Telephone:
(516) 484-3600).
s-iii
CAUTIONARY
STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus
(including the information incorporated by reference in this
prospectus supplement and the accompanying prospectus) and any
free writing prospectus with respect to this offering filed by
us with the SEC contain forward-looking statements
within the meaning of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements are those that address
activities, events or developments that we or our management
intends, expects, projects, believes or anticipates will or may
occur in the future. All statements regarding future
performance, earnings projections, earnings guidance,
managements expectations about its future cash needs and
effective tax rate, and other future events or developments are
forward-looking statements. Forward-looking statements use such
words as may, will, expect,
believe, intend, should,
could, anticipate, estimate,
forecast, project, plan,
predict, potential and similar
expressions. They are based on managements assumptions and
assessments in the light of past experience and trends, current
conditions, expected future developments and other relevant
factors and speak only as of the date on which they are made.
They are not guarantees of future performance, and actual
results, developments and business decisions may differ from
those envisaged by our forward-looking statements, and we do not
assume any obligation to update them, whether as a result of new
information, future developments, or otherwise. Our
forward-looking statements are also subject to risks and
uncertainties, which can affect our performance in both the
near- and long-term. These forward-looking statements should be
considered in light of the information included in this
prospectus supplement, including the information under the
heading Risk Factors in our annual report on
Form 10-K
for the year ended July 31, 2009, and the other reports
that we file with the SEC.
Risks and uncertainties that could materially affect future
results include:
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the effect of litigation and regulatory inquiries associated
with the restatement of our prior period financial statements;
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our ability to successfully complete our business improvement
initiatives, which include integrating and upgrading our
information systems, and the effect of a serious disruption in
our information systems;
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the impact of legislative, regulatory and political developments
globally and the impact of the uncertain global economic
environment and the timing and strength of a recovery in the
markets and regions we serve, and the extent to which adverse
economic conditions may affect our sales volume and results;
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demand for our products and business relationships with key
customers and suppliers, which may be impacted by their cash
flow and payment practices, as well as delays or cancellations
in shipments;
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volatility in foreign currency exchange rates, interest rates
and energy costs and other macro economic challenges currently
affecting us;
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changes in product mix, market mix and product pricing,
particularly relating to the expansion of the systems business;
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increase in costs of manufacturing and operating costs;
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our ability to obtain regulatory approval or market acceptance
of new technologies, enforce patents and protect proprietary
products and manufacturing techniques;
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fluctuations in our effective tax rate;
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s-iv
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our ability to successfully complete or integrate any
acquisitions;
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the impact of pricing and other actions by competitors; and
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our ability to achieve the savings anticipated from cost
reduction and gross margin improvement initiatives.
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Any forward-looking statement made by us in this prospectus
supplement, the accompanying prospectus, any document
incorporated by reference herein or therein or any free writing
prospectus with respect to this offering filed by us with the
SEC speaks only as of the date on which it is made. Factors or
events that could cause our actual results to differ may emerge
from time to time, and it is not possible for us to predict all
of them. We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new
information, future developments or otherwise.
s-v
SUMMARY
This summary highlights information from this prospectus
supplement and the accompanying prospectus. It is not complete
and may not contain all of the information that you should
consider before investing in our notes. We encourage you to read
this prospectus supplement, the accompanying prospectus and the
documents incorporated by reference in their entirety before
making an investment decision, including the information set
forth under the heading Risk Factors.
Pall
Corporation
We are a Fortune 1000 company headquartered in Port
Washington, New York. We are a leading supplier of filtration,
separation and purification technologies, principally made by us
using our engineering capability and fluid management expertise,
proprietary filter media, and other fluid clarification and
separations equipment for the removal of solid, liquid and
gaseous contaminants from a wide variety of liquids and gases.
We serve customers through two business groups globally: Life
Sciences and Industrial. The Life Sciences business group is
focused on developing, manufacturing and selling products to
customers in the Medical and BioPharmaceuticals markets. The
Industrial business group is focused on developing,
manufacturing and selling products to customers in the
Aerospace & Transportation, Microelectronics and
Energy, Water & Process Technologies markets. These
business groups are supported by shared and corporate services
groups that facilitate our corporate governance and business
activities globally and a core portfolio of intellectual
property that underlies the products sold by the business groups.
We are a New York corporation. Our principal executive offices
are located at 25 Harbor Park Drive, Port Washington, New York
11050 and our telephone number is
(516) 484-3600.
Our website is www.pall.com. Information on, or
accessible through, this website is not a part of, and is not
incorporated into, this prospectus supplement.
The
Offering
The summary below describes the principal terms of the notes.
Certain of the terms described below are subject to important
limitations and exceptions. The Description of the
Notes section of this prospectus supplement and the
Description of Debt Securities section of the
accompanying prospectus contain a more detailed description of
the terms of the notes.
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Issuer |
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Pall Corporation. |
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Notes Offered |
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$375,000,000 aggregate principal amount of 5.00% Senior
Notes due 2020. |
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Maturity |
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The notes will mature on June 15, 2020. |
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Interest Rate |
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The notes will bear interest at a rate of 5.00% per year. |
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Interest Payment Dates |
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The interest will be payable semi-annually in arrears on
June 15 and December 15 of each year, beginning on
December 15, 2010. |
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Optional Redemption |
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We may redeem the notes at our option, at any time in whole or
from time to time in part, at a redemption price equal to the
greater of: |
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100% of the principal amount of
the notes being redeemed; or
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S-1
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the sum of the present values of
the remaining scheduled payments of principal and interest on
the notes to be redeemed (exclusive of interest accrued to the
date of redemption) discounted to the date of redemption on a
semi-annual basis (assuming a
360-day year
consisting of twelve
30-day
months) at the applicable Treasury Rate (as defined in this
prospectus supplement) plus 30 basis points.
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We will also pay the accrued and unpaid interest on the
principal amount being redeemed to the date of redemption. |
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Offer to Repurchase Upon Change of Control
Triggering Event |
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If we experience a Change of Control Triggering
Event (as defined in this prospectus supplement) with
respect to the notes, unless we have exercised our right to
redeem the notes, each holder of notes will have the right to
require us to repurchase all or a portion of such holders
notes at a price equal to 101% of the principal amount of the
notes repurchased plus accrued and unpaid interest, if any, as
described more fully under Description of the
NotesOffer to Repurchase Upon Change of Control Triggering
Event. |
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Ranking |
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The notes will be our senior unsecured indebtedness and will
rank equally with all of our other senior unsecured indebtedness
from time to time outstanding. |
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Certain Covenants |
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We and our subsidiaries will be limited in our and their ability
to do the following: |
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incur secured indebtedness;
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enter into certain sale and
leaseback transactions; and
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enter into certain mergers,
consolidations and sales of substantially all of our assets.
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The above restrictions are subject to significant exceptions.
See Description of Debt SecuritiesMerger in
the accompanying prospectus and Description of the
NotesLimitation on Liens and Description of
the NotesLimitation on Sale and Leaseback
Transactions in this prospectus supplement. |
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Use of Proceeds |
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We will use the net proceeds from the sale of the notes, which
will be approximately $370 million, after deducting
underwriting discounts and our offering expenses, principally to
redeem our 6% Senior Notes due 2012. We intend to use any
remaining net proceeds for general corporate purposes. |
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Pending the redemption of the 6% Senior Notes due 2012, we
may also use the net proceeds to repay borrowings under our
Credit Agreement, dated as of June 21, 2006, with JPMorgan
Chase Bank, N.A. and the other lenders party thereto, which
amounts may be |
S-2
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subsequently redrawn by us in connection with such redemption or
otherwise. See Use of Proceeds. |
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Denominations |
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The notes will be issued in minimum denominations of $2,000 and
multiples of $1,000 in excess thereof. |
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Form of Notes |
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We will issue the notes in the form of one or more fully
registered global notes registered in the name of the nominee of
The Depository Trust Company (DTC). Investors
may elect to hold the interests in the global notes through any
of DTC, Clearstream Banking, société anonyme or
Euroclear Bank S.A./N.V., as described under the heading
Description of the NotesBook-Entry; Delivery and
Form. |
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Further Issues |
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We may, without the consent of the holders, re-open
the notes and, subject to certain tax limitations, issue
additional notes on terms identical in all respects to the
outstanding notes offered by this prospectus supplement (except
for the date of issuance, the date interest begins to accrue
and, in certain circumstances, the first interest payment date),
as described under Description of the
NotesGeneral. These additional notes, together with
the notes offered by this prospectus supplement, shall form a
single series with and increase the aggregate principal amount
of the series. |
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Risk Factors |
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You should consider carefully all the information set forth and
incorporated by reference in this prospectus supplement and the
accompanying prospectus and, in particular, you should evaluate
the specific factors set forth under the heading Risk
Factors beginning on
page S-5
of this prospectus supplement, as well as the risk factors
discussed under the heading Cautionary Statement
Concerning Forward-Looking Statements beginning on page
s-iv of this prospectus supplement before deciding whether to
invest in the notes. |
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Governing Law |
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New York. |
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Trustee |
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The Bank of New York Mellon. |
Conflicts
of Interest
Certain of the underwriters and/or their affiliates are lenders
under the Credit Agreement and may receive a portion of the net
proceeds from this offering if such proceeds are applied to
repay such borrowings. Consequently, this offering will be made
in compliance with the requirements of Rule 2720 of the
Conduct Rules of the NASD as administered by FINRA. See
Underwriting (Conflicts of Interest).
S-3
Summary
Consolidated Financial Data
The following table sets forth our summary consolidated
financial and other data for the periods and at the dates
indicated. The summary consolidated financial data as of and for
each of the years in the three-year period ended July 31,
2009 have been derived from our audited consolidated financial
statements included in our annual report on
Form 10-K
for the fiscal year ended July 31, 2009, which is
incorporated by reference herein. The historical financial data
as of and for each of the nine months ended April 30, 2010
and April 30, 2009 have been derived from our unaudited
condensed consolidated financial statements included in our
quarterly report on
Form 10-Q
for the fiscal quarter ended April 30, 2010, which is
incorporated by reference herein. The unaudited condensed
consolidated financial statements have been prepared on the same
basis as our audited consolidated financial statements and, in
the opinion of our management, reflect all adjustments,
consisting solely of normal recurring adjustments, necessary for
a fair presentation of this data. The results for any interim
period are not necessarily indicative of the results that may be
expected for a full year.
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Nine Months Ended April 30,
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Fiscal Year Ended July 31,
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2010
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2009
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2009
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2008
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2007
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(unaudited)
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(in thousands, except per share data)
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Statement of Earnings Data:
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Net sales
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$1,723,322
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$1,677,201
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$2,329,158
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$2,571,645
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$2,249,905
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Cost of sales
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855,307
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877,231
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1,228,468
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1,360,810
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1,190,549
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Gross profit
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868,015
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799,970
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1,100,690
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1,210,835
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1,059,356
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Selling, general and administrative expenses
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550,973
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516,337
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699,832
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749,519
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675,005
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Research and development
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|
54,874
|
|
|
|
52,570
|
|
|
|
71,213
|
|
|
|
71,647
|
|
|
|
62,414
|
|
Restructuring and other charges, net
|
|
|
6,659
|
|
|
|
25,291
|
|
|
|
30,723
|
|
|
|
31,538
|
|
|
|
22,352
|
|
Interest expense, net
|
|
|
6,342
|
|
|
|
22,555
|
|
|
|
28,136
|
|
|
|
32,576
|
|
|
|
39,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes
|
|
|
249,167
|
|
|
|
183,217
|
|
|
|
270,786
|
|
|
|
325,555
|
|
|
|
260,529
|
|
Provision for income taxes
|
|
|
62,874
|
|
|
|
57,097
|
|
|
|
75,167
|
|
|
|
108,276
|
|
|
|
133,032
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
$186,293
|
|
|
|
$126,120
|
|
|
|
$195,619
|
|
|
|
$217,279
|
|
|
|
$127,497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$1.58
|
|
|
|
$1.06
|
|
|
|
$1.65
|
|
|
|
$1.77
|
|
|
|
$1.04
|
|
Diluted
|
|
|
$1.56
|
|
|
|
$1.05
|
|
|
|
$1.64
|
|
|
|
$1.76
|
|
|
|
$1.02
|
|
Average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
117,713
|
|
|
|
118,753
|
|
|
|
118,631
|
|
|
|
122,445
|
|
|
|
123,115
|
|
Diluted
|
|
|
119,107
|
|
|
|
119,689
|
|
|
|
119,571
|
|
|
|
123,686
|
|
|
|
124,393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
As of
|
|
|
|
|
April 30,
|
|
|
|
July 31,
|
|
|
|
|
2010
|
|
|
|
2009
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$483,884
|
|
|
|
|
$414,011
|
|
|
Total assets
|
|
|
2,889,282
|
|
|
|
|
2,840,812
|
|
|
Total long-term debt, including current portion
|
|
|
687,974
|
|
|
|
|
675,098
|
|
|
Total stockholders equity
|
|
|
1,222,963
|
|
|
|
|
1,114,598
|
|
|
Total liabilities and stockholders equity
|
|
|
2,889,282
|
|
|
|
|
2,840,812
|
|
|
S-4
RISK
FACTORS
An investment in the notes involves certain risks. You should
carefully consider the risk factors discussed under the heading
Cautionary Statement Concerning Forward-Looking
Statements provided in this prospectus supplement
beginning on page s-iv, the risks described under Risk
Factors in our most recent annual report on
Form 10-K
and subsequent quarterly reports on
Form 10-Q,
as well as the other information included or incorporated by
reference in this prospectus supplement, before making an
investment decision. Additional risks and uncertainties not
presently known to us or that we currently deem immaterial may
also adversely affect our business or financial performance. Our
business, financial condition or results of operations could be
materially adversely affected by any of these risks. The market
or trading price of the notes could decline due to any of these
risks or other factors, and you may lose all or part of your
investment.
In addition to the foregoing risks relating to us, the following
are additional risks relating to an investment in the notes.
The
notes are effectively subordinated to our secured debt and the
existing and future liabilities of our
subsidiaries.
The notes are our senior unsecured obligations and will rank
equal in right of payment to our other senior unsecured debt
from time to time outstanding. As of April 30, 2010, we had
approximately $728.0 million of total indebtedness
outstanding on a consolidated basis, all of which would rank
equal in right of payment to the notes. 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. We do not currently have any material secured
obligations.
Our subsidiaries are separate and distinct legal entities from
us. The notes are obligations exclusively of Pall Corporation
and are not guaranteed by our subsidiaries, which 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. Our subsidiaries are not prohibited from incurring
additional debt or other liabilities, including senior
indebtedness, or from issuing equity interests that have
priority over our interests in the subsidiaries. If our
subsidiaries were to incur additional debt or liabilities or to
issue equity interests that have priority over our interests in
the subsidiaries, our ability to pay our obligations on the
notes could be adversely affected. As of April 30, 2010,
our consolidated subsidiaries had approximately
$57.2 million of debt outstanding. 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 the
subsidiaries earnings and business considerations. Our
right to receive any assets of any of our subsidiaries upon
their bankruptcy, 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
subsidiarys 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.
The
terms of the indenture and the notes provide only limited
protection against significant corporate events and other
actions we may take that could adversely impact your investment
in the notes.
While the indenture and the notes contain terms intended to
provide protection to the holders of the notes upon the
occurrence of certain events involving significant corporate
transactions, such terms are limited and may not be sufficient
to protect your investment in the notes.
The definition of the term Change of Control Triggering
Event (as defined in Description of the
NotesOffer to Repurchase upon Change of Control Triggering
Event) does not cover a variety of transactions (such as
acquisitions by us or recapitalizations) that could negatively
affect the value of your notes. If we were to enter into a
significant corporate transaction that would negatively affect
the value of the
S-5
notes but would not constitute a Change of Control Triggering
Event, we would not be required to offer to repurchase your
notes prior to their maturity.
Furthermore, the indenture for the notes does not:
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|
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|
|
require us to maintain any financial ratios or specific levels
of net worth, revenues, income, cash flow or liquidity;
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|
|
|
limit our ability to incur indebtedness that is equal in right
of payment to the notes;
|
|
|
|
restrict our subsidiaries ability to issue securities or
otherwise incur indebtedness that would be senior to our equity
interests in our subsidiaries and therefore rank effectively
senior to the notes;
|
|
|
|
limit the ability of our subsidiaries to service indebtedness;
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|
|
|
restrict our ability to repurchase or prepay any other of our
securities or other indebtedness; or
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|
|
restrict our ability to make investments or to repurchase or pay
dividends or make other payments in respect of our common stock
or other securities ranking junior to the notes.
|
As a result of the foregoing, when evaluating the terms of the
notes, you should be aware that the terms of the indenture and
the notes do not restrict our ability to engage in, or to
otherwise be a party to, a variety of corporate transactions,
circumstances and events that could have an adverse impact on
your investment in the notes.
Our
credit ratings may not reflect all risks of your investments in
the notes.
Our credit ratings are an assessment by rating agencies of our
ability to pay our debts when due. Consequently, real or
anticipated changes in our credit ratings will generally affect
the market value of the notes. These credit ratings may not
reflect the potential impact of risks relating to the structure
or marketing of the notes. Agency ratings are not a
recommendation to buy, sell or hold any security, and may be
revised or withdrawn at any time by the issuing organization.
Each agencys rating should be evaluated independently of
any other agencys rating.
If an
active trading market does not develop for the notes, you may be
unable to sell your notes or to sell your notes at a price that
you deem sufficient.
The notes are a new issue of securities for which there
currently is no established trading market. We do not intend to
apply for listing of the notes on any securities exchange or for
quotation of the notes in any automated dealer quotation system.
Although certain of the underwriters have informed us that they
currently intend to make a market in the notes after we complete
the offering, they have no obligation to do so and may
discontinue making a market at any time without notice. No
assurance can be given:
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|
|
that a market for the notes will develop or continue;
|
|
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|
as to the liquidity of any market that does develop; or
|
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|
as to your ability to sell any notes you may own or the price at
which you may be able to sell your notes.
|
S-6
We may
not be able to repurchase the notes upon a change of
control.
Upon the occurrence of specific kinds of change of control
events, unless we have exercised our right to redeem the notes,
each holder of notes will have the right to require us to
repurchase all or any part of such holders notes at a
price equal to 101% of their principal amount, plus accrued and
unpaid interest, if any, to the date of purchase. If we
experience a Change of Control Triggering Event (as
defined in Description of the NotesOffer to
Repurchase upon Change of Control Triggering Event), there
can be no assurance that we would have sufficient financial
resources available to satisfy our obligations to repurchase the
notes. Our failure to purchase the notes as required under the
indenture governing the notes would result in a default under
the indenture, which could have material adverse consequences
for us and the holders of the notes. See Description of
the NotesOffer to Purchase upon Change of Control
Triggering Event.
S-7
USE OF
PROCEEDS
We estimate the net proceeds from the offering of the notes will
be approximately $370 million, after deducting underwriting
discounts and estimated offering expenses payable by us. We
intend to use the net proceeds from this offering principally to
redeem our 6% Senior Notes due 2012 (the 2012
Notes). Currently, there is $280 million aggregate
principal amount of the 2012 Notes outstanding. The 2012 Notes
mature on August 1, 2012 and were issued in August 2002
pursuant to an Indenture, dated as of August 1, 2002, by
and among the Company, the guarantors named therein and the Bank
of New York as Trustee. We intend to use any remaining net
proceeds for general corporate purposes.
Pending the redemption of the 2012 Notes, we may also use the
net proceeds to repay borrowings under our Credit Agreement,
dated as of June 21, 2006, with JPMorgan Chase Bank, N.A.
and the other lenders party thereto, which amounts may be
subsequently redrawn by us in connection with such redemption or
otherwise. As of April 30, 2010, borrowings under the
Credit Agreement aggregated $295 million and bore interest
at a blended rate of 0.5738% per annum.
Certain of the underwriters and/or their affiliates are lenders
under the Credit Agreement and may receive a portion of the net
proceeds from this offering if such proceeds are applied to
repay such borrowings. Consequently, this offering will be made
in compliance with the requirements of Rule 2720 of the Conduct
Rules of the NASD as administered by FINRA. See
Underwriting (Conflicts of Interest).
S-8
CAPITALIZATION
The following table sets forth our cash and cash equivalents,
total debt and other obligations and capitalization as of
April 30, 2010:
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|
|
|
|
on an actual basis; and
|
|
|
|
on an as adjusted basis to give effect to the receipt and
application of the $370 million estimated net proceeds from
this offering to redeem the 2012 Notes, including the payment of
an aggregate redemption premium of approximately
$29 million in accordance with the terms of the 2012 Notes.
See Use of Proceeds.
|
You should read the data set forth in the table below in
conjunction with our historical consolidated financial
statements, including the related notes, which are incorporated
by reference herein.
|
|
|
|
|
|
|
|
|
|
|
As of April 30, 2010
|
|
|
|
Actual
|
|
|
As Adjusted
|
|
|
|
(in thousands, except per share data)
|
|
|
Cash and cash equivalents
|
|
|
$483,884
|
|
|
|
$544,884
|
(1)
|
|
|
|
|
|
|
|
|
|
5.00% Senior Notes due 2020 offered hereby
|
|
|
|
|
|
|
375,000
|
|
Notes payable
|
|
|
40,113
|
|
|
|
40,113
|
|
Current portion of long-term debt
|
|
|
1,999
|
|
|
|
1,999
|
|
Long-term debt, net of current portion
|
|
|
685,975
|
|
|
|
405,975
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
|
728,087
|
|
|
|
823,087
|
|
Common stock (par value $0.10 per share; 500,000 shares
authorized; 127,958 shares issued)
|
|
|
12,796
|
|
|
|
12,796
|
|
Capital in excess of par value
|
|
|
215,123
|
|
|
|
215,123
|
|
Retained earnings
|
|
|
1,360,136
|
|
|
|
1,339,136
|
(2)
|
Treasury stock, at cost (10,940 shares)
|
|
|
(355,165
|
)
|
|
|
(355,165
|
)
|
Stock option loans
|
|
|
(228
|
)
|
|
|
(228
|
)
|
Accumulated other comprehensive loss, net of tax
|
|
|
(9,699
|
)
|
|
|
(9,699
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity (3)
|
|
|
1,222,963
|
|
|
|
1,201,963
|
|
|
|
|
|
|
|
|
|
|
Total capitalization
|
|
|
$1,951,050
|
|
|
|
$2,025,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Reflects the net proceeds from the offering of the notes, less
$309 million applied to redeem the 2012 Notes, including
the related redemption premium. |
|
(2) |
|
Reflects an estimated $21 million of after-tax charges
relating to the redemption of the 2012 Notes. |
|
(3) |
|
The number of shares of our common stock presented in this
prospectus supplement excludes, as of April 30, 2010, a
total of 12,374 shares, including 6,191 shares
reserved for issuance upon exercise of outstanding options,
restricted stock units and restricted units under our stock
compensation plans and 6,183 shares reserved for future
issuance under our stock compensation plans. |
S-9
DESCRIPTION
OF THE NOTES
The following description is a summary of the terms of the
notes being offered. The descriptions in this prospectus
supplement and the accompanying prospectus contain descriptions
of certain terms of the notes and the indenture but do not
purport to be complete and are subject to, and are qualified in
their entirety by reference to, all of the provisions of the
indenture which has been filed as an exhibit to the registration
statement of which this prospectus supplement and the
accompanying prospectus are a part, including the definitions of
specified terms used in the indenture, and to the
Trust Indenture Act of 1939, as amended. Wherever
particular articles, sections or defined terms of the indenture
are referred to, it is intended that those articles, sections or
defined terms will be incorporated herein by reference, and the
statement in connection with which reference is made is
qualified in its entirety by the article, section or defined
term in the indenture. This summary supplements the description
of the debt securities in the accompanying prospectus and, to
the extent it is inconsistent, replaces the description in the
accompanying prospectus.
General
The notes will constitute a series of securities under the
indenture referred to below and will be issued only in fully
registered form in minimum denominations of $2,000 and multiples
of $1,000 in excess thereof. The notes will mature on the date
set forth below. The accompanying prospectus describes
additional provisions of the notes and of the indenture, dated
as of June 15, 2010, between us and The Bank of New York
Mellon, as trustee, under which we will issue the notes. There
is no limit on the aggregate principal amount of notes that we
may issue under the indenture. Subject to certain tax
limitations, we reserve the right, from time to time and without
the consent of any holders of the notes, to re-open such series
of notes on terms identical in all respects to the outstanding
notes of such series (except the date of issuance, the date
interest begins to accrue and, in certain circumstances, the
first interest payment date), so that such additional notes
shall be consolidated with, form a single series with and
increase the aggregate principal amount of the notes of such
series.
The notes will mature on June 15, 2020. The notes will bear
interest at 5.00%. We will pay interest on the notes
semi-annually in arrears on June 15 and December 15 of
each year, beginning December 15, 2010, to the record
holders at the close of business on the preceding June 1 or
December 1 (whether or not a business day). Interest will
be computed on the basis of a
360-day year
consisting of twelve
30-day
months.
Ranking
The notes will be our senior unsecured indebtedness and will
rank equally with all of our other senior unsecured indebtedness
from time to time outstanding.
Optional
Redemption
We may redeem the notes at our option, at any time in whole or
from time to time in part, at a redemption price equal to the
greater of:
|
|
|
|
|
100% of the principal amount of the notes to be redeemed; or
|
|
|
|
the sum of the present values of the remaining scheduled
payments of principal and interest on the notes to be redeemed
(exclusive of interest accrued to the date of redemption)
discounted to the date of redemption on a semi-annual basis
(assuming a
360-day year
consisting of twelve
30-day
months) at the applicable Treasury Rate (as defined below) plus
30 basis points.
|
In each case, we will pay accrued and unpaid interest on the
principal amount being redeemed to the date of redemption.
S-10
Comparable Treasury Issue means the United States
Treasury security selected by an Independent Investment Banker
as having a maturity comparable to the remaining term
(Remaining Life) 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 comparable maturity to the
remaining term of such notes.
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 Reference Treasury Dealer Quotations, or
(2) if the Independent Investment Banker obtains fewer than
four such Reference Treasury Dealer Quotations, the average of
all such quotations.
Independent Investment Banker means one of the
Reference Treasury Dealers that we appoint to act as the
Independent Investment Banker from time to time.
Reference Treasury Dealer means (1) each of
Banc of America Securities LLC and J.P. Morgan Securities
Inc., and their respective successors, unless any of them ceases
to be a primary U.S. Government securities dealer in New
York City (a Primary Treasury Dealer), in which case
we shall substitute another Primary Treasury Dealer and
(2) any other Primary Treasury Dealer we select.
Reference Treasury Dealer Quotations means, with
respect to each Reference Treasury Dealer and any redemption
date, the average, as determined by the Independent Investment
Banker, of the bid and asked prices for the applicable
Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the
Independent Investment Banker by such Reference Treasury Dealer
at 5:00 p.m., New York City time, on the third business day
preceding such redemption date.
Treasury Rate means, with respect to any redemption
date, the rate per year equal to: (1) the yield, under the
heading which represents the average for the immediately
preceding week, appearing in the most recently published
statistical release designated H.15(519) or any
successor publication which is published weekly by the Board of
Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption Treasury
Constant Maturities, for the maturity corresponding to the
applicable Comparable Treasury Issue; provided that, if no
maturity is within three months before or after the Remaining
Life of the notes to be redeemed, yields for the two published
maturities most closely corresponding to the applicable
Comparable Treasury Issue shall be determined and the Treasury
Rate shall be interpolated or extrapolated from those yields on
a straight line basis, rounding to the nearest month; or
(2) if such release (or any successor release) is not
published during the week preceding the calculation date or does
not contain such yields, the rate per year equal to the
semiannual equivalent yield to maturity of the applicable
Comparable Treasury Issue, calculated using a price for the
applicable Comparable Treasury Issue (expressed as a percentage
of its principal amount) equal to the related Comparable
Treasury Price for such redemption date. The Treasury Rate shall
be calculated on the third business day preceding the redemption
date.
Notice of redemption will be mailed at least 30 but not more
than 60 days before the redemption date to each holder of
record of the notes to be redeemed at its registered address.
The notice of redemption for the notes will state, among other
things, the amount of notes to be redeemed, the redemption date,
the manner in which the redemption price will be calculated and
the place or places that payment will be made upon presentation
and surrender of notes to be redeemed. Unless we default in the
payment of the redemption price, interest will cease to accrue
on any notes that have been called for redemption at the
redemption date.
Offer to
Repurchase Upon Change of Control Triggering Event
Upon the occurrence of a Change of Control Triggering Event with
respect to the notes, unless we have exercised our right to
redeem the notes as described under Optional
Redemption by giving irrevocable notice to the trustee in
accordance with the indenture, each holder of notes will have
the right to
S-11
require us to purchase all or a portion of such holders
notes pursuant to the offer described below (the Change of
Control Offer), at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if
any, up to but not including the date of purchase (the
Change of Control Payment), subject to the rights of
holders of notes on the relevant record date to receive interest
due and owing on the relevant interest payment date.
Within 30 days following the date upon which the Change of
Control Triggering Event occurs or, at our option, prior to any
Change of Control but after the public announcement of the
pending Change of Control, we will be required to send, by first
class mail, a notice to each holder of notes to their addresses
as set forth in the register, with a copy to the trustee, which
notice will govern the terms of the Change of Control Offer.
Such notice will state, among other things, the purchase date,
which must be no earlier than 30 days nor later than
60 days from the date such notice is mailed, other than as
may be required by law (the Change of Control Payment
Date). The notice, if mailed prior to the date of
consummation of the Change of Control, will state that the
Change of Control Offer is conditioned on the Change of Control
being consummated on or prior to the Change of Control Payment
Date.
On the Change of Control Payment Date, we will, to the extent
lawful:
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|
|
|
|
accept or cause a third party to accept for payment all notes or
portions of notes properly tendered pursuant to the Change of
Control Offer;
|
|
|
|
deposit or cause a third party to deposit with the paying agent
an amount equal to the Change of Control Payment in respect of
all notes or portions of notes properly tendered; and
|
|
|
|
deliver or cause to be delivered to the trustee the notes
properly accepted together with an officers certificate
stating the aggregate principal amount of notes or portions of
notes being repurchased.
|
We will not be required to make a Change of Control Offer with
respect to the notes if a third party makes such an offer in the
manner, at the times and otherwise in compliance with the
requirements for such an offer made by us and such third party
purchases all the notes properly tendered and not withdrawn
under its offer. In addition, we will not repurchase any notes
if there has occurred and is continuing on the Change of Control
Payment Date an event of default under the indenture, other than
a default in the payment of the Change of Control Payment on the
Change of Control Payment Date.
We must comply in all material respects with the requirements of
Rule 14e-1
under the Exchange Act, and any other securities laws and
regulations thereunder to the extent those laws and regulations
are applicable in connection with the repurchase of the notes as
a result of a Change of Control Triggering Event. To the extent
that the provisions of any such securities laws or regulations
conflict with the Change of Control Offer provisions of the
notes, we will be required to comply with those securities laws
and regulations and will not be deemed to have breached our
obligations under the Change of Control Offer provisions of the
notes by virtue of any such conflict.
For purposes of the foregoing discussion of a Change of Control
Offer, the following definitions are applicable:
Change of Control means the occurrence of any of the
following after the date of issuance of the notes:
(1) the direct or indirect sale, lease, transfer,
conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of
all or substantially all of our assets and the assets of our
subsidiaries taken as a whole to any person or
group (as those terms are used in
Section 13(d)(3) of the Exchange Act) other than to us or
one of our subsidiaries;
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(2) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is
that any person or group (as those terms
are used in Section 13(d)(3) of the Exchange Act) (other
than us or one of our subsidiaries) becomes the beneficial
owner (as defined in
Rules 13d-3
and 13d-5
under the Exchange Act), directly or indirectly, of our Voting
Stock representing a majority of the voting power of our
outstanding Voting Stock;
(3) we consolidate with, or merge with or into, any Person,
or any Person consolidates with, or merges with or into, us, in
any such event pursuant to a transaction in which any of our
outstanding Voting Stock or Voting Stock of such other Person is
converted into or exchanged for cash, securities or other
property, other than any such transaction where our Voting Stock
outstanding immediately prior to such transaction constitutes,
or is converted into or exchanged for, Voting Stock representing
a majority of the voting power of the Voting Stock of the
surviving Person immediately after giving effect to such
transaction;
(4) the first day on which the majority of the members of
our board of directors cease to be Continuing Directors; or
(5) the adoption by our shareholders of a plan relating to
our liquidation or dissolution.
Notwithstanding the foregoing, a transaction will not be deemed
to involve a change of control under clause (2) above if
(i) we become a direct or indirect wholly-owned subsidiary
of a holding company and (ii)(A) the direct or indirect holders
of the Voting Stock of such holding company immediately
following that transaction are substantially the same as the
holders of our Voting Stock immediately prior to that
transaction or (B) immediately following that transaction
no person (as that term is used in Section 13(d)(3) of the
Exchange Act) (other than a holding company satisfying the
requirements of this sentence) is the beneficial owner, directly
or indirectly, of more than 50% of the Voting Stock of such
holding company.
Change of Control Triggering Event means, with
respect to the notes, (i) the rating of such notes is
lowered by each of the Rating Agencies on any date during the
period (the Trigger Period) commencing on the
earlier of (a) the occurrence of a Change of Control and
(b) the first public announcement by us of any Change of
Control (or pending Change of Control), and ending 60 days
following consummation of such Change of Control (which Trigger
Period will be extended following consummation of a Change of
Control for so long as any of the Rating Agencies has publicly
announced that it is considering a possible ratings change), and
(ii) such notes are rated below Investment Grade by each of
the Rating Agencies on any day during the Trigger Period;
provided that a Change of Control Trigger Event will not be
deemed to have occurred in respect of a particular Change of
Control if each Rating Agency making the reduction in rating
does not publicly announce or confirm or inform the trustee at
our request that the reduction was the result, in whole or in
part, of any event or circumstance comprised of or arising as a
result of, or in respect of, the Change of Control.
Notwithstanding the foregoing, no Change of Control Triggering
Event will be deemed to have occurred in connection with any
particular Change of Control unless and until such Change of
Control has actually been consummated.
Continuing Director means, as of any date of
determination, any member of our board of directors who:
(1) was a member of our board of directors on the date of
the issuance of the notes; or
(2) was nominated for election or elected or appointed to
our board of directors with the approval of a majority of the
Continuing Directors who were members of our board of directors
at the time of such nomination, election or appointment (either
by a specific vote or by approval of our
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proxy statement in which such member was named as a nominee for
election as a director, without objection to such nomination).
Investment Grade means a rating of Baa3 or better by
Moodys (or its equivalent under any successor rating
category of Moodys) and a rating of BBB- or better by
S&P (or its equivalent under any successor rating category
of S&P), and the equivalent investment grade credit rating
from any replacement rating agency or rating agencies selected
by us under the circumstances permitting us to select a
replacement rating agency and in the manner for selecting a
replacement rating agency, in each case as set forth in the
definition of Rating Agency.
Moodys means Moodys Investors Service,
Inc., a subsidiary of Moodys Corporation, and its
successors.
Person means any individual, corporation,
partnership, limited liability company, business trust,
association, joint-stock company, joint venture, trust,
incorporated or unincorporated organization or government or any
agency or political subdivision thereof.
Rating Agency means each of Moodys and
S&P; provided, that if any of Moodys or S&P
ceases to provide rating services to issuers or investors, we
may appoint another nationally recognized statistical
rating organization within the meaning of
Rule 15c3-1(c)(2)(vi)(F)
under the Exchange Act as a replacement for such Rating Agency;
provided that we shall give notice of such appointment to
the trustee.
S&P means Standard & Poors
Ratings Services, a division of The McGraw-Hill Companies, Inc.,
and its successors.
Voting Stock of any specified Person as of any date
means the capital stock of such Person that is at the time
entitled to vote generally in the election of the board of
directors of such Person.
The definition of Change of Control includes a phrase relating
to the direct or indirect sale, lease, transfer, conveyance or
other disposition of all or substantially all of our
assets and the assets of our subsidiaries taken as a whole.
Although there is a limited body of case law interpreting the
phrase substantially all, there is no precise,
established definition of the phrase under applicable law.
Accordingly, the applicability of the requirement that we offer
to repurchase the notes as a result of a sale, lease, transfer,
conveyance or other disposition of less than all of our assets
and the assets of our subsidiaries taken as a whole to another
person or group (as those terms are used
in Section 13(d)(3) of the Exchange Act) may be uncertain.
Certain
Restrictive Covenants
Limitation
on Liens
We may not, and may not permit our Domestic Restricted
Subsidiaries to, incur, issue, assume or guarantee any debt that
is secured by a mortgage, pledge, lien, security interest,
conditional sale or other title retention agreement or other
similar encumbrance (collectively, Mortgages) on any
of our Principal Properties or any shares of stock or
indebtedness of any Domestic Restricted Subsidiary, without
first effectively providing that the notes will be secured
equally and ratably with, or prior to, the incurred, issued,
assumed or guaranteed secured debt, for so long as such secured
debt remains so secured.
This limitation on the incurrence, issuance, assumption or
guarantee of any debt secured by a Mortgage will not apply to,
and there will be excluded from any secured debt in any
computation under this covenant, debt secured by:
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Mortgages existing on the date hereof;
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Mortgages on property of, or on any shares of stock or
indebtedness of, any entity existing at the time the entity is
merged into or consolidated with us or becomes a Domestic
Restricted Subsidiary;
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Mortgages in favor of us or any of our Domestic Restricted
Subsidiaries;
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Mortgages on property or on shares of stock or indebtedness
existing at the time of acquisition thereof, including
acquisitions through merger, consolidation or other
reorganization; or to secure the payment of all or any part of
the purchase price thereof or the cost of construction, repair,
alterations or development thereon; or to secure any debt
incurred prior to, at the time of, or within one year after the
later of the acquisition, the completion of construction or the
commencement of full operation of the property or within one
year after the acquisition of the shares or indebtedness for the
purpose of financing all or any part of the purchase price
thereof or construction thereon; provided that, if a commitment
for the financing is obtained prior to or within this one-year
period, the applicable Mortgage will be deemed to be included in
this clause whether or not the Mortgage is created within this
one-year period;
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Mortgages in favor of the United States, any state thereof, or
any department, agency or instrumentality or political
subdivision of any of the foregoing, or in favor of any other
country or any political subdivision thereof;
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Mortgages required by any contract or statute in order to permit
us or any of our Domestic Restricted Subsidiaries to perform any
contract or subcontract made with or at the request of the
United States, any state thereof, or in favor of any other
country or political subdivision thereof, or any department,
agency or instrumentality of any of the foregoing;
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any Mortgage resulting from the deposit of moneys or evidence of
indebtedness in trust for the purpose of defeasing our, or our
Domestic Restricted Subsidiaries, debt or secured debt, the net
proceeds of which are used, substantially concurrently with the
funding thereof, and taking into consideration, among other
things, required notices to be given to the holders of the
outstanding notes in connection with the refunding, refinancing
or repurchase thereof, and the required corresponding durations
thereof, to refund, refinance or repurchase all of the
outstanding notes, including the amount of all accrued interest
thereon and reasonable fees and expenses and premiums, if any,
incurred by us or any of our Domestic Restricted Subsidiaries in
connection therewith;
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easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, are not material in amount
and which do not in any case materially detract from the value
of the property subject thereto or materially interfere with the
ordinary conduct of our business or the business of our
subsidiaries;
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Mortgages for taxes, assessments or other governmental charges
or levies which are not yet due and payable;
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any attachment or judgment Mortgage, unless the attachment or
judgment it secures shall not, within 60 days after the
entry thereof, have been discharged or execution thereof stayed
pending appeal, or shall not have been discharged within
60 days after the expiration of any stay;
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statutory Mortgages of landlords and Mortgages of carriers,
warehousemen, mechanics, materialmen and other similar
Mortgages, in each case, incurred in the ordinary course of
business for sums not yet due and payable;
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Mortgages (other than any Mortgages imposed by the Employee
Retirement Income Security Act) incurred or deposits made in the
ordinary course of business (i) in connection with
workers compensation, unemployment insurance and other
types of social security or retirement benefits, or (ii) to
secure (or obtain letters of credit that secure) the performance
of tenders, statutory obligations, surety bonds, appeal bonds,
bids, leases, performance bonds, purchase, construction or sales
contracts and other similar obligations, in each case not
incurred or made in connection with the borrowing of money, the
obtaining of advances or credit or the payment of the deferred
purchase price of property;
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bankers liens or set-off rights of depositary banks or
securities intermediaries arising in the ordinary course of
business; and
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any extension, renewal or replacement, or successive extensions,
renewals or replacements, of any Mortgage referred to in this
provision, so long as the extension, renewal or replacement
Mortgage is limited to all or a part of the same property,
including any improvements on the property, shares of stock or
indebtedness that secured the Mortgage so extended, renewed or
replaced.
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Notwithstanding anything mentioned above, we and any one or more
of our Domestic Restricted Subsidiaries may incur, issue, assume
or guarantee debt secured by Mortgages that would otherwise be
subject to the above restrictions if the aggregate amount of the
debt secured by the Mortgages, together with the total
discounted net amount of rent required to be paid during the
remaining term of any lease relating to sale and leaseback
transactions pursuant to the Limitation on Sale and
Leaseback Transactions covenant below, does not at any
time exceed 15% of Consolidated Net Tangible Assets.
Limitation
on Sale and Leaseback Transactions
Sale and leaseback transactions by us or any Domestic Restricted
Subsidiary of any Principal Property (whether now owned or
hereafter acquired) are prohibited unless: (i) we or such
Domestic Restricted Subsidiary would be entitled under the
indenture to issue, assume or guarantee debt secured by a
Mortgage upon such Principal Property at least equal in amount
to the Attributable Debt in respect of such transaction without
equally and ratably securing the notes, provided that such
Attributable Debt shall thereupon be deemed to be debt subject
to the provisions described under Limitation on
Liens or (ii) within 180 days, an amount in cash
equal to such Attributable Debt is applied to (a) the
retirement of Funded Debt (debt that matures at or is extendible
or renewable at the option of the obligor to a date more than
12 months after the date of the creation of such Debt)
ranking pari passu with the notes, (b) the
retirement of the notes or (c) the purchase, construction,
development, expansion or improvement of other comparable
property, which amount shall not be less than the greater of the
net proceeds of the sale of the Principal Property leased
pursuant to the arrangement or the fair market value of the
Principal Property so leased.
The restrictions described above do not apply to the following:
(i) a sale and leaseback transaction between us and a
Domestic Restricted Subsidiary or between Domestic Restricted
Subsidiaries, or that involves the taking back of a lease for a
period of less than three years, or (ii) if, at the time of
the sale and leaseback transaction, after giving effect to the
transaction, the total discounted net amount of rent required to
be paid during the remaining term of any lease relating to sale
and leaseback transactions (other than transactions permitted by
the previous bullet points), plus all outstanding secured debt
pursuant to the
Limitation
on Liens covenant above, does not exceed 15% of our
Consolidated Net Tangible Assets.
S-16
Certain
Definitions
The following are the meanings of terms that are important in
understanding the covenants previously described:
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Attributable Debt means the present value
(discounted at the rate of interest implicit in the terms of the
lease) of the obligation of a lessee for net rental payments
during the remaining term of any lease (including any period for
which such lease has been extended or may, at the option of the
lessor, be extended).
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Consolidated Net Tangible Assets means, calculated
as of the date of the financial statements for the most recently
ended fiscal quarter or fiscal year, as applicable, prior to the
date of determination, the aggregate amount of assets of us and
our consolidated Subsidiaries, less applicable reserves but
including investments in non-consolidated entities, after
deducting therefrom: (i) all current liabilities, excluding
any thereof which are by their terms extendible or renewable at
the option of the obligor thereon to a time more than 12 months
after the time as of which the amount thereof is being computed
and excluding deferred income taxes; and (ii) all goodwill,
trade names, trademarks, patents, unamortized debt discount and
expenses and other like intangibles, all as set forth on our
consolidated balance sheet and computed in accordance with
accounting principles generally accepted in the United States.
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Domestic Restricted Subsidiary means (i) any
Subsidiary which owns or leases, directly or indirectly, a
Principal Property; and (ii) any Subsidiary which owns,
directly or indirectly, any stock or indebtedness of a Domestic
Restricted Subsidiary; except that a Domestic Restricted
Subsidiary shall not include any Subsidiary (a) engaged
primarily in financing receivables, making loans, extending
credit or other activities of a character conducted by a finance
company, or (b) that transacts any substantial portion of
its business and regularly maintains any substantial portion of
its fixed assets outside of the United States or that is engaged
primarily in financing the operation of us or our Subsidiaries,
or both, outside the United States.
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Principal Property means each manufacturing or
processing plant or facility of ours or any of our Domestic
Restricted Subsidiaries whether owned or leased on the date of
the indenture or thereafter acquired, other than any property
that either (i) has a gross book value of less than 1% of
Consolidated Net Tangible Assets or (ii) in the good faith
opinion of our board of directors, is not materially important
to our business or to that of our Subsidiaries.
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Subsidiary means, as to any person, any corporation,
association or other business entity in which such person or one
or more of its subsidiaries or such person and one or more of
its subsidiaries owns sufficient equity or voting interests to
enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or persons
performing similar functions) of such entity, and any
partnership or joint venture if more than a 50% interest in the
profits or capital thereof is owned by such person or one or
more of its subsidiaries or such person and one or more of its
subsidiaries (unless such partnership can and does ordinarily
take major business actions without the prior approval of such
person or one or more of its subsidiaries).
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Defeasance
The provisions of the indenture relating to defeasance, which
are described under the caption Description of the Debt
SecuritiesDefeasance and Covenant Defeasance in the
accompanying prospectus, will apply to the notes.
S-17
Book-Entry;
Delivery and Form
The notes will be represented by one or more global notes that
will be deposited with and registered in the name of The
Depository Trust Company (DTC) or its nominee
for the accounts of its participants, including Euroclear Bank
S.A./N.V. (Euroclear) as operator of the Euroclear
System, and Clearstream Banking, société anonyme
(Clearstream). We will not issue certificated
notes, except in the limited circumstances described below.
Transfers of ownership interests in the global notes will be
effected only through entries made on the books of DTC
participants acting on behalf of beneficial owners. You, as the
beneficial owner of notes, will not receive certificates
representing ownership interests in the global notes, except in
the event that use of the book-entry system for the notes is
discontinued. You will not receive written confirmation from DTC
of your purchase. The direct or indirect participants through
whom you purchased the notes should send you written
confirmations providing details of your transactions, as well as
periodic statements of your holdings. The direct and indirect
participants are responsible for keeping accurate account of the
holdings of their customers like you. The laws of some states
require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and
such laws may impair the ability to own, transfer or pledge
beneficial interests in the global notes.
So long as DTC or its nominee is the registered owner and holder
of the global notes, DTC or its nominee, as the case may be,
will be considered the sole owner or holder of the notes
represented by the global notes for all purposes under the
indenture relating to the notes. Except as provided below, you,
as the beneficial owner of interests in the global notes, will
not be entitled to have notes registered in your name, will not
receive or be entitled to receive physical delivery of notes in
definitive form and will not be considered the owner or holder
thereof under the indenture. Accordingly, you, as the beneficial
owner, must rely on the procedures of DTC and, if you are not a
DTC participant, on the procedures of the DTC participants
through which you own your interest, to exercise any rights of a
holder under the indenture.
Neither we, the trustee, nor any other agent of ours or agent of
the trustee will have any responsibility or liability for any
aspect of the records relating to, or payments made on account
of, beneficial ownership interests in global notes or for
maintaining, supervising or reviewing any records relating to
the beneficial ownership interests. DTCs practice is to
credit the accounts of DTCs direct participants with
payment in amounts proportionate to their respective holdings in
principal amount of beneficial interest in a security as shown
on the records of DTC, unless DTC has reason to believe that it
will not receive payment on the payment date. The underwriters
will initially designate the accounts to be credited. Beneficial
owners may experience delays in receiving distributions on their
notes because distributions will initially be made to DTC and
they must be transferred through the chain of intermediaries to
the beneficial owners account. Payments by DTC
participants to you will be the responsibility of the DTC
participant and not of DTC, the trustee or us. Accordingly, we
and any paying agent will have no responsibility or liability
for: any aspect of DTCs records relating to, or payments
made on account of, beneficial ownership interests in notes
represented by a global securities certificate; any other aspect
of the relationship between DTC and its participants or the
relationship between those participants and the owners of
beneficial interests in a global securities certificate held
through those participants; or the maintenance, supervision or
review of any of DTCs records relating to those beneficial
ownership interests.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants,
and by direct participants and indirect participants to
beneficial owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in
effect from time to time.
We have been informed that, under DTCs existing practices,
if we request any action of holders of senior notes, or an owner
of a beneficial interest in a global security such as you
desires to take any action which a holder of notes is entitled
to take under the indenture, DTC would authorize the direct
participants holding the relevant beneficial interests to take
such action, and those direct participants and any indirect
participants would authorize beneficial owners owning through
those direct and indirect participants to take such action or
would otherwise act upon the instructions of beneficial owners
owning through them.
S-18
Clearstream and Euroclear have provided us with the following
information and neither we nor the underwriters take any
responsibility for its accuracy:
Clearstream
Clearstream is incorporated under the laws of Luxembourg as a
professional depositary. Clearstream holds securities for its
participating organizations and facilitates the clearance and
settlement of securities transactions between Clearstream
participants through electronic book-entry changes in accounts
of Clearstream participants, thereby eliminating the need for
physical movement of certificates. Clearstream provides to
Clearstream participants, among other things, services for
safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and
borrowing. Clearstream interfaces with domestic securities
markets in several countries. As a professional depositary,
Clearstream is subject to regulation by the Luxembourg
Commission for the Supervision of the Financial Sector
(Commission de Surveillance du Secteur Financier).
Clearstream participants include underwriters, securities
brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations and may include the
underwriters. Clearstreams U.S. participants are
limited to securities brokers and dealers and banks. Indirect
access to Clearstream is also available to others, such as
banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a Clearstream
participant either directly or indirectly.
Distributions with respect to notes held beneficially through
Clearstream will be credited to cash accounts of Clearstream
participants in accordance with its rules and procedures, to the
extent received by the U.S. depositary for Clearstream.
Euroclear
Euroclear was created in 1968 to hold securities for
participants of Euroclear and to clear and settle transactions
between Euroclear participants through simultaneous electronic
book-entry delivery against payment, thereby eliminating the
need for physical movement of certificates and any risk from
lack of simultaneous transfers of securities and cash. Euroclear
performs various other services, including securities lending
and borrowing and interacts with domestic markets in several
countries. Euroclear is operated by Euroclear Bank S.A./N.V.
under contract with Euroclear plc, a U.K. corporation. All
operations are conducted by the Euroclear operator, and all
Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear operator, not Euroclear
plc. Euroclear plc establishes policy for Euroclear on behalf of
Euroclear participants. Euroclear participants include banks,
including central banks, securities brokers and dealers and
other professional financial intermediaries and may include the
underwriters. Indirect access to Euroclear is also available to
other firms that clear through or maintain a custodial
relationship with a Euroclear participant, either directly or
indirectly.
The Euroclear operator is a Belgian bank. As such it is
regulated by the Belgian Banking and Finance Commission.
Securities clearance accounts and cash accounts with the
Euroclear operator are governed by the Terms and Conditions
Governing Use of Euroclear and the related Operating Procedures
of the Euroclear System, and applicable Belgian law
(collectively, the Terms and Conditions). The Terms
and Conditions govern transfers of securities and cash within
Euroclear, withdrawals of securities and cash from Euroclear,
and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible
basis without attribution of specific certificates to specific
clearance accounts. The Euroclear operator acts under the Terms
and Conditions only on behalf of Euroclear participants and has
no record of or relationship with persons holding through
Euroclear participants.
Distributions with respect to notes held beneficially through
Euroclear will be credited to the cash accounts of Euroclear
participants in accordance with the Terms and Conditions, to the
extent received by the U.S. depositary for Euroclear.
S-19
Euroclear has further advised us that investors who acquire,
hold and transfer interests in the notes by book-entry through
accounts with the Euroclear operator or any other securities
intermediary are subject to the laws and contractual provisions
governing their relationship with their intermediary, as well as
the laws and contractual provisions governing the relationship
between such an intermediary and each other intermediary, if
any, standing between themselves and the global securities
certificates.
Global
Clearance and Settlement Procedures
Initial settlement for the notes will be made in immediately
available funds. Secondary market trading between DTC
participants will occur in the ordinary way in accordance with
DTC rules and will be settled in immediately available funds
using DTCs Same Day Funds Settlement System. Secondary
market trading between Clearstream participants
and/or
Euroclear participants will occur in the ordinary way in
accordance with the applicable rules and operating procedures of
Clearstream and Euroclear and will be settled using the
procedures applicable to conventional eurobonds in immediately
available funds.
Cross market transfers between persons holding directly or
indirectly through DTC, on the one hand, and directly or
indirectly through Clearstream participants or Euroclear
participants, on the other, will be effected through DTC in
accordance with DTC rules on behalf of the relevant European
international clearing system by its U.S. depositary;
however, such cross market transactions will require delivery of
instructions to the relevant European international clearing
system by the counterparty in such system in accordance with its
rules and procedures and within its established deadlines
(European time). The relevant European international clearing
system will, if the transaction meets its settlement
requirements, deliver instructions to its U.S. depositary
to take action to effect final settlement on its behalf by
delivering or receiving notes through DTC, and making or
receiving payment in accordance with normal procedures for same
day funds settlement applicable to DTC. Clearstream participants
and Euroclear participants may not deliver instructions directly
to their respective U.S. depositaries.
Because of time zone differences, credits of notes received
through Clearstream or Euroclear as a result of a transaction
with a DTC participant will be made during subsequent securities
settlement processing and dated the business day following the
DTC settlement date. Such credits or any transactions in such
notes settled during such processing will be reported to the
relevant Euroclear participants or Clearstream participants on
such business day. Cash received in Clearstream or Euroclear as
a result of sales of notes by or through a Clearstream
participant or a Euroclear participant to a DTC participant will
be received with value on the DTC settlement date but will be
available in the relevant Clearstream or Euroclear cash account
only as of the business day following settlement in DTC.
Although DTC, Clearstream and Euroclear have agreed to the
foregoing procedures in order to facilitate transfers of notes
among participants of DTC, Clearstream and Euroclear, they are
under no obligation to perform or continue to perform such
procedures and such procedures may be modified or discontinued
at any time. Neither we nor the paying agent will have any
responsibility for the performance by DTC, Euroclear or
Clearstream or their respective direct or indirect participants
of their obligations under the rules and procedures governing
their operations.
S-20
CERTAIN
UNITED STATES FEDERAL TAX CONSIDERATIONS
The following is a general discussion of certain United States
federal tax considerations relating to the purchase, ownership
and disposition of notes to holders who purchase notes at their
original offering price and hold the notes as capital assets.
Except as provided below, this discussion applies only to
(1) an individual citizen or resident of the United States,
(2) a corporation, or other entity taxable as a
corporation, created or organized in or under the laws of the
United States or any state thereof or the District of Columbia,
(3) an estate the income of which is subject to United
States federal income tax regardless of its source or (4) a
trust with respect to which a court within the United States is
able to exercise primary supervision over its administration and
one or more U.S. persons have the authority to control all
of its substantial decisions, or an electing trust that was in
existence on August 19, 1996 and was treated as a domestic
trust on that date (referred to as a
U.S. holder). This discussion is based upon the
Internal Revenue Code of 1986, as amended (the
Code), Treasury Department regulations (including
proposed Treasury Department regulations) issued thereunder,
Internal Revenue Service (IRS) rulings and
pronouncements and judicial decisions now in effect, all of
which are subject to change, possibly with retroactive effect.
This discussion does not address all aspects of United States
federal taxation that may be relevant to a holder in light of
its particular circumstances, or to holders subject to special
tax rules such as (1) banks, regulated investment
companies, partnerships or other entities classified as
partnerships for U.S. federal income tax purposes,
insurance companies, dealers in securities or currencies or
tax-exempt organizations, (2) persons holding notes as part
of a straddle, hedge, conversion or other integrated
transaction, (3) persons who mark their securities to
market for United States federal income tax purposes or
U.S. holders whose functional currency is not the
U.S. dollar, (4) United States expatriates or
(5) persons subject to alternative minimum taxes. This
discussion also does not address state, local or foreign taxes.
Prospective investors are urged to consult their own tax
advisors with respect to the tax consequences of the purchase,
ownership and disposition of notes in light of their own
circumstances.
Interest
Income and Original Issue Discount
The notes will not be issued with an issue price that is less
than their stated redemption price at maturity by more than the
statutory de minimis amount. As a result, the notes will not be
subject to the original issue discount rules, so that
U.S. holders will generally be taxed on the stated interest
on the notes as ordinary income at the time it is paid or
accrued in accordance with the U.S. holders regular
method of accounting for United States federal income tax
purposes.
Sale,
Exchange, Retirement or Other Disposition of the Notes
Upon the sale, exchange, retirement or other disposition of a
note, a U.S. holder will generally recognize taxable gain
or loss in an amount equal to the difference between the amount
realized by such U.S. holder and such
U.S. holders adjusted tax basis in the note. Any gain
or loss so recognized will generally be capital gain or loss and
be long-term capital gain or loss if the U.S. holder has
held the note for more than one year at the time of disposition.
A reduced tax rate on long-term capital gain may apply to
individual holders. The deductibility of capital losses is
subject to limitations.
Non-U.S.
Holders
As used herein, a
non-U.S. holder
means any holder that is not a U.S. holder. Under current
United States federal income and estate tax law:
(a) payment on a note by us or any paying agent to a holder
that is a
non-U.S. holder
will not be subject to withholding of United States federal
income tax, provided that, with respect to payments of interest,
(i) the holder does not actually or constructively own ten
percent or more of the combined voting power of all classes of
our stock and is not a controlled foreign corporation related
S-21
to us through stock ownership and (ii) the beneficial owner
provides a statement signed under penalties of perjury that
includes its name and address and certifies that it is not a
United States person (as defined in the Code) in compliance with
applicable requirements (or satisfies certain documentary
evidence requirements for establishing that it is not a United
States person);
(b) a holder of a note that is a
non-U.S. holder
will not be subject to United States federal income tax on gain
realized on the sale, exchange or redemption of the note, unless
(i) such gain is effectively connected with the conduct by
the holder of a trade or business in the United States or
(ii) in the case of gain realized by an individual holder,
the holder is present in the United States for 183 days or
more in the taxable year of the sale and either (A) such
gain or income is attributable to an office or other fixed place
of business maintained in the United States by such holder or
(B) such holder has a tax home in the United States; and
(c) a note will not be subject to United States federal
estate tax as a result of the death of a holder who is not a
citizen or resident of the United States at the time of death,
provided that such holder did not at the time of death actually
or constructively own ten percent or more of the combined voting
power of all classes of our stock and, at the time of such
holders death, payments of interest on such note would not
have been effectively connected with the conduct by such holder
of a trade or business in the United States.
Backup
Withholding and Information Reporting
Unless a U.S. holder is an exempt recipient, such as a
corporation, payments under the notes and the proceeds received
from the sale or other disposition of notes may be subject to
information reporting and may also be subject to United States
federal backup withholding at the applicable rate if such
U.S. holder fails to supply an accurate taxpayer
identification number or otherwise fails to comply with
applicable United States information reporting or certification
requirements. Any amounts so withheld may be allowed as a credit
against the holders United States federal income tax
liability, provided that the required information is furnished
to the IRS.
Information returns will be filed with the IRS in connection
with payments on the notes to
non-U.S. holders.
A
non-U.S. holder
may have to comply with certification procedures to establish
that such holder is not a U.S. holder in order to avoid
information reporting and backup withholding.
S-22
UNDERWRITING
(CONFLICTS OF INTEREST)
Subject to the terms and conditions contained in an underwriting
agreement, dated as of the date of this prospectus supplement
between us and the underwriters named below, for whom Banc of
America Securities LLC and J.P. Morgan Securities Inc. are
acting as representatives, we have agreed to sell to each
underwriter, and each underwriter has severally agreed to
purchase from us, the principal amount of notes that appears
opposite its name in the table below:
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Principal
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Underwriter
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amount of notes
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Banc of America Securities LLC
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$140,625,000
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J.P. Morgan Securities Inc.
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$110,625,000
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HSBC Securities (USA), Inc.
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$37,500,000
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Wells Fargo Securities, LLC
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$37,500,000
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Daiwa Capital Markets America Inc.
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$15,000,000
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Mitsubishi UFJ Securities (USA), Inc.
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$15,000,000
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ANZ Securities, Inc.
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$3,750,000
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Banca IMI S.p.A.
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$3,750,000
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BNP Paribas Securities Corp.
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$3,750,000
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Commerz Markets LLC
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$3,750,000
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ING Financial Markets LLC
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$3,750,000
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Total
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$375,000,000
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The underwriters are offering the notes subject to their
acceptance of the notes from us and subject to prior sale. The
underwriting agreement provides that the obligations of the
several underwriters to pay for and accept delivery of the notes
offered by this prospectus supplement are subject to certain
conditions. The underwriters are obligated to take and pay for
all of the notes offered by this prospectus supplement if any
such notes are taken.
The underwriters initially propose to offer the notes to the
public at the public offering price that appears on the cover
page of this prospectus supplement. In addition, the
underwriters initially propose to offer the notes to certain
dealers at prices that represent a concession not in excess of
0.400% of the principal amount of the notes. Any underwriter may
allow, and any such dealer may reallow, a concession not in
excess of 0.250% of the principal amount of the notes to certain
other dealers. After the initial offering of the notes, the
underwriters may from time to time vary the offering prices and
other selling terms. The underwriters may offer and sell notes
through certain of their affiliates.
The following table shows the underwriting discount that we will
pay to the underwriters in connection with the offering of the
notes:
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Paid by us
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Per note
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0.650
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%
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Total
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$2,437,500
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Expenses associated with this offering to be paid by us, other
than underwriting discounts, are estimated to be approximately
$975,000.
We have also agreed to indemnify the underwriters against
certain liabilities, including liabilities under the Securities
Act of 1933, as amended, or to contribute to payments which the
underwriters may be required to make in respect of any such
liabilities.
S-23
The notes are a new issue of securities, and there is currently
no established trading market for the notes. We do not intend to
apply for the notes to be listed on any securities exchange or
to arrange for the notes to be quoted on any quotation system.
The underwriters have advised us that they intend to make a
market in the notes, but they are not obligated to do so. The
underwriters may discontinue any market making in the notes at
any time at their sole discretion. Accordingly, we cannot assure
you that a liquid trading market will develop for the notes,
that you will be able to sell your notes at a particular time or
that the prices you receive when you sell will be favorable.
In connection with the offering of the notes, the underwriters
may engage in transactions that stabilize, maintain or otherwise
affect the prices of the notes. Specifically, the underwriters
may overallot in connection with the offering of the notes,
creating syndicate short positions. In addition, the
underwriters may bid for and purchase notes in the open market
to cover syndicate short positions or to stabilize the prices of
the notes. Finally, the underwriting syndicate may reclaim
selling concessions allowed for distributing the notes in the
offering of the notes, if the syndicate repurchases previously
distributed notes in syndicate covering transactions,
stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market prices of the notes above
independent market levels. The underwriters are not required to
engage in any of these activities, and may end any of them at
any time.
In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive, each underwriter
has represented and agreed that, with effect from and including
the date on which the Prospectus Directive is implemented in
that Member State, it has not made and will not make an offer of
notes to the public in that Member State except that it may,
with effect from and including such date, make an offer of notes
to the public in that Member State at any time:
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to legal entities which are authorized or regulated to operate
in the financial markets or, if not so authorized or regulated,
whose corporate purpose is solely to invest in securities;
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to any legal entity which has two or more of (1) an average
of at least 250 employees during the last financial year;
(2) a total balance sheet of more than 43,000,000;
and (3) an annual net turnover of more than
50,000,000, as shown in its last annual or consolidated
accounts;
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to fewer than 100 natural or legal persons (other than qualified
investors as defined in the Prospectus Directive) subject to
obtaining the prior consent of the representatives for any such
offer; or
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in any other circumstances which do not require the publication
by us of a prospectus pursuant to Article 3 of the
Prospectus Directive.
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For the purposes of the above, the expression an offer of
notes to the public in relation to any notes in any Member
State means the communication in any form and by any means of
sufficient information on the terms of the offer and the notes
to be offered so as to enable an investor to decide to purchase
or subscribe the notes, as the same may be varied in that Member
State by any measure implementing the Prospectus Directive in
that Member State, and the expression Prospectus Directive means
Directive 2003/7I/EC and includes any relevant implementing
measure in that Member State.
Each underwriter has represented and agreed that (a) it has
only communicated or caused to be communicated and will only
communicate or cause to be communicated an invitation or
inducement to engage in investment activity (within the meaning
of Section 21 of the Financial Services and Markets Act
2000 (the Act)) in connection with the issue or sale
of the notes in circumstances in which Section 21(1) of
such Act does not apply to us and (b) it has complied and
will comply with all applicable provisions of such Act with
respect to anything done by it in relation to any notes in, from
or otherwise involving the United Kingdom.
S-24
From time to time in the ordinary course of their respective
businesses, certain of the underwriters and their affiliates
have engaged in and may in the future engage in commercial
banking, derivatives
and/or
financial advisory, investment banking and other commercial
transactions and services with us and our affiliates for which
they have received or will receive customary fees and
commissions.
Conflicts
of Interest
From time to time in the ordinary course of their respective
businesses, certain of the underwriters and their affiliates
have engaged in and may in the future engage in commercial
banking, derivatives and/or financial advisory, investment
banking and other commercial transactions and services with us
and our affiliates for which they have received or will receive
customary fees and commissions. In particular, affiliates of
Banc of America Securities LLC and J.P. Morgan Securities Inc.
are parties to and lenders under our Credit Agreement, dated as
of June 21, 2006, with JPMorgan Chase Bank, N.A. and the
other lenders party thereto. Our Credit Agreement was negotiated
on an arms length basis and contains customary terms
pursuant to which the lenders receive customary fees. Pending
the redemption of the 2012 Notes, we may use the net proceeds
from this offering to repay borrowings under our Credit
Agreement, which amounts may subsequently be redrawn by us in
connection with such redemption or otherwise. Accordingly,
because more than 5% of the net proceeds from this offering
could potentially be paid to affiliates of the underwriters,
this offering will be made in compliance with the requirements
of Rule 2720 of the Conduct Rules of the NASD as administered by
FINRA. See Use of Proceeds.
S-25
LEGAL
MATTERS
The validity of the notes will be passed upon for us by Cleary
Gottlieb Steen & Hamilton LLP, New York, New York, and
certain legal matters will be passed upon for us by Sandra
Marino, our Senior Vice President, General Counsel &
Corporate Secretary. As of June 15, 2010, Ms. Marino
beneficially owned 525.59 shares of our common stock,
17,688 shares of our common stock obtainable through the
exercise of vested options, 19,009 restricted stock units,
11,332 restricted units and unvested options to acquire an
additional 67,466 shares of our common stock. Certain legal
matters, including the validity of the notes, will be passed
upon for the underwriters by Davis Polk & Wardwell
LLP, New York, New York.
EXPERTS
The consolidated financial statements and the related financial
statement schedule, incorporated in this prospectus supplement
by reference from our annual report on
Form 10-K,
and the effectiveness of internal control over financial
reporting have been audited by KPMG LLP, an independent
registered public accounting firm, as stated in their reports,
which are incorporated by reference in this prospectus
supplement. Such consolidated financial statements and financial
statement schedule have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts
in accounting and auditing.
The audit report covering the consolidated financial statements
and the related financial statement schedule states that,
effective August 1, 2008, the Company changed its method of
accounting for fair value measurements due to the adoption of
Statement of Financial Accounting Standards No. 157,
Fair Value Measurements, effective August 1,
2007, the Company changed its method of accounting for
uncertainty in income taxes due to the adoption of Financial
Accounting Standards Board Interpretation No. 48,
Accounting for Uncertainty in Income Taxes,
effective July 31, 2007, the Company changed its method of
accounting for pension and other postretirement benefits due to
the adoption of Statement of Financial Accounting Standards
No. 158, Employers Accounting for Defined
Benefit Pension and Other Postretirement Plans, and
effective August 1, 2006, the Company changed its method
for quantifying errors based on Securities and Exchange
Commission Staff Accounting Bulletin No. 108,
Considering the Effects of Prior Year Misstatements When
Quantifying Misstatements in Current Year Financial
Statements.
S-26
PROSPECTUS
PALL CORPORATION
Debt Securities
We may issue from time to time one or more series of debt
securities. This prospectus describes some of the general terms
that may apply to these debt securities. Each time debt
securities are sold using this prospectus, we will provide a
supplement to this prospectus that contains specific information
about the offering and the terms of the debt securities offered.
You should read this prospectus and the applicable prospectus
supplement carefully before you invest.
Investing in our debt securities involves risks. You should
carefully consider the risk factors described under the heading
Risk Factors beginning on page 1 of this
prospectus, our reports filed with the Securities and Exchange
Commission and in the applicable prospectus supplement.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The date of this prospectus is June 15, 2010
TABLE OF
CONTENTS
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Page
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ii
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iii
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12
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13
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We are responsible for the information contained and
incorporated by reference in this prospectus and in any related
free-writing prospectus we prepare or authorize. We have not
authorized anyone to give you any other information, and we take
no responsibility for any other information that others may give
you. If you are in a jurisdiction where offers to sell, or
solicitations of offers to purchase, the debt securities offered
by this document are unlawful, or if you are a person to whom it
is unlawful to direct these types of activities, then the offer
presented in this document does not extend to you. The
information contained in this document speaks only as of the
date of this document, unless the information specifically
indicates that another date applies.
i
ABOUT
THIS PROSPECTUS
This prospectus is part of an automatic shelf registration
statement that we filed with the Securities and Exchange
Commission, or SEC, as a well-known seasoned issuer
as defined in Rule 405 under the Securities Act of 1933, as
amended. We may offer the securities described in this
prospectus from time to time in one or more offerings. This
prospectus only provides you with a general description of the
securities to be offered. Each time we sell securities pursuant
to this prospectus, we will describe in a prospectus supplement,
which will be delivered with this prospectus, specific
information about the offering and the terms of the particular
securities to be offered. The applicable prospectus supplement
may also add, update or change the information contained in this
prospectus. If there is any inconsistency between the
information in this prospectus and any applicable prospectus
supplement, you should rely on the information in the applicable
prospectus supplement. You should carefully read both this
prospectus and any applicable prospectus supplement, together
with the additional information described under the heading
Where You Can Find More Information.
The registration statement of which this prospectus is a part,
including the exhibits to the registration statement, provides
additional information about us and the securities. Wherever
references are made in this prospectus to information that will
be included in a prospectus supplement, to the extent permitted
by applicable law, rules or regulations, we may instead include
such information or add, update or change the information
contained in this prospectus by means of a post-effective
amendment to the registration statement of which this prospectus
is a part, through filings we make with the SEC that are
incorporated by reference into this prospectus or by any other
method as may then be permitted under applicable law, rules or
regulations. The registration statement, including the exhibits
to the registration statement and any post-effective amendment
thereto, can be obtained from the SEC, as described under the
heading Where You Can Find More Information.
References in this prospectus to the Company,
we, us or our refer to Pall
Corporation and its subsidiaries, unless the context otherwise
requires.
ii
CAUTIONARY
STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus (including the information incorporated by
reference in this prospectus) contains forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are
those that address activities, events or developments that we or
our management intends, expects, projects, believes or
anticipates will or may occur in the future. All statements
regarding future performance, earnings projections, earnings
guidance, managements expectations about its future cash
needs and effective tax rate, and other future events or
developments are forward-looking statements. Forward-looking
statements use such words as may, will,
expect, believe, intend,
should, could, anticipate,
estimate, forecast, project,
plan, predict, potential and
similar expressions. They are based on managements
assumptions and assessments in the light of past experience and
trends, current conditions, expected future developments and
other relevant factors. They are not guarantees of future
performance, and actual results, developments and business
decisions may differ from those envisaged by our forward-looking
statements, and we do not assume any obligation to update them.
Our forward-looking statements are also subject to risks and
uncertainties, which can affect our performance in both the
near- and long-term. These forward-looking statements should be
considered in light of the information included in this
prospectus, including the information under the heading
Risk Factors in our annual report on
Form 10-K
for the year ended July 31, 2009, and the other reports
that we file with the SEC.
Risks and uncertainties that could materially affect future
results include:
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the effect of litigation and regulatory inquiries associated
with the restatement of our prior period financial statements;
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our ability to successfully complete our business improvement
initiatives, which include integrating and upgrading our
information systems, and the effect of a serious disruption in
our information systems;
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the impact of legislative, regulatory and political developments
globally and the impact of the uncertain global economic
environment and the timing and strength of a recovery in the
markets and regions we serve, and the extent to which adverse
economic conditions may affect our sales volume and results;
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demand for our products and business relationships with key
customers and suppliers, which may be impacted by their cash
flow and payment practices, as well as delays or cancellations
in shipments;
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volatility in foreign currency exchange rates, interest rates
and energy costs and other macro economic challenges currently
affecting us;
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changes in product mix, market mix and product pricing,
particularly relating to the expansion of the systems business;
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increase in costs of manufacturing and operating costs;
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our ability to obtain regulatory approval or market acceptance
of new technologies, enforce patents and protect proprietary
products and manufacturing techniques;
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fluctuations in our effective tax rate;
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our ability to successfully complete or integrate any
acquisitions;
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the impact of pricing and other actions by competitors; and
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our ability to achieve the savings anticipated from cost
reduction and gross margin improvement initiatives.
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iii
THE
COMPANY
We are a Fortune 1000 company headquartered in Port
Washington, New York. We are a leading supplier of filtration,
separation and purification technologies, principally made by us
using our engineering capability and fluid management expertise,
proprietary filter media, and other fluid clarification and
separations equipment for the removal of solid, liquid and
gaseous contaminants from a wide variety of liquids and gases.
We serve customers through two business groups globally: Life
Sciences and Industrial. The Life Sciences business group is
focused on developing, manufacturing and selling products to
customers in the Medical and BioPharmaceuticals markets. The
Industrial business group is focused on developing,
manufacturing and selling products to customers in the
Aerospace & Transportation, Microelectronics and
Energy, Water & Process Technologies markets. These
business groups are supported by shared and corporate services
groups that facilitate our corporate governance and business
activities globally and a core portfolio of intellectual
property that underlies the products sold by the business groups.
We are a New York corporation. Our principal executive offices
are located at 25 Harbor Park Drive, Port Washington, New York
11050 and our telephone number is
(516) 484-3600.
Our website is www.pall.com. Information on, or
accessible through, this website is not a part of, and is not
incorporated into, this prospectus.
RISK
FACTORS
An investment in our securities involves certain risks. You
should carefully consider the risk factors discussed under the
heading Cautionary Statement Concerning Forward-Looking
Statements provided at the beginning of this prospectus,
the risks described under Risk Factors in our most
recent annual report on
Form 10-K
and subsequent quarterly reports on
Form 10-Q,
as well as the other information included or incorporated by
reference in this prospectus, before making an investment
decision. Additional risks and uncertainties not presently known
to us or that we currently deem immaterial may also adversely
affect our business or financial performance. Our business,
financial condition or results of operations could be materially
adversely affected by any of these risks. The market or trading
price of our securities could decline due to any of these risks
or other factors, and you may lose all or part of your
investment.
1
USE OF
PROCEEDS
Unless the applicable prospectus supplement indicates otherwise,
we intend to use net proceeds from the sale of the debt
securities for general corporate purposes, including to
refinance or repay outstanding indebtedness if so specified in
the applicable prospectus supplement. We may temporarily invest
funds that are not immediately needed for these purposes in
short-term marketable securities.
RATIO OF
EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges for the nine months ended
April 30, 2010 and each of the five years in the period
ended July 31, 2009 is set forth below. For the purpose of
computing these ratios, earnings consists of income
before provision for income taxes and cumulative effect of a
change in accounting principles, plus fixed charges (excluding
capitalized interest). Fixed charges consists of
interest expense (which includes amortization of debt issue
costs), capitalized interest and a portion of rentals deemed to
be interest.
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Year Ended
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Nine Months Ended
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July 31,
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July 31,
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July 31,
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July 31,
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July 31,
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April 30, 2010
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2009
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2008
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2007
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2006
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2005
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Ratio of Earnings to Fixed Charges
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13.8
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6.6
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6.3
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5.0
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5.2
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5.1x
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2
DESCRIPTION
OF DEBT SECURITIES
We may offer secured or unsecured debt securities, which may be
convertible or non-convertible, in one or more series.
The following description briefly sets forth certain general
terms and provisions of the debt securities. The descriptions in
this prospectus contain descriptions of certain terms of the
debt securities and the indenture but do not purport to be
complete and are subject to, and are qualified in their entirety
by reference to, all of the provisions of the indenture, which
has been filed as an exhibit to the registration statement of
which this prospectus is a part, including the definitions of
specified terms used in the indenture, and to the
Trust Indenture Act of 1939, as amended (the
Trust Indenture Act). Wherever particular
articles, sections or defined terms of the indenture are
referred to, it is intended that those articles, sections or
defined terms will be incorporated herein by reference, and the
statement in connection with which reference is made is
qualified in its entirety by the article, section or defined
term in the indenture. The particular terms of the debt
securities offered by any prospectus supplement and the extent,
if any, to which these general provisions may apply to the debt
securities will be described in the applicable prospectus
supplement. The terms of the debt securities will include those
set forth in the indenture, any related securities documents and
those made a part of the indenture by the Trust Indenture
Act. You should read the summary below, the applicable
prospectus supplement and the provisions of the indenture and
any related security documents, if any, in their entirety before
investing in our debt securities.
The prospectus supplement relating to any series of debt
securities that we may offer will contain the specific terms of
the debt securities. These terms may include the following:
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the title and any limit on the aggregate principal amount of the
debt securities;
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whether the debt securities will be secured or unsecured;
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whether the debt securities are convertible into or exchangeable
for other securities and, if so, the terms and conditions upon
which such securities will be so convertible or exchangeable;
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whether the debt securities are senior or subordinated debt
securities and, if subordinated, the terms of such subordination;
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the percentage or percentages of principal amount at which such
debt securities will be issued;
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the interest rate(s) or the method for determining the interest
rate(s);
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the dates on which interest will accrue or the method for
determining dates on which interest will accrue and dates on
which interest will be payable;
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the dates on which the debt securities may be issued, the
maturity date and other dates of payment of principal;
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redemption or early repayment provisions;
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authorized denominations if other than denominations of $1,000
or any integral multiple thereof;
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the form of the debt securities;
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amount of discount or premium, if any, with which such debt
securities will be issued;
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whether such debt securities will be issued in whole or in part
in the form of one or more global securities;
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the identity of the depositary for global securities;
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whether a temporary security is to be issued with respect to
such series and whether any interest payable prior to the
issuance of definitive securities of the series will be credited
to the account of the persons entitled thereto;
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the terms upon which beneficial interests in a temporary global
security may be exchanged in whole or in part for beneficial
interests in a definitive global security or for individual
definitive securities;
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any covenants applicable to the particular debt securities being
issued;
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any defaults and events of default applicable to the particular
debt securities being issued;
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any restriction or condition on the transferability of the debt
securities;
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the currency, currencies or currency units in which the purchase
price for, the principal of and any premium and any interest on,
such debt securities will be payable;
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the time period within which, the manner in which and the terms
and conditions upon which the purchaser of the debt securities
can select the payment currency;
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the securities exchange(s) or automated quotation system(s) on
which the securities will be listed or admitted to trading, as
applicable, if any;
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whether any underwriter(s) will act as market maker(s) for the
securities;
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the extent to which a secondary market for the securities is
expected to develop;
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our obligation or right to redeem, purchase or repay debt
securities under a sinking fund, amortization or analogous
provision;
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provisions relating to the modification of the indenture both
with and without the consent of holders of debt securities
issued under the indenture;
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place or places where we may pay principal, premium, if any, and
interest and where holders may present the debt securities for
registration of transfer, exchange or conversion;
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place or places where notices and demands relating to the debt
securities and the indentures may be made;
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if other than the principal amount of the debt securities, the
portion of the principal amount of the debt securities that is
payable upon declaration of acceleration of maturity;
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any index or formula used to determine the amount of payments of
principal of, premium, if any, or interest on the debt
securities and the method of determining these amounts;
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any provisions relating to compensation and reimbursement of the
trustee;
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provisions, if any, granting special rights to holders of the
debt securities upon the occurrence of specified events; and
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additional terms not inconsistent with the provisions of the
indenture.
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General
We may sell the debt securities, including original issue
discount securities, at par or at a substantial discount below
their stated principal amount. Unless we inform you otherwise in
a prospectus supplement, we may issue additional debt securities
of a particular series without the consent of the holders of the
debt securities of such series outstanding at the time of
issuance. Any such additional debt securities, together with all
other outstanding debt securities of that series, will
constitute a single series of securities under the indenture. In
addition, we will describe in the applicable prospectus
supplement, material United States (U.S.) federal
tax considerations and any other special considerations for any
debt securities we sell which are denominated in a currency or
currency unit other than U.S. dollars. Any taxes withheld
or deducted from payments in respect of the debt securities and
paid to the relevant tax authority shall be deemed to have been
paid to the applicable holder. Unless we inform you otherwise in
the applicable prospectus supplement, the debt securities will
not be listed on any securities exchange.
We expect most debt securities to be issued in fully registered
form without coupons and in denominations of $1,000 and any
integral multiples thereof. Subject to the limitations provided
in the indenture and in the applicable prospectus supplement,
debt securities that are issued in registered form may be
transferred or exchanged at the corporate office of the trustee
or the principal corporate trust office of the trustee, without
the payment of any service charge, other than any tax or other
governmental charge payable in connection therewith.
Global
Securities
Unless we inform you otherwise in the applicable prospectus
supplement, the debt securities of a series may be issued in
whole or in part in the form of one or more global securities
that will be deposited with, or on behalf of, a depositary
identified in the applicable prospectus supplement. Global
securities will be issued in registered form and in either
temporary or definitive form. Unless and until it is exchanged
in whole or in part for the individual debt securities, a global
security may not be transferred except as a whole by the
depositary for such global security to a nominee of such
depositary or by a nominee of such depositary to such depositary
or another nominee of such depositary or by such depositary or
any such nominee to a successor of such depositary or a nominee
of such successor. The specific terms of the depositary
arrangement with respect to any debt securities of a series and
the rights of and limitations upon owners of beneficial
interests in a global security will be described in the
applicable prospectus supplement.
Events of
Default
Under the terms of the indenture, each of the following
constitutes an event of default for a series of debt securities
unless it is either inapplicable to a particular series or it is
specifically deleted or modified:
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default for 30 days in the payment of any interest when due;
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default in the payment of principal, or premium, if any, when
due;
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default for 30 days in the payment of any sinking fund
installment, if any, when due;
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default in the performance, or breach, of any covenant or
agreement in the indenture for 90 days after written notice;
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default in the payment of any principal of any of our
indebtedness for money borrowed (other than any indebtedness
owing to any of our subsidiaries) in a principal amount in
excess of $50,000,000 (or the foreign currency equivalent at the
time) at the stated final maturity thereof or the occurrence of
any other default resulting in the acceleration prior to the
stated maturity thereof, if such indebtedness is not discharged
or such acceleration is not rescinded or annulled within
30 days after written notice to us by the trustee or to us
and the trustee by the holders of not less than 25% in principal
amount of the applicable series then outstanding, provided that
the resulting event of default under the indenture with respect
to such series will be deemed cured or waived, without any
further action by us or any other person, if such other default
is cured by us or waived by the holders of such indebtedness;
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certain events of bankruptcy, insolvency or reorganization; and
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any other event of default described in the applicable company
order or supplemental indenture under which the series of debt
securities is issued.
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We are required to furnish the trustee annually with an
officers certificate as to our compliance with all
conditions and covenants under the indenture. The indenture
provides that the trustee may withhold notice to you of any
default, except in respect of the payment of the principal of,
premium, if any, or interest on the debt securities, if it
considers it in the interests of the holders of the debt
securities to do so.
Effect of
an Event of Default
If an event of default exists (other than an event of default in
the case of certain events of bankruptcy), the trustee or the
holders of not less than 25% in aggregate principal amount of a
series of outstanding debt securities may declare the principal
amount, or, if the debt securities are original issue discount
securities, the portion of the principal amount as may be
specified in the terms of that series, of and all accrued but
unpaid interest on all outstanding debt securities of that
series to be due and payable immediately, by a notice in writing
to us, and to the trustee if given by holders. Upon that
declaration the principal (or specified) amount will become
immediately due and payable. However, at any time after a
declaration of acceleration has been made, but before a judgment
or decree for payment of the money due has been obtained, the
event of default may, without further act, be deemed to have
been waived and such declaration may, without further act, be
deemed to have been rescinded and annulled subject to conditions
specified in the indenture.
If an event of default in the case of certain events of
bankruptcy, insolvency or reorganization exists, the principal
amount of all debt securities outstanding under the indenture
shall automatically, and without any declaration or other action
on the part of the trustee or any holder of such outstanding
debt, become immediately due and payable.
Subject to the provisions of the indenture relating to the
duties of the trustee, if an event of default then exists, the
trustee will be under no obligation to exercise any of its
rights or powers under the indenture (other than the payment of
any amounts on the debt securities furnished to it pursuant to
the indenture) at your (or any other persons) request,
order or direction, unless you have (or such other person has)
offered to the trustee reasonable security or indemnity. Subject
to the provisions for the security or indemnification of the
trustee, the holders of a majority in aggregate principal amount
of a series of outstanding debt securities have the right to
direct the time, method and place of conducting any proceeding
for any remedy available to the trustee, or exercising any trust
or power conferred on the trustee in connection with the debt
securities of that series.
6
Legal
Proceedings and Enforcement of Right to Payment
You will not have any right to institute any proceeding in
connection with the indenture or for any remedy under the
indenture, unless you have previously given to the trustee
written notice of a continuing event of default with respect to
debt securities of that series. In addition, the holders of at
least 25% in aggregate principal amount of a series of the
outstanding debt securities must have made written request, and
offered reasonable security or indemnity, to the trustee to
institute that proceeding as trustee, and, within 60 days
following the receipt of that notice, the trustee must not have
received from the holders of a majority in aggregate principal
amount of the outstanding debt securities of that series a
direction inconsistent with that request, and must have failed
to institute the proceeding. However, you will have an absolute
and unconditional right to receive payment of the principal of,
premium, if any, and interest on that debt security on or after
the due dates expressed in the debt security and to institute a
suit for the enforcement of that payment.
Modification
and Waiver
Modification
We and the trustee may modify and amend the indenture with the
consent of the holders of a majority in aggregate principal
amount of the outstanding debt securities of each series
affected. However, no modification or amendment may, without the
consent of the holder of each outstanding debt security affected:
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extend the stated maturity of the principal of, or any
installment of interest on, any outstanding debt security;
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reduce the principal amount of or the interest on or any premium
payable upon the redemption of any outstanding debt security;
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change the currency in which the principal amount of and
premium, if any, or interest on any outstanding debt security is
denominated or payable;
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reduce the principal amount of an original issue discount
security that would be due and payable upon a declaration of
acceleration of the maturity thereof;
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impair your right to institute suit for the enforcement of any
payment on any outstanding debt security after the stated
maturity or redemption date;
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materially adversely affect the economic terms of any right to
convert or exchange any outstanding debt security;
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reduce the percentage of the holders of outstanding debt
securities necessary to modify or amend the indenture or to
waive compliance with certain provisions of the indenture or
certain defaults and consequences of such defaults; or
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modify any of these provisions or any of the provisions relating
to the waiver of certain past defaults or certain covenants,
except to increase the required percentage to effect such action
or to provide that certain other provisions may not be modified
or waived without the consent of all of the holders of the debt
securities affected.
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Waiver
The holders of a majority in aggregate principal amount of the
outstanding debt securities of a series may, on behalf of the
holders of all debt securities of that series, waive compliance
by us with certain restrictive covenants of the indenture.
The holders of a majority in aggregate principal amount of the
outstanding debt securities of a series may, on behalf of the
holders of all debt securities of that series, generally waive
any past default under the indenture and the consequences of
such default. However, a default in the payment of the principal
of, or premium, if any, or any interest on, any debt security of
that series cannot be so waived.
Merger,
Consolidation and Sale of Assets
We will not consolidate with or merge into any other entity or
sell other than for cash or lease all or substantially all our
assets to another entity, or purchase all or substantially all
the assets of another entity, and no entity may consolidate with
or merge into us, unless:
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we will be the continuing entity in any merger or consolidation
or the successor, transferee or lessee entity (if other than us)
is a corporation organized and validly existing under the laws
of any U.S. domestic jurisdiction and expressly assumes our
obligations relating to the debt securities;
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immediately after such consolidation, merger, sale, lease or
purchase, there exists no event of default, and no event which,
after notice or lapse of time or both, would become an event of
default; and
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other conditions described in the indenture are met.
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This covenant would not apply to a purchase by a subsidiary of
all or substantially all of the assets of another entity.
Defeasance
and Covenant Defeasance
The indenture provides that we may discharge all of our
obligations with respect to any series of the debt securities at
any time, and that we may also be released from our obligations
under certain covenants and from certain other obligations,
including obligations imposed by a company order or supplemental
indenture with respect to that series, if any, and elect not to
comply with those sections and obligations without creating an
event of default. Discharge under the first procedure is called
defeasance and under the second procedure is called
covenant defeasance.
Defeasance or covenant defeasance may be effected only if:
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we irrevocably deposit with the trustee money or
U.S. government obligations or a combination thereof, as
trust funds in an amount sufficient to pay and discharge each
installment of principal of, premium, if any, and interest on,
all outstanding debt securities of that series;
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no event of default under the indenture has occurred and is
continuing on the date of such deposit, other than an event of
default resulting from the borrowing of funds and the grant of
any related liens to be applied to such deposit; and
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we deliver to the trustee an opinion of counsel to the effect
that (i) the holders of the debt securities of that series
will not recognize income, gain or loss for U.S. federal
income tax purposes as a result of the deposit, defeasance and
discharge or as a result of the deposit and covenant defeasance
and (ii) the deposit, defeasance and discharge or the
deposit and covenant defeasance will not otherwise alter those
holders U.S. federal income tax treatment of
principal and interest payments on the debt securities of that
series and, in the case of a defeasance, this opinion is
accompanied by a ruling to that effect received from or
published by the Internal Revenue Service.
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Governing
Law
The indenture and the debt securities shall be construed in
accordance with and governed by the laws of the State of New
York.
Concerning
the Trustee
The trustee under the indenture will have all the duties and
responsibilities of an indenture trustee specified in the
Trust Indenture Act. The trustee is not required to expend
or risk its own funds or otherwise incur financial liability in
performing its duties or exercising its rights and powers if it
reasonably believes that it is not reasonably assured of
repayment or adequate indemnity.
9
PLAN OF
DISTRIBUTION
We may sell the offered debt securities:
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to or through underwriters or dealers;
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to or through agents;
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directly to one or more purchasers;
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through any combination of these methods; or
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through any other means described in a prospectus supplement.
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We may distribute the debt securities from time to time in one
or more transactions, at a fixed price or prices, which may be
changed, or at market prices prevailing at the time of sale, at
prices related to the prevailing market prices or at negotiated
prices. In some cases, we or dealers acting with or on behalf of
us may also purchase the debt securities and reoffer them to the
public.
Underwriters, dealers and agents that participate in the
distribution of the offered debt securities may be underwriters
as defined in the Securities Act of 1933, as amended (the
Securities Act), and any discounts or commissions
received by them from us and any profit on the resale of the
offered debt securities by them may be treated as underwriting
discounts and commissions under the Securities Act. We will
identify any managing underwriter, other underwriters or agents,
and describe their compensation and the terms of the
transactions, in a prospectus supplement.
If we use underwriters in the sale, we will execute an
underwriting agreement with the underwriters at the time we
reach an agreement for the sale of the debt securities. The
underwriters will acquire the debt securities for their own
account. The underwriters may resell the debt securities in one
or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at
the time of sale. The obligations of the underwriters to
purchase the debt securities will be subject to certain
conditions. The underwriters will be obligated to purchase all
of the debt securities offered if any of the debt securities are
purchased. The underwriters may change from time to time any
initial public offering price and any discount or concession
allowed or re-allowed or paid to dealers.
We may sell the offered debt securities through agents
designated by us. Unless indicated in the applicable prospectus
supplement, any agents will agree to use their reasonable best
efforts to solicit purchases for the period of their appointment.
If we use dealers in the sale, we will sell the debt securities
to the dealer, as principal. The dealer will then sell the debt
securities to the public at varying prices that the dealer will
determine at the time it sells the debt securities.
Unless we inform you otherwise in the applicable prospectus
supplement, the debt securities will not be listed on a national
securities exchange or a foreign securities exchange. Each
series of debt securities may be a new issue of securities with
no established trading market. Underwriters and agents may, from
time to time, purchase and sell the debt securities described in
this prospectus and the relevant prospectus supplement in the
secondary market, but are not obligated to do so. No assurance
can be given that there will be a secondary market for the debt
securities or liquidity in the secondary market if one develops.
From time to time, underwriters and dealers may make a market in
the debt securities.
We may authorize agents and underwriters to solicit offers by
certain institutions to purchase the debt securities at the
public offering price under delayed delivery contracts. If we
use delayed delivery contracts,
10
we will disclose that we are using them in the prospectus
supplement and will tell you when we will demand payment and
delivery of the debt securities under the delayed delivery
contracts. These delayed delivery contracts will be subject only
to the conditions that we describe in the prospectus supplement.
We will describe in the applicable prospectus supplement the
commission that underwriters and agents soliciting purchases of
the debt securities under delayed contracts will be entitled to
receive.
In compliance with guidelines of the Financial Industry
Regulatory Authority (FINRA), the maximum
consideration or discount to be received by any FINRA member
will not exceed 8% of the aggregate amount of the debt
securities offered pursuant to this prospectus and any
applicable prospectus supplement.
Any underwriter, agent or dealer utilized in the initial
offering of debt securities will not confirm sales to accounts
over which it exercises discretionary authority without the
prior specific written approval of its customer.
In connection with underwritten offerings of the offered debt
securities and in accordance with applicable law and industry
practice, the underwriters in certain circumstances are
permitted to engage in certain transactions that stabilize the
price of the debt securities. Such transactions consist of bids
or purchases for the purpose of pegging, fixing or maintaining
the price of the debt securities. If the underwriters create a
short position in the debt securities in connection with the
offering, i.e., if they sell more debt securities than are set
forth on the cover page of the applicable prospectus supplement,
the underwriters may reduce that short position by purchasing
debt securities in the open market. The underwriters also may
impose a penalty bid on certain underwriters. This means that if
the underwriters purchase the debt securities in the open market
to reduce the underwriters short position or to stabilize
the price of the debt securities, they may reclaim the amount of
the selling concession from the underwriters who sold those debt
securities as part of the offering. In general, purchases of a
debt security for the purpose of stabilization or to reduce a
short position could cause the price of the debt security to be
higher than it might be in the absence of such purchases. The
imposition of a penalty bid might also have an effect on the
price of a debt security to the extent that it were to
discourage resales of the debt security.
We may have agreements with the underwriters, dealers and agents
to indemnify them against certain civil liabilities, including
liabilities under the Securities Act, or to contribute with
respect to payments which the underwriters, dealers or agents
may be required to make. Underwriters, dealers and agents may
engage in transactions with, or perform services for, us or our
subsidiaries in the ordinary course of their businesses.
LEGAL
MATTERS
Unless otherwise indicated in the applicable prospectus
supplement, the validity of the debt securities offered hereby
will be passed upon for us by Cleary Gottlieb Steen &
Hamilton LLP, our New York counsel.
EXPERTS
The consolidated financial statements and the related financial
statement schedule, incorporated in this prospectus by reference
from our annual report on
Form 10-K,
and the effectiveness of internal control over financial
reporting have been audited by KPMG LLP, an independent
registered public accounting firm, as stated in their reports,
which are incorporated by reference in this prospectus. Such
consolidated financial statements and financial statement
schedule have been so incorporated in reliance upon the reports
of such firm given upon their authority as experts in accounting
and auditing.
11
The audit report covering the consolidated financial statements
and the related financial statement schedule states that,
effective August 1, 2008, the Company changed its method of
accounting for fair value measurements due to the adoption of
Statement of Financial Accounting Standards No. 157,
Fair Value Measurements, effective August 1,
2007, the Company changed its method of accounting for
uncertainty in income taxes due to the adoption of Financial
Accounting Standards Board Interpretation No. 48,
Accounting for Uncertainty in Income Taxes,
effective July 31, 2007, the Company changed its method of
accounting for pension and other postretirement benefits due to
the adoption of Statement of Financial Accounting Standards
No. 158, Employers Accounting for Defined
Benefit Pension and Other Postretirement Plans, and
effective August 1, 2006, the Company changed its method
for quantifying errors based on Securities and Exchange
Commission Staff Accounting Bulletin No. 108,
Considering the Effects of Prior Year Misstatements When
Quantifying Misstatements in Current Year Financial
Statements.
WHERE YOU
CAN FIND MORE INFORMATION
We are subject to the information reporting requirements of the
Securities Exchange Act of 1934, as amended (the Exchange
Act), and, in accordance with these requirements, we are
required to file periodic reports and other information with the
SEC. The reports and other information filed by us with the SEC
may be inspected and copied at the public reference facilities
maintained by the SEC as described below.
We have filed a registration statement with the SEC on
Form S-3
under the Securities Act relating to the debt securities offered
by this prospectus. This prospectus, which is a part of that
registration statement, does not contain all of the information
set forth in the registration statement. For more information
with respect to our Company and the debt securities offered by
this prospectus, you should refer to the registration statement
and to the exhibits filed with it. Statements contained or
incorporated by reference in this prospectus regarding the
contents of any contract or other document are not necessarily
complete, and, where the contract or other document is an
exhibit to the registration statement or incorporated or deemed
to be incorporated by reference, each of these statements is
qualified in all respects by the provisions of the actual
contract or other document.
You may read and copy the registration statement, including the
exhibits thereto, and any periodic reports and other information
referred to above on file at the SECs Public Reference
Room at 100 F Street, N.E., Washington, D.C.
20549. Please call the SEC at
1-800-SEC-0330
for further information on the operation of the Public Reference
Room. The SEC filings are also available to the public from
commercial document retrieval services. These filings are also
available at the Internet website maintained by the SEC at
http://www.sec.gov
and may also be inspected and copied at the offices of the New
York Stock Exchange, 20 Broad Street, New York, New York
10005.
12
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
We incorporate information into this prospectus by reference,
which means that we disclose important information to you by
referring you to other documents filed separately with the SEC.
The information incorporated by reference is deemed to be part
of this prospectus, except to the extent superseded by
information contained herein or by information contained in
documents filed with or furnished to the SEC after the date of
this prospectus. This prospectus incorporates by reference the
documents set forth below that have been previously filed with
the SEC. These documents contain important information about us
and our financial condition.
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Our annual report on
Form 10-K
for the fiscal year ended July 31, 2009, filed with the SEC
on September 29, 2009;
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Our Definitive Proxy Statement filed on October 9, 2009
(other than information in the Definitive Proxy Statement that
is not specifically incorporated by reference in our Annual
Report on
Form 10-K
for the fiscal year ended July 31, 2009);
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Our quarterly reports on
Form 10-Q
for the fiscal quarters ended October 31, 2009, filed with
the SEC on December 10, 2009, January 31, 2010, filed
with the SEC on March 12, 2010, and April 30, 2010,
filed with the SEC on June 9, 2010; and
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Our current reports on
Form 8-K
filed with the SEC on September 25, 2009, October 7,
2009, November 23, 2009, April 29, 2010 and
May 13, 2010.
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We also incorporate by reference into this prospectus additional
documents that we may file with the SEC under
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act from
the date of this prospectus to the end of the offering of the
debt securities. These documents include our annual reports on
Form 10-K,
quarterly reports on
Form 10-Q
and current reports on
Form 8-K
(other than current reports furnished on
Form 8-K
pursuant to Item 2.02 or 7.01 of
Form 8-K)
that are identified in those forms as being incorporated into
this prospectus and that are filed after the date of this
prospectus and prior to the termination of the offering of the
debt securities made by this prospectus.
You may obtain copies of any of these filings through the
Company as described below, through the SEC or through the
SECs Internet website as described above. Documents
incorporated by reference are available without charge,
excluding all exhibits unless an exhibit has been specifically
incorporated by reference into this prospectus, by requesting
them in writing or by telephone at:
Pall Corporation
25 Harbor Park Drive
Port Washington, New York 11050
Attention: Investor Relations
Telephone:
(516) 484-3600
13
$375,000,000
Pall Corporation
5.00% Senior Notes due
2020
PROSPECTUS SUPPLEMENT
BofA Merrill Lynch
J.P. Morgan
HSBC Securities (USA)
Wells Fargo
Securities
Daiwa Capital Markets
America
Mitsubishi UFJ Securities
(USA)
ANZ Securities
Banca IMI
BNP PARIBAS
COMMERZBANK
ING
June 15, 2010