-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CJbl5Bb03qVq7yu9XTwO4i9HYIIynfCZSdiT+MBwH8y3+5DzGBtKsXIVRQXAYhri BtOActW6F9YvApGkKmcgtQ== 0001047469-99-033225.txt : 19990823 0001047469-99-033225.hdr.sgml : 19990823 ACCESSION NUMBER: 0001047469-99-033225 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 19990820 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CERIDIAN CORP CENTRAL INDEX KEY: 0000109758 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 520278528 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85653 FILM NUMBER: 99696763 BUSINESS ADDRESS: STREET 1: 8100 34TH AVE S CITY: MINNEAPOLIS STATE: MN ZIP: 55425 BUSINESS PHONE: 6128538100 FORMER COMPANY: FORMER CONFORMED NAME: CONTROL DATA CORP /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: COMMERCIAL CREDIT CO DATE OF NAME CHANGE: 19680910 S-4 1 S-4 As filed with the Securities and Exchange Commission on August 20, 1999 Registration No. 333-_____ =============================================================================== U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------- FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ----------------------- CERIDIAN CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 7371 52-0278528 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.) 8100 34TH AVENUE SOUTH MINNEAPOLIS, MN 55425 TELEPHONE NO.: (612) 853-8100 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) GARY M. NELSON VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY CERIDIAN CORPORATION 8100 34TH AVENUE SOUTH MINNEAPOLIS, MN 55425 TELEPHONE NO.: (612) 853-4291 (Name, address, including zip code, and telephone number, including area code, of agent for service) COPY TO: AMY E. CULBERT OPPENHEIMER WOLFF & DONNELLY LLP 45 SOUTH SEVENTH STREET, SUITE 3400 MINNEAPOLIS, MINNESOTA 55402 (612) 607-7000 ------------------------- Approximate date of commencement of proposed sale to the public: The exchange will occur as soon as practicable after the effective date of this registration statement. If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: / / If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / ____________ If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / ____________ ----------------------- CALCULATION OF REGISTRATION FEE
- ----------------------------------- -------------- -------------------------- -------------------------- ------------------- TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF SECURITIES TO BE REGISTERED REGISTERED OFFERING PRICE PER UNIT AGGREGATE OFFERING PRICE REGISTRATION FEE (1) (1) (2) - ----------------------------------- -------------- -------------------------- -------------------------- ------------------- 7.25% Senior Notes due 2004....... $450,000,000 100% 100% $125,100 - ----------------------------------- -------------- -------------------------- -------------------------- ------------------- - ----------------------------------- -------------- -------------------------- -------------------------- -------------------
(1) Estimated solely for the purpose of calculating the registration fee under Rule 457(f)(2) under the Securities Act of 1933. (2) Calculated pursuant to Rule 457(f)(2) under the Securities Act. ----------------------- WE HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL WE FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. ================================================================================ [INSERT THE FOLLOWING RED HERRING LANGUAGE VERTICALLY ON THE LEFT SIDE OF THE FRONT COVER PAGE OF THE PROSPECTUS] The information in this prospectus is not complete and may be changed. We may not consummate the exchange offer until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these notes and is not soliciting an offer to buy these notes in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION DATED AUGUST 20, 1999 PRELIMINARY PROSPECTUS $450,000,000 [CERIDIAN LOGO] EXCHANGE OFFER FOR ALL OUTSTANDING 7.25% SENIOR NOTES DUE 2004 - ------------------------------------------------------------------------------ THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , , 1999, UNLESS WE EXTEND IT. - ------------------------------------------------------------------------------ TERMS OF THE EXCHANGE OFFER ------------------- - - We are offering to exchange registered 7.25% Senior Notes due 2004 for all of the old unregistered 7.25% Senior Notes due 2004. - - The terms of the new notes will be identical in all material respects to the terms of the old notes, except that the registration rights and related liquidated damages provisions, and the transfer restrictions applicable to the old notes will not be applicable to the new notes. - - Subject to the satisfaction or waiver of specified conditions, we will exchange the new notes for all old notes that are validly tendered and not withdrawn prior to the expiration of the exchange offer. - - The Bank of New York is serving as the exchange agent. If you wish to tender your old notes, you must complete, execute and deliver, among other things, a letter of transmittal to the exchange agent no later than 5:00 p.m., New York City time, on the expiration date. - - You may withdraw tenders of old notes at any time prior to the expiration of the exchange offer. - - Any outstanding notes not validly tendered will remain subject to existing transfer restrictions. - - The exchange of old notes for new notes pursuant to the exchange offer will not be a taxable event for United States federal income tax purposes. See "Material United States Federal Income Tax Considerations." - - We will not receive any proceeds from the exchange offer. - - The new notes will not be listed on any securities exchange or included in any automated quotation system. - - The new notes will have the same financial terms and covenants as the old notes, and will be subject to the same business and financial risks. - - SEE "RISK FACTORS" ON PAGE 14 OF THIS PROSPECTUS FOR A DISCUSSION OF RISKS THAT YOU SHOULD CONSIDER BEFORE PARTICIPATING IN THE EXCHANGE OFFER. ------------------- WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. ------------------- 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. ------------------- This prospectus is dated , 1999 TABLE OF CONTENTS
PAGE ----- Documents Incorporated by Reference............... i Where You Can Find More Information............... ii Prospectus Summary................................ 1 Risk Factors...................................... 14 Forward-Looking Statements........................ 20 Use of Proceeds................................... 20 Capitalization.................................... 21 Selected Historical Consolidated and Pro Forma Financial Data...................... 22 PAGE ----- The Exchange Offer................................ 24 Description of New Notes.......................... 36 Material United States Federal Income Tax Considerations...................... 52 Plan of Distribution.............................. 54 Legal Matters..................................... 56 Experts........................................... 56
DOCUMENTS INCORPORATED BY REFERENCE The SEC allows us to "incorporate by reference" certain documents, which means that we can disclose important information to you by referring you to those documents. The information in the documents incorporated by reference is considered to be part of this prospectus, except to the extent that this prospectus updates or supersedes the information. We incorporate by reference the documents listed below which we have previously filed with the SEC (SEC file no. 1-1969): - Our Annual Report on Form 10-K for the fiscal year ended December 31, 1998, including the portions incorporated by reference from our 1998 Annual Report to Stockholders and Proxy Statement in connection with our 1999 annual meeting of stockholders; - Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999 and June 30, 1999; and - Our Current Report on Form 8-K as filed with the SEC on June 21, 1999, as amended and filed with the SEC on August 20, 1999. We also incorporate by reference the consolidated financial statements of ABR Information Services, Inc., the company we acquired in June 1999, contained in the following documents previously filed by ABR with the SEC (SEC file no. 0-24132): - ABR's Annual Report on Form 10-K for the fiscal year ended July 31, 1998, including the portions incorporated by reference from ABR's Proxy Statement in connection with ABR's 1998 annual meeting of stockholders; and - ABR's Quarterly Report on Form 10-Q for the quarters ended October 31, 1998, January 31, 1999 and April 30, 1999. We also incorporate by reference the information contained in all other documents we file with the SEC under Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this prospectus. The information will be considered part of this prospectus from the date the document is filed and will supplement or amend the information contained in this prospectus. i We will provide you, at no charge, a copy of the documents we incorporate by reference in this prospectus. TO OBTAIN TIMELY DELIVERY, REQUESTS FOR COPIES SHOULD BE MADE NO LATER THAN , 1999 (FIVE BUSINESS DAYS BEFORE THE EXPIRATION OF THE OFFER). To request a copy of any or all of these documents, you should write or telephone us at the following address and telephone number: Ceridian Corporation 8100 34th Avenue South Bloomington, Minnesota 55425-1640 Attention: Stockholder Services Department Telephone: (612) 853-8100 WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and special reports, proxy statements, and other documents with the Securities and Exchange Commission under the Securities Exchange Act of 1934. The Exchange Act file number for our SEC filings is 1-1969. Our SEC filings made electronically through the SEC's EDGAR system are available to the public at the SEC's website at HTTP://WWW.SEC.GOV. You may also read and copy any document we file with the SEC at the following SEC public reference rooms: Judiciary Plaza Citicorp Center 7 World Trade Center 450 Fifth Street, N.W. 500 West Madison Street Suite 1300 Washington, D.C. 20549 Chicago, Illinois 60621 New York, New York 10048 You may obtain information regarding the operation of the SEC's public reference rooms by calling the SEC at 1-800-SEC-0330. In addition, because our common stock is listed on the New York Stock Exchange, you may read our reports, proxy statements, and other documents at the offices of the New York Stock Exchange at 20 Broad Street, New York, New York 10005. We have filed with the SEC a registration statement on Form S-4 under the Securities Act, and the rules and regulations promulgated under the Securities Act, with respect to the new notes offered for exchange under this prospectus. This prospectus, which constitutes part of the registration statement, does not contain all of the information set forth in the registration statement and the attached exhibits and schedules. The statements contained in this prospectus as to the contents of any contract, agreement or other document that is filed as an exhibit to the registration statement are not necessarily complete. Accordingly, each such statement is qualified in all respects by reference to the full text of such contract, agreement or document filed as an exhibit to the registration statement or otherwise filed with the SEC. -------------------- You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal to sell these securities. The information in this document may only be accurate on the date of this document. ii PROSPECTUS SUMMARY THIS SUMMARY HIGHLIGHTS THE INFORMATION CONTAINED ELSEWHERE IN OR INCORPORATED BY REFERENCE INTO THIS PROSPECTUS. BECAUSE THIS IS ONLY A SUMMARY, IT DOES NOT CONTAIN ALL OF THE INFORMATION THAT MAY BE IMPORTANT TO YOU. FOR A MORE COMPLETE UNDERSTANDING OF THIS EXCHANGE OFFER, WE ENCOURAGE YOU TO READ THIS ENTIRE PROSPECTUS AND THE DOCUMENTS TO WHICH WE REFER YOU. IN THIS PROSPECTUS, "CERIDIAN," "COMPANY," "WE," "OUR," AND "US" REFER TO CERIDIAN CORPORATION AND OUR SUBSIDIARIES. CERIDIAN We operate exclusively in the information services industry. We provide products and services to customers in the human resources, transportation and media information markets through our Human Resource Services businesses ("HRS"), Comdata subsidiary and Arbitron division. These businesses collect, manage and analyze data and process transactions on behalf of customers, report information resulting from such activities to customers, and provide customers with related software applications and services. The following table sets forth our total revenue and the percentage revenue for each of our business segments for the periods shown: CERIDIAN REVENUE BY BUSINESS SEGMENT [GRAPH] - - SOLD TO FIRST DATA CORPORATION IN JANUARY 1998 IN EXCHANGE FOR NTS TRANSPORTATION SERVICES BUSINESSS AND CASH. PERCENTAGE AMOUNTS MAY NOT TOTAL DUE TO ROUNDING. 1 HUMAN RESOURCE SERVICES The businesses comprising HRS offer a broad range of services and software designed to help employers more effectively manage their work forces and information that is integral to human resource processes. HRS' human resource management products and services include: - payroll processing services and software; - tax filing services; - human resource information software; - benefits administration software; - time and attendance solutions; - recruiting and skills management software; - employee assistance and work-life programs; and - training. These products and services are provided in the United States, Canada and the United Kingdom through Ceridian Employer Services, Ceridian Performance Partners, Centrefile and Usertech. HRS' revenue for the years 1998, 1997 and 1996 was as follows:
1998 1997 1996 -------------------- -------------- ------------- $700.3 million $578.6 million $490.3 million
Payroll processing and tax filing services accounted for about 86% of HRS' 1998 revenue, with about 80% of 1998 payroll processing and tax filing revenue derived from the United States. PAYROLL PROCESSING AND TAX FILING SERVICES. Payroll processing in the United States consists primarily of preparing and furnishing employee payroll checks, direct deposit advices and supporting journals and summaries. We also supply quarterly and annual social security, Medicare, and federal, state and local income tax withholding reports required to be filed by employers and employees. Payroll tax filing consists primarily of collecting funds for federal, state and local employment taxes from customers based on payroll information provided by the customers, remitting funds collected to the appropriate taxing authorities, filing applicable returns, and handling related regulatory correspondence and amendments. Revenue from payroll tax filing services in the United States also includes investment income earned by us from tax filing deposits temporarily held pending remittance to taxing authorities on behalf of our customers. We hold such customer deposits in a fiduciary capacity in a tax filing trust. The trust invests primarily in high quality collateralized short-term investments, top tier commercial paper, U.S. Treasury and Agency securities, AAA rated asset-backed securities and corporate securities rated A3/A- or better. The duration of investments is carefully managed to meet the liquidity needs of the trust. About 62% of 1998 tax filing revenue was attributable to such investment income. Due to the significance of this investment income, HRS' quarterly revenue and profitability fluctuate as a result of changes in interest rates and in the amount of tax filing deposits held. 2 SOURCE 500. In 1998, we introduced our Source 500 product, a fully integrated human resource information system ("HRIS"), payroll, benefits, recruiting and employee self-service solution. Because of the importance of being able to integrate our payroll processing and tax filing systems with other systems and applications utilized by customers and potential customers, particularly third-party HRIS applications, we have also developed interfaces to exchange employee-related information between our payroll system and the HRIS systems of major software vendors. INTERNATIONAL OPERATIONS. In recent years, we have expanded our payroll processing and HRIS software businesses outside of the United States through acquisitions. Approximately 17% of HRS' 1998 revenue was obtained from customers outside of the United States. Our Centrefile Limited subsidiary provides mainframe-based payroll processing services and HRIS software in the United Kingdom. As a result of the acquisition of the payroll processing business of The Toronto-Dominion Bank and the Comcheq payroll processing business of the Canadian Imperial Bank of Commerce in 1998, we handle payroll as well as tax filing funds for our Canadian customers. Revenue from our payroll processing services in Canada also includes investment income received from temporarily holding payroll and payroll tax amounts in a Canadian trust. We earn income from the trust and charge fees for services similar to those provided in the U.S. About 32% of the 1998 revenue of these Canadian businesses was attributable to such investment income. PERFORMANCE PARTNERS. HRS also includes businesses that provide a variety of employee assistance, work-life balance, management support and training products and services. Ceridian Performance Partners provides services to help organizations address workplace effectiveness issues and improve employee recruitment, retention and productivity and reduce absenteeism. COMDATA Our Comdata subsidiary provides transaction processing and decision support services to the transportation industry, primarily trucking companies, truck stops and truck drivers, in both the long haul and local markets in the United States. These services primarily involve the use of a proprietary funds transfer card which facilitates truck driver transactions and provides transaction control and trip information for trucking firms. Additionally, Comdata provides assistance in obtaining regulatory permits and other compliance services, driver relations services, local fueling services and discounted telecommunications services in its markets. Comdata's revenue from products and services provided to the transportation industry for the years 1998, 1997 and 1996 was as follows:
1998 1997 1996 -------------------- -------------- -------------- $261.5 million $197.8 million $173.7 million
Comdata's revenue for 1998 includes revenue from the operations of First Data Corporation's NTS transportation services business that Comdata acquired in 1998. Comdata's revenue for all periods shown excludes revenue from Comdata's gaming services business which was sold to First Data in exchange for the NTS transportation services business. THE COMCHEK(-Registered Trademark-) CARD. Comdata's funds transfer system, most commonly initiated through the use of Comdata's proprietary Comchek card, is designed to enable truck drivers to obtain funding for purchases and cash advances at truck stops and other locations en route to their destination. Drivers may use the Comchek card to purchase fuel, lodging and other approved items, obtain cash advances from ATM machines or through the use of Comchek drafts, make long distance phone calls and make direct 3 deposits of pay, settlements (for non-employee owner-operators) or trip advances to personal bank accounts. Use of the Comchek card allows the trucking company customer greater control over its expenses by allowing it to set limits on the use of the cards, such as by designating locations where the cards may be used, the frequency with which they may be used, phone numbers which may be called and the amount of authorized use. Use of a Comchek card also enables Comdata to capture and provide transaction and trip-related information to trucking company customers (usually within 24 hours after the completion of a given trip). This information greatly enhances a customer's ability to track and plan fuel purchases and other trip expenses and settle with drivers. ARBITRON Arbitron provides media and marketing information (primarily radio audience measurement) to broadcasters, advertising agencies, and advertisers and, through a joint venture, newspapers and magazine publishers and TV broadcasters. Arbitron also provides software applications that give customers access to Arbitron's database and, through a joint venture, measurement data concerning consumer retail behavior and media usage. Arbitron's revenue for the years 1998, 1997 and 1996 was as follows:
1998 1997 1996 -------------------- -------------- ---------------- $194.5 million $165.2 million $153.1 million
RADIO AUDIENCE MEASUREMENT. Arbitron is a leading provider of radio audience measurement information in the United States. Arbitron estimates audience size and demographics in the United States for local radio stations, and reports this and related data to its customers. This information is used by radio stations to price and sell advertising time and by advertising agencies and large corporate advertisers in purchasing advertising time. Arbitron also provides software applications that give customers access to Arbitron's database, and enable them to more effectively analyze and understand that information and develop target marketing strategies. Arbitron is also developing applications to link information provided by Arbitron's database with information from other databases (such as product purchasing behavior) to enable customers to further refine sales strategies and compete more effectively for advertising dollars. The radio audience measurement service and related software sales represented 80% of Arbitron's 1998 revenue. INTERNATIONAL OPERATIONS AND OTHER SERVICES. Through Continental Research, a United Kingdom-based company that Arbitron acquired in 1997, Arbitron provides media, advertising, financial and telecommunications research services in the United Kingdom and Europe. As a result of Arbitron's purchase of the radio station, advertiser/agency and international assets of Tapscan, Inc. in 1998, Arbitron provides software applications for broadcasters, advertising agencies and advertisers that help customers analyze ratings data and make marketing decisions. Arbitron is also developing a passive, personalized electronic measurement device to record broadcast listening or viewing for purposes of audience measurement and verification that advertisements have been broadcast. RECENT ABR ACQUISITION CASH TENDER OFFER AND MERGER On April 30, 1999, we entered into a merger agreement to acquire ABR Information Services, Inc. The transaction was structured as a cash tender offer by one of our wholly owned subsidiaries for all the outstanding voting common stock of ABR at $25.50 per share, net to the sellers in cash, followed by a 4 merger of our wholly owned subsidiary into ABR. Approximately 28,271,063 ABR shares were validly tendered and not withdrawn and purchased by our wholly owned subsidiary pursuant to the tender offer. As a result, immediately after the tender offer we beneficially owned approximately 98.3% of the total number of the then outstanding shares of voting common stock of ABR. On July 22, 1999, our wholly owned subsidiary effected the cash merger with ABR, after which ABR became one of our wholly owned subsidiaries and the remaining shares of ABR not owned by our wholly owned subsidiary were exchanged for $25.50 per share in cash. The total amount of cash we used to acquire all of the shares of ABR, in both the tender offer and the merger, plus pay transaction costs, was approximately $751.0 million. Financing for the tender offer was provided through a combination of existing cash balances, borrowings under our domestic credit agreement and a short-term unsecured term loan. We repaid the short-term loan in full with the net proceeds from the sale of the old notes and existing cash balances. Financing for the merger was provided through a combination of existing cash balances and borrowings under our domestic credit agreement. See "Use of Proceeds." SERVICES PROVIDED BY CERIDIAN BENEFITS SERVICES After the merger, we began to refer to ABR and its subsidiaries under the name "Ceridian Benefits Services." Ceridian Benefits Services is a leading provider of comprehensive benefits administration, payroll and human resource services to employers seeking to outsource these functions. Ceridian Benefits Services provides services in three key areas: - employee health and welfare administration services; - qualified plan administration services; and - integrated payroll and human resource administration services, including tax deposit services and integrated human resource solutions. All services are offered on either an "a la carte" or a total outsourcing basis, allowing customers to outsource certain benefits administration tasks which they find too costly or burdensome to perform in-house, or to outsource the entire benefits administration function. HEALTH AND WELFARE ADMINISTRATION SERVICES. Ceridian Benefits Services' employee health and welfare administration services include portability (I.E., COBRA (the "Consolidated Omnibus Budget Reconciliation Act"), HIPAA (the "Health Insurance Portability and Accountability Act of 1996") or state-mandated continuation coverage) compliance services and administration services for benefits provided to active employees, such as open enrollment, employee enrollment and eligibility, and flexible spending account administration. Ceridian Benefits Services provides administration services for benefits provided to retired and inactive employees, including retiree healthcare, disability, surviving dependent, family leave and severance benefits. Ceridian Benefits Services provides its portability services through the trade name CobraServe(-Registered Trademark-). QUALIFIED PLAN ADMINISTRATION SERVICES. Ceridian Benefits Services' qualified plan administration services include 401(k) plan administration, profit sharing administration, defined benefit plan administration, ESOP administration and Qualified Domestic Relations Order administration. INTEGRATED PAYROLL AND HUMAN RESOURCE ADMINISTRATION SERVICES. Ceridian Benefits Services' integrated payroll and human resource administration services include tax deposit services and integrated human resource solutions and are provided through the trade name PayAmerica(-Registered Trademark-). We are in the process of operationally transferring this portion of Ceridian Benefits Services business to HRS. 5 SUMMARY OF THE TERMS OF THE EXCHANGE OFFER Old Notes................................. On June 10, 1999, we sold in a private transaction the old notes, which consist of $450,000,000 aggregate principal amount of our 7.25% Senior Notes due 2004, to Banc of America Securities LLC, Chase Securities Inc., BNY Capital Markets, Inc., TD Securities (USA) Inc. and U.S. Bancorp Piper Jaffray Inc., the initial purchasers. The initial purchasers then sold the old notes to institutional investors. Simultaneously with the initial sale of the old notes, we entered into a registration rights agreement with the initial purchasers in which we agreed, among other things, to deliver this prospectus to you and to complete an exchange offer for the old notes. See "Exchange Offer--Purpose of Exchange Offer." The Exchange Offer........................ We are offering to exchange up to $450,000,000 aggregate principal amount of our 7.25% Senior Notes due 2004 which have been registered under the Securities Act for a like aggregate principal amount of the old notes. The terms of the new notes are identical in all material respects to the terms of the old notes, except that the registration rights and related liquidated damages provisions, and the transfer restrictions applicable to the old notes are not applicable to the new notes. Old notes may be tendered only in $1,000 increments. Subject to the satisfaction or waiver of specified conditions, we will exchange the new notes for all old notes that are validly tendered and not withdrawn prior to the expiration of the exchange offer. We will cause the exchange to be effected promptly after the expiration of the exchange offer. UPON COMPLETION OF THE EXCHANGE OFFER, THERE MAY BE NO MARKET FOR THE OLD NOTES, AND IF YOU FAILED TO EXCHANGE THE OLD NOTES, YOU MAY HAVE DIFFICULTY SELLING THEM. Resales of the New Notes.................. Based on interpretations by the staff of the SEC, we believe that the new notes issued in the exchange offer may be offered for resale, resold or otherwise transferred by you, without compliance with the registration and prospectus delivery requirements of the Securities Act, if you: 6 - acquire the new notes in the ordinary course of your business; - are not engaging in and do not intend to engage in a distribution of the new notes; - do not have an arrangement or understanding with any person to participate in a distribution of the new notes; - are not an affiliate of us within the meaning of Rule 405 under the Securities Act; and - are not a broker-dealer that acquired the old notes directly from us. If any of these conditions is not satisfied and you transfer any new notes without delivering a proper prospectus or without qualifying for a registration exemption, you may incur liability under the Securities Act. In addition, if you are a broker-dealer seeking to receive new notes for your own account in exchange for old notes that you acquired as a result of market-making or other trading activities, you must acknowledge that you will deliver this prospectus in connection with any offer to resell, resale or other transfer of the new notes that you receive in the exchange offer. See "Plan of Distribution." Expiration Date........................... The exchange offer will expire at 5:00 p.m., New York City time, on ________________, 1999, unless we extend it. Withdrawal................................ You may withdraw the tender of your old notes at any time prior to the expiration of the exchange offer. We will return to you any of your old notes that are not accepted for exchange for any reason, without expense to you, promptly after the expiration or termination of the exchange offer. Consequences of Failing to Exchange Your Old Notes.............................. The exchange offer satisfies our obligations and your rights under the registration rights agreement. After the exchange offer is completed, you will not be entitled to any registration rights with respect to your old notes. Therefore, if you do not exchange your old notes, you will not be able to reoffer, resell or otherwise dispose of your old notes unless: - you comply with the registration and prospectus delivery requirements of the Securities Act; or 7 - you qualify for an exemption from such Securities Act requirements. Interest on the New Notes and the Old Notes.............................. The new notes will bear interest at the rate of 7.25% per annum from the most recent date to which interest has been paid on the old notes or, if no interest has been paid on the old notes, from June 10, 1999. Such interest will be payable semi-annually on each June 1 and December 1, commencing December 1, 1999. No interest will be paid on the old notes following their acceptance for exchange. See "Description of New Notes." Conditions to the Exchange Offer.......... The exchange offer is subject to various conditions. We reserve the right to terminate or amend the exchange offer at any time before the expiration date if various specified events occur. The exchange offer is not conditioned upon any minimum principal amount of outstanding old notes being tendered. See "The Exchange Offer--Conditions to the Exchange Offer." Exchange Agent............................ The Bank of New York is serving as exchange agent for the exchange offer. All executed letters of transmittal should be directed to the exchange agent at the following address: By Mail: 101 Barclay Street, Floor 7E, New York, NY 10286, Attn: Reorganization Section By Hand or Overnight Courier: 101 Barclay Street, Corporate Trust Services Window, Ground Level, New York, NY 10286, Attn: Reorganization Section Questions and requests for assistance should be directed to the exchange agent at (212) 815-3750. Procedures for Tendering Old Notes........ If you wish to tender your old notes, you must cause the following to be transmitted to and received by the exchange agent no later than 5:00 p.m., New York City time, on the expiration date: - a confirmation of the book-entry transfer of the tendered old notes into the exchange agent's account at The Depository Trust Company; - a properly completed and duly executed letter of transmittal in the form accompanying this prospectus (with any required signature guarantees) or, at the option of the tendering holder in the case of a book- 8 entry tender, an agent's message in lieu of such letter of transmittal; and - any other documents required by the letter of transmittal. Guaranteed Delivery Procedures............ If you wish to tender your old notes and you cannot cause the old notes or any other required documents to be transmitted to and received by the exchange agent before 5:00 p.m., New York City time, on the expiration date, you may tender your old notes according to the guaranteed delivery procedures described in this prospectus under the heading "The Exchange Offer--Guaranteed Delivery Procedures." Special Procedures for Beneficial Owners.. If you are the beneficial owner of old notes that are registered in the name of your broker, dealer, commercial bank, trust company, or other nominee, and you wish to participate in the exchange offer, you should promptly contact the person in whose name your outstanding old notes are registered and instruct that person to tender your old notes on your behalf. See "The Exchange Offer--Procedures for Tendering." Representations of Tendering Holders...... By tendering old notes pursuant to the exchange offer, you will, in addition to other customary representations, represent to us that you: - are acquiring the new notes in the ordinary course of business; - are not engaging in or you do not intend to engage in a distribution of the new notes; - have no arrangement or understanding with any person to participate in a distribution of the new notes; - are not an affiliate of us, or if you are an affiliate, you will comply with the registration and prospectus delivery requirements of the Securities Act; and - are not a broker-dealer tendering old notes acquired directly from us. Acceptance of Old Notes and Delivery of New Notes.............................. Subject to the satisfaction or waiver of the conditions to the exchange offer, we will accept for exchange any and all old notes that are properly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the expiration date. We will cause the exchange to be effected promptly after the expiration of the exchange offer. 9 Material United States Federal Income Tax Considerations......................... The exchange of old notes for new notes pursuant to the exchange offer generally will not be a taxable event for United States federal income tax purposes. See "Material United States Federal Income Tax Considerations." Appraisal or Dissenters' Rights........... You will have no appraisal or dissenters' rights in connection with the exchange offer. Use of Proceeds........................... We will not receive any proceeds from the issuance of new notes pursuant to the exchange offer. We will pay all expenses incident to the exchange offer.
SUMMARY OF THE TERMS OF THE NEW NOTES The terms of the new notes will be identical in all material respects to the terms of the old notes, except that the registration rights and related liquidated damages provisions, and the transfer restrictions applicable to the old notes are not applicable to the new notes. The new notes will evidence the same debt as the old notes. The new notes and the old notes will be governed by the same indenture. For more complete information about the new notes, see the "Description of New Notes" section of this prospectus. Issuer.................................... Ceridian Corporation Aggregate Amount.......................... $450.0 million principal amount of 7.25% Senior Notes due 2004. Maturity.................................. The new notes will mature on June 1, 2004. Interest Rate............................. The new notes will bear interest at the rate of 7.25% per annum. Interest Payment Dates.................... We will pay interest on the new notes semi-annually on June 1 and December 1, beginning December 1, 1999. Optional Redemption....................... We may redeem all or part of the new notes at our option, on at least 30 days' notice, at the redemption prices stated in "Description of New Notes--Optional Redemption," plus any accrued and unpaid interest to the date fixed for redemption. Ranking................................... The new notes will be general unsecured obligations of ours. The new notes will rank PARI PASSU in right of payment with all of our other unsubordinated indebtedness and senior in right of payment to all of our future subordinated indebtedness. The new notes will not be guaranteed by any of our subsidiaries. The new notes will effectively be subordinated to (1) any of our secured indebtedness to the extent of the assets securing that 10 indebtedness, and (2) all indebtedness for money borrowed and other liabilities of our subsidiaries. As of June 30, 1999, we had approximately $0.2 million of secured debt, $49.3 million of subsidiary debt and $649.1 million of total consolidated indebtedness. Certain Covenants......................... The indenture governing the new notes contains covenants that, among other things, restrict our ability to: - incur certain liens; - enter into certain affiliate transactions; - merge, consolidate or sell assets; and - engage in sale and leaseback transactions. See "Description of New Notes-- Certain Covenants." Events of Default......................... The indenture describes the circumstances that constitute events of default with respect to the new notes. See "Description of New Notes--Events of Default." Use of Proceeds........................... We will not receive any proceeds from the exchange offer. For a description of the use of proceeds from the offering of the old notes, see "Use of Proceeds." Form of the New Notes..................... The new notes will be represented by one or more permanent global securities in registered form deposited with The Bank of New York, as custodian, for the benefit of The Depository Trust Company. You will not receive notes in registered form unless one of the events set forth under the heading "Description of New Notes--Book-Entry, Delivery and Form" occurs. Instead, beneficial interests in the new notes will be shown on, and transfers of these interests will be effected only through, records maintained in book-entry form by The Depository Trust Company with respect to its participants. Absence of a Public Market for the New Notes.............................. There has been no public market for the old notes, and no active public market for the new notes is currently anticipated. We do not intend to apply for a listing of the new notes on any securities exchange or inclusion in any automated quotation system. We cannot make any assurances regarding the liquidity of the market for the new notes, the ability of holders to sell their new notes or the price at which holders may sell their new notes. See "Plan of Distribution." Trustee................................... The Bank of New York is serving as the trustee under the indenture.
11 SUMMARY HISTORICAL CONSOLIDATED AND PRO FORMA FINANCIAL DATA We derived the following summary historical consolidated statements of operations data and consolidated balance sheet data from both our audited and unaudited consolidated financial statements and related notes. Our consolidated statements of operations data for the six month periods ended June 30, 1999 and 1998 and consolidated balance sheet data at June 30, 1999 include all adjustments, consisting only of normal recurring adjustments, which management considers necessary for a fair presentation of results for these unaudited periods. The results of operations for the six month period ended June 30, 1999 are not necessarily indicative of the results of operations that may be expected for the full fiscal year 1999. Pro forma financial data based on continuing operations for the year ended December 31, 1998 and the six month period ended June 30, 1999, appearing below, include the results of operations of ABR and adjustments to reflect our acquisition of ABR as described in our Current Report on Form 8-K as amended and filed with the SEC on August 20, 1999. You should read the summary historical consolidated and pro forma financial data presented below in conjunction with the "Management's Discussion and Analysis of Financial Condition and Results of Operations", our consolidated financial statements with related notes and other financial information contained or incorporated by reference in our Annual Report on Form 10-K for the year ended December 31, 1998, our Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 and our Current Report on Form 8-K as filed with the SEC on June 21, 1999, as amended and filed with the SEC on August 20, 1999, which we incorporate by reference in this prospectus. See "Documents Incorporated By Reference."
SIX MONTHS YEARS ENDED DECEMBER 31, ENDED JUNE 30, -------------------------------------------------- -------------------------- PRO FORMA PRO FORMA 1998 1998 1997 1996 1995 1994 1999 1999 1998 ------- ---- ---- ---- ---- ---- ---- ---- ---- (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) CONSOLIDATED STATEMENTS OF OPERATIONS DATA: Revenue............................ $1,245.5 $1,162.1 $1,074.8 $942.6 $823.5 $691.5 $701.7 $643.6 $566.4 Costs and Expenses: Cost of revenue.................. 598.8 551.5 527.6 456.9 400.2 338.2 327.3 296.1 263.9 Selling, general and administrative................. 352.1 316.0 308.0 285.1 260.4 230.0 206.6 186.1 159.8 Research and development......... 77.8 77.8 59.6 52.5 38.2 28.5 37.1 37.1 37.7 Other expense (income) (1)....... 15.0 (6.8) 309.3 0.2 32.5 (3.2) 1.7 1.7 1.8 ------- ----- ------- ----- ------ ----- ------ ----- ----- Total costs and expenses...... 1,043.7 938.5 1,204.5 794.7 731.3 593.5 572.7 521.0 463.2 ------- ----- ------- ----- ------ ----- ------ ----- ----- Earnings (loss) before interest 201.8 223.6 (129.7) 147.9 92.2 98.0 129.0 122.6 103.2 and taxes........................ Interest income.................. 11.1 10.4 2.3 3.0 8.0 8.7 3.3 3.8 5.2 Interest expense................. (47.2) (4.3) (11.2) (9.7) (29.5) (30.6) (25.6) (4.1) (2.2) ------- ----- ------- ----- ------ ----- ------ ----- ----- Earnings (loss) before income taxes 165.7 229.7 (138.6) 141.2 70.7 76.1 106.7 122.3 106.2 Income tax provision (benefit) (2). 53.4 65.3 (174.0) 5.7 11.5 11.5 42.8 44.8 39.1 ------- ----- ------- ----- ------ ----- ------ ----- ----- Earnings from continuing operations $112.3 164.4 35.4 135.5 59.2 64.6 $ 63.9 77.5 67.1 ------- ------ ------- ------ Discontinued operations: Gain on sale (3)................. 25.4 386.3 -- -- -- -- -- Earnings from operations (4)..... -- 50.7 46.4 38.3 33.1 -- -- Extraordinary loss................. -- -- -- (38.9) -- -- -- ----- ------- ----- ------ ----- ----- ----- Net earnings ...................... $189.8 472.4 $181.9 $58.6 $97.7 $ 77.5 $ 67.1 ----- ------- ----- ------ ----- ----- ----- ----- ------- ----- ------ ----- ----- ----- Basic earnings per share: Continuing operations............ $0.78 $1.14 $0.23 $0.90 $0.35 $0.39 $0.44 $0.54 $0.46 Net earnings..................... $1.32 $3.01 $1.24 $0.34 $0.64 $0.54 $0.46 Diluted earnings per share: Continuing operations............ $0.76 $1.11 $0.22 $0.84 $0.37 $0.41 $0.43 $0.52 $0.45 Net earnings..................... $1.29 $2.96 $1.12 $0.37 $0.63 $0.52 $0.45 Shares used in calculations (in thousands): Basic............................ 144,070 144,070 156,835 135,841 132,269 131,650 144,338 144,338 144,521 Diluted.......................... 147,597 147,597 159,481 161,938 159,473 156,021 148,981 148,981 147,930 OTHER FINANCIAL DATA: EBITDA (5)......................... $296.8 $265.6 $236.3 $201.7 $171.2 $129.2 $175.2 $154.8 $128.1 Ratio of earnings to fixed charges (6).............................. 3.74x 15.01x -- 9.04x 3.61x 3.49x 4.35x 13.01x 13.67x Earnings to fixed charges deficiency (6)................... -- -- $77.1 -- -- -- -- -- --
DECEMBER JUNE 30, 31, 1999 1998 --------- --------- CONSOLIDATED BALANCE SHEET DATA (7): Working capital.................................................................... $ 187.8 $ 197.0 Total assets....................................................................... 2,089.5 1,289.7 Long-term obligations, less current portion........................................ 648.9 54.2 Total stockholders' equity......................................................... 760.0 650.6
12 (1) Includes 1998 unusual gains of $9.2 million related primarily to the sale of land not used in the business, 1997 unusual losses of $307.6 million related to the termination of a software development project, asset write-offs, contract cancellations and certain legal and administrative proceedings involving us, and 1995 pooling expenses of $29.7 million. Pro forma amounts also include ABR unusual losses related to write-offs of $11.0 million of purchased in-process research and development in April 1998 and $13.8 million of software development costs in October 1998. (2) Includes a 1997 income tax benefit of $175.0 million related to a reduction in the valuation allowance for the future utilization of our remaining net operating losses and other future tax deductions. (3) Represents gain, adjusted in 1998, from the December 1997 sale of Computing Devices International. (4) Represents earnings from operations of Computing Devices International prior to its sale. (5) EBITDA represents income from continuing operations before interest expense and income, income taxes and unusual gains and losses plus depreciation and amortization. EBITDA is included herein because we believe that certain investors find it to be a useful tool for measuring our ability to service our debt; however, EBITDA does not represent cash flow from operations, as defined by generally accepted accounting principles, and should not be considered as a substitute for net income as an indicator of our operating performance or for cash flow as a measure of liquidity. Our determination and presentation of non-GAAP measures of financial performance, such as EBITDA, may not be comparable to similarly titled measures reported by other companies. (6) The ratio of earnings to fixed charges is computed by dividing fixed charges into income before income taxes plus fixed charges. Fixed charges consist of interest (whether expensed or capitalized), amortization of financing costs and the estimated interest component of rent expense. In 1997, the aggregate increase in earnings or decrease in fixed charges required to bring the ratio to 1.00 was $77.1 million. (7) On June 7, 1999, we purchased 98.3% of the outstanding shares of ABR, which shares had been validly tendered and not withdrawn, and soon completed a series of financing transactions related to the acquisition. The acquired assets and liabilities and the financing transactions are included in our consolidated balance sheet as of June 30, 1999, which appears in this report. Therefore, no pro forma balance sheet is included in this report. GENERAL Our principal executive offices are located at 8100 34th Avenue South, Minneapolis, Minnesota 55425. Our telephone number is (612) 853-8100. Our website address is http://www.ceridian.com. The information in our website is not incorporated by reference. 13 RISK FACTORS THE NEW NOTES, LIKE THE OLD NOTES, ENTAIL RISK. IN DECIDING WHETHER TO PARTICIPATE IN THE EXCHANGE OFFER, YOU SHOULD CONSIDER THE RISKS ASSOCIATED WITH THE NATURE OF OUR BUSINESS AND THE RISK FACTORS RELATING TO THE EXCHANGE OFFER IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS. YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS BEFORE MAKING A DECISION TO EXCHANGE YOUR OLD NOTES FOR NEW NOTES. THE RISK FACTORS DESCRIBED BELOW ARE NOT NECESSARILY EXHAUSTIVE, AND WE ENCOURAGE YOU TO PERFORM YOUR OWN INVESTIGATION WITH RESPECT TO THE NEW NOTES AND OUR COMPANY. IF YOU FAIL TO EXCHANGE YOUR OLD NOTES, YOU MAY BE UNABLE TO SELL THEM. Because we did not register the old notes under the Securities Act or any state securities laws, nor do we intend to after the exchange offer, the old notes may only be transferred in limited circumstances under the securities laws. If the holders of the old notes do not exchange their notes in the exchange offer, they lose their right to have their old notes registered under the Securities Act, subject to certain limitations. A holder of old notes after the exchange offer may be unable to sell its old notes. THERE IS NO PUBLIC MARKET FOR THE NEW NOTES, SO YOU MAY BE UNABLE TO SELL THEM. The new notes are new securities for which there is currently no market. Consequently, the new notes will be relatively illiquid, and you may be unable to sell them. We do not intend to apply for listing of the new notes on any securities exchange or for the inclusion of the new notes in any automated quotation system. Accordingly, we cannot assure you that a liquid market for the new notes will develop. YOU MUST TENDER THE OLD NOTES IN ACCORDANCE WITH PROPER PROCEDURES IN ORDER TO ENSURE THE EXCHANGE WILL OCCUR. The exchange of the old notes for the new notes can only occur if the proper procedures, as detailed in this prospectus, are followed. The new notes will be issued in exchange for the old notes only after timely receipt by the exchange agent of the old notes or a book-entry confirmation, a properly completed and executed letter of transmittal (or an agent's message in lieu thereof) and all other required documentation. If you want to tender your old notes in exchange for new notes, you should allow sufficient time to ensure timely delivery. Neither the exchange agent nor us is under any duty to give you notification of defects or irregularities with respect to tenders of old notes for exchange. Old notes that are not tendered will continue to be subject to the existing transfer restrictions. In addition, if you are an affiliate of us or you tender the old notes in the exchange offer in order to participate in a distribution of the new notes, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. For additional information, please refer to the sections entitled "The Exchange Offer" and "Plan of Distribution" later in this prospectus. IF A MARKET DEVELOPS FOR THE NEW NOTES, THE NOTES MIGHT TRADE AT VOLATILE PRICES. If a market develops for the new notes, the notes might trade at prices higher or lower than their initial offering price. The trading price would depend on many factors, such as prevailing interest rates, the market for similar securities, general economic conditions and our financial condition, performance and prospects. 14 OUR INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL HEALTH AND MAKE IT MORE DIFFICULT FOR US TO FULFILL OUR OBLIGATIONS UNDER THE NEW NOTES. At June 30, 1999, we had $649.1 million of total consolidated indebtedness, $450.0 million of such total consolidated indebtedness is represented by the old notes that are subject to this exchange offer. Our indebtedness could have important consequences to you. For example, it could: - increase our vulnerability to general adverse economic and industry conditions; - require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund acquisitions, working capital, capital expenditures and other general corporate purposes; - limit, along with the financial and other restrictive covenants in our indebtedness, our ability to borrow a significant amount of additional funds; - limit, along with the financial and other restrictive covenants in our indebtedness, our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and - place us at a competitive disadvantage compared to our competitors that have less debt. We may be able to incur additional indebtedness in the future which could intensify the risks listed above that we will face. In addition, our Canadian subsidiary is prohibited by its credit agreements from paying any dividends or redeeming its capital stock which limits our ability to upstream cash from our Canadian subsidiary to make payments on the new notes or other non-Canadian indebtedness. ALTHOUGH YOUR NEW NOTES WILL BE REFERRED TO AS "SENIOR NOTES," THEY WILL EFFECTIVELY BE SUBORDINATED TO OUR SECURED DEBT AND THE DEBT OF OUR SUBSIDIARIES. The new notes will be unsecured and therefore will effectively be subordinated to any secured debt we may incur to the extent of the value of the assets securing such debt and to all indebtedness for money borrowed and other liabilities of our subsidiaries. In the event of a bankruptcy or similar proceeding involving us, our assets which serve as collateral will be available to satisfy the obligations under any secured debt before any payments are made on the new notes. We, and our creditors, may access the assets of our subsidiaries only after adequate provision is made for the payment of our subsidiaries' debts and liabilities. As of June 30, 1999, we had approximately $0.2 million of secured debt, $49.3 million of subsidiary debt and $649.1 million of total consolidated indebtedness. FAILURE TO SUCCESSFULLY INTEGRATE CERIDIAN BENEFIT SERVICES INTO OUR OPERATIONS COULD HARM OUR BUSINESS. On April 30, 1999, we entered into a merger agreement to acquire ABR Information Services, Inc. The transaction was structured as a cash tender offer by one of our wholly owned subsidiaries for all the outstanding voting common stock of ABR at $25.50 per share, net to the sellers in cash, followed by a merger of our wholly owned subsidiary into ABR. The cash tender offer was completed in June 1999, and the merger of our wholly owned subsidiary into ABR, resulting in ABR becoming one of our wholly owned subsidiaries, was completed in July 1999. After the merger, we began to refer to ABR and its subsidiaries under the name "Ceridian Benefit Services." There can be no assurance that the Ceridian Benefit Services' businesses will be integrated successfully into our operations or prove profitable. 15 WE MAY MAKE ACQUISITIONS THAT COULD SUBJECT US TO A NUMBER OF OPERATIONAL RISKS. We expect that we will continue to make acquisitions of, investments in and strategic alliances with complementary businesses, products and technologies to enable us to add products and services for our core customer base and for adjacent markets, and to expand each of our businesses geographically. However, implementation of this strategy entails a number of risks, including: - inaccurate assessment of undisclosed liabilities; - entry into markets in which we may have limited or no experience; - diversion of management's attention from our core businesses; - potential loss of key employees or customers of the acquired businesses; - additional year 2000 compliance efforts; - difficulties in assimilating the operations and products of an acquired business or in realizing projected efficiencies and cost savings; and - increase in our indebtedness and a limitation in our ability to access additional capital when needed. Integration of acquisitions, and obtaining anticipated revenue synergies or cost reductions, are also a risk in many acquisitions. CHANGES IN GOVERNMENTAL REGULATION REGARDING PAYROLL AND TAX REMITTANCES AND DECREASES IN INTEREST RATES ON INVESTMENT INCOME FROM CUSTOMER DEPOSITS NEGATIVELY AFFECTS OUR REVENUE. Our payroll and tax filing business in the United States and Canada derives significant revenue and earnings from the investment of customer deposits temporarily held pending remittance to tax filing authorities or the customer's employees. We accept this investment income in lieu of fees that we would otherwise charge these customers. During 1998, the average yield was 5.81%. Changes in governmental regulation on the timing of remittances may reduce the period of time we are allowed to hold such remittances and may adversely affect our revenue and earnings from this source although we would seek to require customers who permit us to retain earnings on their deposits to pay us the fees we otherwise impose. In addition, changes in interest rates will affect our revenue and earnings from this source and are also difficult to predict and could be significant. We have sought to lessen the impact of interest rate decreases by entering into a series of interest rate collar transactions. These interest rate collar transactions provide that if the interest rate we receive on such investments falls below a specified level, the other party must pay us an amount to make up the difference between what we would have received had the rates not fallen below such level and what we actually received. In addition, the transactions provide that if the interest rate we receive on such investments exceeds a specified level, we must pay the other party the amount of such excess. As of June 30, 1999, we had approximately $1.2 billion of such transactions outstanding with six different parties all of which had debt ratings of Aa3/AA- or higher. There can be no assurance as to the terms on which we will be able to obtain collars in the future, or to what extent any decrease in investment income would be offset by the use of such collars. FAILURE TO RETAIN CUSTOMERS COULD ADVERSELY AFFECT OUR PROFITABILITY AND OPERATING RESULTS. Customer retention is an important factor in the amount and predictability of revenue and profits in each of our businesses. Customer retention is dependent on a number of factors, including customer satisfaction, 16 offerings by competitors, our customer service levels, and price. In providing certain services, particularly payroll processing and tax filing services, we incur installation and conversion costs in connection with new customers that must be recovered before the customer relationship provides incremental profit. The longer we are able to retain a customer, the more profitable that customer relationship is likely to be to us. PROBLEMS OR DELAYS EFFECTING SYSTEM UPGRADES AND CONVERSIONS COULD DISRUPT OR INCREASE OUR COSTS. We are in the process of transitioning to new data processing systems and/or software in several of our business units, including systems that process customer data and internal management information systems. The successful implementation of these new systems is critical to the effective delivery of products and services and the efficient operation of our businesses. Problems or delays with the installation or initial operation of the new systems could disrupt or increase costs in connection with the delivery of services and with operations planning, financial reporting and management. FAILURE TO BE YEAR 2000 COMPLIANT COULD DISRUPT OUR OPERATIONS AND ADVERSELY AFFECT OUR OPERATING RESULTS. Our businesses are significantly dependent upon accurate and efficient operation of our computer systems as well as the compliance efforts and readiness of third parties. Although we have tested, remediated or replaced most of our major or key systems, software and products, we continue to test, implement changes and make necessary refinements. Our total cumulative year 2000 remediation costs through June 30, 1999 amounted to $31.0 million. We estimate our total remediation costs for all of 1999 to be approximately $18.0 million, $13.3 million of which we spent through June 30, 1999. We have not yet completed our estimate of year 2000 costs for periods after 1999. Although we believe our remediation, replacement and testing efforts will address all of the year 2000 issues for which we are responsible, to the extent these efforts are not successful, additional remediation efforts would be necessary together with additional customer service efforts and expenditures. If third parties fail in their compliance efforts, we could also be impacted and required to provide additional customer service efforts. In such an event, we could incur additional costs and experience a negative impact on revenues. The year 2000 remediation of a customer's customized software that facilitates the use of our payroll services is the customer's responsibility and there can be no assurance that their systems will become compliant or the impact that their failure to become compliant would have on our business. As part of our customer service efforts, we are assisting our customers in their remediation efforts. These assistance efforts are expected to continue into the first half of 2000 due to the delay by some of our customers in making their customized software available for remediation. Our costs, and the related amount and percentage of our cost recoveries for these efforts, will be highly dependent on a number of factors, including the extent to which our customers utilize these services, the nature of the required remediation, the cooperation of our customers in making their customized software available for remediation, the timing of these remediation efforts and other alternatives available to our customers. See "Management's Discussion and Analysis of Results of Operations and Financial Condition--Year 2000 Matters" from our Annual Report on Form 10-K for the year ended December 31, 1998 and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999 and June 30, 1999 for more information as to our year 2000 efforts, including status, costs, issues, risks and contingency plans, which discussion is incorporated herein by reference. 17 CONSOLIDATION IN THE RADIO BROADCASTING INDUSTRY MAY NEGATIVELY IMPACT OUR OPERATING RESULTS. The recent consolidation in the radio broadcasting industry could put pressure on the pricing of Arbitron's radio ratings service, from which Arbitron derives a substantial majority of its total revenue. While we have experienced some success in offsetting the revenue impact of any concessions by providing ratings to additional stations within a radio group and by providing additional software and other services, there can be no assurance as to the degree to which we will be able to continue to do so. FAILURE TO INTRODUCE NEW PRODUCTS OR ENHANCEMENTS AND OTHERWISE ADAPT TO CHANGING TECHNOLOGY COULD HARM OUR BUSINESS. As a provider of information management and data processing services, we must adapt and respond to technological advances offered by competitors and technological requirements of customers in order to maintain and improve upon our competitive position. We may not develop or release new products and product enhancements within the time frames and at costs which we envisioned. Significant delays, difficulties or added costs in introducing new products or enhancements, either through internal development, acquisitions or cooperative relationships with other companies, could have a material adverse effect on the market acceptance of our products and services and the operating results of our businesses generally. WE FACE COMPETITION IN THE HRS MARKET FROM OUR COMPETITORS WHO HAVE GREATER FINANCIAL RESOURCES THAN US AND IN ALL OF OUR MARKETS FROM POTENTIAL NEW COMPETITORS. Some of our competitors in the HRS market have greater financial resources than us and may as a result be able to take advantage of certain opportunities presented in the market more readily than us. This could materially harm our HRS business and operating results. In addition, new competitors could decide to enter our markets, and thereby intensify the highly competitive conditions that already exist. These new entrants could offer new technologies or a different service model, or could treat the services provided by one of our businesses as one component of a larger product/service offering, thereby enabling them to reduce prices on the component offered by us. Any of these or similar developments could materially harm our business and operating results. WE MAY INCUR LIABILITY FOR ENVIRONMENTAL MATTERS. In the past, we were engaged in certain lines of business that consisted of manufacturing operations, including, for example, computer disk drive and chip manufacturing. These operations used or generated substances or wastes that may be deemed hazardous under applicable environmental laws. As a result, we have incurred, and may in the future incur, liability under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended ("CERCLA") or similar state laws for costs and damages related to spills or other releases of such substances to the environment at sites where such businesses operated, or at off-site locations where hazardous substances were sent for disposal. Courts have interpreted CERCLA to impose strict, joint and several liability upon all persons liable for response costs at a site in certain instances. This generally means that each responsible party could be held liable for all costs and damages relating to the cleanup. As a practical matter, however, the costs of cleanup typically are allocated, according to a volumetric or other standard, among the responsible parties. In that regard, we have responded to information requests from the Minnesota Pollution Control Agency relating to a site where former subsidiaries or businesses allegedly sent wastes for disposal. Because we are awaiting response from the Minnesota Pollution Control Agency, we cannot predict our liability, if any, for these matters. In addition, we are aware of several other contaminated sites at which we have incurred and may 18 continue to incur cleanup costs. Based on our past experience with such matters, our established reserves and, in some cases, the availability of indemnification or contribution from other parties, we do not believe such matters will be material to our business and operating results. We cannot assure you, however, that such claims or similar future claims will not be material. AS A RESULT OF THE ACQUISITION OF CERIDIAN BENEFITS SERVICES, WE FACE POTENTIAL LEGAL LIABILITY AS A PORTABILITY ADMINISTRATOR. As a result of the acquisition of Ceridian Benefits Services, we are subject to potential legal liability as a provider of portability compliance services. As a provider of COBRA compliance services, Ceridian Benefits Services is subject to excise taxes for noncompliance with certain provisions of COBRA. Under current federal laws, the maximum amount of such taxes that may be imposed on Ceridian Benefits Services in any taxable year for unintentional violations of COBRA is $2.0 million. In addition to the excise tax liability that may be imposed on Ceridian Benefits Services, substantial excise taxes may be imposed under COBRA on Ceridian Benefits Services' customers. Under Ceridian Benefits Services' service agreements with its customers, Ceridian Benefits Services assumes financial responsibility for the payment of such taxes assessed against its customers arising out of Ceridian Benefits Services' failure to comply with COBRA, unless such taxes are attributable to the customer's failure to comply with COBRA or with the terms of its agreement with Ceridian Benefits Services. In addition to liability for excise taxes for noncompliance with COBRA, Ceridian Benefits Services accepts financial responsibility for certain liabilities incurred by its customers that are attributable to Ceridian Benefits Services' failure to comply with COBRA or to fulfill the terms of its obligations to its customers under its agreements. These liabilities could, in certain cases, be substantial. The imposition of such liability on us as a result of the acquisition of Ceridian Benefits Services in excess of any available insurance coverage could harm our business and adversely affect our operating results. As a provider of HIPAA compliance and administration services, Ceridian Benefits Services is subject to ERISA penalties for noncompliance with certain provisions of HIPAA. Under Ceridian Benefits Services' service agreements with its customers, Ceridian Benefits Services assumes financial responsibility for the payment of penalties assessed against its customers arising out of Ceridian Benefits Services' failure to comply with HIPAA, unless such penalties are attributable to the customer's failure to comply with HIPAA or with the terms of its agreement with Ceridian Benefits Services. Under ERISA, employers that are subject to HIPAA are liable for penalties at the rate of $110 per "qualified beneficiary" for each day during which the customer's group healthcare plan is in noncompliance. These liabilities could, in certain cases, be substantial. The imposition of such liability on us as a result of the acquisition of Ceridian Benefits Services in excess of any available insurance coverage could harm our business and adversely affect our operating results. CHANGES IN GOVERNMENTAL REGULATIONS COULD HARM OUR BUSINESS AND ADVERSELY AFFECT OUR OPERATING RESULTS. Changes in governmental regulation, and in particular, the extent and type of benefits that employers are required to or may choose to provide employees, and the amount and type of federal or state taxes, may adversely affect our revenue and earnings. Such changes in governmental regulation are difficult to predict and could be significant. 19 FORWARD-LOOKING STATEMENTS This prospectus and the documents we incorporate herein by reference contain forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: - our financial performance; - our growth in revenue and earnings; - our cash flows from operations; - our ability to refinance and repay indebtedness; and - our ability to integrate successfully Ceridian Benefits Services' operations into ours. You can identify forward-looking statements by those that are not historical in nature, particularly those that utilize terminology such as "may," "will," "should," "expects," "anticipates," "contemplates," "estimates," "believes," "plans," "projected," "predicts," "potential" or "continue" or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including the risk factors described in this prospectus. Such factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this prospectus may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus might not occur. USE OF PROCEEDS The exchange offer is intended to satisfy our obligations under the registration rights agreement that we entered into in connection with the private offering of the old notes. We will not receive any cash proceeds from the issuance of the new notes. The old notes that are surrendered in exchange for the new notes will be retired and canceled and cannot be reissued. As a result, the issuance of the new notes will not result in any increase or decrease in our indebtedness. We have agreed to bear the expenses of the exchange offer. No underwriter is being used in connection with the exchange offer. The net proceeds from the issuance and sale of the old notes was approximately $444.6 million (after deduction of initial purchasers' discounts and estimated offering expenses payable by us). We used those net proceeds to repay short-term borrowings we used to finance the acquisition of ABR. At the time of such repayment, such borrowings bore interest at a weighted-average rate of approximately 5.63% per annum. 20 CAPITALIZATION The following table sets forth our capitalization on an actual basis as of June 30, 1999. This table should be read together with the consolidated financial statements and notes incorporated by reference into this prospectus.
JUNE 30, 1999 ----------------------- (IN MILLIONS) Short-term debt and current portion of long-term obligations............................ $ 0.2 -------------------- -------------------- Long-term debt: Long-term obligations, less current portion........................................... 198.9 Notes................................................................................. 450.0 -------------------- Total long-term obligations, excluding current portion............................. 648.9 -------------------- Stockholders' equity: Common stock, $.50 par value; 500,000,000 authorized shares 161,685,596 shares issued and 144,725,633 shares outstanding....................... $ 80.8 Additional paid-in capital............................................................ 1,116.4 Accumulated deficit................................................................... (59.3) Treasury common stock, at cost, 16,959,963 shares..................................... (364.7) Accumulated other comprehensive income................................................ (13.2) -------------------- Total stockholders' equity......................................................... $760.0 -------------------- Total capitalization.................................................... $1,408.9 -------------------- --------------------
21 SELECTED HISTORICAL CONSOLIDATED AND PRO FORMA FINANCIAL DATA We derived the selected historical consolidated statements of operations data for each of the years in the five-year period ended December 31, 1998 and consolidated balance sheet data as of December 31, 1998 from our consolidated financial statements which have been audited by KPMG LLP, independent auditors. The consolidated statements of operations data for the six month periods ended June 30, 1999 and 1998 and consolidated balance sheet data at June 30, 1999 include all adjustments, consisting only of normal recurring adjustments, which management considers necessary for a fair presentation of results for these unaudited periods. The results of operations for the six month period ended June 30, 1999 are not necessarily indicative of the results of operations that may be expected for the full fiscal year 1999. Pro forma financial data based on continuing operations for the year ended December 31, 1998 and the six month period ended June 30, 1999, appearing below, include the results of operations of ABR and adjustments to reflect our acquisition of ABR as described in our Current Report on Form 8-K as amended and filed with the SEC on August 20, 1999. You should read the selected consolidated financial data presented below in conjunction with the "Management's Discussion and Analysis of Financial Condition and Results of Operations", our consolidated financial statements with related notes and other financial information contained or incorporated by reference in our Annual Report on Form 10-K for the year ended December 31, 1998, our Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 and our Current Report on Form 8-K as filed with the SEC on June 21, 1999, as amended and filed with the SEC on August 20, 1999, which we incorporate by reference in this prospectus. See "Documents Incorporated By Reference."
SIX MONTHS YEARS ENDED DECEMBER 31, ENDED JUNE 30, ---------------------------------------------------- --------------------------- PRO FORMA PRO FORMA 1998 1998 1997 1996 1995 1994 1999 1999 1998 ------- ---- ---- ---- ---- ---- ---- ---- ---- (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) CONSOLIDATED STATEMENTS OF OPERATIONS DATA: Revenue............................$1,245.5 $1,162.1 $1,074.8 $942.6 $823.5 $691.5 $701.7 $643.6 $566.4 Costs and Expenses: Cost of revenue.................. 598.8 551.5 527.6 456.9 400.2 338.2 327.3 296.1 263.9 Selling, general and administrative................. 352.1 316.0 308.0 285.1 260.4 230.0 206.6 186.1 159.8 Research and development......... 77.8 77.8 59.6 52.5 38.2 28.5 37.1 37.1 37.7 Other expense (income) (1)....... 15.0 (6.8) 309.3 0.2 32.5 (3.2) 1.7 1.7 1.8 ------- ----- ------- ----- ------ ----- ------ ----- ----- Total costs and expenses...... 1,043.7 938.5 1,204.5 794.7 731.3 593.5 572.7 521.0 463.2 ------- ----- ------- ----- ------ ----- ------ ----- ----- Earnings (loss) before interest and taxes.......................... 201.8 223.6 (129.7) 147.9 92.2 98.0 129.0 122.6 103.2 Interest income.................. 11.1 10.4 2.3 3.0 8.0 8.7 3.3 3.8 5.2 Interest expense................. (47.2) (4.3) (11.2) (9.7) (29.5) (30.6) (25.6) (4.1) (2.2) ------- ----- ------- ----- ------ ----- ------ ----- ----- Earnings (loss) before income taxes 165.7 229.7 (138.6) 141.2 70.7 76.1 106.7 122.3 106.2 Income tax provision (benefit) (2). 53.4 65.3 (174.0) 5.7 11.5 11.5 42.8 44.8 39.1 ------- ----- ------- ----- ------ ----- ------ ----- ----- Earnings from continuing operations $112.3 164.4 35.4 135.5 59.2 64.6 $ 63.9 77.5 67.1 ------- ------ ------- ------ Discontinued operations: Gain on sale (3)................. 25.4 386.3 -- -- -- -- -- Earnings from operations (4)..... -- 50.7 46.4 38.3 33.1 -- -- Extraordinary loss................. -- -- -- (38.9) -- -- -- ----- ------- ----- ------ ----- ----- ----- Net earnings ...................... $189.8 $472.4 $181.9 $58.6 $97.7 $ 77.5 $ 67.1 ----- ------- ----- ------ ----- ----- ----- ----- ------- ----- ------ ----- ----- ----- Basic earnings per share: Continuing operations............ $0.78 $1.14 $0.23 $0.90 $0.35 $0.39 $0.44 $0.54 $0.46 Net earnings..................... $1.32 $3.01 $1.24 $0.34 $0.64 $0.54 $0.46 Diluted earnings per share: Continuing operations............ $0.76 $1.11 $0.22 $0.84 $0.37 $0.41 $0.43 $0.52 $0.45 Net earnings..................... $1.29 $2.96 $1.12 $0.37 $0.63 $0.52 $0.45 Shares used in calculations (in thousands): Basic............................ 144,070 144,070 156,835 135,841 132,269 131,650 144,338 144,338 144,521 Diluted.......................... 147,597 147,597 159,481 161,938 159,473 156,021 148,981 148,981 147,930 OTHER FINANCIAL DATA: EBITDA (5)......................... $296.8 $265.6 $236.3 $201.7 $171.2 $129.2 $175.2 $154.8 $128.1 Ratio of earnings to fixed charges (6)........................... 3.74x 15.01x -- 9.04x 3.61x 3.49x 4.35x 13.01x 13.67x Earnings to fixed charges deficiency (6)................ -- -- $77.1 -- -- -- -- -- --
JUNE 30, DECEMBER 31, 1999 1998 -------- ----------- CONSOLIDATED BALANCE SHEET DATA(7): Working capital.................................................................... $ 187.8 $197.0 Total assets....................................................................... 2,089.5 1,289.7 Long-term obligations, less current portion........................................ 648.9 54.2 Total stockholders' equity......................................................... 760.0 650.6
22 (1) Includes 1998 unusual gains of $9.2 million related primarily to the sale of land not used in the business, 1997 unusual losses of $307.6 million related to the termination of a software development project, asset write-offs, contract cancellations and certain legal and administrative proceedings involving us and 1995 pooling expenses of $29.7 million. Pro forma amounts also include ABR unusual losses related to write-offs of $11.0 million of purchased in-process research and development in April 1998 and $13.8 million of software development costs in October 1998. (2) Includes a 1997 income tax benefit of $175.0 million related to a reduction in the valuation allowance for the future utilization of our remaining net operating losses and other future tax deductions. (3) Represents gain, adjusted in 1998, from the December 1997 sale of Computing Devices International. (4) Represents earnings from operations of Computing Devices International prior to its sale. (5) EBITDA represents income from continuing operations before interest expense and income, income taxes and unusual gains and losses plus depreciation and amortization. EBITDA is included herein because we believe that certain investors find it to be a useful tool for measuring our ability to service our debt; however, EBITDA does not represent cash flow from operations, as defined by generally accepted accounting principles, and should not be considered as a substitute for net income as an indicator of our operating performance or for cash flow as a measure of liquidity. Our determination and presentation of non-GAAP measures of financial performance, such as EBITDA, may not be comparable to similarly titled measures reported by other companies. (6) The ratio of earnings to fixed charges is computed by dividing fixed charges into income before income taxes plus fixed charges. Fixed charges consist of interest (whether expensed or capitalized), amortization of financing costs and the estimated interest component of rent expense. In 1997, the aggregate increase in earnings or decrease in fixed charges required to bring the ratio to 1.00 was $77.1 million. (7) On June 7, 1999, we purchased 98.3% of the outstanding shares of ABR, which shares had been validly tendered and not withdrawn, and soon completed a series of financing transactions related to the acquisition. The acquired assets and liabilities and the financing transactions are included in our consolidated balance sheet as of June 30, 1999, which appears in this report. Therefore, no pro forma balance sheet is included in this report. 23 THE EXCHANGE OFFER PURPOSE OF THE EXCHANGE OFFER We initially sold the old notes in a private offering on June 10, 1999 to Banc of America Securities LLC, Chase Securities Inc., BNY Capital Markets, Inc., TD Securities (USA) Inc. and U.S. Bancorp Piper Jaffray Inc. pursuant to a purchase agreement dated June 8, 1999 between us and them. These initial purchasers of the old notes resold them to qualified institutional buyers in reliance on, and subject to the restrictions imposed under, Rule 144A under the Securities Act. As of the date of this prospectus, $450.0 million aggregate principal amount of old notes are outstanding. In connection with the private offering of the old notes, we entered into a registration rights agreement dated June 10, 1999, with the initial purchasers, in which we agreed, among other things, to: (1) file with the SEC on or before October 8, 1999 an exchange offer registration statement under the Securities Act relating to an exchange offer for the old notes; (2) use our reasonable best efforts to cause such exchange offer registration statement to be declared effective under the Securities Act on or before January 6, 2000; (3) upon the effectiveness of the registration statement, commence the exchange offer and offer the holders of the old notes the opportunity to exchange their old notes for a like principal amount of new notes and to keep the exchange offer open for not less than 20 business days (or longer if required by applicable law) after the date on which notice of the exchange offer is mailed to the holders of the old notes; and (4) use our reasonable best efforts to complete the exchange offer and issue the new notes on or prior to the date that is 35 days immediately following the date that the exchange offer registration statement shall have been declared effective by the SEC. We are making the exchange offer to satisfy our obligations and your registration rights under the registration rights agreement. If any of the events described under (1), (2) or (4) above do not occur within the time period required, we must pay you, as a holder of outstanding old notes, additional interest at a rate of 0.5% per annum for the first 90-day period immediately following any such failure. The additional interest rate shall be further increased by an additional 0.5% per annum after the end of such period until all registration defaults have been cured, up to a maximum additional interest rate of 1% per annum. Upon filing of the exchange offer registration statement after October 8, 1999, the declaration of the effectiveness of the exchange offer registration statement after January 6, 2000, or the consummation of the exchange offer after the date that is 35 days immediately following the date that the exchange offer registration statement shall have been declared effective by the SEC, as applicable, any such increase in the interest rate will cease to be effective. EFFECT OF THE EXCHANGE OFFER Based on several no-action letters issued by the staff of the SEC to third parties in unrelated transactions, we believe that you may offer for resale, resell or otherwise transfer any new notes issued to you in the exchange offer without further registration under the Securities Act or delivery of a prospectus if you: 24 - are acquiring the new notes in the ordinary course of your business; - are not participating, do not intend to participate and have no arrangement or understanding with any person to participate, in a distribution of the new notes; - are not an affiliate of us as defined in Rule 405 under the Securities Act; and - are not a broker-dealer who acquired old notes from us. If you do not satisfy these criteria: - you will not be able to rely on the interpretations of the staff of the SEC in connection with any offer for resale, resale or other transfer of new notes; and - you must comply with the registration and prospectus delivery requirements of the Securities Act, or have an exemption available to you, in connection with any offer for resale, resale or other transfer of the new notes. Each broker-dealer that receives new notes for its own account in exchange for old notes it acquired as a result of market-making or other trading activities, may be a statutory underwriter and must acknowledge that it will deliver a prospectus in connection with any resale of its new notes. This will not be an admission by the broker-dealer that it is an underwriter within the meaning of the Securities Act. See "Plan of Distribution." SHELF REGISTRATION STATEMENT In the event that (1) we reasonably determine that changes in law or the applicable interpretations of the staff of the SEC do not permit us to effect the exchange offer; (2) the exchange offer is not consummated on or before February 10, 2000; or (3) upon the request of any initial purchaser with respect to any old notes held by it, if such initial purchaser is not permitted pursuant to applicable law or applicable interpretations of the staff of the SEC to participate in the exchange offer and thereby receive new notes, we have agreed that we will promptly notify the holders of the old notes and will, at our cost, - cause to be filed with the SEC a shelf registration statement relating to a shelf registration of the old notes covering resales of the old notes, - use our reasonable best efforts to cause the shelf registration statement to be declared effective under the Securities Act as soon as practicable, and - use our reasonable best efforts to keep effective the shelf registration statement until June 10, 2001 or until all old notes eligible to be sold thereunder have been so sold or cease to be outstanding. We will provide to each relevant holder of the old notes copies of the prospectus which is a part of the shelf registration statement, notify each such holder when the shelf registration statement has become effective and take certain other actions as are required to permit unrestricted resales of the relevant old notes. A holder of old notes that sells its old notes pursuant to the shelf registration statement generally will be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the registration rights agreement which are applicable to such a holder (including certain indemnification obligations). In 25 addition, a holder of old notes will be required to deliver information to be used in connection with the shelf registration statement in order to have such holder's notes included in the shelf registration statement. In the event the shelf registration statement is not declared effective (or shall thereafter cease to be effective, subject to certain exceptions, prior to the earlier of June 10, 2001 and the date on which all transfer restricted old notes have been sold thereunder) on or prior to the later of February 10, 2000 and the 60th calendar day after the publication of the change in law or interpretation, we must pay you as a holder of outstanding old notes, additional interest at a rate of 0.5% per annum, for the first 90-day period immediately following any such registration default. The additional interest rate shall be further increased by an additional 0.5% per annum after the end of such period until all registration defaults have been cured, up to a maximum additional interest rate of 1% per annum. Upon the effectiveness of the shelf registration statement after February 10, 2000 or the 60th calendar day after the publication of the change in law or interpretation, as applicable, any such increase in the interest rate will cease to be effective. Any increases in the interest rate pursuant to this paragraph or due to a failure by us to meet the registration requirements discussed earlier in this prospectus in connection with the exchange offer registration statement is referred to in this prospectus as "Liquidated Damages." The foregoing is a summary description of certain material provisions of the registration rights agreement. Because it is a summary, it does not include all of the information that is included in the registration rights agreement. We encourage you to read the entire text of the registration rights agreement carefully because it, and not this description, defines your rights as a holder of the old notes. The registration rights agreement is included as an exhibit to this registration statement. You may request a copy of the registration rights agreement at our address set forth under "Documents Incorporated by Reference." TERMS OF THE EXCHANGE OFFER - We will accept all old notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the expiration date of the exchange offer. You should read "--Expiration Date; Extensions; Amendments" below for an explanation of how the expiration date may be amended. - We will issue and deliver $1,000 principal amount of new notes in exchange for each $1,000 principal amount of outstanding old notes accepted in the exchange offer. Holders may exchange some or all of their old notes in minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof. - By tendering old notes in exchange for new notes and by signing the letter of transmittal (or delivering an agent's message in lieu thereof), you will be representing that, among other things: (1) any new notes to be received by you will be acquired in the ordinary course of your business; (2) you have no arrangement or understanding with any person to participate in the distribution of the new notes; (3) you are not an affiliate (as defined in Rule 405 under the Securities Act) of us, or, if you are an affiliate, you will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable; and (4) you are not a broker-dealer who acquired old notes directly from us. 26 - The terms of the new notes are identical in all material respects to the terms of the old notes, except that the registration rights and related liquidated damages provisions, and the transfer restrictions applicable to the old notes are not applicable to the new notes. The new notes will evidence the same debt as the old notes and will be entitled to the benefits of the indenture governing the old notes. - In connection with the exchange offer, holders of the old notes do not have any appraisal or dissenters' rights under law or the indenture governing the old notes. - We are sending this prospectus and the letter of transmittal to all registered holders of old notes as of the close of business on , 1999. - We are not conditioning the exchange offer upon the tender of any minimum amount of old notes. - We have provided for customary conditions, which we may waive in our discretion. See "--Conditions of the Exchange Offer." - We may accept tendered old notes by giving oral (promptly confirmed in writing) or written notice to the exchange agent. The exchange agent will act as your agent for the purpose of receiving the new notes from us and delivering them to you. - You will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of old notes. We will pay all charges and expenses in connection with the exchange offer other than taxes specified under "--Transfer Taxes." EXPIRATION DATE; EXTENSIONS; AMENDMENTS The exchange offer will expire at 5:00 p.m., New York City time, on ,1999, unless we, in our sole discretion, extend it. We may extend the exchange offer at any time and from time to time by giving oral (promptly confirmed in writing) or written notice to the exchange agent and by making a public announcement of the extension before 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. We may also accept all properly tendered old notes as of the expiration date and extend the expiration date in respect of the remaining outstanding old notes. We may, in our sole discretion, - amend the terms of the exchange offer in any manner; - delay acceptance of, or refuse to accept, any old notes not previously accepted; - extend the exchange offer; or - terminate the exchange offer. We will give prompt notice of any amendment to the registered holders of the old notes. If we materially amend the exchange offer, we will promptly disclose the amendment in a manner reasonably calculated to inform you of the amendment and we will extend the exchange offer to the extent required by law. 27 PROCEDURES FOR TENDERING Only a holder of old notes may tender them in the exchange offer. For purposes of the exchange offer, the term "holder" or "registered holder" includes any participant in The Depository Trust Company whose name appears on a security position listing as a holder of old notes. To tender in the exchange offer, you must cause the following to be transmitted to and received by the exchange agent no later than 5:00 p.m., New York City time, on the expiration date: - a confirmation of the book-entry transfer of the tendered old notes into the exchange agent's account at The Depository Trust Company; - a properly completed and duly executed letter of transmittal in the form accompanying this prospectus (with any required signature guarantees) or, at the option of the tendering holder in the case of a book-entry tender, an agent's message in lieu of such letter of transmittal; and - any other documents required by the letter of transmittal. If you wish to tender your old notes and you cannot cause the old notes or any other required documents to be transmitted to and received by the exchange agent before 5:00 p.m., New York City time, on the expiration date, you may tender your old notes according to the guaranteed delivery procedures described in this section under the heading "--Guaranteed Delivery Procedures." Any beneficial owner of old notes that are registered in the name of a broker, dealer, commercial bank, trust company, or other nominee who wishes to participate in the exchange offer should promptly contact the person through which it beneficially owns such old notes and instruct that person to tender old notes on behalf of such beneficial owner. See "Instructions Forming Part of the Terms and Conditions of the Exchange Offer" included with the letter of transmittal. If the beneficial owner wishes to tender on his or her own behalf, such owner must, prior to completing and executing the letter of transmittal and delivering such beneficial owner's old notes, either make appropriate arrangements to register ownership of the old notes in such owner's name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time. The tender by a holder of old notes will constitute an agreement between such holder, us and the exchange agent in accordance with the terms and subject to the conditions specified in this prospectus and in the letter of transmittal. If a holder tenders less than all the old notes held, the holder should fill in the amount of old notes being tendered in the appropriate box on the letter of transmittal. The exchange agent will deem the entire amount of old notes delivered to it to have been tendered unless the holder has indicated otherwise. The method of delivery of the letter of transmittal and all other required documents to the exchange agent is at your election and risk. Instead of delivery by mail, we recommend that you use an overnight or hand delivery service. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE DELIVERY TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE. DO NOT SEND YOUR LETTER OF TRANSMITTAL OR OTHER REQUIRED DOCUMENTS TO US. 28 SIGNATURE REQUIREMENTS AND SIGNATURE GUARANTEE You must arrange for an "eligible institution" to guarantee your signature on the letter of transmittal or a notice of withdrawal, unless the old notes are tendered: - by a registered holder of such old notes; or - for the account of an eligible guarantor institution. The following are "eligible institutions": - a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc.; - a commercial bank or trust company having an office or correspondent in the United States; or - an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act. If a letter of transmittal is signed by a person other than the registered holder of any old notes listed in the letter of transmittal, the old notes must be endorsed or accompanied by a properly completed bond power and signed by the registered holder as the registered holder's name appears on the old notes. If trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, sign or endorse any required documents, they should so indicate when signing, and unless waived by us, submit evidence satisfactory to us of their authority to so act with the letter of transmittal. BOOK-ENTRY TRANSFER The exchange agent will make a request promptly after the date of this prospectus to establish an account with respect to the old notes. Subject to the establishment of the account, any financial institution that is a participant in The Depository Trust Company's system may make book-entry delivery of old notes by causing The Depository Trust Company to transfer them into the exchange agent's account with respect to the old notes. However, the exchange agent will only exchange the old notes so tendered after a timely confirmation of their book-entry transfer into the exchange agent's account, and timely receipt of an agent's message and any other documents required by the letter of transmittal. The term "agent's message" means a message, transmitted by The Depository Trust Company to, and received by, the exchange agent and forming part of the confirmation of a book-entry transfer, which states that: - The Depository Trust Company has received an express acknowledgment from a participant tendering old notes stating the aggregate principal amount of old notes which have been tendered by such participant; - the participant has received the letter of transmittal and agrees to be bound by its terms; and - we may enforce such agreement against the participant. 29 Although you may effect delivery of old notes through The Depository Trust Company into the exchange agent's account at The Depository Trust Company, you must provide the exchange agent a completed and executed letter of transmittal with any required signature guarantee (or an agent's message in lieu thereof) and all other required documents prior to the expiration date. If you comply with the guaranteed delivery procedures described below, you must provide the letter of transmittal (or an agent's message in lieu thereof) to the exchange agent within the time period provided. DELIVERY OF DOCUMENTS TO THE DEPOSITORY TRUST COMPANY DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. GUARANTEED DELIVERY PROCEDURES If you wish to tender your old notes and (1) you cannot deliver the letter of transmittal or any other required documents to the exchange agent prior to the expiration date or (2) you cannot complete the procedure for book-entry transfer on a timely basis, you may instead effect a tender if: - you make the tender through an eligible guarantor institution; - prior to the expiration date, the exchange agent receives from such eligible guarantor institution a properly completed and duly executed notice of guaranteed delivery (by facsimile transmittal, mail or hand delivery) specifying the name and address of the holder and the principal amount of such old notes tendered, stating that the tender is being made, and guaranteeing that, within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery, the old notes being tendered, a properly completed and duly executed letter of transmittal or a confirmation of a book-entry transfer into the exchange agent's account at The Depository Trust Company and an agent's message and any other documents required by the letter of transmittal, will be deposited by the eligible guarantor institution with the exchange agent; and - the exchange agent receives such old notes and letter of transmittal or confirmation of a book-entry transfer into its account at The Depository Trust Company and an agent's message and all other documents required by the letter of transmittal within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery. WITHDRAWAL OF TENDERS Except as otherwise provided in this prospectus, you may withdraw tendered old notes at any time before 5:00 p.m., New York City time, on the expiration date. To do so, you must provide the exchange agent with a written or facsimile transmission notice of withdrawal before 5:00 p.m., New York City time, on the expiration date. Any notice of withdrawal must: - identify the old notes to be withdrawn (including the principal amount of the old notes and the name and number of the account at The Depository Trust Company to be credited); and - be signed by you in the same manner as the original signature on your letter of transmittal (including any required signature guarantee) or be accompanied by documents of transfer sufficient to permit the registrar to register the transfer of the withdrawn old notes into your name. We will determine all questions as to the validity, form and eligibility (including time of receipt) of all withdrawal notices. Our determination shall be final and binding on all parties. We will not deem any 30 old notes so withdrawn to be validly tendered for purposes of the exchange offer and will not issue new notes with respect to them unless the holder of the old notes so withdrawn validly retenders them. You may retender withdrawn old notes by following one of the procedures described above under "--Procedures for Tendering" at any time prior to the expiration date. DETERMINATION OF VALIDITY We will determine all questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of the tendered old notes in our sole discretion. Our determination will be final and binding. We may reject any and all old notes which are not properly tendered or any old notes of which our acceptance would, in the opinion of our counsel, be unlawful. We also may waive any irregularities or conditions of tender as to particular old notes. Our interpretation of the terms and conditions of the exchange offer (including the instructions in the letter of transmittal) will be final and binding on all parties. Unless waived, you must cure any defects or irregularities in connection with tenders of old notes within such time as we shall determine. Although we intend to notify tendering holders of defects or irregularities with respect to tenders of old notes, neither we nor anyone else has any duty to do so. Neither we nor anyone else shall incur any liability for failure to give such notification. Your old notes will not be deemed tendered until you have cured or we have waived any irregularities. As soon as practicable following the expiration date, the exchange agent will return any old notes that we reject due to improper tender or otherwise unless you cured all defects or irregularities or we waive them. We reserve the right in our sole discretion: - to purchase or make offers for any old notes that remain outstanding subsequent to the expiration date; - to terminate the exchange offer, as set forth in "--Conditions of the Exchange Offer"; and - to the extent permitted by applicable law, to purchase old notes in the open market, in privately negotiated transactions or otherwise. The terms of any such purchases or offers may differ from the terms of the exchange offer. CONDITIONS OF THE EXCHANGE OFFER We will not be required to accept for exchange, or to issue new notes for, any old notes, and we may terminate or amend the exchange offer before the acceptance of old notes if, in our judgment, any of the following conditions has occurred or exists or has not been satisfied: - any action or proceeding is instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer which, in our reasonable judgment, might materially impair our ability to proceed with the exchange offer or materially impair the contemplated benefits of the exchange offer to us, or any material adverse development has occurred in any existing action or proceeding with respect to us or any of our subsidiaries; - any change, or any development involving a prospective change, in our business or financial affairs or of any of our subsidiaries has occurred which, in our reasonable judgment, might 31 materially impair our ability to proceed with the exchange offer or materially impair the contemplated benefits of the exchange offer to us; - there shall have been proposed, adopted or enacted any law, statute, rule or regulation (or an amendment to any existing law, statute, rule or regulation) which, in our sole judgment, might materially impair our ability to proceed with the exchange offer or have a material adverse effect on the contemplated benefits of the exchange offer to us; - there shall occur a change in the current interpretation by the staff of the SEC which permits the new notes issued pursuant to the exchange offer in exchange for the old notes to be offered for resale, resold and otherwise transferred by holders thereof without compliance with the registration and prospectus delivery provisions of the Securities Act provided that: (1) such new notes are acquired in the ordinary course of such holders' business; (2) such holders are not engaging in and do not intend to engage in a distribution of the new notes and have no arrangement or understanding with any person to participate in the distribution of such new notes; (3) such holders are not affiliates of us within the meaning of Rule 405 under the Securities Act; and (4) such holders are not broker-dealers that acquired the old notes directly from us. - there shall have occurred: (1) any general suspension of, shortening of hours for, or limitation on prices for, trading in securities on any national securities exchange or in the over-the-counter market (whether or not mandatory); (2) any limitation by any governmental agency or authority which may adversely affect our ability to complete the transactions contemplated by the exchange offer; (3) a declaration of a banking moratorium or any suspension of payments in respect of banks by federal or state authorities in the United States (whether or not mandatory); (4) a commencement of a war, armed hostilities or other international or national crisis directly or indirectly involving the United States; (5) any limitation (whether or not mandatory) by any governmental authority on, or other event having a reasonable likelihood of affecting, the extension of credit by banks or other lending institutions in the United States; or (6) in the case of any of the foregoing existing at the time of the commencement of the exchange offer, a material acceleration or worsening thereof. The conditions listed above are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to any of these conditions. We may waive these conditions in our reasonable discretion in whole or in part at any time and from time to time. The failure by us at any time to exercise any of the above rights shall not be deemed a waiver of such right and such right shall be deemed an ongoing right which may be asserted at any time and from time to time. If we determine in our reasonable discretion that any of the conditions are not satisfied, we may: - refuse to accept any old notes and return any old notes that have been tendered to the tendering holders; - extend the exchange offer and retain all old notes tendered prior to the expiration date of the exchange offer, subject to the rights of the holders of the tendered old notes to withdraw such old notes; or 32 - waive such termination event with respect to the exchange offer and accept the properly tendered old notes that have not been withdrawn. If we determine that such waiver constitutes a material change in the exchange offer, we will promptly disclose such change in a manner reasonably calculated to inform the holders of such change and we will extend the exchange offer to the extent required by law. ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES Upon satisfaction or waiver of all of the conditions to the exchange offer, we will accept, promptly after the expiration date, all old notes that have been validly tendered and not withdrawn, and will issue the applicable new notes in exchange for such old notes promptly after our acceptance of such old notes. For purposes of the exchange offer, we will be deemed to have accepted validly tendered old notes for exchange when, as, and if we have given written notice of such acceptance to the exchange agent. For each old note accepted for exchange, the holder of the old note will receive a new note having a principal amount equal to that of the surrendered old note. The new notes will bear interest from the most recent date to which interest has been paid on the old notes or, if no interest has been paid on the old notes, from June 10, 1999. Accordingly, registered holders of new notes on the relevant record date for the first interest payment date following the completion of the exchange offer will receive interest accruing from the most recent date to which interest has been paid or, if no interest has been paid, from June 10, 1999. Old notes accepted for exchange will cease to accrue interest from and after the date on which they are accepted for exchange. Holders whose old notes are accepted for exchange will not receive any payment for accrued interest on the old notes otherwise payable on any interest payment date if the record date occurs on or after date on which they are accepted for exchange and will be deemed to have waived their rights to receive the accrued interest on the old notes. If any tendered old notes are not accepted for any reason or if old notes are submitted for a greater principal amount than the holder desires to exchange, such unaccepted or non-exchanged old notes will be returned without expense to the tendering holder of the old notes or, if the old notes were tendered by book-entry transfer, the non-exchanged old notes will be credited to an account maintained with the book-entry transfer facility. In either case, the return of such old notes will be effected promptly after the expiration or termination of the exchange offer. EXCHANGE AGENT We have appointed The Bank of New York as the exchange agent for the exchange offer. The Bank of New York also acts as trustee under the indenture. You should send all executed letters of transmittal to the exchange agent and direct all communications with the exchange agent, including requests for assistance or for additional copies of this prospectus or of the letter of transmittal as follows: 33 DELIVERY TO: THE BANK OF NEW YORK, EXCHANGE AGENT By Mail: By Hand or Overnight Courier: The Bank of New York The Bank of New York 101 Barclay Street 101 Barclay Street Floor 7E Corporate Trust Services Ground Level Window New York, NY 10286 New York, NY 10286 Attn: Reorganization Section Attn: Reorganization Section By Facsimile for Eligible Institutions: (212) 815-6339 Facsimile Confirmation Only: (212) 815-3750 For Information: (212) 815-3750 IF YOU DELIVER THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMIT INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, SUCH DELIVERY OR INSTRUCTIONS WILL NOT BE EFFECTIVE. FEES AND EXPENSES We will bear all expenses of the exchange offer. We are making the principal solicitation pursuant to the exchange offer by mail. Our officers and employees and our affiliates may also make solicitations in person, by telegraph, telephone or facsimile transmission. We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to brokers, dealers or other persons soliciting acceptances of the exchange offer. We, however, will pay the exchange agent reasonable and customary fees for its services and will reimburse its reasonable out-of-pocket costs and expenses and will indemnify the exchange agent for all losses and claims incurred by it as a result of the exchange offer. We may also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this prospectus, letters of transmittal and related documents to the beneficial owners of the old notes and in handling or forwarding tenders for exchange. TRANSFER TAXES We will pay any transfer taxes applicable to the exchange of old notes pursuant to the exchange offer. If, however, a transfer tax is imposed for any reason other than the exchange of old notes pursuant to the exchange offer, then the amount of any of these transfer taxes (whether imposed on the registered holder thereof or any other person) will be payable by the tendering holder. For example, the tendering holder will pay transfer taxes, if: - new notes for principal amounts not tendered, or accepted for exchange are to be registered or issued in the name of any person other than the registered holder of the old notes tendered; or 34 - tendered old notes are registered in the name of any person other than the person signing the letter of transmittal. If you do not submit satisfactory evidence of payment of taxes for which you are liable or exemption from them with your letter of transmittal, we will bill you for the amount of these transfer taxes directly. ACCOUNTING TREATMENT We will record the new notes at the same carrying value as the old notes, which is the principal amount as reflected in our accounting records on the date of the exchange. Accordingly, we will not recognize any gain or loss for accounting purposes. We will capitalize the expenses of the exchange offer for accounting purposes. We will classify these expenses as prepaid expenses and include them in other assets on our balance sheet. We will amortize these expenses on a straight line basis over the life of the new notes. CONSEQUENCES OF FAILURE TO EXCHANGE OLD NOTES Holders of old notes who do not exchange their old notes for new notes pursuant to the exchange offer will continue to be subject to the restrictions on transfer of such old notes. The old notes were originally issued in a transaction exempt from registration under the Securities Act, and may be offered, sold, pledged, or otherwise transferred only: - in the United States to a person whom the seller reasonably believes is a qualified institutional buyer (as defined in Rule 144A under the Securities Act); - outside the United States in an offshore transaction in accordance with Rule 904 under the Securities Act; - pursuant to an exemption from registration under the Securities Act provided by Rule 144, if available; or - pursuant to an effective registration statement under the Securities Act. The offer, sale, pledge or other transfer of old notes must also be made in accordance with any applicable securities laws of any state of the United States, and the seller must notify any purchaser of the old notes of the restrictions on transfer described above. We do not currently anticipate that we will register the old notes under the Securities Act. APPRAISAL OR DISSENTERS' RIGHTS Holders of the old notes will not have appraisal or dissenters' rights in connection with the exchange offer. 35 DESCRIPTION OF NEW NOTES GENERAL The new notes will be issued by us pursuant to the indenture, dated as of June 10, 1999, between us and The Bank of New York, as trustee (the "Trustee"). The terms of the new notes include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939 (the "TIA"). Capitalized terms used in this prospectus but not defined herein will have the meanings assigned to such terms in the indenture. The following is a summary description of certain material provisions of the indenture. Because it is a summary, it does not include all of the information that is included in the indenture. You should read the indenture carefully and in its entirety because it, and not this description, defines your rights as a holder of the new notes. You may request a copy of the indenture at our address set forth under "Documents Incorporated By Reference." The new notes will mature on June 1, 2004 (the "Stated Maturity Date"). The new notes will be our general unsecured obligations and will rank PARI PASSU in right of payment with all of our other unsubordinated indebtedness and will rank senior in right of payment to all of our subordinated indebtedness. Our secured indebtedness, to the extent of such security, and all indebtedness and other obligations (including trade payables) of our Subsidiaries will be effectively senior to the new notes. As of June 30, 1999, we had approximately $49.3 million of subsidiary debt and $649.1 million of total indebtedness. The new notes will be issued in denominations of $1,000 and integral multiples thereof. All payments on the new notes will be made in U.S. dollars. INTEREST AND INTEREST PAYMENT DATES The new notes will bear interest at 7.25% per annum of the principal amount then outstanding from June 10, 1999, payable semi-annually on June 1 and December 1 of each year (each, an "Interest Payment Date"), commencing December 1, 1999, to the persons in whose name the new notes are registered at the close of business on the preceding May 15 and November 15, respectively (whether or not a Business Day) (each, a "Regular Record Date"); provided, however, that interest payable on the Stated Maturity Date will be paid to the person to whom principal is payable. The interest rate on the new notes is subject to increase in certain circumstances if the registration statement of which this prospectus is a part is not declared effective on a timely basis or if certain other conditions are not satisfied, all as further described under "Exchange Offer--Purpose of Exchange Offer." Interest payments will be in the amount of interest accrued from and including the next preceding Interest Payment Date (or from and including June 10, 1999 if no interest has been paid or duly provided for with respect to the new notes) to but excluding the relevant Interest Payment Date or Stated Maturity Date, as the case may be. Interest on the new notes will be computed on the basis of a 360-day year of twelve 30-day months. "Business Day" means any day that is not a day on which banking institutions in New York, New York are authorized or obligated by law or executive order to close. OPTIONAL REDEMPTION We will have the right to redeem the new notes, in whole or in part, at any time and from time to time, subject to the receipt of any consent required under the terms of any of our indebtedness which may be outstanding from time to time, upon not less than 30 nor more than 60 days notice, at a 36 redemption price equal to the sum of (1) 100% of the principal amount of the new notes being redeemed, plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the redemption date, and (2) the Make-Whole Amount, if any, with respect to such notes. The term "MAKE-WHOLE AMOUNT" means, in connection with any optional redemption of any new notes, the excess, if any, of (1) the sum, as determined by a Quotation Agent of the present values of the principal amount of such notes, together with scheduled payments of interest from the redemption date to the stated maturity of the new notes, in each case discounted to the redemption date on a semi-annual basis, which assumes a 360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate over (2) 100% of the principal amount of the new notes to be redeemed. The term "ADJUSTED TREASURY RATE" means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue, which is expressed as a percentage of its principal amount, equal to the Comparable Treasury Price for such redemption date, calculated on the third business day preceding the redemption date, plus in each case 25 basis points. The term "COMPARABLE TREASURY ISSUE" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term from the redemption date to the stated maturity of the new notes 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 the new notes. The term "QUOTATION AGENT" means the Reference Treasury Dealer appointed by us. The term "REFERENCE TREASURY DEALER" means: (1) Banc of America Securities LLC and its respective successors and two additional Primary Treasury Dealers selected by us; PROVIDED, HOWEVER, that if any of the foregoing cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), we will substitute therefor another Primary Treasury Dealer; and (2) any other Primary Treasury Dealer selected by us. The term "COMPARABLE TREASURY PRICE" means, with respect to any redemption date: (1) the average of the bid and asked prices for the Comparable Treasury Issue, which is expressed in each case as a percentage of its principal amount, on the third business day preceding such redemption date, as set forth in the daily statistical release, or any successor release, published by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S. Government Securities;" or (2) if such release is not published or does not contain such prices on such business day, (A) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (B) if the Quotation Agent obtains fewer than three such Reference Treasury Dealer Quotations, the average of all such quotations. The term "REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue, which is expressed in each case as a percentage of its principal amount, quoted in writing to the Trustee by such quotation agent at 5:00 p.m., New York City time, on the third business day preceding such redemption date. Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder of notes to be redeemed at its registered address. Unless we default in 37 payment of the redemption price, on and after the redemption date interest will cease to accrue on the new notes called for redemption. In the case of any partial redemption, the Trustee will select notes for redemption in compliance with the requirements of the principal national securities exchange, if any, on which the new notes are listed or, if not listed, on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem fair and appropriate. However, the new notes to be redeemed shall be equal to at least $1,000 or any multiple thereof. If any new note is to be redeemed in part, the notice of redemption relating to the new note will state the portion of the principal amount to be redeemed. A new note in principal amount equal to the unredeemed portion will be issued in the name of the Holder upon cancellation of the original note. MANDATORY REDEMPTION We will not be required to make any mandatory sinking fund payments with regard to the new notes. PAYMENT AND PAYMENT AGENTS Principal of and any interest or Liquidated Damages on the new notes will be payable, subject to any applicable laws and regulations, at the offices of such paying agents as we may designate from time to time pursuant to the indenture ("Paying Agents"), except that, at our option, payment of any interest or Liquidated Damages may be made by check mailed to the address of the person entitled thereto as such address appears in the Security Register. We have designated the Corporate Trust Office of the Trustee in New York, New York as the Paying Agent and as the place where the new notes may be presented for payment. We may at any time designate one or more additional Paying Agents or rescind the designation of any Paying Agent or approve a change in the office through which any Paying Agent acts, except that we will be required to maintain a Paying Agent in each Place of Payment. Notwithstanding the foregoing, payment of principal and any interest or Liquidated Damages on Book-Entry Securities will be made in accordance with the arrangements from time to time in place between the Paying Agent and the Depository or its nominee as holder. See "--Book-Entry, Delivery and Form." Any payment due on any day that is not a Business Day need not be made on such day, but may be made on the next succeeding Business Day, with the same force and effect as if made on the due date, and no interest or Liquidated Damages will be payable on the date of payment for the period from and after the due date. BOOK-ENTRY, DELIVERY AND FORM Except as set forth below, the new notes to be sold as set forth herein will initially be issued in the form of registered global notes (the "Global Notes"), each of which will be deposited on the issue date with, or on behalf of, the Depository and registered in the name of Cede & Co. (the Depository's nominee). The following are summaries of certain rules and operating procedures of the Depository which affect the Global Notes. 38 The new notes that are issued as described under "--Certificated Securities," will be issued in registered form (the "Certificated Securities"). Upon the transfer of Certificated Securities, such Certificated Securities will, unless the Global Notes have previously been exchanged for Certificated Securities, be exchanged for an interest in the Global Notes representing the principal amount of new notes being transferred. The Depository has advised us that it is a limited-purpose trust company that was created to hold securities for its participating organizations (collectively, the "Participants" or the "Depository's Participants") and to facilitate the clearance and settlement of transactions in such securities between Participants through electronic book-entry changes in accounts of its Participants. The Depository's Participants include securities brokers and dealers, banks and trust companies, clearing corporations and certain other organizations. Access to the Depository's system is also available to other entities such as banks, brokers, dealers and trust companies (collectively, the "Indirect Participants" or the "Depository's Indirect Participants") that clear through or maintain a custodial relationship with a Participant, either directly or indirectly. Persons who are not Participants may beneficially own securities held by or on behalf of the Depository only through the Depository's Participants or the Depository's Indirect Participants. We expect that pursuant to procedures established by the Depository (1) upon deposit of the Global Notes, the Depository will credit the accounts of Participants with an interest in the Global Notes, and (2) ownership of the new notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by the Depository (with respect to the interests of the Depository's Participants), the Depository's Participants and the Depository's Indirect Participants. The laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer new notes will be limited to such extent. So long as the Depository or its nominee is the registered owner of any Global Notes, the Depository or its nominee, as the case may be, will be considered the sole owner of such outstanding new notes. Except as provided below, owners of beneficial interests in a Global Note will not be entitled to have new notes represented by such Global Note registered in their names, will not receive or be entitled to receive physical delivery of Certificated Securities, and will not be considered the owners or Holders thereof under the indenture for any purpose. As a result, the ability of a person having a beneficial interest in new notes represented by a Global Note to pledge such interest to persons or entities that do not participate in the Depository's system or to otherwise take actions in respect of such interest, may be affected by the lack of a physical certificate evidencing such interest. Accordingly, each person owning a beneficial interest in a Global Note must rely on the procedures of the Depository and, if such person is not a Participant or an Indirect Participant, on the procedures of the Participant through which such person owns its interest, to exercise any rights of a Holder under such Global Note or the indenture. Neither we nor the Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of new notes by the Depository, or for maintaining, supervising or reviewing any records of the Depository relating to such new notes. Payments in respect of the principal of, premium and Liquidated Damages, if any, and interest on any new notes registered in the name of the Depository or its nominee on the applicable record date will be payable by the Trustee to or at the direction of such Holder in its capacity as the registered holder under the indenture. Under the terms of the indenture, we and the Trustee may treat the persons in whose names the new notes, including the Global Notes, are registered as the owners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. Consequently, neither we nor 39 the Trustee have or will have any responsibility or liability for the payment of such amounts to beneficial owners of new notes (including principal, premium and Liquidated Damages, if any, and interest), or to immediately credit the accounts of the relevant Participants with such payment, in amounts proportionate to their respective holdings of beneficial interests in the relevant security as shown on the records of the Depository. Payments by the Depository's Participants and the Depository's Indirect Participants to the beneficial owners of new notes will be governed by standing instructions and customary practice and will be the responsibility of the Depository's Participants or the Depository's Indirect Participants. CERTIFICATED SECURITIES If (1) we notify the Trustee in writing that the Depository is no longer willing or able to act as a depository and we are unable to locate a qualified successor within 90 days or (2) we, at our option, notify the Trustee in writing that we elect to cause the issuance of the new notes in definitive form under the indenture, then, upon surrender by the Holder of the Global Note, notes in such form will be issued to each person that the Holder of the Global Note and the Depository identify as the beneficial owner of the new notes. In addition, subject to certain conditions, any person having a beneficial interest in the Global Note may, upon request to the Trustee, exchange such beneficial interest for new notes in definitive form. Upon any such issuance, the Trustee is required to register such new notes in the name of, and cause the same to be delivered to, such person or persons (or the nominee of any thereof). Such new notes will be issued in fully registered form. Neither we nor the Trustee shall be liable for any delay by the Holder of the Global Note or the Depository in identifying the beneficial owners of the related securities, and each such person may conclusively rely on, and shall be protected in relying on, instructions from the Holder of the Global Note or the Depository for all purposes. CERTAIN COVENANTS The indenture contains, among others, the following covenants: LIMITATION ON LIENS. So long as any of the new notes remain outstanding, we will not, and will not permit any of our Subsidiaries to, create or assume any Indebtedness which is secured by a Lien, other than Permitted Liens, of or upon any of our assets or those of our Subsidiaries, whether now owned or hereafter acquired, without equally and ratably securing the new notes by a Lien ranking ratably with and equal to (or, at our option or in the case of liens securing Indebtedness ranked subordinate to the new notes, senior to) such secured Indebtedness. LIMITATION ON AFFILIATE TRANSACTIONS. We will not, and will not permit any of our Subsidiaries to, enter into or permit to exist any transaction or series of related transactions (including the purchase, sale, lease or exchange of any property, employee compensation arrangements or the rendering of any service) with any of our Affiliates (an "Affiliate Transaction") unless the terms thereof: (1) are materially no less favorable to us or our Subsidiary than those that could be obtained at the time of such transaction in arm's-length dealings with a Person who is not an Affiliate; (2) if such Affiliate Transaction (or series of related Affiliate Transactions) involve aggregate payments in an amount in excess of $10 million in any one year, (x) comply with the terms described in clause (1) and (y) have been approved by a majority of the disinterested members of the Board of Directors; and 40 (3) if such Affiliate Transaction (or series of related Affiliate Transactions) involve aggregate payments in an amount in excess of $20 million in any one year, (x) comply with the terms described in clause (2) and (y) have been determined by a nationally recognized investment banking, accounting or qualified appraisal firm to be fair, from a financial standpoint, to us and our Subsidiaries. The provisions described above will not prohibit: (1) any issuance of securities or any payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option and stock ownership plans and other stock-based employee compensation in the ordinary course of business and approved by the Board of Directors; (2) the grant of stock options or similar rights to our employees, officers and directors or those of any of our Subsidiaries in the ordinary course of business and pursuant to plans approved by the Board of Directors; (3) loans or advances to our employees, officers or directors or those of any of our Subsidiaries in the ordinary course of business; (4) fees, compensation or employee benefit arrangements paid to and indemnity provided for the benefit of our directors, officers or employees or those of any of our Subsidiaries in the ordinary course of business; (5) any Affiliate Transaction between us and our Subsidiary or Joint Venture, or between any of our Subsidiaries or Joint Ventures (so long as the other stockholders or partners of any participating Subsidiaries or Joint Ventures which are not our wholly owned Subsidiaries are not themselves our Affiliates); and (6) any transactions effected pursuant to agreements in effect on June 10, 1999; PROVIDED, that such transactions are effected pursuant to terms substantially similar to the terms of such agreements as in effect on June 10, 1999. MERGER, CONSOLIDATION AND SALE OF ASSETS. We will not, in a single transaction or series of related transactions, consolidate or merge with or into any Person, or sell, assign, transfer, lease, convey or otherwise dispose of (or cause or permit any of our Subsidiaries to sell, assign, transfer, lease, convey or otherwise dispose of) all or substantially all of our assets (determined on a consolidated basis) to any Person, unless: (1) either (a) we are the surviving or continuing corporation or (b) the Person (if other than us) formed by such consolidation or into which we are merged or the Person which acquires by sale, assignment, transfer, lease, conveyance or other disposition all or substantially all of our assets (the "Surviving Entity") (x) is a corporation organized and validly existing under the laws of the United States or any state thereof or the District of Columbia and (y) expressly assumes, by supplemental indenture (in form and substance satisfactory to the Trustee) executed and delivered to the Trustee, the due and punctual payment of the principal of, and Liquidated Damages, if any, and interest on, all of the new notes and the performance of every covenant of the new notes, the indenture and the registration rights agreement on the part of us to be performed or observed by us; 41 (2) immediately before and immediately after giving effect to the transaction and the assumption described in clause (1)(b)(y) above, no Default or Event of Default has occurred and is continuing; and (3) we or the Surviving Entity have delivered to the Trustee an officers' certificate and an opinion of counsel, each stating that the consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition, and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, comply with the applicable provisions of the indenture and that all conditions precedent in the indenture relating to the transaction have been satisfied. For purposes of the foregoing description, the transfer (by lease, assignment, sale or otherwise in a single transaction or series of transactions) of all or substantially all of the assets of one or more of our Subsidiaries, the Capital Stock of which constitutes all or substantially all of our assets, will be deemed to be the transfer of all or substantially all of our assets. The indenture will provide that upon any consolidation, combination or merger or any transfer of all or substantially all of our assets in accordance with the foregoing description, in which we are not the continuing corporation, the Surviving Entity formed by such consolidation or into which we are merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made will succeed to, and be substituted for, and may exercise every right and power of, us under the indenture and the new notes with the same effect as if such Surviving Entity had been named as such. LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS. So long as any of the new notes remain outstanding, we will not, and will not permit any Subsidiary to, enter into any sale and lease-back transactions with respect to any assets (other than any sale leaseback transaction involving leases for a term of not more than three years), unless either (1) it relates to our headquarters building now under construction or any real property now owned by ABR; (2) we or such Subsidiary would be entitled to incur Indebtedness secured by a Permitted Lien on the assets to be leased in an amount at least equal to the Attributable Debt in respect of such transaction; or (3) the proceeds of the sale of the assets to be leased are at least equal to their fair market value (as determined by our Board of Directors) and the proceeds are applied to the purchase or acquisition (or, in the case of real property, the construction) of tangible assets or to the retirement (other than at maturity or pursuant to a mandatory sinking fund or mandatory redemption provision) of our Indebtedness for money borrowed which ranks PARI PASSU to the new notes. REPORTS Regardless of whether required by the rules and regulations of the SEC, so long as any new notes are outstanding, we will furnish to the Trustee and each Holder of new notes, within 15 days after we are or would have been required to file with the SEC: (1) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if we were required to file such forms, including for 42 each a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report thereon by our independent certified public accountants; and (2) all information that would be required to be contained in a filing with the SEC on Form 8-K if we were required to file such reports. From and after the time we file a registration statement with the SEC with respect to the new notes, we will file the above information with the SEC so long as the SEC will accept such filings. EVENTS OF DEFAULT The following are Events of Default under the indenture with respect to the new notes: (1) failure to pay interest or any Liquidated Damages payable on any outstanding notes when due, continued for 30 days; (2) failure to pay principal on any notes when due; (3) failure to perform any other covenant in the indenture, continued for 30 days, after written notice as provided in the indenture; (4) (x) we or any of our Subsidiaries fail to pay any of our Indebtedness under one or more agreements or instruments evidencing an aggregate principal amount of Indebtedness equal to at least $15 million (or its equivalent in any other currency or currencies) as and when that Indebtedness becomes due and payable, after the expiration of any applicable grace period, or (y) any other event occurs which, under one or more agreements or instruments evidencing our Indebtedness of or that of any Subsidiary, obligates us or our Subsidiary to pay an aggregate principal amount of Indebtedness equal to at least $15 million (or its equivalent in any other currency or currencies) prior to the date on which it otherwise would have become due and payable; and (5) certain events of voluntary or involuntary bankruptcy, insolvency or reorganization. If an Event of Default (other than an Event of Default described in clause (5) above) occurs and is continuing, either the Trustee or the Holders of at least 25% in principal amount of the outstanding notes by notice as provided in the indenture may declare the principal amount of all of the new notes to be due and payable immediately. However, at any time after a declaration of acceleration with respect to the new notes has been made, but before a judgment or decree based on such acceleration has been obtained, the Holders of a majority in principal amount of the outstanding notes may, under certain circumstances, rescind and annul such acceleration. If an Event of Default described in clause (5) above occurs, all unpaid principal of and accrued interest and Liquidated Damages on the outstanding notes will ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. For information as to waiver of defaults, see "--Modification and Waiver" below. The indenture provides that, subject to the duty of the Trustee during an Event of Default to act with the required standard of care, the Trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request or direction of any of the Holders, unless such Holders shall 43 have offered to the Trustee reasonable security or indemnity. Subject to certain provisions, including those requiring security or indemnification of the Trustee, the Holders of a majority in principal amount of the outstanding notes will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the new notes. We will be required to furnish to the Trustee annually a statement as to our performance of our obligations under the indenture and as to any default in such performance. LEGAL DEFEASANCE AND COVENANT DEFEASANCE The indenture provides that the we, at our option, (1) will be deemed to have been discharged from any and all obligations in respect of the new notes (except for certain obligations to register the transfer of or new notes, to replace stolen, lost, destroyed or mutilated notes upon satisfaction of certain requirements (including, without limitation, providing such security or indemnity as we or the Trustee may require), to maintain paying agencies and to hold certain moneys in trust for payment) ("legal defeasance"), or (2) need not comply with certain restrictive covenants of the indenture (including those described under "--Certain Covenants" above) ("covenant defeasance"), in each case, if we deposit, in trust with the Trustee, money in U.S. dollars or U.S. Government Obligations that through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide money in an amount or a combination thereof, in each case sufficient to pay all the principal of, and interest and Liquidated Damages, if any, on the new notes on the dates such payments are due in accordance with the terms of the indenture and the new notes. In the case of discharge as described in clause (1) above, we are required to deliver to the Trustee an opinion of nationally recognized tax counsel in the United States acceptable to the Trustee to the effect that: (1) the Holders of the new notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the exercise of the option set forth in clause (1) above and will be subject to U.S. federal income tax on the same amounts and in the same manner and at the same times as would have been the case if such option had not been exercised; and (2) either (A) we have received from, or there has been published by the U.S. Internal Revenue Service, a ruling to that effect, or (B) since the date of the indenture, there has been a change in the applicable U.S. federal income tax law. In the case of an election as described in clause (2) above, we are required to deliver to the Trustee an opinion of nationally recognized tax counsel to the effect that the Holders of the new notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the exercise of the option set forth in clause (2) above. SATISFACTION AND DISCHARGE The indenture will be discharged and will cease to be of further effect (except as to surviving rights of registration of transfer or exchange of notes as expressly provided for in the indenture) as to all outstanding notes when: 44 (1) either (a) all the notes theretofore authenticated and delivered (except lost, stolen or destroyed notes which have been replaced or paid and notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by us and thereafter been repaid to us or discharged from such trust) have been delivered to the Trustee for cancellation, or (b) all notes not theretofore delivered to the Trustee for cancellation have become due and payable or will become due and payable at their stated maturity within one year and we have irrevocably deposited or caused to be deposited with the Trustee funds in trust in an amount sufficient to pay and discharge the entire Indebtedness on such notes not theretofore delivered to the Trustee for cancellation, including the principal of and any Liquidated Damages and interest on such notes to the date of deposit or to the maturity thereof; (2) we have paid all other sums payable by us under the indenture in respect of the outstanding notes; and (3) we have delivered to the Trustee an officers' certificate and, in certain circumstances, an opinion of counsel satisfactory to the Trustee, each stating that all conditions precedent under the indenture relating to the satisfaction and discharge of the indenture in respect of the new notes of such series have been complied with. MODIFICATION AND WAIVER From time to time we and the Trustee may, without the consent of the Holders, amend, waive or supplement the indenture or the new notes for certain specified purposes, including, among other things, curing ambiguities, defects or inconsistencies, or making any other provisions with respect to matters or questions arising under the indenture, or making any change that does not adversely affect the interests of any Holder in any material respect. Other modifications and amendments of the indenture may be made by us and the Trustee with the consent of the Holders of not less than a majority in principal amount of the outstanding notes of each series affected thereby; provided, that no such modification or amendment may, without the consent of the Holder of each outstanding note affected thereby: (1) change the stated maturity of the principal of, or any installment of principal of, or interest on, any notes; (2) reduce the principal amount of or the rate of interest on any notes; (3) change the place or currency of payment of principal of or interest on any notes; (4) impair the right to institute suit for the enforcement of any payment on or with respect to any notes; (5) reduce the percentage in principal amount of outstanding notes, the consent of the Holders of which is required for modification or amendment of the indenture or for waiver of compliance with certain provisions of the indenture or for waiver of certain defaults; or 45 (6) change our obligation to maintain an office or agency in the places and for the purposes specified in the indenture. The Holders of not less than a majority in principal amount of the outstanding notes may on behalf of the Holders of all notes waive compliance by us with certain covenants of the indenture. The Holders of not less than a majority in principal amount of the outstanding notes may on behalf of the Holders of all notes waive any past default under the indenture, except a default in the payment of the principal of or interest on any notes or in respect of a provision which cannot be modified or amended under the indenture without the consent of the Holder of each outstanding note affected. GOVERNING LAW AND SERVICE OF PROCESS The indenture and the new notes will be governed by the laws of the State of New York. We have appointed The Bank of New York as our authorized agent upon which process may be served in any action or proceeding arising out of or based upon the indenture or the new notes which may be instituted in any federal or state court having subject matter jurisdiction in the Borough of Manhattan, the City of New York, New York and will irrevocably submit to the jurisdiction of such courts in any such action or proceeding. CERTAIN DEFINITIONS Set forth below are certain defined terms used in the indenture. Reference is made to the indenture for the definitions of other capitalized terms used in this prospectus herein but not defined herein. "AFFILIATE" of any specified Person means any other Person, directly or indirectly, controlling or controlled by, or under direct or indirect common control with, such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "ATTRIBUTABLE DEBT" in respect of a Sale/Leaseback Transaction means, at the time of determination, the present value (discounted at the interest rate implicit in such transaction in accordance with GAAP) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended). "BOARD OF DIRECTORS" means our Board of Directors or any committee thereof duly authorized to act on behalf of such Board. "CAPITAL LEASE OBLIGATION" means an obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP. "CAPITAL STOCK" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity. 46 "COMMODITY PRICE PROTECTION AGREEMENT" means any forward contract, commodity swap, commodity option or other similar financial agreement or arrangement relating to, or the value of which is dependent upon, fluctuations in commodity prices. "CONSOLIDATED NET WORTH" of any Person means the stockholders' equity of such Person, determined on a consolidated basis in accordance with GAAP, less (without duplication) amounts attributable to Disqualified Capital Stock of such Person. "CONSOLIDATED TANGIBLE ASSETS" means Total Assets less the sum of: (1) the total book value of all of our assets and the assets of our Subsidiaries properly classified as intangible assets under GAAP, including such items as goodwill, the purchase price of acquired assets in excess of the fair market value thereof, trademarks, trade names, service marks, customer lists, brand names, copyrights, patents and licenses, and rights with respect to the foregoing, and (2) all amounts representing any write-up in the book value of any of our assets or the assets of our Subsidiaries resulting from a revaluation thereof subsequent to the date of our then most recent audited financial statements. "CURRENCY AGREEMENT" means, with respect to any Person, any foreign exchange contract, currency swap agreement or other similar agreement to which such Person is a party or of which such Person is a beneficiary. "DEFAULT" means any event which is, or after notice or passage of time or both would be, an Event of Default. "DISQUALIFIED CAPITAL STOCK" means, with respect to any Person, Capital Stock of such Person that, by its terms or by the terms of any security into which it is convertible or exchangeable or for which it is exercisable, is, or upon the happening of an event or the passage of time or both would be, required to be redeemed or repurchased (including at the option of the holder thereof) by such Person or any of its Subsidiaries, in whole or in part, on or prior to the Stated Maturity Date of the new notes. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, as are in effect on the Issue Date of the new notes. "GLOBAL NOTES" has the meaning given to such term in the section of this Description of Notes entitled "Book-Entry, Delivery and Form." "HEDGING OBLIGATIONS" of any Person means the obligations of such Person pursuant to any Interest Rate Agreement, Currency Agreement or Commodity Price Protection Agreement. "HOLDER" means a Person in whose name a note is registered on the Security Registrar's books. "INCUR" means issue, assume, guarantee, incur or otherwise become liable for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary of another Person (whether by merger, consolidation, acquisition or otherwise) will be deemed to be 47 Incurred by such Person at the time it becomes such a Subsidiary; PROVIDED FURTHER, HOWEVER, that in the case of a discount security, neither the accrual of interest nor the accretion of original issue discount will be considered an Incurrence of Indebtedness, but the entire face amount of such security will be deemed Incurred upon the issuance of such security. The term "Incurrence" when used as a noun will have a correlative meaning. "INDEBTEDNESS" means, with respect to any Person on any date of determination (without duplication): (i) the principal of and premium (if any) in respect of (A) indebtedness of such Person for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable; (ii) all Capital Lease Obligations of such Person and all Attributable Debt in respect of Sale/Leaseback Transactions entered into by such Person; (iii) the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Capital Stock or, with respect to any Subsidiary of such Person, any Preferred Stock (but excluding, in each case, any accrued dividends); and (iv) all obligations of the type referred to in clauses (i) and (iii) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise. The amount of Indebtedness of any Person at any date will be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations as described above at such date; PROVIDED HOWEVER, that the amount outstanding at any time of any Indebtedness issued with original issue discount will be deemed to be the face amount of such Indebtedness less the remaining unamortized portion of the original issue discount of such Indebtedness at such time as determined in conformity with GAAP. "INTEREST RATE AGREEMENT" means any interest rate swap agreement, interest rate cap agreement or other financial agreement or arrangement designed to protect us or any of our Subsidiaries against fluctuations in interest rates. "ISSUE DATE" means the date on which the new notes are originally issued. "JOINT VENTURE" means a joint venture, partnership or other similar arrangement, whether in corporate, partnership or other legal form; PROVIDED, HOWEVER, that, as to any such arrangement in corporate form, such corporation will not, as to any Person of which such corporation is a Subsidiary, be considered to be a Joint Venture to which such Person is a party. "LIEN" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof and any Sale/Lease-back Transaction other than a Sale/Lease-back Transaction permitted pursuant to clause (a) or (c) of the covenant described herein under the heading "Limitation on Sale and Lease-back Transactions"). "PERMITTED LIENS" means any: (1) Liens arising by reason of: (x) operation of law in favor of carriers, warehousemen, landlords, mechanics, materialmen, laborers, employees or suppliers in existence for less than 120 days or for more than 120 days which are not yet delinquent or are being contested in good faith by negotiations or by appropriate proceedings which suspend the collection thereof; or 48 (y) any interest or title of a lessor under any lease; (2) Liens in favor of us or (other than in the case of Liens securing our Indebtedness or Indebtedness of any of our Subsidiaries) our Subsidiaries; (3) Liens on property of a Person existing at the time such Person is acquired by, merged into or consolidated with us or any of our Subsidiaries; provided that such Liens were not incurred in contemplation of such acquisition, merger or consolidation and do not extend to any assets other than those of the Person acquired by, merged into or consolidated with us or any such Subsidiary; (4) Liens on property existing at the time of acquisition thereof by us or any of our Subsidiaries provided that such Liens were not incurred in contemplation of such acquisition; (5) Liens existing on the date of the indenture; (6) Liens to secure taxes, assessments and other government charges or claims for labor, material or supplies: (x) in respect of obligations which are not overdue, or (y) which are currently being contested in good faith by appropriate proceedings if we have set aside on our books adequate reserves with respect thereto, if required, and if no proceedings have been commenced to foreclose any such Lien; (7) deposits or pledges made in connection with, or to secure payment of, workmen's compensation, unemployment insurance, old age pensions or other social security obligations; (8) Liens in respect of judgments or awards which have been in force for less than the applicable period for taking an appeal, so long as execution is not levied thereunder, or in respect of which we or one of our Subsidiaries, as the case may be, at the time in good faith are prosecuting an appeal or proceedings for review and in respect of which we and our Subsidiaries have maintained reserves in an amount satisfactory to us; (9) encumbrances consisting of easements, rights of way, zoning restrictions, restrictions on the use of real property and defects and irregularities in the title thereto, landlord's or lessor's Liens under leases to which we or any of our Subsidiaries are a party, and other minor liens or encumbrances none of which in our opinion or in the opinion of such Subsidiary interferes materially with the use of the property affected in the ordinary conduct of our business or the business of such Subsidiary and which defects do not individually or in the aggregate have a material adverse effect on our business and the business of our Subsidiaries on a consolidated basis; (10) Liens securing Indebtedness in respect of performance bonds, bankers' acceptances, and surety or appeal bonds entered into by us or our Subsidiaries in the ordinary course of business; (11) Liens securing Hedging Obligations consisting of Interest Rate Agreements, Commodity Price Protection Agreements and Currency Agreements entered into in the ordinary course of business and not for the purpose of speculation; 49 (12) Liens securing Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five business days of Incurrence; (13) Liens securing our Indebtedness and that of our Subsidiaries arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, in any case Incurred in connection with the disposition of any of our assets or those of any such Subsidiary (other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such assets for the purpose of financing such acquisition), in a principal amount not to exceed the gross proceeds actually received by us or any such Subsidiary in connection with such disposition; (14) Liens arising in the ordinary course of business in connection with obligations (other than obligations for borrowed money) that are not overdue or which are being contested in good faith and by appropriate proceedings, including, but not limited to Liens under bid, performance and other surety bonds, supersedes and appeal bonds, Liens on advance or progress payments received from customers under contracts for the sale, lease or license of goods, software or services and upon the products being sold or licensed, in each case securing performance of the underlying contract or the repayment of such advances in the event final acceptance of performance under such contracts does not occur, and Liens upon funds collected temporarily from others pending payment or remittance on their behalf; (15) purchase money security interests on any property acquired or held by us or our Subsidiaries in the ordinary course of business securing Indebtedness incurred or assumed for the purpose of financing all or any part of the cost of acquiring such property; PROVIDED, HOWEVER, that: - any such Lien attaches to such property concurrently with or within 20 days after the acquisition thereof, - such Lien attaches solely to the property so acquired in such transaction, and - the principal amount of the debt secured thereby does not exceed 100% of the cost of such property; (16) Liens arising solely by virtue of any statutory or common law provision relating to banker's liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; PROVIDED, HOWEVER, that: - such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by us in excess of those set forth by regulations promulgated by the Federal Reserve Board, and - such deposit account is not intended by us or any of our Subsidiaries to provide collateral to the depository institution; (17) rights of holders of notes or debentures issued by us or of our Subsidiaries in deposits placed in trust to legally or "in substance" defease such notes or debentures; 50 (18) Any Lien deemed to be created in connection with the securitization of accounts, receivables, instruments, chattel paper or other rights to payment of the Company or its Subsidiaries, (a) to the extent (i) such assets are transferred to a special purpose entity, (which may be owned by the Company or any Subsidiary but is not consolidated for accounting purposes with such transferor or owner) where such transfer is a "true sale" for accounting purposes, and (ii) the face principal amount of such assets at any time outstanding is not more than $150,000,000 or (b) which is granted by any such special purpose entity in the assets so transferred to it; and (19) Liens securing Indebtedness in an aggregate principal amount together with all Liens securing other of our Indebtedness and that of our Subsidiaries outstanding on the date of such Incurrence (other than Liens described in clauses (1) through (18) above) not exceeding 15% of Consolidated Tangible Assets. "PERSON" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "PREFERRED STOCK" as applied to the Capital Stock of any corporation or the equity securities of any trust, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends or distributions or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation or trust over shares of Capital Stock of any other class of such corporation or trust. "PRINCIPAL" of any Indebtedness (including the new notes) means the principal of such Indebtedness plus the premium, if any, payable on such Indebtedness which is due or overdue or is to become due at the relevant time. "SALE/LEASEBACK TRANSACTION" means an arrangement relating to property now owned or hereafter acquired whereby we or one of our Subsidiaries transfers such property to a Person and we or any of our Subsidiaries leases it from such Person under an operating lease. "STATED MATURITY" means, with respect to any instrument, the date specified in such instrument as the fixed date on which the final payment of principal of such instrument is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase, redemption or repayment of such instrument at the option of the holder thereof upon the happening of any contingency unless such contingency has occurred). "SUBSIDIARY" means, in respect of any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by: (1) such Person, (2) such Person and one or more Subsidiaries of such Person, or (3) one or more Subsidiaries of such Person. 51 "TOTAL ASSETS" means our total consolidated assets (including the total consolidated assets of our Subsidiaries) as shown on our most recent balance sheet (excluding the footnotes thereto). MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS The following is a summary of certain material United States federal income tax consequences associated with (1) the exchange of the old notes for the new notes pursuant to the exchange offer by any Holder; and (2) the ownership and disposition of the new notes by a person who is not a "United States person" as defined below (a "Non-U.S. Holder"). This summary is based upon existing United States federal income tax law, which is subject to change, possibly retroactively. This summary does not discuss all aspects of United States federal income taxation which may be important to particular Holders in light of their individual investment circumstances, such as new notes held by investors subject to special tax rules (e.g., financial institutions, insurance companies, broker-dealers, and tax-exempt organizations) or to persons that will hold the new notes as a part of a straddle, hedge, or synthetic security transaction for United States federal income tax purposes or that have a functional currency other than the United States dollar, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition, this summary does not discuss any foreign, state, or local income tax considerations or any taxes other than income taxes. This summary assumes that investors (1) purchased their old notes for cash in the original offering thereof, (2) exchanged their old notes for new notes in the exchange offer, and (3) hold their new notes as "capital assets" (generally, property held for investment) under the United States Internal Revenue Code of 1986, as amended (the "Code"). YOU ARE URGED TO CONSULT WITH YOUR TAX ADVISOR REGARDING THE UNITED STATES FEDERAL, STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX CONSIDERATIONS OF THE EXCHANGE OF THE OLD NOTES FOR THE NEW NOTES PURSUANT TO THE EXCHANGE OFFER AND THE OWNERSHIP AND DISPOSITION OF THE NEW NOTES. For purposes of this summary, a "United States person" is: - an individual who is a citizen or resident of the United States; - a corporation, partnership, or other entity created or organized under the laws of the United States or any state or political subdivision thereof; - an estate the income of which is subject to United States federal income taxation without regard to its source; or - a trust the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust. EXCHANGE OFFER The exchange of the old notes for the new notes pursuant to the exchange offer will not constitute a "significant modification" of the old notes for federal income tax purposes because the terms of the new notes are not materially different from the terms of the old notes. Accordingly, the exchange will be disregarded for federal income tax purposes and the new notes received will be treated as a continuation of the old notes in the hands of each Holder of a new note. As a result (1) a U.S. Holder or Non-U.S. Holder should not recognize taxable gain or loss as a result of exchanging old notes for new notes pursuant to the exchange offer, (2) the holding period of the new notes should include the holding period of the old notes 52 exchanged therefor, and (3) the adjusted tax basis of the new notes should be the same as the adjusted tax basis of the old notes exchanged therefor. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS The following discussion addresses certain material U.S. federal income tax consequences to Non-U.S. Holders. PAYMENTS OF INTEREST Interest paid by us to Non-U.S. Holders will not be subject to United States federal income or withholding tax provided that (1) such holder does not actually or constructively own 10% or more of the total combined voting power of all of our classes of stock entitled to vote, (2) such holder is not a controlled foreign corporation that is related to us through stock ownership, a foreign tax-exempt organization or foreign private foundation for United States federal income tax purposes, and (3) the requirements of section 871(h) or 881(c) of the Code are satisfied as described below under the heading "Owner Statement Requirement." Notwithstanding the above, a Non-U.S. Holder that is engaged in the conduct of a United States trade or business will be subject to (1) United States federal income tax on interest that is effectively connected with the conduct of such trade or business and (2) if the Non-U.S. Holder is a corporation, a United States branch profits tax equal to 30% of its "effectively connected earnings and profits" as adjusted for the taxable year, unless the holder qualifies for an exemption from such tax or a lower tax rate under an applicable treaty. Any Non-U.S. Holder subject to United States federal income tax under the rules described in the preceding sentence, or claiming an exemption from or reduced rate of taxation pursuant to a treaty, will be required to file an applicable statement with us or our agent in order to avoid U.S. withholding tax at a rate of 30% on interest paid on the new notes. GAIN ON DISPOSITION A Non-U.S. Holder will generally not be subject to United States federal income tax on gain recognized on a sale, redemption, or other disposition of a new note unless (1) the gain is effectively connected with the conduct of a trade or business within the United States by the Non-U.S. Holder or (2) in the case of a Non-U.S. Holder who is a nonresident alien individual, such holder is present in the United States for 183 or more days during the taxable year in which such gain is realized and certain other requirements are met. Any such gain that is effectively connected with the conduct of a United States trade or business by a Non-U.S. Holder will be subject to United States federal income tax on a net income basis in the same manner as if such holder were a United States person and, if such Non-U.S. Holder is a corporation, such gain may also be subject to the 30% United States branch profits tax described above, subject to the holder qualifying for an exemption from such tax or a lower tax rate under an applicable treaty. OWNER STATEMENT REQUIREMENT Sections 871(h) and 881(c) of the Code require that either the beneficial owner of a note or a securities clearing organization, bank or other financial institution that holds customers' securities in the ordinary course of its trade or business (a "Financial Institution") and that holds a new note on behalf of such owner file a statement with us or our agent to the effect that the beneficial owner is not a United States person in order to avoid withholding of United States federal income tax. Under current regulations, this requirement will be satisfied if we or our agent receives (1) a statement (an "Owner's Statement") from the beneficial 53 owner of a note in which such owner certifies, under penalties of perjury, that such owner is not a United States person and provides such owner's name and address, or (2) a statement from the Financial Institution holding the note on behalf of the beneficial owner in which the Financial Institution certifies, under penalties of perjury, that it has received the Owner's Statement together with a copy of the Owner's Statement. The beneficial owner must inform us or our agent (or, in the case of a statement described in clause (2) of the immediately preceding sentence, the Financial Institution) within 30 days of any change in information on the Owner's Statement. BACKUP WITHHOLDING AND INFORMATION REPORTING Current United States federal income tax law provides that in the case of payments of interest to Non-U.S. Holders, the 31% backup withholding tax and information reporting will not apply to payments made outside the United States by us or a paying agent on a note if an Owner's Statement is received or an exemption has otherwise been established; provided in each case that we or the paying agent, as the case may be, have no actual knowledge that the payee is a United States person. Under current treasury regulations, payments of the proceeds of the sale of a note to or through a foreign office of a "broker" will not be subject to backup withholding but will be subject to information reporting if the broker is a United States person, a controlled foreign corporation for United States federal income tax purposes, or a foreign person 50% or more of whose gross income is from a United States trade or business for a specified three-year period, unless the broker has in its records documentary evidence that the holder is not a United States person and certain other conditions are met or the holder otherwise establishes an exemption. Payment of the proceeds of a sale to or through the United States office of a broker is subject to backup withholding and information reporting unless the holder certifies its non-United States status under penalties of perjury or otherwise establishes an exemption. Recently, the Treasury Department has promulgated final regulations regarding the withholding and information reporting rules discussed above. In general, such final regulations do not significantly alter the substantive withholding and information reporting requirements but unify current certification procedures and forms and clarify reliance standards. Under the final regulations, special rules apply which permit the shifting of primary responsibility for withholding to certain financial intermediaries acting on behalf of beneficial owners. The final regulations are generally effective for payments made after December 31, 1999, subject to certain transition rules. The United States Internal Revenue Service has recently issued an administrative notice that the effective date of the final regulations will be extended such that the final regulations will only apply to payments made after December 31, 2000, but such administrative notice did not actually modify the text of the effective date provisions of the final regulations. PLAN OF DISTRIBUTION Each broker-dealer that receives new notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such new notes. A broker-dealer may use this prospectus, as it may be amended or supplemented from time to time, in connection with resales of new notes received in exchange for old notes where such old notes were acquired as a result of market-making or other trading activities (not directly from us). We have agreed that, for a period of 60 days after the expiration date, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until 1999, all dealers effecting transactions in the new notes may be required to deliver a prospectus. 54 We will not receive any proceeds from any sale of new notes by broker-dealers. Broker-dealers may sell from time to time new notes they receive for their own account pursuant to the exchange offer through: - one or more transactions in the over-the-counter market; - in negotiated transactions; - through the writing of options on the new notes; or - a combination of such methods of resale. Such broker-dealers may sell at: - market prices prevailing at the time of resale; - prices related to such prevailing market prices; or - negotiated prices. Any broker-dealer may resell directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from the broker-dealer or the purchasers of the new notes. Any broker-dealer that resells new notes that it received for its own account pursuant to the exchange offer and any broker-dealer that participates in a distribution of the new notes may be deemed to be an "underwriter" within the meaning of the Securities Act. Any profit on any underwriter's resale of new notes and any commission or concessions received by any underwriters may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act by acknowledging that it will deliver and by delivering a prospectus. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. We have agreed, for a period of 60 days after the expiration date to promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have also agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the initial purchasers of the old notes directly from us) and will indemnify the holders of the new notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act to the extent they arise out of or are based upon (1) any untrue statement or alleged untrue statement of a material fact contained in the registration statement or prospectus or (2) an omission or alleged omission to state in the registration statement or the prospectus a material fact that is necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. This indemnification obligation does not extend to statements or omissions in the registration statement or prospectus made in reliance upon and in conformity with written information pertaining to the holder that is furnished to us by or on behalf of the holder. 55 LEGAL MATTERS Certain legal matters relating to the new notes offered hereby will be passed upon for us by Oppenheimer Wolff & Donnelly LLP, Minneapolis, Minnesota. EXPERTS The consolidated financial statements and schedule of Ceridian Corporation and subsidiaries as of December 31, 1998 and 1997, and for each of the years in the three-year period ended December 31, 1998, have been incorporated by reference herein and in the registration statement in reliance upon the reports of KPMG LLP, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The consolidated financial statements of ABR Information Services, Inc. and subsidiaries incorporated by reference into this prospectus have been audited by Grant Thornton LLP, independent certified public accountants, to the extent and for the periods indicated in their report thereon. Such consolidated financial statements have been incorporated in reliance upon the report of Grant Thornton LLP. 56 =============================================================================== [CERIDIAN LOGO] $450,000,000 7.25% SENIOR NOTES DUE 2004 ------------------ PROSPECTUS ------------------ , 1999 =============================================================================== PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the General Corporation Law of the State of Delaware grants each corporation organized thereunder, such as us, the power to indemnify its directors and officers against liability for certain of their acts. Section 102(b)(7) of the General Corporation Law of the State of Delaware permits a provision in the certificate of incorporation of each corporation organized thereunder eliminating or limiting, with certain exceptions, the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. Our certificate of incorporation contains such a provision. The foregoing statements are subject to the detailed provisions of Sections 145 and 102(b)(7) of the General Corporation Law of the State of Delaware. Article VI of our Bylaws provides that we must indemnify our officers, directors and employees to the fullest extent permitted by the General Corporation Law of the State of Delaware in connection with proceedings with which any such person is involved by virtue of his or her status as an officer, director or employee. We have also by contract agreed to indemnify our directors against damages, judgments, settlements and costs arising out of any actions against the directors brought by reason of the fact that they are or were one of our directors. We maintain directors' and officers' liability insurance including a reimbursement policy in favor of us. ITEM 21. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES. a. EXHIBITS.
Exhibit No. Description ----------- ----------- 1.1 Purchase Agreement dated June 10, 1999 among Ceridian and Banc of America Securities LLC, Chase Securities Inc., BNY Capital Markets, Inc., TD Securities (USA) Inc. and U.S. Bancorp Piper Jaffray Inc. (incorporated by reference to Exhibit 10.01 to Ceridian's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 1-1969)). 2.1 Asset Purchase Agreement, dated as of November 3, 1997, by and between Ceridian Corporation and General Dynamics Corporation (exhibits and schedules omitted) (incorporated by reference to Exhibit 2.1 to Ceridian's Current Report on Form 8-K dated December 31, 1997 (File No. 1-1969)). 2.2 Closing Agreement, dated as of December 31, 1997, between and among Ceridian Corporation, General Dynamics Corporation, General Dynamics Information Systems, Inc. and CDI Acquisition Company (exhibits and schedules omitted) (incorporated by reference to Exhibit 2.2 to Ceridian's Current Report on Form 8-K dated December 31, 1997 (File No. 1-1969)). 2.3 Exchange Agreement, dated as of January 17, 1998, among First Data Corporation, Integrated Payment Systems Inc., NTS, Inc., First Data Financial Services, L.L.C., Ceridian Corporation, Comdata Network, Inc. and Permicom Permits Services, Inc. (exhibits and schedules omitted) (incorporated by II-1 reference to Exhibit 2.03 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969)). 2.4 Share Purchase Agreement, dated as of January 26, 1998, among The Toronto-Dominion Bank, Business Windows Inc., 3454916 Canada Inc., Ceridian Corporation, Ceridian Canada Ltd. and Ceridian Canada Holdings, Inc. (exhibits and schedules omitted) (incorporated by reference to Exhibit 2.04 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969)). 2.5 Agreement for the Purchase and Sale of Certain of the Assets of Comcheq Services Limited, dated as of March 10, 1998, among the Canadian Imperial Bank of Commerce, Comcheq Services Limited and Ceridian Canada Ltd. (exhibits and schedules omitted) (incorporated by reference to Exhibit 2.1 to Ceridian's Current Report on Form 8-K dated March 10, 1998 (File No. 1-1969)). 2.6 Asset Purchase Agreement, dated as of November 17, 1998, among Ceridian Corporation, Ceridian Performance Partners Ltd., Letter Allied Limited, Work/Family Directions, Inc., Canadian Work/Family Directions Co., WFD, Francene S. Rodgers, Charles S. Rodgers and the Other Shareholders Party Thereto (exhibits and schedules omitted) (incorporated by reference to Exhibit 2.06 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-1969)). 2.7 Agreement and Plan of Merger dated as of April 30, 1999 among Ceridian Corporation, Spring Acquisition Corporation and ABR Information Services, Inc. (incorporated by reference to Exhibit (c)(1) to Ceridian's Schedule 14D-1 dated May 7, 1999 (File No. 005-44917)). 2.8 Amendment No. 1 to Agreement and Plan of Merger dated as of June 2, 1999 among Ceridian Corporation, Spring Acquisition Corporation and ABR Information Services, Inc. (incorporated by reference to Exhibit (c)(3) to Amendment No. 2 to Ceridian's Schedule 14D-1 dated June 3, 1999 (File No. 005-44917)). 3.1 Restated Certificate of Incorporation of Ceridian Corporation (incorporated by reference to Exhibit 4.01 to Ceridian's Registration Statement on Form S-8 (File No. 33-54379)). 3.2 Certificate of Amendment of Restated Certificate of Incorporation of Ceridian Corporation (incorporated by reference to Exhibit 3 to Ceridian's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 (File No. 1-1969)). 3.3 Certificate of Amendment of Restated Certificate of Incorporation of Ceridian Corporation (incorporated by reference to Exhibit 3.01 to Ceridian's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 1-1969)). 3.4 Bylaws of Ceridian Corporation, as amended (incorporated by reference to II-2 Exhibit 3.01 to Ceridian's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 (File No. 1-1969)). 4.1 Indenture dated June 10, 1999 between Ceridian and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.01 to Ceridian's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 1-1969)). 4.2 Registration Rights Agreement dated June 10, 1999 among Ceridian and Banc of America Securities LLC, Chase Securities Inc., BNY Capital Markets, Inc., TD Securities (USA) Inc. and U.S. Bancorp Piper Jaffray Inc. (incorporated by reference to Exhibit 4.02 to Ceridian's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 1-1969)). 5.1 Opinion and Consent of Oppenheimer Wolff & Donnelly LLP. 10.1 Amended and Restated Executive Employment Agreement between Ceridian Corporation and Lawrence Perlman, dated as of November 8, 1996 (incorporated by reference to Exhibit 10.01 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 1-1969)). 10.2 Executive Employment Agreement between Ceridian Corporation and Ronald L. Turner, dated as of July 1, 1997 (incorporated by reference to Exhibit 10.02 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969)). 10.3 Executive Employment Agreement between Ceridian Corporation and Stephen B. Morris, dated as of July 1, 1997 (incorporated by reference to Exhibit 10.03 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969)). 10.4 Executive Employment Agreement between Ceridian Corporation and John R. Eickhoff, dated as of July 1, 1997 (incorporated by reference to Exhibit 10.04 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969)). 10.5 Executive Employment Agreement between Ceridian Corporation and Carl O. Keil, dated as of October 22, 1997 (incorporated by reference to Exhibit 10.05 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969)). 10.6 Executive Employment Agreement between Ceridian Corporation and Tony G. Holcombe, dated as of May 13, 1997. (incorporated by reference to Exhibit 10.06 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-1969)). 10.7 Form of Amendment to Executive Employment Agreement (applicable to agreements between Ceridian and Lawrence Perlman, Ronald L. Turner, Stephen B. Morris, John R. Eickhoff, Carl O. Keil and Tony G. Holcombe filed as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5 and 10.6, respectively) (incorporated by II-3 reference to Exhibit 10.01 to Ceridian's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998 (File No. 1-1969)) 10.8 Ceridian Corporation 1993 Long-Term Incentive Plan (Amended and Restated as of May 14, 1997) (incorporated by reference to Appendix A to Ceridian's Proxy Statement for Annual Meeting of Stockholders, May 14, 1997 (File No. 1-1969)). 10.9 Form of Ceridian Corporation Employee Non-Statutory Stock Option Award Agreement (under 1993 Long-Term Incentive Plan) (incorporated by reference to Exhibit 10.12 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969)). 10.10 Form of Ceridian Corporation Performance-Based Stock Option Award Agreement, dated October 22, 1997 (under the 1993 Long-Term Incentive Plan) (incorporated by reference to Exhibit 10.13 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969)). 10.11 Form of Ceridian Corporation Performance-Based Stock Option Award Agreement, dated July 22, 1998 (under the 1993 Long-Term Incentive Plan) (incorporated by reference to Exhibit 10.11 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-1969)). 10.12 Form of Ceridian Corporation Performance-Based Stock Option Award Agreement, dated October 21, 1998 (under the 1993 Long-Term Incentive Plan) (incorporated by reference to Exhibit 10.12 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-1969)). 10.13 Form of Ceridian Corporation Performance Restricted Stock Award Agreement (under the 1993 Long-Term Incentive Plan) (incorporated by reference to Exhibit 10.17 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 1-1969)). 10.14 Ceridian Corporation 1990 Long-Term Incentive Plan (1992 Restatement) (as amended through October 21, 1994) (incorporated by reference to Exhibit 10.12 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1994 (File No. 1-1969)). 10.15 Ceridian Corporation Benefit Equalization Plan, as amended (effective generally as of January 1, 1994) (incorporated by reference to Exhibit 10.14 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1994 (File No. 1-1969)). 10.16 Ceridian Corporation Employees' Benefit Protection Trust Agreement, dated as of December 1, 1994, between Ceridian Corporation and First Trust National Association (incorporated by reference to Exhibit 10.15 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1994 (File No. 1-1969)). 10.17 Ceridian Corporation Executive Investment Plan (incorporated by reference to II-4 Exhibit 10.17 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-1969)). 10.18 Ceridian Corporation 1993 Non-Employee Director Stock Plan (incorporated by reference to Exhibit 2 to Ceridian's Proxy Statement for Annual Meeting of Stockholders, May 12, 1993 (File No. 1-1969)). 10.19 Ceridian Corporation 1996 Director Performance Incentive Plan (as amended through December 15, 1997) (incorporated by reference to Exhibit 10.22 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969)). 10.20 Ceridian Corporation Employee Stock Purchase Plan (as amended through May 22, 1998) (incorporated by reference to Exhibit 99.01 to Ceridian's Registration Statement on Form S-8 (File No. 333-58143)). 10.21 Form of Indemnification Agreement between Ceridian Corporation and its Directors (incorporated by reference to Exhibit 10.16 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 1-1969)). 10.22 Amended and Restated Credit Agreement, dated as of July 31, 1997, among Ceridian Corporation, Bank of America National Trust and Savings Association as Agent, and the Financial Institutions Parties Thereto (exhibits and schedules omitted) (incorporated by reference to Exhibit 10.1 to Ceridian's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997 (File No. 1-1969)). 10.23 Waiver and First Amendment to Credit Agreement, dated as of December 2, 1997, among Ceridian Corporation, Bank of America National Trust and Savings Association as Agent, and the Financial Institutions Parties Thereto (incorporated by reference to Exhibit 10.25 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969)). 10.24 Credit Agreement, dated as of January 30, 1998, between The Toronto-Dominion Bank and Ceridian Canada Ltd. (exhibits and schedules omitted) (incorporated by reference to Exhibit 10.26 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1995 (File No. 1-1969)). 10.25 Guarantee Agreement, dated as of January 30, 1998, between Ceridian Corporation and The Toronto-Dominion Bank (incorporated by reference to Exhibit 10.27 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969)). 10.26 Credit Agreement, dated as of March 2, 1998, between Canadian Imperial Bank of Commerce and Ceridian Canada Ltd. (exhibits and schedules omitted) (incorporated by reference to Exhibit 10.28 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997(File No. 1-1969)). 10.27 Guarantee Agreement, dated as of March 2, 1998, between Ceridian Corporation and Canadian Imperial Bank of Commerce (incorporated by reference to Exhibit II-5 10.29 Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969)). 10.28 Letter Agreement dated as of December 16, 1997, between Comdata Network, Inc. and International Business Machines Corporation pertaining to the Amended and Restated Agreement for Systems Operations Services dated May 1, 1995 between Comdata Network, Inc. and Integrated Systems Solutions Corporation n.k.a. International Business Machines Corporation (exhibits and schedules omitted) (incorporated by reference to Exhibit 10.30 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969)). 10.29 Amended and Restated Agreement for Systems Operations Services dated May 1, 1995 between Comdata Network, Inc. and Integrated Systems Solutions Corporation n.k.a. International Business Machines Corporation (exhibits and schedules omitted) (incorporated by reference to Exhibit 10.20 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1995 (File No. 1-1969)). 10.30 Telecommunications Services Agreement, dated as of September 1, 1997, among WorldCom Network Services, Inc. d.b.a. WilTel, Comdata Network, Inc. and Comdata Telecommunications Services, Inc., including Program Enrollment Terms, as amended (exhibits and schedules omitted) (incorporated by reference to Exhibit 10.32 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969)). 10.31 Ceridian Corporation 1999 Stock Incentive Plan (incorporated by reference to Exhibit 10.02 to Ceridian's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 1-1969)). 12.1 Statement re: Computation of Ratios. 21.1 Subsidiaries of Ceridian. 23.1 Consent of Oppenheimer Wolff & Donnelly LLP (included in Exhibit 5.1). 23.2 Consent of KPMG LLP. 23.3 Consent of Grant Thornton LLP. 24.1 Powers of Attorney (see page II-9). 25.1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 on Form T-1 of The Bank of New York to act as Trustee under the indenture. 99.1 Form of Letter of Transmittal. 99.2 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. II-6 99.3 Form of Letter to Clients. 99.4 Form of Notice of Guaranteed Delivery.
b. FINANCIAL STATEMENTS SCHEDULES. Independent Auditors' Report on Schedule. Schedule II - Valuation and Qualifying Accounts (incorporated by reference to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1998) ITEM 22. UNDERTAKINGS. The undersigned registrant hereby undertakes: 1. To file, during any period in which offers or sales are being made of the securities registered hereby, a post-effective amendment to this registration statement: a. To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; b. To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and c. To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement; provided, however, that the undertakings set forth in paragraphs (a) and (b) above shall not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement. 2. That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment will be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof. 3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. 4. That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act II-7 of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this registration statement will be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof. 5. To respond to requests for information that is incorporated by reference into this prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. 6. To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. II-8 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on August 20, 1999. CERIDIAN CORPORATION By: /s/ Lawrence Perlman ------------------------------------ Lawrence Perlman Chairman and Chief Executive Officer (Principal Executive Officer) POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Lawrence Perlman, John R. Eickhoff and Gary M. Nelson, and each of them, his or her true and lawful attorney-in-fact and agent with full powers of substitution and resubstitution, for and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on August 20, 1999 by the following persons in the capacities indicated. SIGNATURE TITLE - --------- ------ /s/ Lawrence Perlman - ------------------------------ Chairman and Chief Executive Officer Lawrence Perlman (Principal Executive Officer) /s/ John R. Eickhoff - ----------------------------- Executive Vice President and Chief Financial John R. Eickhoff Officer (Principal Financial Officer) /s/ Loren D. Gross - ----------------------------- Vice President and Corporate Controller Loren D. Gross (Principal Accounting Officer) /s/ Bruce R. Bond - ----------------------------- Director Bruce R. Bond /s/ Nicholas D. Chabraja - ----------------------------- Director Nicholas D. Chabraja /s/ Ruth M. Davis - ----------------------------- Director Ruth M. Davis /s/ Robert H. Ewald - ----------------------------- Director Robert H. Ewald II-9 /s/ Richard G. Lareau - ----------------------------- Director Richard G. Lareau /s/ Ronald T. LeMay - ----------------------------- Director Ronald T. LeMay /s/ George R. Lewis - ----------------------------- Director George R. Lewis /s/ Ronald L. Turner - ----------------------------- Director Ronald L. Turner /s/ Carole J. Uhrich - ----------------------------- Director Carole J. Uhrich /s/ Paul S. Walsh - ----------------------------- Director Paul S. Walsh II-10 INDEX TO EXHIBITS
NO. ITEM METHOD OF FILING --- ---- ---------------- 1.1 Purchase Agreement dated June 10, 1999 among Ceridian and Banc of Incorporated by reference to Exhibit America Securities LLC, Chase Securities Inc., BNY Capital Markets, 10.01 to Ceridian's Quarterly Report Inc., TD Securities (USA) Inc. and U.S. Bancorp Piper Jaffray Inc. on Form 10-Q for the quarter ended June 30, 1999 (File No. 1-1969). 2.1 Asset Purchase Agreement, dated as of November 3, 1997, by and Incorporated by reference to Exhibit 2.1 between Ceridian Corporation and General Dynamics Corporation to Ceridian's Current Report on Form 8-K (exhibits and schedules omitted). dated December 31, 1997 (File No. 1-1969). 2.2 Closing Agreement, dated as of December 31, 1997, between and among Incorporated by reference to Exhibit 2.2 Ceridian Corporation, General Dynamics Corporation, General Dynamics to Ceridian's Current Report on Form 8-K Information Systems, Inc. and CDI Acquisition Company (exhibits and dated December 31, 1997 (File No. 1-1969). schedules omitted). 2.3 Exchange Agreement, dated as of January 17, 1998, among First Incorporated by reference to Exhibit Data Corporation, Integrated Payment Systems Inc., NTS, Inc., 2.03 to Ceridian's Annual Report on Form First Data Financial Services, L.L.C., Ceridian Corporation, 10-K for the year ended December 31, Comdata Network, Inc. and Permicom Permits Services, Inc. 1997 (File No. 1-1969). (exhibits and schedules omitted). 2.4 Share Purchase Agreement, dated as of January 26, 1998, among Incorporated by reference to Exhibit The Toronto-Dominion Bank, Business Windows Inc., 3454916 2.04 to Ceridian's Annual Report on Form Canada Inc., Ceridian Corporation, Ceridian Canada Ltd. and 10-K for the year ended December 31, Ceridian Canada Holdings, Inc. (exhibits and schedules omitted). 1997 (File No. 1-1969). 2.5 Agreement for the Purchase and Sale of Certain of the Assets of Incorporated by reference to Exhibit 2.1 Comcheq Services Limited, dated as of March 10, 1998, among the to Ceridian's Current Report on Form 8-K Canadian Imperial Bank of Commerce, Comcheq Services Limited and dated March 10, 1998 (File No. 1-1969). Ceridian Canada Ltd. (exhibits and schedules omitted). 2.6 Asset Purchase Agreement, dated as of November 17, 1998, among Incorporated by reference to Exhibit 2.06 Ceridian Corporation, Ceridian Performance Partners Ltd., Letter to Ceridian's Annual Report on Form 10-K Allied Limited, Work/Family Directions, Inc., Canadian Work/Family for the year ended December 31, 1998 Directions Co., WFD, Francene S. Rodgers, Charles S. Rodgers and the (File No. 1-1969). Other Shareholders Party Thereto (exhibits and schedules omitted). 2.7 Agreement and Plan of Merger dated as of April 30, 1999 among Incorporated by reference to Exhibit Ceridian Corporation, Spring Acquisition Corporation and ABR (c)(1) to Ceridian's Schedule 14D-1 Information Services, Inc. dated May 7, 1999 (File No. 005-44917). 2.8 Amendment No. 1 to Agreement and Plan of Merger dated as of Incorporated by reference to Exhibit June 2, 1999 among Ceridian Corporation, Spring Acquisition (c)(3) to Amendment No. 2 to Ceridian's Corporation and ABR Information Services, Inc. Schedule 14D-1 dated June 3, 1999 (File No. 005-44917). 3.1 Restated Certificate of Incorporation of Ceridian Corporation. Incorporated by reference to Exhibit 4.01 to Ceridian's Registration Statement on Form S-8 (File No. 33-54379). 3.2 Certificate of Amendment of Restated Certificate of Incorporated by reference to Exhibit 3 Incorporation of Ceridian Corporation. to Ceridian's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 (File No. 1-1969). 3.3 Certificate of Amendment of Restated Certificate of Incorporated by reference to Exhibit Incorporation of Ceridian Corporation. 3.01 to Ceridian's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 1-1969). 3.4 Bylaws of Ceridian Corporation, as amended. Incorporated by reference to Exhibit 3.01 to Ceridian's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 (File No. 1-1969). 4.1 Indenture dated June 10, 1999 between Ceridian and The Bank of Incorporated by reference to Exhibit New York, as Trustee. 4.01 to Ceridian's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 1-1969). 4.2 Registration Rights Agreement dated June 10, 1999 among Incorporated by reference to Exhibit Ceridian and Banc of America Securities LLC, Chase Securities 4.02 to Ceridian's Quarterly Report on Inc., BNY Capital Markets, Inc., TD Securities (USA) Inc. and Form 10-Q for the quarter ended June 30, U.S. Bancorp Piper Jaffray Inc. 1999 (File No. 1-1969). 5.1 Opinion and Consent of Oppenheimer Wolff & Filed herewith. Donnelly LLP. 10.1 Amended and Restated Executive Employment Agreement between Ceridian Incorporated by reference to Exhibit Corporation and Lawrence Perlman, dated as of November 8, 1996. 10.01 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 1-1969). 10.2 Executive Employment Agreement between Ceridian Corporation and Incorporated by reference to Exhibit Ronald L. Turner, dated as of July 1, 1997. 10.02 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969). 10.3 Executive Employment Agreement between Ceridian Corporation and Incorporated by reference to Exhibit Stephen B. Morris, dated as of July 1, 1997. 10.03 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969). 10.4 Executive Employment Agreement between Ceridian Corporation and Incorporated by reference to Exhibit John R. Eickhoff, dated as of July 1, 1997. 10.04 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969). 10.5 Executive Employment Agreement between Ceridian Corporation and Incorporated by reference to Exhibit Carl O. Keil, dated as of October 22, 1997. 10.05 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969). 10.6 Executive Employment Agreement between Ceridian Corporation and Incorporated by reference to Exhibit Tony G. Holcombe, dated as of May 13, 1997. 10.06 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-1969). 10.7 Form of Amendment to Executive Employment Agreement (applicable to Incorporated by reference to Exhibit 10.01 agreements between Ceridian and Lawrence Perlman, Ronald L. Turner, to Ceridian's Quarterly Report on Form 10-Q Stephen B. Morris, John R. Eickhoff, Carl O. Keil and Tony G. for the quarter ended September 30, 1998 Holcombe filed as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5 and 10.6, (File No. 1-1969). respectively). 10.8 Ceridian Corporation 1993 Long-Term Incentive Plan (Amended and Incorporated by reference to Appendix A Restated as of May 14, 1997). to Ceridian's Proxy Statement for Annual Meeting of Stockholders, May 14, 1997 (File No. 1-1969). 10.9 Form of Ceridian Corporation Employee Non-Statutory Stock Incorporated by reference to Exhibit Option Award Agreement (under 1993 Long-Term Incentive Plan). 10.12 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969). 10.10 Form of Ceridian Corporation Performance-Based Stock Option Incorporated by reference to Exhibit Award Agreement, dated October 22, 1997 (under the 1993 10.13 to Ceridian's Annual Report on Long-Term Incentive Plan). Form 10-K for the year ended December 31, 1997 (File No. 1-1969). 10.11 Form of Ceridian Corporation Performance-Based Stock Option Award Incorporated by reference to Exhibit 10.11 Agreement, dated July 22, 1998 (under the 1993 Long-Term Incentive to Ceridian's Annual Report on Form 10-K Plan). for the year ended December 31, 1998 (File No. 1-1969). 10.12 Form of Ceridian Corporation Performance-Based Stock Option Incorporated by reference to Exhibit Award Agreement, dated October 21, 1998 (under the 1993 10.12 to Ceridian's Annual Report on Long-Term Incentive Plan). Form 10-K for the year ended December 31, 1998 (File No. 1-1969). 10.13 Form of Ceridian Corporation Performance Restricted Stock Award Incorporated by reference to Exhibit Agreement (under the 1993 Long-Term Incentive Plan). 10.17 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 1-1969). 10.14 Ceridian Corporation 1990 Long-Term Incentive Plan (1992 Incorporated by reference to Exhibit Restatement) (as amended through October 21, 1994). 10.12 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1994 (File No. 1-1969). 10.15 Ceridian Corporation Benefit Equalization Plan, as amended Incorporated by reference to Exhibit (effective generally as of January 1, 1994). 10.14 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1994 (File No. 1-1969). 10.16 Ceridian Corporation Employees' Benefit Protection Trust Agreement, Incorporated by reference to Exhibit 10.15 dated as of December 1, 1994, between Ceridian Corporation and First to Ceridian's Annual Report on Form 10-K Trust National Association. for the year ended December 31, 1994 (File No. 1-1969). 10.17 Ceridian Corporation Executive Investment Plan. Incorporated by reference to Exhibit 10.17 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-1969). 10.18 Ceridian Corporation 1993 Non-Employee Director Stock Plan. Incorporated by reference to Exhibit 2 to Ceridian's Proxy Statement for Annual Meeting of Stockholders, May 12, 1993 (File No. 1-1969). 10.19 Ceridian Corporation 1996 Director Performance Incentive Plan Incorporated by reference to Exhibit (as amended through December 15, 1997). 10.22 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969). 10.20 Ceridian Corporation Employee Stock Purchase Plan (as amended Incorporated by reference to Exhibit through May 22, 1998). 99.01 to Ceridian's Registration Statement on Form S-8 (File No. 333-58143). 10.21 Form of Indemnification Agreement between Ceridian Corporation Incorporated by reference to Exhibit and its Directors. 10.16 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 1-1969). 10.22 Amended and Restated Credit Agreement, dated as of July 31, 1997, Incorporated by reference to Exhibit among Ceridian Corporation, Bank of America National Trust and 10.1 to Ceridian's Quarterly Report on Savings Association as Agent, and the Financial Institutions Parties Form 10-Q for the quarter ended Thereto (exhibits and schedules omitted). June 30, 1997 (File No. 1-1969). 10.23 Waiver and First Amendment to Credit Agreement, dated as of December Incorporated by reference to Exhibit 10.25 2, 1997, among Ceridian Corporation, Bank of America National Trust to Ceridian's Annual Report on Form 10-K and Savings Association as Agent, and the Financial Institutions for the year ended December 31, 1997 Parties Thereto. (File No. 1-1969). 10.24 Credit Agreement, dated as of January 30, 1998, between The Incorporated by reference to Exhibit Toronto-Dominion Bank and Ceridian Canada Ltd. (exhibits and 10.26 to Ceridian's Annual Report on schedules omitted). Form 10-K for the year ended December 31, 1995 (File No. 1-1969). 10.25 Guarantee Agreement, dated as of January 30, 1998, between Incorporated by reference to Exhibit Ceridian Corporation and The Toronto-Dominion Bank. 10.27 to Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969). 10.26 Credit Agreement, dated as of March 2, 1998, between Canadian Incorporated by reference to Exhibit Imperial Bank of Commerce and Ceridian Canada Ltd. (exhibits 10.28 to Ceridian's Annual Report on and schedules omitted). Form 10-K for the year ended December 31, 1997(File No. 1-1969). 10.27 Guarantee Agreement, dated as of March 2, 1998, between Incorporated by reference to Exhibit Ceridian Corporation and Canadian Imperial Bank of Commerce. 10.29 Ceridian's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969). 10.28 Letter Agreement dated as of December 16, 1997, between Comdata Incorporated by reference to Exhibit 10.30 Network, Inc. and International Business Machines Corporation to Ceridian's Annual Report on Form 10-K pertaining to the Amended and Restated Agreement for Systems for the year ended December 31, 1997 Operations Services dated May 1, 1995 between Comdata Network, Inc. (File No. 1-1969). and Integrated Systems Solutions Corporation n.k.a. International Business Machines Corporation (exhibits and schedules omitted). 10.29 Amended and Restated Agreement for Systems Operations Services dated Incorporated by reference to Exhibit May 1, 1995 between Comdata Network, Inc. and Integrated Systems 10.20 to Ceridian's Annual Report on Solutions Corporation n.k.a. International Business Machines Form 10-K for the year ended Corporation (exhibits and schedules omitted). December 31, 1995 (File No. 1-1969). 10.30 Telecommunications Services Agreement, dated as of September Incorporated by reference to Exhibit 1, 1997, among WorldCom Network Services, Inc. d.b.a. WilTel, 10.32 to Ceridian's Annual Report on Comdata Network, Inc. and Comdata Telecommunications Form 10-K for the year ended December Services, Inc., including Program Enrollment Terms, as 31, 1997 (File No. 1-1969). amended (exhibits and schedules omitted). 10.31 Ceridian Corporation 1999 Stock Incentive Plan. Incorporated by reference to Exhibit 10.02 to Ceridian's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 1-1969). 12.1 Statement re: Computation of Ratios. Filed herewith. 21.1 Subsidiaries of Ceridian. Filed herewith 23.1 Consent of Oppenheimer Wolff & Donnelly LLP. Included in Exhibit 5.1. 23.2 Consent of KPMG LLP. Filed herewith. 23.3 Consent of Grant Thornton LLP. Filed herewith. 24.1 Powers of Attorney. Included on page II-9 of this registration statement. 25.1 Statement of Eligibility and Qualification under the Trust Filed herewith. Indenture Act of 1939 on Form T-1 of The Bank of New York to act as Trustee under the indenture. 99.1 Form of Letter of Transmittal. Filed herewith. 99.2 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Filed herewith. Companies and Other Nominees. 99.3 Form of Letter to Clients. Filed herewith. 99.4 Form of Notice of Guaranteed Delivery. Filed herewith.
EX-5.1 2 EX-5.1 EXHIBIT 5.1 [Letterhead of Oppenheimer Wolff & Donnelly LLP] August 20, 1999 Ceridian Corporation 8100 34th Avenue South Minneapolis, Minnesota 55425 RE: REGISTRATION STATEMENT ON FORM S-4 Ladies and Gentlemen: We have acted as counsel to Ceridian Corporation, a Delaware corporation (the "Company"), in connection with the preparation of a Registration Statement on Form S-4 (the "Registration Statement") filed by the Company with the Securities and Exchange Commission with respect to up to $450,000,000 aggregate principal amount of the Company's 7.25% Senior Notes due 2004 (the "New Notes") which will be offered in exchange for the Company's issued and outstanding 7.25% Senior Notes due 2004 (the "Old Notes") as described in the Registration Statement. The New Notes are to be issued in exchange for the Old Notes pursuant to an indenture (the "Indenture") dated as of June 10, 1999 between the Company and The Bank of New York, as Trustee (the "Trustee") and the related Registration Rights Agreement among the Company, Banc of America Securities LLC, Chase Securities Inc., BNY Capital Markets, Inc., TD Securities (USA) Inc. and U.S. Bancorp Piper Jaffray Inc. (the "Registration Rights Agreement"). In so acting, we have examined and relied upon such records, documents and other instruments as in our judgment are necessary or appropriate in order to express the opinion hereinafter set forth and have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity to original documents of all documents submitted to us as certified or photostatic copies. Based upon and subject to the foregoing, we are of the opinion that the New Notes, when duly executed and authenticated in accordance with the terms of the Indenture, and delivered in exchange for the Old Notes in accordance with the terms of the Indenture, will have been validly issued and will be legally binding obligations of the Company, subject to (a) the effect of bankruptcy, insolvency, reorganization, arrangement, moratorium, fraudulent conveyance, fraudulent transfer and other similar laws relating to or affecting the rights of creditors generally and (b) general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance, injunctive relief or other equitable remedies), regardless of whether considered in a proceeding at law or in equity. We express no opinion herein other than as to the laws of the State of New York, State of Minnesota, the federal laws of the United States and the Delaware General Corporation Law. We hereby consent to the reference to our law firm in the Registration Statement under the caption "Legal Matters" and to the use of this opinion as an exhibit to the Registration Statement. Very truly yours, /s/ Oppenheimer Wolff & Donnelly LLP EX-12.1 3 EX-12.1 Exhibit 12.1 CERIDIAN CORPORATION AND SUBIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Year Ended December 31, ------------------------------------------------------------------------ 1998 1997 1996 1995 1994 ---------- ------------ ------------ ---------- ---------- (Dollars in millions) Earnings before income taxes and other items (1) $ 229.7 $ (77.1) $ 196.2 $ 116.2 $ 115.2 Less undistributed earnings and non-guaranteed losses from less than 50% owned affiliates included above - - - - - ------------- ---------- ----------- --------- --------- Total earnings before income taxes and other items 229.7 (77.1) 196.2 116.2 115.2 Add: Interest 4.3 12.1 10.6 30.6 32.2 Interest portion of rentals (2) 12.1 14.0 13.8 14.0 14.0 ------------- ---------- ----------- --------- --------- Adjusted earnings before income taxes and other items $ 246.1 $ (51.0) $ 220.6 160.8 161.4 ------------- ---------- ----------- --------- --------- ------------- ---------- ----------- --------- --------- Interest $ 4.3 $ 12.1 $ 10.6 $ 30.6 $ 32.2 Interest portion of rentals (2) 12.1 14.0 13.8 14.0 14.0 ------------- ---------- ----------- --------- --------- Total fixed charges $ 16.4 $ 26.1 $ 24.4 $ 44.6 $ 46.2 ------------- ---------- ----------- --------- --------- ------------- ---------- ----------- --------- --------- Ratio of earnings to fixed charges 15.01x 9.04x 3.61x 3.49x ------------- ----------- --------- --------- ------------- ----------- --------- --------- Deficiency $ (77.1) ---------- ----------
(1) Results include continuing and discontinued operations. (2) Interest component assumed to be one-third of rental expense. EX-21.1 4 EX-21.1 Exhibit 21.1 CERIDIAN CORPORATION Subsidiaries August 18, 1999 STATE OR OTHER JURISDICTION SUBSIDIARIES AND THEIR AFFILIATES: OF INCORPORATION - ---------------------------------- ------------------ ABR Information Services, Inc. Florida Ceridian Benefits Services, Inc. Florida (formerly ABR Benefits Services, Inc.) ABR Employer Services, Inc. Florida ABR Properties, Inc. Florida ABR Retirement Plan Services, Inc. Florida BMC Consultants, Inc. Colorado Business Computer Services, Inc. (d/b/a PayAmerica) Virginia Charing Company, Inc. Wisconsin Chowning, Ltd. Wisconsin The Barrington Group Wisconsin Matthews, Malone & Associates, Ltd. Arizona MidAtlantic 401(K) Services, Inc. Virginia Western Pension Service Corporation California Ceridian Canada Holdings, Inc. Delaware Ceridian Canada Ltd. Canada Ceridian Performance Partners Ltd. Canada Ceridian Holdings U.K. Limited United Kingdom Centrefile Limited (f/k/a Datacarrer Limited) United Kingdom CSW Research Limited United Kingdom Euro Fieldwork Limited United Kingdom Ceridian Performance Partners Limited United Kingdom (f/k/a Letterallied Limited) Usertech UK Limited United Kingdom Ceridian Infotech (India) Private Limited India Ceridian Small Business Solutions, Inc. New Jersey (f/k/a Minidata Services, Inc.) Ceridian Tax Service, Inc. California Comdata Network, Inc. Maryland Comdata Network Inc. of California California Comdata Telecommunications Services, Inc. Delaware International Automated Energy Systems, Inc. Florida Permicom Permits Services, Inc. Canada The Partnership Group, Inc. Pennsylvania Scarborough Research (General Partnership) Delaware User Technology Services Inc. New York Web Northstar Interactive Corp. New York Certain subsidiaries, which in the aggregate would not constitute a significant subsidiary, are omitted from this listing. EX-23.2 5 EX-23.2 EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS The Board of Directors Ceridian Corporation: We consent to the use of our reports incorporated herein by reference and to the references to our firm under the headings "Selected Historical Consolidated and Pro Forma Financial Data" and "Experts" in the prospectus in this Form S-4 registration statement. /s/ KPMG LLP Minneapolis, Minnesota August 19, 1999 EX-23.3 6 EX-23.3 Exhibit 23.3 The Board of Directors of Ceridian Corporation: We have issued our reports dated November 11, 1998, accompanying the consolidated financial statements and schedule included in the Annual Report of ABR Information Services, Inc. on Form 10-K for the year ended July 31, 1998 which is incorporated by reference in this Registration Statement. We hereby consent to the incorporation by reference in the Registration Statement of the aforementioned reports and to the use of our name as it appears under the caption "Experts". GRANT THORNTON LLP (manually) Tampa, Florida August 17, 1999 EX-25.1 7 EX-25.1 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| --------------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) --------------------------- CERIDIAN CORPORATION (Exact name of obligor as specified in its charter) Delaware 52-0278528 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 8100 34th Avenue South Minneapolis, MN 55425 (Address of principal executive offices) (Zip code) --------------------------- 7.25% Senior Notes due 2004 (Title of the indenture securities) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
- ------------------------------------------------------------------------------- Name Address - ------------------------------------------------------------------------------- Superintendent of Banks of the State 2 Rector Street, New York, N.Y. of New York 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 18th day of August 1999. THE BANK OF NEW YORK By: REMO J REALE --------------------------- Name: REMO J. REALE Title: VICE PRESIDENT - ------------------------------------------------------------------------------- Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 1999, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
ASSETS Dollar Amounts In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin . ...... $ 4,508,742 Interest-bearing balances ................................. 4,425,071 Securities: Held-to-maturity securities ............................... 836,304 Available-for-sale securities ............................. 4,047,851 Federal funds sold and Securities purchased under agreements to resell ...................................... 1,743,269 Loans and lease financing receivables: Loans and leases, net of unearned income ...........................39,349,679 LESS: Allowance for loan and lease losses ........................603,025 LESS: Allocated transfer risk reserve ..............................15,906 Loans and leases, net of unearned income, allowance, and reserve .................................. 38,730,748 Trading Assets ............................................... 1,571,372 Premises and fixed assets (including capitalized leases) ................................................... 685,674 Other real estate owned ...................................... 10,331 Investments in unconsolidated subsidiaries and associated companies ...................................... 182,449 Customers' liability to this bank on acceptances outstanding ............................................... 1,184,822 Intangible assets ............................................ 1,129,636 Other assets ................................................. 2,632,309 ------------ Total assets ................................................. $ 61,688,578 ------------ ------------ LIABILITIES Deposits: In domestic offices ....................................... $ 25,731,036 Noninterest-bearing ................10,252,589 Interest-bearing ...................15,478,447 In foreign offices, Edge and Agreement subsidiaries, and IBFs .................................. 18,756,302 Noninterest-bearing ...................111,386 Interest-bearing ...................18,644,916 Federal funds purchased and Securities sold under agreements to repurchase .................................. 3,276,362 Demand notes issued to the U.S.Treasury ...................... 230,671 Trading liabilities .......................................... 1,554,493 Other borrowed money: With remaining maturity of one year or less ............... 1,154,502 With remaining maturity of more than one year through three years ..................................... 465 With remaining maturity of more than three years .......... 31,080 Bank's liability on acceptances executed and outstanding ............................................... 1,185,364 Subordinated notes and debentures ............................ 1,308,000 Other liabilities ............................................ 2,743,590 ----------- Total liabilities ............................................ 55,971,865 ----------- ----------- EQUITY CAPITAL Common stock ................................................. 1,135,284 Surplus ...................................................... 764,443 Undivided profits and capital reserves ....................... 3,807,697 Net unrealized holding gains (losses) on available-for-sale securities ............................. 44,106 Cumulative foreign currency translation adjustments .......... (34,817) ----------- Total equity capital ......................................... 5,716,713 ----------- Total liabilities and equity capital ......................... $ 61,688,578 ----------- -----------
I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Thomas J. Mastro We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. Thomas A. Reyni Directors Alan R. Griffith Gerald L. Hassell EX-99.1 8 EX-99.1 EXHIBIT 99.1 LETTER OF TRANSMITTAL TO TENDER FOR EXCHANGE 7.25% SENIOR NOTES DUE 2004 OF CERIDIAN CORPORATION PURSUANT TO THE PROSPECTUS DATED , 1999 THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 1999 (THE "EXPIRATION DATE"), UNLESS THE EXCHANGE OFFER IS EXTENDED BY CERIDIAN CORPORATION (THE "COMPANY") IN ITS SOLE DISCRETION, IN WHICH CASE THE TERM "EXPIRATION DATE" SHALL MEAN THE LATEST DATE AND TIME TO WHICH THE EXCHANGE OFFER IS EXTENDED. TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. DELIVERY TO: THE BANK OF NEW YORK, AS EXCHANGE AGENT ------------------------ BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER: (FOR ELIGIBLE INSTITUTIONS ONLY) The Bank of New York (212) 815-6339 The Bank of New York 101 Barclay Street 101 Barclay Street Floor 7E CONFIRM FACSIMILE BY TELEPHONE Corporate Trust Services New York, NY 10286 (ALONG WITH GENERAL QUESTIONS AND Ground Level Window Attn: Reorganization Section REQUESTS): New York, NY 10286 (212) 815-3750 Attn: Reorganization Section
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. The undersigned hereby acknowledges receipt of the Prospectus dated , 1999 (the "Prospectus") of the Company and this Letter of Transmittal, which together constitute the Company's offer (the "Exchange Offer") to exchange $1,000 principal amount of its 7.25% Senior Notes due 2004 (the "New Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a Registration Statement of which the Prospectus is a part, for each $1,000 principal amount of its outstanding 7.25% Senior Notes due 2004 (the "Old Notes"). The term "Expiration Date" shall mean 5:00 p.m., New York City time, on , 1999, unless the Exchange Offer is extended, in which case the term "Expiration Date" means the latest date and time to which the Exchange Offer is extended. Capitalized terms used but not defined herein have the meanings given to them in the Prospectus. YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT. List on the next page the Old Notes to which this Letter of Transmittal relates. If the space indicated is inadequate, the Certificate or Registration Numbers and the Principal Amounts should be listed on a separately signed schedule affixed hereto. DESCRIPTION OF SENIOR NOTES TENDERED HEREBY
- --------------------------------------------------------------------------------------------- AGGREGATE PRINCIPAL CERTIFICATE OR AMOUNT PRINCIPAL NAME(S) AND ADDRESS(ES) OF REGISTRATION REPRESENTED AMOUNT REGISTERED OWNER(S) (PLEASE FILL IN) NUMBERS* BY OLD NOTES TENDERED** - --------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------- TOTAL -------------------------------
* Need not be completed by Book-Entry Holders. ** Unless otherwise indicated, the Holder will be deemed to have tendered the full aggregate principal amount represented by such Old Notes. All tenders must be in integral multiples of $1,000. This Letter of Transmittal is to be used (i) if certificates of Old Notes are to be forwarded herewith, (ii) if delivery of Old Notes is to be made by book-entry transfer to an account maintained by the Exchange Agent at The Depository Trust Company (the "Depository" or "DTC"), pursuant to the procedures set forth in the "The Exchange Offer--Procedures for Tendering" in the Prospectus, or (iii) if tender of the Old Notes is to be made according to the guaranteed delivery procedures described in the Prospectus under the caption "The Exchange Offer--Guaranteed Delivery Procedures." See Instruction 2. Delivery of documents to a book-entry transfer facility does not constitute delivery to the Exchange Agent. The term "Holder" with respect to the Exchange Offer means any person in whose name Old Notes are registered on the books of the Company or any other person who has obtained a properly completed bond power from the registered holder. The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. Holders who wish to tender their Old Notes must complete this Letter of Transmittal in its entirety. / / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE DEPOSITORY AND COMPLETE THE FOLLOWING: Name of Tendering Institution _____________________________________________ Account Number ____________________________________________________________ Transaction Code Number ___________________________________________________ Holders who cannot deliver this Letter of Transmittal or any other required documents to the Exchange Agent prior to the Expiration Date or cannot complete the procedure for book-entry transfer on a timely basis must tender their Old Notes according to the guaranteed delivery procedures set forth in the Prospectus under the caption "The Exchange Offer--Guaranteed Delivery Procedures." See Instruction 2. 2 / / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING: Name of Registered Holder(s) ______________________________________________ Name of Eligible Institution that Guaranteed Delivery _____________________ If delivery by book-entry transfer: Account Number ____________________________________________________________ Transfer Code Number ______________________________________________________ / / CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name ______________________________________________________________________ Address ___________________________________________________________________ PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Company the principal amount of the Old Notes indicated above. Subject to, and effective upon, the acceptance for exchange of such Old Notes tendered hereby, the undersigned hereby exchanges, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to such Old Notes as are being tendered hereby, including all rights to accrued and unpaid interest thereon as of the Expiration Date. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent the true and lawful agent and attorney-in-fact of the undersigned (with full knowledge that said Exchange Agent acts as the agent of the Company in connection with the Exchange Offer) to cause the Old Notes to be assigned, transferred and exchanged. The undersigned represents and warrants that it has full power and authority to tender, exchange, assign and transfer the Old Notes and to acquire New Notes issuable upon the exchange of such tendered Old Notes, and that when the same are accepted for exchange, the Company will acquire good and unencumbered title to the tendered Old Notes, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim. The undersigned represents to the Company that (i) the New Notes acquired pursuant to the Exchange Offer are being obtained in the ordinary course of business of the person receiving such New Notes, whether or not such person is the undersigned; (ii) neither the undersigned nor any such other person has an arrangement or understanding with any person to participate in a distribution of such New Notes; (iii) the undersigned is not an affiliate (as defined under Rule 405 of the Securities Act) of the Company or, if the undersigned or the person receiving the New Notes covered by this letter is an affiliate of the Company, the New Notes may not be offered for resale, resold or otherwise transferred by the undersigned or such other person without registration under the Securities Act or an exemption therefrom; and (iv) neither the undersigned nor any such other person is a broker-dealer tendering Old Notes acquired directly from the Company. The undersigned also warrants that it will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the exchange, assignment and transfer of tendered Old Notes or transfer ownership of such Old Notes on the account books maintained by a book-entry transfer facility. The undersigned further agrees that acceptance of any tendered Old Notes by the Company and the issuance of New Notes in exchange therefor shall constitute performance in full by the Company of its obligations under the Registration Rights Agreement and that the Company shall have no further obligations or liabilities thereunder for the registration of the Old Notes or the New Notes. 3 The Exchange Offer is subject to certain conditions set forth in the Prospectus under the caption "The Exchange Offer--Conditions of the Exchange Offer." The undersigned recognizes that as a result of these conditions (which may be waived, in whole or in part, by the Company), as more particularly set forth in the Prospectus, the Company may not be required to exchange any of the Old Notes tendered hereby and, in such event, the Old Notes not exchanged will be returned to the undersigned at the address shown below the signature of the undersigned. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Tendered Old Notes may be withdrawn at any time prior to the Expiration Date. Unless otherwise indicated in the box entitled "Special Registration Instructions" or the box entitled "Special Delivery Instructions" in this Letter of Transmittal, certificates for all New Notes delivered in exchange for tendered Old Notes, and any Old Notes delivered herewith but not exchanged, will be registered in the name of the undersigned and shall be delivered to the undersigned at the address shown below the signature of the undersigned. If a New Note is to be issued to a person other than the person(s) signing this Letter of Transmittal, or if the New Note is to be mailed to someone other than the person(s) signing this Letter of Transmittal or to the person(s) signing this Letter of Transmittal at an address different than the address shown on this Letter of Transmittal, the appropriate boxes of this Letter of Transmittal should be completed. If Old Notes are surrendered by Holder(s) that have completed either the box entitled "Special Registration Instructions" or the box entitled "Special Delivery Instructions" in this Letter of Transmittal, signature(s) on this Letter of Transmittal must be guaranteed by an Eligible Institution (as defined in Instruction 2). 4 SPECIAL REGISTRATION INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS To be completed ONLY if the New Notes are to be issued in the name To be completed ONLY if the New Notes are to be sent to of someone other than the undersigned. someone other than the undersigned, or to the undersigned at an address other than that shown above under "Description of Senior Notes Tendered Hereby." Name.................................................................... Name...................................................... (Please Print) (Please Print) Address................................................................. Address................................................... ................................................................. .......................................................... (Include Zip Code) (Include Zip Code) Book-Entry Transfer Facility Account.................................... Employer Identification or Social Security Number.......................
IMPORTANT SIGN HERE (COMPLETE SUBSTITUTE FORM W-9 BELOW) ............................................................................ ............................................................................ Signature(s) of Owner(s) Dated:.............................................................. , 1999 (Must be signed by registered holder(s) exactly as name(s) appear(s) on the Old Notes or on a security position listing as the owner of the Old Notes or by person(s) authorized to become registered holder(s) by properly completed bond powers transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, agents, officers of corporations or others acting in a fiduciary or representative capacity, please provide the following information. Please print or type) Name(s)..................................................................... ............................................................................ (Please Print) Capacity (full title)....................................................... Address .................................................................... ............................................................................ ............................................................................ (Include Zip Code) Area Code and Telephone Numbers............................................. Taxpayer Identification or Social Security No....................................................... (See Substitute Form W-9) GUARANTEE OF SIGNATURE(S) (If Required--See Instruction 4) Name and Title.............................................................. (Please Print) Authorized Signature........................................................ Name of Firm................................................................ Address .................................................................... ............................................................................ (Include Zip Code) Area Code and Telephone Number.............................................. Dated:.............................................................. , 1999 5 THIS SUBSTITUTE FORM W-9 MUST BE COMPLETED AND SIGNED PLEASE PROVIDE YOUR SOCIAL SECURITY NUMBER OR OTHER TAXPAYER IDENTIFICATION NUMBER ON THE FOLLOWING SUBSTITUTE FORM W-9 AND CERTIFY THEREIN THAT YOU ARE NOT SUBJECT TO BACKUP WITHHOLDING. - --------------------------------------------------------------------------------------------------------------------------------- PAYER'S NAME: THE BANK OF NEW YORK - --------------------------------------------------------------------------------------------------------------------------------- SUBSTITUTE PART 1 - PLEASE PROVIDE YOUR TIN IN --------------------------------- FORM W-9 THE BOX AT RIGHT AND CERTIFY BY Social Security Number SIGNING AND DATING BELOW. OR------------------------------ Employer Identification Number -------------------------------------------------------------------------------------------------
Department of the Treasury, PART 2 - Certification - Under Penalties of PART 3 - / / - I am awaiting a TIN. Internal Revenue Service Perjury, I certify that: Payer's Request for Taxpayer (1) The number shown on this form is my correct Identification Number (TIN) Taxpayer Identification Number (or I am waiting for a number to be issued to me and have checked the box in Part 3) and (2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. ------------------------------------------------------------------------------------------------- CERTIFICATION INSTRUCTIONS - You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2). SIGNATURE --------------------------------------------------- DATE ------------------------ -------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a Taxpayer Identification Number has not been issued to me, and either (1) I have mailed or delivered an application to receive a Taxpayer Identification Number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a Taxpayer Identification Number by the time of the exchange, 31% of all reportable payments made to me thereafter will be withheld, until I provide a number. _____________________________ _______________, 1999 Signature Date 6 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES. All physically delivered Old Notes or confirmation of any book-entry transfer to the Exchange Agent's account at a book-entry transfer facility of Old Notes tendered by book-entry transfer, as well as a properly completed and duly executed copy of this Letter of Transmittal or facsimile thereof, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at any of its addresses set forth herein on or prior to the Expiration Date. The method of delivery of this Letter of Transmittal, the Old Notes and all other required documents is at the election and risk of the Holder. Instead of delivery by mail, it is recommended that Holders use an overnight or hand delivery service. Except as otherwise provided below, the delivery will be deemed made only when actually received by the Exchange Agent. No alternative, conditional, irregular or contingent tenders will be accepted. All tendering Holders, by execution of this Letter of Transmittal (or facsimile thereof), shall waive any right to receive notice of the acceptance of the Old Notes for exchange. Delivery to an address other than as set forth herein, or instructions via a facsimile number other than the ones set forth herein, will not constitute a valid delivery. 2. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their Old Notes, and (i) cannot deliver the Letter of Transmittal or any other required documents to the Exchange Agent prior to the Expiration Date or (ii) cannot complete the procedure for book-entry transfer on a timely basis, may effect a tender if: a. the tender is made through a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution"); b. prior to the Expiration Date, the Exchange Agent receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmittal, mail or hand delivery) specifying the name and address of the holder and the principal amount of such Old Notes tendered, stating that the tender is being made, and guaranteeing that, within three New York Stock Exchange trading days after the date of execution of the Notice of Guaranteed Delivery, the Old Notes being tendered, a properly completed and duly executed Letter of Transmittal or a confirmation of a book-entry transfer into the Exchange Agent's account at The Depository Trust Company and an agent's message and any other documents required by the Letter of Transmittal, will be deposited by the Eligible Institution with the Exchange Agent; and c. the Exchange Agent receives such Old Notes and Letter of Transmittal or confirmation of a book-entry transfer into its account at The Depository Trust Company and an agent's message and all other documents required by the Letter of Transmittal within three New York Stock Exchange trading days after the date of execution of the Notice of Guaranteed Delivery. Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be sent to Holders who wish to tender their Old Notes according to the guaranteed delivery procedures set forth above. Any Holder who wishes to tender Old Notes pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery relating to such Old Notes prior to the Expiration Date. Failure to complete the guaranteed delivery procedures outlined above 7 will not, of itself, affect the validity or effect a revocation of any Letter of Transmittal form properly completed and executed by a Holder who attempted to use the guaranteed delivery procedures. 3. PARTIAL TENDERS; WITHDRAWALS. If less than the entire principal amount of Old Notes evidenced by a submitted certificate is tendered, the tendering Holder should fill in the principal amount tendered in the column entitled "Principal Amount Tendered" of the box entitled "Description of Senior Notes Tendered Hereby." A newly issued Old Note for the principal amount of Old Notes submitted but not tendered will be sent to such Holder as soon as practicable after the Expiration Date. All Old Notes delivered to the Exchange Agent will be deemed to have been tendered in full unless otherwise indicated. Any Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date, after which tenders of Old Notes are irrevocable. To withdraw a tender of Old Notes in the Exchange Offer, a written or facsimile transmission notice of withdrawal must be received by the Exchange Agent by 5:00 p.m., New York City time, on the Expiration Date. Any such notice of withdrawal must (i) specify the name of the person having deposited the Old Notes to be withdrawn (the "Depositor"), (ii) identify the Old Notes to be withdrawn (including the certificate or registration number(s) and principal amount of such Old Notes, or, in the case of Old Notes transferred by book-entry transfer, the name and number of the account at the DTC to be credited), (iii) be signed by the Depositor in the same manner as the original signature on this Letter of Transmittal (including any required signature guarantees) or be accompanied by documents of transfer sufficient to have the Trustee with respect to the Old Notes register the transfer of such Old Notes into the name of the Depositor withdrawing the tender, (iv) specify the name in which such Old Notes are to be registered, if different from that of the Depositor and (v) include a statement that such holder is withdrawing his or her election to have such Old Notes exchanged. All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Company, whose determination shall be final and binding on all parties. Any Old Notes so withdrawn will be deemed not to have been validly tendered for purposes of the Exchange Offer and no New Notes will be issued with respect thereto unless the Old Notes so withdrawn are validly retendered prior to the Expiration Date. Any Old Notes which have been tendered but which are not accepted for exchange, will be returned to the Holder thereof without cost to such Holder as soon as practicable after withdrawal, rejection of tender or termination of Exchange Offer. 4. SIGNATURE ON THIS LETTER OF TRANSMITTAL; WRITTEN INSTRUMENTS AND ENDORSEMENTS; GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the registered Holder(s) of the Old Notes tendered hereby, the signature must correspond with the name(s) as written on the face of the certificates without alteration or enlargement or any change whatsoever. If this Letter of Transmittal is signed by a participant in the Depository, the signature must correspond with the name as it appears on the security position listing as the owner of the Old Notes. If any of the Old Notes tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If a number of Old Notes registered in different names are tendered, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal as there are different registrations of Old Notes. Signatures on this Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an Eligible Institution unless the Old Notes tendered hereby are tendered (i) by a registered Holder who has not completed the box entitled "Special Registration Instructions" or "Special Delivery Instructions" on this Letter of Transmittal or (ii) for the account of an Eligible Institution. 8 If this Letter of Transmittal is signed by the registered Holder or Holders of Old Notes (which term, for the purposes described herein, shall include a participant in the Depository whose name appears on a security listing as the owner of the Old Notes) listed and tendered hereby, no endorsements of the tendered Old Notes or separate written instruments of transfer or exchange are required. In any other case, the registered Holder (or acting Holder) must either properly endorse the Old Notes or transmit properly completed bond powers with this Letter of Transmittal (in either case, executed exactly as the name(s) of the registered Holder(s) appear(s) on the Old Notes, and, with respect to a participant in the Depository whose name appears on a security position listing as the owner of Old Notes, exactly as the name of the participant appears on such security position listing), with the signature on the Old Notes or bond power guaranteed by an Eligible Institution (except where the Old Notes are tendered for the account of an Eligible Institution). If this Letter of Transmittal, any certificates or separate written instruments of transfer or exchange are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Company, proper evidence satisfactory to the Company of their authority so to act must be submitted. 5. SPECIAL REGISTRATION AND DELIVERY INSTRUCTIONS. Tendering Holders should indicate, in the applicable box, the name and address (or account at the Depository) in which the New Notes or substitute Old Notes for principal amounts not tendered or not accepted for exchange are to be issued (or deposited), if different from the names and addresses or accounts of the person signing this Letter of Transmittal. In the case of issuance in a different name, the employer identification number or social security number of the person named must also be indicated and the tendering Holder should complete the applicable box. If no instructions are given, the New Notes (and any Old Notes not tendered or not accepted) will be issued in the name of and sent to the acting Holder of the Old Notes or deposited at such Holder's account at the Depository. 6. TRANSFER TAXES. The Company shall pay all transfer taxes, if any, applicable to the exchange of Old Notes pursuant to the Exchange Offer. If, however, certificates representing New Notes or Old Notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be registered or issued in the name of, any person other than the registered Holder of the Old Notes tendered, or if tendered Old Notes are registered in the name of any person other than the person signing the Letter of Transmittal, or if a transfer tax is imposed for any reason other than the exchange of Old Notes pursuant to the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered Holder or any other person) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering Holder. Except as provided in this Instruction 6, it will not be necessary for transfer stamps to be affixed to the Old Notes listed in the Letter of Transmittal. 7. WAIVER OF CONDITIONS. The Company reserves the right, in its reasonable judgment, to waive, in whole or in part, any of the conditions to the Exchange Offer set forth in the Prospectus. 9 8. MUTILATED, LOST, STOLEN OR DESTROYED NOTES. Any Holder whose Old Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further instructions. 9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the Exchange Offer or the procedure for tendering, as well as requests for assistance or additional copies of the Prospectus and this Letter of Transmittal may be directed to the Exchange Agent at the address and telephone number set forth above. 10. VALIDITY AND FORM. All questions as to the validity, form, eligibility (including time of receipt), acceptance of tendered Old Notes and withdrawal of tendered Old Notes will be determined by the Company in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any and all Old Notes not properly tendered or any Old Notes the Company's acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the right to waive any irregularities or conditions of tender as to particular Old Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions in this Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Notes must be cured within such time as the Company shall determine. Neither the Company, the Exchange Agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of Old Notes, nor shall any of them incur any liability for failure to give such notification. Tenders of Old Notes will not be deemed to have been made until such irregularities have been cured or waived. Any Old Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned without cost to such holder by the Exchange Agent to the tendering Holders of Old Notes, unless otherwise provided herein, as soon as practicable following the Expiration Date. 10 IMPORTANT TAX INFORMATION Under federal income tax law, a Holder tendering Old Notes is required to provide the Exchange Agent with such Holder's correct taxpayer identification number ("TIN") on Substitute Form W-9 above. If such Holder is an individual, the TIN is the Holder's social security number. The Certificate of Awaiting Taxpayer Identification Number should be completed if the tendering Holder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future. If the Exchange Agent is not provided with the correct TIN, the Holder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, payments that are made to such Holder with respect to tendered Old Notes may be subject to backup withholding. Certain Holders (including, among others, all domestic corporations and certain foreign individuals and foreign entities) are not subject to these backup withholding and reporting requirements. See the enclosed "Guidelines For Certification of Taxpayer Identification Number on Substitute Form W-9" (the "W-9 Guidelines") for additional information. Such a Holder, who satisfies one or more of the conditions set forth in Item 2 of Part 2 of the Substitute Form W-9, should execute the certification following such Part 2. In order for a foreign Holder to qualify as an exempt recipient, that Holder must submit to the Exchange Agent a properly completed Internal Revenue Service Form W-8, signed under penalties of perjury, attesting to that Holder's exempt status. Several versions of Form W-8 are available depending on the foreign Holder's particular situation. Such forms can be obtained from the Exchange Agent. If backup withholding applies, the Exchange Agent is required to withhold 31% of any amounts otherwise payable to the Holder. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 To prevent backup withholding on payments that are made to a Holder with respect to Old Notes tendered for exchange, the Holder is required to notify the Exchange Agent of his or her correct TIN by completing the form set forth above certifying that the TIN provided on such Substitute Form W-9 is correct (or that such Holder is awaiting a TIN) and that (i) such Holder is exempt, (ii) such Holder has not been notified by the Internal Revenue Service that the Holder is subject to backup withholding as a result of a failure to report all interest or dividends or (iii) the Internal Revenue Service has notified such Holder that the Holder is no longer subject to backup withholding. WHAT NUMBER TO GIVE THE EXCHANGE AGENT Each Holder is required to give the Exchange Agent the social security number or employer identification number of the record Holder(s) of the Old Notes. If Old Notes are in more than one name or are not in the name of the actual Holder, consult the W-9 Guidelines enclosed herewith for instructions on which identification number to report. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER If the tendering Holder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, write "Applied For" in the space for the TIN on Substitute Form W-9, sign and date the form and the Certificate of Awaiting Taxpayer Identification Number and return them to the Exchange Agent. If such certificate is completed and the Exchange Agent is not provided with the TIN by the time of the exchange, the Exchange Agent will withhold 31% of all payments made thereafter until a TIN is provided to the Exchange Agent. IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE THEREOF (TOGETHER WITH OLD NOTES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE. 11 EX-99.2 9 EX-99.2 EXHIBIT 99.2 CERIDIAN CORPORATION OFFER FOR OUTSTANDING 7.25% SENIOR NOTES DUE 2004 IN EXCHANGE FOR 7.25% SENIOR NOTES DUE 2004, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED To: Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: Upon and subject to the terms and conditions set forth in the Prospectus, dated _________ _____, 1999 (the "Prospectus"), and the enclosed Letter of Transmittal (the "Letter of Transmittal"), an offer to exchange (the "Exchange Offer") the registered 7.25% Senior Notes due 2004 (the "New Notes") for any and all outstanding 7.25% Senior Notes due 2004 (the "Old Notes") is being made pursuant to such Prospectus. The Exchange Offer is being made in order to satisfy certain obligations of Ceridian Corporation (the "Company") contained in the Registration Rights Agreement, dated June 10, 1999, among the Company and Banc of America Securities LLC, Chase Securities Inc., BNY Capital Markets, Inc., TD Securities (USA) Inc. and U.S. Bancorp Piper Jaffray Inc. (collectively, the "Initial Purchasers"). We are requesting that you contact your clients for whom you hold Old Notes regarding the Exchange Offer. For your information and for forwarding to your clients for whom you hold Old Notes registered in your name or in the name of your nominee, or who hold Old Notes registered in their own names, we are enclosing the following documents: 1. Prospectus dated __________ _____, 1999; 2. The Letter of Transmittal for your use and for the information of your clients; 3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer if certificates for Old Notes are not immediately available or time will not permit all required documents to reach the Exchange Agent prior to the Expiration Date (as defined below) or if the procedure for book-entry transfer cannot be completed on a timely basis; and 4. A form of letter which may be sent to your clients for whose account you hold Old Notes registered in your name or the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Exchange Offer. YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ___________ _____, 1999 (THE "EXPIRATION DATE"), UNLESS EXTENDED BY THE COMPANY. OLD NOTES TENDERED PURSUANT TO THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE. To participate in the Exchange Offer, a duly executed and properly completed Letter of Transmittal (or facsimile thereof), with any required signature guarantees and any other required documents, should be sent to the Exchange Agent and certificates representing the Old Notes should be delivered to the Exchange Agent, all in accordance with the instructions set forth in the Letter of Transmittal and the Prospectus. If holders of Old Notes wish to tender, but it is impracticable for them to forward their certificates for Old Notes or other required documents prior to the expiration of the Exchange Offer or to comply with the book-entry transfer procedures on a timely basis, a tender may be effected by following the guaranteed delivery procedures described in the Prospectus under the caption "The Exchange Offer--Guaranteed Delivery Procedures." The Company will, upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable costs and expenses incurred by them in forwarding the prospectus and the related documents to the beneficial owners of Old Notes held by them as nominee or in a fiduciary capacity. The Company will pay or cause to be paid all stock transfer taxes applicable to the exchange of Old Notes pursuant to the Exchange Offer, except as set forth in the Instructions to the Letter of Transmittal. Any inquiries you may have with respect to the Exchange Offer, or requests for additional copies of enclosed materials, should be directed to The Bank of New York, as Exchange Agent for the Exchange Offer, at the address and telephone number set forth on the front of the Letter of Transmittal. Very truly yours, CERIDIAN CORPORATION NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF EITHER OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL. EX-99.3 10 EX-99.3 EXHIBIT 99.3 CERIDIAN CORPORATION OFFER FOR OUTSTANDING 7.25% SENIOR NOTES DUE 2004 IN EXCHANGE FOR 7.25% SENIOR NOTES DUE 2004, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED To Our Clients: We are enclosing herewith a prospectus dated ______________, 1999 of Ceridian Corporation, a Delaware corporation (the "Company"), and a related Letter of Transmittal (which together constitute the "Exchange Offer") relating to the offer by the Company to exchange its 7.25% Senior Notes due 2004 (the "New Notes"), pursuant to an offering registered under the Securities Act of 1933, as amended (the "Securities Act"), for a like principal amount of its issued and outstanding 7.25% Senior Notes due 2004 (the "Old Notes") upon the terms and subject to the conditions set forth in the Exchange Offer. We are the holder of record and/or participant in the book-entry transfer facility of Old Notes held by us for your account. A tender of such Old Notes can be made only by us as the record holder and/or participant in the book-entry transfer facility and pursuant to your instructions. The Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender Old Notes held by us for your account. We request instructions as to whether you wish to tender any or all of the Old Notes held by us for your account pursuant to the terms and conditions of the Exchange Offer. We also request that you confirm that we may on your behalf make the representations and warranties contained in the Letter of Transmittal. Pursuant to the Letter of Transmittal, each holder of Old Notes will represent to the Company that (i) the holder is not an "affiliate" of the Company (within the meaning of the Securities Act); (ii) any New Notes to be received by the holder are being acquired in the ordinary course of its business; (iii) the holder has no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of such New Notes; and (iv) the holder is not a broker-dealer tendering Old Notes acquired directly from us. In addition, if the tendering holder is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes, we will represent on behalf of such broker-dealer that the Old Notes to be exchanged for the New Notes were acquired by it as a result of market-making activities or other trading activities, and acknowledge on behalf of such broker-dealer that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Notes. By acknowledging that it will deliver and by delivering a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Notes, such broker-dealer is not deemed to admit that it is an "underwriter" within the meaning of the Securities Act. Your instructions should be forwarded to us as promptly as possible in order to permit us to tender the Old Notes on your behalf in accordance with the provisions of the Exchange Offer. THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ________ __, 1999 (THE "EXPIRATION DATE"), UNLESS EXTENDED BY THE COMPANY. ANY OLD NOTES TENDERED PURSUANT TO THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. Your attention is directed to the following: 1. The Exchange Offer is for any and all of the Old Notes. 2. The Exchange Offer is not conditioned upon any minimum number of Old Notes being tendered. 3. The Exchange Offer is subject to certain conditions set forth in the Prospectus in the section captioned "The Exchange Offer--Conditions of the Exchange Offer." 4. Any transfer taxes incident to the transfer of the Old Notes from the holder to the Company will be paid by the Company, except as otherwise provided in the Instructions in the Letter of Transmittal. 5. The Exchange Offer expires at 5:00 p.m., New York City time, on the Expiration Date unless extended by the Company. If you wish to have us tender your Old Notes, please so instruct us by completing, executing and returning to us the instruction form attached to this letter. INSTRUCTIONS WITH RESPECT TO THE EXCHANGE OFFER The undersigned acknowledge(s) receipt of your letter enclosing the Prospectus, dated __________ _____, 1999, of Ceridian Corporation, a Delaware corporation, and the related specimen Letter of Transmittal. The undersigned further acknowledge(s) that pursuant to the Letter of Transmittal, you will make the following representations on behalf of the undersigned: (i) the undersigned is not an "affiliate" of the Company (within the meaning of the Securities Act); (ii) any New Notes to be received by the undersigned are being acquired in the ordinary course of its business; (iii) the undersigned has no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of such New Notes; and (iv) the undersigned is not a broker-dealer tendering Old Notes acquired directly from us. In addition, if the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes, the undersigned acknowledge(s) that you will represent on behalf of the undersigned that the Old Notes to be exchanged for the New Notes were acquired by the undersigned as a result of market-making activities or other trading activities, and acknowledge on behalf of the undersigned that the undersigned will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Notes. This will instruct you to tender the number of Old Notes indicated below held by you for the account of the undersigned, pursuant to the terms and conditions set forth in the Prospectus and the related letter of Transmittal. (Check one). Box 1 / / Please tender my Old Notes held by you for my account. If I do not wish to tender all of the Old Notes held by you for my account, I have identified on a signed schedule attached hereto the number of Old Notes that I do not wish tendered. Box 2 / / Please do not tender any Old Notes held by you for my account. Date: , 1999 ------------------------- ------------------------------- Signature(s) ------------------------------- ------------------------------- Please print name(s) here ------------------------------- Area Code and Telephone No. UNLESS A SPECIFIC CONTRARY INSTRUCTION IS GIVEN IN THE SPACE PROVIDED, YOUR SIGNATURE(S) HEREON SHALL CONSTITUTE AN INSTRUCTION TO US TO TENDER ALL OLD NOTES. EX-99.4 11 EX-99.4 EXHIBIT 99.4 NOTICE OF GUARANTEED DELIVERY EXCHANGE OFFER FOR ALL OUTSTANDING 7.25% SENIOR NOTES DUE 2004 OF CERIDIAN CORPORATION PURSUANT TO THE PROSPECTUS DATED ________, 1999 This form, or one substantially equivalent hereto, must be used by any holder of 7.25% Senior Notes due 2004 (the "Old Notes") of Ceridian Corporation, a Delaware corporation (The "Company"), who wishes to tender Old Notes pursuant to the Company's Exchange Offer, as defined in the prospectus dated ___________, 1999 (the "Prospectus") and (1) who cannot deliver the Letter of Transmittal or any other required documents to the Exchange Agent before the Expiration Date (as defined in the Prospectus) or (2) cannot complete the procedure for book-entry on a timely basis. Such form may be delivered by facsimile transmission, mail or hand delivery to the Exchange Agent. See "The Exchange Offer--Guaranteed Delivery Procedures" in the Prospectus. THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS: THE BANK OF NEW YORK ------------------- BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND OR (FOR ELIGIBLE OVERNIGHT COURIER: INSTITUTIONS ONLY) The Bank of New York (212) 815-6339 The Bank of New York 101 Barclay Street 101 Barclay Street Floor 7E CONFIRM FACSIMILE BY Corporate Trust Services New York, NY 10286 TELEPHONE: Ground Level Window Attn: Reorganization (212) 815-3750 New York, NY 10286 Section Attn: Reorganization Section DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an "Eligible Institution" under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: The undersigned hereby tenders to the Company upon the terms and subject to the conditions set forth in the Prospectus and the related Letter of Transmittal, receipt of which is hereby acknowledged, the principal amount of Old Notes or Book-Entry Interests in Old Notes, as applicable, specified below pursuant to the guaranteed delivery procedures set forth under the caption "The Exchange Offer--Guaranteed Delivery Procedures" in the Prospectus. By so tendering, the undersigned does hereby make, at and as of the date hereof, the representations and warranties of a tendering holder of Old Notes set forth in the Letter of Transmittal. The undersigned hereby tenders the Old Notes listed below: CERTIFICATE NUMBERS (IF AVAILABLE) PRINCIPAL AMOUNT TENDERED - -------------------------------------- --------------------------------------- - -------------------------------------- --------------------------------------- - -------------------------------------- --------------------------------------- All authority herein conferred or agreed to be conferred shall survive the death, incapacity, or dissolution of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. If Old Notes will be tendered by SIGN HERE book-entry transfer: Name of Tendering Institution: - -------------------------------------- --------------------------------------- Signature(s) The Depository Trust Company Account No: -------------------------- --------------------------------------- Name(s) (Please Print) --------------------------------------- Address --------------------------------------- Zip Code --------------------------------------- Area Code and Telephone Number Date: --------------------------------- GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or a correspondent in the United States or an "eligible guarantor institution" as defined by rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), hereby guarantees deposit with the Exchange Agent of the Letter of Transmittal (or facsimile thereof or Agent's message in lieu thereof), together with the Old Notes tendered hereby in proper form for transfer, or confirmation of the book-entry transfer of such Old Notes into the Exchange Agent's account at The Depository Trust Company, pursuant to the procedure for book-entry transfer set forth in the Prospectus, and any other required documents, all by 5:00 p.m., New York City time, on the third New York Stock Exchange trading day following the Expiration Date. The undersigned acknowledges that it must deliver the Letter of Transmittal and Old Notes tendered hereby to the Exchange Agent within the time period set forth above and that failure to do so could result in a financial loss to the undersigned. SIGN HERE --------------------------------------- Name of Firm --------------------------------------- Authorized Signature --------------------------------------- Name (Please Print) --------------------------------------- --------------------------------------- Address --------------------------------------- Zip Code --------------------------------------- Area Code and Telephone No. Date: --------------------------------- DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM. ACTUAL SURRENDER OF CERTIFICATES FOR OLD NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A COPY OF THE PREVIOUSLY EXECUTED LETTER OF TRANSMITTAL. INSTRUCTIONS 1. DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY. A properly completed and duly executed copy of this Notice of Guaranteed Delivery and any other documents required by this Notice of Guaranteed Delivery must be received by the Exchange Agent at one of its addresses set forth on the cover hereof prior to 5:00 p.m. on the Expiration Date. The method of delivery of this Notice of Guaranteed Delivery and all other required documents to the Exchange Agent is at the election and risk of the Holder but, except as otherwise provided below, the delivery will be deemed made only when actually received by the Exchange Agent. Instead of delivery by mail, it is recommended that holders use an overnight or hand delivery service, properly insured. If such delivery is by mail, it is recommended that the Holder use properly insured, registered mail with return receipt requested. For a full description of the guaranteed delivery procedures, see the Prospectus under the caption "The Exchange Offer--Guaranteed Delivery Procedures." In all cases, sufficient time should be allowed to assure timely delivery. No Notice of Guaranteed Delivery should be sent to the Company. 2. SIGNATURE ON THIS NOTICE OF GUARANTEED DELIVERY; GUARANTEE OF SIGNATURES. If this Notice of Guaranteed Delivery is signed by the holder(s) of the Old Notes referred to herein, then the signature must correspond exactly with the name(s) of the holder(s) that appear on the security position listing maintained by the Depository. If this Notice of Guaranteed Delivery is signed by a person other than the holder(s) of any Old Notes listed, this Notice of Guaranteed Delivery must be accompanied by appropriate powers of attorney, in either case signed exactly as the name or names of the holder(s) that appear on the security position listing maintained by the Depository. If this Notice of Guaranteed Delivery is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and, unless waived by the Company proper evidence satisfactory to the Company of such person's authority so to act must be submitted with this Notice of Guaranteed Delivery. 3. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the Exchange Offer or the procedure for consenting and tendering as well as requests for assistance or for additional copies of the Prospectus, the Letter of Transmittal and this Notice of Guaranteed Delivery, may be directed to the Exchange Agent at the address set forth on the cover hereof or to your broker, dealer, commercial bank or trust company. -----END PRIVACY-ENHANCED MESSAGE-----